Spine 11.7 mm
ANNUAL
REPORT2011-12
SPIRIT OF WIPRO RUN 2011
6 CONTINENTS
21 COUNTRIES
56 CITIES
25000 PARTICIPANTS
Doddakannelli, Sarjapur Road,
Bangalore-560035, India.
www.wipro.com
Spine 11.7 mm
CORPORATE INFORMATION
Board of Directors
Azim H. Premji - Chairman
Company Secretary
V. Ramachandran
B. C. Prabhakar
Narayanan Vaghul
Dr. Jagdish N. Sheth
Dr. Ashok Ganguly
Priya Mohan Sinha
William Arthur Owens
Suresh C. Senapaty
Dr. Henning Kagermann
Shyam Saran
T. K. Kurien
M. K. Sharma
Executive Director and Chief
Financial Officer
Suresh C. Senapaty
Statutory Auditors
BSR & Co. Chartered Accountants
Auditors- IFRS
KPMG
Depository for American
Depository Shares
J. P. Morgan Chase Bank N.A.
Registrar and Share Transfer
Agents
Karvy Computershare Private Ltd.
Registered & Corporate Office
Doddakannelli, Sarjapur Road,
Bangalore – 560 035, India
Ph: +91 (80) 28440011
Fax: +91 (80) 28440054
Website: http: //www.wipro.com
INSIDE
Wipro in brief
Do Business Better
Financial Highlights
Chairman's Letter to the Stakeholders
CEO's Letter to the Stakeholders
CFO's Letter to the Stakeholders
President's (WCCLG) Letter to the Stakeholders
President's (WIN) Letter to the Stakeholders
Board of Directors
Corporate Executive Council
Management Discussion & Analysis
Directors Report
Corporate Governance Report
Business Responsibility Report
Standalone Financial Statements
Consolidated Financial Statements
Consolidated Financial Statements Under IFRS
Glossary
2
4
12
14
16
18
20
22
24
30
32
49
64
94
117
157
193
236
Certain statements in this Annual Report are based on
management's current expectations & forecasts and
may be considered as forward-looking statements.
There are a number of risks, uncertainties and other
factors that could cause actual results to be materially
different from management's current expectations
and forecasts.
This Annual Report is printed on
100% recycled paper as certified by the UK-
based National Association of Paper Merchants
(NAPM) and France - based Association des
Producteurs et des Utilisateurs des papiers et
cartons Recycles (APUR).
Technology for most of our clients is no longer a
cost, but an investment decision - it is a key
enabler to drive productivity and simplify their
business processes to reduce operational costs.
1
DO BUSINESS BETTER
Today's business leaders recognize that
technology can help them drive business
outcomes by improving operations, build
customer relationships and partnerships and drive
innovation. Wipro can enable you to respond and
change according to business needs –
Change that helps you to “Do Business Better”
and be future-ready.
4
FACING TOMORROW'S DEFINING
CHALLENGES HEAD-ON
Do Business Better
An instant is all it takes for information to traverse the world,
These solutions are backed by a deep and broad understanding
and this new reality of accelerated technology aids speed and
of a world of challenges; one where the focus is on the short-
accuracy in business and decision making essential in this
term efficiency versus long-term sustainability, where
new world.
consumerization of technology is throwing up unprecedented
demands, and where analytics is key to staying one step ahead.
Businesses once content with status quo today face immense
pressures and challenges and in most cases look no further than
It is our belief at Wipro that success is when one is able to adjust
technology innovation to set them apart. For Wipro, this means
to changes faster than the competitor. We believe this, we
being able to foresee change, adapting to it, and finding
practice this, and we bring this to bear in all our customer
opportunity in that change. Often, it also means leading the
engagements, all to one ultimate goal - to help our customers do
change.
business better.
We believe that this is the sweet spot in which we innovate and
create the strategies that help our customers and ourselves do
business better.
Our approach has helped us take challenges head on and survive
and thrive in a challenging and rapidly transforming business.
Our response rate and our affinity towards innovation has also
had a direct impact on our customers and their ability to do
business better. With us, they are future ready and better
equipped to meet and address the challenges that they face.
Wipro is fundamentally geared towards doing or helping others
do business better. Our unique blend of IT, BPO and product
engineering services helps our customers develop world class
products and also get these products to market faster. Our
sustainable solutions open up new markets to our customers,
and help them identify new revenue streams.
We also help our customers reduce upfront investments, while
meeting regulatory requirements and minimising
operational risk.
5
DO BUSINESS BETTER
Today's business leaders recognize that
technology can help them drive business
outcomes by improving operations, build
customer relationships and partnerships and drive
innovation. Wipro can enable you to respond and
change according to business needs –
Change that helps you to “Do Business Better”
and be future-ready.
4
FACING TOMORROW'S DEFINING
CHALLENGES HEAD-ON
Do Business Better
An instant is all it takes for information to traverse the world,
These solutions are backed by a deep and broad understanding
and this new reality of accelerated technology aids speed and
of a world of challenges; one where the focus is on the short-
accuracy in business and decision making essential in this
term efficiency versus long-term sustainability, where
new world.
consumerization of technology is throwing up unprecedented
demands, and where analytics is key to staying one step ahead.
Businesses once content with status quo today face immense
pressures and challenges and in most cases look no further than
It is our belief at Wipro that success is when one is able to adjust
technology innovation to set them apart. For Wipro, this means
to changes faster than the competitor. We believe this, we
being able to foresee change, adapting to it, and finding
practice this, and we bring this to bear in all our customer
opportunity in that change. Often, it also means leading the
engagements, all to one ultimate goal - to help our customers do
change.
business better.
We believe that this is the sweet spot in which we innovate and
create the strategies that help our customers and ourselves do
business better.
Our approach has helped us take challenges head on and survive
and thrive in a challenging and rapidly transforming business.
Our response rate and our affinity towards innovation has also
had a direct impact on our customers and their ability to do
business better. With us, they are future ready and better
equipped to meet and address the challenges that they face.
Wipro is fundamentally geared towards doing or helping others
do business better. Our unique blend of IT, BPO and product
engineering services helps our customers develop world class
products and also get these products to market faster. Our
sustainable solutions open up new markets to our customers,
and help them identify new revenue streams.
We also help our customers reduce upfront investments, while
meeting regulatory requirements and minimising
operational risk.
5
HELPING ENTERPRISES
DO BUSINESS BETTER
Innovate to differentiate
Wipro has built its success on looking around and looking ahead.
We have also been active behind a multi-screen solution for a
Some of the challenges around us and in the near future are
customer in the broadcasting space, a remote patient monitoring
varied and yet connected. The world has a burgeoning population
platform, and semiconductor solution framework that brings in
and yet faces a talent crunch. Metals and mineral costs have
long-term royalties.
Challenges are the stepping stones to success, and for both
Wipro and our customers, these are opportunities to excel, to
differentiate, and to do business better.
risen by 300% in five years, while we face shrinking access to
capital. Government regulations are multiplying, while energy
limitations and climate change are forcing businesses to revisit
operations and partnerships.
This climate of uncertainty is ripe for innovation. While
businesses look to redesign their value chains to identify the right
customer, they will also seek to reduce consumption of and
dependence on constrained resources.
The ability to spot trends and effectively use IT to overcome
these challenges will determine the success of global
organisations. The ability to help identify challenges around the
corner and work alongside customers in diverse industries as
they recalibrate their strategy and reformat their business model
is the strength that Wipro brings to the engagement.
At Wipro, we believe that applying minds to the problem brings
radical solutions. This is borne out in engagements such as the
one where we helped create the world's smallest dishwasher for
a customer with a 30% lower energy footprint and 50%
reduction in water consumption. Technology and analytics came
together for a leading telecom customer to reduce their energy
footprint by 11%, operational expenses by 8%, and GHG (Green
House Gas) emissions by 6%.
organisation's ability to address scale, standardization and
simplification, driving efficiency, optimising delivery and lowering
unit costs. This research also found that while IT projects include
hardware, software, services, and facilities, they together
accounted for nearly 63% of the costs. In this scenario,
variabilization enables the business to adopt outcome-based
models, SLA-driven engagements, and pay-per-use models.
Virtualization and pay-as-you-go software such as SaaS and
Cloud now allow businesses to variabilize their asset inventory,
and expand or reduce components or services as the need
dictates.
While our customers have the freedom to leverage the model of
their choice based on their preferences, Wipro believes that
adopting this model also makes it a win-win situation for the
service provider as well.
At Wipro, we are committed to investing in technologies such as
Cloud, which can enable variabilized use of IT - whether
applications, information, processing or storage. To quote an
example, Wipro helped formulate a variabilized cloud solution for
a leading global manufacturer, which, with its variable pricing
model, helped the customer save US$ 30 million.
Businesses that still believe in terms like 'capital-intensive' and
'fixed costs' would thrive only in predictable markets of which
there are hardly any around us. Businesses facing shrinking
product cycles and newer challenges with increasing frequency
and are the facts of business today, and as with every evolution,
the best solution must come to the fore. The answer and the
future is variabilization.
ENABLING ENTERPRISES
TO DO BUSINESS BETTER
Business Agility through
Variabalization
Investments in assets have long been the sign of a successful
business, but in today's unpredictable environment, businesses
would rather focus on being an agile organization than one that is
encumbered by sunken investments. Variabilization of
technology and resources helps a business reduce its fixed costs,
and it no longer needs to worry about end-of-life infrastructure
and the additional investments needed to refresh.
With variabilization, the asset utilisation is dynamic, and this
enables the business to be nimble too.
Internal research at Wipro shows that about 74% of an
organisation's IT costs can be variabilized while still retaining the
6
7
Wipro has built its success on looking around and looking ahead.
We have also been active behind a multi-screen solution for a
Some of the challenges around us and in the near future are
customer in the broadcasting space, a remote patient monitoring
varied and yet connected. The world has a burgeoning population
platform, and semiconductor solution framework that brings in
and yet faces a talent crunch. Metals and mineral costs have
long-term royalties.
Challenges are the stepping stones to success, and for both
Wipro and our customers, these are opportunities to excel, to
differentiate, and to do business better.
HELPING ENTERPRISES
DO BUSINESS BETTER
Innovate to differentiate
risen by 300% in five years, while we face shrinking access to
capital. Government regulations are multiplying, while energy
limitations and climate change are forcing businesses to revisit
operations and partnerships.
This climate of uncertainty is ripe for innovation. While
businesses look to redesign their value chains to identify the right
customer, they will also seek to reduce consumption of and
dependence on constrained resources.
The ability to spot trends and effectively use IT to overcome
these challenges will determine the success of global
organisations. The ability to help identify challenges around the
corner and work alongside customers in diverse industries as
they recalibrate their strategy and reformat their business model
is the strength that Wipro brings to the engagement.
At Wipro, we believe that applying minds to the problem brings
radical solutions. This is borne out in engagements such as the
one where we helped create the world's smallest dishwasher for
a customer with a 30% lower energy footprint and 50%
reduction in water consumption. Technology and analytics came
together for a leading telecom customer to reduce their energy
footprint by 11%, operational expenses by 8%, and GHG (Green
House Gas) emissions by 6%.
organisation's ability to address scale, standardization and
simplification, driving efficiency, optimising delivery and lowering
unit costs. This research also found that while IT projects include
hardware, software, services, and facilities, they together
accounted for nearly 63% of the costs. In this scenario,
variabilization enables the business to adopt outcome-based
models, SLA-driven engagements, and pay-per-use models.
Virtualization and pay-as-you-go software such as SaaS and
Cloud now allow businesses to variabilize their asset inventory,
and expand or reduce components or services as the need
dictates.
While our customers have the freedom to leverage the model of
their choice based on their preferences, Wipro believes that
adopting this model also makes it a win-win situation for the
service provider as well.
At Wipro, we are committed to investing in technologies such as
Cloud, which can enable variabilized use of IT - whether
applications, information, processing or storage. To quote an
example, Wipro helped formulate a variabilized cloud solution for
a leading global manufacturer, which, with its variable pricing
model, helped the customer save US$ 30 million.
Businesses that still believe in terms like 'capital-intensive' and
'fixed costs' would thrive only in predictable markets of which
there are hardly any around us. Businesses facing shrinking
product cycles and newer challenges with increasing frequency
and are the facts of business today, and as with every evolution,
the best solution must come to the fore. The answer and the
future is variabilization.
ENABLING ENTERPRISES
TO DO BUSINESS BETTER
Business Agility through
Variabalization
Investments in assets have long been the sign of a successful
business, but in today's unpredictable environment, businesses
would rather focus on being an agile organization than one that is
encumbered by sunken investments. Variabilization of
technology and resources helps a business reduce its fixed costs,
and it no longer needs to worry about end-of-life infrastructure
and the additional investments needed to refresh.
With variabilization, the asset utilisation is dynamic, and this
enables the business to be nimble too.
6
7
Internal research at Wipro shows that about 74% of an
organisation's IT costs can be variabilized while still retaining the
Business value through
consumerization of
Technology
The shift in focus within the IT world from the enterprise to the
consumer has been gradual, but game-changing nonetheless.
Today's consumer can consume more media and heavy data on a
simple handheld device than the early connected enterprise did.
With tools for communication, collaboration, and entertainment
available across a range of devices, consumer spend on IT - from
a hardware and applications perspective - has overtaken that of
enterprises. Imagine - the world's largest data centres today
serve consumers, not enterprises!
The connected individual is bringing this same preference for
devices and applications into the workplace, and employers
today face the challenge of allowing employees to work from the
location of their choice, on a device running an operating system
of their choice, and yet demanding connectivity to all business
tools and data. IDC recently reported that in 2011, 20% of
respondents to their survey said that they use Facebook and
MySpace for business, and this had more than doubled from 8%
of respondents in 2010.
This should be seen as a positive trend, as not only does it bring
the latest technology to the workplace, it also helps lower the
cost of procuring and provisioning hardware and software for the
employer. Studies have also shown that employees who are
allowed to bring their own devices to the workplace are happier
and more productive.
On the flip side, however, are the pressures faced by the IT
department. An influx of diverse devices will prove to be a
nightmare from a policy and governance standpoint, and could
also expose corporate data to misuse. The safeguards put in
place to prevent unauthorised access, or to ensure standard
protocols among all devices connecting to the network, will have
to be robust and regularly refreshed to address newer threats.
Wipro has been helping customers on this journey for some time
now. For instance, Wipro worked with a customer to implement a
workforce management solution focused around consumer IT for
rescheduling, routing, location intelligence and service
management, for a global utility company. This solution brought
the customer an improvement of up to 30% in resource
efficiency and productivity, further resulting in improved
customer satisfaction, and higher revenues. Consumerization of
Technology is here to stay, and the enterprise that identifies the
best balance between freedom and control for their employees
will reap the benefits of having motivated employees and being
seen as an innovative organization.
Another result of this consumerization is that consumers are
increasingly drawn towards and equipped for a digital lifestyle.
This means that marketers have an added medium - digital - to
reach out to their target audiences and improve loyalty, and this
can be done in interesting and engaging ways.
Wipro Digital works with customers to devise an integrated
digital marketing strategy, with a choice of a full suite of digital
solutions and services, including creative design. Wipro Reach is
the digital marketing platform for e-commerce, content, social
collaboration and CRM, and analytics. Wipro Digital also helps
drive consistent experiences and engagement across channels
for the customer, and aids the business in its quest for return on
investment, helps it to optimise spend, while enhancing
customer loyalty and stickiness.
Business performance
through Analytics
Data is growing at a phenomenal rate, and some of the indicators
models, moving away from one-time sale or rental models to
are simply astounding: enterprise data doubles every 18 months;
pay-per-use or joint ownership models, even for manufactured
35 billion emails are exchanged every day, and YouTube has 24
goods. It can also aid in better product and service design, in
hours worth of video content uploaded every minute! Apart from
forestalling flaws and improving quality, in predicting customer
the consumer-driven or social data, there is a world of data
needs, in determining campaign performance, and in improving
generated each day from sensors, probes, cameras, RFID tags,
efficiency and driving down costs.
GPS devices, microphones, ATMs, transactions, medical records,
online activity, and even Tweets and SMSs contain insights that
can be unlocked. Gartner predicts that by the end of 2012, 25%
of their Global 2000 companies will report information assets in
balance sheets.
At the core of this wealth is analytics.
A six-hour flight from New York to Los Angeles in a twin-engine
aircraft can produce up to 240 terabytes of data. Real-time
analytics can be used to determine how much wear and tear the
aircraft has been subjected to, and this can potentially transform
the parameters considered in aircraft leasing. Insights generated
through advanced analytics that are actionable will be one of the
stark differentiators of the products, processes and business
Analytics can improve operating margins in retail to the tune of
60 per cent. The UN reports that the value of data it retrieves
models of the future.
from real-time healthcare analytics is estimated at US$ 300
Wipro's analytics solution has already made a difference among
million. Using data from analytics can throw up new business
our customers, and has helped a global bank view its customers'
exposure, offer counsel on investment opportunities as well as
on product types and settlement markets that cause the highest
'fail' ratio. The bank's operation balance grew to US$209 billion
as against US$149 billion the previous year. Using Analytics, our
customers derive intelligence that drives their investments, helps
them create better marketing strategies, improves their products
and services, and substantially enhances their productivity.
Analytics is all set to address the needs of a business that looks
to the future with data from today, and Wipro is ideally
positioned to work alongside these businesses and lead them
through this new technological frontier.
8
9
Business value through
consumerization of
Technology
The shift in focus within the IT world from the enterprise to the
consumer has been gradual, but game-changing nonetheless.
Today's consumer can consume more media and heavy data on a
simple handheld device than the early connected enterprise did.
With tools for communication, collaboration, and entertainment
available across a range of devices, consumer spend on IT - from
a hardware and applications perspective - has overtaken that of
enterprises. Imagine - the world's largest data centres today
serve consumers, not enterprises!
The connected individual is bringing this same preference for
devices and applications into the workplace, and employers
today face the challenge of allowing employees to work from the
location of their choice, on a device running an operating system
of their choice, and yet demanding connectivity to all business
tools and data. IDC recently reported that in 2011, 20% of
respondents to their survey said that they use Facebook and
MySpace for business, and this had more than doubled from 8%
of respondents in 2010.
This should be seen as a positive trend, as not only does it bring
the latest technology to the workplace, it also helps lower the
cost of procuring and provisioning hardware and software for the
employer. Studies have also shown that employees who are
allowed to bring their own devices to the workplace are happier
and more productive.
On the flip side, however, are the pressures faced by the IT
department. An influx of diverse devices will prove to be a
nightmare from a policy and governance standpoint, and could
also expose corporate data to misuse. The safeguards put in
place to prevent unauthorised access, or to ensure standard
protocols among all devices connecting to the network, will have
to be robust and regularly refreshed to address newer threats.
Wipro has been helping customers on this journey for some time
now. For instance, Wipro worked with a customer to implement a
workforce management solution focused around consumer IT for
rescheduling, routing, location intelligence and service
management, for a global utility company. This solution brought
the customer an improvement of up to 30% in resource
efficiency and productivity, further resulting in improved
customer satisfaction, and higher revenues. Consumerization of
Technology is here to stay, and the enterprise that identifies the
best balance between freedom and control for their employees
will reap the benefits of having motivated employees and being
seen as an innovative organization.
Another result of this consumerization is that consumers are
increasingly drawn towards and equipped for a digital lifestyle.
This means that marketers have an added medium - digital - to
reach out to their target audiences and improve loyalty, and this
can be done in interesting and engaging ways.
Wipro Digital works with customers to devise an integrated
digital marketing strategy, with a choice of a full suite of digital
solutions and services, including creative design. Wipro Reach is
the digital marketing platform for e-commerce, content, social
collaboration and CRM, and analytics. Wipro Digital also helps
drive consistent experiences and engagement across channels
for the customer, and aids the business in its quest for return on
investment, helps it to optimise spend, while enhancing
customer loyalty and stickiness.
Business performance
through Analytics
Data is growing at a phenomenal rate, and some of the indicators
models, moving away from one-time sale or rental models to
are simply astounding: enterprise data doubles every 18 months;
pay-per-use or joint ownership models, even for manufactured
35 billion emails are exchanged every day, and YouTube has 24
goods. It can also aid in better product and service design, in
hours worth of video content uploaded every minute! Apart from
forestalling flaws and improving quality, in predicting customer
the consumer-driven or social data, there is a world of data
needs, in determining campaign performance, and in improving
generated each day from sensors, probes, cameras, RFID tags,
efficiency and driving down costs.
GPS devices, microphones, ATMs, transactions, medical records,
online activity, and even Tweets and SMSs contain insights that
can be unlocked. Gartner predicts that by the end of 2012, 25%
of their Global 2000 companies will report information assets in
balance sheets.
At the core of this wealth is analytics.
A six-hour flight from New York to Los Angeles in a twin-engine
aircraft can produce up to 240 terabytes of data. Real-time
analytics can be used to determine how much wear and tear the
aircraft has been subjected to, and this can potentially transform
the parameters considered in aircraft leasing. Insights generated
through advanced analytics that are actionable will be one of the
stark differentiators of the products, processes and business
Analytics can improve operating margins in retail to the tune of
60 per cent. The UN reports that the value of data it retrieves
models of the future.
from real-time healthcare analytics is estimated at US$ 300
Wipro's analytics solution has already made a difference among
million. Using data from analytics can throw up new business
our customers, and has helped a global bank view its customers'
exposure, offer counsel on investment opportunities as well as
on product types and settlement markets that cause the highest
'fail' ratio. The bank's operation balance grew to US$209 billion
as against US$149 billion the previous year. Using Analytics, our
customers derive intelligence that drives their investments, helps
them create better marketing strategies, improves their products
and services, and substantially enhances their productivity.
Analytics is all set to address the needs of a business that looks
to the future with data from today, and Wipro is ideally
positioned to work alongside these businesses and lead them
through this new technological frontier.
8
9
THE WINNING
STRATEGY
Differentiation at the front-end, standardization at the back-end
Technology solution providers and business strategists had very
Our priority is on differentiators that lead to success. This is the
clear areas of expertise and responsibility - until recently. Today,
base on which the organisation then innovates, experiences and
no technology solution is far removed from the ultimate business
delivers on the differentiator, supported by a back-end that is
objective, and every initiative and investment is with a larger
entirely reliable and robust. This is what is at the core of our
business goal in mind. Technology consultants and service
ability to capitalise on new opportunities.
Our differentiators help us to be seen as the innovative front-end
that our customers demand, while the standardized back-end
gives them the comfort and confidence of a tried-and-tested
solution that is still customised to their needs.
This combination is our formula for success.
It is what sets us apart.
providers must be able to show business benefit with any
recommended component of the IT infrastructure today, and
should therefore be experienced, should have tried and tested
processes, robust operations and a determined focus on
standardization at the back-end.
A question we constantly ask ourselves at Wipro is this: Why
should anyone partner with us, rather than with someone else?
We believe that we are chosen for the unique value we provide,
because our path to a solution may be different, and because we
are known to constantly rethink the value chain and help our
customers and ourselves reinvent the business to meet the
challenges ahead.
Our domain solutions and delivery excellence provide
differentiation and competitive advantage to our customers. At
Wipro, being adaptive to changes in business, technology, the
environment and society is more than a differentiator - it is an
imperative. This approach is at the root of our solutions, is what
defines our delivery models, and is what drives us to become less
resource intensive. This is the magic confluence at which new
business models emerge.
10
11
THE WINNING
STRATEGY
Differentiation at the front-end, standardization at the back-end
Technology solution providers and business strategists had very
Our priority is on differentiators that lead to success. This is the
clear areas of expertise and responsibility - until recently. Today,
base on which the organisation then innovates, experiences and
no technology solution is far removed from the ultimate business
delivers on the differentiator, supported by a back-end that is
objective, and every initiative and investment is with a larger
entirely reliable and robust. This is what is at the core of our
business goal in mind. Technology consultants and service
ability to capitalise on new opportunities.
Our differentiators help us to be seen as the innovative front-end
that our customers demand, while the standardized back-end
gives them the comfort and confidence of a tried-and-tested
solution that is still customised to their needs.
This combination is our formula for success.
It is what sets us apart.
providers must be able to show business benefit with any
recommended component of the IT infrastructure today, and
should therefore be experienced, should have tried and tested
processes, robust operations and a determined focus on
standardization at the back-end.
A question we constantly ask ourselves at Wipro is this: Why
should anyone partner with us, rather than with someone else?
We believe that we are chosen for the unique value we provide,
because our path to a solution may be different, and because we
are known to constantly rethink the value chain and help our
customers and ourselves reinvent the business to meet the
challenges ahead.
Our domain solutions and delivery excellence provide
differentiation and competitive advantage to our customers. At
Wipro, being adaptive to changes in business, technology, the
environment and society is more than a differentiator - it is an
imperative. This approach is at the root of our solutions, is what
defines our delivery models, and is what drives us to become less
resource intensive. This is the magic confluence at which new
business models emerge.
10
11
FINANCIAL HIGHLIGHTS
FY 2012 *
FY 2011
FY 2010
FINANCIAL PERFORMANCE
Consolidated Revenue in ` Mn
Revenue of IT Services in $ Mn
Profit before Depreciation, Amortisation,
Interest and tax in ` Mn
Depreciation and Amortisation in ` Mn
Profit before Interest and tax in ` Mn
Effective tax rate (%)
Profit after tax in ` Mn
Dividend Paid (including distribution tax) in ` Mn
Free Cash Flow Generation
Return on average Networth (%)
Return on average Capital Employed (%)
PER SHARE DATA - `
EPS
Basic
Diluted
Book Value
Dividend Declared Per Share
FINANCIAL POSITION in ` Mn
Share Capital
Networth
Total Debt
Property Plant & Equipment including Intangible assets
Cash and Investments
Goodwill
Working Capital
Capital Employed
SHAREHOLDING RELATED
Number of Shareholders
Market price of shares** `
RATIOS
Dividend Distribution Ratio
Current Ratio
DSO***
Return on Capital Investment
Operating Cash Flow to PBIT
375,249
5,921
74,142
10,129
64,013
19.7
55,987
17,068
27,099
21.3
20
22.76
22.69
116
6.00
4,917
286,163
58,958
63,217
128,037
67,937
158,121
345,121
227,159
440
30
2.7
74
32
63
310,987
5,221
65,879
8,211
57,668
15.4
53,321
15,516
28,226
24.4
21
21.74
21.61
98
6.00
4,908
240,371
52,802
58,645
114,663
54,818
122,029
293,176
220,238
480
32
2.6
67
35
70
271,574
4,390
59,675
7,831
51,844
16.8
46,116
6,788
38,367
26.8
22
18.91
18.75
80
3.60
2,936
196,549
62,511
57,469
105,348
53,802
103,668
259,063
179,438
424
22
2.5
66
36
98
* Fiscal year for Wipro is April 01 to March 31
** NSE based share price as of 31 March of the respective year
*** DSO - Based on revenues for the quarter ended 31 March for the respective year
Note: All Figures above are based on IFRS Consolidated Financial Statements
st
st
Revenue (
`
Mn)
Profit after Tax (
` Mn
)
Net Worth (
` Mn
)
375,249
310,987
255,338
271,574
55,987
53,321
46,116
38,860
286,163
240,371
196,549
147,381
2009
2010
2011
2012
2009
2010
2011
2012
2009
2010
2011
2012
Revenue - IT Services ( $ Mn)
Market Captilization (
`
Bn)
No. of Employees - IT Services
5,921
5,221
4,323
4,390
1,179
1,082
1,038
135,920
122,385
108,701
97,180
360
2009
2010
2011
2012
2009
2010
2011
2012
2009
2010
2011
2012
Revenue by Segments
2011-12 ( ` Mn)
PBIT by Segments
2011-12 ( ` Mn)
Average Capital Employed by Segments
2011-12 ( ` Mn)
Others Including
reconciling Items
Consumer Care
19,099
& Lighting
33,401
IT Products
38,436
IT Services
284,313
Consumer Care
& Lighting
3,956
Others Including
reconciling Items
(995)
IT Products
1,787
Others Including
reconciling Items
157,508
IT Business
139,843
IT Services
59,265
Consumer Care & Lighting
21,798
* NSE based share price as of 31 March of the respective year
st
12
13
FINANCIAL HIGHLIGHTS
FY 2012 *
FY 2011
FY 2010
Revenue (
Mn)
`
Profit after Tax (
` Mn
)
Net Worth (
` Mn
)
375,249
310,987
255,338
271,574
55,987
53,321
46,116
38,860
286,163
240,371
196,549
147,381
2009
2010
2011
2012
2009
2010
2011
2012
2009
2010
2011
2012
Revenue - IT Services ( $ Mn)
Market Captilization (
`
Bn)
No. of Employees - IT Services
5,921
5,221
4,323
4,390
1,179
1,082
1,038
135,920
122,385
108,701
97,180
360
2009
2010
2011
2012
2009
2010
2011
2012
2009
2010
2011
2012
Property Plant & Equipment including Intangible assets
Revenue by Segments
2011-12 ( ` Mn)
PBIT by Segments
2011-12 ( ` Mn)
Average Capital Employed by Segments
2011-12 ( ` Mn)
Others Including
reconciling Items
19,099
Consumer Care
& Lighting
33,401
IT Products
38,436
IT Services
284,313
Consumer Care
& Lighting
3,956
Others Including
reconciling Items
(995)
IT Products
1,787
Others Including
reconciling Items
157,508
IT Business
139,843
IT Services
59,265
Consumer Care & Lighting
21,798
* Fiscal year for Wipro is April 01 to March 31
** NSE based share price as of 31 March of the respective year
st
*** DSO - Based on revenues for the quarter ended 31 March for the respective year
st
Note: All Figures above are based on IFRS Consolidated Financial Statements
* NSE based share price as of 31 March of the respective year
st
12
13
FINANCIAL PERFORMANCE
Consolidated Revenue in ` Mn
Revenue of IT Services in $ Mn
Profit before Depreciation, Amortisation,
Interest and tax in ` Mn
Depreciation and Amortisation in ` Mn
Profit before Interest and tax in ` Mn
Effective tax rate (%)
Profit after tax in ` Mn
Dividend Paid (including distribution tax) in ` Mn
Free Cash Flow Generation
Return on average Networth (%)
Return on average Capital Employed (%)
PER SHARE DATA - `
EPS
Basic
Diluted
Book Value
Dividend Declared Per Share
FINANCIAL POSITION in ` Mn
Share Capital
Networth
Total Debt
Cash and Investments
Goodwill
Working Capital
Capital Employed
SHAREHOLDING RELATED
Number of Shareholders
Market price of shares** `
Dividend Distribution Ratio
RATIOS
Current Ratio
DSO***
Return on Capital Investment
Operating Cash Flow to PBIT
375,249
5,921
74,142
10,129
64,013
19.7
55,987
17,068
27,099
21.3
20
22.76
22.69
116
6.00
4,917
286,163
58,958
63,217
128,037
67,937
158,121
345,121
227,159
440
30
2.7
74
32
63
310,987
5,221
65,879
8,211
57,668
15.4
53,321
15,516
28,226
24.4
21
21.74
21.61
98
6.00
4,908
240,371
52,802
58,645
114,663
54,818
122,029
293,176
220,238
480
32
2.6
67
35
70
271,574
4,390
59,675
7,831
51,844
16.8
46,116
6,788
38,367
26.8
22
18.91
18.75
80
3.60
2,936
196,549
62,511
57,469
105,348
53,802
103,668
259,063
179,438
424
22
2.5
66
36
98
CHAIRMAN'S LETTER TO
THE STAKEHOLDERS
In the last completed fiscal year covered by this Annual Report,
we achieved revenues of 375 billion, recording a year on year
`
growth of 21%. All our efforts are directed towards positioning
Wipro to leverage emerging opportunities in the market place to
sustain our growth in the future. We continue to focus on our
decade long sustainability journey, where we are seeing an
increasing shift in mindset globally towards sustainable growth.
To conclude, the energy in our leadership team and the high
passion levels in our employees give us the confidence that we
are well on our way to building a strong and sustainable
business. I would like to thank each and every one of our
customers, employees, shareholders, partners and supporters
for their continued trust in building Wipro for this exciting future.
.
Very Sincerely,
Azim H. Premji
Chairman
Dear Stakeholders,
We are living in interesting times. Change is no longer sporadic
and spaced out but regular and continuous. In this constantly
changing world, our clients across the globe are focused on
revenue growth and enhancing productivity with a view to
increasing their profits. The entire Globe is their canvas. They are
identifying newer growth opportunities and differentiating their
offerings to customers in the market place. In parallel, our clients
realize that they need to significantly change their cost
structures and create a focused marketing strategy for each of
their customer segments to compete globally.
In my view, Technology is going to be the KEY enabler for clients
to achieve this dual objective of growth and differentiation as
they transform themselves.
On the 'growth' paradigm, our clients are looking for deeper
customer insights and improved ways of delivering services to
their customers which will increase their ability to cater to a
global market. Wipro's investments in key technology themes,
coupled with our domain specific solutions and global footprint,
positions us to be their trusted partners in their growth journey.
Productivity and Variablization of cost structure is another prime
priority of our clients. Technology for most of our clients is no
longer a cost but an investment decision. It is a key enabler to
drive productivity and simplify their business processes to
reduce operational costs. Wipro with strong delivery capabilities,
global presence and deep business process understanding, is
well placed to help our clients achieve this goal.
On the external front, it is these ideas that make me positive on
our growth prospects in the IT services businesses. This
optimism on the external front is supplemented by the
significant progress on our organizational restructuring initiated
in 2011. Wipro today is better equipped to help our customers to
'Do Business Better'.
14
15
CHAIRMAN'S LETTER TO
THE STAKEHOLDERS
In the last completed fiscal year covered by this Annual Report,
we achieved revenues of 375 billion, recording a year on year
`
growth of 21%. All our efforts are directed towards positioning
Wipro to leverage emerging opportunities in the market place to
sustain our growth in the future. We continue to focus on our
decade long sustainability journey, where we are seeing an
increasing shift in mindset globally towards sustainable growth.
To conclude, the energy in our leadership team and the high
passion levels in our employees give us the confidence that we
are well on our way to building a strong and sustainable
business. I would like to thank each and every one of our
customers, employees, shareholders, partners and supporters
for their continued trust in building Wipro for this exciting future.
.
Very Sincerely,
Azim H. Premji
Chairman
Dear Stakeholders,
We are living in interesting times. Change is no longer sporadic
and spaced out but regular and continuous. In this constantly
changing world, our clients across the globe are focused on
revenue growth and enhancing productivity with a view to
increasing their profits. The entire Globe is their canvas. They are
identifying newer growth opportunities and differentiating their
offerings to customers in the market place. In parallel, our clients
realize that they need to significantly change their cost
structures and create a focused marketing strategy for each of
their customer segments to compete globally.
In my view, Technology is going to be the KEY enabler for clients
to achieve this dual objective of growth and differentiation as
they transform themselves.
On the 'growth' paradigm, our clients are looking for deeper
customer insights and improved ways of delivering services to
their customers which will increase their ability to cater to a
global market. Wipro's investments in key technology themes,
coupled with our domain specific solutions and global footprint,
positions us to be their trusted partners in their growth journey.
Productivity and Variablization of cost structure is another prime
priority of our clients. Technology for most of our clients is no
longer a cost but an investment decision. It is a key enabler to
drive productivity and simplify their business processes to
reduce operational costs. Wipro with strong delivery capabilities,
global presence and deep business process understanding, is
well placed to help our clients achieve this goal.
On the external front, it is these ideas that make me positive on
our growth prospects in the IT services businesses. This
optimism on the external front is supplemented by the
significant progress on our organizational restructuring initiated
in 2011. Wipro today is better equipped to help our customers to
'Do Business Better'.
14
15
CEO'S LETTER TO
THE STAKEHOLDERS
Dear Stakeholders,
result is evident in a very positive employee perception score.
We are living today in an era of a rapidly evolving market where
technology advancement and globalization strongly impacts
business strategy. This trend offers a unique opportunity to
innovate and utilize technology to elevate business performance.
To prepare for this shift, the last fiscal was focused on
Our growth and success has been possible due to the diligence
and passion shown by our leadership team and all members of
Team Wipro. I thank them for their commitment.
We remain focused on building an organization that is future
ready and is designed to win. As we move ahead our vision is
consolidation, fueled by three key directives - a focused business
about impact, momentum and execution - this journey will be
strategy, higher customer satisfaction and greater employee
unique, meaningful and successful for all of us at Wipro.
engagement.
Focused business strategy
for us to win.
Our strategy of creating a higher degree of differentiation at the
front end and standardization in the back end has been critical
Very Sincerely,
We thank all our stakeholders for their support last year and look
forward to the same this year.
These in turn help in transforming big corporate data into
T. K. Kurien
valuable information assets. Further emphasis will be on
Executive Director & CEO-IT Business
To achieve differentiation in the front end, we have significantly
invested in building cross industry solutions and disruptive
technologies such as cloud computing, analytics and mobility.
automation and industrialization of software development to
drive predictable outcomes and cost efficiencies.
Higher customer satisfaction
We have clearly defined customer segmentation. This enables a
single view of each customer and allows us to share best
practices across accounts leading to faster decision making and
quicker response time. Our efforts in building a simpler, nimbler
and leaner Wipro is beginning to yield results, with the customer
satisfaction index surging ahead.
Greater employee engagement
Our employee engagement is a two way connect between an
employee and the organization. We initiated the Employee
Advocacy Group to bring about changes that are relevant and
important to employees. Our simplified people processes have
led to better access to information and easier provisioning. The
16
17
CEO'S LETTER TO
THE STAKEHOLDERS
Dear Stakeholders,
result is evident in a very positive employee perception score.
We are living today in an era of a rapidly evolving market where
technology advancement and globalization strongly impacts
business strategy. This trend offers a unique opportunity to
innovate and utilize technology to elevate business performance.
To prepare for this shift, the last fiscal was focused on
Our growth and success has been possible due to the diligence
and passion shown by our leadership team and all members of
Team Wipro. I thank them for their commitment.
We remain focused on building an organization that is future
ready and is designed to win. As we move ahead our vision is
consolidation, fueled by three key directives - a focused business
about impact, momentum and execution - this journey will be
strategy, higher customer satisfaction and greater employee
unique, meaningful and successful for all of us at Wipro.
engagement.
Focused business strategy
We thank all our stakeholders for their support last year and look
forward to the same this year.
Our strategy of creating a higher degree of differentiation at the
front end and standardization in the back end has been critical
Very Sincerely,
for us to win.
T. K. Kurien
Executive Director & CEO-IT Business
To achieve differentiation in the front end, we have significantly
invested in building cross industry solutions and disruptive
technologies such as cloud computing, analytics and mobility.
These in turn help in transforming big corporate data into
valuable information assets. Further emphasis will be on
automation and industrialization of software development to
drive predictable outcomes and cost efficiencies.
Higher customer satisfaction
We have clearly defined customer segmentation. This enables a
single view of each customer and allows us to share best
practices across accounts leading to faster decision making and
quicker response time. Our efforts in building a simpler, nimbler
and leaner Wipro is beginning to yield results, with the customer
satisfaction index surging ahead.
Greater employee engagement
Our employee engagement is a two way connect between an
employee and the organization. We initiated the Employee
Advocacy Group to bring about changes that are relevant and
important to employees. Our simplified people processes have
led to better access to information and easier provisioning. The
16
17
CFO'S LETTER TO
THE STAKEHOLDERS
Dear Stakeholders,
Our revenue grew 21% in the fiscal 2012, with net income
impact. A silver lining among these dark clouds is the rupee
depreciationin the recent months. However, we are conscious of
its potential for a two-way move and have a consistent hedging
growth of 5%. This reflects a year of organizational restructuring
policy designed to reduce the volatility of exchange rate
to help us leverage the changing global business environment.
fluctuation on our business results.
We are making significant investments, both on the client facing
initiatives as well driving transformation in delivery operations
On the operational front, our focus is to drive excellence across
through process improvement and automation.
A constant in this volatile business environment over the
decades is our consistent and continuous attention to achieving
the highest levels of corporate governance in Wipro. Our strong
governance culture is reflected in the Spirit of Wipro values
promoted at an employee level at the base, a strong and thriving
Ombudsman system at the inner organization core, a strong
management team and Board to keep the tone at the top
consistent with our beliefs. We have a clear internal policy of
all aspects of the business to improve profitability. A specific
area is cutting working capital cycle times and improving cash
flow generation. We are also making significant investments to
improve supply chain efficiencies through process redesign and
automation. We are reasonably confident that our initiatives will
help drive sustainable profitable growth in the years to come.
In this volatile economic environment, we have a sound liquidity
position with net cash (net-of-debt) of $ 1.4 billion. Our financial
stability and strong balance sheet provides us the ability to make
zero tolerance to non-compliance with our value system. We are
both short term and long term investments to accelerate growth.
happy that our efforts in this sphere were recognized by the
We continue our strategy of pursuing strategic acquisitions to fill
Ethisphere Institute, a leading business ethics think-tank, as one
gaps in our portfolio and provide a competitive edge in the
of the 2012 World's Most Ethical (WME) Companies.
business.
An organizational thrust that gained momentum over the last
Overall our priority is to build a sustainable business, which
should deliver superior returns for all our stakeholders. We are
quite confident that we are building an organization for today
which will also adapt to the needs of tomorrow.
decade is our Sustainability Initiatives. Sustainable growth
means that organizations have to look beyond financial
performance to impact of our business on the ecology and
society. Our sustainability reporting initiatives gives us a longer
term view of our business and a stakeholder perspective that
helps us keep our feet on the ground both when things are going
well and when they are not. Our sustainability initiatives have
resulted in Wipro being one of the only two Indian companies in
the Dow Jones Sustainability Index for 2011.
Looking ahead, the global macro environment is volatile, which is
amplified by the fluctuations in exchange rates that have a
material impact on our business. On the macro-environment
front, Eurozone is facing significant challenges that have global
Very Sincerely,
Suresh C. Senapaty
Chief Financial Officer
18
19
CFO'S LETTER TO
THE STAKEHOLDERS
Dear Stakeholders,
Our revenue grew 21% in the fiscal 2012, with net income
impact. A silver lining among these dark clouds is the rupee
depreciationin the recent months. However, we are conscious of
its potential for a two-way move and have a consistent hedging
growth of 5%. This reflects a year of organizational restructuring
policy designed to reduce the volatility of exchange rate
to help us leverage the changing global business environment.
fluctuation on our business results.
We are making significant investments, both on the client facing
initiatives as well driving transformation in delivery operations
On the operational front, our focus is to drive excellence across
through process improvement and automation.
A constant in this volatile business environment over the
decades is our consistent and continuous attention to achieving
the highest levels of corporate governance in Wipro. Our strong
governance culture is reflected in the Spirit of Wipro values
promoted at an employee level at the base, a strong and thriving
Ombudsman system at the inner organization core, a strong
management team and Board to keep the tone at the top
consistent with our beliefs. We have a clear internal policy of
all aspects of the business to improve profitability. A specific
area is cutting working capital cycle times and improving cash
flow generation. We are also making significant investments to
improve supply chain efficiencies through process redesign and
automation. We are reasonably confident that our initiatives will
help drive sustainable profitable growth in the years to come.
In this volatile economic environment, we have a sound liquidity
position with net cash (net-of-debt) of $ 1.4 billion. Our financial
stability and strong balance sheet provides us the ability to make
zero tolerance to non-compliance with our value system. We are
both short term and long term investments to accelerate growth.
happy that our efforts in this sphere were recognized by the
We continue our strategy of pursuing strategic acquisitions to fill
Ethisphere Institute, a leading business ethics think-tank, as one
gaps in our portfolio and provide a competitive edge in the
of the 2012 World's Most Ethical (WME) Companies.
business.
An organizational thrust that gained momentum over the last
Overall our priority is to build a sustainable business, which
decade is our Sustainability Initiatives. Sustainable growth
means that organizations have to look beyond financial
performance to impact of our business on the ecology and
society. Our sustainability reporting initiatives gives us a longer
term view of our business and a stakeholder perspective that
helps us keep our feet on the ground both when things are going
well and when they are not. Our sustainability initiatives have
resulted in Wipro being one of the only two Indian companies in
the Dow Jones Sustainability Index for 2011.
Looking ahead, the global macro environment is volatile, which is
amplified by the fluctuations in exchange rates that have a
material impact on our business. On the macro-environment
front, Eurozone is facing significant challenges that have global
should deliver superior returns for all our stakeholders. We are
quite confident that we are building an organization for today
which will also adapt to the needs of tomorrow.
Very Sincerely,
Suresh C. Senapaty
Chief Financial Officer
18
19
PRESIDENT'S (WIPRO CONSUMER CARE & LIGHTING GROUP)
LETTER TO
THE STAKEHOLDERS
Dear Stakeholders,
Services etc. Our focus on lighting of Green buildings and on new
technology like LED paid off, with 100 out of 170 certified Green
Wipro Consumer Care and Lighting had an invigorating business
Buildings in India using Wipro Lighting. Our range of LED fixtures
year in 2011-12. While the environment continued to be extremely
has been very well accepted by our customers. The launches of
challenging in key business categories and geographies - we
premium designer ranges, has continued to do well in our
managed the terrain well and have delivered superior performance
Modular furniture segment, enhancing our product portfolio, as
in all identified focus areas and business bets. Our business has
grown around 11 times over the last 9 years.
well as helping to manage cost pressures. Our seating range has
been enhanced with newer offerings that has helped growing the
Our business has three main segments - Indian household
business (including personal care and domestic lighting), Unza -
International personal care business, that spans across Asia and
business.
Africa and the Indian Office Solutions business. Let me share
strategic acquisition
with you a snapshot update of our businesses in 2011-12.
As we forge ahead, our guiding principles remain:
• Obsession for growth - both organic and through relevant
The Indian household business, including personal care and
domestic lighting, had a strong year - growing 24%. This growth
was led by our flagship brand Santoor - with revenues crossing
•
Leadership position in defined countries and businesses
We seek leadership in Personal Care in India, Malaysia and
Vietnam. Similarly we seek leadership in Domestic
Lighting, Institutional Lighting and Modular Furniture
the ` 10 billion mark. The brand relaunch with an enhanced
businesses in India.
bathing experience and a new perfume seems to have been well
accepted by the consumer. Santoor is now the largest Toilet Soap
• Globally strong focus brands - led by innovation and
brand in combined South and West India. Santoor extensions into
sustainability. Increased investments in Research &
Glycerine soap and deodorants also have delivered. Our acquired
Development will help us leverage technology for better
brand - Yardley (62% up) has been well accepted by the younger
innovation.
generation. The Domestic Lighting business, which includes
modular switches, incandescent light bulbs, compact fluorescent
lamps (CFLs) and luminaries, also saw good growth - led by CFLs
(35% growth).
•
Leveraging our Team Capability
• Speedy and Effective Execution
It has been a stimulating year in 2011-12! We believe 2012-13, will
be even more exciting!
Very Sincerely,
Romano & Dashing - Male Toiletry brands (14% up). Our skin
Vineet Agrawal
care thrust in Malaysia has worked well and we are now the
President - Wipro Consumer Care & Lighting Group
Our International personal care business - Unza focuses on
personal wash, toiletries, fragrances , deodorants, skincare and
haircare categories. Here, we grew 20%, with leading growth
from China (28%) , Middle East (19%) and Vietnam (13%). The
lead brands, we focus on in Unza are Enchanteur - a female
toiletries brand (21% up - with revenues crossing the USD 100
Mn mark), Safi - a Halal toiletries brand (19% up) and on
market leader in that country. The focus on improving
distribution and increasing media spends has helped improve
growths in South East Asian countries.
The Office solutions business in India, which includes
Commercial Lighting and Modular furniture grew 15%, impacted
by the slowdown in capacity expansion in some of our strong
market segments like Modern work spaces, IT & Enabled
20
21
PRESIDENT'S (WIPRO CONSUMER CARE & LIGHTING GROUP)
LETTER TO
THE STAKEHOLDERS
Dear Stakeholders,
Services etc. Our focus on lighting of Green buildings and on new
technology like LED paid off, with 100 out of 170 certified Green
Wipro Consumer Care and Lighting had an invigorating business
Buildings in India using Wipro Lighting. Our range of LED fixtures
year in 2011-12. While the environment continued to be extremely
has been very well accepted by our customers. The launches of
challenging in key business categories and geographies - we
premium designer ranges, has continued to do well in our
managed the terrain well and have delivered superior performance
Modular furniture segment, enhancing our product portfolio, as
in all identified focus areas and business bets. Our business has
grown around 11 times over the last 9 years.
well as helping to manage cost pressures. Our seating range has
been enhanced with newer offerings that has helped growing the
Our business has three main segments - Indian household
business (including personal care and domestic lighting), Unza -
International personal care business, that spans across Asia and
As we forge ahead, our guiding principles remain:
• Obsession for growth - both organic and through relevant
business.
Africa and the Indian Office Solutions business. Let me share
strategic acquisition
with you a snapshot update of our businesses in 2011-12.
The Indian household business, including personal care and
domestic lighting, had a strong year - growing 24%. This growth
was led by our flagship brand Santoor - with revenues crossing
•
Leadership position in defined countries and businesses
We seek leadership in Personal Care in India, Malaysia and
Vietnam. Similarly we seek leadership in Domestic
Lighting, Institutional Lighting and Modular Furniture
the ` 10 billion mark. The brand relaunch with an enhanced
businesses in India.
bathing experience and a new perfume seems to have been well
accepted by the consumer. Santoor is now the largest Toilet Soap
• Globally strong focus brands - led by innovation and
brand in combined South and West India. Santoor extensions into
sustainability. Increased investments in Research &
Glycerine soap and deodorants also have delivered. Our acquired
Development will help us leverage technology for better
brand - Yardley (62% up) has been well accepted by the younger
innovation.
generation. The Domestic Lighting business, which includes
modular switches, incandescent light bulbs, compact fluorescent
lamps (CFLs) and luminaries, also saw good growth - led by CFLs
(35% growth).
•
Leveraging our Team Capability
• Speedy and Effective Execution
Our International personal care business - Unza focuses on
personal wash, toiletries, fragrances , deodorants, skincare and
haircare categories. Here, we grew 20%, with leading growth
from China (28%) , Middle East (19%) and Vietnam (13%). The
lead brands, we focus on in Unza are Enchanteur - a female
toiletries brand (21% up - with revenues crossing the USD 100
Mn mark), Safi - a Halal toiletries brand (19% up) and on
It has been a stimulating year in 2011-12! We believe 2012-13, will
be even more exciting!
Very Sincerely,
Romano & Dashing - Male Toiletry brands (14% up). Our skin
Vineet Agrawal
care thrust in Malaysia has worked well and we are now the
President - Wipro Consumer Care & Lighting Group
market leader in that country. The focus on improving
distribution and increasing media spends has helped improve
growths in South East Asian countries.
The Office solutions business in India, which includes
Commercial Lighting and Modular furniture grew 15%, impacted
by the slowdown in capacity expansion in some of our strong
market segments like Modern work spaces, IT & Enabled
20
21
PRESIDENT'S (
LETTER TO
THE STAKEHOLDERS
WIPRO INFRASTRUCTURE ENGINEERING
)
Dear Stakeholders,
During 2011-12 Wipro Infrastructure Engineering continued to
grow aggressively in line with our vision of becoming the largest
Hydraulics Company in the world with a 15% global market
share. While we did exceptionally well in India, we are getting
back on the growth path in Europe despite the slowdown. We
Supplier of Value-added Precision Machined Products and
Subsystems to major aviation OEMs.
We also formed a joint venture with Kawasaki for manufacturing
excavator pumps for the Indian market. The new entity, Wipro
Kawasaki Precision Machinery Pvt. Ltd. will be setting up a green-
field facility in Bangalore going live in 2012.
continued to remain focused on consolidating our position in our
Despite the global uncertainty over Eurozone and the relative
key markets, warding off pressures from local competition and
slowdown in India - our biggest market, we remain bullish on the
cheaper imports. Despite the intense competition due to excess
long term growth potential and the infinite possibilities it offers
capacity, we maintained or grew our market share in all key
customer segments. Going forward, we remain bullish on
growing at twice the industry growth rate in our key markets.
From the business expansion perspective, it has been an
unprecedented year for Wipro Infrastructure Engineering as we
forayed into new segments, forged new partnerships and
widened our global footprint.
us. We will continue to invest prudently in capacity expansion
while driving excellence in our offerings to customers through
cost competitiveness and excellence in quality. In terms of
geographic expansion we are keenly looking at the US/North
American market as well as East Europe. While North America
will get us an access to the second largest market, East Europe
presence will help us drive our cost effectiveness in Europe.
We completed the acquisition of R. K. M. EQUIPAMENTOS
Very Sincerely,
HIDRÁULICOS LTDA, one of the leading hydraulic cylinders
manufacturers in Brazil. This acquisition provides us immediate
market access not just into Brazil but the entire Latin American
region as well as strong design and manufacturing expertise for
hydraulics in the agricultural equipment segment.
During the year we commenced our first green-field operations in
China; the world’s largest construction equipment market, which
is pivotal for our global leadership ambitions. We expect to
leverage this manufacturing base to make deep inroads into the
identified segments in the Chinese market.
We formalised our entry into the Aerospace and Defence (A&D)
segment during the year through an agreement to manufacture
actuators for a European aviation major. This is a significant first
step towards realizing our vision to become a leading Global
Pratik Kumar
President- Wipro Infrastructure Engineering
22
23
PRESIDENT'S (
LETTER TO
THE STAKEHOLDERS
WIPRO INFRASTRUCTURE ENGINEERING
)
Dear Stakeholders,
During 2011-12 Wipro Infrastructure Engineering continued to
grow aggressively in line with our vision of becoming the largest
Hydraulics Company in the world with a 15% global market
share. While we did exceptionally well in India, we are getting
back on the growth path in Europe despite the slowdown. We
Supplier of Value-added Precision Machined Products and
Subsystems to major aviation OEMs.
We also formed a joint venture with Kawasaki for manufacturing
excavator pumps for the Indian market. The new entity, Wipro
Kawasaki Precision Machinery Pvt. Ltd. will be setting up a green-
field facility in Bangalore going live in 2012.
continued to remain focused on consolidating our position in our
Despite the global uncertainty over Eurozone and the relative
key markets, warding off pressures from local competition and
slowdown in India - our biggest market, we remain bullish on the
cheaper imports. Despite the intense competition due to excess
long term growth potential and the infinite possibilities it offers
capacity, we maintained or grew our market share in all key
customer segments. Going forward, we remain bullish on
growing at twice the industry growth rate in our key markets.
From the business expansion perspective, it has been an
unprecedented year for Wipro Infrastructure Engineering as we
forayed into new segments, forged new partnerships and
widened our global footprint.
us. We will continue to invest prudently in capacity expansion
while driving excellence in our offerings to customers through
cost competitiveness and excellence in quality. In terms of
geographic expansion we are keenly looking at the US/North
American market as well as East Europe. While North America
will get us an access to the second largest market, East Europe
presence will help us drive our cost effectiveness in Europe.
We completed the acquisition of R. K. M. EQUIPAMENTOS
Very Sincerely,
HIDRÁULICOS LTDA, one of the leading hydraulic cylinders
manufacturers in Brazil. This acquisition provides us immediate
market access not just into Brazil but the entire Latin American
region as well as strong design and manufacturing expertise for
hydraulics in the agricultural equipment segment.
During the year we commenced our first green-field operations in
China; the world’s largest construction equipment market, which
is pivotal for our global leadership ambitions. We expect to
leverage this manufacturing base to make deep inroads into the
identified segments in the Chinese market.
We formalised our entry into the Aerospace and Defence (A&D)
segment during the year through an agreement to manufacture
actuators for a European aviation major. This is a significant first
step towards realizing our vision to become a leading Global
Pratik Kumar
President- Wipro Infrastructure Engineering
22
23
BOARD OF DIRECTORS
Sitting Left to Right
Ashok S. Ganguly - Independent Non-Executive Director
William Arthur Owens - Independent Non-Executive Director
Jagdish N. Sheth - Independent Non-Executive Director
Azim H. Premji - Chairman
Dr. Henning Kagermann - Independent Non-Executive Director
Shyam Saran - Independent Non-Executive Director (in absence)
Standing Left to Right
B. C. Prabhakar - Independent Non-Executive Director
Priya Mohan Sinha - Independent Non-Executive Director
Suresh C Senapaty - Executive Director & Chief Financial Officer
Narayanan Vaghul - Independent Non-Executive Director
M. K. Sharma - Independent Non-Executive Director
T. K. Kurien - CEO, IT Business & Executive Director
24
25
BOARD OF DIRECTORS
Sitting Left to Right
Jagdish N. Sheth - Independent Non-Executive Director
Standing Left to Right
Ashok S. Ganguly - Independent Non-Executive Director
William Arthur Owens - Independent Non-Executive Director
Azim H. Premji - Chairman
Dr. Henning Kagermann - Independent Non-Executive Director
Shyam Saran - Independent Non-Executive Director (in absence)
B. C. Prabhakar - Independent Non-Executive Director
Priya Mohan Sinha - Independent Non-Executive Director
Suresh C Senapaty - Executive Director & Chief Financial Officer
Narayanan Vaghul - Independent Non-Executive Director
M. K. Sharma - Independent Non-Executive Director
T. K. Kurien - CEO, IT Business & Executive Director
24
25
Azim H. Premji
Minister’s Council on Trade and Industry and the India-USA CEO Council, established by the Prime
Mr. Premji has served as our Chief Executive Officer, Chairman and Managing Director (designated as
Minister of India and the President of the USA. Dr. Ganguly is a Rajya Sabha Member. He is a former
Chairman) since September 1968. In 2011, Mr. Premji was honored with the Padma Vibhushan award by
member of the Board of British Airways Plc (1996-2005) and Unilever Plc/NV (1990-97) and a Chairman
the Government of India for his contribution in trade and industry. Mr. Premji is a graduate in Electrical
of Hindustan Unilever Limited (1980-90). Dr. Ganguly was on the Central Board of Directors of the Reserve
Engineering from Stanford University, USA.
T. K. Kurien
Bank of India (2000-2009). In 2006, Dr. Ganguly was awarded the CBE (Hon) by the United Kingdom. In
2008, Dr. Ganguly received the Economic Times Lifetime Achievement Award. Dr. Ganguly received the
Padma Bhushan award by the Government of India in January 1987 and the Padma Vibhushan award in
Mr. Kurien is the CEO, IT Business and Executive Director of the company. Mr. Kurien is also a member of
January 2009.
the Wipro Corporate Executive Council and is credited with building global leadership for some of Wipro’s
business units across the world. Prior to taking over the role as CEO of the IT Business in Feb 2011, he was
Dr. Henning Kagermann
President of Wipro’s recently launched Eco Energy Business. Mr. Kurien was awarded the Global BPO
Dr. Kagermann became a director of the Company on October 27, 2009. He served as Chief Executive
Industry Leader award by IQPC (International Quality & Productivity Center) in 2007 for exceptional
officer of SAP AG until 2009. He has been a member of the SAP Executive Board since 1991. He is also
performance of Wipro BPO.
Suresh C. Senapaty
President of Acatech (GermanAcademy of Science and Technology) and currently a member of
supervisory boards of Deutsche Bank AG, Munich Re, Deutsche Post, BMW Group in Germany and Nokia.
Dr. Kagermann is a professor of Theoretical Physics at the Technical University Braunschweig, Germany
Mr. Senapaty has served as our Chief Financial Officer and Executive Director since April 2008 and served
and received an honorary doctorate from the University of Magdeburg, Germany.
with us in other positions since April 1980. He is a member of the Administrative/Shareholders & Investor
Grievance Committee of our company. Mr. Senapaty holds a B. Com. from Utkal University in India, and is a
Narayanan Vaghul
Fellow Member of the Institute of Chartered Accountants of India. Mr. Senapaty is on the boards of the
Mr. Vaghul has served as a director on our Board since June 1997. He is the Chairman of our Audit, Risk and
following of our Indian subsidiaries/associates: Wipro Trademarks Holding Limited, Wipro Chandrika
Compliance Committee, a member of the Board Governance & Nomination Committee and a member of
Limited, Wipro Travel Services Limited, Cygnus Negri Investments Private Limited, Wipro Technology
the Compensation Committee. He was the Chairman of the Board of ICICI Bank Limited from September
Services Limited, Wipro Consumer Care Limited and Wipro GE Healthcare Private Limited. Mr. Senapaty is
1985 to April 2009. Mr. Vaghul is also on the Boards of Mahindra and Mahindra Ltd., Mahindra World City
also the Chairman of the Audit Committee of Wipro Technology Services Limited.
Developers Limited, Piramal Healthcare Limited, and Apollo Hospitals Enterprise Limited. Mr. Vaghul is on
Dr. Ashok Ganguly
the boards of Hemogenomics Pvt. Ltd., Universal Trustees Pvt. Ltd., and IKP Trusteeship Services Limited.
Mr. Vaghul is the Chairman of the Compensation Committee of Mahindra and Mahindra Limited and
Dr. Ganguly has served as a director on our Board since 1999. He is the Chairman of our Board Governance
Piramal Healthcare Limited. Mr. Vaghul is also a member of the Audit Committee in Nicholas Piramal India
& Nomination Committee and Compensation Committee. He is currently the Chairman of ABP Pvt. Ltd
Limited. Mr. Vaghul is a member of the Remuneration Committee of Mahindra World City Developers
(Ananda Bazar Patrika Group).Dr. Ganguly also currently serves as a non-executive director of Mahindra &
Limited and Apollo Hospitals Enterprise Limited. Mr. Vaghul is also the lead independent director of our
Mahindra Limited and Dr Reddy Laboratories Limited. DrGanguly is on the advisory board of Diageo India
Company. Mr. Vaghul holds Bachelor (Honors) degree in Commerce from Madras University. Mr. Vaghul
Private Limited. Dr. Ganguly is the chairman of Research and Development Committee of Mahindra and
was the recipient of the Padma Bhushan award by the Government of India in 2010. Mr. Vaghul also
Mahindra Ltd, Member of Nomination, Governance & Compensation Committee and Chairman of
received the Economic Times Lifetime Achievement Award.
Science,Technology & Operations Committee of Dr Reddy’s Laboratories Ltd. He is a member of the Prime
26
27
Azim H. Premji
Minister’s Council on Trade and Industry and the India-USA CEO Council, established by the Prime
Mr. Premji has served as our Chief Executive Officer, Chairman and Managing Director (designated as
Minister of India and the President of the USA. Dr. Ganguly is a Rajya Sabha Member. He is a former
Chairman) since September 1968. In 2011, Mr. Premji was honored with the Padma Vibhushan award by
member of the Board of British Airways Plc (1996-2005) and Unilever Plc/NV (1990-97) and a Chairman
the Government of India for his contribution in trade and industry. Mr. Premji is a graduate in Electrical
of Hindustan Unilever Limited (1980-90). Dr. Ganguly was on the Central Board of Directors of the Reserve
Engineering from Stanford University, USA.
T. K. Kurien
Bank of India (2000-2009). In 2006, Dr. Ganguly was awarded the CBE (Hon) by the United Kingdom. In
2008, Dr. Ganguly received the Economic Times Lifetime Achievement Award. Dr. Ganguly received the
Padma Bhushan award by the Government of India in January 1987 and the Padma Vibhushan award in
Mr. Kurien is the CEO, IT Business and Executive Director of the company. Mr. Kurien is also a member of
January 2009.
the Wipro Corporate Executive Council and is credited with building global leadership for some of Wipro’s
business units across the world. Prior to taking over the role as CEO of the IT Business in Feb 2011, he was
Dr. Henning Kagermann
President of Wipro’s recently launched Eco Energy Business. Mr. Kurien was awarded the Global BPO
Dr. Kagermann became a director of the Company on October 27, 2009. He served as Chief Executive
Industry Leader award by IQPC (International Quality & Productivity Center) in 2007 for exceptional
officer of SAP AG until 2009. He has been a member of the SAP Executive Board since 1991. He is also
performance of Wipro BPO.
Suresh C. Senapaty
President of Acatech (GermanAcademy of Science and Technology) and currently a member of
supervisory boards of Deutsche Bank AG, Munich Re, Deutsche Post, BMW Group in Germany and Nokia.
Dr. Kagermann is a professor of Theoretical Physics at the Technical University Braunschweig, Germany
Mr. Senapaty has served as our Chief Financial Officer and Executive Director since April 2008 and served
and received an honorary doctorate from the University of Magdeburg, Germany.
with us in other positions since April 1980. He is a member of the Administrative/Shareholders & Investor
Grievance Committee of our company. Mr. Senapaty holds a B. Com. from Utkal University in India, and is a
Narayanan Vaghul
Fellow Member of the Institute of Chartered Accountants of India. Mr. Senapaty is on the boards of the
Mr. Vaghul has served as a director on our Board since June 1997. He is the Chairman of our Audit, Risk and
following of our Indian subsidiaries/associates: Wipro Trademarks Holding Limited, Wipro Chandrika
Compliance Committee, a member of the Board Governance & Nomination Committee and a member of
Limited, Wipro Travel Services Limited, Cygnus Negri Investments Private Limited, Wipro Technology
the Compensation Committee. He was the Chairman of the Board of ICICI Bank Limited from September
Services Limited, Wipro Consumer Care Limited and Wipro GE Healthcare Private Limited. Mr. Senapaty is
1985 to April 2009. Mr. Vaghul is also on the Boards of Mahindra and Mahindra Ltd., Mahindra World City
also the Chairman of the Audit Committee of Wipro Technology Services Limited.
Developers Limited, Piramal Healthcare Limited, and Apollo Hospitals Enterprise Limited. Mr. Vaghul is on
Dr. Ashok Ganguly
the boards of Hemogenomics Pvt. Ltd., Universal Trustees Pvt. Ltd., and IKP Trusteeship Services Limited.
Mr. Vaghul is the Chairman of the Compensation Committee of Mahindra and Mahindra Limited and
Dr. Ganguly has served as a director on our Board since 1999. He is the Chairman of our Board Governance
Piramal Healthcare Limited. Mr. Vaghul is also a member of the Audit Committee in Nicholas Piramal India
& Nomination Committee and Compensation Committee. He is currently the Chairman of ABP Pvt. Ltd
Limited. Mr. Vaghul is a member of the Remuneration Committee of Mahindra World City Developers
(Ananda Bazar Patrika Group).Dr. Ganguly also currently serves as a non-executive director of Mahindra &
Limited and Apollo Hospitals Enterprise Limited. Mr. Vaghul is also the lead independent director of our
Mahindra Limited and Dr Reddy Laboratories Limited. DrGanguly is on the advisory board of Diageo India
Company. Mr. Vaghul holds Bachelor (Honors) degree in Commerce from Madras University. Mr. Vaghul
Private Limited. Dr. Ganguly is the chairman of Research and Development Committee of Mahindra and
was the recipient of the Padma Bhushan award by the Government of India in 2010. Mr. Vaghul also
Mahindra Ltd, Member of Nomination, Governance & Compensation Committee and Chairman of
received the Economic Times Lifetime Achievement Award.
Science,Technology & Operations Committee of Dr Reddy’s Laboratories Ltd. He is a member of the Prime
26
27
Priya Mohan Sinha
M. K. Sharma
Mr. Sinha became a director of our Company on January 1, 2002. He is a member of our Audit, Risk and
Compliance Committee, Board Governance & Nomination Committee and Compensation Committee. He
has served as the Chairman of PepsiCo India Holdings Limited and President of Pepsi Foods Limited since
July 1992. From October 1981 to November 1992, he was on the Executive Board of Directors of Hindustan
Lever Limited (currently Hindustan Unilever Limited). From 1981 to 1985, he also served as Sales Director
Sharma is a member of the Audit Committee of Fulford (India) Limited and Thomas Cook (India) Limited. Mr.
of Hindustan Lever Limited (currently Hindustan Unilever Limited). Currently, he is also on the board of
Lafarge India Private Limited. He is also a member of Audit and Board and Governance Committee Lafarge
India Private Limited. He was also the Chairman of Reckitt Coleman India Limited and Chairman of Stephan
Chemicals India Limited. Mr. Sinha is also on the Advisory Board of Rieter India. Mr. Sinha holds a Bachelor
of Arts from Patna University, and he has also attended the Advanced Management Program at the Sloan
School of Management, Massachusetts Institute of Technology.
William Arthur Owens
Mr. Owens has served as a director on our Board since July 1, 2006. He is also a member of the Board
Governance and Nomination Committee. He has held a number of senior leadership positions at large
multinational corporations. From April 2004 to November 2005, Mr. Owens served as Chief Executive
Officer and Vice Chairman of the Board of Directors of Nortel Networks Corporation, a networking
communications company. From August 1998 to April 2004, Mr. Owens served as Chairman of the Board
of Directors and Chief Executive Officer of Teledesic LLC, a satellite communications company. From
June 1996 to August 1998, Mr. Owens served as President, Chief Operating Officer and Vice Chairman of
B. C. Prabhakar
the Board of Directors of Science Applications International Corporation (SAIC), a research and
Mr. Prabhakar has served as a director on our Board since February 1997. He has been a practicing lawyer since
engineering firm. Presently, Mr. Owens serves as a member of the Board of Directors of Polycom Inc.,
Intelius, Flow Mobile, Prometheus, and Chairman of Century Link Inc., a communications company. Mr.
Owens holds an M.B.A. (Honors) degree from George Washington University, a B.S. in Mathematics from
the U.S. Naval Academy and a B.A. and M.A. in Politics, Philosophy and Economics from Oxford University.
Mr. Sharma became a director of the Company on July 1, 2011. He is a member of our Audit, Risk and Compliance
Committee. He served as Vice Chairman of Hindustan Unilever Limited from 2000 to 2007. He served as a
whole-time director of Hindustan Unilever Limited from 1995 to 2000. He is currently on the boards of ICICI
Lombard General Insurance Co. Limited, Fulford India Limited (Indian affiliate of MSD), Thomas Cook (India)
Limited, Birla Corporation Limited, KEC International Limited and The Andhra Pradesh Paper Mills Limited. Mr.
Sharma is the Chairman of Remuneration Committee of Fulford (India) Limited. Mr. Sharma is a member the
Shareholder’s Grievance Committee of Thomas Cook (India) Limited. Mr. Sharma is the Chairman of the Board
Governance and Nomination Committee, Compensation Committee of ICICI Lombard General Insurance Co.
Limited.
Shyam Saran
Mr. Saran became a director of our Company on July 1, 2010. He has been a director of Indian Oil Corporation
Limited since March 2012. He is a career diplomat who has served in significant positions in the Indian
government for over three decades. He joined Indian Foreign Service in 1970. He last served as the Special Envoy
of the Prime Minister of India (October 2006 to March 2010) specializing in nuclear issues, and he also was the
Indian envoy on climate change. Prior to this he was the Foreign Secretary of the Government of India from 2004
to 2006. He also served as the Ambassador of India to Nepal, Indonesia, Myanmar and Mauritius. His
diplomatic stints have taken him to Indian missions in Geneva, Beijing and Tokyo. He has been a Fellow of the
United Nations Disarmament Program in Geneva, Vienna and New York, U.S.A. Mr. Saran holds a Post Graduate
degree in Economics. Mr. Saran has been honored with the Padma Bhushan award by the Government of India
for his contribution in civil services.
April 1970. Mr. Prabhakar holds a B.A. in Political Science and Sociology and a BL. from Mysore University, India.
Mr. Prabhakar serves asa non-executive director of Automotive Axles Limited and 3M India Limited. He is also a
member of the Audit, Risk and Compliance Committee and Chairman of the Administrative and Shareholder
Investor Grievances Committee of Wipro Limited.
Dr. Jagdish N. Seth
Dr. Seth has served as a director on our Board since January 1999. Dr. Seth has been a professor at Emory
University since July 1991. Previously, Dr. Seth served on the faculty of Columbia University, Massachusetts
Institute of Technology, the University of Illinois, and the University of Southern California. Dr. Seth also serves on
the board of Manipal Acunova Ltd. Dr. Seth holds a B.Com (Honors) from Madras University, a M.B.A. and a Ph.D
in Behavioral Sciences from the University of Pittsburgh. Dr. Seth is also the Chairman of Academy of Indian
Marketing Professionals.
28
29
Mr. Sinha became a director of our Company on January 1, 2002. He is a member of our Audit, Risk and
Compliance Committee, Board Governance & Nomination Committee and Compensation Committee. He
has served as the Chairman of PepsiCo India Holdings Limited and President of Pepsi Foods Limited since
July 1992. From October 1981 to November 1992, he was on the Executive Board of Directors of Hindustan
of Hindustan Lever Limited (currently Hindustan Unilever Limited). Currently, he is also on the board of
Lafarge India Private Limited. He is also a member of Audit and Board and Governance Committee Lafarge
India Private Limited. He was also the Chairman of Reckitt Coleman India Limited and Chairman of Stephan
Chemicals India Limited. Mr. Sinha is also on the Advisory Board of Rieter India. Mr. Sinha holds a Bachelor
of Arts from Patna University, and he has also attended the Advanced Management Program at the Sloan
School of Management, Massachusetts Institute of Technology.
William Arthur Owens
Mr. Owens has served as a director on our Board since July 1, 2006. He is also a member of the Board
Governance and Nomination Committee. He has held a number of senior leadership positions at large
multinational corporations. From April 2004 to November 2005, Mr. Owens served as Chief Executive
Officer and Vice Chairman of the Board of Directors of Nortel Networks Corporation, a networking
communications company. From August 1998 to April 2004, Mr. Owens served as Chairman of the Board
of Directors and Chief Executive Officer of Teledesic LLC, a satellite communications company. From
engineering firm. Presently, Mr. Owens serves as a member of the Board of Directors of Polycom Inc.,
Intelius, Flow Mobile, Prometheus, and Chairman of Century Link Inc., a communications company. Mr.
Owens holds an M.B.A. (Honors) degree from George Washington University, a B.S. in Mathematics from
the U.S. Naval Academy and a B.A. and M.A. in Politics, Philosophy and Economics from Oxford University.
Priya Mohan Sinha
M. K. Sharma
Lever Limited (currently Hindustan Unilever Limited). From 1981 to 1985, he also served as Sales Director
Sharma is a member of the Audit Committee of Fulford (India) Limited and Thomas Cook (India) Limited. Mr.
Mr. Sharma became a director of the Company on July 1, 2011. He is a member of our Audit, Risk and Compliance
Committee. He served as Vice Chairman of Hindustan Unilever Limited from 2000 to 2007. He served as a
whole-time director of Hindustan Unilever Limited from 1995 to 2000. He is currently on the boards of ICICI
Lombard General Insurance Co. Limited, Fulford India Limited (Indian affiliate of MSD), Thomas Cook (India)
Limited, Birla Corporation Limited, KEC International Limited and The Andhra Pradesh Paper Mills Limited. Mr.
Sharma is the Chairman of Remuneration Committee of Fulford (India) Limited. Mr. Sharma is a member the
Shareholder’s Grievance Committee of Thomas Cook (India) Limited. Mr. Sharma is the Chairman of the Board
Governance and Nomination Committee, Compensation Committee of ICICI Lombard General Insurance Co.
Limited.
Shyam Saran
Mr. Saran became a director of our Company on July 1, 2010. He has been a director of Indian Oil Corporation
Limited since March 2012. He is a career diplomat who has served in significant positions in the Indian
government for over three decades. He joined Indian Foreign Service in 1970. He last served as the Special Envoy
of the Prime Minister of India (October 2006 to March 2010) specializing in nuclear issues, and he also was the
Indian envoy on climate change. Prior to this he was the Foreign Secretary of the Government of India from 2004
to 2006. He also served as the Ambassador of India to Nepal, Indonesia, Myanmar and Mauritius. His
diplomatic stints have taken him to Indian missions in Geneva, Beijing and Tokyo. He has been a Fellow of the
United Nations Disarmament Program in Geneva, Vienna and New York, U.S.A. Mr. Saran holds a Post Graduate
degree in Economics. Mr. Saran has been honored with the Padma Bhushan award by the Government of India
for his contribution in civil services.
June 1996 to August 1998, Mr. Owens served as President, Chief Operating Officer and Vice Chairman of
B. C. Prabhakar
the Board of Directors of Science Applications International Corporation (SAIC), a research and
Mr. Prabhakar has served as a director on our Board since February 1997. He has been a practicing lawyer since
April 1970. Mr. Prabhakar holds a B.A. in Political Science and Sociology and a BL. from Mysore University, India.
Mr. Prabhakar serves asa non-executive director of Automotive Axles Limited and 3M India Limited. He is also a
member of the Audit, Risk and Compliance Committee and Chairman of the Administrative and Shareholder
Investor Grievances Committee of Wipro Limited.
Dr. Jagdish N. Seth
Dr. Seth has served as a director on our Board since January 1999. Dr. Seth has been a professor at Emory
University since July 1991. Previously, Dr. Seth served on the faculty of Columbia University, Massachusetts
Institute of Technology, the University of Illinois, and the University of Southern California. Dr. Seth also serves on
the board of Manipal Acunova Ltd. Dr. Seth holds a B.Com (Honors) from Madras University, a M.B.A. and a Ph.D
in Behavioral Sciences from the University of Pittsburgh. Dr. Seth is also the Chairman of Academy of Indian
Marketing Professionals.
28
29
CORPORATE EXECUTIVE COUNCIL
Pratik Kumar
Mr. Kumar has been associated with Wipro for the last 20 years and is a member of Wipro's senior leadership team. He
has been instrumental in architecting the Wipro Competency Framework for talent management. It was under Mr.
Kumar's leadership that Wipro was recognised as the first company in the world to be assessed at PCMM Level 5, the
highest maturity level on the SEI framework of Carnegie Mellon University. A Post Graduate in Management from XLRI,
Jamshedpur, he has assumed the leadership of Wipro Infrastructure Engineering business as President since July 2010.
Anurag Behar
Mr. Behar has earlier led the Wipro Infrastructure Engineering business, with remarkable growth from USD 30 million to
over USD 300 million in four years. He has also led Wipro’s ecological sustainability initiative ‘Eco Eye’ and also leads
Wipro Cares, a not-for-profit trust for local communities and rehabilitation efforts in communities affected by natural
disasters. Mr. Behar is a Director on the Board of Wipro GE Healthcare Ltd. and a member of the Board of TERI
University. He has an MBA in Marketing & Finance from XLRI, Jamshedpur and a Degree in Electrical Engineering from
REC, Trichy. Mr. Behar has been honoured as a ‘Young Global Leader’ by the World Economic Forum.
Mr. Agrawal is a B.Tech from IIT, New Delhi, and has been instrumental in establishing Wipro’s various national brands
and repositioning of the Wipro identity. Under his leadership, Wipro launched the Innovation Initiative, Wipro Applying
Thought Program and Six Sigma Consultancy. Mr. Agrawal has been awarded the ‘Distinguished Alumni’ award from IIT
Vineet Agrawal
Delhi in 2008.
Sitting Left to Right
T. K. Kurien - CEO, IT Business & Executive Director
Azim H. Premji - Chairman
Standing Left to Right
Pratik Kumar - EVP - HR, Wipro & President, Wipro Infrastructure Engineering
Suresh C Senapaty - CFO & Executive Director
Vineet Agrawal - President, Wipro Consumer Care and Lighting
Anurag Behar - Chief Sustainability Officer
30
31
CORPORATE EXECUTIVE COUNCIL
Pratik Kumar
Mr. Kumar has been associated with Wipro for the last 20 years and is a member of Wipro's senior leadership team. He
has been instrumental in architecting the Wipro Competency Framework for talent management. It was under Mr.
Kumar's leadership that Wipro was recognised as the first company in the world to be assessed at PCMM Level 5, the
highest maturity level on the SEI framework of Carnegie Mellon University. A Post Graduate in Management from XLRI,
Jamshedpur, he has assumed the leadership of Wipro Infrastructure Engineering business as President since July 2010.
Anurag Behar
Mr. Behar has earlier led the Wipro Infrastructure Engineering business, with remarkable growth from USD 30 million to
over USD 300 million in four years. He has also led Wipro’s ecological sustainability initiative ‘Eco Eye’ and also leads
Wipro Cares, a not-for-profit trust for local communities and rehabilitation efforts in communities affected by natural
disasters. Mr. Behar is a Director on the Board of Wipro GE Healthcare Ltd. and a member of the Board of TERI
University. He has an MBA in Marketing & Finance from XLRI, Jamshedpur and a Degree in Electrical Engineering from
REC, Trichy. Mr. Behar has been honoured as a ‘Young Global Leader’ by the World Economic Forum.
Vineet Agrawal
Mr. Agrawal is a B.Tech from IIT, New Delhi, and has been instrumental in establishing Wipro’s various national brands
and repositioning of the Wipro identity. Under his leadership, Wipro launched the Innovation Initiative, Wipro Applying
Thought Program and Six Sigma Consultancy. Mr. Agrawal has been awarded the ‘Distinguished Alumni’ award from IIT
Delhi in 2008.
Sitting Left to Right
T. K. Kurien - CEO, IT Business & Executive Director
Azim H. Premji - Chairman
Pratik Kumar - EVP - HR, Wipro & President, Wipro Infrastructure Engineering
Standing Left to Right
Suresh C Senapaty - CFO & Executive Director
Vineet Agrawal - President, Wipro Consumer Care and Lighting
Anurag Behar - Chief Sustainability Officer
30
31
MANAGEMENT
DISCUSSION & ANALYSIS
Business Segment Overview
therefore we target to be
Economic Overview
Global economy is under stress due to high levels of sovereign
debt in the Western markets coupled with increasing levels of
unemployment and rising income and wealth inequalities. We
see subdued growth in the developed markets and growth
slowing down in the developing markets. In this economic
environment, businesses are focused on investing in newer areas
for growth and driving productivity and enhancing sustainability.
We believe the shift towards driving sustainable growth, has
brought ecological sustainability to the mainstream business
mindset.
The current economic landscape places technology as a primary
business lever in developed markets, which is an opportunity
that Wipro is well positioned to leverage. To elaborate,
technology is the key enabler for businesses to adapt to the
volatile macro environment and the changing ecological
landscape, and our IT business is well set to capitalize on it. In
the emerging markets, our Consumer Care business is well
positioned to ride on the rising consumer demand, while our
manufacturing presence in low cost countries will help our
Infrastructure engineering business address the global demand
for profitability.
IT Services
Industry Overview
NASSCOM Strategic Review Report 2012 estimates worldwide
technology spending to exceed $ 1.7 trillion in 2011, a growth of
5.4% over 2010.
IT Spends bycategory
2010
2011
Growth
($ Billion)
IT Services
BPO
Software
Hardware
Total Spend
IT Services + BPO
586
147
733
293
599
605
153
758
309
645
1,625
1,712
3.2%
4.1%
3.4%
5.5%
7.7%
5.4%
Engineering Spend*
1,125
1,150
2.2%
The shift towards global sourcing, continues, with a 12% growth
in 2011 over 2010. We see a continuing trend of global
businesses turning to offshore technology service providers to
meet their need for Variabilization of their cost structures,
enhanced cost competitiveness and efficiency through
differentiated solutions.
Over the past two decades, India has risen to become the
leading destination for global sourcing of IT, BPO and R&D
services. Established Indian IT services companies have a proven
track record for providing business and technology solutions,
ability to handle scale, high quality talent and strong domain and
technology capabilities. These factors, coupled with strong
existing client relationships have facilitated India's emergence as
the global outsourcing hub.
Wipro is well positioned to address the $ 758 billion market of IT
Services and BPO. In addition, Wipro's unique capability in
Engineering services help us address the $ 1.15 trillion global
spend in that area. Our market continues to be large and our
penetration levels low. We expect Indian IT exports to grow
faster than the growth in global technology spends.
Wipro: Our Credentials and Strategy
Our over-arching desire is to drive 'Accelerated Growth' and
1 A trusted partner of choice to our Clients;
2 Preferred employer of choice in the sphere of our operations
to our Employees;
3 Preferred partner of choice to our Alliance partners; and
4 Recognized as an organization that delivers sustainable and
consistent profitable growth to our Investors
The key elements to realize our accelerated growth are:
¨ Differentiated & prioritized approach to growth &
investments: Our focus is to target growth hot spots across
industry segments and geographies. viz.
•
Industry /Vertical focus: We continue to invest significant
resources in understanding and prioritizing verticals such as
energy, natural resources and utilities, banking, financial
services and insurance, healthcare, life sciences & services
and retail and consumer product goods. Within these
verticals, we invest in acquiring deep industry knowledge,
understanding their information and technology
and leveraging available technologies to deliver effective
solutions and products to our clients and potential clients.
We seek to meet all the IT services needs of our clients in
these verticals with our broad range of specialized service
offerings that are designed to address their industry specific
needs.
• Geographies: Our prioritized investments in addition to our
major markets will be focused on markets such as France and
Germany in Europe, Canada, India, the Middle East, Asia
Pacific and Africa.
32
33
MANAGEMENT
DISCUSSION & ANALYSIS
Economic Overview
Global economy is under stress due to high levels of sovereign
debt in the Western markets coupled with increasing levels of
unemployment and rising income and wealth inequalities. We
see subdued growth in the developed markets and growth
slowing down in the developing markets. In this economic
environment, businesses are focused on investing in newer areas
for growth and driving productivity and enhancing sustainability.
We believe the shift towards driving sustainable growth, has
brought ecological sustainability to the mainstream business
mindset.
The current economic landscape places technology as a primary
business lever in developed markets, which is an opportunity
that Wipro is well positioned to leverage. To elaborate,
technology is the key enabler for businesses to adapt to the
volatile macro environment and the changing ecological
landscape, and our IT business is well set to capitalize on it. In
the emerging markets, our Consumer Care business is well
positioned to ride on the rising consumer demand, while our
manufacturing presence in low cost countries will help our
Infrastructure engineering business address the global demand
for profitability.
Business Segment Overview
IT Services
Industry Overview
NASSCOM Strategic Review Report 2012 estimates worldwide
technology spending to exceed $ 1.7 trillion in 2011, a growth of
5.4% over 2010.
IT Spends bycategory
($ Billion)
IT Services
BPO
IT Services + BPO
Software
Hardware
Total Spend
2010
2011
Growth
586
147
733
293
599
605
153
758
309
645
1,625
1,712
3.2%
4.1%
3.4%
5.5%
7.7%
5.4%
Engineering Spend*
1,125
1,150
2.2%
The shift towards global sourcing, continues, with a 12% growth
in 2011 over 2010. We see a continuing trend of global
businesses turning to offshore technology service providers to
meet their need for Variabilization of their cost structures,
enhanced cost competitiveness and efficiency through
differentiated solutions.
Over the past two decades, India has risen to become the
leading destination for global sourcing of IT, BPO and R&D
services. Established Indian IT services companies have a proven
track record for providing business and technology solutions,
ability to handle scale, high quality talent and strong domain and
technology capabilities. These factors, coupled with strong
existing client relationships have facilitated India's emergence as
the global outsourcing hub.
