0001356570 ifrs-full:GrossCarryingAmountMember wns:CovenantNotToCompeteMember 2021-03-31
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 20-F
| ☐ | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
OR
| ☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended March 31, 2022
OR
| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
OR
| ☐ | 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
Commission file number
001-32945
WNS (Holdings) Limited
(Exact name of Registrant as specified in its charter)
Not Applicable
(Translation of Registrant’s name into English)
Jersey, Channel Islands
(Jurisdiction of incorporation or organization)
Gate 4, Godrej & Boyce Complex
Pirojshanagar, Vikhroli (W)
Mumbai 400 079, India
(Address of principal executive offices)
Gopi Krishnan
General Counsel
Gate 4, Godrej & Boyce Complex
Pirojshanagar, Vikhroli (W)
Mumbai 400 079, India
(91-22)
4095-2100gopi.krishnan@wns.com
(Name, Telephone,
E-mail
and/or Facsimile number and Address of Company Contact Person)Securities registered or to be registered pursuant to Section 12(b) of the Act.
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
American Depositary Shares, each represented by | WNS | The New York Stock Exchange | ||
one Ordinary Share, par value 10 pence per share |
Securities registered or to be registered pursuant to Section 12(g) of the Act.
None
(Title of Class)
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act
None
(Title of Class)
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.
As at March 31, 202
2
, 48,849,907 ordinary shares, par value 10 pence per share, were issued and outstanding, of which48,618,585
ordinary shares were held in the form of American Depositary Shares (“ADSs”). Each ADS represents one ordinary share.Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☒ Yes ☐ No
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. ☐ Yes ☒ No
Note — Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation
S-T
(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ NoIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated
filer, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” and “emerging growth company,” inRule 12b-2
of the Exchange Act.| Large accelerated filer ☒ | Accelerated filer ☐ | Non-accelerated filer ☐ | ||
| Emerging growth company ☐ | ||||
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
| U.S. GAAP ☐ | International Financial Reporting Standards as issued by the International Accounting Standards Board ☒ | Other ☐ |
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow: ☐ Item 17 ☐ Item 18
If this report is an annual report, indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2
of the Exchange Act). ☐ Yes ☒ NoTABLE OF CONTENTS
WNS (HOLDINGS) LIMITED
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Ex-2.3
Description of securities registered under Section 12 of the Securities Exchange Act of 1934, as amendedEx 4.4 Form of the Third Amended and Restated WNS (Holdings) Limited 2016 Incentive Award Plan — incorporated by reference to Exhibit 99.1 of WNS (Holdings) Limited’s Report on Form
6-K
(FileNo. 001-32945),
as furnished to the Commission on July 16, 2021Ex 4.9 Lease Deed dated December 16, 2020 between WNS Global Services Private Limited and DLF Assets Private Limited with respect to the lease of office premises on the 10th floor of Block 10 at DLF IT Park.
Ex 4.10 Leave and License Agreement dated Feb 15, 2021 between Godrej and Boyce Manufacturing Company Limited and WNS Global Services Private Limited with respect to the lease of the office premises with an aggregate area of 84,429 square feet at plant 10.
Ex 4.11 Leave and License Agreement dated Feb 15, 2021 between Godrej and Boyce Manufacturing Company Limited and WNS Global Services Private Limited with respect to the lease of the office premises with an aggregate area of 1,08,000 square feet at plant 5.
Ex 4.12 Leave and License Agreement dated Feb 15, 2021 between Godrej and Boyce Manufacturing Company Limited and WNS Global Services Private Limited with respect to the lease of the office premises with an aggregate area of 84,934 square feet at plant 11.
Ex-4.13
Facility Agreement dated March 10, 2017 among WNS (Mauritius) Limited, HSBC Bank (Mauritius) Limited and Standard Chartered Bank, UKEx-8.1
List of subsidiaries of WNS (Holdings) LimitedEx-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 2002Ex-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 2002Ex-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 2002Ex-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 2002Ex-15.1
Consent of Grant Thornton Bharat LLP, independent registered public accounting firm1
CONVENTIONS USED IN THIS ANNUAL REPORT
In this annual report, references to “US” are to the United States of America, its territories and its possessions. References to “UK” are to the United Kingdom. References to “EU” are to the European Union. References to “India” are to the Republic of India. References to “China” are to the People’s Republic of China. References to “South Africa” are to the Republic of South Africa. References to “$” or “dollars” or “US dollars” are to the legal currency of the US, references to “ ” or “Indian rupees” are to the legal currency of India, references to “pound sterling” or “£” are to the legal currency of the UK, references to “pence” are to the legal currency of Jersey, Channel Islands, references to “Euro” are to the legal currency of the European Monetary Union, references to “South African rand” or “R” or “ZAR” are to the legal currency of South Africa, references to “A$” or “AUD” or “Australian dollars” are to the legal currency of Australia, references to “CHF” or “Swiss Franc” are to the legal currency of Switzerland, references to “RMB” are to the legal currency of China, references to “LKR” or “Sri Lankan rupees” are to the legal currency of Sri Lanka, references to “PHP” or “Philippine Peso” are to the legal currency of the Philippines and references to “NZD” or “New Zealand Dollar” are to the legal currency of New Zealand. Our financial statements are presented in US dollars. Our financial statements included in this annual report are prepared in accordance with the International Financial Reporting Standards and its interpretations (“IFRS”), as issued by the International Accounting Standards Board (“IASB”). Unless otherwise indicated, references to “GAAP” in this annual report are to IFRS, as issued by the IASB.
₹
References to a particular “fiscal” year are to our fiscal year ended March 31 of that calendar year. Any discrepancies in any table between totals and sums of the amount listed are due to rounding. Any amount stated to be $0.0 million represents an amount less than $5,000.
In this annual report, unless otherwise specified or the context requires, the term “WNS” refers to WNS (Holdings) Limited, a public company incorporated under the laws of Jersey, Channel Islands, and the terms “our company,” “we,” “our” and “us” refer to WNS (Holdings) Limited and its subsidiaries.
In this annual report, references to “SEC” or “Commission” are to the United States Securities and Exchange Commission.
We also refer in various places within this annual report to “revenue less repair payments,” which is a
non-GAAP
financial measure that is calculated as (a) revenue less (b) in our auto claims business, payments to repair centers for “fault” repair cases where we act as the principal in our dealings with the third party repair centers and our clients. Thisnon-GAAP
financial information is not meant to be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP.We refer to information regarding the business process management (“BPM”) industry, our company and our competitors from market research reports, analyst reports and other publicly available sources. Although we believe that this information is reliable, we have not independently verified the accuracy and completeness of the information. We caution you not to place undue reliance on this data. BPM services are also sometimes referred to as business process outsourcing (“BPO”) services.
2
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This annual report contains “forward-looking statements” that are based on our current expectations, assumptions, estimates and projections about our company and our industry. The forward-looking statements are subject to various risks and uncertainties. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “will,” “project,” “seek,” “should” and similar expressions. Those statements include, among other things, the discussions of our business strategy and expectations concerning our market position, future operations, margins, profitability, liquidity and capital resources, tax assessment orders and future capital expenditures. We caution you that reliance on any forward-looking statement inherently involves risks and uncertainties, and that although we believe that the assumptions on which our forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate, and, as a result, the forward-looking statements based on those assumptions could be materially incorrect. These risks and uncertainties include but are not limited to:
| • | worldwide economic and business conditions; |
| • | our dependence on a limited number of clients in a limited number of industries; |
| • | the impact of the ongoing coronavirus disease 2019 (“COVID-19”) pandemic on our and our clients’ business, financial condition, results of operations and cash flows; |
| • | currency fluctuations among the Indian rupee, the pound sterling, the US dollar, the Australian dollar, the Euro, the South African rand and the Philippine peso; |
| • | political or economic instability in the jurisdictions where we have operations; |
| • | regulatory, legislative and judicial developments; |
| • | increasing competition in the BPM industry; |
| • | technological innovation; |
| • | our liability arising from cybersecurity attacks, fraud or unauthorized disclosure of sensitive or confidential client and customer data; |
| • | telecommunications or technology disruptions; |
| • | our ability to attract and retain clients; |
| • | negative public reaction in the US or the UK to offshore outsourcing; |
| • | our ability to collect our receivables from, or bill our unbilled services to, our clients; |
| • | our ability to expand our business or effectively manage growth; |
| • | our ability to hire and retain enough sufficiently trained employees to support our operations; |
| • | the effects of our different pricing strategies or those of our competitors; |
| • | our ability to successfully consummate, integrate and achieve accretive benefits from our strategic acquisitions, and to successfully grow our revenue and expand our service offerings and market share; |
| • | future regulatory actions and conditions in our operating areas; |
| • | our ability to manage the impact of climate change on our business; and |
| • | volatility of our ADS price. |
These and other factors are more fully discussed in “Part I — Item 3. Key Information — D. Risk Factors,” “Part I — Item 5. Operating and Financial Review and Prospects” and elsewhere in this annual report. In light of these and other uncertainties, you should not conclude that we will necessarily achieve any plans, objectives or projected financial results referred to in any of the forward-looking statements. Except as required by law, we do not undertake to release revisions of any of these forward-looking statements to reflect future events or circumstances.
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PART I
ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
Not applicable.
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE
Not applicable.
ITEM 3. KEY INFORMATION
A. [Reserved]
B. Capitalization and Indebtedness
Not applicable.
C. Reason for the Offer and the Use of Proceeds
Not applicable.
4
D. Risk Factors
This annual report contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those described in the following risk factors and elsewhere in this annual report. If any of the following risks actually occur, our business, financial condition, results of operations and cash flows could suffer and the trading price of our ADSs could decline.
Risks Related to Our Business
The global economic and
geo-political
conditions have been and continue to be challenging and have had, and may continue to have, an adverse effect on the financial markets and the economy in general, which has had, and may continue to have, a material adverse effect on our business, clients, employees, financial performance, results of operations and cash flows and the prices of our equity shares and ADSs.The global outbreak and spread of the disease caused by the severe acute respiratory syndrome coronavirus known as
COVID-19,
which was reported to have surfaced in December 2019, has caused a slowdown in growth of the global economy. The global economy is entering a pronounced slowdown in 2022 after having shown some momentums of growth in 2021. The global spread ofCOVID-19
has created, and is likely to continue to create, significant volatility and uncertainty and economic disruption. Global prospects remain highly uncertain as theCOVID-19
pandemic resurgence and economic recoveries diverge across countries and sectors, reflecting variations in pandemic-induced disruptions and the extent of policy support. In addition, volatility in the domestic politics of major markets may lead to changes in the institutional framework of the international economy. For further information, see “— Our business operations and future growth have been, and may continue to be, negatively impacted on account of theCOVID-19
pandemic.”In February 2022, a military conflict arose between Russia and Ukraine, with the latter being supported by countries in the NATO alliance as well as others around the globe, including imposition of financial and trade sanctions against Russia. Although the length, impact and outcome of the ongoing military conflict in Ukraine is highly unpredictable, this conflict could lead to significant market and other disruptions, including significant volatility in commodity prices, supply of energy resources, instability in financial markets, supply chain interruptions, political and social instability, changes in consumer or purchaser preferences as well as increase in cyberattacks and espionage. In the event the conflict continues or extends beyond Ukraine, together with reduction or stoppage of energy exports from Russia, the global economy could face a recessionary downturn. We have operations in Poland and Romania, which border Ukraine and are partly dependent on gas supplies from Russia for their energy needs. The economies of Poland and Romania may be materially and adversely affected in the event of any disruption of gas supplies or extension of the conflict beyond Ukraine. In addition, as a result of the ongoing military conflict, there has been a growing number of migrants in Poland and Romania. Such an influx of migrants could lead to rising inflations in these two countries, thereby resulting in an upward pressure on wages, which could have a material adverse effect on our operations in these two countries.
The withdrawal of the UK from the EU in January 2020, commonly referred to as “Brexit,” has also created significant political and economic uncertainty regarding the future trading relationship between the UK and the EU as well as other countries, such as the United States, Australia, and New Zealand. In particular, the UK and the EU have ratified a trade and cooperation agreement governing their future relationship and the UK continues to negotiate agreements on specific areas of trade and economic arrangements with other countries. The
UK-EU
trade and cooperation agreement addresses trade, economic arrangements, law enforcement, judicial cooperation and a governance framework including procedures for dispute resolution, among other things. Because the agreement merely sets forth a framework in many respects and will require complex additional bilateral negotiations between the UK and the EU as both parties continue to work on the rules for implementation, significant political and economic uncertainty remains about how the precise terms of the relationship between the parties will differ from the terms before withdrawal. These developments, or the perception that any of them could occur, have had and may continue to have a material adverse effect on global economic conditions and financial markets, and may significantly reduce global market liquidity, restrict the ability of key market participants to operate in certain financial markets or restrict our access to capital. Any of these factors could have a material adverse effect on our business, financial condition, results of operations and cash flows.29.5% of our revenues and 23.8% of our revenue less repair payments
(non-GAAP)
in fiscal 2022 and 28.0% of our revenues and 24.4% of our revenue less repair payments(non-GAAP)
in fiscal 2021 are denominated in pound sterling. The extent and duration of the decline in the value of the pound sterling to the US dollar and other currencies is unknown at this time. A long-term reduction in the value of the pound sterling as a result of Brexit or otherwise could adversely impact our earnings growth rate and profitability. We believe that our hedging program is effective, however there is no assurance that it will protect us against fluctuations in foreign currency exchange rates.In many countries globally there are concerns over rising inflation and potential economic recessions, including due to the impacts of the
COVID-19
pandemic. In particular, any worsening of the ongoing labor shortage and ongoing rise in inflation could significantly weaken global economies. In parts of Europe and India where we operate, there are similar signs of continued economic slowdown and weakness. Sri Lanka, where we have operations, is facing a significant economic crisis resulting from rapidly depleting foreign reserves, a depreciating local currency, and rising prices. Globally, countries have required and may continue to require additional financial support, sovereign credit ratings have declined and may continue to decline, and there may be default on sovereign debt obligations of certain countries. In addition, the U.S. Federal Reserve System and other regulatory bodies around the world may raise, or may announce intentions to raise, interest rates. Any of these global economic conditions may increase the cost of borrowing and cause credit to become more limited, which could have a material adverse effect on our business, financial condition, results of operations and cash flows. The global economic slowdown may be further prolonged by subsequent outbreaks ofCOVID-19
in countries which are taking, or which have taken, steps to ease lockdown measures; such outbreaks may require those countries to extend their lockdown measures or roll-back previous measures taken to facilitate there-opening
of their economies.These economic and
geo-political
conditions have affected, and may continue to affect, our business in a number of ways, as we have operations in 12 countries and we service clients across multiple geographic regions. The general level of economic activity, such as decreases in business and consumer spending, may result in a decrease in demand for our services, thus reducing our revenue. The cost and availability of credit has been and may continue to be adversely affected by illiquid credit markets and wider credit spreads. The current global economic slowdown and the possibility of continued turbulence or uncertainty in the European, US, Asian and international financial markets and economies, and the political climate in the US and the UK, has adversely affected, and may continue to adversely affect, our liquidity and financial condition, and the liquidity and financial condition of our clients. If these market conditions continue or worsen, they may further limit our ability to access financing or increase our cost of financing to meet liquidity needs, and further affect the ability of our clients to use credit to purchase our services or to make timely payments to us, resulting in adverse effects on our financial condition and results of operations. In the US, there is concern over slowing economic growth and continuing trade tensions.Changing economic conditions may also have an effect on foreign exchange rates, which in turn may affect our business. For further information, see “— Currency fluctuations among the Indian rupee, the pound sterling, the US dollar, the Australian dollar, the Euro, the South African rand and the Philippine peso could have a material adverse effect on our results of operations.”
The current global economic slowdown and uncertainty about the future global economic conditions could also continue to increase the volatility of our ADS price. We cannot predict the timing or duration of an economic slowdown or the timing or strength of a subsequent economic recovery generally or in our targeted industries, including the insurance and travel and leisure industries. If macroeconomic conditions worsen or the current global economic conditions continue for a prolonged period of time, we are not able to predict the impact that such conditions will have on our targeted industries, in general, and our results of operations specifically.
5
A few major clients account for a significant portion of our revenue and any loss of business from these clients could reduce our revenue and significantly harm our business.
We have derived and believe that we will continue to derive in the near term a significant portion of our revenue from a limited number of large clients. In fiscal 2022 and 2021, our five largest clients accounted for 27.1% and 26.8% of our revenue and 27.6% and 27.6% of our revenue less repair payments
(non-GAAP),
respectively. In fiscal 2022 and 2021, our three largest clients accounted for 18.1% and 19.2% of our revenue and 19.6% and 20.2% of our revenue less repair payments(non-GAAP),
respectively. In fiscal 2022, our largest client individually accounted for 7.3% and 7.9% of our revenue and revenue less repair payments(non-GAAP),
respectively, as compared to 8.1% and 8.5% in fiscal 2021, respectively. Any loss of business from any major client could reduce our revenue and significantly harm our business.For example, in October 2021, we ceased to provide certain services to a telecommunications company which was one of our top fifteen customers by revenue contribution in fiscal 2021 as a result of consolidation initiatives of the customer. The customer accounted for 2.4% and 3.1% of our revenue and 2.6% and 3.2% of our revenue less repair payments
(non-GAAP)
in fiscal 2021 and in fiscal 2020, respectively.We have derived, and we expect to continue deriving for the foreseeable future,
a significant portion of our revenue from Aviva Global Services (Management Services) Private Limited (“Aviva MS”). Under our master services agreement with Aviva MS, Aviva MS is permitted to terminate the agreement without cause with 180 days’ notice upon payment of a termination fee.
In addition, the volume of work performed for specific clients is likely to vary from year to year, particularly since we may not be the exclusive outside service provider for our clients. Thus, a major client in one year may not provide the same level of revenue in any subsequent year. For example, until fiscal 2018, Aviva MS was our largest client and revenue from Aviva MS decreased from $54.5 million in fiscal 2017 to $51.9 million in fiscal 2018 to $50.1 million in fiscal 2019 and increased to $53.3 million in fiscal 2020. Part of this decline in revenue of fiscal 2018 and 2019 was attributable to revised pricing terms and part was attributable to a reduction of services due to automation performed by Aviva MS and the automation of certain services by WNS.
The loss of some or all of the business of any large client could have a material adverse effect on our business, results of operations, financial condition and cash flows. A number of factors other than our performance could cause the loss of or reduction in business or revenue from a client, and these factors are not predictable. For example, a client may demand price reductions, change its outsourcing strategy or move work
in-house.
A client may also be acquired by a company with a different outsourcing strategy that intends to switch to another BPM service provider or return workin-house.
6
Our revenue is highly dependent on clients concentrated in a few industries, as well as clients located primarily in the US, the UK, Europe and Australia. Economic slowdowns or factors that affect these industries or the economic environment in the US, the UK, Europe or Australia could reduce our revenue and seriously harm our business.
A substantial portion of our clients are concentrated in the insurance industry, healthcare industry and the travel and leisure industry. In fiscal 2022 and 2021, 29.9% and 29.2% of our revenue, respectively, and 24.3% and 25.6% of our revenue less repair payments
(non-GAAP),
respectively, was derived from clients in the insurance industry. During the same periods, clients in the healthcare industry contributed 17.7% and 18.9% of our revenue, respectively, and 19.1% and 19.9% of our revenue less repair payments(non-GAAP),
respectively and clients in the travel and leisure industry contributed 14.8% and 14.2% of our revenue, respectively, and 16.0% and 14.9% of our revenue less repair payments(non-GAAP),
respectively. Our business and growth largely depend on continued demand for our services from clients in these industries and other industries that we may target in the future, as well as on trends in these industries to outsource business processes.The current global economic slowdown has affected, and may continue to affect, both the industries in which our clients are concentrated and the geographies in which we do business. For more information, see “— The global economic and
geo-political
conditions have been and continue to be challenging and have had, and may continue to have, an adverse effect on the financial markets and the economy in general, which has had, and may continue to have, a material adverse effect on our business, clients, employees, financial performance, results of operations and cash flows and the prices of our equity shares and ADSs.” Certain of our targeted industries are especially vulnerable to crises in the financial and credit markets and potential economic downturns. Our results of operations depend on, among other things, our ability to maintain and increase our sales volume with existing clients and to attract new clients. The impact of theCOVID-19
pandemic has affected, and may continue to affect, the demand for our services across industries from a number of clients, depending on the ability of each client, and the nature of their industries, products and services, in coping with the crisis. A downturn in any of our targeted industries, a slowdown or reversal of the trend to offshore business process outsourcing in any of these industries or the introduction of regulation which restricts or discourages companies from outsourcing could result in a decrease in the demand for our services and adversely affect our results of operations. For instance, the travel and leisure industry is presently impacted by travel restrictions imposed by governments across the globe, as a response to theCOVID-19
outbreak, and the resulting reduction in business and personal travel. While such restrictions are being gradually eased over time, the volume of business from our travel and leisure clients may continue to be lower than in previous years. In addition, the ongoing military conflict between Russia and Ukraine, especially in the event of further escalation beyond the borders of Ukraine and potential cascading effects of the sanctions on Russia, could have a material adverse effect on global trade and travel. Our business has been, and we expect it will continue to be, impacted across industry verticals due to theCOVID-19
pandemic and the Russia-Ukraine conflict. We have observed demand reductions in a range of verticals, particularly travel and leisure, insurance, diversified businesses (especially manufacturing and retail) and utilities during fiscal 2022, as compared to demand levels prior to theCOVID-19
pandemic.In addition, any further weakening of or continuing uncertainty in worldwide economic and business conditions could result in a few of our clients reducing or postponing their outsourced business requirements. Additionally, the
COVID-19
pandemic has caused, and may continue to cause significant financial distress to some of our clients. These issues impacting our clients have in turn reduced, and may continue to reduce, the demand for our services and adversely affect our results of operations. In particular, our revenue is highly dependent on the economic environments in the US, the UK, Europe and Australia. In fiscal 2022 and 2021, 45.4% and 44.2% of our revenue, respectively, and 49.1% and 46.5% of our revenue less repair payments(non-GAAP),
respectively, were derived from clients located in the US. During the same periods, 32.8% and 31.4% of our revenue, respectively, and 27.4% and 27.9% of our revenue less repair payments(non-GAAP),
respectively, were derived from clients located in the UK, 6.1% and 6.7% of our revenue, respectively, and 6.6% and 7.1% of our revenue less repair payments(non-GAAP),
respectively, were derived from clients located in Europe (excluding the UK), and 6.1% and 7.7% of our revenue, respectively, and 6.6% and 8.1% of our revenue less repair payments(non-GAAP),
respectively, were derived from clients located in Australia. Although we have not had any significant project cancelations to date, we have agreed to limited volume commitment and payment term concessions with certain clients that have been significantly affected by theCOVID-19
pandemic. Any further weakening of or continuing uncertainty in the US, UK, European or Australian economy will likely have a further adverse impact on our revenue.Other developments may also lead to a decline in the demand for our services in our targeted industries. Significant changes in the financial services industry or any of the other industries on which we focus, or a consolidation in any of these industries or acquisitions, particularly involving our clients, may decrease the potential number of buyers of our services and have an adverse impact on our profitability. Any significant reduction in or the elimination of the use of the services we provide within any of these industries would result in reduced revenue and harm our business. Our clients may experience rapid changes in their prospects, substantial price competition and pressure on their profitability. Although such pressures can encourage outsourcing as a cost reduction measure, they may also result in increasing pressure on us from clients in these key industries to lower our prices which could negatively affect our business, results of operations, financial condition and cash flows.
7
Our business operations and future growth have been, and may continue to be, negatively impacted on account of the
COVID-19
pandemic.Countries around the world have started easing restrictions imposed over the past two years during the global outbreak of
COVID-19,
including the removal or relaxation of travel restrictions. However, the global outbreak ofCOVID-19
continues to evolve, with a resurgence of infections seen in several countries around the world and there-imposition
of restrictions as a result thereof. TheCOVID-19
pandemic continues to be active, at varying levels, in the majority of countries around the world, including countries where all of our delivery centers are located, and has created, and continues to create, significant uncertainty and disruption. Governmental measures and regulations, such as city or country-wide lockdowns, local, domestic and international travel restrictions as well as closures of the enabling ecosystem necessary for our business to operate smoothly, have impacted, and continue to impact, our ability to fully deliver services to our clients especially from our delivery centers. Such measures present concerns that may have affected, and continue to affect, our ability to conduct our business effectively, including, but not limited to adverse effects on employees’ health, a slowdown and often a stoppage of delivery, work, travel and other activities which are essential and critical for maintainingon-going
business activities. Our ability to continue operations is dependent on a number of factors, such as the continued availability of high-quality internet bandwidth, an uninterrupted supply of electricity and the sustainability of social infrastructure to enable our remote-working employees to continue delivering services. See also “– If we cause disruptions to our clients’ businesses, provide inadequate service or are in breach of our representations or obligations, our clients may have claims for substantial damages against us. Our insurance coverage may be inadequate to cover these claims and, as a result, our profits may be substantially reduced.”Given the uncertainty around the extent and timing of the future spread or mitigation of the
COVID-19
and around the imposition or relaxation of protective measures, we cannot reasonably estimate the impact to our future results of operations, cash flows or financial condition. In addition, the unknown scale and duration of these developments has had, and continues to have, macro and micro negative effects on the financial markets and global economy, which has resulted in an economic downturn that has affected, and may continue to affect, demand for our services and has had, and may continue to have, a material adverse effect on our operations and financial results, earnings, cash flow, financial condition and our ADS price. These effects could be material and long-term in duration. Subsequent outbreaks ofCOVID-19
could therefore prolong the economic impact of theCOVID-19
pandemic.Following guidance from local public health authorities in the countries in which we operate, we have taken various measures, and transitioned into new processes, to help reduce the spread of the virus and maintain the health and safety of our workforce, including but not limited to, implementing remote-working arrangements, restricting access to sites and implementing other measures to help maintain the safety of our workforce, which will allow us to carry out operations from our delivery centers when the local public health authorities allow it. The effects of these policies have negatively impacted, and may continue to negatively impact, productivity and the magnitude of any effect will depend, in part, on the length and severity of the restrictions and other limitations on our ability to conduct our business in the ordinary course. Some of these measures have required, and continue to require, us to provide services and operate client processes in an unsupervised environment, and while this has been acknowledged by our clients, such alternative operating models may result in breaches of our contractual obligations. Also, if a natural disaster, power outage, connectivity issue, or other event occurs that impacts our employees’ ability to work remotely, it may be difficult or, in certain cases, impossible, for us to continue our business for a substantial period of time. The increase in remote working may also result in client privacy, IT security and fraud concerns as well as increase our exposure to potential wage and hour issues.
For example, in India, the Philippines, South Africa and the United States, we have large concentrations of employees performing critical operations. The closure or partial closure of those facilities, or restrictions inhibiting our employees’ ability to access those facilities, during the past two years had disrupted our ability to provide our services and solutions to our clients and had resulted in, among other things, losses of revenue. Similar closure and restrictions continue to be required to be imposed to varying degrees in different jurisdictions from time to time, and such closure and restrictions continue to cause such disruptions to our business. In addition, clients may defer decision making or delay planned work. Certain of our clients have entered into insolvency proceedings as a result of the
COVID-19
pandemic, and terminated their current agreements with us. International, as well as domestic, travel bans imposed as emergency measures by governments, our reduced ability to hire new employees, disruptions to our supply chain, lockdowns in geographies where clients are located and temporary closure of our delivery centers have impaired, and may continue to impair, our ability to sell new business or expand our relationships with existing clients and hence may have an impact on our growth, financial condition, results and/or ADS price. Further, we might suffer delays in managerial and financial reporting and SEC filings, inability to perform audits and apply effective financial controls, or failures under other regulatory or compliance requirements to which we are subject.To the extent that the
COVID-19
pandemic has adversely affected, and continues to adversely affect, our business, financial condition, results of operations and cash flows, it may also have the effect of heightening many of the other risks described in this “Risk Factors” section, such as, but not limited to, those relating to:| • | the global economic and geo-political conditions and financial markets and the economy in general and the resultant potential fluctuations in foreign exchange rates; |
| • | our revenue being highly dependent on clients concentrated in a few industries, as well as clients located primarily in the US, the UK, Europe and Australia; |
| • | us potentially causing disruptions to our clients’ businesses, providing inadequate service or being in breach of our representations or obligations; |
| • | the negative public reaction to offshore outsourcing, proposed legislation or otherwise; |
| • | our operating results, which may differ from period to period and make it difficult for us to prepare accurate internal financial forecasts for responding in a timely manner to offset such period-to-period |
| • | a substantial portion of our assets and operations being located in India and we being subjected to regulatory, economic, social and political uncertainties in India; |
| • | restrictions on entry visas that may affect our ability to compete for and provide services to clients in the US and the UK; and |
| • | our ability to maintain effective controls that may materially impact or are reasonably likely to materially impact our disclosure controls and procedures and internal controls over financial reporting. |
8
Currency fluctuations among the Indian rupee, the pound sterling, the US dollar, the Australian dollar, the Euro, the South African rand and the Philippine peso could have a material adverse effect on our results of operations.
Although substantially all of our revenue is denominated in pound sterling, US dollars, and to a lesser extent, Australian dollars, Euro and South African rand, a significant portion of our expenses (other than payments to repair centers, which are primarily denominated in pound sterling) are incurred and paid in Indian rupees and, to a lesser extent, in South African rand and Philippine peso. Therefore, a weakening of the rate of exchange for the pound sterling, the US dollar, Euro or the Australian dollar against the Indian rupee or, to a lesser extent, a weakening of the pound sterling against the South African rand or the Philippine peso would adversely affect our results. Furthermore, we report our financial results in US dollars and our results of operations would be adversely affected if the pound sterling, Euro or the Australian dollar depreciates against the US dollar, or if the Indian rupee or, to a lesser extent, the South African rand or the Philippine peso appreciates against the US dollar. Fluctuations between the Indian rupee, the Philippine peso, the pound sterling, the South African rand, the Euro or the Australian dollar, on the one hand, and the US dollar, on the other hand, expose us to translation risk when transactions denominated in such currencies are translated to US dollars, our reporting currency. The exchange rates between each of the Indian rupee, the Philippine peso, the pound sterling, the South African rand, the Euro or the Australian dollar, on the one hand, and the US dollar, on the other hand, have changed substantially in recent years and may fluctuate substantially in the future. The ongoing
COVID-19
pandemic has impacted, and may continue to impact, the proper functioning of financial and capital markets and may result in unpredictable fluctuations in foreign currency exchange rates.In addition, the military conflict between Russia and Ukraine may result in a global economic downturn and may result in unpredictable fluctuations in foreign currency exchange rates, and in particular, may negatively impact the Euro, the pound sterling and other currencies in which our revenue is denominated. The withdrawal of the UK from the EU in January 2020 has created significant political and economic uncertainty regarding the future trading relationship between the UK and the EU. See “— The UK’s withdrawal from the EU may have a negative effect on global economic conditions, financial markets and our operations in the UK and EU, which could reduce the value of our ADS.” These developments have caused, and may continue to cause, volatility in the exchange rates between the pound sterling and other currencies.
The average Indian rupee to US dollar exchange rate was approximately74.49 per $1.00 in fiscal 2022, which represented a depreciation of the Indian rupee by an average of 0.3% as compared with the average exchange rate of approximately74.25 per $1.00 in fiscal 2021, which in turn represented a depreciation of the Indian rupee by an average of 4.7% as compared with the average exchange rate of approximately70.91 per $1.00 in fiscal 2020.
₹
₹
₹
The average pound sterling to US dollar exchange rate was approximately £0.73 per $1.00 in fiscal 2022, which represented an appreciation of the pound sterling by an average of 4.6% as compared with the average exchange rate of approximately £0.77 per $1.00 in fiscal 2021, which in turn represented an appreciation of the pound sterling by an average of 2.7% as compared with the average exchange rate of approximately £0.79 per $1.00 in fiscal 2020.
The average Australian dollar to US dollar exchange rate was approximately A$1.35 per $1.00 in fiscal 2022, which represented an appreciation of the Australian dollar by an average of 3.0% as compared with the average exchange rate of approximately A$1.39 per $1.00 in fiscal 2021, which in turn represented an appreciation of the Australian dollar by an average of 5.3% as compared with the average exchange rate of approximately A$1.47 per $1.00 in fiscal 2020.
The average Euro to US dollar exchange rate was approximately €0.860 per $1.00 in fiscal 2022, which represented a depreciation of the Euro by an average of 0.3% as compared with the average exchange rate of approximately €0.857 per $1.00 in fiscal 2021, which in turn represented an appreciation of the Euro by an average of 5.0% as compared with the average exchange rate of approximately €0.900 per $1.00 in fiscal 2020.
The average South African rand to US dollar exchange rate was approximately R14.85 per $1.00 in fiscal 2022, which represented an appreciation of the South African rand by an average of 9.3% as compared with the average exchange rate of approximately R16.37 per $1.00 in fiscal 2021, which in turn represented a depreciation of the South African rand by an average of 10.9% as compared with the average exchange rate of approximately R14.76 per $1.00 in fiscal 2020.
The average Philippine peso to US dollar exchange rate was approximately PHP50.07 per $1.00 in fiscal 2022, which represented a depreciation of the Philippine peso by an average of 2.2% as compared with the average exchange rate of approximately PHP49.00 per $1.00 in fiscal 2021, which in turn represented an appreciation of the Philippine peso by an average of 4.7% as compared with the average exchange rate of approximately PHP51.43 per $1.00 in fiscal 2020.
Our results of operations would be adversely affected if the Indian rupee appreciates significantly against the pound sterling or the US dollar or if the pound sterling or the Australian dollar depreciates against the US dollar or, to a lesser extent, if the South African rand or the Philippine peso appreciates significantly against the US dollar.
For example, the depreciation of the Indian rupee and the Philippine peso and the appreciation of the pound sterling and the Australian dollar against the US dollar in fiscal 2022 positively impacted our results of operations whereas the appreciation of the South African rand against the US dollar negatively impacted our results of operations during that year.
The depreciation of the Indian rupee and the South African rand against the US dollar in fiscal 2021 positively impacted our results of operations whereas the appreciation of the Philippine peso against the US dollar negatively impacted our results of operations during that year.
We hedge a portion of our foreign currency exposures using options and forward contracts. We cannot assure you that our hedging strategy will be successful or will mitigate our exposure to currency risk.
The international nature of our business exposes us to several risks, such as unexpected changes in the regulatory requirements and governmental policy changes of multiple jurisdictions.
We have operations in China, Costa Rica, India, the Philippines, Poland, Romania, South Africa, Spain, Sri Lanka, Turkey, the UK and the US, and we service clients across Asia, Europe, South Africa, Australia and North America. Our corporate structure also spans multiple jurisdictions, with our parent holding company incorporated in Jersey, Channel Islands, and intermediate and operating subsidiaries (including branch offices) incorporated in Australia, Canada, China, Costa Rica, France, India, Mauritius, the Netherlands, the Philippines, Romania, South Africa, Singapore, Sri Lanka, Spain, Turkey, the United Arab Emirates, the UK and the US. As a result, we are exposed to risks typically associated with conducting business internationally, many of which are beyond our control. These risks include:
| • | legal uncertainty owing to the overlap of different legal regimes, and problems in asserting contractual or other rights across international borders; |
| • | potentially adverse tax consequences, such as scrutiny of transfer pricing arrangements by authorities in the countries in which we operate; |
| • | potential tariffs and other trade barriers; |
| • | unexpected changes in legal regimes and regulatory requirements; |
| • | policy changes due to changes in government; |
For example, during the fourth quarter of fiscal 2017, proposed changes to the laws of the UK governing personal injury claims generated uncertainty regarding the future earnings trajectory of our legal services business in our WNS Auto Claims BPM segment, as a result of which we had expected that we would eventually exit from providing legal services in relation to personal injury claims. We also experienced a decrease in volume of and loss of business from certain clients of our traditional repair services in our WNS Auto Claims BPM segment in fiscal 2017. As a result, we had in fiscal 2017 expected the future performance of our WNS Auto Claims BPM segment to decline significantly and therefore significantly reduced our financial projections and estimates of our WNS Auto Claims BPM segment. Accordingly, we performed an impairment review of the goodwill associated with the companies we had acquired for our auto claims business and recorded an impairment charge of $21.7 million to our results of operations in fiscal 2017.
During the fourth quarter of fiscal 2020, Brexit had a negative impact on the insurance industry and applied downward pressure on the expected future performance of the WNS Auto Claims reportable segment, due to contract renegotiations and loss of certain clients. These factors, together with the highly uncertain operating environment in the UK, have negatively impacted and caused us to significantly reduce our financial projections and estimates of the WNS Auto Claims BPM reportable segment from our previous estimates. Accordingly, we performed an impairment review of the goodwill associated with the companies we had acquired for our auto claims business and recorded an impairment charge of $4.1 million to our results of operations in fiscal 2020 for the remaining goodwill balance of our auto claims business.
The occurrence of other changes in legal regimes or regulatory requirements, or any other events associated with the risks of conducting business internationally, could have a material adverse effect on our results of operations and financial condition.
9
Our global operations expose us to numerous and sometimes conflicting legal and regulatory requirements. Failure to adhere to the laws and regulations that govern our business or our clients’ businesses that we are required to comply with in performing our services could harm our business.
We have operations in 12 countries and our corporate structure spans multiple jurisdictions. Further, we service clients across multiple geographic regions and multiple industries. We are required to comply with numerous, and sometimes conflicting and uncertain, laws and regulations including on matters relating to import/export controls, trade restrictions, taxation, immigration, internal disclosure and control obligations, securities regulation, anti-competition, data privacy and protection, anti-corruption, and employment and labor relations. In addition, we are required to obtain and maintain permits and licenses for the conduct of our business in various jurisdictions. Our clients’ business operations are also subject to numerous regulations in the jurisdiction in which they operate or that are applicable to their industry, and our clients may contractually require that we perform our services in compliance with regulations applicable to them or in a manner that will enable them to comply with such regulations. For example, regulations to which our and our clients’ business operations are subject include the Gramm-Leach-Bliley Act, the Health Insurance Portability and Accountability Act, the Health Information Technology for Economic and Clinical Health Act and the California Consumer Privacy Act in the US, the Financial Services Act in the UK and the General Data Protection Regulation in the EU. Countries around the world, including those where we have business operations and where we service customers for our clients, have adopted or have proposed to adopt in the near future, comprehensive privacy and personal data protection laws, including the Protection of Personal Information Act (POPI) in South Africa and the upcoming Personal Data Protection Bill (PDPB) in India. In addition, HealthHelp, which we acquired in March 2017, administers programs offered by the Centers for Medicare & Medicaid Services, a United States federal agency that administers Medicare and Medicaid.
Regulatory changes may result in our exiting certain parts of our business.
On account of the global nature of our and our clients’ operations, compliance with diverse legal and regulatory requirements is difficult, time-consuming and requires significant resources. Further, the extent of development of legal systems varies across the countries in which we operate and local laws may not be adequately developed or be able to provide us clear guidance to sufficiently protect our rights. Specifically, in many countries including those in which we operate and/or seek to expand to, the practices of local businesses may not be in accordance with international business standards and could violate anti-corruption laws and regulations, including the UK Bribery Act 2010 and the US Foreign Corrupt Practices Act 1977. Our employees, subcontractors, agents, business partners, the companies we acquire and their employees, subcontractors and agents, and other third parties with which we associate, could act in a manner which violates policies or procedures intended to ensure compliance with laws and regulations, including applicable anti-corruption laws or regulations.
Violations of such laws or regulations by us, our employees or any of these third parties could subject us to criminal or civil enforcement actions (whether or not we participated or were aware of the actions leading to the violations), including fines or penalties, breach of contract damages, disgorgement of profits and suspension or disqualification from work, any of which could materially and adversely affect our business, including our results of operations and our reputation. If we are unable to maintain our licenses, permits or other qualifications necessary to provide our services, we may not be able to provide services to existing clients or be able to attract new clients and could lose revenue, which could have a material adverse effect on our business.
10
We face competition from onshore and offshore BPM companies and from information technology companies that also offer BPM services. Our clients may also choose to run their business processes themselves, either in their home countries or through captive units located offshore.
The market for outsourcing services is very competitive and we expect competition to intensify and increase from a number of sources. We believe that the principal competitive factors in our markets are price, service quality, sales and marketing skills, business process transformation capabilities and industry expertise. We face significant competition from our clients’ own
in-house
groups including, in some cases,in-house
departments operating offshore or captive units. Clients who currently outsource a significant proportion of their business processes or information technology services to vendors in India may, for various reasons, including diversifying geographic risk, seek to reduce their dependence on any one country. We also face competition from onshore and offshore BPM and information technology services companies. In addition, the trend toward offshore outsourcing, international expansion by foreign and domestic competitors and continuing technological changes will result in new and different competitors entering our markets. TheCOVID-19
pandemic further hastened the development and adoption of such technological changes that may accelerate the pace of disintermediation, which may impact the services that the BPM industry currently provides.These competitors may include entrants from the communications, software and data networking industries or entrants in geographic locations with lower costs than those in which we operate. Technological changes include the development of complex automated systems for the processing of transactions that are formerly labor intensive, which may reduce or replace the need for outsourcing such transaction processing.
Some of these existing and future competitors have greater financial, human and other resources, longer operating histories, greater technological expertise, more recognizable brand names and more established relationships in the industries that we currently serve or may serve in the future. In addition, some of our competitors may enter into strategic or commercial relationships among themselves or with larger, more established companies in order to increase their ability to address client needs, or enter into similar arrangements with potential clients. Increased competition, our inability to compete successfully against competitors, pricing pressures or loss of market share could result in reduced operating margins which could harm our business, results of operations, financial condition and cash flows.
Changes in technology could lead to changes in our clients’ businesses as well as their requirements for business process services, which may adversely impact our business and results of operations.
Proliferation of accessible technology, such as smartphones and internet, has had an impact on the manner in which customers and businesses interact with each other. Companies are increasingly adopting social media platforms, online self-help portals and mobile applications for communicating with and servicing their customers rather than utilizing BPM companies such as ourselves to manage these interactions. Our clients also continue to invest in technology by upgrading their platforms and application capabilities towards increased automation of transactions. Advances in software, such as artificial intelligence, machine learning, robotic process automation and voice recognition, have the potential to reduce dependency on human processing transactions. Such developments and other innovations, such as autonomous vehicles, have the potential to significantly change the way our clients’ businesses operate and may reduce their dependency on BPM companies, including our company, for managing their business processes. We are therefore subject to a risk of disintermediation on account of such changes in technology, which could impact our future growth prospects and may require continued investments in our business.
If we cause disruptions to our clients’ businesses, provide inadequate service or are in breach of our representations or obligations, our clients may have claims for substantial damages against us. Our insurance coverage may be inadequate to cover these claims and, as a result, our profits may be substantially reduced.
Most of our contracts with clients contain service level and performance requirements, including requirements relating to the quality of our services and the timing and quality of responses to the client’s customer inquiries. In some cases, the quality of services that we provide is measured by quality assurance ratings and surveys which are based in part on the results of direct monitoring by our clients of interactions between our employees and our clients’ customers. Lockdowns and other measures imposed by governments around the world, as well as other resulting impacts of the
COVID-19
pandemic, may result in our temporary inability to meet the service level and performance requirements of our clients. Failure to consistently meet service level requirements of a client or errors made by our associates or the software and/or platforms we use in the course of delivering services to our clients could disrupt the client’s business and result in a reduction in revenue or a claim for substantial damages against us. For example, some of our agreements stipulate standards of service that, if not met by us, will require us to pay penalties to our clients or result in lower payment to us. Failure to meet these service level requirements could result in the payment of significant penalties by us to our clients which in turn could have an adverse effect on our business, results of operations, financial condition and cash flows. In addition, in connection with acquiring new business from a client or entering into client contracts, our employees may make various representations, including representations relating to the quality of our services, abilities of our associates and our project management techniques. A failure or inability to meet a contractual requirement or our representations could seriously damage our reputation and affect our ability to attract new business or result in a claim for substantial damages against us.11
Our dependence on our offshore delivery centers requires us to maintain active data and voice communications between our main delivery centers in China, Costa Rica, India, the Philippines, Poland, Romania, South Africa, Spain, Sri Lanka, Turkey, the UK and the US, our international technology hubs in the UK and the US and our clients’ offices. Although we maintain redundant facilities and communications links, disruptions could result from, among other things, technical and electricity breakdowns, computer glitches and viruses and adverse weather conditions. For instance, we depend on a continuous supply of electricity to operate our IT infrastructure. As a result of the
COVID-19
pandemic, we have adopted a hybrid-working model, whereby a significant portion of our employees are working from home. While we have implemented multiple levels of electrical redundancies at our operating premises to mitigate against the risk of power shortage, such measures may not be available at our employees’ homes. Several countries where we operate from could face power shortage in the future, which may disrupt our operations, including for employees working from home, and slow down the expansion of our operations in these countries. For instance:| • | South Africa has been facing widespread rolling power blackouts, with the current period of rolling blackouts taking place since March 2021, due to breakdowns in multiple power stations resulting in planned and unplanned power outages. |
| • | Sri Lanka has been unable to import sufficient oil required for electricity generation due to a foreign exchange crisis since 2021 and has experienced nationwide power cuts. |
| • | Poland and Romania are partly dependent on supply of gas from Russia for their electricity generation, which may be impacted as a result of the ongoing conflict between Ukraine and Russia. |
| • | India faced temporary power shortages in October-November 2021 as a result of shortages of coal used to generate electricity. |
Any significant failure of our equipment or systems, or any major disruption to basic infrastructure like power and telecommunications in the locations in which we operate, could impede our ability to provide services to our clients, have a negative impact on our reputation, cause us to lose clients, reduce our revenue and harm our business.
We depend on human resources to process transactions for our clients. Disruptive incidents, including
man-made
events such as military conflicts, civil strikes and shutdowns, may impact the ability of our employees to commute to and from our operating premises.Non-natural
disasters, whether unintentional (such as those caused by accidents) or intentional (such as those caused by terrorist attacks), may also disrupt our operations. While we have implemented business continuity plans for clients where we have contractually agreed to do so, we may not always be able to provide services to our clients for the duration of such incidents. For further information on the impact of theCOVID-19
pandemic on our human resources planning, see “— Our business operations and future growth have been, and may continue to be, negatively impacted on account of theCOVID-19
pandemic.”Although under most of our contracts with our clients, our liability for breach of our obligations is limited to actual damages suffered by the client and capped at a portion of the fees paid or payable to us under the relevant contract, our liability for breach of our obligations under certain of our contracts is unlimited. With respect to those of our contracts that contain limitations on liability, such limitations may be unenforceable or otherwise may not protect us from liability for damages. In addition, certain liabilities, such as claims of third parties for which we may be required to indemnify our clients, are generally not limited under those agreements. Further, although we have professional indemnity insurance coverage, the coverage may not continue to be available on reasonable terms or in sufficient amounts to cover one or more large claims and our insurers may disclaim coverage as to any future claims. The successful assertion of one or more large claims against us that exceed available insurance coverage, or changes in our insurance policies (including premium increases or the imposition of large deductible or
co-insurance
requirements), could have a material adverse effect on our business, reputation, results of operations, financial condition and cash flows.We are liable to our clients for damages caused by unauthorized disclosure of sensitive or confidential information, whether through a breach or circumvention of our or our clients’ computer systems and processes, through our employees or otherwise. Further, cybersecurity and data privacy considerations could impact our business.
