SOURCE: WNS (Holdings) Limited

May 21, 2010 07:51 ET

WNS Announces Fourth Quarter and Full Year Fiscal 2010 Earnings Updates Guidance for Fiscal 2011

Quarterly and Annual Revenue Increases 24.6% and 11.8% Over the Corresponding Period in the Prior Fiscal Year (as Restated); Quarterly and Annual Revenue Less Repair Payments Increases 1.8% and 1.4% Over the Corresponding Period in the Prior Fiscal Year (as Restated)

NEW YORK, NY and MUMBAI, INDIA--(Marketwire - May 21, 2010) - WNS (Holdings) Limited (NYSE: WNS), a leading provider of global business process outsourcing (BPO) services, today announced results for the fiscal fourth quarter and year ended March 31, 2010, and updated its guidance on revenue less repair payments and adjusted net income (ANI) (or net income attributable to WNS shareholders excluding amortization of intangible assets, share-based compensation and gain/loss attributable to non-controlling interest) for fiscal 2011, due to the increased volatility in exchange rates.

Fiscal Q4 2010

Revenue for the fiscal fourth quarter 2010 of $157.6 million represented an increase of 24.6% over the corresponding quarter in the prior fiscal year, while revenue less repair payments at $96.7 million increased 1.8% over the corresponding quarter in the prior fiscal year. The growth in revenue less repair payments largely resulted from the impact of a stronger British Pound (GBP), and increased transaction volumes from new clients. This growth was offset by transaction volume declines in the travel and insurance industries and the second year pricing terms for the Aviva Global Services (AGS) contract.

Net income for the fiscal fourth quarter 2010 was $1.0 million compared to $2.5 million during the corresponding quarter in the prior fiscal year. The net income in the fiscal fourth quarter was impacted primarily by the stronger Indian Rupee (INR), transaction volume declines in the travel and insurance industries, one-time severance costs of $2.1 million associated with changes in senior management, and lower revenues resulting from the second year pricing terms for the AGS contract. This decline was partially offset by tighter cost management and improved scale benefits.

Adjusted net income was $13.3 million, a decline of 2.6% over the corresponding quarter in the prior year. The primary drivers of this decline were similar to those highlighted in the prior paragraph.

"As I discussed on our April 22 call, we are very focused on our strategic initiatives and expanding our client relationships," said Keshav Murugesh, Group Chief Executive Officer. "We have an active sales pipeline and are developing a more client-centric approach to existing work. Along with opportunities we see in developing new service offerings, we will be well-positioned to achieve long-term growth in our top and bottom lines."

WNS recorded a diluted income per ADS of $0.02 for the fiscal fourth quarter 2010. Adjusted diluted net income per ADS (or diluted income attributable to WNS shareholders per ADS excluding amortization of intangible assets, share-based compensation and loss attributable to non-controlling interest) was $0.30 for the quarter.

Fiscal Year 2010

For the fiscal year 2010, WNS achieved revenue of $582.5 million, representing an increase of 11.8% over the prior fiscal year. Revenue less repair payments of $390.5 million increased 1.4% over the prior year. The growth in revenue less repair payments was largely a result of increased revenue from new and existing clients. This growth was offset by the decline in the GBP/USD exchange rate.

Net income for the full year ended March 31, 2010 was $3.7 million compared to $8.2 million in the prior fiscal year. The net income decrease was a result of the full year impact from interest and amortization charges from the AGS acquisition, foreign exchange losses, lower revenue resulting from the second year pricing terms of the AGS contract, one-time severance costs of $2.1 million associated with changes in senior management and lower transaction volumes in the travel and insurance spaces. These were partially offset by improved synergies in operations from our acquisitions, tighter cost management, improved scale benefits and lower interest expense during the second half of the year resulting from WNS's debt payments.

However, adjusted net income was $50.7 million, an increase of 8.6% over fiscal 2009.

Net income in fiscal 2010 compared with fiscal 2009 included higher amortization and share-based compensation charges. Net income and adjusted net income results also reflected $1 million in one-time costs associated with the unwinding of interest rate swaps from a $15 million prepayment WNS made on its term loan in January 2010.

WNS recorded a diluted income per ADS of $0.08 for the fiscal year 2010. Adjusted diluted net income per ADS was $1.15 for the year.

"We expect to have lower interest expense and aim to improve our operating metrics in fiscal 2011. As such, we should continue to generate a strong amount of cash and maintain our adjusted operating margins," said Alok Misra, Group Chief Financial Officer.

