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o | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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 |
Not Applicable | Jersey, Channel Islands | |
(Translation of Registrant’s name into English) | (Jurisdiction of incorporation or organization) |
Pirojshanagar, Vikhroli(W)
Mumbai 400 079, India
(91-22) 4095-2100
(Address and Telephone number of principal executive offices)
Group Chief Financial Officer
Gate 4, Godrej & Boyce Complex
Pirojshanagar, Vikhroli(W)
Mumbai 400 079, India
(91-22) 4095-2100
alok.misra@wns.com
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
Title of each class | Name of each exchange on which registered | |
American Depositary Shares, each represented by | The New York Stock Exchange | |
one Ordinary Share, par value 10 pence per share |
None
(Title of Class)
None
(Title of Class)
Large accelerated filero | Accelerated filerþ | Non-accelerated filero |
U.S. GAAPþ | International Financial Reporting | Othero | ||
Standards as issued | ||||
by the International Accounting | ||||
Standards Boardo |
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• | 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; |
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• | 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 Ltd., or AVIVA MS, as described below; | |
• | our ability to successfully consummate strategic acquisitions; and | |
• | volatility of our ADS price. |
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For the year ended March 31, | ||||||||||||||||||||
2011 | 2010 | 2009 | 2008 | 2007 | ||||||||||||||||
(US dollars in millions, except share and per share data) | ||||||||||||||||||||
Consolidated Statement of Income Data: | ||||||||||||||||||||
Revenue | $ | 616.3 | $ | 582.5 | $ | 520.9 | $ | 438.0 | $ | 345.4 | ||||||||||
Cost of revenue(1) | 491.8 | 439.3 | 391.8 | 341.5 | 264.4 | |||||||||||||||
Gross profit | 124.4 | 143.2 | 129.1 | 96.5 | 81.0 | |||||||||||||||
Operating expenses: | ||||||||||||||||||||
Selling, general and administrative expenses(1) | 80.5 | 86.2 | 75.5 | 72.7 | 52.5 | |||||||||||||||
Amortization of intangible assets | 31.8 | 32.4 | 24.9 | 2.9 | 1.9 | |||||||||||||||
Impairment of goodwill, intangibles and other assets(2) | — | — | — | 15.5 | — | |||||||||||||||
Operating income | 12.1 | 24.6 | 28.7 | 5.4 | 26.6 | |||||||||||||||
Other (income) expense, net | (6.1 | ) | 7.1 | 5.6 | (9.2 | ) | (2.5 | ) | ||||||||||||
Interest expense | 8.0 | 13.8 | 11.8 | — | 0.1 | |||||||||||||||
Income before income taxes | 10.1 | 3.7 | 11.3 | 14.6 | 29.0 | |||||||||||||||
Provision for income taxes | 1.0 | 1.0 | 3.4 | 5.2 | 2.5 | |||||||||||||||
Net income | 9.1 | 2.7 | 7.9 | 9.4 | 26.5 | |||||||||||||||
Less: Net loss attributable to redeemable noncontrolling interest | (0.7 | ) | (1.0 | ) | (0.3 | ) | — | — | ||||||||||||
Net income attributable to WNS (Holdings) Limited shareholders | $ | 9.8 | $ | 3.7 | $ | 8.2 | $ | 9.4 | $ | 26.5 | ||||||||||
Earnings per share of ordinary share | ||||||||||||||||||||
Basic | $ | 0.21 | $ | 0.09 | $ | 0.19 | $ | 0.22 | $ | 0.69 | ||||||||||
Diluted | $ | 0.21 | $ | 0.08 | $ | 0.19 | $ | 0.22 | $ | 0.64 | ||||||||||
Basic weighted average ordinary shares outstanding | 44,260,713 | 43,093,316 | 42,520,404 | 42,070,206 | 38,608,188 | |||||||||||||||
Diluted weighted average ordinary shares outstanding | 45,020,833 | 44,174,128 | 43,108,599 | 42,945,028 | 41,120,497 |
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As at March 31, | ||||||||||||||||||||
2011 | 2010 | 2009 | 2008 | 2007 | ||||||||||||||||
(US dollars in millions) | ||||||||||||||||||||
Consolidated Balance Sheet Data: | ||||||||||||||||||||
Assets | ||||||||||||||||||||
Cash and cash equivalents | $ | 27.1 | $ | 32.3 | $ | 38.9 | $ | 102.7 | $ | 112.3 | ||||||||||
Bank deposits and marketable securities | 0.0 | 0.0 | 8.9 | 8.1 | 12.0 | |||||||||||||||
Accounts receivable including unbilled revenue, net | 109.4 | 85.7 | 71.2 | 58.6 | 52.4 | |||||||||||||||
Other current assets(3) | 48.3 | 58.9 | 54.4 | 23.4 | 18.5 | |||||||||||||||
Total current assets | 184.8 | 176.9 | 173.4 | 192.8 | 195.2 | |||||||||||||||
Goodwill and intangible assets, net | 250.6 | 278.7 | 299.1 | 96.9 | 44.4 | |||||||||||||||
Property and equipment, net | 48.6 | 51.7 | 56.0 | 50.8 | 41.8 | |||||||||||||||
Deposits and deferred tax assets | 41.1 | 32.3 | 21.9 | 15.4 | 6.2 | |||||||||||||||
Other assets and investments | 3.3 | 10.3 | 11.4 | 1.3 | — | |||||||||||||||
Total assets | 528.4 | 549.9 | 561.8 | 357.2 | 287.6 | |||||||||||||||
Liabilities, redeemable noncontrolling interest and equity | ||||||||||||||||||||
Current portion of long term debt | 50.0 | 40.0 | 45.0 | — | — | |||||||||||||||
Accrual for earn-out payment | — | — | — | 33.7 | — | |||||||||||||||
Other current liabilities(4) | 144.7 | 133.9 | 132.5 | 88.8 | 75.1 | |||||||||||||||
Total current liabilities | 194.7 | 173.9 | 177.5 | 122.5 | 75.1 | |||||||||||||||
Long term debt | 43.1 | 95.0 | 155.0 | — | — | |||||||||||||||
Other non-current liabilities(5) | 19.4 | 27.1 | 41.2 | 7.5 | 6.9 | |||||||||||||||
Redeemable noncontrolling interest | — | 0.3 | 0.0 | — | — | |||||||||||||||
Total WNS (Holdings) Limited shareholders’ equity | 271.2 | 253.6 | 188.1 | 227.2 | 205.6 | |||||||||||||||
Total liabilities, redeemable noncontrolling interest and equity | $ | 528.4 | $ | 549.9 | $ | 561.8 | $ | 357.2 | $ | 287.6 | ||||||||||
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For the year ended March 31, | ||||||||||||||||||||
2011 | 2010 | 2009 | 2008 | 2007 | ||||||||||||||||
(US dollars in millions, except percentages and employee data) | ||||||||||||||||||||
Other Consolidated Financial Data: | ||||||||||||||||||||
Revenue | $ | 616.3 | $ | 582.5 | $ | 520.9 | $ | 438.0 | $ | 345.4 | ||||||||||
Gross profit as a percentage of revenue | 20.2 | % | 24.6 | % | 24.8 | % | 22.0 | % | 23.5 | % | ||||||||||
Operating income as a percentage of revenue | 2.0 | % | 4.2 | % | 5.5 | % | 1.2 | % | 7.7 | % | ||||||||||
Other Unaudited Consolidated Financial and Operating Data: | ||||||||||||||||||||
Revenue less repair payments(6) | $ | 369.4 | $ | 390.5 | $ | 385.0 | $ | 290.6 | $ | 219.6 | ||||||||||
Gross profit as a percentage of revenue less repair payments | 33.7 | % | 36.7 | % | 33.5 | % | 33.2 | % | 36.9 | % | ||||||||||
Operating income as a percentage of revenue less repair payments | 3.3 | % | 6.3 | % | 7.4 | % | 1.9 | % | 12.1 | % | ||||||||||
Number of employees (at period end) | 21,523 | 21,958 | 21,356 | 18,104 | 15,084 |
Notes: | ||
(1) | Includes the following share-based compensation amounts: |
For the year ended March 31, | ||||||||||||||||||||
2011 | 2010 | 2009 | 2008 | 2007 | ||||||||||||||||
(US dollars in millions) | ||||||||||||||||||||
Cost of revenue | $ | 0.9 | $ | 3.7 | $ | 3.6 | $ | 2.4 | $ | 1.0 | ||||||||||
Selling, general and administrative expenses | 3.1 | 11.4 | 9.8 | 4.4 | 2.7 |
(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 borrowings, accrued employee cost, deferred revenue, income taxes payable, deferred tax liabilities and other current liabilities. | |
(5) | Consists of non-current portion of derivatives, capital leases, deferred revenue, deferred tax liabilities, other liabilities 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): |
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For the year ended March 31, | ||||||||||||||||||||
2011 | 2010 | 2009 | 2008 | 2007 | ||||||||||||||||
(US dollars in millions) | ||||||||||||||||||||
Revenue | $ | 616.3 | $ | 582.5 | $ | 520.9 | $ | 438.0 | $ | 345.4 | ||||||||||
Less: Payments to repair centers | 246.9 | 192.0 | 135.9 | 147.4 | 125.8 | |||||||||||||||
Revenue less repair payments | $ | 369.4 | $ | 390.5 | $ | 385.0 | $ | 290.6 | $ | 219.6 | ||||||||||
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• | 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 2010 Term Loan, thereby reducing the availability of our cash flow to fund capital expenditure, working capital and other general corporate purposes; | |
• | it requires us to seek lenders’ 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. |
• | 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; |
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• | 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. |
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• | 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. |
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• | announcements of technological developments; | |
• | regulatory developments in our target markets affecting us, our clients or our competitors; |
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• | actual or anticipated fluctuations in our three monthly 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; | |
• | loss of one or more significant clients; and | |
• | a change in control, or possible change of control, of our company. |
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Source: NASSCOM Strategic Review, February 2011 | ||
Note: Years ending March 31 |
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• | 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. |
• | Named Best New Outsourced Services Delivery (2010) by Shared Services & Outsourcing Network (SSON); | |
• | Named Best New BPO Locator Of The Year (2010) by Business Process Association of Philippines (BPAP); | |
• | Industry-specific multi-year winner — International Association of Outsourcing Professionals (IAOP) 2010 Global Outsourcing 100; | |
• | Recipient of the Special Award at the NASSCOM Corporate Awards for Excellence in Gender Inclusivity 2010 in the ‘Best BPO Company’ category; | |
• | Recipient of the Dian Masalanta Award of the year (2010) for being the dynamic new partner of the National Voluntary Blood Services Program (Govt. of the Philippines); | |
• | WNS ranked among Top 3 BPO companies in India by NASSCOM for six consecutive years; | |
• | Recipient of Best New Outsourced Services Award by SSON (2009); and | |
• | Recipient of the Silver Plate Award for Community Service by HelpAge India (2007). |
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• | Best 20 Leaders by Industry focus: Retail & Consumer Goods — IAOP 2010 Global Outsourcing 100; | |
• | Best 20 Leaders by Industry focus: Financial Services (Insurance) — IAOP 2010 Global Outsourcing 100; | |
• | Best 20 Leaders by Industry focus: Leaders — Customer Relationship Management — IAOP 2010 Global Outsourcing 100; | |
• | Recognized as top five FAO Market Star Performer (2009) by Everest; | |
• | Best 10 companies by Industry focus: Utilities — IAOP 2009 Global Outsourcing 100; | |
• | Best 5 companies by Industry focus: Air Transportation — IAOP 2009 Global Outsourcing 100; | |
• | Best Performing FAO Provider by Global Services 100 (2008); | |
• | WNS awarded Partners in Innovation Challenge for Baggage Claim Process from KLM Dutch Royal Airlines (2008); | |
• | Ranked No.1 insurance outsourcer by Global Outsourcing 100 (2007); and | |
• | WNS Assistance Voted Best Accident Management Company by the Auto Body Professionals Club (2007). |
• | Recipient of the Golden Peacock National Quality awards (2011); | |
• | Recipient of the IDG Media CIO 100 Special Category Award in recognition of WNS’s Infosec architecture and implementations (2010); | |
• | Recipient of the NetApp Enterprise Innovation Award (2010); | |
• | Recipient of the Maharashtra State IT Award (2010); | |
• | Recipient of the Best Project Achievement in Green Six Sigma Award at WCBF, USA (2009); | |
• | Recipient of Golden Peacock Eco-Innovation Award for Green Lean Sigma Program awarded by The World Environment Foundation in association with the Institute of Directors (2009); | |
• | Recipient of the CIO 100 Award for Innovative Storage Solutions (2008); | |
• | Recipient of the Asia-Pacific Six Sigma Excellence award for Best Lean Six Sigma project (2007); | |
• | Recipient of The Global Six Sigma Award for Best Achievement of Six Sigma in Outsourcing (2007); and | |
• | Recipient of Golden Peacock innovation award by Institute of Directors (2007). |
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• | 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. |
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• | 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. |
• | Insurance; | ||
• | Travel and leisure; | ||
• | Banking and financial services; | ||
• | Consulting and professional services; | ||
• | Healthcare; | ||
• | Utilities; | ||
• | Shipping and logistics; and | ||
• | Manufacturing, retail, consumer products, telecom and diversified businesses. |
As percentage of | ||||||||||||||||
As percentage | Revenue less | revenue less | ||||||||||||||
Prior vertical structure | Revenue | of revenue | repair payments | repair payments | ||||||||||||
(US dollars in millions) | ||||||||||||||||
Travel and leisure | $ | 85.0 | 13.8 | % | $ | 85.0 | 23.0 | % | ||||||||
BFSI | 410.0 | 66.5 | % | 163.1 | 44.2 | % | ||||||||||
Industrial and infrastructure | 55.9 | 9.1 | % | 55.9 | 15.1 | % | ||||||||||
Emerging businesses | 65.4 | 10.6 | % | 65.4 | 17.7 | % | ||||||||||
Total | $ | 616.3 | 100.0 | % | $ | 369.4 | 100.0 | % | ||||||||
As percentage of | ||||||||||||||||
As percentage | Revenue less | revenue less | ||||||||||||||
New vertical structure | Revenue | of revenue | repair payments | repair payments | ||||||||||||
(US dollars in millions) | ||||||||||||||||
Insurance | $ | 370.1 | 60.1 | % | $ | 123.2 | 33.4 | % | ||||||||
Travel and leisure | 83.9 | 13.6 | % | 83.9 | 22.7 | % | ||||||||||
Banking and financial services | 26.4 | 4.3 | % | 26.4 | 7.1 | % | ||||||||||
Consulting & professional services | 26.3 | 4.3 | % | 26.3 | 7.1 | % | ||||||||||
Healthcare | 25.7 | 4.2 | % | 25.7 | 7.0 | % | ||||||||||
Utilities | 19.5 | 3.2 | % | 19.5 | 5.3 | % | ||||||||||
Shipping and logistics | 9.8 | 1.6 | % | 9.8 | 2.6 | % | ||||||||||
Manufacturing, retail, consumer products, telecom and diversified businesses | 54.6 | 8.9 | % | 54.6 | 14.8 | % | ||||||||||
Total | $ | 616.3 | 100.0 | % | $ | 369.4 | 100.0 | % | ||||||||
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• | airlines, hotels, and car rental companies; | |
• | travel intermediaries; and | |
• | others, such as global distribution systems and network providers. |
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• | Flexible pricing model — The partnership commenced with a full time employee (FTE) pricing model and gradually moved to a unit transaction pricing (UTP) model. This allows for greater flexibility for the client as its business volumes fluctuate. For example, volumes can surge significantly during the holiday season. This requires meticulous planning between both the client and our team to manage fluctuating volumes; | |
• | Delivering continuous improvement — We implemented Six Sigma and Kaizen principles to boost the productivity of our employees providing services to the clients. Our team identifies opportunities to embed process efficiencies in order to focus on up-sell and cross-sell of products; and | |
• | Deploying high quality talent — Our team developed sales training modules to create a compelling, relevant and customized training program. This includes an intensive 13 week online training program. |
• | 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; |
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• | mortgage banks and loan servicers; | |
• | asset managers and financial advisory service providers; and | |
• | healthcare payers, providers and device manufacturers. |
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• | Managing more than 25 disparate F&A systems; and | |
• | Consolidating fragmented and standalone processes with minimal IT support. |
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• | Supported the client’s implementation of its first SAP© platform by acting as subject matter experts. SAP© is a leading provider of business management software; | |
• | Responded to a rapid increase in customer interaction volumes; | |
• | Scaled our team from 26 to over 1,500 associates in that time period and revamped training materials; | |
• | Implemented projects utilizing Six Sigma and LEAN methodologies at transition, laying the foundation for continuous program improvement, resulting in higher quality transition by embedding Black Belts, which refers to in-house coaches on Six Sigma, to design quality model; | |
• | Reduced the time for a team member to reach optimum productivity, and increased productivity; | |
• | Improved debt recovery; and |
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• | Reduced backlog by collaboratively working with the client. |
• | 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 | |
• | global transformation practice focused on business and process optimization services. |
• | Ramped our team to 150 associates within the first six months; | |
• | Provided cost savings through outcome-based risk-reward commercial construct; | |
• | Full support to the company sales force across states; | |
• | Taken complete ownership of collections performance; and | |
• | Supporting patient queries on supplies and billings. |
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• | Carrying out the daily update of current cash and future cash flows resulting from both accounts receivable and accounts payable positions. This effort spans across more than 150 client affiliate companies. The information processed by the team is used by the client’s front office team to have a clear line of sight into present funds and future positions, which is vital to execute various deals in the market; | |
• | Performing various back office functions which constitute the core of any treasury function. These include deal confirmations, foreign exchange netting, bank and inter-company settlements, bank reconciliation and managing accounts payable processes for the client; | |
• | The daily monitoring of foreign exchange hedging activity including the deal reconciliation and user identity administration of the treasury system; | |
• | Delivering accounting services in an SAP© environment, including processes such as the monthly book closing for treasury entities, management accounting and reporting, accounting bank reconciliation, trade accounts reconciliation, centralized cash pooling system clearing and the preparation of budgets; and | |
