SecProbe.io

CORRESP
1
filename1.htm

WNS (HOLDINGS) LIMITED

LATHAM
& WATKINS llp

9 Raffles Place

#42-02 Republic Plaza

Singapore 048619

Tel:
+65.6536.1161 Fax: +65.6536.1171

www.lw.com

    FIRM / AFFILIATE OFFICES

Barcelona

New
Jersey

Brussels

New
York

    Chicago

    Northern Virginia

    Frankfurt

    Orange County

March 24,
2008

Hamburg
Hong Kong

Paris

San Diego

    London

    San Francisco

    Los Angeles

    Shanghai

Madrid

Silicon
Valley

    Milan

Singapore

    Moscow

Tokyo

    Munich

Washington,
D.C.

File
No. 041135-0005

VIA EDGAR AND FACSIMILE (202) 772 9210

Securities and Exchange Commission

Division of Corporation Finance

Mail Stop 4561

100 F Street, N.E.

Washington, D.C. 20549

    Attention:

    Kathleen Collins, Accounting Branch Chief

Jennifer Thompson, Division of Corporate Finance

Evan Jacobson, Staff Attorney

David Orlic, Special Counsel

    Re:

    WNS (Holdings) Limited

Form 20-F for the Fiscal Year Ended March 31, 2007 filed June 26, 2007

Form 6-K filed February 8, 2008

File No. 1-32945

Ladies and Gentlemen:

     We are counsel to WNS (Holdings) Limited, a company organized under the laws of Jersey,
Channel Islands (the “Company”).

     On behalf of the Company, set forth below is the Company’s responses to the Staff’s comment
letter dated February 28, 2008. For the Staff’s convenience, the Staff’s comments are set forth in
italics before each response.

Form 20-F for the Fiscal Year Ended March 31, 2007

Item 5. Operating and Financial Review and Prospects, page 35

General

    1.

    Item 5.D. of Form 20-F requires registrants to include in their Operating and Financial
Review and Prospects disclosure a discussion of any known trends, uncertainties, demands,
commitments or events that are reasonably likely to have a material effect on a company’s net
sales or revenues, income from continuing operations, profitability, liquidity or capital
resources, or that would cause reported financial information not necessarily to be indicative
of future operating results or financial condition. See also SEC Release No. 33-6835. Please
tell us what

March 24, 2008

Page 2

LATHAM & WATKINS llp

    consideration you gave to including in this section a specific discussion of
these factors.

    The Company advises the Staff that it has considered the following factors in its
discussion in this section of its annual report on 20-F for the fiscal year ended March 31,
2007 (“Fiscal 2007 20-F”) and identifies the specific discussion of these factors
in the Fiscal 2007 20-F:

    •

    The Company’s share of revenue less repair payments from North America has
grown to 36.8% in fiscal 2007 from 28.3% in fiscal 2005. At the time of the
filing of the Fiscal 2007 20-F, the Company expected this trend to continue on
revenue less repair payments in the future and disclosed this in “—Overview
—Revenue — Revenue by Geography” of this section on page 38 of the Fiscal 2007
20-F.

    •

    In July 2006, the Company entered into a contract with one of its major
clients, British Airways, to replace their prior contract that was due to expire
in March 2007. Under the new contract, the parties agreed to change the basis of
pricing for a portion of the contracted services over a transition period from a
“per full time equivalent basis” to a “per unit transaction basis.” At the time
of the filing of the Fiscal 2007 20-F, the Company believed the change could have
the effect of reducing the amount of revenue that it receives under this contract
for the same level of services, but at the same time, the change would also allow
it to share benefits from increases in efficiency in performing services under
this contract. The Company was unable to ascertain the net effect of the change
in the basis of pricing at the time of the filing of the Fiscal 2007 20-F given
the limited period of providing contracted services under this new contract. In
addition, the effect of the change in the basis of pricing depends on the nature of the services (e.g. their scale and complexity) provided
by the Company under the contract, which may vary from time to time. However, the
Company has disclosed its view of the possible effects of the change in the basis
of pricing in “—Overview — Revenue — Our Contracts” of this section on page 39
of the Fiscal 2007 20-F.