Financial Highlights: Fiscal Fourth Quarter Ended March 31, 2010

  • Quarterly revenue of $157.6 million, up 24.6% from the corresponding quarter last year.
  • Quarterly revenue less repair payments of $96.7 million, up 1.8% from the corresponding quarter last year.
  • Quarterly net income of $1.0 million compared to $2.5 million from the corresponding quarter last year.
  • Quarterly adjusted net income (or net income attributable to WNS shareholders excluding amortization of intangible assets, share-based compensation, related fringe benefit taxes and loss attributable to non-controlling interest) of $13.3 million, compared to $13.7 million from the corresponding quarter last year.
  • Quarterly diluted income per ADS of $0.02, compared with $0.06 for the corresponding quarter last year.
  • Quarterly adjusted diluted net income per ADS (or diluted income attributable to WNS shareholders per ADS excluding amortization of intangible assets, share-based compensation, related fringe benefit taxes and loss attributable to non-controlling interest) of $0.30, compared to $0.32 for the corresponding quarter last year.

Financial Highlights: Fiscal Year Ended March 31, 2010

  • Annual revenue of $582.5 million, up 11.8% from the prior fiscal year.
  • Annual revenue less repair payments of $390.5 million, up 1.4% from the prior fiscal year.
  • Annual net income of $3.7 million compared to $8.2 million from the prior fiscal year.
  • Annual adjusted net income (or net income attributable to WNS shareholders excluding amortization of intangible assets, share-based compensation, related fringe benefit taxes and loss attributable to non-controlling interest) of $50.7 million, up 8.6% from the prior fiscal year.
  • Annual diluted income per ADS of $0.08, compared with $0.19 for the prior fiscal year.
  • Annual adjusted diluted net income per ADS (or diluted income attributable to WNS shareholders per ADS excluding amortization of intangible assets, share-based compensation, related fringe benefit taxes and loss attributable to non-controlling interest) of $1.15, up from $1.08 for the prior fiscal year.

Reconciliations of non-GAAP financial measures to GAAP operating results as also the effects of the financial statement adjustments on WNS's previously reported consolidated financial statements are included at the end of this release.

Restatement of Audited Financial Statements

On April 22, 2010, WNS announced that it had, in consultation with its Audit Committee, concluded that corrections to its prior accounting treatment for referral fees earned from garages and, revenues and costs on completed but unbilled repairs, in its Auto Claims BPO segment (the AutoClaims business) are required.

The financial information included in this press release reflects these accounting changes. WNS will restate its audited financial statements for the years ended March 31, 2009 and 2008 (as well as selected financial information for the years ended March 31, 2007 and 2006 and the quarterly information for fiscal 2010 and 2009) to reflect these accounting changes and intends to include the restated financial information in its Annual Report on Form 20-F for fiscal 2010. All prior period financial information contained in this press release gives effect to the restatement of WNS consolidated financials.

Based on its evaluation, management has concluded that as of March 31, 2010, WNS's disclosure control and procedures and internal control over financial reporting were not effective due to a material weakness identified in the design and operating effectiveness of the Company's controls over the recognition and accrual of repair payments to garages and the related fees in its Auto Claims BPO segment. In order to remediate the identified material weakness, management intends to augment its existing US GAAP expertise and strengthen its monitoring controls and documentation for the revenue recognition process in the Auto Claims BPO segment.

Fiscal 2011 Guidance

WNS is updating its guidance for the fiscal year ending March 31, 2011 provided on April 22, 2010 due to the increased volatility in exchange rates:

  • Revenue less repair payments is now expected to be between $353 million and $378 million. This assumes an average GBP to USD exchange rate of 1.45 for the 2011 fiscal year.
  • Adjusted net income (or net income attributable to WNS shareholders excluding amortization of intangible assets, share-based compensation and gain/loss attributable to non-controlling interest) is expected to range between $43 million and $46 million. This assumes an average USD to INR exchange rate of 46.5 for the 2011 fiscal year.

"When we had provided our initial guidance for Fiscal 2011 on 22 April, the prevailing GBP to USD exchange rate was 1.53 whereas it has dropped to 1.45 in the last few days. Our updated guidance reflects this depreciation of the British Pound on the revenue while the impact on the ANI is partly offset by the depreciation in the Indian Rupee," continued Misra. "While we see these headwinds, the BPO market is ripe with opportunity and WNS is in a solid position to take advantage of the growth opportunities within the space."

Conference Call
WNS will host a conference call on May 21, 2010 at 8:00 am (EDT) to discuss the company's quarterly results.

To participate in the call, please use the following details: + 1-866-543-6407; international dial-in +1-617-213-8898; participant passcode 82880611. A replay will be available for one week following the call at + 1-888-286-8010; international dial-in +1-617-801-6888; passcode 63770434, as well as on the WNS website, www.wns.com, beginning two hours after the end of the call.

