EXHIBIT 13.1
Contents
Our Values 2
Quality is a never ending journey 3
Quality in numbers 4-5
Letter to Stakeholders 6-9
Board of Directors 10
The Wipro way 11-13
Wipro Technologies
- Building relationships through Quality 14-21
Wipro Infotech
- A Customer centric vision fuelled by Quality 22-26
Wipro Healthcare and Life Science
- Building a healthy future through the convergence
of Health Science and IT based on Quality 27
Wipro Consumer Care and Lighting
- Creating consumer trust through Quality 28-29
Innovation and Digitisation for Customer satisfaction 30
Contributing to a Quality environment and society 31-32
Directors Report 33-36
Report on Corporate Governance 37-50
Financial Statements 51-210
Annual Report filed with United States Securities
and Exchange Commission (Form 20F) 211-256
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Our Values
Human Values
We respect the unique needs of Customers and employees. We are sensitive to
their differing needs in our interactions with them.
Integrity
We deliver what we commit. With honesty, fairness, reliability and uprightness
in whatever we do.
Innovative Solutions
We consistently offer novel and superior solutions to satisfy the needs of the
Customer.
Value for Money
Delivering higher value to the Customer through continuous improvement in
quality, cost and speed.
Our Promise
With utmost respect to Human Values, we promise to serve our Customer with
Integrity, through Innovative, Value for Money Solutions, by Applying Thought,
day after day.
Quality is a never ending journey...
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"Applying Thought" is Wipro's way of addressing this reality. It means that we
constantly think about our Customers. And continuously attempt to provide them
with innovative and superior value for money solutions. Over the years "Applying
Thought" has become an organization-wise mission, wherein Wiproites see
themselves as catalysts to creating a better service or product. Such is the
commitment, that everyday, somewhere across the globe there's a Wiproite asking:
- Can we do it better?
- Are we satisfying a customer need?
- Is it innovative?
- Does it provide superior value?
- Are we delivering what we commit?
- Can we do it better?
All this boils down to Quality thinking and thinking about Quality. At Wipro we
approach Quality quite differently. That's because we realize that:
- Quality is perceptual. Quality is value as perceived by the customer.
Therefore, our customers define what quality is or what a quality product or
service ought to be.
Quality is measurable. It is easier to improve something that is defined. So
we constantly measure our quality against Customer expectations and attempt to
meet it.
Quality is relative. It is perpetually redefined by the market. So what
constitutes top quality today gets displaced tomorrow when someone raises the
Quality bar to the next level.
At Wipro, Quality becomes the defining factor in all that we do to move a
product or service from mind to market.
It defines our core organization values, policies, processes and systems. It
pervades our relationships and our interactions with all our stakeholders.
It trickles downs to the simplest things -- the way we answer a phone call, the
way we conduct an internal meeting or the time taken to meet a visitor. And has
a huge impact on the larger ones; eliminating defects, reducing cycle time,
increasing process efficiencies, lessening manufacturing bottlenecks, cutting
down service cost and increasing productivity.
This gives us the means to deliver a good quality product and helps us
continually find ways to improve it.
Today as an Organization we are convinced:
- Quality is what differentiates Wipro. It is the reason why our customers come
to us
- Quality is the reason why our customers pay a premium for our products and
services
- Quality is a uniting force. It binds the organization and increases its
resolve to improving Quality continuously
- Quality has a direct impact on improving our financial results.
At the end of the day, we need to ask ourselves: Is our customer satisfied? More
importantly, is he or she delighted? Will our customer come back to us for more?
Will customer delight result in getting new customers? All these questions
ensure we shall never lose sight of the fundamental truth. That the Quality
journey never ends. It's a journey with challenge and as an organization we are
committed to. It's a journey that starts every day with every Wiproite asking:
- Can we do it better?
- Are we satisfying a customer need?
- Is it innovative?
- Does it provide superior value?
- Are we delivering what we commit?
- Can we do it better?
The journey continues...
Quality in numbers- Testimony to the fact that Quality works
At Wipro, we believe that it's the strength of our Quality systems that has
resulted in saving time and costs for our customers, by completing projects on
schedule.
Our Global IT services business has gained 107 new customers. Also, 82 of our
customers in the Global IT services business have each trusted us with over one
million dollars worth of business.
We've also initiated more than 242 Customer touch projects for quality
improvement, even as our Six Sigma initiatives resulted in savings of Rs. 1095
Mn. for the company.
We thank our investors and dedicate this performance to our customers and all
Wiproites.
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[table]
Dear Stakeholder,
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The year 2001-02 tested the adaptability of strategies and business models
globally. Our initial premise was of a "profitability challenged" year for the
global businesses. The response we anticipated was of a significant shift to
offshore to meet this challenge. However, events on September 11 in United
States of America slowed the pace of this shift. In this challenging
environment, our
- Profit after tax grew from Rs.6711 million to Rs.8854 million, a growth
of 32%
- Free cash flow, i.e. after deducting net working capital increase and
investment in fixed assets, increased from Rs.3,251 million to Rs.6,119
million, a growth of 82%
- Return on average net worth was 40% for the year, well in excess of our
internal benchmark of 29%
These results were below our internal expectations, relative to our past track
record of profit growth over the last 10 years. However, in absolute terms, the
figures were satisfying especially when considered against the backdrop of a
challenging environment, compounded by the telecom equipment market decline. In
this challenging environment, we grew our price realization through a
combination of pricing discipline and climbing the value chain, sustaining our
operating margins in the Global IT business. Further, 82% increase in free cash
flow during the year provides the strength to invest for creating sustainable
business advantage for our customers.
VISION FOR 2004
We had in the calendar year 2000 formulated our Vision for the year 2004. Our
Visioning challenge is to make our thinking ambitious and serve as a turbo
charger for the organization. Vision creates an executable dream for us to
strive hard towards achieving. The Vision we have set for ourselves is:
Business Leadership: Among the top 10 Information Technology Services companies
globally and #1 Information Technology company in India
Customer Leadership: The #1 choice of customers through innovative solutions and
Six Sigma processes
People Leadership: Among the top 10 most preferred employers globally by
creating an environment of empowerment, intellectual challenge and wealth
sharing
Brand Leadership: Wipro brand to be among the 5 most admired brands in India
The year 2001-02 did not go as we envisaged. Our revenue growth and profit
growth could have been higher. This makes the Vision we have more challenging,
but challenge is something that every Wiproite relishes.
Let me pause and take stock. Today, we believe Wipro is among the top 10
Information Technology Services companies globally and the #1 Information
Technology company in India, ranked by market capitalization. The challenge is
in getting our revenues up there among the top 10 companies globally, without
diluting our profitability.
GROWING REVENUE
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The key to creating a sustainable base of revenue that grows year on year ahead
of the industry growth rate is in focusing on customer profitability. The
single-minded focus must be on enhancing competitive advantage for the customer
and thereby his profitability. We have a diverse portfolio of
value added IT services executed from offshore centers in India, company wide
initiatives to reduce cost and cycle time through Six Sigma and Quality
initiatives, and a common set of Values that allows us to develop competencies
in our team to face any environment with confidence.