    •

    The Company considers salary levels in India and its ability to efficiently
manage and retain its employees to significantly influence its cost of revenue.
At the time of the filing of the Fiscal 2007 20-F, the Company expected its
employee costs to increase as it continued to increase its headcount to service
additional business and as wages continued to increase in India and disclosed
this in “—Overview — Expenses — Cost of Revenue” of this section on page 40 of
the Fiscal 2007 20-F.

    •

    The Company’s selling, general and administrative (“SG&A”) expenses
primarily comprised employee costs for sale and marketing, general and
administrative and other support personnel, travel expenses, legal and
professional fees, share-based compensation expense, brand building expenses and
other general expenses not related to cost of revenue. At the time of the filing
of the Fiscal 2007 20-F, the Company expected SG&A expenses as a proportion of
revenue less repair payments to continue to

March 24, 2008

Page 3

LATHAM & WATKINS llp

    decline over the next few years. The
Company also expected such employee costs for general and administrative and
other support personnel to increase in fiscal 2008 but at a lower rate than the
increase in its revenue less repair payment. In addition, the Company expected
its employee costs associated with sales and marketing and related travel costs
to increase in fiscal 2008, and the variable component of the sales team costs
(that is based on the achievement of business targets set at the beginning of
each fiscal year) to increase in line with the overall business growth. The
Company disclosed these factors in “—Overview — Expenses — SG&A Expenses” of
this section on page 40 of the Fiscal 2007 20-F.

Results of Operations, page 45

    2.

    We note your analysis of results of operations on both a consolidated and a segmental basis.
Where you list more than one factor as contributing to a change in your results, please
quantify the impact of each factor, where possible, to provide your readers with
greater context for understanding your results.

    The Company notes the Staff’s comment and advises the Staff that in its analysis of results
of operations in future filings on Form 20-F, where it lists more than one factor as
contributing to a change in its results, it will, as requested, quantify the impact of each
factor, where possible. The Company supplementally provides to the Staff in Exhibit
A hereto its proposed presentation for its future filings on Form 20-F in response to
this comment marked to show changes against the relevant disclosure in its Fiscal 2007 Form
20-F.

    3.

    We note the discussion of your contracts on page 38. We note that most of your client
contracts are for multiple years. We also note that while these contracts can typically be
terminated by your clients with or without cause, you tend to have long-term relationships
with your clients. In light of these statements, please tell us how you considered disclosing
your backlog and analyzing changes in your backlog as part of providing context around changes
in your revenues from year to year. We remind you that one of the primary objectives of MD&A
is to give readers a view of the company through the eyes of management, and to do this,
companies should identify and address those key variables and other qualitative and
quantitative factors which are peculiar to and necessary for an understanding and evaluation
of the individual company. Please refer to Item 303(a) of Regulation S-K and to our Release
33-8350, available on our website at www.sec.gov/rules/interp/33-8350.htm, and advise
us of your intentions, if any, to revise your MD&A disclosures.

    The Company supplementally advises the Staff that while its clients customarily provide one
to three month rolling forecasts of their service requirements, its customer contracts do
not generally provide for a committed minimum volume of business or committed amounts of
revenues. The Company’s clients are not committed to place orders for the volume of
transactions indicated in the forecasts of services requirements that they provide to the
Company and they may change their forecasts at any time. The Company’s clients place orders
for service requirement on an as needed basis. In cases where the customer contract
provides for a minimum volume of business, there are termination at will provisions in the
individual

March 24, 2008

Page 4

LATHAM & WATKINS llp

    statements of work which continue to apply, and permit the customer to terminate
an individual statement of work without cause upon notice. As a result of the aforesaid
reasons, the Company is not able to analyze changes in backlog from year to year.

    4.

    We read on page 8 that your profit margin is largely a function of your asset utilization,
and one of the most significant components of your asset utilization is your seat utilization
rate. In light of these statements, please tell us how you considered disclosing your asset
utilization rate or your seat utilization rate and analyzing changes in these rates as part of
providing context around changes in your profitability from year to year. In this regard, we
note your disclosure of built up seats and used seats in your interim financial statements
within your Form 6-K filed February 8, 2008. We remind you that one of the primary objectives
of MD&A is to give readers a view of the company through the eyes of management, and to do
this, companies should identify and address those key variables and other qualitative and
quantitative factors which are peculiar to and necessary for an understanding and evaluation
of the individual company. We further remind you that these key variables and other factors
may be non-financial. Please refer to Item 303(a) of Regulation S-K and to our Release
33-8350, and advise us of your intentions, if any, to revise your MD&A disclosures.