We are typically required to manage, utilize and store sensitive or confidential client data in connection with the services we provide. Under the terms of our client contracts, we are required to keep such information strictly confidential. Our client contracts do not include any limitation on our liability to them with respect to breaches of our obligation to maintain confidentiality of the information we receive from them. Although we seek to implement measures to protect sensitive and confidential client data, there can be no assurance that we would be able to prevent breaches of security. Further, some of our projects require us to conduct business functions and computer operations using our clients’ systems over which we do not have control and which may not be compliant with industry security standards. In addition, some of the client designed processes that we are contractually required to follow for delivering services to them and which we are unable to unilaterally change, could be designed in a manner that allows for control weaknesses to exist and be exploited. Any vulnerability in a client’s system or client designed process, if exploited, could result in breaches of security or unauthorized transactions and result in a claim for substantial damages against us. Although we have implemented appropriate policies, procedures and infrastructure to reduce the possibility of physical, logical and personnel security breaches, along with appropriate audit oversight for verifying continued operating effectiveness of the same through internal audits and external SSAE18 / ISAE3402, ISO27001 and
PCI-DSS
reviews, such measures can never completely eliminate the risk of cybersecurity attacks. Additionally, remote-working solutions deployed during theCOVID-19
pandemic could potentially result in heightened information technology security and data protection risks on account of services being delivered in a physically unsupervised environment. If any person, including any of our employees, penetrates our or our clients’ network security or otherwise mismanages or misappropriates sensitive or confidential client data, we could be subject to significant liability and lawsuits from our clients or their customers for breaching contractual confidentiality provisions or privacy laws.The threat of cyberattacks has increased and evolved in recent years. In particular, during the
COVID-19
pandemic, many companies across the world, including us, have experienced a significant increase in attempted malicious attacks. To date, although there has not been a material cybersecurity attack that has had an adverse effect on our operations, there can be no assurance that there will be no material adverse effect in the future. Rapid advancements and changes to the technological landscape may require us to make significant further investments in the domain of cybersecurity in order to protect our and our clients’ data and infrastructure. In addition, such advancements coupled with the rise in the sophisticated nature of cyber threats and attacks make it possible that certain threats or vulnerabilities may not be detected in time to prevent an attack on our or our clients’ business. On account of the interconnected nature of our business, there is an interdependency between our clients, business partners and our business to implement appropriate cybersecurity controls in order to mitigate cybersecurity risk. A failure of cybersecurity controls at our client or business partners could therefore result in a breach at our company.While we have insurance coverage for mismanagement or misappropriation of such information by our employees, that coverage may not continue to be available on reasonable terms or in sufficient amounts to cover one or more large claims against us, and our insurers may disclaim coverage as to any future claims. Penetration of the network security of our or our clients’ data centers or computer systems or unauthorized use or disclosure of sensitive or confidential client data, whether through breach of our or our clients’ computer systems, systems failure, loss or theft of assets containing confidential information or otherwise, could also have a negative impact on our reputation which would harm our business.
We also cannot be certain that advances in criminal capabilities (including cyber-attacks or cyber intrusions over the internet, malware, computer viruses and the like), discovery of new vulnerabilities or attempts to exploit existing vulnerabilities in our or our clients’ or business partners’ systems, other data thefts, physical system or network
break-ins
or inappropriate access, or other developments will not compromise or breach the technology protecting our or our client’s or business partners’ computer systems and networks that access and store sensitive information. Cyber threats, such as phishing and trojans, could intrude into our or our clients’ or business partners’ network to steal data or to seek sensitive information. Any intrusion into our network or our clients’ or business partners’ network (to the extent attributed to us or perceived to be attributed to us) that results in any breach of security could cause damage to our reputation and adversely impact our business and financial results. A significant failure in security measures could have a material adverse effect on our business, reputation, results of operations and financial condition.12
Our business could be materially and adversely affected if we do not protect our intellectual property or if our services are found to infringe on the intellectual property of others.
Our success depends in part on certain methodologies, practices, tools and technical expertise we utilize in designing, developing, implementing and maintaining applications and other proprietary intellectual property rights. In order to protect our rights in such intellectual properties, we rely upon a combination of nondisclosure and other contractual arrangements as well as trade secret, copyright and trademark laws. We also generally enter into confidentiality agreements with our employees, consultants, clients and potential clients, and limit access to and distribution of our proprietary information to the extent required for our business purpose.
India is a member of the Berne Convention, an international intellectual property treaty, and has agreed to recognize protections on intellectual property rights conferred under the laws of other foreign countries, including the laws of the United States. There can be no assurance that the laws, rules, regulations and treaties in effect in the United States, India and the other jurisdictions in which we operate and the contractual and other protective measures we take, are adequate to protect us from misappropriation or unauthorized use of our intellectual property, or that such laws will not change. We may not be able to detect unauthorized use and take appropriate steps to enforce our rights, and any such steps may not be successful. Infringement by others of our intellectual property, including the costs of enforcing our intellectual property rights, may have a material adverse effect on our business, results of operations and financial condition.
Our clients may provide us with access to, and require us to use, third party software in connection with our delivery of services to them. Our client contracts generally require our clients to indemnify us for any infringement of intellectual property rights or licenses to third party software when our clients provide such access to us. If the indemnities under our client contracts are inadequate to cover the damages and losses, we suffer due to infringement of third party intellectual property rights or licenses to third party software to which we were given access, our business and results of operations could be adversely affected. We are also generally required by our client contracts to indemnify our clients for any breaches of intellectual property rights by our services. Although we believe that we are not infringing on the intellectual property rights of others, claims may nonetheless be successfully asserted against us in the future. The costs of defending any such claims could be significant, and any successful claim may require us to modify, discontinue or rename any of our services. Any such changes may have a material adverse effect on our business, results of operations and financial condition.
Our clients may terminate contracts before completion or choose not to renew contracts, which could adversely affect our business and reduce our revenue.
The terms of our client contracts typically range from three to five years. Many of our client contracts can be terminated by our clients with or without cause, with three to six months’ notice and, in most cases, without penalty. The termination of a substantial percentage of these contracts could adversely affect our business and reduce our revenue. Contracts that will expire on or before March 31, 2023 (including work orders/statement of works that will expire on or before March 31, 2023) represented approximately 12.8% of our revenue and 13.8% of our revenue less repair paymentsbusiness solutions or delivering complex, large or unique projects for our clients that could cause clients to terminate or not renew their contracts with us, which in turn could harm our business and our reputation.
(non-GAAP)
from our clients in fiscal 2022. Failure to meet contractual requirements could result in cancellation ornon-renewal
of a contract. Some of our contracts may be terminated by the client if certain of our key personnel working on the client project leave our employment and we are unable to find suitable replacements. In addition, a contract termination or significant reduction in work assigned to us by a major client could cause us to experience a higher than expected number of unassigned employees, which would increase our cost of revenue as a percentage of revenue until we are able to reduce or reallocate our headcount. We may not be able to replace any client that elects to terminate or not renew its contract with us, which would adversely affect our business and revenue. Further, we may face difficulties in providingend-to-end
For example, in October 2021, we ceased to provide services to a telecommunications company which was one of our top fifteen customers by revenue contribution in fiscal 2021 as a result of consolidation initiatives of the customer. The customer accounted for 2.4% and 3.1% of our revenue and 2.6% and 3.2% of our revenue less repair payments
(non-GAAP)
in fiscal 2021 and in fiscal 2020, respectively. For more information, see “— A few major clients account for a significant portion of our revenue and any loss of business from these clients could reduce our revenue and significantly harm our business.”13
Some of our client contracts contain provisions which, if triggered, could result in lower future revenue and have an adverse effect on our business.
In many of our client contracts, we agree to include certain provisions which provide for downward revision of our prices under certain circumstances. For example, certain contracts allow a client in certain limited circumstances to request a benchmark study comparing our pricing and performance with that of an agreed list of other service providers for comparable services. Based on the results of the study and depending on the reasons for any unfavorable variance, we may be required to make improvements in the service we provide or to reduce the pricing for services to be performed under the remaining term of the contract. Some of our contracts also provide that, during the term of the contract and for a certain period thereafter ranging from six to 12 months, we may not provide similar services to certain or any of their competitors using the same personnel. These restrictions may hamper our ability to compete for and provide services to other clients in the same industry, which may result in lower future revenue and profitability.
Some of our contracts specify that if a change in control of our company occurs during the term of the contract, the client has the right to terminate the contract. These provisions may result in our contracts being terminated if there is such a change in control, resulting in a potential loss of revenue.
Fraud on account of circumvention of controls within our or our clients’ computer systems and processes could adversely impact our business.
Our business is dependent on the secure and reliable operation of controls within our and our clients’ information systems and processes, whether operated or executed by our clients themselves or by us in connection with our provision of services to them. Although we take adequate measures to safeguard against system-related and other fraud, there can be no assurance that we would be able to prevent fraud or even detect them on a timely basis, particularly where it relates to our clients’ information systems which are not managed by us. For example, we have identified incidences where our employees have allegedly exploited weaknesses in information systems as well as processes in order to record fraudulent transactions. Additionally, the physically unsupervised nature of remote-working solutions adopted during the
COVID-19
pandemic could potentially expose us to potential instances of fraud. We are generally required to indemnify our clients from third party claims arising out of such fraudulent transactions and our client contracts generally do not include any limitation on our liability to our clients’ losses arising from fraudulent activities by our employees. Our expansion into new markets may create additional challenges with respect to managing the risk of fraud due to the increased geographical dispersion and use of intermediaries. Accordingly, we may have significant liability arising from fraudulent transactions which may materially affect our business and financial results. Although we have professional indemnity insurance coverage for losses arising from fraudulent activities by our employees, that coverage may not continue to be available on reasonable terms or in sufficient amounts to cover one or more large claims against us, and our insurers may also disclaim coverage as to any future claims. We may also suffer reputational harm as a result of fraud committed by our employees, or by our perceived inability to properly manage fraud related risks, which could in turn lead to enhanced regulatory oversight and scrutiny.14
Our business may not develop in ways that we currently anticipate due to negative public reaction to offshore outsourcing, proposed legislation or otherwise.
We have based our strategy of future growth on certain assumptions regarding our industry, services, and future demand in the market for such services. However, the trend to outsource business processes may not continue and could reverse. In addition, we cannot accurately predict the impact that the
COVID-19
pandemic might have on our clients’ outsourcing demands and efforts, which might be lower in the future, as some of our clients might decide to refrain from offshore outsourcing due to the pressures they may face from increased unemployment in the regions in which they operate as a result of theCOVID-19
pandemic.The issue of domestic companies outsourcing services to organizations operating in other countries is a topic of political discussion in the United States, as well as in Europe, Asia Pacific and other regions in which we have clients. Some countries and special interest groups have expressed concerns about a perceived association between offshore outsourcing and the loss of jobs in the domestic economy. This has resulted in increased political and media attention, especially in the United States, where the subject of outsourcing and immigration reform has been a focus of the current presidential administration. It is possible that there could be a change in the existing laws that would restrict or require disclosure of offshore outsourcing or impose new standards that have the effect of restricting the use of certain visas in the foreign outsourcing context. The measures that have been enacted to date are generally directed at restricting the ability of government agencies to outsource work to offshore business service providers. These measures have not had a significant effect on our business because governmental agencies are not a focus of our operations. However, some legislative proposals would, for example, require contact centers to disclose their geographic locations, require notice to individuals whose personal information is disclosed to
non-US
affiliates or subcontractors, require disclosures of companies’ foreign outsourcing practices, or restrict US private sector companies that have federal government contracts, federal grants or guaranteed loan programs from outsourcing their services to offshore service providers. Potential changes in tax laws may also increase the overall costs of outsourcing or affect the balance of offshore and onshore business services. Such changes could have an adverse impact on the economics of outsourcing for private companies in the US, which could in turn have an adverse impact on our business with US clients.Such concerns have also led the UK and other EU jurisdictions to enact regulations which allow employees who are dismissed as a result of transfer of services, which may include outsourcing to
non-UK
or EU companies, to seek compensation either from the company from which they were dismissed or from the company to which the work was transferred. This could discourage EU companies from outsourcing work offshore and/or could result in increased operating costs for us. In addition, there has been publicity about the negative experiences, such as theft and misappropriation of sensitive client data, of various companies that use offshore outsourcing, particularly in India.Current or prospective clients may elect to perform such services themselves or may be discouraged from transferring these services from onshore to offshore providers to avoid negative perceptions that may be associated with using an offshore provider. Any slowdown or reversal of existing industry trends towards offshore outsourcing would seriously harm our ability to compete effectively with competitors that operate out of facilities located in the UK or the US.
Adverse changes to our relationships with the companies with whom we have an alliance or in the business of the companies with whom we have an alliance could adversely affect our results of operations.
We have alliances with companies whose capabilities complement our own. For example, some of our services and solutions are based on technology, software or platforms provided by these companies. The priorities and objectives of these companies with whom we have an alliance may differ from ours. As most of our alliance relationships are
non-exclusive,
these companies with whom we have an alliance are not prohibited from competing with us or forming closer or preferred arrangements with our competitors. One or more of these companies with whom we have an alliance may be acquired by a competitor, or may merge with each other, either of which could reduce our access over time to the technology, software or platforms provided by those companies. In addition, these companies with whom we have an alliance could experience reduced demand for their technology, software or platforms, including, for example, in response to changes in technology, which could lessen related demand for our services and solutions. If we do not obtain the expected benefits from our alliance relationships for any reason, we may be less competitive and our ability to offer attractive solutions to our clients may be negatively affected, which could have an adverse effect on our results of operations.15
If we are unable to collect our receivables from, or bill our unbilled services to, our clients, our results of operations and cash flows could be adversely affected.
Our business depends on our ability to successfully obtain payment from our clients for work performed. We evaluate the financial condition of our clients and usually bill and collect on relatively short cycles. We maintain allowances, using the expected credit loss model, against receivables and unbilled services. Actual losses on client balances could differ from those that we currently anticipate and, as a result, we might need to adjust our allowances. We might not accurately assess the creditworthiness of our clients. Macroeconomic conditions, such as any domestic or global credit crisis and disruption of the global financial system, including on account of the
COVID-19
pandemic, have also and may continue to result in financial difficulties for our clients, including, but not limited to, limited access to the credit markets, insolvency or bankruptcy and, as a result, have caused and may continue to cause, clients to delay payments to us, request modifications to their payment arrangements that could increase our receivables balance, or default on their payment obligations to us. Timely collection of client balances also depends on our ability to complete our contractual commitments and bill and collect our contracted revenues. If we are unable to meet our contractual requirements, we might experience delays in collection of and/or be unable to collect our client balances, and if this occurs, our results of operations and cash flows could be adversely affected. In addition, if we experience an increase in the time to bill and collect for our services, our cash flows could be adversely affected.We may face difficulties as we expand our operations to establish delivery centers in onshore locations and offshore in countries in which we have limited or no prior operating experience.
In April 2014 our delivery center in South Carolina in the US became fully operational. We also opened an additional delivery center in Pennsylvania in the US in September 2014. In 2016, we opened an additional delivery center in the Philippines at Iloilo, and in fiscal 2017 we expanded into France, Germany and Turkey. In fiscal 2019, we added new facilities in Palma, Spain, and the Philippines. In fiscal 2020, we added new facilities in Pune and Gurgaon, India and the Philippines. In fiscal 2021, we added new facilities in Gurgaon, India, Australia and the Philippines. In fiscal 2022, we added new facilities in Hyderabad, India and the Philippines. We intend to continue to expand our global footprint in order to maintain an appropriate cost structure and meet our clients’ delivery needs. We plan to establish additional delivery centers in the Asia Pacific, North America and Europe, which may involve expanding into countries other than those in which we currently operate. Our expansion plans may also involve expanding into less developed countries, which may have less political, social or economic stability and less developed infrastructure and legal systems. As we expand our business into new countries, we may encounter regulatory, personnel, technological and other difficulties that increase our expenses or delay our ability to start up our operations or become profitable in such countries. This may affect our relationships with our clients and could have an adverse effect on our business, results of operations, financial condition and cash flows.
We may be unable to effectively manage our growth and maintain effective internal controls, which could have a material adverse effect on our operations, results of operations and financial condition.
We were founded in April 1996, and we have experienced growth and significantly expanded our operations. For example, over the last five fiscal years, our employees have increased to 52,081 as at March 31, 2022 from 34,547 as at March 31, 2017. In fiscal 2015, our delivery centers in South Carolina and Pennsylvania, in the US, as well as in South Africa, became fully operational, as did our newest facility in China. In fiscal 2016, we added new facilities in Durban and Port Elizabeth, South Africa and Iloilo, the Philippines. In fiscal 2017, we added new facilities in Durban and Centurion, South Africa. In fiscal 2019, we added new facilities in Palma, Spain and the Philippines. In fiscal 2020, we added new facilities in Pune and Gurgaon, India and the Philippines. In fiscal 2021, we added new facilities in Gurgaon, India, Australia and the Philippines. In fiscal 2022, we added new facilities in Hyderabad, India and the Philippines. We have delivery centers across 12 countries in China, Costa Rica, India, the Philippines, Poland, Romania, South Africa, Spain, Sri Lanka, Turkey, the UK, and the US. We intend to further expand our global delivery capability, and we are exploring plans to do so in Asia Pacific, North America and Europe.
We have also completed numerous acquisitions. For example, in the first quarter of fiscal 2017, we acquired Value Edge, a provider of commercial research and analytics services to clients in the pharma industry based in India, the US and Europe. In January 2017, we acquired Denali, a leading provider of strategic procurement BPM solutions based in the United States. In March 2017, we acquired HealthHelp, an industry leader in care management based in the United States. For more information about more recent acquisitions, see “— We may not succeed in identifying suitable acquisition targets or integrating any acquired business into our operations, which could have a material adverse effect on our business, results of operations, financial condition and cash flows.”
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This growth places significant demands on our management and operational resources. In order to manage growth effectively, we must implement and improve operational systems, procedures and internal controls on a timely basis. If we fail to implement these systems, procedures and controls on a timely basis, we may not be able to service our clients’ needs, hire and retain new employees, pursue new business, complete future acquisitions or operate our business effectively. Failure to effectively transfer new client business to our delivery centers, properly budget transfer costs or accurately estimate operational costs associated with new contracts could result in delays in executing client contracts, trigger service level penalties or cause our profit margins not to meet our expectations or our historical profit margins. As a result of any of these potential problems associated with expansion, our business, results of operations, financial condition and cash flows could be materially and adversely affected.
We are subject to various risks relating to human capital management.
We face risks with respect to the management of human capital resources. If not managed properly, these risks could compromise our future success and harm our business. These risks are discussed in detail below.
Our executive and senior management team and other key team members in our business units are critical to our continued success and the loss of such personnel could harm our business.
Our future success substantially depends on the performance of the members of our executive and senior management team and other key team members in each of our business units. These personnel possess technical and business capabilities including domain expertise that are difficult to replace. There is intense competition for experienced senior management and personnel with technical and industry expertise in the BPM industry, and we may not be able to retain our key personnel due to various reasons, including the compensation philosophy followed by our company as described in “Part I — Item 6. Directors, Senior Management and Employees — Compensation”. Although we have entered into employment contracts with our executive officers, certain terms of those agreements may not be enforceable and in any event these agreements do not ensure the continued service of these executive officers. In the event of a loss of any key personnel, there is no assurance that we will be able to find suitable replacements for our key personnel within a reasonable time. The loss of key members of our senior management or other key team members, particularly to competitors, could have a material adverse effect on our business, results of operations, financial condition and cash flows.
We may fail to attract and retain enough sufficiently trained employees to support our operations, as competition for highly skilled personnel is significant and we experience significant employee attrition. These factors could have a material adverse effect on our business, results of operations, financial condition and cash flows.
The BPM industry relies on large numbers of skilled employees, and our success depends to a significant extent on our ability to attract, hire, train and retain qualified employees. The BPM industry, including our company, experiences high employee attrition. As companies, including our company, transition from a “work from home” model to a return to the office, we may face higher levels of attrition if employees are unwilling to return to
pre-COVID
working schedules. In addition, client mandates that restrict our delivery of services remotely could also adversely affect our ability to attract talents in the future. During each of fiscal 2022, 2021 and 2020, the attrition rate for our employees who have completed six months of employment with us was 36%, 22% and 30%, respectively. We cannot assure you whether our attrition rate will increase or decrease in the future. There is significant competition in the jurisdictions where our operation centers are located, including India, the Philippines, Romania, South Africa and Sri Lanka, for professionals with the skills necessary to perform the services we offer to our clients. Increased competition for these professionals, in the BPM industry or otherwise, could have an adverse effect on us. A significant increase in the attrition rate among employees with specialized skills could decrease our operating efficiency and productivity and could lead to a decline in demand for our services.In addition, our ability to maintain and renew existing engagements and obtain new business will depend largely on our ability to attract, train and retain personnel with skills that enable us to keep pace with growing demands for outsourcing, evolving industry standards and changing client preferences. Our failure either to attract, train and retain personnel with the qualifications necessary to fulfill the needs of our existing and future clients or to assimilate new employees successfully could have a material adverse effect on our business, results of operations, financial condition and cash flows.
Our success in attracting talent depends on our ability to foster a culture of diversity, equity and inclusion at our workplace. We are focused on promoting a range of matters to help foster our workplace culture, including diversity, equal opportunities,
non-discrimination,
inclusion and employee health and safety. We have adopted policies to promote compliance with laws and regulations as well as to foster a respectful workplace for all employees. Any failure in adhering to these policies could harm our reputation and result in negative publicity, thereby negatively affecting our ability to attract and retain talent.Employee strikes and other labor-related disruptions may adversely affect our operations.
Our business depends on a large number of employees executing client operations. Strikes or labor disputes with our employees at our delivery centers may adversely affect our ability to conduct business. Our employees are not unionized, although they may in the future form unions. We cannot assure you that there will not be any strike, lock out or material labor dispute in the future. Work interruptions or stoppages could have a material adverse effect on our business, results of operations, financial condition and cash flows.
17
Our loan agreements impose operating and financial restrictions on us and our subsidiaries.
While we had no indebtedness as of March 31, 2022, we had in the past incurred a substantial amount of indebtedness in connection with our acquisitions. See “Part I — Item 5. Operating and Financial Review and Prospects — Liquidity and Capital Resources.” Generally, our loan agreements contain a number of covenants and other provisions that, among other things, may impose operating and financial restrictions on us and our subsidiaries. These restrictions could put a strain on our financial position. For example:
| • | they may increase our vulnerability to general adverse economic and industry conditions; |
| • | they may require us to dedicate a substantial portion of our cash flow from operations to payments on our loans, thereby reducing the availability of our cash flow to fund capital expenditure, working capital and other general corporate purposes; |
| • | they may require us to seek lenders’ consent prior to paying dividends on our ordinary shares; |
| • | they may limit our ability to incur additional borrowings or raise additional financing through equity or debt instruments; and |
| • | they may impose certain financial covenants on us that we may not be able to meet, which may cause the lenders to accelerate the repayment of the remaining loan outstanding. |
Further, the restrictions that may be contained in our loan agreements may limit our ability to plan for or react to market conditions, meet capital needs or make acquisitions or otherwise restrict our activities or business plans. Our ability to comply with the covenants of our loan agreements may be affected by events beyond our control, and any material deviations from our forecasts could require us to seek waivers or amendments of covenants or alternative sources of financing or to reduce expenditures. We cannot assure you that such waivers, amendments or alternative financing could be obtained, or if obtained, would be on terms acceptable to us.
To fund our capital expenditures, service indebtedness and fund other potential liquidity requirements, we will require a significant amount of cash. Our ability to generate cash depends on many factors beyond our control and we may need to access the credit market to meet our liquidity requirements.
Our ability to fund planned capital expenditures and to make payments on outstanding loans will depend on our ability to generate cash in the future. This, to a large extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. Furthermore, given the recent global economic slowdown and that uncertainty over global economic conditions remains, including on account of the
COVID-19
pandemic and the Russia-Ukraine military conflict, there can be no assurance that our business activity will be maintained at our expected level to generate the anticipated cash flows from operations, or that our credit facilities will be available or sufficient. If the current global economic slowdown and uncertainties continue, we may experience a decrease in demand for our services, resulting in our cash flows from operations being lower than anticipated. This may in turn result in our need to obtain financing, which may not be available to us on favorable terms or at all.If we cannot fund our capital expenditures, service indebtedness or fund our other potential liquidity requirements, we may have to take actions such as seeking additional equity or reducing or delaying capital expenditures, strategic acquisitions and investments. We cannot assure you that any such actions, if necessary, could be effected on commercially reasonable terms or at all.
18
If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent or detect fraud. As a result, current and potential investors could lose confidence in our financial reporting, which could harm our business and have an adverse effect on our ADS price.
Effective internal control over financial reporting is necessary for us to provide reliable financial reports. The effective internal controls together with adequate disclosure controls and procedures are designed to prevent or detect fraud. Deficiencies in our internal controls may adversely affect our management’s ability to record, process, summarize, and report financial data on a timely basis. As a public company, we are required by Section 404 of the Sarbanes-Oxley Act of 2002 to include a report of management’s assessment on our internal control over financial reporting and an independent auditor’s attestation report on our internal control over financial reporting in our annual reports on Form
20-F.
If material weaknesses are identified in our internal controls over financial reporting, we could be required to implement remedial measures. If we fail to maintain effective disclosure controls and procedures or internal control over financial reporting, we could lose investor confidence in the accuracy and completeness of our financial reports, which could have a material adverse effect on our ADS price.
Wage increases may prevent us from sustaining our competitive advantage and may reduce our profit margin.
Salaries and related benefits of our operations staff and other employees in countries where we have delivery centers, in particular India, are among our most significant costs. Wage costs in India have historically been significantly lower than wage costs in the US and Europe for comparably skilled professionals, which has been one of our competitive advantages. However, rapid economic growth in India, increased demand for BPM outsourcing to India, increased competition for skilled employees in India, and regulatory developments resulting in wage increases in India, may reduce this competitive advantage. For example, the Code on Wages 2019, Industrial Relations Code 2020, Social Security Code 2020 and Occupational Safety, Health & Working Condition Code 2020 received assent from the President of India on September 28, 2020. However, the rules for these Acts have not yet been published and the effective date from which these changes are applicable is yet to be notified. Accordingly, while we are unable to determine with certainty the financial impact due to these changes, it is possible that our wage costs in India may increase as a result of these changes when they become effective. In addition, if the US dollar or the pound sterling declines in value against the Indian rupee, wages in the US or the UK will further decrease relative to wages in India, which may further reduce our competitive advantage. We may need to increase our levels of employee compensation more rapidly than in the past to remain competitive in attracting the quantity and quality of employees that our business requires. Wage increases may reduce our profit margins and have a material adverse effect on our financial condition and cash flows.
Further, following the establishment of our delivery centers in the US in 2014, our operations in the US have expanded and our wage costs for employees located in the UK and the US now represent a larger proportion of our total wage costs. Wage increases in the UK and the US may therefore also reduce our profit margins and have a material adverse effect on our financial condition and cash flows.
Our operating results may differ from period to period, which may make it difficult for us to prepare accurate internal financial forecasts and respond in a timely manner to offset such period to period fluctuations.
Our operating results may differ significantly from period to period due to factors such as client losses, variations in the volume of business from clients resulting from changes in our clients’ operations, the business decisions of our clients regarding the use of our services, delays or difficulties in expanding our operational facilities and infrastructure, changes to our pricing structure or that of our competitors, inaccurate estimates of resources and time required to complete ongoing projects, currency fluctuations and seasonal changes in the operations of our clients. For example, our clients in the travel and leisure industry experience seasonal changes in their operations in connection with the US summer holiday season, as well as episodic factors such as adverse weather conditions. Transaction volumes have been, and continue to be, impacted by market conditions affecting the travel industry, including natural disasters, outbreak of infectious diseases (such as the
COVID-19
pandemic, which led to a significant fall in air travel volumes) or other serious public health concerns, military conflict and terrorist attacks. In addition, our contracts do not generally commit our clients to provide us with a specific volume of business.19
In addition, the long sales cycle for our services, which typically ranges from three to 12 months, and the internal budget and approval processes of our prospective clients make it difficult to predict the timing of new client engagements. The extent to which the
COVID-19
pandemic impacts the length of sales cycle for our services will depend on numerous evolving factors that we may not be able to accurately predict, including resurgence of the pandemic, the duration and scope thereof; the effect on our potential and existing clients and client demand for our services and solutions; our ability to sell and provide our services and solutions; the ability of our clients to pay for our services and solutions; and any further closures of our and our clients’ offices and facilities. Commencement of work and ramping up of volume of work with certain new and existing clients have in the past been slower than we had expected and may in the future be slower than we expect. Revenue is recognized upon actual provision of services and when the criteria for recognition are achieved. Accordingly, the financial benefit of gaining a new client may be delayed due to delays in the implementation of our services. These factors may make it difficult for us to prepare accurate internal financial forecasts or replace anticipated revenue that we do not receive as a result of those delays. Due to the above factors, it is possible that in some future quarters our operating results may be significantly below the expectations of the public market, analysts and investors.If our pricing structures do not accurately anticipate the cost and complexity of performing our work, our profitability may be negatively affected.
The terms of our client contracts typically range from three to five years. In many of our contracts, we commit to long-term pricing with our clients, and we negotiate pricing terms with our clients utilizing a range of pricing structures and conditions. Depending on the particular contract, these include input-based pricing (such as full-time equivalent-based pricing arrangements), fixed-price arrangements, output-based pricing (such as transaction-based pricing), outcome-based pricing, and contracts with features of all these pricing models. Our pricing is highly dependent on our internal forecasts and predictions about our projects and the marketplace, which are largely based on limited data and could turn out to be inaccurate. If we do not accurately estimate the costs and timing for completing projects, our contracts could prove unprofitable for us or yield lower profit margins than anticipated. Some of our client contracts do not allow us to terminate the contracts except in the case of
non-payment
by our client. If any contract turns out to be economicallynon-viable
for us, we may still be liable to continue to provide services under the contract.We intend to focus on increasing our service offerings that are based on
non-linear
pricing models (such as fixed-price and outcome-based pricing models) that allow us to price our services based on the value we deliver to our clients rather than the headcount deployed to deliver the services to them.Non-linear
revenues may be subject to short-term pressure on margins as initiatives in developing the products and services take time to deliver. The risk of entering intonon-linear
pricing arrangements is that if we fail to properly estimate the appropriate pricing for a project, we may incur lower profits or losses as a result of being unable to execute projects with the amount of labor we expected or at a margin sufficient to recover our initial investments in our solutions. Whilenon-linear
pricing models are expected to result in higher revenue productivity per employee and improved margins, they also mean that we continue to bear the risk of cost overruns, wage inflation, fluctuations in currency exchange rates and failure to achieve clients’ business objectives in connection with these projects.Our profit margin, and therefore our profitability, is largely a function of our asset utilization and the rates we are able to recover for our services. An important component of our asset utilization is our seat utilization rate, which is the average number of work shifts per day, out of a maximum of three, for which we are able to utilize our work stations, or seats. During fiscal 2022, 2021 and 2020, we incurred significant expenditures to increase our number of seats by establishing additional delivery centers or expanding production capacities in our existing delivery centers. If we are not able to maintain the pricing for our services or an appropriate seat utilization rate, without corresponding cost reductions, our profitability will suffer. The rates we are able to recover for our services are affected by a number of factors, including our clients’ perceptions of our ability to add value through our services, competition, introduction of new services or products by us or our competitors, our ability to accurately estimate, attain and sustain revenue from client contracts, margins and cash flows over increasingly longer contract periods and general economic and political conditions. Our profitability is also a function of our ability to control our costs and improve our efficiency. As we increase the number of our employees and execute our strategies for growth, we may not be able to manage the significantly larger and more geographically diverse workforce that may result, which could adversely affect our ability to control our costs or improve our efficiency. Further, because there is no certainty that our business will
ramp-up
at the rate that we anticipate, we may incur expenses for the increased capacity for a significant period of time without a corresponding growth in our revenue. Commencement of work and ramping up of volume of work with certain new and existing clients have in the past been slower than we had expected and may in the future be slower than we expect. If our revenue does not grow at our expected rate, we may not be able to maintain or improve our profitability. TheCOVID-19
pandemic has also led to, and may continue to lead to, increased costs, as we have to incur additional expenses in relation to the measures we have implemented to safeguard our employees’ health and safety and client operations, such as enhanced sanitization measures at our office premises, laptop rental costs for employees who are working remotely, telecommunications costs for mobile broadband devices, additional software licenses and logistics costs for the movement of equipment and we may need to pay higher costs for compensation, rental, accommodation and other fixed costs as a result of disruptions caused by the continued spread of the virus.20
We have in the past and may in the future enter into subcontracting arrangements for the delivery of services. For example, in China, in addition to delivering services from our own delivery center, we used to deliver services through a subcontractor’s delivery center. We could face greater risk when pricing our outsourcing contracts, as our outsourcing projects typically entail the coordination of operations and workforces with our subcontractor, and utilizing workforces with different skill sets and competencies. Furthermore, when outsourcing work we assume responsibility for our subcontractors’ performance. Our pricing, cost and profit margin estimates on outsourced work may include anticipated long-term cost savings from transformational and other initiatives that we expect to achieve and sustain over the life of the outsourcing contract. There is a risk that we will underprice our contracts, fail to accurately estimate the costs of performing the work or fail to accurately assess the risks associated with potential contracts. In particular, any increased or unexpected costs, delays or failures to achieve anticipated cost savings, or unexpected risks we encounter in connection with the performance of this work, including those caused by factors outside our control, could make these contracts less profitable or unprofitable, which could have an adverse effect on our profit margin.
We may not succeed in identifying suitable acquisition targets or integrating any acquired business into our operations, which could have a material adverse effect on our business, results of operations, financial condition and cash flows.
Our growth strategy involves gaining new clients and expanding our service offerings, both organically and through strategic acquisitions. It is possible that in the future, we may not succeed in identifying suitable acquisition targets available for sale or investments on reasonable terms, have access to the capital required to finance potential acquisitions or investments, or be able to consummate any acquisition or investments. Future acquisitions or joint ventures may also result in the incurrence of indebtedness or the issuance of additional equity securities, which may present difficulties in financing the acquisition or joint venture on attractive terms. The inability to identify suitable acquisition targets or investments or the inability to complete such transactions may affect our competitiveness and our growth prospects.
Historically, we have expanded some of our service offerings and gained new clients through strategic acquisitions. For example, in January 2017, we acquired Denali, a leading provider of strategic procurement BPM solutions in the high technology, retail and CPG, banking and financial services, utilities and healthcare verticals, and in March 2017, we acquired HealthHelp, an industry leader in care management whose solutions are delivered by combining a proprietary technology platform rooted in evidence-based medical research,
high-end
predictive analytics, and deep healthcare industry expertise. In June 2016, we acquired Value Edge, a provider of commercial research and analytics services to clients in the pharma industry. The lack of profitability of any of our acquisitions or joint ventures could have a material adverse effect on our operating results.In addition, our management may not be able to successfully integrate any acquired business into our operations or benefit from any joint ventures that we enter into, and any acquisition we do complete or any joint venture we do enter into may not result in long-term benefits to us. For instance, if we acquire a company, we could experience difficulties in assimilating that company’s personnel, operations, technology and software, or the key personnel of the acquired company may decide not to work for us. There is no assurance that these acquisitions will be profitable for us. Further, we face the risk that the legal regime or regulatory requirements imposed on any business that we acquire may change following our acquisition and such changes may adversely affect our ability to achieve the expected accretive benefits from the acquisition, which could in turn require us to recognize an impairment of goodwill associated with the acquired business. For more information see “— The international nature of our business exposes us to several risks, such as unexpected changes in the regulatory requirements and government policy changes of multiple jurisdictions.”
We also face risks arising from acquisitions of businesses reliant upon a small number of key clients. The value of such acquisitions may decline in the event that their key clients decide not to renew their contracts, or decrease their volume of business or the prices paid for services. For example, HealthHelp is primarily reliant on one client. A decline in the volume of business from this client or in the pricing of our services to this client would likely adversely affect our ability to achieve the expected accretive benefits from our acquisition of HealthHelp.
Further, we may receive claims or demands by the sellers of the entities acquired by us on the indemnities that we have provided to them for losses or damages arising from any breach of contract by us. Conversely, while we may be able to claim against the sellers on their indemnities to us for breach of contract or breach of the representations and warranties given by the sellers in respect of the entities acquired by us, there can be no assurance that our claims will succeed, or if they do, that we will be able to successfully enforce our claims against the sellers at a reasonable cost. Acquisitions and joint ventures also typically involve a number of other risks, including diversion of management’s attention, legal liabilities and the need to amortize acquired intangible assets, any of which could have a material adverse effect on our business, results of operations, financial condition and cash flows.
21
Goodwill, intangible or other assets that we carry on our balance sheet could give rise to significant impairment charges in the future.
As at March 31, 2022, we had goodwill and intangible assets of approximately $189.0 million, which primarily resulted from our acquisitions of HealthHelp, Denali and Value Edge. Under IFRS, we are required to review our goodwill, intangibles or other assets for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. In addition, goodwill, intangible or other assets with indefinite lives are required to be tested for impairment at least annually. For example, during the fourth quarter of fiscal 2017, proposed changes to the laws of the UK governing personal injury claims generated uncertainty regarding the future earnings trajectory of our legal services business in our WNS Auto Claims BPM segment, as a result of which we had expected that we would eventually exit from providing legal services in relation to personal injury claims. We also experienced a decrease in volume of and loss of business from certain clients of our traditional repair services in our WNS Auto Claims BPM segment in fiscal 2017. As a result, we had in fiscal 2017 expected the future performance of our WNS Auto Claims BPM segment to decline significantly and therefore significantly reduced our financial projections and estimates of our WNS Auto Claims BPM segment. Accordingly, we performed an impairment review of the goodwill associated with the companies we had acquired for our auto claims business and recorded an impairment charge of $21.7 million to our results of operations in fiscal 2017. During the fourth quarter of fiscal 2020, Brexit had a negative impact on the insurance industry and applied downward pressure on the expected future performance of the WNS Auto Claims reportable segment, due to contract renegotiations and loss of certain clients. These factors, together with the highly uncertain operating environment in the UK, have negatively impacted and caused us to significantly reduce our financial projections and estimates of the WNS Auto Claims BPM reportable segment from our previous estimate. Accordingly, we performed an impairment review of the goodwill associated with the companies we had acquired for our auto claims business and recorded an impairment charge of $4.1 million to our results of operations in fiscal 2020 for the remaining goodwill balance of our auto claims business. See also “— The international nature of our business exposes us to several risks, such as unexpected changes in the regulatory requirements of multiple jurisdictions.” We may be required to record further impairment charges to our goodwill and intangible assets associated with other acquisitions in the future. For example, if the research and analytics industry experiences a significant decline in business and we determine that we will not be able to achieve the cash flows that we had expected from our acquisitions of Marketics Technologies (India) Private Limited, a provider of offshore analytics services which we acquired in 2007, and Value Edge, we may have to record an impairment of all or a portion of the goodwill or intangible assets relating to those acquisitions. Any further impairment to our goodwill or intangible assets may have a significant adverse impact on our results of operations.
We are incorporated in Jersey, Channel Islands and are subject to Jersey laws and regulations. If the tax benefits enjoyed by our company are withdrawn or changed, we may be liable for higher tax, thereby reducing our profitability.
As a company incorporated in Jersey, Channel Islands, we are currently subject to Jersey income tax at a rate of 0%. Although we continue to enjoy the benefits of the Jersey business tax regime, if Jersey tax laws change or the tax benefits we enjoy are otherwise withdrawn or changed, we may become liable for higher tax, thereby reducing our profitability.
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Risks Related to Key Delivery Locations
A substantial portion of our assets and operations are located in India and we are subject to regulatory, economic, social and political uncertainties in India.
Our primary operating subsidiary, WNS Global Services Private Limited (“WNS Global”), is incorporated in India, and a substantial portion of our assets and employees are located in India. The Government of India, however, has exercised and continues to exercise significant influence over many aspects of the Indian economy. The Government of India has provided significant tax incentives and relaxed certain regulatory restrictions in order to encourage foreign investment in specified sectors of the economy, including the BPM industry. Those programs that have benefited us include tax holidays, liberalized import and export duties and preferential rules on foreign investment and repatriation. We cannot assure you that such liberalization policies will continue. The Government of India may also enact new tax legislation or amend the existing legislation that could impact the way we are taxed in the future. For more information, see “— Tax legislation and the results of actions by taxing authorities may have an adverse effect on our operations and our overall tax rate.” Other legislation passed by the Government of India may also impact our business. For example, the Code on Wages 2019, Industrial Relations Code 2020, Social Security Code 2020 and Occupational Safety, Health & Working Condition Code 2020 received assent from the President of India on September 28, 2020. However, the rules for these Acts have not yet been published and the effective date from which these changes are applicable is yet to be notified. Accordingly, while we are unable to determine with certainty the financial impact due to these changes, it is possible that our wage costs in India may increase as a result of these changes when they become effective. In December 2019, the Parliament of India passed the Citizenship (Amendment) Act, 2019, which provides citizenship to religious minorities in Pakistan, Bangladesh and Afghanistan, prompting protests across India. In addition, there are concerns over the slowing growth of India’s economy and the negative impact that
COVID-19
has had, and may continue to have, on our business, financial condition, results of operations and cash flows. Our financial performance and the market price of our ADSs may be adversely affected by changes in inflation, exchange rates and controls, interest rates, Government of India policies (including taxation regulations and policies), social stability or other political, economic or diplomatic developments affecting India in the future.India has witnessed communal clashes in the past. Although such clashes in India have, in the recent past, been sporadic and have been contained within reasonably short periods of time, any such civil disturbance in the future could result in disruptions in transportation or communication networks, as well as have adverse implications for general economic conditions in India. Such events could have a material adverse effect on our business, the value of our ADSs and your investment in our ADSs.
The UK’s withdrawal from the EU may have a negative effect on global economic conditions, financial markets and our operations in the UK and EU, which could reduce the value of our ADS.
We have operations in the UK, Romania, Spain and Poland. Brexit has created significant political and economic uncertainty regarding the future trading relationship between the UK and the EU and could cause disruptions to, and create uncertainty surrounding, our operations in the UK and the EU. The long-term effects of Brexit will depend on the agreements or arrangements with the EU for the UK to retain access to EU markets either during a transitional period or more permanently. These developments may have an adverse effect on our operations in the UK and the EU, the value of our ADSs and your investment in our ADSs.
Our business in South Africa is evaluated for compliance with the South African government’s Broad-Based Black Economic Empowerment (“BBBEE”) legislation. Failure to maintain a minimum BBBEE rating would result in a loss of certain government grants, and may also result in us losing certain business opportunities or clients imposing contractual penalties on us.
Our business in South Africa is evaluated for compliance with the South African government’s BBBEE legislation against a BBBEE scorecard, which has different levels based on various criteria. South African government grants are available to businesses that meet specified conditions, including achieving a specified minimum BBBEE rating. A level one BBBEE rating has the most rigorous criteria. Additionally, many South African companies require their service providers to maintain a minimum BBBEE rating, and many of our South African client contracts contain clauses that allow our clients to terminate their contracts with us or impose specified penalties on us if we do not maintain a minimum BBBEE rating.
We conduct our domestic business in South Africa (serving clients based in South Africa) through our South Africa subsidiary, WNS South Africa (Pty) Ltd, and our international business in South Africa (serving clients based outside South Africa) through our South Africa subsidiary, WNS Global Services SA (Pty) Limited. During fiscal 2020, pursuant to the requirements of the South African government’s BBBEE Codes of Good Practice, the WNS
B-BBEE
Staff Share Trust subscribed to one participating preference share issued by WNS Global Services SA (Pty) Ltd, which entitles it to 45.56% of voting rights in WNS South Africa (Pty) Ltd. In fiscal 2022, the voting rights were increased to 48.84% to help ensure WNS South Africa (Pty) Ltd maintains the same level of rating. We achieved a level one rating in respect of WNS South Africa (Pty) Ltd in May 2022, which is valid until April 2023 whereas the BBBEE verification audit for WNS Global Services SA (Pty) Limited is currently in progress and the new rating is expected to be issued in the first quarter of fiscal 2023. Our program developed for the purpose of meeting the criteria to achieve the requisite BBBEE rating in respect of WNS Global Services SA (Pty) Limited includes, among other measures, divesting some of our interests in such subsidiary to address the criterion relating to the percentage of ownership of an entity by “black people” (as defined under the applicable legislation). We achieved a level six rating in respect of WNS Global Services SA (Pty) Limited in our last BBBEE verification audit in February 2021, which is valid until February 2022.With the achievement of a level six rating in respect of WNS Global Services SA (Pty) Limited and a level one rating in respect of WNS South Africa (Pty) Ltd, we currently continue to meet the minimum BBBEE rating required under our contracts with South African clients and be eligible for government grants associated with our domestic and international business.
However, there is no assurance that we will maintain our existing BBBEE rating with respect to WNS Global Services SA (Pty) Limited or WNS South Africa (Pty) Ltd in our next annual BBBEE verification audits or thereafter. If we fail to maintain or achieve the required minimum BBBEE ratings, we will cease to be eligible for government grants, will be disqualified from bidding for certain business, and certain of our clients may terminate their contracts with us or impose penalties on us. These outcomes would have an adverse effect on our business, results of operations, financial condition and cash flows.
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Our facilities are at risk of damage by natural disasters.
Our operational facilities and communication hubs may be damaged in natural disasters such as earthquakes, floods, heavy rains, tsunamis and cyclones. For example, Chennai was affected by severe flooding in November 2015. Although our clients experienced minimal disruptions during the Chennai flood due to the business continuity planning and infrastructure resiliency measures we have implemented with a view to minimizing the impact of natural disasters on our business, such measures may be rendered less effective in other circumstances. In addition, we have operational facilities and communication hubs located in regions which are considered to be particularly vulnerable to natural disasters, such as the Philippines and Houston in the United States, which have experienced severe natural disasters such as typhoons, hurricanes and floods. Such natural disasters may lead to disruption to information systems and telephone service for sustained periods. Damage or destruction that interrupts our provision of BPM services could damage our relationships with our clients and may cause us to incur substantial additional expenses to repair or replace damaged equipment or facilities. We may also be liable to our clients for disruption in service resulting from such damage or destruction. While we currently have property damage insurance and business interruption insurance, our insurance coverage may not be sufficient. Furthermore, we may be unable to secure such insurance coverage at premiums acceptable to us in the future or secure such insurance coverage at all. Prolonged disruption of our services as a result of natural disasters would also entitle our clients to terminate their contracts with us.
If the tax benefits and other incentives that we currently enjoy are reduced or withdrawn or not available for any other reason, our financial condition would be negatively affected.
We have benefitted from, and continue to benefit from, certain tax holidays and exemptions in various jurisdictions in which we have operations.