Our strength in Indian IT markets has been at the base of developing our
competencies and introducing new services in the global markets, leveraging the
offshore advantage. We have the widest service range among companies from India
in enhancing our customer productivity and profitability. Our Services portfolio
of application development and maintenance, product design and realization
services, information systems outsourcing and package implementation was
significantly enhanced this year with the launch of system integration practice
in the global markets. In July 2001, we won our first global system integration
order from the Lattice group of the UK to create the infrastructure for
broadband service and within nine months, the first phase of the project went
live on schedule, reinforcing our technical depth and Quality systems. In
Services business, there is no substitute to having satisfied customers for
brand building.
To realize revenue growth, we will invest in Quality. We are what we repeatedly
do. Quality leadership is a habit that we will build on and grow. We started our
Six Sigma initiative five years back. We have trained over 6,500 people in Six
Sigma and executed over 1,000 projects in these five years. Ultimately what
matters to the customer is profitability, and superior Quality can enhance
profitability in a defined time frame.
In the race for Quality there is no finish line. As we achieve each milestone,
we have a new destination identified for progress. We are the global leaders in
Software Services Quality. In 1998, we were the first Software Services Company
to be certified at SEI-CMM level 5. In December 2001, we became the first
company globally to be assessed at PCMM Level 5. This is an absolute global
benchmark for our people process. It is our Quality initiative that
differentiates us from competition, and this is the differentiation that we will
build upon.
The sustainability of the offshore model is driven greatly by our ability to
continuously improve productivity and reduce costs for our customers.
Additionally, we must ensure that our processes guarantee the customer
protection of proprietary data and information, and also protect against
unforeseen disasters. A key driver to continuous improvement in servicing our
customers and improving their profitability is our thrust on web enabling the
customer facing and internal service processes. We began this initiative two
years ago and today, our web-enabling initiative has gained a significant
momentum. This has been greatly appreciated by our customers. We will continue
to invest in information technology to improve our revenue, margins, security
and to ensure customer facing and internal business continuity.
A key initiative to leverage the technical depth of our human resources for
customer benefit is our Innovation initiative, where we focus on developing
Intellectual Property that provides a time-to-market advantage for our clients.
We have senior business managers and a structured process to drive Innovation.
We have framed an Intellectual Property development process to screen ideas,
select specific projects, take customer input and review progress. Currently we
have over 200 people working full time on Innovation projects for specific
identified themes. We are encouraged with the results of the Innovation
initiative in the first year itself, which reaffirms our faith in this
initiative.
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We are on the edge of a significant cusp, the convergence of Information
Technology with Life Sciences. This opens up an interesting market opportunity
to companies with proven competence in Information Technology and Healthcare. In
1989, we set up the Healthcare business practice addressing the imaging
equipment market through joint venture with GE, Wipro GE Medical Systems Limited
and non-imaging equipments through Wipro Biomed business. Over the last decade,
as in most other equipment business, the business has significantly moved to
services. Our relationship with global leaders in medical equipment like GE,
Beckman Coulter, Agilent and Fujinon combined with our domain knowledge provides
us with an exciting opportunity to address a growing market.
We have combined the businesses of Wipro Biomed and the Healthcare vertical in
Wipro Technologies together to address this opportunity, by forming a new
business segment Wipro Healthcare and Lifescience. This business is headed by
DA.Prasanna, who has been appointed Vice-Chairman, to realize the potential.
ACQUISITION, AN OPTION FOR GROWTH
Acquisition to accelerate the pace of revenue growth is an option we have. We
would like this only to be an option for enhancing growth and not a substitute
for organic growth. Our search is for a good business at fair price, not a fair
business at good price or a bargain purchase. It pays to be active, interested
and open minded, which we are, but we are not in a hurry. There is a thin line
between being quick and being hurried. The distinction is purely judgmental.
Looking into our rearview mirror, we can honestly say we have not missed out on
any opportunity that we regret.
We have over Rs.14 billion in cash and cash equivalents. The objective of
maintaining this cash position is primarily for strategic acquisitions. We are
conscious that, if not used for strategic purposes for which it is intended, the
cash with us dilutes the return on equity. Our internal norm of 29% return on
average net worth is something we have achieved for over two decades and we
cherish it. Whenever we conclude that cash with us cannot be used for enhancing
the shareholder value, we will evaluate the quantum to be returned to the
shareholders.
CHALLENGE FOR THE YEAR AHEAD
Looking ahead, the key challenge will be to realize the emerging opportunities
in the global market. In our Global IT Services business, growing new high value
services offerings in terms of system integration and information systems
outsourcing is as key a priority as consolidating our Quality leadership
position. We will focus on building momentum in Healthcare and Life Science
business. We have made a good beginning in expanding our Indian IT Services and
Products business into Asia Pacific IT Market, by leveraging our leadership
position in the Indian IT market. Our challenge here is to build on this
beginning and consolidate our presence in the Asia Pacific IT market. Above all,
we will continue to work to create a strong Wipro team by creating an
environment of empowerment, intellectual challenge and wealth sharing.
ACKNOWLEDGEMENT
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Mr. Hamir Visanji, who has been on our Board of Directors since 1955, retired
from the Board in December 2001. Over the last five decades, Mr. Vissanji has
been an integral part of Wipro's growth and, in his role as the Chairman of the
Audit Committee, a key contributor to Wipro's strong internal processes that
have enabled us to manage this growth. We would like to record our appreciation
and gratitude to Mr. Vissanji for his contributions.
The tragedy of September 11 shocked the world. To us in Wipro, the loss was more
personal. Four of our colleagues -- Deepika Kumar, Hemanth Kumar, Shashikiran
Kadaba and Shreyas were among the many whose lives were lost in the tragedy. We
mourn their loss.
We have entered the new millennium in a challenging environment. We are clear on
what we really want and back it with passion and commitment. We will excel in
future as we have done in the past.
I thank you all for the continuing support and the confidence you have placed in
Wipro. We have the talent and commitment required for succeeding in the current
environment. Our strategy is live to the business environment and realities of
the market place. We have demonstrated our ability to optimize between pricing
and volume play, with a strong volume growth in the last quarter of the year.
Our
team is dedicated and committed to achieving customer productivity and
profitability. We will work towards our Vision with passion and pride.
Very sincerely,
Azim H Premji
Chairman and Managing Director
BOARD OF DIRECTORS
Drawn from diverse industries and specializations, Wipro's Board of Directors
ensure that our stakeholders continue to repose faith and trust in us.
Azim H Premji
Chairman and Managing Director
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P S Pai
Vice Chairman and Executive Officer
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Vivek Paul
Vice Chairman and Executive Officer
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D A Prasanna
Vice Chairman and Executive Officer
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Dr. Ashok Ganguly
Chairman of ICI India Ltd., Former Director of Unilever Plc.
