SEC Filings

6-K
WNS (HOLDINGS) LTD filed this Form 6-K on 08/06/2018
Entire Document
 


Table of Contents

General and Administrative Expenses

Our general and administrative expenses comprise primarily employee costs for senior management and other support personnel, travel expenses, legal and professional fees, share-based compensation expense and other general expenses not related to cost of revenue and selling and marketing.

Foreign Exchange Loss / (Gain), Net

Foreign exchange gains or losses, 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.

Amortization of Intangible Assets

Amortization of intangible assets is primarily associated with our acquisitions of Aviva Global in July 2008 (included up to November 2016), Fusion in June 2012, Value Edge and its subsidiaries in June 2016, Denali in January 2017, HealthHelp in March 2017 and the acquisition of a customer contract from Telkom SA SOC LIMITED (“Telkom”) in May 2015.

Other Income, Net

Other income, net comprises primarily interest income, income from investments, gain or loss on sale of assets and other miscellaneous expenses.

Finance Expense, Net

Finance expense, net 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.

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:

 

     June 30,
2018
     March 31,
2018
     December 31,
2017
     September 31,
2017
     June 30,
2017
     March 31,
2017
 

Total head count(1)

     38,227        36,540        35,657        35,121        35,783        34,547  

Built up seats(2)

     31,794        30,390        29,583        28,541        28,932        28,008  

Used seats(2)

     22,990        22,550        22,467        22,326        22,331        20,795  

Seat utilization rate(3)

     1.20        1.20        1.22        1.23        1.24        1.21  

Notes:

 

(1)

Commencing fiscal 2018, we are including in our disclosed total head count the number of apprentices employed under the India government scheme, National Employability Enhancement Mission, pursuant to which apprentices undergo a three to 36 month apprenticeship to enhance their employability. There is no guarantee of employment with WNS following the completion of the apprenticeship. Our previously disclosed total head count does not include apprentices. The total head count and seat utilization rate presented for prior periods in the table above have been re-computed to include apprentices for comparative purposes.

(2)

Built up seats refer to the total number of production seats (excluding support functions like Finance, Human Resource, Administration and seats dedicated for business continuity planning) that are set up in any premises. Used seats refer to the number of built up seats that are being used by employees. The remainder would be termed “vacant seats.” The vacant seats would get converted into used seats when we increase headcount.

(3)

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 quarter by two.

Critical Accounting Policies

For a description of our critical accounting policies and estimates, refer to “Part I — Item 5. Operating and Financial Review and Prospects — Critical Accounting Policies” and Note 2 to the consolidated financial statements included in our Annual Report on Form 20-F for the fiscal year ended March 31, 2018, except as mentioned in Note 2 to the unaudited consolidated financial statements contained herein.

 

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