About WNS
WNS (Holdings) Limited (NYSE: WNS) is a leading global business process outsourcing company. Deep industry and business process knowledge, a partnership approach, comprehensive service offering and a proven track record enables WNS to deliver business value to some of the leading companies in the world. WNS is passionate about building a market-leading company valued by our clients, employees, business partners, investors and communities. For more information, visit www.wns.com.

About Non-GAAP Financial Measures
For financial statement reporting purposes, the company has two reportable segments: WNS Global BPO and WNS Auto Claims BPO. In the auto claims segment, which includes WNS Assistance and Chang Limited, WNS provides claims-handling and accident-management services, in which it arranges for automobile repairs through a network of third-party repair centers. In its accident-management services, WNS acts as the principal in dealings with the third-party repair centers and clients.

In order to provide accident-management services, the Company arranges for the repair through a network of repair centers. Repair costs are invoiced to customers. Amounts invoiced to customers for repair costs paid to the automobile repair centers are recognized as revenue. The Company uses revenue less repair payments for "fault" repairs as a primary measure to allocate resources and measure segment performance. Revenue less repair payments is a non-GAAP measure which is calculated as revenue less payments to repair centers. For "non fault repairs," revenue including repair payments is used as a primary measure. As the Company provides a consolidated suite of accident management services including credit hire and credit repair for its "Non fault" repairs business, the Company believes that measurement of that line of business has to be on a basis that includes repair payments in revenue.

The Company believes that the presentation of this non-GAAP measure in the segmental information provides useful information for investors regarding the segment's financial performance. The presentation of this non-GAAP information is not meant to be considered in isolation or as a substitute for the Company's financial results prepared in accordance with US GAAP.

Safe Harbor Statement under the provisions of the United States Private Securities Litigation Reform Act of 1995

These forward-looking statements 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, industry growth potential, expansion opportunities and expectations concerning our future financial performance and growth potential, including our fiscal 2011 guidance and future profitability; our ability to generate free cash; and our future operations. We caution you that reliance on any forward-looking statement involves risks and uncertainties, and that although we believe that the assumptions on which our forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate, and, as a result, the forward-looking statements based on those assumptions could be materially incorrect. These factors include but are not limited to worldwide economic and business conditions; political or economic instability in the jurisdictions where we have operations; regulatory, legislative and judicial developments; our ability to attract and retain clients technological innovation; telecommunications or technology disruptions; future regulatory actions and conditions in our operating areas; our dependence on a limited number of clients in a limited number of industries; our ability to expand our business or effectively manage growth; our ability to hire and retain enough sufficiently trained employees to support our operations; negative public reaction in the US or the UK to offshore outsourcing; increasing competition in the BPO industry; our ability to successfully grow our revenue, expand our service offerings and market share and achieve accretive benefits from our acquisition of Aviva Global Services Singapore Pte. Ltd. (which we have renamed as WNS Customer Solutions (Singapore) Private Limited following our acquisition), or Aviva Global, and our master services agreement with Aviva Global Services (Management Services) Private Limited; our ability to successfully consummate strategic acquisitions; the implications of the accounting changes and restatement of our financial statements discussed in this press release for WNS's reporting with the U.S. Securities and Exchange Commission (SEC) (including the timing of that reporting), and any adverse developments in existing legal proceedings or the initiation of new legal proceedings; and volatility of WNS's ADS price. These and other factors are more fully discussed in our annual report on Form 20-F for the fiscal year ended March 31, 2009 filed with the SEC which is available at www.sec.gov. 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.

References to "$" and "USD" refer to the United States dollars, the legal currency of the United States; references to "GBP" refer to the British Pound, the legal currency of Britain; and references to "INR" refer to Indian Rupees, the legal currency of India.

                            WNS HOLDINGS LIMITED
                      CONSOLIDATED STATEMENTS OF INCOME
     (Unaudited, amounts in thousands, except share and per share data)

                                  Three months ended March 31,
                    ------------------------------------------------------
                         2010                        2009
                    ------------  ----------------------------------------
                                                                    As
                                                                previously
                                   As restated    Adjustments    reported
                                  ----------------------------------------

  Revenue           $    157,552  $    126,433  $       6,080  $   132,513
  Cost of
   revenue (a)           123,480        93,678          6,209       99,887
                    ------------------------------------------------------
  Gross profit            34,072        32,755           (129)      32,626
  Operating
   expenses:
  Selling, general
   and
   administrative
   expenses (a)           22,783        17,119             --       17,119
  Amortization of
   intangible
   assets                  8,053         8,012             --        8,012
                    ------------------------------------------------------