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B C Prabhakar
A Practitioner of Law
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Prof Eisuke Sakakibara
Professor of Economics at Keio University, Japan
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Dr. Jagdish N Sheth
Professor of Marketing at Emory University, USA
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P M Sinha
Former Chairman, Pepsico Holdings India
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Narayan Vaghul
Chairman, ICICI Ltd.
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THE WIPRO WAY
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At Wipro Quality is an investment. Customer satisfaction and trust its reward.
The two key ingredients for Quality are Processes and People Six Sigma - the way
we work.
The Six Sigma movement at Wipro was started with the aim of creating a
sustainable change that would make Wipro a truly world-class organization. Over
the years our experiences with the implementation of Six Sigma has resulted in
new methodologies and an organization wide momentum which made "Six Sigma, the
way we work".
A statistical measure that indicates how defect free a product or process is,
Six Sigma refers to an incidence of just 3.4 defects for every 1 Million
opportunities for a defect, or a process efficiency of 99.99966%.
Wipro features prominently among the companies that have successfully
implemented Six Sigma. Evident from the fact that from the year 1997, Wipro has
trained over 150 Black Belts, executed more than 1000 projects and has saved the
company in 2001-02 Rs. 1.1 billion in the process. In addition, there has been a
significant improvement in delivering value to its customers in terms of
features, price and time.
However, the success of Six Sigma hasn't been by chance, it's been the
consistent focus by every Wiproite.
The selection and scoping of projects
Projects are selected based on its link to critical business processes, which
makes it directly related to the vision of the business unit. Other factors are
the potential to contribute either to higher level of customer satisfaction,
employee satisfaction, reduction of costs or improvement in productivity.
The Quality of Black Belts
At Wipro, the quality of our Black Belts and Green Belts make these Wiproites
the most sought after breed of employees. Put through rigorous methodology and
statistical training, they view each problem logically and arrive at the optimal
solution. It would be no wonder therefore, if many of the future leaders of
Wipro would automatically come from the Black Belt or Green Belt group.
[charts]
Performance improvement through DMADV
- A case study
Customer: One of the largest communications company in the world.
Project: To improve the performance requirements of the gateway between the
Internet and the mobile subscriber.
Requirements: Pull Request*/ Push Request**/
------------- -------------- --------------
Sec Sec
Initial 09 03
Desired 30 30
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Methodology: DMADV (Define, Measure, Analyze, Design, Verify)
- Used QFD to identify 3 suitable options out of 5 alternatives
- Used FMEA to do a capability assessment
- Carried out 2 experiments for pull and 5 requirements for push requests
- Performance measured for CTQ (critical to quality) parameters
Delivery: Pull Request*/ Push Request**/
--------- ------------- ---------------
Sec Sec
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Initial 09 03
Desired 30 30
Results 38 45
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*Pull - Request from a mobile subscriber to gateway via GSM network
**Push - Message from the gateway sent to subscriber via GSM network
The litmus test
Six Sigma has contributed to many laurels at Wipro. Wipro has the distinction of
being the first software services company to achieve SEI CMM Level 5. It has
also the distinction of being the first company to achieve PCMM Level 5.
Certifications that show that our customer, quality and process measurements are
not only defined and managed but are optimized as well.
People define Quality.
A Wipro we believe that our quality is in our people. It is their effort that
helps derive customer satisfaction.
Each and every Wiproite is an ambassador of our values and is expected to
reflect them in everything that they do. Each one of the 14,000 men and women,
is committed to enable Wipro attain a leadership position in all of the
businesses that we are in. What attracts and retains this talent is a completely
open and apolitical culture where people do not hesitate to express themselves,
focused employee development initiatives and employee ownership programmes.
Our employee development initiative includes the "Life cycle development
program" which provides valuable inputs at various stages in the employee life
cycle.
a. Entry level program for all new employees
b. New Leaders program for employees who become leaders for the first time.
c. Wipro Leaders' program for employees who start leading other leaders.
d. Business leaders program for those in business leadership roles.
e. Strategic leadership programs for top management members who are in strategic
leadership positions.
Employee ownership is ensured through our broadbased employee stock option
programme called `WESOP'.
Our continuous effort to enhance working practices and employee satisfaction has
resulted in many innovative processes. A people focus that has in the past year
seen many exciting achievements.
- Wipro Technologies was assessed as the world's First PCMM Level 5
Organization. This has helped us to integrate various HR practices such as
selection, performance management and career planning around competencies.
- Employee service delivery was revolutionized by e-enabling HR processes.
- A career management framework was established through the career grouping
initiative at Wipro Technologies.
- Wipro listens and responds - A new initiative aimed at listening to the voice
of our employees through a structured questionnaire was launched and
institutionalized.
- The number of training person days across Wipro was over 95,000.
- The year also saw the 360-degree feedback process called the Wipro Leaders
Quality survey cover over 2000 Leaders.
In addition to these initiatives, our robust performance management system,
comprehensive annual human resources planning and feedback to individual
leaders, through processes like Wipro Leaders Quality feedback, skip level
program and manager assimilation program, form the back bone of our people
development process. All of which only goes to say that for many people, Wipro
is more than an organization to work with.
It is a way of life.
Delivering Customer satisfaction using DMAIC
- A case study
Client: A US based client
Project: Web based Web page editor
Problem: (Improve the Response Time RT for web based text editor)
- RT to change the font properties was more than 44 sec for 2000 characters
- Unable to handle large amount of text (> 2000 characters)
Methodology: DMAIC (Define, Measure, Analyze, Improve, Control)
- Measured and Analyzed 9 samples with number of characters from 100 to 5000
- Carrying out Pareto analysis for RT per character based on size, color and
style
- Used cause and effect diagram to flush causes
- Redesigned web based text editor based on 2 new design pattern identified
Results:
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Wipro Technologies -
Building relationships through Quality
Our Customers are saying this. We aren't. Be it in the US, Japan or Europe, be
it in Retail, Manufacturing, Energy and Utilities, Banking and Finance,
Insurance, Automotive, Consumer Electronics or Telecom, Infrastructure services
or e-Commerce.
Customers across the world have come to recognise Wipro Technologies as a
Quality driven and results oriented IT partner, delivering superior value that
invariably has a significant impact on their fortunes.
This has helped us deepen our relationship, not only in terms of repeat
business, but also in terms of handling larger and more strategic engagements
with clients. We believe our achievements and successes are the outcome of our
uncompromising attitude to delivering Quality and consistently meeting, if not
exceeding, customer expectation. Operating in a fiercely competitive market and
an increasingly turbulent economic environment, Wipro Technologies has made
Quality a key differentiator. Quality, not only in terms of end product but
across the entire delivery chain, be it people, processes, technology or
customer interaction. Which from a customer's perspective translates into a
powerful reason for `Why Wipro?'