• | Providing fair market value reporting based on Accounting Standards Codification, or ASC 815 “Derivatives and Hedging”, hedging position reports, monitoring and reporting outstanding borrowing and lending positions, daily cash position updates and the reporting and reconciliation of dividends from money market funds. |
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• | Fast turnaround on key queries. We developed a blended onsite/offshore delivery model which helped the client gain a better understanding of strategic and business challenges with an overnight turnaround. | |
• | “Thinking” supplier partnership. We leveraged a resource mix of modeling analysts, marketing domains and technology experts to support the client on both strategic and tactical business questions, including portfolio analysis, everyday business questions such as market size estimation, shopper and consumer insights, identifying consumer “need gaps” for new product development and implementing an analytics center of excellence to support account growth. |
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• | Ongoing efficiency. We identified a pattern of client requests which drove the automation and creation template reports, including a unique monitoring report. This report is currently used in over 35 global markets by the client’s senior management team. |
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AVIVA | SITA | |
Biomet Inc. | T-Mobile | |
British Airways | Travelocity | |
Centrica plc | United Airlines | |
FedEx | Virgin Atlantic Airways Ltd | |
MMC |
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Year ended March 31, | ||||||||
2011 | 2010 | |||||||
Below $1.0 million | 163 | 173 | ||||||
$1.0 million to $5.0 million | 39 | 36 | ||||||
$5.0 million to $10.0 million | 12 | 12 | ||||||
More than $10.0 million | 6 | 7 |
• | focused business process outsourcing service companies based in offshore locations (primarily India), such as Genpact Limited, Firstsource Solutions Limited. and Exl Service Holdings, Inc.; | |
• | business process outsourcing divisions of numerous information technology service companies located in India such as Infosys BPO Limited (formerly Progeon Limited) 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 Limited., 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. |
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• | the court which pronounced the judgment has jurisdiction to entertain the case according to the principles recognized by Jersey law with reference to the jurisdiction of the US courts; | |
• | the judgment is given on the merits and is final and conclusive — it cannot be altered by the courts which pronounced it; |
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• | 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. |
• | 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. |
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• | 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. |
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(1) | WNS (Holdings) Limited made 99.99% capital contribution in WNS Global Services Netherlands Cooperative U.A. (“the Co-op”). The remaining 0.01% capital contribution in the Co-op was made by WNS North America, Inc., to satisfy the regulatory requirement to have a minimum of two members. | |
(2) | All the shares except one share of WNS Business Consulting Services Private Limited (formerly known as WNS Mortgage Services Private Limited) are held by WNS North America, Inc. The remaining one share is held by a nominee shareholder on behalf of WNS North America Inc. to satisfy the regulatory requirement to have a minimum of two shareholders. | |
(3) | WNS Philippines Inc is a joint venture company set up between the Co-Op and Advanced Contact Solutions, Inc., or ACS. ACS has assigned its rights and obligations under the joint venture agreement in favor of its holding company Paxys Inc, Philippines. The Co-op has a 65% ownership interest in WNS Philippines Inc. | |
(4) | Formerly subsidiary of Chang Limited. The shares are now held by WNS Global Services (UK) Limited. | |
(5) | Formerly subsidiary of Business Applications Associates Limited. The shares are now held by WNS Customer Solutions (Singapore) Private Limited. | |
(6) | Formerly subsidiary of WNS Global Services Private Limited. The shares are now held by WNS (Holdings) Limited. WNS Customer Solutions North America, Inc. has filed an application with the Secretary of State of the State of Delaware for a merger with and into WNS North America Inc. and the certificate of merger from the Secretary of State of the State of Delaware is pending. | |
(7) | Pursuant to Section 1003 of the Companies Act 2006, UK, Chang Limited and Town & Country Assistance Limited have applied for voluntary dissolution. Notices for striking off were published in the London Gazette on February 1, 2011 and effective 90 days from the date of publication, the said entities will be struck-off from the UK companies register if the UK Companies House does not receive any objection for the proposed striking off. | |
(8) | WNS Cares Foundation is a not-for-profit organization registered under Section 25 of the Companies Act, 1956, India formed for the purpose of promoting corporate social responsibilities and not considered for the purpose of preparing our consolidated financial statements. | |
(9) | Business Applications Associates Limited is in the process of voluntary dissolution. |
Total Space | Total Number of | |||||||||||||||
Location | (square feet) | Workstations/Seats | Lease Expiration | Extendable Until(1) | ||||||||||||
India: | ||||||||||||||||
Mumbai | 362,391 | 2,790 | ||||||||||||||
Godrej Plant 10(2) | Tenancy-at-will | N/A | ||||||||||||||
Godrej Plant 11 (old)(2) | Tenancy-at-will | N/A | ||||||||||||||
Tenancy-at-will | N/A | |||||||||||||||
Godrej Plant 11 | October 23, 2011 | July 23, 2014 | ||||||||||||||
Godrej Plant 5 | November 30, 2012 | August 31, 2015 | ||||||||||||||
Raheja (SEZ) Airoli(3) | May 31, 2019 | N/A | ||||||||||||||
Gurgaon | 195,733 | 2,119 | ||||||||||||||
Infinity Towers A & B | April 30, 2014 | N/A | ||||||||||||||
May 31, 2014 | N/A | |||||||||||||||
Infinity Tower C | March 31, 2015 | N/A | ||||||||||||||
DLF (SEZ) 6(4) | September 15, 2012 | September 15, 2017 |
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Total Space | Total Number of | |||||||||||||||
Location | (square feet) | Workstations/Seats | Lease Expiration | Extendable Until(1) | ||||||||||||
Pune | 441,564 | 5,017 | ||||||||||||||
Magarpatta(5) | N/A | N/A | ||||||||||||||
Weikfield(6) | February 14, 2014 | February 14, 2018 | ||||||||||||||
April 30, 2014 | April 30, 2018 | |||||||||||||||
June 14, 2014 | June 14, 2018 | |||||||||||||||
Nashik | 88,356 | 987 | ||||||||||||||
Shreeniketan | June 30, 2013 | N/A | ||||||||||||||
Vascon | October 14, 2013 | October 14, 2017 | ||||||||||||||
Bangalore | 191,890 | 2,004 | ||||||||||||||
RMZ Continental | June 14, 2015 | June 14, 2025 | ||||||||||||||
October 31, 2015 | October 31, 2025 | |||||||||||||||
June 14, 2015 | June 14, 2025 | |||||||||||||||
Chennai | 133,240 | 818 | ||||||||||||||
RMZ Millenia | March 31, 2012 | August 31, 2048 | ||||||||||||||
DLF SEZ | March 31, 2016 | N/A | ||||||||||||||
Sri Lanka: | 33,124 | 401 | ||||||||||||||
Colombo (HNB) | July 31, 2011 | N/A | ||||||||||||||
UK: | 30,549 | 452 | ||||||||||||||
Ipswich | August 26, 2012 | N/A | ||||||||||||||
Cheadle(7) | July 25, 2020 | N/A | ||||||||||||||
Piccadilly(8) | February 1, 2017 | N/A | ||||||||||||||
Chiswick High Road(9) | December 31, 2011 | N/A | ||||||||||||||
Hayes(10) | February 28, 2021 | N/A | ||||||||||||||
US: | 3,706 | 18 | ||||||||||||||
New York | May 31, 2011 | N/A | ||||||||||||||
Houston | May 31, 2011 | N/A | ||||||||||||||
Romania: | 26,748 | 300 | ||||||||||||||
Bucharest(11) | December 31, 2012 | N/A | ||||||||||||||
The Philippines: | 74,807 | 1,161 | ||||||||||||||
Eastwood(12) | November 30, 2015 | August 31, 2018 | ||||||||||||||
June 30, 2016 | June 30, 2019 | |||||||||||||||
Costa Rica | 11,528 | 211 | ||||||||||||||
Forum San Jose (old) | January 31, 2016 | N/A | ||||||||||||||
Forum San Jose (new)(13) | April 30, 2016 | N/A |
(1) | Reflects the expiration date if each of our applicable extension options are exercised. | |
(2) | The lease agreements for Godrej Plant 10 and Godrej Plant 11(old) expired on February 15, 2011 and May 31, 2010/January 31, 2011, respectively. We have been in negotiations with the landlord to enter into a new lease agreement for Godrej Plant 10 and Godrej Plant 11(old) and expect to enter into the new lease agreement by end of June 2011. |
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(3) | We expect to complete the interior fit out works by the first quarter of fiscal 2012. | |
(4) | We surrendered an unutilized space of 97,318 square feet. | |
(5) | We own these premises. | |
(6) | The operations at our prior Sofotel delivery center were transferred to our existing facility at Weikfield and we surrendered the Sofotel premises to the landlord. We completed the interior fit out works in the balance three floors of Weikfield premises in March 2011. | |
(7) | The operations at our prior Marple delivery center were transferred to our new facility at Cheadle and we surrendered the Marple premises to the landlord. | |
(8) | This is a new client facing facility. | |
(9) | We have sent the landlord a notice to terminate the lease and the premises will be vacated on April 30, 2011. | |
(10) | We have commenced the interior fit out works and expect to move into this office premises in April 2011. | |
(11) | No option to renew unless mutually agreed by the parties in writing. | |
(12) | The operations at our prior Superstore delivery center were transferred to our existing facility at Eastwood and we surrendered the Superstore premises to the landlord. | |
(13) | We expect to complete the interior fit out works by the first quarter of fiscal 2012. |
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Year ended March 31, | ||||||||||||
2011 | 2010 | 2009 | ||||||||||
(US dollars in millions) | ||||||||||||
Revenue | $ | 616.3 | $ | 582.5 | $ | 520.9 | ||||||
Less: Payments to repair centers | 246.9 | 192.0 | 135.9 | |||||||||
Revenue less repair payments | $ | 369.4 | $ | 390.5 | $ | 385.0 | ||||||
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• | In fiscal 2003, we acquired Town & Country Assistance Limited (which we subsequently rebranded as WNS Assistance and which is part of 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 Gurgaon, Mumbai and Pune. | |
• | 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 Global. |
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• | 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 business and AVIVA’s Irish subsidiary, Hibernian Aviva Direct Limited, and certain of its affiliates. | |
• | In November 2009, we opened a facility in San Jose, Costa Rica. | |
• | In January 2010, we moved from our existing facility to a new and expanded facility in Manila, the Philippines. | |
• | In October 2010, we moved from our existing facility in Marple to Manchester, UK and expanded our facility in Manila, the Philippines. | |
• | In November 2010, we expanded our sales office in London, UK. | |
• | In March 2011, we expanded our facility in Bucharest, Romania. |
Revenue | Revenue Less Repair Payments | |||||||||||||||||||||||
Year ended March 31, | Year ended March 31, | |||||||||||||||||||||||
2011 | 2010 | 2009 | 2011 | 2010 | 2009 | |||||||||||||||||||
Top five clients | 54.3 | % | 53.0 | % | 53.4 | % | 41.1 | % | 45.1 | % | 46.3 | % | ||||||||||||
Top ten clients | 65.8 | % | 64.8 | % | 67.3 | % | 53.4 | % | 58.2 | % | 60.7 | % | ||||||||||||
Top twenty clients | 77.8 | % | 76.5 | % | 77.9 | % | 70.2 | % | 73.5 | % | 74.2 | % |
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• | 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. |
Revenue | Revenue Less Repair Payments | |||||||||||||||||||||||
Year ended March 31, | Year ended March 31, | |||||||||||||||||||||||
Business Units | 2011 | 2010 | 2009 | 2011 | 2010 | 2009 | ||||||||||||||||||
Travel and leisure | 13.8 | % | 16.3 | % | 19.6 | % | 23.0 | % | 24.3 | % | 26.5 | % | ||||||||||||
BFSI | 66.5 | % | 65.4 | % | 62.6 | % | 44.2 | % | 48.4 | % | 49.5 | % | ||||||||||||
Industrial and infrastructure | 9.1 | % | 7.6 | % | 6.9 | % | 15.1 | % | 11.4 | % | 9.3 | % | ||||||||||||
Emerging businesses | 10.6 | % | 10.7 | % | 10.9 | % | 17.7 | % | 15.9 | % | 14.7 | % | ||||||||||||
Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||||
As percentage of | ||||||||||||||||
As percentage of | Revenue less | revenue less | ||||||||||||||
Prior vertical structure | Revenue | revenue | repair payments | repair payments | ||||||||||||
(US dollars in millions) | ||||||||||||||||
Travel and leisure | $ | 85.0 | 13.8 | % | $ | 85.0 | 23.0 | % | ||||||||
BFSI | 410.0 | 66.5 | % | 163.1 | 44.2 | % | ||||||||||
Industrial and infrastructure | 55.9 | 9.1 | % | 55.9 | 15.1 | % | ||||||||||
Emerging businesses | 65.4 | 10.6 | % | 65.4 | 17.7 | % | ||||||||||
Total | $ | 616.3 | 100.0 | % | $ | 369.4 | 100.0 | % | ||||||||
As percentage of | ||||||||||||||||
As percentage | Revenue less | revenue less | ||||||||||||||
New vertical structure | Revenue | of revenue | repair payments | repair payments | ||||||||||||
(US dollars in millions) | ||||||||||||||||
Insurance | $ | 370.1 | 60.1 | % | $ | 123.2 | 33.4 | % | ||||||||
Travel and leisure | 83.9 | 13.6 | % | 83.9 | 22.7 | % | ||||||||||
Banking and financial services | 26.4 | 4.3 | % | 26.4 | 7.1 | % | ||||||||||
Consulting & professional services | 26.3 | 4.3 | % | 26.3 | 7.1 | % | ||||||||||
Healthcare | 25.7 | 4.2 | % | 25.7 | 7.0 | % | ||||||||||
Utilities | 19.5 | 3.2 | % | 19.5 | 5.3 | % | ||||||||||
Shipping and logistics | 9.8 | 1.6 | % | 9.8 | 2.6 | % | ||||||||||
Manufacturing, retail, consumer products, telecom and diversified businesses | 54.6 | 8.9 | % | 54.6 | 14.8 | % | ||||||||||
Total | $ | 616.3 | 100.0 | % | $ | 369.4 | 100.0 | % | ||||||||
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Revenue | Revenue Less Repair Payments | |||||||||||||||||||||||
Year ended March 31, | Year ended March 31, | |||||||||||||||||||||||
2011 | 2010 | 2009 | 2011 | 2010 | 2009 | |||||||||||||||||||
UK | 60.9 | % | 58.2 | % | 55.9 | % | 54.0 | % | 55.2 | % | 58.2 | % | ||||||||||||
Europe (excluding the UK) | 15.9 | % | 16.7 | % | 18.8 | % | 7.2 | % | 7.4 | % | 7.5 | % | ||||||||||||
North America (primarily the US) | 22.2 | % | 24.5 | % | 25.0 | % | 37.0 | % | 36.5 | % | 33.9 | % | ||||||||||||
Rest of World | 1.0 | % | 0.6 | % | 0.3 | % | 1.8 | % | 0.9 | % | 0.4 | % | ||||||||||||
Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||||
• | 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. |
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• | 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. |
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As at March 31, | ||||||||||||
2011 | 2010 | 2009 | ||||||||||
Total headcount | 21,523 | 21,958 | 21,356 | |||||||||
Built up seats(1) | 16,278 | 15,836 | 15,485 | |||||||||
Used seats(1) | 13,256 | 13,659 | 12,456 | |||||||||
Seat utilization rate(2) | 1.4 | 1.4 | 1.4 |
(1) | Built up seats refer to the total number of production seats (excluding support functions like Finance, Human Resource and Administration) that are set up in any premises. Used seats refer to the number of built up seats that are being used by employees. The remainder would be termed “vacant seats.” The vacant seats would get converted into used seats when we acquire a new client or increase headcount. | |
(2) | The seat utilization rate is calculated by dividing the average total headcount by the average number of built up seats to show the rate at which we are able to utilize our built up seats. Average total headcount and average number of built up seats are calculated by dividing the aggregate of the total headcount or number of built up seats, as the case may be, as at the beginning and end of the fiscal year by two. |
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• | 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. |
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Revenue | Revenue Less Repair Payments | |||||||||||||||||||||||
Year ended March 31, | Year ended March 31, | |||||||||||||||||||||||
2011 | 2010 | 2009 | 2011 | 2010 | 2009 | |||||||||||||||||||
Unaudited | Unaudited | Unaudited | ||||||||||||||||||||||
Cost of revenue | 79.8 | % | 75.4 | % | 75.2 | % | 66.3 | % | 63.3 | % | 66.5 | % | ||||||||||||
Gross profit | 20.2 | % | 24.6 | % | 24.8 | % | 33.7 | % | 36.7 | % | 33.5 | % | ||||||||||||
Operating expenses: | ||||||||||||||||||||||||
SG&A | 13.1 | % | 14.8 | % | 14.5 | % | 21.8 | % | 22.1 | % | 19.6 | % | ||||||||||||
Amortization of intangibles assets | 5.2 | % | 5.6 | % | 4.8 | % | 8.6 | % | 8.3 | % | 6.5 | % | ||||||||||||
Operating income | 2.0 | % | 4.2 | % | 5.5 | % | 3.3 | % | 6.3 | % | 7.4 | % | ||||||||||||
Other (income) expense, net | (1.0 | )% | 1.2 | % | 1.1 | % | (1.7 | )% | 1.8 | % | 1.5 | % | ||||||||||||
Interest expense | 1.3 | % | 2.4 | % | 2.3 | % | 2.2 | % | 3.5 | % | 3.1 | % | ||||||||||||
Provision for income taxes | 0.2 | % | 0.2 | % | 0.6 | % | 0.3 | % | 0.3 | % | 0.9 | % | ||||||||||||
Net income | 1.5 | % | 0.5 | % | 1.5 | % | 2.5 | % | 0.7 | % | 2.1 | % | ||||||||||||
Net loss attributable to redeemable noncontrolling interest | 0.1 | % | 0.2 | % | 0.1 | % | 0.2 | % | 0.3 | % | 0.1 | % | ||||||||||||
Net income attributable to WNS shareholders | 1.6 | % | 0.6 | % | 1.6 | % | 2.7 | % | 1.0 | % | 2.1 | % |
Year ended March 31, | ||||||||||||
2011 | 2010 | 2009 | ||||||||||
Revenue | 100.0 | % | 100.0 | % | 100.0 | % | ||||||
Less: Payments to repair centers | 40.1 | % | 33.0 | % | 26.1 | % | ||||||
Revenue less repair payments | 59.9 | % | 67.0 | % | 73.9 | % | ||||||
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Year ended March 31, | ||||||||||||||||||||||||
2011 | 2010 | 2009 | ||||||||||||||||||||||
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) | $ | 332.6 | $ | 284.4 | $ | 341.5 | $ | 242.1 | $ | 322.9 | $ | 198.7 | ||||||||||||
Less: Payments to repair centers | — | 246.8 | — | 191.9 | — | 135.9 | ||||||||||||||||||
Revenue less repair payments(1) | 332.6 | 37.6 | 341.5 | 50.1 | 322.9 | 62.9 | ||||||||||||||||||