Wipro is well positioned to address the $ 758 billion market of IT
Services and BPO. In addition, Wipro's unique capability in
Engineering services help us address the $ 1.15 trillion global
spend in that area. Our market continues to be large and our
penetration levels low. We expect Indian IT exports to grow
faster than the growth in global technology spends.
Wipro: Our Credentials and Strategy
Our over-arching desire is to drive 'Accelerated Growth' and
therefore we target to be
1 A trusted partner of choice to our Clients;
2 Preferred employer of choice in the sphere of our operations
to our Employees;
3 Preferred partner of choice to our Alliance partners; and
4 Recognized as an organization that delivers sustainable and
consistent profitable growth to our Investors
The key elements to realize our accelerated growth are:
¨ Differentiated & prioritized approach to growth &
investments: Our focus is to target growth hot spots across
industry segments and geographies. viz.
•
Industry /Vertical focus: We continue to invest significant
resources in understanding and prioritizing verticals such as
energy, natural resources and utilities, banking, financial
services and insurance, healthcare, life sciences & services
and retail and consumer product goods. Within these
verticals, we invest in acquiring deep industry knowledge,
understanding their information and technology
and leveraging available technologies to deliver effective
solutions and products to our clients and potential clients.
We seek to meet all the IT services needs of our clients in
these verticals with our broad range of specialized service
offerings that are designed to address their industry specific
needs.
• Geographies: Our prioritized investments in addition to our
major markets will be focused on markets such as France and
Germany in Europe, Canada, India, the Middle East, Asia
Pacific and Africa.
32
33
• Technologies: We will continue to invest in the 3 disruptive
technologies viz. Cloud Computing Services, Mobility Services
& Analytics with the objective of providing differentiated
business oriented solutions to our customers.
¯ Cloud Computing Services: Our cloud services offering is a
growth driver for our business, and we continue to develop
and improve our cloud based service offerings.
We recognize that an integrated solutions approach is
necessary to realize the business value of cloud services.
We help clients achieve it through:
™ Strategy Consulting Services: Assist our customers
integrate cloud services into their IT portfolio across
public, private and hybrid cloud environments.
™ System Integration Services: Design, build, deploy and
manage cloud computing environments – from
implementing on-premise private clouds for clients to
implementing packaged product SaaS offerings.
™ Engineering Services: Reengineer ISV packaged products
for delivery as a SaaS offering to end customers and host
the SaaS offerings in Wipro data centers.
™ Application Development Services: Provide application
development, testing and management services for
public cloud platforms like Salesforce.com and MS
Dynamic CRM.
™ Infrastructure Services: Offer infrastructure advisory and
collaboration services aimed at designing, managing and
monitoring public and private cloud environments and
virtual desktops.
™ Wipro branded Cloud solutions: Develop industry
specific solutions which will be delivered in a SaaS
business model to our customers.
Our solutions and services extend across the various cloud layers
from business process as a service, software as a service,
platform as a service to infrastructure as a service
¯ Mobility Services: Wipro Mobility Solutions enable next-
generation mobile products and applications from end-to-
end design of mobile devices to creating mobile
ecosystems for enterprises to serving internal and external
customers. Our focus is on understanding all components
of a mobile device, developing holistic system integration
capabilities, market proven solution accelerators, strong
partnerships with mobile enterprise application platforms,
and testing expertise.
¯ Analytics and Information Management: Our Analytics and
Information Management service helps customers
accelerate enterprise wide performance through smart,
agile and integrated analytical solutions and frameworks.
By bringing together the combined expertise of Analytics,
Business Intelligence, Performance Management and
Information Management, we help customers derive
valuable insights, make informed decisions and drive
revenues by harnessing and leveraging enterprise
information. Our service line provides consulting, business
centric and technology specific analytical solutions and
data management frameworks developed through a
complete ecosystem of partners, focusing on industry
specific analytics, optimization and operations analytics,
Enterprise Data Warehouse, MDM, Data quality and data
life cycle management.
Clients: The focus will be on deeper mining in key clients as
well as hunting and acquiring new clients. We are driving
innovation closer to the clients through Global Client partners
with focus on 138 clients. In parallel, we have created a
dedicated ecosystem for hunting.
M&A: Acquisitions will continue to play a key part in
strengthening our domain and technology capabilities, driving
increased market penetration, and broadening the depth and
breadth of our service portfolio.
¨ Employee Centricity: We believe that our employees are the
heart of our organization; hence a large part of our
management focus is towards strengthening and caring for
our employees. Our aim is to create and nourish the best in
class global leadership and provide them unlimited
opportunities for career enhancement and growth. It is our
aim to be a truly global company that not only services global
customers but also employs people worldwide. We
consciously enhance gender diversity with 28% of our
employees being women. We have 23,000 employees onsite
in customer locations of whom 38% are resident citizens. We
have employees of 73 nationalities on our rolls. Our employee
base is young with 65% of our employees aged less than 30
years and the average age of 29 years.
¨ Sales & Marketing
• Sales: We believe that our customer always comes first. To
achieve higher levels of client satisfaction we have organized
ourselves on the four key elements:
™ Client Relationship: We have designated global client
partners with single person accountability for customer
satisfaction and realizing sales targets.
™ Industry Focus: Our sales teams are dedicated to a specific
industry vertical and have significant experience and
exposure in the industry they sell to.
™ Proactive Solutions: We have a consulting led approach
to sales where our teams provide proactive solutions to
prospective clients based on their emerging and/or latent
needs.
™ Geographic Focus: Our dedicated sales teams with a
country and region specific focus increases our knowledge
of the local business culture, anticipate prospective and
existing client needs and to increase our market
penetration.
• Marketing: Our marketing organization is a key part of our
strategy and supports our sales operations by:
Performance Highlights
leadership around our products and services, enhancing our
Selling and marketing
(16,114)
(12,642)
effective IT solutions. For example, our cloud and hosted service
Operating margin
™ Building and enhancing our brand as a global company who
is a leader in global consulting and IT services;
™ Positioning for our brand with clients as a solution provider
that utilizes technology and innovation to help solve
business problems;
™ Crafting go-to-market programs that help drive demand in
the market place. These include creating thought
perception with analysts and media and generating
demand through global field marketing programs and
campaigns.
¨ Delivery Efficiencies - We seek to achieve agility and
increased efficiencies in our organization by continuously
improving the manner in which we develop and deliver our IT
services. We develop preconfigured solutions, standardized
delivery tools and technology-enabled delivery processes to
increase the speed and efficiency of our IT services and
provide our clients with faster, more accessible and more cost
offerings provide clients with standardized and automated
solutions that allow them to collect, process and analyze
information quickly without the need for extensive consultation
and configuration. We also have 101 registered patents, 18
registered copyrights and 11 registered designs. We have
approximately 56 patent applications, 12 design applications and
5 copyright applications pending for registration in various
jurisdictions across the world.
Where specialized solutions are required, we believe that more
experienced and better trained personnel can identify problems,
develop solutions and deliver those solutions in a more efficient
and cost effective manner. By deploying more experienced and
highly trained personnel across our service and product delivery
offerings, we intend to further increase our effectiveness and
efficiency. We have accelerated the speed to market of our
solutions through our globally connected delivery centers and
depth of capabilities. We have seven strategic delivery centers
outside India located in the United States, Finland, China, Poland,
Romania and Mexico. We have over 72 delivery centers globally.
Year ended
March 31,
(Figures in ` million)
Year
on
year change
2012
2011
2011-12
284,313
234,850
21.1%
92,600
81,404
13.8%
27.5%
Revenue
Gross profit
expenses
expenses
expenses
expenses
Gross margin
General and administrative
(17,221)
(15,355)
12.2%
Operating income
59,265
53,407
11.0%
As a Percentage of Revenue:
Selling and marketing
5.7%
5.4%
(29)bps
General and administrative
6.1%
6.5%
48bps
32.6%
20.8%
34.7% (209)bps
22.7%
(190)bps
Our revenue from IT Services increased by 21.1%. In US dollar
terms our revenue increased by 13.4% from US$ 5,221 million to
US$ 5,921 million. This increase is primarily on account of
increase in volume by 11.5% and increase in onsite-offshore mix
by 1.3%. Our average US/INR realization increased from ` 44.9
for the year ended March 31, 2011 to ` 48.0 for the year ended
March 31, 2012.
Our gross profit to revenue percentage declined by 209 bps
during the year. This decline in gross margin is primarily on
account of lower employee utilization rates and an increase in
personnel compensation cost during the year. Further, integration
of our SAIC acquisition from June 2011 has contributed to a
decline in gross margin by 50 bps.
During the current year, we realised 53.8% of revenue from work
done in locations outside India (“Onsite”) and remaining 46.2%
of revenue was realised from the work performed from our
development centers in India (“Offshore”).
Our continued focus on driving revenue productivity resulted in
our onsite price realization increasing by 2.3% during the year
and our offshore price realization increasing by 0.6% in US
dollar terms. Our revenue contribution from Fixed Price Projects
(FPP) is 45.7% for the year. In FPP, we undertake to complete
project within agreed timeline at a fixed price for a given scope of
work. The economic gains or losses realized from completing the
project earlier or later than initially projected timelines or at
lower or higher efforts accrues to us.
34
35
• Technologies: We will continue to invest in the 3 disruptive
valuable insights, make informed decisions and drive
• Marketing: Our marketing organization is a key part of our
technologies viz. Cloud Computing Services, Mobility Services
revenues by harnessing and leveraging enterprise
strategy and supports our sales operations by:
Performance Highlights
& Analytics with the objective of providing differentiated
information. Our service line provides consulting, business
for delivery as a SaaS offering to end customers and host
¨ Employee Centricity: We believe that our employees are the
business oriented solutions to our customers.
¯ Cloud Computing Services: Our cloud services offering is a
growth driver for our business, and we continue to develop
and improve our cloud based service offerings.
We recognize that an integrated solutions approach is
necessary to realize the business value of cloud services.
We help clients achieve it through:
™ Strategy Consulting Services: Assist our customers
integrate cloud services into their IT portfolio across
public, private and hybrid cloud environments.
™ System Integration Services: Design, build, deploy and
manage cloud computing environments – from
implementing on-premise private clouds for clients to
implementing packaged product SaaS offerings.
™ Engineering Services: Reengineer ISV packaged products
the SaaS offerings in Wipro data centers.
™ Application Development Services: Provide application
development, testing and management services for
public cloud platforms like Salesforce.com and MS
Dynamic CRM.
™ Infrastructure Services: Offer infrastructure advisory and
collaboration services aimed at designing, managing and
monitoring public and private cloud environments and
virtual desktops.
™ Wipro branded Cloud solutions: Develop industry
specific solutions which will be delivered in a SaaS
business model to our customers.
Our solutions and services extend across the various cloud layers
from business process as a service, software as a service,
platform as a service to infrastructure as a service
¯ Mobility Services: Wipro Mobility Solutions enable next-
generation mobile products and applications from end-to-
end design of mobile devices to creating mobile
ecosystems for enterprises to serving internal and external
customers. Our focus is on understanding all components
of a mobile device, developing holistic system integration
capabilities, market proven solution accelerators, strong
partnerships with mobile enterprise application platforms,
and testing expertise.
¯ Analytics and Information Management: Our Analytics and
Information Management service helps customers
accelerate enterprise wide performance through smart,
agile and integrated analytical solutions and frameworks.
By bringing together the combined expertise of Analytics,
Business Intelligence, Performance Management and
Information Management, we help customers derive
centric and technology specific analytical solutions and
data management frameworks developed through a
complete ecosystem of partners, focusing on industry
specific analytics, optimization and operations analytics,
Enterprise Data Warehouse, MDM, Data quality and data
life cycle management.
Clients: The focus will be on deeper mining in key clients as
well as hunting and acquiring new clients. We are driving
innovation closer to the clients through Global Client partners
with focus on 138 clients. In parallel, we have created a
dedicated ecosystem for hunting.
M&A: Acquisitions will continue to play a key part in
strengthening our domain and technology capabilities, driving
increased market penetration, and broadening the depth and
breadth of our service portfolio.
heart of our organization; hence a large part of our
management focus is towards strengthening and caring for
our employees. Our aim is to create and nourish the best in
class global leadership and provide them unlimited
opportunities for career enhancement and growth. It is our
aim to be a truly global company that not only services global
customers but also employs people worldwide. We
consciously enhance gender diversity with 28% of our
employees being women. We have 23,000 employees onsite
in customer locations of whom 38% are resident citizens. We
have employees of 73 nationalities on our rolls. Our employee
base is young with 65% of our employees aged less than 30
years and the average age of 29 years.
¨ Sales & Marketing
• Sales: We believe that our customer always comes first. To
achieve higher levels of client satisfaction we have organized
ourselves on the four key elements:
™ Client Relationship: We have designated global client
partners with single person accountability for customer
satisfaction and realizing sales targets.
™ Industry Focus: Our sales teams are dedicated to a specific
industry vertical and have significant experience and
exposure in the industry they sell to.
™ Proactive Solutions: We have a consulting led approach
to sales where our teams provide proactive solutions to
prospective clients based on their emerging and/or latent
needs.
™ Geographic Focus: Our dedicated sales teams with a
country and region specific focus increases our knowledge
of the local business culture, anticipate prospective and
existing client needs and to increase our market
penetration.
™ Building and enhancing our brand as a global company who
is a leader in global consulting and IT services;
™ Positioning for our brand with clients as a solution provider
that utilizes technology and innovation to help solve
business problems;
™ Crafting go-to-market programs that help drive demand in
the market place. These include creating thought
leadership around our products and services, enhancing our
perception with analysts and media and generating
demand through global field marketing programs and
campaigns.
¨ Delivery Efficiencies - We seek to achieve agility and
increased efficiencies in our organization by continuously
improving the manner in which we develop and deliver our IT
services. We develop preconfigured solutions, standardized
delivery tools and technology-enabled delivery processes to
increase the speed and efficiency of our IT services and
provide our clients with faster, more accessible and more cost
effective IT solutions. For example, our cloud and hosted service
offerings provide clients with standardized and automated
solutions that allow them to collect, process and analyze
information quickly without the need for extensive consultation
and configuration. We also have 101 registered patents, 18
registered copyrights and 11 registered designs. We have
approximately 56 patent applications, 12 design applications and
5 copyright applications pending for registration in various
jurisdictions across the world.
Where specialized solutions are required, we believe that more
experienced and better trained personnel can identify problems,
develop solutions and deliver those solutions in a more efficient
and cost effective manner. By deploying more experienced and
highly trained personnel across our service and product delivery
offerings, we intend to further increase our effectiveness and
efficiency. We have accelerated the speed to market of our
solutions through our globally connected delivery centers and
depth of capabilities. We have seven strategic delivery centers
outside India located in the United States, Finland, China, Poland,
Romania and Mexico. We have over 72 delivery centers globally.
Year ended
March 31,
(Figures in ` million)
Year
on
year change
2012
2011
2011-12
284,313
234,850
21.1%
92,600
81,404
(16,114)
(12,642)
13.8%
27.5%
(17,221)
(15,355)
12.2%
Revenue
Gross profit
Selling and marketing
expenses
General and administrative
expenses
Operating income
59,265
53,407
11.0%
As a Percentage of Revenue:
Selling and marketing
expenses
General and administrative
expenses
5.7%
5.4%
(29)bps
6.1%
6.5%
48bps
Gross margin
Operating margin
32.6%
20.8%
34.7% (209)bps
22.7%
(190)bps
Our revenue from IT Services increased by 21.1%. In US dollar
terms our revenue increased by 13.4% from US$ 5,221 million to
US$ 5,921 million. This increase is primarily on account of
increase in volume by 11.5% and increase in onsite-offshore mix
by 1.3%. Our average US/INR realization increased from ` 44.9
for the year ended March 31, 2011 to ` 48.0 for the year ended
March 31, 2012.
Our gross profit to revenue percentage declined by 209 bps
during the year. This decline in gross margin is primarily on
account of lower employee utilization rates and an increase in
personnel compensation cost during the year. Further, integration
of our SAIC acquisition from June 2011 has contributed to a
decline in gross margin by 50 bps.
During the current year, we realised 53.8% of revenue from work
done in locations outside India (“Onsite”) and remaining 46.2%
of revenue was realised from the work performed from our
development centers in India (“Offshore”).
Our continued focus on driving revenue productivity resulted in
our onsite price realization increasing by 2.3% during the year
and our offshore price realization increasing by 0.6% in US
dollar terms. Our revenue contribution from Fixed Price Projects
(FPP) is 45.7% for the year. In FPP, we undertake to complete
project within agreed timeline at a fixed price for a given scope of
work. The economic gains or losses realized from completing the
project earlier or later than initially projected timelines or at
lower or higher efforts accrues to us.
34
35
Revenue Mix Vertical Distribution
Our revenue distribution across geographies is as below
Our revenue increase of 13.4% was primarily due to a 57%
increase in revenue from energy and utilities (organic growth of
28%), a 13% increase in revenue from financial solution, a 11%
increase in revenue from retail and transportation, a 6% increase
in revenue from manufacturing and Hi-tech, a 6% increase in
revenue from healthcare life sciences and a 4% increase in
revenue from global media and telecom.
Our revenue distribution across industry verticals is as below
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
Global M edia &
Teleco m
Finance Solutions
FY11
FY12
Transportation
Retail &
Energy & Utilities
M anufacturing &
Hitech
Sciences & Services
Healthcare, Life
Revenue Mix Service Line Distribution
We continued to expand and grow our Services portfolio. Growth
in the current year was driven by 28% increase in revenues from
Analytics & Information Management, 17% increase in revenues
from Technology Infrastructure Services, 16% increase in
revenues from Business Application Services, 2% increase in
revenues from Business Process Outsourcing, 11% increase in
revenues from Product Engineering and 10% increase in
revenues from Application Development and Maintenance.
Our Revenue distribution across service lines
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
60.0%
50.0%
40.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
A m ericas
Europe
Japan
India & Middle
East business
APAC and Other
Emerging M arkets
FY11
FY12
We added 173 new customers in the current year, compared to
155 in the previous year.
Our top customer contributed 3.6% of our revenue, top 5
customers 11.3% and the top 10 customers accounted for 19.6%
of our revenue. We have 7 customers contributing more than
$100 million revenues in the current year, an increase from 3 in
the previous year.
Revenue contributed by the customers added during the year
was at 2%, the same level as in the previous year.
In our IT Services Business segment, manpower cost accounts for
approximately 50% of the Revenues. Other major costs included
Sub-contracted manpower cost, depreciation and employee-
travel cost.
The operational drivers for these costs are Utilisation of
employees, Onsite: Offshore composition and the composition of
experience profile of employees called the 'Bulge-mix'.
During the current year, our investments for strategic bench to
fuel growth resulted in a drop in gross Utilisation from 69.9% in
FY11 to 68.3% in FY12. As of March 31, 2012 approximately 42%
of our employees had less than 3 years of work-experience, as
compared to 40% as of March 31, 2011.
FY11
FY12
Risk Factors
Technology
Analytics and
Infrastructure Services
Information M anagement
Business
Application
M obility
Business Process Outsourcing
Product Engineering &
R&D Business
Development & M aintenance
Application Services
Consulting
Revenue Mix: Geographical Distribution
Growth in the current year was driven by an 18% increase in
revenues from Europe, 17% increase in revenues from India &
Middle East business and 42% increase in revenues from APAC
and Other Emerging Markets. Increase in Revenues from the US
geography in the current year was 7%.
36
Our revenues from this business are derived in major currencies
of the world while a significant portion of its costs are in Indian
rupees. The exchange rate between the rupee and major
currencies of the world has fluctuated significantly in recent
years and may continue to fluctuate in the future. Currency
fluctuations can adversely affect our revenues and gross margins.
The market for IT services is highly competitive. Our competitors
include software companies, IT companies, systems consulting
and integration firms, other technology companies and client in-
house information services departments. We may also face
competition from IT and ITES companies operating from
emerging low cost destination like China, Philippines, Brazil,
Romania, Poland etc.
cost affordable computing, which is expected to also fuel growth.
Increased adoption of virtualization and cloud computing
technologies, large-scale digitization and the increased
importance of big data or analytics have also contributed to
growth in the server and storage markets. Demand for
networking equipment is increasing as businesses invest in
expanding and upgrading their infrastructure, and as penetration
of mobile devices, teleconferencing and voice over internet
protocol ("VOIP") increases.
Increasing demand for data and rising consumer income is
leading to an increase in demand for notebook computers, which
according to the NASSCOM Strategic Review Report, 2012, was
the fastest growing market among all hardware categories.
Wipro Credentials and Strategy
Our IT Products segment provides a range of IT products
encompassing computing, storage, networking, security, and
software products. Under this segment, we sell IT products
manufactured by us and third-party IT products.
Our range of IT Products is comprised of the following:
• Wipro Manufactured Products. Our manufactured range of
products includes desktops, notebooks, net power servers,
netStor storage and super computers. We offer form
factors and functionalities that cater to the entire spectrum
of users - from individuals to high-end corporate entities.
We continue to launch new products based on market
needs
• Enterprise Platforms. Our offerings in this category include
design and deployment services for enterprise class
servers, databases and server computing resource
management software
• Networking Solutions. Our offerings under this category are
comprised of consulting, design, deployment and audit of
enterprise wide area network (WAN), wireless LAN and
unified communication systems
• Software Products. Our products under this category are
comprised of enterprise application, data warehousing and
business intelligence software from leading software
product companies
• Data Storage. Our products under this category are
comprised of network storage, secondary and near line
storage, backup and storage fabrics
• Contact Center Infrastructure: Our offerings include switch
integration, voice response solutions, computer telephony
interface, customized agent desktop application, predictive
dialer, customer relationship management, multiple host
integration and voice logger interface
• Enterprise Security: Our security products include intrusion
detection systems, firewalls and physical security
infrastructure covering surveillance and monitoring
systems
• Emerging Technologies. We also offer new technologies
including virtualization, IP video solutions and private cloud
implementations
37
We derive approximately 52% of revenues from United States
and 28% from Europe. In an economic slowdown, our clients
located in these geographies may reduce or defer their
technology spending significantly. Reduction in spending on IT
services may lower the demand for our services and negatively
affect our revenues and profitability.
Some countries and organizations have expressed serious
concerns about a perceived association between offshore
outsourcing and the loss of jobs domestically. With the growth of
offshore outsourcing receiving increasing political and media
attention, there have been concerted efforts to enact new
legislation to restrict offshore outsourcing or impose
disincentives on companies which have been outsourcing jobs.
This may adversely impact our ability to do business in these
jurisdictions and could affect our revenues and operating
profitability.
Our employees who work onsite at client facilities or at our
facilities in the United States on temporary or extended
assignments typically must obtain visas. If U.S. immigration laws
change and make it more difficult for us to obtain H-1B and L-1
visas for our employees, our ability to compete for and provide
services to our clients in the United States could be impaired.
These risks are broadly country risks. At an organizational level,
we have a well-defined business contingency plan and disaster
recovery plan to address these unforeseen events and minimize
the impact on services delivered from our development centers
based in India or abroad.
IT Products
Industry Overview
According to the NASSCOM Strategic Review Report 2012, the
hardware market in India is estimated to account for 40% of the
domestic IT industry and is expected to grow over 15% in 2012.
The key components of the hardware industry are servers,
desktops and laptops, storage devices, peripherals and
networking equipment. Increased use of computing devices in
education and consistent demand from enterprises are key
factors driving the continued growth of this market. Additionally,
the Government of India is promoting initiatives to provide low
Revenue Mix Vertical Distribution
Our revenue distribution across geographies is as below
Our revenue increase of 13.4% was primarily due to a 57%
increase in revenue from energy and utilities (organic growth of
28%), a 13% increase in revenue from financial solution, a 11%
increase in revenue from retail and transportation, a 6% increase
in revenue from manufacturing and Hi-tech, a 6% increase in
revenue from healthcare life sciences and a 4% increase in
revenue from global media and telecom.
Our revenue distribution across industry verticals is as below
60.0%
50.0%
40.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
Global M edia &
Teleco m
Finance Solutions
M anufacturing &
Hitech
Healthcare, Life
Sciences & Services
Transportation
Retail &
Energy & Utilities
Revenue Mix Service Line Distribution
We continued to expand and grow our Services portfolio. Growth
in the current year was driven by 28% increase in revenues from
Analytics & Information Management, 17% increase in revenues
from Technology Infrastructure Services, 16% increase in
revenues from Business Application Services, 2% increase in
revenues from Business Process Outsourcing, 11% increase in
revenues from Product Engineering and 10% increase in
revenues from Application Development and Maintenance.
Our Revenue distribution across service lines
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
A m ericas
Europe
Japan
India & Middle
East business
APAC and Other
Emerging M arkets
FY11
FY12
FY11
FY12
We added 173 new customers in the current year, compared to
155 in the previous year.
Our top customer contributed 3.6% of our revenue, top 5
customers 11.3% and the top 10 customers accounted for 19.6%
of our revenue. We have 7 customers contributing more than
$100 million revenues in the current year, an increase from 3 in
the previous year.
Revenue contributed by the customers added during the year
was at 2%, the same level as in the previous year.
In our IT Services Business segment, manpower cost accounts for
approximately 50% of the Revenues. Other major costs included
Sub-contracted manpower cost, depreciation and employee-
travel cost.
The operational drivers for these costs are Utilisation of
employees, Onsite: Offshore composition and the composition of
experience profile of employees called the 'Bulge-mix'.
During the current year, our investments for strategic bench to
fuel growth resulted in a drop in gross Utilisation from 69.9% in
FY11 to 68.3% in FY12. As of March 31, 2012 approximately 42%
of our employees had less than 3 years of work-experience, as
compared to 40% as of March 31, 2011.
FY11
FY12
Risk Factors
Technology
Infrastructure Services
Analytics and
Information M anagement
M obility
Business
Application
Product Engineering &
Application Services
Business Process Outsourcing
Development & M aintenance
Revenue Mix: Geographical Distribution
R&D Business
Consulting
Growth in the current year was driven by an 18% increase in
revenues from Europe, 17% increase in revenues from India &
Middle East business and 42% increase in revenues from APAC
and Other Emerging Markets. Increase in Revenues from the US
geography in the current year was 7%.
Our revenues from this business are derived in major currencies
of the world while a significant portion of its costs are in Indian
rupees. The exchange rate between the rupee and major
currencies of the world has fluctuated significantly in recent
years and may continue to fluctuate in the future. Currency
fluctuations can adversely affect our revenues and gross margins.
The market for IT services is highly competitive. Our competitors
include software companies, IT companies, systems consulting
and integration firms, other technology companies and client in-
house information services departments. We may also face
competition from IT and ITES companies operating from
emerging low cost destination like China, Philippines, Brazil,
Romania, Poland etc.
cost affordable computing, which is expected to also fuel growth.
Increased adoption of virtualization and cloud computing
technologies, large-scale digitization and the increased
importance of big data or analytics have also contributed to
growth in the server and storage markets. Demand for
networking equipment is increasing as businesses invest in
expanding and upgrading their infrastructure, and as penetration
of mobile devices, teleconferencing and voice over internet
protocol ("VOIP") increases.
Increasing demand for data and rising consumer income is
leading to an increase in demand for notebook computers, which
according to the NASSCOM Strategic Review Report, 2012, was
the fastest growing market among all hardware categories.
Wipro Credentials and Strategy
Our IT Products segment provides a range of IT products
encompassing computing, storage, networking, security, and
software products. Under this segment, we sell IT products
manufactured by us and third-party IT products.
Our range of IT Products is comprised of the following:
• Wipro Manufactured Products. Our manufactured range of
products includes desktops, notebooks, net power servers,
netStor storage and super computers. We offer form
factors and functionalities that cater to the entire spectrum
of users - from individuals to high-end corporate entities.
We continue to launch new products based on market
needs
• Enterprise Platforms. Our offerings in this category include
design and deployment services for enterprise class
servers, databases and server computing resource
management software
• Networking Solutions. Our offerings under this category are
comprised of consulting, design, deployment and audit of
enterprise wide area network (WAN), wireless LAN and
unified communication systems
• Software Products. Our products under this category are
comprised of enterprise application, data warehousing and
business intelligence software from leading software
product companies
• Data Storage. Our products under this category are
comprised of network storage, secondary and near line
storage, backup and storage fabrics
• Contact Center Infrastructure: Our offerings include switch
integration, voice response solutions, computer telephony
interface, customized agent desktop application, predictive
dialer, customer relationship management, multiple host
integration and voice logger interface
• Enterprise Security: Our security products include intrusion
detection systems, firewalls and physical security
infrastructure covering surveillance and monitoring
systems
• Emerging Technologies. We also offer new technologies
including virtualization, IP video solutions and private cloud
implementations
We derive approximately 52% of revenues from United States
and 28% from Europe. In an economic slowdown, our clients
located in these geographies may reduce or defer their
technology spending significantly. Reduction in spending on IT
services may lower the demand for our services and negatively
affect our revenues and profitability.
Some countries and organizations have expressed serious
concerns about a perceived association between offshore
outsourcing and the loss of jobs domestically. With the growth of
offshore outsourcing receiving increasing political and media
attention, there have been concerted efforts to enact new
legislation to restrict offshore outsourcing or impose
disincentives on companies which have been outsourcing jobs.
This may adversely impact our ability to do business in these
jurisdictions and could affect our revenues and operating
profitability.
Our employees who work onsite at client facilities or at our
facilities in the United States on temporary or extended
assignments typically must obtain visas. If U.S. immigration laws
change and make it more difficult for us to obtain H-1B and L-1
visas for our employees, our ability to compete for and provide
services to our clients in the United States could be impaired.
These risks are broadly country risks. At an organizational level,
we have a well-defined business contingency plan and disaster
recovery plan to address these unforeseen events and minimize
the impact on services delivered from our development centers
based in India or abroad.
IT Products
Industry Overview
According to the NASSCOM Strategic Review Report 2012, the
hardware market in India is estimated to account for 40% of the
domestic IT industry and is expected to grow over 15% in 2012.
The key components of the hardware industry are servers,
desktops and laptops, storage devices, peripherals and
networking equipment. Increased use of computing devices in
education and consistent demand from enterprises are key
factors driving the continued growth of this market. Additionally,
the Government of India is promoting initiatives to provide low
36
37
We plan to grow in the IT Products market by focusing on:
Performance Highlights
Performance Highlights
Positioning
Build enhanced solution capabilities to position ourselves as
a Valued Added System Integrator, and
To offer innovative and best in class IT Products and
Solutions catering to client needs
Product Differentiation
• Product Engineering to deliver value differentiation on Wipro
products
• Focus on building brand “Ego” and evolve as lifestyle brands
within our manufactured products busines
• Strengthen server portfolio though a combination of in-house
and traded products
Geographical expansion - enhanced focus for addressing
new markets - Middle-East and Africa
Customer Engagement
• Vertical Focus - Strengthen presence in key verticals such
as Government, Telecom and Banking
• Mid-Market Drive - Tier 2/3 city penetration. Establish
leadership position across 10 cities through increased
coverage and marketing activities
• Deliver customized solutions
Alliances - realign existing and form new alliances, leverage
alliance partnerships for joint GTM with Wipro. Partner with
emerging technology providers to improve market address
and develop new streams of revenue;
Operational Excellence - Sustain Green Leadership in Wipro
manufactured products. Continue to drive delivery and
operational excellence through industry standard processes
and global best practices for better customer satisfaction
(CSAT) and cost optimization.
Year ended
March 31,
(Figures in ` million)
Year
on
year change
2012
2011
2011-12
38,436
36,910
4,356
4,067
(1,395)
(1,284)
4.1%
7.1%
8.6%
(1,174)
(1,174)
0%
Revenue
Gross profit
Selling and marketing
expenses
General and administrative
expenses
Operating income
1,787
1,609
11.1%
As a Percentage of Revenue:
Selling and marketing
expenses
General and administrative
expenses
3.6%
3.5%
(15) bps
3.1%
3.2%
13 bps
Gross margin
Operating margin
11.3%
4.7%
11.0%
4.4%
31 bps
29bps
Our revenue from the IT Products segment increased by 4.1%
primarily due to an increase in export revenue from US$ 79
million for the year ended March 31, 2011 to US$ 97 million for
the year ended March 31, 2012.
Our gross profit to revenue percentage in our IT Products
segment increased marginally by 31 bps. This increase is
primarily due to an increase in finance income on deferred
consideration earned from the total outsourcing contracts.
Risk
IT Products revenues are impacted by seasonal changes that
affect purchasing patterns among our consumers of desktops,
notebooks, servers, communication devices and other products.
The IT products market is a dynamic and highly competitive
market. In the marketplace, we compete with both international
and local providers. We are witnessing pricing pressures due to
commoditization of manufactured products business and higher
focus on Indian markets by leading global companies.
Nonetheless, we are favorably positioned due to our quality
leadership, expertise in target markets and our ability to
create client loyalty by delivering value to the customer.
Consumer Care and Lighting
Industry Overview
AC Nielsen estimates that India is amongst the fastest growing
geographies for fast moving consumer goods (“FMCG”), with a
growth rate of 14.2% for the Moving Annual Total November
2011, or the twelve month period ending in November 2011, for
the non-food segment, the market we address. According to AC
Nielsen, the market is expected to grow at a compounded annual
growth rate (“CAGR”) between 12% to 15% for the period from
2012-2015. According to AC Nielsen, household and personal
care FMCG market in the other Asian countries in which we
operate including Malaysia, Vietnam and Indonesia, is expected
to grow at a CAGR of 8% for the period from 2012-2015.
Wipro Credentials and Strategy
Our Consumer Care and Lighting business segment focuses
on niche markets in personal care in specific geographies in
Asia, the Middle East and Africa, as well as office solutions in
India. We successfully leverage our brands and distribution
strengths to sustain a profitable presence in the personal care
sector, including personal wash, fragrances, hair and skin
care, male toiletries and household lighting and office
products. Our office solutions include lighting products,
modular switches, modular furniture and security solutions.
Our Santoor brand is the third largest in India in the soap
category, and our Safi brand is the largest Halal toiletries
brand in Malaysia. Our Yardley brand gives us a stronger
presence in the Middle East in the luxury segment of personal
care. We are among the top 15 companies in personal care in
India, and the third largest company in personal care in
Malaysia and the fourth largest company in personal care in
Vietnam.
We market and sell our personal care products through a
network of distribution channels which include modern retail
outlets, hypermarts, supermarts, traditional retailers, van
operators and wholesalers. We sell and market our consumer
care products primarily through our distribution network in
India, which has access to over 4,000 distributors and
approximately 1.9 million retail outlets. We sell a significant
portion of our lighting products to major industrial and
commercial customers through our direct sales force, from
34 sales offices located throughout India.
In India, we leverage our brand recognition by successfully
incorporating the Wipro name in our consumer brands. We
intend to expand our marketing efforts with the aid of
advertising campaigns and promotional efforts targeted at
specific regions of India. We intend to introduce acquired
personal care product brands to further establish our
presence in the markets for personal care products in India.
In our other geographies, led by Malaysia, Vietnam, Indonesia
and China, we have direct access to over 230,000 retail
outlets.
Year ended
March 31,
(Figures in ` million)
Year
on
year change
2012
2011
2011-12
33,401
27,258
22.5%
14,456
(9,195)
12,116
(7,514)
19.3%
22.4%
Revenue
Gross profit
Selling and marketing
expenses
expenses
expenses
expenses
Gross margin
Operating margin
General and administrative
(1,305)
(1,152)
13.3%
Operating income
3,956
3,450
14.7%
As a Percentage of Revenue:
Selling and marketing
27.5%
27.6%
4 bps
General and administrative
3.9%
4.2%
32 bps
43.3%
11.8%
44.4%
(117) bps
12.7%
(82) bps
Our Consumer Care and Lighting revenue increased by 22.5%.
This increase is attributable to an increase of approximately
24.1% in revenue from consumer products including Yardley
products sold in Indian markets and an increase of approximately
20% in revenue from personal care products sold in southeast
Asian markets.
The growth in revenues in Indian markets is primarily due to an
increase in revenue from toilet soap products, domestic lighting
and institutional business.
Our gross profit as a percentage of our revenues from the
Consumer Care and Lighting segment decreased by 117 bps. The
increase in major input costs has primarily contributed to
reduction in gross margin.
Risk Factors
Our competitors in the consumer care and lighting are located
primarily in India, and include multinational and Indian
companies. Certain competitors have recently focused on sales
strategies designed to increase sales volumes by lowering prices.
Sustained price pressures by competitors may require us to
respond with similar or different pricing strategies. This may
adversely affect our gross and operating profits in future periods.
38
39
We plan to grow in the IT Products market by focusing on:
Performance Highlights
Year ended
March 31,
(Figures in ` million)
Year
on
year change
2012
2011
2011-12
38,436
36,910
4,356
4,067
4.1%
7.1%
8.6%
• Focus on building brand “Ego” and evolve as lifestyle brands
Selling and marketing
(1,395)
(1,284)
• Strengthen server portfolio though a combination of in-house
General and administrative
(1,174)
(1,174)
0%
Geographical expansion - enhanced focus for addressing
new markets - Middle-East and Africa
As a Percentage of Revenue:
Operating income
1,787
1,609
11.1%
Selling and marketing
3.6%
3.5%
(15) bps
Customer Engagement
• Vertical Focus - Strengthen presence in key verticals such
General and administrative
3.1%
3.2%
13 bps
Revenue
Gross profit
expenses
expenses
expenses
expenses
Gross margin
Operating margin
Positioning
Build enhanced solution capabilities to position ourselves as
a Valued Added System Integrator, and
To offer innovative and best in class IT Products and
Solutions catering to client needs
Product Differentiation
• Product Engineering to deliver value differentiation on Wipro
products
within our manufactured products busines
and traded products
as Government, Telecom and Banking
• Mid-Market Drive - Tier 2/3 city penetration. Establish
leadership position across 10 cities through increased
coverage and marketing activities
• Deliver customized solutions
Alliances - realign existing and form new alliances, leverage
alliance partnerships for joint GTM with Wipro. Partner with
emerging technology providers to improve market address
and develop new streams of revenue;
Operational Excellence - Sustain Green Leadership in Wipro
manufactured products. Continue to drive delivery and
operational excellence through industry standard processes
and global best practices for better customer satisfaction
(CSAT) and cost optimization.
11.3%
4.7%
11.0%
4.4%
31 bps
29bps
Our revenue from the IT Products segment increased by 4.1%
primarily due to an increase in export revenue from US$ 79
million for the year ended March 31, 2011 to US$ 97 million for
the year ended March 31, 2012.
Our gross profit to revenue percentage in our IT Products
segment increased marginally by 31 bps. This increase is
primarily due to an increase in finance income on deferred
consideration earned from the total outsourcing contracts.
Risk
IT Products revenues are impacted by seasonal changes that
affect purchasing patterns among our consumers of desktops,
notebooks, servers, communication devices and other products.
The IT products market is a dynamic and highly competitive
market. In the marketplace, we compete with both international
and local providers. We are witnessing pricing pressures due to
commoditization of manufactured products business and higher
focus on Indian markets by leading global companies.
Nonetheless, we are favorably positioned due to our quality
leadership, expertise in target markets and our ability to
create client loyalty by delivering value to the customer.
Consumer Care and Lighting
Industry Overview
AC Nielsen estimates that India is amongst the fastest growing
geographies for fast moving consumer goods (“FMCG”), with a
growth rate of 14.2% for the Moving Annual Total November
2011, or the twelve month period ending in November 2011, for
the non-food segment, the market we address. According to AC
Nielsen, the market is expected to grow at a compounded annual
growth rate (“CAGR”) between 12% to 15% for the period from
2012-2015. According to AC Nielsen, household and personal
care FMCG market in the other Asian countries in which we
operate including Malaysia, Vietnam and Indonesia, is expected
to grow at a CAGR of 8% for the period from 2012-2015.
Performance Highlights
Wipro Credentials and Strategy
Our Consumer Care and Lighting business segment focuses
on niche markets in personal care in specific geographies in
Asia, the Middle East and Africa, as well as office solutions in
India. We successfully leverage our brands and distribution
strengths to sustain a profitable presence in the personal care
sector, including personal wash, fragrances, hair and skin
care, male toiletries and household lighting and office
products. Our office solutions include lighting products,
modular switches, modular furniture and security solutions.
Our Santoor brand is the third largest in India in the soap
category, and our Safi brand is the largest Halal toiletries
brand in Malaysia. Our Yardley brand gives us a stronger
presence in the Middle East in the luxury segment of personal
care. We are among the top 15 companies in personal care in
India, and the third largest company in personal care in
Malaysia and the fourth largest company in personal care in
Vietnam.
We market and sell our personal care products through a
network of distribution channels which include modern retail
outlets, hypermarts, supermarts, traditional retailers, van
operators and wholesalers. We sell and market our consumer
care products primarily through our distribution network in
India, which has access to over 4,000 distributors and
approximately 1.9 million retail outlets. We sell a significant
portion of our lighting products to major industrial and
commercial customers through our direct sales force, from
34 sales offices located throughout India.
In India, we leverage our brand recognition by successfully
incorporating the Wipro name in our consumer brands. We
intend to expand our marketing efforts with the aid of
advertising campaigns and promotional efforts targeted at
specific regions of India. We intend to introduce acquired
personal care product brands to further establish our
presence in the markets for personal care products in India.
In our other geographies, led by Malaysia, Vietnam, Indonesia
and China, we have direct access to over 230,000 retail
outlets.
Year ended
March 31,
(Figures in ` million)
Year
on
year change
2012
2011
2011-12
33,401
27,258
22.5%
14,456
(9,195)
12,116
(7,514)
19.3%
22.4%
(1,305)
(1,152)
13.3%
Revenue
Gross profit
Selling and marketing
expenses
General and administrative
expenses
Operating income
3,956
3,450
14.7%
As a Percentage of Revenue:
Selling and marketing
expenses
General and administrative
expenses
27.5%
27.6%
4 bps
3.9%
4.2%
32 bps
Gross margin
Operating margin
43.3%
11.8%
44.4%
(117) bps
12.7%
(82) bps
Our Consumer Care and Lighting revenue increased by 22.5%.
This increase is attributable to an increase of approximately
24.1% in revenue from consumer products including Yardley
products sold in Indian markets and an increase of approximately
20% in revenue from personal care products sold in southeast
Asian markets.
The growth in revenues in Indian markets is primarily due to an
increase in revenue from toilet soap products, domestic lighting
and institutional business.
Our gross profit as a percentage of our revenues from the
Consumer Care and Lighting segment decreased by 117 bps. The
increase in major input costs has primarily contributed to
reduction in gross margin.
Risk Factors
Our competitors in the consumer care and lighting are located
primarily in India, and include multinational and Indian
companies. Certain competitors have recently focused on sales
strategies designed to increase sales volumes by lowering prices.
Sustained price pressures by competitors may require us to
respond with similar or different pricing strategies. This may
adversely affect our gross and operating profits in future periods.
38
39
A major share of revenue in Consumer care and lighting business
comes from top three brands in India and international business.
Any dilution in market share of such brand against competition
may adversely impact our revenue. Further, price volatility in
major inputs for personal care products, could have an adverse
impact on our margin.
Others
Our "Others" business segment includes our Infrastructure
Engineering business. This business is centered on mobile
construction equipments and material handling solutions. We
manufacture and sell cylinders and truck hydraulics, and we also
distribute hydraulic pumps, motors and valves for international
companies. We are the world's largest independent
manufacturer of hydraulic cylinders. We have a global footprint
of manufacturing facilities in Europe, Brazil, China and India and
sell to customers across the globe. We also expanded this
business to provide water solutions that address the entire
spectrum of treatment solutions and systems for water and
waste water.
Our strategy is to increase our global market share through
strengthening relationships with global original equipment
manufacturers (OEMs) who are likely to seek stable suppliers like
Wipro to partner; and diversification into newer segments
organically and/or inorganically through acquisitions. Our main
domestic competitors include, UT Limited (India), Dongyong,
Pacoma, Sundaram Hydraulics and Dantal and overseas suppliers
such as the Kayaba, Precision Hydraulics Company and Hyva (in
tipping business).
Our Others business segment also includes our Wipro Eco
Energy business unit, which provides intelligent, sustainable
alternatives for energy generation, distribution and consumption.
We help customers reduce their energy footprint, increase
energy efficiency and replace conventional with renewable
energy sources.
Risk Factors
The Infrastructure Engineering business is linked to
infrastructure spending globally. If there is an economic
slowdown, it would translate in to lower growth for our
customers and in turn reduce our growth prospects.
Performance Highlights
Revenue from our Others segment, including reconciling
items, increased by 59.5%, from ` 11,969 million for the year
ended March 31, 2011 to ` 19,099 million for the year ended
March 31, 2012. The increase in revenue is attributable to
increased demand for infrastructure engineering products in
India and Europe. Further, integration of our acquisition of
R. K. M. Equipamentos Hidraulicos Ltda from May 2011 has
resulted in additional revenue of ` 639 million.
(1) For the purpose of segment reporting only, we have
included the impact of exchange rate fluctuations in
revenue. Excluding the impact of exchange rate
fluctuations, revenue, as reported in our statements of
income under IFRS, is ` 310,542 million and ` 371,971
million for the years ended March 31, 2011 and 2012,
respectively.
(2) Our adjusted non-GAAP profit for the year ended March
31, 2011 and 2012 is ` 52,601 million and ` 55,605 million
an increase of 5.7% over the year ended March 31,2011.
Segment Contribution
100%
75%
50%
25%
0%
100%
75%
50%
25%
Revenue
IT Services
IT Products
Consumer Care and Lighting
Others, including reconciling
items
Segment Contribution
Operating Income
IT Services
IT Products
Consumer Care and Lighting
Others, including reconciling
items
75%
76%
12%
9%
4%
2011
10%
9%
5%
2012
Year ended March 31
92%
93%
0%
-1%
3%
6%
2011
-2%
3%
6%
2012
Year ended March 31
percentage of revenue from our Consumer Care and Lighting
segment by 117 bps and a decline in gross profit as a
percentage of revenue from our Others segment, including
reconciling items by 147 bps. This decline was partially offset
by an increase in gross profit as a percentage of revenue from
our IT Products segment by 31 bps.
• Our selling and marketing expenses as a percentage of
revenue increased from 7.1% for the year ended March 31,
2011 to 7.4% for the year ended March 31, 2012. In absolute
terms selling and marketing expenses increased by 25.3%,
primarily due to an increase in the IT Services and Consumer
Care and Lighting segment.
• Our general and administrative expenses as a percentage of
revenue decreased from 5.9% for the year ended March 31,
2011 to 5.4% for the year ended March 31, 2012. In absolute
terms general and administrative expenses increased by
10.6%, primarily due to increased expenses in the IT
Services segment and Consumer Care and Lighting segment.
• As a result of the foregoing factors, our operating income
increased by 11%, from ` 57,668 million for the year ended
March 31, 2011 to ` 64,013 million for the year ended March
31,2012.
•
Our finance expenses increased from ` 1,933 million for the
year ended March 31, 2011 to ` 3,491 million for the year
ended March 31, 2012. This increase is primarily due to
increase of ` 1,277 million in exchange loss on foreign
currency borrowings and related derivative instruments. This
increase is also due to increase in interest expense by
` 281 million during the year ended March 31, 2012, due to
higher loans and borrowings.
• Our finance and other income, increased from ` 6,652
million for the year ended March 31, 2011 to ` 8,895 million
for the year ended March 31, 2012. Our interest and dividend
income increased by ` 2,248 million during the year ended
March 31, 2012 as compared to the year ended March 31,
2011. This was partially offset by a marginal decrease in the
gain from sale of investments during the same period.
• Our income taxes increased by ` 4,049 million from ` 9,714
million for the year ended March 31, 2011 to ` 13,763
million for the year ended March 31, 2012. Adjusted for tax
write-backs our effective tax rate increased from 16.5% for
the year ended March 31, 2011 to 21% for the year ended
March 31, 2012. This increase is primarily due to the
expiration of the tax holiday period for STPs, which resulted
in a substantial portion of our pre-tax income becoming
subject to taxation. The increase is partially offset by an
increase in profits from our operations in SEZ units.
• Our equity in earnings of affiliates for the years ended
March 31, 2011 and 2012 was ` 648 million and ` 333
million, respectively. Equity in earnings of affiliates primarily
relates to the equity in earnings of Wipro GE.
• As a result of the foregoing factors, our profit attributable to
equity holders increased by ` 2,753 million, or 5.2%, from
` 52,977 million for the year ended March 31, 2011 to
` 55,730 million for the year ended March 31, 2012.
Discussion on financial performance with respect to operational
performance
Our revenue and profit for the years ended March 31, 2011 and 2012
are provided below.
Wipro Limited and subsidiaries
(Figures in ` million except otherwise stated)
Year ended March 31,
Year
on
year change
2012
2011
2011-12
375,249
310,987
20.7%
(263,173)
(212,808)
23.7%
112,076
98,179
14.2%
(27,777)
(22,172)
25.3%
(20,286)
(18,339)
10.6%
64,013
57,668
11.0%
55,730
52,977
5.2%
7.4%
7.1%
(27) bps
5.4%
5.9%
49 bps
Results of operations for the years ended March 31, 2012 and
2011
29.9%
17.1%
31.6% (170) bps
18.5% (148) bps
22.76
22.69
21.74
21.61
• Our total revenues increased by 20.7%. This was driven
primarily by a 21%, 4%, 23% and 60% increase in revenue
from our IT Services, IT Products, Consumer Care and
Lighting and Others segment, including reconciling items,
business segments, respectively.
• Our gross profit as percentage of our total revenue decreased
by 170 basis points (bps). This was primarily on account of a
decline in gross profit as a percentage of revenue from our IT
Services segment by 209 bps, a decline in gross profit as a
Revenue(1)
Cost of
revenue
Gross profit
Selling and marketing
expenses
General and
administrative
expenses
Operating
income
Profit
attributable to
equity holders
As a Percentage of Revenue:
Selling and
marketing
expenses
General and
administrative
expenses
Gross margin
Operating
margin
Earnings per share
Basic
Diluted
40
41
(1) For the purpose of segment reporting only, we have
included the impact of exchange rate fluctuations in
revenue. Excluding the impact of exchange rate
fluctuations, revenue, as reported in our statements of
income under IFRS, is ` 310,542 million and ` 371,971
million for the years ended March 31, 2011 and 2012,
respectively.
(2) Our adjusted non-GAAP profit for the year ended March
31, 2011 and 2012 is ` 52,601 million and ` 55,605 million
an increase of 5.7% over the year ended March 31,2011.
Segment Contribution
manufacturer of hydraulic cylinders. We have a global footprint
Our revenue and profit for the years ended March 31, 2011 and 2012
of manufacturing facilities in Europe, Brazil, China and India and
are provided below.
Discussion on financial performance with respect to operational
performance
Wipro Limited and subsidiaries
Revenue
IT Services
IT Products
Year ended March 31,
Consumer Care and Lighting
100%
75%
50%
25%
Others, including reconciling
items
0%
Segment Contribution
A major share of revenue in Consumer care and lighting business
comes from top three brands in India and international business.
Any dilution in market share of such brand against competition
may adversely impact our revenue. Further, price volatility in
major inputs for personal care products, could have an adverse
impact on our margin.
Others
Our "Others" business segment includes our Infrastructure
Engineering business. This business is centered on mobile
construction equipments and material handling solutions. We
manufacture and sell cylinders and truck hydraulics, and we also
distribute hydraulic pumps, motors and valves for international
companies. We are the world's largest independent
sell to customers across the globe. We also expanded this
business to provide water solutions that address the entire
spectrum of treatment solutions and systems for water and
waste water.
Our strategy is to increase our global market share through
strengthening relationships with global original equipment
manufacturers (OEMs) who are likely to seek stable suppliers like
Wipro to partner; and diversification into newer segments
organically and/or inorganically through acquisitions. Our main
domestic competitors include, UT Limited (India), Dongyong,
Pacoma, Sundaram Hydraulics and Dantal and overseas suppliers
such as the Kayaba, Precision Hydraulics Company and Hyva (in
tipping business).
Our Others business segment also includes our Wipro Eco
Energy business unit, which provides intelligent, sustainable
alternatives for energy generation, distribution and consumption.
We help customers reduce their energy footprint, increase
energy efficiency and replace conventional with renewable
energy sources.
Risk Factors
The Infrastructure Engineering business is linked to
infrastructure spending globally. If there is an economic
slowdown, it would translate in to lower growth for our
customers and in turn reduce our growth prospects.
Performance Highlights
Revenue from our Others segment, including reconciling
items, increased by 59.5%, from ` 11,969 million for the year
ended March 31, 2011 to ` 19,099 million for the year ended
March 31, 2012. The increase in revenue is attributable to
increased demand for infrastructure engineering products in
India and Europe. Further, integration of our acquisition of
R. K. M. Equipamentos Hidraulicos Ltda from May 2011 has
resulted in additional revenue of ` 639 million.
Selling and marketing
(27,777)
(22,172)
25.3%
(Figures in ` million except otherwise stated)
Year
on
year change
2012
2011
2011-12
375,249
310,987
20.7%
(263,173)
(212,808)
23.7%
112,076
98,179
14.2%
(20,286)
(18,339)
10.6%
64,013
57,668
11.0%
55,730
52,977
5.2%
7.4%
7.1%
(27) bps
5.4%
5.9%
49 bps
29.9%
17.1%
31.6% (170) bps
18.5% (148) bps
Revenue(1)
Cost of
revenue
Gross profit
expenses
General and
administrative
expenses
Operating
income
Profit
attributable to
equity holders
Selling and
marketing
expenses
General and
administrative
expenses
Gross margin
Operating
margin
As a Percentage of Revenue:
Earnings per share
Basic
Diluted
22.76
22.69
21.74
21.61
Operating Income
IT Services
IT Products
Consumer Care and Lighting
Others, including reconciling
items
100%
75%
50%
25%
0%
-1%
3%
6%
2011
-2%
3%
6%
2012
Year ended March 31
Results of operations for the years ended March 31, 2012 and
2011
• Our total revenues increased by 20.7%. This was driven
primarily by a 21%, 4%, 23% and 60% increase in revenue
from our IT Services, IT Products, Consumer Care and
Lighting and Others segment, including reconciling items,
business segments, respectively.
• Our gross profit as percentage of our total revenue decreased
by 170 basis points (bps). This was primarily on account of a
decline in gross profit as a percentage of revenue from our IT
Services segment by 209 bps, a decline in gross profit as a
75%
76%
12%
9%
4%
2011
10%
9%
5%
2012
Year ended March 31
92%
93%
percentage of revenue from our Consumer Care and Lighting
segment by 117 bps and a decline in gross profit as a
percentage of revenue from our Others segment, including
reconciling items by 147 bps. This decline was partially offset
by an increase in gross profit as a percentage of revenue from
our IT Products segment by 31 bps.
• Our selling and marketing expenses as a percentage of
revenue increased from 7.1% for the year ended March 31,
2011 to 7.4% for the year ended March 31, 2012. In absolute
terms selling and marketing expenses increased by 25.3%,
primarily due to an increase in the IT Services and Consumer
Care and Lighting segment.
• Our general and administrative expenses as a percentage of
revenue decreased from 5.9% for the year ended March 31,
2011 to 5.4% for the year ended March 31, 2012. In absolute
terms general and administrative expenses increased by
10.6%, primarily due to increased expenses in the IT
Services segment and Consumer Care and Lighting segment.
• As a result of the foregoing factors, our operating income
increased by 11%, from ` 57,668 million for the year ended
March 31, 2011 to ` 64,013 million for the year ended March
31,2012.
•
Our finance expenses increased from ` 1,933 million for the
year ended March 31, 2011 to ` 3,491 million for the year
ended March 31, 2012. This increase is primarily due to
increase of ` 1,277 million in exchange loss on foreign
currency borrowings and related derivative instruments. This
increase is also due to increase in interest expense by
` 281 million during the year ended March 31, 2012, due to
higher loans and borrowings.
• Our finance and other income, increased from ` 6,652
million for the year ended March 31, 2011 to ` 8,895 million
for the year ended March 31, 2012. Our interest and dividend
income increased by ` 2,248 million during the year ended
March 31, 2012 as compared to the year ended March 31,
2011. This was partially offset by a marginal decrease in the
gain from sale of investments during the same period.
• Our income taxes increased by ` 4,049 million from ` 9,714
million for the year ended March 31, 2011 to ` 13,763
million for the year ended March 31, 2012. Adjusted for tax
write-backs our effective tax rate increased from 16.5% for
the year ended March 31, 2011 to 21% for the year ended
March 31, 2012. This increase is primarily due to the
expiration of the tax holiday period for STPs, which resulted
in a substantial portion of our pre-tax income becoming
subject to taxation. The increase is partially offset by an
increase in profits from our operations in SEZ units.
• Our equity in earnings of affiliates for the years ended
March 31, 2011 and 2012 was ` 648 million and ` 333
million, respectively. Equity in earnings of affiliates primarily
relates to the equity in earnings of Wipro GE.
• As a result of the foregoing factors, our profit attributable to
equity holders increased by ` 2,753 million, or 5.2%, from
` 52,977 million for the year ended March 31, 2011 to
` 55,730 million for the year ended March 31, 2012.
40
41
Foreign exchange gains/(losses), net
We have a consistent hedging policy, designed to minimize the
impact of volatility in foreign exchange fluctuations on the
earnings. We evaluate exchange rate exposure arising from these
transactions and enter into foreign currency derivative
instruments to mitigate such exposure. We follow established
risk management policies, including the use of derivatives like
foreign exchange forward / option contracts to hedge forecasted
cash flows denominated in foreign currency. Our foreign
exchange gains / (losses), net for the years ended March 31, 2011
and 2012 were ` 445 million and ` 3,278 million respectively.
The foreign exchange losses, net with respect to effective portion
of derivative hedging instrument designated as cash flow hedges
upon the occurrence of the related forecasted transaction and
recorded as part of Revenues for the years ended March 31, 2011
and 2012 were ` (3,023) million and ` (3,720) million,
respectively.
Our foreign exchange gains/(losses), net, comprise of:
•
The changes in fair value for derivatives not designated as
hedging derivatives and ineffective portions of the hedging
instruments. For forward foreign exchange contracts which
are designated and effective as cash flow hedges, the marked
to market gains and losses are deferred and reported as a
component of other comprehensive income in stockholder’s
equity and subsequently recorded in the income statement
when the hedged transactions occur, along with the hedged
items; and Exchange differences arising from the translation
or settlement of transactions in foreign currency, except for
exchange differences on debt denominated in foreign
currency (which are reported within finance expense, net).
Although our functional currency is the Indian rupee, we
transact a significant portion of our business in foreign
currencies, in particular the U.S. dollar. The exchange rate
between the Rupee and the dollar has changed substantially
in recent years and may fluctuate substantially in the future.
Consequently, the results of our operations are affected as
the Rupee fluctuates against the U.S. dollar. Our exchange
rate risk primarily arises from our foreign currency revenues,
cash balances, payables and debt. The break up of our
currency wise exposure on the balance sheet is shown in the
table below
As at March 31, 2012
Figures in Millions
(Figures in ` million except otherwise stated)
US$
Euro
Pound Sterling
Japanese Yen
Other currencies#
Total
Trade receivables
Unbilled revenues
Cash and cash equivalents
Other assets
30,205
9,735
23,726
206
5,711
2,727
1,439
515
Loans and borrowings
(28,419)
(742)
Trade payables and accrued expenses
(12,095)
(2,186)
Net Assets/(liabilities)
23,563
7,464
6,427
3,131
1,492
42
-
(1,912)
9,180
402
59
322
-
(21,728)
(140)
(21,085)
5,699
48,444
Net cash provided by/(used in)
continuing operations:
485
1,931
181
-
(2,068)
6,228
16,137
28,910
944
(50,684)
(18,401)
25,350
(Figures in ` million except otherwise stated)
As at March 31, 2011
US$
Euro
Pound Sterling
Japanese Yen
Other currencies#
Total
Trade receivables
Unbilled revenues
Cash and cash equivalents
Other assets
24,408
13,605
22,463
187
5,123
239
1,863
311
Loans and borrowings
(27,544)
(1,322)
4,821
494
1,949
63
-
Trade payables and accrued expenses
(10,770)
(2,063)
(1,407)
370
-
290
2
(18,861)
(357)
Net assets/(liabilities)
27,979
4,151
5,920
(18,556)
# Other currencies reflects currencies such as Singapore dollar, Saudi Arabian riyals etc.
3,237
37,959
271
1,414
126
-
(162)
4,886
14,609
29,797
689
(47,727)
(14,759)
18,750
We enter into derivative instruments to primarily hedge our forecasted cash flows denominated in certain foreign currencies, foreign currency
debt and net investment in overseas operations. Please refer to our Notes to the Consolidated Financial Statements under IFRS for additional
details on our foreign currency exposures.
Finance expense
Our finance expense is comprised of interest expense on
borrowings, impairment losses recognized on financial
assets, gains/losses on translation or settlement of foreign
currency borrowings and changes in fair value and gains/
losses on settlement of related derivative instruments, except
foreign exchange gains/losses on short-term borrowings
which are considered as a natural economic hedge for the
foreign currency monetary assets which are classified as
foreign exchange gains/losses, net within results from
operating activities. Borrowing costs are recognized in the
statement of income using the effective interest method.
Finance and other income
Our finance and other income comprises interest income on
deposits, dividend income and gains on disposal of available
for-sale financial assets. Interest income is recognized using
the effective interest method. Dividend income is recognized
when the right to receive payment is established.
Liquidity and Capital Resources
The Company’s cash flow from its operating, investing and
financing activities, as reflected in the Consolidated Statement of
Cash Flows under IFRS, is summarized in the table below:
Our credit period to customers generally ranges from 45-60
days. The quantum of overdue debtors beyond 90 days has come
down from ` 14,834 million (24% of the total receivables) in year
ended March 31, 2011 to ` 12,702 million (16% of the total
receivables) in year ended March 31, 2012. The age wise break up
of receivables, net of allowances that are past due, is given
below:
Debtors
Not due
Past due
0-30 days
Past due
31-60 days
Past due
61-90 days
Past due
> 90 days
% to Total
Year ended % to
March 31,
Total
Year ended
March 31,
2012
49,983
9,970
4,410
3,263
62%
12%
5%
4%
2011
32,295
4,249
6,976
3,273
52%
7%
11%
5%
12,702
16%
14,834
25%
(Figures in ` million except otherwise stated)
Total
80,328
100%
61,627
100%
Year ended March 31,
Year on
year change
2012
2011
2011-12
inventory days for consumer care and lighting and infrastructure
Further, operating cash flow is decreased due to increase in
Operating activities
40,076
40,437
Investing activities
(8,056)
(17,239)
Financing activities
(17,397)
(26,378)
(361)
9,183
8,981
Net change in cash and cash
14,623
(3,180)
17,803
1,680
523
1,157
equivalents
Effect of exchange rate
changes on cash and cash
equivalent
As of March 31, 2012, we had cash and cash equivalent and
short-term investments of ` 119,627 million. Cash and cash
equivalent and short-term investments, net of debt was ` 60,669
million. In addition we have unused credit lines of ` 32,747
million. To utilize these lines of credit we require the consent of
the lender and compliance with certain financial covenants. We
have historically financed our working capital and capital
expenditures through our operating cash flows and through bank
debt, as required.
Cash provided by operating activities for the year ended March
31, 2012 decreased by ` 361 million, while profit for the year
increased by ` 2,666 million during the same period. The
decrease in cash provided by operating activities is primarily due
to an increase in current receivables including unbilled,
attributable higher revenue from IT Services segment without
any corresponding change in Receivable Days in the IT Services
segment.
Receivable Days
Year ended March 31,
(In no. of days)
IT Services segment
IT Products segment
2012
70
155
2011
70
131
services by 12 days and 32 days, respectively and also due to
increase in finance lease receivables by ` 463 million, primarily
relating to large projects and increase in prepaid expenses and
deposits by ` 1,886 million and ` 451 million, respectively. This is
partially offset by the increase in trade payables and accrued
expenses on account of better management of payment terms.
Receivable Days as of a particular reporting date is the
proportion of receivables, adjusted for unbilled and unearned
revenue to the revenues for the respective fiscal quarter
multiplied by 90.
Cash used in investing activities for the year ended March 31,
2012 was ` 8,056 million. Cash provided by operating activities
was utilized for the payment for business acquisitions amounting
to ` 7,920 million. We also sold (net of purchases) available for
sale investments and inter-corporate deposits amounting to
` 4,057 million.
We purchased property, plant and equipment amounting to
` 12,977 million, which was primarily driven by the growth
strategy of the Company.
Cash used in financing activities for the year ended March 31,
2012 was ` 17,397 million as against ` 26,378 million for the
year ended March 31, 2011. This decrease is primarily due to net
proceeds from loans and borrowings amounting to ` 712 million
and payment of dividend amounting to ` 17,229 million.
On April 25, 2012, our Board proposed a cash dividend of
` 4 per equity share and ADR. The proposal is subject to the
approval of shareholders at the Annual General Meeting to be
held on July 23, 2012, and if approved, would
42
43
Foreign exchange gains/(losses), net
We have a consistent hedging policy, designed to minimize the
impact of volatility in foreign exchange fluctuations on the
earnings. We evaluate exchange rate exposure arising from these
transactions and enter into foreign currency derivative
instruments to mitigate such exposure. We follow established
risk management policies, including the use of derivatives like
foreign exchange forward / option contracts to hedge forecasted
cash flows denominated in foreign currency. Our foreign
exchange gains / (losses), net for the years ended March 31, 2011
and 2012 were ` 445 million and ` 3,278 million respectively.
The foreign exchange losses, net with respect to effective portion
of derivative hedging instrument designated as cash flow hedges
upon the occurrence of the related forecasted transaction and
recorded as part of Revenues for the years ended March 31, 2011
and 2012 were ` (3,023) million and ` (3,720) million,
respectively.
Our foreign exchange gains/(losses), net, comprise of:
•
The changes in fair value for derivatives not designated as
hedging derivatives and ineffective portions of the hedging
instruments. For forward foreign exchange contracts which
are designated and effective as cash flow hedges, the marked
to market gains and losses are deferred and reported as a
component of other comprehensive income in stockholder’s
equity and subsequently recorded in the income statement
when the hedged transactions occur, along with the hedged
items; and Exchange differences arising from the translation
or settlement of transactions in foreign currency, except for
exchange differences on debt denominated in foreign
currency (which are reported within finance expense, net).
Although our functional currency is the Indian rupee, we
transact a significant portion of our business in foreign
currencies, in particular the U.S. dollar. The exchange rate
between the Rupee and the dollar has changed substantially
in recent years and may fluctuate substantially in the future.
Consequently, the results of our operations are affected as
the Rupee fluctuates against the U.S. dollar. Our exchange
rate risk primarily arises from our foreign currency revenues,
cash balances, payables and debt. The break up of our
currency wise exposure on the balance sheet is shown in the
table below
As at March 31, 2012
Figures in Millions
(Figures in ` million except otherwise stated)
US$
Euro
Pound Sterling
Japanese Yen
Other currencies#
Total
5,699
48,444
Trade receivables
Unbilled revenues
Cash and cash equivalents
Other assets
30,205
9,735
23,726
206
5,711
2,727
1,439
515
Loans and borrowings
(28,419)
(742)
Trade payables and accrued expenses
(12,095)
(2,186)
Net Assets/(liabilities)
23,563
7,464
As at March 31, 2011
(Figures in ` million except otherwise stated)
US$
Euro
Pound Sterling
Japanese Yen
Other currencies#
Total
3,237
37,959
6,427
3,131
1,492
42
-
(1,912)
9,180
4,821
494
1,949
63
-
402
59
322
-
(21,728)
(140)
(21,085)
370
290
-
2
(18,861)
(357)
485
1,931
181
-
(2,068)
6,228
271
1,414
126
-
(162)
4,886
16,137
28,910
944
(50,684)
(18,401)
25,350
14,609
29,797
689
(47,727)
(14,759)
18,750
Trade receivables
Unbilled revenues
Cash and cash equivalents
Other assets
24,408
13,605
22,463
187
5,123
239
1,863
311
Loans and borrowings
(27,544)
(1,322)
Trade payables and accrued expenses
(10,770)
(2,063)
(1,407)
Net assets/(liabilities)
27,979
4,151
5,920
(18,556)
# Other currencies reflects currencies such as Singapore dollar, Saudi Arabian riyals etc.
We enter into derivative instruments to primarily hedge our forecasted cash flows denominated in certain foreign currencies, foreign currency
debt and net investment in overseas operations. Please refer to our Notes to the Consolidated Financial Statements under IFRS for additional
details on our foreign currency exposures.
42
Finance expense
Our finance expense is comprised of interest expense on
borrowings, impairment losses recognized on financial
assets, gains/losses on translation or settlement of foreign
currency borrowings and changes in fair value and gains/
losses on settlement of related derivative instruments, except
foreign exchange gains/losses on short-term borrowings
which are considered as a natural economic hedge for the
foreign currency monetary assets which are classified as
foreign exchange gains/losses, net within results from
operating activities. Borrowing costs are recognized in the
statement of income using the effective interest method.
Finance and other income
Our finance and other income comprises interest income on
deposits, dividend income and gains on disposal of available
for-sale financial assets. Interest income is recognized using
the effective interest method. Dividend income is recognized
when the right to receive payment is established.
Liquidity and Capital Resources
The Company’s cash flow from its operating, investing and
financing activities, as reflected in the Consolidated Statement of
Cash Flows under IFRS, is summarized in the table below:
Our credit period to customers generally ranges from 45-60
days. The quantum of overdue debtors beyond 90 days has come
down from ` 14,834 million (24% of the total receivables) in year
ended March 31, 2011 to ` 12,702 million (16% of the total
receivables) in year ended March 31, 2012. The age wise break up
of receivables, net of allowances that are past due, is given
below:
Debtors
Year ended
March 31,
2012
% to Total
Year ended % to
Total
March 31,
2011
Not due
Past due
0-30 days
Past due
31-60 days
Past due
61-90 days
Past due
> 90 days
49,983
9,970
4,410
3,263
62%
12%
5%
4%
32,295
4,249
6,976
3,273
52%
7%
11%
5%
12,702
16%
14,834
25%
(Figures in ` million except otherwise stated)
Total
80,328
100%
61,627
100%
Year ended March 31,
Year on
year change
Net cash provided by/(used in)
continuing operations:
2012
2011
2011-12
Operating activities
40,076
40,437
Investing activities
(8,056)
(17,239)
Financing activities
(17,397)
(26,378)
(361)
9,183
8,981
Net change in cash and cash
equivalents
Effect of exchange rate
changes on cash and cash
equivalent
14,623
(3,180)
17,803
1,680
523
1,157
As of March 31, 2012, we had cash and cash equivalent and
short-term investments of ` 119,627 million. Cash and cash
equivalent and short-term investments, net of debt was ` 60,669
million. In addition we have unused credit lines of ` 32,747
million. To utilize these lines of credit we require the consent of
the lender and compliance with certain financial covenants. We
have historically financed our working capital and capital
expenditures through our operating cash flows and through bank
debt, as required.
Cash provided by operating activities for the year ended March
31, 2012 decreased by ` 361 million, while profit for the year
increased by ` 2,666 million during the same period. The
decrease in cash provided by operating activities is primarily due
to an increase in current receivables including unbilled,
attributable higher revenue from IT Services segment without
any corresponding change in Receivable Days in the IT Services
segment.
Receivable Days
Year ended March 31,
(In no. of days)
IT Services segment
IT Products segment
2012
70
155
2011
70
131
Further, operating cash flow is decreased due to increase in
inventory days for consumer care and lighting and infrastructure
services by 12 days and 32 days, respectively and also due to
increase in finance lease receivables by ` 463 million, primarily
relating to large projects and increase in prepaid expenses and
deposits by ` 1,886 million and ` 451 million, respectively. This is
partially offset by the increase in trade payables and accrued
expenses on account of better management of payment terms.
Receivable Days as of a particular reporting date is the
proportion of receivables, adjusted for unbilled and unearned
revenue to the revenues for the respective fiscal quarter
multiplied by 90.
Cash used in investing activities for the year ended March 31,
2012 was ` 8,056 million. Cash provided by operating activities
was utilized for the payment for business acquisitions amounting
to ` 7,920 million. We also sold (net of purchases) available for
sale investments and inter-corporate deposits amounting to
` 4,057 million.
We purchased property, plant and equipment amounting to
` 12,977 million, which was primarily driven by the growth
strategy of the Company.
Cash used in financing activities for the year ended March 31,
2012 was ` 17,397 million as against ` 26,378 million for the
year ended March 31, 2011. This decrease is primarily due to net
proceeds from loans and borrowings amounting to ` 712 million
and payment of dividend amounting to ` 17,229 million.
On April 25, 2012, our Board proposed a cash dividend of
` 4 per equity share and ADR. The proposal is subject to the
approval of shareholders at the Annual General Meeting to be
held on July 23, 2012, and if approved, would
43
result in a cash outflow of approximately ` 11,431, million
including corporate dividend tax thereon.
We maintain a debt/borrowing level that we have established
through consideration of a number of factors including cash flow
expectations, cash required for operations and investment plans.
We continually monitor our funding requirements, and strategies
are executed to maintain sufficient flexibility to access global
funding sources, as needed. Please refer to Note 12 of our Notes
to the Consolidated Financial Statements under IFRS for
additional details on our borrowings.
As discussed above, cash generated from operations is our
primary source of liquidity. We believe that our cash and cash
equivalents along with cash generated from operations will be
sufficient to meet our working capital requirements as well as
repayment obligations in respect of debt / borrowings.
As of March 31, 2012, we had contractual commitments of
` 1,673 million related to capital expenditures on construction or
expansion of software development facilities, ` 14,838 million
related to non-cancelable operating lease obligations and
` 6,378 million related to other purchase obligations. Plans to
construct or expand our software development facilities are
dictated by business requirements.
In relation to our acquisitions, a portion of the purchase
consideration is payable upon achievement of specified earnings
targets in the future. We expect that our cash and cash
equivalents, investments in liquid and short-term mutual funds
and the cash flows expected to be generated from our operations
in the future will generally be sufficient to fund the earn-out
payments and our expansion plans.
In the normal course of business, we transfer accounts
receivables, net investment in sale-type finance receivable and
employee advances (financial assets). Please refer Note 15 of our
Notes to Consolidated Financial Statements under IFRS.
Our liquidity and capital requirements are affected by many
factors, some of which are based on the normal ongoing
operations of our businesses and some of which arise from
uncertainties related to global economies and the markets that
we target for our services. We cannot be certain that additional
financing, if needed, will be available on favorable terms, if at all.
As of March 31, 2011 and 2012, our cash and cash equivalent
were primarily held in Indian Rupees, U.S. Dollars, Pound Sterling,
Euros, Japanese Yen, Singapore Dollars and Saudi Riyals. Please
refer to “Financial risk management” under Note 15 of our Notes
to the Consolidated Financial Statements under IFRS for more
details on our treasury activities.
Acquisitions
An active acquisition program is an important element of our
corporate strategy. On June 10, 2011, we acquired the global
oil and gas information technology practice of the Commercial
Business Services Business Unit of Science Applications International
Corporation Inc along with 100% of the share capital in SAIC Europe
Limited and SAIC India Private Limited. On July 2, 2011 we also
acquired 100% of the share capital of SAIC Gulf LLC (hereafter the
acquisitions are collectively referred to as ‘oil and gas business of
SAIC’). The oil and gas business of SAIC provides consulting, system
integration and outsourcing services to global oil majors with
significant domain capabilities in the areas of digital oil field, petro-
technical data management and petroleum application services,
addressing the upstream segment. The Company believes that the
acquisition will further strengthen Wipro’s presence in the Energy,
Natural Resources and Utilities domain. Typically the significant
majority of our integration activities relating to an acquisition are
substantially completed within three to six months after the
Acquisition Date.
We believe our acquisition program supports our long-term strategic
direction, strengthens our competitive position, particularly in
acquiring new domain expertise, expands our customer base,
increases our ability to expand our service offerings and provides a
greater scale to grow our earnings and increase stockholders’ value.
See Note 6 of our Notes to Consolidated Financial Statements under
IFRS for additional information related to our acquisitions.
Contractual obligations
The table of future payments due under known contractual
commitments as of March 31, 2012, aggregated by type of
contractual obligation, is given below:
(Figures in ` million except otherwise stated)
Particulars
Total
contractual
payment
Payments due in
2012-13
2013-15 2015-17 2017-18
onwards
35,740
35,740
-
-
22,502
453
22,012
37
716
255
314
141
444
406
30
1,673
1,673
-
8
-
-
-
6
-
-
14,839
3,301
5,493
2,349
3,696
6,378
6,378
-
473
-
473
-
-
-
-
Short-term
borrowings
Long-term
debt
Obligations
under capital
leases
Estimated
interest
payment (1)
Capital
commitments
Non-cancelable
operating lease
Obligation
Purchase
obligations
Other
non-current
liabilities(2)
(1) Interest payments for long-term fixed rate debts have been
calculated based on applicable rates and payment dates. Interest
payments on floating rate debt have been calculated based on
the payment dates and implied forward interest rates as of
March 31, 2012 for each relevant debt instrument.
(2) Other non-current liabilities and non-current tax liabilities in
the statement of financial position include 3,046 million in
`
respect of employee benefit obligations and
5,403 million
`
towards uncertain tax positions, respectively. For these amounts
the extent of the amount and timing of repayment/settlement is
not reliably estimatable or determinable at present and
accordingly have not been disclosed in the table above
Risk Management at corporate level
Risk Management at Wipro is an enterprise wide function. It
is backed by a qualified team of specialists with deep
industry experience who develop frameworks and
methodologies for assessing and mitigating risks.
ERM Framework at Wipro
Our framework is based on principles laid out in the four
globally recognized standards
• Orange Book by UK Government Treasury.
• COSO; Enterprise Risk Management – Integrated Framework
by Treadway Commission
• AS/NS 4360:2004 by AUS/NZ Standards board
• ISO/FDIS 31000:2009 by ISO
We have consciously moved to a system of proactive risk
management by capturing weak signals and responding to them
instead of reacting to a crisis. Early identification gives us a wider
range of options and alternatives to respond effectively and
efficiently.
ERM Functional Risk Management - Approach and
Methodology:
Early Warning
Signal
Root
Cause Analysis
& Productive
Testing
Systemic
Correction
Functional
Risk
Tracking
Diagnostic
dashboards
1. Exception reporting
2. Complaint received
via Ombuds process &
other organizational
channels
3. Security incident logs
& other periodic risk
reports
4. Feedback analysis of
employee helpline
calls/mails
1. Root cause analysis
to identify process
failures
2. Vulnerability
assessment of
the process
3. Stress testing of
control point
4. Post mitigation
control assurance
1. Identifying systemic
change
2. Stock take of other
similar processes
3. Control automated
where feasible
4. System generated
triggers for non
automated
corrections
1. Function wise
risk register
2. Joint review
with functional
teams
1. Crisp summary
for management
action
2. Repeatability and
Reproducibility
of controls
Where possible, compliance has been automated and exceptions
deployed and assessed to evaluate their robustness and
tracked through action oriented dashboards.
effectiveness.
We carry out comprehensive process analysis to identify
To enhance accountability and effectiveness, mitigations
vulnerabilities that help us extrapolate known failure modes as
implemented are tracked using a functional risk register jointly
early warning indicators.
Our defined mitigation measures for the risks identified in
periodic reviews is in the form of systemic fixes, which are
with the functional owner. This also increases the repeatability
and reproducibility of effectiveness of controls.
44
45
result in a cash outflow of approximately ` 11,431, million
including corporate dividend tax thereon.
We maintain a debt/borrowing level that we have established
through consideration of a number of factors including cash flow
expectations, cash required for operations and investment plans.
We continually monitor our funding requirements, and strategies
are executed to maintain sufficient flexibility to access global
funding sources, as needed. Please refer to Note 12 of our Notes
to the Consolidated Financial Statements under IFRS for
additional details on our borrowings.
As discussed above, cash generated from operations is our
primary source of liquidity. We believe that our cash and cash
equivalents along with cash generated from operations will be
sufficient to meet our working capital requirements as well as
repayment obligations in respect of debt / borrowings.
As of March 31, 2012, we had contractual commitments of
` 1,673 million related to capital expenditures on construction or
expansion of software development facilities, ` 14,838 million
related to non-cancelable operating lease obligations and
` 6,378 million related to other purchase obligations. Plans to
construct or expand our software development facilities are
dictated by business requirements.
In relation to our acquisitions, a portion of the purchase
consideration is payable upon achievement of specified earnings
targets in the future. We expect that our cash and cash
equivalents, investments in liquid and short-term mutual funds
and the cash flows expected to be generated from our operations
in the future will generally be sufficient to fund the earn-out
payments and our expansion plans.
In the normal course of business, we transfer accounts
receivables, net investment in sale-type finance receivable and
employee advances (financial assets). Please refer Note 15 of our
Notes to Consolidated Financial Statements under IFRS.
Our liquidity and capital requirements are affected by many
factors, some of which are based on the normal ongoing
operations of our businesses and some of which arise from
uncertainties related to global economies and the markets that
we target for our services. We cannot be certain that additional
financing, if needed, will be available on favorable terms, if at all.
As of March 31, 2011 and 2012, our cash and cash equivalent
were primarily held in Indian Rupees, U.S. Dollars, Pound Sterling,
Euros, Japanese Yen, Singapore Dollars and Saudi Riyals. Please
refer to “Financial risk management” under Note 15 of our Notes
to the Consolidated Financial Statements under IFRS for more
details on our treasury activities.
Acquisitions
An active acquisition program is an important element of our
corporate strategy. On June 10, 2011, we acquired the global
oil and gas information technology practice of the Commercial
Business Services Business Unit of Science Applications International
Corporation Inc along with 100% of the share capital in SAIC Europe
Limited and SAIC India Private Limited. On July 2, 2011 we also
acquired 100% of the share capital of SAIC Gulf LLC (hereafter the
acquisitions are collectively referred to as ‘oil and gas business of
SAIC’). The oil and gas business of SAIC provides consulting, system
integration and outsourcing services to global oil majors with
significant domain capabilities in the areas of digital oil field, petro-
technical data management and petroleum application services,
addressing the upstream segment. The Company believes that the
acquisition will further strengthen Wipro’s presence in the Energy,
Natural Resources and Utilities domain. Typically the significant
majority of our integration activities relating to an acquisition are
substantially completed within three to six months after the
Acquisition Date.
We believe our acquisition program supports our long-term strategic
direction, strengthens our competitive position, particularly in
acquiring new domain expertise, expands our customer base,
increases our ability to expand our service offerings and provides a
greater scale to grow our earnings and increase stockholders’ value.
See Note 6 of our Notes to Consolidated Financial Statements under
IFRS for additional information related to our acquisitions.
Contractual obligations
The table of future payments due under known contractual
commitments as of March 31, 2012, aggregated by type of
contractual obligation, is given below:
(Figures in ` million except otherwise stated)
Particulars
Payments due in
Total
contractual
payment
2012-13
2013-15 2015-17 2017-18
onwards
35,740
35,740
-
-
22,502
453
22,012
37
716
255
314
141
14,839
3,301
5,493
2,349
3,696
444
406
30
1,673
1,673
6,378
6,378
473
-
473
8
-
-
-
-
-
-
-
6
-
-
-
-
Short-term
borrowings
Long-term
debt
Obligations
under capital
leases
Estimated
interest
payment (1)
Capital
commitments
Non-cancelable
operating lease
Obligation
Purchase
obligations
Other
non-current
liabilities(2)
(1) Interest payments for long-term fixed rate debts have been
calculated based on applicable rates and payment dates. Interest
payments on floating rate debt have been calculated based on
the payment dates and implied forward interest rates as of
March 31, 2012 for each relevant debt instrument.
(2) Other non-current liabilities and non-current tax liabilities in
the statement of financial position include 3,046 million in
`
respect of employee benefit obligations and
`
5,403 million
towards uncertain tax positions, respectively. For these amounts
the extent of the amount and timing of repayment/settlement is
not reliably estimatable or determinable at present and
accordingly have not been disclosed in the table above
Risk Management at corporate level
Risk Management at Wipro is an enterprise wide function. It
is backed by a qualified team of specialists with deep
industry experience who develop frameworks and
methodologies for assessing and mitigating risks.
ERM Framework at Wipro
Our framework is based on principles laid out in the four
globally recognized standards
• Orange Book by UK Government Treasury.
• COSO; Enterprise Risk Management – Integrated Framework
by Treadway Commission
• AS/NS 4360:2004 by AUS/NZ Standards board
• ISO/FDIS 31000:2009 by ISO
We have consciously moved to a system of proactive risk
management by capturing weak signals and responding to them
instead of reacting to a crisis. Early identification gives us a wider
range of options and alternatives to respond effectively and
efficiently.
ERM Functional Risk Management - Approach and
Methodology:
Early Warning
Signal
Root
Cause Analysis
& Productive
Testing
Systemic
Correction
Functional
Risk
Tracking
Diagnostic
dashboards
1. Exception reporting
2. Complaint received
via Ombuds process &
other organizational
channels
3. Security incident logs
& other periodic risk
reports
4. Feedback analysis of
employee helpline
calls/mails
1. Root cause analysis
to identify process
failures
2. Vulnerability
assessment of
the process
3. Stress testing of
control point
4. Post mitigation
control assurance
1. Identifying systemic
change
2. Stock take of other
similar processes
3. Control automated
where feasible
4. System generated
triggers for non
automated
corrections
1. Function wise
risk register
2. Joint review
with functional
teams
1. Crisp summary
for management
action
2. Repeatability and
Reproducibility
of controls
Where possible, compliance has been automated and exceptions
tracked through action oriented dashboards.
deployed and assessed to evaluate their robustness and
effectiveness.
We carry out comprehensive process analysis to identify
vulnerabilities that help us extrapolate known failure modes as
early warning indicators.
Our defined mitigation measures for the risks identified in
periodic reviews is in the form of systemic fixes, which are
To enhance accountability and effectiveness, mitigations
implemented are tracked using a functional risk register jointly
with the functional owner. This also increases the repeatability
and reproducibility of effectiveness of controls.
44
45
Our listing on the New York Stock Exchange (NYSE) provided
Relations front (including number of people employed)
The entire evaluation of internal controls was carried out by a
central team reporting into the Chief Financial Officer.
We have obtained a clean and unqualified report from our
independent auditors on the effectiveness of our internal
controls.
Material developments in Human resources/Industrial
In our IT Services segments, we had 135,920 employees as of
March 31, 2012.
Attrition for the year in our IT Services business segment
(excluding BPO operations, Indian IT operations and other
overseas subsidiaries) was 19.5% compared with 24.1% last year.
Voluntary attrition stood at 17.6% compared with 22.3% last
We have presence across multiple countries, and a large
number of employees, suppliers and other partners
collaborate to provide solutions to our customer needs.