Domain knowledge: Wipro has built a strong domain competency which in many cases
runs into many hundreds of man years. Enabling us to design intelligent
solutions to IT centric business problems.
Full service provider: Wipro has end-to-end capabilities in that it provides
consultancy, designs, implements and maintains seamlessly. Wipro offers a
complete array of IT solutions and services ranging from application
development, e-business and enterprise solutions to infrastructure solutions and
VLSI design.
Wipro guarantees low Total Cost of Ownership: Wipro's process methodologies and
frameworks help our clients enjoy up to 35% cost savings and 10% productivity
enhancements. Wipro assures Time-to-Market advantage: Wipro, with its vast
resources is able to offer up to 75% time-to-market advantage, crucial to many
verticals such as Telecom.
Scalability: Wipro can ramp up its resources with Quality to meet the most
stringent of client requirements, onsite and offshore, resulting in faster
implementation and cost savings.
People Quality: Wipro is the world's only PCMM Level 5 and one of the few SEI
CMM Level 5 companies. Coupled with a high degree of customer orientation and
professionalism, this has helped build greater trust in all our client
engagements.
Today Wipro is proud to say that the world recognizes Wipro Technologies as a
global practitioner with proven value delivery. Following are some of our
achievements in the various segments in which we operate.
[chart]
Enterprise Solutions
Banking and Financial Services
Having entered the financial services area only a few years ago, our focus on
building knowledge, has in a very short time frame, enabled us to build
considerable expertise in the areas of banking and financial services, foreign
exchange and commodities, capital markets and asset management.
We create value for our customers by delivering a lower Total Cost of Ownership
(TCO) across the life of the solution through reduced defects in the solution's
life, increased productivity, best in class knowledge, talent and
infrastructure.
We have also developed Risk Mitigation strategies covering Business Continuity,
Financial,
Change Management, Technology, Communication and Resource risks. Our focus for
banking and financial services allows us to enjoy the agility, flexibility and
focus of a smaller organization, as well as allowing us to draw on the
scalability of Wipro as a whole. All of which has resulted in significant wins
this year, including: A world's leading securities brokerage - One of the top 5
banks in the world - Leading European Financial Services organizations - One of
the world's leading Stock Exchanges - One of the leading French Banks
Insurance
"Wipro has, solid credentials and a long history, whose vision is backed up by
very solid investment. Wipro is not only investing in their infrastructure in
terms of buildings, technology and quality management systems but also in terms
of the recruitment of high calibre graduates, education and promotion
opportunities," said Karen Forte, Head of IT, Allianz, endorsing our investment
in quality and expertise.
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At the forefront of every insurance company is a customer whose peace of mind is
paramount. And behind every smiling customer is a solution that made it
possible. Wipro's entry into insurance has seen us providing services and
solutions to the best in the industry. We have embarked on a new relationship
with Allianz, one of Ireland's leading multi-line general insurance companies. A
partnership that has us developing software for their business systems, customer
information systems and analysis.
Retail
"Within a short span of time, Wipro has provided Best Buy with complementary
skills and the relationship has been extremely successful. We are particularly
impressed by the quality of their professionals and their customer orientation.
We are excited about the future of this relationship". Rao Vellanki, IS Leader
and Director, Best Buy.
In the Retail vertical, Wipro used its expertise to maximum effect for Best Buy,
the number one speciality retailer of consumer electronics, personal computers,
entertainment software and appliances in the United States. We set up an
offshore development center to support the implementation of a corporate-wide
Enterprise Application Integration initiative of Best Buy. Wipro also set up an
exclusive Center of Excellence, to develop an enterprise integration strategy
for various applications across the organization. This enabled us to understand
the customer's needs better and develop a quality solution that was customised
to them. To prove that this was not a unique case, and in an effort to converge
technology expertise and retail business domain knowledge, we have set up
several Centers of Excellence. Key among them are:
- Customer loyalty program solutions
- Point of sale solutions
- Supply chain execution solutions
- Merchandising and pricing solutions
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Energy and Utilities
"We had chosen Wipro more than a year back due to the excellent quality
credentials and technical capability that had come across to us" said Jim Brown,
Head of IS at Thames Water. "Our experience since then has been of a partner who
has exceeded our earlier expectations and also delivered best class performance
at significantly lower costs to us. Wipro has provided us significant benefits
including reducing costs to the tune of 20% in the IT budget for Application
Support and Maintenance within this period of engagement and implementation of
world class quality processes. We have built a very positive and successful
relationship with Wipro and look forward to a rewarding partnership ahead," he
added.
In a highly deregulated environment, Information Technology was increasingly
seen to be driving many of the strategies employed by utilities to function
smarter. In such a challenging scenario, Wipro established itself as a clear
leader in providing IT/IS solutions to the energy and utilities sector. We
worked in partnership with energy and utility clients across Europe and the USA
in architecting and implementing best-of-breed packages relevant to this
industry, for meeting business needs related to customer billing, revenue
assurance and margin analysis.
Our engagements with Transco, one of the largest gas transportation companies in
Europe and with Thames Water, a global specialist in water and waste water
operations, products and services, reinforces the value delivery we provide and
the strong partnerships that Wipro has developed in this sector.
Thames Water, has in fact confirmed that Wipro Technologies' comprehensive IT
services have resulted in savings to the tune of 20% on their IT Budgets for
Support and Maintenance. They also realized annualized savings on the
applications supported by Wipro alone to the tune of 35%.
Other significant wins at companies like PinnacleWest and successful execution
of projects at companies such as nPower and Pepco Energy Services, have
adequately demonstrated our understanding of the energy and utilities industry,
and the ability to deliver measurable business results.
Manufacturing
We have shown significant progress in this area of business in the past year,
with the setting up of a dedicated development facility for 3M at Hyderabad. And
further strengthened our eight-year old relationship with Seagate with the
execution of a high-end Oracle 11i implementation project. Needless to say, the
Quality deliverables and commitment shown by Wipro Technologies throughout the
eight years of our engagement has led to a relationship that is stronger than
ever.
We have also grown in strength, with acquisitions of blue chip clients in the
automobile sector in Japan and chemical sector in Germany. To add to this, we
launched our engineering services business through an alliance with Geometric
Software Services Limited. This initiative has already started showing results
with a few client engagements in the Engineering Services division.
Media, Publishing and Entertainment
Our Innovation methodology has seen us launch a comprehensive workflow solution
for the media and publishing industry. Born out of the Innovation initiative at
Wipro Technologies, Flow-briX, the solution, has evolved out of Wipro's
experience in developing workflow solutions for some of the largest publishing
houses in Europe and US. This has helped us firmly position ourselves as a prime
solution provider in this domain.
Travel and Transportation
With early wins in the travel and transportation area, and the simultaneous
creation of a dedicated group focused on expertise and solution development, we
will be in a position to offer strong solutions to this industry. Among other
new developments, we developed a framework for Internet Booking (iBEX), set up
an SI partnership with Cognosys for offering their Travel products and
successfully developed vertical applications for Wallenius Wilhelmsen and
Stevedoring Services of America.