  Operating income         3,236         7,624           (129)       7,495
  Other expenses
   (income), net            (777)         (262)            --         (262)
  Interest expenses        2,757         4,460             --        4,460
                    ------------------------------------------------------
  Income before
   income taxes            1,256         3,426           (129)       3,297
  Provision for
   income taxes              410           994            (36)         958
                    ------------------------------------------------------
  Consolidated net
   income                    846         2,432            (93)       2,339
  Less: Net loss
   attributable to
   noncontrolling
   interest                (179)          (107)            --         (107)
                    ------------------------------------------------------
  Net income
   attributable to
   WNS (Holdings)
   Limited
   shareholders     $      1,025  $      2,539  $         (93) $     2,446
                    ======================================================

  Earnings per
   share of
   ordinary share
  Basic             $       0.02  $       0.06  $        0.00  $      0.06
  Diluted           $       0.02  $       0.06  $        0.00  $      0.06

  Basic weighted
   average ordinary
   shares
   outstanding        43,504,631    42,591,278             --   42,591,278
  Diluted weighted
   average ordinary
   shares
   outstanding        44,615,440    42,793,875             --   42,793,875

  Note:
  (a) Includes the
   following share-
   based
   compensation
   amounts:
  Cost of revenue   $        963  $        967  $          --  $       967
  Selling, general
   and
   administrative
   expenses         $      3,446  $      2,426  $          --  $     2,426


                                      Year ended March 31,
                    ------------------------------------------------------
                        2010                        2009
                    -----------  -----------------------------------------
                                                                    As
                                                                previously
                                  As restated    Adjustments     reported
                                 -----------------------------------------

  Revenue           $   582,461  $    520,901  $      18,363  $    539,264
  Cost of revenue
   (a)                  439,248       391,808         18,508       410,316
                    ------------------------------------------------------
  Gross profit          143,213       129,093           (145)      128,948
  Operating
   expenses:
  Selling, general
   and
   administrative
   expenses (a)          86,231        75,522             --        75,522
  Amortization of
   intangible
   assets                32,422        24,912             --        24,912
                    ------------------------------------------------------

  Operating income       24,560        28,659           (145)       28,514
  Other expenses
   (income), net          7,052         5,639             --         5,639
  Interest expenses      13,823        11,782             --        11,782
                    ------------------------------------------------------ 
  Income before
   income taxes           3,685        11,238           (145)       11,093
  Provision for
   income taxes             998         3,343            (41)        3,302
                    ------------------------------------------------------
  Consolidated net
   income                 2,687         7,895           (104)        7,791
  Less: Net loss
   attributable to
   noncontrolling
   interest              (1,023)         (287)            --          (287)
                    ------------------------------------------------------
  Net income
   attributable to
   WNS (Holdings)
   Limited
   shareholders     $     3,710  $      8,182  $        (104) $      8,078
                    ======================================================

  Earnings per
   share of
   ordinary share
  Basic             $      0.09  $       0.19  $        0.00  $       0.19
  Diluted           $      0.08  $       0.19  $        0.00  $       0.19

  Basic weighted
   average ordinary
   shares
   outstanding       43,093,316    42,520,404             --    42,520,404
  Diluted weighted
   average ordinary
   shares
   outstanding       44,174,128    43,108,599             --    43,108,599

  Note:
  (a) Includes the
   following share-
   based
   compensation
   amounts:
  Cost of revenue   $     3,730  $      3,647  $          --  $      3,647
  Selling, general
   and
   administrative
   expenses         $    11,397  $      9,775  $          --  $      9,775





Reconciliation of revenue less repair payments (non-GAAP) to revenue (GAAP)


                                                      Amounts in thousands

                                    Three months ended March 31,
                        --------------------------------------------------
                           2010                      2009
                        ---------  ---------------------------------------
                                                                    As
                                                                previously
                                   As restated    Adjustments    reported
                                   ---------------------------------------
Revenue less repair
 payments (Non-GAAP)    $  96,731  $    95,010  $         533  $    95,543
Add: Payments to repair
 centers                   60,821       31,423          5,547       36,970
                        --------------------------------------------------
Revenue (GAAP)          $ 157,552  $   126,433  $       6,080  $   132,513
                        ==================================================


                                        Year ended March 31,
                        --------------------------------------------------
                           2010                      2009
                        ---------  ---------------------------------------
                                                                    As
                                        As                      previously
                                     restated     Adjustments    reported
                                   ---------------------------------------
Revenue less repair
 payments (Non-GAAP)    $ 390,538  $   385,027  $       1,346  $   386,373
Add: Payments to repair
 centers                  191,923      135,874         17,017      152,891
                        --------------------------------------------------
Revenue (GAAP)          $ 582,461  $   520,901  $      18,363  $   539,264
                        ==================================================