In fiscal 2022, fiscal 2021 and 2020, our tax rate in India, the Philippines and Sri Lanka impacted our effective tax rate. We would have incurred approximately $20.9 million, $11.1 million and $17.7 million in additional income tax expense on our combined operations in our Special Economic Zone operations in India, the Philippines and Sri Lanka, if the tax holidays and exemptions described below had not been available for the respective periods.
We expect our tax rate in India, the Philippines and Sri Lanka to continue to impact our effective tax rate.
In the past, the majority of our Indian operations were eligible to claim income tax exemption with respect to profits earned from export revenue from operating units registered under the Software Technology Parks of India (“STPI”). The benefit was available for a period of 10 years from the date of commencement of operations, but not beyond March 31, 2011. Effective April 1, 2011, upon the expiration of this tax exemption, income derived from our operations in India became subject to the prevailing annual tax rate of 34.95% in fiscal 2022, fiscal 2021 and 2020. In December 2019, the Government of India enacted the India Tax Law effective retroactively to April 1, 2019, which enables Indian companies to elect to be taxed at a lower income tax rate of 25.17% as compared to the current rate of 34.95%. Once a company elects into the lower income tax rate, a company may not benefit from any tax holidays associated with Special Economic Zones and certain other tax incentives and may not reverse its election. Our current intent is to continue to be subject to the current rate of 34.95% and claim tax holidays associated with SEZ. See “Part I — Item 4. Information on the Company — B. Business Overview — Regulations.”
When any of our tax holidays or exemptions expire or terminate, or if the applicable government withdraws, changes the conditions or reduces the benefits of a tax holiday or exemption that we enjoy, our tax expense may materially increase and this increase may have a material impact on our results of operations. For example, any changes in the regulations relating to work from home arrangements may impact the tax exemption benefits available to us. The applicable tax authorities may also disallow deductions claimed by us and assess additional taxable income on us in connection with their review of our tax returns.
Tax legislation and the results of actions by taxing authorities may have an adverse effect on our operations and our overall tax rate.
The government of India, the US or other jurisdictions where we have a presence could enact new tax legislation which would have a material adverse effect on our business, results of operations and financial condition. In addition, our ability to repatriate surplus earnings from our delivery centers in a
tax-efficient
manner is dependent upon interpretations of local laws, possible changes in such laws and the renegotiation of existing double tax avoidance treaties. Changes to any of these may adversely affect our overall tax rate, or the cost of our services to our clients, which would have a material adverse effect on our business, results of operations and financial condition.The UK has revised the corporate tax rate from 19% to 25% from fiscal 2024. South Africa has reduced the corporate tax rate from 28% to 27% from fiscal 2023. The US Government has proposed to increase the US corporate tax rate. Once effective, this tax rate increase will have an impact on the various current and deferred tax items recorded by the Company’s subsidiaries.
Member countries of the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting have agreed on a two Pillar approach to address the tax challenges arising from the digitalization of the global economy. This is expected to alter the global tax landscape. The rules to operationalize the implementation of these changes have been recently issued and may have an impact on the various current and deferred tax items recorded by the Company’s subsidiaries.
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We are subject to transfer pricing and other tax related regulations and any determination that we have failed to comply with them could materially adversely affect our profitability.
Transfer pricing regulations to which we are subject require that any international transaction among our company and its subsidiaries, or the WNS group enterprises, be on
arm’s-length
terms. We believe that the international transactions among the WNS group enterprises are onarm’s-length
terms. If, however, the applicable tax authorities determine that the transactions among the WNS group enterprises do not meetarm’s-length
criteria, we may incur increased tax liability, including accrued interest and penalties. This would cause our tax expense to increase, possibly materially, thereby reducing our profitability and cash flows. We have signed an advance pricing agreement with the Government of India providing for the agreement on transfer pricing matters over certain transactions covered thereunder for a period of five years starting from April 2013, which has been renewed on similar terms for another five years starting from April 2018.We may be required to pay additional taxes in connection with audits by the tax authorities.
From time to time, we receive orders of assessment from Indian tax authorities assessing additional taxable income on us and/or our subsidiaries in connection with their review of our tax returns. We currently have orders of assessment in fiscal 2003 through fiscal 2018 pending before various appellate authorities. These orders assess additional taxable income that could in the aggregate give rise to an estimated1,867.0 million ($24.6 million based on the exchange rate on March 31, 2022) in additional taxes, including interest of470.9 million ($6.2 million based on the exchange rate on March 31, 2022).
₹
₹
These orders of assessment allege, among others, that the transfer prices we applied to certain of the international transactions between WNS Global or WNS Business Consulting Services Private Limited (“WNS BCS”), each of which is one of our Indian subsidiaries, as the case may be, and our other wholly-owned subsidiaries were not on774.3 million ($10.2 million based on the exchange rate on March 31, 2022) primarily on account of the Indian tax authorities’ denying the set off of brought forward business losses and unabsorbed depreciation. We have appealed against these orders of assessment before higher appellate authorities. For more details on these assessments, See “Part II — Management’s Discussion and Analysis of Financial Condition and Results of Operations —Tax Assessment Orders.”
arm’s-length
terms, disallow a tax holiday benefit claimed by us, deny theset-off
of brought forward business losses and unabsorbed depreciation and disallow certain expenses claimed as tax deductible by WNS Global or WNS BCS, as the case may be. As at March 31, 2022 we have provided a tax reserve of₹
In addition, we currently have orders of assessment pertaining to similar issues that have been decided in our favor by appellate authorities, vacating tax demands of5,435.2 million ($71.7 million based on the exchange rate on March 31, 2022) in additional taxes, including interest of1,931.3 million ($25.5 million based on the exchange rate on March 31, 2022). The income tax authorities have filed or may file appeals against these orders at higher appellate authorities.
₹
₹
In case of disputes, the Indian tax authorities may require us to deposit with them all or a portion of the disputed amounts pending resolution of the matters on appeal. Any amount paid by us as deposits will be refunded to us with interest if we succeed in our appeals. We have deposited898.1 million ($11.8 million based on the exchange rate on March 31, 2022) of the disputed amount with the tax authorities and may be required to deposit the remaining portion of the disputed amount with the tax authorities pending final resolution of the respective matters.
₹
As at March 31, 2022, corporate tax returns in fiscal 2019 and thereafter remain subject to examination by tax authorities in India.
After consultation with our Indian tax advisors and based on the facts of these cases, certain legal opinions from counsel, the nature of the tax authorities’ disallowances and the orders from appellate authorities deciding similar issues in our favor in respect of assessment orders for earlier fiscal years, we believe these orders are unlikely to be sustained at the higher appellate authorities and we intend to dispute the orders of assessment.
In fiscal 2021, the Company received an assessment order from the Indian service tax authority, demanding payment of148.9 million ($2.0 million based on the exchange rate on March 31, 2022) towards service tax for the period April 1, 2014 to June 30, 2017. The tax authorities have rejected input service tax credit on certain types of input services. The Company has orders of assessment pertaining to similar issues for earlier fiscal years that have been decided in favor of the Company by appellate authorities. We intend to dispute the order of assessment.
₹
25
In 2016, we also received an assessment order from the Sri Lankan Tax Authority, demanding payment of LKR 25.2 million ($0.1 million based on the exchange rate on March 31, 2022) in connection with the review of our tax return in fiscal 2012. The assessment order challenges the tax exemption that we have claimed for export business. We have filed an appeal against the assessment order with the Sri Lankan Tax Appeal Commission. Based on consultations with our tax advisors, we believe this order of assessment is more likely than not to be upheld in our favor. We intend to continue to dispute the assessment.
No assurance can be given, however, that we will prevail in our tax disputes. If we do not prevail, payment of additional taxes, interest and penalties may adversely affect our results of operations, financial condition and cash flows. There can also be no assurance that we will not receive similar or additional orders of assessment in the future.
Terrorist attacks, civil unrest and other acts of violence in any of the countries in which we operate or their neighboring countries could adversely affect our operations, resulting in a loss of client confidence and materially adversely affecting our business, results of operations, financial condition and cash flows.
Terrorist attacks and other acts of violence or war in any of the countries in which we operate or their neighboring countries may adversely affect worldwide financial markets and could potentially lead to economic recession, which could adversely affect our business, results of operations, financial condition and cash flows. For example, South Asia has, from time to time, experienced instances of terrorism, civil unrest and hostilities in and among neighboring countries, including Sri Lanka, India and Pakistan. In February 2022, a military conflict arose between Russia and Ukraine, and we have operations in Poland and Romania, which border Ukraine. While the conflict has not presently spread beyond Ukraine, such an escalation in the future may directly impact our operations in those countries. In April 2019, several churches and hotels in Sri Lanka, including premises within one kilometer of one of our delivery centers, were targeted in a series of coordinated terrorist bombings. In previous years, military confrontations between India and Pakistan have occurred in the region of Kashmir and along the India/Pakistan border. There have also been incidents in and near India, such as the bombings of the Taj Mahal Hotel and Oberoi Hotel in Mumbai in 2008, a terrorist attack on the Parliament of India, troop mobilizations along the India/Pakistan border and an aggravated geopolitical situation in the region. Such military activity or terrorist attacks in the future could disrupt our operations or influence the Indian economy by disrupting communications and making travel more difficult. Resulting political tensions could create a greater perception that investments in Indian companies involve a high degree of risk. Such political tensions could similarly create a perception that there is a risk of disruption of services provided by India-based companies, which could have a material adverse effect on the market for our services. Furthermore, if India were to become engaged in armed hostilities, particularly hostilities that were protracted or involved the threat or use of nuclear weapons, we might not be able to continue our operations.
Climate change risks, if not managed properly, can adversely affect our operations and profitability.
Enterprises are increasingly focused on managing risks arising from climate change and compliance with relevant laws and regulations. Extreme weather due to climate change can lead to epidemics as well as business disruptions. Climate change events can result in physical damage to our building infrastructure and other physical assets, disrupt the continued functioning of infrastructures such as the transportation network and utilities in the countries where we operate and negative affect the morale of our employees. For example, drought can result in increases in food prices and food shortages. Changes in the availability of natural resources like water in countries where we operate could directly impact our operations and our employees’ livelihood, which could impact our ability to do business and to ensure business continuity.
In response to increasing awareness in climate change and other related socio-environmental issues, clients increasingly request for our emission performance during the RFP or bidding stage. This could translate into filtering criteria or other parameters in the clients’ process of selecting their service providers. If our performance is not managed in these areas, it may adversely impact our ability to compete and win contracts.
As countries worldwide undertake to lower greenhouse gas emissions, we may be increasingly subject to regulatory requirements relating to reduced emissions, including carbon tax and other emission reduction targets Such new regulations can lead to increased cost of compliance including reporting and disclosure requirements. Risks resulting from potential violations or
non-compliance
with such laws and regulations can impact our profitability through penalties and/or by limiting our ability to operate in certain countries and can also adversely affect our reputation and brand.Restrictions on entry visas may affect our ability to compete for and provide services to clients in the US and the UK, which could have a material adverse effect on future revenue.
The vast majority of our employees are Indian nationals. The ability of some of our executives to work with and meet our European and North American clients and our clients from other countries depends on the ability of our senior managers and employees to obtain the necessary visas and entry permits. In response to previous terrorist attacks and global unrest, US and European immigration authorities have sharply increased the level of scrutiny in granting visas. Immigration laws in those countries may also require us to meet certain other legal requirements as a condition to obtaining or maintaining entry visas. These restrictions have significantly lengthened the time requirements to obtain visas for our personnel, which has in the past resulted, and may continue to result, in delays in the ability of our personnel to meet with our clients. Further, the
COVID-19
pandemic resulted in the temporary suspension of existing visas and several governments not granting new visas. While a number of countries have resumed the issuance of visas and are reopening of their borders for travel, continuing or intermittent restrictions on visas and travel may recur in the future. In addition, immigration laws are subject to legislative change and varying standards of application and enforcement due to political forces, economic conditions or other events, including terrorist attacks. We cannot predict the political or economic events that could affect immigration laws or any restrictive impact those events could have on obtaining or monitoring entry visas for our personnel. If we are unable to obtain the necessary visas for personnel who need to visit our clients’ sites or, if such visas are delayed, we may not be able to provide services to our clients or to continue to provide services on a timely basis, which could have a material adverse effect on our business, results of operations, financial condition and cash flows.If more stringent labor laws become applicable to us, our profitability may be adversely affected.
India has stringent labor legislation that protects the interests of workers, including legislation that sets forth detailed procedures for dispute resolution and employee removal and legislation that imposes financial obligations on employers upon retrenchment. Though we are exempt from a number of these labor laws at present, there can be no assurance that such laws will not become applicable to the BPM industry in India in the future. In addition, our employees may in the future form unions. If these labor laws become applicable to our workers or if our employees unionize, it may become difficult for us to maintain flexible human resource policies, discharge employees or downsize, and our profitability may be adversely affected.
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Most of our delivery centers operate on leasehold property and our inability to renew our leases on commercially acceptable terms or at all may adversely affect our results of operations.
Most of our delivery centers operate on leasehold property. Our leases are subject to renewal and we may be unable to renew such leases on commercially acceptable terms or at all. Our inability to renew our leases, or a renewal of our leases with a rental rate higher than the prevailing rate under the applicable lease prior to expiration, may have an adverse impact on our operations, including disrupting our operations or increasing our cost of operations. In addition, in the event of
non-renewal
of our leases, we may be unable to locate suitable replacement properties for our delivery centers or we may experience delays in relocation that could lead to a disruption in our operations. Any disruption in our operations could have an adverse effect on our results of operations.27
Risks Related to our ADSs
Substantial future sales of our shares or ADSs in the public market could cause our ADS price to fall.
Sales by us or our shareholders of a substantial number of our ADSs in the public market, or the perception that these sales could occur, could cause the market price of our ADSs to decline. These sales, or the perception that these sales could occur, also might make it more difficult for us to sell securities in the future at a time or at a price that we deem appropriate or to pay for acquisitions using our equity securities. As at March 31, 2022, we had 48,849,907 ordinary shares outstanding (excluding Nil treasury shares), including 48,618,585 shares represented by 48,618,585 ADSs. In addition, as at March 31, 2022, a total of 2,943,777 ordinary shares or ADSs are issuable upon the exercise or vesting of options and restricted share units (“RSUs”) outstanding under our 2006 Incentive Award Plan (as amended and restated, the “2006 Incentive Award Plan”) and our 2016 Incentive Award Plan (as amended and restated, the “2016 Incentive Award Plan”). All ADSs are freely transferable, except that ADSs owned by our affiliates may only be sold in the US if they are registered or qualify for an exemption from registration, including pursuant to Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”). The remaining ordinary shares outstanding may also only be sold in the US if they are registered or qualify for an exemption from registration, including pursuant to Rule 144 under the Securities Act.
The market price for our ADSs may be volatile.
The market price for our ADSs is likely to be highly volatile and subject to wide fluctuations in response to factors including the following:
| • | announcements of technological developments; |
| • | regulatory developments in our target markets affecting us, our clients or our competitors; |
| • | actual or anticipated fluctuations in our operating results; |
| • | changes in financial estimates by securities research analysts; |
| • | changes in the economic performance or market valuations of other companies engaged in BPM; |
| • | addition or loss of executive officers or key employees; |
| • | sales or expected sales of additional shares or ADSs; |
| • | loss of one or more significant clients; and |
| • | a change in control, or possible change of control, of our company. |
In addition, securities markets generally and from time to time experience significant price and volume fluctuations that are not related to the operating performance of particular companies. These market fluctuations may also have a material adverse effect on the market price of our ADSs.
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We may not be able to pay any dividends on our shares and ADSs.
We have never declared or paid any dividends on our ordinary shares. We cannot give any assurance that we will declare dividends of any amount, at any rate or at all. Because we are a holding company, we rely principally on dividends, if any, paid by our subsidiaries to us to fund our dividend payments, if any, to our shareholders. Any limitation on the ability of our subsidiaries to pay dividends to us could have a material adverse effect on our ability to pay dividends to you.
Any future determination to pay cash dividends will be at the discretion of our Board of Directors and will be dependent upon our results of operations and cash flows, our financial position and capital requirements, general business conditions, legal, tax, regulatory and any contractual restrictions on the payment of dividends and any other factors our Board of Directors deems relevant at the time.
Subject to the provisions of the Companies (Jersey) Law 1991 (the “1991 Law”) and our Articles of Association, we may by ordinary resolution declare annual dividends to be paid to our shareholders according to their respective rights and interests in our distributable reserves. Any dividends we may declare must not exceed the amount recommended by our Board of Directors. Our Board of Directors may also declare and pay an interim dividend or dividends, including a dividend payable at a fixed rate, if paying an interim dividend or dividends appears to the Board to be justified by our distributable reserves. We can only declare dividends if our directors who are to authorize the distribution make a prior statement that, having made full enquiry into our affairs and prospects, they have formed the opinion that:
| • | immediately following the date on which the distribution is proposed to be made, we will be able to discharge our liabilities as they fall due; and |
| • | having regard to our prospects and to the intentions of our directors with respect to the management of our business and to the amount and character of the financial resources that will in their view be available to us, we will be able to continue to carry on business and we will be able to discharge our liabilities as they fall due until the expiry of the period of 12 months immediately following the date on which the distribution is proposed to be made or until we are dissolved under Article 150 of the 1991 Law, whichever first occurs. |
Subject to the deposit agreement governing the issuance of our ADSs, holders of ADSs will be entitled to receive dividends paid on the ordinary shares represented by such ADSs. See “— Risks Related to Our Business — Our loan agreements impose operating and financial restrictions on us and our subsidiaries.”
Holders of ADSs may be restricted in their ability to exercise voting rights.
At our request, the depositary of our ADSs will mail to you any notice of shareholders’ meeting received from us together with information explaining how to instruct the depositary to exercise the voting rights of the ordinary shares represented by ADSs. If the depositary timely receives voting instructions from you, it will endeavor to vote the ordinary shares represented by your ADSs in accordance with such voting instructions. However, the ability of the depositary to carry out voting instructions may be limited by practical and legal limitations and the terms of the ordinary shares on deposit. We cannot assure you that you will receive voting materials in time to enable you to return voting instructions to the depositary in a timely manner. Ordinary shares for which no voting instructions have been received will not be voted.
As a foreign private issuer, we are not subject to the proxy rules of the Commission, which regulate the form and content of solicitations by
US-based
issuers of proxies from their shareholders. The form of notice and proxy statement that we have been using does not include all of the information that would be provided under the Commission’s proxy rules.29
Holders of ADSs may be subject to limitations on transfers of their ADSs.
The ADSs are transferable on the books of the depositary. However, the depositary may close its transfer books at any time or from time to time when it deems necessary or advisable in connection with the performance of its duties. In addition, the depositary may refuse to deliver, transfer or register transfers of ADSs generally when the transfer books of the depositary are closed, or at any time or from time to time if we or the depositary deem it necessary or advisable to do so because of any requirement of law or of any government or governmental body or commission or any securities exchange on which the American Depositary Receipts or our ordinary shares are listed, or under any provision of the deposit agreement or provisions of or governing the deposited shares, or any meeting of our shareholders, or for any other reason.
Holders of ADSs may not be able to participate in rights offerings or elect to receive share dividends and may experience dilution of their holdings, and the sale, deposit, cancellation and transfer of our ADSs issued after exercise of rights may be restricted.
If we offer our shareholders any rights to subscribe for additional shares or any other rights, the depositary may make these rights available to them after consultation with us. We cannot make rights available to holders of our ADSs in the US unless we register the rights and the securities to which the rights relate under the Securities Act, or an exemption from the registration requirements is available. In addition, under the deposit agreement, the depositary will not distribute rights to holders of our ADSs unless we have requested that such rights be made available to them and the depositary has determined that such distribution of rights is lawful and reasonably practicable. We can give no assurance that we can establish an exemption from the registration requirements under the Securities Act, and we are under no obligation to file a registration statement with respect to these rights or underlying securities or to endeavor to have a registration statement declared effective. Accordingly, holders of our ADSs may be unable to participate in our rights offerings and may experience dilution of your holdings as a result. The depositary may allow rights that are not distributed or sold to lapse. In that case, holders of our ADSs will receive no value for them. In addition, US securities laws may restrict the sale, deposit, cancellation and transfer of ADSs issued after exercise of rights.
We may be classified as a passive foreign investment company, which could result in adverse US federal income tax consequences to US holders of our ADSs or ordinary shares.
Based on our financial statements and relevant market and shareholder data, we believe that we should not be treated as a passive foreign investment company for US federal income tax purposes (“PFIC”) with respect to our most recently closed taxable year. However, the application of the PFIC rules is subject to uncertainty in several respects, and we cannot assure you that we will not be a PFIC for any taxable year. A
non-US
corporation will be a PFIC for any taxable year if either (i) at least 75% of its gross income for such year is passive income or (ii) at least 50% of the value of its assets (based on an average of the quarterly values of the assets) during such year is attributable to assets that produce passive income or are held for the production of passive income. A separate determination must be made after the close of each taxable year as to whether we were a PFIC for that year. Because the value of our assets for purposes of the PFIC test will generally be determined by reference to the market price of our ADSs and ordinary shares, fluctuations in the market price of the ADSs and ordinary shares may cause us to become a PFIC. In addition, changes in the composition of our income or assets may cause us to become a PFIC. If we are a PFIC for any taxable year during which a US holder (as defined in “Part I — Item 10. Additional Information — E. Taxation — US Federal Income Taxation” of our annual report on Form20-F
for our fiscal year ended March 31, 2022) holds an ADS or ordinary share, certain adverse US federal income tax consequences could apply to such US holder.If a United States person is treated as owning at least 10% of our ordinary shares (or ADSs), such holder may be subject to adverse US federal income tax consequences.
If a United States person is treated as owning (directly, indirectly or constructively) at least 10% of the value or voting power of our ordinary shares (or ADSs), such person may be treated as a “United States shareholder” with respect to each “controlled foreign corporation” in our group (if any). Because our group includes one or more US subsidiaries, certain of our
non-US
subsidiaries could be treated as controlled foreign corporations regardless of whether we are or are not treated as a controlled foreign corporation (although there is currently a pending legislative proposal to limit the application of these rules). A United States shareholder of a controlled foreign corporation may be required to annually report and include in its US taxable income its pro rata share of “Subpart F income,” “global intangiblelow-taxed
income” and investments in US property by controlled foreign corporations, whether or not we make any distributions. An individual that is a United States shareholder with respect to a controlled foreign corporation generally would not be allowed certain tax deductions or foreign tax credits that would be allowed to a United States shareholder that is a US corporation. A failure to comply with these reporting obligations may subject such holder to significant monetary penalties and may prevent the statute of limitations with respect to such holder’s US federal income tax return for the year for which reporting was due from starting. We cannot provide any assurances that we will assist investors in determining whether any of ournon-US
subsidiaries are treated as a controlled foreign corporation or whether such investor is treated as a United States shareholder with respect to any of such controlled foreign corporations or furnish to any United States shareholders information that may be necessary to comply with the aforementioned reporting and tax paying obligations. The IRS has provided limited guidance on situations in which investors may rely on publicly available information to comply with their reporting and taxpaying obligations with respect to certain controlled foreign corporations. A United States investor should consult its own advisors regarding the potential application of these rules to its investment in our ordinary shares (or ADSs).30
Our share repurchase programs could affect the price of our ADSs.
In March 2018, our shareholders authorized our 2018 share repurchase program for the repurchase of up to 3,300,000 of our ADSs, each representing one ordinary share, at a price range of $10 to $100 per ADS. Pursuant to the terms of our 2018 share repurchase program, our ADSs may be purchased in the open market from time to time for 36 months from March 30, 2018, the date on which the shareholders approved our 2018 share repurchase program. To date, we have repurchased 3,300,000 ADSs in the open market under this repurchase program and completed the authorized repurchases under this share repurchase program. We funded the repurchases under this repurchase program with cash on hand.
In September 2020, our shareholders authorized a new share repurchase program for the repurchase of up to 3,300,000 of our ADSs, each representing one ordinary share, at a price range of $10 to $110 per ADS. Pursuant to the terms of the repurchase program, our ADSs may be purchased in the open market from time to time for 36 months from April 1, 2021 to March 31, 2024. To date, we have repurchased 1,100,000 ADSs in the open market under this repurchase program.
We have funded, and intend to continue to fund, the repurchases of ADSs under our repurchase programs with cash on hand. We are not obligated under our repurchase programs to repurchase a specific number of ADSs, and our repurchase programs may be suspended at any time at our discretion. We intend to hold the shares underlying any such repurchased ADSs as treasury shares.
Any repurchases pursuant to our repurchase programs could affect the price of our ADSs and increase its volatility. The existence of a repurchase program could also cause the price of our ADSs to be higher than it would be in the absence of such a program and could potentially reduce the market liquidity of our ADSs. There can be no assurance that any repurchases will enhance shareholder value because the market price of our ADSs may decline below the levels at which we repurchase any ADSs. In addition, although our repurchase programs are intended to enhance long-term shareholder value, short-term price fluctuations in our ADSs could reduce the program’s effectiveness. Significant changes in the price of our ADSs and our ability to fund our repurchase programs with cash on hand could impact our ability to repurchase ADSs. The timing and amount of future repurchases is dependent on our cash flows from operations, available cash on hand and the market price of our ADSs. Furthermore, our programs do not obligate us to repurchase any dollar amount or number of ADSs and may be suspended at any time at our discretion, and any suspension or discontinuation could cause the market price of our ADSs to decline.
We have certain anti-takeover provisions in our Articles of Association that may discourage a change in control.
Our Articles of Association contain anti-takeover provisions that could make it more difficult for a third party to acquire us without the consent of our Board of Directors. These provisions include:
| • | a classified Board of Directors with staggered three-year terms; and |
| • | the ability of our Board of Directors to determine the rights, preferences and privileges of our preferred shares and to issue the preferred shares without shareholder approval, which could be exercised by our Board of Directors to increase the number of outstanding shares and prevent or delay a takeover attempt. |
These provisions could make it more difficult for a third party to acquire us, even if the third party’s offer may be considered beneficial by many shareholders. As a result, shareholders may be limited in their ability to obtain a premium for their shares.
It may be difficult for you to effect service of process and enforce legal judgments against us or our affiliates.
We are incorporated in Jersey, Channel Islands, and our primary operating subsidiary, WNS Global, is incorporated in India. A majority of our directors and senior executives are not residents of the US and the majority of our assets and the assets of those persons are located outside the US. As a result, it may not be possible for you to effect service of process within the US upon those persons or us. In addition, you may be unable to enforce judgments obtained in courts of the US against those persons outside the jurisdiction of their residence, including judgments predicated solely upon the securities laws of the US. Furthermore, shareholders of Jersey companies may not have standing to initiate a shareholders derivative action in courts of the US.
31
ITEM 4. INFORMATION ON THE COMPANY
A. | History and Development of our Company |
WNS (Holdings) Limited was incorporated as a private liability company on February 18, 2002 under the laws of Jersey, Channel Islands, and maintains a registered office in Jersey at 22 Grenville Street, St Helier, Jersey JE4 8PX, Channel Islands. We converted from a private limited company to a public limited company on January 4, 2006 in accordance with Article 17A of the 1991 Law, when we acquired more than 30 shareholders as calculated in accordance with Article 17A of the 1991 Law. We gave notice of this to the Jersey Financial Services Commission (“JFSC”) in accordance with Article 17(3) of the 1991 Law on January 12, 2006. Our principal executive office is located at Gate 4, Godrej & Boyce Complex, Pirojshanagar, Vikhroli (W), Mumbai 400 079, India, and the telephone number for this office is.Our agent for service in the US is our subsidiary, WNS North America Inc., 515 Madison Avenue, 8th Floor, New York, NY 10022.
(91-22)
4095-2100. Our website address iswww.wns.com
Information contained on our website does not constitute part of this annual report.
We began operations as an
in-house
unit of British Airways in 1996 and became a business process outsourcing service provider for third parties in fiscal 2003. Warburg Pincus acquired a controlling stake in our company from British Airways in May 2002 and inducted a new senior management team.Fiscal 2003 — 2008
We made a number of acquisitions that helped expand our service offerings. These acquisitions included:
| • | Town and Country Assistance Limited (which we subsequently rebranded as WNS Assistance and which is part of WNS Auto Claims BPM), a UK-based automobile claims handling company, in fiscal 2003; |
| • | the health claims management business of Greensnow Inc. in fiscal 2004; |
| • | Trinity Partners Inc. (which we subsequently merged into our subsidiary, WNS North America Inc.), a provider of BPM services to financial institutions, focusing on mortgage banking, in fiscal 2006; |
| • | The fare audit services business of PRG Airlines Services Limited and the financial accounting business of GHS Holdings LLC in fiscal 2007; |
| • | Marketics, a provider of offshore analytics services, in fiscal 2008; and |
| • | Flovate (which we subsequently renamed as WNS Workflow Technologies Limited), a company engaged in the development and maintenance of software products and solutions, in fiscal 2008 |
In July 2006, we completed our initial public offering, whereupon our ADSs became listed on the New York Stock Exchange (the “NYSE”) under the symbol “WNS.” In February 2012, in connection with our
follow-on
offering, we issued new ordinary shares in the form of ADSs, at a price of $9.25 per ADS, aggregating approximately $50.0 million and at the same time, Warburg Pincus divested 6,847,500 ordinary shares in the form of ADSs. In February 2013, Warburg Pincus sold its remaining 14,519,144 ordinary shares in the form of ADSs, thereby divesting its entire stake in our company.We invested in our infrastructure to expand our service portfolio from data-oriented processing to include complex voice and blended data/voice service capabilities, and commenced offering comprehensive processes in the travel and leisure, banking and financial services and insurance industries.
We opened facilities in a number of locations, including Gurgaon, India; Colombo, Sri Lanka; and Bucharest, Romania, thereby expanding our operating footprint across India, Sri Lanka and Romania. We also expanded our facilities in Gurgaon, Mumbai and Pune, India. In fiscal 2008, we transferred our delivery center in Sri Lanka to Aviva Global pursuant to “build-operate-transfer” contractual arrangement we had with Aviva.
We entered into a joint venture with ACS, a provider in BPM services and customer care in the Philippines, to form WNS Philippines Inc. (which became our wholly owned subsidiary following our acquisition of ACS’s shareholding in WNS Philippines Inc, in fiscal 2012)
Fiscal 2009 — Fiscal 2013
We acquired a number of companies, including:
| • | Chang Limited, an auto insurance claims processing services provider in the UK, in fiscal 2009; |
| • | BizAps, a provider of SAP ® solutions, in fiscal 2008 to optimize the enterprise resource planning functionality for our finance and accounting processes; |
| • | Fusion (which we subsequently renamed as WNS Global Services SA (Pty) Ltd), a provider of a range of management services, including contact center, customer care and business continuity services, to both South African and international clients, in fiscal 2013. |
We opened facilities in Manila, the Philippines; San Jose, Costa Rica; Vizag, India; and Gydnia, Poland; and also expanded various facilities in India, the Philippines, Costa Rica and Romania, as well as our sales office in the UK.
We completed a
follow-on
public offering of ADSs in fiscal 2012, which raised approximately $50.0 million to fund our growth initiatives and enhance delivery capability.Fiscal 2014 — 2018
We acquired the following companies in fiscal 2017:
| • | Value Edge Research Services Private Limited (“Value Edge”), a leading provider of commercial research and analytics services to clients in the pharmaceutical and biopharmaceutical industries; |
| • | Denali Sourcing Services Inc. (“Denali”), a leading provider of strategic procurement BPM services; and |
| • | MTS HealthHelp Inc. and its subsidiaries (“HealthHelp”), an industry leader in BPM care management. |
Fiscal 2019 — present
| • | We added new facilities in Manila and Iloilo, the Philippines; Madrid, Spain; Vizag, Hyderabad and Pune, India; and New South Wales, Australia. We also expanded our facilities in Bangalore, Gurgaon, Nashik and Pune, India; |
| • | We acquired the following companies in fiscal 2022: |
| • | On August 1, 2021, we acquired all outstanding shares of MOL Information Processing Services (I) Private Limited. Subsequently, the name of the entity was changed to WNS Information Services (India) Private Limited. |
| • | CEPROCS S.R.L. (“CEPROCS”), provider of global sourcing and procurement services in December 2021, pursuant to which we agreed to acquire its customer contract, skilled workforce and related assets. |
32
In April 2017, we established the WNSorganization registered under the Section 8 of the Indian Companies Act, 2013, India. The WNS Cares Foundation was formed for the purpose of promoting corporate social responsibilities and does not qualify as a subsidiary under IFRS 10 — Consolidated Financial Statements and hence is not considered for the purpose of preparing our consolidated financial statements.
B-BBEE
Staff Share Trust with the principal objective of creating meaningful participation of the Black employees (as defined in the applicable legislation) of our South African subsidiaries in the growth of the company. We are committed to transformation in South Africa and are implementing this structure to benefit Black People in accordance with the objectives and requirements of the Codes of Good Practice on Black Economic Empowerment as promulgated by section 9(1) of the Broad-Based Black Economic Empowerment Act No. 53 of 2003 of South Africa. In June 2017, we established WNS New Zealand Limited, a wholly owned subsidiary of WNS Global Services (Australia) Pty Ltd. In July 2017, we merged Value Edge into WNS Global Services Private Limited. In September 2018, we established WNS Global Services (UK) International Limited, a wholly owned subsidiary of WNS (Mauritius) Limited. In October 2018, we established WNS Global Services North Americas Inc., a wholly owned subsidiary of WNS Global Services (UK) International Limited and WNS Global Services (UK) Limited, Sucursal En España, a new branch of WNS Global Services (UK) Limited. In December 2018, we established WNS SA Domestic (Pty) Ltd, a wholly owned subsidiary of WNS Global Services SA (Pty) Limited andWNS-Healthhelp
Philippines Inc, a wholly owned subsidiary of HealthHelp LLC. In September 2019, we changed the name of our wholly-owned South African subsidiary, WNS SA Domestic (Pty) Ltd to WNS South Africa (Pty) Ltd. In November 2019, we established WNS Denali Sourcing Services Inc, a wholly-owned subsidiary of Denali. In January 2020, we changed the name of our wholly-owned Netherlands subsidiary, WNS Global Services Netherlands Cooperatief U.A., to WNS Global Services Netherlands B.V. and our Ireland branch, WNS Global Services Netherlands Cooperatief U.A. (Ireland Branch), to WNS Global Services Netherlands B.V. (Ireland Branch). In March 2020, we demerged our Netherlands subsidiary, WNS Global Services Netherlands B.V., and formed WNS Business Consulting Netherlands B.V. In April 2020, we established a new entity in Canada, WNS Gestion des Processus d’Affaire Inc., a wholly-owned subsidiary of our company. In July 2020, we changed the name of our Turkey branch, WNS Global Services Netherlands Cooperatief U.A. Merkezi Hollanda Istanbul Merkez to WNS Global Services Netherlands B.V Merkezi Hollanda Istanbul Merkez Subesi. In July 2021, we incorporated a new entity WNS Global Services AG in Switzerland. In August 2021, we incorporated a new entity in Portugal, WNS Global Services Lisbon, Unipessoal LDA. We acquired MOL Information Processing Services (India) Private Limited in August , 2021 and changed its name on December 01, 2021 to WNS Information Services (India) Private Limited. In December , 2021, we established a new branch at Romania, WNS Global Services (Romania)SRL-Punct
De Lucru Sibiu. In April 2022, we dissolved WNS Denali Sourcing Services Inc, a wholly-owned subsidiary of Denali Sourcing Service Inc. Our organizational structure now comprises 42 entities in 25 countries, and 11 branches in Poland, UAE, China, Singapore, France, Romania, Turkey, Ireland and Spain. Of these 42 entities, WNS Cares Foundation, which is a wholly-owned subsidiary of WNS Global, is anot-for-profit
We have our principal executive office in Mumbai, India, and we have client service offices in Beijing (China), Dubai (United Arab Emirates), Germany, London (the UK), New York (the US), Sydney (Australia) and Singapore, and we have delivery centers in Sydney (Australia) Guangzhou, Dalian and Shanghai (China), San Jose (Costa Rica), Bangalore, Chennai, Gurgaon, Mumbai, Nashik, Pune, Noida and Vizag (India), Manila, Iloilo and Alabang (the Philippines), Gydnia (Poland), Bucharest (Romania), Cape Town, Johannesburg, Durban and Port Elizabeth (South Africa), Colombo (Sri Lanka), Istanbul (Turkey), Ipswich and Manchester (the UK), Spain and Columbia, South Carolina, Pittsburgh, Bellevue, Houston and Texas (the US).
33
Our capital expenditures in fiscal 2022, 2021 and 2020 amounted to $28.3 million, $26.5 million and $27.9 million, respectively. Our principal capital expenditures were incurred for the purposes of setting up new delivery centers, expanding existing delivery centers and developing new technology-enabled solutions to enable execution and management of clients’ business processes. We estimate that our expected capital expenditure in fiscal 2023 would be up to $40.0 million. The geographical distribution, timing and volume of our capital expenditures in the future will depend on new client contracts we may enter into or the expansion of our business under our existing client contracts.
As at March 31, 2022, we had commitments for capital expenditures of $9.5 million (net of advances to capital vendors) relating to the purchase of property and equipment for our delivery centers. Of this committed amount, we plan to spend approximately $2.8 million in India, approximately $4.2 million in Philippines, approximately $0.7 million in South Africa, and approximately $1.8 million in the rest of the world. We expect to fund these estimated capital expenditures from cash generated from operating activities, existing cash and cash equivalents and the use of existing credit facilities. See “Part I — Item 5. Operating and Financial Review and Prospects — Liquidity and Capital Resources” for more information.
34
B. Business Overview
We are a global BPM company, offering an array ofindustry-specific and cross-industry solutions. We combine our deep industry knowledge with technology, analytics and process expertise to(“BPaaS”) platforms, embedded analytics and process
end-to-end
co-create
innovative, digitally enabled transformational solutions with 414 clients across various industries as at March 31, 2022 (with each client generating more than $0.01 million in revenue in fiscal 2022). Our solutions and capabilities encompass intelligent automation (robotic process automation (“RPA”), hyperautomation, artificial intelligence (“AI”) and cognitive computing), natural language processing and machine learning (“ML”), blockchain, internet of things (“IoT”), businessprocess-as-a-service
re-engineering
frameworks. Hyperautomation refers to an approach that organizations adopt to accelerate digital transformation and rapidly automate business processes. It involves the orchestrated use of technologies such as AI, RPA, ML and natural language processing.A key element in all our transformation engagements is our ability to deliver business value through the
co-creation
of solutions and products with our clients and strategic partners. We seek to help our clients “transform” their businesses by identifying business and process optimization opportunities through technology-enabled solutions, improvements to their processes, global delivery capabilities, analytics anddomain-led
understanding of their business. This, combined with our client-centric approach, enables us to align our people, processes, technologies and delivery network with our clients’ business requirements. Our industry-aligned approach helps us provide a specialized focus on each of the sectors that we target, effectively transform and manage our clients’ business processes, and offer customized solutions and business insights designed to improve their competitive positioning. The major industry verticals that we currently focus on are: insurance, healthcare, diversified businesses (including manufacturing, retail and consumer packaged goods (“CPG”), media and entertainment, and telecommunication (telecom)), travel and leisure, shipping and logistics,hi-tech
and professional services (formerly known as consulting and professional services), banking and financial services, and utilities.Our cross-industry solutions, common across multiple industries, include customer experience services, finance and accounting (including procurement), research and analytics (now branded as “WNS Triange”), consulting and transformation, human resources, technology and automation, and governance, risk and compliance services.
We measure our execution of clients’ business processes against multiple performance parameters, and aim to consistently meet and exceed these parameters in order to maintain and expand our client relationships. We strive to build long-term client relationships, and typically sign multi-year contracts with our clients that provide us with recurring revenue. In fiscal 2022, 156 and 147 clients contributed more than $1 million to our revenue and revenue less repair payments
(non-GAAP),
respectively.As at March 31, 2022, we had 52,081 employees executing business processes for our 414 clients (with each client generating more than $0.01 million in revenue in fiscal 2022).
In fiscal 2022, our revenue was $1,109.8 million, our revenue less repair payments
(non-GAAP)
was $1,026.8 million and our profit was $132.1 million. Our revenue less repair payments is anon-GAAP
financial measure. For a discussion of our revenue less repair payments(non-GAAP)
and a reconciliation of our revenue less repair payments(non-GAAP)
to revenue, see “Part I — Item 5. Operating and Financial Review and Prospects — Overview.”35
Industry Overview
The global BPM market continues to evolve in response to a disruptive business landscape. While companies are still looking to benefit from process efficiency, cost advantage and labor arbitrage from their BPM solution providers, a continually evolving marketplace has resulted in a broader and more strategic narrative on outsourcing, with a strong focus on
domain-led,
technology-enabled, and innovative value creation. Customer experience,data-led
insights and digital innovation are integral to business success, and enterprises now expect their BPM solution providers to play a bigger and more profound role in driving transformational outcomes. We are increasingly seeing BPM solution providers leverage the power of data, advanced analytics and AI to drive transformative and scalable solutions for enterprises. As companies outsource more of their complex andhigh-end
business processes, the key consideration for them is the ability of the BPM provider to understand their unique industry and client-specific requirements, design and develop transformational plans, execute intricate, multi-layered process transitions, design a robust business continuity plan and successfully manage these processes on an ongoing basis. The increased focus on variable cost structures and the delivery of tangible business benefits have resulted in alternative service delivery and pricing models such as transaction-based, outcome-based and subscription models.While BPM companies continue to address business disruptions caused by digital and technological changes and evolving customer expectations, they have also placed strong focus on cybersecurity, data privacy, and raising business continuity planning to extreme crisis continuity planning levels. Clients now expect BPM service providers to
co-architect
new, resilient and flexible solutions and models that will enable business safety and continuity during a wide array of adverse situations.This ability to create and implement disaster recovery solutions is expected to become an important factor in evaluating BPM providers. BPM companies will be required to leverage a diversified geographical footprint and deliver continuity solutions that will enable clients to maximize operational agility, scalability and sustainability. These solutions will increasingly deploy technology and automation, and leverage the potential for increased adoption of “work-from-home” models.
In the next few years, clients will strengthen their focus on reducing costs, accelerating business transformation and digital adoption, leveraging data and analytics, and adopting outcome-based pricing models. We expect that BPM providers will play a key role in helping clients across industries to create and digitizeprocesses. It is important for BPM companies to leverage their geographical footprint and implement robust practices that help businesses achieve maximum operational agility, scalability and sustainability. Innovative digital ways of working and extensive adoption of hybrid working models have come into sharp focus, and are emerging as the new norms for BPM solutions.
end-to-end
In such an environment, businesses are thus undertaking a rigorous and multi-faceted evaluation process when selecting a BPM provider. Based on our experience, a client typically seeks the following key attributes in a BPM provider:
| • | Domain knowledge and industry-specific expertise |
| • | Process expertise across horizontal service offerings |
| • | “Skin in the game” approach denoting the ability to work as a true partner, absorb risks and prioritize outcomes |
| • | Ability to invest in infrastructure and talent to innovate, automate, transform, provide operational expertise and drive best practices based on internal and external benchmarking |
| • | Proven ability to execute a diverse range of mission-critical and often complex business processes |
| • | Ability to tie service delivery, technology implementation and process automation with the client’s existing information technology (“IT”) infrastructure, negating the need for large IT overhauls |
| • | Capabilities to drive improved process standardization across business units and multiple locations, demonstrating strong global delivery capabilities |
| • | Comprehensive analytical capabilities to deliver actionable business insights; domain-led analytics solutions customized to industry requirements and embedded as part of the larger BPM services portfolio |
| • | Ability to deliver technology-enabled services and solutions, including RPA, cognitive computing, intelligent automation, AI, natural language processing, IoT, industrial robotics, blockchain, cloud-based offerings and platform-based BPM |
| • | Agility to build robust operational models that will swiftly and comprehensively manage disruptions and drive maximum business continuity, underpinned by an extensive geographical footprint, a seamless transition methodology, digital ways of working and a strong remote work model |
| • | Possesses a strong global presence through a mix of offshore, nearshore and onshore delivery centers to access talent and capabilities, create cultural alignment, leverage language skills, and mitigate risks |
| • | Capability to scale employees and infrastructure without a diminution in quality of service |
| • | Ability to raise client’s competitive positioning by improving operating efficiency, reducing cost, enhancing the end-client experience, delivering actionable insights, and creating differentiation |
The global BPM industry is a large and growing industry. According to the Gartner Forecast: IT Services, Worldwide, 2020-2026, 1Q22 Update, the worldwide Business Process Services (“BPS”) market comprising traditional and digital components is estimated to be at $191.181 billion in the year ending 2022. Gartner has estimated that the revenues for the worldwide BPS market will grow from $181.32 billion in 2021 to $255.558 billion in 2026 at a compounded annual growth rate of 7.1% (compounded annual growth rate calculated by Gartner).
The following chart sets forth the estimated growth in revenue generated in the Worldwide BPS market:
Chart / Graph created by WNS Global Services based on Gartner research.
Source: Gartner, Inc., Forecast: IT Services, Worldwide, 2020-2026, 1Q22 Update. Colleen Graham, Misako Sawai, Cathy Tornbohm, Twiggy Lo et al., March 30, 2022.
The Gartner content described herein (the “Gartner Content”) represent(s) research opinion or viewpoints published, as part of a syndicated subscription service, by Gartner, Inc. (“Gartner”), and are not representations of fact. Gartner Content speaks as of its original publication date (and not as of the date of this [type of filing]), and the opinions expressed in the Gartner Content are subject to change without notice.
The industry trends continue to drive BPM providers to be more innovative, strategic and forward-looking in their approach. Against the backdrop of this changing environment, we believe that WNS, with our focused domain, digital, andcapabilities, guiding principles of
data-to-insights
co-creation
and client centricity, extensive global footprint, robust business continuity planning methodologies, and transformational andre-engineering
frameworks, is well positioned to deliver business value to our clients. We offer hyperautomation and technology-enabled BPaaS solutions that are designed help companies adapt rapidly to changing business scenarios and accelerate their business transformation. Further, we offer customized engagement models that cater to each client’s scale and transformation journey. In addition to traditional pricing models based on headcount (often referred to as full-time equivalents (FTE)), we offer transaction-, subscription- and outcome-based pricing models to provide clients with cost flexibility and measurable business benefits.In fiscal 2022, 36.6% of our total revenues were generated from
“non-FTE”
models. These“non-linear”
pricing models, whichde-link
the relationship between headcount and revenue for BPM providers, create an incentive for the providers to improve the productivity of their employees, increase the use of technology, and enhance the overall efficiency of their operations.36
Competitive Strengths
We believe that we have the competitive strengths necessary to maintain and enhance our position as a leading global provider of BPM services.