[chart]
Government
The expertise we gained by working for a few leading Government organizations
like the Scottish Parliament has seen us launch a new vertical focused on the
Government and Public Sector organizations. A separate business unit for
Government organizations will, we believe, lead to more focus in this area and
result in better Quality solutions in this vertical.
Technology Solutions
Telecom and Internet Service Provider
"Wipro Technologies ability to provide a long term easily adaptable solution,
its commitment to quality, the enthusiasm of its employees, its outstanding
track record, and its unparalleled success with leading telecommunications
operators were the key factors why we chose Wipro. Wipro's offer of a range of
professional services while adhering to strict budgets and timelines is enabling
us to effectively meet our strategic objectives", said Colin Orr Burns,
executive vice-president of Iqara Broadband.
As the fastest growing division of Wipro Technologies, Telecom and Internet
Service Provider had a good year. Winning our largest ever fixed price contract
order was just the beginning; our commitment to Quality led us to successfully
deliver the first phase of this highly complex $70 Mn Systems Integration
project on schedule. We also successfully powered the Cable ISP solution to
Iqara Broadband, a part of British Gas group.
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Embedded and Internet Access.
Platforms: Wipro brings its proven methodology in productization and migration
of large applications in this area. Sun Microsystems, as part of its plans to
develop an open source platform for Solaris OE, is drawing on Wipro's expertise,
and functionality developed by the GNOME community, to build a modern desktop
environment for the Solaris OE. Wipro's Platforms group, besides coordinating
the overall development effort, is providing its expertise in porting and
migration, bug fixing, accessibility-enabling and testing of the GNOME solution.
Wipro will carry out the integration of the GNOME solution with the existing
Common Desktop Environment and provide complete life-cycle maintenance in the
post-release phase. Wipro will deliver defect-free, robust and cost effective
software that will allow Solaris Software users to seamlessly integrate their
workstations into the office environment.
Automotive: In the automotive segment, Wipro has been working with several major
players in Europe and the USA. Visteon Corporation, USA selected Wipro Embedded
and Internet Access as a development partner for automotive embedded systems
after an elaborate evaluation of major vendors. This win established Embedded
and Internet Access' automotive electronics group as a name to reckon with in
the field of providing automotive solutions to leading automotive components
vendors in the world.
Visteon, headquartered in Dearborn, Michigan, USA is the second largest
automotive supplier in the world dedicated to providing integrated automotive
technology systems in the area of telematics/ multimedia, powertrain systems and
climate system electronics. Wipro is extending its complete offering of
automotive solutions, especially in the area of telematics, multimedia and
instrumentation clusters.
Consumer Electronics: Thompson Multimedia selected Wipro as a major outsourcing
partner, endorsing Wipro's ability to help clients complete product realization
using state-of-the-art technologies, technology building blocks and Intellectual
Properties. Thompson Multimedia has been working with Wipro for the past 18
months and this new partnership is an endorsement of a high level of customer
satisfaction and high Quality of the deliverables and support being extended to
them. As part of this partnership, Wipro helps Thompson Multimedia develop
new generation products for the consumer electronics market. Wipro's solution
will incorporate hardware services, software services and Intellectual
Properties (802.11a, MP3, USB 1.1, etc.).
Intellectual Property: "The use of Wipro's technology will significantly improve
Indigita's time-to-market for digital content interchange and communications,
compliant with industry standards," said Mel Gable, CEO of Indigita, a leading
provider of connectivity and storage management solutions for original equipment
manufacturers and systems integrators.
Wipro's singular ability to leverage its knowledge and high quality expertise in
VLSI has earned us rich dividends. The creation of new Intellectual Properties
that fit in with existing systems and requirements of customers has seen us
achieve many successes.
Wipro has licensed its 1394 Audio/Video Link Layer Interface as well as the
AV/C Command Set Software to Indigita. This reinforces Wipro's expertise in 1394
technologies and its status as a preferred choice for buyers in the embedded
market. The technology building blocks licensed by Wipro will enable the rapid
deployment of high-speed serial communications functionality in ASIC devices to
be developed by Indigita.
Telecom and Internetworking
"We were amazed to see the depth and breadth of core telecom expertise in Wipro.
While we were aware that Indian companies were good at Software, it was an eye
opener to see the strong expertise that Wipro had in VLSI/hardware
engineering. The combination of highly skilled engineers, diversity of expertise
and a good track record convinced us to partner with Wipro," said David Heard,
CEO Santera Systems.
While Wipro's Telecom and Internetworking division was possibly the worst hit by
the slowdown in the telecom industry, it was a track record of providing Quality
solutions that helped this division hold its own in such challenging times.
Wipro Technologies became the world's first software services organization to
achieve the TL9000, a quality certification applicable to the telecommunications
industry. One of the significant wins last year was Santera Systems, a leading
provider of now- and next-generation switching equipment for the global
communications market who entrusted Wipro with their VLSI designs.
Horizontal Expertise
Technology Infrastructure Services
Technology Infrastructure Services has emerged as a clear differentiator for
Wipro Technologies. Leveraging on decades of hardware experience, Wipro
Technologies has managed to provide global clients with best-in-class services
like Infrastructure Consulting and Integration, Infrastructure Management, IT
Infrastructure Security, Remote Infrastructure Management, and Telecom
Infrastructure Services.
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Package Implementation
"Wipro has shown itself to be quality driven, something that was clearly evident
in their approach to our large application support requirements," said Ian
Londesbrough - CRM Delivery Manager, nPower. "The high quality of their CRM team
is beyond doubt."
A rapid competency build up in Enterprise Application Solutions like ERP, CRM,
SCM and B2B integration helped us witness several new milestones in large
accounts like Transco and Weyerhaeuser, particularly in the areas of core SAP
R/3 activities and new generation SAP initiatives. Wipro provided services in
Oracle e-business suite 11i implementation, as well as
Ariba Buyer implementations to Sony. Other significant wins being SCA Packaging
(Europe), Sanyo Energy (Europe), Emerson (US), Pepco Energy Services (US),
Putnam (US), and Nationwide Financial (US).
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Building on a strong start in 2000-01, the CRM practice, consisting of Siebel
and Clarify technologies, grew at a rapid pace, with several new customer
acquisitions. Wipro successfully completed a CRM project at Pepco Energy
Services, US. The Siebel/ABP integration at Pepco Energy Service, executed by
Wipro, integrates the billing system, ABP that ensures all new order information
from Siebel is created in the billing system and all the confirmations are
updated in Siebel.
Wipro Technologies won a CRM project at nPower, a leading supplier of gas and
electricity in UK. This came soon after the successful completion of projects by
Wipro with companies such as Farmers Insurance (US), where CIOs have relied on
Wipro's Customer Relationship Management (CRM) skills as a key enabler of their
large CRM initiatives.