Reconciliation of cost of revenue (non-GAAP to GAAP)

                                                      Amounts in thousands

                                    Three months ended March 31,
                        --------------------------------------------------
                           2010                      2009
                        --------- ----------------------------------------
                                                                    As
                                                                previously
                                   As restated    Adjustments    reported
                                  ----------------------------------------
Cost of revenue
 (excluding share-based
 compensation expense and
 payment to repair
 centers) (Non-GAAP)    $  61,696  $    61,288  $         662  $    61,950
Add: Payments to repair
 centers                   60,821       31,423          5,547       36,970
Add: Share-based
 compensation expense         963          967             --          967
                        --------------------------------------------------
Cost of revenue (GAAP)  $ 123,480  $    93,678  $       6,209  $    99,887
                        ==================================================

                                          Year ended March 31,
                        --------------------------------------------------
                          2010                     2009
                        ---------   --------------------------------------
                                                                    As
                                         As                     previously
                                      restated     Adjustments   reported
                                    --------------------------------------
Cost of revenue
 (excluding
 share-based
 compensation expense
 and payment to repair
 centers) (Non-GAAP)    $ 243,595  $   252,287  $       1,491  $   253,778
Add: Payments to repair
 centers                  191,923      135,874         17,017      152,891
Add: Share-based
 compensation expense       3,730        3,647             --        3,647
                        --------------------------------------------------
Cost of revenue (GAAP)  $ 439,248  $   391,808  $      18,508  $   410,316
                        ==================================================


Reconciliation of selling, general and administrative expense (non-GAAP to
GAAP)

                                                      Amounts in thousands

                                    Three months ended March 31,
                        --------------------------------------------------
                           2010                      2009
                        --------  ----------------------------------------
                                                                    As
                                                                previously
                                   As restated    Adjustments    reported
                                  ----------------------------------------
Selling, general and
 administrative
 expenses (excluding
 share-based
 compensation expense
 and related FBT(1))
 (Non-GAAP)             $  19,337  $    14,862  $          --  $    14,862
Add: Share-based
 compensation expense       3,446        2,426             --        2,426
Add: Related FBT(1)            --         (169)            --         (169)
                        --------------------------------------------------
Selling, general and
 administrative
 expenses (GAAP)        $  22,783  $    17,119  $          --  $    17,119
                        ==================================================


                                          Year ended March 31,
                        --------------------------------------------------
                           2010                     2009
                        ---------   --------------------------------------
                                                                    As
                                         As                     previously
                                      restated     Adjustments   reported
                                    --------------------------------------
Selling, general and
 administrative
 expenses (excluding
 share-based
 compensation
 expense and related
 FBT(1)) (Non-GAAP)     $  74,375  $    65,301  $          --  $    65,301
Add: Share-based
 compensation expense      11,397        9,775             --        9,775
Add: Related FBT(1)           459          446             --          446
                        --------------------------------------------------
Selling, general and
 administrative
 expenses (GAAP)        $  86,231  $    75,522  $          --  $    75,522
                        ==================================================




Reconciliation of operating income (non-GAAP to GAAP)

                                                      Amounts in thousands

                                    Three months ended March 31,
                        --------------------------------------------------
                           2010                      2009
                        --------  ----------------------------------------
                                                                    As
                                                                previously
                                   As restated    Adjustments    reported
                                  ----------------------------------------
Adjusted operating income
 (excluding amortization
 of intangible assets,
 share-based
 compensation, and
 related FBT(1)) (Non-
 GAAP)                  $  15,698  $    18,860  $        (129) $    18,731
Less: Amortization of
 intangible assets          8,053        8,012             --        8,012
Less: Share-based
 compensation expense       4,409        3,393             --        3,393
Less: Related FBT(1)           --         (169)            --         (169)
                        --------------------------------------------------
Operating income (GAAP) $   3,236  $     7,624  $        (129) $     7,495
                        ==================================================


                                          Year ended March 31,
                        --------------------------------------------------
                           2010                     2009
                        ---------   --------------------------------------
                                                                    As
                                         As                     previously
                                      restated     Adjustments   reported
                                    --------------------------------------
Adjusted operating income
 (excluding amortization
 of intangible assets,
 share-based
 compensation, and
 related FBT(1))
 (Non-GAAP)             $  72,568  $    67,439  $        (145) $    67,294
Less: Amortization of
 intangible assets         32,422       24,912             --       24,912
Less: Share-based
 compensation expense      15,127       13,422             --       13,422
Less: Related FBT(1)          459          446             --          446
                        --------------------------------------------------
Operating income (GAAP) $  24,560  $    28,659  $        (145) $    28,514
                        ==================================================

1. FBT means the fringe benefit taxes on options and restricted share units
   granted to employees under the WNS 2002 Stock Incentive Plan and the WNS
   2006 Incentive Award Plan (as applicable) payable by WNS to the
   Government of India. In August 2009, the Government of India passed the
   Finance (No.2) Bill, 2009 which withdrew the levy of FBT.