Well-positioned for the evolving BPM market
The BPM industry, which started with the first wave of simple outsourced processes, has now expanded to include complex business processes and higher-value services that involve processservice offerings,
re-engineering,
business and digital transformation, management of mission-critical operations, and generation of business insights to aid decision-making. We believe that our industry-specific expertise,end-to-end
digital-led
transformation capabilities, technology-enabled solutions, process management skills, advanced analytics, global delivery network and customer-centric approach position us at the forefront of the evolving BPM market.To meet the needs of a rapidly evolving and growing BPM market, we continue to develop new innovation-driven and
outcome-led
capabilities across domain, digital, data and analytics, customer experience, hyperautomation and new technologies. We believe that our scalable digital accelerators, products and prototypes form the foundation of our ability to provide leading-edge industry solutions and collaborate with global organizations through the course of their transformation journeys.For instance, our WNSvirtual capabilities and
Co-creation
Labs, currently in New York, London and Pune (India), have been designed to provide clients with an environment conducive to ideating, prototyping and testing innovations before they are taken to the market. Equipped withstate-of-the-art
on-site
immersive spaces, our WNSCo-creation
Labs seek to enable businesses to solve crucial challenges, seize new opportunities and preempt risks, interweaving empathetic design principles at every step. They have been designed to foster real-time collaboration and deliver solutions that are customized to the markets, strategies and competitive challenges of our clients.Deep industry expertise
We have established deep expertise in the industries we target as a result of our vertical organizational structure, legacy client relationships, proprietary technology offerings, key acquisitions, targeted training programs and the hiring of management with specific industry knowledge. Our deep domain expertise in each of the 13 industries we serve helps us develop keen insights and transform them into leading-edge impactful business solutions with the help of technology, analytics and process rigor. We have developed methodologies, frameworks, proprietary knowledge and industry-specific technology platforms applicable to our target industries that allow us to provide industry-focused solutions and help clients compete within these industries.
We have structured our company into business units aligned with each of the industries on which we focus. This gives us strong advantages of
in-depth
industry knowledge and industry-specific technology platforms and solutions, which in turn enable us to approach clients in each of our target industries with an integrated effort covering sales, marketing and delivery.37
We have received numerous recognitions for our industry leadership. Our awards and recognitions in fiscal 2022 and 2021 are set forth below:
Vertical-specific Recognitions
Insurance:
| • | A “Leader” in ISG Provider Lens TM Insurance Services 2021 Quadrant Report for US in property and casualty insurance (“P&C”), life and retirement insurance, and retirement insurance third-party administrator |
| • | A “Leader” in ISG Provider Lens TM Insurance Services 2021 Quadrant Report for Australia in P&C |
| • | A “Leader” in NelsonHall’s Vendor Evaluation Assessment Tool (“NEAT”) for Life, Annuities and Pension: Operational Transformation 2021 |
| • | A “Leader” in NelsonHall’s NEAT for Commercial Property and Casualty Insurance Operations Transformation 2022 |
| • | A “Leader” in Everest Group’s P&C Insurance — Service Provider Landscape with Services PEAK Matrix ® Assessment 2021 |
| • | A “Major Contender” in Everest Group’s Life and Pensions Insurance BPS/TPA — Service Provider Landscape with Services PEAK Matrix ® Assessment 2022 |
Healthcare:
| • | A “Leader” in NelsonHall’s NEAT for Healthcare Commercial Payer BPS 2021 |
| • | A “Major Contender” in Everest Group’s Healthcare Payer Operations PEAK Matrix ® Assessment 2022 |
| • | A “Major Contender” in Everest Group’s Life Sciences Operations — Services PEAK Matrix ® Assessment 2021 |
| • | A “Major Contender” in Everest Group’s Revenue Cycle Management (RCM) Operations – Services PEAK Matrix ® Assessment 2021 |
Banking and Financial Services:
| • | A “Leader” in NelsonHall’s NEAT for Digital Banking 2022 |
| • | A “Major Contender” in Everest Group’s Capital Markets Operations — Services PEAK Matrix ® Assessment 2021 |
| • | A “Major Contender” in Everest Group’s Banking Operations — Services PEAK Matrix ® Assessment 2022 |
| • | A “Major Contender” in Everest Group’s Mortgage Operations PEAK Matrix ® Assessment 2022 |
Utilities:
| • | A “Leader” in ISG Provider Lens TM Utilities Services and Solutions North America Quadrant Report 2021 in Intelligent BPM and Digital Transformation midmarket sector |
38
Horizontal-specific Recognitions
Finance and Accounting:
| • | A “Leader” in ISG Provider Lens TM Digital Finance and Accounting (“F&A”) Outsourcing Services 2021 Global Report acrossProcure-to-Pay, Order-to-Cash Record-to-Report |
| • | A “Major Contender” in Everest Group’s Finance and Accounting Outsourcing (“FAO”) — Service Provider Landscape with PEAK Matrix ® Assessment 2021 |
Customer Experience Services:
| • | A “Leader” in IDC MarketScape for Worldwide Digital Customer Care Services 2021-2022 Vendor Assessment (December 2021) |
| • | A “Major Contender” in Everest Group’s Customer Experience Management — Service Provider Landscape with Services PEAK Matrix ® Assessment 2021 |
Research and Analytics:
| • | A “Major Contender” in Everest Group’s Advanced Analytics & Insights Services PEAK Matrix ® Assessment 2022 |
Procurement:
| • | A “Leader” in ISG’s Provider Lens TM Procurement BPO and Transformation Services 2022 Global Report |
| • | A “Leader” in NelsonHall’s NEAT for Procurement Transformation 2021 |
| • | A “Major Contender” in Everest Group’s Procurement Outsourcing – Service Provider Landscape with Services PEAK Matrix ® Assessment 2021 |
Intelligent Automation:
| • | A “Leader” in ISG Provider Lens ™ Intelligent Automation — Solutions and Services 2021 Quadrant Report for the US and a “Rising Star” for the UK |
Human Resources:
| • | A “Major Contender” in Everest Group’s Multi-Process Human Resources Outsourcing (MPHRO) Services PEAK Matrix ® Assessment 2022 |
39
Corporate:
| • | The Association for Talent Development Best Award 2021 in the Talent Development category |
| • | Economic Times’ Best Workplaces for Women 2021 |
| • | WNS Included in 2021 Bloomberg Gender-Equality Index |
| • | National Energy Conservation Award 2021 |
| • | Energy and Environment Foundation Global Clean India Award 2021 |
| • | Golden Peacock Business Excellence Award 2021 |
| • | Five Stevie International Business Awards 2021 |
| • | Financial Management Solution (Gold Award) |
| • | Achievement in Finance (Bronze Award) |
| • | Financial Management Solution (Bronze Award) |
| • | Artificial Intelligence/Machine Learning Solution (Bronze Award) |
| • | Business or Competitive Intelligence Solution (Bronze Award) |
| • | Four Stevie Sales and Customer Service Awards 2021 |
| • | Covid-19 Response Category (Silver Award) |
| • | Customer Service Team of the Year (Bronze Award) |
| • | Customer Service Department of the Year (Bronze Award) |
| • | Customer Service Management Team of the Year (Bronze Award) |
| • | Five Stevie Sales and Customer Service Awards 2022 |
| • | Customer Service Training Team of the Year — Internal — All Other Industries (Gold Award) |
| • | Best Use of Thought Leadership in Business Development (Silver Award) |
| • | Best Use of Technology in Customer Service — Other Service Industries (Silver Award) |
| • | Customer Service Team of the Year — Recovery Situation — Other Service Industries (Bronze Award) |
| • | Business Intelligence Solution — New (Bronze Award) |
| • | The Share Services & Outsourcing Network’s Impact Award North America 2021 in the “Creative Talent Management” category |
Technology:
| • | IDG’s CIO 100 “Hybrid Workplace Pioneer” Award 2021 |
Risk Management:
| • | DSCI Excellence Award for Industry Leaders — Security Leader of the Year |
Human Resources (“HR”):
| • | Six Brandon Hall Human Capital Management (HCM) Excellence Awards |
| • | Best Strategy for a Corporate Learning University (Silver Award) |
| • | Best Learning Program Supporting a Change Transformation Business Strategy (Silver Award) |
| • | Best Advance in Employee Recognition Program (Bronze Award) |
| • | Best Advance in Leadership Development (Bronze Award) |
| • | Best Advance in Leadership Development Competency Models (Bronze Award) |
| • | Best Use of Social Collaborative Learning (Bronze Award) |
| • | WNS China won the Liepin China Northeast Region Best Employer Award 2021 and 51 Job China Top Human Resources Management Award 2022 |
| • | KelpHR PoSH Awards ® 2021 — 25 Safest Workplaces in India |
| • | WNS was included in the 2022 Bloomberg Gender-Equality Index |
Corporate Social Responsibility (“CSR”):
| • | India CSR Award in the category “Best Digital Education Project 2021 (BPM industry)” |
| • | Golden Peacock Global Corporate Social Responsibility Award 2021 |
| • | 8 th National CSR Times Award 2021:WNS Cares Foundation has won the CSR Times Award 2021 (Silver) for CyberSmart |
| • | SABERA Awards 2021 — Special Jury Commendation in the category — Shiksha (Education) |
| • | Stevie International Business Award 2021 in the category ‘CSR Program of the Year in Asia, Australia and New Zealand’ (Bronze Award) |
40
End-to-end
We seek to focus our service portfolio on more complex processes and solutions, and to shift away from reliance on services that are less integral to our clients’ business operations, such as commoditized voice and transactional services (telemarketing and technical helpdesks), which characterized the business process outsourcing industry in its early days. We offer an array of higher-value, judgment-based services that seek to not only reduce cost and improve operating efficiency, but also enable improved decision-making, competitive positioning and business outcomes for our clients. These include
high-end
finance and accounting services, including strategic sourcing through supply chains, digital customer experience solutions, consulting and transformation services, technology-enabled offerings and analytics capabilities. We also provide a wide array of industry-specific solutions, which cut across traditional “horizontal” services. These solutions are designed to help clients address process efficiency requirements, provide digital capabilities, generate business insights, and improve competitive positioning within their respective industries.We have also developed and continue to develop technology-enabled, or automated, solutions that utilize our proprietary software and licensed software in conjunction with our core BPM services. These integrated, technology-enabled solutions allow us to offer higher-value, differentiated services which are more scalable and repeatable and create value for our clients through increased process efficiency and quality. We also collaborate with technology companies, combining their software tools, platforms and expertise with our service capabilities to deliver business solutions to the marketplace. These technologies include RPA, cognitive computing, ML, AI, natural language processing and hyperautomation. We believe that technology-enabled automated solutions will enable us to grow our revenue in a
non-linear
way by decoupling revenue growth from headcount growth.To this end, we offer platform-enabled BPM or BPaaS that tightly integrates our domain expertise, business processes, automation, embedded analytics and cloud-based infrastructure.
Proven global delivery platform
We deliver our services from 54 delivery centers in 12 countries around the world, located in China, Costa Rica, India, the Philippines, Poland, Romania, South Africa, Spain, Sri Lanka, Turkey, the UK and the US. Our ability to offer services delivered from a mix of onshore, nearshore and offshore locations benefits our clients from the perspectives of access to skills and talent, cultural alignment, language capabilities, business continuity, risk mitigation, scalability, efficiency and cost effectiveness.
We believe the breadth of our delivery capability allows us to meet our clients’ needs, diversifies our workforce and allows us to access local talent pools around the world. Additionally, we have put in place a distributed workforce model that comprises an efficient blend of
in-office
and remote working to tap the best talent and skills.Our client-centric focus
We have a client-centric engagement model that leverages our industry-specific and shared-services expertise, flexible pricing models, “client-partner” relationship approach, as well as our global delivery platform to offer business solutions designed to meet our clients’ specific needs. We work closely with our clients to understand their specific requirements and to
“co-create”
unique, custom solutions that are designed to enable them to better compete and create differentiation within their respective industries.We seek to enhance our value proposition to our clients by providing them with flexible pricing models that align our objectives with those of our clients. In addition to traditional
FTE-based
pricing, we provide alternative pricing models such as transaction-based pricing, outcome-based pricing and subscription pricing. A sizable percentage of our revenue, being 36.6% in fiscal 2022, is derived from these“non-FTE”-based
pricing models. These models enable our clients to pay only for actual work performed or tangible benefit received.We have also adopted a client-centric sales model, which is tightly integrated with our vertical organizational structure. Strategic client accounts are assigned a dedicated “client-partner” from our team who is responsible for managing therelationship with the client. The “client-partner” is typically a seasoned resource with deep domain experience, who often works directly in the client’s local offices. Within our company, the “client-partner” is assigned to a specific vertical, and directly manages sales resources responsible for expanding client relationships. The “client-partner” is responsible for driving business value to our clients, monitoring quality of delivery and customer satisfaction, and managing account growth and profitability.
day-to-day
41
Proven experience in transitioning processes and running them efficiently
Many of the business processes that clients outsource to us are core to their operations, requiring substantial program management expertise to enable the transition of work to us. A well-planned and effectively managed transition is the cornerstone of our business proposition and helps our clients outsource their operations effectively and efficiently, focus on their business priorities and implement operating models that are designed to help them achieve their business strategies.
Our transition approach is structured to help deliver business outcomes to our clients by:
| • | Minimizing risk and achieving rapid transition of services; |
| • | Ramping up operations with minimal disruption to existing business, metrics, customers and suppliers; |
| • | Effectively managing changes brought about by transformative tools and technologies; |
| • | Managing a seamless transfer of responsibilities from any incumbent service provider to us; and |
| • | Continuing to engage with clients to adapt to and drive changes for a future-ready transition model by leveraging remote training. |
At its core, all aspects of the transition process are governed by EnABLE, our proprietary transition toolkit, which has been tested and evolved over 20 years. EnABLE embeds multi-level governance, visibility, transparency, flexibility and compliance across the entire transition life cycle.
Our differentiators include:
| • | Customer-centricity: |
| • | Robust governance |
| • | Strong leadership and experience |
| • | Global presence |
Extensive investment in human capital development
At WNS, we have created a learning organization with the objective of empowering employees with skills that will help them to constantly collaborate,
co-create
and outperform in a changing business landscape. This learning organization is designed to offer developmental programs to every employee band level in the organization, across business units and enabling units. It is responsible for developing organization-wide skills within focus groups, such as behavioral, domain, technical, leadership, functional as well as process-related skills. See “— Human Capital — Training and Development.”42
Learning Academy (the “LA”):
The learning organization comprises the following building blocks:
• | Digital Capability Building |
| • | WNS Education Program : In line with the digital transformation strategy, WNS Education Program (a niche arm of the LA) strives to create bespoke certifications for capabilities that enable digital transformation in the BPM space. |
| • | Digital Future (“DiFU”) Digital Competency Framework : This four-step journey helps us identify, assess and build the competencies required for digital readiness. To put it into practice, we engaged with Deloitte Consulting who conducted a study with MIT Sloan to identify 23 critical indicators of digital readiness. These indicators have been customized toWNS-specific contexts to create a Digital Competency framework. |
| • | Immersive Learning Experience :On-Demand (“GLINT”)This is an AI-led digital learning and knowledge platform comprising tailored modules mapped to specific business requirements. GLINT facilitates an environment of knowledge sharing andpeer-to-peer |
| • | Leadership Programs : |
| • | Accessible, On-demand and Personalized Learning:on-demand personalized learning through platform play, which leverages anAI-driven search engine to help employees learn on the go. The learning is available on demand and is accessible across regions over commonly used smart devices. |
| • | Business-aligned Learning: |
Experienced management team
We benefit from the effective leadership of a global management team with diverse backgrounds, including extensive experience in outsourcing. Members of our executive and senior management team have, on average, more than 20 years of experience in diverse industries, including in the business process and IT outsourcing sector, and in the course of their respective careers have gathered experience in developing long-standing client relationships, leveraging technology, launching practices in new geographies, developing new service offerings and successfully integrating acquisitions.
43
Business Strategy
Our objective is to further develop and strengthen our position as a leading global professional services and BPM provider, and continue to be a strategic partner of choice for our clients. Our various awards, new digital capabilities, and breadth of unique solutions and their impact on client business are a proof of progress. We seek to increase our client base and expand our existing relationships through deep industry expertise, our ability to develop trusted client relationships and by being a strategic partner to support our clients’ business strategies and transformational requirements. To serve our clients better, we continue to invest in domain expertise, digital capabilities including
domain-led
hyperautomation, data and analytics, technology, customer experience, intelligent automation, agile execution, consulting and transformation, and our employees to serve our clients better. We also make select acquisitions to fill capability gaps.We believe that WNS’ strategic investment programs are aligned with the market changes towards the accelerated need for digital transformation and broader BPM services. We are confident that our differentiated capabilities, solid business momentum and proven ability to execute position us well to drive long-term sustainable value for all of our key stakeholders. We have made significant investments with a view to accelerate our growth and ensure we are competitive in a changing industry environment with a stronger focus on digital transformation requirements. These investments include:
| • | Expansion and development of our sales force and onshore digital transformation consulting teams, so as to be closer to our clients and address their business challenges and needs; |
| • | Expansion of other sales channels including the development of new collaborations and alliances, and broadening our engagement with industry advisors and analysts; |
| • | Increase in the range of services and solutions offered to our clients across different industries and business functions, including services to assess, design and execute digital transformations such as: |
| • | Building industry-specific and cross-industry digital solutions, and augmenting our digital capabilities through strategic partnerships and targeted acquisitions; |
| • | Building our business transformation capabilities with a digital focus including domain-led hyperautomation, intelligent automation, customer/user experience and design, technology, data and analytics, transformation program management and organization change management capabilities through new talent, internally developed intellectual property, strategic partnerships and acquisitions; |
| • | Focused interventions towards digitally enabled operations through automated metrics management, agent utilization monitoring, and digital training and quality assurance; and |
| • | Applying agile practices and approaches and setting up our WNS Co-creation Labs (London, New York, Pune) to support the design and delivery of our customer experience services, including the use of targeted operating model design, Center of Excellence (“CoE”) (a CoE approach refers to organizations meticulously bringing together the best of delivery models, innovative technology, process excellence frameworks and talent to orchestrate business transformation) or shared services approaches, business transformation assessments, solutions and execution, customer experience, and user experience and design thinking. |
| • | Expansion of our domain CoEs as function-specific repositories combining WNS’ deep domain expertise, industry best practice knowledge, latest digital technologies and dedicated subject matter experts to create specialist capability and drive business value for clients; |
| • | Increasing expertise, management and digital capability of our workforce; |
| • | Expansion of our global delivery platform; and |
| • | Focused strategic acquisitions to improve our capabilities. |
The key elements of our growth strategy are described below:
Increase business from existing clients and new clients
We are focused on building a sales team with strategic offerings, and more consultative skills including transformation, digital technology enablement, and new operating models. We have organized our company into vertical business units. The addition of vertically focused practice leaders in key geographies is bringing senior-level domain and market focus, especially for large deals and strategic client relationships. These client-facing investments are expected to enable WNS to further drive innovation and
co-creation.
Our sales force of 121 members as at March 31, 2022 provides broad sales coverage and management experience. Our sales force is organized into two groups, one focused primarily on expanding existing client relationships (which we refer to as “farmers”) and another focused on adding new clients (which we refer to as “hunters”).
We seek to expand our relationships with existing clients by cross-selling new services (such as digital transformations including technology, automation, and data and analytics offerings), moving up the value chain, and expanding into other lines of business and geographies within each client. Our account managers and “client-partners” have industry-specific knowledge and expertise, and are responsible for maintaining a thorough understanding of our clients’ strategies and outsourcing roadmaps, as well as identifying and advocating new business solutions and opportunities. As a result of this strategy, we have built a strong track record of extending the scope of our client relationships over time.
For new clients, we seek to provide value-added solutions by leveraging our deep industry knowledge built on the back of process expertise, digital enablement, customer experience, data and analytics, and digital transformation solutions. As a result of our capabilities and industry verticalapproach, we have been able to compete effectively for new opportunities.
go-to-market
Reinforce leadership in existing industries
Through our industry-focused operating model, we have established leading professional services and BPM practices in various industry verticals and business sectors. To complement our industry-focused approach, we continue to invest in digital capabilities (including data and analytics, customer experience, AI, intelligent automation and other new technologies), agile execution and talent acquisition and training with the goal of expanding our business and acquiring industry-specific expertise to improve our service offerings across industries.
We intend to leverage our knowledge of the following industries to penetrate additional client opportunities: insurance; healthcare; diversified businesses (including manufacturing, retail, CPG, media and entertainment and telecom); travel and leisure; shipping and logistics;
hi-tech
and professional services; banking and financial services; and utilities.44
Provide higher value-added services
The BPM market is continuing to evolve and transform towards digital business models, user design and experience, innovation and transformation. Enterprises expect their BPM providers to be a strategic partner and key driver of business transformations involving digital solutions around new technologies, cognitive, intelligent automations, hyperautomation, and advanced data and analytics. We are further developing our client value proposition by combining our extensive domain and industry expertise with our capabilities in these areas to deliver enterprise-wide digital transformations for our customers that are designed to take their business performance to new levels. As the BPM market further evolves and matures, the demand for industry-specific services and new pricing models will increase. We continue to make significant investments in these areas which we believe will give us a competitive advantage. We intend to broaden the scope of our higher-value service offerings to capture new market opportunities. By delivering a wider portfolio of higher-value services to our clients, and migrating them towards subscription, transaction, and outcome-based pricing models, we aim to move up the value chain with our clients and thereby enhance the size, strength and profitability of these relationships.
Our focus has been on building capabilities, new services and product offerings around digital business including our new data and analytics positioning (“WNS Triange”), cognitive technologies, hyperautomation, intelligent automation, data and analytics, and technologies that are targeted to the challenges and requirements of specific industry sectors. We are also developing key complementary capabilities such as organization change management,
co-creation
facilitation, program management and agile enablement to help enable enterprise-wide transformation. We are proactively addressing the shift to technology, analytics and automation through a combination of internal capability development, strategic collaborations and acquisitions.Enhance awareness of the WNS brand name
Our reputation for operational excellence, domain expertise, and technology and analytics capabilities among our clients has been instrumental in attracting and retaining clients as well as talented and skilled employees. We believe that our guiding principles of
co-creation
and client centricity resonate favorably with clients as they are indicative of our intent to completely align with client needs and leverage synergistic collaboration (with clients and strategic partners) to drive outcomes.We also believe that we have benefited from strong client referrals that have helped us to scale our business. We are actively driving initiatives to enhance awareness of the WNS brand in our target client and employee markets. To accomplish this, we have a dedicated global marketing team comprising experienced industry talent. We are also focusing on developing channels to increase market awareness of the WNS brand, including participation in industry events and conferences, exposure in industry publications, publication of articles and white papers, webinars and podcasts, internet and digital media, social media, and other initiatives that create enhanced visibility of the WNS brand and establish WNS’ thought leadership capabilities in the BPM industry.
We are working to improve visibility and positioning with the BPM industry analysts, sourcing advisors, general management consulting firms, and boutique outsourcing firms, who are often retained by prospective clients to provide strategic advice, act as intermediaries in the sourcing processes, develop scope specifications, and aid in the partner selection and implementation process. We are also leveraging our global partner network for jointstrategies. Given
go-to-market
COVID-19’s
impact, we have augmented our digital engagement by leveraging various platforms to further enhance our brand presence.Expand our delivery capabilities
We currently operate from 54 delivery centers located in 12 countries around the world. As at the end of fiscal 2022, we increased our delivery capacity by 130 seats, or approximately 4%, as compared to the end of fiscal 2021, as a result of expansion in some of our delivery locations. We intend to expand our global delivery capability, as necessary, through additional delivery centers in onshore, nearshore and offshore locations as well as through collaboration with other providers, based on client demand and market trends. In line with post-COVID trends, we plan to further expand to locations classified as tier 2 cities in India to access under-tapped talent pool and provide more flexibility to our employees. Additionally, we will continue to expand and/or consolidate our capacity requirements across our existing locations, as necessary, in line with client demands and through the adoption of a hybrid operating model that consists of both work-from-home and work-from-office arrangements in the medium to long term. This approach will allow us to offer our clients maximum value and flexibility and gain access to potential clients and markets that may have specific delivery requirements or constraints.
We remain focused on creating a delivery model that can provide certainty in outcomes despite business variability. Our focus remains on enhancing both our
in-office
and remote cybersecurity protocols and fine-tuning a new longer-term future-state hybrid model solution that will allow us to seamlessly move delivery between office and home. We have also set our sights on, and introduced, a hybrid people model with full time, temporary contract and gig workers, such as independent contractors, online platform workers, contract firm workers andon-call
workers.45
Broaden industry expertise and enhance growth through selective acquisitions and partnerships
Our guiding philosophy for inorganic growth remains capability-based. We continually endeavor to fill gaps in our capabilities and market coverage through acquisitions and partnerships, with the eventual aim to add more value to our clients. Specifically, our acquisition strategy is focused on adding new service offerings, technology-enabled automation tools and capabilities, and deeper industry expertise as well as expanding our geographic delivery platform. Towards that end, we run a structured and well-calibrated development program. Our acquisition track record demonstrates our proven ability to integrate, manage and develop the assets we acquire. We intend to continue our pursuit of calibrated and targeted acquisitions in the future and rely on our integration capabilities to expand our business.
Business Process Management Service Offerings
We offer our services to clients through industry-focused business units. We are organized into the following vertical business units to provide more specialized focus on each of these industries and more effectively manage our sales, solutions, marketing and delivery processes:
| • | Insurance; |
| • | Healthcare; |
| • | Diversified businesses (including manufacturing, retail, CPG, media and entertainment, and telecom); |
| • | Travel and leisure; |
| • | Shipping and logistics; |
| • | Hi-tech and professional services (formerly known as consulting and professional services); |
| • | Banking and financial services; and |
| • | Utilities. |
In addition to industry-specific services, we offer a range of services that are common across multiple industries (which we refer to as our horizontal services), including customer experience services, finance and accounting (including procurement), research and analytics and technology services. In addition, our global transformation practice offers higher-value services such as transformation and consulting services, which are designed to help our clients modify their business processes to enhance productivity, manage changes in the business environment, and leverage business knowledge to increase market competitiveness. We help clients drive these initiatives with technology-enabled solutions, process
re-design
including initiatives such as Six Sigma or Lean, and business analytics.To achieve an
in-depth
understanding of our clients’ industries and the geographies in which they operate, we manage and conduct our sales processes in our four key markets – Europe, North America, Asia-Pacific and Africa. Our sales teams are led by senior professionals who focus on target industries, processes and clients. Each business unit is staffed by a dedicated team of managers and employees engaged in providing BPM client solutions. In addition, each business unit draws upon common support services from our information technology, human resources, training, corporate communications, corporate finance, risk management and legal departments, which we refer to as our corporate-enabling units.46
Vertical Business Units:
Insurance
Our insurance services are structured into multiple lines of business and cater to a diverse and sizeable number of clients globally. We offer industry-specific and cross-industry solutions combining our deep industry knowledge with automation, digital technology, analytics and process expertise to
co-create
digitally enabled transformational solutions.Our solutions target the various functions along the insurance value chain, including delegated underwriting, actuarial services,claims management, financial planning and analysis, and Lloyd’s of London market insurance processes. Our service models providesolutions for back-office support, customer experience services, capabilities for new product introductions and sales enablement.
end-to-end
go-to-market
We continually update our suite of comprehensive digital BPM solutions to meet the evolving technology needs of insurance our clients. We have invested inmodularized digital solutions. These solutions leverage hyperautomation, robotics, cognitive automation, advanced analytics, AI, blockchain and IoT.
co-creation
labs and digital transformation practices to developend-to-end
Some of our initiatives include(a target operating model that combines technology platforms and BPaaS) service model and offerings for startups, brokers and insurers; WNS EXPIRIUS, a digitally integrated customer-experience service model to simplify processes across channels; businessa gain share / outcome-based business transformation model to enable rapid business improvement; and anmodel powered by our insurance RPA CoE to
Insurance-in-a-Box
transformation-as-a-service,
RPA-as-a-service
co-create
robotics solutions for clients. In addition, we are collaborating with a host of technology platforms and insurtech companies (being companies that use technological innovations to introduce digitization to insurance services) to create a simplified and lean set of processes. The aim is to drive growth for insurers and deliver committed business outcomes.As at March 31, 2022, we had 10,828 employees working in this business unit. In fiscal 2022 and 2021, this business unit accounted for 29.9% and 29.2% of our revenue, and 24.3% and 25.6% of our revenue less repair payments
(non-GAAP),
respectively.Sub-verticals
/ Industry Sectorssub-verticals
and industry sectors we serve include:| • | Life insurance, pensions and annuity providers; |
| • | Property and casualty insurance providers; |
| • | Reinsurers; |
| • | Insurance and reinsurance brokers and managing general agents; |
| • | Loss assessors; |
| • | Motor insurance companies; |
| • | Self-insured auto fleet owners; and |
| • | Lloyd’s of London market. |
Service Offerings
. We provide the following key areas of services to clients in this business unit:Insurance — Service Offerings | ||||||||
Operations | Actuarial Services | Enterprise Shared Services | Research and Analytics | Customer Experience Services | ||||
| Underwriting support and delegated underwriting, supply chain, claims management, policy administration, risk and compliance, premium / billing management, mailroom operations, contract issuance/ change management ,channel management and reinsurance services; | In-force model projections / reporting, financial modeling, product management and pricing, capital management, asset-liability management, reserving and claims analysis, solvency II (a regulatory framework applicable to insurance companies) and capital modeling, pricing and underwriting support, and catastrophe modeling; | Finance and accounting, technology support, HR and payroll, and consulting services Sourcing and procurement (strategic sourcing, category management, contract management, spending analytics and transactional procurement) Platform consulting and implementation support, consulting and transformation services (automation, business process re-engineering and digital); | Claims analytics, subrogation and recovery analytics, fraud analytics, customer analytics, broker analytics, underwriting analytics, reserve estimation, risk selection and analytics, speech analytics, pricing analytics, digital analytics, data mining and management services, reporting, dashboarding and visualization, data science and predictive modeling across claims, and claims liability decision tool; and | Sales and service, customer analytics, customer inquiry management and customer information administration. | ||||
Technology Tools / Platforms
. We utilize the following proprietary and collaboration tools and technologies to deliver services to our clients in this business unit:| • | WNS EXPIRIUS microservices, which include: |
| • | EXPIRIUS ConverseEX – a conversational cognitive self-serve solution; |
| • | EXPIRIUS CloudServEX – an omni-channel cloud contact center-as-a-service |
| • | EXPIRIUS AssistEX – proactive agent assistance and automation; |
| • | EXPIRIUS TranslateEX – a real-time language translation solution; |
| • | EXPIRIUS EngageEX – a workforce engagement suite; |
| • | EXPIRIUS RemoteEX – user monitoring for security and compliance; |
| • | EXPIRIUS ElevateEX – comprehensive customer insights and integrated analytics-as-a-service; |
| • | EXPIRIUS JourneyEX – a customer journey discovery and orchestration solution. |
| • | Inspektlabs: A computer vision technology platform focused on automating inspections of any physical asset using photos and videos |
| • | BAIL: An intelligent and versatile liability assessment and first notice of loss decision-making tool |
| • | Attestiv: This is designed to authenticate digital media captured by any person or device using AI and blockchain |
| • | Rightindem: A solution for electronic notification of loss for reporting motor and property claims in a conversational style; |
| • | VIPR: This is designed to deliver a modern, comprehensive suite of dedicated software solutions that provide end-to-end |
| • | Formotiv: This is designed to provide first-party behavioural data and intent scores to enable intuitive digital experiences and help create personalized digital experiences, that is, tailored to individual users; |
| • | Dimension Universe: A life and annuities analytics solution that uses hyperautomation and operational data to provide clients with a 360-degree view of business planning and forecasting; |
| • | Opliant: This automates risk alerts on risk registers for insurers using advanced data analytics and automation; |
| • | Datazone.ai: An AI-based data capture and discovery tool that analyzes both structured and unstructured data using AI. It entails metadata management, access controls, centralized data catalogue and other key features; |
| • | UW Workbench for London Markets: A digital orchestration of workflow and application to cover pre-bind, post-bind andnon-bureau technical accounting administrative tasks; the orchestration is achieved via a hyperautomation platform that extracts, categorizes, contextualizes and consolidates structured and unstructured data from documents in a fully automated manner, applying business rules for automated processing; |
| • | WNS Skense: A proprietary cognitive data capture and contextualization platform that extracts data from multiple unstructured and structured sources, without the need for an input template / rule-based set-up. It presents the contextualized information in a structured, usable format; |
| • | SPiQ: A speech analytics platform that transcribes call center data into text and provides deeper analysis using natural language processing and text-mining techniques; |
| • | Agilius: A data engineering and insights generation platform that uses big data and cloud technology; |
| • | Risk offering: to assist clients in recognizing risk events and changes to claim rates early on, in order to move towards a more market responsive, risk-based pricing approach for the efficient deployment of capital and reduction in extreme risk-event losses; |
| • | Simplified personal lines property and casualty underwriting models driven by data and analytics to for purposes of streamlining minimal question sets. These models are designed to make the policy-purchasing experience seamless with minimal clicks; |
| • | WinBot: A proprietary cloud-based solution to enable digital self-service and automated customer interactions; |
| • | Insurer Connect: A proprietary self-service Alexa and Google Assistant based solution for customer connection and query resolution; |
| • | Broker Connect: An advanced mobility solution to meet the requirements of insurance brokers and financial advisors; |
| • | eAdjudicator: An end-to-end |
| • | WNS’ iPAS: An insurance policy administration system integrator that provides a unified view of operations spread across multiple geographies with the real-time distribution of work to manage high-transaction volumes; |
| • | IMAGN: An image analytics platform used by home insurers for analyzing image / video data for rooftop hailstorm damage detection using ML / AI techniques; |
| • | Subrogation Smart Network: A blockchain-based solution for insurers and collection houses supporting subrogation and recovery processes; |
| • | Skan.AI: This offers customer journey analytics and process flow analytics, resulting in identification of future process re-engineering, transformation and automation opportunities; and |
| • | E-FNOL: An app for smartphones and desktops that allows claim policy holders, brokers and third-party administrators to register claims through their mobile devices. |
47
Healthcare
We deliverBPM solutions across the healthcare value chain. We facilitate business transformation through the adoption of
end-to-end
new-age
digital solutions, data platforms and advanced analytics, business processre-engineering
and RPA. Besides seeking to deliver significant cost reduction for our clients, weco-create
innovative and high-impact solutions that focus on end customers with a view to enabling value creation. Our solutions are designed to help clients enhance the quality of care by driving improved compliance with clinical pathways and derive deeper insights for better decision-making through advanced analytics.We are well-positioned in the pharmaceutical and biopharmaceutical industry with research and analytics expertise to support the product life cycle and commercial operations. We enable our clients to engage in data-driven decision-making by leveraging our proprietary solutions such as PRECIZON (a cloud-based, natural language processing driven fully customizable competitive intelligence platform), WNS Forecasto (a cloud-based forecasting platform for business planning cycles), Unified Analytics Platform (a proprietary cloud-based business intelligence self-serve analytics platform), WNS Skense (a proprietary cognitive data capture and contextualization platform), SocioSEER
TM
(a social media analytics platform), Therapy Area Analyzer (a proprietary therapy area knowledge repository, covering 12 disease areas and 120 indications and providing information on disease etiology, epidemiology and product analysis for 15 countries) and other technology or domain intellectual property (“IP”), which we have built with a view to delivering holistic value to our clients.We specialize in enabling thesales and marketing value chain with an
end-to-end
industry-led
talent pool supporting key functions like sales force sizing, sales force effectiveness, market mix modeling, multi-channel marketing and attribution, and next-best-action marketing. Our analytics knowledge center comprises more than 1,000 analytics experts who leverage deep pharmaceutical domain knowledge, strong analytics capabilities and proprietary frameworks to deliver actionable business insights to leading pharmaceutical companies. Supporting our analytics team is a strong group of technical experts skilled across various data-related domains, including platform-agnostic data hosting, curation and governance, data ingestion, visualization and big data feed for advanced analytics.We seek to generate value for clients across the healthcare payer services landscape, driving claims transformation with a focus on value-based care, clinical programs and claims decision support using technology and domain to optimize cost, improve quality and provide superior member and provider experience. For providers, we deliver clinically empowered revenue cycle management designed to improve financial performance and modernize customer experience. For third-party administrators, we seek to enable high compliance and cost savings through our innovative bill review solution. Our solution modernizes workflow and leverages analytics, clinical knowledge and domain-backed technology to create an intelligent revenue cycle that seamlessly engages with providers, payers and patients with a view to delivering value-based care.
Further, we believe we are well-positioned to be a strategic provider, helping the healthcare industry deliver benefits management across several key specialty healthcare areas, including radiology, cardiology, oncology, sleep care, orthopedics and pain management. Our analytics-based medical-content-rules-driven platforms, Consult
TM
and Protus™
, seek to deliver the right care to patients and reduce cost of care for our clients in the process.As at March 31, 2022, we had 6,161 employees in this business unit. In fiscal 2022 and 2021, this business unit accounted for 17.7% and 18.9% of our revenue and 19.1% and 19.9% of our revenue less repair payments
(non-GAAP),
respectively.Sub-verticals
/ Industry Sectorssub-verticals
and industry sectors we serve include:| • | Durable medical equipment manufacturers; |
| • | Health insurance companies; |
| • | Healthcare provider practices, hospitals and diagnostic centers; |
| • | Pharmaceutical, biotech and medical device companies; and |
| • | Third-party administrators. |
Service Offerings
. We provide the following key areas of services to clients in this business unit:Healthcare — Service Offerings | ||||||||
Providers | Payers | Durable Medical Equipment Manufacturers | Enterprise Shared Services | Pharmaceutical and Consumer Health | ||||
| Revenue cycle management, medical coding, bill preparation, receivables management, payment posting, debt analysis; | Claims administration, member and provider services, clinical support, overpayment recovery, fraud detection and investigation, utilization management services (that is, optimizing payer healthcare spend on areas such as tests and procedures without compromising the patient care-quality-safety norms); | Billings and submissions, fulfillment support, collections, patient services, collection analytics, reporting and dashboarding, sales force effectiveness; | Finance and accounting, workflow / platforms, research and analytics (knowledge process outsourcing), technology solutions, front-end / mailroom, customer experience / helpdesk services; procurement support; and | Competitive intelligence, pipeline analysis, product profiling, key performance indicators reporting, epidemiology analysis, market opportunity assessment, social media analysis, key opinion leader research, modeling and tool building support, pricing analytics, patient data analytics, market mix model, big data platform development, data governance, and scientific content development and medical information management. | ||||
Technology Tools / Platforms
. We utilize the following technology tools and platforms in delivering services to our clients in this business unit:| • | PRECIZON: A cloud-based, natural language processing driven fully customizable competitive intelligence platform; |
| • | SocioSEER ™ : A social media analytics platform; |
| • | Unified Analytics Platform: A proprietary cloud-based business intelligence self-serve analytics platform; |
| • | WNS Forecasto: A cloud-based forecasting platform for business planning cycles; |
| • | Therapy Area Analyzer: A proprietary therapy area knowledge repository; |
| • | Consult ™ : A clinical decision support technology platform; |
| • | TrackBox: A proprietary workflow management solution; and |
| • | WNS Skense: A proprietary cognitive data capture and contextualization platform. |
48
Diversified Businesses (including Manufacturing, Retail and CPG, Media and Entertainment and Telecom)
We deliver comprehensive BPM solutions for diversified businesses, including manufacturing, retail and CPG, media and entertainment, and telecom. Across these industries, we have developed a suite of transformative digital and analytics solutions that are designed to optimize business performance and enhance customer experience. Our offerings include a host of platform-based and intelligent automation-driven solutions such as WNS’ Financial(“FIAB”) designed to prevent financial leakages, unlock working capital and bolster compliance; WNS EXPIRIUS designed for enhanced customer experience and higher sales; warranty management BPaaS; supply chain planning suite and control tower; CPO TRAC (a procurement management solution to assist chief procurement officers (“CPOs”)) for
Intelligence-in-a-Box
digital-led
procurement management;e-commerce
digital merchandising and digital order management.Our offerings also encompass advanced analytics solutions that help drive business performance, including working capital optimization, sourcing spend reduction, marketing spend optimization, supply chain risk reduction and increased customer lifetime value.
As at March 31, 2022, we had 3,422 employees in this business unit. In fiscal 2022 and 2021, this business unit accounted for 13.5% and 15.3% of our revenue and 14.6% and 16.1% of our revenue less repair payments
(non-GAAP),
respectively.Manufacturing
:
Sub-verticals
/ Industry Sectorssub-verticals
and industry sectors we serve include:| • | Electronics manufacturers; |
| • | Metal and mining companies; |
| • | Optical equipment and imaging product manufacturers; |
| • | Building and construction product manufacturers; |
| • | Aeronautical product manufacturers; |
| • | Precision engineering companies; |
| • | Industrial manufacturing companies; |
| • | Specialty chemicals companies; |
| • | High-tech products companies; and |
| • | Food processing companies. |
Service Offerings
. We provide the following key areas of services to clients in this business unit:Manufacturing – Service Offerings | ||||
Supply Chain Planning and Forecasting | Sourcing and Procurement | Fulfillment and Logistics | ||
| Sales and operations planning, demand forecasting, supply planning, inventory management, inventory analytics; | Strategic sourcing, category management, contract management, spend analytics, transactional procurement; | Order entry and processing, order tracking, billing / invoicing, transport management, logistics optimization; | ||
Warranty and Returns Management | Sales, Marketing and Customer Services | Enterprise Shared Services | ||
| Warranty customer operations, warranty claims management, parts / repair management, warranty financial management, returns management, customer helpdesk; | Global market opportunities, brand building, go-to market strategy, customer experience services, order management, acquisition analytics, retention analytics; and | Finance and accounting services, statutory and compliance support, customer experience services, human resource services, IT service desk, application support. | ||
Technology Tools / Platforms.
We utilize the following technology tools and platforms in delivering services to our clients in this business unit:| • | FIAB: This combines advanced analytics-led techniques, applications and methods designed to enableend-to-end |
| • | CPO TRAC: A procurement management solution that leverages digital advancements coupled with predictive and functional analytics designed to transform procurement functions; and |
| • | Warranty Management BPaaS: A platform-led offering that is designed to enable automated claims processing, improve customer satisfaction and reduce cost of warranty operations. |
49
Retail and Consumer Packaged Goods
:
Our services are supported by a research and analytics platform, WADE
SM
, which was designed and developed to enable retail and CPG companies to access, organize and analyze data from various external sources and further use the insights gained to make informed decisions.Sub-verticals
/ Industry Sectors
. The key retail and CPGsub-verticals
and industry sectors we serve include:| • | Beverage companies; |
| • | Fast food chains and restaurants; |
| • | Processed food suppliers; |
| • | Cosmetics and healthcare companies; |
| • | Apparel and footwear; |
| • | General merchandize retailers; |
| • | Specialty retailers; and |
| • | E-commerce retailers. |
Service Offerings
. We provide the following key areas of services to clients in this business unit:Retail and Consumer Packaged Goods – Service Offerings | ||||
Strategy Solutions | Customer Experience Services | Supply Chain Solutions | ||
| Market entry strategy, balancing portfolio investments, consumer and market insights, innovation strategies, power brand strategy, marketing spending optimization; | Omni-channel (phone, e-mail, fax, website, live chat, social media) customer experience services; | Retailer-supplier collaboration for demand-driven supply chain and retail execution management, supply intelligence, supplier performance and risk monitoring, contract management, supply chain orchestration – global trade shared services, trading partner helpdesks, logistics; | ||
Revenue Management Solutions | Content Services | Enterprise Shared Services | ||
| Planning and execution of transaction and interaction-based campaign strategies, loyalty management, credit control and collections; | Product catalogs, user-generated content moderation, digital content protection, web / print content, website analytics and optimization; and | Finance and accounting services, statutory and compliance support, sourcing and procurement services, human resource services, IT service desk and application support. | ||
Technology Tools / Platforms
. We utilize the following technology tools and platforms in delivering services to our clients in this business unit:| • | WADE SM : A predictive analytics solution framework designed and developed to enable retail and CPG companies to access, organize and analyze data from various external sources and further use the insights gained to make informed decisions; |
| • | WNS EXPIRIUS: A digital customer experience model that integrates human-assisted design and domain expertise with AI-driven conversational insights andconsulting-led strategies; and |
| • | SocioSEER TM : A social media analytics platform. |
50
Media and Entertainment
:
Working with some of the largest media and entertainment companies in the world gives us an undisputed advantage in understanding the nuances of the business. We leverage years of industry and process experience, and a large team of digital media experts to deliver next-generation cost-effective solutions to clients in this industry.
Sub-verticals
/ Industry Sectors
. The key media and entertainmentsub-verticals
and industry sectors we serve include:| • | Music; |
| • | Publishing; |
| • | Television; |
| • | Radio; |
| • | Filmed entertainment; |
| • | Gaming and animation; |
| • | Sports entertainment; and |
| • | Internet and outdoor advertising firms. |
Service Offerings
. We provide the following key areas of services to clients in this business unit:Media and Entertainment – Service Offerings | ||||
Strategy Solutions | Digital Operations and Royalty Management Solutions | Sales, Marketing and Distribution Solutions | ||
| Market entry strategy, balancing portfolio investments, consumer and market insights, innovation strategies, brand power strategy, marketing expense optimization; | Digital operations solutions to help companies successfully expand into the digital business; royalty management solutions to help clients manage rights and royalties in both new media and traditional media; piracy protection services to help companies prevent media piracy issues; | Seamless integration of traditional and digital product sales, marketing and distribution to enable clients to roll out timely innovative pricing / packaging strategies; | ||
Customer Experience Services | Content Services | Enterprise Shared Services | ||
| Omni-channel (phone, e-mail, fax, website, live chat, social media) customer experience services; | Product catalogs, user-generated content moderation, digital content protection, web / print content, website analytics, optimization; and | Finance and accounting services, statutory and compliance support, sourcing and procurement services, human resource services, IT service desk, application support. | ||
Technology Tools / Platforms
. We utilize the following technology tools and platforms in delivering services to our clients in this business unit:| • | SocioSEER ™ : A social media analytics platform; and |
| • | WNS EXPIRIUS: A digital customer experience model that integrates human-assisted design and domain expertise with AI-driven conversational insights andconsulting-led strategies. |
51
Telecom
:
built-in
variable capacity to meet business requirements helps us deliver business value. WNS’end-to-end
Our solutions are underpinned by the right mix of digital, analytics, and domain and process expertise that enables our clients to achieve cost efficiencies and drive sustainable growth.