Datawarehousing and Business Intelligence
By offering cutting edge technology services and solutions to its customers in
the business intelligence and datawarehousing segment, Wipro has entered into
strategic business and technological alliances with leading vendors like
Informatica, IBM, Brio, and SAS. We have also started services and identified
business intelligence applications like analytical CRM, ERP and SCM Analytics,
e-business intelligence, and teradata as thrust areas.
In the US, Wipro Technologies has created a good impact in providing business
intelligence consulting to the financial services segment and has managed to
architect, integrate and manage datawarehousing/business intelligence
applications like risk containment, scorecard applications, dashboard reporting,
fraud management, claims and actuarial analysis. In the UK and Europe, the
company has been working with leading energy and utilities companies for
datawarehousing/business services.
E-Commerce
"WiproWebSecure was adopted by several large enterprises and has the potential
to become a solid product," said Gartner.
After success in the global IT services space, Wipro Technologies has now made
progress in the IT product segment. WiproWebsecure, our Application Security
product, has achieved significant milestones during the year.
Gaining widespread recognition, the product saw successful implementation in
Home Depot and Lattice Group among others. Proof of its efficacy was also seen
when leading market researcher Gartner named Wipro Technologies as a niche
player in the Magic Quadrant of the extranet access management market for its
Web security product, WiproWebSecure.
Wipro Infotech -
A Customer-centric vision fuelled by Quality
The year 2001-02 saw Wipro Infotech establish itself as a comprehensive IT
services provider, with the strong success of our software solutions business.
From architecting and integrating IT solutions to managing IT infrastructure,
Wipro's customers today, recognize and appreciate Wipro's ability to deliver
high quality, reliable and cost effective IT solutions. A proposition that is by
the day, getting wider and deeper, ranging from core IT infrastructure and
value-added IT services to high-end software services.
For us at Wipro Infotech, who believe that IT is a business enabler, it was a
great challenge to provide continued business value to our customers in
difficult market conditions. This was made possible by our comprehensive range
of offerings and our single-minded devotion to Quality on all fronts - products,
services, people and processes. This powerful combination drove the company
closer to its customers. Consequently, our journey through the fiscal has seen
several prestigious customer wins, recognition by principals and the industry.
Growth in Services - a continual process
The depth and width of our services portfolio has been instrumental in growing
our services business substantially. We further strengthened our technology
integration practice this year by launching call center integration and storage
integration services thereby augmenting our existing portfolio of network
integration, telecom integration, platform integration, data center services.
With the integration of Wipro Net into our portfolio last year, we now offer a
range of remote management services in addition to our already robust managed
security services.
Our strength and leadership in integration services found its reward, when we
were awarded India's No. 1 network integrator by Voice & Data magazine for the
fourth consecutive year. What was more significant though, was the fact that
during the year, we won close to 50 infrastructure management contracts, taking
our total number to 196. This included a prestigious 2-year contract from the
Department of Registration and Stamps, Govt. of Andhra Pradesh. We also won over
260 system integration contracts.
Further, our thrust on building the telecom integration practice saw us win two
of the country's largest system integration contracts from the telecom sector.
Over 1100 Availability Services contracts were signed during the year.
Successful year in Software Services
This was our first full year in the software services area in the domestic
market. Today, we offer the strength of our global best practices in India
including robust project management methodologies and quality processes. A
combination of re-usable frameworks coupled with best-of-breed solutions helps
us offer reduced cost of ownership and enhanced value on customers' total IT
investments.
We won several prestigious projects in core business areas of end-to-end ERP
implementation, transport optimization, web based dealer integration, HR
information systems, mediation implementation and IT consulting. Most of these
were won against stiff competition from global IT Services companies. We won
over 65 projects during the year including a few from multinational
organizations in India.
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"We enjoy working with the Wipro team who take care of the overall project
completion. Even though the contract is for specific project areas, we find that
Wipro's consultants have been helping us in other areas as well; a fact clearly
noticed by our chief financial officer." S.R. Balasubramanian - Vice President
(IT), HDFC Bank
Managing content for a financial portal
- A case study
The Customer: One of India's premier credit rating firms.
The Challenge: To provide real-time financial analysis, updates, automate
content and workflow processes.
The Solution: Having studied the customer's requirements, Wipro helped the
customer choose the right technology platform for content management. Backed by
domain expertise in financial services, Wipro implemented the project
end-to-end, including hardware, software and hosting. A whole host of web based
interactive tools, online payment transactions, personalization and elaborate
registration, subscription and shopping cart modules were integrated. As a
result, the portal now has a number of modules with diverse functionalities,
automated workflow processes, complex database synchronization and a dynamic and
well-defined caching to ensure speed and efficient traffic handling.
Launch of Consulting Services: moving up the services value chain
The last two decades has seen us gain significant experience in the IT domain,
both in the software and in the hardware arena, in India and worldwide. This has
put us in an ideal position to launch our IT consulting services practice. Our
consulting services are woven around four pillars. They include:
Strategic consulting services
These services facilitates clients to articulate, implement, monitor and
continuously evolve powerful strategies. This specifically comprises:
Business planning/business process improvement - This includes assisting clients
in the articulation and implementation of their strategy, which would assist
clients in business and financial modelling.
IT strategy articulation and implementation - This includes strategic IT
articulation and deployment to ensure that technology enables clients attain
their ambitious business plans.
Business technology consulting
This includes understanding underlying business architecture of the client in
the context of the dynamic business landscape to assess the need for a
technology.
IT governance and optimization consulting
Here, we assist businesses carry out an assessment of their Information
Technology Management Processes, benchmark the same with industry standard
practices and provide concrete action steps to bridge the concomitant gaps.
Process consulting
This encompasses business process improvement and change management consulting.
The services offered include organization-wide framework consulting and
application assistance for Six Sigma implementation, as well as process
improvements in specific areas using Six Sigma methodology. Our experience with
SEI CMM and PCMM would be offered as a service to our customers.
Business Continuity and Risk Management consulting
As an end-to-end consulting and solutions provider in information security,
Wipro offers services ranging from risk consulting, business continuity planning
and security solution architecting to preventive consulting services like
security solution integration, thus addressing customer needs through the entire
lifecycle.
Making a mark in Asia Pacific
Having established ourselves strongly in the domestic market over the last two
decades, we have set our sights on extending this leadership into the Asia
Pacific and the Middle East. In line with this objective, we successfully
launched our operations in the Asia Pacific and Middle East markets. Today, we
have full-fledged business offices in Dubai and Singapore with presence in
Sydney, Taipei, Bangkok, Hong Kong and Saudi Arabia. In the very first year of
operations, we received an encouraging response from customers across the region
including a prestigious project that we won from the Dubai e-Government to
provide data center management services. Our strategic alliance with IBM will
further enhance our IT services proposition to customers in the region.
Over 25 high-powered delegations from countries including Australia, New
Zealand, Bahrain, Korea, China, Malaysia, Kazakhstan and the Middle East and
Thailand visited our campus during the year. They comprised ministers,
dignitaries, senior bureaucrats, industrialists and even heads of state.
