annual report . index wipro- an overview contents of management’s discussion management’s...

ANNUAL REPORT www.profmariamichael.com

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

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WIPRO - AN OVERVIEW

• 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

Verticals• IT Consulting • Business Process Outsourcing• Product Engineering Solutions • Technology Infrastructure Services• Infrastructure Engineering• Computer Hardware Manufacturing• Commercial Lighting Manufacturing


WIPRO - AN OVERVIEW

• Wipro’s Sister Concern(Business Units)• Wipro Infrastructure Engineering• Wipro InfoTech• Wipro Lighting


CONTENTS OF MANAGEMENT’S DISCUSSION & ANALYSIS

• 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.



• 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



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



Discussion on Financial Performance w.r.t Operational Performance(contd..)Revenue Mix• Service Line Wise• Vertical Wise Operational Factors• Acquisitions• Cost (Segment Wise)


MANAGEMENT’S DISCUSSION & ANALYSIS OF WIPRO

• Segment Wise Contribution to Revenue



• Segment Wise Contribution to EBIT



Industry OverviewIT 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.



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.



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.



Opportunities & ThreatsIT 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.



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.



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. 19,073million on Fixed Assets.



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.



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.



Operational Performance• Revenue Mix Vertical Distribution



Operational Performance(contd..)• Revenue Mix Service Line Wise Distribution



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.


CONTENTS OF DIRECTORS’ REPORT

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



Subsidiary CompaniesConsolidated 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 )



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’ REPORTResearch & 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



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


DIRECTORS’ REPORT OF WIPRO

Financial PerformanceSubsidiary 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 WIPRODividend• 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.



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.



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.



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.



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.



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’ 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’ 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.



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, and4. Governance of the management process


AUDITORS’ REPORT

4 types of Auditors’ Report• Unqualified Opinion Report• Qualified Opinion Report• Adverse Opinion Report• Disclaimer Of Opinion Report


AUDITORS’ REPORT

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

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

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

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

• 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

• 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.


annual report . index wipro- an overview contents of management’s discussion management’s...

Documents

financial performance

segment wise target

current financial year

t operational performancecontd

industry overviewpoints

product industry

domestic bpo industry

market share