Service Offerings: We provide the following key areas of services to clients in this business unit:
Telecom — Service Offerings | ||||||
Customer Acquisition | Order Provisioning and Order Management | Operations and Customer Experience Services | Enterprise Shared Services | |||
| Contract administration, sales order processing, service administration and data control; | New products and services, service delivery process creation, order provisioning, technical validation and support, rejected order tracking, order tracking, proactive order management, billing, data management (for example, forms and administration); | Inbound customer experience services, logging and monitoring service requests, customer relationship management (“CRM”) analytics, collection analytics, web correspondence, IT customer experience services (global service desk); and | Finance and accounting services, statutory and compliance support, sourcing and procurement services, human resource services, IT service desk, application support. | |||
Travel and Leisure
We deliverservices to clients across the travel and leisure industry value chain.
end-to-end
Our endeavor to improve our clients’ competitive positioning is underpinned by a combination of domain expertise andmodels and application programming interface (“API”)-integrated offerings, we seek to improve customer experience, enhance operational control and efficiency, and drive revenue uplift. We also collaborate with third-party global technology solution providers in our efforts to drive innovation in our service offerings that seek to provide customized anddigital-driven solutions to our clients.
digital-led
solutions. Weco-create
intelligent, automated, resilient systems, and facilitate our clients’ adoption of digitalization. Through our digital product portfolio of cloud-based,as-a-service
best-of-breed
As at March 31, 2022, we had 12,911 employees in this business unit, several hundred of whom have International Air Transport Association, Universal Federation of Travel Agents or other travel industry related certifications. In fiscal 2022 and 2021, this business unit accounted for 14.8% and 14.2% of our revenue and 16.0% and 14.9% of our revenue less repair payments
(non-GAAP),
respectively.Sub-verticals
/Industry
Sectors
. The key travel and leisuresub-vertical
and industry sectors we serve include:| • | Suppliers: Airlines, cargo, hotels, cruise lines, coach companies; |
| • | Travel intermediaries: Online travel agencies, travel management companies, tour operators; and |
| • | Other travel segments: Airports, hospitality brands, global distribution systems (GDS), travel technology companies. |
52
Service Offerings
. We provide the following key areas of services to clients in this business unit:Travel and Leisure — Service Offerings | ||||||
Operations | Enterprise Shared Services | Research and Analytics | Customer Experience Services | |||
Commercial / Marketing: Passenger name record fulfillment, fares and distribution, billing information data tapes audit, campaign management and eCommerce; Crew scheduling and rostering, disruption management, during travel services, maintenance and engineering, port operations and baggage desk, Right to Fly; Digital Content Services: Content loading, content parity, rate loading and content writing; Cargo: Commercial, revenue management, trucking, operations and BI, revenue accounting, rate / revenue audit and helpdesk; | Finance and accounting, procurement, human resources; | Loyalty and customer analytics, guest experience and customer satisfaction score analytics, market and campaign analytics, strategic research and market intelligence, business intelligence and data management; and | Bookings and reservations, cancellations and reschedules, rates enquiry, booking refunds, ancillary cross sell / up sell and corporate bookings; Guest relations, general queries, website assistance, complaint management and surveys, VIP desk / concierge / after hours, guest special requests and social customer experience management; and Member Services: Enrollment and administration, general program enquiries, redemption bookings, membership fulfillment, tier management and technical helpdesk. | |||
Technology Tools / Platforms
. We utilize the following technology tools and platforms in delivering services to our clients in this business unit:| • | WNS EXPIRIUS: A digital customer experience model that integrates human-assisted design and domain expertise with AI-driven conversational insights andconsulting-led strategies; |
| • | SocioSEER ™ : A social media analytics platform; |
| • | TruAgent: An intelligent analytics-powered solution that drives and manages the performance of contact centers; |
| • | InTouch TM : A social media engagement platform; |
| • | Claim fraud analytics: An automated analytics solution to identify fraudulent passenger and baggage claims; |
| • | Travel recovery tracking solution: An analytical platform providing insights related to the demand recovery patterns for the travel industry; |
| • | Qbay SM : Amulti-GDS platform for queue management; |
| • | Refunds application control: Streamlined refunds processing; |
| • | SeatSure: Automated seating of minors; |
| • | CFO TRAC: A unified and comprehensive suite of technology solutions designed to enable the futuristic agenda of chief financial officers (“CFOs”); |
| • | Outperforming CFO Framework: A best-practice and digital-enablement toolkit designed to deliver finance and accounting process optimization; |
| • | E-Close: A financial close management tool; |
| • | Verifare Plus 3.0 SM : A fare audit tool; |
| • | AnciFly: An ancillary revenue analytics engine; |
| • | Commercial Planning Suite: An integrated revenue analytics platform; |
| • | Data monetization platform: An engine to mine available data and create revenue generation opportunities; |
| • | Fintinel: Advanced financial analytics to identify audit targets by analyzing all the transactions; |
| • | WNS ACOSS: An end-to-end |
| • | WNS Skense: A proprietary cognitive data capture and processing platform to drive automation; |
| • | CFO digital cockpit: One-view analytical insights of the finance organization; and |
| • | Spend analytics: Automated spend classification and analysis. |
53
Shipping and Logistics
We are one of only a few providers of BPM solutions for the shipping and logistics market. Our strategic focus is demonstrated through our organizational structure, where we have a separate logistics vertical and approximately 4,000 dedicated logistics BPM professionals who cater to more than 21 leading logistics brands worldwide. Our client solutions span the entire shipment life cycle, such as booking, documentation, core operations support, customer experience services, finance and accounting, customer experience services, business technology and data analytics.
We have a long-term strategic focus on developing and deploying
new-age
technologies, tools and platforms designed to create sustainable cost and quality advantage for our clients. We also leverage our analytics expertise in combination with industry domain knowledge and custom-built proprietary frameworks to help clients make informed decisions at the right time. We provide an array of services to our clients, such as complex data integration, cutting-edge advanced analytics, personalization and big data.As at March 31, 2022, we had 5,666 employees working in this business unit. In fiscal 2022 and 2021, this business unit accounted for 7.7% and 7.0% of our revenue, and 8.3% and 7.3% of our revenue less repair payments
(non-GAAP),
respectively.Sub-verticals
/ Industry Sectors
. The key shipping and logisticssub-verticals
and industry sectors we serve include:| • | Global air express and courier companies; |
| • | Ocean shipping — Non-vessel operating common carrier, ocean liners, ports and terminals and shipping agencies; |
| • | Trucking — Less-than-truckload, full truckload, truck rental and leasing, compliance, safety and accountability; companies |
| • | Third-party logistics and fourth-party logistics services; |
| • | Rail; and |
| • | Transportation safety and compliance. |
Service Offerings
. We provide the following key areas of services to clients in this business unit:Shipping and Logistics — Service Offerings | ||||||
Sales and Marketing | Customer Experience Services | Document Processing | Operations Support | |||
| Tariff filing and maintenance, rate quotes, service contract / rate agreement creation and maintenance and actuarial services; | Customer file and debtor file administration, customer helpdesk, booking desk-phone / e-mail / electronic data interchange web, rating companies) and capital modeling, pricing and underwriting support, and catastrophe modeling; | Exports, bill of lading, processing, advance custom manifest submission, freight audit, billing and invoicing, vessel closures, imports, import data quality process / checks, arrival notifications, import general manifest filings with delivery order issuance, customers document processing, verified gross mass updating; | Vessel schedules — long-term support, vessel schedules — coastal, routing module maintenance, traffic control coordination, booking with carrier, hazardous cargo approvals, vendor management — vendor file administration, purchase order / job order creation, gate moves, ship husbanding, stowage planning, bay plan submission and distribution, inbound and outbound trans-shipment, maintenance and repairs, global stock reconciliation, container leasing validation, vessel performance reports, inventory management, chart corrections management, safety and environmental key performance indicator (“KPI”) monitoring onshore; | |||
Transportation Safety and Compliance, and Analytics Services | Enterprise Shared Services | HR and Payroll | Sourcing and Procurement | |||
| Driver logs, driver qualification, video log monitoring, and miles without hours exceptions handling; | Accounts payable, accounts receivables, disbursement accounting, credit and collections, agency reconciliations, general ledger / bank reconciliation, cash reporting and audit / vendor reconciliation, financial management reporting, vendor helpdesk, monthly closing / quarterly / yearly closing, treasury support, agency audits, claims management; | Strategic sourcing, category management, contract management, spending analytics, and transactional procurement; | ||||
Research and Analytics | Technology Services | |||||
| Metrics realization and analysis, network design and optimization, transport management, shipping performance management, tonnage analytics, carrier sourcing analytics, fleet analysis and maintenance, reverse logistics analytics, revenue analytics, and distribution center analytics; and | Intranet support, claims management, data hubbing, e-commerce registration,e-learning module content management,e-learning module content creation and intelligent automation services across segments; platform consulting and implementation support, consulting and transformation services (automation, business processre-engineering, digital). | |||||
Technology Tools / Platforms
. We utilize the following technology tools and platforms in delivering services to our clients in this business unit:| • | WNS Malkom ™ : AnAI- andML-enabled optical character recognition billing platform designed to digitize and automate approximately60-70 percent of a bill of lading with afront-end application; |
| • | WNS Fire: A desktop app designed to enable organizations to build a world-class dispute management process by reducing resolution cycle time and maximizing customer satisfaction with real-time data and insights; |
| • | WNS Bridge: A single enterprise-wide real-time visual dashboard to enable decision support; |
| • | WNS EXPIRIUS: A digital customer experience model that integrates human-assisted design and domain expertise with AI-driven conversational insights andconsulting-led strategies; |
| • | Digital Freight Automation Services: Driving end-to-end ML-driven workflows and real-time data to drive intelligent operations; |
| • | ACE: Intelligent automation BOTs for portals to raise and rectify disputes; |
| • | iLearn: A digital learning platform; |
| • | Bolt: Custom learning experience to address training needs around logistics sectors from domain perspective; and |
| • | GLINT — A full-stack AI learning journey management platform. |
54
Hi-Tech
and Professional ServicesOur
hi-tech
and professional services (“HPS”) business unit’s objective is to help clients gain a competitive edge and outperform in their respective industries by leveraging digital transformation and tech-enabled solutions under aconsultancy-led
approach. We currently cater to more than 35 clients from our key delivery centers in India, Romania, China, the Philippines and Sri Lanka.Our HPS business unit offers an array of solutions to key
sub-segments
within the vertical. Our solutions range from complex trust and safety, fraud operations, business and market intelligence to simple data management and labeling operations. We have helped clients set up global business services centers encompassing horizontal services such as finance and accounting, human resource management, customer interaction services, procurement, and IT and infrastructure management.As at March 31, 2022, we had 3,705 employees in the business unit. In fiscal 2022 and 2021, this business unit accounted for 6.2% and 6.2% of our revenue, and 6.7% and 6.5% revenue less repair payments
(non-GAAP),
respectively.Sub-verticals
/ Industry Sectorssub-verticals
and industry sectors we serve include:| • | Content and information publishers; |
| • | Background verification companies; |
| • | High technology (“Hi-Tech”) firms; |
| • | Legal services firms; |
| • | Executive search firms; |
| • | Real estate service firms; and |
| • | Marketing service providers. |
Service Offerings
. We provide the following key areas of services to clients in this business unit:Hi-Tech and Professional Services — Service Offerings | ||||||
Background Verification Firms | Content and Information Publishers | Legal Services Firms | Executive Search Firms | |||
| Background checks, identity, education, employment, criminal background and social media checks, corporate investigative research, enhanced due diligence, international verification checks, occupational health checks, credit history checks, motor vehicle records checks for Federal Motor Carrier Safety Administration and Department of Transportation compliance; | Content sourcing, content creation, database creation, maintenance and update, aggregation, indexing and tagging, content copy editing and proofing, content enrichment, analysis and product creation, content review and quality assurance, design and production services for digital / print products, advertising operations and order fulfillment, analytics and CRM support; | Legal support, legal and business research, case management, document management, digital dictation transcription, pitch support, patent and trademark searches, contract management, title checking, lease management, company secretarial services, legal transcription and documentation, personal injury litigation support, property law (conveyancing); | Search lifecycle support, sourcing, pre-screening, name identification, interview and offer management, pitch book support, business intelligence, industry and company research, databaseclean-up, update and management, document management, marketing and business development support, talent consulting, contract checks and audits; | |||
Real Estate Services Firms | Marketing Service Providers | Hi-Tech Firms | ||||
| Real estate accounting, lease management, surveying and lettings support, business and financial research, real estate analytics, portfolio and fund accounting, sales and marketing support, end-to-end | Industry, company and product research, market research operations, market research analytics, shopper and CRM analytics, web / digital analytics, campaign management and analytics, database management, digital content management and production support (designing and development); | Revenue operations (lead generation and scrubbing, upper funnel management, advertisement sales, digital and print advertisement operations, campaign management, agency and partner support); Trust and safety (transaction monitoring, vendor and customer due diligence, know your customer (“KYC”) / anti-money laundering (“AML”) document verification); Annotation solutions (text, image, data, video, voice, exception management); Business-to-business BPaaS (Workforce Management as a Service, an end-to-end re-engineering, end-to-end Support services (customer lifecycle management, process consulting, decision support). | ||||
55
Banking and Financial Services
Our banking and financial services practice supports more than 25 leading clients, including large commercial and retail banks, wholesale and retail lenders, wealth advisors, asset managers, investment banks, private equity firms, hedge funds, financial technology (or commonly referred to as FinTech) organizations and mortgage servicing companies, with a comprehensive suite of BPM and transformation solutions.
We seek to add value to our clients’ businesses by improving customer experience, unlocking cost efficiencies and revenue opportunities, streamlining processes, and leveraging a wide range of process
re-engineering,
automation (robotic andnon-robotic),
and digital and advanced analytics (AI and ML) solutions.As at March 31, 2022, we had 3,292 employees working in this business unit. In fiscal 2022 and 2021, this business unit accounted for 5.8% and 4.7% of our revenue, and 6.2% and 4.9% of our revenue less repair payments
(non-GAAP),
respectively.Sub-verticals
/ Industry Sectors
. The key banking and financial servicessub-verticals
and industry sectors we serve include:| • | Retail and commercial banking; |
| • | Mortgage and loans; |
| • | Wealth and investment banking; |
| • | Financial technology; |
| • | Asset management; |
| • | Financial advisory firms; |
| • | Financial research and financial market intelligence companies; |
| • | Trade finance; and |
| • | Private equity and hedge funds. |
Service Offerings
. We provide the following key areas of services to clients in this business unit:Banking and Financial Services — Service Offerings | ||||||
Retail Banking | Commercial Banking | Capital Markets | Mortgage | |||
On-boarding: Application processing, document review and verification, KYC and customer due diligence, underwriting, spend limit;Servicing: Maintenance, customer support, transaction processing, complaints and disputes handling, vulnerable customer management, fraud detection and management, chargebacks, AML transaction monitoring; | On-boarding: Application processing, KYC / ultimate beneficial owner verification, document review and verification;Credit Risk: Credit analysis, probability of default / loss given default, financial spreading, risk grading support; Operations: Collateral management, covenant monitoring, renewals, annual reviews, settlement, rollovers, billing; Cash Management: Funds transfer, Nostro / Vostro (these terms are used with reference to one bank maintaining money at another bank), reconciliation, payment processing and investigation, AML transaction monitoring; Trade Finance: Processing of import / export letters of credit, standby letters of credit, guarantees, receivables financing, trade-based money laundering support; | Front Office: Financial and business research, investment strategy and modeling, order entry, allocation / rebalancing; portfolio construction support, pitch book support; financial statement spreading Middle Office: Reference data management, cash flow forecasting, risk management, amendments / maintenance of existing data, manual trade allocations, manual trade booking, trade exception / rejection management, trade amendment, trade confirmation, queries handling; Back Office: Clearing and settlement, custody / record keeping, stock transfer, collateral management, expense and income processing, fund accounting / net asset value calculations, reconciliations, financial reporting, settlement; | Origination: Application processing, KYC, pre-underwriting and underwriting support, credit evaluation, title commitment,pre-funding audit, disbursal;Servicing: Customer service, loan boarding and set-up, adjustable rate mortgage audit, payments processing, assignments and endorsements, lien release, escrow management / periodic analysis, final documents follow up and audit;Default Management: Pre-loss mitigation, foreclosure support, borrower research, loan modification, forbearance support;Secondary Market: Post close audit, due diligence of acquired packets, documentary fulfillment, trailing doc follow ups; | |||
Fintech | Enterprise Shared Services | Research and Analytics | ||||
| Application processing support / helpdesk, customer service, complaints handling, exception management, customer screening, transaction monitoring, operations advisory and transformation consulting services; | Finance and Accounting: Accounts payable, travel and expenses management, general ledger, budgeting and forecasting, financial planning and analysis, reporting, capital management support, asset liability management; Sourcing and Procurement: Strategic sourcing, category management, contract management, spend analytics, transactional procurement; vendor management; and | Financial and business research, equity / fixed income / credit research, risk analytics, fraud analytics, model development and validation, loyalty analytics, customer interaction analytics. | ||||
Technology Tools / Platforms
. We utilize the following technology tools and platforms in delivering services to our clients in this business unit:| • | RiskCheck: A negative news screening platform; |
| • | iDetect: A fraud detection engine leveraging advanced analytics; |
| • | CreditEvaluator: A credit evaluation / pre-underwriting tool for credit cards; |
| • | KYC Researcher: An RPA-based tool for politically exposed person and sanctions screening; |
| • | iDebt: An intelligent debt management solution designed to improve collections efficiency and effectiveness; |
| • | Kwilo: An AI-based financial statement spreading tool; |
| • | WNS Skense: A proprietary cognitive data capture and contextualization platform underpinned by AI and ML; |
| • | Tookitaki: An analytics-led transaction monitoring platform; |
| • | MozaIQ: An automation solution to enable digital mortgage origination; |
| • | FCC Investigator: An intelligent automation tool that links data from multiple systems with risk and relevance scoring to discover red flags in a financial crime process; and |
| • | FCC Accelerator: Enables end-to-end |
56
Utilities
We are a leading utilities BPM solutions provider with domain expertise across the utilities value chain — generation, transmission and distribution. Our solutions portfolio supports utility companies catering to the residential, industrial, and small and medium enterprise segments.
We are a strategic transformation provider to clients from the US, the UK, and Asia-Pacific and African regions. We offer digital-driven, technology-enabled,andprocesses for our clients through our solutions spanning(including customer acquisition and management, billing and metering, payment processing, credit and collections) and other areas within the utilities value chain, including distribution and field services. Our long-standing relationships with leading global companies have helped us develop geography- and industry-specific domain expertise and capabilities in key segments. We enable business transformation by leveraging analytics, digital platforms, tools and solutions, and automation through AI and cognitive intelligence solutions.
analytics-led
and automation-infused services. We supportbusiness-to-consumer
business-to-business
meter-to-cash
Our capabilities to support clients across processes in oil and gas, electricity and water suppliers includetool offers platform integration, application integration, data integration, process integration, component integration and system integration capabilities along with document control and digitization, master data management, enterprise resource planning implementation and support, and digital
end-customer
support, back-office processes, new product offerings (including prepay meters), FAO services (including procurement services), debt management and other enabling services, such as meter reading, bill printing and digital support services (including smart metering). OurUtility-in-a-Box
meter-to-cash.
WNS EXPIRIUS enables our customer experience services along with our following CoEs: Sales CoE (sales,services span the customer life cycle, namely customer acquisition, relationship management, customer retention and collections.
up-sell
or cross-sell), Fulfillment CoE (transaction processing, customer retention), Assisted Digital Channels and Smart Collections (debt management). Theend-to-end
Using social media analytics and big data analytics across multiple channels, we help provide clients with a single view of the customer. Our analytics offerings include mining of structured and unstructured data, speech and text analytics, and revenue assurance analytics that includes bankruptcy analytics and fraud reduction and Energy Assistance Program (a program to assist
low-income
families in managing their energy costs) analysis with a view to enable clients to acquire more customers, and improve cross-sell,up-sell
and collection rates. Our offerings in RPA, AI and ML include feasibility studies to identify processes, design and build solutions, and develop codes to automate processes for deployment in live environments. As an organization, we are also working on our oil and gas capability and building our renewable energy capability by evaluating a carbon emission model that is designed to not only help our clients but also their customers.As at March 31, 2022, we had 3,258 employees working in this business unit. In fiscal 2022 and 2021, this business unit accounted for 4.4% and 4.6% of our revenue, and 4.7% and 4.8% of our revenue less repair payments
(non-GAAP),
respectively.Sub-verticals
/ Industry Sectors
. The key utilitiessub-verticals
and industry sectors we serve include:| • | Oil and gas; |
| • | Electricity; and |
| • | Water. |
Service Offerings
. We provide the following key areas of services to clients in this business unit:Utilities — Service Offerings | ||||||
Digital Meter-to-Cash Revenue Cycle Operations | Customer Experience Services | RPA, AI and ML | Research and Analytics | |||
| Managing the customer life cycle, which covers acquisition, billing, payment and withdrawal along with dispute resolution, exception handling, customer debt management, payment management for electricity, gas and water utilities across residential and business customers, all-encompassing smart and analog meters, reduction in voids and gap properties, energy efficiency and zero carbon emission; | Sales CoE encompassing customer acquisitions, retention, enhancement, cross-selling / up-selling, customer experience services — queries, correspondence, and asset management; prepay to help our clients set up a completely new offering for the customers; | Feasibility studies to identify processes, build solution design, develop codes to automate processes for deployment in live environments; | Data mining, decision-support services, revenue assurance covering smart collections, fraud analytics, bankruptcy forecasting, fraud reduction, cash flow improvement and engagement with vulnerable customers; this also has customer analytics — segmentation, lifetime value analysis, net promoter score analysis, speech analytics and text analytics; | |||
Utilities — Service Offerings | ||||||
Enterprise Shared Services | ||||||
Finance and accounting, supply chain management and procurement: E-sourcing, vendor rationalization, supplier management, procurement optimization, sourcing,procure-to-pay order-to-cash record-to-report; Human resource management: Administration support and payroll services. | ||||||
57
Horizontal Units
Finance and Accounting
Our finance and accounting services encompassing an array ofindustry-specific and cross-industry solutions are powered by deep domain knowledge,capabilities and digital innovation. We seek to drivefinance transformation leveraging intelligent automation, AI, cognitive computing, natural language processing, ML, blockchain, IoT, BPaaS platforms, embedded analytics and process
end-to-end
data-to-insights
end-to-end
re-engineering
frameworks.We continue to utilize our virtual transition models designed to enable fast, seamless and cost-effective transitions. We have also implemented shared service centers rationalizing financial systems and IT platforms for our clients.
As at March 31, 2022, we had 7,799 employees in this horizontal unit. In fiscal 2022 and 2021, this horizontal unit accounted for 22.4% and 23.3% of our revenue, and 24.2% and 24.5% of our revenue less repair payments
(non-GAAP),
respectively.Sub-vertical
/ Industry Sectors| • | Retail and CPG; |
| • | Insurance; |
| • | Energy and utilities; |
| • | Healthcare; |
| • | Media and entertainment; |
| • | Banking and financial services; |
| • | Telecom; |
| • | Manufacturing; |
| • | Shipping and logistics; |
| • | Travel and leisure; and |
| • | Other emerging industries. |
Service Offerings
. We provide the following key areas of services to clients in this horizontal unit:Finance and Accounting — Service Offerings | ||||||
Source-to-Pay | Quote-to-Sustain | Record-to-Report | Decision Support | |||
Sourcing to Contract: Sourcing and supplier relationship management; Procurement: Procurement operations; Invoice to Pay: Document management, invoice processing and reporting, purchasing card and travel expense claims processing, payment remittances and accounts payable enquiries; Miscellaneous activities and month-end close; | Quote-to-Order: Order-to-Bill: Bill-to-Cash: Report-to-Sustain: | Record: Master data management, book keeping, fixed assets, intercompany and general accounting; Report: Financial reporting, statutory reporting and taxation; | Budgeting, forecasting, variance analysis and management reporting; | |||
Corporate Functions | Supply Chain Finance | Governance, Risk, Compliance and Audit Services | Industry-specific Accounting | |||
| Treasury, cash management, financial planning and analysis, tax and compliance, decision support and management accounting; | Product costing, inventory accounting, manufacturing accounting, supply chain analytics and supply chain fulfillment support; | Governance consulting, risk analytics services, compliance services and audit services; and | Passenger revenue accounting, revenue audit and recovery, claims management, loan account maintenance, royalty accounting, fiduciary accounting, trip records, freight and fuel charges accounting, cost accounting, franchise accounting, meter reading, pre-payment billing and disbursement accounting. | |||
Technology Tools / Platforms
. We utilize the following technology tools and platforms in delivering services to our clients in the horizontal unit:| • | Outperforming CFO Framework: A best practices-enabled framework with toolkits for assessment and digital enablement, designed to create transformation roadmaps, enhance process optimization and target operating model redesign; |
| • | FIAB: A suite of advanced analytics offerings for the CFO’s organization, providing insights to enhance visibility and financial controls. The following are the primary applications under FIAB: |
| • | JEAP — An app based on advanced statistical models, designed to transform how controllership works; |
| • | enC@SH — Working capital enhancement through advanced AP analytics and a range of simulators for ‘What-if Analysis’; provides a prioritized list of opportunities to enhance liquidity and bottom-line impact; |
| • | DoppelSkanner — A nimble and non-intrusive universal duplicate detection application with multiple cutting-edge features such as fuzzy matching (a technique that provides improved ability to process word-based matching queries to find matching phrases or sentences from a database), phonetic matching and user customizable strictness; and |
| • | Fintinel — A risk and audit analytics application designed to identify the right set of audit targets from accounts payable invoices and travel and expense claims using a range of intelligent statistical and forensic methods. |
| • | WNS eClose: A workflow solution for streamlining the period-end close process; |
| • | WNS JE Rec TRAC TM : A workflow solution for automatic reconciliation tracking, processing, validation and checklist; |
| • | AP TRAC: An end-to-end |
| • | CashWiz: A cloud-based cash application platform leveraging fuzzy logic; |
| • | WNS Trackpoint Pro: A web-based case management tool; |
| • | Quote-to-Sustain: end-to-end |
| • | F&A TRAC: An e-forms and workflow solution that can be utilized across multiple management processes such assource-to-pay, quote-to-sustain record-to-report.. |
58
Customer Experience Services
Our Customer Experience (“CX”) services leverage a human-centered design that seeks to ensure domain, digital and innovation are at the core to deliver superior business outcomes and build customer trust. We focus on
co-creating
business outcomes with our clients by combining our domain-focused digital solutions and CoEs.WNS CX services are enabled by our proprietary solution WNS EXPIRIUS. It is a customer experience solution that integrates human-assisted design and domain expertise with
AI-driven
conversational insights and CXconsulting-led
strategies to create a holistic digital CX.The EXPIRIUS model comprises eight modular solutions, or microservices, which are all led by return on investment. These solutions have been designed to meet the specific CX demands of businesses powered through consulting and four CoEs: Sales, Fulfillment, Assisted Digital Channels and Smart Collections. Our global network of WNSservices span the customer life cycle, namely customer acquisition, relationship management, customer retention and collections.
Co-creation
Labs leverages a human-centered approach to support the design and delivery of CX services. Theend-to-end
As at March 31, 2022, we had 14,665 employees in this horizontal unit. In fiscal 2022 and 2021, this horizontal unit accounted for 17.1% and 16.9% of our revenue, and 18.5% and 17.8% of our revenue less repair payments
(non-GAAP),
respectively.Sub-verticals
/ Sectors| • | Healthcare; |
| • | Manufacturing; |
| • | Retail and CPG; |
| • | Shipping and logistics; |
| • | Banking and financial services; |
| • | Travel and leisure; |
| • | Media and entertainment; |
| • | Telecom; |
| • | Utilities; and |
| • | Hi-Tech. |
Service Offerings
. We provide the following key areas of services to clients in this horizontal unit:Customer Experience Services — Service Offerings | ||||||
Customer Experience Transformation | Centers of Excellence | Workforce Models | Engagement Models | |||
Cutting-edge technology, proven methodologies and frameworks, and human-assisted solutions; Expertise across CX initial state assessment, customer journey mapping, omni-channel engagement and hyper-personalized solutions, customer analysis, intelligent automation, realignment of CX strategy post COVID-19; | WNS’ industry-contextualized CoEs combine domain experts with WNS EXPIRIUS; Four CoEs: WNS Sales CoE (A “Sales + Service” bundled offering designed to transform order-taking contact centers to revenue-generating profit centers), WNS Fulfillment CoE (designed to enable seamless, omni-channel, and unified fulfillment experiences through a digital and analytics driven approach), WNS Assisted Digital Channels CoE (leverages an integrated omni-channel contact strategy, underpinned by AI, cognitive and analytical solutions), and WNS’ Smart Collections CoE (a debt collections strategy driven by in-house smart tools); | WNS Open Talent Model: Designed to foster communities of domain experts and enable enterprises to access best-in-class Channels: Voice, email, chat, social media (traditional sites such as Facebook, Twitter, forums, blogs and review sites), digital engagement (mobile, web) and asynchronous messaging; Languages: Support in English, French, Italian, Spanish, German, Arabic, Afrikaans and more than 20 key regional languages across the globe; and | Innovative, outcome-driven commercial models aimed at reducing the total cost of ownership and unlocking non-linear growth through levers across digital, domain and delivery during the deal tenure. | |||
Technology Tools / Platforms
. We utilize the following technology tools and platforms in delivering services to our clients in this horizontal unit:| • | WNS EXPIRIUS Toolkit – We collaborate with leading enterprise software product providers, niche vendors and unique tools / platform providers to co-create domain-specific IP and solutions leveraging the right digital infrastructure. As a result, under the EXPIRIUS umbrella, we have created a toolkit of eight microservices, each of which is designed to address a specific business challenge. |
| • | EXPIRIUS ConverseEX (a conversational cognitive self-service solution); |
| • | EXPIRIUS CloudServEX (an omni-channel cloud contact center-as-a-service |
| • | EXPIRIUS AssistEX (proactive agent assistance and automation); |
| • | EXPIRIUS TranslateEX (a real-time language translation solution); |
| • | EXPIRIUS EngageEX (a workforce engagement suite); |
| • | EXPIRIUS RemoteEX (user monitoring for security and compliance); |
| • | EXPIRIUS ElevateEX (360° customer insights and integrated analytics-as-a-service); |
| • | EXPIRIUS JourneyEX (a customer journey discovery and orchestration solution). |
59
Research and Analytics
Our research and analytics practice (now branded as “WNS Triange”) is designed to drive transformation by enabling businesses to define the right data, analytics and AI strategy, and execute that strategy with cloud-based platforms and solutions.
A deep domain understanding across industries as the foundation, WNS Triange aims to help businesses ask the right questions to accurately identify all the critical challenges, strategize on clear goals, translate them to impactful actions and achieve desired outcomes at speed and scale.
WNS Triange is underpinned by advanced analytics capabilities and domain knowledge, deep understanding of intelligent cloud platforms and technology deployments, outcome-driven models, specialized data and analytics CoE services,
co-creation
labs designed to deliver continuous innovation and experimentation, and strategic partnerships with leaders in analytics and technology solutions.The three core pillars of our data, analytics and AI practice are Triange Consult, Triange NxT and Triange CoE.
As at March 31, 2022, we had 3,344 employees in this horizontal unit. In fiscal 2022 and 2021, this horizontal unit accounted for 10.5% and 10.4% of our revenue, and 11.3% and 10.9% of our revenue less repair payments
(non-GAAP),
respectively.Sub-vertical
/ Industry Sectorssub-verticals
we serve include:| • | Retail and CPG; |
| • | Banking and financial services; |
| • | Insurance; |
| • | Utilities; |
| • | Travel and leisure; |
| • | Healthcare; and |
| • | Other emerging industries. |
Service Offerings
. We provide the following key areas of services to clients in this horizontal unit:Research and Analytics – Service Offerings | ||||
Triange Consult | Triange NxT | Triange CoE | ||
| Designed to enable clients to accelerate their data-driven digital transformation through consulting expertise, transformation roadmaps, proprietary frameworks across data strategy, governance, quality, AI / ML operations and domain-specific areas combined with design thinking principles; | Platform-driven offering built with core components that democratize data access with plug-and-play Platforms are equipped to have a 360-degree view of data along withslice-and-dice what-if scenario builders and ML operations;Core components are leveraged to build various AI-powered industry analytics modules with seamless user interface to help solve specific business problems; and | CoE model that combines industry and domain expertise, AI assets, intelligent cloud offerings, frameworks, best practices and strategic partnerships to implement modernized enterprise data landscape and help accelerate client’s data-driven digital transformation journey. | ||
Technology Tools / Platforms
. Some of the key platform-driven offerings that are part of Triange NxT include:| • | Unified Analytics Platform (“UAP”): UAP combines intelligent cloud, data engineering components and AI / ML operations with industry-specific modules to deliver an end-to-end in-a-Box API-driven architecture, insurance-specific algorithms (including claims, pricing, underwriting, fraud, marketing and customer analytics) andAI-powered decision models, and deliver seamless and visually intuitive insights to enable business users of insurance clients to make data-driven decisions; and |
| • | WNS Skense: Skense is a proprietary cognitive data capture and contextualization platform; this enterprise-grade platform underpinned by AI and ML is designed to drive intelligent automation; it ingests structured / unstructured business data and applies proprietary algorithms to generate contextualized information, followed by summarization to create structured and harmonized data sets. |
60
Technology Services
Our technology strategy for clients has been to leverage established and emerging technologies to
re-define
existing business models, embed process intelligence and automation into business operations, and drive organizational agility while simultaneously expediting the shift to the ‘Work from Anywhere’ model.At the core of our technology strategy is “WNS TRACservice provisioning (from consulting / advisory to implementation, support and managed services).
®
,” which is a consolidated suite of comprehensive digital BPM solutions. It combines the strengths of deep domain and technology expertise, a global partner ecosystem andend-to-end
WNS TRACsolutions that are designed to seamlessly integrate with clients’ existing technology environment, our digital solutions seek to drive transformation for today’s anytime-anywhere consumers.
®
solutions arepre-configured
with best practices and industrialized accelerators designed to drive development and adoption of cloud-native applications, intelligent automation, AI, advanced analytics, blockchain and IoT – with a host of deployment options and commercial models to choose from. Available asall-inclusive
BPaaS orplug-and-play
As at March 31, 2022, we had 502 employees in this horizontal unit. In fiscal 2022 and 2021, this horizontal unit accounted for 2.1% and 2.2% of our revenue, and 2.2% and 2.3% of our revenue less repair payments
(non-GAAP),
respectively.Sub-verticals
/ Industry Sectors| • | Travel and leisure; |
| • | Insurance; |
| • | Shipping and logistics; |
| • | Utilities; |
| • | Retail and CPG; and |
| • | Healthcare. |
Industry-specific
Technology Tools / Platforms
. We utilize the following industry-specific technology tools and platforms in delivering services to our clients in this horizontal unit:| • | Travel TRAC |
| • | Verifare Plus 3.0 SM : A fully automated, analytics-enabled andweb-based fare audit solution designed to enable airlines to maximize revenue recovery and minimize revenue leakage; |
| • | Qbay SM : A fully automated and cloud-hosted workflow management platform designed to manage back-office operations across centers and geographies, minimize costs and enhance customer service; |
| • | SmartPro ® Interline Audit Tool: A fully automated,analytics-led andweb-enabled proration engine designed to help airlines make better revenue management decisions, arrest revenue leakage, prorate accurately, comply with industry regulations and reduce total cost of operations; |
| • | BIDT: A revenue integrity solution; |
| • | WNS ACOSS: A suite of agile solutions designed to enhance efficiencies across revenue and cost-critical cargo processes; and |
| • | Commercial Planning Suite: A cloud-based and unified decision support / analytics platform designed to drive actionable insights from disparate sources for functions such as revenue management, sales, pricing, network planning, code share and alliances. |
| • | Insurance TRAC |
| • | WNS Insurance BPaaS / Insurance-in-a-Box: |
| • | Mobile-enabled First Notice of Loss: A smartphone self-serve application designed for claims lodgment; and |
| • | eAdjudicator: An RPA- andanalytics-led solution designed to automate theend-to-end |
| • | Shipping and Logistics TRAC |
| • | WNS Malkom: A digital billing platform, underpinned by AI and ML, designed to automate the end-to-end |
| • | WNS CollecTRAC: A re-usable collections bot,plug-and-play ready-to-integrate |
| • | CPG and Retail TRAC |
Warranty BPaaS: A
platform-led
offering designed to automate claims processing, improve customer satisfaction and reduce the cost of warranty operations.| • | Healthcare |
WNS TRACbox: A multi-channel workflow platform for advanced document handling for improvement in process and operational efficiency.
Cross-industry Technology Tools / Platforms
. We utilize the following cross-industry technology tools and platforms in delivering services to our clients in this horizontal unit:| • | CFO TRAC |
| • | Procure-to-Pay: |
| • | Order-to-Cash: software-as-a-service order-to-cash |
| • | Record-to-Report: |
| • | CPO TRAC, including ProjectTRAC and InsightTRAC |
| • | WNS Procurement Card: A fully integrated, compliant and automated solution designed to manage the reconciliation and settlement process in the client’s existing enterprise resource planning system; |
| • | WNS Supplier Portal: A supplier self-service portal designed to enable efficient online exchange and flow of supplier communications; and |
| • | WNS Spend Analytics: A solution designed to centralize, classify, search and improve data quality to derive meaningful and actionable business insights in real-time. |
| • | WNS Xpert |
| • | A proprietary low-code /no-code process-agnostic workflow automation platform withbest-of-breed |
| • | Managed Services |
| • | TrackPoint Pro: A proprietary, web-based case management solution that is designed to transform operations, increase efficiency and drive higher stakeholder satisfaction; and |
| • | Zoho Desk: A cloud-hosted solution designed to streamline work practices and increase collaboration through easy and effective query resolution. |
| • | Analytics |
| • | SocioSEER ™ : A social media analytics platform; |
| • | WNS Brandttitude ™ : A cloud-based business intelligence self-serve analytics platform; |
| • | WNS Agilius: A proprietary cloud-based business intelligence self-serve analytics platform; |
| • | WNS Sentinel: An AI-led tracking tool for early identification of trends for new product development; and |
| • | WNS Skense: A proprietary cognitive data extraction and contextualization platform underpinned by AI and ML; and |
| • | Data Management Suite: A comprehensive suite designed to enable enterprises to scale the data maturity curve faster. |
| • | Customer Experience |
| • | WNS EXPIRIUS: A digital customer experience model designed to integrate human-assisted design and domain expertise with AI-driven conversational insights andconsulting-led strategies, combining multiple solutions across the customer interaction life cycle. |
| • | RPA and Intelligent Automation TRAC ™ : A proprietary suite of automation solutions developed on third-party collaborators’ platforms for RPA, cognitive technologies, ML and AI systems. It is designed to deliver automation and transformation services to our clients. |
61
Sales and Marketing
The sales cycle for BPM services is time-consuming and complex in nature. The extended sales cycle generally includes initiating client contact, submitting requests for information and requests for proposals for client business, hosting client visits to our delivery centers (in person or virtually), and performing analysis (including diagnostic studies,and pilot implementations) to demonstrate our delivery capabilities, finally culminating into a contract with the client. Due to the complex nature of the sales cycle, we have aligned our sales teams to our vertical business units and staffed them with “hunting” or new relationship sales professionals (which we refer to as “hunters”), as well as “farming” or existing client relationship professionals (which we refer to as “farmers”). Our hunters and farmers have specialized industry knowledge and experience, which enable them to better understand prospective and existing clients’ business needs and to offer appropriate domain-specific solutions.
proofs-of-concept,
Our sales and sales support professionals are based in Australia, the UAE, Eastern Europe, India, Singapore, South Africa, the UK and the US. Our sales teams work closely with our global sales support team, which provides critical analytical support throughout the sales cycle. Other key capabilities offered by our sales support team include transformation, consulting, generating leads for potential business opportunities and research support.
Our sales teams comprise highly experienced professionals, with an average tenure at WNS exceeding five years. They bring a wealth of industry expertise and leverage their knowledge to orchestrate transformative deals with new and existing clients. As at March 31, 2022, our front-line sales teams consisted of 121 members including hunters and farmers.
Our hunting team’s focus post-pandemic is to continue strengthening WNS’ position in our key sectors and service lines and open up new
sub-sectors
and geographies to become a market leader. We continue to focus on large transformative opportunities that drive desired business outcomes for our clients. Our teams of farmers are responsible for identifying and initiating discussions with and selling services in new areas to existing clients, while our hunters are responsible for identifying opportunities with new clients who seek to outpace and outperform their peers by transforming their operational and digital service models.Both farmers and hunters work with clients toas well as expanding our relationships with existing clients.
co-create
digital-led
solutions that help our clients embrace change and deliver value to their end customers. By leveraging their detailed understanding of the clients’ business objectives gained through close interactions, our sales teams actively identify and target processes that can be better digitized and delivered by us with a view to improving self-service and cost efficiency, service accuracy and effectiveness, and financial control and systematized performance consistency. Through this forward-looking design philosophy, we have developed a strong track record of increasing our salesyear-on-year
A key aspect of our sales growth has been the ability of our sales leaders, in collaboration with their expert solutions and operations team, to both foresee and adapt to market changes that impact clients’ respective industries, operating and revenue models. The pervasiveness of AI and ML and the integration of data into the human-centric and automated decision making process have changed WNS’ approach to BPM. Our team’s focus has evolved into developing service models that utilize digital offerings and services by means of our proprietary and our collaborators’ solutions. This helps us to address and often go beyond clients’ needs. We are an evolved digital solutions provider in key business verticals such as manufacturing, healthcare, travel, retail and insurance. Our proprietary solutions such as the
domain-led
hyperautomation suite, the pharmaceutical-specific PRECIZON (a cloud-based, natural language-processing driven fully customizable competitive intelligence platform), WNS EXPIRIUS (a digitally integrated customer-experience service model), and the cross-industry SocioSEER™
(a social media analytics platform) digitally scrape, aggregate and learn, while being overlaid with a human to cull dashboards into bespoke reports for leaders. We offer intelligent automation solutions to drive smart outcomes. For example, we recently collaborated with a leading provider of promotional solutions to leverage intelligent automation and the cloud to drive a seamless customer experience across channels.We take a long-term, holistic approach toward building client relationships – from initial contact to business as usual, underpinned by a multi-layered governance methodology to ensure collaboration,
co-creation
and service evolution. We believe it is the commitment of our sales, service and leadership teams that is the core reason behind clients collaborating with and continuing with WNS through opportune and turbulent times.62
Clients
As at March 31, 2022, we had a diverse client base of 414 clients (with each client generating more than $0.01 million in revenue in fiscal 2022) across a variety of industries and service types, including companies that we believe are among the leading players in their respective industries.
We believe the diversity in our client profile differentiates us from our competitors. See “Part I – Item 5. Operating and Financial Review and Prospects – Revenue” for additional information on our client base.
The table below sets forth the number of our clients by revenue for the periods indicated. We believe that the large number of clients who generate more than $1 million of annual revenue indicates our ability to extend the depth of our relationships with existing clients over time.
Year ended March 31, | ||||||||
2022 | 2021 | |||||||
Below $1.0 million | 258 | 250 | ||||||
$1.0 million to $5.0 million | 108 | 101 | ||||||
$5.0 million to $10.0 million | 25 | 14 | ||||||
More than $10.0 million | 23 | 19 | ||||||
Competition
Competition in the BPM services industry is intense and growing steadily. See “Part I – Item 3. Key Information – D. Risk Factors – Risks Related to Our Business – We face competition from onshore and offshore BPM companies and from information technology companies that also offer BPM services. Our clients may also choose to run their business processes themselves, either in their home countries or through captive units located offshore.”
We compete primarily with:
| • | Focused BPM service companies with presence in offshore locations (primarily India), such as EXL Service Holdings, Inc., Firstsource Solutions Limited and Genpact Limited |
| • | BPM divisions of numerous information technology service companies operating out of India, such as Cognizant Technology Solutions, Infosys Technologies Limited, Tata Consultancy Services Limited and Wipro Technologies Limited |
| • | Global companies such as Accenture Limited, Capgemini, Electronic Data Systems Corporation, a division of Hewlett-Packard, and International Business Machines Corporation, which provide an array of products and services, including broad-based information technology, software, consulting and business process outsourcing services |
| • | Global financial services and consulting firms such as Deloitte Private Limited, industry-focused niche technology players such as InterGlobe Enterprises Limited and Accelya Holding World SL, and specialty analytics service providers such as Mu Sigma Inc. |
In addition, departments of certain companies may choose to perform their business processes
in-house,
and in some cases via an owned and operated facility in an offshore location such as India. Their employees provide these services as part of their regular business operations.Intellectual Property
We use a combination of our own proprietary software platforms and systems, together with our clients’ software systems and third party software platforms and systems, to deliver our BPM and technology services. Our proprietary solutions combined with licensed software (includingallows us to position and market our services as integrated solutions under our WNS TRAC
on-premise
or cloud hosted services likesoftware-as-a-service/
platform-as-a-service)
TM
suite. In most of the cases, these technology solutions are combined with our core BPM service offerings. Our principal proprietary software solutions include: | (1) | WNS TRAC ® industry-specific solutions, including the following: |
| a) | Insurance TRAC TM solutions including digital claims platform, WNS InVog(Insurance-in-a-box), |
| b) | Travel TRAC TM solutions, including revenue accounting platform, fare audit platform (“Verifare Plus 3.0SM ”), farepro-ration solution (SmartPro), revenue integrity solution (“BIDT”), queue distribution and productivity management solution (QbaySM ), ACOSS as suite of agile solutions designed to enhance efficiencies across revenue and cost-critical cargo processes, and other solutions which we use in our Travel business unit |
| c) | S&L TRAC TM solutions including WNS Malkom, a cloud native digital platform that coversend-to-end |
| d) | Healthcare TRAC ™ solutions including multi-channel workflow platform for advanced document handling and improvement in process and operational efficiency (WNS TRACKBox) and |
| e) | Industry-specific point-solutions used in other business units. |
| (2) | WNS auto claims software platform (Claimonix) for insurers and fleet services, which we use in our WNS Assistance business, as well as other insurance clients; |
| (3) | WNS TRAC ® cross-industry solutions, including the following: |
| a) | CFO TRAC TM solutions for our finance and accounting services, combining our proprietary software as well as solutions developed on 3rd party software. The suite includes AP TRACTM , solution forend-to-end |
| b) | Digital CIS TRAC TM solutions including WNS EXPIRIUS for our CIS (Customer Interaction Services) practice, combining multiple solutions across the customer interaction lifecycle |
| c) | CPO TRAC TM solutions for procurement including proprietary solutions like ProjectTRAC, InsightTRAC, WNS Procurement Card and PIA chatbot for procurement services |
| (4) | WNS RPA and Intelligent Automation TRAC TM , including our proprietary automation solutions and solutions developed on third party partner platforms for RPA, cognitive technologies, ML and AI systems for delivering automation and transformation services to our clients. |
There are other proprietary software, point solutions and platform solutions developed on third party software used for cross-industry services including our Research and Analytics business unit.
We customarily enter into licensing and
non-disclosure
agreements with our clients with respect to the use of their software platforms and systems. We maintain intellectual property rights in our proprietary software platforms and systems, and license the use of third party software platforms and systems from their respective owners. Under our contracts with third-party software platform providers, any solutions developed by us based on such third party software platforms, using our domain knowledge, are our intellectual property (unless qualified otherwise). Our client contracts usually provide that all customized intellectual property created specifically for the use of our clients will be assigned to them, unless it is clearly identified as our intellectual property.Our employees are also required to sign confidentiality agreements as a condition to their employment. These agreements include confidentiality undertakings regarding our company’s and the client’s intellectual property that bind our employees even after they cease to work with us. These agreements also ensure that all intellectual property created or developed by our employees in the course of their employment is assigned to us.