Consolidating leadership in the Enterprise Infrastructure market
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This was a challenging year in the enterprise infrastructure market with
customers downsizing or postponing IT infrastructure procurement. In such market
conditions, we emerged strong by growing our market share in the high-end PC
server market and retaining leadership position in the enterprise server and
networking market.
In addition to this, our products proposition was further augmented with the
launch of the Wipro LittleGenius range of corporate notebooks. This marked our
successful entry into the highly competitive notebook market. The year also saw
us win recognition from our enterprise partners. We were Sun Microsystems'
leading partner and were awarded `Best Distributor: Asia South-2001' by Sun
Microsystems. We continued to be lead partners for iPlanet, Citrix, Macromedia,
Computer Associates and IBM (Intel range of servers). We have been declared the
largest sales partner for Cisco and were adjudged `Outstanding Partner' for
Cisco in the high technology area including IP telephony. Wipro Infotech has
also been declared as the largest partner for HP Openview.
We announced a strategic alliance with IBM in the latter part of the year. With
this, we now have an even wider range of computing platforms to offer to our
customers in India. This has also helped us enhance our services offerings
around these platforms to customers in India.
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01markets: Cost effective procurement services to customers
01markets established itself during the year as a successful e-procurement
business with transactions of Rs. 2041 million through 104 procurement auctions
spread across 6 industry verticals.
01markets enabled its clients to identify procurement savings in the range of 9
to 10% for direct as well as indirect goods. Clients also benefited from
substantial reductions in their sourcing
cycle times. 01markets was awarded the Golden Peacock Award for Innovation
Management for the year 2001.
Quality: The imperative for Customer satisfaction
The Quality journey at Wipro Infotech has seen us pass newer milestones during
the year. Our application of the Six Sigma methodology enabled us to offer
higher value to customers through continuous business process improvement. We
initiated 110 new Six Sigma projects during the year, and we today have 17 Black
Belts across Wipro Infotech.
We were awarded the ISO 14000 certification for our manufacturing facility in
Pondicherry. We also acquired the ISO 9001:2000 certification for our
infrastructure management services practice during the year. Both these
certifications are a step closer to enhancing customer satisfaction through
continuous improvement of current processes.
Innovation: Key to Customer satisfaction
At Wipro Infotech, we believe it is our ability to innovate that leads to
customer satisfaction. The focus of our Innovation framework is to learn from
experience, build on expertise and create solutions and services that satisfy
the customers' stated and latent needs. Our Innovation methodology, saw early
success, with the launch of several new practices including storage consulting,
IT outsourcing and Six Sigma consulting, which today is an integral part of our
overall consulting framework.
The knowledge edge
At Wipro Infotech, we believe it is critical to stay in a mode of continuous
learning. Our Knowledge Management initiative took significant strides in the
areas of learning and knowledge extraction, enhancement and practice.
Building a virtual sales team for a leading Indian FMCG company - A case study
The Customer: A leading FMCG company with leading brands and a network of 5
factories, 28 depots, 3400 distributors and 1.4 million retail outlets. A
sales-force of 250 sales persons and a distributor sales team of 3000.
The Challenge: To create a virtual office on the web for the sales team. A
mobile workforce, the team needed to access information and data from the field,
so that sales could be monitored in real time and corrective actions taken as
and when required.
The Solution: We designed, developed and implemented the portal, and integrated
web-applications with the ERP solution. The portal captures secondary sales data
and analysis of sales and stock availability for every distributor, distributor
sales team performance, outlet monitoring, merchandising monitoring and new
product performance monitoring. It also featured employee self service modules
like loan application, leave application, employee profile, sales force reports,
community features such as chat, bulletin board, classifieds, calendar
scheduling etc.
The success of the learning initiative has brought about a structured competency
model designed for the entire organization. Implementation of e-learning has
ensured mandatory skill training and uniform competency measurement across the
organization. Over 290 engineers were certified across diverse competencies and
over 1,500 employees were trained across 200 training programs spanning 8,600
training man-days. As part of the competency certification program, around 1,700
Business Partner engineers were also certified.
A key initiative to inculcate a culture of knowledge sharing and reusing in the
organization was
`Kalpavriksha' - the Knowledge Management portal. It has enabled uniform
knowledge dissemination across the organization and has also enabled Best
Practices sharing within the organization.
`TerraNova', our Center of Excellence opened its doors to customers this year.
The center is a showcase of our solutions and integration capabilities. Multiple
technologies and their working across diverse platforms are displayed, through a
replication of the customers' business environment.
TerraNova demonstrates solutions on Sun Microsystems, Cisco, Nortel, Intel and
HP platforms with a range of enterprise applications and products.
Leveraging the power of the Internet
The year in passing saw us leverage the power of the Internet to drive external
and internal efficiencies. We moved closer to our customers and partners through
the launch of robust, content-rich community websites and portals for our
business partners and customers. We also launched a sales force automation tool
as part of sales process improvement and this tool works as an
opportunity-tracking device for all listed customer accounts.
Employee productivity was enhanced through the launch of various applications in
the areas of recruitment, human resources, administration, finance, legal,
marketing and operations, all of which translated into greater customer
satisfaction.
Vertical Solutions: Bringing us closer to the customer
To ensure that we address our customers' total IT requirements ranging from
products to highend solutions most effectively, we reorganized ourselves into
six verticals, with independent solutions, frameworks and strategies being
created for each vertical. The six verticals identified include finance, banking
and insurance, manufacturing, IT and IT enabled services, telecommunications,
healthcare and government. This initiative we believe, is key to offer business
value to our customers. We are constantly striving to leverage our domain
knowledge in each of the above verticals to offer a customized mix of products,
services and solutions that meet vertical-specific requirements.
Wipro Healthcare and Life Science - Driving the convergence of Healthscience and
IT to deliver Quality solutions to build a healthy future
Wipro has been addressing the Healthcare services market through its Wipro
Biomed division and Wipro GE Medical Systems Ltd. These businesses, which focus
on the device market in India, have performed exceedingly well and are presently
market leaders in their respective fields.
Wipro in its constant quest for looking at new business opportunities where it
can add value, announced in April 2002 its new venture - Wipro Healthcare and
Life Science, which will address the requirements of the Bio-IT market, where
Information Technology converges with Life Science. The estimated addressable
market opportunity is around $25 billion, growing at over 20% annually. The key
regions of focus are USA, Europe and India. The existing business of Wipro
Biomed and the existing client base of Wipro Technologies in the Healthcare
vertical will be transferred to Wipro Healthcare and Life Sciences business
unit. This business will offer solutions in three core areas:
Healthcare Information Technology to Health Delivery System
Our focus is the complete Healthcare delivery system which includes Hospitals,
Physician Practices, HMOs and Health Insurance companies. The solutions would be
defect-free Six Sigma engineered. Our unique value proposition is the ability to
integrate the healthcare enterprise, thereby delivering a improved workflow and
reducing costs for our customers. Some of the solutions, which we are presently
offering are Hospital Information Systems, Clinical and Lab Information Systems
and web based HIPAA Compliant, Internet based Electronic Claims systems and
other custom solutions.