Robust internal controls and scalable processes are
imperative to manage this global scale of operations.
us an opportunity to get our independent auditors assess and
certify our internal controls primarily in the areas impacting
financial reporting. For the companies listed in the United
States of America, the Public Company Accounting Reform
and Investor Protection Act of 2002, more popularly known
as the Sarbanes–Oxley Act requires:
• Management to establish, maintain, assess and report on
effectiveness of internal controls over financial reporting and;
year.
•
Independent auditors to opine on effectiveness of internal
controls over financial reporting.
We adopted the COSO framework (Framework suggested by
Company of Sponsoring Trade way Organisation) for evaluating
internal controls. COSO identifies five layers of internal controls,
namely, Control Environment, Risk Assessment, Control Activity,
Information and Communication and Monitoring. Information
Technology controls were documented, assessed and tested
under the COBIT framework.
Risk Management areas for the year:
(Listed alphabetically, not in order of impact)
1. Business Continuity & Disaster Recovery
2. Climate Change & Sustainability
3. Country (Geo-Political) Risks
4. Critical Partner Alliance Risks
5. Code of Business Conduct compliance / governance
6. Emerging Technology adoption
7. Fraud
8. Global economic conditions
9. Information Security & Compliance
10.Intellectual Property Risks
11. Large Project Risks
12. M&A Integration Risks
13. People Engagement & Supply Chain Risks
14.Physical Security & Employee safety
15. Regulatory Compliance including FCPA, UK Bribery act,
Employment, Immigration and Tax laws
16. Reputation Risks
17. Systemic vulnerabilities
Intellectual Property Protection
Internal Control Systems and their adequacy
Focus on implementation of Intellectual Property risk
management continued during the year. The controls were
further subjected to an independent stress testing for assessing
implementation effectiveness.
Large Project Risks
Specific models to address risks in business segments/processes
were rolled out such as, customer credit risk assessment, deal
risk assessment, etc.
Physical Security & Employee Safety
Employee safety continued as a core focus with enhanced
measures for transportation process (24*7 operations).
Proactive anti-fraud Initiatives
Rule based anomaly detection systems have been introduced to
identify exceptions. The control environment has been further
strengthened during the year with more automated controls.
Failure modes were comprehensively re-assessed and technology
solutions were explored and implemented to automate controls.
Climate Change & Sustainability
Awareness & Training
Role based training programs to enhance risk literacy covering
Intellectual Property practices, information security compliance,
risk management in large bids, delivery risk management, Foreign
Corrupt Practices Act and UK Bribery Act compliance were
deployed. Educational newsletters and case studies were also
regularly published.
Outlook
We have followed a practice of providing only revenue guidance
for our largest business segment, namely, IT Services. The
guidance is provided at the release of every quarterly earnings
when detailed Revenue outlook for the succeeding quarter is
shared. Over the years, the Company has performed in line with
quarterly Revenue guidance.
On April 25, 2012, along with our earnings release for quarter
ended March 31, 2012, we provided our most recent quarterly
guidance. Revenue from IT Services segment for the quarter
ending June 30, 2012 is likely to be ranged between
USD 1,520-1,550 million*.
* Guidance is based on the following exchange rates: GBP/USD
at 1.58, Euro/USD at 1.31, AUD/USD at 1.07, USD/INR at 50.07.
During the year, we engaged a 3rd party expert firm Det Norske
Veritas (DNV) to carry out a specific risk assessment of Climate
Change & Sustainability risks across the organization. Outcome
of this exercise will be added to the risk inventory for mitigation
tracking in the current year.
Critical Partner Alliance Risk Management
A Risk Management framework was deployed to assess the
risks in engagement with critical alliance partners. Key risk
indicators such as availability of alternates, financial stability,
and delivery performance were assessed and mitigated.
Code of Business Conduct compliance / governance (Ombuds
Process)
To augment the current Ombuds (whistle blowing) process at
Wipro, we rolled out a 24/7 hotline and web support across the
globe, accessible to employees, partners, clients and all other
interested parties. Systemic issues identified during Ombuds
investigations are considered as risks and taken up for mitigation.
Global Economic Conditions
Global Risks 2012 report tabled at World Economic Forum
(WEF), 2012 listed “Bad Government Balance sheets” as a top
risk. As a pro-active measure, we developed an Economic risk
indicator framework with scenario planning and possible
mitigations.
Info security & Business Continuity
Focus areas for the year included enhancing the information
security compliance and business continuity planning in
customer engagements and data protection reviews &
compliance
46
47
Intellectual Property Protection
Internal Control Systems and their adequacy
We have presence across multiple countries, and a large
number of employees, suppliers and other partners
collaborate to provide solutions to our customer needs.
Robust internal controls and scalable processes are
imperative to manage this global scale of operations.
Our listing on the New York Stock Exchange (NYSE) provided
us an opportunity to get our independent auditors assess and
certify our internal controls primarily in the areas impacting
financial reporting. For the companies listed in the United
States of America, the Public Company Accounting Reform
and Investor Protection Act of 2002, more popularly known
as the Sarbanes–Oxley Act requires:
• Management to establish, maintain, assess and report on
effectiveness of internal controls over financial reporting and;
•
Independent auditors to opine on effectiveness of internal
controls over financial reporting.
We adopted the COSO framework (Framework suggested by
Company of Sponsoring Trade way Organisation) for evaluating
internal controls. COSO identifies five layers of internal controls,
namely, Control Environment, Risk Assessment, Control Activity,
Information and Communication and Monitoring. Information
Technology controls were documented, assessed and tested
under the COBIT framework.
Risk Management areas for the year:
(Listed alphabetically, not in order of impact)
1. Business Continuity & Disaster Recovery
2. Climate Change & Sustainability
3. Country (Geo-Political) Risks
4. Critical Partner Alliance Risks
5. Code of Business Conduct compliance / governance
6. Emerging Technology adoption
7. Fraud
8. Global economic conditions
9. Information Security & Compliance
10.Intellectual Property Risks
11. Large Project Risks
12. M&A Integration Risks
13. People Engagement & Supply Chain Risks
14.Physical Security & Employee safety
15. Regulatory Compliance including FCPA, UK Bribery act,
Employment, Immigration and Tax laws
16. Reputation Risks
17. Systemic vulnerabilities
Focus on implementation of Intellectual Property risk
management continued during the year. The controls were
further subjected to an independent stress testing for assessing
implementation effectiveness.
Large Project Risks
Specific models to address risks in business segments/processes
were rolled out such as, customer credit risk assessment, deal
risk assessment, etc.
Physical Security & Employee Safety
Employee safety continued as a core focus with enhanced
measures for transportation process (24*7 operations).
Proactive anti-fraud Initiatives
Rule based anomaly detection systems have been introduced to
identify exceptions. The control environment has been further
strengthened during the year with more automated controls.
Failure modes were comprehensively re-assessed and technology
solutions were explored and implemented to automate controls.
Climate Change & Sustainability
Awareness & Training
During the year, we engaged a 3rd party expert firm Det Norske
Role based training programs to enhance risk literacy covering
Veritas (DNV) to carry out a specific risk assessment of Climate
Intellectual Property practices, information security compliance,
Change & Sustainability risks across the organization. Outcome
risk management in large bids, delivery risk management, Foreign
of this exercise will be added to the risk inventory for mitigation
Corrupt Practices Act and UK Bribery Act compliance were
tracking in the current year.
deployed. Educational newsletters and case studies were also
indicators such as availability of alternates, financial stability,
for our largest business segment, namely, IT Services. The
regularly published.
Outlook
We have followed a practice of providing only revenue guidance
guidance is provided at the release of every quarterly earnings
when detailed Revenue outlook for the succeeding quarter is
shared. Over the years, the Company has performed in line with
quarterly Revenue guidance.
On April 25, 2012, along with our earnings release for quarter
ended March 31, 2012, we provided our most recent quarterly
guidance. Revenue from IT Services segment for the quarter
ending June 30, 2012 is likely to be ranged between
USD 1,520-1,550 million*.
* Guidance is based on the following exchange rates: GBP/USD
at 1.58, Euro/USD at 1.31, AUD/USD at 1.07, USD/INR at 50.07.
Critical Partner Alliance Risk Management
A Risk Management framework was deployed to assess the
risks in engagement with critical alliance partners. Key risk
and delivery performance were assessed and mitigated.
Code of Business Conduct compliance / governance (Ombuds
Process)
To augment the current Ombuds (whistle blowing) process at
Wipro, we rolled out a 24/7 hotline and web support across the
globe, accessible to employees, partners, clients and all other
interested parties. Systemic issues identified during Ombuds
investigations are considered as risks and taken up for mitigation.
Global Economic Conditions
Global Risks 2012 report tabled at World Economic Forum
(WEF), 2012 listed “Bad Government Balance sheets” as a top
risk. As a pro-active measure, we developed an Economic risk
indicator framework with scenario planning and possible
mitigations.
Info security & Business Continuity
Focus areas for the year included enhancing the information
security compliance and business continuity planning in
customer engagements and data protection reviews &
compliance
46
The entire evaluation of internal controls was carried out by a
central team reporting into the Chief Financial Officer.
We have obtained a clean and unqualified report from our
independent auditors on the effectiveness of our internal
controls.
Material developments in Human resources/Industrial
Relations front (including number of people employed)
In our IT Services segments, we had 135,920 employees as of
March 31, 2012.
Attrition for the year in our IT Services business segment
(excluding BPO operations, Indian IT operations and other
overseas subsidiaries) was 19.5% compared with 24.1% last year.
Voluntary attrition stood at 17.6% compared with 22.3% last
year.
47
We continually strive to provide our employees with competitive
and innovative compensation packages. Our compensation
packages include a combination of salary, stock options, pension,
and health and disability insurance. We measure our
compensation packages against industry standards and seek to
match or exceed them. We adopted an employee stock purchase
plan in 1984, employee stock option plan in 1999 and 2000 and
restricted stock unit option plan in 2004, 2005 and 2007. We
have devised both business segment performance and individual
performance linked incentive programs that we believe more
accurately link performance to compensation for each employee.
Compensation/People practices
Our human resources department is centralized at our corporate
headquarters in Bangalore and functions across all of our business
segments. We have implemented corporate-wide recruiting,
training, performance evaluation and compensation programs that
are tailored to address the needs of each of our business
segments.
Our relationship with employees and employee groups are based
on mutual trust and respect and we continue to maintain the same
spirit at all times. We continue to fulfill all requirements and
commitments which could arise out of collective bargaining as
required across various development centers and manufacturing
facilities and other such agreements in specific geographies across
Americas, Europe and Asia.
We hire entry level graduates from both the top engineering and
management universities in India, as well as more experienced
lateral hires through employee referral programs, advertisements,
placement consultants, our website postings and walk-ins. To
facilitate employee growth within the Company, all new openings
are first offered to our employees. The nature of work, skill sets
requirements and experience levels are highlighted to the
employees. Applicants undergo the regular recruitment process
and, if selected, get assigned to their new roles.
48
DIRECTORS’
REPORT
Dear Shareholders,
I am happy to present the 66th Directors’ Report of your
Company along with the Balance Sheet and Profit and Loss
Account for the year ended March 31, 2012.
Financial Performance
Key aspects of financial performance for Wipro and its group
companies and standalone / consolidated financial results of
Wipro Limited for the financial year 2011-12 are tabulated below:
(` in Mn)
*profit for the year in standalone results is after considering loss
of ` 2,787 million (March 2011: gain of ` 326 million) relating
to changes in fair value of forward contracts designated as
hedges of net investment in non-integral foreign operations,
translation of foreign currency borrowings and changes in fair
value of related cross currency swaps together designated as
hedges of net investment in non-integral foreign operations.
In the consolidated Accounts, these are considered as hedges
of net investment in non-integral foreign operations and are
recognized directly in shareholders’ funds. (Refer note 33 on
page 141)
Consolidated
Standalone
Outlook
2011-12 2010-11 2011-12 2010-11
Sales and Other
income
384,563 318,094 329,103 269,812
Profit before Tax
69,813
62,348
59,186
57,055
Provision for Tax
13,845
9,695
12,335
8,618
Minority interest
and equity in
earnings/(losses) in
affiliates
77
271
-
-
Profit for the year*
56,045
52,924
46,851
48,437
Appropriations
Interim Dividend
4,917
4,908
4,917
4,908
Proposed Dividend
on equity shares
Corporate tax
on distributed
dividend
Transfer to General
Reserve
Balance retained
in Profit & Loss
account
9,835
9,818
9,835
9,818
2,393
2,204
2,393
2,204
4,685
4,844
4,685
4,844
65,365
31,150
51,684
26,663
According to Nasscom Strategic Review 2012, Global technology
spend is expected to grow by 5% in 2012. Worldwide IT Services
spending is expected to grow 4.3% in 2012 and 4.7% in 2013. The
growth is fuelled both by use of IT to reduce cost structures as
well as increased adoption of cloud, mobility, analytics and social
media. India accounts for less than 5% of the global technology
spending and this provides a strong headroom for growth of the
IT-BPO sector in India.
Worldwide IT spending is forecast to total $3.7 trillion in 2012, a
2.5 percent increase from 2011, according to the latest outlook
by Gartner, Inc.
Subsidiary Companies
The Ministry of Corporate Affairs, Government of India, has
granted a general exemption under section 212(8) of the
Companies Act, 1956 from the requirement to attach detailed
financial statements of each subsidiary. In compliance with
the exemption granted, we have presented in page 190 to 192
summary financial information for each subsidiary.
The detailed financial statements and audit reports of each of the
subsidiaries are available for inspection at the registered office
of the company during office hours between 11 am to 1 pm and
upon written request from a shareholder, your company will
arrange to send the financial statements of subsidiary companies
to the said shareholder.
01 Directors Report_2012.indd 49
6/19/2012 7:47:39 PM
Wipro Limited
49
Consolidated Results
Our Sales for the current year grew by 21% to ` 384,563 million
and our Profit for the year was ` 56,045 million, recording an
increase of 6% over the previous year.
Dividend
Your Directors recommend a final Dividend of 200% (` 4/- per
equity share of ` 2/- each) to be appropriated from the profits of
the year 2011-12, subject to the approval of the shareholders at
the ensuing Annual General Meeting. The Dividend will be paid
in compliance with applicable regulations.
During the year 2011-12, unclaimed dividend of ` 5,731,075/-
was transferred to the Investor Education and Protection Fund,
as required under the Investor Education and Protection Fund
(Awareness and Protection of Investor) Rules, 2001.
Interim Dividend
Pursuant to the approval of Board of Directors on January 20,
2012, your company had distributed an interim dividend of
` 2/- per share, of face value of ` 2/- each, to shareholders, who
were on the Register of Members of the company as at closing
hours of January 25, 2012, being the record date fixed by the
Board of Directors for this purpose. Interim Dividend was paid
on February 3, 2012.
Acquisitions in IT Space
During the year, the Company acquired IT Business of SAIC Group
and entered in to a Joint Venture Agreement with Kawasaki
and for an acquisition in Brazil for its Infrastructure Engineering
Business.
Investments in direct subsidiaries
During the year under review, your Company had invested
an aggregate amount of USD 101 Mn as equity in its direct
subsidiaries i.e. Wipro Cyprus Private Limited, Wipro Inc, Wipro
Holdings Mauritius Limited and Wipro Infrastructure Engineering
Machinery (Changzhou) Co., Ltd. Apart from this, your Company
had funded its subsidiaries, from time to time, as per the fund
requirements, through loans, guarantees and other means.
Research and Development
Requirement under Rule 2 of Companies (Disclosure of
particulars in the report of Board of Directors) Rules, 1988
regarding Technical Absorption and Research and Development
in Form B is given in page 53 to 54 of the Annual Report, to the
extent applicable.
Corporate Governance & Corporate Social Responsibility
Your company believes that Corporate Governance is the basis
of stakeholder satisfaction. Your company’s governance practices
are described separately in detail in the section on Corporate
Governance Report (page 64 to 92) of this Annual Report.
Your company has obtained a certificate from V. Sreedharan
& Associates, Company Secretaries on compliance with clause
49 of the listing agreement with Indian Stock Exchanges. This
certificate is given in page 93 of this Annual Report.
The Ministry of Corporate Affairs had issued National
Voluntary Guidelines on Social, Environmental and Economic
Responsibilities of Business 2011 for adoption by companies.
The Guidelines broadly outline governance based on Ethics,
Transparency and Accountability, Goods and Services that
contribute to sustainability, promote well being of employees,
respect the interest of disadvantaged, vulnerable and
marginalised groups of stake holders, promotion of human
rights, protect and restore environment, supporting inclusive
growth and equitable development and provide value to
our customers. Corporate Social Responsibility initiatives are
provided in page no. 94 to 116.
Personnel
The particulars of employees as required by Section 217 (2A) of
the Companies Act, 1956, read with the Companies (Particulars
of Employee) Rules, 1975 as amended is reported in page no.
58 to 63 provided as annexure ‘C’ to this report.
Wipro Employee Stock Option Plans (WESOP) / Restricted
Stock Unit Plans
Summary Information on stock options program of the Company
is provided as Annexure B of this report. The information is
being provided in compliance with Clause 12 of the Securities
and Exchange Board of India (Employee Stock Option Scheme)
and (Employee Stock Purchase Scheme) Guidelines, 1999, as
amended. No employee was issued Stock Option, during the year
equal to or exceeding 1% of the issued capital of the Company
at the time of grant.
Foreign Exchange Earnings and Outgoings
During the year, your company has earned foreign exchange of
` 234,413 million and the outgoings in foreign exchange were
` 99,782 million, including outgoings on materials imported
and dividend.
Conservation of Energy
The Company has taken several steps to conserve energy
through its “Sustainability” initiatives disclosed separately as
part of this Annual Report. The information on Conservation of
Energy as required under Section 217(1)(e) of the Companies Act,
1956 read with Rule 2 of the Companies (Disclosure of Particulars
in the Report of Board of Directors) Rules, 1988 is provided in
Annexure A in page 52 of this Annual Report.
Directors:
(A) Re-appointment
Articles of Association of the Company provide that at least
two-third of our Directors shall be subject to retirement by
rotation. One third of these retiring Directors must retire from
office at each Annual General Meeting of the shareholders. A
retiring Director is eligible for reelection. Dr. Jagdish N Sheth, Mr.
Shyam Saran and Dr. Henning Kagermann, Directors, retire by
Annual Report 2011-12
50
01 Directors Report_2012.indd 50
6/19/2012 7:47:39 PM
rotation and, being eligible offer themselves for reappointment
at the ensuing Annual General Meeting. The Board Governance
and Nomination Committee have recommended their re-
appointment for consideration of the Shareholders approval.
Cost Audit Report
The Cost Audit report for the year ended March 31, 2011 was due
on September 30, 2011 and was filed on September 24, 2011.
Group
The names of the Promoters and entities comprising “group”
(and their shareholding) as defined under the Monopolies and
Restrictive Trade Practices (“MRTP”) Act, 1969 for the purposes
of Section 3(1)(e)(i) of SEBI (Substantial Acquisition of Shares and
Takeover) Regulations, 1997 include the following:
Name of the shareholder
Sl.
No.
1
2
3
4
5 Mr. Azim Hasham Premji Partner
Azim H Premji
Yasmeen A Premji
Rishad Azim Premji
Tariq Azim Premji
Representing Hasham Traders
6 Mr Azim Hasham Premji Partner
Representing Prazim Traders
7 Mr. Azim Hasham Premji Partner
Representing Zash Traders
Regal Investments & Trading Company
Pvt Ltd
Vidya Investment & Trading Company
Pvt Ltd
8
9
No. of
shares
93,405,100
10,62,666
6,86,666
2,65,000
543,765,000
541,695,000
1,87,666
1,87,666
10 Napean Trading & Investment Company
1,87,666
Pvt Ltd
11 Azim Premji Foundation (I) Pvt. Ltd
12 Azim Premji Trust
13 Azim Premji Trustee Company Private
10,843,333
1,95,187,120
NIL
Limited
14 Azim Premji Foundation for
Development
15 Azim Premji Foundation
16 Azim Premji Trust Services Private Limited
17 Azim Premji Safe Deposits Private Limited
18 Azim Premji Custodial Services Private
Limited
Total
NIL
NIL
Nil
Nil
Nil
1,927,880,883
Management’s Discussion and Analysis Report
The Management’s Discussion and Analysis on Company’s
performance – industry trends and other material changes with
respect to the Company and its subsidiaries, wherever applicable,
are presented from page 32 to 48 of this Annual Report.
Re-appointment of Statutory Auditor
The auditors, M/s. BSR & Co (Regt. No. 101248W), Chartered
Accountants, retire at the ensuing Annual General Meeting and
have confirmed their eligibility and willingness to accept office, if
re-appointed. The proposal for their re-appointment is included
in the notice for Annual General Meeting sent herewith.
Fixed Deposits
Your company has not accepted any fixed deposits. Hence, there
is no outstanding amount as on the Balance Sheet date.
Green Initiatives in Corporate Governance
Ministry of Corporate affairs have permitted companies to send
electronic copies of Annual Report, notices, quarterly results
intimation about dividend etc., to the e-mail IDs of shareholders.
We are accordingly arranging to send soft copies of these
documents to the e-mail IDs of shareholders available with us or
with our depositories. In case any of the shareholder would like
to receive physical copies of these documents, the same shall
be forwarded on written request to the Registrars M/s. Karvy
Computer Share Private Limited.
Directors’ Responsibility Statement
On behalf of the Directors I confirm that as required under
Section 217 (2AA) of the Companies Act, 1956.
540,408,000
a)
In the preparation of the annual accounts, the applicable
accounting standards have been followed and that no
material departures are made from the same;
b) We have selected such accounting policies and applied
them consistently and made judgements and estimates
that are reasonable and prudent so as to give true and fair
view of the state of affairs of the Company at the end of
the financial year and of the profits of the Company for the
period;
c) We have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance
with the provisions of the Companies Act, 1956 for
safeguarding the assets of the Company and for preventing
and detecting fraud and other irregularities; and
d) We have prepared the annual accounts on a going concern
basis.
Acknowledgements and Appreciation
Your Directors take this opportunity to thank the customers,
shareholders, suppliers, bankers, business partners/associates,
financial institutions and Central and State Governments
for their consistent support and encouragement to the
Company. I am sure you will join our Directors in conveying our
sincere appreciation to all employees of the Company and its
Subsidiaries and Associates for their hard work and commitment.
Their dedication and competence has ensured that the Company
continues be a significant and leading player in the IT services
industry.
For and on behalf of the Board of Directors
Bangalore, June 15, 2012
Azim H. Premji,
Chairman
Wipro Limited
51
01 Directors Report_2012.indd 51
6/19/2012 7:47:39 PM
Annexure A forming part of the Directors Report
A.
DISCLOSURE OF PARTICULARS WITH RESPECT TO
CONSERVATION OF ENERGY
D. CONSUMPTION PER UNIT PRODUCTON
(Wipro Consumer Care Division)
Electricity
(KWH/Tonne)
Liquid Diesel Oil
(Litres/tonne)
ACT
149.74
132.38
STD
99.00
109.00
NA
Electricity
(KWH/000 Nos.)
Liquid Diesel Oil
(Litres/000 Nos.)
ACT
13.48
14.04
STD
16.00
16.00
ACT
0.17
0.36
STD
-
-
Electricity
(KWH/000 Nos.)
Liquid Diesel Oil
(Litres/000 Nos.)
ACT
113.77
107.55
STD
129.00
129.00
ACT
2.25
5.19
STD
-
-
(Wipro Infrastructure Engineering Division)
Vansapati
ELECTRICITY
a. Purchased
2011 - 12
2010 - 11
2011 - 12
2010 - 11
General Lighting
System
2011 - 12
2010 - 11
Flourescent
Tube Light
2011 - 12
2010 - 11
Unit
Total Amount
Rate / Unit
KWH 9,890,305
`
`
8,528,328
57,612,166 46,194,564
5.42
5.83
b. Own Generation through Diesel Generator
KWH 2,204,232
2.99
14.64
Unit
Unit/Litre of diesel Units
Cost Per Unit
`
1,080,430
2.92
13.28
B. CONSUMPTION PER UNIT PRODUCTON
(Wipro Infrastructure Engineering Division)
Hydraulic cylinder
2011-12
2010-11
Electricity
(kwh/cyl.)
19.83
20.11
Diesel
(Lts/Cyl.)
1.21
0.77
C.
DISCLOSURE OF PARTICULARS WITH RESPECT TO
CONSERVATION OF ENERGY
(Wipro Consumer Care Division)
ELECTRICITY
a Purchased
2011 - 12
2010 - 11
Unit
Total Amount
Rate / Unit
KWH 23,012,741 19,857,756
`
122,844,357 98,858,732
`
4.98
5.34
b Own Generation
Through Diesel Generator
Unit
Unit / Litre of
diesel
Cost Per Unit
COAL
Quantity
Total Cost
Avg. Rate
FURNACE OIL
Quantity FO
Total Cost
Avg. Rate
LPG & PROPANE
Quantity
Total Cost `
Avg. Rate `
H2 GAS
Quantity CMT
Total Cost `
Avg. Rate `
Annual Report 2011-12
52
KWH 1,525,930
3.22
Units
1,961,637
3.14
`
13.10
12.25
Tones
`
`
Ltrs.
`
`
Kgs.
4,075
1,843
18,867,818 10,184,851
5,528
4,630
3,149,110
4,537,803
211,036,593 102,419,666
32.52
46.51
826,377
741,751
43,754,490 30,954,644
41.73
52.95
128,323
4,276,179
33.32
108,642
3,547,283
32.65
01 Directors Report_2012.indd 52
6/19/2012 7:47:39 PM
Form B
Wipro’s R&D Activities: 2011–12
Strengthening the portfolio of Applied Research, Centers of
Excellence (CoE), Customer Co-innovation, Cloud, Mobility,
Analytics, Solution Accelerators, and Software Engineering Tools
& Methodologies, have been the focus of Wipro’s Research and
Development (R & D) activities.
Applied Research
Wipro’s focus on Inclusive Innovation is aimed at discovering
where and how Information and Communication Technology
(ICT) can address effective delivery of G2C and B2B services
to rural citizens in Education, Health, Agriculture, and Rural
Development sectors.
The Applied Research in Intelligent Systems Engineering (ARISE)
lab initiative set up this year jointly with IMEC, the world’s leading
applied research organization in Nano-technology and Nano-
electronics provides a collaborative platform for customers
to co-innovate and build affordable solutions for emerging
market needs. ARISE has started applied research and system
prototyping activities in two disruptive Nano-technologies
- Hyper-spectral imaging (HSI) and Body area networks that
have wide-ranging applications for Healthcare, Insurance,
Manufacturing and Energy & Utilities customers.
Center of Excellence (COE)
Wipro’s COE create competencies in emerging areas of
technology and industry domains and incubate new practices
for business growth. Big Data, Machine to Machine, Natural
User Experience, Web Science, and Nano electronics were the
technology themes identified for the year and Investments
in these technology themes have resulted in development
of industry application prototypes in the area of Augmented
Reality, Sensor Networks and Big Data visualization.
The COE also created new services in the areas of Big Data
Management, Application Performance, and Asset Tracking
solutions thereby helping Wipro establish partnerships with
leading technology platform providers like Microsoft, Cisco,
EMC, HP, Oracle, Amazon, Salesforce and emerging technology
startups like Splunk.
Customer Co-Innovation
Wipro was involved in performance tuning for a large project
for Government of India. In-depth consulting was provided,
based on custom Hadoop configuration with load balancing,
performance tuning, proactive monitoring, and replication
setup. Wipro conducted a detailed study of existing modeling
and simulation systems used by insurance major and forecast
a data explosion due to the implementation of Solvency II
regulatory requirements. We worked closely for a large Indian
Non-Renewable energy provider in setting up RTU’s connected
to the Windmills to meet this regulatory need.
Cloud
Integrated Cloud Services (ICS) group was created this year
to provide end-to-end business solutions to customers using
cloud technologies. The offers include process-centric solutions
(Process transformation leveraging SaaS Applications, Cloud
Enabled Process Outsourcing, Cloud Based Business Platforms)
and technology-centric solutions (Application Transformation
for Private and Public Cloud, Cloud Based Infrastructure
Transformation, Custom Cloud Engineering) and a wide variety
of service products that align to these solution areas. The team
is focused on creating industry relevant vertical cloud solutions
for the various industries by building a strong value network of
partners, creating IPs, frameworks, and accelerators.
Mobility
Wipro Mobility Solutions enables the mobile individual – at work
and outside. Wipro brings its own IP on business processes and
application code to help its clients rapidly implement mobile
solutions, particularly in the areas of sales force, customer
support, and employee benefits management. For enterprises
looking to reach the mobile customer, we offer remote health
management, anywhere TV and entertainment, connected
home, automobile navigation and entertainment, mobile retail
and mobile banking solutions.
Analytics
A new Service line ‘Analytics & Information Management’ was
formed with a view to maximize opportunities in the Analytics
space. Big Data capabilities required by enterprises were
developed in data management and processing areas like
Non-relational, No SQL databases, in-memory databases, and
map-reduce technologies. We are also creating a Big Data /
Appliances Lab-on-Hire to enable Customer POCs. Partnerships
with academia include collaborations with top universities
with leading quant programs – Duke University, DePaul, Indian
Statistical Institute, IIM-B and Carnegie Mellon.
Solution Accelerators
Wipro continues to invest in reusable IPs/solution accelerators
(components, tools, and frameworks). We have integrated
various accelerator assets to create integrated stacks and
solutions. Our Digital TV broadcast middleware reusable IPs
(ATSC, OpenCable, Cable Card components for US market; DVB-
T/S/C for Europe; ISDB-T/S for Japan; MHEG-5 etc.) have helped
DTV OEMs reduce R&D costs and product development lead
time. Today, the stacks have over 30 licensees.
Some other examples of integrated stack and solutions and
business platforms are: the Wipro Cloud stack, digital marketing
platform and enterprise grade smart meters, Telco in a Box, and
Oracle-based Clinical Trials solutions. Wipro has also developed a
Telehealth solution platform designed around patient centricity,
device interoperability, open standards for integration with back-
end PHR and decision support tools/systems.
01 Directors Report_2012.indd 53
6/19/2012 7:47:39 PM
Wipro Limited
53
Software Engineering Tools & Methodologies
We are committed to our investments in ‘in-house’ development
of software engineering tools to improve productivity
and quality. Some examples include, Wipro Requirements
Management, Wipro Style, Wipro Accelerator, Wipro Unit Test,
Wipro code checker and Deepcheck. We have also developed
a tool called Wipro PAT (Portfolio Analysis Tool) in Transition
area. We have developed a tool for Flex delivery especially for
Managed Services engagements for effective queue, capacity,
and productivity management at reduced cost. KEDB (Known
Error Data Base) Tool on our Knowledge Management platform
is another Wipro developed tool that helps in faster ticket
resolution in managed services projects. An automated SHINE
workflow-enabled learning framework was implemented on the
Knowledge Management platform that reduces the cycle time to
make new joiners ready for productive deployment on projects.
Patents
In FY 11-12, Wipro has filed for 15 new patents. From the previous
filings, 10 patents have been granted. Wipro has also submitted
invention disclosures and has contributed for its client to win
patent in the pay-TV services area on techniques adopted in
the middleware architecture. We have bagged two US Patents
on algorithms/IPs in video post processing.
Expenditure on R & D
During the year, under review, your Company incurred an
expenditure of ` 1,904 million including capital expenditure in
continued development of R & D activities.
Annual Report 2011-12
54
01 Directors Report_2012.indd 54
6/19/2012 7:47:39 PM
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58
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59
01 Directors Report_2012.indd 59
6/19/2012 7:47:40 PM
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62
01 Directors Report_2012.indd 62
6/19/2012 7:47:40 PM
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01 Directors Report_2012.indd 63
6/19/2012 7:47:40 PM
Wipro Limited
63
CORPORATE GOVERNANCE
REPORT
Our Corporate Governance principles and practices have been
articulated through the Company’s Code of Business Conduct
and Ethics, Corporate Governance guidelines, charters of various
sub-committees of the Board and Company’s Disclosure policies.
These policies seek to focus on enhancement of long-term
shareholder value without compromising on Ethical Standards
and Corporate Social Responsibilities. These practices form an
integral part of the Company’s operating plans.
The Spirit of Wipro represents the core values of Wipro framed
around these Corporate Governance principles and practices.
The three values encapsulated in the Spirit of Wipro are:
Intensity to Win
•
•
Make customers successful
Team, innovate and excel
Act with Sensitivity
•
•
Respect for the individual
Thoughtful and responsible
Unyielding Integrity
•
•
Delivering on commitments
Honesty and fairness in action
Corporate Governance philosophy is put into practice at Wipro
through the following four layers, namely,
•
•
•
•
Governance by Shareholders,
Governance by Board of Directors,
Governance by Sub-committee of Board of Directors, and
Governance of the management process
FIRST LAYER: GOVERNANCE BY SHAREHOLDERS
Annual General Meeting
Annual General meeting for the year 2011-12 is scheduled
on July 23, 2012 at 4.00 p.m. The meeting will be
conducted at Wipro Campus, Cafetaria Hall, EC-3 Ground
Floor, Opp. Tower 8, No. 72 Keonics Electronic City, Hosur
Road, Bangalore - 561 229.
For those of you, who are unable to make it to the meeting,
the facility to appoint a proxy to represent you at the meeting
is also available. For this you need to fill a proxy form and send
it to us. The last date for receipt of proxy forms by us is July 21,
before 4.00 p.m.
Annual General Meetings and other General Body meeting of
the last three years and Special Resolutions, if any.
For the year 2008-09 we had our Annual General Meeting on July
21, 2009, at 4.30 p.m. The meeting was held at Wipro Campus,
Cafeteria Hall EC-3, Ground Floor, Opp. Tower 8, No. 72, Keonics
Electronic City, Hosur Road, Bangalore – 561 229. The following
resolutions was passed.
•
•
Re-appointment of Mr. Azim H Premji as Chairman and
Managing Director of the Company as well as the payment
of salary, commission and perquisites.
On the same date at the same venue we had a Court
Convened Extraordinary General Meeting. In this meeting
the scheme of Amalgamation of Indian branch offices
Wipro Networks Pte. Ltd., Singapore and WMNetserv
Limited, Cyprus with Wipro Limited was taken up.
For the year 2009-10 we had our Annual General Meeting on July
22, 2010, at 4.30 p.m. The meeting was held at Wipro Campus,
Cafeteria Hall EC-3, Ground Floor, Opp. Tower 8, No. 72, Keonics
Electronic City, Hosur Road, Bangalore – 561 229. The following
resolutions were passed (last one being special resolution).
•
•
Appointment of Dr. Henning Kagermann as a Director.
Appointment of Mr. Shyam Saran as a Director.
Re-appointment of Mr. Rishad Premji under Section 314(1B) for
holding office or place of profit.
For the year 2010-11 we had our Annual General Meeting on July
19, 2011, at 4.30 p.m. The meeting was held at Wipro Campus,
Cafeteria Hall EC-3, Ground Floor, Opp. Tower 8, No. 72, Keonics
Electronic City, Hosur Road, Bangalore - 561 229.
Annual Report 2011-12
64
02 Corporate Governance_2012.indd 64
6/19/2012 7:48:00 PM
The following resolutions were passed (last one being special
resolution).
•
•
•
•
Appointment of Mr. M. K. Sharma as a Director.
Appointment of Mr. T. K. Kurien as a Director.
Re-appointment of Mr. Azim H. Premji as Chairman and
Managing Director.
To pay remuneration by way of commission for a further
period of five years commencing from April 1, 2012 to any
one or more or all of the existing Non-Executive Directors, or
Non-Executive Directors to be appointed in future.
Financial Calendar
Our tentative calendar for declaration of results for the financial
year 2012-13 is as given below:
Table 01: Calendar for Reporting
Quarter ending
Fo r t h e q u a r t e r e n d i n g
June 30, 2012
For the quarter and half year
ending September 30, 2012
For the quarter and nine month
ending December 31, 2012
For the year ending
March 31, 2013
Release of results
Fourth week of July 2012
Fourth week of October 2012
Third week of January 2013
Third week of April 2013
In addition, the Board may meet on other dates if there are
special requirements.
Interim Dividend
Your Board of Directors declared an Interim Dividend of ` 2/- per
share on equity shares of ` 2/- each on January 20, 2012.
Record Date for Interim Dividend
The record date for the purpose of payment of Interim Dividend
was fixed as January 25, 2012, and the Interim Dividend was paid
to our shareholders who were on the Register of Members as at
the closing hours of January 25, 2012.
share transfers in physical form, lodged with M/s. Karvy
Computershare Private Limited, Registrar and Share
Transfer Agent of the Company on or before June 30, 2012.
(ii)
In respect of shares held in electronic form, to those
“deemed members” whose names appear in the statements
of beneficial ownership furnished by National Securities
Depository Limited (NSDL) and Central Depository Services
(India) Limited (CDSL) as at the opening hours on July 1, 2012.
National ECS facility
As per RBI notification, with effect from October 1, 2009, the
remittance of money through ECS is replaced by National
Electronic clearing Services (NECS) and banks have been
instructed to move to the NECS platform.
NECS essentially operates on the new and unique bank account
number, allotted by banks post implementation of Core Banking
Solutions (CBS) for centralized processing of inward instructions
and efficiency in handling bulk transaction.
In this regard, shareholders holding shares in electronic form
are requested to furnish the new 10-digit Bank Account Number
allotted to you by your bank (after implementation of CBS),
along with photocopy of a cheque pertaining to the concerned
account, to your Depository Participant (DP). Please send these
details to the Company/Registrars, if the shares are held in
physical form, immediately.
If your bank particulars have changed for any reason, please
arrange to register the NECS with the revised bank particulars.
The Company will use the NECS mandate for remittance of
dividend either through NECS or other electronic modes failing
which the bank details available with Depository Participant will
be printed on the dividend warrant. All the arrangements are
subject to RBI guidelines, issued from time to time.
Special Resolution passed during the Financial Year 2011-12
through the Postal Ballot Procedure
There were no Special Resolutions passed through Postal Ballot
Procedure during the year 2011-12.
Final Dividend
Awards and Rating
Your Board of Directors has recommended a Final Dividend of
` 4/- per share on equity shares of face value of ` 2/- each.
Date of Book closure
Our Register of members and share transfer books will remain
closed from July 1 to July 23, 2012 (both days inclusive).
Final Dividend Payment Date
Dividend on equity shares as recommended by the Directors for
the year ended March 31, 2012, when declared at the meeting,
will be paid on July 25, 2012.
(i)
to those members whose names appear on the Company’s
register of members, after giving effect to all valid
The Company has been awarded the highest rating of
Stakeholder Value and Corporate Rating 1 (called SVG 1) by
ICRA Limited, a rating agency in India being an associate of
Moody’s. This rating implies that the Company belongs to the
Highest Category on the composite parameters of stakeholder
value creation and management as also Corporate Governance
practices.
The company has been awarded the National award for
excellence in Corporate Governance from Institute of Company
Secretaries of India during the year 2004.
The company has been given the award for excellence in
Financial Reporting from Institute of Chartered Accountants of
India during the year 2012.
02 Corporate Governance_2012.indd 65
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Wipro Limited
65
Mr. Azim H. Premji Chairman and managing Director of the
Company has been awarded Long time Achievement Award for
Excellence in Corporate Governance from Institute of Company
Secretaries of India during the year 2011.
The Company has also been assigned LAAA rating to Wipro’s long
term credit. This is the highest credit quality rating assigned by
ICRA Limited to long term instruments.
The Company’s Long Term Corporate Credit Rating by Standard
and Poor (S & P), a Credit Rating Agency is BBB+ (Outlook
Negative).
The Company was ranked among the Top 5 in Greenpeace
International Ranking Guide and regained its top position among
The Company has been Awarded as one of the world’s Most
Ethical Company’s by Ethisphere Institute.
Corporate Social Responsibility and Business Responsibility
Reporting
Wipro’s sustainability reporting articulates our perspective on
the emerging forces in the global sustainability landscape and
Wipro’s response on multiple dimensions. For each of the three
dimensions of economic, ecological and social sustainability,
we state the possible risks as well as the opportunities that we
are trying to leverage.
Our fourth ‘Sustainability Report’ for 2010-11 is a comprehensive
articulation of Wipro’s multiple initiatives on Energy and
Greenhouse Gas reduction, Water Efficiency, Waste Management,
Diversity, Employee Engagement, Customer Stewardship,
Education, Community Care and Advocacy. Our report has been
rated A+ for the fourth successive instance based on a rigorous
external audit by DNV AS, the globally renowned provider
of sustainability assurance services. The rating represents
the highest standards of transparency and completeness in
reporting.
The theme of our sustainability report for 2010-11 “The
imperative of hope” symbolizes the pressing need for seeking
answers to the intractable social and environmental problems
that the world faces in a spirit of optimism and courage. The
challenges are so many and so deep rooted that many view them
with a sense of resignation as part of an existential dilemma that
we can only hope to cope with and not ever resolve.
Your Company’s Sustainability Report for 2010-11 has been
assessed by DNV at the A+ level, which represents the highest
levels of transparency, coverage and quality of reporting. You
can know more about our sustainability and Social Initiatives
in our website www.wipro.com/about.wipro/sustainability/
disclosures.aspx.
Your Company’s Sustainability Report for 2011-12, which forms
part of this Annual Report 2011-12 includes the disclosures
recommended under National Voluntary Guidelines for the
Social, Environmental and Economic Responsibilities of Business,
2011 issued by the Ministry of Corporate Affairs, Government
of India.
Shareholders’ Satisfaction Survey
The Company conducted a Shareholders’ Satisfaction survey in
July 2011 seeking views on various matters relating to investor
services.
1,944 shareholders participated and responded to the survey.
The analysis of the responses reflects an average rating of
about 4.08 on a scale of 1 to 5. Around 85% of the shareholders
indicated that the services rendered by the Company were good
/excellent and were satisfied.
We are constantly in the process of enhancing our service
levels to further improve the satisfaction levels based on the
feedback received from our shareholders. We would welcome
any suggestions from your end to improve our services.
Means of Communication with Shareholders / Analysis
We have established procedures to disseminate, in a planned
manner, relevant information to our shareholders, analysts,
employees and the society at large.
Our Audit Committee reviews the earnings press releases, SEC
filings and annual and quarterly reports of the Company, before
they are presented to the Board of Directors for their approval
for release.
News Releases, Presentations, etc.: All our news releases and
presentations made at investor conferences and to analysts
are posted on the Company’s website at www.wipro.com/
corporate/investors.
Quarterly results: Our quarterly results are published in widely
circulated national newspapers such as The Business Standard,
the local daily Kannada Prabha. We have also commenced
intimating quarterly results to shareholders by email from
January 2011 onwards.
Website: The Company’s website contains a separate dedicated
section “Investors” where information sought by shareholders
is available. The Annual report of the Company, earnings press
releases, SEC filings and quarterly reports of the Company
apart from the details about the Company, Board of directors
and Management, are also available on the website in a user-
friendly and downloadable form at www.wipro.com/corporate/
investors.
Annual Report: Annual Report containing audited standalone
accounts, consolidated financial statements together with
Directors’ report, Auditors’ report and other important
information are circulated to members and others entitled
thereto.
Table 02: Communication of Results
Means of communications
Number of times during
2011-12
Earnings Calls
Publication of results
Analysts meet
4
4
1
Annual Report 2011-12
66
02 Corporate Governance_2012.indd 66
6/19/2012 7:48:00 PM
Listing on Stock Exchanges, Stock Codes, International
Securities Identification Number (ISIN) and Cusip Number
for ADRs
We have also internally fixed turnaround times for closing the
queries/complaints received from the shareholders within 7
working days if the documents are clear in all respects.
Your company’s shares are listed in the following exchanges as
of March 31, 2012 and the stock codes are:
Table 03: Stock codes
Equity shares
Bombay Stock Exchange
Limited (BSE)
National Stock Exchange of
India Limited (NSE)
American Depository Receipts
New York Stock Exchange
(NYSE)
Notes:
Stock Codes
507685
Wipro
WIT
1.
2.
3.
Listing fees for the year 2011-12 has been paid to the Indian
Stock Exchanges
Listing fees to NYSE for the calendar year 2012 has been
paid.
The stock code on Reuters is WPRO@IN and on Bloomberg
is WIPR.BO
International Securities Identification Number (ISIN)
ISIN is an identification number for traded shares. This number
needs to be quoted in each transaction relating to the
dematerialized equity shares of the Company. Our ISIN number
for our equity shares is INE075A01022.
CUSIP Number for American Depository Shares
The Committee on Uniform Security Identification Procedures
(CUSIP) of the American Bankers Association has developed a
unique numbering system for American Depository Shares. This
number identifies a security and its issuer and is recognized
globally by organizations adhering to standards issued by the
International Securities Organization. Cusip number for our
American Depository Scrip is 97651M109.
Corporate Identity Number (CIN)
Our Cor porate Identit y Number (CIN), allotted by
Ministry of Company Affairs, Government of India is
L32102KA1945PLC020800, and our Company Registration
Number is 20800.
Registrar and Transfer Agents
The Power of share transfer and related operations has been
delegated to Registrar and Share Transfer Agents Karvy
Computershare Private Limited, Hyderabad.
Share Transfer System
The turnaround time for completion of transfer of shares in
physical form is generally less than 7 working days from the date
of receipt, if the documents are clear in all respects.
Address for correspondence
The address of our Registrar and Share Transfer Agents is given
below.
Karvy Computershare Private Ltd.
Karvy House
Karvy Computer Share Private Limited, Unit: Wipro Limited,
Plot No: 17-24, Vittal Rao Nagar, Madhapur,
Hyderabad:- 500 081.
Tel: 040 23420815
Fax: 040 23420814
E-mail id: jayaramanvk@karvy.com Contact person: Mr. V K
Jayaraman
E-mail id: krishnans@karvy.com Contact person: Mr. Krishnan S
Shareholder grievance can also be sent through email to the
following designated email id: einward.ris@karvy.com.
Overseas depository for ADSs
J.P. Morgan Chase Bank N.A.
60, Wall Street New York, NY 10260
Tel: 001 212 648 3208
Fax: 001 212 648 5576
Indian custodian for ADSs
India sub custody
J.P. Morgan Chase Bank N.A. J.P. Morgan Towers,
1st Floor, off C.S.T. Road, Kalina, Santacruz (East), Mumbai - 400 098
Tel: 91-22-61573484
Fax: 91-22-61573910
Web-based Query Redressal System
Members may utilize this new facility extended by the Registrar
& Transfer Agents for redressal of their queries.
Please visit http://karisma.karvy.com and click on “investors”
option for query registration through free identity registration
to log on. Investor can submit the query in the “QUERIES” option
provided on the web-site, which would give the grievance
registration number. For accessing the status/response to your
query, please use the same number at the option “VIEW REPLY”
after 24 hours. The investors can continue to put additional
queries relating to the case till they are satisfied.
Shareholders can also send their correspondence to the
Company with respect to their shares, dividend, request for
annual reports and shareholder grievance.The contact details
are provided below:
Ph: 91 80 28440011 (Extn 226185)
Fax: 91 080 28440051
E-mail: ramachandran.venkatesan@wipro.com
Mr.V. Ramachandran,
Company Secretary
Wipro Limited
Doddakannelli
Sarjapur Road
Bangalore - 560 035
02 Corporate Governance_2012.indd 67
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Wipro Limited
67
Description of voting rights
All our shares carry voting rights on a pari-passu basis.
Pursuant to Clause 5A of the Listing Agreement, Shareholders
holding physical shares and not having claimed share certificates
have been sent reminder letters to claim the certificates from
the Company. Based on their response, such shares will be
transferred to “unclaimed suspense account” as per the Listing
Agreement subject to necessary due diligence and verification
of such claims. The disclosure as required under Clause 5A of the
Listing Agreement is given below:
•
•
•
•
Aggregate number of shareholders and the outstanding
shares lying in the Unclaimed Suspense Account at the
beginning of the year : Nil
Number of shareholders who approached the issuer for
transfer of shares from the Unclaimed Suspense Account
during the year: Nil
Number of shareholders to whom shares were transferred
from the Unclaimed Suspense Account during the year :
Nil
Aggregate number of shareholders and the outstanding
shares lying in the Unclaimed Suspense Account at the end
of the year : Nil
Ph: 91 80 28440011 (Extn 226183)
Fax: 91 080 28440051
E-mail: kothandaraman.gopal@wipro.com
Mr. G. Kothandaraman,
Senior Manager-
Secretarial &
Compliance
Wipro Limited
Doddakannelli
Sarjapur Road
Bangalore - 560 035
Analysts can reach our Investor Relations Team for any queries
and clarification Financial/Investor Relations related matters:
Ph: 91 80 28440011 (Extn. 226186)
Fax 91 080 28440051
E-mail: manoj.jaiswal@wipro.com
Ph : 91 80 28440011 (226143)
Fax: 91 80 28440051
E-mail: aravind.viswanathan@wipro.
com
Ph: +1 650-316-3537
Email : sridhar.ramasubbu@wipro.
com
Mr. Manoj Jaiswal,
Vice President &
Corporate Treasurer
Wipro Limited
Doddakannelli
Sarjapur Road
Bangalore - 560 035
Mr. Aravind
Viswanathan,
Head Investor
Relations, Wipro
Limited,Doddkannelli,
Sarjapur Road,
Bangalore - 560 035
Mr R Sridhar
CFO-International
Sales & Operations
Wipro Limited
East Brunswick
Tower 2
New Jersey
US
Table 04: Distribution of Shareholding and categories of Shareholders as on March 31, 2012
Category
0-5000
5001 - 10000
10001 - 20000
20001 - 30000
30001 - 40000
40001 - 50000
50001 - 100000
100001 and above
Total
No. of Share
holders
222,590
1,698
1,085
421
225
163
307
669
227,158
March 31, 2012
% of
Shares
23,801,266
97.98
6,209,071
0.75
7,816,272
0.47
5,164,044
0.18
3,912,806
0.09
3,644,390
0.08
0.15
10,926,971
0.30 2,397,281,408
100.00 2,458,756,228
No. of Shares % of Total
Equity
0.97
0.25
0.32
0.22
0.16
0.15
0.44
97.49
100.00
No. of Share
holders
215,769
1,659
1,111
434
223
152
281
608
220,237
March 31, 2011
% of
Shares
23,535,421
97.97
6,088,430
0.75
8,009,893
0.50
5,396,893
0.20
3,904,440
0.10
3,418,497
0.07
0.13
9,942,841
0.28 2,394,112,730
100.00 2,454,409,145
No. of Shares % of Total
Equity
0.96
0.25
0.33
0.22
0.16
0.14
0.40
97.54
100.00
We have 5,397 shareholders holding one share each of the Company.
Annual Report 2011-12
68
02 Corporate Governance_2012.indd 68
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Table 05: Major City Wise Report As On March 31, 2012
S.No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
City
Ahmedabad
Bangalore
Chandigarh
Chennai
Cochin
Coimbatore
Guwahati
Hyderabad
Indore
Jaipur
Jamshedpur
Kanpur
Kolkatta
Lucknow
Madurai
Mangalore
Mumbai
Nagpur
New Delhi
Panaji
Pune
Rajkot
Surat
Vadodara
Others
Total
No. of shareholders
No. of shares
8,152
20,274
812
12,610
927
1,303
600
6,957
2,091
3,341
643
3,467
11,227
1,385
701
1,593
55,543
1,322
9,728
1,007
7,111
1,085
2,883
5,015
67,380
227,157
1,166,338
1,964,765,124
192,227
3,514,226
207,303
138,273
55,840
2,239,977
422,011
331,013
95,058
500,654
1,344,287
185,355
79,706
241,762
398,774,861
216,847
3,181,541
189,489
1,879,207
208,988
15,642,918
4,454,282
16,764,131
2,416,791,418
Note: Excludes shares held by custodians and against which depository receipts have been issued
I)(a) Shareholding Pattern as of March 31, 2012 under Clause 35 of the Listing Agreement
Partly paid-up shares
Held by promoter/promoter group
Held by public
Total
Outstanding convertible
securities:
No. of partly paid-up
shares
0
0
0
No. of outstanding
securities
As a % of Total No. of
partly paid-up shares
0
0
0
As a % of total no. of
outstanding convertible
Held by promoter/promoter group
Held by public
Total
Warrants:
0
0
0
No. of warrants
securities
0
0
0
As a % of total no. of
warrants
Held by promoter/promoter group
Held by public
Total
0
0
0
0
0
0
As a % of Total No. of shares of
the Company
0
0
0
As a % of total no. of shares of the
Company assuming full
conversion
of the convertible securities
0
0
0
As a % of total no. of shares of
the Company, assuming full
conversion of warrants
0
0
0
02 Corporate Governance_2012.indd 69
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Wipro Limited
69
I)(a) Shareholding Pattern as of March 31, 2012 under Clause 35 of the Listing Agreement
Partly paid-up shares
No. of partly paid-up
shares
As a % of Total No. of
partly paid-up shares
As a % of Total No. of shares of
the Company
Total paid-up capital of the
Company, assuming full
conversion of warrants and
convertible securities
Category
code (I)
Category of shareholder
(II)
(1)
(a)
(b)
(c)
(d)
(e)
(f )
(2)
(a)
(b)
(c)
(d)
(B)
(1)
(a)
(b)
(c)
(d)
(e)
(f )
(g)
(h)
Shareholding of Promoter
and Promoter Group
Indian
Individuals/ Hindu
Undivided Family
Central Government/ State
Government(s)
Bodies Corporate (Promoter
in his capacity as Director
of Private Limited/Section
25 Companies)*
Financial Institutions/
Banks
Any Other – Partnership
firms (Promoter in his
capacity as partner of
Partnership firms)
Trust
Sub-Total (A)(1)
Foreign
Individuals (Non-Resident
Individuals/ Foreign
Individuals)
Bodies Corporate
Institutions
Any Other (specify)
Sub-Total (A)(2)
Total Shareholding of
Promoter and Promoter
Group (A)= (A)(1)+(A)(2)
Public Shareholding
Institutions
Mutual Funds/ UTI
Financial Institutions/
Banks
Central Government/ State
Government(s)
Venture Capital Funds
Insurance Companies
Foreign Institutional
Investors (exclusive of ADR)
Foreign Venture Capital
Investors
Any Other (specify)
Sub-Total (B)(1)
2,458,756,228 shares of ` 2/- each = ` 4,917,512,456
Number of
shareholders
(III)
Total number
of shares
Number of
shares held in
dematerialized
form
Total shareholding as
a percentage of total
number of shares
Shares Pledged
or otherwise
encumbered
As a
percentage
of (A+B)
As a
percentage
of (A+B+C)
Number
of
Shares
As a
Percentage
4
Nil
4
Nil
95,419,432
95,419,432
Nil
Nil
11,406,331
11,406,331
3.95
Nil
0.47
3.88
Nil
Nil
Nil
0.46
Nil
Nil
Nil
Nil
3
1,625,868,000
1,625,868,000
67.27
66.13
1
195,187,120
195,187,120
12 1,927,880,883 1,927,880,883
8.08
79.77
7.94
78.41
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
NIL
NIL
NIL
12 1,927,880,883 1,927,880,883
Nil
Nil
Nil
NIL
79.77
Nil
Nil
Nil
NIL
78.41
202
16
Nil
Nil
3
423
Nil
49,882,499
422,679
49,882,499
422,679
Nil
Nil
Nil
33,532,300
163,931,370
Nil
33,522,300
163,931,370
Nil
Nil
2.06
0.02
Nil
Nil
1.39
6.78
Nil
2.03
0.02
1.36
6.67
Nil
644
Nil
247,768,848
Nil
247,768,848
Nil
10.25
10.08
Nil
NA
NA
Nil
NA
NA
Annual Report 2011-12
70
02 Corporate Governance_2012.indd 70
6/19/2012 7:48:01 PM
Category
code (I)
Category of shareholder
(II)
Number of
shareholders
(III)
Total number
of shares
Number of
shares held in
dematerialized
form
Total shareholding as
a percentage of total
number of shares
Shares Pledged
or otherwise
encumbered
(2)
(a)
(b)
(c)
(C)
Non-Institutions
Bodies Corporate
Individuals -
(i) Holding nominal share
capital up to ` 1 lakh.
(ii) Individual shareholders
holding nominal share
capital in excess of ` 1
lakh.
Any Other (specify)
(i) Non-Resident Indians
(ii) Trusts
(a) Wipro Inc. Benefit Trust
(b) Wipro Equity Reward Trust
(c) Other Trust
(iii) Non-Executive Directors
and Executive Directors &
Relatives**
(iv) Clearing Members
(v) Foreign Nationals
Sub-Total (B)(2)
Total Public Shareholding
(B)= (B)(1)+(B)(2)
TOTAL (A)+(B)
Shares held by
Custodians and against
which Depository
Receipts have been issued
Promoter and Promoter
Group
Public
GRAND TOTAL (A)+(B)+(C)
As a
percentage
of (A+B)
As a
percentage
of (A+B+C)
Number
of
Shares
NA
As a
Percentage
NA
1,940
69,420,414
69,373,245
219,336
51,531,870
50,169,680
251
79,294,900
51,216,875
4,652
23,381,102
6,258,088
1
1
17
5
1,614,671
1,614,671
13,226,600
193,440
156,094
13,226,600
1,934,404
156,094
284
14
226,501
227,145
2,269,484
53,112
241,141,687
488,910,535
2,269,484
53,112
194,531,289
442,300,137
2.87
2.13
3.28
0.97
0.07
0.55
0.01
0.01
0.09
0.00
9.98
20.23
2.82
2.10
3.23
0.95
0.07
0.54
0.01
0.01
0.09
0.00
9.81
19.88
227,157 2,416,791,418 2,370,181,020
100.00
98.29
NA
Nil
NA
NA
Nil
NA
1
41,964,810
227,158 2,458,756,228 2,412,145,830
41,964,810
1.71
1.71
100
Nil
Nil
02 Corporate Governance_2012.indd 71
6/19/2012 7:48:01 PM
Wipro Limited
71
I)(b) Statement showing Shareholding of persons belonging to the category “Promoter and Promoter Group”
Name of the shareholder
Sr.
No.
Number of
shares
Shares Pledged or otherwise encumbered
Shares as a
percentage of total
number of shares
{i.e., Grand Total
(A)+(B)+(C) indicated
in Statement at para
(A)(1) above}
(I)
(II)
(III)
(IV)
Number
(V)
As a
Percentage
(VI)=(V)/
(III)*100
As a Percentage
total A+B+C of
sub-clause (I)(a)
(VIII)
Azim H Premji
Yasmeen A Premji
Rishad Azim Premji
Tariq Azim Premji
Mr. Azim H. Premji partner
representing Hasham Traders
Mr. Azim H. Premji partner
representing Prazim Traders
Mr. Azim H. Premji partner
representing Zash Traders
Regal Investment Trading
Company Pvt. Ltd.
Vidya Investment Trading
Company Pvt. Ltd.
Napean Trading Investment
Company Pvt. Ltd.
Azim Premji Foundation (I) Pvt.
Ltd.
Azim Premji Trust
1
2
3
4
5
6
7
8
9
10
11
12
TOTAL
93,405,100
1,062,666
686,666
265,000
543,765,000
541,695,000
540,408,000
187,666
187,666
187,666
10,843,333
195,187,120
1,927,880,883
3.80
0.04
0.03
0.01
22.12
22.03
21.98
0.01
0.01
0.01
0.44
7.94
78.41
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
I)(c) Statement showing Shareholding of persons belonging to the category “Public” and holding more than 1% of the total
number of shares.
Sr. No. Name of the shareholder
Life Insurance Corporation of India
1
TOTAL
Number of
shares
32,947,882
32,947,882
Shares as a percentage of total number of shares
{i.e., Grand Total (A)+(B)+(C) indicated
in Statement at para (I)(a) above}
1.34%
1.34%
(I)(d) Statement showing details of locked-in shares”
Sr. No. Name of the shareholder
Wipro Inc. Benefit Trust(held
through trustees for sole
beneficiary of Wipro Inc.)
TOTAL
Category of
Shareholders
(Promoters/
public)
Public
No. of Shares Locked-shares as a percentage of
total number of shares {i.e. Grand
Total (A)+(B)+(C) indicated in
Statement at para (l)(a) above}
0.02
403,668
Percentage
0.02
403,668
0.02
0.02
Annual Report 2011-12
72
02 Corporate Governance_2012.indd 72
6/19/2012 7:48:01 PM
(II)(a) statement showing details of depository receipts (DRs)
Sr.No. Type of outstanding DR
(ADRs, GDRs, SDRs, etc.)
American Depository Receipts
(JP MORGAN CHASE BANK)
TOTAL
Number of
outstanding
DRs
41,964,810
Number
of shares
underlying
outstanding
DRs
41,964,810
41,964,810
41,964,810
Shares underlying outstanding DRs
as a percentage of total number of shares
{i.e., Grand Total (A)+(B)+(C) indicated in
Statement at Para(I)(a) above}
1.71%
1.71%
(II)(b) Statement showing Holding of Depository Receipts (DRs), where underlying shares are held by promoter/ promoter
group in excess of 1% of the total number of shares.
Sr. No Name of the DR Holder
1
Nil
Type of
outstanding
DR (ADRs,
GDRs, SDRs,
etc.)
Nil
Number
of shares
underlying
outstanding
DRs
Nil
Shares underlying outstanding DRs as a
percentage of total number of shares {i.e., Grand
Total (A)+(B)+(C) indicated in Statement at para (I)
(a) above}
Nil
*out of 11,406,331 equity shares shown under I(A)(c), 10,843,333 equity shares are held by Azim Premji Foundation (I) Pvt.Ltd.
Mr. Premji is also the promoter Director of Azim Premji Foundation (I) Pvt. Ltd. These shares are included under “Promoter Category”.
** Out of 13,420,040 shares held by other Trusts, 13,226,600 equity shares are held by Wipro Equity Reward Trust.
** The shareholding comprises of 39,999 shares held by 3 Non- Executive Directors & relatives and 116,095 shares held by 2 Executive
non promoter Directors and relatives. These directors not being Promoter Directors and in as much as they do not exercise any
significant control over the company, they are classified under “Any Other” category.
Note : “Promoter shareholding” and “Promoter Group” and “Public shareholding” as per Clause 40A of the Listing Agreement.
The details of outstanding employee stock options as on March 31, 2012 are provided in Annexure B to the Director’s Report, as
per SEBI (ESOP & ESPP) Guidelines, 1999 as amended from time to time.
Dematerialization of shares and liquidity
SECOND LAYER: GOVERNANCE BY THE BOARD OF DIRECTORS
98.10% of outstanding equity shares have been dematerialized
up to March 31, 2012.
Table 06: List of top ten shareholders of the Company as at
March 31, 2012
Sl.
No.
1
2
3
4
5
6
7
8
9
Name of the shareholder
Mr Azim Hasham Premji Partner
Representing Hasham Traders
Mr Azim Hasham Premji Partner
Representing Prazim Traders
Mr Azim Hasham Premji Partner
Representing Zash Traders
Azim Premji Trust
Azim H Premji*
JP Morgan Chase Bank (ADR
Depository)
Life Insurance Corporation of India
Alco Company Private Limited
Custodian of Enemy Property
(shares held on behalf of a non-
resident shareholder as per law)
%
No. of
shares
543,765,000 22.12
541,695,000 22.03
540,408,000 21.98
195,187,120
95,419,432
41,964,810
32,947,882
16,787,000
15,360,000
7.94
3.88
1.71
1.34
0.68
0.62
10 Wipro Equity Reward Trust
13,226,600
0.54
* includes shares held by his immediate family members.
All our directors inform the Board every year about the Board
membership and Board Committee membership they occupy in
other companies including Chairmanships in Board/Committees
of such companies. They notify us of any change as and when
they take place in these disclosures at the board meeting.
As on March 31, 2012, we had nine non-executive Directors,
three executive Directors of which one executive Director is also
Chairman of our Board. All the nine non-executive directors are
independent directors i.e. independent of management and free
from any business or other relationship that could materially
influence their judgment. All the independent directors satisfy
the criteria of independence as defined under listing agreement
with Indian Stock Exchanges and New York Stock Exchange
Corporate Governance standards. The profile of our Directors is
given below as of March 31, 2012.
Azim H. Premji has served as our Chief Executive Officer,
Chairman and Managing Director (Designated as Chairman)
since September 1968. More recently, Mr Azim Premji, Chairman,
Wipro Limited has been honoured with the Padma Vibhushan
award by Government of India for his contribution in trade and
industry. Azim Premji is a graduate in Electrical Engineering from
Stanford University, USA.
02 Corporate Governance_2012.indd 73
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Wipro Limited
73
Dr. Ashok Ganguly has served as a director on our Board since
1999. He is the Chairman of our Board Governance & Nomination
Committee and Compensation Committee. He is currently
the Chairman of ABP Pvt. Ltd (Ananda Bazar Patrika Group).
Dr. Ganguly also currently serves as a non-executive director
of Mahindra & Mahindra Limited and Dr Reddy Laboratories
Limited. Dr Ganguly is on the advisory board of Diageo India
Private Limited. Dr. Ganguly is the chairman of Research
and Development Committee of Mahindra and Mahindra
Ltd, Member of Nomination, Governance & Compensation
Committee and Chairman of Science, Technology & Operations
Committee of Dr Reddy’s Laboratories Ltd. He is a member of the
Prime Minister’s Council on Trade and Industry and the India-USA
CEO Council, established by the Prime Minister of India and the
President of the USA. Dr. Ganguly is a Rajya Sabha Member. He is
a former member of the Board of British Airways Plc (1996-2005)
and Unilever Plc/NV (1990-97) and Dr. Ganguly was formerly the
Chairman of Hindustan Unilever Limited (1980-90). Dr. Ganguly
was on the Central Board of Directors of the Reserve Bank of India
(2000-2009). In 2006, Dr. Ganguly was awarded the CBE (Hon) by
the United Kingdom. In 2008, Dr. Ganguly received the Economic
Times Lifetime Achievement Award. Dr. Ganguly received the
Padma Bhushan award by the Government of India in January
1987 and the Padma Vibhushan award in January 2009.
B.C. Prabhakar has served as a director on our Board since
February 1997. He has been a practicing lawyer since April 1970.
Mr. Prabhakar holds a B.A. in Political Science and Sociology and
a BL. from Mysore University, India. Mr. Prabhakar serves as a
non-executive director of Automotive Axles Limited and 3M India
Limited. He is also a member of the Audit, Risk and Compliance
Committee and Chairman of the Administrative and Shareholder
Investor Grievances Committee of Wipro Limited.
Dr. Jagdish N. Sheth has served as a director on our Board since
January 1999. Dr. Sheth has been a professor at Emory University
since July 1991. Previously, Dr. Sheth served on the faculty of
Columbia University, Massachusetts Institute of Technology, the
University of Illinois, and the University of Southern California. Dr.
Sheth also serves on the board of Manipal Acunova Ltd. Dr.Sheth
holds a B.Com (Honors) from Madras University, a M.B.A. and a
Ph.D in Behavioral Sciences from the University of Pittsburgh.
Dr. Sheth is also the Chairman of Academy of Indian Marketing
Professionals.
Narayanan Vaghul has served as a director on our Board since
June 1997. He is the Chairman of our Audit, Risk and Compliance
Committee, a member of the Board Governance & Nomination
Committee and a member of the Compensation Committee.
He was the Chairman of the Board of ICICI Bank Limited from
September 1985 to April 2009. Mr. Vaghul is also on the Boards
of Mahindra and Mahindra Ltd., Mahindra World City Developers
Limited, Piramal Healthcare Limited, and Apollo Hospitals
Enterprise Limited. Mr. Vaghul is on the boards of Hemogenomics
Pvt. Ltd., Universal Trustees Pvt.Ltd., and IKP Trusteeship Services
Limited. Mr. Vaghul is the Chairman of the Compensation
Committee of Mahindra and Mahindra Limited and Piramal
Healthcare Limited. Mr. Vaghul is also a member of the Audit
Committee in Nicholas Piramal India Limited. Mr. Vaghul is a
member of the Remuneration Committee of Mahindra World City
Developers Limited and Apollo Hospitals Enterprise Limited. Mr.
Vaghul is also the lead independent director of our Company.
Mr. Vaghul holds Bachelor (Honors) degree in Commerce from
Madras University. Mr. Vaghul was the recipient of the Padma
Bhushan award by the Government of India in 2010. Mr. Vaghul
also received the Economic Times Lifetime Achievement Award.
Priya Mohan Sinha became a director of our Company
on January 1, 2002. He is a member of our Audit, Risk and
Compliance Committee, Board Governance & Nomination
Committee and Compensation Committee. He has served as
the Chairman of PepsiCo India Holdings Limited and President
of Pepsi Foods Limited since July 1992. From October 1981 to
November 1992, he was on the Executive Board of Directors of
Hindustan Lever Limited (currently Hindustan Unilever Limited).
From 1981 to 1985, he also served as Sales Director of Hindustan
Lever Limited (currently Hindustan Unilever Limited). Currently,
he is also on the board of Lafarge India Private Limited. He is
also a member of Audit and Board and Governance Committee
Lafarge India Private Limited. He was also the Chairman of Reckitt
Coleman India Limited and Chairman of Stephan Chemicals India
Limited. Mr. Sinha is also on the Advisory Board of Rieter India. Mr.
Sinha holds a Bachelor of Arts from Patna University, and he has
also attended the Advanced Management Program at the Sloan
School of Management, Massachusetts Institute of Technology.
William Arthur Owens has served as a director on our Board
since July 1, 2006. He is also a member of the Board Governance
and Nomination Committee. He has held a number of senior
leadership positions at large multinational corporations. From
April 2004 to November 2005, Mr. Owens served as Chief
Executive Officer and Vice Chairman of the Board of Directors
of Nortel Networks Corporation, a networking communications
company. From August 1998 to April 2004, Mr. Owens served as
Chairman of the Board of Directors and Chief Executive Officer
of Teledesic LLC, a satellite communications company. From
June 1996 to August 1998, Mr. Owens served as President,
Chief Operating Officer and Vice Chairman of the Board of
Directors of Science Applications International Corporation
(SAIC), a research and engineering firm. Presently, Mr. Owens
serves as a member of the Board of Directors of Polycom Inc.,
Intelius, Flow Mobile, Prometheus, and Chairman of Century Link
Inc., a communications company. Mr. Owens holds an M.B.A.
(Honors) degree from George Washington University, a B.S. in
Mathematics from the U.S. Naval Academy and a B.A. and M.A.
in Politics, Philosophy and Economics from Oxford University.
Shyam Saran became a director of our Company on July 1,
2010. He has been a director of Indian Oil Corporation Limited
since March 2012. He is a career diplomat who has served in
significant positions in the Indian government for over three
decades. He joined Indian Foreign Service in 1970. He last served
as the Special Envoy of the Prime Minister of India (October
2006 to March 2010) specializing in nuclear issues, and he also
was the Indian envoy on climate change. Prior to this he was
Annual Report 2011-12
74
02 Corporate Governance_2012.indd 74
6/19/2012 7:48:01 PM
the Foreign Secretary of the Government of India from 2004
to 2006. He also served as the Ambassador of India to Nepal,
Indonesia, Myanmar and Mauritius. His diplomatic stints have
taken him to Indian missions in Geneva, Beijing and Tokyo. He
has been a Fellow of the United Nations Disarmament Program
in Geneva, Vienna and New York, U.S.A. Mr. Saran holds a Post
Graduate degree in Economics. Mr. Saran has been honored with
the Padma Bhushan award by the Government of India for his
contribution in civil services.
Dr. Henning Kagermann became a director of the Company
on October 27, 2009. He served as Chief Executive officer of
SAP AG until 2009. He has been a member of the SAP Executive
Board since 1991. He is also President of Acatech (German
Academy of Science and Technology) and currently a member of
supervisory boards of Deutsche Bank AG, Munich Re, Deutsche
Post, BMW Group in Germany and Nokia. Dr. Kagermann is
a professor of Theoretical Physics at the Technical University
Braunschweig, Germany and received an honorary doctorate
from the University of Magdeburg, Germany.
M K Sharma became a director of the Company on July 1, 2011.
He is a member of our Audit, Risk and Compliance Committee.
He served as Vice Chairman of Hindustan Unilever Limited from
2000 to 2007. He served as a whole-time director of Hindustan
Unilever Limited from 1995 to 2000. He is currently on the boards
of ICICI Lombard General Insurance Co. Limited, Fulford India
Limited (Indian affiliate of MSD), Thomas Cook (India) Limited,
Birla Corporation Limited, KEC International Limited and The
Andhra Pradesh Paper Mills Limited. Mr. Sharma is a member of
the Audit Committee of Fulford (India) Limited and Thomas Cook
(India) Limited. Mr. Sharma is the Chairman of Remuneration
Committee of Fulford (India) Limited. Mr. Sharma is a member
the Shareholder’s Grievance Committee of Thomas Cook (India)
Limited. Mr. Sharma is the Chairman of the Board Governance
and Nomination Committee, Compensation Committee of ICICI
Lombard General Insurance Co. Limited.
Suresh C Senapaty has served as our Chief Financial Officer and
Executive Director since April 2008 and served with us in other
positions since April 1980. He is a member of the Administrative/
Shareholders & Investor Grievance Committee. Mr. Senapaty
holds a B. Com. from Utkal University in India, and is a Fellow
Member of the Institute of Chartered Accountants of India. Mr.
Senapaty is on the Boards of the following Indian Subsidiary/
Associate companies: Wipro Trademarks Holding Limited,
Wipro Chandrika Limited, Wipro Travel Services Limited, Cygnus
Negri Investments Private Limited, Wipro Technology Services
Limited, Wipro Consumer Care Limited and Wipro GE Healthcare
Private Limited. Mr. Senapaty is also the Chairman of the Audit
Committee of Wipro Technology Services Limited.
T K Kurien has served as our Chief Executive Officer-IT Business
and Executive Director, Wipro Limited since February 2011 and
served with us in other positions since February 2000. Mr. Kurien
is a Chartered Accountant. Mr. Kurien is also a member of the
Board of Wipro GE Healthcare Private Limited.
Information flow to the Board Members
Information is provided to the Board members on a continous
basis for their information, review, inputs and approval from
time to time. More specifically, we present our annual Strategic
Plan and Operating Plans of our businesses to the Board for their
review, inputs and approval. Likewise, our quarterly financial
statements and annual financial statements are first presented to
the Audit committee and subsequently to the Board of Directors
for their approval. In addition specific cases of acquisitions,
important managerial decisions, material positive/negative
developments and statutory matters are presented to the Board
and Committees of the Board for their approval.
As a system in most cases information to directors is submitted
along with the agenda papers well in advance of the Board
meeting. Inputs and feedback of Board members are taken in
preparation of agenda and documents for the Board meeting.
We schedule meetings of our business heads and functional
heads with the Directors prior to the Board meeting dates.
These meetings facilitate Directors to provide their inputs and
suggestions on various strategic and operational matters directly
to the business and functional heads. Meeting with directors
enthuse and motivate our business leaders.
Board Meetings
We decide on the board meeting dates in consultation with
Board Governance & Compensation Committee and all our
directors, considering the practices of earlier years. Once
approved by the Board Governance & Nomination Committee,
the schedule of the Board meeting and Board Committee
meetings is communicated in advance to the Directors to enable
them to schedule their meetings.
Our Board met four times in the financial year 2011-12, on April
25-27 2011, July 19-20 2011, October 30-31, 2011 and January
18-20,2012.
Our Board meetings are normally scheduled for two days. The
gap between two meetings did not exceed four months.
The necessary quorum was present for all the meetings.
Post-meeting follow-up system
After the board meetings, we have a formal system of follow up,
review and reporting on actions taken by the management on
the decisions of the Board and sub-committees of the Board.
Disclosure of materially significant related party transactions
During the year 2011-12, no transactions of material nature had
been entered into by the Company with the Management or
their relatives that may have a potential conflict with interest
of the Company. None of the Non-Executive Directors have
any pecuniary material relationship or transactions with the
Company for the year ended March 31, 2012, and have given
undertakings to that effect as per clause 49 of the Listing
Agreement.
02 Corporate Governance_2012.indd 75
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Wipro Limited
75
Details of transactions of a material nature with any of the
related parties (including transactions where Directors may
have a pecuniary interest) as specified in Accounting Standard
18 of the Companies (Accounting Standards) Rules, 2006, have
been reported in the Notes to the Accounts and they are not in
conflict with the interest of the Company at large.
Register under Section 301 of the Companies Act, 1956 is
maintained and particulars of transactions are entered in the
Register, wherever applicable.
Such transactions are provided to the Board, and the interested
Directors neither participate in the discussion, nor do they vote
on such matters, wherever approval of Board is sought.
Details of non-compliance by the company, penalties, and
strictures imposed on the company by Stock Exchange or SEBI
or any statutory authority, on any matter related to capital
markets, during the last three years.
The Company has complied with the requirements of the Stock
Exchange or SEBI on matters related to Capital Markets, as
applicable.
Whistle Blower policy and affirmation that no personnel
have been denied access to the Audit, Risk and Compliance
Committee
The Company has adopted an Ombuds process which is a
channel for receiving and redressing of employees’ complaints.
The details are provided in the section titled compliance with
non-mandatory requirements of this report. No personnel of the
Company were denied access to the Audit/Risk and Compliance
Committee.
Details of compliance with mandatory requirements and
adoption of the non-mandatory requirements of this clause.
Your Company has complied with all the mandatory requirements
of the Clause 49 of the Listing Agreement. The details of
these compliances have been given in the relevant sections
of this Report. This Annual Report includes the disclosures
recommended under National Voluntary Guidelines for the
Social, Environmental and Economic Responsibilities of Business,
2011 issued by the Ministry of Corporate Affairs, Government
of India. Please refer page 94 to 116 of this Annual Report for
further details.
Lead Independent Director
The Board of Directors of the Company has designated Mr. N
Vaghul as the Lead Independent Director. The role of the Lead
Independent Director is described in the Corporate Governance
guidelines of your company.
Particulars of directors proposed for re-appointment.
Dr. Jagdish N. Sheth, Dr. Henning Kagermann and Mr. Shyam
Saran, retire by rotation and being eligible offer themselves
for re-appointment at this Annual General Meeting. The
Board Governance and Nomination Committee/Board have
recommended their re-appointment for consideration of the
Shareholders.
Brief resume of the Directors proposed for re-appointment at the
ensuing Annual General Meeting is provided as an Annexure to
the Notice convening the Annual General Meeting.
Remuneration Policy and criteria of making payments
Directors
Compensation Committee recommends the remuneration,
including the commission based on the net profits of the
Company for the Chairman and Managing Director and other
Executive Directors. This is then approved by the Board and
shareholders. Prior approval of shareholders is obtained in case
of remuneration to non executive directors.
The remuneration paid to Chairman and Managing Director and
other Executive Directors is determined keeping in view the
industry benchmark, the relative performance of the Company
to the industry performance, and macro economic review
on remuneration packages of CEOs of other organizations.
Perquisites and retirement benefits are paid according to the
Company policy as applicable to all employees.
Independent Non-Executive Directors are appointed for their
professional expertise in their individual capacity as independent
professionals / Business Executives. Independent Non Executive
Directors receive sitting fees for attending the meeting of the
Board and Board Committees and commission as approved by
the Board and shareholders. This remuneration approved by
the Board subject to the condition that cumulatively it shall not
exceed 1% of the net profits of the Company for all Independent
Non Executive Directors in aggregate for one financial year
subject to an individual limit for each of the Non-Executive
Directors.
The remuneration by way of commission paid to the Independent
Non-Executive directors is determined periodically & reviewed
based on the industry benchmarks.
Details of Remuneration to all Directors
Table 07 provides the remuneration paid to the Directors for the
services rendered during the financial year 2011-12. No stock
options were granted to any of the Independent Non Executive
Directors during the year 2011-12.
Annual Report 2011-12
76
02 Corporate Governance_2012.indd 76
6/19/2012 7:48:01 PM
Table 07: Directors remuneration paid and grant of stock options during the financial year 2011-12
i
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Relationship
with directors
Salary
3,000,000
Allowances
1,310,184
-
-
-
-
-
-
-
-
-
-
-
-
47,57,100 1,12,50,000
-
-
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5,692,478
11,678,942
11,237,925 3,175,000
1,200,000
100,000*
2,375,000
1,950,000
125,000*
6,237,519
16,766,045
2,000,000 1,500,000
125,000*
Commission
/Incentives
Other annual
compensation
Deferred
benefits
Stock options
granted
during the
year
Sitting fees
Notice period
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
340,000
260,000
80,000@
240,000
240,000
160,000@
1,606,037
2,626,891
-
-
Upto 6
Months
-
-
1,555,623
771,497
1,403,345
3,318,750
60,000
-
-
-
-
-
-
-
-
-
-
80,000
140,000
80,000@
Upto 6
Months
Upto 6
Months
* Figures mentioned in $ - as amounts payable in $
@ Figures in ` equivalent to amount paid in foreign currency
# Appointed as Director with effect from July 1, 2011
All figures other than specifically stated above are in Indian Rupees
02 Corporate Governance_2012.indd 77
6/19/2012 7:48:01 PM
Wipro Limited
77
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Annual Report 2011-12
78
02 Corporate Governance_2012.indd 78
6/19/2012 7:48:02 PM
THIRD LAYER: GOVERNANCE BY THE SUB-COMMITTEE OF
THE BOARD OF DIRECTORS
Our Board has constituted sub-committees to focus on specific
areas and make informed decisions within the authority
delegated to each of the Committees. Each Committee of
the Board is guided by its Charter, which defines the scope,
powers and composition of the Committee. All decisions and
recommendations of the Committees are placed before the
Board either for information or for review and approval.
We have four sub-committees of the Board as at March 31, 2012.
•
•
•
•
Audit/Risk and Compliance Committee
Board Governance and Nomination Committee
Compensation Committee
Administrative/Shareholders’ Grievance Committee
Audit/Risk and Compliance Committee
The Audit/Risk and Compliance Committee of the Board of
Directors, which was formed in 1987, reviews, acts on and reports
to our Board of Directors with respect to various auditing and
accounting matters, This Committee was renamed as Audit/Risk
and Compliance Committee with effect from April 22, 2009. The
primarily responsibilities of the Committee, inter-alia, are
•
•
•
•
•
•
Auditing and accounting matters, including recommending
the appointment of our independent auditors to the
shareholders
Compliance with legal and statutory requirements
Integrity of the Company’s financial statements, discussing
with the independent auditors the scope of the annual
audits, and fees to be paid to the independent auditors
Performance of the Company’s Internal Audit function,
Independent Auditors and accounting practices.
Review of related party transactions, functioning of Whistle
Blower mechanism, and
Implementation of the applicable provisions of the
Sarbanes Oxley Act, 2002 including review on the progress
of internal control mechanism to prepare for certification
under Section 404 of the Sarbanes Oxley Act, 2002.
The Chairman of the Audit/Risk and Compliance Committee is
present at the Annual General Meeting. The detailed charter of
the Committee is posted at our website and available at www.
wipro.com/investors/corporate-governance.
All members of our Audit/Risk and Compliance Committee are
independent non executive directors and financially literate. The
Chairman of our Audit/Risk and Compliance Committee has the
accounting and financial management related expertise.
Statutory Auditors as well as Internal Auditors always have
independent meetings with the Audit/Risk and Compliance
Committee and also participate in the Audit/Risk and Compliance
Committee meetings.
Our CFO & Executive Director and other Corporate Officers
make periodic presentations to the Audit/Risk and Compliance
Committee on various issues.
The Audit/Risk and Compliance Committee is comprised of the
following four non-executive directors:
Mr. N. Vaghul – Chairman
Mr. P. M. Sinha, Mr. B. C. Prabhakar and Mr. M. K. Sharma – Members
Our Audit/Risk and Compliance Committee met Six times during
the financial year on – April 24, 2011; June 15, 2011; July 18,
2011; October 29, 2011; January 18, 2012 and March 13, 2012.
The composition of the Audit/Risk and Compliance
Committee and their attendance are given in Table 09.
Name
Position
N. Vaghul**
Chairman
P. M. Sinha **
Member
B. C. Prabhakar** Member
M. K. Sharma@
Member
Number of meetings
Attended
6
4
6
4
** Out of which participation was over Tele-conference for 1
meeting.
@ Mr. M. K. Sharma has attended all Audit Committee meets after
the date of his appointment.
Board Governance and Nomination Committee
All members of the Board Governance and Nomination
Committee are independent non executive directors.
The primary responsibilities of the Board Governance and
Nomination Committee are:
•
•
•
•
•
•
•
Develop and recommend to the Board Corporate
Governance Guidelines applicable to the Company.
Evaluation of the Board on a continuing basis including an
assessment of the effectiveness of the full board, operations
of the Board Committees and Contributions of Individual
directors.
Lay down policies and procedures to assess the
requirements for inclusion of new members on the Board.
Implement policies and processes relating to corporate
governance principles.
Ensure that appropriate procedures are in place to access
Board membership needs and Board effectiveness.
Review the company’s policies that relate to matters of
corporate social responsibility, including public issues of
significance to the company and its stakeholders.
Formulate the disclosure Policy, its review and approval of
disclosure.
The Board Governance and Nomination Committee of the Board
met four times on – April 25, 2011, July 18, 2011 October 29,
2011 and January 19, 2012, during the financial year 2011-12.
02 Corporate Governance_2012.indd 79
6/19/2012 7:48:02 PM
Wipro Limited
79
Table 10 provides the composition and attendance of the
Board Governance and Nomination Committee.
Name
Position
Dr. Ashok S. Ganguly Chairman
P. M. Sinha*
N. Vaghul
Bill Owens
Member
Member
Member
Number of meetings
attended
4
3
4
4
* Attended one meeting over Tele-conference
The detailed charter of this Committee is posted on our
website and available at www.wipro.com/investors/corporate.
governance
Compensation Committee
Our Executive Vice-President - Human Resources makes
periodic presentations to the Compensation Committee on
compensation reviews.
The members of the Compensation Committee are as follows:
Dividend payments, issue of duplicate share certificates,
transmission of shares and other shareholder related queries,
complaints etc.
In addition to above, this Committee is also empowered
to oversee administrative matters like opening/closure of
Company’s Bank accounts, grant and revocation of general,
specificand banking powers of attorney, consider and approve
allotment of equity shares pursuant to exercise of stock options,
setting up branch offices and other administrative matters as
delegated by Board from time to time.
The Chairman of the Committee is an independent non executive
director.
The Administrative and Shareholders Grievance Committee
met four times in the financial year on – April 25, 2011, July 25,
2011, October 29, 2011 and January 18, 2012. In addition, the
Shareholders Grievance Committee, reviews once in 15 days the
investor complaints and redressal of the shareholders queries.