We have registered the trademarks “WNS,”
“WNS-Extending
Your Enterprise” and “WNS TRAC” in most of the countries where we have a presence.We customarily enter into licensing and
non-disclosure
agreements with our clients with respect to the use of their software platforms and systems. We maintain intellectual property rights in our proprietary software platforms and systems, and license the use of third party software platforms and systems from their respective owners. Under our contracts with third-party software platform providers, any solutions developed by us on top of such third party software platforms, using our domain knowledge, are our intellectual property (unless qualified otherwise). Our client contracts usually provide that all customized intellectual property created specifically for the use of our clients will be assigned to them, unless it is clearly identified as our intellectual property.Our employees are also required to sign confidentiality agreements as a condition to their employment. These agreements include confidentiality undertakings regarding our company’s and clients’ intellectual property that bind our employees even after they cease to work with us. These agreements also ensure that all intellectual property created or developed by our employees in the course of their employment is assigned to us.
We have registered the trademarks “WNS,”
“WNS-Extending
Your Enterprise” and “WNS TRAC” in most of the countries where we have global presence.63
Technology
We have a dedicated team of technology experts who support clients at every stage of their engagement with us. The team designs, implements and supports technology solutions to enable delivery of business processes for our clients.
Wide-area-network
Customer experience services technology infrastructure
e-mail,
social media, and interactive voice response channels across all our delivery centers, designed to improve customer experience. These customized platforms orchestrate omni-channel customer journeys across digital channels including self-service and payment card industry data security standard compliance.Data centers
Cloud computing
e-mail
security, for some of our clients and our corporate use.Work from Anywhere:
Technology service management methodology
Process and Quality Assurance and Risk Management
Our process and quality assurance compliance programs are critical for the success of our operations. We have an independent quality team to monitor, analyze, provide feedback and report process performance and compliance. Our company-wide quality management system focuses on effectively managing our client processes on an ongoing basis. Our process delivery is managed by independent empowered teams and is measured regularly against
pre-defined
operational metrics. We have over 1,468 employees that help us meet quality assurance and ISO 9001 standards for Quality Management Systems and ensure continued compliance. We apply Lean Six Sigma methodologies, which are statistical and process-focused methodologies to improve and deliver consistent quality to customers. We apply well-defined quality management principles to improve and provide consistent levels of service quality to our clients. In fiscal 2022, more than 67 different projects were completed using Lean Six Sigma methodologies and over 462 additional projects are in progress. We also trained over 35,816 employees in ISO 9001 and Lean Six Sigma principles in fiscal 2022.We have been honored with the following awards for our achievements in quality assurance in fiscal 2022:
| • | WNS won the Golden Peacock Business Excellence Award 2021; and |
| • | WNS won two 2021 ISG Digital Case Study Awards for “standout” digital transformation engagements with its clients |
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Our Board of Directors is primarily responsible for overseeing our risk management processes. The Board of Directors receives and reviews reports from the Chief Risk Officer as considered appropriate regarding our company’s assessment of risks. The Board of Directors focuses on the most significant risks facing our company and our company’s general risk management strategy, and also ensures that risks taken by our company are consistent with the Board’s appetite for risk.
Our risk management framework also focuses on three important elements: business continuity planning, information security and operations risk management.
Our approach to business continuity planning involves implementation of an organization-wide business continuity management framework which includes continual self-assessment, strategy formulation, execution and review. Our business continuity strategy leverages our expanding network of delivery centers for operational and technological risk mitigation in the event of a disaster. To manage our business continuity planning program, we employ a dedicated team of experienced professionals. A customized business continuity strategy is developed for key clients, depending on their specific requirements. For mission-critical processes, operations are typically split across multiple delivery centers in accordance with client-approved customized business continuity plans.
We have further enhanced our business continuity strategy, in view of the ongoing
COVID-19
pandemic, through the implementation of a secure hybrid “Work-from-Home and Work-from-Office” model.“Our approach to information security involves implementation of an organization-wide information security management system, which complies with the ISO 27001:2013 to manage organizational information security risks. These measures seek to ensure that sensitive information pertaining to our company or our clients remains secure. Currently, information security systems at 55 delivery centers are ISO 27001:2013 certified, and we expect to seek similar certifications for our newer delivery centers. We also comply with the Payment Card Industry Data Security Standard (“PCI DSS”) which is a security standard aimed at helping companies proactively protect cardholder data and sensitive authentication data. In addition, on an annual basis, we undergo “Service Organization Controls (“SOC”) 1 Type 2” audits, pursuant to Statements on Standards for Attestation Engagement No. 18 and International Standards for Assurance Engagements No. 3402, with respect to our general control environment supporting operational delivery, and “SOC 2 Type 2” audits, with respect to the trust service categories of security, availability and confidentiality.
Our approach to operations risk management involves the implementation of a “three lines of defense” framework for our clients’ offshored business processes. Under this framework, the quality assurance teams embedded within the business units act as the first line of defense, an independent and centralized risk management team acts as the second line of defense and an independent centralized audit team acts as the third line of defense. Our lines of defense are designed to identify potential risks, evaluate design efficiency and operating effectiveness of controls embedded within the outsourced business processes that we manage for our clients, and propose additional controls as appropriate for mitigation of the identified risks.
In addition, our clients may be governed by regulations specific to their industries or in the jurisdictions where they operate or where their customers are domiciled which may require them to comply with certain process-specific requirements. As we serve a large number of clients globally and across various industries, we rely on our clients to identify the process-specific compliance requirements and the measures that must be implemented in order to comply with their regulatory obligations. We assist our clients to maintain and enforce compliance in their business processes by implementing control and monitoring procedures and providing training to our employees serving specific client programs. These control and monitoring procedures are separate from and in addition to our periodic internal audits.
Human Capital
As at March 31, 2022, we had 52,081 employees, of whom 34,201 are based in India, 10,858 are based in the Philippines, 2,988 are based in South Africa, 1,213 are based in the US, 1,025 are based in Sri Lanka, 473 are based in the UK, 429 are based in Romania, 412 are based in China, 124 are based in Poland, 115 are based in Costa Rica, 103 are based in Spain, 66 are based in Australia, 38 are based in Turkey, 11 are based in Germany, 11 are based in France, six are based in Canada, four are based in the United Arab Emirates, three are based in Singapore, and one is based in Switzerland. Most of our associates hold university degrees. As at March 31, 2021, we had 43,997 employees. Our employees are not unionized. We believe that our employee relations are good. We focus heavily on recruiting, training and retaining our employees.
Recruiting and Retention
We believe that talent acquisition is an integral part our overall organizational strategy. We have developed effective human resource strategies and demonstrated a strong track record in recruitment specific to the needs of our business units to optimize the training and development of our employees. As we continue to grow, we look to improve and enhance our candidate pool, which is sourced from recruitment agencies, job portals, advertisements, college campuses (where we focus on recruiting talented individuals) and
walk-in
applications. In addition, a significant number of our applicants are referred to us by existing employees. We recruited an average of 1,425 employees per month in fiscal 2022.During fiscal 2022, 2021 and 2020, the attrition rate for our employees who had completed six months of employment with us was 36%, 22% and 30% respectively.
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Training and Development
In the past three years, we have been growing at an accelerated pace with a diversified client base. Our talent strategy complements our business strategy to access, mobilize and optimize talents for the organization’s aspiration to impact clients and stakeholders. In the age of “new normal” and rapid digital transformation, we are poised to build a digital-capable and resilient workforce that is ready for the future.
We have created a learning strategy based on a combination of organizational, business-unit and horizontal strategies, employee input and leadership conversations. Our talent development team carries out an intensive analysis of our training needs at the organization, business unit and location levels each year. Final training plans are approved by the leaders of our business units in alignment with their respective strategies.
Our talent strategy consists of four main components: (i) future ready workforce, (ii) robust leadership bench, (iii) inclusive culture, and (iv) talent fungibility.
Future-ready Workforce
.
Digital technology is fast-evolving and is becoming increasingly more pervasive in our lives. We recognize the importance of a workforce that is ready for a digital future. We aim to prepare our workforce to become digital natives. Below are some of the programs that we have implemented to create a future-ready workforce.
| • | Digital Future |
| • | WNS Education Program: |
| • | FutureSkills: |
| • | G LINT AI-led digital learning and knowledge platform designed to enable us to democratize learning, keep pace with digitization, create future-ready workforce and foster a culture of excellence. GLINT offers an immersive learning experience through modules that are tailored to our specific business needs. The platform also facilitates an environment of knowledge sharing and peer to peer learning to foster collaboration. This provides an excellent solution for us as an organization as we evolve to keep pace with digitization, creating a future-ready workforce and driving collaborative innovation. As digitization touches all aspects of our lives, virtual workplaces and learning environments are increasingly becoming the new normal. |
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Robust Leadership Bench
.
| • | Signature Leadership Development Program (“SLDP”): 12-month program that includesface-to-face one-on-one |
| • | The CEO Millennial Council: |
| • | The Millennium — WNS’ Leadership Academy: |
| • | The Trusted Client Advisor (“TCA”) co-created with four leading learning providers. |
| • | “Q-rious” Awards: |
| • | i-Excel |
| • | In collaboration with Harvard Business Publishing: |
| • | In collaboration with Cornell University: |
| • | on three key themes of enterprise leadership, inspirational leadership and being future forward (i.e. developing an understanding of key trends impacting the organization’s future). |
| • | Gravitas : 23-hour journey with two components — a programmatic journey focusing on self-introspection, impactful communication, professional presence and personal well-being; and a self-introspection journey, which gives360-degree feedback in a virtual live and survey format. |
| • | Building Coaching Capabilities |
| • | WNS Certified Coach : This program formid-level managers has been conceptualized to enable a coaching mindset and build coaching capabilities across the enterprise. |
| • | Leader as Mentor and Coach This program has been created to help leaders acquire coaching and mentoring tools and techniques to augment their leadership style. |
These leadership programs are available on multiple platforms in different formats, including self-paced courses, virtual
instructor-led
sessions, simulation-based training and other blended learning methods.Inclusive Culture
. We are committed to creating an inclusive culture within the organization. To this end, some of the programs we have implemented include:| • | Centurion Program : |
| • | Build a talent pipeline of potential women leaders through structured development; |
| • | Provide an aspirational and structured career progression framework for high-potential female employees; and |
| • | Further our diversity and inclusion agenda. |
| • | Bloomberg Gender Equality Index : |
Talent Fungibility
. The BPM industry has been revolutionized by AI, robotics and other digital disruptions. As such, there is an increasing need for a pool of fungible talents to meet changing business requirements. We have implemented a number of initiatives designed to keep our employees’ skills relevant in the competitive market and in different roles.Examples include:
| • | The “Aspire” Program tie-ups with reputed academic institutes, leader-speak sessions, live projects, etc. |
| • | HR Leadership Program 18-month journey, created in collaboration with Deloitte Consulting, has been curated for HR managers to move into leadership roles for different HR functions. |
| • | COMPASS |
| • | Emerging Leaders Program : |
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Employee Health and Safety
In response to the ongoing
COVID-19
pandemic, we have taken the following measures to protect our employees:| • | Established a command and control center for communication and coordination across the organization; |
| • | Implemented proactive communication, education, and awareness programs on employee health, safety and prevention measures; |
| • | Provided for preventive and detective health measures at our offices, including conducting temperature checks upon entry and providing face masks and hand sanitizers; |
| • | Deployed trained medical staff on our premises; |
| • | Created procedures for cleaning, sanitization and quarantine measures in the event of potential contamination; and |
| • | Adhered to various advice, guidelines and directives of global, national, and local health and governmental agencies, including in relation to travel restrictions, social distancing, quarantines, virus prevention, and medical protocols. |
Environmental, Social and Governance
We are dedicated towards building a sustainable business model and a socially conscious future, one that is driven by collaboration and people. Our business strategy is designed to help ensure that we continue to evolve our sustainability agenda and commit to the highest standards. We partner with our 50,000+ employees, 380+ clients, our partners and the community around us to
co-create
a better tomorrow. Our commitment towards sustainability across environment, social and governance (“ESG”) are guided by our five pillar approach –| • | Enabling our people to outperform |
| • | Delivering value to our clients: data-to-insights |
| • | Caring for our communities: |
| • | Building a safe environment for all our stakeholders through ethics, integrity and compliance: co-existence and collective action – be it in working with our clients and value chain partners, collaborating with our employees or nurturing the interests of the communities within which we function. We strive to comply with laws at all times and maintain transparency in our disclosures and communication. We have achieved ISO 27001 information security certification and are certified under “Payment Card Industry Data Security Standard (PCI DSS)” in the “Level 1 Service Provider” category. |
| • | Protecting our planet: |
Our five pillar approach has been ratified by an extensive materiality assessment which was conducted by an external agency in order to identify ESG priorities for internal and external stakeholders.
The assessment survey is available at https://nasdaqomx.qualtrics.com/jfe/form/SV_7VsWronI3AY1LTg.
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Regulations
Due to the industry and geographic diversity of our operations and services, our operations are subject to a variety of rules and regulations, and several federal and state agencies in Australia, China, Costa Rica, Canada, France, Germany, India, Ireland, Mauritius, the Netherlands, New Zealand, the Philippines, Poland, Portugal, Romania, Singapore, South Africa, Spain, Sri Lanka, Switzerland, Turkey, United Arab Emirates, the UK and the US that regulate various aspects of our business. See “Part I — Item 3. Key Information — D. Risk Factors — Risks Related to our Business — Our global operations expose us to numerous and sometimes conflicting legal and regulatory requirements. Failure to adhere to the laws and regulations that govern our business or our clients’ businesses that we are required to comply with in performing our services could harm our business.” We have benefitted from, and continue to benefit from, certain tax holidays and exemptions in various jurisdictions in which we have operations.
In fiscal 2022, 2021 and 2020, our tax rate in India, the Philippines and Sri Lanka impacted our effective tax rate. We would have incurred approximately $20.9 million, $11.1 million and $17.7 million in additional income tax expense on our combined operations in our SEZ operations in India, the Philippines and Sri Lanka in fiscal 2022, 2021 and 2020, respectively, if the tax holidays and exemptions described below had not been available for the respective periods.
We expect our tax rate in India, the Philippines and Sri Lanka to continue to impact our effective tax rate. Our tax rate in India has been impacted by the reduction in the tax exemption enjoyed by our delivery center operating under the SEZ scheme. Our effective tax rate in Sri Lanka had been impacted by the withdrawal of tax exemption on export income in Sri Lanka with effect from April 1, 2018 until December 31, 2019, following which the income from export of service had been subject to tax at 14% on net basis. From January 1, 2020, our operations in Sri Lanka are eligible to claim income tax exemption with respect to the profits earned from export revenue, as more fully described below. From fiscal 2016 until fiscal 2022, we started operations in various delivery centers in the Philippines that are eligible for tax exemption benefits expiring between fiscal 2020 and fiscal 2026. Following the expiry of the tax benefits, income generated by the Philippines subsidiary will be taxed at the prevailing special tax rate, which currently is 5% on gross profit. As per The Corporate Recovery and Tax Incentives for Enterprises Act (“CREATE”) which is effective from April 2021, enterprises will be taxed at 5% on gross profit for a fixed period of 10 years. Also, any changes in the regulations relating to work from home arrangements may impact the tax exemption benefits available to our Philippines subsidiary.
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India
In the past, the majority of our Indian operations were eligible to claim income tax exemption with respect to profits earned from export revenue from operating units registered under the STPI. The benefit was available for a period of 10 years from the date of commencement of operations, but not beyond March 31, 2011. Effective April 1, 2011, upon the expiration of this tax exemption, income derived from our operations in India became subject to the prevailing annual tax rate of 34.95%.
In 2005, the Government of India implemented the SEZ legislation, with the effect that taxable income of new operations established in designated SEZs may be eligible for a
15-year
tax holiday scheme consisting of a complete tax holiday for the initial five years and a partial tax holiday for the subsequent ten years, subject to the satisfaction of certain capital investment conditions in the last five years. From fiscal 2012 until fiscal 2021, the Company started operations in various delivery centers in Mumbai, Pune, Chennai, Gurgaon and Noida, India that were registered under the SEZ scheme. Some of these operations are eligible for a 100.0% income tax exemption for a period of five years from the date of commencement of operations, which are set to expire between fiscal 2022 and fiscal 2024. Following the expiry of the 100.0% income tax exemption, these operations are eligible for a 50.0% income tax exemption, which are set to expire between fiscal 2026 and fiscal 2034. Such income tax exemptions are only eligible for business units and operations set up under the SEZ legislation on or before March 31, 2020.In addition to these tax holidays, our Indian subsidiaries are also entitled to certain benefits under relevant state legislation and regulations. These benefits include rebates and waivers in relation to payment for transfer of property and registration (including for purchase or lease of premises) and commercial usage of electricity.
The Government of India may enact new tax legislation that could impact the way we are taxed in the future. For example, the change in the law in fiscal 2017 has resulted in any new business units or operations set up under the SEZ legislation after March 31, 2020 not being eligible for the same income tax holidays that our existing SEZ operations currently enjoy. See “Part I — Item 3. Key Information — D. Risk Factors — Risks Related to Key Delivery Locations — Tax legislation and the results of actions by taxing authorities may have an adverse effect on our operations and our overall tax rate.”
Philippines
From fiscal 2016 until fiscal 2022, our company started operations in various delivery centers in the Philippines which are eligible for tax exemption benefits expiring between 2020 and 2026. Following the expiry of the tax benefits, income generated by the Philippines subsidiary will be taxed at the prevailing special tax rate, which currently is 5% on gross profit. As per the Corporate Recovery and Tax Incentives for Enterprises Act (“CREATE”) which is effective from April, 2021, enterprises will be taxed at 5% on gross profit for a fixed period of 10 years.
Any changes in the regulations relating to work from home arrangements may impact the tax exemption benefits available to our Philippines subsidiary.
Sri Lanka
Our operations in Sri Lanka were eligible to claim income tax exemption with respect to the profits earned from export revenue until fiscal 2018 and have since been taxed at 14% on net basis with effect from April 1, 2018 until December 31, 2019. From January 1, 2020, our operations in Sri Lanka are eligible to claim income tax exemption with respect to the profits earned from export revenue till such exemptions are revoked due to change in legislation.
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Enforcement of Civil Liabilities
We are incorporated in Jersey, Channel Islands. Most of our directors and executive officers reside outside of the US. Substantially all of the assets of these persons and substantially all of our assets are located outside the US. As a result, it may not be possible for investors to effect service of process on these persons or us within the US, or to enforce against these persons or us, either inside or outside the US, a judgment obtained in a US court predicated upon the civil liability provisions of the federal securities or other laws of the US or any state thereof. A judgment of a US court is not directly enforceable in Jersey, but constitutes a cause of action which will be enforced by Jersey courts provided that:
| • | the court which pronounced the judgment has jurisdiction to entertain the case according to the principles recognized by Jersey law with reference to the jurisdiction of the US courts; |
| • | the judgment is given on the merits and is final and conclusive — it cannot be altered by the courts which pronounced it; |
| • | there is payable pursuant to the judgment a sum of money, not being a sum payable in respect of tax or other charges of a like nature or in respect of a fine or other penalty; |
| • | the courts of the US have jurisdiction in the circumstances of the case; |
| • | the judgment can be enforced by execution in the jurisdiction in which the judgment is given; |
| • | the person against whom the judgment is given does not benefit from immunity under the principles of public international law; |
| • | there is no earlier judgment in another court between the same parties on the same issues as are dealt with in the judgment to be enforced; |
| • | the judgment was not obtained by fraud, duress and was not based on a clear mistake of fact; and |
| • | the recognition and enforcement of the judgment is not contrary to public policy in Jersey, including observance of the principles of natural justice which require that documents in the US proceeding were properly served on the defendant and that the defendant was given the right to be heard and represented by counsel in a free and fair trial before an impartial tribunal. |
It is the policy of Jersey courts to award compensation for the loss or damage actually sustained by the person to whom the compensation is awarded. Although the award of punitive damages is generally unknown to the Jersey legal system, there is no prohibition on them either by statute or by customary law. Whether a judgment is contrary to public policy depends on the facts of each case. Exorbitant, unconscionable, or excessive awards will generally be contrary to public policy. Moreover, if a US court gives a judgment for multiple damages against a qualifying defendant, the Protection of Trading Interests Act 1980, an Act of the UK extended to Jersey by the Protection of Trading Interests Act 1980 (Jersey) Order 1983 (“the Order”), provides that such judgment would not be enforceable in Jersey and the amount which may be payable by such defendant may be limited. The Order provides, among others, that such qualifying defendant may be able to recover such amount paid by it as represents the excess of such multiple damages over the sum assessed as compensation by the court that gave the judgment. A “qualifying defendant” for these purposes is a citizen of the UK and Colonies, a body corporate incorporated in the UK, Jersey or other territory for whose international relations the UK is responsible or a person carrying on business in Jersey.
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Jersey courts cannot enter into the merits of the foreign judgment and cannot act as a court of appeal or review over the foreign courts. It is doubtful whether an original action based on US federal securities laws can be brought before Jersey courts. A plaintiff who is not resident in Jersey may be required to provide security for costs in the event of proceedings being initiated in Jersey. There is uncertainty as to whether the courts of Jersey would:
| • | recognize or enforce judgments of US courts obtained against us or our directors or officers predicated upon the civil liability provisions of the securities laws of the US or any state in the US; or |
| • | entertain original actions brought in each respective jurisdiction against us or our directors or officers predicated upon the federal securities laws of the US or any state in the US. |
In India, recognition and enforcement of foreign judgments is provided for under Section 13 and Section 44A of the Code of Civil Procedure, 1908 (India) (the “Civil Code”), as amended. Section 44A of the Civil Code provides that where a foreign judgment has been rendered by a superior court in any country or territory outside India which the Indian government has by notification declared to be a reciprocating territory, such foreign judgment may be enforced in India by proceedings in execution as if the judgment had been rendered by a competent court in India. However, Section 44A of the Civil Code is applicable only to monetary decrees not being in the nature of amounts payable in respect of taxes or other charges of a similar nature or in respect of fines or other penalties and does not include arbitration awards. The US has not been declared by the Indian government to be a reciprocating territory for the purposes of Section 44A of the Civil Code. Accordingly, a judgment of a foreign court, which is not a court in a reciprocating territory, may be enforced in India only by a fresh suit instituted in a court of India and not by proceedings in execution. Furthermore, the execution of the foreign decree under Section 44A of the Civil Code is also subject to the exception under Section 13 of the Civil Code, as discussed below.
Section 13 of the Civil Code, states that a foreign judgment is conclusive as to any matter directly adjudicated upon except:
| • | where the judgment has not been pronounced by a court of competent jurisdiction; |
| • | where the judgment has not been given on the merits of the case; |
| • | where it appears on the face of the proceedings that the judgment is founded on an incorrect view of international law or a refusal to recognize the law of India in cases where such law is applicable; |
| • | where the proceedings in which the judgment was obtained were opposed to natural justice; |
| • | where the judgment has been obtained by fraud; or |
| • | where the judgment sustains a claim founded on a breach of any law in force in India. |
The suit must be brought in India within three years from the date of the judgment in the same manner as any other suit filed to enforce a civil liability in India. It is unlikely that a court in India would award damages on the same basis as a foreign court if an action is brought in India. Furthermore, it is unlikely that an Indian court would enforce foreign judgments if it viewed the amount of damages awarded as excessive or inconsistent with public policy in India. A party seeking to enforce a foreign judgment in India is required to obtain prior approval from the Reserve Bank of India under the Indian Foreign Exchange Management Act, 1999, to repatriate any amount recovered pursuant to such execution and such amount may be subject to tax in accordance with applicable laws. Any judgment in a foreign currency would be converted into Indian rupees on the date of judgment and not on the date of payment. We cannot predict whether a suit brought in a court in India will be disposed of in a timely manner.
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C. Organizational Structure
The following diagram illustrates our company’s organizational structure and the place of organization of each of our subsidiaries as at the date hereof. Unless otherwise indicated, each of our subsidiaries is wholly owned, directly or indirectly, by WNS (Holdings) Limited. Directly owned subsidiaries of WNS are represented by shaded boxes.
Notes:
| (1) | WNS Global Services AG, wholly-owned subsidiary of WNS Global Services (UK) International Limited, was incorporated in Switzerland on July 16, 2021. |
| (2) | On August 1, 2021, we acquired all outstanding shares of MOL Information Processing Services (I) Private Limited. The name of the entity was changed to WNS Information Services (India) Private Limited with effect from December 1, 2021. |
| (3) | WNS Global Services Lisbon, Unipessoal LDA, a wholly-owned subsidiary of WNS Global Services (UK) International Limited, was incorporated in Portugal on August 13, 2021. |
| (4) | WNS Global Services (Romania) SRL-Punct De Lucru Sibiu, new branch established on December 28, 2021. |
| (5) | WNS Denali Sourcing Services, Inc. a fully owned subsidiary of Denali Sourcing Services Inc. has been dissolved with effect from April 20, 2022. |
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D. Property, Plants and Equipment
As at March 31, 2022, we have an installed capacity of 34,494 production workstations, or seats, that can operate on an uninterrupted 24/7 basis and can be staffed on a three-shift per day basis.
The majority of our properties are leased by us, as described in the table below, and most of our leases are renewable at our option, as described below. The following table describes each of our delivery centers and sales offices, including centers under construction, and sets forth our lease expiration dates.
Location | Total Space (square feet) | Total number of work stations | Lease Expiration Date | Extendable Until (1) | ||||||||||||
India: | ||||||||||||||||
Mumbai | 421,387 | 3,103 | ||||||||||||||
Godrej Plant 10 | February 15, 2026 | N/A | ||||||||||||||
Godrej Plant 11 | February 15, 2026 | N/A | ||||||||||||||
Godrej Plant 5 | February 15, 2026 | N/A | ||||||||||||||
Raheja (SEZ), Airoli | May 31, 2029 | N/A | ||||||||||||||
Interface building, Malad – 4 th floor | March 31, 2025 | N/A | ||||||||||||||
Gurgaon | 342,640 | 3,958 | ||||||||||||||
World Tech park Block – B2 – 9 th floor | April 30, 2032 | N/A | ||||||||||||||
World Tech park Block – B3 – 9 th floor | April 30, 2032 | N/A | ||||||||||||||
World Tech Park – 8 th , 9th , 10th & part 11th floor | April 30, 2032 | N/A | ||||||||||||||
World Tech Park– Remaining part of 11 th floor | April 30, 2032 | N/A | ||||||||||||||
World Tech Park – Block A3 – 11 th floor | April 30, 2032 | N/A | ||||||||||||||
World Tech Park – Block B3 – 10 th floor | April 30, 2032 | N/A | ||||||||||||||
World Tech Park – Block B2 – 10 th floor | April 30, 2032 | N/A | ||||||||||||||
World Tech Park – Block A2& A3 – 10 th floor | April 30, 2032 | N/A | ||||||||||||||
Pune | 594,616 | 8,705 | ||||||||||||||
Magarpatta | N/A | N/A | ||||||||||||||
Weikfield – Phase I | February 14, 2023 | N/A | ||||||||||||||
Weikfield – Phase II | April 30, 2023 | N/A | ||||||||||||||
Weikfield – Phase III | June 14, 2023 | N/A | ||||||||||||||
Magarpatta (SEZ) – Level 5 | February 14, 2026 | N/A | ||||||||||||||
Magarpatta (SEZ) – Level 6 | October 26, 2026 | N/A | ||||||||||||||
Magarpatta (SEZ) – Level 7 | February 28, 2027 | N/A | ||||||||||||||
Magarpatta – Tower 9 | February 28, 2029 | N/A | ||||||||||||||
Pune Info city – 5 th floor | June 14, 2022 | June 14, 2027 | ||||||||||||||
Pune Info city – 4 th floor | June 14, 2023 | June 14, 2028 | ||||||||||||||
Pune Info city – 3 rd floor | September 30, 2023 | September 30, 2033 | ||||||||||||||
Nashik | 1,14,908 | 1,546 | ||||||||||||||
Shreeniketan | June 30, 2023 | N/A | ||||||||||||||
Vtech | October 13, 2023 | N/A | ||||||||||||||
Ashoka Business Conclave – 6 th floor | November 19, 2024 | N/A | ||||||||||||||
Ashoka Business Conclave – 3 rd floor | November 19, 2025 | N/A | ||||||||||||||
Bangalore | 191,890 | 1,990 | ||||||||||||||
RMZ Centennial – Ground floor and Level 1 | June 14, 2025 | June 14, 2028 | ||||||||||||||
RMZ Centennial – Level 2 and 3 | October 31, 2025 | October 31, 2028 | ||||||||||||||
RMZ Centennial – Terrace | July 31, 2025 | July 31, 2028 | ||||||||||||||
Chennai | 125,644 | 945 | ||||||||||||||
RMZ Millenia Ground and 1 st floor | March 31, 2024 | March 31, 2045 | ||||||||||||||
DLF (SEZ) – Phase 1&2 | March 15, 2026 | March 31, 2031 | ||||||||||||||
DLF IT SEZ – 9 th floor | March 15, 2026 | March 15, 2031 | ||||||||||||||
Vishakhapatnam | 249,633 | 1,071 | ||||||||||||||
MPS Plaza (2) | September 4, 2022 | March 4, 2027 | ||||||||||||||
Vizag IT Park Ltd | April 1, 2034 | N/A | ||||||||||||||
Tech Mahindra | March 31, 2026 | March 31, 2029 | ||||||||||||||
Noida | 22,111 | 265 | ||||||||||||||
Brookfield | January 22, 2023 | January 22, 2033 | ||||||||||||||
Indore | 52,214 | 573 | ||||||||||||||
Brilliant Titanium – 5 th floor | May 15, 2032 | N/A | ||||||||||||||
Hyderabad | 19,863 | 329 | ||||||||||||||
Maximus Tower, 1 st floor | January 5, 2023 | January 04, 2028 | ||||||||||||||
74
Location | Total Space (square feet) | Total number of work stations | Lease Expiration Date | Extendable Until (1) | ||||||||||||
Sri Lanka: | 54,675 | 820 | ||||||||||||||
Colombo (HNB) – Level 12 and 13 | July 31, 2028 | N/A | ||||||||||||||
Colombo (Orion City) | August 24, 2023 | August 24, 2028 | ||||||||||||||
UK: | 14,810 | 170 | ||||||||||||||
Ipswich (Museum Street) | May 23, 2028 | N/A | ||||||||||||||
Piccadilly (Malta House) | February 10, 2027 | N/A | ||||||||||||||
Sackville House,39-40 Piccadilly | January 9, 2025 | January 9, 2030 | ||||||||||||||
Regus Manchester Didsbury | August 31, 2022 | N/A | ||||||||||||||
US: | 106,376 | 612 | ||||||||||||||
7909 Parklane Road, Columbia SC-1 st floor | May 31, 2026 | May 31, 2029 | ||||||||||||||
Bellevue (Sterling Plaza) – 5 th and 6th floors | May 31, 2024 | N/A | ||||||||||||||
Pittsburg (One Waterfront Place) | July 31, 2022 | July 31, 2027 | ||||||||||||||
Houston (Corporate Drive) (3) | June 30, 2022 | N/A | ||||||||||||||
Houston (Northchase Drive) | March 31, 2026 | March 31, 2036 | ||||||||||||||
Jay Madison Avenue | June 30, 2024 | N/A | ||||||||||||||
Turkey: | N/A | 10 | ||||||||||||||
Istanbul (MeydanK Plaza) | April 30, 2023 | N/A | ||||||||||||||
Switzerland: | 2,077 | — | ||||||||||||||
Zurich (Bahnhofstrasse) (4) | Not specified | N/A | ||||||||||||||
Romania: | 46,730 | 586 | ||||||||||||||
Bucharest (West Gate) – 2 nd and 3rd floors | January 19, 2023 | January 19, 2026 | ||||||||||||||
Centrul de Afacer – 8 th floor | December 31, 2024 | December 31, 2025 | ||||||||||||||
Philippines: | ||||||||||||||||
Manila | 621,809 | 6,716 | ||||||||||||||
Eastwood – 10 th floor | June 30, 2023 | June 30, 2026 | ||||||||||||||
Eastwood – 9 th floor | June 30, 2023 | June 30, 2026 | ||||||||||||||
Techno Plaza II | April 30, 2026 | N/A | ||||||||||||||
Zeta Tower – 10 th floor | May 14, 2024 | May 14, 2029 | ||||||||||||||
Exxa tower – 15 th floor | March 19, 2023 | March 19, 2028 | ||||||||||||||
Exxa Tower – 16 th floor | June 14, 2023 | June 14, 2028 | ||||||||||||||
Exxa Tower – 17 th floor | November 30, 2023 | November 30, 2028 | ||||||||||||||
Giga Tower – 8 th floor | October 15, 2024 | October 15, 2029 | ||||||||||||||
Giga Tower – 9 th floor | April 30, 2025 | April 30, 2030 | ||||||||||||||
Ilo Ilo | ||||||||||||||||
One Global Centre | January 15, 2026 | N/A | ||||||||||||||
Three Techno Place – 4 th floor | March 16, 2027 | March 16, 2032 | ||||||||||||||
Two Techno Place | April 30, 2024 | April 30, 2029 | ||||||||||||||
Cybergate Tower 1- 7th floor | December 31, 2026 | N/A | ||||||||||||||
Acclaim GST | November 14, 2022 | N/A | ||||||||||||||
Alabang | ||||||||||||||||
Vector 2 – 9 th and 10th floors | February 28, 2027 | February 28, 2032 | ||||||||||||||
Capella – 15 th and 16th floors | May 31, 2026 | May 31, 2031 | ||||||||||||||
FiliInvest Axis – 21 st floor | August 14, 2023 | August 14, 2028 | ||||||||||||||
FiliInvest Axis – 22 nd floor | November 30, 2023 | November 30, 2028 | ||||||||||||||
Tera Towers | September 30, 2025 | N/A | ||||||||||||||
Costa Rica: | 12,592 | 200 | ||||||||||||||
San Jose (Forum H) | April 30, 2025 | N/A | ||||||||||||||
United Arab Emirates: | 510 | N/A | ||||||||||||||
Dubai Airport Free Trade Zone | November 22, 2023 | N/A | ||||||||||||||
South Africa: | 206,220 | 2,685 | ||||||||||||||
Cape Town | ||||||||||||||||
Knowledge Park | March 31, 2025 | March 31, 2030 | ||||||||||||||
Claremont – Level 4 | June 30, 2022 | June 30, 2027 | ||||||||||||||
Claremont – Level 5 | June 30, 2022 | June 30, 2027 | ||||||||||||||
Bellavile | ||||||||||||||||
Ambition House – 4 th floor | October 31, 2022 | N/A | ||||||||||||||
Johannesburg | ||||||||||||||||
DownSouth Ridge Park | April 30, 2023 | August 31, 2026 | ||||||||||||||
Durban | ||||||||||||||||
Hippopark Avenue – Sections 1 and 2 | April 30, 2025 | N/A | ||||||||||||||
Poland: | 17,400 | 217 | ||||||||||||||
Gdynia (Luzycka Office Park)- Buildings C and D | August 31, 2027 | N/A | ||||||||||||||
China: | 47,598 | 515 | ||||||||||||||
Guangzhou (Zhongshan Street) – 22 nd and 30th floor | April 30, 2024 | N/A | ||||||||||||||
Dalian (Dalian Software Park) – Building 22 | May 15, 2023 | N/A | ||||||||||||||
Beijing (YongAnDongLi) – 5 th floor | May 31, 2023 | N/A | ||||||||||||||
Shanghai (Huangu PL) | January 31, 2024 | N/A | ||||||||||||||
Germany: | 32 | — | ||||||||||||||
Friedrich-Ebert-Anlage 36 | October 31, 2022 | N/A | ||||||||||||||
Australia: | 1,216 | — | ||||||||||||||
Sydney (Berry Street) | March 27, 2023 | N/A | ||||||||||||||
Spain: | 3,806 | 52 | ||||||||||||||
4A, Mira II, Balear – 1 st floor | July 17, 2023 | N/A | ||||||||||||||
5A, Mira II, Balear – 1 st floor | September 6, 2023 | N/A | ||||||||||||||
Notes:
N/A means not applicable.
| (1) | Reflects the expiration date if the applicable extension option is exercised. |
| (2) | We have issued a termination notice to MPS Plaza and will surrender the facility in September 2022. |
| (3) | We have issued a termination notice to Houston Corporate Drive and will surrender the facility in July 2022. |
| (4) | The lease may be terminated with three-months’ notice. |
| (5) | We have signed a lease for new premises located at Central Avenue, Mumbai, India (the second, third and fourth floors), effective starting from April 1, 2023; the premises have 187,457 square feet of total space. |
| (6) | We have signed a lease for new premises located at Cybergate Tower 1, Ilo Ilo, Philippines (the third and fourth floors), effective starting from July 31, 2022; the premises have 44,945 square feet of total space. |
Our delivery centers are equipped with fiber optic connectivity and have backups to their power supply designed to achieve uninterrupted operations. In fiscal 2023, we intend to continue to streamline our operations by further consolidating production capacities in our delivery centers.
ITEM 4A. | UNRESOLVED STAFF COMMENTS |
None.
75
ITEM 5. | OPERATING AND FINANCIAL REVIEW AND PROSPECTS |
The following discussion on the financial condition and results of operations of our company should be read in conjunction with our consolidated financial statements and the related notes included elsewhere in this annual report. Some of the statements in the following discussion contain forward-looking statements that involve risks and uncertainties. See “Special Note Regarding Forward-Looking Statements.” Our actual results could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including, but not limited to, those described below and elsewhere in this annual report, particularly in the risk factors described in “Part I — Item 3 Key Information — D. Risk Factors.”
For a discussion of our results in fiscal 2021 compared to fiscal 2020 and certain comparative numbers in fiscal 2020, please refer to “Part I — Item 5. Operating and Financial Review and Prospects” contained in our Annual Report on Form
20-F
for fiscal 2021 filed with the SEC on May 14, 2021.Overview
We are a leading global provider of BPM services, offering comprehensive data, voice, analytical and business transformation services with a blended onshore, near shore and offshore delivery model. We transfer the business processes of our clients to our delivery centers, located in China, Costa Rica, India, the Philippines, Poland, Romania, South Africa, Spain, Sri Lanka, Turkey, the UK, and the US, with a view to offer cost savings, operational flexibility, improved quality and actionable insights to our clients. We seek to help our clients “transform” their businesses by identifying business and process optimization opportunities through technology-enabled solutions, improvements to their processes, global delivery capabilities, analytics and an understanding of their business.
We win outsourcing engagements from our clients based on our domain knowledge of their business, our experience in managing the specific processes they seek to outsource and our customer-centric approach. Our company is organized into vertical business units in order to provide more specialized focus on each of the industries that we target, to more effectively manage our sales and marketing process and to develop
in-depth
domain knowledge. The major industry verticals we currently target are the insurance; healthcare; travel and leisure; diversified businesses (including manufacturing, retail and CPG, media and entertainment, and telecom); shipping and logistics;hi-tech
and professional services; banking and financial services; and utilities industries.Our portfolio of services includes vertical-specific processes that are tailored to address our clients’ specific business and industry practices. In addition, we offer a set of shared services that are common across multiple industries, including finance and accounting, customer experience services, research and analytics, technology services, legal services, and human resources outsourcing.
Although we typically enter into long-term contractual arrangements with our clients, these contracts can usually be terminated with or without cause by our clients and often with short notice periods. Nevertheless, our client relationships tend to be long-term in nature given the scale and complexity of the services we provide coupled with risks and costs associated with switching processes
in-house
or to other service providers. We structure each contract to meet our clients’ specific business requirements and our target rate of return over the life of the contract. In addition, since the sales cycle for offshore BPM is long and complex, it is often difficult to predict the timing of new client engagements. As a result, we may experience fluctuations in growth rates and profitability from quarter to quarter, depending on the timing and nature of new contracts. Our operating results may also differ significantly from quarter to quarter due to seasonal changes in the operations of our clients. For example, our clients in the travel and leisure industry typically experience seasonal changes in their operations in connection with the US summer holiday season, as well as episodic factors such as adverse weather conditions. Our focus, however, is on deepening our client relationships and maximizing shareholder value over the life of a client’s relationship with us.The following table represents our revenue (a GAAP financial measure) for the periods indicated:
Year ended March 31, | ||||||||
2022 | 2021 | |||||||
(US dollars in millions) | ||||||||
Revenue | $ | 1,109.8 | $ | 912.6 | ||||
Our revenue is generated primarily from providing BPM services. We have two reportable segments for financial statement reporting purposes — WNS Global BPM and WNS Auto Claims BPM. In our WNS Auto Claims BPM segment, we provide both “fault” and
“non-fault”
repairs. For “fault” repairs, we provide claims handling and repair management services, where we arrange for automobile repairs through a network of third party repair centers. In our repair management services, where we act as the principal in our dealings with the third party repair centers and our clients, the amounts which we invoice to our clients for payments made by us to third party repair centers are reported as revenue. Where we are not the principal in providing the services, we record revenue from repair services net of repair cost. See Note 2(s) to our consolidated financial statements included elsewhere in this annual report. Since we wholly subcontract the repairs to the repair centers, we evaluate the financial performance of our “fault” repair business based on revenue less repair payments to third party repair centers, which is anon-GAAP
financial measure. We believe that revenue less repair payments (anon-GAAP
financial measure) for “fault” repairs reflects more accurately the value addition of the BPM services that we directly provide to our clients. Management believes that revenue less repair payments(non-GAAP)
may be useful to investors as a more accurate reflection of our performance and operational results.76
For our
“non-fault”
repairs business, we generally provide a consolidated suite of accident management services including credit hire and credit repair, and we believe that measurement of such business on a basis that includes repair payments in revenue is appropriate. Revenue including repair payments is therefore used as a primary measure to allocate resources and measure operating performance for accident management services provided in our“non-fault”
repairs business. Our“non-fault”
repairs business where we provide accident management services accounts for a relatively small portion of our revenue for our WNS Auto Claims BPM segment.Revenue less repair payments is a
non-GAAP
financial measure which is calculated as (a) revenue less (b) in our auto claims business, payments to repair centers for “fault” repair cases where we act as the principal in our dealings with the third party repair centers and our clients. Thisnon-GAAP
financial information is not meant to be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP. Our revenue less repair payments(non-GAAP)
may not be comparable to similarly titled measures reported by other companies due to potential differences in the method of calculation.The following table reconciles our revenue (a GAAP financial measure) to revenue less repair payments (a
non-GAAP
financial measure) for the periods indicated:Year ended March 31, | ||||||||
2022 | 2021 | |||||||
(US dollars in millions) | ||||||||
Revenue | $ | 1,109.8 | $ | 912.6 | ||||
Less: Payments to repair centers (1) | 83.0 | 43.9 | ||||||
Revenue less repair payments (non-GAAP) | $ | 1,026.8 | $ | 868.7 | ||||
Note:
| (1) | Consists of payments to repair centers in our auto claims business for “fault” repair cases where we act as the principal in our dealings with the third party repair centers and our clients. |
The following table sets forth our constant currency revenue less repair payments (acomparisons of business performance. Constant currency revenue less repair payments
non-GAAP
financial measure) for the periods indicated. Constant currency revenue less repair payments is anon-GAAP
financial measure. We present constant currency revenue less repair payments(non-GAAP)
so that revenue less repair payments(non-GAAP)
may be viewed without the impact of foreign currency exchange rate fluctuations, thereby facilitatingperiod-to-period
(non-GAAP)
is presented by recalculating prior period’s revenue less repair payments(non-GAAP)
denominated in currencies other than in US dollars using the foreign exchange rate used for the latest period, without taking into account the impact of hedging gains/losses. Ournon-US
dollar denominated revenue includes, but is not limited to, revenue denominated in pound sterling, the Australian dollar, the Euro and the South African rand. Management believes constant currency revenue less repair payments(non-GAAP)
may be useful to investors in evaluating the underlying operating performance of our company. Thisnon-GAAP
financial information is not meant to be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP. Our constant currency revenue less repair payments(non-GAAP)
may not be comparable to similarly titled measures reported by other companies due to potential differences in the method of calculation.Year ended March 31, | ||||||||
2022 | 2021 | |||||||
(US dollars in millions) | ||||||||
Revenue less repair payments (non-GAAP) | $ | 1,026.8 | $ | 868.7 | ||||
Exchange rate impact | (3.5 | ) | 10.3 | |||||
Constant currency revenue less repair payments (non-GAAP) | $ | 1,023.4 | $ | 879.0 | ||||
77
Global Economic Conditions
Global economic conditions continue to show signs of turbulence. The
COVID-19
pandemic has had, and is likely to continue to have, a significant impact on the global economy, our clients’ businesses, and on our operations, financial performance and visibility, as described in further detail below, see “—Impact ofCOVID-19.”
The global outbreak and spread of the
COVID-19
disease caused by the severe acute respiratory syndrome coronavirus 2, which was reported to have surfaced in December 2019, has caused a slowdown in the growth of the global economy. The global economy is entering a pronounced slowdown in 2022 after having shown some momentums of growth in 2021. The global spread ofCOVID-19
has created, and is likely to continue to create, significant volatility and uncertainty and economic disruption. Global prospects remain highly uncertain as theCOVID-19
pandemic resurgence and economic recoveries diverge across countries and sectors, reflecting variations in pandemic-induced disruptions and the extent of policy support. In addition, volatility in the domestic politics of major markets may lead to changes in the institutional framework of the international economy.In February 2022, a military conflict arose between Russia and Ukraine, with the latter being supported by countries in the NATO alliance as well as others around the globe, including imposition of financial and trade sanctions against Russia. Although the length, impact and outcome of the ongoing military conflict in Ukraine is highly unpredictable, this conflict could lead to significant market and other disruptions, including significant volatility in commodity prices, supply of energy resources, instability in financial markets, supply chain interruptions, political and social instability, changes in consumer or purchaser preferences as well as increase in cyberattacks and espionage. In the event the conflict continues or extends beyond Ukraine, together with reduction or stoppage of energy exports from Russia, the global economy could face a recessionary downturn. We have operations in Poland and Romania, which border Ukraine and are partly dependent on gas supplies from Russia for their energy needs. The economies of Poland and Romania may be materially and adversely affected in the event of any disruption of gas supplies or extension of the conflict beyond Ukraine. In addition, as a result of the ongoing military conflict, there is an increasing number of migrants in Poland and Romania. Such an influx of migrants could lead to rising inflations in these two countries, thereby resulting in an upward pressure on wages, which could have a material adverse effect on our operations in these two countries.