Cost of revenue(2) | 222.0 | 22.9 | 210.4 | 34.3 | 213.1 | 39.9 | ||||||||||||||||||
Other costs(3) | 71.7 | 5.7 | 68.6 | 5.8 | 58.9 | 6.4 | ||||||||||||||||||
Segment operating income | 38.9 | 9.0 | 62.5 | 10.0 | 50.9 | 16.5 | ||||||||||||||||||
Other (income) expense, net | (5.8 | ) | (0.3 | ) | 9.1 | (2.1 | ) | 6.1 | (0.5 | ) | ||||||||||||||
Interest expense | 8.0 | 0.0 | 13.8 | 0.1 | 11.2 | 0.6 | ||||||||||||||||||
Segment income before income taxes | 36.7 | 9.3 | 39.7 | 12.0 | 33.6 | 16.4 | ||||||||||||||||||
Benefit (provision) for income taxes | 0.5 | (1.6 | ) | 1.9 | (2.9 | ) | 0.3 | (3.6 | ) | |||||||||||||||
Segment income | $ | 37.2 | $ | 7.7 | $ | 41.5 | $ | 9.2 | $ | 33.9 | $ | 12.8 | ||||||||||||
Notes: | ||
(1) | Segment revenue and revenue less repair payments include inter-segment revenue of $0.8 million for fiscal 2011, $1.1 million for fiscal 2010 and $0.7 million for fiscal 2009. | |
(2) | Cost of revenue includes inter-segment expenses of $0.8 million for fiscal 2011, $1.1 million for fiscal 2010 and $0.7 million for fiscal 2009, and excludes stock-based compensation expenses of $0.9 million for fiscal 2011, $3.7 million for fiscal 2010 and $3.6 million for fiscal 2009, which are not allocable between our segments. | |
(3) | Excludes stock-based compensation expenses (including related fringe benefit tax) of $3.1 million for fiscal 2011, $11.9 million for fiscal 2010 and $10.2 million for fiscal 2009, which are not allocable between our segments. SG&A expenses comprise other costs and stock-based compensation expenses. |
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Fiscal 2011 | Fiscal 2010 | |||||||||||||||||||||||||||||||
Three months ended | Three months ended | |||||||||||||||||||||||||||||||
March | December | September | June | March | December | September | June | |||||||||||||||||||||||||
2011 | 2010 | 2010 | 2010 | 2010 | 2009 | 2009 | 2009 | |||||||||||||||||||||||||
(Unaudited, US dollars in millions) | ||||||||||||||||||||||||||||||||
Revenue | $ | 159.5 | $ | 152.7 | $ | 154.2 | $ | 150.0 | $ | 157.6 | $ | 145.8 | $ | 146.0 | $ | 133.1 | ||||||||||||||||
Cost of revenue | 126.1 | 121.5 | 121.0 | 123.2 | 123.5 | 110.7 | 109.1 | 95.9 | ||||||||||||||||||||||||
Gross Profit | 33.4 | 31.1 | 33.2 | 26.7 | 34.1 | 35.1 | 36.9 | 37.1 | ||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||||||
SGA expenses | 21.1 | 20.2 | 19.7 | 19.6 | 22.8 | 20.6 | 22.1 | 20.8 | ||||||||||||||||||||||||
Amoritsation of Intangible Assets | 8.0 | 8.0 | 7.9 | 8.0 | 8.1 | 8.1 | 8.1 | 8.2 | ||||||||||||||||||||||||
Impairment of goodwill, intangibles and other assets | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Operating income (loss) | 4.3 | 3.0 | 5.6 | (0.8 | ) | 3.2 | 6.4 | 6.7 | 8.2 | |||||||||||||||||||||||
Other (income) expense, net | (1.4 | ) | (5.1 | ) | (1.9 | ) | 2.3 | (0.8 | ) | 2.9 | 2.1 | 2.8 | ||||||||||||||||||||
Interest expense | 1.6 | 1.8 | 1.9 | 2.7 | 2.8 | 3.5 | 3.4 | 4.1 | ||||||||||||||||||||||||
(Benefit) provision for income taxes | (0.7 | ) | 0.5 | 0.8 | 0.5 | 0.4 | 0.0 | 0.2 | 0.3 | |||||||||||||||||||||||
Net income (loss) | 4.9 | 5.7 | 4.8 | (6.3 | ) | 0.8 | (0.1 | ) | 1.0 | 0.9 | ||||||||||||||||||||||
Net loss attributable to non-controlling interest | 0.2 | 0.1 | 0.1 | 0.3 | 0.2 | 0.4 | 0.4 | 0.1 | ||||||||||||||||||||||||
Net loss attributable to WNS (Holdings) Ltd Shareholders | $ | 5.2 | $ | 5.8 | $ | 4.9 | $ | (6.0 | ) | $ | 1.0 | $ | 0.3 | $ | 1.4 | $ | 1.0 |
Fiscal 2011 | Fiscal 2010 | |||||||||||||||||||||||||||||||
Three months ended | Three months ended | |||||||||||||||||||||||||||||||
March | December | September | June | March | December | September | June | |||||||||||||||||||||||||
2011 | 2010 | 2010 | 2010 | 2010 | 2009 | 2009 | 2009 | |||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||
Gross profit as a percentage of revenue | 20.9 | % | 20.4 | % | 21.5 | % | 17.8 | % | 21.6 | % | 24.1 | % | 25.3 | % | 27.9 | % | ||||||||||||||||
Operating income (loss) as a percentage of revenue | 2.7 | % | 2.0 | % | 3.6 | % | (0.5) | % | 2.1 | % | 4.4 | % | 4.6 | % | 6.1 | % | ||||||||||||||||
Gross profit as a percentage of revenue less repair payments | 35.4 | % | 33.6 | % | 35.6 | % | 29.9 | % | 35.2 | % | 36.5 | % | 37.0 | % | 37.9 | % | ||||||||||||||||
Operating income (loss) as a percentage of revenue less repair payments | 4.6 | % | 3.2 | % | 6.0 | % | (0.9) | % | 3.3 | % | 6.7 | % | 6.7 | % | 8.4 | % |
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Fiscal 2011 | Fiscal 2010 | |||||||||||||||||||||||||||||||
Three months ended | Three months ended | |||||||||||||||||||||||||||||||
March | December | September | June | March | December | September | June | |||||||||||||||||||||||||
2011 | 2010 | 2010 | 2010 | 2010 | 2009 | 2009 | 2009 | |||||||||||||||||||||||||
(Unaudited, US dollars in millions) | ||||||||||||||||||||||||||||||||
Revenue | $ | 159.5 | $ | 152.7 | $ | 154.2 | $ | 150.0 | $ | 157.6 | $ | 145.8 | $ | 146.0 | $ | 133.1 | ||||||||||||||||
Less: Payments to repair centers | 65.2 | 60.0 | 61.1 | 60.7 | 60.9 | 49.5 | 46.3 | 35.2 | ||||||||||||||||||||||||
Revenue less repair payments | $ | 94.3 | $ | 92.7 | $ | 93.1 | $ | 89.3 | $ | 96.7 | $ | 96.3 | $ | 99.7 | $ | 97.9 | ||||||||||||||||
Payments Due By Period | ||||||||||||||||||||
More | ||||||||||||||||||||
Less than | than 5 | |||||||||||||||||||
Total | 1 year | 1-3 years | 3-5 years | years | ||||||||||||||||
(US dollars in thousands) | ||||||||||||||||||||
2010 Term Loan | $ | 93,095 | $ | 50,000 | $ | 43,095 | $ | — | $ | — | ||||||||||
Operating leases | 77,959 | 12,770 | 27,358 | 18,069 | 19,762 | |||||||||||||||
Purchase obligations | 8,238 | 8,134 | 104 | — | — | |||||||||||||||
Total | $ | 179,292 | $ | 70,904 | $ | 70,557 | $ | 18,069 | $ | 19,762 | ||||||||||
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Name | Age | Designation | ||
Directors | ||||
Eric B. Herr(1)(2)(3) | 62 | Non-Executive Chairman | ||
Keshav R. Murugesh | 47 | Director and Group Chief Executive Officer | ||
Jeremy Young | 45 | Director | ||
Deepak S. Parekh(2)(4) | 66 | Director | ||
Richard O. Bernays(1)(3)(5) | 68 | Director | ||
Anthony A. Greener(1)(2)(3) | 70 | Director | ||
Albert Aboody(6) | 63 | Director | ||
Executive Officers | ||||
Keshav R. Murugesh | 47 | Group Chief Executive Officer | ||
Alok Misra | 44 | Group Chief Financial Officer | ||
Johnson J. Selvadurai | 52 | Managing Director - Europe | ||
Michael Garber(7) | 54 | Global Head – Sales & Marketing | ||
Ronald Strout(7) | 64 | Chief of Staff & Head Americas | ||
Swaminathan Rajamani(7) | 34 | Chief People Officer |
Notes: | ||
(1) | Member of our Nominating and Corporate Governance Committee. | |
(2) | Member of our Compensation Committee. | |
(3) | Member of our Audit Committee. | |
(4) | Chairman of our Nominating and Corporate Governance Committee. | |
(5) | Chairman of our Compensation Committee. | |
(6) | Appointed as a director and Chairman of our Audit Committee in place of Sir Anthony A. Greener with effect from June 28, 2010. | |
(7) | On March 10, 2011, Michael Garber — Global Head — Sales & Marketing, Ronald Strout — Chief of Staff & Head Americas and Swaminathan Rajamani — Chief People Officer were each designated as an executive officer of our company as a result of an increase in their responsibilities to include policy-making functions. |
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• | Pay for Performance:We design compensation to pay for performance in order to provide for better compensation against higher performance levels; conversely, where individual performance and/or our company performance falls short of expectations, the programs should deliver lower compensation. In periods of temporary downturns in our performance, our programs continue to ensure that successful, high-performing employees remain motivated and committed. | |
• | External Market Dynamics; Linked with Shareholder Value:Our equity-based compensation is awarded to employees with higher levels of responsibility and greater influence on long-term results, thereby making a significant portion of their total compensation dependent on long-term share appreciation. | |
• | Pay Differentiation: Based on Individual Performance and our Performance. As employees progress in the hierarchy of our company, they will be able to more directly affect the company results. Therefore, an increasing proportion of their pay is linked to company performance and shareholder value. | |
• | Competitiveness Value of the Job in the Marketplace:In order to attract and retain a highly skilled work force, we remain competitive with the pay of other employers who compete with us for talent in the relevant markets. |
• | Assessment of Company Performance:Financial performance measures are used to determine a significant portion of the size of payouts under our cash incentive bonus program. The financial performance measures, adopted on improving both top-line revenues and bottom-line earnings, are pre-established by our Compensation Committee annually at the beginning of the fiscal year and are applied uniformly across the company. When the pre-determined financial measures are achieved as set forth in our annual plan, employees who are eligible for cash incentive bonuses receive amounts that are at target. The cash incentive bonus for each senior management who has responsibility for a business unit is also tied to the financial performance of the business unit headed by such senior managers. These measures reflect targets that are intended to be aggressive but attainable. The remainder of an individual’s payout under our cash incentive bonus program is determined by individual performance. Our senior management refers to our business unit and enabling unit leaders. | |
• | Assessment of Individual Performance:The evaluation of an individual’s performance determines a portion of the size of payouts under our cash incentive bonus program and also influences any changes in base salary. At the beginning of each fiscal year, our Compensation Committee, along with our Group Chief Executive Officer, set the respective performance objectives for the fiscal year for the executive officers and senior management. The performance objectives are initially proposed by our Group Chief Executive Officer and modified by our Compensation Committee based on the performance assessment conducted for the preceding fiscal year and also looking at targets for the current fiscal year. Every evaluation metric is supplemented with key performance indicators. At the end of the fiscal year, our Group Chief Executive Officer discusses respective achievement of the pre-established objectives as well as the senior management’s contribution to our company’s performance and other leadership accomplishments. This evaluation is shared with our Compensation Committee and then with our executive officers and senior management. After the discussion, our Compensation Committee, in discussion with our Group Chief Executive Officer, assigns a corresponding numerical performance rating that translates into specific payouts under our cash incentive bonus program and also influences any changes in base salary. |
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• | Cognizant Technology Solutions; | |
• | EXL Service Holdings; | |
• | First Source solutions Limited; | |
• | Genpact Limited; | |
• | Infosys Technologies Limited; | |
• | Syntel Inc.; | |
• | Tata Consultancy Services Limited; and | |
• | Wipro Limited. |
• | Base salary or, in the case of executive officers based in India, fixed compensation; | |
• | Cash bonus; | |
• | Equity incentives of RSUs; | |
• | Benefits and perquisites; and | |
• | Severance benefits. |
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• | Adjusted net income, or net income attributable to WNS shareholders excluding amortization of intangible assets, share-based compensation, gain/loss attributable to redeemable noncontrolling interest; | |
• | Operating margins; | |
• | Support cross sell and corporate initiatives; and | |
• | People attrition rate. |
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Total RSUs | ||||
Granted | Vesting Schedule | |||
54,181 | 20% will vest on the first anniversary of the grant date, another 20% will vest on the second anniversary of the grant date and the balance will vest on the third anniversary of the grant date. | |||
696,100 | 60% of these RSUs which is time based will vest equally (20%) each on the first, second and third anniversary of the grant date, respectively, and 40% which is performance based will vest on the third anniversary of the grant date based on the achievement of the defined performance target in the RSU letters issued to employees. In addition the employee shall be eligible for an additional vesting of 10% of the RSUs granted to such employee, which would vest either on the third or fourth anniversary of the grant date based on the over-performance criteria stated in the relevant RSU letter. | |||
750,281 | ||||
• | Medical insurance; | |
• | Accident and life insurance; | |
• | Retirement benefits as mandated by law (such as provident fund in India, 401(k) in the US, pension in the UK); | |
• | Telephone expenses reimbursement; | |
• | Company provided car; | |
• | Fuel and maintenance for car; | |
• | Leased residential accommodation; and | |
• | Relocation benefits (as individually negotiated in their employment agreements). |
• | Accelerated vesting of equity awards. All granted but unvested share options and RSUs would immediately vest and become exercisable by our executive officers subject to certain conditions set out in the applicable equity incentive plans. |
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• | Severance and notice payment.Eligible terminated executive officers receive severance and notice payments as reflected in their individual employment agreements. | |
• | Benefit continuation.Eligible terminated executive officers receive basic employee benefits such as health and life insurance and other perquisites as reflected in their individual employment agreements. |
Name | Base Salary | Benefits | Bonus | Total | ||||||||||||
Keshav R. Murugesh | $ | 639,033 | $ | 32,220 | $ | 537,003 | $ | 1,208,256 | ||||||||
Alok Misra | $ | 319,178 | $ | 16,110 | $ | 176,026 | $ | 511,314 | ||||||||
Johnson J. Selvadurai | $ | 305,671 | $ | 89,406 | $ | 58,689 | $ | 453,766 | ||||||||
Steve Reynolds(1) | $ | 313,246 | $ | 11,572 | $ | 209,843 | $ | 534,661 | ||||||||
Michael Garber(2) | $ | 15,556 | $ | 1,170 | $ | 8,438 | $ | 25,164 | ||||||||
Ronald Strout(2) | $ | 12,500 | $ | 956 | $ | 3,466 | $ | 16,922 | ||||||||
Swaminathan Rajamani(2) | $ | 7,278 | $ | 349 | $ | 7,940 | $ | 15,567 |
Notes: | ||
(1) | On September 13, 2010 Steve Reynolds’ employment agreement was terminated and he ceased to be Managing Director — North America. | |
(2) | On March 10, 2011, Michael Garber — Global Head — Sales & Marketing, Ronald Strout — Chief of Staff & Head Americas and Swaminathan Rajamani — Chief People Officer were each designated as an executive officer of our company as a result of an increase in their responsibilities to include policy-making functions. The compensation for each of these executive officers disclosed in the table pertains to the compensation paid to them for services rendered from March 10, 2011 (when they became designated as executive officers of our company) to March 31, 2011. |
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a. | In the case where the termination occurs during the first year from the effective date of the employment agreement, he would be eligible to receive (i) his base salary for a period of 30 months from the effective date of termination in monthly installment in arrears; and (ii) the bonus for the period of 30 months on the basis of his target bonus as set in the year in which the termination occurs, such bonus shall be paid along with the payment of accrued obligations (as defined in the employment agreement); | |
b. | In the case where the termination occurs during second year from the effective date of the employment agreement, he would be eligible to receive (i) his base salary for a period of 18 months from the effective date of termination in monthly installment in arrears; and (ii) the bonus for the period of 18 months on the basis of target bonus as set in the year in which the termination occurs, such bonus would be paid along with the payment of accrued obligations (as defined in the employment agreement); | |
c. | In the case where the termination occurs during the years after the second year from the effective date of the employment agreement, he would be eligible to receive (i) his base salary for a period of 12 months from the effective date of termination in monthly installment in arrears; and (ii) his target bonus for the year in which the termination occurs, such bonus would be paid along with the payment of accrued obligations (as defined in the employment agreement). |
Position | Employee Name | Date of Grant | Total RSUs Granted in Fiscal 2011 | Expiration Date | ||||||||||
Director | Albert Aboody | 15-Jul-10 | 9,031 | 14-Jul-20 | ||||||||||
28-Oct-10 | 7,030 | 27-Oct-20 | ||||||||||||
Deepak S. Parekh | 28-Oct-10 | 7,030 | 27-Oct-20 | |||||||||||
Eric B. Herr | 28-Oct-10 | 7,030 | 27-Oct-20 | |||||||||||
Keshav R. Murugesh | 13-Aug-10 | 87,800 | 12-Aug-20 | |||||||||||
Richard O. Bernays | 28-Oct-10 | 7,030 | 27-Oct-20 | |||||||||||
Anthony A. Greener | 28-Oct-10 | 7,030 | 27-Oct-20 | |||||||||||
Total | 131,981 | |||||||||||||
Executive Officer | Alok Misra | 13-Aug-10 | 33,000 | 12-Aug-20 | ||||||||||
Johnson J. Selvadurai | 13-Aug-10 | 22,000 | 12-Aug-20 | |||||||||||
Steve Reynolds(1) | NA | NA | NA | |||||||||||
Michael Garber(2) | 1-Nov-10 | 22,000 | 31-Oct-20 | |||||||||||
Ronald Strout(2) | 23-Aug-10 | 22,000 | 22-Aug-20 | |||||||||||
Swaminathan Rajamani(2) | 29-Nov-10 | 22,000 | 28-Nov-20 | |||||||||||
Total | 121,000 | |||||||||||||
Grand Total | 252,981 | |||||||||||||
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Notes: | ||
(1) | On September 13, 2010, Steve Reynolds’ employment agreement was terminated and he ceased to be Managing Director — North America. | |
(2) | On March 10, 2011, Michael Garber — Global Head — Sales & Marketing, Ronald Strout — Chief of Staff & Head Americas and Swaminathan Rajamani — Chief People Officer were each designated as an executive officer of our company as a result of an increase in their responsibilities to include policy-making functions. |