Reconciliation of net income attributable to WNS shareholders (non-GAAP to
GAAP)

                                                      Amounts in thousands

                                    Three months ended March 31,
                        --------------------------------------------------
                           2010                      2009
                        --------  ----------------------------------------
                                                                    As
                                                                previously
                                   As restated    Adjustments    reported
                                  ----------------------------------------
Adjusted net income
 (excluding
 amortization of
 intangible assets,
 share-based
 compensation
 expense, related
 FBT(1) and loss
 attributable to
 noncontrolling
 interest)
 (Non-GAAP)             $  13,308  $    13,668  $         (93) $    13,575
Less: Amortization
 of intangible assets       8,053        8,012             --        8,012
Less: Share-based
 compensation expense       4,409        3,393             --        3,393
Less: Related FBT(1)           --         (169)            --         (169)
Add: Loss attributable
 to noncontrolling
 interest                     179          107             --          107
                        --------------------------------------------------
Net income
 attributable to WNS
 (Holdings) Limited
 shareholders (GAAP)    $   1,025  $     2,539  $         (93) $     2,446
                        ==================================================


                                          Year ended March 31,
                        --------------------------------------------------
                           2010                     2009
                        ---------   --------------------------------------
                                                                    As
                                         As                     previously
                                      restated     Adjustments   reported
                                    --------------------------------------
Adjusted net income
 (excluding
 amortization of
 intangible assets,
 share-based
 compensation
 expense, related
 FBT(1) and loss
 attributable to
 noncontrolling
 interest)
 (Non-GAAP)             $   50,695  $    46,675  $        (104) $    46,571
Less: Amortization of
 intangible assets          32,422       24,912             --       24,912
Less: Share-based
 compensation expense       15,127       13,422             --       13,422
Less: Related FBT(1)           459          446             --          446
Add: Loss attributable
 to noncontrolling
 interest                    1,023          287             --          287
                        ---------------------------------------------------
Net income
 attributable
 to WNS
 (Holdings) Limited
 shareholders (GAAP)    $    3,710  $     8,182  $        (104) $     8,078
                        ===================================================

1. FBT means the fringe benefit taxes on options and restricted share units
   granted to employees under the WNS 2002 Stock Incentive Plan and the WNS
   2006 Incentive Award Plan (as applicable) payable by WNS to the
   Government of India. In August 2009, the Government of India passed the
   Finance (No.2) Bill, 2009 which withdrew the levy of FBT.




Reconciliation of basic income per ADS (non-GAAP to GAAP)

                                                      Amounts in thousands

                                    Three months ended March 31,
                        --------------------------------------------------
                           2010                      2009
                        --------  ----------------------------------------
                                                                    As
                                                                previously
                                   As restated    Adjustments    reported
                                  ----------------------------------------
Basic adjusted net
 income per ADS
 (excluding
 amortization of
 intangible
 assets, share-based
 compensation
 expense, related
 FBT(1) and loss
 attributable to
 noncontrolling
 interest)
 (Non-GAAP)             $    0.31  $      0.32  $        0.00  $      0.32
Less: Adjustments for
 amortization of
 intangible
 assets, share-based
 compensation
 expense, related
 FBT(1) and loss
 attributable to
 noncontrolling
 interest                    0.29         0.26             --         0.26
                        --------------------------------------------------
Basic income per ADS
 (GAAP)                 $    0.02  $      0.06  $        0.00  $      0.06
                        ==================================================


                                          Year ended March 31,
                        --------------------------------------------------
                           2010                     2009
                        ---------   --------------------------------------
                                                                    As
                                         As                     previously
                                      restated     Adjustments   reported
                                    --------------------------------------
Basic adjusted net
 income per ADS
 (excluding
 amortization of
 intangible
 assets, share-based
 compensation
 expense, related
 FBT(1) and loss
 attributable to
 noncontrolling
 interest)
 (Non-GAAP)             $    1.18  $      1.10           0.00  $      1.10
Less: Adjustments for
 amortization of
 intangible
 assets, share-based
 compensation
 expense, related
 FBT(1) and loss
 attributable to
 noncontrolling
 interest                    1.09         0.91             --         0.91
                        --------------------------------------------------
Basic income per ADS
 (GAAP)                 $    0.09  $      0.19           0.00  $      0.19
                        ==================================================