The withdrawal of the UK from the EU in January 2020, commonly referred to as “Brexit,” has also created significant political and economic uncertainty regarding the future trading relationship between the UK and the EU as well as other countries, such as the United States, Australia and New Zealand. In particular, the UK and the EU have ratified a trade and cooperation agreement governing their future relationship and the UK continues to negotiate agreements on specific areas of trade and economic arrangements with other countries. The
UK-EU
trade and cooperation agreement addresses trade, economic arrangements, law enforcement, judicial cooperation and a governance framework including procedures for dispute resolution, among other things. Because the agreement merely sets forth a framework in many respects and will require complex additional bilateral negotiations between the UK and the EU as both parties continue to work on the rules for implementation, significant political and economic uncertainty remains about how the precise terms of the relationship between the parties will differ from the terms before withdrawal. These developments, or the perception that any of them could occur, have had and may continue to have a material adverse effect on global economic conditions and financial markets, and may significantly reduce global market liquidity, restrict the ability of key market participants to operate in certain financial markets or restrict our access to capital. Any of these factors could have a material adverse effect on our business, financial condition, results of operations and cash flows.In many countries globally there are concerns over rising inflation and potential economic recessions, including due to the impacts of the
COVID-19
pandemic. In particular, any worsening of the ongoing labor shortage and ongoing rise in inflation could significantly weaken global economies. In parts of Europe and India where we operate, there are similar signs of continued economic slowdown and weakness. Sri Lanka, where we have operations, is facing a significant economic crisis resulting from rapidly depleting foreign reserves, a depreciating local currency and rising prices. Globally, countries have required and may continue to require additional financial support, sovereign credit ratings have declined and may continue to decline, and there may be default on sovereign debt obligations of certain countries. In addition, the U.S. Federal Reserve System and other regulatory bodies around the world may raise, or may announce intentions to raise, interest rates. Any of these global economic conditions may increase the cost of borrowing and cause credit to become more limited, which could have a material adverse effect on our business, financial condition, results of operations and cash flows. The global economic slowdown may be further prolonged by subsequent outbreaks ofCOVID-19
in countries which are taking, or which have taken, steps to ease lockdown measures; such outbreaks may require those countries to extend their lockdown measures or roll-back previous measures taken to facilitate there-opening
of their economies. For further information, see “Part I — Item 3. Key Information — D. Risk Factors — The global economic andgeo-political
conditions have been and continue to be challenging and have had, and may continue to have, an adverse effect on the financial markets and the economy in general, which has had, and may continue to have, a material adverse effect on our business, clients, employees, financial performance, results of operations and cash flows and the prices of our equity shares and ADSs.”These economic and
geo-political
conditions have affected, and may continue to affect, our business in a number of ways, as we have operations in 12 countries and we service clients across multiple geographic regions. The general level of economic activity, such as decreases in business and consumer spending, may result in a decrease in demand for some of our services, thus reducing our revenue. The cost and availability of credit has been and may continue to be adversely affected by illiquid credit markets and wider credit spreads. The current global economic slowdown and the possibility of continued turbulence or uncertainty in the European, US, Asian and international financial markets and economies, and the political climate in the US and the UK, has adversely affected, and may continue to adversely affect, our liquidity and financial condition, and the liquidity and financial condition of our clients. If these market conditions continue or worsen, they may further limit our ability to access financing or increase our cost of financing to meet liquidity needs, and further affect the ability of our clients to use credit to purchase our services or to make timely payments to us, resulting in adverse effects on our financial condition and results of operations. In the US, there is concern over slowing economic growth and continuing trade tensions.78
Furthermore, a weakening of the rate of exchange for the pound sterling, the US dollar or, to a lesser extent, the Australian dollar or the Euro (in which our revenue is principally denominated) against the Indian rupee, or to a lesser extent, the Philippine peso or the South African rand (in which a significant portion of our costs are denominated) would also adversely affect our results.
Fluctuations between the Indian rupee, the Philippine peso, the pound sterling, the South African rand, the Euro, or the Australian dollar, on the one hand, and the US dollar, on the other hand, also expose us to translation risk when transactions denominated in these currencies are translated into US dollars, our reporting currency. The exchange rates between each of the Indian rupee, the Philippine peso, the pound sterling, the South African rand, the Euro, and the Australian dollar, on the one hand, and the US dollar, on the other hand, have changed substantially in recent years and may fluctuate substantially in the future.
For example, the Indian rupee depreciated against the US dollar by an average of 0.3%, the Philippine peso depreciated against the US dollar by an average of 2.2%, the Euro depreciated against the US dollar by an average of 0.3%, while the pound sterling appreciated against the US dollar by an average of 4.6%, the South African rand appreciated against the US dollar by an average of 9.3%, and the Australian dollar appreciated against the US dollar by an average of 3.0%, in fiscal 2022.
The depreciation of the Indian rupee, and the Philippine peso, and the appreciation of the pound sterling and the Australian dollar, in each case against the US dollar in fiscal 2022, positively impacted our results of operations, whereas the appreciation of the South African rand and the depreciation of the Euro, in each case against the US dollar, negatively impacted our results of operations in fiscal 2022.
The current global economic slowdown and uncertainty about the future global economic conditions could also continue to increase the volatility of our ADS price. We cannot predict the timing or duration of an economic slowdown or the timing or strength of a subsequent economic recovery generally or in our targeted industries, including the insurance and travel and leisure industries. If macroeconomic conditions worsen or the current global economic conditions continue for a prolonged period of time, we are not able to predict the impact that such conditions will have on our targeted industries, in general, and our results of operations specifically.
Impact of
COVID-19
The
COVID-19
pandemic has had and is likely to continue to have a significant impact on the global economy, our clients’ businesses, and on our operations, financial performance and visibility of business outlook. It has required organizations around the world, including WNS, tore-think
their business strategies around service delivery, workforce management, information technology, cyber security and data privacy. Despite recent progress in the administration of vaccines, the outbreak of recent variants, including Delta and Omicron, and the related mitigation measures that have been put into place across the globe, have had and are likely to continue to have a significant impact on the global economy and demand for our services from a number of our clients across industries, depending on the ability of each client, and the nature of their industries, products and services, in coping with the crisis. While our revenues have increased in fiscal 2022, as compared to fiscal 2021, our business has been, and we expect will continue to be, impacted across industry verticals as theCOVID-19
pandemic continues to affect the global economy across industries.We have seen, and we continue to see, deterioration in many of our clients’ businesses, and the outlook going forward remains uncertain and volatile. Our revenue has faced, and continues to face, pressure from declining demand volumes from a number of clients (as their businesses continue to be negatively impacted), delays in new businessbasis. Such improvement was driven by broad-based revenue growth across verticals and service offerings and reduced
ramp-ups,
and lockdowns and other measures imposed by governments around the world, which has resulted and continues to result in our temporary inability to meet the service level and performance requirements of our clients. We have also received, and continue to receive, client requests for price reductions and discounts. However, for the three months ended September 30, 2021, December 31, 2021 and March 31, 2022, we experienced revenue improvement both sequentially and on ayear-on-year
COVID-19
headwinds. These benefits more than offset the impact of wage increases, the reinstatement of our corporate leave policy allowing our employees to carry forward unused leave entitlement, which resulted in a provision for such leave entitlement and increased facility related and business continuity costs. In addition, the number of our clients have increased, resulting in increased revenues in fiscal 2022, as compared to fiscal 2021.We have a business continuity planning mechanism in place and continue to actively work to understand our clients’ changing requirements, adapt delivery to a “work from home” model, ensure data security, prioritize critical processes, adjust service levels and manage discretionary costs (such as travel costs) and fixed costs (such as personnel costs). While travel restrictions have had a short-term impact on our ability to deliver our services, we have been working to reduce our reliance on travel by changing our business model to be able to conduct meetings using virtual conferencing and collaboration tools. Our “work from home” delivery capability steadily improved throughout fiscal 2021, and the first quarter of fiscal 2022, from delivering over 80% of our clients’ requirements in April 2020 to almost 100% of our clients’ requirements in the second, third and fourth quarters of fiscal 2021. In addition, we have also worked, and will continue to work with national, state, and local authorities, so as to comply with applicable rules and regulations related to the
COVID-19
pandemic.79
Due to the need to ensure the continuity of our operations, theterm costs incurred might benefit us in the long term, as these steps have broadened our “remote working” capabilities, which we expect to become an opportunity and a permanent feature in our future delivery strategy, as well as our business continuity plans, given that the
COVID-19
pandemic has required us to increase our expenses to ensure an adequate transition. For example, we have incurred costs as we significantly shifted towards a “work from home” model, where we purchased additional equipment (such as desktops and laptops) for our employees’ home use, software and internet connectivity devices, productivity enhancement technology tools, provided accommodation, meal and transportation allowances and overtime compensation to our employees and organized sanitization and cleaning of our offices and facilities. As a result of these early investments, we are now able to execute a “work from home” model for both existing and new clients. We expect that we will continue to require additional expenditures to meet evolving client requirements for flexible work arrangements and expanded services to support areas outside of their traditional business focus. We also expect that we will continue to incur additional costs to monitor and improve operational efficiency of our “work from home” model, invest in information technology solutions and security measures to safeguard against information security risks and incrementally transition to a hybrid “work from home” and office model on a limited basis as local restrictions ease and circumstances permit, including costs to implement safeguards to protect the health and safety of our employees as they gradually return to the office. We believe that theseshort-to-medium
COVID-19
pandemic has caused our clients to critically evaluate their business models and potentially adopt a shift towards BPM and a greater willingness to embrace digital transformation services and technology-enabled, automated process solutions.In the short to medium term, we expect volatility to continue in the foreseeable future. We have observed demand reductions from a number of clients in a range of verticals, particularly travel and leisure, diversified businesses (especially manufacturing and retail) and utilities during fiscal 2021 and fiscal 2022, as compared to demand levels prior to the
COVID-19
pandemic. However, beginning in June of fiscal 2021, we have observed a gradual resurgence of client engagement, particularly in the areas of competitive positioning and cost reduction, accelerating digital transformation and improving operational flexibility.In addition, we have experienced an increase in the number of clients, resulting in an increase in revenue in fiscal 2022, as compared to fiscal 2021.In the longer term, while we remain confident in our business and the quality of our services, the magnitude of the impact to our business and financial performance in fiscal 2023 and beyond will be a function of several factors, including, but not limited to, the following:
| • | the level of demand for services from clients across the industries, including the demand within their own customer base that we serve; |
| • | the extent of governmental restrictions, such as lockdowns and travel restrictions, which will affect our ability to sustain the delivery of services to clients and to gain new business in a “remote working” environment; |
| • | our ability to implement policies and measures to ensure the health and safety of our employees, such as conducting temperature screening for all personnel and visitors, ensuring adequate cleaning of our offices and facilities and having adequately aware and trained medical staff; |
| • | the impact and challenge of implementing “remote working” arrangements on the effectiveness of our productivity or operating capability, especially for our employees working in India, the Philippines, South Africa and Sri Lanka, due to varying local governmental regulations, client requirements, size and scale of operations and technology or infrastructure issues, such as hardware access, software compatibility and internet connectivity; |
| • | the volatility in exchange rate movements; and |
| • | the duration of the COVID-19 pandemic globally and the duration that it will takes for our clients’ businesses to stabilize and recover. |
We continue to work closely with our clients to maximize our ability to service their rapidly changing business requirements.
80
We are continually evaluating the impact of the
COVID-19
pandemic on our liquidity and financial position. As at March 31, 2022, we have cash and investments of $413.0 million, unutilized lines of credit amounting to $96.1 million and no debt. Based on our current level of operations, we expect that our anticipated cash generated from operating activities, cash and cash equivalents on hand, and use of existing credit facilities will be sufficient to fund our estimated capital expenditures, share repurchases and working capital needs for the next 12 months. However, under the current challenging economic and business conditions as discussed under “— Global Economic Conditions,” there can be no assurance that our business activity would be maintained at the expected level to generate the anticipated cash flows from operations. Also, see “Part I — Item 5. Operating and Financial Review and Prospects — Liquidity and Capital Resources” for more information.Further, in evaluating the recoverability of our trade receivables, including unbilled revenue, contract assets, goodwill, long lived assets and investments, we have considered the available internal and external information in the preparation of our consolidated financial statements. Having performed a sensitivity analysis based on the current assumptions and indicators of future economic conditions, we expect to recover the carrying amount of these assets. However, the impact of the
COVID-19
pandemic may be different from the assumptions and estimates which we used and the scale and duration ofCOVID-19
related developments are unknown and could have macro and micro negative effects on the financial markets and global economy, which could in turn have a material adverse effect on our operations and financial results, earnings, cash flow and financial condition.Following the
COVID-19
pandemic, there is a possibility that more businesses globally will adopt delivery models with improved technology infrastructure, and incorporate elements of the “work from home” model. Countries may enact more flexible labor laws, which may potentially expand a company’s employee base to include a higher number of part-time and gig workers, such as independent contractors, online platform workers, contract firm workers andon-call
workers. This may allow businesses such as ours to expand delivery models beyond the larger cities and into the smaller ones, for example, Tier 2 and Tier 3 cities in India.For further information, see “Part I — Item 3. Key Information — D. Risk Factors — Our business operations and future growth may be negatively impacted on account of the
COVID-19
pandemic.”81
Revenue
We generate revenue by providing BPM services to our clients. The following table shows our revenue (a GAAP financial measure) and revenue less repair payments (a
non-GAAP
financial measure) for the periods indicated:Year ended March 31, | Change | |||||||||||||||
2022 | 2021 | $ | % | |||||||||||||
(US dollars in millions) | ||||||||||||||||
Revenue | $ | 1,109.8 | $ | 912.6 | 197.2 | 21.6 | % | |||||||||
Revenue less repair payments (non-GAAP) | $ | 1,026.8 | $ | 868.7 | 158.1 | 18.2 | % | |||||||||
We have a large client base diversified across industries and geographies. As at March 31, 2022, we had a diverse client base of 414 clients (with each client generating more than $0.01 million in revenue in fiscal 2022).
Our revenue is characterized by client, industry, service type, geographic and contract type diversity, as the analysis below indicates.
Revenue by Top Clients
In fiscal 2022 and 2021, the percentage of revenue and revenue less repair payments
(non-GAAP)
that we derived from our largest clients were in the proportions set forth in the following table:As a percentage of revenue | As a percentage of revenue less repair payments (non-GAAP) | |||||||||||||||
Year ended March 31, | Year ended March 31, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Top client | 7.3 | % | 8.1 | % | 7.9 | % | 8.5 | % | ||||||||
Top five clients | 27.1 | % | 26.8 | % | 27.6 | % | 27.6 | % | ||||||||
Top ten clients | 41.1 | % | 42.3 | % | 41.4 | % | 43.4 | % | ||||||||
Top twenty clients | 54.1 | % | 58.8 | % | 53.4 | % | 58.5 | % | ||||||||
Revenue by Industry
For financial statement reporting purposes, we aggregate our operating segments, except for the WNS Auto Claims BPM (which we market under the WNS Assistance brand) as it does not meet the aggregation criteria under IFRS. See “— Results by Reportable Segment.”
We organize our company into the following industry-focused business units to provide more specialized focus on each of these industries: insurance; healthcare; travel and leisure; diversified businesses (including manufacturing, retail, CPG, media and entertainment, and telecom); shipping and logistics;
hi-tech
and professional services; banking and financial services; and utilities.In fiscal 2022 and 2021, our revenue and revenue less repair payments
(non-GAAP)
were diversified across our industry-focused business units in the proportions set forth in the following table:As a percentage of revenue | As a percentage of revenue less repair payments (non-GAAP) | |||||||||||||||
Year ended March 31, | Year ended March 31, | |||||||||||||||
Service Type | 2022 | 2021 | 2022 | 2021 | ||||||||||||
Insurance | 29.9 | % | 29.2 | % | 24.3 | % | 25.6 | % | ||||||||
Healthcare | 17.7 | % | 18.9 | % | 19.1 | % | 19.9 | % | ||||||||
Travel and leisure | 14.8 | % | 14.2 | % | 16.0 | % | 14.9 | % | ||||||||
Diversified businesses including manufacturing, retail, CPG, media and entertainment, and telecom | 13.5 | % | 15.3 | % | 14.6 | % | 16.1 | % | ||||||||
Shipping and logistics | 7.7 | % | 7.0 | % | 8.3 | % | 7.3 | % | ||||||||
Hi-tech and professional services | 6.2 | % | 6.2 | % | 6.7 | % | 6.5 | % | ||||||||
Banking and financial services | 5.8 | % | 4.7 | % | 6.2 | % | 4.9 | % | ||||||||
Utilities | 4.4 | % | 4.5 | % | 4.8 | % | 4.8 | % | ||||||||
Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||
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Certain services that we provide to our clients are subject to the seasonality of our clients’ business. Accordingly, we typically see an increase in transaction related services within the travel and leisure industry during holiday seasons, such as during the US summer holidays (our fiscal second quarter); an increase in business in the insurance industry during the beginning and end of the fiscal year (our fiscal first and last quarters) and during the US peak winter season (our fiscal third quarter); and an increase in business in the consumer product industry during the US festive season towards the end of the calendar year when new product launches and campaigns typically happen (our fiscal third quarter).
The impact of the
COVID-19
pandemic has affected, and we expect it to continue to affect, the demand for our services across industries from a number of our clients, depending on the ability of each client, and the nature of their industries, products and services, in coping with the crisis. Our business has been, and we expect will be, impacted across industry verticals as theCOVID-19
pandemic continues to affect the global economy across industries. For further information, see “— Global Economic Conditions — Impact ofCOVID-19.”
Revenue by Service Type
In fiscal 2022 and 2021, our revenue and revenue less repair payments
(non-GAAP)
were diversified across service types in the proportions set forth in the following table:As a percentage of revenue | As a percentage of revenue less repair payments (non-GAAP) | |||||||||||||||
Year ended March 31, | Year ended March 31, | |||||||||||||||
Service Type | 2022 | 2021 | 2022 | 2021 | ||||||||||||
Industry-specific | 38.9 | % | 40.8 | % | 42.0 | % | 42.9 | % | ||||||||
Finance and accounting | 22.4 | % | 23.3 | % | 24.2 | % | 24.5 | % | ||||||||
Customer experience services | 17.1 | % | 16.9 | % | 18.5 | % | 17.8 | % | ||||||||
Research and analytics | 10.5 | % | 10.4 | % | 11.3 | % | 10.9 | % | ||||||||
Auto claims | 8.7 | % | 6.0 | % | 1.3 | % | 1.2 | % | ||||||||
Others (1) | 2.4 | % | 2.6 | % | 2.7 | % | 2.7 | % | ||||||||
Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||
Note:
| (1) | Others includes revenue from technology services, legal services and human resources outsourcing services. |
83
Revenue by Geography
In fiscal 2022 and 2021, our revenue and revenue less repair payments
(non-GAAP)
were derived from the following geographies (based on the location of our clients) in the proportions set forth below in the following table:As a percentage of revenue | As a percentage of revenue less repair payments (non-GAAP) | |||||||||||||||
Year ended March 31, | Year ended March 31, | |||||||||||||||
Geography | 2022 | 2021 | 2022 | 2021 | ||||||||||||
North America (primarily the US) | 45.4 | % | 44.2 | % | 49.1 | % | 46.5 | % | ||||||||
UK | 32.8 | % | 31.4 | % | 27.4 | % | 27.9 | % | ||||||||
Europe (excluding the UK) | 6.1 | % | 6.7 | % | 6.6 | % | 7.1 | % | ||||||||
Australia | 6.1 | % | 7.7 | % | 6.6 | % | 8.1 | % | ||||||||
South Africa | 2.0 | % | 2.9 | % | 2.2 | % | 3.0 | % | ||||||||
Rest of world | 7.6 | % | 7.1 | % | 8.1 | % | 7.4 | % | ||||||||
Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||
Our business in South Africa is evaluated for compliance with the South African government’s BBBEE legislation against a BBBEE scorecard, which has different levels based on various criteria. South African government grants are available to businesses that meet specified conditions, including achieving a specified minimum BBBEE rating. A level one BBBEE rating has the most rigorous criteria. Additionally, many South African companies require their service providers to maintain a minimum BBBEE rating, and many of our South African client contracts contain clauses that allow our clients to terminate their contracts with us or impose specified penalties on us if we do not maintain a minimum BBBEE rating.
We conduct our domestic business in South Africa (serving clients based in South Africa) through our South Africa subsidiary, WNS South Africa (Pty) Ltd, and our international business in South Africa (serving clients based outside South Africa) through our South Africa subsidiary, WNS Global Services SA (Pty) Limited. During fiscal 2020, pursuant to the requirements of the South African government’s BBBEE Codes of Good Practice, the WNS
B-BBEE
Staff Share Trust subscribed to one participating preference share issued by WNS Global Services SA (Pty) Ltd, which entitles it to 45.56% of voting rights in WNS South Africa (Pty) Ltd. In fiscal 2022, the voting rights were increased to 48.84% to help ensure WNS South Africa (Pty) Ltd maintains the same level. We achieved a level one rating in respect of WNS South Africa (Pty) Ltd in May 2022, which is valid until April 2023 whereas the BBBEE verification audit for WNS Global Services SA (Pty) Limited is currently in progress and the new rating is expected to be issued in the first quarter of fiscal 2023. To help us achieve the requisite BBBEE rating for WNS Global Services SA (Pty) Limited, we have implemented a program that includes divesting some of our interests in such subsidiary to address the requirement relating to the percentage of ownership of an entity by “black people” (as defined under the applicable legislation). We expect to maintain a level one rating in respect of WNS South Africa (Pty) Ltd and achieve a level six rating in respect of WNS Global Services SA (Pty) Limited, which would help ensure that we continue to meet the minimum BBBEE rating required under our contracts with South African clients and be eligible for government grants associated with our domestic and international business. However, there is no assurance that WNS South Africa (Pty) Ltd or WNS Global Services SA (Pty) Limited will maintain their existing BBBEE ratings in the future annual BBBEE verification audits. If we fail to maintain or achieve the required minimum BBBEE ratings, we will cease to be eligible for government grants, will be disqualified from bidding for certain business, and certain of our clients may terminate their contracts with us or impose penalties on us. These outcomes would have an adverse effect on our business, results of operations, financial condition and cash flows.84
Revenue by Location of Delivery Centers
For fiscal 2022 and 2021, our revenue and revenue less repair payments
(non-GAAP)
were derived from the following geographies (based on the location of our delivery centers) in the proportions set forth in the following table:As a percentage of revenue | As a percentage of revenue less repair payments (non-GAAP) | |||||||||||||||
Year ended March 31, | Year ended March 31, | |||||||||||||||
Location of Delivery Center | 2022 | 2021 | 2022 | 2021 | ||||||||||||
India | 50.1 | % | 50.8 | % | 54.1 | % | 53.4 | % | ||||||||
United States | 15.2 | % | 16.5 | % | 16.4 | % | 17.3 | % | ||||||||
Philippines | 12.9 | % | 13.1 | % | 13.9 | % | 13.8 | % | ||||||||
UK (1) | 11.5 | % | 7.9 | % | 4.4 | % | 3.3 | % | ||||||||
South Africa | 5.1 | % | 5.7 | % | 5.5 | % | 5.9 | % | ||||||||
Sri Lanka | 1.5 | % | 1.7 | % | 1.6 | % | 1.8 | % | ||||||||
China | 1.3 | % | 1.4 | % | 1.4 | % | 1.5 | % | ||||||||
Romania | 1.1 | % | 1.4 | % | 1.2 | % | 1.5 | % | ||||||||
Spain | 0.5 | % | 0.6 | % | 0.5 | % | 0.6 | % | ||||||||
Poland | 0.4 | % | 0.5 | % | 0.5 | % | 0.6 | % | ||||||||
Costa Rica | 0.3 | % | 0.4 | % | 0.4 | % | 0.3 | % | ||||||||
Australia (2) | 0.1 | % | — | 0.1 | % | — | ||||||||||
Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||
Note:
| (1) | Includes revenue and revenue less repair payments (non-GAAP) derived from Turkey, which was not significant. |
| (2) | Revenue from Australia is for process being delivered under our “work from home” model. We do not have any delivery center in Australia. |
Our Contracts
We provide our services under contracts with our clients, which typically range from three to five years, with some being rolling contracts with no end dates. Typically, these contracts can be terminated by our clients with or without cause and with short notice periods. However, we tend to have long-term relationships with our clients given the complex and comprehensive nature of the business processes executed by us, coupled with the switching costs and risks associated with relocating these processes
in-house
or to other service providers.Each client contract has different terms and conditions based on the scope of services to be delivered and the requirements of that client. Occasionally, we may incur significant costs on certain contracts in the early stages of implementation, with the expectation that these costs will be recouped over the life of the contract to achieve our targeted returns. Each client contract has corresponding service level agreements that define certain operational metrics based on which our performance is measured. Some of our contracts specify penalties or damages payable by us in the event of failure to meet certain key service level standards within an agreed upon time frame.
When we are engaged by a client, we typically transfer that client’s processes to our delivery centers over a
six-month
period. This transfer process is subject to a number of potential delays. Therefore, we may not recognize significant revenue until several months after commencing a client engagement.In the WNS Global BPM segment, we charge for our services based on the following pricing models:
| 1) | per full-time-equivalent arrangements, which typically involve billings based on the number of full-time employees (or equivalent) deployed on the execution of the business process outsourced; |
| 2) | per transaction arrangements, which typically involve billings based on the number of transactions processed (such as the number of e-mail responses, or airline coupons or insurance claims processed); |
| 3) | subscription arrangements, which typically involve billings based on per member per month, based on contractually agreed rates; |
| 4) | fixed-price arrangements, which typically involve billings based on achievements of pre-defined deliverables or milestones; |
| 5) | outcome-based arrangements, which typically involve billings based on the business result achieved by our clients through our service efforts (such as measured based on a reduction in days sales outstanding, an improvement in working capital, an increase in collections or a reduction in operating expenses); or |
| 6) | other pricing arrangements, including cost-plus arrangements, which typically involve billing the contractually agreed direct and indirect costs and a fee based on the number of employees deployed under the arrangement. |
Apart from the above-mentioned pricing methods, a small portion of our revenue is comprised of reimbursements ofexpenses incurred by us in providing services to our clients.
out-of-pocket
Outcome-based arrangements are examples of
non-linear
pricing models where revenues from platforms and solutions and the services we provide are linked to usage or savings by clients rather than the efforts deployed to provide these services. We intend to focus on increasing our service offerings that are based onnon-linear
pricing models that allow us to price our services based on the value we deliver to our clients rather than the headcount deployed to deliver the services to them. We believe thatnon-linear
pricing models help us to grow our revenue without increasing our headcount. Accordingly, we expect increased use ofnon-linear
pricing models to result in higher revenue per employee and improved margins.Non-linear
revenues may be subject to short-term pressure on margins, however, as initiatives in developing the products and services take time to deliver. Moreover, in outcome-based arrangements, we bear the risk of failure to achieve clients’ business objectives in connection with these projects. For more information, see “Part I — Item 3. Key Information — D. Risk Factors — If our pricing structures do not accurately anticipate the cost and complexity of performing our work, our profitability may be negatively affected.”In our WNS Auto Claims BPM segment, we earn revenue from claims handling, repair management services and legal services relating to personal injury claims. For claims handling, we charge on a per claim basis or a fixed fee per vehicle over a contract period. For automobile repair management services, where we arrange for the repairs through a network of repair centers that we have established, we invoice the client for the amount of the repair. When we direct a vehicle to a specific repair center, we receive a referral fee from that repair center. We also provide a consolidated suite of services towards accident management including credit hire and credit repair for
“non-fault”
repairs business. Further, we provide legal services relating to personal injury claims through our subsidiary WNS Legal Assistance LLP.85
Revenue by Contract Type
For fiscal 2022 and 2021, our revenue and revenue less repair payments
(non-GAAP)
were diversified by contract type in the proportions set forth in the following table:As a percentage of revenue | As a percentage of revenue less repair payments (non-GAAP) | |||||||||||||||
Year ended March 31, | Year ended March 31, | |||||||||||||||
Revenue by Contract type | 2022 | 2021 | 2022 | 2021 | ||||||||||||
Full-time-equivalent | 63.4 | % | 65.0 | % | 68.5 | % | 68.2 | % | ||||||||
Transaction | 17.0 | % | 14.6 | % | 10.3 | % | 10.3 | % | ||||||||
Subscription | 9.3 | % | 10.8 | % | 10.0 | % | 11.3 | % | ||||||||
Fixed price | 5.7 | % | 4.6 | % | 6.2 | % | 4.9 | % | ||||||||
Others (1) | 4.6 | % | 5.0 | % | 5.0 | % | 5.3 | % | ||||||||
Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||
Note:
| (1) | Others includes revenue from “outcome-based arrangements”, which typically involve billings based on the business result achieved by our clients through our service efforts (such as measured based on a reduction in days sales outstanding, an improvement in working capital, an increase in collections or a reduction in operating expenses). |
86
Expenses
The majority of our expenses consist of cost of revenue and operating expenses. The key components of our cost of revenue are employee costs, payments to repair centers, facilities costs, depreciation, legal and professional costs, and travel expenses. Our operating expenses include selling and marketing expenses, general and administrative expenses, foreign exchange gains and losses and amortization of intangible assets. Our
non-operating
expenses include finance expenses as well as other expenses recorded under “other income, net.”Cost of Revenue
Employee costs represent the largest component of cost of revenue. In addition to employee salaries, employee costs include costs related to recruitment, training and retention, and share-based compensation expense. Historically, our employee costs have increased primarily due to increases in the number of employees to support our growth and, to a lesser extent, to recruit, train and retain employees. Salary levels in India and our ability to efficiently manage and retain our employees significantly influence our cost of revenue. See “Part I — Item 4. Information on the Company — B. Business Overview — Human Capital.” Regulatory developments may, however, result in wage increases in India and increase our cost of revenue.
For example, the Code on Wages 2019, Industrial Relations Code 2020, Social Security Code 2020 and Occupational Safety, Health & Working Condition Code 2020 received assent from the President of India on September 28, 2020. However, the rules implementing these Acts have not yet been published and the effective date from which these changes are applicable has yet to be announced. Accordingly, while we are unable to ascertain with certainty the financial impact due to these changes, it is possible that our wage costs in India may increase as a result of these changes when they become effective. See “Part I — Item. 3. Key Information. — D. Risk Factors — Risks Related to Our Business — Wage increases may prevent us from sustaining our competitive advantage and may reduce our profit margin.” We seek to mitigate these cost increases through improvements in employee productivity, employee retention and asset utilization.
Our WNS Auto Claims BPM segment includes repair management services, where we arrange for automobile repairs through a network of third party repair centers. This cost is primarily driven by the volume of accidents and the amount of the repair costs related to such accidents. It also includes incremental and direct costs incurred to contract with claimants by WNS Legal Assistance LLP.
Our facilities costs comprise lease rentals, utilities cost, facilities management and telecommunication network cost. Most of our leases for our facilities are long-term agreements and have escalation clauses which provide for increases in rent at periodic intervals. Most of these agreements have clauses that have fixed escalation of lease rentals.
We create capacity in our operational infrastructure ahead of anticipated demand as it takes six to nine months to build up a new site. Hence, our cost of revenue as a percentage of revenue may be higher during periods in which we carry such additional capacity.
Once we are engaged by a client in a new contract, we normally have a transition period to transfer the client’s processes to our delivery centers and accordingly incur costs related to such transfer.
Selling and Marketing Expenses
Our selling and marketing expenses comprise primarily employee costs for sales and marketing personnel, share-based compensation expense, brand building expenses, legal and professional fees, travel expenses, and other general expenses relating to selling and marketing.
Selling and marketing expenses as a proportion of revenue was 4.9% in fiscal 2022 as compared with 5.4% for fiscal 2021. Selling and marketing expenses as a proportion of revenue less repair payments
(non-GAAP)
was 5.2% in fiscal 2022 as compared with 5.7% for fiscal 2021. Due to the uncertainty of theCOVID-19
pandemic, we have limited visibility at this time on its impact on our sales team and selling and marketing expenses, if any, and are unable to forecast whether or to what extent selling and marketing expenses as a proportion of revenue or revenue less repair payments will increase or decrease in fiscal 2023.87
General and Administrative Expenses
Our general and administrative expenses comprise primarily employee costs for senior management and other support personnel, share-based compensation expense, legal and professional fees, travel expenses, and other general expenses not related to cost of revenue and selling and marketing.
General and administrative expenses as a proportion of revenue was 13.6% in fiscal 2022 as compared with 13.8% in fiscal 2021. General and administrative expenses as a proportion of revenue less repair payments
(non-GAAP)
was 14.7% in fiscal 2022 as compared with 14.5% in fiscal 2021. Due to the uncertainty of theCOVID-19
pandemic, we have limited visibility at this time on its impact on our general and administrative expenses, if any, and are unable to forecast whether or to what extent general and administrative expenses in absolute terms will increase or decrease in fiscal 2023.Foreign Exchange Loss / (Gain), Net
Foreign exchange loss / (gain), net include:
| • | marked to market gains or losses on derivative instruments that do not qualify for “hedge” accounting and are deemed ineffective; |
| • | realized foreign currency exchange gains or losses on settlement of transactions in foreign currency and derivative instruments; and |
| • | unrealized foreign currency exchange gains or losses on revaluation of other assets and liabilities. |
We had a foreign exchange gain of $6.0 million in fiscal 2022 as compared to a loss of $0.8 million in fiscal 2021.
Amortization of Intangible Assets
Amortization of intangible assets is primarily associated with our acquisitions of Fusion Outsourcing Services (Proprietary) Limited in June 2012, Value Edge in June 2016, Denali in January 2017, HealthHelp in March 2017, the acquisition of a customer contract from Telkom SA SOC Limited in May 2015, and CEPROCS in December 2021.
Other Income, Net
Other income, net comprises interest income, income from investments, gain or loss on sale of assets and other miscellaneous income and expenses.
Finance Expense
Finance expense primarily relates to interest charges payable on our term loans and short-term borrowings, transaction costs and the gains/losses on settlement of related derivative instruments. On adoption of IFRS 16, with effect from April 1, 2019, interest expense on lease liabilities is also reflected in this line item. We expect our interest payable on our term loans to be lower in fiscal 2023 as compared to fiscal 2022, when we fully repaid loans which we obtained to fund our acquisition of HealthHelp.
88
Operating Data
Our profit margin is largely a function of our asset utilization and the rates we are able to recover for our services. One of the most significant components of our asset utilization is our seat utilization rate which is the average number of work shifts per day, out of a maximum of three, for which we are able to utilize our seats. Generally, an improvement in seat utilization rate will improve our profitability unless there are other factors which increase our costs such as an increase in lease rentals, large
ramp-ups
to build new seats, and increases in costs related to repairs and renovations to our existing or used seats. In addition, an increase in seat utilization rate as a result of an increase in the volume of work will generally result in a lower cost per seat and a higher profit margin as the total fixed costs of our built up seats remain the same while each seat is generating more revenue.The following table presents certain operating data as at the dates indicated:
As at March 31, | ||||||||
2022 | 2021 | |||||||
Total headcount | 52,081 | 43,997 | ||||||
Built up seats (1) | 34,494 | 34,365 | ||||||
Used seats (1) | — | — | ||||||
Seat utilization rate (1) (2) | — | — | ||||||
Notes:
| (1) | “Built up seats” refers to the total number of production seats (excluding support functions like finance, human resources, administration and seats dedicated for business continuity planning) that are set up in any premises. “Used seats” refers to the number of built up seats that are being used by employees. The remainder would be termed “vacant seats.” The vacant seats would get converted into used seats when we increase headcount. |
The service delivery capacities of our remote-working employees may not be equivalent to their normal capacities when working in our delivery centers.
The “work from home” model continued to be used in fiscal 2022 and fiscal 2021. Accordingly, the used seats details and seat utilization rate details are not relevant for fiscal 2022 and fiscal 2021.
| (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. |
We expect our total headcount in fiscal 2023 to increase as compared to fiscal 2022 as the impact of an increased flow of business from new and existing clients is expected to continue to increase our hiring requirements in fiscal 2023.
Foreign Exchange
Exchange Rates
We report our financial results in US dollars and our results of operations would be adversely affected if the pound sterling or, to a lesser extent, the Euro or the Australian dollar depreciates against the US dollar, or if the Indian rupee or, to a lesser extent, the Philippine peso or the South African rand appreciates against the US dollar. Although a substantial portion of our revenue and revenue less repair payments
(non-GAAP)
is denominated in US dollars (55.6% and 60.1%, respectively, in fiscal 2022 and 54.0% and 56.7%, respectively, in fiscal 2021), pound sterling (29.5% and 23.8%, respectively, in fiscal 2022 and 28.0% and 24.4%, respectively, in fiscal 2021), and, to a lesser extent, Australian dollars (5.7% and 6.2%, respectively, in fiscal 2022 and 7.3% and 7.7%, in fiscal 2021), the Euro (5.7% and 6.1%, respectively, in fiscal 2022 and 6.3% and 6.6%, respectively, in fiscal 2021), and the South African rand (2.0% and 2.1%, respectively, in fiscal 2022 and 2.9% and 3.1%, respectively, in fiscal 2021), most of our expenses (net of payments to repair centers) are incurred and paid in Indian rupees (45.8% in fiscal 2022 and 43.5% in fiscal 2021) and, to a lesser extent, in the Philippine peso (12.3% in fiscal 2022 and 13.3% in fiscal 2021) and the South African rand (5.7% in fiscal 2022 and 6.2% in fiscal 2021). The exchange rates between these currencies and the US dollar have changed substantially in recent years and may fluctuate substantially in the future.89
The average Indian rupee to US dollar exchange rate was approximately74.49 per $1.00 in fiscal 2022, which represented a depreciation of the Indian rupee of 0.3% as compared with the average exchange rate of74.25 per $1.00 in fiscal 2021, which in turn represented a depreciation of the Indian rupee of 4.7% as compared with the average exchange rate of approximately70.91 per $1.00 in fiscal 2020.
₹
₹
₹
The average pound sterling to US dollar exchange rate was approximately £0.73 per $1.00 in fiscal 2022, which represented an appreciation of the pound sterling of 4.6% as compared with the average exchange rate of approximately £0.77 per $1.00 in fiscal 2021, which in turn represented an appreciation of the pound sterling of 2.7% as compared with the average exchange rate of approximately £0.79 per $1.00 in fiscal 2020.
The average Australian dollar to US dollar exchange rate was approximately A$1.35 per $1.00 in fiscal 2022, which represented an appreciation of the Australian dollar of 3.0% as compared with the average exchange rate of approximately A$1.39 per $1.00 in fiscal 2021, which in turn represented an appreciation of the Australian dollar of 5.3% as compared with the average exchange rate of approximately A$1.47 per $1.00 in fiscal 2020.
The average Euro to US dollar exchange rate was approximately €0.860 per $1.00 in fiscal 2022, which represented a depreciation of the Euro of 0.3% as compared with the average exchange rate of approximately €0.857 per $1.00 in fiscal 2021, which in turn represented an appreciation of the Euro of 5.0% as compared with the average exchange rate of approximately €0.900 per $1.00 in fiscal 2020.
The average South African rand to US dollar exchange rate was approximately R14.85 per $1.00 in fiscal 2022, which represented an appreciation of the South African rand of 9.3% as compared with the average exchange rate of approximately R16.37 per $1.00 in fiscal 2021, which in turn represented a depreciation of the South African rand of 10.9% as compared with the average exchange rate of approximately R14.76 per $1.00 in fiscal 2020.
The average Philippine peso to US dollar exchange rate was approximately PHP50.07 per $1.00 in fiscal 2022, which represented a depreciation of the Philippine peso of 2.2% as compared with the average exchange rate of approximately PHP49.00 per $1.00 in fiscal 2021, which in turn represented an appreciation of the Philippine peso of 4.7% as compared with the average exchange rate of approximately PHP51.43 per $1.00 in fiscal 2020.
The depreciation of the Indian rupee against the US dollar by 0.3% and 4.7% in fiscal 2022 and 2021, as compared with the average exchange rate in fiscal 2021 and 2020, respectively had a positive impact on our expenses in those years. As a result, increases in our cost of revenue, and to a lesser extent, our general and administrative expenses were partially offset by the positive impact of the depreciation of Indian rupee in fiscal 2022 and 2021. The appreciation of the Australian dollar and pound sterling in fiscal 2022 and fiscal 2021, the depreciation of the Philippine peso in fiscal 2022, the depreciation of South African rand and the appreciation of the Euro in fiscal 2021, in each case against the US dollar, positively impacted our results of operations in those years. The appreciation of South African rand and the depreciation of the Euro against the US dollar in fiscal 2022 and the appreciation of the Philippine peso against the US dollar in fiscal 2021 negatively impacted our results of operations in those years. See “Part I — Item 11. Quantitative and Qualitative Disclosures About Market Risk — B. Risk Management Procedures — Components of Market Risk — Exchange Rate Risk.”
We have subsidiaries in several countries and hence, the functional currencies of these entities differ from our reporting currency, the US dollar. The financial statements of these entities are translated to the reporting currency as at the balance sheet date. Adjustments resulting from the translation of these financial statements from functional currency to reporting currency are accumulated and reported as other comprehensive income/(loss), which is a separate component of equity and such exchange differences are recognized in our consolidated statement of income in the period in which such subsidiaries are disposed. Foreign currency transaction gains and losses are recorded as other income or expense.
90
Currency Regulation
Our Indian subsidiaries are registered as exporters of BPM services with STPI or Special Economic Zone (“SEZ”). According to the prevailing foreign exchange regulations in India, an exporter of BPM services registered with STPI or SEZ is required to receive its export proceeds in India within a period of nine months from the date of such exports in order to avail itself of the tax and other benefits. In the event that such a registered exporter has received any advance against exports in foreign exchange from its overseas customers, it is required to render the requisite services so that such advances are earned within a period of one year from the date of such receipt. If such a registered exporter does not meet these conditions, it will be required to obtain permission from the Reserve Bank of India to receive and realize such foreign currency earnings.
A majority of the payments we receive from our clients are denominated in pound sterling and US dollars. For most of our clients, our subsidiaries in Mauritius, the Netherlands, Australia, the UK and the US enter into contractual agreements directly with our clients for the provision of BPM services by our Indian subsidiaries, which hold the foreign currency receipts in an export earners’ foreign currency account. All foreign exchange requirements, such as for the import of capital goods, expenses incurred during overseas travel by employees and discharge of foreign exchange expenses or liabilities, can be met using the foreign currency in the export earners’ foreign currency account in India. As and when funds are required by us, the funds in the export earners’ foreign currency account may be transferred to an ordinary rupee-denominated account in India.
There are currently no Jersey, UK or US foreign exchange control restrictions on the payment of dividends on our ordinary shares or on the conduct of our operations.
Income Taxes
We operate in multiple tax jurisdictions including Australia, China, Costa Rica, Canada, France, Germany, India, Ireland, Mauritius, the Netherlands, New Zealand, the Philippines, Poland, Portugal, Romania, Singapore, South Africa, Spain, Sri Lanka, Switzerland, Turkey, United Arab Emirates, the UK and the US. As a result, our effective tax rate changes from year to year based on recurring factors such as the geographical mix of income before taxes, state and local taxes, the ratio of permanent items to
pre-tax
book income and the implementation of various global tax strategies, as well asnon-recurring
events.In fiscal 2022, 2021 and 2020, our tax rate in India, the Philippines and Sri Lanka impacted our effective tax rate. We would have incurred approximately $20.9 million, $11.1 million and $17.7 million in additional income tax expense on our combined operations in our SEZ operations in India, the Philippines and Sri Lanka in fiscal 2022, 2021 and 2020, respectively, if the tax holidays and exemptions described below had not been available for the respective periods.
We expect our tax rate in India, the Philippines and Sri Lanka to continue to impact our effective tax rate. Our tax rate in India has been impacted by the reduction in the tax exemption enjoyed by our delivery center operating under the SEZ scheme as discussed below. From fiscal 2016 until fiscal 2022, we started operations in various delivery centers in the Philippines that are eligible for tax exemption benefits expiring between fiscal 2020 and fiscal 2026. Following the expiry of the tax benefits, income generated by the Philippines subsidiary will be taxed at the prevailing special tax rate, which currently is 5% on gross profit. As per The Corporate Recovery and Tax Incentives for Enterprises Act (“CREATE”) which is effective from April, 2021, enterprises will be taxed at 5% on gross profit for a fixed period of 10 years. Our effective tax rate in Sri Lanka had been impacted by the withdrawal of tax exemption on export income in Sri Lanka with effect from April 1, 2018 until December 31, 2019, following which the income from export of service had been subject to tax at 14% on net basis. From January 1, 2020, our operations in Sri Lanka are eligible to claim income tax exemption with respect to the profits earned from export revenue, as more fully described below.
India
In the past, the majority of our Indian operations were eligible to claim income tax exemption with respect to profits earned from export revenue from operating units registered under the STPI. The benefit was available for a period of 10 years from the date of commencement of operations, but not beyond March 31, 2011. Effective April 1, 2011, upon the expiration of this tax exemption, income derived from our operations in India became subject to the prevailing annual tax rate, which was 34.95% in fiscal 2022, 2021 and 2020.
In 2005, the Government of India implemented the SEZ legislation, with the effect that taxable income of new operations established in designated SEZs may be eligible for a
15-year
tax holiday scheme consisting of a complete tax holiday for the initial five years and a partial tax holiday for the subsequent ten years, subject to the satisfaction of certain capital investment conditions in the last five years. From fiscal 2012 until fiscal 2022, the Company started operations in various delivery centers in Mumbai, Pune, Chennai, Gurgaon and Noida, India that were registered under the SEZ scheme. Some of these operations are eligible for a 100% income tax exemption for a period of five years from the date of commencement of operations, which are set to expire between fiscal 2022 and fiscal 2024. Following the expiry of the 100% income tax exemption, these operations are eligible for a 50% income tax exemption which are set to expire between fiscal 2026 and fiscal 2034. Such income tax exemption are only eligible for business units and operations set up under the SEZ legislation on or before March 31, 2020.91
In addition to these tax holidays, our Indian subsidiaries are also entitled to certain benefits under relevant state legislation and regulations. These benefits include rebates and waivers in relation to payment for transfer of property and registration (including for purchase or lease of premises) and commercial usage of electricity.
The Government of India may enact new tax legislation that could impact the way we are taxed in the future. For example, the change in the law in fiscal 2017 has resulted in any new business units or operation units set up under the SEZ legislation after March 31, 2020 not being eligible for the same income tax holidays that our existing SEZ operations currently enjoy. See “Part I — Item 3. Key Information — D. Risk Factors — Risks Related to Key Delivery Locations — Tax legislation and the results of actions by taxing authorities may have an adverse effect on our operations and our overall tax rate.
Philippines
From fiscal 2016 until fiscal 2022, our company started operations in various delivery centers in the Philippines which are eligible for tax exemption benefits expiring between 2020 and 2026. Following the expiry of the tax benefits, income generated by the Philippines subsidiary will be taxed at the prevailing special tax rate, which currently is 5% on gross profit. As per The Corporate Recovery and Tax Incentives for Enterprises Act (“CREATE”) which is effective from April 2021, enterprises will be taxed at 5% on gross profit for a fixed period of 10 years.
Any changes in the regulations relating to work-from-home arrangements may impact the tax exemption benefits available to our Philippines subsidiary.
Sri Lanka
Our operations in Sri Lanka were eligible to claim income tax exemption with respect to the profits earned from export revenue until fiscal 2018 and have since been taxed at 14% on net basis with effect from April 1, 2018 until December 31, 2019. From January 1, 2020, our operations in Sri Lanka are eligible to claim income tax exemption with respect to the profits earned from export revenue till such exemptions are revoked due to change in legislation.