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• | Class I, whose term will expire at the annual general meeting to be held in fiscal 2014; | |
• | Class II, whose term will expire at the annual general meeting to be held in fiscal 2012; and | |
• | Class III, whose term will expire at the annual general meeting to be held in fiscal 2013. |
• | Class I: Sir Anthony A. Greener and Mr. Richard O. Bernays; | |
• | Class II : Mr. Keshav R. Murugesh and Mr. Albert Aboody; and | |
• | Class III: Mr. Jeremy Young, Mr. Eric B. Herr and Mr. Deepak S. Parekh. |
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• | to serve as an independent and objective party to monitor our financial reporting process and internal control systems; | |
• | to review and appraise the audit efforts of our independent accountants and exercise ultimate authority over the relationship between us and our independent accountants; and | |
• | to provide an open avenue of communication among the independent accountants, financial and senior management and the Board of Directors. |
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• | to assist the Board of Directors by identifying individuals qualified to become board members and members of board committees, to recommend to the Board of Directors nominees for the next annual meeting of shareholders, and to recommend to the Board of Directors nominees for each committee of the Board of Directors; | |
• | to monitor our corporate governance structure; and | |
• | to periodically review and recommend to the Board of Directors any proposed changes to the corporate governance guidelines applicable to us. |
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Number of Ordinary Shares | ||||||||
Beneficially Owned | ||||||||
Name | Number | Percent | ||||||
Directors | ||||||||
Keshav R. Murugesh(4) | 71,856 | 0.16 | % | |||||
Jeremy Young(1)(3) | 21,366,644 | 48.08 | % | |||||
Eric B. Herr | 32,812 | 0.07 | % | |||||
Deepak S. Parekh | 25,812 | 0.06 | % | |||||
Richard O. Bernays | 25,812 | 0.06 | % | |||||
Anthony A. Greener | 24,049 | 0.05 | % | |||||
Albert Aboody | — | — | ||||||
Executive Officers | ||||||||
Alok Misra | 82,552 | 0.19 | % | |||||
Johnson J. Selvadurai(2) | 318,004 | 0.72 | % | |||||
Michael Garber | — | — | ||||||
Ronald Strout | — | — | ||||||
Swaminathan Rajamani | — | — | ||||||
All our directors and executive officers as a group (twelve persons)(3) | 21,947,541 | 49.38 | % |
Notes: | ||
(1) | Jeremy Young is a director of our company and a Managing Director and member of Warburg Pincus LLC. All shares indicated as owned by Mr. Young was a result of his affiliation with the Warburg Pincus entities. Mr. Young disclaims beneficial ownership of all shares held by the Warburg Pincus entities. | |
(2) | Of the 318,004 shares beneficially owned by Johnson J. Selvadurai, 251,666 shares are indirectly held via a trust which is controlled by Mr. Selvadurai. | |
(3) | Includes the shares beneficially owned by Jeremy Young, nominee director of Warburg Pincus, because of his affiliation with the Warburg Pincus entities. Mr. Young disclaims beneficial ownership of all shares held by the Warburg Pincus entities. | |
(4) | Of the 71,856 shares beneficially owned by Keshav R. Murugesh 19,856 shares are held jointly with his wife Shamini K. Murugesh in the form of ADRs. |
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Options Summary | RSU Summary | |||||||||||||||||||||||||||||||
Number | ||||||||||||||||||||||||||||||||
Number of | of | |||||||||||||||||||||||||||||||
shares | shares | |||||||||||||||||||||||||||||||
underlying | underlying | |||||||||||||||||||||||||||||||
unexercised | RSUs | |||||||||||||||||||||||||||||||
Number of | options | Number of | that will | |||||||||||||||||||||||||||||
shares | that will | Number of | shares | vest in | Number of | |||||||||||||||||||||||||||
underlying | vest in | shares | underlying | next 60 | shares | |||||||||||||||||||||||||||
unexercised | next 60 | underlying | RSUs held | days | underlying | |||||||||||||||||||||||||||
but | days from | options | that have | from | RSUs held | |||||||||||||||||||||||||||
vested | Exercise | March 31, | that have | Exercise | vested but | March 31, | that have | |||||||||||||||||||||||||
Name | options | price | 2011 | not vested | price | unexercised | 2011 | not vested | ||||||||||||||||||||||||
Directors | ||||||||||||||||||||||||||||||||
Keshav R. Murugesh | 52,000 | 295,800 | ||||||||||||||||||||||||||||||
Jeremy Young | — | — | ||||||||||||||||||||||||||||||
Eric B. Herr | 14,000 | $ | 20.00 | 1,186 | 41,347 | |||||||||||||||||||||||||||
2,000 | $ | 22.98 | ||||||||||||||||||||||||||||||
Deepak S. Parekh | 14,000 | $ | 20.00 | 1,186 | 13,347 | |||||||||||||||||||||||||||
2,000 | $ | 22.98 | ||||||||||||||||||||||||||||||
Richard O. Bernays | 14,000 | $ | 28.87 | 1,186 | 13,347 | |||||||||||||||||||||||||||
2,000 | $ | 22.98 | ||||||||||||||||||||||||||||||
Anthony A. Greener | 14,000 | $ | 28.48 | 1,186 | 14,277 | |||||||||||||||||||||||||||
2,000 | $ | 22.98 | ||||||||||||||||||||||||||||||
Albert Aboody | 16,061 | |||||||||||||||||||||||||||||||
Executive Officers | ||||||||||||||||||||||||||||||||
Alok Misra | 13,260 | $ | 15.32 | 49,861 | 19,431 | 67,621 | ||||||||||||||||||||||||||
Johnson J. Selvadurai | 20,000 | $ | 20.00 | 16,532 | 16,579 | 41,440 | ||||||||||||||||||||||||||
5,000 | $ | 30.21 | ||||||||||||||||||||||||||||||
8,227 | $ | 27.75 | ||||||||||||||||||||||||||||||
Ronald Strout | 22,000 | |||||||||||||||||||||||||||||||
Michael Garber | 22,000 | |||||||||||||||||||||||||||||||
Swaminathan Rajamani | 22,000 |
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Number of Shares | Percentage | |||||||
Name of Beneficial Owner | Beneficially Owned | Beneficially Owned(1) | ||||||
Warburg Pincus(2) | 21,366,644 | 48.08 | % | |||||
FMR LLC(3) | 6,354,465 | 14.30 | % | |||||
Columbia Wanger Asset Management, L.P. (4) | 5,979,000 | 13.45 | % | |||||
Nalanda India Fund Limited(5) | 5,211,410 | 11.73 | % |
Notes: | ||
(1) | Based on an aggregate of 44,443,726 ordinary shares outstanding as at March 31, 2011. | |
(2) | Information is based on a report on Schedule 13G jointly filed with the Commission on August 22, 2006 by Warburg Pincus Private Equity VIII, L.P., or WP VIII, Warburg Pincus International Partners, L.P., or WPIP, Warburg Pincus Netherlands International Partners I, CV, or WP Netherlands, Warburg, Pincus Partners, LLC, or WPP LLC, Warburg, Pincus & Co., or Warburg Pincus, and Warburg Pincus LLC, or WP LLC. The sole general partner of each of WP VIII, WPIP and WP Netherlands is WPP LLC. WPP LLC is managed by Warburg Pincus. WP LLC manages each of WP VIII, WPIP and WP Netherlands. Charles R. Kaye and Joseph P. Landy are each Managing General Partners of Warburg Pincus and Co-President and Managing Members of WP LLC. Each of Warburg Pincus, WPP LLC, WP LLC, Mr. Kaye and Mr. Landy disclaims beneficial ownership of the ordinary shares except to the extent of any indirect pecuniary interest therein. | |
(3) | Information is based on a report on Amendment No. 5 to Schedule 13G jointly filed with the Commission on February 14, 2011 by FMR LLC, Edward C. Johnson 3d, Fidelity Management & Research Company and Fidelity Mid Cap Stock Fund. Edward C. Johnson 3d is the Chairman of FMR LLC. Fidelity Management & Research Company, a wholly owned subsidiary of FMR LLC, is the investment adviser to Fidelity Mid Cap Stock Fund. | |
(4) | Information is based on a report on Amendment No. 3 to Schedule 13G jointly filed with the Commission on February 11, 2011 by Columbia Wanger Asset Management, L.P. and Columbia Acorn Trust. | |
(5) | Information is based on a report on Schedule 13G filed with the Commission on February 2, 2011 by Nalanda India Fund Limited. |
• | FMR LLC reported its percentage ownership of our ordinary shares to be 10.264% in a report on Schedule 13G jointly filed with the Commission on June 19, 2007, 14.999% in a report on Amendment No. 1 to Schedule 13G jointly filed with the Commission on February 14, 2008, 9.49% in a report on Amendment No. 3 to Schedule 13G jointly filed with the Commission on February 17, 2009, 12.641% in a report on Amendment No. 4 to Schedule 13G jointly filed with the Commission on February 16, 2010 and 15.00% (based on the then number of our ordinary shares reported as outstanding at that time) in a report on Amendment No. 5 to Schedule 13G jointly filed with the Commission on February 14, 2011 . | |
• | Columbia Wanger Asset Management, L.P. reported its percentage ownership of our ordinary shares to be Columbia 8.16% in a report on Schedule 13G filed with the Commission on February 5, 2009, 10.05% in a report on Amendment No. 1 to Schedule 13G filed with the Commission on March 9, 2009, 12.2% in a report on Amendment No. 2 to Schedule 13G filed with the Commission on February 10, 2010 and 13.4% (based on the then number of our ordinary shares reported as outstanding at that time) in a report on Amendment No. 3 to Schedule 13G filed with the Commission on February 11, 2011. | |
• | Nalanda India Fund Limited reported its percentage ownership of our ordinary shares to be 5.25% in a report on Schedule 13G filed with the Commission on March 20, 2008, 9.86% in a report on Amendment No. 1 to Schedule 13G filed with the Commission on February 9, 2009, 12.3% in reports on Schedule 13G filed with the Commission on February 10, 2009 and January 13, 2010 and 11.76% (based on the then number of our ordinary shares reported as outstanding at that time) in reports on Schedule 13G filed with the Commission on February 2, 2011. |
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• | Tiger Global Management, LLC reported that it owned 6.6% of our ordinary shares in a report on Amendment No. 1 to Schedule 13G filed with the Commission on February 12, 2009 and thereafter divested its entire interest in a report on Amendment No. 2 to Schedule 13G filed with the Commission on February 12, 2010. | |
• | Lone Spruce, L.P., Lone Balsam, Lone Sequoia, Lone Pine Associates LLC, Lone Pine Capital LLC (which we refer to collectively herein as “Lone Capital”) and Stephen F. Mandel reported Lone Pine Associates’s ownership of 1.0%, Lone Pine Capital’s ownership of 4.4% and Mr. Mandel’s ownership of 5.4% of our ordinary shares in a report on Schedule 13G jointly filed with the Commission on August 17, 2007 by Lone Capital and Mr. Mandel. Lone Capital and Mr. Mandel thereafter in a report on Amendment No. 1 to Schedule 13G jointly filed with the Commission on February 14, 2008 reported that they ceased to own more than 5% of our ordinary shares. Lone Pine Associates, the general partner of Lone Spruce, Lone Sequoia and Lone Balsam, has the power to direct the affairs of Lone Spruce, Lone Sequoia and Lone Balsam. Mr. Mandel is the Managing Member of each of Lone Pine Associates and Lone Pine Capital and in such capacity directs their operations. |
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• | immediately following the date on which the distribution is proposed to be made, we will be able to discharge our liabilities as they fall due; and | |
• | having regard to our prospects and to the intentions of our directors with respect to the management of our business and to the amount and character of the financial resources that will in their view be available to us, we will be able to continue to carry on business and we will be able to discharge our liabilities as they fall due until the expiry of the period of 12 months immediately following the date on which the distribution is proposed to be made or until we are dissolved under Article 150 of the 1991 Law, whichever first occurs. |
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Price per ADS on NYSE | ||||||||
High | Low | |||||||
Fiscal year: | ||||||||
2007(1) | $ | 35.83 | $ | 20.79 | ||||
2008 | $ | 29.85 | $ | 12.81 | ||||
2009 | $ | 20.00 | $ | 3.10 | ||||
2010 | $ | 17.25 | $ | 5.10 | ||||
2011 | $ | 13.38 | $ | 8.46 | ||||
Fiscal Quarter: | ||||||||
2010 | ||||||||
First quarter | $ | 10.40 | $ | 5.10 | ||||
Second quarter | $ | 16.50 | $ | 8.39 | ||||
Third quarter | $ | 17.25 | $ | 11.59 | ||||
Fourth quarter | $ | 15.95 | $ | 10.12 | ||||
2011 | ||||||||
First quarter | $ | 13.38 | $ | 9.62 | ||||
Second quarter | $ | 13.35 | $ | 8.46 | ||||
Third quarter | $ | 12.94 | $ | 8.76 | ||||
Fourth quarter | $ | 11.98 | $ | 9.70 | ||||
Month: | ||||||||
October 2010 | $ | 10.90 | $ | 8.76 | ||||
November 2010 | $ | 12.10 | $ | 10.35 | ||||
December 2010 | $ | 12.94 | $ | 11.29 | ||||
January 2011 | $ | 11.98 | $ | 10.30 | ||||
February 2011 | $ | 11.36 | $ | 9.70 | ||||
March 2011 | $ | 10.97 | $ | 9.70 | ||||
April 2011 (till April 17, 2011) | $ | 10.61 | $ | 9.61 |
Note: | ||
(1) | From July 26, 2006 following the completion of our initial public offering on the NYSE. |
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• | increase our authorized or paid-up share capital; | |
• | consolidate and divide all or any part of our shares into shares of a larger amount than is fixed by our Memorandum of Association; | |
• | sub-divide all or any part of our shares into shares of smaller amount than is fixed by our Memorandum of Association; | |
• | convert any of our issued or unissued shares into shares of another class; | |
• | convert all our issued par value shares into no par value shares and vice versa; | |
• | convert any of our paid-up shares into stock, and reconvert any stock into any number of paid-up shares of any denomination; | |
• | convert any of our issued limited shares into redeemable shares which can be redeemed; | |
• | cancel shares which, at the date of passing of the resolution, have not been taken or agreed to be taken by any person, and diminish the amount of the authorized share capital by the amount of the shares so cancelled; | |
• | reduce our issued share capital; or | |
• | alter our Memorandum or Articles of Association. |
• | the consideration of our annual financial statements and report of our directors and auditors; | |
• | the election of directors (if necessary); | |
• | the appointment of auditors and the fixing of their remuneration; | |
• | the sanction of dividends; and | |
• | the transaction of any other business of which notice has been given. |
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• | it is in respect of a share which is fully paid-up; | |
• | it is in respect of only one class of shares; | |
• | it is in favor of a single transferee or not more than four joint transferees; | |
• | it is duly stamped, if so required; and | |
• | it is delivered for registration to our registered office for the time being or another place that we may from time to time determine accompanied by the certificate for the shares to which it relates and any other evidence as we may reasonably require to prove the right of the transferor or person renouncing to make the transfer or renunciation. |
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• | controlling possible conflicts of interests between us and our directors, such as loans by us or directors, and contracts between us and our directors other than a duty on directors to disclose an interest in any transaction to be entered into by us or any of our subsidiaries which to a material extent conflicts with our interest; |
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• | specifically requiring particulars to be shown in our accounts of the amount of loans to officers or directors’ emoluments and pensions, although these would probably be required to be shown in our accounts in conformity to the requirement that accounts must be prepared in accordance with generally accepted accounting principles; | |
• | requiring us to file details of charges other than charges of Jersey realty; or | |
• | as regards statutory preemption provisions in relation to further issues of shares. |
Corporate Law Issue | Delaware Law | Jersey Law | ||
Special Meetings of Shareholders | Shareholders of a Delaware corporation generally do not have the right to call meetings of shareholders unless that right is granted in the certificate of incorporation or by-laws. However, if a corporation fails to hold its annual meeting within a period of 30 days after the date designated for the annual meeting, or if no date has been designated for a period of 13 months after its last annual meeting, the Delaware Court of Chancery may order a meeting to be held upon the application of a shareholder. | Under the 1991 Law, directors shall, notwithstanding anything in a Jersey company’s articles of association, call a general meeting on a shareholders’ requisition. A shareholders’ requisition is a requisition of shareholders holding not less than one-tenth of the total voting rights of the shareholders of the company who have the right to vote at the meeting requisitioned. Failure to call an annual general meeting in accordance with the requirements of the 1991 Law is a criminal offense on the part of a Jersey company and its directors. The JFSC may, on the application of any officer, secretary or shareholder call, or direct the calling of, an annual general meeting. |
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Corporate Law Issue | Delaware Law | Jersey Law | ||
Interested Director Transactions | Interested director transactions are not voidable if (i) the material facts as to the interested director’s relationship or interests are disclosed or are known to the Board of Directors and the board in good faith authorizes the transaction by the affirmative vote of a majority of the disinterested directors, (ii) the material facts are disclosed or are known to the shareholders entitled to vote on such transaction and the transaction is specifically approved in good faith by vote of the majority of shares entitled to vote on the matter or (iii) the transaction is fair as to the corporation as of the time it is authorized, approved or ratified by the Board of Directors, a committee or the shareholders. | A director of a Jersey company who has an interest in a transaction entered into or proposed to be entered into by the company or by a subsidiary which conflicts or may conflict with the interests of the company and of which the director is aware, must disclose the interest to the company. Failure to disclose an interest entitles the company or a member to apply to the court for an order setting aside the transaction concerned and directing that the director account to the company for any profit. A transaction is not voidable and a director is not accountable notwithstanding a failure to disclose if the transaction is confirmed by special resolution and the nature and extent of the director’s interest in the transaction are disclosed in reasonable detail in the notice calling the meeting at which the resolution is passed. Without prejudice to its power to order that a director account for any profit, a court shall not set aside a transaction unless it is satisfied that the interests of third parties who have acted in good faith thereunder would not thereby be unfairly prejudiced and the transaction was not reasonable and fair in the interests of the company at the time it was entered into. |