Table 12 provides the composition and attendance of the
Shareholders / Investors Grievance Committee.
Dr. Ashok Ganguly – Chairman
Mr. N. Vaghul and Mr. P. M. Sinha – Members.
The primary responsibilities of the Compensation Committee,
inter-alia:
a) Determine and approve salaries, benefits and stock options
grants to Senior Management employees and Directors of
our Company.
b) Approve and evaluate the Compensation Plans and
programs for Whole-time directors.
All members of the Compensation Committee are independent
non-executive directors. This Committee of the Board met four
times on – April 25, 2011, July 18, 2011, October 29, 2011 and
January 18, 2012, during the financial year 2011-12
Table 11 provides the composition and attendance of the
Board Governance and Compensation Committee.
Name
Position
Dr. Ashok S. Ganguly Chairman
P. M. Sinha
N. Vaghul
Member
Member
Number of
meetings attended
4
3
4
Administrative/Shareholders & Investors Grievance
Committee:
The members of the Committee as on March 31, 2012 are as under:
Mr. B. C. Prabhakar – Chairman
Mr. Suresh C. Senapaty – Member Mr. T. K. Kurien – Member
The Administrative/Shareholders & Investors Grievance
Committee is responsible for resolving investor’s complaints
pertaining to share transfers, non receipt of annual reports,
Annual Report 2011-12
80
Table 12
Name
Position
B. C. Prabhakar
Suresh C. Senapaty Member
Member
T. K.Kurien
Chairman
Number of meetings
Attended
4
4
3
The status on the shareholder queries and complaints we
received, response to the complaints and the current status
of pending queries if any, as on March 31, 2012 is Tabulated in
Table 13.
Table 13
Description
Non-Receipt of
Securities
Non-Receipt of
annual reports
Correction/
Revalidation
of Dividend
Warrants
SEBI/Stock
Exchange
Complaints
Non-Receipt
of Dividend
Warrant
Demat request
Received
Others
Total
Nature
Complaint
Received Replied Pending
33
33
0
Complaint
40
40
Request
429
429
Complaint
7
7
Complaint
161
161
Request
0
0
Request
0
670
0
670
0
0
0
0
0
0
02 Corporate Governance_2012.indd 80
6/19/2012 7:48:02 PM
Apart from this there are certain pending cases relating to dispute over title to shares in which in certain cases the Company has
been made a party. However, these cases are not material in nature.
Mr. V. Ramachandran, Company Secretary is our Compliance Officer for the Listing Agreement with Stock Exchange.
Unclaimed Dividends
Pursuant to Sec- 205A and 205C and other applicable provisions of Companies Act, 1956, Dividends that are unclaimed for a period
of seven years are required to be transferred to the Investor Education and Protection Fund administered by the Central Government.
We give below a table providing the dates of declaration of Dividend since 2004-05 and the corresponding dates when unclaimed
dividend are due to be transferred to the central government.
Table 14
Financial Year
Date of declaration of
Dividend
2004-2005
2005-2006
2006-2007 (Interim Dividend)
2006-2007 (Final Dividend)
2007-2008 (Interim Dividend)
2007-2008 (Final Dividend)
2008-2009 (Final Dividend)
2009-10 (Final Dividend)
2010-11 (Interim Dividend)
2010-11 (Final Dividend)
2011-12(Interim Dividend)
21-Jul-05
18-Jul-06
23-Mar-07
18-Jul-07
19-Oct-07
17-Jul-08
21-Jul-09
22-Jul-10
21-Jan-11
21-Jul-11
24-Jan-12
Last date for
claiming unpaid
Dividend
20-Jul-12
17-Jul-13
22-Mar-14
17-Jul-14
18-Oct-14
16-Jul-15
20-Jul-16
21-Jul-17
20-Jan-18
20-Jul-18
23-Jan-19
Unclaimed
Amount (Rs) as on
May 31, 2012
1,104,970
2,994,210
2,030,720
1,039,601
2,504,444
2,567,528
2,102,160
1,902,462
1,359,426
2,725,220
1,408,564
Due date for transfer
to Investor Education
and Protection Fund
19-Aug-12
16-Aug-13
21-Apr-14
16-Aug-14
17-Nov-14
15-Aug-15
19-Aug-16
20-Aug-17
19-Feb-18
19-Aug-18
22-Feb-19
Separate letters will be sent to the Shareholders who are yet
to encash the Dividend indicating that Dividend yet to be
encashed by the concerned shareholder and the amount
remaining unpaid will be transferred as per the above dates.
Members are requested to utilize this opportunity and get
in touch with Company’s Registrar and Share Transfer Agent,
M/s. Karvy Computershare Pvt. Limited, Hyderabad for encashing
the unclaimed Dividend standing to the credit of their account.
After completion of seven years as per the above table, no claims
shall lie against the said Fund or against the Company for the
amounts of Dividend so transferred nor shall any payment be
made in respect of such claims.
Secretarial Audit
A qualified practicing Company Secretary has carried out
secretarial audit every quarter to reconcile the total admitted
capital with National Securities Depository Limited (NSDL)
and Central Depository Services (India) Limited (CDSL) and the
total issued and listed capital. The audit confirms that the total
issued/paid up capital is in agreement with the aggregate total
number of shares in physical form, shares allotted and advised
for demat credit but pending execution and the total number
of dematerialized shares held with NSDL and CDSL
Compliance with Clause 49 of the Listing Agreement
The certificate dated June 15, 2012 obtained from V Sreedharan
& Associates, Company Secretaries is given at page no. 93 of
the Annual Report for Compliance with Clause 49 of Listing
Agreement.
Subsidiary Monitoring Framework
All the subsidiary companies of the Company are managed
with their Boards having the rights and obligations to manage
these companies in the best interest of their stakeholders.
The Company nominates its representatives on the Board
of subsidiary companies and monitors performance of such
companies, inter alia, by reviewing:
•
•
Financial statements, in particular the investment made by
the unlisted subsidiary companies, statement containing
all significant transactions and arrangements entered into
by the unlisted subsidiary companies forming part of the
financials being reviewed by the Audit Committee of the
your Company on a quarterly basis
Minutes of the meetings of the unlisted subsidiary
companies, if any, placed before the Company’s Audit
Committee/Board regularly.
02 Corporate Governance_2012.indd 81
6/19/2012 7:48:02 PM
Wipro Limited
81
FOURTH LAYER: GOVERNANCE OF THE MANAGEMENT
PROCESS
Corporate Executive Council of the Company (CEC)
The day-to-day management is vested with the CEC of the
Company comprising of Business and Functional heads who
work under the overall superintendence and control of the
Board. The CEC is headed by the Chairman, Mr. Azim H. Premji.
The list of CEC members is given below:
(i) Azim H. Premji, Chairman and Managing Director
(ii) Suresh Senapaty, CFO and Executive Director
(iii) T.K. Kurien, CEO (IT Business) and Executive Director
Likewise, under this policy, we have prohibited discrimination,
retaliation or harassment of any kind against any employees
who, based on the employee’s reasonable belief that such
conduct or practice have occurred or are occurring, reports
that information or participates in the said investigation. No
individual in the Company has been denied access to the Audit/
Risk and Compliance Committee or its Chairman.
Mechanism followed under Ombudsmen process is appropriately
communicated within the Company across all levels and has
been displayed on Wipro’s intranet and on Wipro’s website at
www.wipro.com
The Audit/Risk and Compliance Committee periodically reviews
the functioning of this mechanism.
(iv) Vineet Agrawal, President Wipro Consumer Care and
Compliance Committee
Lighting
(v) Pratik Kumar, Executive Vice-President - Human Resources
& President - Wipro Infrastructure Engineering
(vi) Anurag Behar, Chief Sustainablity Officer.
Code of Business Conduct and Ethics
In 1983, we articulated ‘Wipro Beliefs’ consisting of six statements.
At the core of beliefs was integrity articulated as
•
Our individual and Company relationship should be
governed by the highest standard of conduct and integrity.
Over years, this articulation has evolved in form but remained
constant in substance. Today we articulate it as Code of Business
Conduct and Ethics.
In our company, the Board of Directors and all employees have
a responsibility to understand and follow the Code of Business
Conduct. All employees are expected to perform their work
with honesty and integrity. Wipro’s Code of Business Conduct
reflects general principles to guide employees in making ethical
decisions. This code is also applicable to our representatives.
The Code outlines fundamental ethical considerations as well
as specific considerations that need to be maintained for
professional conduct. This Code has been displayed on the
Company’s website. www.wipro.com/corporate/investors/
corporate-governance.
The Chairman has affirmed to the Board of Directors that this
Code of Business Conduct and Ethics has been complied by the
Board members and Senior Management.
Ombudsmen process
We have adopted an Ombudsmen process which is the channel
for receiving and redressing employees’ complaints. Under this
policy, we encourage our employees to report any reporting of
fraudulent financial or other information to the stakeholders,
any conduct that results in violation of the Company’s Code of
Business Conduct and Ethics, to management (on an anonymous
basis, if employees so desire).
We have a Compliance Committee which considers matters
relating to Wipro’s Code of Business Conduct, Ombuds process,
Code for Prevention of Insider Trading and other applicable
statutory matters. The Compliance Committee consists of
Chairman, CFO & Executive Director, CEO-IT Business, Executive
Vice-President - Human Resources, Vice-President - Legal and
General Counsel, Chief Risk Officer and Vice-President - Internal
Audit. During the financial year 2011-12, the Compliance
Committee met four times and submitted its report to the Audit
Committee for its review and consideration.
Compliance with adoption of mandatory requirements
Your Company has complied with all the mandatory requirements
of Clause 49 of the Listing Agreement.
Non Compliance on matters related to capital markets
Your Company has complied with the requirements of the
Stock Exchange or SEBI on matters related to Capital Markets,
as applicable.
Compliance report on Non-mandatory requirements under
Clause 49
1.
The Board – Chairman’s Office & Tenure of Directors
The Chairman of Wipro is an Executive Director and this provision
is not applicable to Wipro. Some of our independent directors
have completed a tenure exceeding a period of nine years on
the Board of Directors of the Company.
2.
Remuneration Committee
The Board of Directors constituted a Compensation Committee,
which is entirely composed of independent directors. The
Committee also discharges the duties and responsibilities as
described under non-mandatory requirements of Clause 49. The
details of the Compensation Committee and its powers have
been discussed in this section of the Annual Report.
3.
Shareholders rights
We display our quarterly and half yearly results on our web site,
www.wipro.com and also publish our results in widely circulated
Annual Report 2011-12
82
02 Corporate Governance_2012.indd 82
6/19/2012 7:48:02 PM
newspapers. We have sent quarterly results by email to those
shareholders who have provided their email ids with effect from
December 2010 quarter onwards. We have also communicated
the payment of dividend by e-mail to shareholders in addition
to dispatch of letters to all shareholders. We will publish the
voting results of the Shareholder meetings and make it available
in Company’s website www.wipro.com and report the same to
Stock Exchange in terms of Clause 35A of Listing Agreement.
4. Audit Qualifications
The Auditors have not qualified the financial statements of the
Company.
5.
Training of Board Members
The board of directors is responsible for supervision of the
Company. To achieve this, board undertakes periodic review
of various matters including business wise performance, risk
management, borrowings, internal audit/external audit reports
etc. In order to enable the directors to fulfill the governance
role, comprehensive presentations are made on the various
businesses, business models, risk minimization procedures and
new initiatives of the Company. Changes in domestic/overseas
corporate and industry scenario including their effect on the
company, statutory matters are also presented to the directors
on a periodic basis
6. Mechanism for evaluation: Independent Board members
In line with our corporate governance guidelines, evaluation of
all Board members is done on an annual basis. This evaluation is
lead by the Chairman of the Board Governance and Nomination
Committee with specific focus on the performance and effective
functioning of the Board, Committees of the Board and report
the recommendation to the Board. The evaluation process also
considers the time spent by each of the Board members, core
competencies, personal characteristics, accomplishment of
specific responsibilities and expertise.
7. Whistle Blower Policy
The details of the Ombudsmen process and its functions have
been discussed earlier in this section.
Disclosures by the Management
During the year 2011-12, there have been no transactions
of material nature entered into by the Company with the
Management or their relatives that may have a potential conflict
with interest of the Company. None of the Non-Executive
Directors have any pecuniary material relationship or material
transaction with the Company for the year ended March 31,
2012 and has given undertakings to that effect as per Clause
49 of Listing Agreement.
Code for prevention of Insider Trading
We have comprehensive guidelines on preventing insider
trading. Our guidelines are in compliance with the SEBI
guidelines on prevention of Insider Trading.
NYSE Corporate Governance Listing Standards
The Company has made this disclosure of compliance with the
NYSE Listing Standards in its website www.wipro.com/investors/
corp-governance and has filed the same with the New York Stock
Exchange (NYSE).
Declaration as required under Clause 49 (I)(D)(ii) of the Stock
Exchange Listing Agreement
All Directors and senior management personnel of the Company
have affirmed compliance with Wipro’s Code of Business Conduct
and Ethics for the financial year ended March 31, 2012.
Date: June 15, 2012
Sd/-
Azim H. Premji
Chairman
02 Corporate Governance_2012.indd 83
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Wipro Limited
83
Share Data
The performance of our stock in the financial year is tabulated in Table 15.
Table 15: Monthly high and low price points and volume in National Stock Exchange and New York Stock Exchange is
provided below:
Month
Volume
traded NSE
April
May
June
July
August
September
October November December
January
February
March
26,203,043
17,814,389
20,266,712 25,725,741
32,158,011
36,452,411
24,900,644
34,868,144
41,130,090
30,312,774
25,163,650
28,123,232
Price in NSE during each month:
490
453.9
450.9
435
397.2
359.95
390
389.45
420.95
425
453
448.05
19-Apr-11
2-May11
1-Jun-11
8-Jul-11
1-Aug-11
21Sep-11
28-Oct-11
14-Nov-11
13-Dec-11
4-Jan-12
17-Feb-12
9-Mar-12
639,452
539,401
446,583
1,154,821
498,158
1,708,409
1,698,761
1,643,586
1,900,127
1,903,417
1,489,281
1,581,732
439.5
428
381.45
350
310.5
312.3
323.6
360.05
379.05
382.5
410
416.25
4-Apr-11
4-May-11
20-Jun-11
8-Jul-11
19-Aug-11
6-Sep-11
3-Oct-11
18-Nov-11
2-Dec-11
12-Jan-12
1-Feb-12
27-Mar-12
2,183,439
939,570
1,829,456
1,154,821
1,561,982
2,041,335
1,277,993
2,043,004
4,940,550
2,920,897
1,059,014
1,537,441
High
Date
Volume
traded on
that date
Low
Date
Volume
trade on
that date
S&P CNX Nifty Index during each month:
High
Low
5,928.65
5,706.05
5,775.25
5,328.70
5,657.90
5,740.10
5,195.90
5,532
5,551.9
4,720
5,169.25
4,758.85
5,360.25
4,728.30
5,326.45
4,639.10
5,099.25
4,531.15
5,217
5,629.95
4,588.05
5,159
5,499.40
5,135.95
Wipro Price Movement vis-à-vis Previous
Month High/Low (%) :
High %
Low %
1.09
1.87
-7.36
-2.16
-0.66
-10.87
S&P CNX Nifty Index Movement vis-à-vis
Previous Month High/Low %
High %
Low %
0.96
6.69
-2.58
-6.61
-2.03
2.49
-3.53
-8.24
1.45
6.47
-8.69
-11.28
-3.27
-14.67
-9.38
0.57
-6.89
0.82
8.34
3.62
3.69
-0.64
-0.14
11.26
-0.63
-1.89
8.08
5.28
-4.27
-2.32
0.96
0.91
2.31
1.26
6.58
7.18
7.92
12.44
-1.09
1.52
-2.32
-0.45
Graph : 01 Wipro share price movements in NSE compared with S&P CNX Nifty
10
8
6
4
2
0
-2
-4
-6
-8
-10
Relative performance of Wipro Share Vs. S & P CNX Nifty
April
May
June
July
Aug
Sept
October
November
December
January
February
March
Wipro Share
S & P CNS Nifty
Month & Year 2011-12
Annual Report 2011-12
84
02 Corporate Governance_2012.indd 84
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Table 16: ADS Share Price during the financial year 2011-12
April
13.77
May
13.83
June
13.17
July
August
September October November December
January
February
11.88
9.98
9.25
10.46
9.6
10.19
10.88
10.98
March
11.00
6,309.65
6,192.68
6,076.31
5,882.55
5,540.76
5,169.91
5,623.53
5,570.69
5,485.15
5,685.15
5,907.88
6,060.97
5.9
0.44
-4.77
-9.80
-15
-7.31
13.08
-8.22
6.15
6.77
0.92
0.18
3.7
-1.85
-1.88
-3.19
-5.81
-6.69
8.77
-0.94
-1.54
3.65
3.92
2.60
Wipro ADS
price in
NYSE during
each Month
closing ($) (*)
NYSE TMT
Index during
each month
closing ($)
Wipro
ADS Price
Movement
(%) Vis a vis
Previous
month
Closing $ (*)
NYSE TMT
Index
Movement
(%) Vis a vis
Previous
month
Closing $ (*)
Graph 02: Wipro Share price movements in NYSE compared with TMT index
15
12
9
6
3
0
-3
-6
-9
-12
-15
Relative performance of Wipro ADS Vs. NYSE TMT Index
April
May
June
July
Aug
Sept
October
November
December
January
February
March
Wipro ADS Price
NYSE TMT
Month & Year 2011-12
02 Corporate Governance_2012.indd 85
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Wipro Limited
85
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1-Mar-12
1-Feb-12
1-Jan-12
1-Dec-11
1-Nov-11
1-Oct-11
1-Sep-11
1-Aug-11
1-Jul-11
1-Jun-11
1-May-11
1-Apr-11
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Annual Report 2011-12
86
02 Corporate Governance_2012.indd 86
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Other Information
a. Table 17 Share Capital History
History of IPO/ Private Placement/ Bonus Issues/ Stock Split/ Allotment of Shares pursuant to Exercise of Stock Options
Type of Issue
Year of Issue
Bonus
shares/
Stock
split ratio
Face
Value of
Shares (`)
Shares Allotted
No. of
Shares
Total
17,000
22,667
45,334
90,668
92,168
Total
Paid-up
Capital
(`)
1,700,000
2,266,700
4,533,400
9,066,800
9,216,800
Number Nominal Value
1,700,000
566,700
2,266,700
4,533,400
1,50,000
17,000
5,667
22,667
45,334
1,500
92,168
9,216,800
1,843,360
3,686,720
265,105
18,433,600
36,867,200
2,651,050
184,336
1,843,360
3,686,720
7,373,440
7,638,545
18,433,600
18,433,600
36,867,200
73,734,400
76,385,450
100/-
100/-
100/-
100/-
100/-
100/-
10/-
10/-
10/-
10/-
1:3
1:1
1:1
1:1
10:1
1:1
1:1
1:1
2:1
5:1
1:1
2:1
IPO
Bonus issue
Bonus issue
Bonus issue
Issue of shares
to Wipro Equity
Reward Trust
Bonus issue
Stock split
Bonus issue
Bonus issue
Issue of shares
pursuant to
merger of
Wipro Infotech
Limited and
Wipro Systems
Limited with the
Company
Bonus issue
Bonus issue
Stock split
ADR
Allotment of
equity shares
pursuant to
exercise of stock
options
Bonus
Allotment of
equity shares
pursuant to
exercise of stock
options
Allotment of
equity shares
pursuant to
exercise of stock
options
Bonus
Allotment of
equity shares
pursuant to
exercise of stock
options
1946
1971
1980
1985
1985
1987
1990
1990
1992
1995
1995
1997
1999
2000
On various dates
(Upto the record
date for issue of
bonus shares in the
year 2004)
2004
On various dates
(Upto March 31,
2005)
On various dates
(Upto the record
date for issue of
bonus shares in the
year 2005)
2005
On various dates
(Upto March 31,
2006)
10/-
10/-
2/-
$41.375
2/-
7,638,545
30,554,180
76,385,450
305,541,800
3,162,500
496,780
6,325,000
993,560
15,277,090
45,831,270
229,156,350
232,318,850
232,815,630
152,770,900
458,312,700
458,312,700
464,637,700
465,631,260
2/- 465,631,260
5,123,632
2/-
931,262,520
10,247,264
698,446,890 1396,893,780
703,570,522 1407,141,044
2/-
2,323,052
4,646,104
705,893,574 1,411,787,148
1:1
2/- 705,893,574
13,967,119
2/-
1,411,787,148 1,411,787,148 2,823,574,296
27,934,238 1,425,754,267 2,851,508,534
02 Corporate Governance_2012.indd 87
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Wipro Limited
87
Type of Issue
Year of Issue
Bonus
shares/
Stock
split ratio
Face
Value of
Shares (`)
Shares Allotted
No. of
Shares
Total
Total
Paid-up
Capital
(`)
Number Nominal Value
2/-
33,245,383
66,490,766 1,458,999,650 2,917,999,300
2/-
2,453,670
5,117,426 1,461,453,320 2,922,906,640
On various dates
upto March 31,
2007
On various dates
upto
March 31,2008
March 26, 2009
2/-
968,803
1,937,606 1,462,422,123 2,926,781,952
On various dates
upto
March 31, 2009
On various dates
upto
March 31, 2010
2010
On various dates
upto
March 31, 2011
On various dates
upto
March 31, 2012
2/-
2,558,623
5,117,426 1,464,980,746 2,929,961,492
2/-
3,230,443
6,460,886 1,468,211,189 2,936,422,378
2:3
2/- 979,765,124
6,432,832
2/-
1,959,530,248 2,447,976,313 4,895,952,626
12,865,664 2,454,409,145 4,908,818,290
2/-
4,347,083
8,694,166 2,458,756,228 4,917,512,456
Allotment of
Equity Shares
pursuant to
exercise of Stock
Options
Allotment of
Equity Shares
pursuant to
exercise of Stock
Options
Allotment of
equity shares
to shareholders
of subsidiary
companies
arising from
merger
Allotment of Equity
Shares pursuant to
exercise of Stock
Options
Allotment of
Equity Shares
pursuant to
exercise of Stock
Options
Bonus issue
Allotment of
Equity Shares
pursuant to
exercise of Stock
Options
Allotment of Equity
Shares pursuant to
Exercise of Stock
Options
History of Bonus Issue and Stock Split
Ratio
Year
1:3(Bonus)
1971
1:1(Bonus)
1980
1:1(Bonus)
1985
1:1(Bonus)
1987
10:1 (stock split)
1990
1:1(Bonus)
1990
1:1(Bonus)
1992
1:1(Bonus)
1995
2:1(Bonus)
1997
5:1 (stock split)
1999
2:1(Bonus)
2004
1:1(Bonus)
2005
2:3 (Bonus)
2010
Annual Report 2011-12
88
02 Corporate Governance_2012.indd 88
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History of Dividend declared for the last fifteen years
Financial Year
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07 (Interim Dividend)
2006-07 (Final Dividend)
2007-08 (Interim Dividend)
2007-08 (Final Dividend)
2008-09
2009-10
2010-11(Interim Dividend)
2010-11 (Final dividend)
2011-12(Interim Dividend)
2011-12(Final Dividend)
Dividend amount per share (`) and rate (%)
` 1.50 Per Share (Face value ` 10)
` 1.50 Per Share (Face value ` 10)
` 0.30 Per Share (Face value ` 2)
` 0.50 Per Share (Face value ` 2)
` 1.00 Per Share (Face value ` 2)
` 1.00 Per Share (Face value ` 2)
` 29.00 Per Share (Face value ` 2)
` 5.00 Per Share (Face value ` 2)
` 5.00 Per Share (Face value ` 2)
` 5.00 Per Share (Face value ` 2)
` 1.00 Per Share (Face value ` 2)
` 2.00 Per Share (Face value ` 2)
` 4.00 Per Share (Face value ` 2)
` 4.00 Per Share (Face value ` 2)
` 6 Per Share (Face value ` 2)
` 2 per Share (Face Value ` 2)
` 4.00 Per Share (Face value ` 2)
` 2.00 Per share(Face value ` 2)
` 4.00 Per Share (Face Value `2)
Percentage
15%
15%
15%
25%
50%
50%
1450%
250%
250%
250%
50%
100%
200%
200%
300%
100%
200%
100%
200%
Table 18: Mergers and Demergers
Since the mid-1990s, Company’s growth has been both organic and through mergers and demergers. The table below gives the
relevant data on such mergers/demergers from the year 1994 onwards.
Merging Company
Wipro Infotech Limited
Wipro Systems Limited
Wipro Computers Limited
Wipro Net Limited
Wipro BPO Solutions Limited
Spectramind Limited, Bermuda
Spectramind Limited, Mauritius
Wipro Infrastructure Engineering Limited
Wipro HealthCare IT Limited
Quantech Global Services Limited
MPACT Technology Services Private Limited
mPower Software Services (India) Private Limited
CMango India Private Limited
Indian Branches of Wipro Networks Pte. Limited and WMNETSERV Limited
Wipro Yardley Consumer Care Private Limited
Merger/Demerger
Merger
Merger
Merger
Demerger
Merger
Merger
Merger
Merger
Merger
Merger
Merger
Merger
Merger
Merger
Merger
Appointed Date
April 1, 1994
April 1, 1994
April 1, 1999
April 1, 2001
April 1, 2005
April 1, 2005
April 1, 2005
April 1, 2007
April 1, 2007
April 1, 2007
April 1, 2007
April 1, 2007
April 1, 2007
April 1, 2009
April 1, 2010
02 Corporate Governance_2012.indd 89
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Wipro Limited
89
1
2
3
4
5
6
7
8
9
10
11
30
31
32
33
Table No.19: Locations or facilities (other than Corporate and Administrative Office)
Address
Sl.
No.
3rd, 4th, 5th and 6th Floor, S B Towers, 88, M G Road
No. 8, 7th Main, 1st Block, (K-2) Koramangala
26, Sri Chamundi Complex, (M-2), Bommanahalli, Hosur Main Road
No.1,2,3,4 and 54/1, Survey No.201/C, (M-3, M4) Madivala, Hosur Main Road,
No.1,2,3,4 and 54/3, Survey No.201/C, (M-3) Research and Development, Madivala, Hosur Main Road, Bangalore 560 068, India
No. 319/1, (Adea Building) Bomanahalli, Hosur Main Road,
2nd, 3rd, 4th Floor, Sigma Tech Park, Beta Towers, No. 7 Whitefield Main Road,
Electronics City Phase 1, 2, 3,4, Keonics Electronic City, Hosur Road
Wipro SEZ, Doddathogur Village, Begur Hobli/ Electronic City,
3rd Floor, Ahmed Plaza, No.38/1&2, Bertenna Agrahara, Hosur Main Road
Pritech Park SEZ, ECO Space, Outer Ring Road, Belandur Village
12 Wirpo, SEZ, Doddakannelli Village, Varthur Hobli, Sarjapur Road,
13
14
15
16
17
18
146/147, Mettagalli Industrial Area, Mettagalli
111, (CDC-1) Mount Road, Guindy
105, (Sterling Building) Mount Road, Guindy
475A, Shollinganallur, Old Mahabalipuram Road (CDC-2)
475A, Shollinganallur, Old Mahabalipuram Road (WBPO)
ELCOT SEZ, Sy.No.602/3, Sholinganallur Village,
19 Mahindra World City SEZ, Kanchepuram District
20
21
22
23
Ascendas IT Park, Taramani Road,
Infopark SEZ, Kusumagiri Po, Kakanad
1-8-448, Lakshmi Buildings, S P Road, Begumpet
Survey Nos.64, Serilingampali Mandal, Madhapur,
24 Wipro SEZ, S.No.203/1, Manikonda Jagir Village, Rajendranagar Mandal, RR District
Hyderabad 500 019, India
25
S.No.203/1, Manikonda Jagir Village, Rajendranagar Mandal, RR District
26 Wipro SEZ, IT Park, Gopanapally, RR District
27
28
Plot No.2, MIDC, Rajeev Gandhi Infotech Park-1, Hinjewadi
Plot No.2, MIDC, Rajeev Gandhi Infotech Park-1, Hinjewadi (WBPO)
29 Wipro SEZ, Plot No.31, MIDC, Rajeev Gandhi Infotech Park-2, Hingewadi
Hyderabad 500 020, India
Hyderabad 500 032, India
Pune 411 027, India
Pune 411 027, India
Pune 411 027, India
2nd , 3rd, 4th Floor, Spectra Building, Hiranandani Garderns, Powai (WBPO)
Mumbai 400 076, India
3rd Floor CIDCO Building, Belapur Railway station Complex (WBPO)
Navi Mumbai 400 614, India
Hiranandani SEZ, Hiranandani Garderns, Powai
Serene Properties Pvt. Ltd., SEZ, Mindspace, Airoli
34 Wipro Ltd, SEZ, Plot No. 1, 7, 8 & 9, Block-DM, Sector-V, Saltlake,
35
36
37
38
Block-CN 1- V, Sector-V, Saltlake,
Plot No. 2 (P), IDCO Info City, Industrial Estate Chandaka,
237, 238 and 239 Okhla Industrial Estate, Phase-III (WBPO)
Omaxe Squire, Plot 13, Jasola
Annual Report 2011-12
90
02 Corporate Governance_2012.indd 90
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City/Country
Bangalore 560 001, India
Bangalore 560 095, India
Bangalore 560 068, India
Bangalore 560 068, India
Bangalore 560 068, India
Bangalore 560 066, India
Bangalore 560 100, India
Bangalore 560 100, India
Bangalore 560 100, India
Bangalore 560 034, India
Bangalore 560 035, India
Mysore 570 016, India
Chennai 600 032, India
Chennai 600 032, India
Chennai 600 019, India
Chennai 600 019, India
Chennai 600 119, India
Chennai 603 002, India
Chennai 600 113, India
Kochi 682 030, India
Hyderabad 500 003, India
Hyderabad 500 033, India
Mumbai 400 076, India
Mumbai 400 708, India
Kolkata 700 091, India
Kolkata 700 091, India
Bhubaneswar 751 022, India
New Delhi 100 020, India
New Delhi 100 020, India
40
41
42
43
44
45
46
47
48
49
50
51
Address
Sl.
No.
39 Wipro SEZ, Plot No. 2,3 & 4, Knowledge Park, Greater Noida, UP
No. 480-481, Udyog Vihar, Phase-III, Gurgoan
City/Country
Greater Noida, India
Haryana-122 015, India
Lot-7, Block-2, Corner Arch Bishop Reyes Street and Mindanao St.CEBU Business Park, CEBU IT Tower Cebu City, Philippines
1, Cyber Pod Centris, Eton Centris, Barangay Pinahan, Quezon City, Manila
Philippines
Tainfu Software Park, Tainfu Avenue, 765, Hi-Tech Zone, Chengdu
Unit 1518, Building 1, Shanghai Pudong Software Park, Shanghai
Unit A202, Information Center, Zhongguancun Software Park, Hai Dian District, Beijing
Yokohama Landmark Tower 9F # 911A, Minato-Mirai, Nishi-ku, Yokohama, Kanagawa
185, Kings Court, Kings Road, Reading RG 14 EX
G6, S2/S3 Columbia House, Columbia Drive, Worthing BN13 3HD
Unit 12, Charter Point, Ashby Business Park, Ashby-de-la-Zouch Leicestershire LE65 1JF
Ashton House, Birchwood Park, Warrington Road, Birchwood, Warrington, WA3 6AE
2, Rue Marie Berhaut, Immeuble Cap Nord A, 35000 RENNES
52 Web Campus, Kaistrasse, 101 Kiel 24114
53 Munich Office (Germany)Willy-Brandt-Allee 4, D-81829 Munchen, Munich
54
55
56
“BüroHaus auf dem hagen_campus, Richmodstr. 6 50667 Koeln (Cologne),
Technology Centre, Vahrenwalder Strasse 7, 30165 Hannover
Polarisavenue 57, 2132 JH Hoofddorp,
57 Wassenaarsweg 22, 2596 CH Den Haag,
58
59
PartnerPort, Altrottstrasse 31, Walldorf,
Technopolis, Business id 0487422-3, Elektroniikkatie 8, FIN 90570, Oulu
60 Millennium Park 6, A-6890 Lustenau, Austria
61
TRUST CORPORATION SA., Splaiul Independentei, nr 319C, Sector 6, Bucharest, Romania.
Tel +40 213 128 010
China
China
China
Japan
United Kingdom
United Kingdom
United Kingdom
United Kingdom
France
Germany
Germany
Germany
Germany
Netherlands
Netherlands
Germany
Finland
Austria
Romania
62
C. Brediceanu, Nr. 10, City Business Center Building C, Timisoara, Tel.: +40 312 261 300, Timisore
Romania
63 Wipro Limited, Infopark – Building D. 5.6. 1117 Budapest Gábor Dénes utca 2.
64
65
66
67
68
69
70
71
72
73
74
Frykdalsbacken 12-14, Stockholm,
Rua Engº Frederico Ulrich, 2650, Edifício WIPRO, 4470-605 Moreira, Maia, Porto
Centro Empresarial de Braga, Lugar da Ventosa, 4710 - 319 Ferreiros, Braga,
Hiomotie 30, Pitäjänmäki, Helsinki
Koy Elektrocity, Tykistökatu 4, 5th floor, Apartment 504Turku,
Dusseldorferstr 71B, 40667 Meerbusch, Germany
Level-6, 80, George Street, Paramatta
Levels 1 and 3, 19 Grenfell Street, Adelaide, SA 5000
Level 3, 80 Dorcas Street, South Melbourne, Victoria – 3205
Chrysler Building, 6th Floor, 1 Riverside Drive West, WINDSOR ONN5A5K4
Level 6, 80 George St, Parramatta, NSW, 2150
Hungary
Sweden
Portugal
Portugal
Finland
Finland
Germany
NSW, Australia
Adelaide, Australia
Melbourne, Australia
Canada
Australia
02 Corporate Governance_2012.indd 91
6/19/2012 7:48:04 PM
Wipro Limited
91
City/Country
Australia
Australia
Singapore
Address
Level 3, 80 Dorcas Street, South Melbourne, Victoria - 3205
Levels 1 and 3, 19 Grenfell Street, Adelaide, SA 5000
#02-08/09/10, 1 Changi Buiness Park, Crescent, Singapore 486025
Suite G08-09, 2300 Century Square, Jalan Usahawan,Cyber 6, 63000 Cyberjaya, Selangor Darul Ehsan Malaysia
6th Floor, Damac - Executive Heights, Dubai UAE, PO 500119
B124, Ground Floor, Smart Village, Giza, Cairo, Arab Republic of Egypt
3535 Piedmont Road NE, Building 14 Suites 1400/1550 Atlanta, GA 30305
3575 Piedmont Road NE, Building 15 Suite 600 Atlanta, GA 30305
3565 Piedmont Road NE, Building 4 Suite 500 Atlanta, GA 30305
Seattle/Bellevue , Washington: 110 110th Avenue, NE, Suite 300 Bellevue, WA 98004
Troy, Michigan: 888 W. Big Beaver Road, Suite 1290 Troy, MI 48084
Bentonville, Arkansas: 711 SE J Street, Suite 11 Bentonville, AR 72712
Brea, California: 3300 East Birch Street Brea, CA 92821-6254
Jefferson City, Missouri: 905Weathered Rock Road Jefferson City, MO 65101-1806
Leonia, New Jersey: 2 Christie Heights Street Leonia, NJ 07605
Norcross, Georgia: 6620 Bay Circle Drive Norcross, GA 30071-1210
Sl.
No.
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91 Omaha, Nebraska: 11707 Miracle Hills Drive Omaha, NE 68154
92
93 Old - Rua Alexandre Dumas, 2100 SI 32 - Chácara Santo Antonio. 04717-004 Sao Paulo, SP- Brazil
94
95
96
97
98
Dubai
Egypt
US
US
US
US
US
US
US
US
US
US
US
US
Brazil
João Marchesini Street, number 139 - 5th and 6th floorPost Code: 80215-432 Curitiba/Parana - Brazil Brazil
Carlos Pellegrini, 581 (Piso 7) 1009 Capital Federal, Buenos Aires – Argentina
427 E. Garza Sada Avenue Local 38-27. Col. Altavista Monterrey, NL, México C.P. 64840
800 North Point Pkwy Alpharetta, GA 30005 USA
Avenida Maria Coelho Aguiar, 215, 6º Andar do Bloco B do Centro Empresarial de São Paulo
SP CEP 05804-900. Brazil
2, Christie Heights, Leonia, New Jersey 07605
Tempe, Arizona: 2005 E. Technology Circle Tempe, AZ 85284
Argentina
Mexico
US
Brazil
99
100 3300 East Birch Street, Brea, CA 92821-6254
101 140 Riverside Court, Kings Mountain, NC 28086
102 6620 Bay Circle Drive, Norcross, GA 30071-1210
103 11707 Miracle Hills Dive, Omaha, NE 68154
104 2005 E. Technology Circle, Tempe, AZ 85284
105 Dusseldorestr. 71B, 40667 Meerbush
The Company’s manufacturing facilities are located at:
Address
US
US
US
US
US
US
Germany
City/ State
Sl.
No.
1
2
3
4
5
6
7
8
9
10
11
P O Box No.12, Dist. Jalgaon
L-8, MIDC, Waluj
105, Hootagalli Industrial Area
A-28, Thattanchavady Industrial Estate
120/1, Vellancheri,
Plot No.4, Anthrasanahalli Industrial Area
9A/10B, Peenya Industrial Area
Plot no.226C/226D, Industrial Development Area, APIIC, Hindupur – 515211, Andhra Pradesh.
Plot C-1, SIPCOT Industrial Park, Irrungattukottai, Sriperumbadur Taluk, Kancheepuram Dist.
Baddi Industrial Area, Baddi, Himachal Pradesh
Plot No.99-104, Sector 6A, IIE, SIDCUL, Haridwar
Amalner 425 401
Aurangabad 431 136
Mysore 571 186
Pondicherry 560 058
Guduvanchery 603 202
Tumkur 572 106
Bangalore
Hindupur – 515211,
Tamil Nadu - 602105
Himachal Pradesh
Uttarakhand 249403
Annual Report 2011-12
92
02 Corporate Governance_2012.indd 92
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CORPORATE GOVERNANCE
COMPLIANCE CERTIFICATE
Corporate Identity No. : L32102KA1945PLC020800
Nominal Capital ` 555 crores
To the Members of Wipro Limited
We have examined all the relevant records of Wipro Limited (“the Company”) for the purpose of certifying compliance of the
conditions of the Corporate Governance under Clause 49 of the Listing Agreement with the Stock Exchanges for the financial year
ended March 31, 2012. We have obtained all the information and explanations which to the best of our knowledge and belief were
necessary for the purposes of certification.
The compliance of conditions of corporate governance is the responsibility of the Management. Our examination was limited to the
procedure and implementation process adopted by the Company for ensuring the compliance of the conditions of the corporate
governance. This certificate is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with
which the management has conducted the affairs of the Company.
In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has
complied with the mandatory conditions of the Clause 49 of the Listing Agreement. As regards Annexure 1D of non-mandatory
requirements, the Company has complied with items 2,3,4,5,6 and 7 of such non-mandatory requirements.
Bangalore, June 15, 2012
For V. Sreedharan & Associates
Company Secretaries
Sd/-
V. Sreedharan
Partner
F.C.S.2347; C.P. No. 833
02 Corporate Governance_2012.indd 93
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Wipro Limited
93
Business ResponsiBility
RepoRt
Introductory Context
this section provides a detailed overview of Wipro’s
sustainability program - its constituent dimensions,
vision, goals and progress as of March 31st 2012. While
we have been publishing a comprehensive sustainability
report for four years now, this is the first instance that
we are including a sustainability overview as part of our
Annual Financial Report.
our sustainability Report is based on the AA1,000
standard and the GRi framework - based on which,
our reports have been consistently rated A+ four
times in succession, representing the highest levels
of transparency and depth of reporting. in preparing
this overview, while drawing from our GRi reporting
experience, we have largely aligned it with the ‘national
Voluntary Guidelines (nVGs) on the social, environmental
and economic responsibilities of Business” drafted by the
Ministry of Corporate Affairs.
i. For details of the NVGs, please refer http://www.iica.
in/images/MCA_NVG_BOOKLET.pdf. A summary
articulation of the nine principles of Responsible Business
under the nVG framework is available in the annexure at
the end of this section
ii. Our Sustainability Reports can be viewed and
downloaded at www.wipro.com/about-wipro/
sustainability/sustainability-disclosures.aspx
Why Disclose:
We believe that sustainability disclosures carry
value for both, the stakeholders at which they are
targeted and for the reporting organization. For the
stakeholder, it provides a consistent and logical basis
to understand the organization’s vision, commitment
and progress on the principal ecological, social and
economic indicators. A company’s thinking and actions
on sustainability is increasingly seen as a proxy for its
long term orientation and longevity. For the reporting
organization, disclosures provide a valuable platform to
engage with its stakeholders and to use it as a catalyst
for continuous improvement. We believe that including
this sustainability overview section in our Annual Report
will provide us with a far larger scale of reach with
our investors, customers and other key stakeholders ;
we hope that this will lead on to a richer platform for
engaging with our stakeholders which will provide us
with valuable insights and inputs into our sustainability
program.
Scope:
the scope of this report covers all of Wipro’s business
- unless mentioned otherwise - and is for the financial
year 2011-12 .
the content for this section is driven by the twin
pillars of stakeholder inclusiveness and Materiality
Determination i.e. ‘Who are our stakeholders’ and ‘What
issues are material to them’
For our materiality determination framework, please
refer to our last sustainability Report for 2010-11. there
are no significant changes from the seventeen principal
sustainability dimensions mentioned in the report.
the principal sustainability topics covered in this report
and their mapping to corresponding nVG principles are
shown in the diagrammatic representation below
4
stAKeHolDeR
enGAGeMent
1
6
CoRpoRAte
GoVeRnAnCe
eColoGiCAl
sustAinABility
HuMAn CApitAl
people enGAGeMent
At WipRo
3 4
5
SUStAINABILItY
DIMeNSIoN
poliCy
ADVoCACy
7
VAlue CHAin
sustAinABility
2
9
eDuCAtion AnD
CoMMunity
8
stakeholder engagement
(Aligned to principle 4 of the nVG guidelines)
Management Approach:
At Wipro, we have always viewed our Customers,
employees and investors as strategic partners and
stakeholders. over the last decade, our programs in
education and community care has brought us in close
engagement with two new stakeholders – partners in
the education ecosystem and proximate Communities.
While the it services industry model does not
necessitate a deep supply chain, the rapid expansion
of this sector in the last two decades has resulted
in a variety of ancillary services e.g. bus transport,
housekeeping, canteen, security. services suppliers and
Contractors have become thus critical stakeholders for
Annual Report 2011-12
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03 Responsible Business Report_2012.indd 94
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our operations. our suppliers have played a strategic
role in the success of our Green Computing journey.
Wipro has been engaging closely with Government
and industry networks on matters related to energy,
water, e-waste and education policy. simultaneously,
we also have collaborative partnerships with Research
and Academic institutions. to these seven stakeholders,
we have , by deliberate design, identified another
stakeholder, Current and Future generations. We think
that the future must inform our thinking and actions
on sustainability more than anything else, as otherwise
our vision will stop short of being truly sustainable;
therefore, while this stakeholder group may not have a
tangible and real face to it, they act as an anchor for all
our decisions.
- integrity and transparency at workplace, the company’s
larger vision on sustainability and social issues
- Counseling and Grievance Redressal
Investors
Annual General Meeting, Annual
Report, investor meets, Analyst
conferences, Roadshows,
shareholder voting, investor
complaints
Ranges from Quarterly to Annual;
Analyst meets and roadshows
may be periodic depending on
situational requirement
- Company strategy and performance, future plans
- Returns to shareholders
- Corporate governance standards
A summary of our stakeholder engagement
- top risks and company’s approach to risk mitigation
Customers
strategic and operational reviews,
Customer Meets, Formal customer
feedback and surveys
ongoing and continuous; surveys
are annual and project-based
- Delivery compliance (Quality, schedule, etc.) across
products and services
- impact on customer’s business goals
- Does Wipro meet the expected norms and code of con-
duct (Wipro or Customer agreed) on environment, labor
and human rights and corporate responsibility?
Employees
open houses, performance
reviews, 360 deg feedback,
All hands meet, Focus groups,
leadership webcasts, Blogs and
discussion groups, perception
surveys
Ranges from daily (blogs) to annual (360 deg feedback)
- empowerment, Continuous learning , Quality of Work,
Work-life balance
Suppliers
Regular operational reviews,
supplier meets, Vendor survey
Will vary from monthly to annual
- Quality and cost effectiveness of services
- innovativeness of delivery
- Compliance on labor and human rights ; Alignment to
Wipro CoBCe (Code of conduct and ethics)
- Alignment with Wipro expectations on ecological
sustainability
- incorporate diverse suppliers (minority, disadvantaged
sector for example) in procurement
The education
ecosystem
periodic meetings and
discussions, Regular e-mail
exchanges, Annual education
Forum, Faculty Workshops,
Mission10X collaborative portal
Varies from weekly to annual
- systemic reform in india’s school education system:
educational material and publications, organizational
capability development and public advocacy
- improving the quality of engineering education through
- Compensation & Benefits, Workplace facilities
both curriculum interventions and faculty training
- Health & safety
- Diversity in the workplace
- Career planning, Appraisal and Feedback
Engagement Modes
Engagement Frequency
Engagement Focus Areas
03 Responsible Business Report_2012.indd 95
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Wipro limited
95
Business ResponsiBility
RepoRt
Communities
and NGOs
periodic meetings with partners,
open meets with community, partner
newsletters
Varies from monthly to quarterly
- identification of emerging material areas for engagement/
intervention
- education for disadvantaged children e.g. children of migrant
laborers, children with hearing disability etc
- primary healthcare for rural communities
- environment issues that affect disadvantaged communities
e.g. Water
- long term rehabilitation for disaster affected areas
Policy, Research
and Advocacy
planned meetings, workshops,
taskforces and steering committees
of industry network bodies
Varies from monthly to annual
- india’s policies on climate change, energy efficiency, water,
e-waste and iCt
- policy research on energy options for india
- Advocacy papers and reports on business responsibility
Current and
Future Generations
indirect inference from our school
interventions mentioned above,
published sociological research and
analysis of emerging generation
- ecological sustainability of our planet
- Meaningful work, work life balance
Engagement Modes
Engagement Frequency
Engagement Focus Areas
Corporate Governance
(Aligned to principle 1 of the nVG guidelines)
An organization’s license to operate in the long run is dependent
on the soundness of its governance and management practices.
the visual below showing the organizational architecture of
Wipro illustrates this point - most of the boxes reflect a long-term
orientation that a company needs to assiduously build and
ingrain into its DnA.
Governance and Management Architecture at Wipro
strategic
planning
operational
planning
Regular reviews by
Board and CeC
PEOPLE
Continuous
learning
Empowered
workplace
Leadership
development
Diversity &
Inclusivity
POLICIES
People
Environment
Health,
Safety
Information
Security
Procurement
PROCESSES
Talent
Supply
Chain
Global
Delivery
Model
Wividus
Backoffice
Continuous
Internal
Audit
Governance
• Enterprise
Risk Management
• COBC
• Ombuds-process
• Board governance
• Internal Audit
Practices
• Innovation
• Quality
• Customer Centricity
• Knowledge
Management
Sustainability
• Resource And
Cost Efficiency
• Ecological footprint
reduction
• Education and
Community
• Transparent disclosures
Sustainability Governance
sustainability is integral to Wipro’s vision and outlook ;
this is reflected in the commitment and engagement with
sustainability issues by Wipro’s leadership team, starting from
our Chairman. the Chief sustainability officer (Cso) who carries
overarching responsibility for our sustainability charter reports
to the chairman and is part of the Corporate executive Council,
the senior most executive body in the organization. in addi-
tion, we have constituted a sustainability Council that provides
direction and reviews progress on our sustainability goals. the
council includes the Ceos of the it, Consumer Care and lighting
and the infrastructure engineering businesses, the Cso and the
global heads of Human Resources, operations, Marketing, talent
transformation, Recruitment, Risk Management , Diversity and
sustainability. the council meets once a quarter and its charter
includes all dimensions of corporate responsibility.
Annual Report 2011-12
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For other details on Corporate Governance – including
the governance structure, mechanisms, composition of
board, board sub-committees, etc - please refer to the
Corporate Governance section of this report.
Code of Business Conduct
Wipro has a corporation wide Code of Business Conduct
& ethics (CoBCe) that sets both, the broad direction
and specific guidelines for all business transactions. the
emphasis is on human rights, prevention of fraudulent
and corrupt practices, freedom of association, elimination
of child and forced labor, advertisement and media
policy, avoidance of conflict of interest, prevention of
sexual harassment and unyielding integrity at all times.
the CoBCe contains guidelines for all business practices
and is applicable to all employees, contractors and
consultants. the complete code can be accessed at www.
wipro.com/corporate/investors/ corporate-governance.
htm. the CoBCe is socialized at multiple points of an
employee’s lifecycle - it is first covered as part of the
induction program of new hires and subsequently, every
employee has to take an online test annually to assert his
familiarity with the tenets of the CoBCe. We have a zero
tolerance policy for non compliance with the CoBCe,
especially on non-negotiable factors - e.g. child labor,
anti-corruption etc.
The Ombuds-process
Having a robust whistleblower policy that employees and
other stakeholders can use without fear or apprehension
is a sine non qua for a transparent and ethical company.
Wipro’s
ombuds-process is designed to be this and more. it
allows and encourages any affected stakeholder to report
breaches of the CoBCe and any other matter of integrity
to the concerned ombuds-person.
in Wipro, our Chief Risk officer is also the Chief ombuds-
person who works with designated ombuds-person in
each Bu.
the process ensures confidential and anonymous
submissions regarding (i) questionable accounting
or auditing matters, the conduct of which results in a
violation of law by Wipro or
(ii) substantial mismanagement of company resources
(iii) Any instance of sexual harassment or any other form
of discrimination (iv) Any violation of human rights as
articulated in the CoBCe and as per the principles of the
u.n.Global Compact. in 2011-12, the ombuds portal has
been upgraded with a 24/7 multi-lingual hotline facility
for ease of access in logging
concerns as well as access via web at www.wipro.com.
in 2011-12, a total of 728 complaints were received via
the ombudsprocess and the resolution percentage of
cases as of March 2012 was 92%.
Human Capital -
people engagement at Wipro
(Aligned to principle 3, 4 and 5 of the nVG guidelines)
Management Approach:
Doing good begins at home. We believe that the global
standards that we embrace as a corporation must translate
into our actions as an employer. these standards are
incorporated in meeting the strategic drivers that shape
our people practices and processes. ours is a global
knowledge workforce that offers high end solutions to a
global customer audience. in this context drivers such as
engagement, learning and empowerment are integral to
building a world class workforce. Core values of the spirit
of Wipro and the CoBCe create a global foundation for a
free and fair workplace for employees across all countries
and businesses. At the same time, our practices are broad
and flexible in integrating local regulatory and cultural
flavors. our practices in wellbeing and health, learning
and development and Diversity are influenced by globally
accepted standards set applied to operational contexts.
All our efforts point towards creating and nurturing a
workplace characterized by freedom, fairness and world-
class practices.
engagement and empowerment
employee engagement is an inclusive and empowering
platform that connects employees with leaders as well
as peer groups. Forums such as company level Wipro
Meets, Business unit level All Hands Meets and Regional
meets are interactive platforms for sharing information,
voicing feedback and conferring reward and recognition.
Webcasts and web-chats also form a regular channel of
engagement between senior leaders or subject Matter
experts (sMes) and employees. A host of newsletters
are created internally by respective functions to keep
Wiproites abreast of latest developments and initiatives.
information on people policies and practices are made
available to all employees on the company intranet
portal; revisions to policies are updated regularly as well.
During 2011-12, several policies
Wipro was among the top 3 in the 2012 Business today list
of Best Companies to work for in india.
03 Responsible Business Report_2012.indd 97
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Wipro limited
97
Business ResponsiBility
RepoRt
and processes were simplified as part of the ‘simplify’
initiative, to improve employees’ experience.
At Wipro, we respect employees’ right to form or participate
in trade unions. less than 1% of our employees in the it
business are part of registered trade unions. these are a
section of employees in europe, Brazil, Mexico and Australia.
We also have Work Councils in France and Germany. Collective
Bargaining Agreements are entered into with trade unions
in Finland and Brazil. the HR function meets these groups
every month to consult on any changes that can impact work
environment and terms and conditions.
one significant source of employee feedback and opinion,
globally, is the employee perception survey (eps). the eps is
held once every 2 years and covers various themes that are
material to employees -Culture, Manager Quality, Role, Work
environment, leadership and the spirit of Wipro values. in
the eps 2011, Diversity, team, social Responsibility, Customer
Focus and Values were the 5 top-rated drivers of engagement.
the areas of improvement on which we are focusing
are career growth, development linked to role, greater
communication around Wipro’s strategic direction.
in 2011, in order to more directly embed employee feedback
into organizational action, the employee Advocacy Group
(eAG) was created. the eAG is formed of volunteers who come
together as peers, as a steering group. the eAG works on two
specific areas:
channelizing feedback on existing policies and practices, and
reviewing new policies before launch, wherever feasible.
At Wipro, we believe in the power of appreciation; recognizing
performance and valuable contribution is a part of our
organizational DnA. Quarterly, half yearly and annual reward
events are held across businesses and geographies to
recognize stellar accomplishments. in 2011, the Winners Circle
reward and recognition framework was launched.
partner employees
Across it businesses, contract employees with specific
skills are deployed in projects. skilled contract employ-
ment is a leverage point for technology firms globally; it
creates value as well as flexibility, for clients and talented
individuals alike. At Wipro, our people supply chain is a key
value enabler, for various critical business and functional
processes. Contract workforce is an integral part of vari-
ous projects across it business. Across locations, contract
workforce is engaged in key functions such as security,
Housekeeping and other essential support functions. our
total contract workforce is around 25,000, and covers both
skilled and support services.
A unique example of enhancing people supply chain value
is the partner employee engagement team (peet) in one
of our service lines, which alone employs over 10,000
skilled contract employees. the partner engagement
team is a dedicated human resource team that manages
engagement, learning & development, performance man-
agement and reward & recognition for contract employ-
ees. this practice was initiated in 2010-11 and since then
has yielded
tangible results in terms of higher retention as well as
higher engagement of contract workforce. in 2011-12, the
partner employee engagement practice was recognized as
one of 8 most impactful practices at the nHRD HR show-
case event at Bangalore.
the Winner’s Circle is comprehensive and people-friendly;
it brings together all types of rewards under a single point-
based framework. Winners earn reward ‘points’ and have a
wide choice of prizes to redeem their points.
Details of our employee metrics for the it business are
provided in ‘Management Discussion & Analysis’ section of the
report.
Free and Fair workplace
Wipro is an equal opportunity employer and remains
committed to the highest standards of openness, probity
and accountability. the Code of Business Conduct &
ethics (CoBC&e) defines our commitment and actions as a
meritocracy and equal
opportunity employer. All decisions regarding hiring, learning
opportunity, salary, compensation and separation are based
on merit and performance. We are committed to non-
discrimination on any grounds, such as nationality or ethnic
origin, gender, race, religion, caste, disability, political or
sexual orientation.
We strongly believe that this commitment reinforces
a progressive and high-performing culture at work.
Compliance with basic employment norms such as adherence
to minimum wage standards, statutory benefits and timely
wage payment have been maintained without any defaults
for the reporting period across our businesses. suppliers and
third party
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employment agreements also include contractual obliga-
tions to fulfill these employment norms.
Health and Well being
Wipro promotes and adheres to a cohesive and holistic
approach to the well being of its employees - including
physical, emotional and mental well being. Work-life
balance at Wipro is perceived not just as a time share
between work and home but rather as a focus on all
aspects governing ‘life’ for all employees, irrespective
of gender or any other factor. We view employees as
complete individuals and hence our practices to promote
safety, health, emergency response and overall wellness
are frequently revised based on regulations, industry
trends and employee feedback. this approach is reflected
in our workplace security administration, prevention and
mitigation of health and safety hazards, comprehensive
medical policies and numerous initiatives on fitness,
nutrition and emotional wellbeing. employees actively
support and participate in these initiatives, thereby mak-
ing them relevant and successful. 15 of our locations,
covering 70% of our workforce, are certified for oHsAs
18001:2007 (occupational health and safety assessment
series)
physical safety & security
• Security teams trained in vigilance, Emergency Response Teams with employee
volunteers and Working with law enforcement agencies to continuously improve,
through drills & simulations. senior police officials are invited for web-chats with
employees
• Educations and Awareness drives, such as Security Week
• Occupational Health Centers at major campus locations
• Comprehensive medical cover across locations, globally
• Life cover, Accidental Death and Disability cover in all key geographies.
Comprehensive Medical Benefits
package/ Retirement Benefit options
• Comprehensive leave policies - Covering Medical Leave and Industrial Injury Leave
• Maternity, Paternity and other Parental leave, as mandated by law, across
geographies.
• Voluntary pension plans
Mental and physical well being
• “Fit for Life” program has over 34,000 registered users.
• Physical fitness facilities such as gym, tennis court, basketball courts available on
major Wipro Campuses. Health/ low calorie food options in cafeterias.
• Tie ups with crèches, hospitals, pharmacies and gyms.
• mitr - an “Employee Assistance program (EAP)” for emotional counseling as well as
specialist legal and financial advice in india. Accessible 24X7 on phone. over 700
calls received by mitr during 2011-12. plans for 2012-13 year include identifying
and focusing on major stressors and expanding the concept of emotional wellness.
• Similar EAP programs also available in key geographies like the U.S. and U.K.
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Learning and Development at Wipro
At Wipro, learning and development is an integral part of
the work culture and takes place in many different ways.
structured learning takes place via classroom training
and online e-learning. every employee has an individual
learning plan that addresses individual learning needs
through the integrated talent Management system
(itMs) portal, which is a vast repository of over 17,961
e-learning titles, spread over 3,520 courses. soft
skill training inputs are linked to the performance
Management system and are customized to each role
within Wipro. the range of training spans technical,
domain, process and behavioural training. the pioneering
WAse program (Wipro Academy of softwareexcellence)
was launched in 1995. the WAse program consists of an
8-semester (four years) off - campus collaborative Ms
program with the Birla institute of technology & science
(Bits), pilani (Rajasthan, india). students receive technical
and academic inputs as well as the opportunity to apply
their learning in live projects.
WASE: 3,143 students joined in 2011-12
WiSTA: 400 students joined in the first year of the
program in 11-12
TEC: 2,000 employees benefitted
WistA (Wipro software technology Academy) is the
latest entrant in Wipro’s training repertoire. WistA is
a new, work-integrated M.s. program in information
technology for science graduates with non-mathematics
disciplines. it is structured along similar lines as WAse, in
collaboration with Vit university, Vellore (tamil nadu).
last year also witnessed the launch of talent enrichment
Centers (teCs). teCs enable employees to upgrade their
skills, spend minimal in-between projects and find the
right assignments.
the key focus of 2011- 2012 has been to build capabilities
in realm of program Management, Architecture and
Delivery Management which have been identified as
key distinguishing capabilities for Wipro. We believe
this will help us partner with our clients in their
business transformation initiatives. this includes the
Architect Career essentials (ACe) framework launched in
october 2011 and the unified Competency Framework
for technical competency building. At the middle
management level, the Delivery Manager Academy offers
individualized development where Delivery Managers are
entrusted with driving growth, operational efficiencies,
customer relationships and people engagement. Global
program excellence Group has also been formed under
Global transformation office to assess, develop and
deploy program managers.
At Wipro, leadership development is a strong,
institutionalized process that comprises lifecycle
programs and customized interventions to build leaders
at all levels. every year, all leaders above the middle
management grade receive 360-degree feedback on
the Wipro leaders’ Qualities (WlQs). the qualities are
periodically revised to keep aligned to current and
emerging business realities. in 2011, the WlQs underwent
revision and the revised qualities are centered on the
twin pillars of Client and people. 2012
During 2011-12, it business employees across levels
benefited from over 7,500 programs. these programs
included over 5,000 technical and domain skill building,
over 1,000 functional, operational and quality process
orientation, and over 1,000 behavioural and leadership
development programs.
Summary of Learning and Development courses:
Wipro featured in the 2011 Global top 25 Companies
for leaders rankings by Aon Hewitt, the RBl Group and
Fortune.
technical skill building programs
non technical learning
(functional, domain,
operational, quality
Behavioral skill building
leadership development
Total
people Diversity at Wipro
5,314
1,310
896
289
7,809
For a global organization such as ours, talent and
workforce diversity is a key success factor. We believe in
treating all people with respect and dignity. Managing
diversity not only makes us more creative, flexible,
productive and competitive but also promotes innovation
and business success. our focus on Diversity and
inclusion has gathered significant momentumover the
last four years and today it is seen as a key aspect of our
work culture and ethos. Wipro’s diversity charter focuses
on four primary pillars: Gender, nationalities, persons with
Disabilities and people from underprivileged sections of
society.
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the Women of Wipro program is a strategic business
enabler for Wipro. the objectives of Women of Wipro
are to improve retention of women employees, facilitate
an increased talent pipeline of women leaders at senior
levels, and develop Wipro as an equal opportunity
employer. Women of Wipro has been instrumental in the
launch of numerous programs , more notable of which
are the Women in leadership workshops which help
understand and address the issues and dilemmas often
faced by successful career women and the “Mentoring
for success” program for high-potential women in middle
management.
• Gender:
persons with disability voluntarily declare their disability
through a self identification Form ensuring complete
transparency. During in 2011-12, 150 persons declared
their disability via this form. We have also introduced a
Reasonable Accommodation policy, to enable managers
and HR teams in providing an inclusive environment.
other interventions include an e-learning module on
Diversity and inclusion which has been completed by
over 7,000 employees as on March 2012. An emergency
evacuation preparedness program for persons with
disabilities was initiated in 2011-12 at Bangalore, Kolkata
and Chennai. At the close of 2011-12, we had over 350
persons with disability working in different roles, across
geographies.
• 28 % of our workforce in the IT business consists of
people engagement in Manufacturing units:
women employees
• 515 women employees covered in “Mentoring for
success” program
• “Women of Wipro” speaker series -senior women
from client organizations speak on career and life
nationality: 10.6% of workforce consists of
employees from across 75 nationalities.
persons with Disabilities: 350 across various roles
Wipro was presented the 2011 ‘NASSCOM
Corporate Award’ as the Best IT services & Product
Company for Excellence in Gender Inclusivity
“Women helping Women” category award at the
8th Annual stevie Awards for Women in Business
in 2009, Wipro introduced a comprehensive framework
designed to aid the inclusion and a high degree of
contribution by employees with disabilities who
worked with Wipro. this laid the foundation to welcome
more people with disability into Wipro. We believe
that an inclusive environment facilitates employment
as well as career building for persons with disability.
the framework focuses on 6 areas - people policies,
Accessible infrastructure, Accessibleinformation systems,
Recruitment, training and Awareness. this includes
enabling infrastructural changes in existing and new
premises, such as addition of hand rails, ramps, lifts,
designated parking spaces, customized workstations and
also technology assistance in terms of modified laptops,
voice activated programs and other assistive applications.
the key tenets of human rights and labor practices
as articulated in the CoBCe are also applied across
our manufacturing setups (Consumer Care& lighting
and Wipro infrastructure - Win). in Win, 38% of our
total workforce is non- indian. As a demonstration
of our commitment to diversity and inclusion, Win
manufacturing has started employing women and
people with hearing impairment on the shop floor in the
Chennai plant. in collaboration with the Directorate of
employment and training we have made efforts to ensure
that appropriate training, safety and other enabling
infrastructure is provided. Recruitment drives are
conducted in collaboration with Vocational Rehabilitation
Centre to extend opportunities to people with disabilities.
ecological sustainability
(Aligned to principle 6 of the nVG guidelines)
Management Approach:
ecological sustainability is a cornerstone of our charter
and a major driver of many of our key programs,
internal and external. Hitherto, resource efficiency –
materials, energy, water -, waste management and
pollution mitigation have been the principal levers of
any corporate organization’s environmental program.
But this has changed in the last few years ; with the
increasing centrality of issues like climate change and
water stress, organizations have come to realize that
externalizing the costs of ecological damage is a poor
idea in the long run.
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our program is built on five pillars : energy efficiency
and GHG mitigation, Water efficiency and responsible
use, Waste management, Biodiversity and product
Responsibility. We present a progress update on the
first four in this sub-section with the last dimension
being covered in the next sub-section.
Scope of Reporting:
India: 67 locations, the majority of operations is from 27
owned locations representing 88% of our workforce.
Overseas: 85 locations, which includes 8 customer data
centers. nearly all of the office locations overseas are
leased.
Management system
We have been following the guidelines of the iso 14001
framework for more than a decade now as one of the
cornerstones of our environmental Management system
(eMs). 20 of our campus sites in india are certified to the
standards of iso 14001:2004.
energy
Goal(s)
to Reduce the scope 1 and scope 2 GHG intensity
of Wipro’s operations by 50% over a 4 year period :
from 2.6 Mt per employee in 2010-11 to 1.3 Mt per
employee by 2014-15, translating into a net reduction
of nearly 60,600 tons at the Wipro ltd level. this target
applies to all of ourcampus facilities and offices
note: For scope 3 emissions – these comprise emission
sources that are not in our direct sphere of control
- while we have a strong baseline measurement in
place, we are in the process of expanding the sources
to be included under this scope as per the new GHG
Corporate Value Chain (scope 3) Accounting and
Reporting standard. We will complete this exercise
by end-2012 and simultaneously establish goals for
reduction that are appropriate for this category
the below dashboard provides a summary of our overall
carbon emissions – categorized under scope 1 (emission
from direct energy consumption, like fuel) and scope 2
(emissions from purchased electricity)
GHG-Scope 1 and 2
300,000
290,150
292,350
250,000
243,393
200,000
150,000
100,000
50,000
0
52,917
60,633
69,253
2009-10
2010-11
2010-12
it non - it
A summary of our scope 3 emissions (other indirect sources) is
provided below.out of the 15 categories of scope 3 reporting
as per the new GHG corporate value chain standard, we are
presently reporting on 6 of the 12 applicable categories. in
2011-12, we added new reporting heads (reported separately
below) for which data was not available in earlier years -
for example Agent airline bookings, Cash claims on cab
commute, Hotel stays.
180,000
160,000
140,000
120,000
100,000
80,000
60,000
40,000
20,000
0
Scope 3
169,451
170,608
130,188
9,440
6,799
6,255
2009-10
2010-11
2011-12
37,169
422
2011-12
(new
categories)
it non - it
the table below shows the extent of coverage across our
operations for the major scope 3 categories
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Category
Coverage
Business travel
Complete for Air travel
across all business units, 95%
for all other travel modes
employee Commute
Complete
upstream leased
Assets/ office space
Waste generated
in operations
Downstream
transportation/
distribution
Complete; this is currently
reported under scope 1 and
scope 2
Complete
Complete; transportation
and distribution for
computing products
end-of-life treatment
of sold products
Complete
Business travel and commute each contribute to 20% of
the total emissions profile for the india it business
the 11% reduction in GHG emissions intensity for the
reporting year as compared to 2010-11 has been driven
by two key contributory factors:
•
energy efficiency measures contributed to a 4%
decrease in energy intensity per employee. this is
due to energy optimization measures, replacement
of some older equipment with more energy
efficient equipment and consolidation of operations
accompanied by a transition from leased to owned
facilities with the resulting increase in overall
utilization of office space.
• We have used separate grid emission factors (from
Central electricity Authority) based on locations of
our operations; for south india operations we have
used 0.75 Kg/KwH while for other regions we have
used 0.80 kg/KwH. the undifferentiated emission
factor in 2010 was 0.79 kg/KwH. the emission factor
for south used is 5% lower than the grid emission
factor used for 2010-11. this is a more accurate
representation of our GHG emissions.
office Space energy Metrics
GHG Mitigation Strategy
the total energy consumption, electricity and back-
up diesel generated, for office spaces across all global
operations in it is 319 Mn units. Data centers, india and
overseas (usA and Germany) contribute to another 75 Mn
units. Considering the significant change in our energy
efficiency consumption profile due to data centers, we
report energy and emissions intensity for office spaces
and data centers separately.
the emissions intensity per employee and per area (floor
space) for office facilities is shown below. Against a per
employee annual emission target of 2.2 tons for 11-12, we
are at 2.34.
emissions Intensity
m
u
n
n
A
r
e
p
e
e
y
o
p
m
e
r
e
p
s
n
o
t
l
3.0
2.5
2.0
1.5
1.0
0.5
0.0
emissions intensity-india
emissions intensity-Global
emissions per square Feet-india
2.7
2.6
15.91
2.39
2.34 2.2
12.46
2010-11
2.7
2.6
15.91
2011-12
2.39
2.34
14.32
19.00
17.00
15.00
13.00
11.00
9.00
7.00
5.00
K
g
p
e
r
s
q
u
a
r
e
F
e
e
t
p
e
r
A
n
n
u
m
our five year GHG mitigation strategy consists of
three key elements – energy efficiency, Renewable
energy (Re) purchase and Captive Re ; of this, Re
procurement will contribute the maximum to GHG
emission reductions. the visual below depicts a
graphic representation of this strategy
80%
Renewable energy (purch)
MW scale purchase of Clean
energy from third party providers
15%
energy efficiency
80
GHG
Mitigation
Approach
15
Higher Cooling
efficiency (earth Air tunnel, Geo- thermal)
Higher lighting efficiency (leD)
5
Changes in bldg. design
Behavioral and process changes
5%
Renewable energy (Gen)
MW scale generation of solar pV,
Wind, Bio Gasifier
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energy efficiency:
over the preceding five year period, we have
implemented a variety of energy efficiency measures
e.g. we were one of the early adopters of Green Building
Design with 18 of our current buildings certified to the
international leeD standard ( silver, Gold, platinum) .
since 2007, we have been working on a server
rationalization and virtualization program, through
which we have decommissioned old physical servers
and replaced the processing capacity with virtualization
technology on fewer numbers of servers. As of March
2012, we have 800 virtual servers running on 120
physical servers - contributing to an energy savings of
approximately 3 Million units annually.
the above measures have resulted in a cumulative
energy intensity reduction of around 20%.
Re procurement:
For the reporting period of 2011-12, we procured 55 Mn
units of Renewable energy through the ppAs (power
purchase agreements) with private producers, which
amounts to approximately 17% of our total office space
energy consumption in the it business.
Captive Re:
We implemented two pilot installations of solar pV of
100 KW each in our Kolkata and Chennai campuses ; this
is combination with our extensive use of solar water
heaters in our guest blocks and cafeterias have resulted in
a cumulated savings of 1.6 Mn units of electricity.
Remote collaboration and mobile productivity
enablers
the it services outsourcing model require frequent
travel to customer locations , mainly overseas, across
the delivery life cycle and contributes to around 20% of
our overall emissions footprint. over the years, we have
launched various remote collaboration and workstation
productivity solutions, like internet enabled voice and
video conferencing technologies and accessibility of
intranet based applications over internet. this has
resulted in a 30% increase in the use of web meeting
technologies (like Microsoft live meeting and Webex).
our conservative estimates show an emissions savings of
over 30,000 tons.
Water: Intensity and Recycling Ratio
At Wipro, we view water from the three inter-related
lens of Conservation, Responsibility and security; our
articulated goals are therefore predicated on these three
dimensions.
Goal(s): To improve water efficiency (Fresh water use
per employee) by 5% year on year
Water
efficiency
• Responsible Sourcing - To
ensure responsible water
manage ment in proximate
communities, especially in
locations that are prone to
water scarcity
Water
security
Water
Responsibility
• Recognizing water availability as a business risk, to
proactively assess and plan for the water security of
the organization in a manner that is congruent with
the above two goals.
Water is withdrawn from four sources - ground water,
municipal water supplies, private purchase and rain
water utilization - with the first two sources accounting
for nearly 65% of the sourced water. the majority of the
balance 35% is from private sources near our operations.
the water supplied by the municipal bodies and the
industrial association are sourced by them in turn from
river or lake systems. our water that is purchased from
private sources can be traced to have been extracted
from ground water.
the per employee water consumption for the reporting
year is 1.71 m3 per month (as compared to 1.81 in
2010-11). We recycle 1,032,050 m3 of water in 23 of our
major locations, (872,880 for 21 locations in 2010-11)
using sewage treatment plants (stps), which represents
33% of the total water consumed. the percentage
of this recycled water as a percentage of freshwater
extracted is around 50%. We are continuously exploring
better metering of our water infrastructure (input and
consumption points). A significant proportion of the
water data is based on water balance derivations and not
actual readings.
sourcing of water is a complex interplay of various
socio-economic factors at various levels - organization,
community, catchment area and the city. Hence a multi-
stakeholder approach to water management is crucial.
While government agencies and the public sector have
been important players in water till now, there are enough
case studies from across the world that illustrates the
critical importance of community management in water.
With the objective of improving our own understanding
of the socio-economic context of our sourcing of
water and acting upon it, we have commissioned a
comprehensive study to explore these areas at two of our
large locations in Bangalore and Chennai.
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the study, to be completed in 2012, will serve as a
reference template for Wipro to form an informed
understanding of the water scenario in the other
locations that it operates in. the study could also play a
role in larger advocacy across government, utility service
providers and business.
Biodiversity:
nature provides us the best illustration of why diversity
is critical; for it is well understood now that biodiversity
or the plurality of species is crucial to human well
being - from providing new sources of medical cures to
preserving climate integrity and providinglivelihoods to
millions. We think therefore that the business sector must
get involved much more in the issues of biodiversity.
As an organization with large campuses in urban
settings, we are acutely conscious ofour responsibility
on this front and have set for ourselves the following
goals.
• To convert five of our existing campuses to
biodiversity zones by 2015.
• All new campuses will incorporate biodiversity
principles into their design
our first biodiversity project was initiated at our
electronic City campus inpartnership with AtRee, a
globally renowned biodiversity institution (www.atree.
org) in 2010-11. the first phase of the project - a butterfly
park and herbal garden - will get completed by March
2013.
pollution and Waste:
Goal(s): To ensure 95% of total waste is recycled/
reused by
2013 - i.e. Less than 5% is disposed through landfills.
pollution of air and water poses one of the most serious
threats to community health and welfare. our waste
management strategies are centered around either
• recycling the waste for further use or
• arranging for safe disposal. to operationalize our
strategy, we follow robust processes of segregating
waste into organic, inorganic,e-waste, hazardous,
packaging, Bio medical and other categories, which is
then either recycled inhouse or through outsourced
vendor
83% of the total waste from our it india operations is
recycled -through both, in-house recycling units and
through authorized vendor tie-ups. A majority of the
balance mixed solid waste is also handled through
authorized vendors - however its trail is not entirely
known to us and hence we have classified it as untreated
waste. in 2012-13, we are initiating a comprehensive
waste audit at key locations by an external agency - the
audit will help us verify our processes and get insights
into improving our recycling ratio.
We continually assess operational risks to the
environment and apply the precautionary principle in
our approach to get insights and plan - for example, the
responsible water use study and waste life cycle audits to
be completed in 2012-13. in the reporting period, there
were no instances of environmental fines imposed or
negative consequences due to our operations.
Consumer Care and Lighting
Although a formal program was started in 2011-12, over
the past couple of years, aspects of sustainability are
ingrained in many resource and operational efficiency,
health and safety, labor relations and community
initiatives across the manufacturing locations. . there
have been targeted reductions in the water and
electricity consumption apart from the increased use
the use of recycled water in the factory premises. All our
manufacturing units have rain water harvesting facilities.
the CClG business has been reporting resource use
(energy, water, waste) as part of key disclosures, like the
Carbon Disclosure project for the past three years.
Consumer Care and Lighting goals on Energy, Water and
Waste
• energy: 10% reduction over last year for both lighting and
consumer care units
• Water: Reduce fresh water consumption by 5% yoy. .
Recycling/Reuse water: From 12% to 20% of fresh water
consumption in lighting and from 7% to 15% of fresh water
in soaps (metrics arrived based on rule of thumb)
• Waste: 100% disposal of hazardous waste through pollution
control board certified agencies. For non-hazardous
categories, we will reduce percentage waste going to
landfills by 5% yoy.
Wipro Infrastructure engineering (WIN):
energy conservation, material conservation through
redesigning of products and processes have been part of
Win’s quality and environmental management systems.
All manufacturing locations of Win are iso14001 certified.
there is zero discharge of waste water across all plant
locations.
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Value Chain sustainability
(Aligned to Principle 2 and Principle 9 of the NVG
guidelines)
Management Approach:
in the globalised world of markets for services and
products, the networks for resources, skills and
manufacturing locations are increasingly multi-tiered
and interlinked. the environmental and social footprint
of products and services is therefore spread across
these many layers and carry different degrees of risks.
it becomes the responsibility of the primary producer
of services and products therefore to exercise varying
degrees of influence and control on its value chain.
in our sustainability vision and thinking, we recognize the
centrality of going beyond our organization’s boundaries
and of working with all important stakeholders in the value
chain - suppliers, customers, contractors, service providers
etc.
our customer stewardship program consists of multiple
pillars - the Green Computing initiative, the Green Data
Center program, the it for Green portfolio of software
solutions and custom solutions in Green Buildings and
Clean energy. in our lighting division, our portfolio
includes a range of CFl and leD lights. Apart from
health products, we continue to look for innovations
which promote consumer well being across our product
portfolio. For more details on our customer solutions
portfolio, please refer to the “Customer Stewardship”
section of our last sustainability Report 2010-11
started in 2007, we have been pioneers in Green
Computing with mature programs on the three pillars
of energy efficiency, toxics elimination and extended
producer Responsibility for e-waste.
our supplier Responsibility program is more recent : in
2011-12, we initiated a environmental and social Risk
profiling of our top 100 suppliers in the Computers and it
services division. We will use this as a foundation to create
a strong program on supplier responsibility from 2012-13
onwards
It Services
in it services, our predominant suppliers are utility
providers, telecom, it infrastructure and support services
like hospitality, catering and transportation. An example
of the collaborative approach that we adopt with our
service providers is the successful partnership with the
local transport authority in Bengaluru that has resulted in
significant benefits for employees, local community and
the environment.
Another unique example is a study that we initiated
in 11-12 to explore the development of a Responsible
Water use framework - this involves interaction with local
authorities and water supply chain stakeholders.
Recognizing the socio-economic benefits of local
procurement, we encourage sourcing from the local
economy. Aligned to the leeD standards, nearly 50% of
the construction materials is sourced locally.
At an aggregate level , nearly 88% of our supplier
base is based in india which translated into 73% of the
procurement by value for the reporting year.
We have also started an exercise in consolidating our
supply chain base in order to make our engagement
more focused and meaningful. in Fy13, we will also be
launching our supplier engagement program on esG
principles with a select group of suppliers.
Wipro expects its suppliers to adhere to similar standards
of ethics and integrity as for itself. specific clauses in the
CoBCe require our suppliers to adhere to the ethical
and responsible principles governing child labor, forced
labor, discrimination, fraud and anti-corruption. We have
zero tolerance for breaches of fundamental human rights
principles and on bribery and anti-corruption with a
resultant terminaton of any supplier found guilty of such
breaches.
our ombuds process is available 24X7 (online and
through specified contact numbers) for supplier s and
contractors to report any breach of code of conduct
by Wipro employees. in 2011-12, we have launched a
multilingual 24X7 call center. During 2011-12, there were
25 instances of suppliers who were found in breach of
the CoBCe, subsequent to which we terminated and
blacklisted 6. For the balance 19 - where the breaches
were not serious- limited actions were taken along with
counseling and warnings.
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It products:
Consumer Care and Lighting:
life cycle sustainability in our personal computing
business is based based on the three pillars of
energy management, chemicals management and
waste (end of lifecycle) management. All our new
product launches are energy star 5 (as per u.s. epA
standards) enabled. in india, Bee Ver 1.0 (equivalent
to es 5) is a new energy rating system for laptops
and all 4 laptop models introduced in the reporting
period are compliant with Bee guidelines. over the
years, we have developed successful partnerships
to procure computing components that meet and
exceed RoHs (Restriction on Hazardous substances)
guidelines. Across all the customer shipments that
were made during 11-12, RoHs compliance stood at
around 99.7%, with the small portion explainable on
account of customer specified components. We have
also launched a few models as part of our “Beyond
RoHs” program with the aim to offer pVC and BFR
free products. We are fully geared up to meet the
new e-waste guidelines and are working closely with
stakeholders to ensure compliance.
Customer communication on health and safety
aspects is a key aspect of our sustainability program.
instructions on our end-of-life disposal program
are added in all shipments. our take-back program
for end of life desktops and laptops is an industry
first in india. Across the country there are 17
collection centers. in 2011-12, we collected 229 tons
of e-waste. All products follow required eMi/eMC
(electromagnetic interference) regulations. Desktop
Monitors (18.5 and 20 inch models) are tCo certified -
which cover aspects of ergonomics and user centered
design. instructions on safe disposal and recyclability
are mentioned on the carton and individual
accessories. the installation failure trend, which
measures hard failures in the first month of product
use, is one of the lowest in the industry at 0.27%.
Across the warranty period (1 year) this figure is still a
low 0.4%, which demonstrates the build quality of the
product.
Greenpeace continues to be instrumental in providing
critical feedback and inputs to our Green Computing
journey. Their “Guide to Green Electronics” has rated
Wipro as the no. 1 green company in india since 2009.
earlier last year, Wipro launched a program for our key
and materially important component suppliers with
a view to understand their environmental footprint
and social impact and further strengthen our supply
chain engagement on esG (environment, social and
Governance) aspects.
product quality and manufacturing efficiency have
always been part of our life cycle sustainability program
in the Wipro Consumer Care & lighting division. We use
recycled material in packaging across our key product
categories. We are first in the market to introduce leD
lighting for domestic consumers and are leaders in
selling the leD lighting solutions in commercial and
institutional markets in india. leDs draw 1/10th of
power of normal Gls bulbs for the same luminosity
output. simultaneously, we have reduced the mercury
content in our CFl bulbs from 4.5 mg to 3 mg and are
planning to eliminate the mercury in tube lights (Ftl)
through alternate arrangement by the end of 2012-
13. All our manufacturing locations have quality, eMs
(environmental Management system) and Health &
safety, which does thorough audit of the sustainable
practices within the organization as a part of certification
process.
We are working on a program that will include on-
product communication of safe disposal method for
consumer care products like baby diapers and lighting
products like CFl and tubelights. A Management team
visits the market once in a month in different parts
of country to collect feedback on product issues and
to identify opportunities for more effective customer
service. the inputs from these visits are captured in a
‘Customer service opportunity (Cso)’ portal with the
commitment that the issues should be resolved within
45 days. A toll free customer care number is printed in
all the products we sell, through which customers can
log complaints/queries and suggestions related to our
products.
education and Community
(Aligned to principle 8 of the nVG guidelines)
Management Approach:
For more details on our innovations in customer
solutions addressing this principle, please refer
to the “Customer Stewardship” section of our last
Sustainability Report 2010-11 and the “Value chain
sustainability” section of this report.
our social transformation initiatives are now nearly
a decade old. over the years, our approach has been
to engage in social issues with sensitivity, rigor and
responsibility.
education and Community Care are the two areas that
we decided focus on when we started a decade back.
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Business ResponsiBility
RepoRt
the following visual is a summary view of our three social transformation programs addressing the two focus areas.
VISUAL SUMMARY oF WIpRo’S pRoGRAMS IN eDUCAtIoN AND CoMMUNItY CARe
Addresses
issues of deep
systematic reform
in india’s education
ecosystem
n
o
i
t
a
c
u
d
E
Comprises
Mission 10X, a
not-for-profit trust
Comprises
Wipro Applying
thought in schools
(WAtis)
Works with
700 + engineering
colleges across 20
states, reaching
10,000 faculty
Through a network
of 30 partners,
reaches 2000+
schools across
the country
e
r
a
C
y
t
i
n
u
m
m
o
C
Addresses
long-term disaster
rehabilitation &
issues of health,
education and
environment
Comprises
Wipro Cares, a
not-for-profit trust
Works with
proximate
communities
through partners
the reasons for this deliberate set of choices have the
same compelling validity today as they had then
technology and learning gap between industry and
academia
• Education is the only catalyst of social development
that can bring about change which is truly
sustainable and durable over the long term; and
• It is a fundamental responsibility of every business
to engage deeply with its proximate communities
and to try to address some of their biggest
challenges
Mission 10X
Mission10X, started in 2007, was sought to create a
quantum improvement in the employability of students
by bringing about systemic change in the existing
teaching-learning paradigms in engineering education.
over the last 4 years Mission10X has reached out to
over 21,000 faculty members through the innovative
Mission10X learning Approach (MxlA).
Key goals for Mission10X Phase 2 are:
• to develop 250 Academic leaders to build institutions
of excellence
• to deploy 2,500 unified learning Kits to bridge the
• to empower 25,000 more faculty members in
Mission10X learning Approach
Highlights of 2011-12
• Mission10X reached out to over 8,400 Mission10Xians.
the Mission10X community has reached out to 25 states
covering over 1,184 colleges in india.
•
•
•
Academic leadership program (Alp) for principals for
engineering colleges. over 200 principals from various
engineering colleges have participated so far.
launched Mission10X technology learning Center
(MtlC). the unified technology learning platform (utlp)
being part of MtlC will provide a platform to the students
to do industry relevant projects and help build the
necessary skills that are required by the industry.
partnership withmany international and national
educational organizations including Dale Carnegie
training, university of Cambridge, Harvard Business
school publishing, indian society of technical education
and international Federation of engineering education
societies (iFees)
Annual Report 2011-12
108
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•
nAssCoM national Association of software and services
Companies has partnered with Mission10X to use
Mission10X pedagogy across it companies.
World economic Forum’s latest report featured
Mission10X as one of the 55 global good practices in
solving talent Mobility and employability problems. For
more information, visit www.mission10x.com
Wipro Cares
started in 2004, Wipro Cares is Wipro’s sustainability
initiative that focuses on the developmental needs of
communities in its proximate locations.
Focus Areas:
• Education for the underprivileged
• Primary health care
• Long term Disaster rehabilitation.
Key Highlights of 2011-12
Focus area for 2012-13:
extend our education focus in teacher capacity building
for children with disabilities.
the visual below presents the key community initiatives
we have engaged in 2011-12 undertaken under the
charter of Wipro Cares:
Volunteering is an integral part of Wipro Cares where
we provide the employees of Wipro with a platform to
engage meaningfully with communities. in 2011-12
Wipro Cares saw around 700 volunteers across india
sharing their knowledge and skills with underprivileged
communities through various initiatives. Wipro Cares
currently has eight chapters in Bangalore, Mumbai,
Chennai, nCR, Kolkata, pune, Kochi and Hyderabad.