Reconciliation of diluted income per ADS (non-GAAP to GAAP)

                                                      Amounts in thousands

                                    Three months ended March 31,
                        --------------------------------------------------
                           2010                      2009
                        --------  ----------------------------------------
                                                                    As
                                                                previously
                                   As restated    Adjustments    reported
                                  ----------------------------------------
Diluted adjusted net
 income per ADS
 (excluding
 amortization
 of intangible
 assets, share-based
 compensation
 expense, related
 FBT(1) and loss
 attributable to
 noncontrolling
 interest)
 (Non-GAAP)             $     0.30  $      0.32  $        0.00  $      0.32
Less: Adjustments for
 amortization of
 intangible assets,
 share-based
 compensation
 expense, related
 FBT(1) and loss
 attributable to
 noncontrolling
 interest                     0.28         0.26             --         0.26
                        ---------------------------------------------------
Diluted income per ADS
 (GAAP)                 $     0.02  $      0.06  $        0.00  $      0.06
                        ===================================================


                                          Year ended March 31,
                        --------------------------------------------------
                           2010                     2009
                        ---------   --------------------------------------
                                                                    As
                                         As                     previously
                                      restated     Adjustments   reported
                                    --------------------------------------
Diluted adjusted net                                                        
 income per ADS
 (excluding
 amortization
 of intangible
 assets, share-based
 compensation
 expense, related
 FBT(1) and loss
 attributable to
 noncontrolling
 interest)
 (Non-GAAP)             $    1.15  $      1.08           0.00  $      1.08
Less: Adjustments for
 amortization of
 intangible assets,
 share-based
 compensation
 expense, related
 FBT(1) and loss
 attributable to
 noncontrolling
 interest                    1.07         0.89             --         0.89
                        --------------------------------------------------
Diluted income per ADS
 (GAAP)                 $    0.08  $      0.19           0.00  $      0.19
                        ==================================================

1. FBT means the fringe benefit taxes on options and restricted share units
   granted to employees under the WNS 2002 Stock Incentive Plan and the WNS
   2006 Incentive Award Plan (as applicable) payable by WNS to the
   Government of India. In August 2009, the Government of India passed the
   Finance (No.2) Bill, 2009 which withdrew the levy of FBT.




                            WNS HOLDINGS LIMITED
                         CONSOLIDATED BALANCE SHEET
     (Unaudited, amounts in thousands, except share and per share data)

                                         As at March 31,
                       ----------------------------------------------------
                         2010                      2009
                       -------- -------------------------------------------
                                                                   As
                                                               previously
                                  As restated   Adjustments     reported
                       ----------------------------------------------------

ASSETS
Current assets:
  Cash and cash
   equivalents         $  32,311  $    38,931  $          --  $      38,931
  Bank deposits and
   marketable
   securities                 45        8,925             --          8,925
  Accounts receivable,
   net                    84,974       71,183         (9,926)        61,257
  Accounts receivable
   -- related parties        739           64             --             64
  Funds held for
   clients                11,372        5,379             --          5,379
  Employee receivables     1,526          745             --            745
  Prepaid expenses         2,101        2,082             --          2,082
  Prepaid income taxes     5,602        5,768             --          5,768
  Deferred tax assets      1,959        1,718             25          1,743
  Other current assets    36,308       38,647             --         38,647
                       ----------------------------------------------------

    Total current
     assets              176,937      173,442         (9,901)       163,541
Goodwill                  90,662       81,679             --         81,679
Intangible assets, net   188,079      217,372             --        217,372
Property and equipment,
 net                      51,700       55,992             --         55,992
Other assets              10,242       11,449             --         11,449
Deposits                   7,086        6,309             --          6,309
Deferred tax assets       25,184       15,584             --         15,584
                       ----------------------------------------------------

                       ----------------------------------------------------
TOTAL ASSETS           $ 549,890  $   561,827  $      (9,901) $     551,926
                       ====================================================


LIABILITIES AND EQUITY
Current liabilities:
  Accounts payable     $  27,900  $    30,879  $          --  $      30,879
  Accounts payable --
   related parties            --           42             --             42
  Current portion of
   long term debt         40,000       45,000             --         45,000
  Short term line of
   credit                     --        4,331             --          4,331
  Accrued employee cost   30,977       23,754             --         23,754
  Deferred revenue         4,891        5,583             --          5,583
  Deferred tax
   liabilities                --           27            (27)            --
  Income taxes payable     2,550        3,995             --          3,995
  Other current
   liabilities            67,585       63,870         (9,744)        54,126
                          -------------------------------------------------