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Corporate Law Issue | Delaware Law | Jersey Law | ||
Cumulative Voting | Delaware law does not require that a Delaware corporation provide for cumulative voting. However, the certificate of incorporation of a Delaware corporation may provide that shareholders of any class or classes or of any series may vote cumulatively either at all elections or at elections under specified circumstances. | There are no provisions in the 1991 Law relating to cumulative voting. | ||
Approval of Corporate Matters by Written Consent | Unless otherwise specified in a Delaware corporation’s certificate of incorporation, action required or permitted to be taken by shareholders at an annual or special meeting may be taken by shareholders without a meeting, without notice and without a vote, if consents in writing setting forth the action, are signed by shareholders with not less than the minimum number of votes that would be necessary to authorize the action at a meeting. All consents must be dated. No consent is effective unless, within 60 days of the earliest dated consent delivered to the corporation, written consents signed by a sufficient number of holders to take action are delivered to the corporation. | Insofar as the memorandum or articles of a Jersey company do not make other provision in that behalf, anything which may be done at a meeting of the company (other than remove an auditor) or at a meeting of any class of its shareholders may be done by a resolution in writing signed by or on behalf of each shareholder who, at the date when the resolution is deemed to be passed, would be entitled to vote on the resolution if it were proposed at a meeting. A resolution shall be deemed to be passed when the instrument, or the last of several instruments, is last signed or on such later date as is specified in the resolution. | ||
Business Combinations | With certain exceptions, a merger, consolidation or sale of all or substantially all the assets of a Delaware corporation must be approved by the Board of Directors and a majority of the outstanding shares entitled to vote thereon. | A sale or disposal of all or substantially all the assets of a Jersey company must be approved by the Board of Directors and, only if the Articles of Association of the company require, by the shareholders in general meeting. A merger involving a Jersey company must be generally documented in a merger agreement which must be approved by special resolution of that company. |
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Corporate Law Issue | Delaware Law | Jersey Law | ||
Limitations on Directors Liability | A Delaware corporation may include in its certificate of incorporation provisions limiting the personal liability of its directors to the corporation or its shareholders for monetary damages for many types of breach of fiduciary duty. However, these provisions may not limit liability for any breach of the duty of loyalty, acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, the authorization of unlawful dividends, or unlawful share purchase or redemption, or any transaction from which a director derived an improper personal benefit. Moreover, these provisions would not be likely to bar claims arising under US federal securities laws. | The 1991 Law does not contain any provisions permitting Jersey companies to limit the liability of directors for breach of fiduciary duty. Any provision, whether contained in the articles of association of, or in a contract with, a Jersey company or otherwise, whereby the company or any of its subsidiaries or any other person, for some benefit conferred or detriment suffered directly or indirectly by the company, agrees to exempt any person from, or indemnify any person against, any liability which by law would otherwise attach to the person by reason of the fact that the person is or was an officer of the company is void (subject to what is said below). | ||
Indemnification of Directors and Officers | A Delaware corporation may indemnify a director or officer of the corporation against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred in defense of an action, suit or proceeding by reason of his or her position if (i) the director or officer acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation and (ii) with respect to any criminal action or proceeding, the director or officer had no reasonable cause to believe his or her conduct was unlawful. | The prohibition referred to above does not apply to a provision for exempting a person from or indemnifying the person against (a) any liabilities incurred in defending any proceedings (whether civil or criminal) (i) in which judgment is given in the person’s favor or the person is acquitted, (ii) which are discontinued otherwise than for some benefit conferred by the person or on the person’s behalf or some detriment suffered by the person, or (iii) which are settled on terms which include such benefit or detriment and, in the opinion of a majority of the directors of the company (excluding any director who conferred such benefit or on whose behalf such benefit was conferred or who suffered such detriment), the person was substantially successful on the merits in the person’s resistance to the proceedings, (b) any liability incurred otherwise than to the company if the person acted in good faith with a view to the best interests of the company, (c) any liability incurred in connection with an application made to the court for relief from liability for negligence, default, breach of duty or breach of trust under Article 212 of the 1991 Law in which relief is granted to the person by the court or (d) any liability against which the company normally maintains insurance for persons other than directors. |
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Corporate Law Issue | Delaware Law | Jersey Law | ||
Appraisal Rights | A shareholder of a Delaware corporation participating in certain major corporate transactions may, under certain circumstances, be entitled to appraisal rights pursuant to which the shareholder may receive cash in the amount of the fair value of the shares held by that shareholder (as determined by a court) in lieu of the consideration the shareholder would otherwise receive in the transaction. | The 1991 Law does not confer upon shareholders any appraisal rights. | ||
Shareholder Suits | Class actions and derivative actions generally are available to the shareholders of a Delaware corporation for, among other things, breach of fiduciary duty, corporate waste and actions not taken in accordance with applicable law. In such actions, the court has discretion to permit the winning party to recover attorneys’ fees incurred in connection with such action. | Under Article 141 of the 1991 Law, a shareholder may apply to court for relief on the ground that a company’s affairs are being conducted or have been conducted in a manner which is unfairly prejudicial to the interests of its shareholders generally or of some part of its shareholders (including at least the shareholder making the application) or that an actual or proposed act or omission by the company (including an act or omission on its behalf) is or would be so prejudicial. There may also be common law personal actions available to shareholders. Under Article 143 of the 1991 Law (which sets out the types of relief a court may grant in relation to an action brought under Article 141 of the 1991 Law), the court may make an order regulating the affairs of a company, requiring a company to refrain from doing or continuing to do an act complained of, authorizing civil proceedings and providing for the purchase of shares by a company or by any of its other shareholders. | ||
Inspection of Books and Records | All shareholders of a Delaware corporation have the right, upon written demand under oath stating the purpose thereof, to inspect or obtain copies of the corporation’s shares ledger and its other books and records for any proper purpose. | The register of shareholders and books containing the minutes of general meetings or of meetings of any class of shareholders of a Jersey company must during business hours be open to the inspection of a shareholder of the company without charge. The register of directors and secretaries must during business hours (subject to such reasonable restrictions as the company may by its articles or in general meeting impose, but so that not less than two hours in each business day be allowed for inspection) be open to the inspection of a shareholder or director of the company without charge. |
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Corporate Law Issue | Delaware Law | Jersey Law | ||
Amendments to Charter | Amendments to the certificate of incorporation of a Delaware corporation require the affirmative vote of the holders of a majority of the outstanding shares entitled to vote thereon or such greater vote as is provided for in the certificate of incorporation; a provision in the certificate of incorporation requiring the vote of a greater number or proportion of the directors or of the holders of any class of shares than is required by Delaware corporate law may not be amended, altered or repealed except by such greater vote. | The memorandum and articles of association of a Jersey company may only be amended by special resolution (being a two-third majority if the articles of association of the company do not specify a greater majority) passed by shareholders in general meeting or by written resolution signed by all the shareholders entitled to vote. |
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Fiscal year: | Period End(1) | Average(2) | High | Low | ||||||||||||
2007 | 43.10 | 45.06 | 46.83 | 42.78 | ||||||||||||
2008 | 40.02 | 40.13 | 43.05 | 38.48 | ||||||||||||
2009 | 50.98 | 45.84 | 51.96 | 39.73 | ||||||||||||
2010 | 44.95 | 47.39 | 50.48 | 44.94 | ||||||||||||
2011 | 44.54 | 45.49 | 47.49 | 43.90 | ||||||||||||
2012 (till April 17, 2011) | 44.26 | 44.27 | 44.46 | 44.05 |
Notes: | ||
(1) | The spot rate at each period end and the average rate for each period may differ from the exchange rates used in the preparation of financial statements included elsewhere in this annual report. | |
(2) | Represents the average of the spot rate on the last day of each month during the period. |
Month: | High | Low | ||||||
October 2010 | 44.55 | 44.05 | ||||||
November 2010 | 45.83 | 43.90 | ||||||
December 2010 | 45.54 | 44.70 | ||||||
January 2011 | 45.92 | 44.59 | ||||||
February 2011 | 45.66 | 45.06 | ||||||
March 2011 | 45.24 | 44.54 | ||||||
April 2011 (till April 17, 2011) | 44.46 | 44.05 |
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Fiscal year: | Period End(1) | Average(2) | High | Low | ||||||||||||
2007 | £ | 0.51 | £ | 0.52 | £ | 0.58 | £ | 0.50 | ||||||||
2008 | 0.50 | 0.50 | 0.52 | 0.47 | ||||||||||||
2009 | 0.70 | 0.58 | 0.73 | 0.50 | ||||||||||||
2010 | 0.66 | 0.63 | 0.69 | 0.59 | ||||||||||||
2011 | 0.62 | 0.64 | 0.70 | 0.61 | ||||||||||||
2012 (till April 17, 2011) | 0.61 | 0.61 | 0.62 | 0.61 |
Notes: | ||
(1) | The spot rate at each period end and the average rate for each period may differ from the exchange rates used in the preparation of financial statements included elsewhere in this annual report. | |
(2) | Represents the average of the spot rate on the last day of each month during the period. |
Month: | High | Low | ||||||
October 2010 | £ | 0.64 | £ | 0.62 | ||||
November 2010 | 0.64 | 0.61 | ||||||
December 2010 | 0.65 | 0.63 | ||||||
January 2011 | 0.65 | 0.62 | ||||||
February 2011 | 0.63 | 0.62 | ||||||
March 2011 | 0.63 | 0.61 | ||||||
April 2011 (till April 17, 2011) | 0.62 | 0.61 |
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• | banks; | |
• | certain financial institutions; | |
• | insurance companies; | |
• | broker dealers; | |
• | traders that elect to mark-to-market; | |
• | tax-exempt entities; | |
• | persons liable for alternative minimum tax; | |
• | real estate investment trusts; | |
• | regulated investment companies; | |
• | US expatriates; | |
• | persons holding ADSs or ordinary shares as part of a straddle, hedging, conversion or integrated transaction; | |
• | persons that actually or constructively own 10% or more of our voting stock; or | |
• | persons holding ADSs or ordinary shares through partnerships or other pass-through entities. |
• | a citizen or resident of the US; | |
• | a corporation (or other entity taxable as a corporation) organized under the laws of the United States, any State thereof or the District of Columbia; | |
• | an estate whose income is subject to US federal income taxation regardless of its source; or | |
• | a trust that (1) is subject to the primary supervision of a court within the United States and the control of one or more US persons for all substantial decisions of the trust or (2) has a valid election in effect under applicable US Treasury regulations to be treated as a US person. |
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• | at least 75% of its gross income is passive income, or | |
• | at least 50% of its assets (determined on the basis of a quarterly average) is attributable to assets that produce or are held for the production of passive income. |
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• | the excess distribution or gain will be allocated ratably over your holding period for the ADSs or ordinary shares, | |
• | the amount allocated to the current taxable year, and any taxable year prior to the first taxable year in which we became a PFIC, will be treated as ordinary income, and | |
• | the amount allocated to each other year will be subject to tax at the highest tax rate in effect for that year and the interest charge normally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year. |
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Type of Service | Fees | |||
1. | Issuance of ADSs, including upon the deposit of ordinary shares or to any person to whom an ADS distribution is made pursuant to share dividends or other free distributions of shares, bonus distributions, share splits or other distributions (except where converted to cash) | $5.00 per 100 ADSs (or any portion thereof) | ||
2. | Surrender of ADSs for cancellation and withdrawal of ordinary shares underlying such ADSs (including cash distributions made pursuant to a cancellation or withdrawal) | $5.00 per 100 ADSs (or any portion thereof) | ||
3. | Distribution of cash proceeds, including cash dividends or sale of rights and other entitlements, not made pursuant to a cancellation or withdrawal) | $2.00 per 100 ADSs (or any portion thereof) | ||
4. | Issuance of ADSs upon the exercise of rights | $5.00 per 100 ADSs (or any portion thereof) | ||
5. | Operations and maintenance costs in administering the ADSs (provided that the total fees assessed under this item, combined with the total fees assessed under item 3 above, should not exceed $0.02 per ADS in any calendar year) | $0.02 per ADS per calendar year |
• | taxes (including applicable interest and penalties) and other governmental charges; | |
• | registration fees for the registration of ordinary shares or other deposited securities with applicable registrar and applicable to transfers of ordinary shares or other deposited securities in connection with the deposit or withdrawal of ordinary shares or other deposited securities; | |
• | certain cable, telex, facsimile and electronic transmission and delivery expenses; | |
• | expenses and charges incurred by the Depositary in the conversion of foreign currency into US dollars; | |
• | fees and expenses incurred by the Depositary in connection with compliance with exchange control regulations and other regulatory requirements applicable to ordinary shares, deposited securities, ADSs and ADRs; | |
• | fees and expenses incurred by the Depositary in connection with the delivery of deposited securities; and | |
• | any additional fees, charges, costs or expenses that may be incurred by the Depositary from time to time. |
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• | pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; | |
• | provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and members of our Board of Directors; and | |
• | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on our financial statements. |
• | augmented the US GAAP expertise of our accounting team in the area of revenue recognition; | ||
• | enhanced the monitoring controls and documentation for the revenue recognition process in the WNS Auto Claims BPO segment; and | ||
• | performed a thorough review of all the contracts in the WNS Auto Claims BPO segment to check for implication and adherence with US GAAP. |
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WNS (Holdings) Limited
April 29, 2011
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Fiscal | ||||||||||||
2011(1) | 2011(2) | 2010(2) | ||||||||||
Audit fees | $ | 499,000 | $ | 200,000 | $ | 822,000 | ||||||
Audit-related fees | 28,250 | 101,000 | 48,200 | |||||||||
Tax fees | 6,000 | — | 27,000 | |||||||||
All other fees | — | — | 17,600 |
Notes: | ||
(1) | Fees of Grant Thornton. | |
(2) | Fees of Ernst & Young. |
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• | Report of Independent Registered Public Accounting Firm Grant Thornton | |
• | Report of Independent Registered Public Accounting Firm Ernst & Young | |
• | Consolidated Balance Sheets as at March 31, 2011 and 2010 | |
• | Consolidated Statements of Income for the years ended March 31, 2011, 2010 and 2009 | |