Wipro Cares also organized old books collection, blood
donation, joy of giving, nGo stalls during Diwali and eye
donation drives through the year.
Access to education
supported the education of 10500 + children in 6 cities & 1 village though 8 projects
primary Health
Care services
supported a population of 45000 covering 30 villges in Aurangabad, tumkur
and Hindupur with opD and RCH(Reproductive Child Health) facilities
started similar projects in Mysore and Amalner covering a population of 5000 people
Restoration of
environment
planted more than 25,000 trees and generated livelihood for more than 25
subsistence farmers in rural tamil nadu through a social forestry project
Disaster Rehabilitation
Karnataka floods project completed, built 539 houses for two districts
(yadgir&Koppal) in north Karnataka
Completed the project which provided eco sanitation, dug wells, rainwater
harvesting for a village of 90 households which was affected by the Kosi floods in Bihar
Carried out a global collection drive for Japan, collected 100,000 usD which was donated
to Ashinaga, an nGo that supports the educational and emotional needs of children.
employee engagement
increased employee engagement through various campaigns across Wipro locations
pan-india, currently have a base of around 700 volunteers
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Wipro Applying thought In Schools (WAtIS)
WAtis is a social initiative of Wipro’s that aims to bring about quality education in schools in india. our strategy and focus
areas within the larger ambit of school education reform can be summarised as follows.
education: a prime enabler of social vision
our Mission: work with social orgs to increase their
capacity in ngaging with school education to realize the
vision.
our Focus areas: org capability building in the education
space
• to address the scarcity of orgs and people in this space
• For sustainable impact
Developing educational material & Literature
• to address the scarcity of good material for children and
educators
public Advocacy
• to create greater awareness on important educational
issues
Radical stimulus to influence public thinking
Create good educational literature large advocacy initiatives
Advocate
strategy
experiment and learn
Build eco-system
Deep engagement
with schools
support thematic experiments
create shareable learning
Build civil
society eco-system
strengthen network build
capabilities in network
education reform in india is a large canvas and our program focuses on 3 outcome areas within this and our work in 2011-12
also was in line with this.
Work in schools
Leads to
Org Capability building
Edu Material & Literature
Public Advocacy
to work with school to
• support org
capability development
• Develop educational
material
• Do public advocacy
What
Way
to help orgs build specific
capabilities
to address lack of good
orgs working in educa-
tion
For sustainable impact
to support development
of good children’s books
& materials for educators
to address the scarcity
of good educational
material
to provide radical stimulus
to public thinking
on education
to address lack of
awareness on important
educational issues
Worked with around
2000 schools and 10,500
educators across 17
states reaching around
800,000 students
• supported over 65
projects with 30 orgs
• partners network
of 27 of india’s
foremost educational
organizations
• 14 Wipro Fellows
recruited so far
• Published 3 books 3 in
process
• Learning Standards for
primary classes
• A video series on
student Misconceptions
• Student Learning Study
results as cover story of
“India Today”
• Student Misconception
videos disseminated to
10,000 schools
• Completed Quality Edu.
study: advocacy efforts
underway
Annual Report 2011-12
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one of the key outcomes of our work has been to develop a
country-wide network of partner organizations.
policy Advocacy
(Aligned to principle 7 of the nVG guidelines)
Management Approach:
Aligned with our conviction that business, government,
civil society and academia must be equal stakeholders in
engaging on the critical issues of sustainability, we have
consciously been working towards building advocacy and
engaging with
government and industry networks on areas that , we
think, need priority attention.
our areas of focus on policy and advocacy have centered
around Clean energy and Climate Change, Water, e-Waste,
education and Diversity. our approach is to work through
industry platforms like Cii and to support research and
publication s with partners who carry expertise in the
above domains.
this section provides an overview of the work that we have
been doing on policy and advocacy in the above areas
with emphasis on the highlights for 2011-12.
Stakeholders and the primary issues
our primary identified stakeholders for public policy and
advocacy are
•
Relevant government ministries and departments,
both at the center and the states where we operate
in ; our interactions have been largely with the
Ministry of environment and Forests, Ministry of new
and Renew able energy, the planning Commission,
Ministry of Human Resources Development, Ministry
of Corporate Affairs
•
•
Industry networks and associations play a crucial
role as catalysts for awareness, advocacy and
action on the multiple dimensions of sustainability
; by providing a common platform for industry
representatives to share and exchange ideas and
practices, industry association can help foster a
virtuous cycle of innovation led improvement.
industry networks also lend trength and credibility in
the dialogue process with government on important
matters of policy and directives. the industry
networks that we have been an integral part of are:
•
•
•
•
The CII-Godrej Green Business Center
The CII-ITC Center for Sustainable Development
The CII Climate Change Council
The Nasscom working groups on Gender
Diversity
Research and Advocacy NGOs: issues like energy,
Climate Change, Water, Biodiversity, Community
Health etc require strong civil society involvement
in addition to policy intervention and business
action ; while the advocacy role of nGos is well
established, an equally critical role is that of
furthering empirical research in these areas. nGos,
by combining the right blend of field work and
academic rigor can generate valuable insights that
can inform the work of practitioners, policy makers
and industry professionals. illustrative examples of
such organizations that we work with are : Cstep in
the area of Clean energy, BioMe in the area of Water,
AtRee in the area of Biodiversity etc
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the table below provides a summary of our major stakeholder engagements in policy and advocacy.
Category of
engagement
Brief
Domain / Area
Brief highlights
Advocacy through
industry network
Cii-Climate Change
Council
Climate Change
- High level body with representation across
industries
influencing policy
through industry
network
Cii working group
on CsR
CsR related
directives in
proposed Companies
Bill Amendment 2011
Advocacy through
industry network
CDp working group
on iCt sector module
Climate Change
- led the indian business representation at
Durban Cop17
- tabled concerns and challenges with
national solar Mission
- Cross industry representation
- prepared comprehensive ‘essential &
leadership’ guidelines on nVG disclosures for
companies
- Regular representations to Ministry of
Corporate Affairs on industry stand on
proposed Companies Bill amendments,
especially on the mandating of 2% of pAt
spend on CsR
- part of global working group convened by
Carbon Disclosure project (CDp) to create and
publish an iCt sector supplement for CDp
disclosure
Advocacy through
industry network
Cii sustainability
Advisory Council
sustainability in
Business
- High level body with wide representation
from industry sectors and government
influencing policy
through invited
engagement
with government
influencing policy
through industry
network
Water
e-waste
planning
Commission
working group on
Water
MAit(Manufacturers’
Association of
information
technology)
working group and
the ‘e-waste 2012’
legislation
Annual Report 2011-12
112
- Creates awareness and debate on multiple
sustainability dimensions e.g. Climate
Change, Water, education etc
-part of the planning Commission working
group on Water that provided detailed inputs
as part of the 12th plan exercise
- Wipro played a central role as part of the
MAit working group that worked with the
Ministry of environment and Forests in the
drafting of the e-waste 2012 legislation
- the legislation seeks to place the primary
onus for e-waste collection and handling on
the producer
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Category of
engagement
Brief
Domain / Area
Brief highlights
Advocacy through
industry network
Cii working group on
Green procurement
sustainable
operations
Advocacy through
press and education
network
Wipro-education
initiatives (ei)
advocacy on ‘Quality
education study’
school education
- prepared and published comprehensive
guidelines for green procurement that
companies can adopt
- Wide representation from across industries
- Based on two year study of nearly 900
schools across the country, we along with
our partner ei published a detailed analytical
study of quality of school education in india’s
urban school system
- the study was covered in detail in select
national press
- Convened discussions with schools and
other stakeholders in education across the 4
cities of Kolkata,Chennai,Bangalore and new
Delhi
- Report shared with thousands of schools
across country
- study and discussions around it can be
accessed at www.qualityeducationstudy.com
•
Persons with Disability: Inclusive interventions in
the work place and systemic interventions in the
space of education for this section
• We will continue to work primarily through industry
networks, the education ecosystem and research and
advocacy nGos in bringing about systemic change ;
one of our core operating principles is to not spread
our energies and resources thin by working on too
many issues - we will, therefore, be selective in the
partners we engage with on the areas mentioned
above.
plans and direction forward
• We think that public policy and advocacy will have
to play an increasingly strong part in bringing
sustainability concerns, challenges and solutions to
the center stage of attention in the national arena;
the business sector must adopt a proactive and
visionary stance, moving away from a compliance-
driven mindset to one where it sees itself as a driver
of a shift to a radically different position for business
- one in which it views larger socio-ecological
issues as being central to its own sustainability and
therefore one where it should drive innovation and
improvement through progressive thinking
• Our areas of advocacy focus will continue to be
•
Energy and Climate Change
• Water
•
•
•
•
Biodiversity
E-Waste
Education, including ‘Sustainability Education’
Gender Diversity
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Annexure
“National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business” from the Ministry of
Corporate Affairs– A summary of the 9 principles and core elements
principle #
principle
Key aspects of elements
1
2
3
4
5
Business to conduct
and govern with ethics,
transparency and
accountability
Business should provide
goods and services that
are safe and contribute to
sustainability throughout
their life cycle
Businesses should promote
the wellbeing of all employees
Businesses should respect the
interests of, and be responsive
towards all stakeholders,
especially those who are
disadvantaged, vulnerable
and marginalised
Businesses should respect and
promote human rights
i) Corporate Governance
transparent Communication
ii)
iii)
institutionalization of Anti-Corruption practices
iV) High standards of mandatory financial reporting
V) Disclosure on nVG reporting status
Vi) Zero complicity with any party that is in breach of nVGs
lifecycle Resource use
i)
ii) Consumer education
iii) sustainable product Design and Manufacturing
iV) Regular review of new technology from ethical, social and
environmental perspectives
V) Respect for ip, especially embedded in traditional forms
Vi) promote sustainable Consumption
i)
Freedom of Association
ii) equal opportunity employer
iii) Zero Child and Forced labor
iV) Work-life Balance, especially of women
V) Adequate workplace facilities, especially for people with disability
Vi) Adequate emphasis on safety, Hygiene and Dignity at the workplace
Vii) Climate of continuous learning and empowerment
Viii) Harassment free workplace
Formal process of stakeholder identification and engagement
i)
ii) transparency and Accountability for impact on stakeholders
iii) special attention to stakeholders in underdeveloped areas,
iV) Fair and equitable resolution of stakeholder differences
i)
policy on Human Rights that is based on indian Constitution and
international Bill of Human Rights
ii)
integrate Human Rights into management systems Compliance,
iii) Recognize Human Rights of all stakeholders including that
of community
iV)
influence and promote human rights across the value chain
V) Zero complicity with third party Human Right violations
Annual Report 2011-12
114
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principle #
principle
Key aspects of elements
6
7
8
9
Business should respect,
protect, and make efforts to
restore the environment
Businesses, when engaged in
influencing public and regula-
tory policy, should do so in a
responsible manner
Businesses should support in-
clusive growth and equitable
development
Businesses should engage
with and provide value to
their customers and consum-
ers in a responsible manner
i) optimize use of natural resources
ii) Assess and minimize pollution and bear its cost
iii) equitable sharing of business benefits of the usage of biological and
natural resources
iV) Adoption of energy efficiency, renewable energy and Clean
production systems
V) evolve an environmental Management system that helps in
preventing / mitigating any potential environmental disaster
Vi) Adequate environmental Reporting
Vii) Address environmental issues in supply Chain
i) pursue policy advocacy that is consistent with the nVGs
ii) leverage industry networks for such policy advocacy
i) Minimize negative impact, if any, on social development
ii)
innovate in products, technologies and processes that promote
social
well being
iii) Align with development priorities at local and national level
iv) Must display special sensitivity to local concerns, esp in
under-developed areas
i) Must address overall well being of customers and society,
not a narrow need
ii) should not restrict freedom of choice of the customer in any way
iii) transparent disclosure about the social and ecological impacts of
products through labeling etc.
iv) Responsible Advertising,
v) ensure that products do not overuse natural resources and / or lead
to
conspicuous consumption
Grievance Handling process for customers
vi)
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115
inDepenDent AssuRAnCe stAteMent
on Business ResponsiBility RepoRt
Introduction
Det norske Veritas As (‘DnV’) has been commissioned by the management of Wipro limited (‘Wipro’ or ‘the Company’)
to carry out an independent assurance engagement on the Business Responsibility Report (‘BRR’ or ‘the Report’) to be
published along with its Annual Report 2011 – 12 in its printed format. this assurance engagement has been conducted
against the nine principles enunciated in the ‘national Voluntary Guidelines on social, environmental and economic
Responsibilities of Business’ (nVG) framed by the Ministry of Corporate Affairs (MCA), Government of india. the verification
was conducted by a multidisciplinary team of qualified and experienced assurance professionals during May 2012, for the
year of activities covered in the Report i.e. 1st April 2011 to 31st March 2012.
the intended users of this assurance statement are the management of the Company and readers of this Report. the
management of Wipro is responsible for all information provided in the Report as well as the processes for collecting,
analyzing and reporting the information. DnV’s responsibility regarding this verification is to Company only and in
accordance with the agreed scope of work. the assurance engagement is based on the assumption that the data and
information provided to us is complete and true.
DnV expressly disclaims any liability or co-responsibility for any decision a person or entity would make based on this
Assurance statement.
Scope, boundary and limitations of Assurance
the scope of work agreed upon with Wipro includes verification of the content of the BRR i.e. disclosures against
nine principles of nVG and reported in the Annual Report 2011-12 i.e. review of the policies, initiatives, practices and
performance described in the Report as well as references made in the Report.
For Det Norske Veritas AS,
the reporting boundary is as set out in the Report, covering entities over which Wipro has management control and
significant influence as explained in the report.
During the verification process, there were no limitations encountered on the scope for the assurance engagement.
Assurance Methodology
this assurance engagement was planned and carried out in accordance with the DnV protocol for Verification of
sustainability Reporting .the Report has been reviewed for a moderate level of assurance, as set out in Verisustain.
As part of the engagement, DnV has verified the statements and claims made in the Report and assessed the robustness of
the underlying data management system, information flow and controls.
Conclusion
We consider the methodology and process for gathering information developed by the Company for this Report is
appropriate and the qualitative and quantitative data included in the Report, were found to be reliable, identifiable and
traceable; the personnel responsible were able to demonstrate the origin and interpretation of the data.
the report predominantly covers the response to Wipro’s it business which account for 86 % of its total business revenue,
however Wipro needs to include disclosures related to its non it business to improve the completeness.
in our opinion the Report, provides a fair representation of the company’s sustainability policies, objectives, management
approach and performance during the reporting year. on the basis of our verification methodology and scope of work
agreed upon nothing has come to our attention that would cause us not to believe that this report is not materially correct
and is not a fair representation of the data and information.
nandkumar Vadakepatth
lead Verifier
Head-sustainability & Business excellence services(south)
Det norske Veritas As, india
Bangalore, india, 15 th June 2012.
Jayaram santhosh
Reviewer
Head-sustainability & Business excellence services(south)
Det norske Veritas As, india
Annual Report 2011-12
116
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FINANCIAL
STATEMENTS
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117
Standalone Financial Statements
AUDITORS’ REPORT
To the Members of WIPRO LIMITED
We have audited the attached balance sheet of Wipro Limited (“the Company”) as of March 31, 2012, the statement of profit and
loss and the cash flow statement for the year ended on that date, annexed thereto. These financial statements are the responsibility
of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
1.
As required by the Companies (Auditor’s Report) Order, 2003, as amended (“the Order”), issued by the Central Government
of India in terms of Section 227(4A) of the Companies Act, 1956 (“the Act”), we enclose in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the said Order.
2.
Further to our comments in paragraph 1 above, we report that:
a) we have obtained all the information and explanations, which to the best of our knowledge and belief were necessary
for the purposes of our audit;
b)
c)
d)
e)
(f )
in our opinion, proper books of account as required by law have been kept by the Company so far as appears from our
examination of those books;
the balance sheet, statement of profit and loss and cash flow statement dealt with by this report are in agreement with
the books of account;
in our opinion, the balance sheet, statement of profit and loss and cash flow statement dealt with by this report comply
with the accounting standards referred to in sub-section (3C) of Section 211 of the Act ;
on the basis of written representations received from the directors as on March 31, 2012 and taken on record by the
Board of Directors, we report that none of the directors is disqualified as of March 31, 2012 from being appointed as a
director in terms of clause (g) of sub-section (1) of Section 274 of the Act; and
In our opinion and to the best of our information and according to the explanations given to us, the said accounts give
the information required by the Act, in the manner so required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
–
–
–
in the case of the balance sheet, of the state of affairs of the Company as of March 31, 2012;
in the case of the statement of profit and loss, of the profit of the Company for the year ended on that date; and
in the case of the cash flow statement, of the cash flows of the Company for the year ended on that date.
for B S R & Co.
Chartered Accountants
Firm Registration No: 101248W
Natrajh Ramakrishna
Partner
Membership No. 032815
Bangalore
April 25, 2012
Annual Report 2011-12
118
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ANNEXURE TO AUDITORS’ REPORT
Standalone Financial Statements
Annexure referred to in paragraph 1 of our report to the members of Wipro Limited (“the Company”) for the year ended March 31, 2012.
(i)
(a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed
assets.
(b)
The Company has a regular programme of physical verification of its fixed assets by which all fixed assets are verified in
a phased manner over a period of three years. In our opinion, this periodicity of physical verification is reasonable having
regard to the size of the Company and the nature of its assets. As informed to us, no material discrepancies were noticed
on such verification.
(c) Fixed assets disposed off during the year were not substantial, and therefore, do not affect the going concern assumption.
(ii)
(a) The inventory, except goods-in-transit, has been physically verified by the management during the year. In our opinion,
the frequency of such verification is reasonable.
(b) The procedures for the physical verification of inventories followed by the management are reasonable and adequate
in relation to the size of the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory. As informed to us, the discrepancies noticed on verification
between the physical stocks and the book records were not material.
(iii)
(a) The Company has granted loans to four parties covered in the register maintained under Section 301 of the Companies
Act, 1956 (“Act”). The maximum amount outstanding during the year was ` 4,060 millions and the year-end balance of
such loans was ` 3,969 millions (of which loans amounting to ` 3,536 millions are interest free).
(b)
In our opinion, the rate of interest, where applicable and other terms and conditions on which loans have been granted
to companies, firms or other parties covered in the register maintained under Section 301 of the Act are not, prima facie,
prejudicial to the interest of the Company.
(c) The principal amounts and interest, where applicable, are being repaid regularly in accordance with the agreed contractual
terms. Additionally, there are no overdue amounts in excess of Rupees one lakh. Accordingly, paragraphs 4(iii) (c) and (d)
of the Order is not applicable to the Company.
(d) The Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the
register maintained under Section 301 of the Act. Accordingly, paragraphs 4 (iii) (e) to (g) of the Order are not applicable
to the Company.
(vi)
In our opinion and according to the information and explanations given to us, there is an adequate internal control system
commensurate with the size of the Company and the nature of its business with regard to purchase of inventories and fixed
assets and with regard to sale of goods and services. We have not observed any major weakness in the internal control system
during the course of the audit.
(v)
(a)
In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements
referred to in Section 301 of the Act have been entered in the register required to be maintained under that Section.
(b)
In our opinion and according to the information and explanations given to us, the transactions made in pursuance of
contracts or arrangements referred to in (a) above and exceeding the value of ` five lakh in respect of any party during
the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant
time.
(vi) The Company has not accepted any deposits from the public.
(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of account relating to material, labor and other items of cost maintained by the Company
pursuant to the Rules prescribed by the Central Government for the maintenance of cost records under section 209(1)(d) of the
Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However,
we have not made a detailed examination of the records.
03 Standalone_2012 new.indd 119
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Wipro Limited
119
Standalone Financial Statements
(ix)
(a) According to the information and explanations given to us and on the basis of our examination of the records of the
Company, amounts deducted/accrued in the books of account in respect of undisputed statutory dues including Provident
Fund, Service tax, Employees’ State Insurance, Income-tax, Sales-tax, Wealth tax, Customs duty, Excise duty, Investor
Education and Protection Fund and other material statutory dues have been generally regularly deposited during the
year by the Company with the appropriate authorities.
According to the information and explanations given to us, no undisputed amounts payable in respect of Provident
Fund, Service tax, Employees’ State Insurance, Income-tax, Salestax, Wealth tax, Investor Education and Protection Fund,
Customs duty, Excise duty and other material statutory dues were in arrears as of March 31, 2012 for a period of more
than six months from the date they became payable.
(b) According to the information and explanation given to us, there is no disputed amounts payable in respect of Wealth
tax. The following dues of Income tax, Excise duty, Customs duty, Sales tax and Service tax have not been deposited by
the Company on account of disputes:
Nature of the Statute
Nature of the dues
Income Tax and interest
demanded
Sales tax, interest and
penalty demanded
Sales tax demanded
Amount
unpaid *
(` in millions)
Period to which
the amount relates
(Assessment year)
5,226 2007-2008
866 1986-87 to 2007-08
Forum where dispute is
pending
Income tax Appellate
Tribunal
Appellate Authorities
414 1986-87 to 2009-10
Appellate Tribunal
Sales tax and penalty
Demanded
39 1999-00 to 2006-07
High Court / Supreme
Court
Excise duty demanded
Excise duty demanded
Customs duty, interest
and penalty demanded
Customs duty and penalty
demanded
Customs duty demanded
41 1997-98 to 2010-11
7 2004-05
342 1994-95, 1997-98,
2001-10
Appellate Authorities
CESTAT
Appellate Authorities
40 1991-92 to 2006-07
CESTAT
44 1990-98 and 2005-06 High Court / Supreme
Service tax demanded
105 2003-04 to 2007-08
Court
Appellate Authorities
Service tax demanded
378 2002-03 to 2009-10
CESTAT
The Income Tax Act, 1961
State Sales Tax/VAT and CST
(pertaining to various states)
State Sales Tax/VAT and CST
(pertaining to various states)
State Sales Tax/VAT and CST
(pertaining to Kerala, Karnataka
and Andhra Pradesh)
The Central Excise Act, 1944
The Central Excise Act, 1944
The Customs Act, 1962
The Customs Act, 1962
The Customs Act, 1962
The Finance Act, 1994 -
Service tax
The Finance Act, 1994 -
Service tax
*The amounts paid under protest have been reduced from the amounts demanded in arriving at the aforesaid disclosure.
(x) The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses during
the financial year and in the immediately preceding financial year.
(xi)
In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of
dues to its banks. The Company did not have any outstanding dues to any financial institutions or debentures holders during
the year.
(xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and
other securities.
(xiii) In our opinion and according to the information and explanations given to us, the Company is not a chit fund / nidhi / mutual
benefit fund / society.
Annual Report 2011-12
120
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Standalone Financial Statements
(xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities,
debentures and other investments.
(xv) In our opinion and according to the information and explanations given to us, the terms and conditions on which the Company
has given guarantees for loans taken by others from banks or financial institutions are not prejudicial to the interest of the
Company.
(xvi) In our opinion and according to the information and explanations given to us, the term loans taken by the Company have
been applied for the purposes for which they were raised.
(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company,
we are of the opinion that the funds raised on short-term basis have not been used for long-term investment.
(xviii) The Company has not made any preferential allotment of shares to companies/firms/parties covered in the register maintained
under Section 301 of the Act.
(xix) The Company did not have any outstanding debentures during the year.
(xx) The Company has not raised any money by public issues during the year.
(xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported
during the course of our audit.
for B S R & Co.
Chartered Accountants
Firm Registration No: 101248W
Natrajh Ramakrishna
Partner
Membership No. 032815
Bangalore
April 25, 2012
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Wipro Limited
121
Standalone Financial Statements
BALANCE SHEET
(` in millions, except share and per share data, unless otherwise stated)
Notes
As of March 31,
2012
2011
EQUITY AND LIABILITIES
Shareholders’ funds
Share capital
Reserves and surplus
Share application money pending allotment (1)
Non-current liabilities
Long term borrowings
Deferred tax liabilities
Other long term liabilities
Long term Provisions
Current Liabilities
Short term borrowings
Trade payables
Other current liabilities
Short term provisions
TOTAL EQUITY AND LIABILITIES
ASSETS
Non-current assets
Fixed assets
Tangible assets
Intangible assets and goodwill
Capital work-in-progress
Non-current investments
Deferred tax assets
Long term loans and advances
Other non-current assets
Current assets
Current investments
Inventories
Trade receivables
Cash and bank balances
Short term loans and advances
Other current assets
3
4
5
6
47(ii)
7
8
9
10
11
12
13
14
15
47(ii)
16
17
18
19
20
21
22
23
2
4,917
238,608
243,525
–
22,022
58
355
2,593
25,028
30,410
38,922
20,507
27,567
117,406
385,959
41,961
4,537
3,012
62,943
326
9,404
9,194
131,377
40,409
7,851
79,670
62,328
33,211
31,113
254,582
385,959
4,908
208,294
213,202
–
19,354
–
2,659
2,737
24,750
27,754
36,099
12,454
26,939
103,246
341,198
41,045
1,325
3,964
60,184
108
9,627
7,823
124,076
47,950
7,249
57,813
52,033
24,835
27,242
217,122
341,198
TOTAL ASSETS
Significant Accounting Policies
(1) value is less than one million rupees.
The notes referred to above form an integral part of the balance sheet
As per our report attached
For and on behalf of the Board of Directors
for B S R & Co.
Chartered Accountants
Firm Registration No: 101248W
Natrajh Ramakrishna
Partner
Membership No. 032815
Bangalore
April 25, 2012
Annual Report 2011-12
122
Azim Premji
Chairman
B. C. Prabhakar
Director
Suresh C. Senapaty
Chief Financial Officer
& Director
T. K. Kurien
CEO, IT Business
& Executive Director
V. Ramachandran
Company Secretary
03 Standalone_2012 new.indd 122
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STATEMENT OF PROFIT AND LOSS
(` in millions, except share and per share data, unless otherwise stated)
Standalone Financial Statements
Notes
For the year ended March 31,
2012
2011
REVENUE
Revenue from operations (gross)
Less: Excise duty
Revenue from operations (net)
Other Income
Total Revenue
EXPENSES
Cost of materials consumed
Purchases of stock-in-trade [Refer note 27]
Changes in inventories of finished goods, work in progress and stock-in-trade
Employee benefits expense
Finance Costs
Depreciation expense
Amortisation expense
Other expenses
Total Expenses
Profit before tax
Tax expense
Current tax [Refer note 47(i)]
Deferred tax
Net Profit
Earnings per equity share [Refer note 41]
(Equity shares of par value ` 2 each)
Basic
Diluted
Significant Accounting Policies
24
25
26
27
28
29
13
14
30
2
318,034
1,205
316,829
12,274
329,103
14,475
32,086
449
264,012
1,007
263,005
6,807
269,812
10,857
26,972
(316)
133,115
109,374
6,057
7,395
66
76,274
269,917
59,186
12,495
(160)
12,335
46,851
1,360
5,934
67
58,509
212,757
57,055
8,378
240
8,618
48,437
19.13
19.09
19.88
19.78
The notes referred to above form an integral part of the statement of profit and loss
As per our report attached
For and on behalf of the Board of Directors
for B S R & Co.
Chartered Accountants
Firm Registration No: 101248W
Natrajh Ramakrishna
Partner
Membershi
Azim Premji
Chairman
B. C. Prabhakar
Director
Suresh C. Senapaty
Chief Financial Officer
& Director
T. K. Kurien
CEO, IT Business
& Executive Director
V. Ramachandran
Company Secretary
Wipro Limited
123
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Standalone Financial Statements
CASH FLOW STATEMENT
(` in millions)
Year ended March 31,
A. Cash flows from operating activities:
Profit before tax
Adjustments:
Depreciation and amortisation
Amortisation of share based compensation
Provision for diminution in the value of non-current investments
Exchange differences, net
Impact of cash flow hedges
Interest on borrowings
Dividend / interest income
Profit on sale of investments
Gain on sale of fixed assets
Working capital changes:
Trade receivables and unbilled revenue
Loans and advances and other assets
Inventories
Liabilities and provisions
Net cash generated from operations
Direct taxes paid, net
Net cash generated by operating activities
B. Cash flows from investing activities:
Acquisition of fixed assets including capital advances
Proceeds from sale of fixed assets
Purchase of investments
Proceeds from sale / maturity of investments
Investment in inter-corporate deposits
Refund of inter-corporate deposits
Payment for acquisition
Investment in subsidiaries
Dividend / interest income received
Net cash used in investing activities
C. Cash flows from financing activities:
Proceeds from exercise of employee stock options
Share application money pending allotment
Interest paid on borrowings
Dividends paid including distribution tax
Proceeds from borrowings / loans
Repayment of borrowings / loans
Net cash used in financing activities
Net increase / (decrease) in cash and cash equivalents during the year
Cash acquired upon merger
Cash and cash equivalents at the beginning of the year
Effect of exchange rate changes on cash balance
Cash and cash equivalents at the end of the year [Refer note 21]
As per our report attached
For and on behalf of the Board of Directors
2012
59,186
7,461
878
1,767
2,972
1,095
799
(8,386)
(181)
(108)
(22,471)
(2,730)
(602)
4,806
44,486
(14,507)
29,979
(7,701)
420
(332,889)
340,611
(13,480)
10,380
(4,044)
(4,526)
7,831
(3,398)
9
–
(744)
(17,130)
69,298
(68,671)
(17,238)
9,343
–
52,033
952
62,328
2011
57,055
6,001
1,310
–
804
4,251
586
(6,234)
(171)
(130)
(14,675)
(6,540)
(1,133)
4,029
45,153
(8,041)
37,112
(8,689)
431
(468,165)
451,328
(14,290)
20,100
–
(1,577)
6,122
(14,740)
36
(18)
(615)
(15,585)
71,371
(82,522)
(27,333)
(4,961)
28
56,643
323
52,033
for B S R & Co.
Chartered Accountants
Firm Registration No: 101248W
Natrajh Ramakrishna
Partner
Membership No. 032815
Bangalore
April 25, 2012
Annual Report 2011-12
124
Azim Premji
Chairman
B. C. Prabhakar
Director
Suresh C. Senapaty
Chief Financial Officer
& Director
T. K. Kurien
CEO, IT Business
& Executive Director
V. Ramachandran
Company Secretary
03 Standalone_2012 new.indd 124
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NOTES TO THE FINANCIAL STATEMENTS
(` in millions, except share and per share data, unless otherwise stated)
1. Company overview
Standalone Financial Statements
Wipro Limited (Wipro or the Company), is a leading India
based provider of IT Services, including Business Process
Outsourcing (BPO) services, globally. Further, Wipro has
other businesses such as IT Products, Consumer Care
and Lighting and Infrastructure engineering. Wipro is
headquartered in Bangalore, India.
2.
Significant Accounting Policies
i.
Basis of preparation of financial statements
The financial statements are prepared in accordance with
Indian Generally Accepted Accounting Principles (GAAP)
under the historical cost convention on the accrual basis,
except for certain financial instruments which are measured
on a fair value basis. GAAP comprises Accounting Standards
specified in the Companies (Accounting Standards) Rules,
2006 (as amended), Accounting Standards issued by the
Institute of Chartered Accountants of India (ICAI) and other
generally accepted accounting principles in India.
of each balance sheet date is disclosed under long term
loans and advances.
v.
Investments
Long term investments are stated at cost less other than
temporary decline in the value of such investments, if
any. Current investments are valued at lower of cost and
fair value determined by category of investment. The fair
value is determined using quoted market price/market
observable information adjusted for cost of disposal. On
disposal of the investment, the difference between its
carrying amount and net disposal proceeds is charged or
credited to the statement of profit and loss.
vi.
Inventories
Inventories are valued at lower of cost and net realizable
value, including necessary provision for obsolescence. Cost
is determined using the weighted average method. Cost of
work-in-progress and finished goods include material cost
and appropriate share of manufacturing overheads.
ii.
Use of estimates
vii. Provisions and contingent liabilities
The preparation of financial statements in accordance
with the generally accepted accounting principles
requires management to make judgments, estimates and
assumptions that affect the application of accounting
policies and the reported amounts of assets and liabilities,
income, expenses and the disclosure of contingent
liabilities at the end of the reporting period. Estimates and
underlying assumptions are reviewed on an ongoing basis.
Revision to accounting estimate is recognised in the period
in which the estimates are revised and in any future period
affected.
iii. Goodwill
The goodwill arising on acquisition of a group of assets is
not amortized and is tested for impairment if indicators of
impairment exist.
iv.
Tangible assets, intangible assets and Capital work-
in-progress
Fixed assets are stated at historical cost less accumulated
depreciation. Costs include expenditure directly
attributable to the acquisition of the asset. Borrowing costs
directly attributable to the construction or production of
qualifying assets are capitalized as part of the cost.
Intangible assets are stated at the consideration paid for
acquisition less accumulated amortization.
Cost of fixed assets not ready for use before the balance
sheet date is disclosed capital work-in-progress. Advances
paid towards the acquisition of fixed assets outstanding as
Provisions are recognised when the Company has a
present obligation as a result of past event, it is probable
that an outflow of resources will be required to settle the
obligation, and a reliable estimate can be made of the
amount of obligation.
A disclosure for a contingent liability is made when there is
a possible obligation or a present obligation that may, but
probably will not, require an outflow of resources. Where
there is a possible obligation or a present obligation in
respect of which the likelihood of outflow of resources is
remote, no provision or disclosure is made.
The Company recognizes provision for onerous contracts
based on the estimate of excess of unavoidable costs of
meeting obligations under the contracts over the expected
economic benefits.
viii. Revenue recognition
Services:
The Company recognizes revenue when the significant
terms of the arrangement are enforceable, services have
been delivered and the collectability is reasonably assured.
The method of recognizing the revenues and costs
depends on the nature of the services rendered:
A. Time and material contracts
Revenues and costs relating to time and material
contracts are recognized as the related services are
rendered.
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Wipro Limited
125
Standalone Financial Statements
B. Fixed-price contracts
Revenues from fixed-price contracts, including systems
development and integration contracts are recognized
using the “percentage-of-completion” method.
Percentage of completion is determined based on
project costs incurred to date as a percentage of total
estimated project costs required to complete the
project. When total cost estimates exceed revenues in
an arrangement, the estimated losses are recognized in
the statement of profit and loss in the period in which
such losses become probable based on the current
contract estimates.
‘Unbilled revenues’ included in other current assets
represent cost and earnings in excess of billings as of
the balance sheet date. ‘Unearned revenues’ included
in other current liabilities represent billing in excess of
revenue recognized.
C. Maintenance Contracts
Revenue from maintenance contracts is recognized
ratably over the period of the contract using the
percentage of completion method. When services
are performed through an indefinite number of
repetitive acts over a specified period of time, revenue
is recognized on a straight-line basis over the specified
period unless some other method better represents the
stage of completion.
In certain projects, a fixed quantum of service or output
units is agreed at a fixed price for a fixed term. In such
contracts, revenue is recognized with respect to the
actual output achieved till date as a percentage of total
contractual output. Any residual service unutilized by
the customer is recognized as revenue on completion
of the term.
Products:
Revenue from sale of products is recognised when the
product has been delivered, in accordance with the sales
contract. Revenue from product sales are shown as net of
excise duty, sales tax separately charged and applicable
discounts.
Other income:
Agency commission is accrued when shipment of
consignment is dispatched by the principal.
Interest is recognized using the time-proportion method,
based on rates implicit in the transaction.
Dividend income is recognized when the Company’s right
to receive dividend is established.
ix.
Leases
Leases of assets, where the Company assumes substantially
all the risks and rewards of ownership are classified as
finance leases. Finance leases are capitalized at the lower
of the fair value of the leased assets at inception and the
present value of minimum lease payments. Lease payments
are apportioned between the finance charge and the
outstanding liability. The finance charge is allocated to
periods during the lease term at a constant periodic rate
of interest on the remaining balance of the liability.
Leases where the lessor retains substantially all the risks
and rewards of ownership are classified as operating leases.
Lease rentals in respect of assets taken under operating
leases are charged to profit and loss account on a straight
line basis over the lease term.
In certain arrangements, the Company recognizes revenue
from the sale of products given under finance leases. The
Company records gross finance receivables, unearned
income and the estimated residual value of the leased
equipment on consummation of such leases. Unearned
income represents the excess of the gross finance lease
receivable plus the estimated residual value over the sales
price of the equipment. The Company recognises unearned
income as financing revenue over the lease term using the
effective interest method.
x.
Foreign currency transactions
The Company is exposed to currency fluctuations on foreign
currency transactions. Foreign currency transactions are
accounted in the books of account at the average rate for
the month.
Transaction:
The difference between the rate at which foreign currency
transactions are accounted and the rate at which they are
realized is recognized in the statement of profit and loss.
Translation:
Monetary foreign currency assets and liabilities at period-
end are restated at the closing rate. The difference arising
from the restatement is recognized in the statement of
profit and loss.
In March 2009, Ministry of Corporate affairs issued a
notification amending AS 11, ‘The effects of changes in
foreign exchange rates’. This was further amended by
notification dated December 29, 2011. Before the said
amendment, AS 11 required the exchange gains / losses
on long term foreign currency monetary assets / liabilities
to be recorded in the statement of profit and loss.
The amended AS 11 provides an irrevocable option to the
Company to amortise exchange rate fluctuation on long
term foreign currency monetary asset / liability over the
life of the asset / liability or March 31, 2020, whichever is
earlier. The amendment is applicable retroactively from the
financial year beginning on or after December 7, 2006.
The Company did not elect to exercise this option.
Annual Report 2011-12
126
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xi.
Financial Instruments
Financial instruments are recognised when the Company
becomes a party to the contractual provisions of the
instrument.
Derivative instruments and Hedge accounting:
The Company is exposed to foreign currency fluctuations
on foreign currency assets, liabilities, net investment in a
non-integral foreign operation and forecasted cash flows
denominated in foreign currency. The Company limits the
effects of foreign exchange rate fluctuations by following
established risk management policies including the use of
derivatives. The Company enters into derivative financial
instruments, where the counterparty is a bank.
The Company has adopted the principles of Accounting
Standard 30, Financial Instruments: Recognition and
Measurement (AS 30) issued by ICAI except to the
extent the adoption of AS 30 does not conflict with
existing accounting standards prescribed by Companies
(Accounting Standards) Rules, 2006 and other authoritative
pronouncements.
In accordance with the recognition and measurement
principles set out in AS 30, changes in fair value of derivative
financial instruments designated as cash flow hedges are
recognised directly in shareholders’ funds and reclassified
into the statement of profit and loss upon the occurrence
of the hedged transaction.
Changes in the fair value of derivative financial instruments
that do not qualify for hedge accounting are recognised in
the statement of profit and loss.
The fair value of derivative financial instruments is
determined based on observable market inputs including
currency spot and forward rates, yield curves, currency
volatility etc.
Non-Derivative Financial Instruments
A financial instrument is any contract that gives rise to
a financial asset of one entity and a financial liability or
equity instrument of another entity. Financial assets of the
Company mainly include cash and bank balances, trade
receivables, unbilled revenues, finance lease receivables,
employee travel and other advances, other loans and
advances and derivative financial instruments with a
positive fair value. Financial liabilities of the Company
mainly comprise long term and short term borrowings,
trade payable, accrued expenses and derivative financial
instruments with a negative fair value. Financial assets
are derecognized when all of risks and rewards of the
ownership of the financial asset have been transferred. In
cases where substantial risk and rewards of ownership of
the financial assets are neither transferred nor retained,
financial assets are derecognized only when the Company
has not retained control over the financial asset.
Standalone Financial Statements
The Company measures the financial assets and liabilities,
except for derivative financial assets and liabilities at
amortized cost using the effective interest method.
The Company measures the short-term payables and
receivables with no stated rate of interest at original invoice
amount, if the effect of discounting is immaterial. Non-
interest bearing deposits are discounted to their present
value.
xii. Depreciation and amortization
The Company has provided for depreciation using straight
line method, at the rates specified in Schedule XIV to the
Companies Act, 1956, except in cases of the following
assets, which are depreciated based on estimated useful
life, which is higher than the rates specified in Schedule
XIV.
Class of Asset
Buildings
Computer equipment and Software
(included under plant and machinery)
Furniture and fixtures
Electrical installations
(included under plant and machinery)
Office equipment
Vehicles
Estimated
useful life
30 - 60 years
2 - 7 years
5 - 6 years
5 years
5 years
4 years
Fixed assets individually costing Rupees five thousand or
less are depreciated at 100% over a period of one year.
Assets under finance lease are amortised over their
estimated useful life or the lease term, whichever is lower.
Intangible assets are amortized over their estimated useful
life on a straight line basis. For various brands acquired by
the Company, estimated useful life has been determined
ranging between 20 to 25 years. The Company believes
this based on number of factors including the competitive
environment, market share, brand history, product life
cycles, operating plan, no restrictions on title and the
macroeconomic environment of the countries in which
the brands operate. Accordingly, such intangible assets are
being amortised over the determined useful life. Payments
for leasehold land are amortised over the period of lease.
xiii.
Impairment of assets
Financial assets:
The Company assesses at each balance sheet date whether
there is any objective evidence that a financial asset or
group of financial assets is impaired. If any such indication
exists, the Company estimates the amount of impairment
loss. The amount of loss for short-term receivables is
measured as the difference between the assets carrying
amount and undiscounted amount of future cash flows.
Reduction, if any, is recognised in the statement of profit
and loss. If at the balance sheet date there is any indication
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Wipro Limited
127
Standalone Financial Statements
that if a previously assessed impairment loss no longer
exists, the recognised impairment loss is reversed, subject
to maximum of initial carrying amount of the short-term
receivable.
Other than financial assets:
The Company assesses at each balance sheet date whether
there is any indication that a non-financial asset including
goodwill may be impaired. If any such indication exists, the
Company estimates the recoverable amount of the asset.
If such recoverable amount of the asset or the recoverable
amount of the cash generating unit to which the asset
belongs to is less than its carrying amount, the carrying
amount is reduced to its recoverable amount. The reduction
is treated as an impairment loss and is recognised in the
statement of profit and loss. If at the balance sheet date
there is an indication that a previously assessed impairment
loss no longer exists, the recoverable amount is reassessed
and the asset is reflected at the recoverable amount subject
to a maximum of depreciated historical cost. In respect of
goodwill, the impairment loss will be reversed only when
it was caused by specific external events of an exceptional
nature that is not expected to recur and their effects have
been reversed by subsequent external events.
xiv. Employee benefits
Provident fund:
Employees receive benefits from a provident fund. The
employee and employer each make monthly contributions
to the plan. A portion of the contribution is made to the
provident fund trust managed by the Company, while the
remainder of the contribution is made to the Government’s
provident fund. The Company is generally liable for any
shortfall in the fund assets based on the government
specified minimum rate of return.
Compensated absences:
The employees of the Company are entitled to compensated
absence. The employees can carry-forward a portion of
the unutilized accumulating compensated absence and
utilize it in future periods or receive cash compensation at
retirement or termination of employment. The Company
records an obligation for compensated absences in the
period in which the employee renders the services that
increases this entitlement. The Company measures the
expected cost of compensated absence as the additional
amount that the Company expects to pay as a result of
the unused entitlement that has accumulated at the
balance sheet date. The Company recognizes accumulated
compensated absences based on actuarial valuation. Non-
accumulating compensated absences are recognized in
the period in which the absences occur. The Company
recognizes actuarial gains losses immediately in the
statement of profit and loss.
Gratuity:
In accordance with the Payment of Gratuity Act, 1972, the
Company provides for a lump sum payment to eligible
employees, at retirement or termination of employment
based on the last drawn salary and years of employment
with the Company. The gratuity fund is managed by the
Life Insurance Corporation of India (LIC), HDFC Standard
Life, TATA AIG and Birla Sun-life. The Company’s obligation
in respect of the gratuity plan, which is a defined benefit
plan, is provided for based on actuarial valuation carried
out by an independent actuary using the projected unit
credit method. The Company recognizes actuarial gains
and losses immediately in the statement of profit and loss.
Superannuation:
Superannuation plan, a defined contribution scheme, is
administered by the LIC and ICICI Prudential Insurance
Company Limited. The Company makes annual
contributions based on a specified percentage of each
covered employee’s salary.
xv. Employee stock options
The Company determines the compensation cost based
on the intrinsic value method. The compensation cost is
amortised on a straight line basis over the vesting period.
xvi. Taxes
Income tax:
The current charge for income taxes is calculated in
accordance with the relevant tax regulations. Tax liability
for domestic taxes has been computed after considering
Minimum Alternate Tax (MAT). The excess tax paid under
MAT provisions being over and above regular tax liability can
be carried forward and set off against future tax liabilities
computed under regular tax provisions. Accordingly, MAT
credit has been recognized, wherever applicable on the
balance sheet which can be carried forward for a period
of ten years from the year of recognition.
Deferred tax:
Deferred tax assets and liabilities are recognised for the
future tax consequences attributable to timing differences
that result between the profit offered for income taxes and
the profit as per the financial statements of the Company.
Deferred taxes are recognised in respect of timing differences
which originate during the tax holiday period but reverse after
the tax holiday period. For this purpose, reversal of timing
difference is determined using first in first out method.
Deferred tax assets and liabilities are measured using
the tax rates and tax laws that have been enacted or
substantively enacted by the balance sheet date. The effect
on deferred tax assets and liabilities of a change in tax rates
is recognised in the period that includes the enactment/
substantive enactment date.
Annual Report 2011-12
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Deferred tax assets on timing differences are recognised
only if there is a reasonable certainty that sufficient future
taxable income will be available against which such
deferred tax assets can be realized. However, deferred
tax assets on the timing differences when unabsorbed
depreciation and losses carried forward exist, are
recognised only to the extent that there is virtual certainty
that sufficient future taxable income will be available
against which such deferred tax assets can be realized.
Deferred tax assets are reassessed for the appropriateness
of their respective carrying amounts at each balance sheet
date.
The Company offsets, on a year on year basis, the current
and non-current tax assets and liabilities, where it has a
legally enforceable right and where it intends to settle such
assets and liabilities on a net basis.
xvii. Earnings per share
Basic:
The number of equity shares used in computing basic
earnings per share is the weighted average number of
Standalone Financial Statements
shares outstanding during the year excluding equity shares
held by controlled trusts.
Diluted:
The number of equity shares used in computing diluted
earnings per share comprises the weighted average
number of equity shares considered for deriving basic
earnings per share, and also the weighted average number
of equity shares that could have been issued on the
conversion of all dilutive potential equity shares.
Dilutive potential equity shares are deemed converted as of
the beginning of the period, unless issued at a later date. The
number of equity shares and potentially dilutive equity shares
are adjusted for any stock splits and bonus shares issued.
xviii. Cash flow statement
Cash flows are reported using the indirect method,
whereby net profits before tax is adjusted for the effects
of transactions of a non-cash nature and any deferrals or
accruals of past or future cash receipts or payments. The
cash flows from regular revenue generating, investing and
financing activities of the Company are segregated.
3.
Share Capital
Authorised Capital
2,650,000,000 (2011: 2,650,000,000) equity shares [Par value of ` 2 per share]
25,000,000 (2011: 25,000,000) 10.25% redeemable cumulative preference shares
[Par value of ` 10 per share]
Issued, subscribed and fully paid-up capital
2,458,756,228 (2011: 2,454,409,145) equity shares of ` 2 each [Refer note (i) below]
As of March 31,
2012
5,300
250
5,550
4,917
4,917
2011
5,300
250
5,550
4,908
4,908
Terms / Rights attached to equity shares
The Company has only one class of equity shares having a par value of ` 2 per share. Each holder of equity shares is entitled to
one vote per share. The Company declares and pays dividend in Indian Rupees. The dividend proposed by the Board of Directors
is subject to shareholders approval in the ensuing Annual General Meeting.
Following is the summary of per share dividends recognised as distributions to equity shares:
Interim dividend
Final dividend
For the Year ended March 31,
2012
` 2
` 4
2011
` 2
` 4
In the event of liquidation of the Company, the equity shareholders will be entitled to receive the remaining assets of the Company,
after distribution of all preferential amounts, if any, in proportion to the number of equity shares held by the shareholders.
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Wipro Limited
129
Standalone Financial Statements
(i) Reconciliation of number of shares
Opening number of equity shares / American Depository Receipts
(ADRs) outstanding
Equity shares / ADRs fully allotted as fully paid bonus shares /
ADRs by capitalization of Securities Premium account and Capital
redemption reserve
Equity shares issued pursuant to Employee Stock Option Plan
Closing number of equity shares / ADRs outstanding
As of March 31, 2012
As of March 31, 2011
No. of Shares
` million
No. of shares
` million
2,454,409,145
4,908
1,468,211,189
2,936
–
4,347,083
2,458,756,228
–
9
4,917
979,765,124
6,432,832
2,454,409,145
1,960
12
4,908
(ii) Details of shareholders having more than 5% of the total equity shares of the Company
Sl.
No.
1
2
3
4
Name of the Shareholder
Mr. Azim Hasham Premji Partner representing Hasham Traders
Mr. Azim Hasham Premji Partner representing Prazim Traders
Mr. Azim Hasham Premji Partner representing Zash Traders
Azim Premji Trust
As of March 31, 2012
As of March 31, 2011
No. of shares
543,765,000
541,695,000
540,408,000
195,187,120
% held
22.12
22.03
21.98
7.94
No. of shares
543,765,000
541,695,000
540,408,000
213,000,000
% held
22.15
22.07
22.01
8.68
(iii) Other details of Equity Shares for a period of five years immediately preceding March 31, 2012
Aggregate number of share allotted as fully paid up pursuant to contract(s) without
payment being received in cash
(Allotted to the Wipro Inc Trust, the sole beneficiary of which is Wipro Inc., a wholly
owned subsidiary of the Company, in consideration of acquisition of inter-company
investments)
Aggregate number of shares allotted as fully paid bonus shares
Aggregate number of shares bought back
(iv) Shares reserved for issue under option
As of March 31,
2012
2011
1,614,671
1,614,671
979,119,256
–
979,119,256
–
For details of shares reserved for issue under the employee stock option plan of the Company, refer note 39.
Annual Report 2011-12
130
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4.
Reserves and Surplus:
Capital Reserve
Balance brought forward from previous year
Additions during the year
Securities premium account
Balance brought forward from previous year
Add: Exercise of stock options by employees
Less : Amount utilised for bonus shares
Restricted stock units reserve [Refer note 39] *
Employee stock options outstanding
Less: Deferred employee compensation expense
General reserve
Balance brought forward from previous year
Amount transferred from surplus balance in the statement of profit and loss
[Refer note (a) below]
Foreign exchange translation reserve
Balance brought forward from previous year
On account of foreign branch operations
Hedging reserve [Refer note 34 & 2(xi)]
Balance brought forward from previous year
Net loss reclassified into statement of profit and loss
Deferred cancellation gain / (loss) relating to roll-over hedging
Changes in fair value of effective portion of derivatives
Gain / (loss) on cash flow hedging derivatives, net
Surplus from statement of profit and loss
Balance brought forward from previous year
Profit for the year
Less: Appropriations
– Interim dividend
– Proposed dividend
– Tax on dividend
– Amount transferred to general reserve
Closing balance
Standalone Financial Statements
As of March 31,
2012
1,144
–
1,144
30,123
332
–
30,455
2,819
(1,913)
906
2011
1,144
–
1,144
29,188
2,895
(1,960)
30,123
3,791
(3,507)
284
151,755
147,012
4,626
156,381
4,743
151,755
–
85
85
(1,675)
1,272
(12)
(1,632)
(372)
(2,047)
26,663
46,851
4,917
9,835
2,393
4,685
51,684
238,608
–
–
–
(5,099)
4,041
222
(839)
3,424
(1,675)
–
48,437
4,908
9,818
2,204
4,844
26,663
208,294
* Restricted stock units reserve includes Deferred Employee Compensation, which represents future charge to the statement of
profit and loss and employee stock options outstanding to be treated as securities premium at the time of allotment of shares.
(a) Additions to General Reserve include:
Transfer from statement of profit and loss
(Additional dividend paid) / Excess provision reversed for the previous year
Adjustment on account of merger
Others
For the year ended March 31,
2012
4,685
(6)
–
(53)
4,626
2011
4,844
19
(74)
(46)
4,743
Wipro Limited
131
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Standalone Financial Statements
5.
Share application money pending allotment
(a) Number of shares proposed to be issued for share application money pending allotment outstanding as of March 31,
2012 and 2011 is 150,824 and 211,605 respectively representing the shares to be issued under employee stock option
plan formulated by the Company.
(b) Securities premium on account of shares pending allotment amounts to ` 39 and ` 55 as of March 31, 2012 and 2011,
respectively. The shares pending allotment as of the year-end is expected to be allotted upon the completion of the
vesting period based on the grant to which it pertains to.
(c) The Company has sufficient authorized equity share capital to cover the share capital on allotment of shares pending
allotment as of March 31, 2012 and 2011.
(d) There are no interest accrued and due on amount due for refund as of March 31, 2012 and 2011.
(e) No shares are pending for allotment beyond the period for allotment as of March 31, 2012 and 2011.
6.
Long term borrowings
Secured:
Obligation under finance lease (a)
Unsecured:
Term loan:
External commercial borrowing (b)
Interest free loan from State Government (c)
Others (d)
As of March 31,
2012
2011
10
10
21,728
37
247
22,012
22,022
96
96
18,861
37
360
19,258
19,354
(a) Obligation under finance lease is secured by underlying fixed assets. These obligations are repayable in monthly installments
within the year ending March 31, 2014. These obligations carry an interest rate of 15.6%.
(b) The Company entered into an arrangement with a consortium of banks to obtain External Commercial Borrowings (ECB) during the
year ended March 31, 2008. Pursuant to this arrangement, the Company has availed ECB of approximately 35 billion Yen repayable
in full in April 2013. The ECB carries an average interest rate of 1.86% p.a. The ECB is an unsecured borrowing and the Company is
subject to certain customary restrictions on additional borrowings and quantum of payments for acquisitions in a financial year.
(c) Interest free loan from State Government is repayable in five equal annual installments of ` 7 starting from financial year 2013-14.
(d) Unsecured loans from others are repayable in monthly installments within the year ending March 31, 2015. The interest rate for
these loans ranges from 6.03% to 7.21%.
As of March 31, 2012 and 2011, the Company has complied with the covenants under the loan arrangements.
7. Other long term liabilities
Others
Derivative liabilities
Deposits and other advances received
Annual Report 2011-12
132
As of March 31,
2012
307
48
355
2011
2,586
73
2,659
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8.
Long term provisions
Employee benefit obligations
Warranty provision [Refer note 40]
9.
Short term borrowings
Unsecured
Loan repayable on demand from banks
Standalone Financial Statements
As of March 31,
2012
2,579
14
2,593
2011
2,701
36
2,737
As of March 31,
2012
2011
30,410
30,410
27,754
27,754
The interest rate for these loans ranges from 1.0% to 2.0% other than PCFC loan disbursed in Indian Rupees, interest rate for which
is 9.50%.
10. Trade payables
Trade payables – Due to micro and small enterprises [Refer note 42]
Trade payables – Due to other than micro and small enterprises
Accrued expenses
11. Other current liabilities
Current maturities of long term borrowings
Current maturities of obligation under finance lease
Unearned revenue
Statutory liabilities
Derivative liabilities
Advances from customers
Unclaimed dividends
Interest accrued but not due on borrowings
12. Short term provisions
Employee benefit obligations
Provision for tax
Proposed dividend
Tax on proposed dividend
Warranty provision [Refer note 40]
Others [Refer note 40]
As of March 31,
2012
1
26,260
12,661
38,922
As of March 31,
2012
371
66
8,685
3,776
6,780
739
22
68
20,507
As of March 31,
2012
3,176
11,870
9,835
1,595
276
815
27,567
2011
1
19,031
17,067
36,099
2011
266
67
6,188
3,288
1,814
798
20
13
12,454
2011
1,620
11,634
9,818
1,593
416
1,858
26,939
Wipro Limited
133
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Standalone Financial Statements
13. Tangible assets
Gross carrying value
As of April 1, 2010
Additions (b, d)
Disposals / adjustments
As of March 31, 2011 (c)
As of April 1, 2011
Additions due to acquisition
Additions (d)
Disposals / adjustments
As of March 31, 2012 (c)
Depreciation
As of April 1, 2010
Charge for the year
Deductions / other adjustments (c)
As of March 31, 2011
As of April 1, 2011
Charge for the year
Deductions / other adjustments
As of March 31, 2012
Net Block
As of March 31, 2011
As of March 31, 2012
Land (a)
Buildings
Plant and
machinery
Furniture
and fixtures
Office
equipment
Vehicles
Total
16,074
3,910
3,275
910
(44)
–
4,820
19,305
4,820 19,305
–
–
680
328
–
(7)
5,148 19,978
97
7
–
104
104
18
(59)
63
908
323
(36)
1,195
1,195
476
–
1,671
34,455
6,604
(955)
40,104
40,104
10
6,113
(640)
45,587
23,277
4,138
(870)
26,545
26,545
4,825
(446)
30,924
6,729
968
(437)
7,260
7,260
–
1,048
(346)
7,962
3,669
804
(342)
4,131
4,131
1,329
(267)
5,193
2,072
284
(53)
2,303
2,303
–
420
(39)
2,684
2,700
26
(437)
2,289
2,289
–
21
(590)
1,720
1,721
1,057
421
241
(44)
(335)
1,254 1,807
1,254 1,807
250
497
(26)
(515)
1,725 1,542
65,940
12,067
(1,926)
76,081
76,081
10
8,610
(1,622)
83,079
30,729
5,934
(1,627)
35,036
35,036
7,395
(1,313)
41,118
4,716
18,110
5,085 18,307
13,559
14,663
3,129
2,769
1,049 482
959 178
41,045
41,961
(a) Includes gross block of ` 1,270 (2011: ` 1,270) and accumulated amortisation of ` 63 (2011: ` 104) being leasehold land.
(b) Include gross block of ` 37 and accumulated depreciation of ` 17 on account of merger.
(c) Includes Plant and machinery of ` 25 (2011: ` 25) and Furniture & fixtures of ` 5 (2011: ` 5) for research and development assets.
(d) Interest capitalised aggregated to ` 43 and ` 137 for the year ended March 31, 2012 and 2011 respectively.
Annual Report 2011-12
134
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14.
Intangible assets and goodwill
Gross carrying value
As of April 1, 2010
Additions
Disposals / adjustments
As of March 31, 2011
As of April 1, 2011
Additions due to acquisition
Additions
Disposals / adjustments
As of March 31, 2012
Amortisation
As of April 1, 2010
Charge for the year
Deductions / other adjustments
As of March 31, 2011
As of April 1, 2011
Charge for the year
Deductions / other adjustments
As of March 31, 2012
Net Block
As of March 31, 2011
As of March 31, 2012
Standalone Financial Statements
Goodwill
447
–
–
447
447
3,219
–
–
3,666
–
–
–
–
–
–
–
–
Technical
Know-how
Brands, patents,
trademarks and
rights
55
35
(3)
87
87
–
38
–
125
46
3
(1)
48
48
6
3
57
1,171
7
–
1,178
1,178
–
30
–
1,208
275
64
–
339
339
60
6
405
Total
1,673
42
(3)
1,712
1,712
3,219
68
–
4,999
321
67
(1)
387
387
66
9
462
447
3,666
39
68
839
803
1,325
4,537
15. Non-current investments
(Valued at cost unless stated otherwise)
Trade
Investments in unquoted equity instruments
– Subsidiaries [Refer note 43(i)]
Investments in unquoted preference shares
– Subsidiary (a) [Refer note 43(ii)]
Non-trade
Investment in unquoted equity instruments (Associate)
– Wipro GE Healthcare Private Limited (b) [Refer note 43 (iii)]
Less: Provision for diminution in value of non-current investments
As of March 31,
2012
2011
64,591
60,065
–
–
227
64,818
1,875
62,943
227
60,292
108
60,184
(a) value of investments is less than one million rupees.
(b) Investments in this company carry certain restrictions on transfer of shares as provided for in the shareholders’ agreements.
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Wipro Limited
135
Standalone Financial Statements
16. Long term loans and advances
(Unsecured, considered good unless otherwise stated)
Inter corporate deposit to Subsidiary *
Loans to subsidiary companies *
Capital advances
Prepaid expenses
Security deposits
Other deposits
Other advances
* Refer note 45 for loans given to subsidiaries.
17. Other non-current assets
Secured, considered good:
Finance lease receivables
Unsecured, considered good:
Derivative assets
Others
Finance lease receivables are secured by the underlying assets given on lease.
18. Current investments
Quoted
Investments in Indian money market mutual funds * [Refer note 44(i)]
Investments in debentures [Refer note 44 (ii)]
Unquoted
Certificate of deposit/bonds
Investments in equity instruments [Refer note 44(iii)]
Aggregate market value of quoted investments
As of March 31,
2012
273
4,074
1,889
1,489
1,178
501
–
9,404
As of March 31,
2012
5,710
5,710
3,458
26
3,484
9,194
As of March 31,
2012
19,842
129
19,971
20,369
69
20,438
40,409
19,996
2011
273
3,585
2,067
2,163
1,256
271
12
9,627
2011
4,839
4,839
2,984
–
2,984
7,823
2011
23,877
722
24,599
23,282
69
23,351
47,950
24,645
* includes investments in mutual funds amounting to ` 400 (2011: Nil) pledged as margin money deposit for entering into currency
future contracts.
19.
Inventories
Raw materials
Stock in process
Finished goods
Traded goods
Stores and spares
Annual Report 2011-12
136
As of March 31,
2012
3,113
927
866
1,675
1,270
7,851
2011
2,206
833
523
2,561
1,126
7,249
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20. Trade Receivables
Unsecured:
Over six months from the date they were due for payment
Considered good
Considered doubtful
Less: Provision for doubtful receivables
Other receivables
Considered good
Considered doubtful
Less: Provision for doubtful receivables
21. Cash and bank balances
Cash and cash equivalents
Balances with Banks
– In current accounts
– Unclaimed dividend
– In deposit accounts
Cheques, drafts on hand
Cash in hand
Deposit accounts with more than 3 months but less than 12 months maturity
Deposit accounts with more than 12 months maturity
Standalone Financial Statements
As of March 31,
2012
2011
5,192
2,203
7,395
(2,203)
5,192
74,478
170
74,648
(170)
74,478
79,670
2,516
2,028
4,544
(2,028)
2,516
55,297
65
55,362
(65)
55,297
57,813
As of March 31,
2012
2011
32,957
22
27,971
1,377
1
62,328
21,040
800
22,353
20
28,691
967
2
52,033
18,278
–
a)
b)
Cash and cash equivalents include restricted cash balance of ` 22 and ` 20, primarily on account of unclaimed dividends, as
of March 31, 2012 and 2011, respectively.
The deposits with banks comprise time deposits, which can be withdrawn at any time without prior notice and without any
penalty on the principal.
22.
Short term loans and advances
(Unsecured, considered good unless otherwise stated)
Employee travel and other advances
Advance to suppliers
Balance with excise and customs
Prepaid expenses
Other deposits
Security deposits
Inter corporate deposits
Advance income tax
MAT credit entitlement
Others
Considered doubtful
Less: Provision for doubtful loans and advances
As of March 31,
2012
2,027
1,000
949
3,107
253
461
7,340
14,630
1,060
2,384
844
34,055
(844)
33,211
2011
1,417
630
786
1,876
278
173
4,240
13,316
126
1,993
568
25,403
(568)
24,835
Wipro Limited
137
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Standalone Financial Statements
23. Other current assets
Secured and considered good:
Finance lease receivables
Unsecured and considered good:
Derivative assets
Interest receivable
Unbilled revenues
Finance lease receivables are secured by the underlying assets given on lease.
24. Revenue from operations (gross)
Sale of products
Sale of services
(A) Details of income from sale of products
Mini computers/micro processor based systems and data
Toilet soaps
Hydraulic and pneumatic equipment
Lighting products
Others
Less: Excise duty
(B) Details of income from services rendered
Software services
IT enabled services
Others
25. Other income
Income from current investments
– Dividend on mutual fund units
– Profit on sale of investments, net
Interest on debt instruments and others
Other exchange differences, net
Miscellaneous income
As of March 31,
2012
2,003
2,003
1,879
1,467
25,764
29,110
31,113
2011
2,411
2,411
2,124
905
21,802
24,831
27,242
Year ended March 31,
2012
63,897
254,137
318,034
2011
51,668
212,344
264,012
For the year ended March 31,
2012
30,392
10,996
8,672
5,092
8,745
63,897
(1,205)
62,692
2011
28,581
8,404
6,186
2,075
6,422
51,668
(1,007)
50,661
For the year ended March 31,
2012
234,726
18,969
442
254,137
2011
194,139
18,021
184
212,344
Year ended March 31,
2012
2,090
181
6,296
3,451
256
12,274
2011
2,288
171
3,946
13
389
6,807
Annual Report 2011-12
138
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26. Cost of materials consumed
Opening stock
Add: Purchases
Less: Closing stock
Details of raw materials consumed
Peripherals / Components for computers
Oil and fats
Others
27. Changes in inventories of finished goods, work in progress and Stock-in-trade
Opening stock
In Process
Traded goods
Finished products
Less: Closing stock
In Process
Traded goods
Finished products
(Increase) / Decrease
Details of purchase of traded goods
Computer units / printers / software products
Others
28. Employee benefits expense
Salaries and wages
Contribution to provident and other funds
Share based compensation
Staff welfare expenses
29. Finance costs
Interest
Exchange fluctuations on foreign currency borrowings, net
Standalone Financial Statements
Year ended March 31,
2012
2,206
15,382
(3,113)
14,475
Year ended March 31,
2012
2,079
3,831
8,565
14,475
2011
1,467
11,596
(2,206)
10,857
2011
1,287
2,903
6,667
10,857
Year ended March 31,
2012
833
2,561
523
3,917
927
1,675
866
3,468
449
Year ended March 31,
2012
23,132
8,954
32,086
2011
543
2,416
642
3,601
833
2,561
523
3,917
(316)
2011
22,241
4,731
26,972
Year ended March 31,
2012
126,605
2,553
878
3,079
133,115
2011
102,923
2,472
1,310
2,669
109,374
Year ended March 31,
2012
799
5,258
6,057
2011
586
774
1,360
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Wipro Limited
139
Standalone Financial Statements
30. Other expenses
Subcontracting / technical fees / third party application
Travel
Provision for diminution in the value of non-current investments
Repairs to building
Repairs to machinery
Power and fuel
Rent
Communication
Advertisement and sales promotion
Legal and professional
Staff recruitment
Carriage and freight
Stores and spares
Insurance
Rates and taxes
Auditors’ remuneration
As auditor
For certification including tax audit
Reimbursement of expenses
Miscellaneous expenses
Year ended March 31,
2012
32,918
10,947
1,767
253
4,311
2,334
2,154
2,408
3,231
1,310
1,271
1,473
288
524
638
43
2
1
10,401
76,274
2011
26,151
8,564
–
188
1,336
2,005
1,848
2,159
2,479
1,282
1,513
1,202
227
449
378
37
2
1
8,688
58,509
31. Capital commitments
The estimated amount of contracts remaining to be
executed on Capital account and not provided for, net of
advances is ` 1,248 (2011: ` 1,682).
32. Contingent Liabilities
Contingent liabilities in respect of:
a) Disputed demands for excise
duty, customs duty, income tax,
sales tax and other matters
b) Performance and financial
guarantees given by banks on
behalf of the Company
c) Guarantees given by the
Company on behalf of subsidiaries
As of March 31,
2012
2011
2,374
1,472
18,986
9,706
5,597
3,919
The Company’s Indian operations have been established as
units in Special Economic Zone and Software Technology
Park Unit under plans formulated by the Government of
India. As per the plan, the Company’s Indian operations
have export obligations to the extent of net positive foreign
exchange (i.e. foreign exchange inflow - foreign exchange
outflow should be positive) over a five year period. The
consequence of not meeting this commitment in the future
would be a retroactive levy of import duties on certain
hardware previously imported duty free. As of March 31,
2012, the Company has met all commitments required
under the plan.
Tax Demands:
The Company had received tax demands aggregating to
` 40,040 (including interest of ` 10,616) arising primarily
on account of denial of deduction under Section 10A of
the Income Tax Act, 1961 in respect of profit earned by
the Company’s undertaking in Software Technology Park
at Bangalore for the years ended March 31, 2001 to March
2008. The appeals filed against the said demand before
the Appellate authorities have been allowed in favor of the
Company by the second appellate authority for the years
upto March 2004 and further appeals have been filed by
the Income tax authorities before the Hon’ble High Court.
The first appellate authority has granted relief for the year
ended March 31, 2005 and further appeal has been filed by
the Income tax authorities before the Income-tax Appellate
Tribunal. The Company is in appeal before the Income-tax
Appellate Tribunal for the years ended March 31, 2006
and March 31, 2007 after receiving the assessment orders
following the directions of the Dispute Resolution Panel.
For the year ended March 31, 2008, the objections against
the draft assessment order are pending before the Dispute
Resolution Panel.
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Considering the facts and nature of disallowance and the
order of the appellate authority upholding the claims of the
Company for earlier years, the Company believes that the
final outcome of the above disputes should be in favor of
the Company and there should not be any material impact
on the financial statements.
The Company is subject to legal proceedings and claims
which have arisen in the ordinary course of its business. The
resolution of these legal proceedings is not likely to have
a material and adverse effect on the results of operations
or the financial position of the Company.
33. Adoption of AS 30
The Company has applied the principles of AS 30, as per
announcement by ICAI except to the extent such principles
of AS 30 does not conflict with existing accounting
standards prescribed by Companies (Accounting Standards)
Rules, 2006.
The Company has designated USD 262 million (2011: USD
262 million) and Euro 40 million (2011: Euro 40 million)
of forward contracts as hedges of its net investments in
non integral foreign operations. The Company has also
designated a yen-denominated foreign currency borrowing
amounting to JPY 16.5 billion (2011: JPY 16.5 billion), along
with a floating for floating Cross-Currency Interest Rate
Swap (CCIRS), as a hedging instrument to hedge its net
investment in a non-integral foreign operation. Further,
the Company has also designated yen-denominated
foreign currency borrowing amounting to JPY 8 billion
(2011: JPY 8 billion) along with floating for fixed CCIRS as
cash flow hedge of the yen-denominated borrowing and
also as a hedge of net investment in a non-integral foreign
operation. As equity investments in non-integral foreign
subsidiaries/operations are stated at historical cost, in
these standalone financial statements, the changes in fair
value of forward contracts, the yen-denominated foreign
currency borrowing and the related CCIRS amounting to
gain/ (loss) of ` (2,787) for the year ended March 31, 2012
has been recorded in the statement of profit and loss as
part of other income (2011: ` 326).
34. Derivatives
As of March 31, 2012 the Company has recognized losses
of ` 2,047 (2011: ` 1,675) relating to derivative financial
instruments (comprising foreign currency forward contract
and option contracts) that are designated as effective cash
flow hedges in the shareholders’ fund.
The following table presents the aggregate contracted
principal amounts of the Company’s derivative contracts
outstanding as of:
Standalone Financial Statements
(In Million)
As of March 31,
2012
2011
Designated derivative instruments
Sell
Buy
Non designated derivative
instruments
Cross currency swaps
Sell
Buy
$
£
¥
AUD
€
CHF
1,081 $
4 £
1,474 ¥
– AUD
17 €
– CHF
–
901
21
3,026
4
2
6
–
AUD
¥
$
AUD
£
€
$
¥
31,511 ¥
1,103 $
31
58 £
84 €
555 $
1,997 ¥
31,511
788
13
40
88
617
–
As of the balance sheet date, the Company has net foreign
currency exposures that are not hedged by a derivative
instrument or otherwise amounting to ` 21,492 (2011 : ` 27,733).
35. Sale of financial assets
From time to time, in the normal course of business, the
Company transfers accounts receivables, net investment
in finance lease receivables and employee advances
(financials assets) to banks. Under the terms of the
arrangements, the Company surrenders control over the
financial assets and is without recourse. Accordingly, such
transfers are recorded as sale of financial assets. Gains
and losses on sale of financial assets without recourse are
recorded at the time of sale based on the carrying value
of the financial assets and fair value of servicing liability.
In certain cases, transfer of financial assets may be with
recourse. Under arrangements with recourse, the Company
is obligated to repurchase the uncollected financial assets,
subject to limits specified in the agreement with the
banks. Accordingly, in such cases the amount received
are recorded as borrowings in the balance sheet and cash
flows from financing activities. Additionally, the Company
retains servicing responsibility for the transferred financial
assets.
During the year ended March 31, 2012, the Company
transferred financial assets of Nil (2011: ` 1,369), under
such arrangements. Proceeds from transfer of receivables
on non-recourse basis are included in the net cash provided
by operating activities in the statements of cash flows.
Proceeds from transfer of receivables on recourse basis are
included in the net cash provided by financing activities.
This transfer resulted in a net gain / (loss) of Nil for the year
ended March 31, 2012 (2011: ` (7)). As of March 31, 2012,
the maximum amounts of recourse obligation in respect
of the transferred financial assets are Nil (2011: Nil).
Wipro Limited
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Standalone Financial Statements
36. Finance lease receivables
Operating leases:
The Company provides lease financing for the traded and
manufactured products primarily through finance leases.
The finance lease portfolio contains only the normal
collection risk with no important uncertainties with
respect to future costs. These receivables are generally
due in monthly, quarterly or semi-annual installments over
periods ranging from 3 to 5 years.
The components of finance lease receivables are as follows:
The Company leases office and residential facilities
under cancelable and non-cancelable operating lease
agreements that are renewable on a periodic basis at the
option of both the lessor and the lessee. Rental payments
under such leases are ` 2,154 and ` 1,848 during the years
ended March 31, 2012 and 2011, respectively.
Details of contractual payments under non-cancelable
leases are given below:
Gross investment in lease
Not later than one year
Later than one year and not later
than five years
Unguaranteed residual values
Unearned finance income
Net investment in finance receivables
As of March 31,
2012
8,999
2,043
6,776
180
(1,286)
7,713
2011
8,851
2,523
6,129
199
(1,601)
7,250
Present value of minimum lease receivables are as follows:
As of March 31,
2012
2011
7,713
1,964
5,588
161
7,250
2,350
4,723
177
Present value of minimum lease
payments receivables
Not later than one year
Later than one year and not later
than five years
Unguaranteed residual value
37. Assets taken on lease
Finance leases:
The following is a schedule of present value of minimum
lease payments under finance leases, together with the
value of the future minimum lease payments as of March
31, 2012 and 2011.
Present value of minimum lease
payments
Not later than one year
Later than one year and not
later than five years
Thereafter
Total present value of minimum
lease payments
Add: Amount representing interest
Total value of minimum lease
payments
As of March 31,
2012
2011
66
10
–
76
6
82
67
96
–
163
25
188
Not later than one year
Later than one year and not later
than five years
Thereafter
38. Employee benefit plans
As of March 31,
2012
965
3,220
1,782
5,967
2011
717
2,237
1,464
4,418
Gratuity: In accordance with applicable Indian laws, the
Company provides for gratuity, a defined benefit retirement
plan (Gratuity Plan) covering certain categories of employees.
The Gratuity Plan provides a lump sum payment to vested
employees, at retirement or termination of employment,
an amount based on the respective employee’s last drawn
salary and the years of employment with the Company.
The Company provides the gratuity benefit through annual
contributions to a fund managed by the Life Insurance
Corporation of India (LIC), HDFC Standard Life, Tata AIG
and Birla Sun Life (‘Insurer’). Under this plan, the settlement
obligation remains with the Company, although the Insurer
administers the plan and determines the contribution
premium required to be paid by the Company.
Change in the benefit obligation
As of March 31,
Projected benefit obligation (PBO)
at the beginning of the year
Service cost
Interest cost
Benefits paid
Actuarial loss / (gain)
PBO at the end of the year
Change in plan assets
Fair value of plan assets at the
beginning of the year
Expected return on plan assets
Employer contributions
Benefits paid
Actuarial gain / (loss)
Fair value of plan assets at the end
of the year
Present value of unfunded obligation
Recognised liability
2012
2011
2,448
424
207
(343)
83
2,819
2,023
628
158
(229)
(132)
2,448
As of March 31,
2012
2011
2,339
180
587
(343)
52
2,815
(4)
(4)
1,932
160
463
(229)
13
2,339
(109)
(109)
Annual Report 2011-12
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The Company has invested the plan assets with the insurer
managed funds. The expected rate of return on plan asset
is based on expectation of the average long term rate of
return expected on investments of the fund during the
estimated term of the obligation. Expected contribution
to the fund during the year ending March 31, 2013 is ` 336.
Net gratuity cost for the year ended March 31, 2012 and
2011 are as follows:
Service cost
Interest cost
Past Service cost
Expected return on plan assets
Actuarial loss / (gain) recognized
For the year ended
March 31,
2012
424
207
(16)
(180)
31
466
2011
628
158
–
(160)
(145)
481
The weighted average actuarial assumptions used to
determine benefit obligations and net periodic gratuity
cost are:
Assumptions
As of March 31,
Discount rate
Expected rate of salary increase
Expected return on plan assets
2012
8.35%
5%
8%
2011
7.95%
5%
8%
As of March 31, 2012 and 2011, 100% of the plan assets
were invested in the insurer managed funds.
Experience adjustments:
On Plan liabilities
On Plan assets
Present value of benefit
obligation
Fair value of plan assets
Excess of obligations over
plan assets
As of March 31,
2012
2011
2010
2009
(140)
52
(55)
15
84
18
(59)
26
2,819
2,815
2,448
2,339
2,023
1,932
1,820
1,394
(4)
(109)
(91)
(426)
The Company assesses these assumptions with its
projected long-term plans of growth and prevalent
industry standards. The estimates of future salary increase,
considered in actuarial valuation, take account of inflation,
seniority, promotion and other relevant factors such as
supply and demand factors in the employment market.
Superannuation: Apart from being covered under
the gratuity plan, the employees of the Company also
participate in a defined contribution plan maintained
by the Company. This plan is administered by the Life
Insurance Corporation of India and ICICI Prudential
Insurance Company Limited. The Company makes annual
Standalone Financial Statements
contributions based on a specified percentage of each
covered employee’s salary.
For the year ended March 31, 2012, the Company has
reversed (net) ` (38), being excess the contribution (2011:
contribution recognised ` 168) to superannuation fund, in
the statement of profit and loss.
Provident fund (PF): In addition to the above, all employees
receive benefits from a provident fund. The employee and
employer each make monthly contributions to the plan
equal to 12% of the covered employee’s salary. A portion
of the contribution is made to the provident fund trust
established by the Company, while the remainder of the
contribution is made to the Government’s provident fund.
The interest rate payable by the trust to the beneficiaries
is regulated by the statutory authorities. The Company has
an obligation to make good the shortfall, if any, between
the returns from its investments and the administered rate.
Upto year ended March 31, 2011, in the absence of
guidance from the Actuarial Society of India, actuarial
valuation could not have been applied to reliably measure
the provident fund liabilities. During the year ended March
31, 2012, the Actuarial Society of India issued the final
guidance for measurement of provident fund liabilities.
Accordingly, based on such actuarial valuation there is no
shortfall in the fund as of March 31, 2012.
The details of fund and plan assets are given below:
Change in the benefit obligation
As of March 31,
Fair value of plan assets
Present value of defined benefit
obligation
Excess of (obligations over plan
assets) / plan assets over obligations
2012
17,928
2011
15,305
17,664
15,408
264
(103)
The principal assumptions used in determining the
present value obligation of interest guarantee under the
deterministic approach are as follows:
Assumptions
As of March 31,
Discount rate
Average remaining tenure of
investment portfolio
Guaranteed rate of return
2012
8.35%
6 years
8.25%
2011
7.95%
7 years
9.5%
For the year ended March 31, 2012, the Company
contributed ` 2,125 (2011: ` 1,824) towards provident fund.
As of March 31, 2012, provision for leave encashment
of ` 3,289 has been presented under Provisions -
Employee retirement benefits. The liability as of March
31, 2011 of ` 2,028 that was previously included under
Sundry Creditors in the financial statements for year
ended March 31, 2011 prepared under the pre-revised
Schedule VI of the Companies Act, 1956, has now been
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Wipro Limited
143
Standalone Financial Statements
accordingly reclassified under provisions. Provision for
leave encashment is a deferred deduction under the
tax laws which can be claimed only on actual payment.
Accordingly, the consequent impact on current and
deferred tax has been given effect.
39. Employee stock option
i)
Employees covered under Stock Option Plans and
Restricted Stock Unit (RSU) Option Plans (collectively
“stock option plans”) are granted an option to
purchase shares of the Company at the respective
exercise prices, subject to requirements of vesting
conditions. These options generally vest over a period
of five years from the date of grant. Upon vesting, the
employees can acquire one equity share for every
option. The maximum contractual term for these
stock option plans is generally 10 years.
ii)
iii)
The stock compensation cost is computed under the
intrinsic value method and amortised on a straight
line basis over the total vesting period of five years
The instrinic value on the date of grant approximates
the fair value. For the year ended March 31, 2012, the
Company has recorded stock compensation expense
of ` 878 (2011: ` 1,310).
The compensation committee of the board evaluates
the performance and other criteria of employees
and approves the grant of options. These options
vest with employees over a specified period subject
to fulfillment of certain conditions. Upon vesting,
employees are eligible to apply and secure allotment
of Company’s shares at a price determined on the
date of grant of options. The particulars of options
granted under various plans are tabulated below. (The
number of shares in the table below are adjusted for
any stock splits and bonus shares issues).
Wipro Employee Stock Option Plans and Restricted Stock Unit Option Plans
A summary of the general terms of grants under stock option plans and restricted stock unit option plans are as follows:
Name of Plan
Wipro Employee Stock Option Plan 1999 (1999 Plan)
Wipro Employee Stock Option Plan 2000 (2000 Plan)
Stock Option Plan (2000 ADS Plan)
Wipro Restricted Stock Unit Plan (WRSUP 2004 plan)
Wipro ADS Restricted Stock Unit Plan (WARSUP 2004 plan)
Wipro Employee Restricted Stock Unit Plan 2005 (WSRUP 2005 plan)
Wipro Employee Restricted Stock Unit Plan 2007 (WSRUP 2007 plan)
Authorized
Shares (1)
Range of
Exercise Prices
171 – 490
171 – 490
3 – 7
2
0.04
2
2
50,000,000 `
250,000,000 `
15,000,000 US$
20,000,000 `
20,000,000 US$
20,000,000 `
16,666,667 `
(1) adjusted for the two equity shares for every three equity shares stock dividend approved by the shareholders on June 4, 2010.
The activity in these stock option plans is summarized below:
As of March 31,
Outstanding at the beginning of the period (1)
Granted
Exercised
Forfeited and lapsed
Annual Report 2011-12
144
Range of
Exercise
Prices
` 480 – 489
4 – 6
US$
`
2
US$
0.04
` 480 – 489
4 – 6
US$
`
2
0.04
US$
` 480 – 489
4 – 6
US$
`
2
0.04
US$
` 480 – 489
4 – 6
US$
`
2
0.04
US$
2012
Number
Weighted
Average
Exercise
Price
–
–
2
0.04
480.20
–
2
–
–
–
2
0.04
–
–
2
0.04
– `
– US$
15,382,761 `
3,223,892 US$
30,000 `
– US$
40,000 `
– US$
– `
– US$
`
US$
– `
– US$
`
US$
(3,708,736)
(638,347)
(1,106,987)
(411,853)
2011
Number
200,000 `
2,677 US$
17,103,172 `
2,943,035 US$
– `
– US$
5,227,870 `
1,437,060 US$
(80,000)
`
– US$
`
US$
`
US$
`
US$
(5,482,210)
(870,622)
(120,000)
(2,677)
(1,466,071)
(285,581)
Weighted
Average
Exercise
Prices
293.40
2.82
2
0.04
–
–
2
0.04
293.40
–
2
0.04
293.40
2.82
2
0.04
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Standalone Financial Statements
As of March 31,
Outstanding at the end of the period
Exercisable at the end of the period
Range of
Exercise
Prices
` 480 – 489
4 – 6
US$
`
2
0.04
US$
` 480 – 489
4 – 6
US$
`
2
0.04
US$
2012
Number
30,000 `
– US$
10,607,038 `
2,173,692 US$
– `
– US$
5,370,221 `
578,400 US$
Weighted
Average
Exercise
Price
480.20
–
2
0.04
–
–
2
0.04
2011
Number
Weighted
Average
Exercise
Prices
–
–
2
0.04
–
–
2
0.04
– `
– US$
15,382,761 `
3,223,892 US$
– `
– US$
7,533,984 `
1,147,391 US$
(1) The opening balance as of April 1, 2010 have been adjusted for the two equity shares for every three equity shares stock dividend
approved by the shareholders on June 4, 2010.
The following table summarizes information about outstanding stock options:
Range of Exercise price
Numbers
` 480 – 489
US$ 4 – 6
` 2
US$ 0.04
30,000
–
10,607,038
2,173,692
2012
Weighted
Average
Remaining Life
(Months)
Weighted
Average
Exercise Price
48
`
480.20
Numbers
–
–
15,382,761
–
2
–
US$
`
30
37
US$
0.04
3,223,892
2011
Weighted
Average
Remaining Life
(Months)
–
–
35
48
Weighted
Average
Exercise Price
`
–
US$
`
–
2
US$
0.04
The weighted-average grant-date fair value of options
granted during the year ended March 31, 2012 was ` 449.80
(2011: ` 417.65) for each option. The weighted average share
price of options exercised during the year ended March 31,
2012 was ` 399.22 (2011: ` 424.28) for each option.
The fair value of 30,000 options granted during the year
ended March 31, 2012 (other than at nominal exercise
price) has been estimated on the date of grant using the
Black-Scholes-Merton option pricing model. The fair value
of share options has been determined using the following
assumptions:
The movement in Restricted Stock Unit reserve is summarized
below:
Opening balance
Less: Amount transferred to share
premium
Add: Amortisation **
Closing balance
For the year ended
March 31,
2012
284
2011
1,723
(332)
954
906
(2,872)
1,433
284
Expected term
Risk free interest rates
Volatility
Dividend yield
** Includes amortization expense relating to options granted
to employees of the Company’s subsidiaries, amounting to
` 76 (2011: ` 123). This expense has been debited to respective
subsidiaries.