    Total current
     liabilities         173,903      177,481         (9,771)       167,710
Long term debt            95,000      155,000             --        155,000
Deferred revenue           3,515        3,561             --          3,561
Other liabilities          3,727        1,967             --          1,967
Accrued pension
 liability                 3,921        2,570             --          2,570
Deferred tax
 liabilities               8,343        9,946             --          9,946
Derivative contracts       7,600       23,163             --         23,163
                       ----------------------------------------------------

TOTAL LIABILITIES        296,009      373,688         (9,771)       363,917




                            WNS HOLDINGS LIMITED
                         CONSOLIDATED BALANCE SHEET
     (Unaudited, amounts in thousands, except share and per share data)

  Commitments and
   contingencies
Equity:
WNS (Holdings) Limited
 shareholders' equity:
Ordinary shares, $0.16 (10
 pence) par value,
 authorized:
50,000,000 shares; Issued
 and outstanding:
 43,743,953 and 42,607,403
 shares, respectively           6,848        6,667          --       6,667
Additional paid-in-capital    203,531      184,122          --     184,122
Retained earnings              50,797       47,087        (170)     46,917
Accumulated other
 comprehensive loss            (7,573)     (49,750)         40     (49,710)
                            ----------------------------------------------
  WNS (Holdings) Limited
   shareholders' equity       253,603      188,126        (130)    187,996
Noncontrolling interest           278           13          --          13
                            ----------------------------------------------

    Total equity              253,881      188,139        (130)    188,009
                            ----------------------------------------------

                            ----------------------------------------------
  TOTAL LIABILITIES AND
   EQUITY                   $ 549,890   $  561,827  $   (9,901) $  551,926
                            ==============================================




                           WNS (HOLDINGS) LIMITED
               CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                      (Unaudited, amounts in thousands)


                                        Year ended March 31,
                       ----------------------------------------------------
                            2010                       2009
                       ------------ ---------------------------------------
                                                                     As
                                         As                      previously
                                      restated    Adjustments     reported
                                    ---------------------------------------
Cash flows from
 operating activities
    Net cash provided
     by operating
     activities        $    54,275  $    62,879  $         18  $    62,897

Cash flows from
 investing activities
  Acquisitions, net of
   cash received            (1,461)    (290,994)           --     (290,994)
  Facility and
   property cost           (13,257)     (22,693)           --      (22,693)
  Proceeds from sale
   of assets, net              660          342            --          342
  Marketable
   securities and
   deposits sold
   (purchased), net          9,548       (2,273)           --       (2,273)
                       ---------------------------------------------------
    Net cash used in
     investing
     activities             (4,510)    (315,618)           --     (315,618)
                       ---------------------------------------------------


Cash flows from
 financing activities
  Proceeds from
   exercise of stock
   options                   3,933          988            --          988
  Excess tax benefits
   from share-based
   compensation              1,825        2,226            --        2,226
  Proceeds from issue
   of shares by
   subsidiary to non
   controlling
   interest                  1,348          300            --          300
  Repayment of long
   term debt               (65,000)          --            --           --
  Payment of debt
   issuance cost               (87)      (1,197)           --       (1,197)
  Proceeds from long
   term debt                    --      200,000            --      200,000
  Repayment of short                                                        
   term borrowings,
   net                      (4,128)      (2,894)           --       (2,894)
  Principal payments
   under capital
   leases                      (57)        (183)           --         (183)
                       ---------------------------------------------------
    Net cash (used in)
     provided by
     financing
     activities            (62,166)     199,240            --      199,240
                       ---------------------------------------------------

Effect of exchange
 rate changes on cash
 and cash equivalents        5,781      (10,268)          (18)     (10,286)
  Net change in cash
   and cash
   equivalents              (6,620)     (63,767)           --      (63,767)
  Cash and cash
   equivalents at
   beginning of year        38,931      102,698            --      102,698
                       ---------------------------------------------------
  Cash and cash
   equivalents at end
   of year             $    32,311  $    38,931  $         --  $    38,931
                       ===================================================

Contact Information

  • CONTACT:
    Investors:
    Alan Katz
    VP -- Investor Relations
    WNS (Holdings) Limited
    +1 212 599-6960 ext. 241
    Email Contact

    Media:
    Deborah Kops
    Chief Marketing Officer
    WNS (Holdings) Limited
    + 1 703 321-6526
    Email Contact