• | Consolidated Statements of Equity and Comprehensive Income for the years ended March 31, 2011, 2010 and 2009 | |
• | Consolidated Statements of Cash Flows for the years ended March 31, 2011, 2010 and 2009 | |
• | Notes to Consolidated Financial Statements |
1.1 | Memorandum of Association of WNS (Holdings) Limited, as amended — incorporated by reference to Exhibit 3.1 of the Registration Statement on Form F-1 (File No. 333-135590) of WNS (Holdings) Limited, as filed with the Commission on July 3, 2006. | |
1.2 | Articles of Association of WNS (Holdings) Limited, as amended — incorporated by reference to Exhibit 3.2 of the Registration Statement on Form F-1 (File No. 333-135590) of WNS (Holdings) Limited, as filed with the Commission on July 3, 2006. | |
2.1 | Form of Deposit Agreement among WNS (Holdings) Limited, Deutsche Bank Trust Company Americas, as Depositary, and the holders and beneficial owners of American Depositary Shares evidenced by American Depositary Receipts, or ADR, issued thereunder (including the Form of ADR) — incorporated by reference to Exhibit 4.1 of the Registration Statement on Form F-1 (File No. 333-135590) of WNS (Holdings) Limited, as filed with the Commission on July 3, 2006. | |
2.2 | Specimen Ordinary Share Certificate of WNS (Holdings) Limited — incorporated by reference to Exhibit 4.4 of the Registration Statement on Form 8-A (File No. 001-32945) of WNS (Holdings) Limited, as filed with the Commission on July 14, 2006. | |
4.1 | Lease Deed dated January 25, 2006 between DLF Cyber City and WNS Global Services Private Limited — incorporated by reference to Exhibit 4.2 of the Annual Report on Form 20-F for fiscal 2007 (File No. 001-32945) of WNS (Holdings) Limited, as filed with the Commission on June 26, 2007. | |
4.2 | Lease Deed dated March 10, 2005 between DLF Cyber City and WNS Global Services Private Limited — incorporated by reference to Exhibit 10.2 of the Registration Statement on Form F-1 (File No. 333-135590) of WNS (Holdings) Limited, as filed with the Commission on July 3, 2006. | |
4.3 | Leave and Licence Agreement dated November 10, 2005 between Godrej & Boyce Manufacturing Company Limited and WNS Global Services Private Limited with respect to the lease of office premises with an aggregate |
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area of 59,202 square feet at Plant 10 — incorporated by reference to Exhibit 10.5 of the Registration Statement on Form F-1 (File No. 333-135590) of WNS (Holdings) Limited, as filed with the Commission on July 3, 2006. | ||
4.4 | Leave and Licence Agreement dated November 10, 2005 between Godrej & Boyce Manufacturing Company Limited and WNS Global Services Private Limited with respect to the lease of office premises with an area of 4,867 square feet at Plant 10 — incorporated by reference to Exhibit 4.5 of the Annual Report on Form 20-F for fiscal 2007 (File No. 001-32945) of WNS (Holdings) Limited, as filed with the Commission on June 26, 2007. | |
4.5 | Leave and Licence Agreement dated November 10, 2005 between Godrej & Boyce Manufacturing Company Limited and WNS Global Services Private Limited with respect to the lease of office premises with an aggregate area of 20,360 square feet at Plant 10 — incorporated by reference to Exhibit 4.6 of the Annual Report on Form 20-F for fiscal 2007 (File No. 001-32945) of WNS (Holdings) Limited, as filed with the Commission on June 26, 2007. | |
4.6 | Leave and Licence Agreement dated May 31, 2006 between Godrej & Boyce Manufacturing Company Limited and WNS Global Services Private Limited with respect to Plant 11 — incorporated by reference to Exhibit 10.12 of the Registration Statement on Form F-1 (File No. 333-135590) of WNS (Holdings) Limited, as filed with the Commission on July 3, 2006. | |
4.7 | Lease Deed dated December 6, 2010 between DLF Assets Private Limited and WNS Global Services Private Limited with respect to lease of office premises. ** | |
4.8 | Lease Deed dated January 28, 2011 between BCR Real Estate Fund and WNS BPO Services Costa Rica, S.A. with respect to Lease premises. ** | |
4.9 | WNS (Holdings) Limited 2002 Stock Incentive Plan — incorporated by reference to Exhibit 10.10 of the Registration Statement on Form F-1 (File No. 333-135590) of WNS (Holdings) Limited, as filed with the Commission on July 3, 2006. | |
4.10 | Form of the Amended and Restated WNS (Holdings) Limited 2006 Incentive Award Plan — incorporated by reference to Appendix A to WNS (Holdings) Limited’s Proxy Statement which was furnished as Exhibit 99.3 of its Report on Form 6-K (File No. 001-32945), as furnished to the Commission on January 12, 2009. | |
4.11 | Share Sale and Purchase Agreement, dated July 11, 2008, relating to the sale and purchase of shares in Aviva Global Services Singapore Pte. Ltd. between Aviva International Holdings Limited and WNS Capital Investment Limited — incorporated by reference to Exhibit 4.15 of the Annual Report on Form 20-F for fiscal 2008 (File No. 001-32945) of WNS (Holdings) Limited, as filed with the Commission on August 1, 2008. # | |
4.12 | Master Services Agreement, dated July 11, 2008, between Aviva Global Services (Management Services) Private Ltd. and WNS Capital Investment Limited — incorporated by reference to Exhibit 4.16 of the Annual Report on Form 20-F for fiscal 2008 (File No. 001-32945) of WNS (Holdings) Limited, as filed with the Commission on August 1, 2008. # | |
4.13 | Variation Agreement dated August 3, 2009 between Aviva Global Services (Management Services) Private Ltd. and WNS Capital Investment Limited. ** | |
4.14 | Novation and Agreement of Amendment dated March 24, 2011 between Aviva Global Services (Management Services) Private Ltd., WNS Capital Investment Limited and WNS Global Services Private Limited to assign the Master Services Agreement, dated July 11, 2008, between Aviva Global Services (Management Services) Private Ltd. and WNS Capital Investment Limited which was incorporated by reference to Exhibit 4.16 of the Annual Report on Form 20-F for fiscal 2008 (File No. 001-32945) of WNS (Holdings) Limited, as filed with the Commission on August 1, 2008. ** | |
4.15 | Facility Agreement dated July 2, 2010 between WNS (Mauritius) Limited, as borrower, WNS (Holdings) Limited and subsidiary guarantors named there in, the Hongkong and Shanghai Banking Coropration Limited, DBS Bank Ltd and BNP Paribas, as lead arrangers, and others — incorporated by reference to Exhibit 99.1 of the Report on Form 6-K (File No. 001-32945) of WNS (Holdings) Limited, as furnished to the Commission on July 30, 2010. |
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8.1 | List of subsidiaries of WNS (Holdings) Limited.** | |
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. ** | |
12.2 | Certification by the Chief Financial Officer to 17 CFR 240, 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. ** | |
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. ** | |
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. ** | |
15.1 | Consent of Ernst & Young, independent registered public accounting firm. ** | |
15.2 | Consent of Grant Thornton, independent registered public accounting firm. ** | |
15.3 | Auditor letter of Ernst & Young, independent registered public accounting firm, pertaining to Item 16F. ** |
** | Filed herewith. | |
# | Certain portions of this exhibit have been omitted pursuant to a confidential treatment order of the Commission. The omitted portions have been separately filed with the Commission. |
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WNS (HOLDINGS) LIMITED | ||||
By: | /s/ Keshav R. Murugesh | |||
Name: | Keshav R. Murugesh | |||
Title: | Group Chief Executive Officer | |||
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F-2 | ||||
F-3 | ||||
F-4 | ||||
F-5 | ||||
F-6 | ||||
F-8 | ||||
F-9 |
F-1
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(Amounts in thousands, except share and per share data)
As at March 31, | ||||||||
2011 | 2010 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 27,090 | $ | 32,311 | ||||
Bank deposits and marketable securities | 12 | 45 | ||||||
Accounts receivable, net of allowance of $4,397 and $3,152, respectively | 78,030 | 44,082 | ||||||
Accounts receivable — related parties | 556 | 739 | ||||||
Unbilled revenue | 30,837 | 40,892 | ||||||
Funds held for clients | 8,799 | 11,372 | ||||||
Employee receivables | 1,232 | 1,526 | ||||||
Prepaid expenses | 2,307 | 2,101 | ||||||
Prepaid income taxes | 8,502 | 5,602 | ||||||
Deferred tax assets | 3,078 | 1,959 | ||||||
Other current assets | 24,322 | 36,308 | ||||||
Total current assets | 184,765 | 176,937 | ||||||
Investments | 2 | — | ||||||
Goodwill | 94,036 | 90,662 | ||||||
Intangible assets, net | 156,587 | 188,079 | ||||||
Property and equipment, net | 48,592 | 51,700 | ||||||
Other assets | 3,350 | 10,242 | ||||||
Deposits | 7,345 | 7,086 | ||||||
Deferred tax assets | 33,742 | 25,184 | ||||||
TOTAL ASSETS | $ | 528,419 | $ | 549,890 | ||||
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 43,748 | $ | 27,900 | ||||
Current portion of long term debt | 50,000 | 40,000 | ||||||
Short term borrowings | 14,593 | — | ||||||
Accrued employee cost | 31,034 | 30,977 | ||||||
Deferred revenue | 6,962 | 4,891 | ||||||
Income taxes payable | 3,088 | 2,550 | ||||||
Other current liabilities | 45,255 | 67,585 | ||||||
Total current liabilities | 194,680 | 173,903 | ||||||
Long term debt | 43,095 | 95,000 | ||||||
Deferred revenue | 5,976 | 3,515 | ||||||
Other liabilities | 2,978 | 3,727 | ||||||
Accrued pension liability | 4,087 | 3,921 | ||||||
Deferred tax liabilities | 5,953 | 8,343 | ||||||
Derivatives | 431 | 7,600 | ||||||
TOTAL LIABILITIES | 257,200 | 296,009 | ||||||
Commitments and contingencies | ||||||||
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: 44,443,726 and 43,743,953 shares, respectively | 6,955 | 6,848 | ||||||
Additional paid-in-capital | 208,050 | 203,531 | ||||||
Retained earnings | 60,259 | 50,797 | ||||||
Accumulated other comprehensive loss | (4,045 | ) | (7,573 | ) | ||||
Total WNS (Holdings) Limited shareholders’ equity | 271,219 | 253,603 | ||||||
TOTAL LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND EQUITY | $ | 528,419 | $ | 549,890 | ||||
F-4
Table of Contents
(Amounts in thousands, except per share data)
Year ended March 31, | ||||||||||||
2011 | 2010 | 2009 | ||||||||||
Revenue (a) | $ | 616,251 | $ | 582,461 | $ | 520,901 | ||||||
Cost of revenue (a) | 491,847 | 439,248 | 391,808 | |||||||||
Gross profit | 124,404 | 143,213 | 129,093 | |||||||||
Operating expenses: | ||||||||||||
Selling, general and administrative expenses (a) | 80,543 | 86,231 | 75,522 | |||||||||
Amortization of intangible assets | 31,810 | 32,422 | 24,912 | |||||||||
Operating income | 12,051 | 24,560 | 28,659 | |||||||||
Other (income) expenses, net | (6,106 | ) | 7,052 | 5,639 | ||||||||
Interest expense (a) | 8,018 | 13,823 | 11,782 | |||||||||
Income before income taxes | 10,139 | 3,685 | 11,238 | |||||||||
Provision for income taxes | 1,052 | 998 | 3,343 | |||||||||
Net income | 9,087 | 2,687 | 7,895 | |||||||||
Less: Net loss attributable to redeemable noncontrolling interest | (730 | ) | (1,023 | ) | (287 | ) | ||||||
Net income attributable to WNS (Holdings) Limited shareholders | $ | 9,817 | $ | 3,710 | $ | 8,182 | ||||||
Earnings per share of ordinary share | ||||||||||||
Basic | $ | 0.21 | $ | 0.09 | $ | 0.19 | ||||||
Diluted | $ | 0.21 | $ | 0.08 | $ | 0.19 | ||||||
(a) | Includes the following related party amounts: |
Revenue | $ | 3,752 | $ | 2,625 | $ | 3,242 | ||||||
Cost of revenue | 182 | 319 | 280 | |||||||||
Selling, general and administrative expenses | 55 | 9 | 137 | |||||||||
Interest expense | — | — | 269 |
F-5
Table of Contents
YEARS ENDED MARCH 31, 2011, 2010 AND 2009
(Amounts in thousands, except share data)
Accumulated | ||||||||||||||||||||||||||||||||||||
Ordinary shares | Ordinary | other | Total WNS (Holdings) | Redeemable | ||||||||||||||||||||||||||||||||
Par | Additional | shares | Retained | comprehensive | Limited | noncontrolling | Comprehensive | |||||||||||||||||||||||||||||
Number | value | paid-in capital | subscribed | earnings | Income (loss) | shareholders’ equity | interest | income | ||||||||||||||||||||||||||||
Balance at March 31, 2008 | 42,363,100 | $ | 6,622 | $ | 167,459 | $ | 10 | $ | 38,905 | $ | 14,222 | $ | 227,218 | $ | — | |||||||||||||||||||||
Shares issued for exercised options and restricted share units (“RSUs”) | 244,303 | 45 | 953 | (10 | ) | — | — | 988 | — | |||||||||||||||||||||||||||
Share-based compensation charge | — | — | 13,484 | — | — | — | 13,484 | — | ||||||||||||||||||||||||||||
Excess tax benefits (tax deficiencies) from exercise of share-based options and RSUs, net | — | — | 2,226 | — | — | — | 2,226 | — | ||||||||||||||||||||||||||||
Issue of shares by subsidiary to redeemable noncontrolling interest | — | — | — | — | — | — | — | 300 | ||||||||||||||||||||||||||||
Comprehensive loss: | ||||||||||||||||||||||||||||||||||||
Net income (loss) | — | — | — | — | 8,182 | — | 8,182 | (287 | ) | $ | 7,895 | |||||||||||||||||||||||||
Pension adjustment | — | — | — | — | — | (50 | ) | (50 | ) | — | (50 | ) | ||||||||||||||||||||||||
Change in fair value of cash flow hedges* | — | — | — | — | — | (12,667 | ) | (12,667 | ) | — | (12,667 | ) | ||||||||||||||||||||||||
Foreign currency translation | — | — | — | — | — | (51,255 | ) | (51,255 | ) | — | (51,255 | ) | ||||||||||||||||||||||||
Total comprehensive loss | (55,790 | ) | (287 | ) | $ | (56,077 | ) | |||||||||||||||||||||||||||||
Balance at March 31, 2009 | 42,607,403 | $ | 6,667 | $ | 184,122 | $ | — | $ | 47,087 | $ | (49,750 | ) | $ | 188,126 | $ | 13 |
F-6
Table of Contents
(cont’d)
YEARS ENDED MARCH 31, 2011, 2010 AND 2009
(Amounts in thousands, except share data)
Total WNS | ||||||||||||||||||||||||||||||||||||
Accumulated | (Holdings) | |||||||||||||||||||||||||||||||||||
Ordinary shares | Additional | Ordinary | other | Limited | Redeemable | |||||||||||||||||||||||||||||||
Par | paid-in | shares | Retained | comprehensive | shareholders’ | noncontrolling | Comprehensive | |||||||||||||||||||||||||||||
Number | value | capital | subscribed | earnings | Income (loss) | equity | interest | income | ||||||||||||||||||||||||||||
Shares issued for exercised options and restricted share units | 1,136,550 | 181 | 3,752 | — | — | — | 3,933 | — | ||||||||||||||||||||||||||||
Share-based compensation charge | — | — | 15,119 | — | — | — | 15,119 | — | ||||||||||||||||||||||||||||
Excess tax benefits (tax deficiencies) from exercise of share-based options and RSUs, net | — | — | 538 | — | — | — | 538 | — | ||||||||||||||||||||||||||||
Issue of shares by subsidiary to redeemable noncontrolling interest | — | — | — | — | — | — | — | 1,332 | ||||||||||||||||||||||||||||
Comprehensive income (loss): | ||||||||||||||||||||||||||||||||||||
Net income (loss) | — | — | — | — | 3,710 | — | 3,710 | (1,023 | ) | $ | 2,687 | |||||||||||||||||||||||||
Pension adjustment | — | — | — | — | — | 221 | 221 | (30 | ) | 191 | ||||||||||||||||||||||||||
Change in fair value of cash flow hedges, net of tax of $92* | — | — | — | — | — | 20,845 | 20,845 | — | 20,845 | |||||||||||||||||||||||||||
Foreign currency translation | — | — | — | — | — | 21,111 | 21,111 | (14 | ) | 21,097 | ||||||||||||||||||||||||||
Total comprehensive income (loss) | 45,887 | (1,067 | ) | $ | 44,820 | |||||||||||||||||||||||||||||||
Balance at March 31, 2010 | 43,743,953 | $ | 6,848 | $ | 203,531 | $ | — | $ | 50,797 | $ | (7,573 | ) | $ | 253,603 | $ | 278 | ||||||||||||||||||||
Shares issued for exercised options and restricted share units | 699,773 | 107 | 672 | — | — | — | 779 | — | ||||||||||||||||||||||||||||
Share-based compensation charge | — | — | 4,017 | — | — | — | 4,017 | — | ||||||||||||||||||||||||||||
Excess tax benefits (tax deficiencies) from exercise of share-based options and RSUs, net | — | — | (170 | ) | — | — | — | (170 | ) | — | ||||||||||||||||||||||||||
Accretion to redeemable noncontrolling interest | — | — | — | — | (355 | ) | — | (355 | ) | 355 | ||||||||||||||||||||||||||
Comprehensive income (loss): | ||||||||||||||||||||||||||||||||||||
Net income (loss) | — | — | — | — | 9,817 | — | 9,817 | (730 | ) | $ | 9,087 | |||||||||||||||||||||||||
Pension adjustment, net of tax of $33 | — | — | — | — | — | 748 | 748 | 40 | 788 | |||||||||||||||||||||||||||
Change in fair value of cash flow hedges, net of tax of $36* | — | — | — | — | — | (4,770 | ) | (4,770 | ) | 63 | (4,707 | ) | ||||||||||||||||||||||||
Foreign currency translations | — | — | — | — | — | 7,550 | 7,550 | (6 | ) | 7,544 | ||||||||||||||||||||||||||
Total comprehensive income (loss) | 13,345 | (633 | ) | $ | 12,712 | |||||||||||||||||||||||||||||||
Balance at March 31, 2011 | 44,443,726 | $ | 6,955 | $ | 208,050 | $ | — | $ | 60,259 | $ | (4,045 | ) | $ | 271,219 | $ | — | ||||||||||||||||||||
* | net of reclassification adjustment of gain of $4,505, and loss of $3,584 and $2,680 for the years ended March 31, 2011, 2010 and 2009, respectively. |
F-7
Table of Contents
(Amounts in thousands)
Year ended March 31, | ||||||||||||
2011 | 2010 | 2009 | ||||||||||
Cash flows from operating activities | ||||||||||||
Net income | $ | 9,087 | $ | 2,687 | $ | 7,895 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Depreciation and amortization | 51,169 | 53,574 | 46,701 | |||||||||
Share-based compensation | 4,014 | 15,127 | 13,422 | |||||||||
Amortization of debt issue cost | 1,501 | 671 | 450 | |||||||||
Allowance for doubtful accounts | 1,249 | 1,238 | 458 | |||||||||
(Gain) loss on sale of property and equipment | (19 | ) | 19 | 18 | ||||||||
Deferred rent | (16 | ) | 1,016 | 312 | ||||||||
Unrealized gain on marketable securities | — | — | (58 | ) | ||||||||
Unrealized loss (gain) on derivative instruments | 4,612 | (33 | ) | 313 | ||||||||
Deferred income taxes | (12,006 | ) | (11,251 | ) | (8,690 | ) | ||||||
Excess tax benefits from share-based compensation | (569 | ) | (1,825 | ) | (2,226 | ) | ||||||
Other, net | 56 | 20 | — | |||||||||
Changes in operating assets and liabilities | ||||||||||||
Accounts receivable and unbilled revenue | (20,414 | ) | (13,196 | ) | 1,914 | |||||||
Other current assets | 8,102 | 5,613 | 8,046 | |||||||||
Accounts payable | 13,643 | (3,830 | ) | 3,628 | ||||||||
Deferred revenue | 4,381 | (1,051 | ) | 1,010 | ||||||||
Other liabilities | (28,984 | ) | 5,496 | 5,778 | ||||||||