5 years
8%
62.2%
1.28%
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Wipro Limited
145
Standalone Financial Statements
40. Provisions
Provision for warranty represent cost associated with
providing sales support services which are accrued at
the time of recognition of revenues and are expected to
be utilized over a period of 1 to 2 years from the balance
sheet date. Other provisions primarily include provisions
for tax related contingencies and litigations. The timing
of cash outflows in respect of such provision cannot be
reasonably determined. The activity in the provision
balance is summarized below:
For the year ended
March 31, 2012
Provision
for Warranty
Others-
taxes
March 31, 2011
Provision
for Warranty
Others-
taxes
Provision at the
beginning of the
year
Additions during
the year, net
Utilized/Reversed
during the year
Provision at the
end of the year
Non-current
portion
Current portion
452
1,858
532
1,763
420
179
482
149
(582)
(1,222)
(562)
(54)
290
14
276
815
–
815
452
1,858
36
416
–
1,858
41. Earnings per share
The computation of equity shares used in calculating basic
and diluted earnings per share is set out below:
Weighted average equity
shares outstanding
Share held by controlled
trusts
Weighted average equity
shares for computing basic
EPS
Dilutive impact of employee
stock options
Weighted average equity
shares for computing
diluted EPS
Net income considered for
computing EPS (` in Million)
For the year ended March 31,
2011
2012
2,463,897,683 2,451,354,673
(14,841,271)
(14,841,271)
2,449,056,412 2,436,513,402
5,315,776
12,856,846
2,454,372,188 2,449,370,248
46,851
48,437
Earnings per share and number of shares outstanding for
the year ended March 31, 2011 have been adjusted for
the two equity shares for every three equity shares stock
dividend approved by the shareholders on June 4, 2010.
42. The Management has identified enterprises which have
provided goods and services to the Company and which
qualify under the definition of micro and small enterprises,
as defined under Micro, Small and Medium Enterprises
Development Act, 2006. Accordingly, the disclosure in
respect of the amounts payable to such enterprises as
of March 31, 2012 has been made in the annual financial
statements based on information received and available
with the Company. The Company has not received any
claim for interest from any supplier under the said Act.
For the year ended
March 31,
2012
2011
The principal amount remaining
unpaid to any supplier as of the end
of each accounting year;
The interest due remaining unpaid
to any supplier as of the end of each
accounting year;
The amount of interest paid by the
Company along with the amounts
of the payment made to the supplier
beyond the appointed day during
the year;
– Interest
– Principal
The amount of interest due and
payable for the period of delay in
making payment (which have been
paid but beyond the appointed day
during the year) but without adding
the interest specified under this Act;
The amount of interest accrued
and remaining unpaid at the end
of the year;
The amount of further interest
remaining due and payable even
in the succeeding years, until such
date when the interest dues as
above are actually paid to the small
enterprise;
1
–
1
35
–
–
–
–
1
2
88
–
1
–
Annual Report 2011-12
146
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43. Details of Non-current investments
(i)
Investments in unquoted equity instruments (Fully paid up) of Subsidiaries [Trade]
Name of the subsidiary
No. of shares
Currency Face value
As of March 31,
Standalone Financial Statements
Wipro Consumer Care Limited
Wipro Chandrika Limited
Wipro Trademarks Holding Limited
Wipro Travel Services Limited
Wipro Technology Services Limited
Wipro Energy IT Services India Private Limited
(formerly SAIC India Private Limited)
Vignani Solutions Private Limited
Wipro Holdings (Mauritius) Limited
Wipro Australia Pty Limited
Wipro Inc.
Wipro Japan KK
Wipro Shanghai Limited
Wipro Cyprus Private Limited
3D Networks Pte Limited
Planet PSG Pte Limited
Cmango Pte Limited
WMNETSERV Limited
Wipro Chengdu Limited
Wipro Airport IT Services Limited
Wipro Infrastructure Engineering Machinery
(Changzhou) Company Limited
2012
50,000
900,000
94,000
66,171
39,284,680
879,136
45,831,270
105,448,318
25,000
160,378
650
149,609
28,126,108
1,472,279
–
24,000
2011
50,000
900,000
94,000
66,171
39,284,680
–
44,448,318
25,000
156,378
650
(Refer note 1 below)
148,910
28,126,108
1,472,279
2
24,000
(Refer note 1 below)
INR
INR
INR
INR
INR
INR
INR
USD
AUD
USD
JPY
EUR
SGD
SGD
USD
USD
10
10
10
10
10
10
10
1
1
2,500
50,000
1
1
1
1
1
3,700,000
3,700,000
INR
10
(Refer note 1 below)
2012
1
7
22
1
6,205
886
1
4,747
1
17,244
10
9
33,465
1,271
94
–
83
24
37
483
64,591
2011
1
7
22
1
6,205
–
–
2,023
1
16,802
10
9
33,355
1,271
94
16
83
24
37
104
60,065
Note1 – As per the local laws of People’s Republic of China, there is no concept of issuance of Share Certificate. Hence the
investment by the Company is considered as equity contribution.
(ii)
Investments in unquoted preference shares (Fully paid up) of Subsidiary [Trade]
Name of the subsidiary
No. of shares
Currency Face value
As of March 31,
9% cumulative redeemable preference shares
held in Wipro Trademarks Holding Limited (a)
(a) Value of investment is less than one million rupees.
2012
2011
2012
2011
1,800
1,800
INR
10
–
–
(iii) Investments in equity instruments (Fully paid up) of Associate [Non-Trade]
Name of the associate
No. of shares
Currency Face value
As of March 31,
Wipro GE Healthcare Private Limited
2012
5,150,597
2011
5,150,597
INR
10
2012
227
2011
227
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Wipro Limited
147
Standalone Financial Statements
44. Details of current investments
(i)
Investments in Indian money market mutual funds
Fund House
No. of Units as of March 31,
Balances as of March 31,
Birla Mutual Fund
DWS Mutual Fund
DSP BlackRock Mutual Fund
Kotak Mutual Fund
ICICI Prudential Mutual Fund
Reliance Mutual Fund
IDFC Mutual Fund
Tata Mutual Fund
Franklin Templeton Mutual Fund
UTI Mutual Fund
JP Morgan
Religare Mutual Fund
HDFC Mutual Fund
Axis Mutual Fund
SBI Mutual Fund
2012
2011
62,693,235
281,936,542
57,027,753
–
30,000,000
50,003,369
89,387,501
100,461,481
51,060,882
239,954,367
90,530,657
–
254,395,503
163,254,234
30,131,560
184,569,350
23,863,804
238,800,422
516,514
110,876,864
475,391
50,048,176
826,155
920,158
28,632,720
15,000,000
30,009,000
–
–
129,999,183
2012
3,917
656
300
1,220
1,662
1,826
3,204
483
566
747
1,374
700
915
984
2011
3,709
–
500
1,335
6,025
–
2,752
2,703
3,676
1,065
150
300
–
–
1,288
19,842
1,662
23,877
(ii)
Investments in debentures – Others (Fully paid up)
No. of shares/units
Currency
Face value
As of March 31,
Debentures in Citicorp Finance (India) Limited
Debentures in Morgan Stanley
2012
1,500
–
2011
2,500
500
INR
INR
100,000
1,000,000
2012
129
–
129
2011
241
481
722
(iii) Investments in equity instruments – Others (Fully paid up)
Mycity Technology Limited
WeP Peripherals Limited
No. of shares/units
Currency
Face value
As of March 31,
2012
2011
44,935
44,935
306,000
306,000
INR
INR
10
10
2012
2011
45
24
69
45
24
69
Annual Report 2011-12
148
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45. Related party relationships and transactions
The list of subsidiaries as of March 31, 2012 are provided in the table below.
Direct Subsidiaries
Step Subsidiaries
Wipro Inc.
Wipro Gallagher Solutions Inc.
Enthink Inc.*
Infocrossing Inc.
Wipro Energy IT Services India Private
Limited (formerly SAIC India Private
Limited)
Wipro Japan KK
Wipro Shanghai Limited
Wipro Trademarks Holding Limited
Wipro Travel Services Limited
Wipro Consumer Care Limited
Wipro Holdings (Mauritius) Limited
Wipro Cyprus Private Limited
Cygnus Negri Investments Private
Limited
Wipro Holdings UK Limited
Wipro Technologies S.A DE C. V
Wipro BPO Philippines LTD. Inc
Wipro Holdings Hungary Korlátolt
Felelősségű Társaság
Wipro Technologies Argentina SA
Wipro Information Technology
Egypt SAE
Wipro Arabia Limited*
Wipro Poland Sp Zoo
Wipro IT Services Poland Sp. z o. o
Wipro Outsourcing Services UK
Limited
Wipro Technologies (South Africa)
Proprietary Limited
Standalone Financial Statements
Country of
Incorporation
USA
USA
USA
USA
India
Japan
China
India
India
India
India
Mauritius
U.K.
Wipro Technologies UK Limited U.K.
Wipro Holding Austria
GmbH (A)
Austria
3D Networks (UK) Limited
Wipro Europe Limited (A)
(formerly SAIC Europe Limited)
U.K.
U.K
Cyprus
Mexico
Philippines
Hungary
Argentina
Egypt
Saudi Arabia
Poland
Poland
U.K.
South Africa
Wipro Limited
149
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Standalone Financial Statements
Direct Subsidiaries
Step Subsidiaries
Wipro Information Technology
Netherlands BV
(formerly RetailBox BV)
Country of
Incorporation
Netherland
Wipro Infrastructure Engineering AB
Wipro Technologies SRL
Wipro Singapore Pte Limited
Wipro Portugal S.A. (A) (Formerly
Enabler Informatica SA)
Portugal
Wipro Technologies Limited,
Russia
Russia
Wipro Gulf LLC
(formerly SAIC Gulf LLC)
Sultanate of
Oman
Wipro Technology Chile SPA
Chile
Wipro Infrastructure
Engineering Oy. (A)
Sweden
Finland
Hydrauto Celka San ve Tic
Turkey
PT WT Indonesia
Romania
Singapore
Indonesia
Wipro Unza Holdings Limited (A) Singapore
Wipro Technocentre
(Singapore) Pte Limited
Singapore
Wipro (Thailand) Co. Limited
Thailand
Wipro Bahrain Limited WLL
Bahrain
Wipro Yardley FZE
Wipro Technologies SDN BHD
WMNETSERV (U.K.) Limited
WMNETSERV INC
Wipro Australia Pty Limited
Wipro Networks Pte Limited
(formerly 3D Networks Pte Limited)
Planet PSG Pte Limited
Wipro Chengdu Limited
Wipro Chandrika Limited*
Vignani Solutions Private Limited
WMNETSERV Limited
Wipro Technology Services Limited
Wipro Airport IT Services Limited*
Wipro Infrastructure Engineering
Machinery (Changzhou) Co., Ltd.
Dubai
Australia
Singapore
Singapore
Malaysia
China
India
India
Cyprus
U.K.
USA
India
India
China
* All the above direct subsidiaries are 100% held by the Company except that the Company hold 98% of the equity securities of
Enthink Inc., 66.67% of the equity securities of Wipro Arabia Limited, 90% of the equity securities of Wipro Chandrika Limited and
74% of the equity securities of Wipro Airport IT Services Limited.
Annual Report 2011-12
150
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(A) Step Subsidiary details of Wipro Unza Holdings Limited, Wipro Holding Austria GmbH, Wipro Portugal S.A, Wipro Infrastructure
Engineering Oy and Wipro Europe Limited are as follows:
Standalone Financial Statements
Step Subsidiaries
Step Subsidiaries
Wipro Unza Singapore Pte Limited
Wipro Unza Indochina Pte Limited
Wipro Unza Cathay Limited
Wipro Unza China Limited
PT Unza Vitalis
Wipro Unza Thailand Limited
Wipro Unza Overseas Limited
Unzafrica Limited
Wipro Unza Middle East Limited
Unza International Limited
Unza Nusantara Sdn Bhd
Wipro Unza Vietnam Co., Limited
Wipro Unza (Guangdong) Consumer
Products LTD.
Unza Holdings Sdn Bhd
Unza (Malaysia) Sdn Bhd
Wipro Manufacturing Services Sdn Bhd
Wipro Holding Austria GmbH
Wipro Portugal S.A.
Wipro Infrastructure Engineering Oy
Wipro Europe Limited
(formerly SAIC Europe Limited)
Gervas Corporation Sdn Bhd
Formapac Sdn Bhd
Wipro Technologies Austria GmbH
New Logic Technologies SARL
SAS Wipro France
(formerly Enabler France SAS)
Wipro Retail UK Limited
(formerly Enabler UK Limited)
Wipro do Brasil Technologia Ltda
(formerly Enabler Brazil Ltda)
Wipro Technologies Gmbh (formerly
Enabler & Retail Consult GmbH)
Wipro Infrastructure Engineering LLC
Wipro UK Limited
(formerly SAIC Limited)
Wipro Europe (formerly Science
Applications International,
Europe SARL)
Country of
Incorporation
Singapore
Singapore
Vietnam
Hong Kong
Hong Kong
China
Indonesia
Thailand
British Virgin Islands
Nigeria
British Virgin Islands
British Virgin Islands
Malaysia
Malaysia
Malaysia
Wipro Unza (Malaysia) Sdn Bhd Malaysia
Malaysia
Malaysia
Malaysia
Malaysia
Malaysia
Shubido Pacific Sdn Bhd(a)
Gervas (B) Sdn Bhd
R.K.M Equipamentos
Hidraulicos Ltda
Austria
France
France
U.K.
Brazil
Brazil
Germany
Russia
U.K.
France
a) All the above subsidiaries are 100% held by the Company except Shubido Pacific Sdn Bhd in which the Company holds 62.55%
of the equity securities.
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Wipro Limited
151
Standalone Financial Statements
Name of other related parties
Nature
% of holding
Fully controlled trust
Fully controlled trust
49%
Country of
Incorporation
India
USA
India
Wipro Equity Reward Trust
Wipro Inc Benefit Trust
Wipro GE Healthcare Private Limited
Azim Premji Foundation
Hasham Premji (partnership firm)
Prazim Traders (partnership firm)
Zash Traders (partnership firm)
Regal Investment & Trading Company
Private Limited
Vidya Investment & Trading Company
Private Limited
Napean Trading & Investment Company
Private Limited
Azim Premji Trust
Trust
Trust
Associate
Entity controlled by Director
Entity controlled by Director
Entity controlled by Director
Entity controlled by Director
Entity controlled by Director
Entity controlled by Director
Entity controlled by Director
Entity controlled by Director
Key management personnel
Azim Premji
Suresh C Senapaty
T K Kurien
Suresh Vaswani
Girish S Paranjpe
Chairman and Managing Director
Chief Financial Officer & Director
CEO, IT Business & Director1
Jt CEO, IT Business & Director2
Jt CEO, IT Business & Director2
Relative of Key Management Personnel
Rishad Premji
1 w.e.f February 1, 2011
2 Upto January 31, 2011
The Company has the following related party transactions:
Transaction / Balances
Subsidiaries / Trusts
Associate
Sale of services
Sale of products
Purchase of services
Purchase of products
Dividend paid
Commission paid
Rent paid
Dividend payable
Remuneration paid
Interest income
Dividend received
Royalty received
Corporate guarantee commission
Loans and advances given
Balances as of the year end
Receivables
Payables
2012
7,024
328
5,816
33
89
382
24
59#
–
32
–
–
115
131
2011
6,481
–
5,563
64
71
373
–
60#
–
30
5
–
97
–
18,878*
2,052
11,715*
1,965
2012
56
20
–
–
–
–
–
–
–
–
–
98
–
–
16
–
Entities controlled
by Directors
2012
–
12
–
–
11,102
–
3
7,330
–
–
–
–
–
–
2011
–
–
–
–
10,362
–
–
7,401
–
–
–
–
–
–
Key Management
Personnel@
2012
–
–
–
–
573
–
–
382
87
–
–
–
–
–
2011
–
–
–
–
536
–
–
384
275
–
–
–
–
–
2011
5
13
–
–
–
–
–
–
–
–
–
–
–
–
7
–
1
7,330
–
7,401
–
384
–
385
# Represents dividend payable to Wipro Inc Benefit Trust and Wipro Equity Reward Trust.
Annual Report 2011-12
152
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@ Including relative of key management personnel.
* Includes the following balances being in the nature of loans given to subsidiaries of the Company including interest accrued,
where applicable and inter-corporate deposits with subsidiary.
Standalone Financial Statements
Name of the entity
Wipro Cyprus Private Limited
Wipro Chandrika Limited
Wipro Singapore Pte Limited
Wipro Holdings (Mauritius) Limited
Wipro Consumer Care Limited
Vignani Solutions Private Limited
Wipro Inc.
Balance as of
March 31,
Maximum amount due
during the year
2012
1,935
299
–
–
1
105
2,007
2011
1,577
273
–
–
1
–
2,007
2012
2,026
299
–
–
1
105
2,007
2011
1,577
273
22
3
2
–
2,007
The following are the significant related party transactions during the year ended March 31, 2012 and 2011:
Sale of services
Wipro Inc.
Sale of products
Wipro Infrastructure Engineering AB
Purchase of services
Infocrossing Inc.
Wipro Technologies SRL-BPO
Wipro Retail UK Limited
Wipro Portugal S.A
Wipro Technologies OY
Purchase of products
Unza Holdings Limited
Vignani Solutions Private Limited
Dividend paid
Hasham Traders
Prazim Traders
Zash Traders
Azim Premji Trust
Commission paid
Wipro Japan KK
Wipro Technologies Gmbh
Rent paid
Wipro Holding UK Limited
For the year ended March 31,
2012
2011
3,917
4,144
323
1,603
923
744
20
188
20
13
3,263
3,250
3,242
1,278
339
43
24
–
839
937
710
783
635
61
–
3,045
3,033
3,026
426
373
–
–
Wipro Limited
153
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Standalone Financial Statements
Dividend received
Wipro Cyprus Private Limited
Dividend payable
Hasham Traders
Prazim Traders
Zash Traders
Azim Premji Trust
Remuneration paid to key management personnel
Azim Premji
Suresh Senapaty
T K Kurien
Girish Paranjpe
Suresh Vaswani
Interest income
Wipro Cyprus Private Limited
Wipro Chandrika Limited
Corporate guarantee commission
Wipro Infrastructure Engineering AB
Infocrossing Inc.
Wipro Holding UK Limited
Loans and advances given
Wipro Chandrika Limited
Vignani Solutions Private Limited
46. Acquisitions
On June 10, 2011, the Company acquired the global oil and
gas information technology practice of the Commercial
Business Services Business Unit of Science Applications
International Corporation Inc., Delaware, USA (‘SAIC’)
through an Asset and Stock Purchase agreement (‘ASPA’).
SAIC’s global oil and gas practice provides consulting,
system integration and outsourcing services to global oil
majors with significant domain capabilities in the areas
of digital oil field, petro-technical data management and
petroleum application services, addressing the upstream
segment. The Company believes that the acquisition will
further strengthen Wipro’s presence in the Energy, Natural
Resources and Utilities domain. In accordance with the
ASPA, all fixed assets, current assets and liabilities, right and
obligations of the oil and gas business of US and Canada
have been vested with the Company. The acquired assets
and liabilities recorded in the books of SAIC relating to the
US and Canada oil and gas business are recorded by the
For the year ended March 31,
2012
2011
–
5
2,175
2,167
2,162
781
19
18
45
–
–
15
18
25
25
40
26
105
2,175
2,167
2,162
852
28
43
8
89
102
14
16
24
17
36
–
–
Company at their respective book values. The goodwill of
` 3,219 comprises value of expected synergies arising from
the acquisition. The purchase consideration of ` 3,781was
settled in cash.
47.
Income Tax
The provision for taxation includes tax liability in India
on the Company’s worldwide income. The tax has been
computed on the worldwide income as reduced by the
various deductions and exemptions provided by the
Income tax Act in India (Act) and the tax credit in India for
the tax liabilities payable in foreign countries.
Most of the Company’s operations are through units in
Special Economic Zone and Software Technology Parks
(‘STPs’). Income from STPs is not eligible for deduction
from April 01, 2011. Income from SEZ’s are eligible for 100%
deduction for the first 5 years, 50% deduction for the next
5 years and 50% deduction for another 5 years subject to
fulfilling certain conditions.
Annual Report 2011-12
154
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Standalone Financial Statements
presentation and disclosures made in the financial
statements, particularly presentation of Balance Sheet.
50. Additional information pursuant to Schedule VI
(i) Value of imported and indigenous materials consumed
The Company has calculated its tax liability after
considering the provisions of law relating to Minimum
Alternative Tax (MAT). As per the Act, any excess of MAT
paid over the normal tax payable can be carried forward
and set off against the future tax liabilities. Accordingly an
amount of ` 1,060 is included under ‘Short term loans and
advances’ in the balance sheet as of March 31, 2012 (March
31, 2011: ` 126).
i)
Current tax provision includes reversal of tax provision
in respect of earlier periods no longer required
amounting to ` 745 for the year ended March 31,
2012 (2011: ` 590) and MAT credit of ` 1,060 for the
year ended March 31, 2012 (2011: Nil).
ii)
The components of the deferred tax, net are as follows:
Raw Materials
Imported
Indigenous
Deferred Tax Assets - DTA
As of March 31,
2012
2011
Stores and Spares
Imported
Indigenous
Accrued expenses and liabilities
931
525
Allowances for doubtful trade
receivables
Deferred Tax Liabilities - (DTL)
Tangible assets
Amortisable goodwill
Net DTA/(DTL)
707
1,638
642
1,167
(1,312)
(1,059)
(58)
–
(1,370)
(1,059)
268
108
(ii) Value of imports on CIF basis
(Does not include value of imported
items locally purchased)
Raw materials, components and
peripheral
The Net DTA / (DTL) of ` 268 (2011: ` 108) has the following
breakdown:
Stores and spares
Capital goods
(iii) Activities in foreign currency
For the year ended March 31,
2012
2011
%
34
66
`
4,880
9,595
%
35
65
`
3,837
7,020
100
14,475
100
10,857
18
82
100
52
236
288
7
93
100
17
210
227
For the year ended
March 31,
2012
2011
22,982
27,358
212
394
40
231
23,588
27,629
For the year ended
March 31,
2012
2011
Deferred tax asset
Deferred tax liabilities
Net DTA/(DTL)
As of March 31,
2012
326
(58)
268
2011
108
–
108
48. The Company publishes standalone financial statements
along with the consolidated financial statements in the
annual report. In accordance with Accounting Standard 17,
Segment Reporting, the Company has disclosed the segment
information in the consolidated financial statements.
49. Hitherto the applicability of revised Schedule VI from the
current year, the Company has reclassified previous year
figures to conform to this year’s classification. The adoption
of revised Schedule VI does not impact recognition and
measurement principles followed for preparation of the
financial statements. However, it significantly impacts
a) Expenditures
Traveling and onsite allowance
62,226
57,855
Interest
Royalty
Professional fees
Subcontracting charges
Foreign taxes
Dividend
Others
205
959
6,567
14,221
3,231
0.22
114
307
7,843
9,390
2,901
0.11
12,373
10,133
99,782.22
88,543.11
Wipro Limited
155
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Standalone Financial Statements
For the year ended
March 31,
b) Earnings
Export of goods on F.O.B basis
8,554
6,291
Services
Agency commission
225,640
177,192
219
288
234,413
183,771
Net amount remitted (in ` Million)
Number of shares held by
non-resident shareholders
Number of foreign shareholders
Financial year to which interim
dividend relates
For the year ended
March 31,
2012
0.08
2011
0.07
40,701
7
34,810
8
2011-12
2010-11
Dividend remitted in foreign currencies:
Final Dividend
Net amount remitted (in ` Million)
Number of shares held by
non-resident shareholders
Number of foreign shareholders
Financial year to which final
dividend relates
For the year ended
March 31,
2012
0.14
2011
0.04
35,087
7
6,978
2
2010-11
2009-10
Dividend remitted in foreign currencies:
Interim Dividend
As per our report attached
For and on behalf of the Board of Directors
for B S R & Co.
Chartered Accountants
Firm Registration No: 101248W
Natrajh Ramakrishna
Partner
Membership No. 032815
Bangalore
April 25, 2012
Azim Premji
Chairman
B. C. Prabhakar
Director
Suresh C. Senapaty
Chief Financial Officer
& Director
T. K. Kurien
CEO, IT Business
& Executive Director
V. Ramachandran
Company Secretary
Annual Report 2011-12
156
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Consolidated Financial Statements
AUDITORS’ REPORT
AUDITORS’ REPORT TO THE BOARD OF DIRECTORS ON THE CONSOLIDATED FINANCIAL STATEMENTS OF WIPRO LIMITED
AND ITS SUBSIDIARIES
We have audited the attached consolidated balance sheet of Wipro Limited (‘the Company’) and subsidiaries (collectively called
‘the Wipro Group’) as of March 31, 2012, the consolidated statement of profit and loss and the consolidated cash flow statement
for the year ended on that date, annexed thereto. These consolidated financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan
and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated
financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management,
as well as evaluating the overall consolidated financial statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
We report that the consolidated financial statements have been prepared by the Company’s management in accordance with
the requirements of Accounting Standard 21, Consolidated Financial Statements and Accounting Standard 23, Accounting for
Investments in Associates in Consolidated Financial Statements, issued by the Institute of Chartered Accountants of India (‘ICAI’).
Without qualifying our opinion, we draw attention to Note 28 of the Notes that describes the principles of Accounting Standard
(AS) 30, Financial Instruments: Recognition and Measurements, followed by the Company, which has not currently been notified
by the National Advisory Council for Accounting Standards pursuant to the Companies (Accounting Standards) Rules, 2006 as per
Section 211(3C) of the Companies Act, 1956. Had the Company not followed the principles of AS 30, the profit after taxation for
the year ended March 31, 2012 would have been lower by ` 1,633 million.
In our opinion and to the best of our information and according to the explanations given to us, the consolidated financial statements
give a true and fair view in conformity with the accounting principles generally accepted in India:
(a)
in the case of the consolidated balance sheet, of the state of affairs of the Wipro Group as of March 31, 2012;
(b)
in the case of the consolidated statement of profit and loss, of the profit of the Wipro Group for the year ended on that date; and
(c)
in the case of the consolidated cash flow statement, of the cash flows of the Wipro Group for the year ended on that date.
for B S R & Co.
Chartered Accountants
Firm registration No: 101248W
Natrajh Ramakrishna
Partner
Membership No. 032815
Bangalore
June 13, 2012
04 Consolidated_2012.indd 157
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Wipro Limited
157
Consolidated Financial Statements
Consolidated Financial Statements
CONSOLIDATED BALANCE SHEET
(` in millions, except share and per share data, unless otherwise stated)
Notes
As of March 31,
2012
2011
EQUITY AND LIABILITIES
Shareholders’ funds
Share capital
Reserves and surplus
Share application money pending allotment (1)
Minority interest
Non-current liabilities
Long term borrowings
Deferred tax liabilities
Other long term liabilities
Long term provisions
Current Liabilities
Short term borrowings
Trade payables
Other current liabilities
Short term provisions
TOTAL EQUITY AND LIABILTIES
ASSETS
Non-current assets
Goodwill
Fixed assets
Tangible assets
Intangible assets
Capital work-in-progress
Non-current investments
Deferred tax assets
Long term loans and advances
Other non-current assets
Current assets
Current investments
Inventories
Trade receivables
Cash and bank balances
Short term loans and advances
Other current assets
TOTAL ASSETS
3
4
5
6
36(ii)
7
8
9
10
11
12
13
14
15
36(ii)
16
17
18
19
20
21
22
23
2
4,915
265,258
270,173
–
849
22,510
275
778
3,107
26,670
35,480
47,736
23,305
28,368
134,889
432,581
4,906
219,964
224,870
–
691
19,759
141
2,659
2,714
25,273
31,166
42,047
16,169
28,125
117,507
368,341
67,961
54,266
54,627
1,767
3,466
3,232
440
22,893
9,168
163,554
41,483
10,662
80,387
77,666
23,263
35,566
269,027
432,581
48,849
1,769
5,034
2,993
179
20,510
7,823
141,423
49,413
9,707
61,773
61,141
15,271
29,613
226,918
368,341
Significant Accounting Policies
(1) value is less than one million rupees
The notes referred to above form an integral part of the balance sheet
As per our report attached
For and on behalf of the Board of Directors
for B S R & Co.
Chartered Accountants
Firm Registration No: 101248W
Natrajh Ramakrishna
Partner
Membership No. 032815
Bangalore
June 13, 2012
Annual Report 2011-12
158
Azim Premji
Chairman
B. C. Prabhakar
Director
Suresh C. Senapaty
Chief Financial Officer
& Director
T. K. Kurien
CEO, IT Business
& Executive Director
V. Ramachandran
Company Secretary
04 Consolidated_2012.indd 158
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CONSOLIDATED STATEMENT OF PROFIT AND LOSS
Consolidated Financial Statements
(` in millions, except share and per share data, unless otherwise stated)
Notes
For the year ended March 31,
2012
2011
REVENUE
Revenue from operations (gross)
Less: Excise duty
Revenue from operations (net)
Other income
Total Revenue
EXPENSES
Cost of materials consumed
Purchases of stock-in-trade
Changes in inventories of finished goods, work in progress and stock-in-trade
Employee benefits expense
Finance costs
Depreciation expense
Amortisation expense
Other expenses
Total Expenses
Profit before tax
Tax expense
Current tax [refer note 36(i)]
Deferred tax
Profit before minority interest/share in earnings of associates
Minority interest
Share in earnings of associates
Net Profit
Earnings per equity share [Refer note 38]
(Equity shares of par value ` 2 each)
Basic
Diluted
24
25
26
13
14
27
373,083
1,205
371,878
12,685
384,563
20,158
37,595
118
154,074
3,439
9,592
162
89,611
314,749
69,814
13,933
(88)
13,845
55,969
(257)
333
56,045
22.88
22.83
311,392
1,007
310,385
7,709
318,094
14,922
33,991
(652)
127,210
1,932
7,732
159
70,452
255,746
62,348
9,469
226
9,695
52,653
(344)
615
52,924
21.72
21.61
Significant Accounting Policies
The notes referred to above form an integral part of the statement of profit and loss
2
As per our report attached
For and on behalf of the Board of Directors
for B S R & Co.
Chartered Accountants
Firm Registration No: 101248W
Natrajh Ramakrishna
Partner
Membership No. 032815
Bangalore
June 13, 2012
Azim Premji
Chairman
B. C. Prabhakar
Director
Suresh C. Senapaty
Chief Financial Officer
& Director
T. K. Kurien
CEO, IT Business
& Executive Director
V. Ramachandran
Company Secretary
04 Consolidated_2012.indd 159
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Wipro Limited
159
Consolidated Financial Statements
Consolidated Financial Statements
CONSOLIDATED CASH FLOW STATEMENT
(` in millions)
Year ended March 31,
A.
B.
C.
Cash flows from operating activities:
Profit before tax
Adjustments:
Depreciation and amortisation
Amortisation of share based compensation
Exchange differences - net
Impact of cash flow hedges
Interest on borrowings
Dividend / interest income
Profit on sale of investments
Loss on sale of subsidiary
Gain on sale of fixed assets
Working capital changes :
Trade receivables and unbilled revenue
Loans and advances and other assets
Inventories
Liabilities and provisions
Net cash generated from operations
Direct taxes paid, net
Net cash generated by operating activities
Cash flows from investing activities:
Acquisition of fixed assets including capital advances
Proceeds from sale of fixed assets
Purchase of investments
Proceeds from sale / maturity of investments
Investment in inter-corporate deposits
Refund of inter-corporate deposits
Payment for acquisition of businesses, net of cash acquired
Dividend / interest income received
Net cash used in investing activities
Cash flows from financing activities:
Proceeds from exercise of employee stock options
Share application money pending allotment
Interest paid on borrowings
Dividends paid including distribution tax
Proceeds from borrowings / loans
Repayment of borrowings / loans
Net cash used in financing activities
Net increase / (decrease) in cash and cash equivalents during the year
Cash and cash equivalents at the beginning of the year
Effect of exchange rate changes on cash balance
Cash and cash equivalents at the end of the year [Refer note 21]
As per our report attached
For and on behalf of the Board of Directors
2012
69,814
9,754
954
280
1,095
1,025
(8,708)
(187)
77
(104)
(20,599)
(3,495)
(862)
7,150
56,194
(16,105)
40,089
(12,977)
774
(338,599)
346,826
(14,550)
10,380
(7,920)
8,010
(8,056)
9
–
(902)
(17,229)
70,839
(69,905)
(17,188)
14,845
61,141
1,680
77,666
2011
62,348
7,891
1,433
822
4,389
776
(6,460)
(192)
–
(131)
(17,816)
(5,234)
(1,781)
3,692
49,737
(9,293)
40,444
(12,211)
521
(474,476)
456,894
(14,290)
20,100
(140)
6,363
(17,239)
36
(18)
(696)
(15,585)
72,596
(83,798)
(27,465)
(4,260)
64,878
523
61,141
for B S R & Co.
Chartered Accountants
Firm Registration No: 101248W
Natrajh Ramakrishna
Partner
Membership No. 032815
Bangalore
June 13, 2012
Annual Report 2011-12
160
Azim Premji
Chairman
B. C. Prabhakar
Director
Suresh C. Senapaty
Chief Financial Officer
& Director
T. K. Kurien
CEO, IT Business
& Executive Director
V. Ramachandran
Company Secretary
04 Consolidated_2012.indd 160
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Consolidated Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
(` in millions, except share and per share data, unless otherwise stated)
1. Company overview
Wipro Limited (Wipro or the Parent), together with
its subsidiaries (collectively, the Company or the
group) is a leading India based provider of IT Services,
including Business Process Outsourcing (BPO) services,
globally. Further, Wipro has other businesses such as IT
Products, Consumer Care and Lighting and Infrastructure
engineering. Wipro is headquartered in Bangalore, India.
Minority interest in share of net result for the year is
identified and adjusted against the profit after tax.
Excess of loss, if any, attributable to the minority over
and above the minority interest in the equity of the
subsidiaries is absorbed by the Company.
– The consolidated financial statements are prepared
using uniform accounting policies for similar
transactions and other events in similar circumstances.
2.
Significant Accounting Policies
iii. Use of estimates
i.
Basis of preparation of financial statements
The financial statements are prepared in accordance with
Indian Generally Accepted Accounting Principles (GAAP)
under the historical cost convention on the accrual basis,
except for certain financial instruments which are measured
on a fair value basis. GAAP comprises Accounting Standards
(AS), issued by the Institute of Chartered Accountants
of India (ICAI) and other generally accepted accounting
principles in India.
ii.
Principles of consolidation
The preparation of financial statements in accordance
with the generally accepted accounting principles
requires management to make judgments, estimates and
assumptions that affect the application of accounting
policies and the reported amounts of assets and liabilities,
income, expenses and the disclosure of contingent
liabilities at the end of the reporting period. Estimates and
underlying assumptions are reviewed on an ongoing basis.
Revision to accounting estimate is recognised in the period
in which the estimates are revised and in any future period
affected.
The consolidated financial statements have been prepared
on the following basis:
iv.
Tangible assets, intangible assets and capital
work-in-progress
– The consolidated financial statements include the
financial statements of Wipro and all its subsidiaries,
which are more than 50% owned or controlled. The
financial statements of the parent Company and its
majority owned / controlled subsidiaries have been
combined on a line by line basis by adding together
the book values of all items of assets, liabilities,
incomes and expenses after eliminating all inter-
Company balances / transactions and resulting
unrealized gain / loss.
– The consolidated financial statements include the
share of profit / loss of associate companies, which
are accounted under the ‘Equity method’, wherein,
the share of profit / loss of the associate Company
has been added / deducted to / from the cost of
investment.
– Minority interest in the net assets of consolidated
subsidiaries consists of:
a)
b)
the amount of equity attributable to the
minorities at the dates on which investment in
a subsidiary is made; and
the minorities share of movements in equity
since the date of parent-subsidiary relationship
came into existence.
Fixed assets are stated at historical cost less accumulated
depreciation. Costs include expenditure directly
attributable to the acquisition of the asset. Borrowing costs
directly attributable to the construction or production of
qualifying assets are capitalized as part of the cost.
Intangible assets are stated at the consideration paid for
acquisition less accumulated amortization.
Cost of fixed assets not ready for use before the balance
sheet date is disclosed as capital work-in-progress.
Advances paid towards the acquisition of fixed assets
outstanding as of each balance sheet date is disclosed
under long term loans and advances.
v.
Investments
Long term investments are stated at cost less other than
temporary decline in the value of such investments, if
any. Current investments are valued at lower of cost and
fair value determined by category of investment. The fair
value is determined using quoted market price/market
observable information adjusted for cost of disposal. On
disposal of the investment, the difference between its
carrying amount and net disposal proceeds is charged or
credited to the statement of profit and loss.
vi.
Inventories
Inventories are valued at lower of cost and net realizable
value, including necessary provision for obsolescence. Cost
04 Consolidated_2012.indd 161
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Wipro Limited
161
Consolidated Financial Statements
is determined using the weighted average method. Cost of
work-in-progress and finished goods include material cost
and appropriate share of manufacturing overheads.
vii. Provisions and contingent liabilities
Provisions are recognised when the Company has a
present obligation as a result of past event, it is probable
that an outflow of resources will be required to settle the
obligation, and a reliable estimate can be made of the
amount of obligation.
A disclosure for a contingent liability is made when there is
a possible obligation or a present obligation that may, but
probably will not, require an outflow of resources. Where
there is a possible obligation or a present obligation in
respect of which the likelihood of outflow of resources is
remote, no provision or disclosure is made.
The Company recognizes provision for onerous contracts
based on the estimate of excess of unavoidable costs of
meeting obligations under the contracts over the expected
economic benefits.
viii. Revenue recognition
Services:
The Company recognizes revenue when the significant
terms of the arrangement are enforceable, services have
been delivered and the collectability is reasonably assured.
The method for recognizing revenues and costs depends
on the nature of the services rendered:
A. Time and material contracts
Revenues and costs relating to time and material contracts
are recognized as the related services are rendered.
B.
Fixed-price contracts
Revenues from fixed-price contracts, including systems
development and integration contracts are recognized
using the “percentage-of-completion” method. Percentage
of completion is determined based on project costs
incurred to date as a percentage of total estimated
project costs required to complete the project. When
total cost estimates exceed revenues in an arrangement,
the estimated losses are recognized in the statement of
profit and loss in the period in which such losses become
probable based on the current contract estimates.
‘Unbilled revenues’ included in other current assets
represent cost and earnings in excess of billings as of the
balance sheet date. ‘Unearned revenues’ included in other
current liabilities represent billing in excess of revenue
recognized.
C. Maintenance contracts
Revenue from maintenance contracts is recognized ratably
over the period of the contract using the percentage of
completion method. When services are performed through
an indefinite number of repetitive acts over a specified
period of time, revenue is recognized on a straight-line
basis over the specified period unless some other method
better represents the stage of completion.
In certain projects, a fixed quantum of service or output
units is agreed at a fixed price for a fixed term. In such
contracts, revenue is recognized with respect to the
actual output achieved till date as a percentage of total
contractual output. Any residual service unutilized by the
customer is recognized as revenue on completion of the
term.
Products:
Revenue from sale of products is recognised when the
product has been delivered, in accordance with the sales
contract. Revenues from product sales are shown as net
of excise duty, sales tax separately charged and applicable
discounts.
Other income:
Agency commission is accrued when shipment of
consignment is dispatched by the principal.
Interest is recognized using the time-proportion method,
based on rates implicit in the transaction.
Dividend income is recognized when the Company’s right
to receive dividend is established.
ix.
Leases
Leases of assets, where the Company assumes substantially
all the risks and rewards of ownership are classified as
finance leases. Finance leases are capitalized at the lower
of the fair value of the leased assets at inception and the
present value of minimum lease payments. Lease payments
are apportioned between the finance charge and the
outstanding liability. The finance charge is allocated to
periods during the lease term at a constant periodic rate
of interest on the remaining balance of the liability.
Leases where the lessor retains substantially all the risks
and rewards of ownership are classified as operating leases.
Lease rentals in respect of assets taken under operating
leases are charged to profit and loss account on a straight
line basis over the lease term.
In certain arrangements, the Company recognizes revenue
from the sale of products given under finance leases. The
Company records gross finance receivables, unearned
income and the estimated residual value of the leased
equipment on consummation of such leases. Unearned
income represents the excess of the gross finance lease
receivable plus the estimated residual value over the sales
price of the equipment. The Company recognises unearned
income as financing revenue over the lease term using the
effective interest method.
Annual Report 2011-12
162
04 Consolidated_2012.indd 162
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x.
Foreign currency transactions
Transaction:
The Company is exposed to currency fluctuations on foreign
currency transactions. Foreign currency transactions are
accounted in the books of account at the average rate for
the month.
The difference between the rate at which foreign currency
transactions are accounted and the rate at which they are
realized is recognized in the statement of profit and loss.
Translation:
Monetary foreign currency assets and liabilities at period-
end are translated at the closing rate. The difference arising
from the translation is recognised in the statement of
profit and loss, except for the exchange difference arising
on monetary items that qualify as hedging instruments in
a cash flow hedge or hedge of a net investment in a non-
integral foreign operation. In such cases the exchange
difference is initially recognised in hedging reserve or
translation reserve, respectively. Such exchange differences
are subsequently recognised in the statement of profit and
loss on occurrence of the underlying hedged transaction
or on disposal of the investment, respectively. Further,
foreign currency differences arising from translation of
intercompany receivables or payables relating to foreign
operations, the settlement of which is neither planned nor
likely in the foreseeable future, are considered to form part
of net investment in foreign operation and are recognized
in Foreign Currency Translation Reserve (FCTR).
Integral operations:
Monetary assets and liabilities are translated at the
exchange rate prevailing at the date of the balance sheet.
Non-monetary items are translated at the historical rate.
The items in the statement of profit and loss are translated
at the average exchange rate during the period. The
differences arising out of the translation are recognised in
the statement of profit and loss.
Non-integral operations:
Assets and liabilities are translated at the exchange rate
prevailing at the date of the balance sheet. The items in the
statement of profit and loss are translated at the average
exchange rate during the period. The differences arising
out of the translation are transferred to translation reserve.
xi.
Financial Instruments
Financial instruments are recognised when the Company
becomes a party to the contractual provisions of the
instrument.
Derivative instruments and Hedge accounting:
The Company is exposed to foreign currency fluctuations
on foreign currency assets, liabilities, net investment in
Consolidated Financial Statements
non-integral foreign operations and forecasted cash flows
denominated in foreign currency. The Company limits the
effects of foreign exchange rate fluctuations by following
established risk management policies including the use of
derivatives. The Company enters into derivative financial
instruments, where the counterparty is a bank.
The Company has adopted the principles of Accounting
Standard 30, Financial Instruments: Recognition and
Measurement (AS 30) issued by ICAI except to the
extent the adoption of AS 30 does not conflict with
existing accounting standards prescribed by Companies
(Accounting Standards) Rules, 2006 and other authoritative
pronouncements.
In accordance with the recognition and measurement
principles set out in AS 30, changes in fair value of
derivative financial instruments designated as cash flow
hedges are recognised directly in shareholders’ funds
and reclassified into the profit and loss account upon the
occurrence of the hedged transaction. The Company also
designates derivative financial instruments as hedges
of net investment in non-integral foreign operation. The
portion of the changes in fair value of derivative financial
instruments determined to be an effective hedge are
recognised in the shareholders’ funds and would be
recognised in the statement of profit and loss upon sale
or disposal of related non-integral foreign operation.
Changes in fair value relating to the ineffective portion of
the hedges and derivatives that do not qualify for hedge
accounting are recognised in the statement of profit and
loss.
The fair value of derivative financial instruments is
determined based on observable market inputs including
currency spot and forward rates, yield curves, currency
volatility etc.
Non-Derivative Financial Instruments
A financial instrument is any contract that gives rise to
a financial asset of one entity and a financial liability or
equity instrument of another entity. Financial assets of the
Company mainly include cash and bank balances, trade
receivables, unbilled revenues, finance lease receivables,
employee travel and other advances, other loans and
advances and derivative financial instruments with a
positive fair value. Financial liabilities of the Company
mainly comprise secured and unsecured borrowings, trade
payables, accrued expenses, eligible current and non-
current liabilities and derivative financial instruments with a
negative fair value. Financial assets are derecognized when
all of risks and rewards of the ownership of the financial
asset have been transferred. In cases where substantial risk
and rewards of ownership of the financial assets are neither
transferred nor retained, financial assets are derecognized
only when the Company has not retained control over the
financial asset.
04 Consolidated_2012.indd 163
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Wipro Limited
163
Consolidated Financial Statements
The Company measures the financial assets and liabilities,
except for derivative financial assets and liabilities at
amortized cost using the effective interest method.
The Company measures the short-term payables and
receivables with no stated rate of interest at original
invoice amount, if the effect of discounting is immaterial.
Noninterest bearing deposits are discounted to their
present value.
xii. Depreciation and amortisation
The Company has provided for depreciation using straight
line method, at the rates specified in Schedule XIV to the
Companies Act, 1956, except in cases of the following
assets, which are depreciated based on estimated useful
life, which is higher than the rates specified in Schedule
XIV.
Nature of asset
Buildings
Computer equipment and software
(included under plant and machinery)
Furniture and fixtures
Electrical installations
(included under plant and machinery)
Office equipment
Vehicles
Plant and machinery
Life of asset
30 – 60 years
2 – 6 years
3 – 10 years
5 years
3 – 10 years
4 years
2 – 21 years
Fixed assets individually costing Rupees five thousand or
less are depreciated at 100% over a period of one year.
Assets under finance lease are amortised over their
estimated useful life or the lease term, whichever is lower.
Intangible assets are amortized over their estimated useful
life on a straight line basis. For various brands acquired by
the Company, estimated useful life has been determined
ranging between 20 to 25 years. The Company believes
this based on number of factors including the competitive
environment, market share, brand history, product life
cycles, operating plan, no restrictions on title and the
macroeconomic environment of the countries in which
the brands operate. Accordingly, such intangible assets are
being amortised over the determined useful life. Payments
for leasehold land are amortised over the period of lease.
xiii.
Impairment of assets
Financial assets:
The Company assesses at each balance sheet date whether
there is any objective evidence that a financial asset or
group of financial assets is impaired. If any such indication
exists, the Company estimates the amount of impairment
loss. The amount of loss for short-term receivables is
measured as the difference between the assets carrying
amount and undiscounted amount of future cash flows.
Reduction, if any, is recognised in the statement of profit
and loss. If at the balance sheet date there is any indication
that if a previously assessed impairment loss no longer
exists, the recognised impairment loss is reversed, subject
to maximum of initial carrying amount of the short-term
receivable.
Other than financial assets:
The Company assesses at each balance sheet date whether
there is any indication that a non-financial asset including
goodwill may be impaired. If any such indication exists, the
Company estimates the recoverable amount of the asset.
If such recoverable amount of the asset or the recoverable
amount of the cash generating unit to which the asset
belongs to is less than its carrying amount, the carrying
amount is reduced to its recoverable amount. The reduction
is treated as an impairment loss and is recognised in the
statement of profit and loss. If at the balance sheet date
there is an indication that a previously assessed impairment
loss no longer exists, the recoverable amount is reassessed
and the asset is reflected at the recoverable amount subject
to a maximum of depreciated historical cost. In respect of
goodwill, the impairment loss will be reversed only when
it was caused by specific external events of an exceptional
nature that is not expected to recur and their effects have
been reversed by subsequent external events.
xiv. Employee benefits
Provident fund:
Employees receive benefits from a provident fund. The
employee and employer each make monthly contributions
to the plan. A portion of the contribution is made to the
provident fund trust managed by the Company, while the
remainder of the contribution is made to the Government’s
provident fund. The Company is generally liable for any
shortfall in the fund assets based on the government
specified minimum rate of return.
Compensated absences:
The employees of the Company are entitled to compensated
absence. The employees can carry-forward a portion of
the unutilized accumulating compensated absences and
utilize it in future periods or receive cash compensation at
retirement or termination of employment. The Company
records an obligation for compensated absences in the
period in which the employee renders the services that
increases this entitlement. The Company measures the
expected cost of compensated absence as the additional
amount that the Company expects to pay as a result of
the unused entitlement that has accumulated at the
balance sheet date. The Company recognizes accumulated
compensated absences based on actuarial valuation. Non-
accumulating compensated absences are recognized in
the period in which the absences occur. The Company
recognizes actuarial gains and losses immediately in the
statement of profit and loss.
Annual Report 2011-12
164
04 Consolidated_2012.indd 164
6/19/2012 7:50:32 PM
Buildings
Computer equipment
Gratuity:
In accordance with the Payment of Gratuity Act, 1972, the
Company provides for a lump sum payment to eligible
employees, at retirement or termination of employment
based on the last drawn salary and years of employment
with the Company. The gratuity fund is managed by the
Life Insurance Corporation of India (LIC), HDFC Standard
Life, TATA AIG and Birla Sun-life. The Company’s obligation
in respect of the gratuity plan, which is a defined benefit
plan, is provided for based on actuarial valuation carried
out by an independent actuary using the projected unit
credit method. The Company recognizes actuarial gains
and losses immediately in the statement of profit and loss.
Superannuation:
Superannuation plan, a defined contribution scheme, is
administered by the LIC and ICICI Prudential Insurance
Company Limited. The Company makes annual
contributions based on a specified percentage of each
eligible employee’s salary.
xv. Employee stock options
The Company determines the compensation cost based
on the intrinsic value method. The compensation cost is
amortised on a straight line basis over the vesting period.
xvi. Taxes
Income tax:
The current charge for income taxes is calculated in
accordance with the relevant tax regulations. Tax liability
for domestic taxes has been computed after considering
Minimum Alternate Tax (MAT). The excess tax paid under
MAT provisions being over and above regular tax liability can
be carried forward and set off against future tax liabilities
computed under regular tax provisions. Accordingly, MAT
credit has been recognized, wherever applicable on the
balance sheet which can be carried forward for a period
of ten years from the year of recognition.
Deferred tax:
Deferred tax assets and liabilities are recognised for the
future tax consequences attributable to timing differences
that result between the profit offered for income taxes and
the profit as per the financial statements of each entity in
the Group.
Deferred taxes are recognised in respect of timing
differences which originate during the tax holiday period
but reverse after the tax holiday period. For this purpose,
reversal of timing difference is determined using first in
first out method.
Deferred tax assets and liabilities are measured using
the tax rates and tax laws that have been enacted or
Consolidated Financial Statements
substantively enacted by the balance sheet date. The effect
on deferred tax assets and liabilities of a change in tax rates
is recognised in the period that includes the enactment/
substantive enactment date.
Deferred tax assets on timing differences are recognised
only if there is a reasonable certainty that sufficient future
taxable income will be available against which such
deferred tax assets can be realized. However, deferred
tax assets on the timing differences when unabsorbed
depreciation and losses carried forward exist, are
recognised only to the extent that there is virtual certainty
that sufficient future taxable income will be available
against which such deferred tax assets can be realized.
Deferred tax assets are reassessed for the appropriateness
of their respective carrying amounts at each balance sheet
date.
The Company offsets, on a year on year basis, it’s current
and non-current tax assets and liabilities, where it has a
legally enforceable right and where it intends to settle such
assets and liabilities on a net basis.
xvii. Earnings per share
Basic:
The number of equity shares used in computing basic
earnings per share is the weighted average number of
shares outstanding during the year excluding equity shares
held by controlled trust.
Diluted:
The number of equity shares used in computing diluted
earnings per share comprises the weighted average
number of equity shares considered for deriving basic
earnings per share, and also the weighted average number
of equity shares that could have been issued on the
conversion of all dilutive potential equity shares.
Dilutive potential equity shares are deemed converted
as of the beginning of the period, unless issued at a later
date. The number of equity shares and potentially dilutive
equity shares are adjusted for any stock splits and bonus
shares issued.
xviii. Cash flow statement
Cash flows are reported using the indirect method,
whereby net profits before tax is adjusted for the effects
of transactions of a non-cash nature and any deferrals or
accruals of past or future cash receipts or payments. The
cash flows from regular revenue generating, investing and
financing activities of the Company are segregated.
04 Consolidated_2012.indd 165
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Wipro Limited
165
Consolidated Financial Statements
3.
Share capital
Authorised Capital
2,650,000,000 (2011: 2,650,000,000) equity shares [Par value of ` 2 per share]
25,000,000 (2011: 25,000,000) 10.25% redeemable cumulative preference shares
[Par value of ` 10 per share]
Issued, subscribed and fully paid-up capital [Refer note (i) below]
2,458,756,228 (2011: 2,454,409,145) equity shares of ` 2 each
Less: 1,614,671 (2011: 1,614,671) equity shares issued to controlled trusts
2,457,141,557 (2011: 2,452,794,474) equity shares of ` 2 each
As of March 31,
2012
5,300
250
5,550
4,917
(2)
4,915
2011
5,300
250
5,550
4,908
(2)
4,906
Terms / Rights attached to equity shares
The Company has only one class of equity shares having a par value of ` 2 per share. Each shareholder of equity shares is entitled
to one vote per share. The Company declares and pays dividend in Indian Rupees. The dividend proposed by the Board of Directors
is subject to shareholders approval in the ensuing Annual General Meeting.
Following is the summary of per share dividends recognised as distributions to equity shares.
For the Year ended March 31,
2011
` 2
Interim dividend
` 4
Final dividend
In the event of liquidation of the Company, the equity shareholders will be entitled to receive the remaining assets of the Company,
after distribution of all preferential amounts, if any, in proportion to the number of equity shares held by the shareholders.
2012
` 2
` 4
(i) Reconciliation of number of shares
As of March 31, 2012
No. of Shares ` million
As of March 31, 2011
No. of shares
` million
Opening number of equity shares / American Depository Receipts
(ADRs) outstanding
Equity shares / ADRs fully allotted as fully paid bonus shares /
ADRs by capitalization of Securities Premium account and Capital
redemption reserve
Equity shares issued pursuant to Employee Stock Option Plan
Number of equity shares / ADRs outstanding
Less: Equity shares issued to controlled trusts
Closing number of equity shares / ADRs outstanding
2,454,409,145
4,908
1,468,211,189
2,936
–
4,347,083
2,458,756,228
(1,614,671)
2,457,141,557
–
9
4,917
(2)
4,915
979,765,124
6,432,832
2,454,409,145
(1,614,671)
2,452,794,474
1,960
12
4,908
(2)
4,906
Name of the Shareholder
(ii) Details of shareholders having more than 5% of the total equity shares of the Company
Sl.
No.
1. Mr. Azim Hasham Premji Partner representing Hasham Traders
2. Mr. Azim Hasham Premji Partner representing Prazim Traders
3. Mr. Azim Hasham Premji Partner representing Zash Traders
4.
As of March 31, 2012
No. of shares % held
22.12
543,765,000
22.03
541,695,000
21.98
540,408,000
7.94
195,187,120
Azim Premji Trust
As of March 31, 2011
No. of shares
543,765,000
541,695,000
540,408,000
213,000,000
% held
22.15
22.07
22.01
8.68
(iii) Other details of Equity Shares for a period of five years immediately preceding March 31, 2012
Aggregate number of share allotted as fully paid up pursuant to contract(s) without payment
being received in cash
(Allotted to the Wipro Inc. Trust, the sole beneficiary of which is Wipro Inc., a wholly owned
subsidiary of the Company, in consideration of acquisition of inter-company investments)
Aggregate number of shares allotted as fully paid bonus shares
Aggregate number of shares bought back
As of March 31,
2012
2011
1,614,671
1,614,671
979,119,256
–
979,119,256
–
Annual Report 2011-12
166
04 Consolidated_2012.indd 166
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(iv) Shares reserved for issue under option
For details of shares reserved for issue under the employee stock option plan of the Company, refer note 35.
4.
Reserves and surplus
Consolidated Financial Statements
Capital Reserve
Balance brought forward from previous year
Additions during the year
Securities premium account
Balance brought forward from previous year
Add: Exercise of stock options by employees
Less : Amount utilised for bonus shares
Less: Shares issued to controlled trust [refer note 3(iii)]
Foreign exchange translation reserve
Balance brought forward from previous year
Movement during the year
Restricted stock units reserve [Refer note 35] *
Employee stock options outstanding
Less: Deferred employee compensation expense
General reserve
Balance brought forward from previous year
Amount transferred from surplus balance in the statement of profit and loss
[Refer note (a) below]
Hedging reserve [Refer note 29 & 2(xi)]
Balance brought forward from previous year
Net loss reclassified into statement of profit and loss
Deferred cancellation gain / (loss) relating to roll-over hedging
Changes in fair value of effective portion of derivatives
Gain / (loss) on cash flow hedging derivatives, net
Surplus from statement of profit and loss
Balance brought forward from previous year
Add: Profit for the year
Less: Appropriations
– Interim dividend
– Proposed dividend
– Tax on dividend
– Amount transferred to general reserve
Closing balance
As of March 31,
2012
1,144
–
1,144
30,123
332
–
30,455
(540)
29,915
1,485
5,910
7,395
2,819
(1,913)
906
2011
1,144
–
1,144
29,188
2,895
(1,960)
30,123
(540)
29,583
218
1,267
1,485
3,791
(3,507)
284
157,544
152,712
4,594
162,138
(1,226)
1,272
(12)
(1,639)
(379)
(1,605)
31,150
56,045
4,917
9,835
2,393
4,685
65,365
265,258
4,832
157,544
(4,954)
4,041
222
(535)
3,728
(1,226)
–
52,924
4,908
9,818
2,204
4,844
31,150
219,964
* Restricted stock units reserve includes Deferred Employee Compensation, which represents future charge to the statement of
profit and loss and employee stock options outstanding to be treated as securities premium at the time of allotment of shares.
04 Consolidated_2012.indd 167
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Wipro Limited
167
Consolidated Financial Statements
(a) Additions to General Reserve include:
Transfer from statement of profit and loss
Adjustment on account of merger
Additional purchase consideration
(Additional dividend paid) / Excess provision reversed for the previous year
Dividend paid to Wipro Equity Reward Trust and Wipro Inc Benefit Trust
Others
5.
Share application money pending allotment
For the year ended March 31,
2012
4,685
–
(186)
(6)
142
(41)
4,594
2011
4,844
(64)
(54)
19
74
13
4,832
a) Number of shares proposed to be issued for share application money pending allotment outstanding as of March 31,
2012 and 2011 is 150,824 and 211,605 respectively representing the shares to be issued under employee stock option
plan formulated by the Company.
Securities premium on account of shares pending allotment amounts to ` 39 and ` 55 as of March 31, 2012 and 2011,
respectively. The shares pending allotment as of the year-end is expected to be allotted upon the completion of the
vesting period based on the grant to which it pertains to.
b)
c)
The Company has sufficient authorized equity share capital to cover the share capital on allotment of shares pending
allotment as of March 31, 2012 and 2011.
d)
There are no interest accrued and due on amount due for refund as of March 31, 2012 and 2011.
e) No shares are pending for allotment beyond the period for allotment as of March 31, 2012 and 2011.
6.
Long term borrowings
Secured:
Term loan from bank (a)
Obligation under finance lease (b)
Unsecured:
Term loan:
External commercial borrowing (c)
Interest free loan from State Government (d)
Others (e)
As of March 31,
2012
44
454
498
21,728
37
247
22,012
22,510
2011
49
431
480
18,861
37
381
19,279
19,759
(a) Term loan from bank are repayable in four equal installments of ` 11 starting from financial year 2013-14. Term loan carries an
interest of 6.5%. Term loan from bank is secured by hypothecation of stock-in-trade, book debts, immovable/movable properties
and other assets of a subsidiary.
(b) Obligation under finance lease is secured by underlying fixed assets. These obligations are repayable in monthly installments
within the year ending March 31, 2017. The interest rates for these finance lease obligations ranges from 2.5% to 15.6%.
(c) The Company entered into an arrangement with a consortium of banks to obtain External Commercial Borrowings (ECB) during the
year ended March 31, 2008. Pursuant to this arrangement, the Company has availed ECB of approximately 35 billion Yen repayable
in full in April 2013. The ECB carries an average interest rate of 1.86% p.a. The ECB is an unsecured borrowing and the Company is
subject to certain customary restrictions on additional borrowings and quantum of payments for acquisitions in a financial year.
(d) Interest free loan from State Government is repayable in five equal annual installments of ` 7 starting from financial year 2013-14.
(e) Unsecured loans from others are repayable in monthly installments within the year ending March 31, 2015. The interest rate for
these loans ranges from 6.03% to 7.21%.
As of March 31, 2012 and 2011, the Company has complied with the covenants under the loan arrangements.
Annual Report 2011-12
168
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7. Other long term liabilities
Others
Derivative liabilities
Deposits and other advances received
Others
8.
Long term provisions
Employee benefit obligations
Warranty provision [Refer note 37]
9.
Short term borrowings
Secured:
Cash credit (a)
Unsecured:
Loan repayable on demand from banks (b)
Consolidated Financial Statements
As of March 31,
2012
307
96
375
778
As of March 31,
2012
3,046
61
3,107
As of March 31,
2012
1,727
33,753
35,480
2011
2,586
73
–
2,659
2011
2,633
81
2,714
2011
1,325
29,841
31,166
(a) Cash credit is secured by hypothecation of stock-in-trade, book debts, immovable/movable properties and other assets of two
subsidiaries. The interest rate for these loans ranges from 1.53% to 6.4%.
(b) The interest rate for loan repayable on demand from banks ranges from 1.0% to 6.4% other than PCFC loan disbursed in Indian
Rupees, interest rate for which is 9.50%.
10. Trade payables
Trade payables
Accrued expenses
11. Other current liabilities
Current maturities of long term borrowings
Current maturities of obligation under finance lease
Unearned revenue
Statutory liabilities
Derivative liabilities
Advances from customers
Unclaimed dividends
Interest accrued but not due on borrowings
Others
As of March 31,
2012
28,805
18,931
47,736
As of March 31,
2012
706
262
9,569
4,689
6,780
1,153
22
102
22
23,305
2011
22,201
19,846
42,047
2011
1,673
203
6,595
4,046
1,814
1,025
20
31
762
16,169
Wipro Limited
169
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Consolidated Financial Statements
12. Short term provisions
Employee benefit obligations
Provision for tax
Proposed dividend
Tax on proposed dividend
Warranty provision [Refer note 37]
Others [Refer note 37]
13. Tangible assets
Gross carrying value:
As of April 1, 2010
Translation adjustment (b)
Additions (c)
Disposal / adjustments
As of March 31, 2011
As of April 01, 2011
Translation adjustment (b)
Additions (c)
Additions due to acquisitions
Disposal / adjustments
As of March 31, 2012
Depreciation
As of April 1, 2010
Translation adjustment (b)
Charge for the year
Disposal / adjustments
As of March 31, 2011
As of April 01, 2011
Translation adjustment (b)
Charge for the year
Disposal / adjustments
As of March 31, 2012
Net Block
As of March 31, 2011
As of March 31, 2012
As of March 31,
2012
3,176
12,700
9,776
1,595
306
815
28,368
2011
2,028
12,361
9,818
1,593
467
1,858
28,125
Land (a)
Buildings
Plant and
machinery
Furniture
and fixtures
Office
equipment
Vehicles
Total
4,110
19
1,053
–
5,182
5,182
61
574
6
(44)
5,779
115
1
42
–
158
158
12
71
(55)
186
19,214
117
3,533
(41)
22,823
22,823
389
2,113
15
(159)
25,181
2,015
50
489
(39)
2,515
2,515
136
646
(28)
3,269
47,006
337
8,360
(1,145)
54,558
54,558
1,951
10,073
279
(960)
65,901
31,437
230
5,493
(1,077)
36,083
36,083
1,217
6,531
(622)
43,209
5,024
5,593
20,308
21,912
18,475
22,692
6,753
33
1,315
(521)
7,580
7,580
136
1,261
32
(467)
8,542
3,787
10
903
(316)
4,384
4,384
70
1,495
(343)
5,606
3,196
2,936
3,108
35
377
(70)
3,450
3,450
93
468
19
(56)
3,974
1,756
35
350
(59)
2,082
2,082
63
568
(38)
2,675
1,368
1,299
2,941
11
117
(458)
2,611
2,611
26
69
9
(621)
2,094
2,019
13
455
(354)
2,133
2,133
21
281
(536)
1,899
83,132
552
14,755
(2,235)
96,204
96,204
2,656
14,558
360
(2,307)
111,471
41,129
339
7,732
(1,845)
47,355
47,355
1,519
9,592
(1,622)
56,844
478
195
48,849
54,627
(a) Includes Gross block of ` 1,586 (2011 : ` 1,426) and Accumulated amortisation of ` 186 (2011 : ` 158) being leasehold land.
(b) Represents translation of tangible assets of non-integral operations into Indian Rupee.
(c) Interest capitalised aggregated to ` 43 and ` 137 for the year ended March 31, 2012 and 2011 respectively.
Annual Report 2011-12
170
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14.
Intangible assets
Gross carrying value:
As of April 1, 2010
Translation adjustment (a)
Additions
Disposal / adjustments
As of March 31, 2011
As of April 1, 2011
Translation adjustment (a)
Additions
Disposal / adjustments
As of March 31, 2012
Amortisation
As of April 1, 2010
Translation adjustment (a)
Charge for the year
Disposal / adjustments
As of March 31, 2011
As of April 01, 2011
Translation adjustment (a)
Amortisation
Disposal / adjustments
As of March 31, 2012
Net Block
As of March 31, 2011
As of March 31, 2012
Consolidated Financial Statements
Technical
Know-how
Brands, patents,
trademarks and
rights
377
19
91
(3)
484
484
32
73
(7)
582
355
18
20
50
443
443
30
22
(8)
487
41
95
2,744
(109)
1
–
2,636
2,636
93
30
–
2,759
830
(61)
139
–
908
908
39
140
–
1,087
1,728
1,672
Total
3,121
(90)
92
(3)
3,120
3,120
125
103
(7)
3,341
1,185
(43)
159
50
1,351
1,351
69
162
(8)
1,574
1,769
1,767
(a) Represents translation of intangible assets of non-integral operations into Indian Rupee.
15. Non-current investments
(Valued at cost unless stated otherwise)
Investment in unquoted equity instruments (Associate)
– Wipro GE Healthcare Private Limited (a) [Refer note 30]
As of March 31,
2012
3,232
3,232
2011
2,993
2,993
(a) Investments in this Company carry certain restrictions on transfer of shares as provided for in the shareholders’ agreements.
16. Long term loans and advances
(Unsecured, considered good unless otherwise stated)
Capital advances
Prepaid expenses
Security deposits
Advance income tax
Other deposits
Other advances
As of March 31,
2012
1,998
3,068
1,372
15,922
533
–
22,893
2011
2,212
2,423
1,409
14,156
271
39
20,510
Wipro Limited
171
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Consolidated Financial Statements
17. Other non-current assets
Secured, considered good:
Finance lease receivables
Unsecured, considered good:
Derivative assets
Finance lease receivables are secured by the underlying assets given on lease.
18. Current investments
Quoted
Investments in Indian money market mutual funds * [Refer note 44(i)]
Investment in debentures [Refer note 44(ii)]
Unquoted
Certificate of deposits/bonds [Refer note 44(iii)]
Investment in equity instruments [Refer note 44(iv)]
Others
Aggregate market value of quoted investments
As of March 31,
2012
5,710
3,458
9,168
As of March 31,
2012
20,760
129
20,889
20,497
69
28
20,594
41,483
20,914
2011
4,839
2,984
7,823
2011
25,200
722
25,922
23,394
69
28
23,491
49,413
25,968
* include investments in mutual funds amounting to ` 400 (2011: Nil) pledged as margin money deposit for entering into currency
future contracts.
19.
Inventories
Raw materials
Stock in process
Finished goods
Traded goods
Stores and spares
20. Trade Receivables
Unsecured
Over six months from the date they were due for payment
Considered good
Considered doubtful
Less: Provision for doubtful receivables
Other receivables
Considered good
Considered doubtful
Less: Provision for doubtful receivables
Annual Report 2011-12
172
As of March 31,
2012
4,144
1,410
1,873
1,964
1,271
10,662
2011
3,217
1,109
875
3,381
1,125
9,707
As of March 31,
2012
2011
7,608
2,678
10,286
(2,678)
7,608
72,779
176
72,955
(176)
72,779
80,387
3,487
2,489
5,976
(2,489)
3,487
58,286
105
58,391
(105)
58,286
61,773
04 Consolidated_2012.indd 172
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21. Cash and bank balances
Cash and cash equivalents
Balances with Banks [Refer note 45]
– In current accounts
– Unclaimed dividend
– In deposit accounts
Cheques, drafts on hand
Cash in hand
Deposit accounts with more than 3 months but less than 12 months maturity
Deposit accounts with more than 12 months maturity
Consolidated Financial Statements
As of March 31,
2012
2011
39,481
22
36,525
1,632
6
77,666
24,590
900
26,654
20
33,514
949
4
61,141
20,004
1,283
a)
b)
Cash and cash equivalents include restricted cash balance of ` 22 and ` 20, primarily on account of unclaimed dividends, as
of March 31, 2012 and 2011, respectively.
The deposits with banks comprise time deposits, which can be withdrawn at any time without prior notice and without any
penalty on the principal.
22. Short term loans and advances
(Unsecured, considered good unless otherwise stated)
Employee travel and other advances
Advance to suppliers
Balance with excise and customs
Inter corporate deposits
Prepaid expenses
Security deposits
Other deposits
MAT credit entitlement
Others
Considered doubtful
Less: Provision for doubtful loans and advances
23. Other current assets
Secured, considered good:
Finance lease receivables
Unsecured, considered good:
Derivative assets
Interest receivable
Unbilled revenue
Finance lease receivables are secured by the underlying assets given on lease.
As of March 31,
2012
2,127
1,120
1,543
8,410
4,585
608
253
1,223
3,394
844
24,107
(844)
23,263
As of March 31,
2012
2,003
2,003
1,879
1,659
30,025
33,563
35,566
2011
1,500
760
1,570
4,240
3,431
325
278
488
2,679
568
15,839
(568)
15,271
2011
2,411
2,411
2,124
929
24,149
27,202
29,613
Wipro Limited
173
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Consolidated Financial Statements
24. Other income
Income from current investments
– Dividend on mutual fund units
– Profit on sale of investments, net
Interest on debt instruments and others
Other exchange differences, net
Miscellaneous income
25. Employee benefits expense
Salaries and wages
Contribution to provident and other funds
Share based compensation
Staff welfare expenses
26. Finance costs
Interest
Exchange fluctuations on foreign currency borrowings, net
27. Other expenses
Subcontracting / technical fees / third party application
Travel
Advertisement and sales promotion
Repairs
Communication
Power and fuel
Rent
Stores and spares
Insurance
Rates and taxes
Auditors’ remuneration
Miscellaneous expenses
Year ended March 31,
2012
2,211
190
6,497
3,278
509
12,685
2011
2,402
152
4,064
445
646
7,709
Year ended March 31,
2012
146,030
3,707
954
3,383
154,074
2011
119,437
3,376
1,433
2,964
127,210
Year ended March 31,
2012
1,025
2,414
3,439
2011
776
1,156
1,932
Year ended March 31,
2012
33,877
12,484
6,946
4,876
3,296
2,890
3,734
1,132
1,334
563
46
18,433
89,611
2011
26,121
9,967
5,337
5,255
3,745
2,452
3,230
827
877
460
40
12,141
70,452
Annual Report 2011-12
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28. Adoption of AS 30
The Company has applied the principles of AS 30, as per
announcement by ICAI except to the extent such principles
of AS 30 does not conflict with existing accounting
standards prescribed by Companies (Accounting Standards)
Rules, 2006.
i)
ii)
iii)
As permitted by AS 30, the Company has designated
a yen-denominated foreign currency borrowing
amounting to JPY 16.5 billion (2011: JPY 16.5 billion)
along with a floating for floating Cross-Currency Interest
Rate Swap (CCIRS), as a hedging instrument to hedge
its net investment in a non-integral foreign operation.
In addition, the Company has also designated yen-
denominated foreign currency borrowing amounting to
JPY 8 billion (2011: JPY 8 billion) along with floating for
fixed CCIRS as cash flow hedge of the yen-denominated
borrowing and also as a hedge of net investment in
non-integral foreign operation.
Accordingly, the translation gain/(loss) on the
foreign currency borrowings and portion of the
changes in fair value of CCIRS which are determined
to be effective hedge of net investment in non-
integral operation and cash flow hedge of yen-
denominated borrowings aggregating to ` (1,633)
for the year ended March 31, 2012 (2011: ` 447) was
recognised in translation reserve / hedging reserve
in shareholders’ funds. The amount of gain/(loss) of
` (1,627) for the year ended March 31, 2012 (2011:
` 142) recognised in translation reserve would be
transferred to profit and loss account upon sale or
disposal of the non-integral foreign operation and the
amount of gain / (loss) of ` (6) for year ended March
31, 2012 (2011: ` 305) recognised in the hedging
reserve would be transferred to the statement of
profit and loss occurrence of the hedged transaction.
In accordance with AS 11, if the Company had
continued to recognize translation (losses) /gains
on foreign currency borrowing in the statement
of profit and loss, the foreign currency borrowing
would not have been eligible to be combined
with CCIRS for hedge accounting. Consequently,
the CCIRS also would not have qualified for hedge
accounting and changes in fair value of CCIRS would
have to be recognised in the statement of profit
and loss. As a result profit after tax would have been
lower by ` 1,633 for the year ended March 31, 2012
(2011: higher by ` 447).
29. Derivatives
As of March 31, 2012, the Company has recognised losses
of ` 1,605 (2011: ` 1,226) relating to derivative financial
instruments (comprising of foreign currency forward
contract, option contracts and floating to fixed CCIRS)
that are designated as effective cash flow hedges in the
shareholders’ funds.
In addition to the derivative instruments discussed above in
Note 28, the Company has also designated certain foreign
currency forward contracts to hedge its net investment
Consolidated Financial Statements
in non-integral foreign operations. The Company has
recognized loss of ` 1,153 for the year ended March 31,
2012 (2011: ` 122) relating to the derivative financial
instruments in translation reserve in the shareholders’
funds.
The following table presents the aggregate contracted
principal amounts of the Company’s derivative contracts
outstanding as of:
(In Million)
As of March 31,
2012
2011
Designated cash flow hedging
derivative instruments
Sell
$
£
¥
AUD
CHF
€
1,081 $
4 £
1,474 ¥
– AUD
– CHF
17 €
901
21
3,026
4
6
2
Net investment hedges in
foreign operations
Cross currency swaps
Others
Non designated derivative
instruments
Sell
Buy
Cross currency swaps
30.
Investment in associates
¥ 24,511 ¥
$
$
40 €
€
262
24,511
262
40
$
£
€
AUD
$
¥
¥
$
841
£
58
44
€
31 AUD
$
555
1,997 ¥
¥
7,000
526
40
48
13
617
–
7,000
Wipro GE Medical Systems (Wipro GE)
The Company has a 49% equity interest in Wipro GE
Healthcare Private Limited (Wipro GE), an entity in which
General Electric, USA holds the majority equity interest.
The shareholders agreement provides specific rights to the
two shareholders. Management believes that these specific
rights do not confer joint control as defined in Accounting
Standard 27 “Financial Reporting of Interests in Joint
Ventures”. Consequently, Wipro GE is not considered as a
joint venture and consolidation of financial statements is
carried out as per the equity method in terms of Accounting
Standard 23 “Accounting for Investments in Associates in
Consolidated financial statements”.
Wipro GE had received tax demands aggregating to ` 2,615
(including interest) arising primarily on account of transfer
pricing adjustments, denial of export benefits and tax
Wipro Limited
175
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Consolidated Financial Statements
holiday benefits claimed by Wipro GE under the Income Tax
Act, 1961 (the “Act”) for the year ended March 31, 2001 to
March 31, 2007. The appeals filed against the said demand
before the Appellate authorities have been allowed in favor
of the Company by first appellate authority for the years
upto March 2004 and further appeals have been filed by
the Income tax authorities before the second appellate
authority. The first appellate authority has granted partial
relief for the year ended March 31, 2005 and further appeal
would be preferred by the Company before the second
appellate authority. The Company filed appeal before the
second appellate authority for the year ended March 31,
2006 after receiving the assessment orders following the
directions of the Dispute Resolution Panel. The second
appellate authority passed an order directing assessing
officer (AO) to give fair opportunity of hearing to the
Company, the case is pending with AO. For the year ended
March 31, 2007, the appeal filed against the demand is
pending before the first appellate authority.
Considering the facts and nature of disallowance and the
order of the appellate authority upholding the claims of
Wipro GE, Wipro GE believes that the final outcome of the
disputes should be in favour of Wipro GE and will not have
any material adverse effect on its financial position and
results of operations.
Others
During the year ended March 31, 2012, the Company
entered into an agreement to purchase 26% of the equity
investments in Wipro Kawasaki Precision Machinery Pvt.
Ltd. for a cash consideration of ` 130. This investment
is accounted as an equity method investment under
Accounting Standard 23, “Accounting for Investments in
Associates in Consolidated Financial Statements”.
31. Sale of financial assets
From time to time, in the normal course of business,
the Company transfers accounts receivables and net
investment in finance lease receivables (financials assets) to
banks. Under the terms of the arrangements, the Company
surrenders control over the financial assets and transfer is
without recourse. Accordingly, such transfers are recorded
as sale of financial assets. Gains and losses on sale of
financial assets without recourse are recorded at the time
of sale based on the carrying value of the financial assets
and fair value of servicing liability.
In certain cases, transfer of financial assets may be with
recourse. Under arrangements with recourse, the Company
is obligated to repurchase the uncollected financial assets,
subject to limits specified in the agreement with the
banks. The Company has transferred trade receivables
with recourse obligation and accordingly, in such cases
the amounts received are recorded as borrowings in the
balance sheet and cash flows from financing activities. As
of March 31, 2012 and 2011, the maximum amounts of
recourse obligation in respect of the transferred financial
assets (recorded as borrowings) are ` 1,163 and ` 1,085
respectively.
32. Finance lease receivables
The Company provides lease financing for the traded and
manufactured products primarily through finance leases.
The finance lease portfolio contains only the normal
collection risk with no important uncertainties with
respect to future costs. These receivables are generally
due in monthly, quarterly or semi-annual installments over
periods ranging from 3 to 5 years.
The components of finance lease receivables are as follows:
Gross investment in lease
Not later than one year
Later than one year and not later
than five years
Unguaranteed residual values
Unearned finance income
Net investment in finance receivables
As of March 31,
2012
8,999
2,043
6,776
180
(1,286)
7,713
2011
8,851
2,523
6,129
199
(1,601)
7,250
Present value of minimum lease receivables are as follows:
As of March 31,
2012
2011
7,713
1,964
5,588
161
7,250
2,350
4,723
177
Present value of minimum lease
payments receivables
Not later than one year
Later than one year and not later
than five years
Unguaranteed residual value
33. Assets taken on lease
Finance leases:
The following is a schedule of present value of minimum
lease payments under finance leases, together with the
value of the future minimum lease payments as of March
31, 2012 and 2011.
Present value of minimum lease
payments
Not later than one year
Later than one year and not later
than five years
Thereafter
Total present value of minimum
lease payments
Add: Amount representing interest
Total value of minimum lease payments
As of March 31,
2012
2011
262
454
–
716
49
765
203
372
60
635
66
701
Annual Report 2011-12
176
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Operating leases:
The Company leases office and residential facilities
under cancelable and non-cancelable operating lease
agreements that are renewable on a periodic basis at the
option of both the lessor and the lessee. Rental payments
under such leases are ` 3,734 and ` 3,230 during the years
ended March 31, 2012 and 2011 respectively.
Details of contractual payments under non-cancelable
leases are given below:
Not later than one year
Later than one year and not later
than five years
Thereafter
34. Employee benefit plans
As of March 31,
2012
3,301
7,842
3,696
14,839
2011
1,828
5,143
3,294
10,265
Gratuity: In accordance with applicable Indian laws,
the Company provides for gratuity, a defined benefit
retirement plan (Gratuity Plan) covering certain categories
of employees. The Gratuity Plan provides a lump sum
payment to vested employees, at retirement or termination
of employment, an amount based on the respective
employee’s last drawn salary and the years of employment
with the Company. The Company provides the gratuity
benefit through annual contributions to a fund managed
by the Life Insurance Corporation of India (LIC), HDFC
Standard Life, TATA AIG and Birla Sunlife (‘Insurer’). Under
this plan, the settlement obligation remains with the
Company, although the Insurer administers the plan and
determines the contribution premium required to be paid
by the Company.
Change in the benefit obligation
As of March 31,
Consolidated Financial Statements
Change in plan assets
Fair value of plan assets at the
beginning of the year
Acquisitions
Expected return on plan assets
Employer contribution
Benefits paid
Actuarial (loss) / gain
Fair value of the plan assets at the
end of the year
Recognised asset / (liability)
As of March 31,
2012
2011
2,387
1
184
586
(344)
52
2,866
1,967
–
164
473
(230)
13
2,387
21
(89)
The Company has invested the plan assets with the insurer
managed funds. The expected return on plan assets is
based on expectation of the average long term rate of
return expected on investments of the fund during the
estimated term of the obligations. Expected contribution
to the fund during the year ending March 31, 2013 is ` 341.
Net gratuity cost for the year ended March 31, 2012 and
2011 are as follows:
Current service cost
Past service cost
Interest on obligation
Expected return on plan assets
Actuarial loss / (gain) recognized
Net gratuity cost
For the year ended
March 31,
2012
435
(16)
211
(184)
14
460
2011
386
254
161
(164)
(168)
469
The weighted average actuarial assumptions used to
determine benefit obligations and net periodic gratuity
cost are:
2012
2011
Assumptions
Projected Benefit Obligation (PBO)
at the beginning of the year
Acquisitions
Current service cost
Past service cost
Interest on obligation
Benefits paid
Actuarial loss / (gain)
PBO at the end of the year
2,476
25
435
(16)
211
(352)
66
2,845
2,060
–
386
254
161
(230)
(155)
2,476
Discount rate
Expected rate of salary increase
Expected return on plan assets
As of March 31,
2011
7.95%
5%
8%
2012
8.35%
5%
8%
04 Consolidated_2012.indd 177
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Wipro Limited
177
Consolidated Financial Statements
As of March 31, 2012, 2011, 2010 and 2009, 100% of the
plan assets were invested in the insurer managed funds.
The details of fund and plan assets are given below:
Change in the benefit obligation
As of March 31,
Experience Adjustments:
On Plan Liabilities
On Plan Assets
Present value of benefit
obligation
Fair value of plan assets
Excess of (obligations over
plan assets)/plan assets
over obligations
As of March 31,
2010
2011
2012
2009
(147)
52
(32)
15
84
18
(53)
26
2,845
2,866
2,476
2,387
2,060
1,967
1,858
1,416
21
(89)
(93)
(442)
The Company assesses these assumptions with its
projected long-term plans of growth and prevalent
industry standards. The estimates of future salary increase,
considered in actuarial valuation, take account of inflation,
seniority, promotion and other relevant factors such as
supply and demand factors in the employment market.
Superannuation: Apart from being covered under
the gratuity plan, the employees of the Company also
participate in a defined contribution plan maintained by
the Company. This plan is administered by the LIC & ICICI.
The Company makes annual contributions based on a
specified percentage of each covered employee’s salary.
For the year ended March 31, 2012, the Company
contributed ` 493 to superannuation fund (2011: ` 631).
Provident Fund (PF): In addition to the above, all
employees receive benefits from a provident fund. The
employee and employer each make monthly contributions
to the plan equal to 12% of the covered employee’s salary.
A portion of the contribution is made to the provident fund
trust established by the Company, while the remainder of
the contribution is made to the Government’s provident
fund.
The interest rate payable by the trust to the beneficiaries
is regulated by the statutory authorities. The Company has
an obligation to make good the shortfall, if any, between
the returns from its investments and the administered rate.
Upto year ended March 31, 2011, in the absence of
guidance from the Actuarial Society of India, actuarial
valuation could not have been applied to reliably measure
the provident fund liabilities. During the year ended March
31, 2012, the Actuarial Society of India issued the final
guidance for measurement of provident fund liabilities.
Accordingly, based on such actuarial valuation there is no
shortfall in the fund as of March 31, 2012.
Fair value of plan assets
Present value of defined benefit
obligation
Excess of (obligations over
plan assets) / plan assets over
obligations
2012
17,932
2011
15,309
17,668
15,412
264
(103)
The principal assumptions used in determining the
present value obligation of interest guarantee under the
deterministic approach are as follows:
Assumptions
Discount rate
Average remaining tenure of
investment portfolio
Guaranteed rate of return
As of March 31,
2012
8.35%
6 years
8.25%
2011
7.95%
7 years
9.5%
For the year ended March 31, 2012, the Company
contributed ` 2,236 to PF (2011: ` 2,276).
As of March 31, 2012, provision for leave encashment
of ` 3,289 has been presented under Provisions –
Employee retirement benefits. The liability as of March
31, 2011 of ` 2,028 that was previously included under
Sundry Creditors in the financial statements for year
ended March 31, 2011 prepared under the pre-revised
Schedule VI of the Companies Act, 1956, has now been
accordingly reclassified under provisions. Provision for
leave encashment is a deferred deduction under the
tax laws which can be claimed only on actual payment.
Accordingly, the consequent impact on current and
deferred tax has been given effect.
35. Employee stock option
i)
ii)
Employees covered under Stock Option Plans and
Restricted Stock Unit (RSU) Option Plans (collectively
“stock option plans”) are granted an option to
purchase shares of the Company at the respective
exercise prices, subject to requirements of vesting
conditions. These options generally vest in tranches
over a period of five years from the date of grant.
Upon vesting, the employees can acquire one equity
share for every option. The maximum contractual
term for aforementioned stock option plans is
generally 10 years.
The stock compensation cost is computed under the
intrinsic value method and amortised on a straight
line basis over the total vesting period of five years.
The intrinsic value on the date of grant approximates
the fair value. For the year ended March 31, 2012, the
Company has recorded stock compensation expense
of ` 954 (2011: ` 1,433).
Annual Report 2011-12
178
04 Consolidated_2012.indd 178
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iii)
The compensation committee of the board evaluates the performance and other criteria of employees and approves the
grant of options. These options vest with employees over a specified period subject to fulfillment of certain conditions.
Upon vesting, employees are eligible to apply and secure allotment of Company’s shares at a price determined on the
date of grant of options. The particulars of options granted under various plans are tabulated below. (The numbers of
shares in the table below are adjusted for any stock splits and bonus shares issues).
Wipro Employee Stock Option Plans and Restricted Stock Unit Option Plans
A summary of the general terms of grants under stock option plans and restricted stock unit option plans are as follows:
Consolidated Financial Statements
Name of Plan
Wipro Employee Stock Option Plan 1999 (1999 Plan)
Wipro Employee Stock Option Plan 2000 (2000 Plan)
Stock Option Plan (2000 ADS Plan)
Wipro Restricted Stock Unit Plan (WRSUP 2004 plan)
Wipro ADS Restricted Stock Unit Plan (WARSUP 2004 plan)
Wipro Employee Restricted Stock Unit Plan 2005 (WSRUP 2005 plan)
Wipro Employee Restricted Stock Unit Plan 2007 (WSRUP 2007 plan)
Authorized
Shares (1)
Range of
Exercise Prices
171 – 490
171 – 490
3 – 7
2
0.04
2
2
50,000,000 `
250,000,000 `
15,000,000 US$
20,000,000 `
20,000,000 US$
20,000,000 `
16,666,667 `
(1) adjusted for the two equity shares for every three equity shares stock dividend approved by the shareholders on June 4, 2010.
