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ANNUAL REPORT

ANNUAL REPORT. Index. WIPRO- An Overview Contents of Management’s Discussion Management’s Discussion & Analysis of WIPRO Contents of Director’s Report Director’s Report of WIPRO Auditor’s Report Notes to Accounts References. WIPRO (Western India Vegetable Products Ltd).

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ANNUAL REPORT

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  1. ANNUAL REPORT www.profmariamichael.com

  2. Index www.profmariamichael.com WIPRO- An Overview Contents of Management’s Discussion Management’s Discussion & Analysis of WIPRO Contents of Director’s Report Director’s Report of WIPRO Auditor’s Report Notes to Accounts References

  3. WIPRO (Western India Vegetable Products Ltd). • Started as a vegetable oil trading company in 1947 by Mr. M.H Premji. • In 1977, when IBM was asked to leave India, Wipro entered the information technology sector. • An annual turnover of US $ 6bn, employing 100000 employees. WIPRO - AN OVERVIEW www.profmariamichael.com

  4. Verticals • IT Consulting • Business Process Outsourcing • Product Engineering Solutions • Technology Infrastructure Services • Infrastructure Engineering • Computer Hardware Manufacturing • Commercial Lighting Manufacturing WIPRO - AN OVERVIEW www.profmariamichael.com

  5. Wipro’s Sister Concern(Business Units) • Wipro Infrastructure Engineering • Wipro InfoTech • Wipro Lighting WIPRO - AN OVERVIEW www.profmariamichael.com

  6. Segment wise contribution to revenue. • Segment wise contribution to EBIT. • Industry Overview • Points the number of segments. • Market share of each segment in the industry. • CAGR of each segment. • Key Factors adding to the development/fall of each segment. • Segment wise target for the next financial year. CONTENTS OF MANAGEMENT’S DISCUSSION & ANALYSIS www.profmariamichael.com

  7. Opportunities & Threats(Segment Wise) • Outlook • Revenue growth for the current Financial Year. • Profit After Tax(PAT) for the current Financial Year. • Discussion on Financial Performance w.r.t • Operational Performance • Authorized Share Capital • Paid Up Share Capital Financial Factors • Equity Shares • Secured Loan CONTENTS OF MANAGEMENT’S DISCUSSION & ANALYSIS www.profmariamichael.com

  8. Discussion on Financial Performance w.r.t • Operational Performance(contd..) • Unsecured Loan • Fixed Assets • Investments • Inventories Financial Factors • Sundry Debtors • Cash & Bank Balances • Loans & Advances • Current Liabilities CONTENTS OF MANAGEMENT’S DISCUSSION & ANALYSIS www.profmariamichael.com

  9. Discussion on Financial Performance w.r.t • Operational Performance(contd..) • Revenue Mix • Service Line Wise • Vertical Wise Operational Factors • Acquisitions • Cost (Segment Wise) CONTENTS OF MANAGEMENT’S DISCUSSION & ANALYSIS www.profmariamichael.com

  10. Segment Wise Contribution to Revenue MANAGEMENT’S DISCUSSION & ANALYSIS OF WIPRO www.profmariamichael.com

  11. Segment Wise Contribution to EBIT MANAGEMENT’S DISCUSSION & ANALYSIS OF WIPRO www.profmariamichael.com

  12. Industry Overview • IT Services • Account for 34% of the domestic IT industry. • Cumulative Annual Growth Rate (CAGR) of over 6.21% in worldwide IT services. • Key verticals driving the growth of the IT services market are Retail, BFSI, Telecom and Manufacturing. MANAGEMENT’S DISCUSSION & ANALYSIS OF WIPRO www.profmariamichael.com

  13. BPO Services • Account for 18% of the domestic BPO industry. • Expected Compound Annual Growth Rate (CAGR) of 11.9% by 2012. • IT Products • Account for 8.23% of the domestic IT product industry. • Expected Compound Annual Growth Rate (CAGR) of 3.68% by 2012. MANAGEMENT’S DISCUSSION & ANALYSIS OF WIPRO www.profmariamichael.com