Net cash provided by operating activities | 35,806 | 54,275 | 62,879 | |||||||||
Cash flows from investing activities | ||||||||||||
Acquisitions, net of cash acquired (See Note 3) | (494 | ) | (1,461 | ) | (290,994 | ) | ||||||
Subscription of shares in a non-profit organization | (2 | ) | — | — | ||||||||
Facility and property cost | (15,263 | ) | (13,257 | ) | (22,693 | ) | ||||||
Proceeds from sale of property and equipment, net | 309 | 660 | 342 | |||||||||
Marketable securities and deposits sold (purchased), net | 34 | 9,548 | (2,273 | ) | ||||||||
Net cash used in investing activities | (15,416 | ) | (4,510 | ) | (315,618 | ) | ||||||
Cash flows from financing activities | ||||||||||||
Proceeds from exercise of stock options | 779 | 3,933 | 988 | |||||||||
Excess tax benefits from share-based compensation | 569 | 1,825 | 2,226 | |||||||||
Proceeds from issue of shares by subsidiary to redeemable noncontrolling interest | — | 1,348 | 300 | |||||||||
Repayment of long term debt | (107,750 | ) | (65,000 | ) | — | |||||||
Payment of debt issuance cost | (1,093 | ) | (87 | ) | (1,197 | ) | ||||||
Proceeds from long term debt | 64,895 | — | 200,000 | |||||||||
Proceeds from (repayments of) short term borrowings, net | 13,608 | (4,128 | ) | (2,894 | ) | |||||||
Principal payments under capital leases | — | (57 | ) | (183 | ) | |||||||
Net cash (used in) provided by financing activities | (28,992 | ) | (62,166 | ) | 199,240 | |||||||
Effect of exchange rate changes on cash and cash equivalents | 3,381 | 5,781 | (10,268 | ) | ||||||||
Net change in cash and cash equivalents | (5,221 | ) | (6,620 | ) | (63,767 | ) | ||||||
Cash and cash equivalents at beginning of year | 32,311 | 38,931 | 102,698 | |||||||||
Cash and cash equivalents at end of year | $ | 27,090 | $ | 32,311 | $ | 38,931 | ||||||
Supplemental disclosure of cash flow information: | ||||||||||||
Cash paid for interest | $ | 11,392 | $ | 10,447 | $ | 7,856 | ||||||
Cash paid for income taxes | 13,711 | 9,864 | 8,932 | |||||||||
Assets acquired under capital lease | — | — | 52 | |||||||||
Cash flows from related parties | 3,580 | 2,106 | (267 | ) |
F-8
Table of Contents
MARCH 31, 2011
(Amounts in thousands, except share and per share data)
F-9
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)
MARCH 31, 2011
(Amounts in thousands, except share and per share data)
F-10
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)
MARCH 31, 2011
As at March 31, | ||||||||
2011 | 2010 | |||||||
Fixed deposits with banks | $ | 5,459 | $ | 6,991 | ||||
Other cash and bank balances | 21,631 | 25,320 | ||||||
Cash and cash equivalents | $ | 27,090 | $ | 32,311 | ||||
Year ended March 31, | ||||||||||||
2011 | 2010 | 2009 | ||||||||||
Balance at the beginning of the year | $ | 3,152 | $ | 1,935 | $ | 1,784 | ||||||
Charged to operations | 1,794 | 1,666 | 535 | |||||||||
Write-off, net of collections | (183 | ) | (20 | ) | (218 | ) | ||||||
Reversal | (510 | ) | (428 | ) | (77 | ) | ||||||
Translation adjustment | 144 | (1 | ) | (89 | ) | |||||||
Balance at the end of the year | $ | 4,397 | $ | 3,152 | $ | 1,935 | ||||||
F-11
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)
MARCH 31, 2011
Asset description | Asset life (in years) | |||
Buildings | 20 | |||
Computers and software | 3-4 | |||
Furniture, fixtures and office equipment | 4-5 | |||
Vehicles | 3 | |||
Leasehold improvements | Lesser of estimated useful life or lease term |
F-12
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)
MARCH 31, 2011
Weighted average | ||||
amortization period (in | ||||
Asset description | months) | |||
Customer contracts | 100 | |||
Customer relationship | 90 | |||
Intellectual property rights | 36 | |||
Leasehold benefits | 48 | |||
Covenant not-to-compete | 48 |
F-13
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)
MARCH 31, 2011
F-14
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)
MARCH 31, 2011
Year ended March 31, | ||||||||||||
2011 | 2010 | 2009 | ||||||||||
Numerator: | ||||||||||||
Net income attributable to WNS (Holdings) Limited shareholders | $ | 9,817 | $ | 3,710 | $ | 8,182 | ||||||
Impact on net income attributable to WNS (Holdings) Limited shareholders through changes in redeemable noncontrolling interest | (355 | ) | — | — | ||||||||
9,462 | 3,710 | 8,182 | ||||||||||
Denominator: | ||||||||||||
Basic weighted average ordinary shares outstanding | 44,260,713 | 43,093,316 | 42,520,404 | |||||||||
Dilutive impact of stock options and Restricted Share Units | 760,120 | 1,080,812 | 588,195 | |||||||||
Diluted weighted average ordinary shares outstanding | 45,020,833 | 44,174,128 | 43,108,599 | |||||||||
F-15
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)
MARCH 31, 2011
F-16
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)
MARCH 31, 2011
Amount | ||||
Cash | $ | 17,118 | ||
Accounts receivable | 16,172 | |||
Other assets | 12,076 | |||
Property and equipment | 15,912 | |||
Intangible assets | ||||
— Customer relationships | 46,301 | |||
— Customer contracts | 177,247 | |||
— Leasehold benefits | 1,835 | |||
Current liabilities | (25,472 | ) | ||
Other liabilities | (3,128 | ) | ||
Deferred tax liability | (8,968 | ) | ||
Total purchase consideration | $ | 249,093 | ||
F-17
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)
MARCH 31, 2011
F-18
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)
MARCH 31, 2011
As at March 31, | ||||||||
2011 | 2010 | |||||||
Building | $ | 12,673 | $ | 12,424 | ||||
Computers and software | 66,482 | 59,828 | ||||||
Furniture, fixtures and office equipment | 56,717 | 51,269 | ||||||
Vehicles | 2,327 | 2,299 | ||||||
Leasehold improvements | 44,443 | 40,193 | ||||||
Capital work-in-progress | 5,592 | 5,492 | ||||||
188,234 | 171,505 | |||||||
Accumulated depreciation and amortization | (139,642 | ) | (119,805 | ) | ||||
Property and equipment, net | $ | 48,592 | $ | 51,700 | ||||
F-19
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)
MARCH 31, 2011
March 31, 2011 | ||||||||||||
Accumulated | ||||||||||||
Gross | amortization | Net | ||||||||||
Customer contracts | $ | 190,211 | $ | 70,819 | $ | 119,392 | ||||||
Customer relationships | 65,508 | 29,135 | 36,373 | |||||||||
Intellectual property rights | 4,974 | 4,812 | 162 | |||||||||
Leasehold benefits | 1,835 | 1,248 | 587 | |||||||||
Covenant not-to-compete | 353 | 280 | 73 | |||||||||
$ | 262,881 | $ | 106,294 | $ | 156,587 | |||||||
March 31, 2010 | ||||||||||||
Accumulated | ||||||||||||
Gross | amortization | Net | ||||||||||
Customer contracts | $ | 189,961 | $ | 49,300 | $ | 140,661 | ||||||
Customer relationships | 64,891 | 19,962 | 44,929 | |||||||||
Intellectual property rights | 4,660 | 3,344 | 1,316 | |||||||||
Leasehold benefits | 1,835 | 789 | 1,046 | |||||||||
Covenant not-to-compete | 337 | 210 | 127 | |||||||||
$ | 261,684 | $ | 73,605 | $ | 188,079 | |||||||
Year ending March 31, | Amount | |||
2012 | $ | 30,864 | ||
2013 | 28,729 | |||
2014 | 26,892 | |||
2015 | 26,826 | |||
2016 | 26,826 | |||
Thereafter | 16,450 | |||
$ | 156,587 | |||
F-20
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)
MARCH 31, 2011
WNS | ||||||||||||
WNS | Auto | |||||||||||
Global | Claims | Total | ||||||||||
Balance as at March 31, 2009 | $ | 52,063 | $ | 29,616 | $ | 81,679 | ||||||
Goodwill arising from earn-out paid for BizAps acquisition | 1,111 | — | 1,111 | |||||||||
Foreign currency translation | 6,341 | 1,531 | 7,872 | |||||||||
Balance as at March 31, 2010 | $ | 59,515 | $ | 31,147 | $ | 90,662 | ||||||
Goodwill arising from earn-out paid for BizAps acquisition | 471 | — | 471 | |||||||||
Foreign currency translation | 806 | 2,097 | 2,903 | |||||||||
Balance as at March 31, 2011 | $ | 60,792 | $ | 33,244 | $ | 94,036 | ||||||
Year ended March 31, | ||||||||||||
2011 | 2010 | 2009 | ||||||||||
Domestic | $ | (868 | ) | $ | (2,515 | ) | $ | (5,729 | ) | |||
Foreign | 11,007 | 6,200 | 16,967 | |||||||||
Income before income taxes | $ | 10,139 | $ | 3,685 | $ | 11,238 | ||||||
F-21
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)
MARCH 31, 2011
Year ended March 31, | ||||||||||||
2011 | 2010 | 2009 | ||||||||||
Current taxes | ||||||||||||
Domestic taxes | $ | — | $ | — | $ | — | ||||||
Foreign taxes | 13,058 | 12,249 | 12,033 | |||||||||
13,058 | 12,249 | 12,033 | ||||||||||
Deferred taxes | ||||||||||||
Domestic taxes | — | — | — | |||||||||
Foreign taxes | (12,006 | ) | (11,251 | ) | (8,690 | ) | ||||||
$ | 1,052 | $ | 998 | $ | 3,343 | |||||||
Year ended March 31, | ||||||||||||
2011 | 2010 | 2009 | ||||||||||
Net income before taxes | $ | 10,139 | $ | 3,685 | $ | 11,238 | ||||||
Enacted tax rates in Jersey | 0 | % | 0 | % | 0 | % | ||||||
Statutory income tax | — | — | — | |||||||||
Provision due to: | ||||||||||||
Foreign minimum alternative taxes and state taxes | 57 | 107 | 213 | |||||||||
Differential foreign tax rates | 958 | 853 | 3,086 | |||||||||
Others (permanent differences) | 37 | 38 | 44 | |||||||||
Provision for income taxes | $ | 1,052 | $ | 998 | $ | 3,343 | ||||||
F-22
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)
MARCH 31, 2011
Year ended March 31, | ||||||||
2011 | 2010 | |||||||
Deferred tax assets: | ||||||||
Property and equipment | $ | 11,254 | $ | 9,552 | ||||
Net operating loss carry forward | 6,380 | 6,290 | ||||||
Accruals deductible on actual payment | 3,325 | 1,260 | ||||||
Share-based compensation | 1,773 | 3,418 | ||||||
Minimum alternate tax | 20,398 | 12,904 | ||||||
Others | 603 | 250 | ||||||
Total deferred tax assets | 43,733 | 33,674 | ||||||
Less: Valuation allowances (a) | (5,782 | ) | (5,073 | ) | ||||
Deferred tax assets, net of valuation allowances | 37,951 | 28,601 | ||||||
Deferred tax liabilities: | ||||||||
Property and equipment | (26 | ) | (26 | ) | ||||
Intangibles | (6,674 | ) | (9,718 | ) | ||||
Others | (384 | ) | (57 | ) | ||||
Total deferred tax liabilities | (7,084 | ) | (9,801 | ) | ||||
Net deferred tax assets | $ | 30,867 | $ | 18,800 | ||||
(a) | The change in valuation allowance of $709 is the result of valuation allowance recognized on deferred tax assets on net operating losses of a foreign jurisdiction for the year ended March 31, 2011, where the Company believes that based on available evidence, it is more likely than not, that the asset will not be realized. |
F-23
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)
MARCH 31, 2011
Year ended March 31, | ||||||||||||
2011 | 2010 | 2009 | ||||||||||
Opening balance | $ | 19,970 | $ | 16,953 | $ | 17,038 | ||||||
(Decrease) increase related to prior year tax positions | (614 | ) | 147 | 81 | ||||||||
Increase on account of business combinations | — | — | 106 | |||||||||
Increase related to current year tax positions | 100 | 2,296 | 4,519 | |||||||||
Effect of exchange rate changes | 126 | 574 | (4,791 | ) | ||||||||
Closing balance | $ | 19,582 | $ | 19,970 | $ | 16,953 | ||||||
F-24
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)
MARCH 31, 2011
Year ended March 31, | ||||||||
2011 | 2010 | |||||||
Payments in advance of services | $ | 4,356 | $ | 5,234 | ||||
Advance billings | 6,546 | 1,615 | ||||||
Claims handling | 1,399 | 862 | ||||||
Other | 637 | 695 | ||||||
$ | 12,938 | $ | 8,406 | |||||
F-25
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)
MARCH 31, 2011
(Amounts in thousands, except share and per share data)
Year ended March 31, | ||||||||||||
2011 | 2010 | 2009 | ||||||||||
India | $ | 5,292 | $ | 5,326 | $ | 5,361 | ||||||
Philippines | 37 | 25 | — | |||||||||
Sri Lanka | 324 | 350 | 339 | |||||||||
United Kingdom | 781 | 515 | 609 | |||||||||
United States | 328 | 492 | 519 | |||||||||
$ | 6,762 | $ | 6,708 | $ | 6,828 | |||||||
Year ended March 31, | ||||||||
2011 | 2010 | |||||||
Change in projected benefit obligations | ||||||||
Obligation at beginning of the year | $ | 4,988 | $ | 3,505 | ||||
Foreign currency translation | 75 | 473 | ||||||
Service cost | 1,405 | 1,128 | ||||||
Interest cost | 447 | 349 | ||||||
Benefits paid | (780 | ) | (278 | ) | ||||
Plan Amendments | 262 | — | ||||||
Actuarial (gain) loss | (830 | ) | (189 | ) | ||||
Benefit obligation at end of the year | $ | 5,567 | $ | 4,988 | ||||
Change in plan assets | ||||||||
Plan assets at beginning of the year | $ | 231 | $ | 355 | ||||
Foreign currency translation | — | 37 | ||||||
Actual return | (9 | ) | 9 | |||||
Actual contributions | 673 | 108 | ||||||
Benefits paid | (780 | ) | (278 | ) | ||||
Plan assets at end of the year | $ | 115 | $ | 231 | ||||
Accrued pension liability | $ | (5,452 | ) | $ | (4,757 | ) | ||
Current | (1,365 | ) | (836 | ) | ||||
Non-current | (4,087 | ) | (3,921 | ) | ||||
Net amount recognized | (5,452 | ) | (4,757 | ) | ||||
Accumulated benefit obligation at end of the year | $ | 3,806 | $ | 3,317 | ||||
F-26
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)
MARCH 31, 2011
(Amounts in thousands, except share and per share data)
Year ended March 31, | ||||||||||||
2011 | 2010 | 2009 | ||||||||||
Service cost | $ | 1,405 | $ | 1,128 | $ | 838 | ||||||
Interest cost | 447 | 349 | 277 | |||||||||
Expected return on plan assets | (17 | ) | (77 | ) | (51 | ) | ||||||
Amortization of prior service cost | 78 | — | — | |||||||||
Actuarial loss | 92 | 205 | 238 | |||||||||
Net periodic gratuity cost for the year | $ | 2,005 | $ | 1,605 | $ | 1,302 | ||||||
Year ended March 31, | ||||||||||||
2011 | 2010 | 2009 | ||||||||||
Net actuarial gain (loss) | $ | 721 | $ | 109 | $ | (435 | ) | |||||
Amortization of net actuarial loss | 88 | 205 | 235 | |||||||||
Foreign currency translation | 18 | (93 | ) | 150 | ||||||||
Total | $ | 827 | $ | 221 | $ | (50 | ) | |||||
Year ended March 31, | ||||||
2011 | 2010 | 2009 | ||||
Discount rate | 9%-10.42% | 7%-10.57% | 7%-9.95% | |||
Rate of increase in compensation levels | 8%-10% | 7%-15% for 5 years and 7%- 10% thereafter | 10%-15% for 5 years and 9% thereafter | |||
Rate of return on plan assets | 7.5% | 7.5% | 7.5% |
F-27
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)
MARCH 31, 2011
(Amounts in thousands, except share and per share data)
Year ending March 31, | Amount | |||
2012 | $ | 1,479 | ||
2013 | 1,593 | |||
2014 | 1,645 | |||
2015 | 1,652 | |||
2016 | 1,720 | |||
2017-2021 | 6,209 | |||
$ | 14,298 | |||
F-28
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)
MARCH 31, 2011
(Amounts in thousands, except share and per share data)
Year ended March 31, | ||||||||
2011 | 2010 | |||||||
Cumulative translation adjustments | $ | (3,984 | ) | $ | (11,534 | ) | ||
Unrealized gain (loss) on cash flow hedges, net of tax | (355 | ) | 4,415 | |||||
Net actuarial gain (loss) on pension plans, net of tax | 294 | (454 | ) | |||||
Total | $ | (4,045 | ) | $ | (7,573 | ) | ||
F-29
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)
MARCH 31, 2011
(Amounts in thousands, except share and per share data)
Year ended March 31, | ||||||||||||
2011 | 2010 | 2009 | ||||||||||
Share-based compensation recorded in | ||||||||||||
Cost of revenue | $ | 938 | $ | 3,730 | $ | 3,647 | ||||||
Selling, general and administrative expenses | 3,076 | 11,397 | 9,775 | |||||||||
Total share-based compensation | $ | 4,014 | $ | 15,127 | $ | 13,422 | ||||||
Recognized income tax benefit | $ | (478 | ) | $ | (2,563 | ) | $ | (3,002 | ) | |||
F-30
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)
MARCH 31, 2011
(Amounts in thousands, except share and per share data)
Weighted average | Weighted average remaining contract | Aggregate | ||||||||||||||
exercise | term (in | intrinsic | ||||||||||||||
Shares | price | years) | value | |||||||||||||
Outstanding at April 1, 2010 | 1,198,271 | $ | 17.71 | 6.02 | $ | 1,785 | ||||||||||
Granted | — | — | ||||||||||||||
Exercised | (127,904 | ) | 5.41 | |||||||||||||
Forfeited | (3,381 | ) | 23.48 | |||||||||||||
Lapsed | (51,736 | ) | 6.02 | |||||||||||||
Outstanding at March 31, 2011 | 1,015,250 | $ | 19.84 | 5.24 | $ | 796 | ||||||||||
Options vested and expected to vest | 1,015,250 | $ | 19.84 | 5.24 | $ | 796 | ||||||||||
Options exercisable | 1,015,250 | $ | 19.84 | 5.24 | $ | 796 |
F-31
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)
MARCH 31, 2011
(Amounts in thousands, except share and per share data)
Weighted | Weighted average remaining contract | Aggregate | ||||||||||||||
average | term (in | intrinsic | ||||||||||||||
Shares | fair value | years) | value | |||||||||||||
Outstanding as at April 1, 2010 | 1,853,597 | $ | 12.81 | 7.50 | $ | 19,889 | ||||||||||
Granted | 433,872 | 9.17 | ||||||||||||||
Vested/exercised | (534,465 | ) | 15.26 | |||||||||||||
Forfeited | (414,779 | ) | 10.85 | |||||||||||||
Outstanding as at March 31, 2011 | 1,338,225 | $ | 11.22 | 8.37 | $ | 14,118 | ||||||||||
RSUs expected to vest | 1,178,763 | $ | 11.22 | 8.37 | $ | 12,436 | ||||||||||
RSUs exercisable | 291,201 | $ | 13.08 | 7.47 | $ | 3,072 |
Year ended March 31, | ||||||||||||
2011 | 2010 | 2009 | ||||||||||
Expected life | 2.0 years | 2.3 years | 2.4 years | |||||||||
Risk free interest rates | 0.5 | % | 1.3 | % | 2.2 | % | ||||||
Volatility | 68.8 | % | 57.4 | % | 33.7 | % | ||||||
Dividend yield | 0.0 | % | 0.0 | % | 0.0 | % |
F-32
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)
MARCH 31, 2011
(Amounts in thousands, except share and per share data)
Weighted | Weighted average remaining contract | Aggregate | ||||||||||||||
average | term (in | intrinsic | ||||||||||||||
Shares | fair value | years) | value | |||||||||||||
Outstanding at April 1, 2010 | — | $ | — | — | $ | — | ||||||||||
Granted | 316,409 | 8.98 | ||||||||||||||
Vested/exercised | — | — | ||||||||||||||
Forfeited | (31,250 | ) | 8.81 | |||||||||||||
Outstanding at March 31, 2011 | 285,159 | $ | 9.00 | 9.42 | $ | 3,008 | ||||||||||
PSUs expected to vest | 241,729 | $ | 9.00 | 9.42 | $ | 2,550 | ||||||||||
PSUs exercisable | — | $ | — | — | $ | — |
Year ended | ||||
March 31, | ||||
2011 | ||||
Expected life | 3.2 years | |||
Risk free interest rates | 0.8 | % | ||
Volatility | 69.3 | % | ||
Dividend yield | 0.0 | % |
F-33
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)
MARCH 31, 2011
(Amounts in thousands, except share and per share data)
Name of the related party | Relationship | |
Warburg Pincus and its affiliates | Principal shareholder | |
The Indian Hotels Co Limited (Indian Hotels) | A company having a director in common with WNS Holdings | |
Datacap Software Private Limited (“Datacap”) | A company of which a member of management is a principal shareholder | |
HDFC Limited | A company having a director in common with WNS Holdings | |