    The Company supplementally advises the Staff that in its future filings on Form 20-F, it
will, as requested, revise its MD&A disclosure to include the additional disclosure below
after the section “—Overview — Expenses.”

    “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 work stations.
Generally, an improvement in the 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 of the dates indicated:

    As of March 31,

    2007

    2006

    2005

    Total head count

    15,084

    10,433

    7,176

    Built up seats (1)

    8,794

    6,534

    4,603

    Used seats (1)

    7,769

    5,004

    3,832

    Seat utilization rate (2)

    1.7

    1.6

    1.6

    Notes:

    (1)

    Built up seats refer to the total number of production seats (excluding
support functions like Finance, Human Resource and Administration) that are set up in
any premises. Used seats refer to the number of

March 24, 2008

Page 5

LATHAM & WATKINS llp

    built up seats that are being used by
employees. The remainder would be termed “vacant seats.” The vacant seats would get
converted into used seats when we acquire a new client or increase head count.

    (2)

    The seat utilization rate is calculated by dividing the total head count by
the number of built up seats to show the rate at which we are able to utilize our
built up seats.”

    5.

    We note your analysis of segmental operating income on pages 49 and 50. Please consider
providing your readers with better insight into the impact of segmental cost of revenues as
opposed to segmental selling, general and administrative expenses when analyzing changes in
your segmental operating income, particularly if these types of expenses experience differing
trends. Please also disclose either here or in your segment footnote how centrally incurred
costs such as selling, general and administrative expenses are allocated to your reportable
segments, as we believe this provides your readers with important insight into your
determination of segmental operating income. Refer to paragraph 31(b) of SFAS 131.

    The Company advises the Staff that in its future filings on Form 20-F, it will, as
requested, revise its segmental disclosure to provide a breakdown of cost of revenues and
SG&A expenses on a segmental basis. Substantially all SG&A expenses are incurred and
recorded for each reportable segment separately. The salary costs of the Company’s
employees who are not designated as belonging to either of the business segments, such as
our Group Chief Executive Officer and Group Chief Financial Officer, are allocated to the
WNS Global BPO segment as substantially all of their work done for the Company relates to
this business segment. The Company has certain corporate office expenses comprising
primarily of salary costs of employees who had spent time performing services related to
both the WNS Global BPO segment and the WNS Auto Claims BPO segment. However, as the costs
allocable to the WNS Auto Claims BPO segment were insignificant, representing approximately
1% of the SG&A expenses allocable to the WNS Auto Claims BPO segment for each of fiscal
2007, 2006 and 2005, these costs were not allocated to the WNS Auto Claims BPO segment.
Other than these insignificant corporate office expenses, there are no centrally incurred
SG&A expenses that require allocation between the two reportable segments. The Company
supplementally provides to the Staff in Exhibit A hereto its proposed presentation
for its future filings on Form 20-F in response to this comment marked to show changes
against the relevant disclosure in its Fiscal 2007 Form 20-F.

Liquidity and Capital Resources, page 52

    6.

    Please refer to your analysis of cash flows from operating activities. We remind you that
you should analyze the underlying reasons for changes in your cash flows and explain the
variability in your cash flows, rather than merely reciting the information seen on the face
of your cash flow statement. Please refer to Section IV of our Release 33-8350 and tell us of
your intentions, if any, to revise your disclosures accordingly.

    The Company advises the Staff that in its future filings on Form 20-F, it will, as
requested, revise its analysis of cash flows from operating activities to analyze the
underlying reasons for changes in its cash flows and explain the variability in its cash
flows. The Company supplementally provides to the Staff in Exhibit A hereto its

March 24, 2008

Page 6

LATHAM & WATKINS llp

    proposed presentation for its future filings on Form 20-F in response to this comment
marked to show changes against the relevant disclosure in its Fiscal 2007 Form 20-F.

Item 6 — Directors, Senior Management and Employees, page 54

    7.

    On page 57 of this section you disclose the aggregate com