The activity in these stock option plans is summarized below:
As of March 31,
Outstanding at the beginning of the period (1)
Granted
Exercised
Forfeited and lapsed
Outstanding at the end of the period
Exercisable at the end of the period
Range of
Exercise
Prices
` 480 – 489
4 – 6
US$
`
2
US$
0.04
` 480 – 489
4 – 6
US$
`
2
US$
0.04
` 480 – 489
4 – 6
US$
`
2
US$
0.04
` 480 – 489
4 – 6
US$
`
2
US$
0.04
` 480 – 489
4 – 6
US$
`
2
US$
0.04
` 480 – 489
4 – 6
US$
`
2
0.04
US$
2012
Number
Weighted
Average
Exercise
Price
–
–
2
0.04
480.20
–
2
–
–
–
2
0.04
–
–
2
0.04
480.20
–
2
0.04
–
–
2
0.04
– `
– US$
15,382,761 `
3,223,892 US$
30,000 `
– US$
40,000 `
– US$
– `
– US$
`
US$
– `
– US$
`
US$
(3,708,736)
(638,347)
(1,106,987)
(411,853)
30,000 `
– US$
10,607,038 `
2,173,692 US$
– `
– US$
5,370,221 `
578,400 US$
2011
Number
200,000 `
Weighted
Average
Exercise
Prices
293.40
2.82
2
0.04
–
–
2
0.04
293.40
–
2
0.04
293.40
2.82
2
0.04
–
–
2
0.04
–
–
2
0.04
2,677 US$
17,103,172 `
2,943,035 US$
– `
– US$
5,227,870 `
1,437,060 US$
(80,000)
(5,482,210)
(870,622)
(120,000)
(2,677)
(1,466,071)
(285,581)
`
– US$
`
US$
`
US$
`
US$
– `
– US$
15,382,761 `
3,223,892 US$
– `
– US$
7,533,984 `
1,147,391 US$
(1) The opening balance as of April 1, 2010 have been adjusted for the two equity shares for every three equity shares stock dividend
approved by the shareholders on June 4, 2010.
Wipro Limited
179
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Consolidated Financial Statements
The following table summarizes information about outstanding stock options:
Numbers
30,000
–
10,607,038
2,173,692
2012
Weighted
Average
Remaining Life
(Months)
48
–
30
37
Weighted
Average
Exercise Price
480.20
–
2
0.04
`
US$
`
US$
Numbers
–
–
15,382,761
3,223,892
Range of Exercise price
` 480 – 489
US$ 4 – 6
` 2
US$ 0.04
2011
Weighted
Average
Remaining Life
(Months)
Weighted
Average Exercise
Price
–
–
2
0.04
`
US$
`
US$
–
–
35
48
The weighted-average grant-date fair value of options
granted during the year ended March 31, 2012 was ` 449.80
(2011: ` 417.65) for each option. The weighted average share
price of options exercised during the year ended March 31,
2012 was ` 399.22 (2011: ` 424.28) for each option.
The fair value of 30,000 options granted during the year
ended March 31, 2012 (other than at nominal exercise
price) has been estimated on the date of grant using the
Black-Scholes-Merton option pricing model. The fair value
of share options has been determined using the following
assumptions:
Expected term
Risk free interest rates
Volatility
Dividend yield
5 years
8%
62.2%
1.28%
The movement in Restricted Stock Unit reserve is
summarized below:
For the year ended
March 31,
2012
284
2011
1,723
(332)
954
906
(2,872)
1,433
284
Opening balance
Less: Amount transferred to share
premium
Add: Amortisation
Closing balance
36.
Income tax
The provision for taxation includes tax liability in India
on the Company’s worldwide income. The tax has been
computed on the worldwide income as reduced by the
various deductions and exemptions provided by the
Income tax act in India (Act) and the tax credit in India for
the tax liabilities payable in foreign countries.
Most of the Company’s operations are through units in
Software Technology Parks (‘STPs’) and Special Economic
Zones (SEZ’s). Income from STPs is not eligible for deduction
from 1st April, 2011. Income from SEZ’s are eligible for 100%
deduction for the first 5 years, 50% deduction for the next
5 years and 50% deduction for another 5 years subject to
fulfilling certain conditions.
Pursuant to the amendments in the Act, the Company has
calculated its tax liability after considering the provisions
of law relating to Minimum Alternate Tax (MAT). As per the
Act, any excess of MAT paid over the normal tax payable
can be carried forward and set off against the future tax
liabilities. Accordingly an amount of ` 1,223 (2011: ` 488)
is included under ‘Short term loans and advances’ in the
balance sheet as of March 31, 2012.
i)
Current taxes are net of reversal of provisions recorded
in earlier periods, which are no longer required,
amounting to ` 845 for the year ended March 31,
2012 (2011: ` 590) and MAT credit of ` 1,061 for the
year ended March 31, 2012 (2011: Nil).
ii)
The components of the deferred tax, net are as follows:
Deferred tax assets (DTA)
Accrued expenses and liabilities
Allowances for doubtful trade
receivables
Carry–forward business losses
Deferred revenue
Others
Deferred tax liabilities (DTL)
Tangible assets
Amortisable goodwill
Net DTA/(DTL)
As of March 31,
2012
2011
930
520
789
324
813
29
2,885
(2,445)
(275)
(2,720)
165
716
90
–
171
1,497
(1,318)
(141)
(1,459)
38
The Net DTA / (DTL) of ` 165 (2011: ` 38) has the following
breakdown:
Deferred tax asset
Deferred tax liabilities
Net DTA/(DTL)
As of March 31,
2012
440
(275)
165
2011
179
(141)
38
Annual Report 2011-12
180
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Consolidated Financial Statements
37. Provisions
38. Earnings per share
Provision for warranty represents cost associated with
providing sales support services which are accrued at the time
of recognition of revenues and are expected to be utilized
over a period of 1 to 2 years from the date of balance sheet.
Other provisions primarily include provisions for tax related
contingencies and litigations. The timing of cash outflows in
respect of such provision cannot be reasonably determined. The
activity in provision balance is summarized below:
For the year ended
March 31, 2012
March 31, 2011
Provision for
Warranty
Others-
taxes
Provision for
Warranty
Others-
taxes
Provision at the
beginning of the
year
Additions during the
year, net
Utilized/reversed
during the year
Provision at the
end of the year
Non-current portion
Current portion
548
1,858
611
1,763
460
179
532
149
(641)
(1,222)
(595)
(54)
367
61
306
815
–
815
548
81
467
1,858
–
1,858
The computation of equity shares used in calculating basic
and diluted earnings per share is set out below:
Weighted average equity
shares outstanding
Share held by controlled
trusts
Weighted average equity
shares for computing basic
EPS
Dilutive impact of employee
stock options
Weighted average equity
shares for computing diluted
EPS
Net income considered for
computing EPS (` in Million)
For the year ended
March 31,
2012
2011
2,463,897,683 2,451,354,673
(14,841,271)
(14,841,271)
2,449,056,412 2,436,513,402
5,315,776
12,856,846
2,454,372,188 2,449,370,248
56,045
52,924
Earnings per share and number of shares outstanding for
the year ended March 31, 2011 have been adjusted for
the two equity shares for every three equity shares stock
dividend approved by the shareholders on June 4, 2010.
39. Related party relationships and transactions
The list of subsidiaries as of March 31, 2012 are provided in the table below.
Direct Subsidiaries
Step Subsidiaries
Wipro Inc.
Wipro Energy IT Services India Private Limited
(formerly SAIC India Private Limited)
Wipro Japan KK
Wipro Shanghai Limited
Wipro Trademarks Holding Limited
Wipro Travel Services Limited
Wipro Consumer Care Limited
Wipro Holdings (Mauritius) Limited
Wipro Gallagher Solutions Inc.
Enthink Inc.*
Infocrossing Inc.
Cygnus Negri Investments Private
Limited
Wipro Holdings UK Limited
Country of
Incorporation
USA
USA
USA
USA
India
Japan
China
India
India
India
India
Mauritius
U.K.
Wipro Technologies UK Limited U.K.
Wipro Holding Austria GmbH (A) Austria
3D Networks (UK) Limited
Wipro Europe Limited (A)
(formerly SAIC Europe Limited)
U.K.
U.K
Wipro Limited
181
04 Consolidated_2012.indd 181
6/19/2012 7:50:33 PM
Consolidated Financial Statements
Direct Subsidiaries
Step Subsidiaries
Wipro Cyprus Private Limited
Wipro Technologies S.A DE C. V
Wipro BPO Philippines Ltd. Inc.
Wipro Holdings Hungary Korlátolt
Felelősségű Társaság
Wipro Technologies Argentina SA
Wipro Information Technology Egypt
SAE
Wipro Arabia Limited *
Wipro Poland Sp Zoo
Wipro IT Services Poland Sp. z o. o
Wipro Outsourcing Services UK Limited
Wipro Technologies (South Africa)
Proprietary Limited
Wipro Information Technology
Netherlands BV (formerly RetailBox BV)
Wipro Infrastructure Engineering AB
Wipro Technologies SRL
Wipro Singapore Pte Limited
Wipro Yardley FZE
Wipro Technologies SDN BHD
WMNETSERV (U.K.) Limited
WMNETSERV INC
Wipro Australia Pty Limited
Wipro Networks Pte Limited (formerly 3D
Networks Pte Limited)
Planet PSG Pte Limited
Wipro Chengdu Limited
Wipro Chandrika Limited*
Vignani Solutions Private Limited
WMNETSERV Limited
Wipro Technology Services Limited
Wipro Airport IT Services Limited*
Wipro Infrastructure Engineering Machinery
(Changzhou) Co., Ltd.
Wipro Portugal S.A. (A)
(Formerly Enabler Informatica SA)
Wipro Technologies Limited,
Russia
Wipro Gulf LLC
(formerly SAIC Gulf LLC)
Wipro Technology Chile SPA
Wipro Infrastructure
Engineering Oy. (A)
Hydrauto Celka San ve Tic
Turkey
Romania
Singapore
PT WT Indonesia
Indonesia
Wipro Unza Holdings Limited (A) Singapore
Singapore
Wipro Technocentre (Singapore)
Pte Limited
Wipro (Thailand) Co Limited
Wipro Bahrain Limited WLL
Country of
Incorporation
Cyprus
Mexico
Philippines
Hungary
Argentina
Egypt
Saudi Arabia
Poland
Poland
U.K.
South Africa
Netherland
Portugal
Russia
Sultanate of
Oman
Chile
Sweden
Finland
Thailand
Bahrain
Dubai
Australia
Singapore
Singapore
Malaysia
China
India
India
Cyprus
U.K.
USA
India
India
China
* All the above direct subsidiaries are 100% held by the Company except that the Company holds 98% of the equity securities of
Enthink Inc., 66.67% of the equity securities of Wipro Arabia Limited, 90% of the equity securities of Wipro Chandrika Limited and
74% of the equity securities of Wipro Airport IT Services Limited.
Annual Report 2011-12
182
04 Consolidated_2012.indd 182
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(A) Step Subsidiary details of Wipro Unza Holdings Limited, Wipro Holding Austria GmbH, Wipro Portugal S.A, Wipro Infrastructure
Consolidated Financial Statements
Engineering Oy and Wipro Europe Limited are as follows:
Step Subsidiaries
Step Subsidiaries
Wipro Unza Singapore Pte Limited
Wipro Unza Indochina Pte Limited
Wipro Unza Cathay Limited
Wipro Unza China Limited
PT Unza Vitalis
Wipro Unza Thailand Limited
Wipro Unza Overseas Limited
Unzafrica Limited
Wipro Unza Middle East Limited
Unza International Limited
Unza Nusantara Sdn Bhd
Wipro Holding Austria GmbH
Wipro Portugal S.A.
Wipro Infrastructure Engineering Oy
Wipro Europe Limited
(formerly SAIC Europe Limited)
Country of
Incorporation
Singapore
Singapore
Vietnam
Hong Kong
Hong Kong
China
Wipro Unza Vietnam Co., Limited
Wipro Unza (Guangdong) Consumer
Products Ltd.
Unza Holdings Sdn Bhd
Unza (Malaysia) Sdn Bhd
Wipro Manufacturing Services Sdn Bhd
Gervas Corporation Sdn Bhd
Formapac Sdn Bhd
Wipro Technologies Austria GmbH
New Logic Technologies SARL
SAS Wipro France
(formerly Enabler France SAS)
Wipro Retail UK Limited
(formerly Enabler UK Limited)
Wipro do Brazil Technologia Ltda
(formerly Enabler Brazil Ltda)
Wipro Technologies Gmbh (formerly
Enabler & Retail Consult GmbH)
Wipro Infrastructure Engineering LLC
Wipro UK Limited (formerly SAIC Limited)
Wipro Europe (formerly Science
Applications International, Europe SARL)
Indonesia
Thailand
British Virgin
Islands
Nigeria
British Virgin
Islands
British Virgin
Islands
Malaysia
Malaysia
Malaysia
Wipro Unza (Malaysia) Sdn Bhd Malaysia
Malaysia
Malaysia
Malaysia
Malaysia
Malaysia
Shubido Pacific Sdn Bhd (a)
Gervas (B) Sdn Bhd
R.K.M Equipamentos Hidraulicos
Ltda
Austria
France
France
U.K.
Brazil
Brazil
Germany
Russia
U.K.
France
(a) All the above subsidiaries are 100% held by the Company except Shubido Pacific Sdn Bhd in which the Company holds 62.55%
of the equity securities.
The list of controlled trusts is:
Name of entity
Wipro Equity Reward Trust
Wipro Inc Benefit Trust
Nature
Trust
Trust
Country of Incorporation
India
USA
Wipro Limited
183
04 Consolidated_2012.indd 183
6/19/2012 7:50:34 PM
% of
holding
49%
Country of
Incorporation
India
Consolidated Financial Statements
List of other related parties are as under:
Name of other related parties
Nature
Wipro GE Healthcare Private Limited
Azim Premji Foundation
Hasham Premji (partnership firm)
Prazim Traders (partnership firm)
Zash Traders (partnership firm)
Regal Investment & Trading Company Private Limited
Vidya Investment & Trading Company Private Limited
Napean Trading & Investment Company Private Limited
Azim Premji Trust
Key management personnel
Azim Premji
Suresh C Senapaty
T K Kurien
Suresh Vaswani
Girish S Paranjpe
Relative of key management personnel
Rishad Premji
Associate
Entity controlled by Director
Entity controlled by Director
Entity controlled by Director
Entity controlled by Director
Entity controlled by Director
Entity controlled by Director
Entity controlled by Director
Entity controlled by Director
Chairman and Managing Director
Chief Financial Officer & Director
CEO, IT Business & Director 1
Jt CEO, IT Business & Director 2
Jt CEO, IT Business & Director 2
Relative of the director
1 w.e.f February 01, 2011
2 Upto January 31, 2011
The Company has the following related party transactions:
Transaction / Balances
Associate
Sale of services
Sale of products
Dividend paid
Dividend payable
Remuneration
Royalty income
Rent paid
Balances as of the year end
Receivables
Payables
@ Including relative of key management personnel.
2012
56
20
–
–
–
98
–
16
–
2011
5
13
–
–
–
–
–
7
–
Entities controlled by
Directors
2012
–
12
11,102
7,330
–
–
3
2011
–
–
10,362
7,401
–
–
–
Key Management
Personnel@
2012
–
–
573
382
87
–
–
2011
–
–
536
384
275
–
–
1
7,330
–
7,401
–
384
–
385
Annual Report 2011-12
184
04 Consolidated_2012.indd 184
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The following are the significant related party transactions
during the year ended March 31, 2012 and 2011:
Sale of products
Azim Premji Foundation
Dividend paid
Hasham Traders
Prazim Traders
Zash Traders
Azim Premji Trust
Year ended March 31,
2012
2011
12
–
3,263
3,250
3,242
1,278
3,045
3,033
3,026
426
Rent paid
Hasham Premji Private Limited
3
–
Dividend payable
Hasham Traders
Prazim Traders
Zash Traders
Azim Premji Trust
Remuneration paid to key
management personnel
Azim Premji
Suresh Senapaty
T K Kurien
Girish Paranjpe
Suresh Vaswani
40. Capital commitments
2,175
2,167
2,162
781
19
18
45
–
–
2,175
2,167
2,162
852
28
43
8
89
102
The estimated amount of contracts remaining to be
executed on Capital account and not provided for, net of
advances is ` 1,673 (2011: ` 2,071).
41. Contingent liabilities
a) Disputed demands for excise duty,
custom duty, income tax, sales tax
and other matters
b) Per formance and financial
guarantee given by the banks on
behalf of the Company
Tax Demands:
As of March 31,
2012
2011
2,374
1,472
23,240
19,841
Consolidated Financial Statements
at Bangalore for the years ended March 31, 2001 to March
31, 2008. The appeals filed against the said demand before
the Appellate authorities have been allowed in favor of the
Company by the second appellate authority for the years
upto March 31, 2004 and further appeals have been filed
by the Income tax authorities before the Honorable High
Court. The first appellate authority has granted relief for the
year ended March 31, 2005 and further appeal has been
filed by the Income tax authorities before the Income-tax
Appellate Tribunal. The Company is in appeal before the
Income-tax Appellate Tribunal for the years ended March
31, 2006 and March 31, 2007 after receiving the assessment
orders following the directions of the Dispute Resolution
Panel. For the year ended March 31, 2008, the objection
against the draft assessment order is pending before the
Dispute Resolution Panel.
Considering the facts and nature of disallowance and the
order of the appellate authority upholding the claims of the
Company for earlier years, the Company believes that the
final outcome of the above disputes should be in favor of
the Company and there should not be any material impact
on the financial statements.
The Company is subject to legal proceedings and claims
which have arisen in the ordinary course of its business. The
resolution of these legal proceedings is not likely to have
a material and adverse effect on the results of operations
or the financial position of the Company.
42. Acquisitions
In June 2011, the Company acquired the global oil and
gas information technology practice of the Commercial
Business Services Business Unit of Science Applications
International Corporation Inc. along with 100% of the
share capital in SAIC Europe Limited and SAIC India Private
Limited. In July 2011, the Company also acquired 100% of
the share capital of SAIC Gulf LLC (hereafter the acquisitions
are collectively referred to as ‘oil and gas business of SAIC’).
The oil and gas business of SAIC provides consulting,
system integration and outsourcing services to global oil
majors with significant domain capabilities in the areas
of digital oil field, petro-technical data management and
petroleum application services, addressing the upstream
segment. The Company believes that the acquisition will
further strengthen Wipro’s presence in the Energy, Natural
Resources and Utilities domain. The goodwill of ` 6,004
comprises of value of expected synergies arising from the
acquisition. The purchase consideration of ` 7,536 was
settled in cash.
43. Segment reporting
The Company had received tax demands aggregating to
` 40,040 (including interest of ` 10,616) arising primarily
on account of denial of deduction under Section 10A of
the Income Tax Act, 1961 in respect of profit earned by
the Company’s undertaking in Software Technology Park
a)
The Company is currently organized by business
segments, comprising IT Services, IT Products,
Consumer Care and Lighting and Others. Business
segments have been determined based on system of
internal financial reporting to the board of directors
04 Consolidated_2012.indd 185
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Wipro Limited
185
Consolidated Financial Statements
b)
c)
and chief executive officer and are considered to
be primary segments. The secondary segment is
identified based on the geographic location of the
customer.
IT Services: The IT Services segment provides IT
and IT enabled services to customers. Key service
offering includes software application development,
application maintenance, research and development
services for hardware and software design, data
center outsourcing services and business process
outsourcing services.
IT Products: The IT Products segment sells a range of
Wipro personal desktop computers, Wipro servers and
Wipro notebooks. The Company is also a value added
reseller of desktops, servers, notebooks, storage
products, networking solutions and packaged
software for leading international brands. In certain
total outsourcing contracts of the IT Services
segment, the Company delivers hardware, software
products and other related deliverables. Revenue
relating to these items is reported as revenue from
the sale of IT Products.
d) Consumer care and lighting: The Consumer Care and
Lighting segment manufactures, distributes and sells
personal care products, baby care products, lighting
products and hydrogenated cooking oils in the Indian
and Asian markets.
e)
f )
The Others’ segment consists of business segments
that do not meet the requirements individually for
a reportable segment as defined in AS 17 Segment
Reporting and includes corporate and treasury.
Segment Revenue, Segment Results, Segment
Assets and Segment Liabilities include the respective
amounts identifiable to each of the segment. Segment
revenue resulting from business with other business
segments are on the basis of market determined
prices and common costs are apportioned on a
reasonable basis.
The segment information for the year ended March 31, 2012 and 2011 is as follows:
Revenues
IT Services
IT Products
Consumer care and lighting
Others
Eliminations
Total
Profit before interest and tax
IT Services
IT Products
Consumer care and lighting
Others
Total
Interest and other income, net
Profit before tax
Tax expense
Profit before share in earnings of associate and minority interest
Minority interest
Share in earnings of associate
Net profit
Notes to Segment report
Year ended March 31,
2012
2011
284,111
37,924
34,599
18,731
(209)
375,156
58,997
1,247
3,886
225
64,355
5,459
69,814
(13,845)
55,969
(257)
333
56,045
234,760
36,995
28,436
11,209
(570)
310,830
53,457
1,627
3,426
(849)
57,661
4,687
62,348
(9,695)
52,653
(344)
615
52,924
a)
The segment report of Wipro Limited and its consolidated subsidiaries has been prepared in accordance with the AS 17
“Segment Reporting” issued pursuant to the Companies (Accounting Standard) Rules, 2006.
Annual Report 2011-12
186
04 Consolidated_2012.indd 186
6/19/2012 7:50:34 PM
b)
Segment wise depreciation and amortisation is as follows:
IT Services
IT Products
Consumer Care & Lighting
Others
Consolidated Financial Statements
Year ended March 31,
2012
8,697
41
513
503
9,754
2011
6,994
65
483
349
7,891
c)
d)
e)
Segment PBIT includes ` 509 for the year ended March 31, 2012, (2011: ` 646) of certain operating other income / (loss) which
is reflected in other income in the statement of profit and loss.
For the purpose of segment reporting, the Company has included the impact of ‘Other exchange difference, net’ in ‘Revenues’.
Segment assets and liabilities are as follows:
IT Services and Products
Consumer Care & Lighting
Others
As of March 31, 2012
Segment
Assets
233,046
29,540
169,995
432,581
Segment
Liabilities
69,347
7,033
26,221
102,601
As of March 31, 2011
Segment
Assets
193,384
26,312
148,645
368,341
Segment
Liabilities
56,307
5,505
28,167
89,979
f )
The Company has four geographic segments: India, USA, Europe and Rest of the World. Significant portion of the segment
assets are in India. Revenue from geographical segments based on domicile of the customers is outlined below:
India
United States of America
Europe
Rest of the world
Year ended March 31,
2012
80,135
148,160
87,186
59,675
375,156
2011
67,234
129,286
68,159
46,151
310,830
g)
Segment-wise capital expenditure incurred during the year ended March 31, 2012 and 2011 is given below:
IT Services
IT Products
Consumer Care & Lighting
Others
Year ended March 31,
2012
9,296
797
750
2,134
12,977
2011
10,301
889
455
566
12,211
h)
For the purpose of reporting, business segments are considered as primary segment and geographic segments are considered
as secondary segment.
i) Management believes that it is currently not practicable to provide disclosure of geographical assets and liabilities, since the
meaningful segregation of the available information is onerous.
04 Consolidated_2012.indd 187
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Wipro Limited
187
Consolidated Financial Statements
44. Details of current investments
(i)
Investments in Indian money market mutual funds as of March 31, 2012
Birla Mutual Fund
IDFC Mutual Fund
Reliance Mutual Fund
ICICI Prudential Mutual Fund
JP Morgan
SBI Mutual Fund
Kotak Mutual Fund
Axis Mutual Fund
HDFC Mutual Fund
UTI Mutual Fund
Franklin Templeton Mutual Fund
Religare Mutual Fund
DWS Mutual Fund
Tata Mutual Fund
DSP BlackRock Mutual Fund
(ii)
Investments in debentures as of March 31, 2012
Debentures in Citicorp Finance (India) Limited
(iii) Investments in certificate of deposits / bond as of March 31, 2012
LIC Housing Finance Ltd.
IDFC Ltd.
Vijaya Bank
Corporation Bank
GIC Housing Finance Ltd.
Canara Bank
Syndicate Bank
IL&FS Ltd.
Axis Bank
Indian Overseas Bank
HDFC Ltd.
EXIM Bank of India
NABARD
Punjab National Bank
Allahabad Bank
National Highway Authority of India
Indian Bank
L&T Finance Ltd.
National Housing Bank
IRFC
Bank of India
Andhra Bank
Oriental Bank of Commerce
Tube Investments
ICICI Bank
PGC of India
Power Finance Corporation
Annual Report 2011-12
188
As of March 31, 2012
4,502
3,204
1,898
1,662
1,374
1,288
1,240
985
935
789
744
700
656
483
300
20,760
As of March 31, 2012
129
129
As of March 31, 2012
3,879
2,516
2,040
1,892
1,130
910
907
902
722
681
584
498
461
453
453
400
274
250
249
237
228
227
227
149
128
50
50
20,497
04 Consolidated_2012.indd 188
6/19/2012 7:50:34 PM
(iv)
Investments in equity instruments as of March 31, 2012
Mycity Technology Limited
WeP Peripherals Limited
45. Cash and Bank
Details of balances with banks as of March 31, 2012 are as follows:
Bank Name
Wells Fargo Bank
HSBC Bank
Canara Bank
Axis Bank
Corporation Bank
Citi Bank
Indian Overseas Bank
Union Bank of India
HDFC Bank
Punjab National Bank
State Bank of Travancore
Standard Chartered Bank
Oriental Bank of Commerce
ICICI Bank
Allahabad Bank
Yes Bank
ING Vysya
South Indian Bank
State Bank of India
Karur Vysya Bank
Federal Bank
Malayan Bank Berhad
Others including cash and cheques on hand
Total
Consolidated Financial Statements
As of March 31, 2012
45
24
69
In Current
Account
22,189
5,881
1
49
–
3,653
2
2
2,560
–
–
1,660
1
699
–
6
2
–
564
–
–
106
3,766
41,141
In Deposit
Account
–
616
6,357
4,725
4,508
207
3,820
2,854
–
2,335
2,000
14
1,415
600
1,235
950
950
850
253
600
600
330
1,306
36,525
Total
22,189
6,497
6,358
4,774
4,508
3,860
3,822
2,856
2,560
2,335
2,000
1,674
1,416
1,299
1,235
956
952
850
817
600
600
436
5,072
77,666
46. Hitherto the applicability of revised Schedule VI from the current year, the Company has reclassified previous year figures
to conform to this year’s classification. The adoption of revised Schedule VI does not impact recognition and measurement
principles followed for preparation of the financial statements. However, it significantly impacts presentation and disclosures
made in the financial statements, particularly presentation of Balance Sheet.
As per our report attached
For and on behalf of the Board of Directors
for B S R & Co.
Chartered Accountants
Firm Registration No: 101248W
Natrajh Ramakrishna
Partner
Membership No. 032815
Bangalore
June 13, 2012
Azim Premji
Chairman
B. C. Prabhakar
Director
Suresh C. Senapaty
Chief Financial Officer
& Director
T. K. Kurien
CEO, IT Business
& Executive Director
V. Ramachandran
Company Secretary
04 Consolidated_2012.indd 189
6/19/2012 7:50:34 PM
Wipro Limited
189
Consolidated Financial Statements
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190
04 Consolidated_2012.indd 190
6/19/2012 7:50:34 PM
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6/19/2012 7:50:35 PM
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04 Consolidated_2012.indd 192
6/19/2012 7:50:35 PM
CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION
REpORT OF INDEpENDENT REgISTERED pubLIC ACCOuNTINg FIRM
Consolidated Financial Statements Under IFRS
The Board of Directors and Equity holders
Wipro Limited:
We have audited the accompanying consolidated statements of financial position of Wipro Limited and subsidiaries (“the Company”)
as of March 31, 2012 and 2011, and the related consolidated statements of income, comprehensive income, changes in equity and
cash flows for each of the years in the three-year period ended March 31, 2012. These consolidated financial statements are the
responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements
based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position
of the Company as of March 31, 2012 and 2011, and the results of their operations and their cash flows for each of the years in the
three-year period ended March 31, 2012, in conformity with International Financial Reporting Standards as issued by International
Accounting Standards Board.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the
Company’s internal control over financial reporting as of March 31, 2012, based on criteria established in Internal Control – Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated May
16, 2012 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.
KPMG
Bangalore, India
May 16, 2012
05 US Gap IFRS_2012.indd 193
6/19/2012 7:50:54 PM
Wipro Limited
193
Consolidated Financial Statements Under IFRS
WIpRO LIMITED AND SubSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL pOSITION
(Rupees in millions, except share and per share data, unless otherwise stated)
Notes
As at March 31,
2012
2011
ASSETS
Goodwill ..............................................................................................
Intangible assets ...............................................................................
Property, plant and equipment ..................................................
Investment in equity accounted investees .............................
Derivative assets ...............................................................................
Deferred tax assets ..........................................................................
Non-current tax assets ...................................................................
Other non-current assets ..............................................................
Total non-current assets ..................................................................
Inventories ..........................................................................................
Trade receivables ..............................................................................
Other current assets ........................................................................
Unbilled revenues ............................................................................
Available for sale investments .....................................................
Current tax assets .............................................................................
Derivative assets ...............................................................................
Cash and cash equivalents............................................................
Total current assets ...........................................................................
TOTAL ASSETS ...........................................................................................
EQuITY
Share capital .......................................................................................
Share premium..................................................................................
Retained earnings ............................................................................
Share based payment reserve .....................................................
Other components of equity .......................................................
Shares held by controlled trust ...................................................
Equity attributable to the equity holders of the Company .
Non-controlling interest ................................................................
Total equity ................................................................................................
LIAbILITIES
Loans and borrowings ....................................................................
Derivative liabilities .........................................................................
Deferred tax liabilities .....................................................................
Non-current tax liabilities ..............................................................
Other non-current liabilities .........................................................
Provisions ............................................................................................
Total non-current liabilities .............................................................
Loans and borrowings and bank overdraft ............................
Trade payables and accrued expenses .....................................
Unearned revenues .........................................................................
Current tax liabilities .......................................................................
Derivative liabilities .........................................................................
Other current liabilities ..................................................................
Provisions ............................................................................................
Total current liabilities ......................................................................
TOTAL LIAbILITIES ..................................................................................
TOTAL EQuITY AND LIAbILITIES ......................................................
5
5
4
16
15
18
11
9
8
11
7
15
10
12
15
18
14
14
12
13
15
14
14
`
54,818
3,551
55,094
2,993
2,984
1,467
9,239
8,983
139,129
9,707
61,627
19,744
24,149
49,282
4,955
1,709
61,141
232,314
371,443
4,908
30,124
203,250
1,360
580
(542)
239,680
691
240,371
19,759
2,586
301
5,021
2,706
81
30,454
33,043
42,024
6,595
7,340
1,358
7,934
2,324
100,618
131,072
371,443
67,937
4,229
58,988
3,232
3,462
2,597
10,287
11,781
162,513
10,662
80,328
25,743
30,025
41,961
5,635
1,468
77,666
273,488
436,001
4,917
30,457
241,912
1,976
6,594
(542)
285,314
849
286,163
22,510
307
353
5,403
3,519
61
32,153
36,448
47,258
9,569
7,232
6,354
9,703
1,121
117,685
149,838
436,001
The accompanying notes form an integral part of these consolidated financial statements.
Annual Report 2011-12
194
2012
Convenience
Translation into
uS$ in millions
(unaudited)
Refer note 2(iv)
1,335
83
1,159
64
68
51
202
231
3,193
210
1,578
506
590
825
111
29
1,526
5,374
8,567
97
598
4,754
39
130
(11)
5,606
17
5,623
442
6
7
106
69
1
631
716
929
188
142
125
191
22
2,313
2,944
8,567
05 US Gap IFRS_2012.indd 194
6/19/2012 7:50:54 PM
WIpRO LIMITED AND SubSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Rupees in millions, except share and per share data, unless otherwise stated)
Consolidated Financial Statements Under IFRS
Notes
2010
2011
2012
2012
Year ended March 31,
Convenience
Translation into
uS$ in millions
(unaudited)
Refer note 2(iv)
Revenues ..................................................................... 21
271,957
310,542
371,971
7,309
Cost of revenues ....................................................... 22
(186,299)
(212,808)
(263,173)
(5,171)
gross profit ........................................................................
85,658
97,734
108,798
2,138
Selling and marketing expenses ........................
General and administrative expenses ..............
22
22
(18,608)
(14,823)
(22,172)
(18,339)
(27,777)
(20,286)
(546)
(399)
Foreign exchange gains / (losses), net ..............
(383)
445
3,278
64
Results from operating activities ............................
51,844
57,668
64,013
1,258
Finance expense ....................................................... 23
Finance and other income ....................................
24
(1,324)
4,360
(1,933)
6,652
(3,491)
8,895
(69)
175
Share of profits of equity accounted investees 16
530
648
333
7
profit before tax ...............................................................
55,410
63,035
69,750
1,371
Income tax expense ................................................
18
(9,294)
(9,714)
(13,763)
(270)
profit for the year ............................................................
46,116
53,321
55,987
1,100
Attributable to:
Equity holders of the Company ..........................
45,931
52,977
55,730
1,095
Non-controlling interest ........................................
185
344
257
5
profit for the year ............................................................
46,116
53,321
55,987
1,100
Earnings per equity share:
25
Basic .............................................................................
Diluted ..........................................................................
Weighted-average number of equity shares used in
computing earnings per equity share:
18.91
18.75
21.74
21.61
22.76
22.69
0.45
0.45
Basic ..............................................................................
2,429,025,243
2,436,440,633 2,449,056,412 2,449,056,412
Diluted ..........................................................................
2,449,658,532
2,451,154,154 2,455,958,722 2,455,958,722
The accompanying notes form an integral part of these consolidated financial statements.
05 US Gap IFRS_2012.indd 195
6/19/2012 7:50:54 PM
Wipro Limited
195
Consolidated Financial Statements Under IFRS
WIpRO LIMITED AND SubSIDIARIES
CONSOLIDATED STATEMENTS OF COMpREHENSIVE INCOME
(Rupees in millions, except share and per share data, unless otherwise stated)
Notes
2010
2011
2012
Year ended March 31,
2012
Convenience
Translation into
uS$ in millions
(unaudited)
Refer note 2(iv)
Profit for the year ....................................................................
Other comprehensive income, net of taxes:
Foreign currency translation differences:
Translation difference relating to foreign
operations ............................................................
Net change in fair value of hedges of net
investment in foreign operations ................
Net change in fair value of cash flow hedges..
Net change in fair value of available for sale
investments ...................................................................
Total other comprehensive income, net of taxes .......
Total comprehensive income for the year .....................
Attributable to:
Equity holders of the Company ..............................
Non-controlling interest............................................
17
17
15, 18
7, 18
46,116
53,321
55,987
1,100
(5,522)
1,222
9,226
4,202
9,841
(50)
8,471
54,587
54,447
140
54,587
20
(2,780)
3,684
(350)
29
4,955
58,276
57,956
320
58,276
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6,076
62,063
61,744
319
62,063
181
(55)
(7)
-
119
1,219
1,213
6
1,219
The accompanying notes form an integral part of these consolidated financial statements.
Annual Report 2011-12
196
05 US Gap IFRS_2012.indd 196
6/19/2012 7:50:54 PM
Consolidated Financial Statements Under IFRS
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05 US Gap IFRS_2012.indd 197
6/19/2012 7:50:54 PM
Wipro Limited
197
Consolidated Financial Statements Under IFRS
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Annual Report 2011-12
198
05 US Gap IFRS_2012.indd 198
6/19/2012 7:50:54 PM
Consolidated Financial Statements Under IFRS
WIpRO LIMITED AND SubSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Rupees in millions, except share and per share data, unless otherwise stated)
Year ended March 31,
2010
2011
2012
2012
Convenience
Translation
into uS$
in millions
(unaudited)
Refer note
2(iv)
46,116
53,321
55,987
1,100
Cash flows from operating activities:
Profit for the year ..............................................................................................
Adjustments to reconcile profit for the year to net cash generated
from operating activities:
Gain on sale of property, plant and equipment ..........................
Depreciation and amortization ..........................................................
Exchange (gain) / loss ............................................................................
Impact of cash flow/net investment hedging activities ...........
Gain on sale of investments ................................................................
Loss on sale of subsidiary .....................................................................
Share based compensation .................................................................
Income tax expense ...............................................................................
Share of profits of equity accounted investees ............................
Dividend and interest (income)/expenses, net ............................
Changes in operating assets and liabilities:
Trade receivables ...........................................................................
Unbilled revenues ..........................................................................
Inventories ........................................................................................
Other assets .....................................................................................
Trade payables and accrued expenses...................................
Unearned revenues .......................................................................
Other liabilities and provisions .................................................
Cash generated from operating activities before taxes .....................
Income taxes paid, net ..........................................................................
Net cash generated from operating activities .......................................
Cash flows from investing activities:
Expenditure on property, plant and equipment and intangible assets
Proceeds from sale of property, plant and equipment .............
Purchase of available for sale investments ....................................
Proceeds from sale of available for sale investments.................
Investment in inter-corporate deposits ..........................................
Refund of inter-corporate deposits ..................................................
Payment for business acquisitions, net of cash acquired .........
Interest received ......................................................................................
Dividend received ...................................................................................
Net cash (used) in investing activities ......................................................
Cash flows from financing activities:
(43)
7,831
(1,462)
6,017
(308)
-
1,302
9,294
(530)
(2,820)
(2,150)
(2,600)
(218)
(2,203)
(66)
(1,272)
2,024
58,912
(7,914)
50,998
(12,631)
397
(340,891)
325,770
(10,750)
4,950
(4,399)
2,297
1,442
(33,815)
Proceeds from issuance of equity shares .......................................
Proceeds from issuance of equity shares by a subsidiary ........
Repayment of loans and borrowings ..............................................
Proceeds from loans and borrowings ..............................................
Interest paid on loans and borrowings ...........................................
Payment of cash dividend (including dividend tax thereon) ..
Net cash (used) in financing activities ......................................................
Net increase / (decrease) in cash and cash equivalents during the
year.. ......................................................................................................................
Effect of exchange rate changes on cash and cash equivalents……….
(1,258)
Cash and cash equivalents at the beginning of the year……………… 48,232
63,556
Cash and cash equivalents at the end of the year (Note 10)………….
6
60
(55,661)
63,011
(1,194)
(6,823)
(601)
16,582
(131)
8,211
1,036
4,389
(192)
-
1,092
9,714
(648)
(5,684)
(10,699)
(7,441)
(1,781)
(5,451)
5,674
(867)
(813)
49,730
(9,293)
40,437
(12,211)
521
(474,476)
456,894
(14,290)
20,100
(140)
3,960
2,403
(17,239)
25
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72,596
(696)
(15,585)
(26,378)
(3,180)
(104)
10,129
1,938
1,095
(187)
77
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13,763
(333)
(7,651)
(17,470)
(5,876)
(862)
(3,501)
4,289
2,898
1,040
56,181
(16,105)
40,076
(12,977)
774
(338,599)
346,826
(14,550)
10,380
(7,920)
5,799
2,211
(8,056)
(2)
199
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2
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(150)
(343)
(115)
(17)
(69)
84
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20
1,104
(316)
788
(255)
15
(6,654)
6,815
(286)
204
(156)
114
43
(158)
22
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70,839
(902)
(17,229)
(17,397)
14,623
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1,392
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(339)
(342)
287
523
63,556
60,899
1,680
33
60,899 1,197
77,202 1,517
The accompanying notes form an integral part of these consolidated financial statements
Wipro Limited
199
05 US Gap IFRS_2012.indd 199
6/19/2012 7:50:54 PM
Consolidated Financial Statements Under IFRS
WIpRO LIMITED AND SubSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Rupees in millions, except share and per share data, unless otherwise stated)
1.
The Company overview
b.
Available-for-sale financial assets;
Wipro Limited (“Wipro” or the ”Parent Company”), together with
its subsidiaries and equity accounted investees (collectively,
“the Company” or the “Group”) is a leading India based provider
of IT Services, including Business Process Outsourcing (“BPO”)
services, globally. Further, Wipro has other businesses such as
IT Products, Consumer Care and Lighting and Infrastructure
engineering.
Wipro is a public limited company incorporated and domiciled
in India. The address of its registered office is Wipro Limited,
Doddakannelli, Sarjapur Road, Bangalore - 560 035, Karnataka,
India. Wipro has its primary listing with Bombay Stock Exchange
and National Stock Exchange in India. The Company’s American
Depository Shares representing equity shares are also listed
on the New York Stock Exchange. These consolidated financial
statements were authorized for issue by Audit Committee on
May 16, 2012.
2. basis of preparation of financial statements
(i)
Statement of compliance
The consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards
and its interpretations (“IFRS”), as issued by the International
Accounting Standards Board (“IASB”).
(ii) Basis of preparation
These consolidated financial statements have been prepared in
compliance with IFRS as issued by the IASB. Accounting policies
have been applied consistently to all periods presented in these
financial statements.
The consolidated financial statements correspond to the
classification provisions contained in IAS 1(revised), “Presentation
of Financial Statements”. For clarity, various items are aggregated
in the statements of income and statements of financial position.
These items are disaggregated separately in the Notes to
the consolidated financial statements, where applicable. The
accounting policies have been consistently applied to all periods
presented in these consolidated financial statements.
All amounts included in the consolidated financial statements
are reported in millions of Indian rupees (Rupees in millions)
except share and per share data, unless otherwise stated. Due to
rounding off, the numbers presented throughout the document
may not add up precisely to the totals and percentages may not
precisely reflect the absolute figures.
(iii) Basis of measurement
The consolidated financial statements have been prepared on
a historical cost convention and on an accrual basis, except for
the following material items which have been measured at fair
value as required by relevant IFRS:-
a. Derivative financial instruments; and
(iv) Convenience translation (unaudited)
The accompanying consolidated financial statements have
been prepared and reported in Indian rupees, the national
currency of India. Solely for the convenience of the readers, the
consolidated financial statements as of and for the year ended
March 31, 2012, have been translated into United States dollars
at the certified foreign exchange rate of US$1 = ` 50.89, as
published by Federal Reserve Board of Governors on March 30,
2012. No representation is made that the Indian rupee amounts
have been, could have been or could be converted into United
States dollars at such a rate or any other rate.
(v) Use of estimates and judgment
The preparation of the consolidated financial statements in
conformity with IFRSs requires management to make judgments,
estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets,
liabilities, income and expenses. Actual results may differ from
those estimates.
Estimates and underlying assumptions are reviewed on a
periodic basis. Revisions to accounting estimates are recognized
in the period in which the estimates are revised and in any future
periods affected. In particular, information about significant
areas of estimation, uncertainty and critical judgments in
applying accounting policies that have the most significant
effect on the amounts recognized in the consolidated financial
statements is included in the following notes:
a)
Revenue recognition: The Company uses the percentage of
completion method using the input (cost expended) method to
measure progress towards completion in respect of fixed price
contracts. Percentage of completion method accounting relies
on estimates of total expected contract revenue and costs. This
method is followed when reasonably dependable estimates of the
revenues and costs applicable to various elements of the contract
can be made. Key factors that are reviewed in estimating the future
costs to complete include estimates of future labor costs and
productivity efficiencies. Because the financial reporting of these
contracts depends on estimates that are assessed continually
during the term of these contracts, recognized revenue and profit
are subject to revisions as the contract progresses to completion.
When estimates indicate that a loss will be incurred, the loss is
provided for in the period in which the loss becomes probable.
To date, the Company has not incurred a material loss on any
fixed-price and fixed-timeframe contract.
b) Goodwill: Goodwill is tested for impairment at least annually
and when events occur or changes in circumstances indicate that
the recoverable amount of the cash generating unit is less than its
carrying value. The recoverable amount of cash generating units
is determined based on higher of value-in-use and fair value less
cost to sell. The calculation involves use of significant estimates and
Annual Report 2011-12
200
05 US Gap IFRS_2012.indd 200
6/19/2012 7:50:54 PM
assumptions which includes revenue growth rates and operating
margins used to calculate projected future cash flows, risk-adjusted
discount rate, future economic and market conditions.
3.
(i)
Significant accounting policies
Basis of consolidation
Consolidated Financial Statements Under IFRS
c)
Income taxes: The major tax jurisdictions for the Company
are India and the United States of America. Significant judgments
are involved in determining the provision for income taxes
including judgment on whether tax positions are probable of
being sustained in tax assessments. A tax assessment can involve
complex issues, which can only be resolved over extended
time periods. Though, the Company considers all these issues
in estimating income taxes, there could be an unfavorable
resolution of such issues.
d) Deferred taxes: Deferred tax is recorded on temporary
differences between the tax bases of assets and liabilities and
their carrying amounts, at the rates that have been enacted or
substantively enacted. The ultimate realization of deferred tax
assets is dependent upon the generation of future taxable profits
during the periods in which those temporary differences and tax
loss carry-forwards become deductible. The Company considers
the expected reversal of deferred tax liabilities and projected
future taxable income in making this assessment. The amount of
the deferred income tax assets considered realizable, however,
could be reduced in the near term if estimates of future taxable
income during the carry-forward period are reduced.
e)
Business combination: In accounting for business
combinations, judgment is required in identifying whether an
identifiable intangible asset is to be recorded separately from
goodwill. Additionally, estimating the acquisition date fair
value of the identifiable assets acquired and liabilities assumed
involves management judgment. These measurements are
based on information available at the acquisition date and are
based on expectations and assumptions that have been deemed
reasonable by management. Changes in these judgments,
estimates, and assumptions can materially affect the results of
operations.
f ) Other estimates: The preparation of financial statements
involves estimates and assumptions that affect the reported
amount of assets, liabilities, disclosure of contingent liabilities
at the date of financial statements and the reported amount of
revenues and expenses for the reporting period. Specifically, the
Company estimates the uncollectability of accounts receivable by
analyzing historical payment patterns, customer concentrations,
customer credit-worthiness and current economic trends. If
the financial condition of a customer deteriorates, additional
allowances may be required. Similarly, the Company provides
for inventory obsolescence, excess inventory and inventories
with carrying values in excess of net realizable value based
on assessment of the future demand, market conditions and
specific inventory management initiatives. If market conditions
and actual demands are less favorable than the Company’s
estimates, additional inventory provisions may be required. In all
cases inventory is carried at the lower of historical cost and net
realizable value. The stock compensation expense is determined
based on the Company’s estimate of equity instruments that will
eventually vest.
Subsidiaries
The consolidated financial statements incorporate the financial
statements of the Parent Company and entities controlled by the
Parent Company (its subsidiaries). Control is achieved where the
Company has the power to govern the financial and operating
policies of an entity so as to obtain benefits from its activities.
In assessing control, potential voting rights that currently are
exercisable are taken into account.
All intra-company balances, transactions, income and expenses
including unrealized income or expenses are eliminated in full
on consolidation.
Equity accounted investees
Equity accounted investees are entities in respect of which, the
Company has significant influence, but not control, over the
financial and operating policies. Generally, a Company has a
significant influence if it holds between 20 and 50 percent of
the voting power of another entity. Investments in such entities
are accounted for using the equity method (equity accounted
investees) and are initially recognized at cost.
(ii) Functional and presentation currency
Items included in the consolidated financial statements of each
of the Company’s subsidiaries and equity accounted investees
are measured using the currency of the primary economic
environment in which these entities operate (i.e. the “functional
currency”). These consolidated financial statements are
presented in Indian Rupee, the national currency of India, which
is the functional currency of Wipro Limited and its domestic
subsidiaries and equity accounted investees.
(iii) Foreign currency transactions and translation
a)
Transactions and balances
Transactions in foreign currency are translated into the respective
functional currencies using the exchange rates prevailing at the
dates of the transactions. Foreign exchange gains and losses
resulting from the settlement of such transactions and from the
translation at the exchange rates prevailing at reporting date of
monetary assets and liabilities denominated in foreign currencies
are recognized in the statement of income and reported within
foreign exchange gains/(losses), net within results of operating
activities. Gains/losses relating to translation or settlement of
borrowings denominated in foreign currency are reported within
finance expense except foreign exchange gains/losses on short-
term borrowings, which are considered as a natural economic
hedge for the foreign currency monetary assets are classified and
reported within foreign exchange gains/(losses), net within results
from operating activities. Non monetary assets and liabilities
denominated in a foreign currency and measured at historical
cost are translated at the exchange rate prevalent at the date of
transaction.
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201
Consolidated Financial Statements Under IFRS
b)
Foreign operations
For the purpose of presenting consolidated financial statements,
the assets and liabilities of the Company’s foreign operations that
have local functional currency are translated into Indian Rupee
using exchange rates prevailing at the reporting date. Income
and expense items are translated at the average exchange
rates for the period. Exchange differences arising, if any, are
recognized in other comprehensive income and held in foreign
currency translation reserve (FCTR), a component of equity.
When a foreign operation is disposed off, the relevant amount
recognized in FCTR is transferred to the statement of income
as part of the profit or loss on disposal. Goodwill and fair value
adjustments arising on the acquisition of a foreign operation
are treated as assets and liabilities of the foreign operation and
translated at the exchange rate prevailing at the reporting date.
c) Others
Foreign currency differences arising on the translation or
settlement of a financial liability designated as a hedge of a
net investment in a foreign operation are recognized in other
comprehensive income and presented within equity in the FCTR
to the extent the hedge is effective. To the extent the hedge
is ineffective, such difference are recognized in statement of
income. When the hedged part of a net investment is disposed
off, the relevant amount recognized in FCTR is transferred
to the statement of income as part of the profit or loss on
disposal. Foreign currency differences arising from translation
of intercompany receivables or payables relating to foreign
operations, the settlement of which is neither planned nor
likely in the foreseeable future, are considered to form part of
net investment in foreign operation and are recognized in FCTR.
(iv) Financial Instruments
a) Non-derivative financial instruments
Non derivative financial instruments consist of:
-
-
financial assets, which include cash and cash equivalents,
trade receivables, unbilled revenues, finance lease receivables,
employee and other advances, investments in equity and debt
securities and eligible current and non-current assets;
financial liabilities, which include long and short-term loans
and borrowings, bank overdrafts, trade payable, eligible
current liabilities and non-current liabilities.
Non derivative financial instruments are recognized initially
at fair value including any directly attributable transaction
costs. Financial assets are derecognized when substantial risks
and rewards of ownership of the financial asset have been
transferred. In cases where substantial risks and rewards of
ownership of the financial assets are neither transferred nor
retained, financial assets are derecognized only when the
Company has not retained control over the financial asset.
Subsequent to initial recognition, non derivative financial
instruments are measured as described below:
A. Cash and cash equivalents
The Company’s cash and cash equivalent consist of cash on
hand and in banks and demand deposits with banks, which
can be withdrawn at anytime, without prior notice or penalty
on the principal.
For the purposes of the cash flow statement, cash and cash
equivalents include cash on hand, in banks and demand deposits
with banks, net of outstanding bank overdrafts that are repayable
on demand and are considered part of the Company’s cash
management system.
b. Available-for-sale financial assets
The Company has classified investments in liquid mutual funds,
equity securities, other than equity accounted investees and
certain debt securities (primarily certificate of deposits with
banks) as available-for-sale financial assets. These investments
are measured at fair value and changes therein are recognized
in other comprehensive income and presented within equity.
The impairment losses, if any, are reclassified from equity into
statement of income. When an available for sale financial asset
is derecognized, the related cumulative gain or loss in equity is
transferred to statement of income.
C.
Loans and receivables
Loans and receivables are non-derivative financial assets with
fixed or determinable payments that are not quoted in an
active market. They are presented as current assets, except for
those maturing later than 12 months after the balance sheet
date which are presented as non-current assets. Loans and
receivables are initially recognized at fair value plus transaction
costs and subsequently measured at amortized cost using the
effective interest method, less any impairment losses. Loans and
receivables comprise trade receivables, unbilled revenues, cash
and cash equivalents and other assets.
b) Derivative financial instruments
The Company is exposed to foreign currency fluctuations on
foreign currency assets, liabilities, net investment in foreign
operations and forecasted cash flows denominated in foreign
currency.
The Company limits the effect of foreign exchange rate
fluctuations by following established risk management policies
including the use of derivatives. The Company enters into
derivative financial instruments where the counterparty is a
bank.
Derivatives are recognized and measured at fair value.
Attributable transaction cost are recognized in statement of
income as cost.
A. Cash flow hedges
Changes in the fair value of the derivative hedging instrument
designated as a cash flow hedge are recognized in other
comprehensive income and held in cash flow hedging reserve,
a component of equity to the extent that the hedge is effective.
To the extent that the hedge is ineffective, changes in fair value
are recognized in the statement of income and reported within
foreign exchange gains/(losses), net within results from operating
activities. If the hedging instrument no longer meets the criteria for
hedge accounting, expires or is sold, terminated or exercised, then
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Consolidated Financial Statements Under IFRS
hedge accounting is discontinued prospectively. The cumulative
gain or loss previously recognized in the cash flow hedging reserve
is transferred to the statement of income upon the occurrence of
the related forecasted transaction. If the forecasted transaction
is no longer expected to occur, such cumulative balance is
immediately recognized in the statement of income.
d)
Share based payment reserve
The share based payment reserve is used to record the value
of equity-settled share based payment transactions with
employees. The amounts recorded in share based payment
reserve are transferred to share premium upon exercise of stock
options by employees.
b. Hedges of net investment in foreign operations
e)
Cash flow hedging reserve
The Company designates derivative financial instruments as
hedges of net investments in foreign operations. The Company
has also designated a combination of foreign currency
denominated borrowings and related cross-currency swaps as
a hedge of net investment in foreign operations. Changes in the
fair value of the derivative hedging instruments and gains/losses
on translation or settlement of foreign currency denominated
borrowings designated as a hedge of net investment in foreign
operations are recognized in other comprehensive income and
within equity in the FCTR to the extent that the hedge is effective.
To the extent that the hedge is ineffective, changes in fair
value are recognized in the statement of income and reported
within foreign exchange gains/(losses), net within results from
operating activities.
Changes in fair value of derivative hedging instruments
designated and effective as a cash flow hedge are recognized
in other comprehensive income (net of taxes), and presented
within equity in the cash flow hedging reserve.
f)
Foreign currency translation reserve
The exchange difference arising from the translation of financial
statements of foreign subsidiaries, differences arising from
translation of long-term intercompany receivables or payables
relating to foreign operations, changes in fair value of the derivative
hedging instruments and gains/losses on translation or settlement
of foreign currency denominated borrowings designated as hedge
of net investment in foreign operations are recognized in other
comprehensive income, and presented within equity in the FCTR.
C. Others
Changes in fair value of foreign currency derivative instruments
not designated as cash flow hedges or hedges of net investment
in foreign operations are recognized in the statement of income
and reported within foreign exchange gains/(losses), net within
results from operating activities.
Changes in fair value and gains/(losses) on settlement of foreign
currency derivative instruments relating to borrowings, which have
not been designated as hedges are recorded in finance expense.
g) Other reserve
Changes in the fair value of available for sale financial assets is
recognized in other comprehensive income (net of taxes), and
presented within equity in other reserve.
h) Dividend
A final dividend, including tax thereon, on common stock is
recorded as a liability on the date of approval by the shareholders.
An interim dividend, including tax thereon, is recorded as a liability
on the date of declaration by the board of directors.
(v) Equity and share capital
a)
Share capital and share premium
The Company has only one class of equity shares. The authorized
share capital of the Company is 2,650,000,000 equity shares, par
value ` 2 per share. Par value of the equity shares is recorded as
share capital and the amount received in excess of par value is
classified as share premium.
Every holder of the equity shares, as reflected in the records of the
Company as of the date of the shareholder meeting shall have
one vote in respect of each share held for all matters submitted
to vote in the shareholder meeting.
b)
Shares held by controlled trust (Treasury shares)
The Company’s equity shares held by the controlled trust, which
is consolidated as a part of the Group are classified as Treasury
Shares. The Company has 14,841,271 treasury shares as of March
31, 2011 and 2012, respectively. Treasury shares are recorded at
acquisition cost.
c)
Retained earnings
Retained earnings comprises of the Company’s prior years’
undistributed earnings after taxes. A portion of these earnings
amounting to ` 1,144 is not freely available for distribution.
(vi) Property, plant and equipment
a)
Recognition and measurement
Property, plant and equipment are measured at cost less
accumulated depreciation and impairment losses, if any. Cost
includes expenditures directly attributable to the acquisition
of the asset. Borrowing costs directly attributable to the
construction or production of a qualifying asset are capitalized
as part of the cost.
b) Depreciation
The Company depreciates property, plant and equipment over
the estimated useful life on a straight-line basis from the date
the assets are available for use. Assets acquired under finance
lease and leasehold improvements are amortized over the
shorter of estimated useful life of the asset or the related lease
term. The estimated useful life of assets are reviewed and where
appropriate are adjusted, annually. The estimated useful lives
of assets for the current and comparative period are as follows:
Category
Buildings
Plant and machinery
Computer equipment and software
Furniture, fixtures and equipment
Vehicles
useful life
30 to 60 years
2 to 21 years
2 to 6 years
3 to 10 years
4 years
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Consolidated Financial Statements Under IFRS
When parts of an item of property, plant and equipment
have different useful lives, they are accounted for as separate
items (major components) of property, plant and equipment.
Subsequent expenditure relating to property, plant and
equipment is capitalized only when it is probable that future
economic benefits associated with these will flow to the
Company and the cost of the item can be measured reliably.
Deposits and advances paid towards the acquisition of property,
plant and equipment outstanding as of each reporting date and
the cost of property, plant and equipment not available for use
before such date are disclosed under capital work- in-progress.
(vii) Business combination, Goodwill and Intangible assets
Business combinations are accounted for using the purchase
(acquisition) method. The cost of an acquisition is measured as
the fair value of the assets given, equity instruments issued and
liabilities incurred or assumed at the date of exchange. Identifiable
assets acquired and liabilities and contingent liabilities assumed in
a business combination are measured initially at fair value at the
date of an acquisition. Transaction costs incurred in connection
with a business combination are expensed as incurred.
The cost of an acquisition also includes the fair value of any
contingent consideration. Any subsequent changes to the fair
value of contingent consideration classified as liabilities are
recognized in the consolidated statement of income.
a)
Arrangements where the Company is the lessee
Leases of property, plant and equipment, where the Company
assumes substantially all the risks and rewards of ownership are
classified as finance leases. Finance leases are capitalized at the
lower of the fair value of the leased property and the present
value of the minimum lease payments. Lease payments are
apportioned between the finance charge and the outstanding
liability. The finance charge is allocated to periods during the
lease term at a constant periodic rate of interest on the remaining
balance of the liability.
Leases where the lessor retains substantially all the risks and
rewards of ownership are classified as operating leases. Payments
made under operating leases are recognized in the statement of
income on a straight-line basis over the lease term.
b)
Arrangements where the Company is the lessor
In certain arrangements, the Company recognizes revenue
from the sale of products given under finance leases. The
Company records gross finance receivables, unearned income
and the estimated residual value of the leased equipment on
consummation of such leases. Unearned income represents the
excess of the gross finance lease receivable plus the estimated
residual value over the sales price of the equipment. The
Company recognizes unearned income as financing revenue
over the lease term using the effective interest method.
a) Goodwill
(ix)
Inventories
The excess of the cost of an acquisition over the Company’s share
in the fair value of the acquiree’s identifiable assets, liabilities and
contingent liabilities is recognized as goodwill. If the excess is
negative, a bargain purchase gain is recognized immediately in
the statement of income.
b)
Intangible assets
Intangible assets acquired separately are measured at cost of an
acquisition. Intangible assets acquired in a business combination
are measured at fair value as at the date of an acquisition.
Following initial recognition, intangible assets are carried at cost
less any accumulated amortization and impairment losses, if any.
The amortization of an intangible asset with a finite useful life
reflects the manner in which the economic benefit is expected
to be generated and consumed. Intangible assets with indefinite
lives comprising of brands are not amortized, but instead
tested for impairment at least annually and written down to the
recoverable amount as required.
The estimated useful life of amortizable intangibles are reviewed
and where appropriate are adjusted, annually. The estimated
useful lives of the amortizable intangible assets for the current
and comparative periods are as follows:
Category
Customer-related intangibles
Marketing related intangibles
(viii) Leases
useful life
2 to 11 years
20 to 30 years
Inventories are valued at lower of cost and net realizable
value, including necessary provision for obsolescence. Cost is
determined using the weighted average method.
(x)
Impairment
a)
Financial assets
The Company assesses at each reporting date whether there
is any objective evidence that a financial asset or a group of
financial assets is impaired. If any such indication exists, the
Company estimates the amount of impairment loss.
A.
Loans and receivables
Impairment losses on trade and other receivables are recognized
using separate allowance accounts. Refer Note 2 (v) for further
information regarding the determination of impairment.
b. Available for sale financial asset
When the fair value of available-for-sale financial assets declines
below acquisition cost and there is objective evidence that the
asset is impaired, the cumulative loss that has been recognized
in other comprehensive income, a component of equity in other
reserve is transferred to the statement of income. An impairment
loss may be reversed in subsequent periods, if the indicators for
the impairment no longer exist. Such reversals are recognized
in other comprehensive income.
b) Non financial assets
The Company assesses long-lived assets, such as property,
plant, equipment and acquired intangible assets for impairment
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whenever events or changes in circumstances indicate that
the carrying amount of an asset or group of assets may not
be recoverable. If any such indication exists, the Company
estimates the recoverable amount of the asset. The recoverable
amount of an asset or cash generating unit is the higher of its
fair value less cost to sell (FVLCTS) and its value-in-use (VIU). If
the recoverable amount of the asset or the recoverable amount
of the cash generating unit to which the asset belongs is less
than its carrying amount, the carrying amount is reduced to its
recoverable amount. The reduction is treated as an impairment
loss and is recognized in the statement of income. If at the
reporting date there is an indication that a previously assessed
impairment loss no longer exists, the recoverable amount is
reassessed and the impairment losses previously recognized
are reversed such that the asset is recognized at its recoverable
amount but not exceeding written down value which would
have been reported if the impairment losses had not been
recognized initially.
Intangible assets with indefinite lives comprising of brands
are not amortized, but instead tested for impairment at least
annually at the same time and written down to the recoverable
amount as required.
Goodwill is tested for impairment at least annually at the same
time and when events occur or changes in circumstances
indicate that the recoverable amount of the cash generating
unit is less than its carrying value. The goodwill impairment test
is performed at the level of cash-generating unit or groups of
cash-generating units which represent the lowest level at which
goodwill is monitored for internal management purposes. An
impairment in respect of goodwill is not reversed.
(xi) Employee Benefit
a)
Post-employment and pension plans
The Group participates in various employee benefit plans.
Pensions and other post-employment benefits are classified as
either defined contribution plans or defined benefit plans. Under
a defined contribution plan, the Company’s only obligation
is to pay a fixed amount with no obligation to pay further
contributions if the fund does not hold sufficient assets to pay
all employee benefits. The related actuarial and investment risks
fall on the employee. The expenditure for defined contribution
plans is recognized as an expense during the period when the
employee provides service. Under a defined benefit plan, it is
the Company’s obligation to provide agreed benefits to the
employees. The related actuarial and investment risks fall on the
Company. The present value of the defined benefit obligations
is calculated using the projected unit credit method.
The company has the following employee benefit plans:
A. provident fund
Employees receive benefits from a provident fund, which is a
defined benefit plan. The employer and employees each make
periodic contributions to the plan. A portion of the contribution
is made to the approved provident fund trust managed by the
Company; while the remainder of the contribution is made to
Consolidated Financial Statements Under IFRS
the government administered pension fund. The Company is
generally liable for any shortfall in the fund assets based on the
government specified minimum rates of return.
b.
Superannuation
Superannuation plan, a defined contribution scheme is
administered by Life Insurance Corporation of India and ICICI
Prudential Insurance Company Limited. The Company makes
annual contributions based on a specified percentage of each
eligible employee’s salary.
C. gratuity
In accordance with the Payment of Gratuity Act, 1972, the
Company provides for a lump sum payment to eligible employees,
at retirement or termination of employment based on the last
drawn salary and years of employment with the Company. The
gratuity fund is managed by the Life Insurance Corporation of
India (LIC), HDFC Standard Life, TATA AIG and Birla Sun-life. The
Company’s obligation in respect of the gratuity plan, which is a
defined benefit plan, is provided for based on actuarial valuation
using the projected unit credit method. The Company recognizes
actuarial gains and losses immediately in the statement of income.
b)
Termination benefits
Termination benefits are recognized as an expense when
the Company is demonstrably committed, without realistic
possibility of withdrawal, to a formal detailed plan to terminate
employment before the normal retirement date, or to provide
termination benefit as a result of an offer made to encourage
voluntary redundancy.
c)
Short-term benefits
Short-term employee benefit obligations are measured on an
undiscounted basis and are recorded as expense as the related
service is provided. A liability is recognized for the amount
expected to be paid under short-term cash bonus or profit-
sharing plans, if the Company has a present legal or constructive
obligation to pay this amount as a result of past service provided
by the employee and the obligation can be estimated reliably.
d)
Compensated absences
The employees of the Company are entitled to compensated
absences. The employees can carry forward a portion of the
unutilized accumulating compensated absences and utilize it
in future periods or receive cash at retirement or termination
of employment. The Company records an obligation for
compensated absences in the period in which the employee
renders the services that increases this entitlement. The
Company measures the expected cost of compensated absences
as the additional amount that the Company expects to pay as a
result of the unused entitlement that has accumulated at the end
of the reporting period. The Company recognizes accumulated
compensated absences based on actuarial valuation. Non-
accumulating compensated absences are recognized in the
period in which the absences occur. The Company recognizes
actuarial gains and losses immediately in the statement of
income.
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Consolidated Financial Statements Under IFRS
(xii) Share based payment transaction
b.
Fixed-price contracts
Employees of the Company receive remuneration in the form of
equity settled instruments, for rendering services over a defined
vesting period. Equity instruments granted are measured
by reference to the fair value of the instrument at the date
of grant. In cases, where equity instruments are granted at a
nominal exercise price, the intrinsic value on the date of grant
approximates the fair value. The expense is recognized in the
statement of income with a corresponding increase to the share
based payment reserve, a component of equity.
The equity instruments generally vest in a graded manner over
the vesting period. The fair value determined at the grant date is
expensed over the vesting period of the respective tranches of
such grants (accelerated amortization). The stock compensation
expense is determined based on the Company’s estimate of
equity instruments that will eventually vest.
(xiii) Provisions
Provisions are recognized when the Company has a present
obligation (legal or constructive) as a result of a past event, it is
probable that an outflow of economic benefits will be required
to settle the obligation, and a reliable estimate can be made of
the amount of the obligation.
The amount recognized as a provision is the best estimate of
the consideration required to settle the present obligation at
the end of the reporting period, taking into account the risks
and uncertainties surrounding the obligation.
When some or all of the economic benefits required to settle a
provision are expected to be recovered from a third party, the
receivable is recognized as an asset, if it is virtually certain that
reimbursement will be received and the amount of the receivable
can be measured reliably.
Provisions for onerous contracts are recognized when the
expected benefits to be derived by the Group from a contract
are lower than the unavoidable costs of meeting the future
obligations under the contract. Provisions for onerous contracts
are measured at the present value of lower of the expected
net cost of fulfilling the contract and the expected cost of
terminating the contract.
(xiv) Revenue
The Company derives revenue primarily from software
development and related services, BPO services, sale of IT and
other products.
Revenues from fixed-price contracts, including systems
development and integration contracts are recognized using the
“percentage-of-completion” method. Percentage of completion
is determined based on project costs incurred to date as a
percentage of total estimated project costs required to complete
the project. The cost expended (or input) method has been used
to measure progress towards completion as there is a direct
relationship between input and productivity. If the Company does
not have a sufficient basis to measure the progress of completion
or to estimate the total contract revenues and costs, revenue is
recognized only to the extent of contract cost incurred for which
recoverability is probable. When total cost estimates exceed
revenues in an arrangement, the estimated losses are recognized
in the statement of income in the period in which such losses
become probable based on the current contract estimates.
‘Unbilled revenues’ represent cost and earnings in excess of
billings as at the end of the reporting period. ‘Unearned revenues’
represent billing in excess of revenue recognized. Advance
payments received from customers for which no services have
been rendered are presented as ‘Advance from customers’.
C. Maintenance contract
Revenue from maintenance contracts is recognized ratably over
the period of the contract using the percentage of completion
method. When services are performed through an indefinite
number of repetitive acts over a specified period of time, revenue is
recognized on a straight-line basis over the specified period unless
some other method better represents the stage of completion.
In certain projects, a fixed quantum of service or output units is
agreed at a fixed price for a fixed term. In such contracts, revenue
is recognized with respect to the actual output achieved till
date as a percentage of total contractual output. Any residual
service unutilized by the customer is recognized as revenue on
completion of the term.
b)
Products
Revenue from products are recognized when the significant
risks and rewards of ownership have transferred to the buyer,
continuing managerial involvement usually associated with
ownership and effective control have ceased, the amount of
revenue can be measured reliably, it is probable that economic
benefits associated with the transaction will flow to the Company
and the costs incurred or to be incurred in respect of the
transaction can be measured reliably.
a)
Services
c) Multiple-element arrangements
The Company recognizes revenue when the significant terms of
the arrangement are enforceable, services have been delivered
and the collectability is reasonably assured. The method for
recognizing revenues and costs depends on the nature of the
services rendered:
A. Time and materials contracts
Revenues and costs relating to time and materials contracts are
recognized as the related services are rendered.
Revenue from contracts with multiple-element arrangements
are recognized using the guidance in IAS 18, Revenue. The
Company allocates the arrangement consideration to separately
identifiable components based on their relative fair values
or on the residual method. Fair values are determined based
on sale prices for the components when it is regularly sold
separately, third-party prices for similar components or cost
plus, an appropriate business-specific profit margin related to
the relevant component.
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d) Others
The Company accounts for volume discounts and pricing
incentives to customers by reducing the amount of revenue
recognized at the time of sale.
Revenues are shown net of sales tax, value added tax, service
tax and applicable discounts and allowances. Revenue includes
excise duty.
The Company accrues the estimated cost of warranties at the
time when the revenue is recognized. The accruals are based
on the Company’s historical experience of material usage and
service delivery costs.
(xv) Finance expense
Finance expense comprise interest cost on borrowings,
impairment losses recognized on financial assets, gains / (losses)
on translation or settlement of foreign currency borrowings
and changes in fair value and gains / (losses) on settlement of
related derivative instruments except foreign exchange gains/
(losses), net on short-term borrowings which are considered as
a natural economic hedge for the foreign currency monetary
assets which are classified as foreign exchange gains/(losses),
net within results from operating activities. Borrowing costs that
are not directly attributable to a qualifying asset are recognized
in the statement of income using the effective interest method.
(xvi) Finance and other income
Finance and other income comprises interest income on
deposits, dividend income and gains / (losses) on disposal of
available-for-sale financial assets. Interest income is recognized
using the effective interest method. Dividend income is
recognized when the right to receive payment is established.
(xvii) Income tax
Income tax comprises current and deferred tax. Income tax
expense is recognized in the statement of income except to
the extent it relates to a business combination, or items directly
recognized in equity or in other comprehensive income.
a)
Current income tax
Current income tax for the current and prior periods are
measured at the amount expected to be recovered from or
paid to the taxation authorities based on the taxable income
for the period. The tax rates and tax laws used to compute the
current tax amount are those that are enacted or substantively
enacted by the reporting date and applicable for the period. The
Company offsets current tax assets and current tax liabilities,
where it has a legally enforceable right to set off the recognized
amounts and where it intends either to settle on a net basis, or
to realize the asset and liability simultaneously.
b) Deferred income tax
Consolidated Financial Statements Under IFRS
the deferred income tax arises from the initial recognition of
goodwill or an asset or liability in a transaction that is not a
business combination and affects neither accounting nor taxable
profits or loss at the time of the transaction.
Deferred income tax asset are recognized to the extent that it
is probable that taxable profit will be available against which
the deductible temporary differences, and the carry forward of
unused tax credits and unused tax losses can be utilized.
Deferred income tax liabilities are recognized for all taxable
temporary differences except in respect of taxable temporary
differences associated with investments in subsidiaries,
associates and foreign branches where the timing of the reversal
of the temporary difference can be controlled and it is probable
that the temporary difference will not reverse in the foreseeable
future.
The carrying amount of deferred income tax assets is reviewed
at each reporting date and reduced to the extent that it is no
longer probable that sufficient taxable profit will be available to
allow all or part of the deferred income tax asset to be utilized.
Deferred income tax assets and liabilities are measured at the
tax rates that are expected to apply in the period when the asset
is realized or the liability is settled, based on tax rates (and tax
laws) that have been enacted or substantively enacted at the
reporting date.
The Company offsets deferred income tax assets and liabilities,
where it has a legally enforceable right to offset current tax assets
against current tax liabilities, and they relate to taxes levied by
the same taxation authority on either the same taxable entity, or
on different taxable entities where there is an intention to settle
the current tax liabilities and assets on a net basis or their tax
assets and liabilities will be realized simultaneously.
(xviii) Earnings per share
Basic earnings per share is computed using the weighted average
number of equity shares outstanding during the period adjusted
for treasury shares held. Diluted earnings per share is computed
using the weighted-average number of equity and dilutive
equivalent shares outstanding during the period, using the
treasury stock method for options and warrants, except where
the results would be anti-dilutive.
New Accounting standards adopted by the Company:
The Company adopted IAS 24 (revised 2009) “Related Party
Disclosures” (“IAS 24”) effective April 1, 2011. The purpose of the
revision is to simplify the definition of a related party, clarifying
its intended meaning and eliminating inconsistencies from
the definition. Adoption of IAS 24 (revised 2009), did not have
a material effect on these consolidated financial statements.
New Accounting standards not yet adopted by the Company:
Deferred income tax is recognized using the balance sheet
approach. Deferred income tax assets and liabilities are
recognized for deductible and taxable temporary differences
arising between the tax base of assets and liabilities and
their carrying amount in financial statements, except when
In October, 2010, the IASB issued an amendment to IFRS 7
“Disclosures – Transfers of financial assets”. The purpose of the
amendment is to enhance the existing disclosures in IFRS 7 when
an asset is transferred but is not derecognized and introduce
new disclosures for assets that are derecognized but the entity
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Wipro Limited
207
Consolidated Financial Statements Under IFRS
continues to have a continuing exposure to the asset after the
sale. The amendment is effective for fiscal years beginning on or
after July 1, 2011. Earlier application is permitted. The Company
is evaluating the impact, these amendments will have on the
Company’s consolidated financial statements.
In December, 2011, the IASB issued an amendment to IFRS 7
“Disclosures – offsetting financial assets and financial liabilities”.
The amended standard requires additional disclosures where
financial assets and financial liabilities are offset in the balance
sheet. These disclosures would provide users with information
that is useful in (a) evaluating the effect or potential effect of
netting arrangements on an entity’s financial position and
(b) analyzing and comparing financial statements prepared
in accordance with IFRSs and U.S. GAAP. The amendment is
effective retrospectively for fiscal years beginning on or after
January 1, 2013. Earlier application is permitted. The Company
is evaluating the impact, these amendments will have on the
Company’s consolidated financial statements.
In November 2009, the IASB issued the chapter of IFRS 9 “Financial
Instruments relating to the classification and measurement of
financial assets”. The new standard represents the first phase
of a three-phase project to replace IAS 39 Financial Instruments:
Recognition and Measurement (IAS 39) with IFRS 9 Financial
Instruments (IFRS 9). IFRS 9 uses a single approach to determine
whether a financial asset is measured at amortized cost or fair
value, replacing the many different rules in IAS 39. The approach
in IFRS 9 is based on how an entity manages its financial assets
(its business model) and the contractual cash flow characteristics
of the financial assets. In October 2010, the IASB added the
requirement relating to classification and measurement of
financial liabilities to IFRS 9. Under the amendment, an entity
measuring its financial liability at fair value, can present the
amount of fair value change in the liability attributable to change
in the liabilities credit risk in other comprehensive income.
Further the IASB also decided to carry-forward unchanged from
IAS 39 requirements relating to de-recognition of financial assets
and financial liabilities. IFRS 9 is effective for fiscal years beginning
on or after January 1, 2015. Earlier application is permitted. The
Company is evaluating the impact, these amendments will have
on the Company’s consolidated financial statements.
In May 2011, the IASB issued IFRS 10” Consolidated Financial
Statements”. The new standard establishes principles for
the presentation and preparation of consolidated financial
statements when an entity controls one or more other
entities. IFRS 10 replaces the consolidation requirements
in SIC-12 “Consolidation—Special Purpose Entities” and IAS 27
“Consolidated and Separate Financial Statements”. IFRS 10
builds on existing principles by identifying the concept of
control as the determining factor in whether an entity should
be included within the consolidated financial statements of the
parent company. The standard provides additional guidance to
assist in the determination of control where this is difficult to
assess. IFRS 10 is effective for fiscal years beginning on or after
January 1, 2013. Earlier application is permitted. The Company
is evaluating the impact, these amendments will have on the
Company’s consolidated financial statements.
In May 2011, the IASB issued IFRS 13 “Fair Value Measurement”.
The new standard defines fair value, sets out in a single IFRS a
framework for measuring fair value and requires disclosures
about fair value measurements. IFRS 13 applies when other
IFRSs require or permit fair value measurements. It does not
introduce any new requirements to measure an asset or a liability
at fair value or change what is measured at fair value in IFRSs or
address how to present changes in fair value. IFRS 13 is effective
for fiscal years beginning on or after January 1, 2013. Early
application is permitted. The Company is evaluating the impact,
these amendments will have on the Company’s consolidated
financial statements.
In June 2011, the IASB issued Amendment to IAS 1 “Presentation of
Financial Statements” that will improve and align the presentation
of items of other comprehensive income (OCI) in financial
statements prepared in accordance with International Financial
Reporting Standards (IFRSs). The amendments require companies
preparing financial statements in accordance with IFRSs to group
together items within OCI that may be reclassified to the profit or
loss section of the income statement. The amendments will also
reaffirm existing requirements that items in OCI and profit or loss
should be presented as either a single statement or two consecutive
statements. This amendment is effective for fiscal years beginning
on or after July 1, 2012. Earlier adoption is permitted. The Company
is evaluating the impact, these amendments will have on the
Company’s consolidated financial statements.
In June 2011, the IASB issued IAS 19 (Amended) “Employee
Benefits”. The new standard has eliminated an option to defer
the recognition of gains and losses through re-measurements
and requires such gain or loss to be recognized through other
comprehensive income in the year of occurrence to reduce
volatility. The amended standard requires immediate recognition
of effects of any plan amendments. Further it also requires asset
in profit or loss to be restricted to government bond yields or
corporate bond yields, considered for valuation of Projected
Benefit Obligation, irrespective of actual portfolio allocations.
The actual return from the portfolio in excess of such yields
is recognized through Other Comprehensive Income. The
amendment is effective retrospectively for fiscal years beginning
on or after January 1, 2013. Earlier adoption is permitted. The
Company is evaluating the impact, these amendments will have
on the Company’s consolidated financial statements.
In December, 2011, the IASB issued an amendment to IAS 32
“Offsetting financial assets and financial liabilities”. The purpose
of the amendment is to clarify some of the requirements for
offsetting financial assets and financial liabilities on the balance
sheet. This includes clarifying the meaning of “currently has a
legally enforceable right to set-off” and also the application
of the IAS 32 offsetting criteria to settlement systems (such as
central clearing house systems) which apply gross settlement
mechanisms that are not simultaneous. The amendment is
effective retrospectively for fiscal years beginning on or after
January 1, 2014. Earlier application is permitted. The Company
is evaluating the impact these a mendments will have on the
Company’s consolidated financial statements.
Annual Report 2011-12
208
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4. property, plant and equipment
gross carrying value:
As at April 1, 2010
Translation adjustment
Additions
Disposal / adjustments
As at March 31, 2011
Accumulated depreciation/impairment:
As at April 1, 2010
Translation adjustment
Depreciation
Disposal / adjustments
As at March 31, 2011
Capital work-in-progress
Net carrying value as at March 31, 2011
gross carrying value:
As at April 1, 2011
Translation adjustment
Additions
Acquisition through business combination..
Disposal / adjustments
As at March 31, 2012
Accumulated depreciation/impairment:
As at April 1, 2011
Translation adjustment
Depreciation
Disposal / adjustments
As at March 31, 2012
Capital work-in-progress
Net carrying value as at March 31, 2012
Consolidated Financial Statements Under IFRS
Land
buildings
plant and
machinery*
Furniture
fixtures and
equipment
Vehicles
Total
` 2,794
17
943
-
` 3,754
` -
-
-
-
` -
` 3,754
30
445
58
(44)
` 4,243
` -
-
-
-
` -
` 19,359
117
3,533
(41)
` 22,968
` 1,998
50
493
(39)
` 2,502
` 22,968
389
2,113
15
(159)
` 25,326
` 2,502
136
649
(28)
` 3,259
` 46,657
337
8,360
(1,145)
` 54,209
` 30,995
231
5,500
(1,077)
` 35,649
` 9,855
68
1,692
(591)
` 11,024
` 5,497
45
1,271
(375)
` 6,438
` 54,209
1,951
10,096
279
(960)
` 65,575
` 35,649
1,233
6,537
(622)
` 42,797
` 11,024
229
1,729
51
(523)
` 12,510
` 6,438
132
2,077
(381)
` 8,266
` 2,929
11
117
(458)
` 2,599
` 2,004
14
455
(354)
` 2,119
` 2,599
26
69
9
(621)
` 2,082
` 2,119
21
281
(536)
` 1,885
` 81,594
550
14,645
(2,235)
` 94,554
` 40,494
340
7,719
(1,845)
` 46,708
7,248
` 55,094
` 94,554
2,625
14,452
412
(2,307)
` 109,736
` 46,708
1,522
9,544
(1,567)
` 56,207
5,459
` 58,988
*Including net carrying value of computer equipment and software amounting to ` 4,397 and ` 7,463 as at March 31, 2011 and
2012, respectively.
Interest capitalized by the Company was ` 66 and ` 63 for
the year ended March 31, 2011 and 2012, respectively. The
capitalization rate used to determine the amount of borrowing
cost capitalized for the year ended March 31, 2011 and 2012 are
4.23% and 11.07%, respectively.
5. goodwill and Intangible assets
The movement in goodwill balance is given below:
Year ended March 31,
2012
Balance at the beginning of the year ` 53,802 ` 54,818
7,207
Translation adjustment
5,912
Acquisition through business
combination, net
Balance at the end of the year
` 54,818 ` 67,937
962
54
2011
The Company has recognized additional goodwill as a result of
earn-out provisions from business combinations consummated
in fiscal years 2006 and 2007 (contingent consideration)
amounting to ` 54 and ` 207 during the year ended March 31,
2011 and 2012, respectively.
Goodwill as at March 31, 2011 and 2012 has been allocated to
the following reportable segments:
Segment
As at March 31,
IT Services
IT Products
Consumer Care and Lighting
Others
Total
2011
2012
` 39,098 ` 49,809
546
15,354
2,228
` 54,818 ` 67,937
472
13,475
1,773
The goodwill held in the Infocrossing, Healthcare and Unza cash
generating units (CGU) are considered significant in comparison
to the total carrying amount of goodwill as at March 31, 2012.
The goodwill held in these CGUs are as follows:
Cgus
Infocrossing
Healthcare
Unza
As at March 31,
2011
2012
` 11,592 ` 13,221
11,358
14,173
9,959
12,492
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Wipro Limited
209
Consolidated Financial Statements Under IFRS
The movement in intangible assets is given below:
gross carrying value:
As at April 1, 2010
Translation adjustment
Additions
As at March 31, 2011
Accumulated amortization and impairment:
As at April 1, 2010
Translation adjustment
Amortization
As at March 31, 2011
Net carrying value as at March 31, 2011
gross carrying value:
As at April 1, 2011
Translation adjustment
Acquisition through business combination
Additions
As at March 31, 2012
Accumulated amortization and impairment:
As at April 1, 2011
Translation adjustment
Amortization
As at March 31, 2012
Net carrying value as at March 31, 2012
Net carrying value of marketing-related intangibles includes
indefinite life intangible assets (brands and trade-marks) of `
660 and ` 1,745 as of March 31, 2011 and 2012, respectively.
The assessment of marketing-related intangibles (brands
and trade-marks) that have an indefinite life were based on
a number of factors, including the competitive environment,
market share, brand history, product life cycles, operating plan
and macroeconomic environment of the geographies in which
these brands operate.
Amortization expense on intangible assets is included in selling
and marketing expenses in the statement of income.
As of March 31, 2012, the estimated remaining amortization
period for customer-related intangibles acquired on acquisition
are as follows:
Estimated remaining
amortization period
2.75 years
8 years
Intangible assets
Customer related Marketing related
` 1,932
11
-
` 1,943
` 392
-
341
` 733
` 1,210
` 1,943
123
864
-
` 2,930
` 733
-
429
` 1,162
` 1,768
` 3,464
(105)
36
` 3,395
` 993
(48)
109
` 1,054
` 2,341
` 3,395
171
-
97
` 3,663
` 1,054
65
83
` 1,202
` 2,461
Total
` 5,396
(94)
36
` 5,338
` 1,385
(48)
450
` 1,787
` 3,551
` 5,338
294
864
97
` 6,593
` 1,787
65
512
` 2,364
` 4,229
Goodwill and indefinite life intangible were tested for impairment
annually in accordance with the Company’s procedure for
determining the recoverable value of such assets. For the purpose
of impairment testing, goodwill is allocated to a CGU representing
the lowest level within the Group at which goodwill is monitored
for internal management purposes, and which is not higher than
the Group’s operating segment. The useful life of the trademark
and brand in respect of the acquired Wipro Yardley FZE, Wipro
Yardley Consumer Care Private Limited, Chandrika and Northwest
has been determined to be indefinite life intangible assets. For
the purpose of impairment testing, indefinite life intangibles
in Wipro Yardley FZE and Wipro Yardley Consumer Care Private
Limited are allocated to the Yardley businesses and the indefinite
life intangibles in Chandrika and Northwest are allocated to
Consumer Care India businesses. The recoverable amount of the
CGU is the higher of its FVLCTS and its VIU. The FVLCTS of the
CGU is determined based on the market capitalization approach,
using the turnover and earnings multiples derived from observed
market data. The VIU is determined based on discounted cash
flow projections. Key assumptions on which the Company has
based its determination of VIUs include:
1.25 – 8.25 years
8.125 years
a)
Estimated cash flows for five years based on formal/
approved internal management budgets with extrapolation for
the remaining period, wherever such budgets were shorter than
5 years period.