Mahindra & Mahindra Limited | A company having a director in common with WNS Holdings | |
Singapore Telecommunications Limited (“Singtel”) (up to July 30, 2010) | A company having a director in common with WNS Holdings | |
Students in free Enterprise (SIFE) | A company having a director in common with WNS Holdings |
Amount receivable (payable) | ||||||||||||||||||||
Year ended March 31, | at March 31, | |||||||||||||||||||
Nature of transaction/related party | 2011 | 2010 | 2009 | 2011 | 2010 | |||||||||||||||
Revenue | ||||||||||||||||||||
Warburg Pincus and its affiliates | 3,752 | 2,625 | 3,242 | 556 | 739 | |||||||||||||||
Cost of revenue | ||||||||||||||||||||
Warburg Pincus and its affiliates | 20 | — | 1 | — | — | |||||||||||||||
Datacap | 1 | — | 1 | — | — | |||||||||||||||
Singtel | 161 | 319 | 274 | — | — | |||||||||||||||
Mahindra & Mahindra Limited | — | — | 4 | — | — | |||||||||||||||
Selling, general and administrative expense | ||||||||||||||||||||
Warburg Pincus and its affiliates | — | — | 108 | — | — | |||||||||||||||
SIFE | 55 | — | — | — | — | |||||||||||||||
Indian Hotels | — | 4 | — | — | — | |||||||||||||||
Datacap | — | 5 | 29 | — | — | |||||||||||||||
Property and equipment additions | ||||||||||||||||||||
Warburg Pincus and its affiliates | — | — | 2 | — | — | |||||||||||||||
Datacap | — | 2 | 5 | — | — | |||||||||||||||
Other income | ||||||||||||||||||||
Warburg Pincus and its affiliates | — | — | — | — | — | |||||||||||||||
Interest expenses | — | — | ||||||||||||||||||
HDFC Limited | — | — | 269 | — | — |
F-34
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)
MARCH 31, 2011
(Amounts in thousands, except share and per share data)
Year ended March 31, | ||||||||||||
2011 | 2010 | 2009 | ||||||||||
Foreign exchange loss (gain) , net | $ | 2,444 | $ | 5,098 | $ | (1,697 | ) | |||||
Interest income | (331 | ) | (452 | ) | (2,048 | ) | ||||||
Ineffective portion of interest rate swap | 3,229 | — | — | |||||||||
Forward/ option contract (gain) loss | (11,096 | ) | 3,652 | 10,007 | ||||||||
Others | (352 | ) | (1,246 | ) | (623 | ) | ||||||
Total | $ | (6,106 | ) | $ | 7,052 | $ | 5,639 | |||||
F-35
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)
MARCH 31, 2011
(Amounts in thousands, except share and per share data)
Year ended March 31, 2011 | ||||||||||||||||
WNS Global | WNS Auto Claims | Inter | ||||||||||||||
BPO | BPO | segments(a) | Total | |||||||||||||
Revenue from external customers | $ | 331,822 | $ | 284,429 | $ | — | $ | 616,251 | ||||||||
Segment revenue | $ | 332,647 | $ | 284,429 | $ | (825 | ) | $ | 616,251 | |||||||
Payments to repair centers | — | 246,850 | — | 246,850 | ||||||||||||
Revenue less repair payments | 332,647 | 37,579 | (825 | ) | 369,401 | |||||||||||
Depreciation | 18,043 | 1,316 | — | 19,359 | ||||||||||||
Other costs | 275,694 | 27,298 | (825 | ) | 302,167 | |||||||||||
Segment operating income | 38,910 | 8,965 | — | 47,875 | ||||||||||||
Other income, net | (5,758 | ) | (348 | ) | — | (6,106 | ) | |||||||||
Interest expense | 8,016 | 2 | — | 8,018 | ||||||||||||
Segment income before income taxes | 36,652 | 9,311 | — | 45,963 | ||||||||||||
(Benefit) provision for income taxes | (547 | ) | 1,599 | — | 1,052 | |||||||||||
Segment income | 37,199 | 7,712 | — | 44,911 | ||||||||||||
Unallocated share-based compensation expense | 4,014 | |||||||||||||||
Amortization of intangible assets | 31,810 | |||||||||||||||
Net income | 9,087 | |||||||||||||||
Less: Net loss attributable to redeemable noncontrolling interest | (730 | ) | ||||||||||||||
Net income attributable to WNS (Holdings) Limited shareholders | $ | 9,817 | ||||||||||||||
Capital expenditures | $ | 13,222 | $ | 2,041 | $ | — | $ | 15,263 | ||||||||
Segment assets, net of eliminations | $ | 405,411 | $ | 123,008 | $ | — | $ | 528,419 | ||||||||
Two customers in the WNS Auto Claims BPO segment and one customer in WNS Global BPO accounted for 16.4%, 13.2% and 12.2%, respectively, of the Company’s total revenue for the year ended March 31, 2011. The receivables from these three customers comprised nil, 7.6% and 10.3% of the Company’s total accounts receivables, respectively, as at March 31, 2011. |
(a) | This represents invoices raised by WNS Global BPO on WNS Auto Claims BPO on an arm’s length basis for business process outsourcing services rendered by the former to the latter. |
F-36
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)
MARCH 31, 2011
(Amounts in thousands, except share and per share data)
Year ended March 31, 2010 | ||||||||||||||||
WNS Global | WNS Auto Claims | Inter | ||||||||||||||
BPO | BPO | segments(a) | Total | |||||||||||||
Revenue from external customers | $ | 340,411 | $ | 242,050 | $ | — | $ | 582,461 | ||||||||
Segment revenue | $ | 341,477 | $ | 242,050 | $ | (1,066 | ) | $ | 582,461 | |||||||
Payments to repair centers | — | 191,923 | — | 191,923 | ||||||||||||
Revenue less repair payments | 341,477 | 50,127 | (1,066 | ) | 390,538 | |||||||||||
Depreciation | 20,094 | 1,058 | — | 21,152 | ||||||||||||
Other costs | 258,850 | 39,034 | (1,066 | ) | 296,818 | |||||||||||
Segment operating income | 62,533 | 10,035 | — | 72,568 | ||||||||||||
Other expense (income),net | 9,106 | (2,054 | ) | — | 7,052 | |||||||||||
Interest expense | 13,759 | 64 | — | 13,823 | ||||||||||||
Segment income before income taxes | 39,668 | 12,025 | — | 51,693 | ||||||||||||
(Benefit) provision for income taxes | (1,857 | ) | 2,855 | — | 998 | |||||||||||
Segment income | 41,525 | 9,170 | — | 50,695 | ||||||||||||
Unallocated share-based compensation expense (Including related fringe benefit taxes — $459) | 15,586 | |||||||||||||||
Amortization of intangible assets | 32,422 | |||||||||||||||
Net income | 2,687 | |||||||||||||||
Less: Net loss attributable to redeemable noncontrolling interest | (1,023 | ) | ||||||||||||||
Net income attributable to WNS (Holdings) Limited shareholders | $ | 3,710 | ||||||||||||||
Capital expenditures | $ | 11,974 | $ | 1,283 | $ | — | $ | 13,257 | ||||||||
Segment assets, net of eliminations | $ | 443,575 | $ | 106,315 | $ | — | $ | 549,890 | ||||||||
Two customers in the WNS Auto Claims BPO segment and one customer in WNS Global BPO accounted for 13.4%, 12.6% and 15.5%, respectively, of the Company’s total revenue for the year ended March 31, 2010. The receivables from these three customers comprised 10.4%, 7.8% and 9.2% of the Company’s total accounts receivables, respectively, as at March 31, 2010. |
(a) | This represents invoices raised by WNS Global BPO on WNS Auto Claims BPO on an arm’s length basis for business process outsourcing services rendered by the former to the latter. |
F-37
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)
MARCH 31, 2011
(Amounts in thousands, except share and per share data)
Year ended March 31, 2009 | ||||||||||||||||
WNS | WNS Auto | |||||||||||||||
Global | Claims | Inter | ||||||||||||||
BPO | BPO | segments(a) | Total | |||||||||||||
Revenue from external customers | $ | 322,176 | $ | 198,725 | $ | — | $ | 520,901 | ||||||||
Segment revenue | $ | 322,917 | $ | 198,725 | $ | (741 | ) | $ | 520,901 | |||||||
Payments to repair centers | — | 135,874 | — | 135,874 | ||||||||||||
Revenue less repair payments | 322,917 | 62,851 | (741 | ) | 385,027 | |||||||||||
Depreciation | 20,930 | 859 | — | 21,789 | ||||||||||||
Other costs | 251,044 | 45,496 | (741 | ) | 295,799 | |||||||||||
Segment operating income | 50,943 | 16,496 | — | 67,439 | ||||||||||||
Other expense (income), net | 6,099 | (460 | ) | 5,639 | ||||||||||||
Interest expense | 11,192 | 590 | 11,782 | |||||||||||||
Segment income before income taxes | 33,652 | 16,366 | 50,018 | |||||||||||||
(Benefit) provision for income taxes | (305 | ) | 3,648 | 3,343 | ||||||||||||
Segment income | 33,957 | 12,718 | 46,675 | |||||||||||||
Unallocated share-based compensation expense (Including related fringe benefit taxes — $446) | 13,868 | |||||||||||||||
Amortization of intangible assets | 24,912 | |||||||||||||||
Net income | 7,895 | |||||||||||||||
Less: Net loss attributable to redeemable noncontrolling interest | (287 | ) | ||||||||||||||
Net income attributable to WNS (Holdings) Limited shareholders | $ | 8,182 | ||||||||||||||
Capital expenditures | $ | 21,227 | $ | 1,466 | $ | — | $ | 22,693 | ||||||||
Segment assets, net of eliminations | $ | 471,258 | $ | 90,569 | $ | — | $ | 561,827 | ||||||||
Two customers in the WNS Auto Claims BPO segment and one customer in WNS Global BPO accounted for 15.3%, 11.0% and 15.5%, respectively, of the Company’s total revenue for the year ended March 31, 2009. The receivables from these three customers comprised 8.7%, 4.9% and 12.1% of the Company’s total accounts receivables, respectively, as at March 31, 2009. |
(a) | This represents invoices raised by WNS Global BPO on WNS Auto Claims BPO at an arm’s length basis for business process outsourcing services rendered by the former to the latter. |
F-38
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)
MARCH 31, 2011
(Amounts in thousands, except share and per share data)
Year ended March 31, | ||||||||||||
2011 | 2010 | 2009 | ||||||||||
UK | $ | 375,046 | $ | 339,219 | $ | 291,218 | ||||||
North America | 136,772 | 142,699 | 130,469 | |||||||||
Europe (excludes UK) | 98,073 | 97,297 | 97,713 | |||||||||
Other | 6,360 | 3,246 | 1,501 | |||||||||
$ | 616,251 | $ | 582,461 | $ | 520,901 | |||||||
As at March 31, | ||||||||
2011 | 2010 | |||||||
UK | $ | 3,653 | $ | 2,352 | ||||
India | 36,654 | 43,479 | ||||||
US | 387 | 674 | ||||||
Other | 7,898 | 5,195 | ||||||
$ | 48,592 | $ | 51,700 | |||||
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 |
F-39
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)
MARCH 31, 2011
(Amounts in thousands, except share and per share data)
Fair value measurement at reporting date using | ||||||||||||||||
Quoted prices | ||||||||||||||||
in | ||||||||||||||||
active | Significant | |||||||||||||||
markets | other | Significant | ||||||||||||||
for identical | observable | unobservable | ||||||||||||||
March 31, | assets | inputs | inputs | |||||||||||||
Description | 2011 | (Level 1) | (Level 2) | (Level 3) | ||||||||||||
Assets | ||||||||||||||||
Derivative contracts | ||||||||||||||||
— current | $ | 11,182 | $ | — | $ | 11,182 | $ | — | ||||||||
— non current | 2,282 | — | 2,282 | — | ||||||||||||
Total Assets | $ | 13,464 | $ | — | $ | 13,464 | $ | — | ||||||||
Liabilities | ||||||||||||||||
Derivative contracts | ||||||||||||||||
— current | $ | 4,323 | $ | — | $ | 4,323 | $ | — | ||||||||
— non current | 431 | — | 431 | — | ||||||||||||
Total liabilities | $ | 4,754 | $ | — | $ | 4,754 | $ | — | ||||||||
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 | $ | — | ||||||||
F-40
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)
MARCH 31, 2011
(Amounts in thousands, except share and per share data)
F-41
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)
MARCH 31, 2011
(Amounts in thousands, except share and per share data)
For fiscal year ending March 31 | Amount | |||
2012 | $ | 50,000 | ||
2013 | 42,028 | |||
2014 | 1,067 |
F-42
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)
MARCH 31, 2011
(Amounts in thousands, except share and per share data)
F-43
Table of Contents
\
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)
MARCH 31, 2011
(Amounts in thousands, except share and per share data)
March 31, 2011 | ||||||||||||||||
Foreign | ||||||||||||||||
exchange | Foreign | Interest | ||||||||||||||
forward | exchange | rate | Total | |||||||||||||
contracts | option contracts | contracts | derivatives | |||||||||||||
Assets | ||||||||||||||||
Derivatives not designated as hedging instruments | ||||||||||||||||
Other current assets | $ | 2,586 | $ | 1,206 | — | $ | 3,792 | |||||||||
Other assets — non current | 13 | 920 | — | 933 | ||||||||||||
Total | $ | 2,599 | $ | 2,126 | — | $ | 4,725 | |||||||||
Derivatives designated as hedging instruments | ||||||||||||||||
Other current assets | $ | 3,186 | $ | 4,204 | — | $ | 7,390 | |||||||||
Other assets — non current | 123 | 1,226 | — | 1,349 | ||||||||||||
Total | $ | 3,309 | $ | 5,430 | — | $ | 8,739 | |||||||||
Total assets | $ | 5,908 | $ | 7,556 | — | $ | 13,464 | |||||||||
Liabilities | ||||||||||||||||
Derivatives not designated as hedging instruments | ||||||||||||||||
Other current liabilities | $ | 1,802 | — | — | $ | 1,802 | ||||||||||
Derivative contracts | 73 | — | — | 73 | ||||||||||||
Total | $ | 1,875 | — | — | $ | 1,875 | ||||||||||
Derivatives designated as hedging instruments | ||||||||||||||||
Other current liabilities | $ | 813 | — | $ | 1,708 | $ | 2,521 | |||||||||
Derivative contracts | 166 | — | 192 | 358 | ||||||||||||
Total | $ | 979 | — | $ | 1,900 | $ | 2,879 | |||||||||
Total liabilities | $ | 2,854 | — | $ | 1,900 | $ | 4,754 | |||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)
MARCH 31, 2011
(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 | |||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)
MARCH 31, 2011
(Amounts in thousands, except share and per share data)
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) | ||||||||||||
Year ended | Year ended | |||||||||||||||
As at March 31, 2011 | March 31, 2011 | March 31, 2011 | ||||||||||||||
Derivatives designated as hedges | ||||||||||||||||
Foreign exchange forward contracts | $ | 2,331 | Revenue | $ | (2,613 | ) | $ | — | ||||||||
Other (income) expense, net | 11,248 | Other (income) expense, net* | (1,314 | ) | ||||||||||||
Foreign exchange option contracts | (2,409 | ) | Revenue | (3,429 | ) | — | ||||||||||
Other (income) expense, net | 158 | Other (income) expense, net* | (2,652 | ) | ||||||||||||
Interest rate swaps | (250 | ) | Interest expense | (3,563 | ) | Other (income) expense, net* | (3,229 | ) | ||||||||
$ | (328 | ) | $ | 1,801 | $ | (7,195 | ) | |||||||||
Location of gain or (loss) | Amount of gain (loss) | |||||
recognized in income on | recognized in income on | |||||
derivatives | Derivatives | |||||
Year ended | ||||||
March 31, 2011 | ||||||
Derivatives not designated as hedging instruments | ||||||
Foreign exchange forward contracts | Other (income) expense, net | $ | 3,890 | |||
Foreign exchange option contracts | Other (income) expense, net | (234 | ) | |||
$ | 3,656 | |||||
* | The foreign exchange forward contracts and foreign exchange option contracts include loss of $1,265 and $2,438, respectively, which is reclassified into earnings as a result of the discontinuance of cash flow hedge due to the non-occurrence of original forecasted transactions by the end of the originally specified time period. The interest rate swap includes a net loss of $3,229 on account of re-designation of interest rate swap. |
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)
MARCH 31, 2011
(Amounts in thousands, except share and per share data)
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) | ||||||||||||
Year ended | Year ended | |||||||||||||||
As at March 31, 2010 | March 31, 2010 | March 31, 2010 | ||||||||||||||
Derivatives designated as hedges | ||||||||||||||||
Foreign exchange forward contracts | $ | 10,001 | Revenue | $ | 2,404 | $ | — | |||||||||
Other (income) expense, net | (4,084 | ) | Other (income) expense, net* | 779 | ||||||||||||
Foreign exchange option contracts | (324 | ) | Revenue | 6 | ||||||||||||
Other (income) expense, net | (671 | ) | Other (income) expense, net* | 374 | ||||||||||||
Interest rate swaps | (5,354 | ) | Interest expense | (5,477 | ) | Other (income) expense, net* | (869 | ) | ||||||||
$ | 4,323 | $ | (7,822 | ) | $ | 284 | ||||||||||
Location of gain or (loss) | Amount of gain (loss) | |||||
recognised in income | recognised in income | |||||
on derivatives | on derivatives | |||||
Year ended | ||||||
March 31, 2010 | ||||||
Derivatives not designated as hedging instruments | ||||||
Foreign exchange forward contracts | Other (income) expense, net | $ | 425 | |||
Foreign exchange option contracts | Other (income) expense, net | (476 | ) | |||
$ | (51 | ) | ||||
* | The foreign exchange forward contracts and foreign exchange option contracts include gains of $286 and $328, respectively, which is reclassified into earnings as a result of the discontinuance of cash flow hedge due to the non-occurrence of original forecasted transactions by the end of the originally specified time period. The interest rate swap includes a net loss of $869 on account of re-designation of interest rate swap. | |
At March 31, 2011, an unrealized gain of $874 on derivative instruments included in other comprehensive income is expected to be reclassified to earnings during the next 12 months. (Unrealized gain of $4,505 as at March 31, 2010) | ||
As at March 31, 2011 the notional values of outstanding foreign exchange forward contracts and foreign exchange option contracts designated as hedges amounted to $188,560 and $248,044, respectively ($185,089 and $224,981, respectively as at March 31, 2010). |
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)
MARCH 31, 2011
(Amounts in thousands, except share and per share data)
Operating | ||||
Year ending March 31, | leases | |||
2012 | $ | 12,770 | ||
2013 | 13,978 | |||
2014 | 13,380 | |||
2015 | 10,303 | |||
2016 | 7,766 | |||
Thereafter | 19,762 | |||
Total minimum lease payments | $ | 77,959 | ||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)
MARCH 31, 2011
(Amounts in thousands, except share and per share data)
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)
MARCH 31, 2011
(Amounts in thousands, except share and per share data)
As at March 31, | ||||||||
2011 | 2010 | |||||||
Derivative instruments | $ | 11,182 | $ | 22,808 | ||||
VAT receivables | 10,103 | 8,644 | ||||||
Deferred cost | 1,659 | 1,340 | ||||||
Advances | 1,006 | 1,035 | ||||||
Other current assets | 372 | 2,481 | ||||||
Total | $ | 24,322 | $ | 36,308 | ||||
As at March 31, | ||||||||
2011 | 2010 | |||||||
Derivative instruments | $ | 2,282 | $ | 8,375 | ||||
Deferred cost | 823 | 1,566 | ||||||
Transition premium | 246 | 301 | ||||||
Total | $ | 3,351 | $ | 10,242 | ||||
As at March 31, | ||||||||
2011 | 2010 | |||||||
Accrued expenses | $ | 30,273 | $ | 40,702 | ||||
Withholding taxes and VAT payables | 2,513 | 2,728 | ||||||
Derivative instruments | 9,963 | 17,597 | ||||||
Interest payable on long term debt | 1,152 | 2,217 | ||||||
Other liabilities | 1,354 | 4,341 | ||||||
Total | $ | 45,255 | $ | 67,585 | ||||
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