  14. Consumer Care & Lighting • Account for 8% of the domestic IT product industry. • Expected Compound Annual Growth Rate (CAGR) of 10-12% between 2009-2012. • Wipro Infrastructure Engineering (WIN) • Selling of hydraulic cylinders and truck tipping systems. • World’s second largest third-party manufacturer of hydraulic cylinders. MANAGEMENT’S DISCUSSION & ANALYSIS OF WIPRO www.profmariamichael.com

  15. Opportunities & Threats • IT Services • Opportunity: Global companies are expanding their outsourcing activities to leverage the high quality, cost competitive IT services from India. • Threats: • Profit is booked in Indian Rupees resulting in exchange fluctuation against foreign currencies. • Economic slowdown may result in loss of business. MANAGEMENT’S DISCUSSION & ANALYSIS OF WIPRO www.profmariamichael.com

  16. Outlook • Revenue growth for the current Financial Year is 28% to Rs. 255,442 million. • Profit After Tax(PAT) for the current Financial Year is 19% to Rs. 38,999 million. • Discussion on Financial Performance w.r.t • Operational Performance (As on 31 March 2009) • Financial Performance • Authorized Share Capital: Authorized share capital of Rs. 3,550 million. • Paid up Share Capital: paid-up capital of Rs. 2,928 million, an increase of Rs. 5 million during this year. MANAGEMENT’S DISCUSSION & ANALYSIS OF WIPRO www.profmariamichael.com

  17. Financial Performance(contd..) • Equity Shares: During the year, 2.6 million shares were allotted on exercise of the options under various Employee Stock Option Plans(ESOP) instituted by the Company. • Secured Loans: Secured loans have decreased by Rs. 214 million. • Unsecured Loans: Unsecured loans have increased by Rs. 12,256 million. • Fixed Assets: The Company invested Rs. 19,073 • million on Fixed Assets. MANAGEMENT’S DISCUSSION & ANALYSIS OF WIPRO www.profmariamichael.com

  18. Financial Performance(contd..) • Investments: Investments in units of liquid mutual funds have increased from Rs. 14,317 million in fiscal 2008 to Rs. 15,136 million in fiscal 2009. • Inventories: Inventories have increased from Rs. 6,664 million as on March 31, 2008 to Rs. 7,586 million as on March 31, 2009. • Sundry Debtors: Sundry Debtors for the current year is at Rs. 48,859 million against Rs. 40,453 million in the previous year. MANAGEMENT’S DISCUSSION & ANALYSIS OF WIPRO www.profmariamichael.com

  19. Financial Performance(contd..) • Cash & Bank Balances: Cash and bank balances have increased from Rs. 39,270 million to Rs. 49,117 million, an increase by Rs.9,847 million. • Current Liabilities: Current Liabilities has increased from Rs. 39,890 million to Rs. 67,989 million. MANAGEMENT’S DISCUSSION & ANALYSIS OF WIPRO www.profmariamichael.com

  20. Operational Performance • Revenue Mix Vertical Distribution MANAGEMENT’S DISCUSSION & ANALYSIS OF WIPRO www.profmariamichael.com

  21. Operational Performance(contd..) • Revenue Mix Service Line Wise Distribution MANAGEMENT’S DISCUSSION & ANALYSIS OF WIPRO www.profmariamichael.com

  22. Operational Performance(contd..) • Acquisitions • Acquired Wipro Technology Services during Jan 09, engaged in providing of Information Technology Service & Solutions to CITI Group. • The company has paid Rs. 1,765 million relating to certain other small acquisitions and earn-outs related to previous acquisitions. MANAGEMENT’S DISCUSSION & ANALYSIS OF WIPRO www.profmariamichael.com

  23. Financial Results • Comparison of Current year’s financial results with previous year’s financial results based on: • Sales and Other Income • Profit Before Tax • Profit For The Year • Provision For Tax • Appropriation • Dividend • Dividend Tax • Transfer to General Reserve • Balance carried Forward CONTENTS OF DIRECTORS’ REPORT www.profmariamichael.com