92
Results of Operations
The following table sets forth certain financial information as a percentage of revenue and revenue less repair payments
(non-GAAP)
for the periods indicated:As a percentage of | ||||||||||||||||
Revenue | Revenue less repair payments (non-GAAP) | |||||||||||||||
Year ended March 31, | Year ended March 31, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Cost of revenue | 66.2 | % | 64.3 | % | 63.5 | % | 62.5 | % | ||||||||
Gross profit | 33.8 | % | 35.7 | % | 36.5 | % | 37.5 | % | ||||||||
Operating expenses: | ||||||||||||||||
Selling and marketing expenses | 4.9 | % | 5.4 | % | 5.2 | % | 5.7 | % | ||||||||
General and administrative expenses | 13.6 | % | 13.8 | % | 14.7 | % | 14.5 | % | ||||||||
Foreign exchange (gain)/loss, net | (0.5 | )% | 0.1 | % | (0.6 | )% | 0.1 | % | ||||||||
Amortization of intangible assets | 1.0 | % | 1.5 | % | 1.1 | % | 1.6 | % | ||||||||
Operating profit | 14.8 | % | 14.8 | % | 16.0 | % | 15.5 | % | ||||||||
Other income, net | (1.2 | )% | (1.4 | )% | (1.4 | )% | (1.4 | )% | ||||||||
Finance expense | 1.2 | % | 1.6 | % | 1.3 | % | 1.7 | % | ||||||||
Income tax expense | 2.9 | % | 3.3 | % | 3.2 | % | 3.5 | % | ||||||||
Profit after tax | 11.9 | % | 11.2 | % | 12.9 | % | 11.8 | % | ||||||||
The following table reconciles revenue (a GAAP financial measure) to revenue less repair payments (a
non-GAAP
financial measure) and sets forth payments to repair centers and revenue less repair payments(non-GAAP)
as a percentage of revenue for the periods indicated:Year ended March 31, | ||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
(US dollars in millions) | ||||||||||||||||
Revenue | $ | 1,109.8 | $ | 912.6 | 100.0 | % | 100.0 | % | ||||||||
Less: Payments to repair centers | 83.0 | 43.9 | 7.5 | % | 4.8 | % | ||||||||||
Revenue less repair payments (non-GAAP) | $ | 1,026.8 | $ | 868.7 | 92.5 | % | 95.2 | % | ||||||||
93
The following table presents our results of operations for the periods indicated:
Year ended March 31, | ||||||||
2022 | 2021 | |||||||
(US dollars in millions) | ||||||||
Revenue | $ | 1,109.8 | $ | 912.6 | ||||
Cost of revenue (1) | 735.2 | 587.2 | ||||||
Gross profit | 374.6 | 325.4 | ||||||
Operating expenses: | ||||||||
Selling and marketing expenses (2) | 53.9 | 49.6 | ||||||
General and administrative expenses (3) | 151.1 | 126.3 | ||||||
Foreign exchange (gain)/loss, net | (6.0 | ) | 0.8 | |||||
Amortization of intangible assets | 11.5 | 13.7 | ||||||
Operating profit | 164.1 | 135.1 | ||||||
Other income, net | (13.9 | ) | (12.5 | ) | ||||
Finance expense | 13.4 | 14.8 | ||||||
Profit before income taxes | 164.5 | 132.7 | ||||||
Income tax expense | 32.4 | 30.1 | ||||||
Profit after tax | $ | 132.1 | $ | 102.6 | ||||
Notes:
| (1) | Includes share-based compensation expense of $5.2 million in fiscal 2022 and $4.9 million in fiscal 2021. |
| (2) | Includes share-based compensation expense of $4.9 million in fiscal 2022 and $4.3 million in fiscal 2021. |
| (3) | Includes share-based compensation expense of $34.1 million in fiscal 2022 and $29.0 million in fiscal 2021. |
94
Fiscal 2022 Compared to Fiscal 2021
Revenue
The following table sets forth our revenue and percentage change in revenue for the periods indicated:
Year ended March 31, | ||||||||||||||||
2022 | 2021 | Change | % Change | |||||||||||||
(US dollars in millions) | ||||||||||||||||
Revenue | $ | 1,109.8 | $ | 912.6 | $ | 197.2 | 21.6 | % | ||||||||
The increase in revenue of $197.2 million was primarily attributable to an increase in revenue from existing clients of $160.0 million, and revenue from new clients of $38.0 million, partially offset by a decrease in the hedging gain on our revenue by $0.8 million to a gain of $3.5 million in fiscal 2022 from a gain of $4.2 million in fiscal 2021. The increase in revenue was primarily due to higher volumes in our insurance, travel and leisure, healthcare, shipping and logistics, banking and financial services,
hi-tech
and professional services, diversified businesses, and utilities verticals and an appreciation of the pound sterling, the South African rand, and the Australian dollar by an average of 4.6%, 9.3%, and 3.0%, respectively, against the US dollar in fiscal 2022, as compared to the respective average exchange rates in fiscal 2021. This increase in revenue was partially offset by a depreciation of the Euro by an average of 0.3% against the US dollar in fiscal 2022, as compared to the average exchange rate in fiscal 2021.Revenue by Geography
The following table sets forth the composition of our revenue based on the location of our clients in our key geographies for the periods indicated:
Revenue | As a percentage of revenue | |||||||||||||||
Year ended March 31, | ||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
(US dollars in millions) | ||||||||||||||||
North America (primarily the US) | $ | 504.3 | $ | 403.5 | 45.4 | % | 44.2 | % | ||||||||
UK | 363.9 | 286.6 | 32.8 | % | 31.4 | % | ||||||||||
Europe (excluding the UK) | 67.9 | 61.4 | 6.1 | % | 6.7 | % | ||||||||||
Australia | 67.4 | 70.3 | 6.1 | % | 7.7 | % | ||||||||||
South Africa | 22.3 | 26.4 | 2.0 | % | 2.9 | % | ||||||||||
Rest of world | 84.1 | 64.3 | 7.6 | % | 7.1 | % | ||||||||||
Total | $ | 1,109.8 | $ | 912.6 | 100.0 | % | 100.0 | % | ||||||||
The increase in revenue in the North America (primarily the US) region was primarily attributable to higher volumes in our travel and leisure, diversified businesses, healthcare, banking and financial services, insurance, shipping and logistics,
hi-tech
and professional services, and utilities verticals. The increase in revenue from the UK region was primarily attributable to higher volumes in our insurance, utilities,hi-tech
and professional services, healthcare, banking and financial services, travel and leisure, and shipping and logistics verticals and an appreciation of the pound sterling against the US dollar by an average of 4.6%, as compared to the average exchange rate in fiscal 2021, partially offset by a lower volume in our diversified businesses vertical. The increase in revenue from the rest of world region was primarily attributable to higher volumes in our shipping and logistics, banking and financial services, travel and leisure,hi-tech
and professional services, insurance, and healthcare verticals, partially offset by a lower volume in our diversified businesses vertical. The increase in revenue from the Europe (excluding the UK) region was primarily attributable to higher volumes in our shipping and logistics, diversified businesses, travel and leisure, healthcare, insurance, and banking and financial services verticals, partially offset by a lower volume in ourhi-tech
and professional services vertical and a depreciation of the Euro against the US dollar by an average of 0.3%, as compared to the average exchange rate in fiscal 2021. The decrease in revenue from the South Africa region was primarily attributable to lower volumes in our diversified businesses, and banking and financial services verticals, partially offset by a higher volume in our travel and leisure vertical and an appreciation of the South African rand against the US dollar by an average of 9.3%, as compared to the average exchange rate in fiscal 2021. The decrease in revenue from the Australia region was primarily attributable to lower volumes in our insurance, shipping and logistics, andhi-tech
and professional services verticals, partially offset by higher volumes in our healthcare, travel and leisure, and diversified businesses verticals, and an appreciation of the Australian dollar against the US dollar by an average of 3.0%, as compared to the average exchange rate in fiscal 2021.95
Revenue Less Repair Payments
(non-GAAP)
The following table sets forth our revenue less repair payments
(non-GAAP)
and percentage change in revenue less repair payments(non-GAAP)
for the periods indicated:Year ended March 31, | ||||||||||||||||
2022 | 2021 | Change | % Change | |||||||||||||
(US dollars in million) | ||||||||||||||||
Revenue less repair payments (non-GAAP) | $ | 1,026.8 | $ | 868.7 | $ | 158.1 | 18.2 | % | ||||||||
The increase in revenue less repair payments
(non-GAAP)
of $158.1 million was primarily attributable to an increase in revenue less repair payments(non-GAAP)
from existing clients of $129.3 million, and revenue less repair payments(non-GAAP)
from new clients of $29.7 million, partially offset by a decrease in the hedging gain on our on our revenue less repair payments(non-GAAP)
by $0.8 million to a gain of $3.5 million in fiscal 2022 from a gain of $4.2 million in fiscal 2021. The increase in revenue less repair payments(non-GAAP)
was primarily due to higher volumes in our travel and leisure, insurance, healthcare, shipping and logistics, banking and financial services,hi-tech
and professional services, diversified businesses, and utilities verticals and an appreciation of the pound sterling, the South African rand, and the Australian dollar by an average of 4.6%, 9.3%, and 3.0%, respectively, against the US dollar in fiscal 2022, as compared to the respective average exchange rates in fiscal 2021. This increase in revenue was partially offset by a depreciation of the Euro by an average of 0.3% against the US dollar in fiscal 2022, as compared to the respective average exchange rates in fiscal 2021.Revenue Less Repair Payments
(non-GAAP)
by GeographyThe following table sets forth the composition of our revenue less repair payments
(non-GAAP)
based on the location of our clients in our key geographies for the periods indicated:Revenue less repair payments (non-GAAP) | As a percentage of revenue less repair payments (non-GAAP) | |||||||||||||||
Year ended March 31, | ||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
(US dollars in millions) | ||||||||||||||||
North America (primarily the US) | $ | 504.3 | $ | 403.5 | 49.1 | % | 46.5 | % | ||||||||
UK | 280.9 | 242.7 | 27.4 | % | 27.9 | % | ||||||||||
Europe (excluding the UK) | 67.9 | 61.4 | 6.6 | % | 7.1 | % | ||||||||||
Australia | 67.4 | 70.3 | 6.6 | % | 8.1 | % | ||||||||||
South Africa | 22.3 | 26.4 | 2.2 | % | 3.0 | % | ||||||||||
Rest of world | 84.1 | 64.3 | 8.1 | % | 7.4 | % | ||||||||||
Total | $ | 1,026.8 | $ | 868.7 | 100.0 | % | 100.0 | % | ||||||||
The increase in revenue less repair payments
(non-GAAP)
from the North America (primarily the US) region was primarily attributable to higher volumes in our travel and leisure, diversified businesses, healthcare, banking and financial services, insurance, shipping and logistics,hi-tech
and professional services, and utilities verticals. The increase in revenue less repair payments(non-GAAP)
from the UK region was primarily attributable to higher volumes in our insurance, utilities,hi-tech
and professional services, healthcare, banking and financial services, travel and leisure, and shipping and logistics verticals and an appreciation of the pound sterling against the US dollar by an average of 4.6%, as compared to the average exchange rate in fiscal 2021, partially offset by a lower volume in our diversified businesses vertical. The increase in revenue less repair payments(non-GAAP)
from the rest of world region was primarily attributable to higher volumes in our shipping and logistics, banking and financial services, travel and leisure,hi-tech
and professional services, insurance, and healthcare verticals, partially offset by a lower volume in our diversified businesses vertical. The increase in revenue less repair payments(non-GAAP)
from the Europe (excluding the UK) region was primarily attributable to higher volumes in our shipping and logistics, diversified businesses, travel and leisure, healthcare, insurance, and banking and financial services verticals, partially offset by a lower volume in ourhi-tech
and professional services vertical and a depreciation of the Euro against the US dollar by an average of 0.3%, as compared to the average exchange rate in fiscal 2021. The decrease in revenue less repair payments(non-GAAP)
from the South Africa region was primarily attributable to lower volumes in our diversified businesses, and banking and financial services verticals, partially offset by a higher volume in our travel and leisure vertical and an appreciation of the South African rand against the US dollar by an average of 9.3%, as compared to the average exchange rate in fiscal 2021. The decrease in revenue less repair payments(non-GAAP)
from the Australia region was primarily attributable to lower volumes in our insurance, shipping and logistics, andhi-tech
and professional services verticals, partially offset by higher volumes in our healthcare, travel and leisure, and diversified businesses verticals, and an appreciation of the Australian dollar against the US dollar by an average of 3.0%, as compared to the average exchange rate in fiscal 2021.96
Cost of Revenue
The following table sets forth the composition of our cost of revenue for the periods indicated:
Year ended March 31, | ||||||||||||
2022 | 2021 | Change | ||||||||||
(US dollars in millions) | ||||||||||||
Employee costs | $ | 503.7 | $ | 404.4 | $ | 99.3 | ||||||
Repair payments | 83.0 | 43.9 | 39.0 | |||||||||
Facilities costs | 56.4 | 51.3 | 5.1 | |||||||||
Depreciation | 48.6 | 47.8 | 0.8 | |||||||||
Legal and professional costs | 10.2 | 14.1 | (4.0 | ) | ||||||||
Travel costs | 3.0 | 1.4 | 1.7 | |||||||||
Other costs | 30.3 | 24.3 | 6.0 | |||||||||
Total cost of revenue | $ | 735.2 | $ | 587.2 | $ | 148.0 | ||||||
As a percentage of revenue | 66.2 | % | 64.3 | % | ||||||||
The increase in cost of revenue was primarily due to higher employee costs on account of a higher headcount, wage inflation and the reinstatement of our corporate leave policy allowing our employees to carry forward unused leave entitlement which resulted in a provision for such leave entitlement; higher repair payments; higher other costs; higher facilities running costs due to increase in facilities utilization; higher travel costs due to increased travel on account of the easing of
COVID-19
related travel restrictions in many countries; and higher depreciation costs. Further, the appreciation of the South African rand and the pound sterling against the US dollar by an average of 9.3% and 4.6%, respectively, in fiscal 2022 as compared to the respective average exchange rates in fiscal 2021, which resulted in an increase in our cost of revenue by approximately $5.0 million.These increases were partially offset by lower legal and professional costs, and a depreciation of the Philippine peso and Indian rupee against the US dollar by an average of 2.2% and 0.3%, respectively, in fiscal 2022 as compared to the respective average exchange rates in fiscal 2021, which resulted in a decrease in our cost of revenue by approximately $2.6 million. Further, the cost of revenue associated with
COVID-19
related business continuity costs, such as costs arising from towards the provision of accommodation to our employees, rental laptops and WIFI dongles, which are devices that allow remote access via the Internet as we shifted to a “work from home” model, decreased by $1.8 million to $14.1 million in fiscal 2022 as compared to $15.9 million in fiscal 2021.Gross Profit
The following table sets forth our gross profit for the periods indicated:
Year ended March 31, | ||||||||||||
2022 | 2021 | Change | ||||||||||
(US dollars in millions) | ||||||||||||
Gross profit | $ | 374.6 | $ | 325.4 | $ | 49.2 | ||||||
As a percentage of revenue | 33.8 | % | 35.7 | % | ||||||||
As a percentage of revenue less repair payments (non-GAAP) | 36.5 | % | 37.5 | % | ||||||||
Gross profit as a percentage of revenue decreased in fiscal 2022 from fiscal 2021, due to a higher cost of revenue as discussed above.
Gross profit as revenue less repair payments
(non-GAAP)
decreased in fiscal 2022 from fiscal 2021, primarily due to a higher cost of revenue (excluding repair payments) as a percentage of revenue less repair payments(non-GAAP)
as discussed above.During fiscal 2022, our built up seats increased by 0.4% from 34,365 as at the end of fiscal 2021 to 34,494 as at the end of fiscal 2022 due to the expansion of facilities in the Philippines and the addition of a new facility in Hyderabad, India after we acquired MOL IPS in August 2021, partially offset by the surrender of a few of our facilities in South Africa, to streamline our operations by consolidating existing capacities in our delivery centers. Our total headcount increased by 18.4% from 43,997 to 52,081 during the same period, in line with the increase in revenue generation by such hires.
For further information, see notes (1) and (2) to the table presenting certain operating data in “— Operating Data” above.
97
Selling and Marketing Expenses
The following table sets forth the composition of our selling and marketing expenses for the periods indicated:
Year ended March 31, | ||||||||||||
2022 | 2021 | Change | ||||||||||
(US dollars in millions) | ||||||||||||
Employee costs | $ | 46.6 | $ | 43.6 | $ | 3.0 | ||||||
Other costs | 7.2 | 6.0 | 1.2 | |||||||||
Total selling and marketing expenses | $ | 53.9 | $ | 49.6 | $ | 4.2 | ||||||
As a percentage of revenue | 4.9 | % | 5.4 | % | ||||||||
As a percentage of revenue less repair payments (non-GAAP) | 5.2 | % | 5.7 | % | ||||||||
The increase in our selling and marketing expenses was primarily due to an increase in employee costs due to wage inflation and higher share-based compensation costs; an increase in other costs due to higher marketing costs and higher travel costs, partially offset by lower legal and professional costs; and an appreciation of the pound sterling and South African rand against the US dollar by an average of 4.6% and 9.3%, respectively, in fiscal 2022, as compared to the respective average exchange rates in fiscal 2021, resulting in an increase of selling and marketing expenses by approximately $0.8 million.
General and Administrative Expenses
The following table sets forth the composition of our general and administrative expenses for the periods indicated:
Year ended March 31, | ||||||||||||
2022 | 2021 | Change | ||||||||||
(US dollars in millions) | ||||||||||||
Employee costs | $ | 121.5 | $ | 104.1 | $ | 17.4 | ||||||
Other costs | 29.6 | 22.2 | 7.4 | |||||||||
Total general and administrative expenses | $ | 151.1 | $ | 126.3 | $ | 24.8 | ||||||
As a percentage of revenue | 13.6 | % | 13.8 | % | ||||||||
As a percentage of revenue less repair payments (non-GAAP) | 14.7 | % | 14.5 | % | ||||||||
The increase in general and administrative expenses was primarily due to an increase in employee costs due to higher salaries on account of a higher headcount, wage inflation, the reinstatement of our corporate leave policy, as explained above, and higher share-based compensation costs; and an increase in other costs due to higher legal and professional costs and higher travel costs. Further, an appreciation of the South African rand and pound sterling against the US dollar by an average of 9.3% and 4.6%, respectively, in fiscal 2022, as compared to the respective average exchange rates in fiscal 2021, resulted in an increase of general and administrative expenses by approximately $1.0 million.
These increases were partially offset by a depreciation of Indian rupee and Philippine peso against the US dollar by an average of 0.3% and 2.2%, respectively, in fiscal 2022, as compared to the respective average exchange rates in fiscal 2021, which resulted in a decrease of general and administrative expenses by approximately $0.3 million.
98
Foreign Exchange Loss / (Gain), Net
The following table sets forth our foreign exchange loss / (gain), net for the periods indicated:
Year ended March 31, | ||||||||||||
2022 | 2021 | Change | ||||||||||
(US dollars in millions) | ||||||||||||
Foreign exchange (gain)/loss, net | $ | (6.0 | ) | $ | 0.8 | $ | (6.7 | ) | ||||
We recorded foreign exchange gain of $6.0 million in fiscal 2022, primarily on account of a revaluation gain of $5.9 million and a foreign exchange gain on
de-designation
of hedges of $0.1 million as compared to a foreign exchange loss of $0.8 million in fiscal 2021, primarily on account of a revaluation loss of $0.6 million and a foreign exchange loss onde-designation
of hedges of $0.2 million.99
Amortization of Intangible Assets
The following table sets forth our amortization of intangible assets for the periods indicated:
Year ended March 31, | ||||||||||||
2022 | 2021 | Change | ||||||||||
(US dollars in millions) | ||||||||||||
Amortization of intangible assets | $ | 11.5 | $ | 13.7 | $ | (2.2 | ) | |||||
The decrease in amortization of intangible assets was primarily attributable to the completion of the amortization of certain intangible assets associated with our Denali and HealthHelp acquisitions, partially offset by an increase in amortization of certain intangible assets associated with our acquisition of CEPROCS and software costs and an appreciation of the pound sterling and South African rand against the US dollar by an average of 4.6% and 9.3%, respectively, in fiscal 2022 as compared to the respective average exchange rates in fiscal 2021.
Operating Profit
The following table sets forth our operating profit for the periods indicated:
Year ended March 31, | ||||||||||||
2022 | 2021 | Change | ||||||||||
(US dollars in millions) | ||||||||||||
Operating profit | $ | 164.1 | $ | 135.1 | $ | 29.0 | ||||||
As a percentage of revenue | 14.8 | % | 14.8 | % | ||||||||
As a percentage of revenue less repair payments (non-GAAP) | 16.0 | % | 15.5 | % | ||||||||
Operating profit as a percentage of revenue was similar in fiscal 2022 as compared to fiscal 2021 notwithstanding higher revenues in fiscal 2022 due to higher cost of revenue as a percentage of revenue, offset by lower selling and marketing expenses, general and administrative expenses and amortization of intangible assets and higher foreign exchange gains as a percentage of revenue.
Operating profit as a percentage of revenue less repair payments
(non-GAAP)
was higher in fiscal 2022 from fiscal 2021, due to lower selling and marketing expenses, amortization of intangible assets and higher foreign exchange gains as a percentage of revenue less repair payments(non-GAAP),
partially offset by higher cost of revenue (excluding repair payments) and general and administrative expenses as a percentage of revenue less repair payments(non-GAAP).
100
Other Income, net
The following table sets forth our other income, net for the periods indicated:
Year ended March 31, | ||||||||||||
2022 | 2021 | Change | ||||||||||
(US dollars in millions) | ||||||||||||
Other income, net | $ | (13.9 | ) | $ | (12.5 | ) | $ | (1.4 | ) | |||
Other income, net was higher in fiscal 2022 as compared with fiscal 2021, primarily due to interest income of $1.8 million, received in relation to an income tax refund in fiscal 2022 and higher cash and cash equivalents and investments as compared to interest income of $0.8 million received in relation to income tax refund in fiscal 2021, partially offset by lower interest yield.
Finance Expense
The following table sets forth our finance expense for the periods indicated:
Year ended March 31, | ||||||||||||
2022 | 2021 | Change | ||||||||||
(US dollars in millions) | ||||||||||||
Finance expense | $ | 13.4 | $ | 14.8 | $ | (1.4 | ) | |||||
Finance expense decreased primarily due to lower interest on the right of use assets under IFRS 16, and lower interest on our long-term loans taken for the acquisition of HealthHelp, as we repaid the debt in full in fiscal 2022.
Income Tax Expense
The following table sets forth our income tax expense for the periods indicated:
Year ended March 31, | ||||||||||||
2022 | 2021 | Change | ||||||||||
(US dollars in millions) | ||||||||||||
Income tax expense | $ | 32.4 | $ | 30.1 | $ | 2.4 | ||||||
The increase in income tax expense was primarily due to an increase in taxable profits in fiscal 2022, partially offset by higher taxable profits in tax exempt jurisdictions.
Profit After Tax
The following table sets forth our profit after tax for the periods indicated:
Year ended March 31, | ||||||||||||
2022 | 2021 | Change | ||||||||||
(US dollars in millions) | ||||||||||||
Profit after tax | $ | 132.1 | $ | 102.6 | $ | 29.5 | ||||||
As a percentage of revenue | 11.9 | % | 11.2 | % | ||||||||
As a percentage of revenue less repair payments (non-GAAP) | 12.9 | % | 11.8 | % | ||||||||
The increase in profit after tax as a percentage of revenue as well as a percentage of revenue less repair payments
(non-GAAP)
was primarily on account of similar operating profit as a percentage of revenue and higher operating profit as a percentage of revenue less repair payments(non-GAAP),
lower finance expense, and higher other income, partially offset by higher income tax expense, as explained above.Fiscal 2021 Compared to Fiscal 2020
For a discussion of our results in fiscal 2021 compared to fiscal 2020, please see “Part I — Item 5. Operating and Financial Review and Prospects — Results of Operations — Fiscal 2021 Compared to Fiscal 2020” contained in our Annual Report on Form
20-F
for fiscal 2021 filed with the SEC on May 14, 2021.101
Results by Reportable Segment
For purposes of evaluating operating performance and allocating resources, we have organized our company by operating segments. See Note 28 to our consolidated financial statements included elsewhere in this annual report. For financial statement reporting purposes, we aggregate the segments that meet the criteria for aggregation as set forth in IFRS 8 “” (“IFRS 8”). We have separately reported our Auto Claims BPM segment, as it does not meet the aggregation criteria under IFRS 8. Accordingly, pursuant to IFRS 8, we have two reportable segments: WNS Global BPM and WNS Auto Claims BPM.
Operating Segments
WNS Global BPM is delivered out of our delivery centers in China, Costa Rica, India, the Philippines, Poland, Romania, South Africa, Spain, Sri Lanka, Turkey, the UK and the US. This segment includes all of our business activities with the exception of WNS Auto Claims BPM. WNS Auto Claims BPM is our automobile claims management business which is primarily based in the UK and is part of our insurance business unit. See “Part I — Item 4. Information on the Company — B. Business Overview — Business Process Management Service Offerings.” We report WNS Auto Claims BPM as a separate segment for financial statement reporting purposes since a substantial part of our reported revenue in this business consists of amounts invoiced to our clients for payments made by us to third party automobile repair centers, resulting in lower long-term gross margins when measured on the basis of revenue, relative to the WNS Global BPM segment.
Our revenue is generated primarily from providing BPM services.
102
In our WNS Auto Claims BPM segment, we provide both “fault” and
“non-fault”
repairs. For “fault” repairs, we provide claims handling and repair management services, where we arrange for automobile repairs through a network of third party repair centers. In our repair management services, where we act as the principal in our dealings with the third party repair centers and our clients, the amounts which we invoice to our clients for payments made by us to third party repair centers are reported as revenue. Where we are not the principal in providing the services, we record revenue from repair services net of repair cost. Since we wholly subcontract the repairs to the repair centers, we evaluate the financial performance of our “fault” repair business based on revenue less repair payments(non-GAAP)
to third party repair centers, which is anon-GAAP
financial measure. We believe that revenue less repair payments(non-GAAP)
for “fault” repairs reflects more accurately the value addition of the BPM services that we directly provide to our clients.For our
“non-fault”
repairs business, we generally provide a consolidated suite of accident management services including credit hire and credit repair, and we believe that measurement of such business on a basis that includes repair payments in revenue is appropriate. Revenue including repair payments is therefore used as a primary measure to allocate resources and measure operating performance for accident management services provided in our“non-fault”
repairs business. Our“non-fault”
repairs business where we provide accident management services accounts for a relatively small portion of our revenue for our WNS Auto Claims BPM segment. In our WNS Auto Claims BPM segment, effective July 1, 2015, WNS Legal Assistance LLP, a subsidiary of WNS Assistance Limited, commenced providing legal services in relation to personal injury claims.Revenue less repair payments is a
non-GAAP
financial measure which is calculated as (a) revenue less (b) in our auto claims business, payments to repair centers for “fault” repair cases where we act as the principal in our dealings with the third party repair centers and our clients. Thisnon-GAAP
financial information is not meant to be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP. Our revenue less repair payments(non-GAAP)
may not be comparable to similarly titled measures reported by other companies due to potential differences in the method of calculation.We allocate resources based on segment revenue less repair payments
(non-GAAP)
and measures segment performance based on revenue less repair payments(non-GAAP)
and to a lesser extent on segment operating income. The accounting policies of our reportable segments are the same as those of our company.We may in the future change our reportable segments based on how our business evolves.
The following table shows revenue and revenue less repair payments
(non-GAAP)
for our two reportable segments for the periods indicated:Year ended March 31, | ||||||||||||||||
2022 | 2021 | |||||||||||||||
(US dollars in millions) | ||||||||||||||||
WNS Global BPM | WNS Autoclaims BPM | WNS Global BPM | WNS Autoclaims BPM | |||||||||||||
Segment revenue (1) | $ | 1,014.7 | $ | 96.1 | $ | 858.4 | $ | 54.6 | ||||||||
Less: Payments to repair centers | — | 83.0 | — | 43.9 | ||||||||||||
Revenue less repair payments (non-GAAP) (1) | 1,014.7 | 13.2 | 858.4 | 10.7 | ||||||||||||
Cost of revenue (excluding payments to repair centers) (2) | 635.7 | 12.4 | 528.7 | 10.0 | ||||||||||||
Other costs (3) | 156.4 | 3.7 | 140.1 | 3.2 | ||||||||||||
Segment operating profit / (loss) | 222.6 | (2.9 | ) | 189.6 | (2.6 | ) | ||||||||||
Other income, net | (13.1 | ) | (0.7 | ) | (11.8 | ) | (0.6 | ) | ||||||||
Finance expense | 13.3 | 0.1 | 14.8 | 0.1 | ||||||||||||
Segment profit before income taxes | 222.5 | (2.2 | ) | 186.7 | (2.0 | ) | ||||||||||
Income tax expense | 32.7 | (0.3 | ) | 29.7 | (0.4 | ) | ||||||||||
Segment profit / (loss) | $ | 189.8 | $ | (1.9 | ) | $ | 157.0 | $ | (2.4 | ) | ||||||
Notes:
| (1) | Segment revenue and revenue less repair payments (non-GAAP) include inter-segment revenue of $1.0 million and $0.3 million in fiscal 2022 and 2021, respectively. |
| (2) | Cost of revenue includes inter-segment expenses of $1.0 million and $0.3 million in fiscal 2022 and 2021, respectively, and excludes share-based compensation expense of $5.2 million and $4.9 million in fiscal 2022 and 2021, respectively, which are not allocable between our segments. |
| (3) | Other costs include selling and marketing expenses, general and administrative expenses and foreign exchange loss / (gains). Excludes share-based compensation expense of $39.0 million and $33.3 million in fiscal 2022 and 2021, respectively, which are not allocable between our segments. |
WNS Global BPM accounted for 91.4% of our revenue and 98.8% of our revenue less repair payments
(non-GAAP)
in fiscal 2022, as compared to 94.1% of our revenue and 98.8% of our revenue less repair payments(non-GAAP)
in fiscal 2021.103
WNS Global BPM
Segment Revenue
Fiscal 2022 Compared to Fiscal 2021
Revenue in the WNS Global BPM segment increased by 18.2% to 1,014.7 million in fiscal 2022 from $858.4 million in fiscal 2021. This increase was primarily attributable to the increase in the volume of transactions executed for existing clients by $128.5 million, revenue from new clients of $28.6 million and an appreciation of the pound sterling, the South African rand, and the Australian dollar by an average of 4.6%, 9.3% and 3.0%, respectively, against the US dollar in fiscal 2022, as compared to the respective average exchange rates in fiscal 2021. This increase was partially offset by $0.8 million being attributable to the decrease in hedging gains on our revenue to $3.5 million in fiscal 2022 from $4.2 million in fiscal 2021.
Fiscal 2021 Compared to Fiscal 2020
For a discussion of our segment revenue in fiscal 2021 compared to fiscal 2020, please see “Part I — Item 5. Operating and Financial Review and Prospects — Results by Reportable Segment — WNS Global BPM — Segment Revenue — Fiscal 2021 Compared to Fiscal 2020” contained in our Annual Report on Form
20-F
for fiscal 2021 filed with the SEC on May 14, 2021.Segment Operating Profit
Fiscal 2022 Compared to Fiscal 2021
Segment operating profit in the WNS Global BPM segment increased by 17.4% to $222.6 million in fiscal 2022 from $189.6 million in fiscal 2021. The increase was primarily attributable to higher segment revenue, and higher foreign exchange gains, partially offset by higher cost of revenue, higher general and administrative expenses, and higher selling and marketing expenses.
Our cost of revenue includes employee costs, facilities costs, legal and professional costs, depreciation, travel costs and other related costs. Employee related costs represent the largest component of our cost of revenue for the WNS Global BPM segment.
Our cost of revenue increased by $107.0 million to $635.7 million in fiscal 2022 from $528.7 million in fiscal 2021, primarily on account of an increase in employee costs on account of a higher headcount, wage inflation, the reinstatement of our corporate leave policy allowing our employees to carry forward unused leave entitlement, which resulted in a provision for such leave entitlement, higher other costs, higher facilities running costs, higher travel costs, and higher depreciation costs. Further, the appreciation of the South African rand and the pound sterling against the US dollar by an average of 9.3% and 4.6% respectively, in fiscal 2022 as compared to the respective average exchange rates in fiscal 2021, resulted in an increase in our cost of revenue by approximately $5.0 million.
These increases were partially offset by lower legal and professional costs, and a depreciation of the Philippine peso, and Indian rupee against the US dollar by an average of 2.2%, and 0.3% respectively, in fiscal 2022 as compared to the respective average exchange rates in fiscal 2021, which resulted in a decrease in our cost of revenue by approximately $2.6 million. Further, the cost of revenue decreased due to decrease in
COVID-19
related business continuity costs, such as costs arising from towards the provision of accommodation to our employees, rental laptops and WIFI dongles, which are devices that allow remote access via the Internet as we shifted to a “work from home” model by $1.8 million to $14.1 million in fiscal 2022 as compared to $15.9 million in fiscal 2021.Our other costs include selling and marketing expenses, general and administrative expenses and foreign exchange loss or gain. Our other costs increased by $16.3 million to $156.4 million in fiscal 2022 from $140.1 million in fiscal 2021, primarily on account of an increase in general and administrative expenses by $19.5 million, and selling and marketing expenses by $3.6 million, partially offset by higher foreign exchange gain by $6.9 million to a gain of $6.0 million in fiscal 2022 as compared to a loss of $0.9 million in fiscal 2021.
General and administrative expenses increased by $19.5 million to $113.7 million in fiscal 2022 from $94.2 million in fiscal 2021, primarily due to an increase in employee costs due to higher salaries on account of higher headcount, wage inflation, the reinstatement of our corporate leave policy, as explained above, and higher share-based compensation costs, and an increase in other costs due to higher legal and professional costs and higher travel costs. Further, an appreciation of the South African rand, and pound sterling against the US dollar by an average of 9.3% and 4.6%, respectively, in fiscal 2022, as compared to the respective average exchange rates in fiscal 2021, resulted in an increase of general and administrative expenses by approximately $1.0 million.
Selling and marketing expenses increased by $3.6 million to $48.7 million in fiscal 2022 from $45.0 million in fiscal 2021, primarily due to an increase in employee costs due to wage inflation, and higher share-based compensation costs, an increase in other costs due to higher marketing costs, higher travel costs, and an appreciation of the pound sterling, and South African rand against the US dollar by an average of 4.6% and 9.3%, respectively, in fiscal 2022, as compared to the respective average exchange rates in fiscal 2021, which resulted in an increase of selling and marketing expenses by approximately $0.8 million, partially offset by lower legal and professional costs.
These increases were partially offset by a depreciation of Indian rupee and Philippine peso against the US dollar by an average of 0.3% and 2.2%, respectively, in fiscal 2022, as compared to the respective average exchange rates in fiscal 2021, which resulted in a decrease of general and administrative expenses by approximately $0.3 million.
We recorded foreign exchange loss of $6.0 million in fiscal 2022, primarily on account of a revaluation gain of $5.9 million and a foreign exchange gain on
de-designation
of hedges of $0.1 million as compared to a foreign exchange loss of $0.8 million in fiscal 2021, primarily on account of a revaluation loss of $0.6 million and a foreign exchange loss onde-designation
of hedges of $0.2 million.Fiscal 2021 Compared to Fiscal 2020
For a discussion of our segment operating profit in fiscal 2021 compared to fiscal 2020, please see “Part I — Item 5.Operating and Financial Review and Prospects — Results by Reportable Segment — WNS Global BPM — Segment Operating Profit — Fiscal 2021 Compared to Fiscal 2020” contained in our Annual Report on Form
20-F
for fiscal 2021 filed with the SEC on May 14, 2021.104
Segment Profit
Fiscal 2022 Compared to Fiscal 2021
Segment profit in the WNS Global BPM segment increased by 20.9% to $189.8 million in fiscal 2022 from $157.0 million in fiscal 2021. The increase in profit was primarily attributable to higher operating profit, lower finance expenses, and higher other income, net, partially offset by higher income tax expense.
The finance expense in fiscal 2022 was $13.3 million as compared to $14.8 million in fiscal 2021 primarily due to lower interest on the right of use assets under IFRS 16, and lower interest on our long-term loans taken for the acquisition of HealthHelp, as we repaid the debt in full in fiscal 2022.
The other income, net increased by $1.3 million in fiscal 2022 to $13.1 million from $11.8 million in fiscal 2021 primarily due to higher interest income associated with an income tax refund of $1.0 million, and higher cash and cash equivalents and investments, partially offset by lower interest yield.
The income tax expense in fiscal 2022 was $32.7 million as compared to $29.7 million in fiscal 2021. The increase in income tax expense was primarily due to an increase in taxable profits in fiscal 2022, partially offset by higher taxable profits in tax exempt jurisdictions.
Fiscal 2021 Compared to Fiscal 2020
For a discussion of our segment profit in fiscal 2021 compared to fiscal 2020, please see “Part I — Item 5. Operating and Financial Review and Prospects — Results by Reportable Segment — WNS Global BPM — Segment Profit — Fiscal 2021 Compared to Fiscal 2020” contained in our Annual Report on Form
20-F
for fiscal 2021 filed with the SEC on May 14, 2021.WNS Auto Claims BPM
Segment Revenue
Fiscal 2022 Compared to Fiscal 2021
Revenue in the WNS Auto Claims BPM segment increased by $41.5 million to $96.1 million in fiscal 2022 from $54.6 million in fiscal 2021. The increase was primarily on account of an increase in revenue from existing clients by $32.2 million, revenue from new clients of $9.3 million and an appreciation of the pound sterling against the US dollar by an average of 4.6% in fiscal 2022 as compared to the average exchange rate in fiscal 2021. Payments made to repair centers in fiscal 2022 increased by $39.0 million to $83.0 million in fiscal 2022 from $43.9 million in fiscal 2021.
Revenue less repair payments
(non-GAAP)
in this segment increased by $2.5 million to $13.2 million in fiscal 2022 from $10.7 million in fiscal 2021. The increase was primarily on account of an increase in revenue from existing clients by $1.4 million, revenue from new clients of $1.0 million and an appreciation of the pound sterling against the US dollar by an average of 4.6% in fiscal 2022 as compared to the average exchange rate in fiscal 2021.Fiscal 2021 Compared to Fiscal 2020
For a discussion of our segment revenue in fiscal 2021 compared to fiscal 2020, please see “Part I — Item 5. Operating and Financial Review and Prospects — Results by Reportable Segment — WNS Auto Claims BPM — Segment Revenue — Fiscal 2021 Compared to Fiscal 2020” contained in our Annual Report on Form
20-F
for fiscal 2021 filed with the SEC on May 14, 2021.105
Segment Operating Profit
Fiscal 2022 Compared to Fiscal 2021
The segment reported an operating loss of $2.9 million in fiscal 2022 as compared to an operating loss of $2.6 million in fiscal 2021. The higher segment operating loss recorded in fiscal 2022 was primarily due to higher cost of revenue (excluding payments to repair centers), higher general and administrative expenses, and higher foreign exchange loss, partially offset by lower selling and marketing expenses.
Our cost of revenue (excluding payments to repair centers) increased by $2.4 million to $12.4 million in fiscal 2022 from $10.0 million in fiscal 2021. The increase in cost of revenue (excluding payments made to repair centers) was primarily on account of an increase in our employee costs by $2.7 million, partially offset by a decrease in facilities costs by $0.4 million
Our other costs include selling and marketing expenses, general and administrative expenses, and foreign exchange loss or gain. Our other costs increased by $0.4 million to $3.7 million in fiscal 2022 from $3.2 million in fiscal 2021, primarily due to, an increase in general and administrative expenses by $0.3 million to $3.4 million in fiscal 2022 from $3.1 million in fiscal 2021, an increase in foreign exchange losses by $0.2 million.
Fiscal 2021 Compared to Fiscal 2020
For a discussion of our segment operating profit in fiscal 2021 compared to fiscal 2020, please see “Part I — Item 5. Operating and Financial Review and Prospects — Results by Reportable Segment — WNS Auto Claims BPM — Segment Operating Profit — Fiscal 2021 Compared to Fiscal 2020” contained in our Annual Report on Form
20-F
for fiscal 2021 filed with the SEC on May 14, 2021.Segment Profit
Fiscal 2022 Compared to Fiscal 2021
The segment reported a loss of $1.9 million in fiscal 2022 as compared to a loss of $2.4 million in fiscal 2021. This was primarily attributable to lower income tax expense, and higher other income, net in fiscal 2022 of $0.7 million as compared to $0.6 million in fiscal 2021, partially offset by higher segmental operating losses.
Fiscal 2021 Compared to Fiscal 2020
For a discussion of our segment profit in fiscal 2021 compared to fiscal 2020, please see “Part I — Item 5. Operating and Financial Review and Prospects — Results by Reportable Segment — WNS Auto Claims BPM — Segment Profit — Fiscal 2021 Compared to Fiscal 2020” contained in our Annual Report on Form
20-F
for fiscal 2021 filed with the SEC on May 14, 2021.106
Tax Assessment Orders
Transfer pricing regulations to which we are subject require that any international transaction among the WNS group enterprises be on
arm’s-length
terms. We believe that the international transactions among the WNS group enterprises are onarm’s-length
terms. If, however, the applicable tax authorities determine that the transactions among the WNS group enterprises do not meetarm’s-length
criteria, we may incur increased tax liability, including accrued interest and penalties. This would cause our tax expense to increase, possibly materially, thereby reducing our profitability and cash flows. We have signed an advance pricing agreement with the Government of India providing for the agreement on transfer pricing matters over certain transactions covered thereunder for a period of five years starting from April 2013 which has been renewed on similar terms for another five years starting from April 2018. The applicable tax authorities may also disallow deductions or tax holiday benefits claimed by us and assess additional taxable income on us in connection with their review of our tax returns.From time to time, we receive orders of assessment from the Indian tax authorities assessing additional taxable income on us and/or our subsidiaries in connection with their review of our tax returns. We currently have orders of assessment for fiscal 2003 through fiscal 2018 pending before various appellate authorities. These orders assess additional taxable income that could in the aggregate give rise to an estimated1,867.0 million ($24.6 million based on the exchange rate on March 31, 2022) in additional taxes, including interest of470.9 million ($6.2 million based on the exchange rate on March 31, 2022).
₹
₹
107
The following sets forth the details of these orders of assessment:
Entity | Tax year(s) | Amount demanded (including interest) | Interest on amount Demanded | |||||||||||||||||
( ₹ and US dollars in millions) | ||||||||||||||||||||
Permanent establishment of WNS North America Inc (“WNS NA Inc”) in India | Fiscal 2003 | ₹ | 0.1 | $ | (0.1 | ) (1) | ₹ | 0.1 | $ | (0.1 | ) (1) | |||||||||
Permanent establishment of WNS NA Inc and WNS Global Services UK Limited (“WNS UK”) in India | Fiscal 2004 | ₹ | 8.1 | $ | (0.1 | ) (1) | ₹ | 2.2 | $ | (0.1 | ) (1) | |||||||||
Permanent establishment of WNS NA Inc and WNS UK in India | Fiscal 2005 | ₹ | 4.1 | $ | (0.1 | ) (1) | ₹ | 1.2 | $ | (0.1 | ) (1) | |||||||||
WNS Global Services Private Limited (“WNS Global”) | Fiscal 2006 | ₹ | 29.8 | $ | (0.4 | ) (1) | ₹ | 7.7 | $ | (0.1 | ) (1) | |||||||||
Permanent establishment of WNS NA Inc and WNS UK in India | Fiscal 2006 | ₹ | 13.2 | $ | (0.2 | ) (1) | ₹ | 5.6 | $ | (0.1 | ) (1) | |||||||||
Permanent establishment of WNS NA Inc. and WNS UK in India | Fiscal 2007 | ₹ | 23.1 | $ | (0.3 | ) (1) | ₹ | 5.4 | $ | (0.1 | ) (1) | |||||||||
WNS Global | Fiscal 2009 | ₹ | 55.2 | $ | (0.7 | ) (1) | ₹ | — | $ | — | ||||||||||
WNS Business Consulting Services Private Limited (“WNS BCS”) | Fiscal 2010 | ₹ | 1.0 | $ | (0.1 | ) (1) | ₹ | — | $ | — | ||||||||||
Permanent establishment of WNS NA Inc in India | Fiscal 2011 | ₹ | 31.0 | $ | (0.4 | ) (1) | ₹ | 8.2 | $ | (0.1 | ) (1) | |||||||||
WNS Global | Fiscal 2015 | ₹ | 258.6 | $ | (3.4 | ) (1) | ₹ | 94.9 | $ | (1.3 | ) (1) | |||||||||
WNS Global | Fiscal 2016 | ₹ | 908.4 | $ | (11.9 | ) (1) | ₹ | 345.6 | $ | (4.2 | ) (1) | |||||||||
WNS Global | Fiscal 2017 | ₹ | 286.1 | $ | (3.7 | ) (1) | ₹ | — | $ | — | ||||||||||
WNS Global | Fiscal 2018 | ₹ | 248.3 | $ | (3.2 | ) (1) | ₹ | — | $ | — | ||||||||||
Total | ₹ | 1,867.0 | $ | (24.6 | ) (1) | ₹ | 470.9 | $ | (6.3 | ) (1) | ||||||||||
Note:
| (1) | Based on the exchange rate as at March 31, 2022. |
The aforementioned orders of assessment allege that the transfer prices we applied to certain of the international transactions between WNS Global or WNS BCS (each of which is one of our Indian subsidiaries), as the case may be, and our other wholly-owned subsidiaries named above were not on774.3 million ($10.2 million based on the exchange rate on March 31, 2022) primarily on account of the Indian tax authorities’ denying the
arm’s-length
terms, disallow a tax holiday benefit claimed by us, deny the set off of brought forward business losses and unabsorbed depreciation and disallow certain expenses claimed as tax deductible by WNS Global or WNS BCS, as the case may be. As at March 31, 2022, we have provided a tax reserve of₹
set-off
of brought forward business losses and unabsorbed depreciation. We have appealed against these orders of assessment before higher appellate authorities.108
In addition, we currently have orders of assessment pertaining to similar issues that have been decided in our favor by appellate authorities, vacating tax demands of5,435.2 million ($71.7 million based on the exchange rate on March 31, 2022) in additional taxes, including interest of1,931.3 million ($25.5 million based on the exchange rate on March 31, 2022). The income tax authorities have filed or may file appeals against these orders at higher appellate authorities.
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₹
In case of disputes, the Indian tax authorities may require us to deposit with them all or a portion of the disputed amounts pending resolution of the matters on appeal. Any amount paid by us as deposits will be refunded to us with interest if we succeed in our appeals. We have deposited898.1 million ($11.8 million based on the exchange rate on March 31, 2022) of the disputed amount with the tax authorities and may be required to deposit the remaining portion of the disputed amount with the tax authorities pending final resolution of the respective matters.
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As at March 31, 2022, corporate tax returns for fiscal year 2019 and thereafter remain subject to examination by tax authorities in India.
After consultation with our Indian tax advisors and based on the facts of these cases, legal opinions from counsel on certain matters, the nature of the tax authorities’ disallowances and the orders from appellate authorities deciding similar issues in our favor in respect of assessment orders for earlier fiscal years, we believe these orders are unlikely to be sustained at the higher appellate authorities and we intend to vigorously dispute the orders of assessment.
In 2021, we received an assessment order from the Indian service tax authority, demanding payment of148.9 million ($2.0 million based on the exchange rate on March 31, 2022) towards service
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