Acquisition
Citi Technology Services Limited
Wipro Yardley FZE and Wipro Yardley
Consumer Care Private Limited
Science Application International
Corporation
R.K.M Equipamentos Hidraulicos Ltd
Annual Report 2011-12
210
05 US Gap IFRS_2012.indd 210
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b)
Terminal value arrived by extrapolating last forecasted
year cash flows to perpetuity using long-term growth rates.
These long-term growth rates take into consideration external
macroeconomic sources of data. Such long-term growth rate
considered does not exceed that of the relevant business and
industry sector.
c)
The discount rates used are based on the Company’s
weighted average cost of capital as an approximation of the
weighted average cost of capital of a comparable market
participant, which are adjusted for specific country risks.
d)
Value-in-use is calculated using after tax assumptions. The
use of after tax assumptions does not result in a value-in-use that
is materially different from the value-in-use that would result if
the calculation was performed using before tax assumptions. The
before tax discount rate is determined based on the value-in-use
derived from the use of after tax assumptions.
Assumptions
Terminal value long-term
growth rate
After tax discount rate
Before tax discount rate
Year ended March 31,
2012
3%-6%
2011
2.5%-6%
10%-17%
10%-16%
12.3%-19.5% 11.4%-20.8%
Based on the above, no impairment was identified as of March 31,
2011 and 2012 as the recoverable value of the CGUs exceeded the
carrying value. Further, none of the CGU’s tested for impairment
as of March 31, 2011 and 2012 were at risk of impairment. An
analysis of the calculation’s sensitivity to a change in the key
parameters (Revenue growth, operating margin, discount rate
and long-term growth rate) based on reasonably probable
assumptions, did not identify any probable scenarios where the
CGU’s recoverable amount would fall below its carrying amount.
6. business combination
Science Applications International Corporation
On June 10, 2011, the Company acquired the global oil and gas
information technology practice of the Commercial Business
Services Business Unit of Science Applications International
Corporation Inc along with 100% of the share capital in SAIC
Europe Limited and SAIC India Private Limited. On July 2, 2011
the Company also acquired 100% of the share capital of SAIC
Gulf LLC (hereafter the acquisitions are collectively referred to
as ‘oil and gas business of SAIC’). The oil and gas business of
SAIC provides consulting, system integration and outsourcing
services to global oil majors with significant domain capabilities
in the areas of digital oil field, petro-technical data management
and petroleum application services, addressing the upstream
segment. The Company believes that the acquisition will further
Consolidated Financial Statements Under IFRS
strengthen Wipro’s presence in the Energy, Natural Resources
and Utilities domain. The goodwill of ` 5,309 comprises of value
of expected synergies arising from the acquisition. The purchase
consideration of ` 7,536 was settled in cash.
The following table summarizes the recognized amounts of
assets acquired and liabilities assumed:
Descriptions
Cash and cash
equivalents
Trade receivables
Property, plant and
equipment
Customer - related
intangibles
Other assets
Current tax assets
Trade payables and
accrued expenses
Unearned revenues
D e fe r re d i n co m e
taxes, net
Total
Goodwill
Total purchase price
pre-
acquisition
carrying
amount
` 541
1,170
75
Fair value
adjustments
purchase
price
allocated
-
-
-
541
1,170
75
-
756
756
288
82
(602)
-
-
-
288
82
(602)
(76)
54
-
(61)
(76)
(7)
` 1,532
` 695
` 2,227
5,309
` 7,536
None of the goodwill, other than goodwill relating to business
purchase in the U.S. (` 2,703), is expected to be deductible for
income tax purposes.
The gross and fair value of trade receivables included in other
assets above amounts to ` 1,170. None of the trade receivable
has been impaired and it is expected that full contractual amount
can be collected.
From the date of acquisition, the oil and gas business of SAIC
have contributed ` 6,792 of revenue and ` 243 of profit before
tax for the period of the Company.
If the acquisition had occurred on April 1, 2011, management
estimates that the annual consolidated revenue for the Company
would have been ` 373,798 and the annual profit before taxes
for the year for the Company would have been ` 69,935. The
pro-forma amounts are not necessarily indicative of the results
that would have occurred if the acquisitions had occurred on
dates indicated or that may result in the future.
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Wipro Limited
211
Consolidated Financial Statements Under IFRS
7. Available for sale investments
Available for sale investments consists of the following:
Cost*
` 37,013
As at March 31, 2011
Gross gain
recognized
directly in
equity
` 126
Gross loss
recognized
directly in
equity
` (49)
Fair Value
As at March 31, 2012
Cost* gross gain
recognized
directly in
equity
` 96
Fair Value
gross loss
recognized
directly in
equity
` (25) ` 32,706
` 37,090 ` 32,635
12,189
` 49,202
17
` 143
(14)
` (63)
9,267
12,192
` 49,282 ` 41,902
-
` 96
(12)
` (37)
9,255
` 41,961
Investment in liquid and short-term
mutual funds and others
Certificate of deposits
Total
* Available for sale investments include investments amounting to ` Nil and ` 400 as of March 31, 2011 and 2012, respectively, on
which there is a lien.
8.
Trade receivables
(1)These deposits can be withdrawn by the Company at any time
without prior notice and without any penalty on the principal.
Trade receivables
Allowance for doubtful accounts
receivable
As at March 31,
2011
2012
` 64,221 ` 83,076
(2,594)
(2,748)
` 61,627 ` 80,328
The activity in the allowance for doubtful accounts receivable
is given below:
Balance at the beginning of the year
Additions during the year, net
Uncollectable receivables charged
against allowance
Balance at the end of the year
9.
Inventories
Inventories consist of the following:
Stores and spare parts
Raw materials and components
Work in progress
Finished goods
10. Cash and cash equivalents
Year ended March 31,
2012
` 2,594
393
(239)
2011
` 2,327
399
(132)
` 2,594
` 2,748
As at March 31,
2011
2012
` 1,125 ` 1,271
4,144
1,410
3,837
` 9,707 ` 10,662
3,217
1,109
4,256
Cash and cash equivalents as of March 31, 2010, 2011 and 2012
consist of cash and balances on deposit with banks. Cash and
cash equivalents consist of the following:
As at March 31,
2010
2012
` 24,155 ` 27,628 ` 41,141
2011
40,723
36,525
` 64,878 ` 61,141 ` 77,666
33,513
Cash and bank balances
Demand deposits with
banks(1)
Annual Report 2011-12
212
Cash and cash equivalent consists of the following for the
purpose of the cash flow statement:
As at March 31,
Cash and cash equivalents
(as per above)
Bank overdrafts
11. Other assets
2010
2012
` 64,878 ` 61,141 ` 77,666
2011
(1,322)
(464)
` 63,556 ` 60,899 ` 77,202
(242)
Current
Interest bearing deposits with
corporates(1)
Prepaid expenses
Due from officers and employees
Finance lease receivables
Advance to suppliers
Deferred contract costs
Interest receivable
Deposits
Balance with excise and customs
Non-convertible debentures
Others
Non current
Prepaid expenses including rentals
for leasehold land
Finance lease receivables
Deposits
Non-convertible debentures
Others
As at March 31,
2011
2012
` 4,240
` 8,410
5,507
4,620
1,681
1,110
2,003
2,411
1,868
1,407
1,659
1,503
1,123
393
227
603
1,543
1,570
45
815
1,072
1,677
` 19,744 ` 25,743
` 2,423
` 3,422
5,710
4,839
2,507
1,680
84
-
41 58
` 8,983 ` 11,781
` 28,727 ` 37,524
Total
(1) Such deposits earn a fixed rate of interest and will be liquidated
within 12 months.
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Finance lease receivables
Finance lease receivables consist of assets that are leased to customers for periods ranging from 3 to 5 years, with lease payments
due in monthly, quarterly or semi-annual installments. Details of finance lease receivables are given below:
Consolidated Financial Statements Under IFRS
Minimum lease payment
As at March 31,
present value of minimum
lease payment
As at March 31,
2011
2012
2011
2012
` 2,523
6,129
199
8,851
(1,601)
` 7,250
` 2,043
6,776
180
8,999
(1,286)
` 7,713
` 2,350
4,723
177
-
-
` 7,250
` 1,964
5,588
161
-
-
` 7,713
` 2,411
4,839
` 2,003
5,710
7 million, GBP 21 million, MYR 47 million and RM 8 million,
respectively. To utilize these unused lines of credit, the Company
requires consent of the lender and compliance with certain
financial covenants. Significant portion of these lines of credit
are revolving credit facilities and floating rate foreign currency
loans, renewable on a periodic basis. Significant portion of these
facilities bear floating rates of interest, referenced to LIBOR and
a spread, determined based on market conditions.
The Company has non-fund based revolving credit facilities
in various currencies equivalent to ` 34,963 for operational
requirements that can be used for the issuance of letters of
credit and bank guarantees. As of March 31, 2012, an amount of
` 11,724 was unutilized out of these non-fund based facilities.
Not later than one year
Later than one year but not later than five years
Unguaranteed residual values
Gross investment in lease
Less: Unearned finance income
Present value of minimum lease payment receivable
Included in the financial statements as follows:
Current finance lease receivables
Non-current finance lease receivables
12. Loans and borrowings
Short-term loans and borrowings
The Company had short-term borrowings including bank
overdrafts amounting to ` 31,694 and ` 35,740 as at March
31, 2011 and 2012, respectively. Short-term borrowings from
banks as of March 31, 2012 primarily consist of lines of credit
of approximately ` 19,730, US$ 812 million, SEK 241 million,
SAR 90 million, Euro 17 million, GBP 21 million, MYR (Malaysian
Ringgit) 47 million and RM (Chinese Yuan) 41 million from
bankers primarily for working capital requirements. As of March
31, 2012, the Company has unutilized lines of credit aggregating
` 11,395, US$ 334 million, SEK 111 million, SAR 34 million, Euro
Long-term loans and borrowings
A summary of long- term loans and borrowings is as follows:
Currency
Unsecured external commercial borrowing
Japanese Yen
Unsecured term loan
Indian Rupee
Saudi Riyals
Others
Other secured term loans
Obligations under finance leases
Current portion of long term loans and borrowings
Non-current portion of long term loans and borrowings
As at March 31, 2011
Indian
Foreign
Rupee
currency
in millions
Foreign
currency
in
millions
As at March 31, 2012
Interest rate
Indian
Rupee
Final
maturity
35,016
` 18,861
35,016
` 21,728
1.86% April 2013
NA
66
366
786
354
106
` 20,473
635
` 21,108
` 1,349
19,759
NA
6
79
177
463 6.03% – 7.21% 2012 – 2015
1.25% 2012 – 2013
0 – 3.7% 2012 – 2014
55 3.18% – 6.5% 2012 – 2017
` 22,502
716
` 23,218
` 708
22,510
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Wipro Limited
213
A portion of the above short-term loans and borrowings,
other secured term loans and obligation under finance leases
aggregating to ` 2,067 and ` 2,398 as at March 31, 2011 and 2012,
respectively, are secured by inventories, accounts receivable,
certain property, plant and equipment and underlying assets.
Interest expense was ` 776 and ` 1,057 for the year ended March
31, 2011 and 2012, respectively.
The following is a schedule of future minimum lease payments
under finance leases, together with the present value of
minimum lease payments as of March 31, 2011 and 2012:
Minimum lease payment
As at March 31,
present value of minimum
lease payment
As at March 31,
2011
` 242
396
63
701
(66)
` 635
2012
` 281
478
6
765
(49)
` 716
provisions:
Current:
Provision for warranty
Others
Non-current:
Provision for warranty
Total
2011
` 203
372
60
-
-
` 635
` 203
432
2012
` 255
455
6
-
-
` 716
` 255
461
As at March 31,
2011
2012
` 467
` 306
1,857 815
` 1,121
` 2,324
` 81
` 2,405
` 61
` 1,182
Provision for warranty represents cost associated with providing
sales support services which are accrued at the time of
recognition of revenues and are expected to be utilized over
a period of 1 to 2 years. Other provisions primarily include
provisions for indirect tax related contingencies and litigations.
The timing of cash outflows in respect of such provision cannot
be reasonably determined.
Consolidated Financial Statements Under IFRS
The Company has entered into cross-currency interest rate swap
(CCIRS) in connection with the unsecured external commercial
borrowing and has designated a portion of these as hedge of
net investment in foreign operation.
The contract governing the Company’s unsecured external
commercial borrowing contain certain covenants that limit
future borrowings and payments towards acquisitions in a
financial year. The terms of the other secured and unsecured
loans and borrowings also contain certain restrictive covenants
primarily requiring the Company to maintain certain financial
ratios. As of March 31, 2012, the Company has met the covenants
under these arrangements.
Not later than one year
Later than one year but not later than five year.
Later than five years
Total minimum lease payments
Less: Amount representing interest
Present value of minimum lease payments
Included in the financial statements as follows:
Current finance lease payables
Non-current finance lease payables
13. Trade payables and accrued expenses
Trade payables and accrued expenses consist of the following:
As at March 31,
Trade payables
Accrued expenses
2011
2012
` 20,618 ` 23,429
23,829
` 42,024 ` 47,258
21,406
14. Other liabilities and provisions
Other liabilities:
Current:
Statutory and other liabilities
Employee benefit obligation
Advance from customers
Others
Non-current:
Employee benefit obligations
Others
Total
As at March 31,
2011
2012
` 4,046
2,028
1,049
` 4,241
3,176
1,157
811 1,129
` 9,703
` 7,934
` 2,633
73
` 2,706
` 10,640
` 3,046
473
` 3,519
` 13,222
Annual Report 2011-12
214
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Consolidated Financial Statements Under IFRS
Fair Value
The fair value of cash and cash equivalents, trade receivables,
unbilled revenues, trade payables, current financial liabilities and
borrowings approximate their carrying amount largely due to
the short-term nature of these instruments. A substantial portion
of the Company’s long-term debt has been contracted at floating
rates of interest, which are reset at short intervals. Accordingly,
the carrying value of such long-term debt approximates
fair value. Further, finance lease receivables are periodically
evaluated based on individual credit worthiness of customers.
Based on this evaluation, the Company records allowance for
expected losses on these receivables. As of March 31, 2011 and
2012, the carrying value of such receivables, net of allowances
approximates the fair value.
Investments in liquid and short-term mutual funds, which are
classified as available-for-sale are measured using quoted market
prices at the reporting date multiplied by the quantity held.
Fair value of investments in certificate of deposits, classified as
available for sale is determined using observable market inputs.
The fair value of derivative financial instruments is determined
based on observable market inputs including currency spot and
forward rates, yield curves, currency volatility etc.
Fair value hierarchy
Level 1 – Quoted prices (unadjusted) in active markets for
identical assets or liabilities.
Level 2 – Inputs other than quoted prices included within Level
1 that are observable for the asset or liability, either directly (i.e.
as prices) or indirectly (i.e. derived from prices).
Level 3 – Inputs for the assets or liabilities that are not based on
observable market data (unobservable inputs)
A summary of activity for provision for warranty and other
provisions is as follows:
Year ended March 31, 2012
provision
for
warranty
` 548
Others
Total
` 1,857
` 2,405
460
180
640
(641)
` 367
(1,222)
` 815
(1,863)
` 1,182
Balance at the beginning
of the year
Additional provision
during the year, net
Provision used during the
year
Balance at the end of the
year
15. Financial instruments
Financial assets and liabilities (carrying value/fair value):
Assets:
Trade receivables
Unbilled revenues
Cash and cash equivalents
Available for sale financial
investments
Derivative assets
Other assets
Total
Liabilities:
Loans and borrowings
Trade payables and accrued
expenses
Derivative liabilities
Other liabilities
Total
As at March 31,
2011
2012
` 61,627 ` 80,328
30,025
77,666
41,961
24,149
61,141
49,282
4,693
16,995
4,930
21,769
` 217,887 ` 256,679
` 52,802 ` 58,958
47,258
42,024
3,944
140
6,661
566
` 98,910 ` 113,443
By Category (Carrying value/Fair value):
Assets:
Loans and receivables
Derivative assets
Available for sale financial assets
Total
Liabilities:
Financial liabilities at amortized cost
Trade and other payables
Derivative liabilities
Total
As at March 31,
2011
2012
` 163,912 ` 209,788
4,693
4,930
41,961
49,282
` 217,887 ` 256,679
` 52,802
42,164
` 58,958
47,824
3,944 6,661
` 113,443
` 98,910
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215
Consolidated Financial Statements Under IFRS
The following table presents fair value hierarchy of assets and liabilities measured at fair value on a recurring basis:
particulars
As at March 31, 2011
As at March 31, 2012
Total
Fair value measurements at
reporting date using
Level 1
Level 2
Level 3
Total
Fair value measurements at
reporting date using
Level 1
Level 2
Level 3
` 1,991
1,523
1,179
` -
-
-
` 1,991
1,523
1,179
25,246
25,246
-
24,036
` -
-
-
-
-
` 2,218
1,136
1,576
` -
-
-
` 2,218
1,136
1,576
20,785
18,373
2,412
21,176
-
21,176
` -
-
-
-
-
Assets
Derivative instruments
- Cash flow hedges
- Net investment hedges
- Others
Available for sale financial assets:
- Investment in liquid and short-
term mutual funds
- Investment in certificate of
deposits and other investments
Liabilities
Derivative instruments
- Cash flow hedges
- Net investment hedges
- Others
Derivatives assets and liabilities:
24,036
1,504
1,701
739
-
-
-
-
The Company is exposed to foreign currency fluctuations
on foreign currency assets / liabilities, forecasted cash flows
denominated in foreign currency and net investment in foreign
operations. The Company follows established risk management
policies, including the use of derivatives to hedge foreign currency
assets / liabilities, foreign currency forecasted cash flows and
net investment in foreign operations. The counter party in these
derivative instruments is a bank and the Company considers the
risks of non-performance by the counterparty as non-material.
The following table presents the aggregate contracted principal
amounts of the Company’s derivative contracts outstanding:
As at March 31,
2011
2012
US$ 901 uS$ 1,081
€ 2 € 17
£ 21 £ 4
¥ 3,026 ¥ 1,474
AUD 4 AuD -
CHF 6 CHF -
Designated derivative instruments
Sell
Net investment hedges in foreign
operations
Cross-currency swaps
Others
Non designated derivative
instruments
Sell
Buy
Cross currency swaps
Annual Report 2011-12
216
-
-
-
2,812
2,668
1,181
1,504
1,701
739
The following table summarizes activity in the cash flow hedging
reserve within equity related to all derivative instruments
classified as cash flow hedges:
2,812
2,668
1,181
-
-
-
-
-
-
Balance as at the beginning of the
year
Net (gain)/loss reclassified into
statement of income on occurrence
of hedged transactions (1)
Deferred cancellation gains/(losses)
relating to roll - over hedging
Changes in fair value of effective
portion of derivatives
Gains/ (losses) on cash flow hedging
derivatives, net
Balance as at the end of the year
Deferred tax asset thereon
Balance as at the end of the year, net
of deferred tax
As at March 31,
2011
2012
` (4,954) ` (1,226)
4,041
1,272
222
(12)
(535)
(1,639)
` 3,728 ` (379)
` (1,226) ` (1,605)
247
` (1,008) ` (1,358)
218
(1) On occurrence of hedge transactions, net (gain)/loss was
included as part of revenues.
¥ 24,511 ¥ 24,511
US$ 262 uS$ 262
€ 40 € 40
The related hedge transactions for balance in cash flow
hedging reserve as of March 31, 2012 are expected to occur and
reclassified to the statement of income over a period of 2 years.
US$ 526 uS$ 841
£ 40 £ 58
€ 48 € 44
AUD 13 AuD 31
US$ 617 uS$ 555
¥ - ¥ 1,997
¥ 7,000 ¥ 7,000
As at March 31, 2011 and 2012, there were no significant gains
or losses on derivative transactions or portions thereof that have
become ineffective as hedges, or associated with an underlying
exposure that did not occur.
Sale of financial assets
From time to time, in the normal course of business, the
Company transfers accounts receivables, net investment in
05 US Gap IFRS_2012.indd 216
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finance lease receivables (financial assets) to banks. Under the
terms of the arrangements, the Company surrenders control over
the financial assets and transfer is without recourse. Accordingly,
such transfers are recorded as sale of financial assets. Gains and
losses on sale of financial assets without recourse are recorded
at the time of sale based on the carrying value of the financial
assets and fair value of servicing liability.
In certain cases, transfer of financial assets may be with recourse.
Under arrangements with recourse, the Company is obligated
to repurchase the uncollected financial assets, subject to limits
specified in the agreement with the banks. The Company has
transferred trade receivables with recourse obligation (credit
risk) and accordingly, in such cases the amounts received are
recorded as borrowings in the statement of financial position
and cash flows from financing activities. As at March 31, 2011 and
2012, the maximum amount of recourse obligation in respect
of the transferred financial assets (recorded as borrowings) is `
1,085 and ` 1,163, respectively.
Financial risk management
General
Market risk is the risk of loss of future earnings, to fair values or
to future cash flows that may result from a change in the price
of a financial instrument. The value of a financial instrument
may change as a result of changes in the interest rates, foreign
currency exchange rates, equity prices and other market changes
that affect market risk sensitive instruments. Market risk is
attributable to all market risk sensitive financial instruments
including investments, foreign currency receivables, payables
and loans and borrowings.
The Company’s exposure to market risk is a function of
investment and borrowing activities and revenue generating
activities in foreign currency. The objective of market risk
management is to avoid excessive exposure of the Company’s
earnings and equity to losses.
Risk Management Procedures
The Company manages market risk through a corporate treasury
department, which evaluates and exercises independent control
over the entire process of market risk management. The corporate
treasury department recommends risk management objectives
and policies, which are approved by senior management
and the Audit Committee. The activities of this department
Consolidated Financial Statements Under IFRS
include management of cash resources, implementing hedging
strategies for foreign currency exposures, borrowing strategies,
and ensuring compliance with market risk limits and policies.
Foreign currency risk
The Company operates internationally and a major portion of
the business is transacted in several currencies and consequently
the Company is exposed to foreign exchange risk through
its sales and services in the United States and elsewhere,
and purchases from overseas suppliers in various foreign
currencies. The exchange rate risk primarily arises from foreign
exchange revenue, receivables, cash balances, forecasted cash
flows, payables and foreign currency loans and borrowings. A
significant portion of revenue is in U.S. dollars, euro and pound
sterling, while a significant portion of costs are in Indian rupees.
The exchange rate between the rupee and U.S. dollar, euro and
pound sterling has fluctuated significantly in recent years and
may continue to fluctuate in the future. Appreciation of the rupee
against these currencies can adversely affect the Company’s
results of operations.
The Company evaluates exchange rate exposure arising from
these transactions and enters into foreign currency derivative
instruments to mitigate such exposure. The Company follows
established risk management policies, including the use of
derivatives like foreign exchange forward / option contracts to
hedge forecasted cash flows denominated in foreign currency.
The Company has designated certain derivative instruments
as cash flow hedge to mitigate the foreign exchange exposure
of forecasted highly probable cash flows. The Company has
also designated a combination of foreign currency borrowings
and related cross-currency swaps and other foreign currency
derivative instruments as hedge of its net investment in foreign
operations.
As at March 31, 2011 and 2012, Re. 1 increase / decrease in the
exchange rate of Indian Rupee with U.S. dollar would result in
approximately ` 810 and ` 1,629 decrease / increase in the fair
value of the Company’s foreign currency dollar denominated
derivative instruments, respectively.
As at March 31, 2011 and 2012, 1% change in the exchange rate
between U.S. dollar and Yen would result in approximately ` 170
and ` 194 increase/decrease in the fair value of cross-currency
interest rate swaps, respectively.
05 US Gap IFRS_2012.indd 217
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217
Consolidated Financial Statements Under IFRS
The below table presents foreign currency risk from non derivative financial instruments as of March 31, 2011 and 2012:
Trade receivables
Unbilled revenues
Cash and cash equivalents
Other assets
As at March 31, 2011
uS$
Euro
` 24,408
13,605
22,463
187
` 5,123
239
1,863
311
pound
Sterling
` 4,821
494
1,949
63
Japanese
Yen
` 370
-
290
2
Other
currencies#
` 3,237
271
1,414
126
Total
` 37,959
14,609
27,979
689
Loans and borrowings
Trade payables and accrued expenses
Net assets / (liabilities)
` (27,544)
(10,770)
` 22,349
` (1,322)
(2,063)
` 4,151
` -
(1,407)
` 5,920
` (18,861)
(357)
` (18,556)
` -
(162)
` 4,886
` (47,727)
(14,759)
` 18,750
As at March 31, 2012
uS$
Euro
Trade receivables
Unbilled revenues
Cash and cash equivalents
Other assets
Loans and borrowings
Trade payables and accrued expenses
Net assets / (liabilities)
` 30,205
9,735
23,726
206
` (28,214)
(12,095)
` 23,563
` 5,711
2,727
1,439
515
` (742)
(2,186)
` 7,464
pound
Sterling
` 6,427
3,131
1,492
42
` -
(1,912)
` 9,180
Japanese
Yen
` 402
59
322
-
` (21,728)
(140)
` (21,085)
Other
currencies#
` 5,699
485
1,931
181
` -
(2,068)
` 6,228
Total
` 48,444
16,137
28,910
944
` (50,684)
(18,401)
` 25,350
# Other currencies reflects currencies such as Singapore dollars, Saudi Arabian riyals etc.
As at March 31, 2011 and 2012 respectively, every 1% increase/
decrease of the respective foreign currencies compared to
functional currency of the Company would impact our result
from operating activities by approximately ` 187 and ` 254
respectively.
customers, taking into account the financial condition, current
economic trends, analysis of historical bad debts and ageing of
accounts receivable. Individual risk limits are set accordingly. No
single customer accounted for more than 10% of the accounts
receivable as at March 31, 2011 and 2012, respectively and
revenues for the year ended March 31, 2010, 2011 and 2012,
respectively. There is no significant concentration of credit risk.
Financial assets that are neither past due nor impaired
Cash and cash equivalents, available-for-sale financial assets,
investment in certificates of deposits and interest bearing
deposits with corporates are neither past due nor impaired.
Cash and cash equivalents with banks and interest-bearing
deposits are placed with corporate, which have high credit-
ratings assigned by international and domestic credit-rating
agencies. Available-for-sale financial assets substantially
include investment in liquid mutual fund units. Certificates of
deposit represent funds deposited with banks or other financial
institutions for a specified time period.
Financial assets that are past due but not impaired
There is no other class of financial assets that is past due but not
impaired except for trade receivables of ` 2,594 and ` 2,748 as of
March 31, 2011 and 2012, respectively. Of the total receivables, `
41,146 and ` 58,982 as of March 31, 2011 and 2012, respectively,
were neither past due nor impaired. The company’s credit period
generally ranges from 45-60 days. The aging analysis of the
receivables have been considered from the date of the invoice.
Interest rate risk
Interest rate risk primarily arises from floating rate borrowing,
including various revolving and other lines of credit. The
Company’s investments are primarily in short-term investments,
which do not expose it to significant interest rate risk. The
Company manages its net exposure to interest rate risk relating
to borrowings, by balancing the proportion of fixed rate
borrowing and floating rate borrowing in its total borrowing
portfolio. To manage this portfolio mix, the Company may enter
into interest rate swap agreements, which allows the Company
to exchange periodic payments based on a notional amount
and agreed upon fixed and floating interest rates. As of March
31, 2012, substantially all of the Company borrowings was
subject to floating interest rates, which reset at short intervals. If
interest rates were to increase by 100 bps from March 31, 2012,
additional annual interest expense on the Company’s floating
rate borrowing would amount to approximately ` 564.
Credit risk
Credit risk arises from the possibility that customers may not
be able to settle their obligations as agreed. To manage this,
the Company periodically assesses the financial reliability of
Annual Report 2011-12
218
05 US Gap IFRS_2012.indd 218
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The age wise break up of receivables, net of allowances that are
past due, is given below:
Financial assets that are neither past
due nor impaired
Financial assets that are past due but
not impaired
Past due 0 – 30 days
Past due 31 – 60 days
Past due 61 – 90 days
Past due over 90 days
Total past due and not impaired
Counterparty risk
As at March 31,
2011
2012
` 41,146 ` 58,982
4,249
6,976
3,273
14,834
9,970
4,410
3,263
12,702
` 29,332 ` 30,345
Counterparty risk encompasses issuer risk on marketable
securities, settlement risk on derivative and money market
contracts and credit risk on demand and time deposits. Issuer
risk is minimized by only buying securities which are at least
AA rated. Settlement and credit risk is reduced by the policy of
Consolidated Financial Statements Under IFRS
entering into transactions with counterparties that are usually
banks or financial institutions with acceptable credit ratings.
Exposure to these risks are closely monitored and maintained
within predetermined parameters. There are limits on credit
exposure to any financial institution. The limits are regularly
assessed and determined based upon credit analysis including
financial statements and capital adequacy ratio reviews. In
addition, net settlement agreements are contracted with
significant counterparties.
Liquidity risk
Liquidity risk is defined as the risk that the Company will
not be able to settle or meet its obligations on time or at a
reasonable price. The Company’s corporate treasury department
is responsible for liquidity, funding as well as settlement
management. In addition, processes and policies related to
such risks are overseen by senior management. Management
monitors the Company’s net liquidity position through rolling
forecasts on the basis of expected cash flows. As of March 31,
2011 and 2012, cash and cash equivalents are held with major
banks and financial institutions.
The table below provided details regarding the contractual maturities of significant financial liabilities.
Loans and borrowings
Trade payables and accrued expenses
Derivative liabilities
Loans and borrowings
Trade payables and accrued expenses
Derivative liabilities
Less than 1
year
` 33,043
42,024
1,358
Less than 1
year
` 36,448
47,258
6,354
As at March 31, 2011
1-2 years
2-4 years
4-7 years
Total
` 19,322
-
2,586
` 304
-
-
` 133
-
-
` 52,802
42,024
3,944
As at March 31, 2012
1-2 years
2-4 years
4-7 years
Total
` 22,121
-
273
` 314
-
34
` 75
-
-
` 58,958
47,258
6,661
The balanced view of liquidity and financial indebtedness is stated in the table below. This calculation of the net cash position is
used by the management for external communication with investors, analysts and rating agencies:
Cash and cash equivalents
Interest bearing deposits with
corporates
Available for sale investments
Loans and borrowings
Net cash position
As at March 31,
2011
` 61,141
4,240
2012
` 77,666
8,410
49,282
(52,802)
` 61,861
41,961
(58,958)
` 69,079
16.
Investment in equity accounted investees
Wipro GE Medical Systems (Wipro GE)
The Company holds 49% interest in Wipro GE. Wipro GE is a
private entity that is not listed on any public exchange. The
carrying value of the investment in Wipro GE as at March 31, 2011
and 2012 was ` 2,993 and ` 3,232, respectively. The Company’s
share of profits of Wipro GE for the year ended March 31, 2010,
2011 and 2012 was ` 530, ` 648 and ` 335, respectively.
The aggregate summarized financial information of Wipro GE
is as follows:
Revenue
Gross profit
Profit for the year
Total assets
Total liabilities.
Total equity
2011
Year ended March 31,
2010
` 12,567
3,573
934
2012
` 19,882 ` 25,684
4,611
553
5,278
1,127
As at March 31,
2011
` 16,830
8,543
` 8,287
2012
` 18,608
10,408
` 8,200
Wipro Limited
219
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18.
Income taxes
Income tax expense has been allocated as follows:
Year ended March 31,
2010
` 9,294
2012
` 9,714 ` 13,763
2011
(14)
2
(1)
Income tax expense as per
the statement of income
Income tax included in
other comprehensive
income on:
unrealized gains/(losses)
on available for sale
investments
gains/(losses) on cash flow
hedging derivatives
Total income taxes
2,091
` 11,371
44
(29)
` 9,760 ` 13,733
Income tax expense from continuing operations consist of the
following:
Current taxes
Domestic
Foreign
Deferred taxes
Domestic
Foreign
Total income tax expense
Year ended March 31,
2010
2011
2012
` 5,461 ` 5,573 ` 10,602
4,065
` 8,864 ` 9,468 ` 14,667
3,895
3,403
390
` 40 ` 292 ` (935)
31
` 430 ` 246 ` (904)
` 9,294 ` 9,714 ` 13,763
(46)
Current taxes are net of reversal of provisions recorded in earlier
periods, which are no longer required, amounting to ` 442, `
590 and ` 845 for the year ended March 31, 2010, 2011 and
2012, respectively.
Consolidated Financial Statements Under IFRS
In April 2010, Wipro GE acquired medical equipment and related
businesses from General Electric for a cash consideration of
approximately ` 3,728.
Wipro GE had received tax demands aggregating to ` 2,615
(including interest) arising primarily on account of transfer
pricing adjustments, denial of export benefits and tax holiday
benefits claimed by Wipro GE under the Income Tax Act, 1961
(the “Act”) for the year ended March 31, 2001 to March 31, 2007.
The appeals filed against the said demand before the Appellate
authorities have been allowed in favor of the Company by first
appellate authority for the years upto March 2004 and further
appeals have been filed by the Income tax authorities before
the second appellate authority. The first appellate authority
has granted partial relief for the year ended March 31, 2005 and
further appeal would be preferred by the Company before the
second appellate authority. The Company filed appeal before
the second appellate authority for the year ended March 31, 2006
after receiving the assessment orders following the directions
of the Dispute Resolution Panel. The second appellate authority
passed an order directing assessing officer (AO) to give fair
opportunity of hearing to the company, the case is pending with
AO. For the year ended March 31, 2007, the appeal filed against
the demand is pending before the first appellate authority.
Considering the facts and nature of disallowance and the order of
the appellate authority upholding the claims of Wipro GE, Wipro
GE believes that the final outcome of the disputes should be in
favour of Wipro GE and will not have any material adverse effect
on its financial position and results of operations.
Others
During the year ended March 31, 2012, the Company entered
into an agreement to purchase 26% of the equity investments
in Wipro Kawasaki Precision Machinery Pvt. Ltd for a cash
consideration of ` 130. This investment is accounted as an equity
method investment under IAS 28, “Investments in Associates”.
17. Foreign currency translation reserve
The movement in foreign currency translation reserve attributable
to equity holders of the Company is summarized below:
Balance at the beginning of the year
Translation difference related to
foreign operations
Change in effective portion of
hedges of net investment in foreign
operations
Total change during the year
Balance at the end of the year
As at March 31,
2011
` 258
1,246
2012
` 1,524
9,164
20
` 1,266
` 1,524
(2,780)
` 6,384
` 7,908
Annual Report 2011-12
220
05 US Gap IFRS_2012.indd 220
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The reconciliation between the provision of income tax of
the Company and amounts computed by applying the Indian
statutory income tax rate to profit before taxes is as follows:
Profit before taxes
Enacted income tax rate
in India
Computed expected tax
expense
Effect of:
Income exempt from tax
Basis differences that will
reverse during a tax holiday
period
Income taxed at higher/
(lower) rates
Income taxes relating to
prior years.
Changes in unrecognized
deferred tax assets
Expenses disallowed for
tax purposes
Others, net
Total income tax expense
Year ended March 31,
2010
` 55,410
2012
` 63,035 ` 69,750
33.99% 33.218% 32.445%
2011
18,834
20,939
22,630
(10,802)
898
(10,458)
(217)
(9,115)
636
(475)
(566)
367
(442)
(590)
(845)
811
456
160
426
(214)
300
14
4
` 9,294 ` 9,714 ` 13,763
20
The tax rates under Indian Income Tax Act, for the year ended
March 31, 2012 is 32.445% as compared to 33.218% for the year
ended March 31, 2011. This change in tax rate is on account of
reduction in surcharge from 7.5% for the year ended March 31,
2011 to 5% for the year ended March 31, 2012, in the financial
annual budget by the Indian Government.
The components of deferred tax assets and liabilities are as
follows:
As at March 31,
2011
2010
521
716
568
328
2012
Carry-forward business losses ` 1,851 ` 2,042 ` 2,330
930
Accrued expenses and liabilities
789
Allowances for doubtful
accounts receivable
Cash flow hedges
Minimum alternate tax
Deferred revenue
Others
247
1,223
1,285
85
6,889
Property, plant and equipment ` (525) ` (1,107) ` (2,223)
(1,120)
Amortizable goodwill
Intangible assets
(685)
I nv e s t m e n t i n e q u i t y
accounted investee
262
363
-
83
3,455
218
488
-
196
4,181
(659)
(682)
(458)
(734)
(432)
(2,149)
(617)
(567)
(4,645)
(3,015)
` 1,306 ` 1,166 ` 2,244
Net deferred tax assets
A m o u n t s p r e s e n t e d i n
statement of financial position:
Deferred tax assets
Deferred tax liabilities
` 1,686 ` 1,467 ` 2,597
` (380) ` (301) ` (353)
Consolidated Financial Statements Under IFRS
Deferred taxes on unrealized foreign exchange gain / loss relating
to cash flow hedges is recognized in other comprehensive
income and presented within equity in the cash flow hedging
reserve. Deferred tax liability on the intangible assets identified
and recorded separately at the time of an acquisition is recorded
by an adjustment to goodwill. Other than these, the change in
deferred tax assets and liabilities is primarily recorded in the
statement of income.
In assessing the realizability of deferred tax assets, the Company
considers the extent to which, it is probable that the deferred
tax asset will be realized. The ultimate realization of deferred
tax assets is dependent upon the generation of future taxable
profits during the periods in which those temporary differences
and tax loss carry-forwards become deductible. The Company
considers the expected reversal of deferred tax liabilities,
projected future taxable income and tax planning strategies in
making this assessment. Based on this, the Company believes
that it is probable that the Company will realize the benefits of
these deductible differences. The amount of the deferred tax
asset considered realizable, however, could be reduced in the
near term if the estimates of future taxable income during the
carry-forward period are reduced. Deferred tax asset in respect
of unused tax losses amounting to ` 2,076 and ` 1,734 as of
March 31, 2011 and 2012, respectively have not been recognized
by the Company.
The Company has recognized deferred tax assets of ` 2,042 and `
2,330 in respect of carry forward losses of its various subsidiaries
during the year ended March 31, 2011 and 2012. Management’s
projections of future taxable income and tax planning strategies
support the assumption that it is probable that sufficient taxable
income will be available to utilize these deferred tax assets.
Pursuant to the changes in the Indian income tax laws, Minimum
Alternate Tax (MAT) has been extended to income in respect of
which deduction is claimed under section 10A, 10B and 10AA
of the Act; consequently, the Company has calculated its tax
liability for current domestic taxes after considering MAT. The
excess tax paid under MAT provisions over and above normal
tax liability can be carried forward and set-off against future tax
liabilities computed under normal tax provisions. The Company
was required to pay MAT and accordingly, a deferred tax asset
of ` 488 and ` 1,223 has been recognized in the statement of
financial position as of March 31, 2011 and 2012, respectively,
which can be carried forward for a period of ten years from the
year of recognition.
A substantial portion of the profits of the Company’s India
operations are exempt from Indian income taxes being profits
attributable to export operations and profits from undertakings
situated in Software Technology, Hardware Technology Parks
and Export Oriented units. Under the tax holiday, the taxpayer
can utilize an exemption from income taxes for a period of any
ten consecutive years. The tax holidays on all facilities under
Software Technology, Hardware Technology Parks and Export
Oriented units has expired on March 31, 2011. Additionally,
under the Special Economic Zone Act, 2005 scheme, units in
05 US Gap IFRS_2012.indd 221
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Wipro Limited
221
Consolidated Financial Statements Under IFRS
designated special economic zones providing service on or after
April 1, 2005 will be eligible for a deduction of 100 percent of
profits or gains derived from the export of services for the first
five years from commencement of provision of services and 50
percent of such profits and gains for a further five years. Certain
tax benefits are also available for a further five years subject to
the unit meeting defined conditions. Profits from certain other
undertakings are also eligible for preferential tax treatment. In
addition, dividend income from certain category of investments
is exempt from tax. The difference between the reported income
tax expense and income tax computed at statutory tax rate is
primarily attributable to income exempt from tax.
Deferred income tax liabilities are recognized for all taxable
temporary differences except in respect of taxable temporary
differences associated with investments in subsidiaries where
the timing of the reversal of the temporary difference can be
controlled and it is probable that the temporary difference will
not reverse in the foreseeable future. Accordingly, deferred
income tax liabilities on cumulative earnings of subsidiaries
amounting to ` 12,969 and ` 15,722 as of March 31, 2011 and
2012, respectively has not been recognized. Further, it is not
practicable to estimate the amount of the unrecognized deferred
tax liabilities for these undistributed earnings.
The tax loss carry-forwards of ` 5,941 and ` 5,344 as of March
31, 2011 and 2012, respectively relates to certain subsidiaries
on which deferred tax asset has not been recognized by the
Company. Approximately, ` 4,644 and ` 4,417 as of March 31,
2011 and 2012 respectively, of these tax loss carry-forwards is
not currently subject to expiration dates. The remaining tax loss
carry forward of approximately ` 1,297 and ` 928 as of March
31, 2011 and 2012 respectively, expires in various years through
fiscal 2029.
We are subject to U.S. tax on income attributable to our
permanent establishment in the United States due to operation
of our U.S. branch. In addition, the Company is subject to a 15%
branch profit tax in the United States on the “dividend equivalent
amount” as that term is defined under U.S. tax law. The Company
has not triggered the branch profit tax until year ended March
31, 2012. The Company intends to maintain the current level of
net assets in the United States commensurate with its operation
and consistent with its business plan. The Company does not
intend to repatriate out of the Unites States any portion of its
current profits. Accordingly, the Company did not record current
and deferred tax provision for branch profit tax.
19. Dividends
The Company declares and pays dividends in Indian rupees.
According to the Indian law any dividend should be declared out
of accumulated distributable profits only after the transfer to a
general reserve of a specified percentage of net profit computed
in accordance with current regulations.
The cash dividends paid per equity share were ` 4, ` 6 and
` 4 during the years ended March 31, 2010, 2011 and 2012,
respectively. The Company has also paid an interim dividend
of ` 2 per equity share during the year ended March 31, 2012.
During the year ended March 31, 2011, the Company has also
paid stock dividend, commonly known as bonus shares in India,
comprised of two equity shares for every three equity shares
outstanding on the record date and two ADSs for every three
ADSs outstanding on the record date. The stock dividend did
not affect the ratio of ADSs to equity shares, such that each ADS
after the stock dividend continues to represent one equity share
of par value of ` 2 per share.
The Board of Directors in their meeting on April 25, 2012
proposed a final dividend of ` 4 (US$0.08) per equity share and
ADR. The proposal is subject to the approval of shareholders at
the Annual General Meeting to be held on July 23, 2012, and
if approved, would result in a cash outflow of approximately
` 11,431, including corporate dividend tax thereon (` 1,595).
20. Additional capital disclosures
The key objective of the Company’s capital management is
to ensure that it maintains a stable capital structure with the
focus on total equity to uphold investor, creditor and customer
confidence and to ensure future development of its business. The
Company focused on keeping strong total equity base to ensure
independence, security, as well as a high financial flexibility for
potential future borrowings, if required without impacting the
risk profile of the Company.
The Company’s goal is to continue to be able to return excess
liquidity to shareholders by continuing distributing annual
dividends in future periods. During the year ended March 31,
2011 and 2012, the Company distributed ` 6 and ` 4, respectively
in dividend per equity share. The Company has also distributed
an interim dividend of ` 2 per equity share during the year ended
March 31, 2012. The amount of future dividends will be balanced
with effort to continue to maintain an adequate liquidity status.
The capital structure as of March 31, 2011 and 2012 was as
follows:
Total equity attributable to
the equity shareholders of
the Company
As percentage of total
capital
Current loans and
borrowings
Non-current loans and
borrowings
Total loans and borrowings
As percentage of total capital
Total capital (loans and
borrowings and equity)
As at March 31,
2011
` 239,680 ` 285,314
2012 % Change
19.04%
82%
83%
33,043
36,448
19,759
52,802
18%
22,510
58,958
17%
11.66%
` 292,482 `344,272
17.71%
The Company is predominantly equity-financed. This is also
evident from the fact that loans and borrowings represented
Annual Report 2011-12
222
05 US Gap IFRS_2012.indd 222
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only 18% and 17% of total capital as of March 31, 2011 and 2012,
respectively. Further, the Company has consistently been a net
cash company with cash and bank balance along with available
for sale investments being in excess of debt.
23. Finance expense
Consolidated Financial Statements Under IFRS
Interest expense
Exchange fluctuation
on foreign currency
borrowings, net
Total
Year ended March 31,
2010
2012
` 1,232 ` 776 ` 1,057
2011
92
2,434
` 1,324 ` 1,933 ` 3,491
1,157
24. Finance and other income
Interest income
Dividend income
Gain on sale of investments
Total
2011
Year ended March 31,
2010
2012
` 2,610 ` 4,057 ` 6,497
2,211
187
` 4,360 ` 6,652 ` 8,895
2,403
192
1,442
308
2011
Year ended March 31,
2010
2012
` 202,990 ` 234,285 `281,014
90,957
` 271,957 ` 310,542 `371,971
68,967
76,257
Year ended March 31,
2010
2012
` 107,230 ` 126,867 `154,066
60,270
51,813
50,166
2011
25. Earnings per equity share
A reconciliation of profit for the year and equity shares used in
the computation of basic and diluted earnings per equity share
is set out below:
Basic: Basic earnings per share is calculated by dividing the
profit attributable to equity shareholders of the Company by the
weighted average number of equity shares outstanding during
the period, excluding equity shares purchased by the Company
and held as treasury shares. Equity shares held by controlled
Wipro Equity Reward Trust (‘WERT’) and Wipro Inc Benefit Trust
(WIBT) have been reduced from the equity shares outstanding
for computing basic and diluted earnings per share.
17,527
26,415
34,210
8,064
7,831
5,020
4,534
3,157
3,062
1,797
1,593
1,023
950
566
5,563
10,156
8,211
12,609
10,129
5,253
5,114
3,492
3,230
2,427
1,629
1,324
1,181
399
7,455
9,455
6,583
4,007
3,734
2,862
1,818
1,883
1,487
394
7,729
` 219,730 ` 253,319 `311,236
21. Revenues
Rendering of services
Sale of products
Total revenues
22. Expenses by nature
Employee compensation
Raw materials, finished
goods, process stocks
and stores and spares
consumed
Sub contracting/technical
fees/third party application
Travel
Depreciation and
amortization
Repairs
Advertisement
Communication
Rent
Power and fuel
Legal and professional fees
Rates, taxes and insurance
Carriage and freight
Provision for doubtful debt
Miscellaneous expenses
Total cost of revenues,
selling and marketing
expenses and general and
administrative expenses
05 US Gap IFRS_2012.indd 223
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Wipro Limited
223
Consolidated Financial Statements Under IFRS
Year ended March 31,
Profit attributable to equity holders of the Company
Weighted average number of equity shares outstanding
Basic earnings per share
2010
` 45,931
2,429,025,243
` 18.91
2011
` 52,977
2012
` 55,730
2,436,440,633 2,449,056,412
` 22.76
` 21.74
Diluted: Diluted earnings per share is calculated by adjusting the weighted average number of equity shares outstanding during
the period for assumed conversion of all dilutive potential equity shares. Employee share options are dilutive potential equity
shares for the Company.
The calculation is performed in respect of share options to determine the number of shares that could have been acquired at fair
value (determined as the average market price of the Company’s shares during the period). The number of shares calculated as
above is compared with the number of shares that would have been issued assuming the exercise of the share options.
Year ended March 31,
Profit attributable to equity holders of the Company
Weighted average number of equity shares outstanding
Effect of dilutive equivalent share options
Weighted average number of equity shares for diluted earnings per share
Diluted earnings per share
2010
` 45,931
2,429,025,243
20,633,289
2,449,658,532
` 18.75
2011
` 52,977
2012
` 55,730
2,436,440,633 2,449,056,412
14,713,521
6,902,310
2,451,154,154 2,455,958,722
` 22.69
` 21.61
Earnings per share and number of share outstanding for the year ended March 31, 2010, have been adjusted for the two equity
shares for every three equity shares stock dividend approved by the shareholders on June 4, 2010.
26. Employee stock incentive plans
The stock compensation expense recognized for employee
services received during the year ended March 31, 2010, 2011
and 2012 is ` 1,302, ` 1,092 and ` 949, respectively.
Wipro Employee Stock Option Plans and Restricted Stock Unit
Option Plans
A summary of the general terms of grants under stock option
plans and restricted stock unit option plans are as follows:
Wipro Equity Reward Trust (WERT)
Name of plan
Authorized
Shares(1)
Range of
Exercise
prices
50,000,000 ` 171 – 490
250,000,000 ` 171 – 490
15,000,000 US$ 3 – 7
20,000,000 `
2
20,000,000 US$ 0.04
20,000,000 `
16,666,667 `
2
2
Wipro Employee Stock Option
Plan 1999 (1999 Plan)
Wipro Employee Stock Option
Plan 2000 (2000 Plan)
Stock Option Plan (2000 ADS
Plan)
Wipro Restricted Stock Unit
Plan (WRSUP 2004 plan)
Wipro ADS Restricted Stock
Unit Plan (WARSUP 2004 plan)
Wipro Employee Restricted
Stock Unit Plan 2005 (WSRUP
2005 plan)
Wipro Employee Restricted
Stock Unit Plan 2007 (WSRUP
2007 plan)
7,961,760 13,269,600 13,269,600
(1) adjusted for the two equity shares for every three equity shares
stock dividend approved by the shareholders on June 4, 2010.
Employees covered under the stock option plans and restricted
stock unit option plans (collectively “stock option plans”) are
granted an option to purchase shares of the Company at the
respective exercise prices, subject to requirement of vesting
In 1984, the Company established a controlled trust called the
Wipro Equity Reward Trust (“WERT”). The WERT purchases shares
of the Company out of funds borrowed from the Company. The
Company’s compensation committee recommends to the WERT
certain officers and key employees, to whom the WERT grants
shares from its holdings at nominal price. Such shares are then
held by the employees subject to vesting conditions. The shares
held by the WERT are reported as a reduction in stockholders’
equity
The movement in the shares held by the WERT is given below:
Year ended March 31,
2010
2012
7,961,760 13,269,600 13,269,600
2011
-
-
-
-
-
-
Shares held at the
beginning of the period(1)
Shares granted to
employees
Grants forfeited by
employees
Shares held at the end of
the period
(1)The opening balance as of April 1, 2010 has been adjusted
for the two equity shares for every three equity shares stock
dividend approved by the shareholders on June 4, 2010.
Annual Report 2011-12
224
05 US Gap IFRS_2012.indd 224
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conditions (generally service conditions). These options generally vests in tranches over a period of five years from the date of
grant. Upon vesting, the employees can acquire one equity share for every option. The maximum contractual term for these stock
option plans is generally ten years.
The activity in these stock option plans is summarized below:
Consolidated Financial Statements Under IFRS
Outstanding at the
beginning of the period(1)
Granted
Exercised
Forfeited and lapsed
Outstanding at the end of
the period
Exercisable at the end of
the period
Range of
Exercise
Prices
` 229 – 265
` 480 – 489
US$ 4 – 6
` 2
US$ 0.04
` 229 – 265
` 480 – 489
US$ 4 – 6
` 2
US$ 0.04
` 229 – 265
` 480 – 489
US$ 4 – 6
` 2
US$ 0.04
` 229 – 265
` 480 – 489
US$ 4 – 6
` 2
US$ 0.04
` 229 – 265
` 480 – 489
US$ 4 – 6
` 2
US$ 0.04
` 229 – 265
` 480 – 489
US$ 4 – 6
` 2
US$ 0.04
2010
Number
Weighted
Average
Exercise
Price
1,140 ` 254
5,000
120,000 ` 489
1,606 US$ 4.7
13,799,549 ` 2
2,470,641 US$ 0.04
— ` —
— ` —
— US$ —
` 2
137,100 US$ 0.04
— ` —
— ` —
— US$ —
` 2
US$ 0.04
` 254
— ` —
— US$ —
` 2
US$ 0.04
— ` —
(2,736,924)
(493,519)
(1,140)
(805,722)
(348,401)
120,000
1,606
10,261,903
1,765,821
` 489
US$ 4.7
` 2
US$ 0.04
— ` —
Year ended March 31,
2011
Number
Weighted
Average
Exercise
Price
— ` —
200,000
` 293.40
2,677 US$ 2.82
2,943,035 US$ 0.04
— ` —
— ` —
— US$ —
` 2
US$ 0.04
— ` —
` 293.40
— US$ —
5,227,870
1,437,060
(80,000)
17,103,172
` 2 15,382,761
3,223,892
2012
Number Weighted
Average
Exercise
price
— ` —
40,000
30,000
— ` —
— uS$ —
` 2
uS$ 0.04
— ` —
` 480.20
— uS$ —
` 2
— uS$ —
— ` —
— ` —
— uS$ —
` 2
uS$ 0.04
— ` —
— ` —
— uS$ —
` 2
(411,853) uS$ 0.04
— ` —
(5,482,210)
(870,622)
(120,000)
(2,677)
(1,466,071)
(285,581)
` 2 (3,708,736)
(638,347)
US$ 0.04
— ` —
` 293.40
US$ 2.82
` 2 (1,106,987)
US$ 0.04
— ` —
30,000
— ` —
— US$ —
` 480.20
— uS$ —
` 2 10,607,038 ` 2
2,173,692 uS$ 0.04
US$ 0.04
— ` —
— ` —
15,382,761
3,223,892
— ` —
US$ 4.7
` 2
US$ 0.04
1,606
4,719,739
645,341
— ` —
— US$ —
` 2
US$ 0.04
7,533,984
1,147,391
— ` —
— uS$ —
5,370,221 ` 2
578,400 uS$ 0.04
(1)The opening balance as of April 1, 2010 have been adjusted for the two equity shares for every three equity shares stock dividend
approved by the shareholders on June 4, 2010.
05 US Gap IFRS_2012.indd 225
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Wipro Limited
225
Consolidated Financial Statements Under IFRS
The following table summarizes information about outstanding stock options:
2010
As at March 31,
2011
2012
Range of
Exercise price
` 229 – 265
` 480 – 489
US$ 4 –6
` 2
US$ 0.04
Numbers Weighted
Average
Remaining
Life
(Months)
-
-
120,000
1,606
10,261,903
1,765,821
Weighted
Average
Exercise
Price
Numbers Weighted
Average
Remaining
Life
(Months)
Weighted
Average
Exercise
Price
Numbers Weighted
Average
Remaining
Life
(Months)
Weighted
Average
Exercise
price
` -
-
49 ` 489
-
1 US$ 4.70
-
37 ` 2 15,382,761
3,223,892
44 US$ 0.04
- ` -
- ` -
- US$ -
-
30,000
-
35 ` 2 10,607,038
2,173,692
48 US$ 0.04
- ` -
48 ` 480.20
- uS$ -
30 ` 2
37 uS$ 0.04
The weighted-average grant-date fair value of options granted during the year ended March 31, 2010, 2011 and 2012 was ` 814,
` 417.65 and ` 449.8 for each option, respectively. The weighted average share price of options exercised during the year ended
March 31, 2010, 2011 and 2012 was ` 557.52, ` 424.28 and ` 399.22 for each option, respectively.
The fair value of 30,000 options granted during the year ended
March 31, 2012 (other than at nominal exercise price) has been
estimated on the date of grant using the Black-Scholes-Merton
option pricing model. The fair value of share options has been
determined using the following assumptions:
Expected term
Risk free interest rates
Volatility
Dividend yield
27. Employee benefits
a)
Employee costs include:
5 years
8%
62.2%
1.28%
Salaries and bonus
Employee benefit plans
Gratuity
Contribution to provident
and other funds
Share based compensation
Year ended March 31,
2010
2012
` 103,194 ` 122,399 ` 149,410
2011
276
2,458
469
2,907
460
3,247
1,302
949
` 107,230 ` 126,867 ` 154,066
1,092
The employee benefit cost is recognized in the following line
items in the statement of income:
Year ended March 31,
2010
2012
` 90,350 ` 106,235 ` 128,770
14,169
10,860
9,126
2011
b) Defined benefit plans - Gratuity:
Amount recognized in the statement of income in respect of
gratuity cost (defined benefit plan) is as follows:
Year ended March 31,
2010
2011
(164)
(122)
2012
` 133 ` 161 ` 211
(184)
Interest on obligation
Expected return on plan
assets
Actuarial losses/(gains)
recognized
(16)
Past service cost
435
Current service cost
` 276 ` 469 ` 460
Net gratuity cost/(benefit)
Actual return on plan assets ` 138 ` 177 ` 232
-
328
254
386
(168)
(63)
14
In May 2010, the Government of India amended the Payment of
Gratuity Act, 1972 to increase the limit of gratuity payment from
` 0.35 to ` 1. Consequently, during the year ended March 31,
2011, the Company has recognized ` 254 of vested past service
cost in the statement of income.
The principal assumptions used for the purpose of actuarial
valuation are as follows:
Discount rate
Expected return on plan
assets
Expected rate of salary
increase
As at March 31,
2010
7.15%
8%
2011
7.95%
8%
2012
8.35%
8%
5%
5%
5%
7,754
9,772
11,127
` 107,230 ` 126,867 ` 154,066
The expected return on plan assets is based on expectation of
the average long term rate of return expected on investments of
the fund during the estimated term of the obligations.
Cost of revenues
Selling and marketing
expenses
General and administrative
expenses
Annual Report 2011-12
226
05 US Gap IFRS_2012.indd 226
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Change in present value of defined benefit obligation is summarized below:
Defined benefit obligation at the beginning of the year
Acquisitions
Current service cost
Past service cost
Interest on obligation
Benefits paid
Actuarial losses/(gains)
Defined benefit obligation at the end of the year
Change in plan assets is summarized below:
Fair value of plan assets at the beginning of the year
Acquisitions
Expected return on plan assets
Employer contributions
Benefits paid
Actuarial gains/(losses)
Fair value of plan assets at the end of the year
Present value of unfunded obligation
Recognized asset/(liability)
Consolidated Financial Statements Under IFRS
2009
` 1515
34
369
-
135
(118)
(77)
` 1,858
As at March 31,
2010
` 1,858
-
328
-
133
(214)
(45)
` 2,060
2012
2011
` 2,476
` 2,060
25
-
435
386
(16)
254
211
161
(352)
(230)
66
(155)
` 2,476 ` 2,845
As at March 31,
2011
` 1,967
-
164
473
(230)
2009
` 1,244
19
92
154
(118)
2012
2010
` 2,387
` 1,416
1
-
184
122
586
625
(344)
(214)
25 18
13 52
1,416 1,967 2,387 2,866
` 21
` (442)
` 21
` (442)
` (89)
` (89)
` (93)
` (93)
The experience adjustments, meaning difference between changes in plan assets and obligations expected on the basis of actuarial
assumption and actual changes in those assets and obligations are as follows:
Difference between expected and actual developments:
of fair value of the obligation
of fair value of plan assets
As at March 31,
2010
2011
2012
` (84)
18
` (32)
15
` (147)
52
As at March 31, 2010, 2011 and 2012, 100% of the plan assets were invested in insurer managed funds.
The expected future contribution and estimated future benefit payments from the fund are as follows:
Expected contribution to the fund during the year ending March 31, 2013
Estimated benefit payments from the fund for the year ending March 31:
2013
2014
2015
2016
2017
Thereafter
Total
` 341
` 620
612
626
686
717
2,969
` 6,230
The expected benefits are based on the same assumptions used to measure the Company’s benefit obligations as of March 31, 2012.
c)
Provident Fund:
Upto year ended March 31, 2011, in the absence of guidance from the Actuarial Society of India, actuarial valuation could not have
been applied to reliably measure the provident fund liabilities. During the year ended March 31, 2012, the Actuarial Society of
India issued the guidance for measurement of provident fund liabilities. Accordingly, based on such actuarial valuation there is no
shortfall in the fund as at March 31, 2012.
05 US Gap IFRS_2012.indd 227
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Wipro Limited
227
Consolidated Financial Statements Under IFRS
The details of fund and plan assets are given below:
Fair value of plan assets
Present value of defined benefit obligation
Net (shortfall)/excess
As at March 31,
2011
2010
2009
2012
` 10,020 ` 12,285 ` 15,309 ` 17,932
17,668
12,194 15,412
10,013
` (103) ` 264
` 7
` 91
The principal assumptions used in determining the present value obligation of interest guarantee under the deterministic approach
are as follows:
Discount rate for the term of the obligation
Average remaining tenure of investment portfolio
Guaranteed rate of return
28. Related party relationships and transactions
List of subsidiaries as of March 31, 2012 are provided in the table below.
Direct Subsidiaries
Step Subsidiaries
Wipro Inc.
Wipro Gallagher Solutions Inc.
Enthink Inc.*
Infocrossing Inc.
Wipro Energy IT Services India Private
Limited (formerly SAIC India Private
Limited)
Wipro Japan KK
Wipro Shanghai Limited
Wipro Trademarks Holding Limited
Wipro Travel Services Limited
Wipro Consumer Care Limited
Wipro Holdings (Mauritius) Limited
Wipro Cyprus Private Limited
Cygnus Negri Investments Private
Limited
Wipro Holdings UK Limited
Wipro Technologies S.A DE C. V
Wipro BPO Philippines LTD. Inc
Wipro Holdings Hungary Korlátolt
Felelősségű Társaság
Wipro Technologies Argentina SA
Wipro Information Technology Egypt
SAE
Wipro Arabia Limited*
As at March 31,
2009
6.75%
7 years
8.5%
2010
7.15%
7 years
8.5%
2011
7.95%
7 years
9.5%
2012
8.35%
6 years
8.25%
Country of
Incorporation
U.S.
U.S.
U.S.
U.S.
India
Japan
China
India
India
India
India
Mauritius
U.K.
Wipro Technologies UK Limited U.K.
Wipro Holding Austria GmbH(A) Austria
3D Networks (UK) Limited
Wipro EuropeLimited (A)
(formerly SAIC Europe Limited)
U.K.
U.K
Cyprus
Mexico
Philippines
Hungary
Argentina
Egypt
Saudi Arabia
Annual Report 2011-12
228
05 US Gap IFRS_2012.indd 228
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Direct Subsidiaries
Step Subsidiaries
Wipro Poland Sp Zoo
Wipro IT Services Poland Sp. z o. o
Wipro Outsourcing Services UK
Limited
Wipro Technologies (South Africa)
Proprietary Limited
Wipro Information Technology
Netherlands BV
(formerly RetailBox BV)
Wipro Infrastructure Engineering AB
Wipro Technologies SRL
Wipro Singapore Pte Limited
Wipro Yardley FZE
Wipro Technologies SDN BHD
WMNETSERV (U.K.) Limited.
WMNETSERV INC
Wipro Australia Pty Limited
Wipro Networks Pte Limited (formerly
3D Networks Pte Limited)
Planet PSG Pte Limited
Wipro Chengdu Limited
Wipro Chandrika Limited*
Vignani Solutions Private Limited
WMNETSERV Limited
Wipro Technology Services Limited
Wipro Airport IT Services Limited*
Wipro Infrastructure Engineering
Machinery (Changzhou) Co., Ltd.
Consolidated Financial Statements Under IFRS
Wipro Portugal S.A.(A) (Formerly
Enabler Informatica SA)
Wipro Technologies Limited,
Russia
Wipro Gulf LLC
(formerly SAIC Gulf LLC)
Wipro Technology Chile SPA
Wipro Infrastructure
Engineering Oy.(A)
Hydrauto Celka San ve Tic
Turkey
Romania
Singapore
PT WT Indonesia
Indonesia
Wipro Unza Holdings Limited (A) Singapore
Singapore
Wipro Technocentre
(Singapore) Pte Limited
Wipro (Thailand) Co Limited
Wipro Bahrain Limited WLL
Country of
Incorporation
Poland
Poland
U.K.
South Africa
Netherland
Portugal
Russia
Sultanate of
Oman
Chile
Sweden
Finland
Thailand
Bahrain
Dubai
Australia
Singapore
Singapore
Malaysia
China
India
India
Cyprus
U.K.
U.S.
India
India
China
*All the above direct subsidiaries are 100% held by the Company except that the Company hold 98% of the equity securities of
Enthink Inc., 66.67% of the equity securities of Wipro Arabia Limited, 90% of the equity securities of Wipro Chandrika Limited and
74% of the equity securities of Wipro Airport IT Services Limited.
05 US Gap IFRS_2012.indd 229
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Wipro Limited
229
Consolidated Financial Statements Under IFRS
As of March 31, 2012, the Company also held 49% of the equity securities of Wipro GE HealthCare Private Limited that is accounted
for as an equity method investment.
(A) Step Subsidiary details of Wipro Unza Holdings Limited, Wipro Holding Austria GmbH, Wipro Portugal S.A, Wipro Infrastructure
Engineering Oy and Wipro Europe Limited are as follows:
Step Subsidiaries
Step Subsidiaries
Wipro Unza Singapore Pte Limited
Wipro Unza Indochina Pte Limited
Wipro Unza Cathay Limited
Wipro Unza China Limited
Wipro Unza Vietnam Co., Limited
Wipro Unza (Guangdong) Consumer
Products LTD.
PT Unza Vitalis
Wipro Unza Thailand Limited
Wipro Unza Overseas Limited
Unzafrica Limited
Wipro Unza Middle East Limited
Unza International Limited
Unza Nusantara Sdn Bhd
Unza Holdings Sdn Bhd
Unza (Malaysia) Sdn Bhd
Wipro Manufacturing Services Sdn Bhd
Gervas Corporation Sdn Bhd
Formapac Sdn Bhd
Wipro Technologies Austria GmbH
New Logic Technologies SARL
SAS Wipro France
(formerly Enabler France SAS)
Wipro Retail UK Limited
(formerly Enabler UK Limited)
Wipro do Brasil Technologia Ltda (formerly
Enabler Brazil Ltda)
Wipro Technologies Gmbh (formerly Enabler
& Retail Consult GmbH)
Wipro Infrastructure Engineering LLC
Wipro UK Limited (formerly SAIC Limited)
Wipro Europe (formerly Science Applications
International, Europe SARL)
Wipro Holding Austria GmbH
Wipro Portugal S.A.
Wipro Infrastructure Engineering
Oy
Wipro Europe Limited
(formerly SAIC Europe Limited)
Country of
Incorporation
Singapore
Singapore
Vietnam
Hong Kong
Hong Kong
China
Indonesia
Thailand
British virgin
islands
Nigeria
British virgin
islands
British virgin
islands
Malaysia
Malaysia
Malaysia
Wipro Unza (Malaysia) Sdn Bhd Malaysia
Malaysia
Malaysia
Malaysia
Malaysia
Malaysia
Shubido Pacific Sdn Bhd(a)
Gervas (B) Sdn Bhd
R.K.M Equipamentos Hidraulicos
Ltda
Austria
France
France
U.K.
Brazil
Brazil
Germany
Russia
U.K.
France
Annual Report 2011-12
230
05 US Gap IFRS_2012.indd 230
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a) All the above subsidiaries are 100% held by the Company except Shubido Pacific Sdn Bhd in which the Company holds 62.55%
of the equity securities.
Consolidated Financial Statements Under IFRS
The list of controlled trusts are:
Name of entity
Wipro Equity Reward Trust
Wipro Inc Benefit Trust
The other related parties are:
Nature
Trust
Trust
Country of Incorporation
India
USA
Name of entity
Nature
% of holding Country of
Wipro GE Healthcare Private Limited
Azim Premji Foundation
Azim Premji Trust
Hasham Premji (partnership firm)
Prazim Traders (partnership firm)
Zash Traders (partnership firm)
Regal Investment Trading Company Private Limited
Vidya Investment Trading Company private Limited
Napean Trading Investment Company Private Limited
Key management personnel
-
Azim Premji
-
Suresh C Senapaty
-
Suresh Vaswani
-
Girish S Paranjpe
-
T K Kurien
-
Dr. Ashok S Ganguly
-
Narayanan Vaghul
-
Dr. Jagdish N Sheth
-
P.M Sinha
-
B.C. Prabhakar
- William Arthur Owens
-
-
-
Relative of Key management personnel
-
Dr. Henning Kagermann
Shyam Saran
M K Sharma
Rishad Premji
49%
Incorporation
India
Associate
Entity controlled by Director
Entity controlled by Director
Entity controlled by Director
Entity controlled by Director
Entity controlled by Director
Entity controlled by Director
Entity controlled by Director
Entity controlled by Director
Chairman and Managing Director
Chief Financial Officer and Director
Jt CEO, IT Business and Director(1)
Jt CEO, IT Business and Director(1)
CEO, IT Business and Director(2)
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director(3)
Relative of the Key management
personnel
Up to January 31, 2011
(1)
(2) With effect from February 01, 2011
(3) With effect from July 01, 2011
05 US Gap IFRS_2012.indd 231
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Wipro Limited
231
Consolidated Financial Statements Under IFRS
The Company has the following related party transactions:
Transaction/ balances
Associate
Sale of goods and services
Dividend
Royalty income
Others
Key management personnel#
Remuneration and short-term benefits
Other benefits
Remuneration to relative of key
management personnel
Balances as on March 31,
Receivables
Payables
2010
` 7
-
32
-
2011
` 18
-
-
-
2012
` 75
-
98
-
Entities controlled by
Directors
2012
2011
` -
` 12
10,362 11,102
-
3
2010
` 1
4,418
-
-
-
-
Key Management
personnel
2011
` -
536##
-
-
2010
` -
234
-
-
2012
` -
573##
-
-
-
-
-
1
-
-
-
-
7
-
-
-
-
16
-
-
-
-
-
2
-
-
-
-
-
-
-
-
1
-
175
34
4
-
44
260
30
5
-
8
108
34
5
-
22
# Post employment benefit comprising gratuity, and compensated absences are not disclosed as these are determined for the
Company as a whole.
## including relative of key management personnel.
29. Commitments and contingencies
Operating leases: The Company has taken office and residential
facilities under cancelable and non-cancelable operating lease
agreements that are renewable on a periodic basis at the option
of both the lessor and the lessee. The operating lease agreements
extend up to a maximum of fifteen years from their respective
dates of inception and some of these lease agreements have
price escalation clause. Rental payments under such leases were
` 3,062, ` 3,230 and ` 3,734, for the year ended March 31, 2010,
2011 and 2012, respectively.
Details of contractual payments under non-cancelable leases
are given below:
As at March 31,
Not later than one year
Later than one year but not later than
five years
Later than five years
2011
2012
` 1,828 ` 3,301
7,842
5,143
3,294
3,696
` 10,265 ` 14,839
Capital commitments: As at March 31, 2011 and 2012, the
Company had committed to spend approximately ` 2,071 and
` 1,673, respectively, under agreements to purchase property
and equipment. These amounts are net of capital advances paid
in respect of these purchases.
Guarantees: As at March 31, 2011 and 2012, performance
and financial guarantees provided by banks on behalf of the
Company to the Indian Government, customers and certain
other agencies amount to approximately ` 19,841 and ` 23,240,
respectively, as part of the bank line of credit.
Contingencies and lawsuits: The Company had received tax
demands aggregating to ` 40,040 (including interest of ` 10,616)
Annual Report 2011-12
232
arising primarily on account of denial of deduction under section
10A of the Income Tax Act, 1961 in respect of profit earned by
the Company’s undertaking in Software Technology Park at
Bangalore for the years ended March 31, 2001 to March 31, 2008.
The appeals filed against the said demand before the Appellate
authorities have been allowed in favor of the Company by the
second appellate authority for the years up to March 31, 2004
and further appeals have been filed by the Income tax authorities
before the Honorable High Court. The first appellate authority
has granted relief for the year ended March 31, 2005 and further
appeal has been filed by the Income tax authorities before the
Income-tax Appellate Tribunal. The Company is in appeal before
the Income-tax Appellate Tribunal for the years ended March
31, 2006 and March 31, 2007 after receiving the assessment
orders following the directions of the Dispute Resolution Panel.
For the year ended March 31, 2008, the objections against the
draft assessment order is pending before the Dispute Resolution
Panel.
Considering the facts and nature of disallowance and the order
of the appellate authority upholding the claims of the Company
for earlier years, the Company believes that the final outcome
of the above disputes should be in favor of the Company and
there should not be any material impact on the consolidated
financial statements.
The Contingent liability in respect of disputed demands for
excise duty, custom duty, income tax, sales tax and other matters
amounts to ` 1,384, ` 1,472 and ` 2,374 as of March 31, 2010,
2011 and 2012, respectively.
The Company is subject to legal proceedings and claims which
have arisen in the ordinary course of its business. The resolution
of these legal proceedings is not likely to have a material and
adverse effect on the results of operations or the financial
position of the Company.
05 US Gap IFRS_2012.indd 232
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Other commitments: The Company’s Indian operations have
been established as unit in Special Economic Zone and
Software Technology Park Unit under plans formulated by the
Government of India. As per the plan, the Company’s India
operations have export obligations to the extent of foreign
exchange net positive (i.e. foreign exchange inflow – foreign
exchange outflow should be positive) over a five year period.
The consequence of not meeting this commitment in the
future would be a retroactive levy of import duties on certain
hardware previously imported duty free. As of March 31, 2012,
the Company has met all commitments required under the plan.
30. Segment Information
The Company is currently organized by segments, which includes
IT Services (comprising of IT Services and BPO Services), IT
Products, Consumer Care and Lighting and ‘Others’.
Information on reportable segments is as follows:
Consolidated Financial Statements Under IFRS
The Chairman of the Company has been identified as the
Chief Operating Decision Maker (CODM) as defined by IFRS 8,
Operating Segments. The Chairman of the Company evaluates
the segments based on their revenue growth, operating income
and return on capital employed. The management believes
that return on capital employed is considered appropriate for
evaluating the performance of its operating segments. Return on
capital employed is calculated as operating income divided by
the average of the capital employed at the beginning and at the
end of the period. Capital employed includes total assets of the
respective segments (except cash and cash equivalents, available
for sale investments and inter-corporate deposits amounting to `
105,348, ` 114,663 and ` 128,037 as of March 31, 2010, 2011 and
2012, respectively, which is included under Reconciling items)
less all liabilities, excluding loans and borrowings.
IT Services and products
IT
Services
202,490
(132,144)
(10,213)
(12,446)
IT
products
38,205
(34,151)
(1,275)
(1,015)
47,687 1,764
Revenues
Cost of revenues
Selling and marketing expenses
General and administrative expenses
Operating income of segment
Finance expense
Finance and other income
Share of profits of equity accounted
investees
Profit before tax
Income tax expense
Profit for the year
Depreciation and amortization expense
Total assets
Total liabilities
Opening capital employed
Closing capital employed
Average capital employed
Return on capital employed
Additions to:
Goodwill
Intangible assets
Property, plant and equipment
Year ended March 31, 2010
Consumer
Care and
Lighting
Total
Others Reconciling
Items
240,695
(166,295)
(11,488)
(13,461)
49,451
22,584
(11,805)
(6,470)
(1,207)
7,143
(7,446)
(323)
(210)
3,102 (836)
1,152
(753)
(327)
55
127
6,816
165,192
61,009
91,401
109,487
100,444
49%
1,557
18
12,223
402
24,428
5,707
17,901
19,269
18,585
17%
1,019
1,031
627
294
7,125
4,284
5,544
5,414
5,479
(15)%
-
-
538
319
133,183
62,379
89,426
124,893
107,159
-
-
-
11
Entity
Total
271,574
(186,299)
(18,608)
(14,823)
51,844
(1,324)
4,360
530
55,410
(9,294)
46,116
7,831
329,928
133,379
204,272
259,063
231,667
22%
2,576
1,049
13,399
05 US Gap IFRS_2012.indd 233
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Wipro Limited
233
Consolidated Financial Statements Under IFRS
Revenues
Cost of revenues
Selling and marketing expenses
General and administrative expenses
Operating income of segment
Finance expense
Finance and other income
Share of profits of equity accounted
investees
Profit before tax
Income tax expense
Profit for the year
Depreciation and amortization expense
Total assets
Total liabilities
Opening capital employed
Closing capital employed
Average capital employed
Return on capital employed
Additions to:
Goodwill
Intangible assets
Property, plant and equipment
Revenues
Cost of revenues
Selling and marketing expenses
General and administrative expenses
Operating income of segment
Finance expense
Finance and other income
Share of profits of equity accounted
investees
Profit before tax
Income tax expense
Profit for the year
Depreciation and amortization expense
Total assets
Total liabilities
Opening capital employed
Closing capital employed
Average capital employed
Return on capital employed
Additions to:
Goodwill
Intangible assets
Property, plant and equipment
IT Services and products
IT
Services
234,850
(153,446)
(12,642)
(15,355)
53,407
IT
products
36,910
(32,843)
(1,284)
(1,174)
1,609
Total
Year ended March 31, 2011
Consumer
Care and
Lighting
27,258
(15,142)
(7,514)
(1,152)
10,896
(10,160)
(491)
(342)
3,450 (97)
271,760
(186,289)
(13,926)
(16,529)
55,016
1,073
(1,217)
(241)
(316)
(701)
Others Reconciling
Items
7,088
183,961
60,998
109,487
126,929
118,208
47%
54
28
12,647
433
26,506
5,726
19,269
20,926
20,097
17%
-
8
400
328
9,978
5,343
5,414
6,922
6,168
(2)%
-
-
707
362
150,998
59,005
124,893
138,399
131,646
-
-
-
891
IT Services and products
IT
Services
284,313
(191,713)
(16,114)
(17,221)
IT
products
38,436
(34,080)
(1,395)
(1,174)
59,265 1,787
Others Reconciling
Items
Total
Year ended March 31, 2012
Consumer
Care and
Lighting
33,401
(18,945)
(9,195)
(1,305)
322,749
(225,793)
(17,509)
(18,395)
61,052
18,565
(17,302)
(620)
(533)
534
(1,133)
(453)
(53)
3,956 110 (1,105)
Entity
Total
310,987
(212,808)
(22,172)
(18,339)
57,668
(1,933)
6,652
648
63,035
(9,714)
53,321
8,211
371,443
131,072
259,063
293,176
276,119
21%
54
36
14,645
Entity
Total
375,249
(263,173)
(27,777)
(20,286)
64,013
(3,491)
8,895
333
69,750
(13,763)
55,987
10,129
436,001
149,838
293,176
345,121
319,149
20%
8,768
222,792
74,287
126,929
152,757
139,843
44%
5,524
824
12,757
428
29,815
7,270
20,926
22,669
21,798
18%
47
29
624
481
15,767
6,661
6,922
11,875
9,398
1%
341
108
1,139
452
167,627
61,620
138,399
157,820
148,110
-
-
-
344
5,912
961
14,864
Annual Report 2011-12
234
05 US Gap IFRS_2012.indd 234
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The Company has four geographic segments: India, the
United States, Europe and Rest of the world. Revenues from
the geographic segments based on domicile of the customer
are as follows:
c)
For the purpose of segment reporting only, the Company
has included the impact of ‘foreign exchange gains / (losses),
net’ in revenues (which is reported as a part of operating profit
in the statement of income).
Consolidated Financial Statements Under IFRS
India
United States
Europe
Rest of the world
Year ended March 31,
2010
2012
2011
` 80,135
` 62,179 ` 67,904
148,160
129,217
87,186
68,159
59,768
45,707
` 271,574 ` 310,987 ` 375,249
119,870
56,780
32,745
No client individually accounted for more than 10% of the
revenues during the year ended March 31, 2010, 2011 and 2012.
Notes:
a)
The Company has the following reportable segments:
i)
IT Services: The IT Services segment provides IT and IT
enabled services to customers. Key service offering includes
software application development, application maintenance,
research and development services for hardware and software
design, data center outsourcing services and business process
outsourcing services.
ii)
IT Products: The IT Products segment sells a range of
Wipro personal desktop computers, Wipro servers and Wipro
notebooks. The Company is also a value added reseller of
desktops, servers, notebooks, storage products, networking
solutions and packaged software for leading international
brands. In certain total outsourcing contracts of the IT Services
segment, the Company delivers hardware, software products
and other related deliverables. Revenue relating to these items
is reported as revenue from the sale of IT Products.
iii) Consumer care and lighting: The Consumer Care and
Lighting segment manufactures, distributes and sells personal
care products, baby care products, lighting products and
hydrogenated cooking oils in the Indian and Asian markets.
iv)
The Others’ segment consists of business segments that do
not meet the requirements individually for a reportable segment
as defined in IFRS 8.
Corporate activities such as treasury, legal and accounting,
v)
which do not qualify as operating segments under IFRS 8, and
elimination of inter-segment transactions have been considered
within ‘reconciling items’.
Revenues include excise duty of ` 842, ` 1,007 and ` 1,205
b)
for the year ended March 31, 2010, 2011 and 2012, respectively.
For the purpose of segment reporting, the segment revenues are
net of excise duty. Excise duty is reported in reconciling items.
d)
For evaluating performance of the individual business
segments, stock compensation expense is allocated on the
basis of straight line amortization. The incremental impact of
accelerated amortization of stock compensation expense over
stock compensation expense allocated to the individual business
segments is reported in reconciling items.
e)
For evaluating the performance of the individual business
segments, amortization of intangibles acquired through
business combinations are reported in reconciling items.
f )
For evaluating the performance of the individual business
segments, loss on disposal of subsidiaries are reported in
reconciling items.
g)
The Company generally offers multi-year payment
terms in certain total outsourcing contracts. These payment
terms primarily relate to IT hardware, software and certain
transformation services in outsourcing contracts. Corporate
treasury provides internal financing to the business units offering
multi-year payment terms. Accordingly, such receivables are
reflected in capital employed in reconciling items. As of March
31, 2010, 2011 and 2012, capital employed in reconciling items
includes ` 8,516, ` 12,255 and ` 13,562, respectively, of such
receivables on extended collection terms. The finance income on
deferred consideration earned under these contracts is included
in the revenue of the respective segment and is eliminated under
reconciling items.
h) Operating income of segments is after recognition of stock
compensation expense arising from the grant of options:
Segments
IT Services
IT Products
Consumer Care and
Lighting
Others
Reconciling items
Total
2011
Year ended March 31,
2010
2012
` 1,159 ` 1,214 ` 871
62
89
90
112
93
71
18
(39)
26
(99)
` 1,302 ` 1,092 ` 949
31
(355)
i) Management believes that it is currently not practicable to
provide disclosure of geographical location wise assets, since the
meaningful segregation of the available information is onerous.
05 US Gap IFRS_2012.indd 235
6/19/2012 7:50:58 PM
Wipro Limited
235
gLOSSARY
A&D
Aerospace & Defence
ADM
Application Development & Maintenance
ADR
American Depository Receipt
ApAC
Asia Pacific
ASEAN
Association of Southeast Asian Nations
Banking & Financial Services
Business Process Outsourcing
bFSI
bpO
bpS
Fpp
IFRS
Ip
IT
IT
ITES
LAN
Fixed Price Projects
International Financial Reporting Standards
Intellectual Property
Products Information Technology Products
Services Information Technology Services
Information Technology Enabled Services
Local Area Network
Basis Point
LATAM
Latin America
CAgR
Compounded Annual Growth Rate
CCLg
Consumer Care & Lighting
CEM
CFL
Client Engagement Manager
Compact Fluorescent Lamps
CMSp
Communication & Service Provider
COSO
Company of Sponsoring Trade way Organisation
Cpg
CSAT
CTI
Consumer Packaged Goods
Customer Satisfaction
Computer Telephony Interface
FMCg
Fast Moving Consumer Goods
LED
LEED
Light Emitting Diode
Leadership in Energy and Environmental
Designs
M2M
Machine to Machine
NASSCOM National Association of Software and Services
Companies
Natural User Interface
Original Equipment Manufacturer
Restricted Stock Unit
Wide Area Network
Wipro Infrastructure Engineering
NuI
OEM
RSu
WAN
WIN
05 US Gap IFRS_2012.indd 236
6/19/2012 7:50:58 PM
NOTES
NOTES
NOTES
NOTES
Spine 11.7 mm
CORPORATE INFORMATION
Board of Directors
Azim H. Premji - Chairman
Company Secretary
V. Ramachandran
B. C. Prabhakar
Narayanan Vaghul
Dr. Jagdish N. Sheth
Dr. Ashok Ganguly
Priya Mohan Sinha
William Arthur Owens
Suresh C. Senapaty
Dr. Henning Kagermann
Shyam Saran
T. K. Kurien
M. K. Sharma
Executive Director and Chief
Financial Officer
Suresh C. Senapaty
Statutory Auditors
BSR & Co. Chartered Accountants
Auditors- IFRS
KPMG
Depository for American
Depository Shares
J. P. Morgan Chase Bank N.A.
Registrar and Share Transfer
Agents
Karvy Computershare Private Ltd.
Registered & Corporate Office
Doddakannelli, Sarjapur Road,
Bangalore – 560 035, India
Ph: +91 (80) 28440011
Fax: +91 (80) 28440054
Website: http: //www.wipro.com
INSIDE
Wipro in brief
Do Business Better
Financial Highlights
Chairman's Letter to the Stakeholders
CEO's Letter to the Stakeholders
CFO's Letter to the Stakeholders
President's (WCCLG) Letter to the Stakeholders
President's (WIN) Letter to the Stakeholders
Board of Directors
Corporate Executive Council
Management Discussion & Analysis
Directors Report
Corporate Governance Report
Business Responsibility Report
Standalone Financial Statements
Consolidated Financial Statements
Consolidated Financial Statements Under IFRS
Glossary
2
4
12
14
16
18
20
22
24
30
32
49
64
94
117
157
193
236
Certain statements in this Annual Report are based on
management's current expectations & forecasts and
may be considered as forward-looking statements.
There are a number of risks, uncertainties and other
factors that could cause actual results to be materially
different from management's current expectations
This Annual Report is printed on
100% recycled paper as certified by the UK-
based National Association of Paper Merchants
(NAPM) and France - based Association des
Producteurs et des Utilisateurs des papiers et
cartons Recycles (APUR).
and forecasts.
Spine 11.7 mm
ANNUAL
REPORT2011-12
SPIRIT OF WIPRO RUN 2011
6 CONTINENTS
21 COUNTRIES
56 CITIES
25000 PARTICIPANTS
Doddakannelli, Sarjapur Road,
Bangalore-560035, India.
www.wipro.com