  24. Subsidiary Companies • Consolidated Results • Percentage growth in total sales and income for the current year. • Total profit for the current year. • Dividend • Percentage at which Dividend is paid. • Total unclaimed dividend for the current year. • Mergers & Acquisitions • Information about the companies acquired during the current year (i.e. Area of Operation, Cost of Acquisition ) CONTENTS OF DIRECTORS’ REPORT www.profmariamichael.com

  25. Employee Stock Option Plans (ESOP) • Information relating to stock options program of the Company. • Qualification criteria. • Total Number of Shares under the plan. • Pricing Formula. • Corporate Governance • Set of Processes, Customs, Policies which are followed to administer or control the organization. • Goals for which these rules are followed. • Corporate Governance philosophy of the organization. CONTENTS OF DIRECTORS’ REPORT www.profmariamichael.com

  26. Research & Development • Latest R&D activities being carried. • Tools & Departments involved. • Patents Filed & Granted. • Expenditure on R&D. • Quality Assurance • List of Quality Certifications and standards. • Conservation of Energy • Initiatives started by the company to conserve energy. • Total Energy( in KWH) purchased and generated for each business unit. • Investments in direct subsidiaries CONTENTS OF DIRECTORS’ REPORT www.profmariamichael.com

  27. Directors’ Responsibility Statement • Statutory Responsibility • General Responsibility • Foreign Exchange Earnings and Outgoings • Total Foreign Exchange Earnings during the year. • Total Foreign Exchange Outgoing during the year including outgoings on materials imported and dividend. • Directors’ Re-appointment • The trend followed for appointment and retirement of directors. • Acknowledgements and Appreciation CONTENTS OF DIRECTORS’ REPORT www.profmariamichael.com

  28. Financial Performance • Subsidiary Companies (As on 31 March 2009) • Global corporation having operations in more than 31 countries through 76 subsidiary companies. • Consolidated Results (As on 31 March 2009) • Sales and Other Income for the current year grew by 27% to Rs. 259,616 million. • Profit for the year is Rs. 38,999 million, increase of 19% over the previous year. • Sales have grown at a compounded annual growth rate (CAGR) of 30% and Profit after Tax at 37%. DIRECTORS’ REPORT OF WIPRO www.profmariamichael.com

  29. Dividend • Directors recommend a final Dividend of 200% (Rs.4 per equity share of Rs. 2/- each). • Unclaimed dividend of Rs.88,824/- was transferred to the Investor Education and Protection Fund, as required by the Investor Education and Protection Fund (Awareness and Protection of Investor) Rules, 2001. • Mergers & Acquisitions • Pursue the strategy of “string of pearls acquisitions”. • In January 2009,Company acquired Wipro Technology Services Limited (formerly called as Citi Technology Services Limited “CTS”) for US $ 127 million. DIRECTORS’ REPORT OF WIPRO www.profmariamichael.com

  30. Mergers & Acquisitions(contd..) • To enhance Wipro’s capabilities to address Technology Infrastructure Services business in the financial service industry. • Company also re-structured a few of its overseas subsidiaries and merged them with their holding company in the US (WIPRO Inc.). • Employee Stock Option Plans (ESOP) • 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. DIRECTORS’ REPORT OF WIPRO www.profmariamichael.com

  31. Types • WESOP2000 • Wipro Restricted Stock Unit Plan 2004,2005,2007 • Pricing Criteria • Market price defined by SEBI. (WESOP2000) • Face value of the share.(WRSUP 2004,05,07) • 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. DIRECTORS’ REPORT OF WIPRO www.profmariamichael.com

  32. Foreign Exchange Earnings and Outgoings • Foreign exchange earnings of Rs. 166,229 million. • Foreign exchange outgoings of Rs. Rs. 70,256 million including outgoings on materials imported and dividend. • Research & Development • Wipro’s R&D focus is to strengthen the portfolio of Centers of Excellence (CoE), Solution Accelerators and Software Engineering Tools & Methodologies. DIRECTORS’ REPORT OF WIPRO www.profmariamichael.com

  33. Research & Development (ctd.) • During the financial year 2008-09, Wipro has filed for 13 patents and was granted 1 patent. • Will continue to invest in in-house development of Software Engineering Tools to improve productivity and Quality • Total expenditure of Rs.492 million in the current year. DIRECTORS’ REPORT OF WIPRO www.profmariamichael.com

  34. Conservation of Energy • The Company has taken several steps to conserve energy through its "Eco Eye" initiatives. • Disclosure w.r.t Conservation Of Energy. • Investment in Direct Subsidiaries • Company has invested an aggregate of US $ 432 million as equity, in its direct subsidiaries Wipro Cyprus Private Limited, Wipro Holdings (Mauritius) Limited, Wipro Inc and Wipro Technology Services Limited. DIRECTORS’ REPORT OF WIPRO www.profmariamichael.com

  35. Directors’ Responsibility Statement • As per the annual accounts, the directors have fulfilled their responsibities by keeping the Books Of Account Transparent as per Companies Act 1956. • Directors’ Re-appointment • At least two thirds of the 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. DIRECTORS’ REPORT OF WIPRO www.profmariamichael.com

  36. Directors’ Re-appointment(contd..) • Mr Azim H Premji has been re-elected as the Chairman and Managing Director of the Company (designated as “Chairman”) • This re-appointment is subject to the approval of the shareholders of the Company at the ensuing Annual General Meeting. DIRECTORS’ REPORT OF WIPRO www.profmariamichael.com

  37. Corporate Governance • Corporate Governance philosophy is put into practice in Wipro through the following four layers, namely, • 1. Governance by Shareholders, • 2. Governance by Board of Directors, • 3. Governance by Sub-committee of Board of • Directors, and • 4. Governance of the management process DIRECTORS’ REPORT OF WIPRO www.profmariamichael.com

  38. 4 types of Auditors’ Report • Unqualified Opinion Report • Qualified Opinion Report • Adverse Opinion Report • Disclaimer Of Opinion Report AUDITORS’ REPORT www.profmariamichael.com

  39. Unqualified Opinion Report • Most frequent type of report. • Issued when the financial statements presented are free of material misstatements and are in accordance with GAAP. • It is the best type of report an auditee may receive from an external auditor. • Also known as “clean opinion”. AUDITORS’ REPORT www.profmariamichael.com

  40. Qualified Opinion Report • Issued when the auditor encounters one of two types of situations which do not comply with GAAP. • Very similar to an unqualified report. • States that the financial statements are fairly presented with a certain exception which is otherwise misstated. AUDITORS’ REPORT www.profmariamichael.com

  41. Adverse Opinion Report • Issued when the auditor determines that the financial statements of an auditee are materially misstated. • As a whole, do not conform with GAAP. • Considered the opposite of an unqualified or clean opinion, • States that the information contained is materially incorrect, unreliable, and inaccurate. AUDITORS’ REPORT www.profmariamichael.com

  42. Disclaimer Of Opinion Report • Commonly referred to simply as a Disclaimer. • Issued when the auditor could not form, and consequently refuses to present, an opinion on the financial statements. • In 1949 Statement on Auditing Procedure No. 23 was published in order to provide guidance to auditors in presenting a disclaimer. AUDITORS’ REPORT www.profmariamichael.com

  43. The balance sheet, profit and loss account and cash flow statement dealt with by this report comply with the accounting standards. • Consolidated financial statements have been prepared by the Company’s management in accordance with the requirements of: • Accounting Standard (AS) 21. • Consolidated Financial Statements and Accounting Standard (AS) 23. AUDITORS’ REPORT www.profmariamichael.com

  44. Without qualifying our opinion, we draw attention to Note 4 of the Notes to Accounts that describes the early adoption by the Company of Accounting Standard (AS) 30 • Had the Company not early adopted AS 30 and the related limited revisions, profit after taxation for the year ended March 31, 2009 would have been lower by Rs 3,044 million. (Pg No.104 of Annual Report) • Chartered Accountants: B S R & Co. AUDITORS’ REPORT www.profmariamichael.com

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