Discovery IT to Life Science Companies
Here, our focus is providing IT solutions to drug discovery companies where we
shall IT enable the parts of the drug discovery process, thereby crashing the
drug development times significantly. We are also entering the field of IT
enabling the filing of FDA approval process. Wipro Biomed addresses the clinical
and scientific devices market in India. It markets and services equipment of
leading companies like Beckman Coulter and Agilent, which offer leading edge
technology to medical and life science institutions.
Software Design and Engineering services to large medical device and Healthcare
Information Technology vendors
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Building on the existing strengths of Wipro in embedded devices and software
engineering excellence, we provide solutions to address large medical device
companies and Healthcare Information Technology vendors.
Wipro's domain knowledge and customer relationships will provide Wipro a
distinct advantage to address the requirements of this emerging segment. We
would leverage the technological edge, certified quality processes and people to
bring significant value to our customers by giving them timely, defect free and
value for money solutions. This would improve competitiveness of our customers
and thereby improve outcome for their patients.
Wipro Consumer Care and Lighting -
Creating consumer trust through Quality
A passion for Quality
At Wipro Consumer Care and Lighting we understand that Quality is a never ending
journey. It's our passion for Quality that ensures we are constantly enhancing
the value of our brands and continuously introducing innovative products to
enrich the lives of our customers.
Quality Brands
Wipro Consumer Care and Lighting division has strong brands addressing consumer
needs in personal wash, toiletries, personal grooming, baby care, cooking medium
and lighting categories. Our product range comprises:
Santoor Soap, Santoor Talc
Wipro Shikakai Soap
Milk & Roses Soap
Wipro Active Talc
Wipro Baby Soft Range
Wipro Brand Domestic lighting,
Commercial and Institutional lighting
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Insights into Quality
At the heart of each of our brands and strategies are key customer insights. An
extensive use of market research helps us understand the changes taking place in
our customer's lives and how their needs are evolving. Proprietary research
methodologies help us develop innovative offerings and products to meet these
changing needs and therefore deliver satisfaction.
With the inherent belief that the customer is the final judge of our product
Quality, we have undertaken a number of steps to ensure that all the customer
defined parameters of our Quality are monitored, constantly benchmarked and
improved upon. These include factors like defect free manufacturing, easy
availability and product attribute ratings. Here, Six Sigma tools have helped us
develop robust processes to eliminate defects in manufacturing. Similarly, our
extensive distribution network, ensures our division's consumer product is
available in more than one million retail outlets across the country. In
addition, our distribution and servicing are also benchmarked against
competition and constantly monitored to ensure improvements are taking place.
Creating value for the Customer
"Wipro Baby Soft nappies and diapers are a big help...no need to wash clothes,
just change the nappy...the baby is happy because it is softer than cloth and
keeps him dry...it also gives me the freedom to do all the things I want without
spending time on changing wet clothes." Mrs. Sindhu Menon, mother, Cochin.
In the Baby Care category for example, customers talked of how doctors routinely
prescribed medicinal tablets for babies at dosage levels like half a tablet or
quarter of a tablet. But attempts to split the tablet normally led to a powdered
tablet and the mother unsure of whether the child had got the right dosage. This
insight led to the development of the `Wipro Baby Soft Tablet Cutter' - designed
to hygienically solve this dilemma. This product has had an ecstatic response
amongst mothers across the country.
In the lighting category, where consumers were looking for an assured life of
the light bulbs they purchased, Wipro Longlite bulbs were designed to last 30%
longer than normal bulbs. Similarly
in lighting fittings, where customers were worried about products turning
defective very soon, we launched a new product - Wipro Prima with a 5 year
guarantee, a first for the category. Both innovations have been well appreciated
by consumers.
"Your Fantasy range is excellent in form and function...a beauty with brains."
Raju Mahagaonkar, Chairman, Indian Institute of Interior Designers, Pune.
To continue our story of creating value, in our Commercial and Institutional
lighting business we developed special products for the Pharma and Software
industries which have helped us dominate these segments. These include lighting
designed to be free of glare and free from electromagnetic interference for the
software industry and special lighting for operation theatres in hospitals.
All of these insights leading to innovation only illustrate our approach to
constantly enhance value in each and every one of our offerings.
Building consumer trust
"See, how my skin glows. Using Santoor makes me look and feel younger. I trust
only Santoor." Jayshree, housewife, Vijayawada
The Indian woman is constantly evolving and expects her brands to do the same.
Advanced qualitative and quantitative research tools were used to develop the
marketing mix for the re-launch of our lead brand Santoor. The brand's new
communication showed the Santoor protagonist as being spontaneous, caring,
nurturing and a role model for her child. All the values that our consumers
instantly identified with and which in turn helped strengthen and heighten the
emotional bond of our customers with Santoor.
Milestones in the Quality journey
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Customers acknowledge and reward our brand and product Quality. Santoor is one
of the leading brands in South and West India and the number one brand in Andhra
Pradesh.
Wipro Shikakai, a hair care soap is a leader in its category.
Our brand offerings in talc make Wipro the second largest player in the talc
category.
Wipro Baby Soft is among the top two brands in the baby care segment.
In Lighting, we have made tremendous strides in South and West India and are
amongst the top brands here.
In Institutional Lighting we have been growing at a good pace and dominating our
focus segments.
But in the same breath, we aren't resting on our laurels, because we know that
the Quality journey is a never ending one.
Innovation and Digitization
for Customer satisfaction
At Wipro, Innovation is a means to provide value add to our Customers, and it is
so integral to us, that we articulated it in our Promise statement in 1998.
Innovation is one of our four Values. While we have always worked on providing
innovative solutions to the customer, we wanted to give Innovation a specific
thrust.
We have defined Innovation as the "implementation of a new idea resulting in a
marketable product or service". The objective is to drive revenues through the
development of Intellectual Properties that yield new products and services.
A team is set up directly under the Chairman's office to give it the required
thrust and attention. Similarly, in both Wipro Infotech and Wipro Technologies
we have set up teams to oversee the Innovation initiative. We have studied the
best practices on Innovation and have formulated a structured process to capture
ideas, fund potential ideas, have structured periodic reviews, and develop a
`go-to-market strategy'. An important aspect is to be able to drop ideas and
projects early enough, and to ensure that we capture what we learned from these
projects. We have a formal reward and recognition process for idea generators
and the core members who work on the development of these Innovation projects.
We have defined three themes under which we have taken up the projects - Home
Networking, Content Commerce and Collaboration and Knowledge Management.
Customer inputs and Customer buy-in is an integral part of our process. This has
helped us to screen and shape the ideas into viable marketable products. We have
had revenues in the first year of implementation for each of these themes.
Currently, we have over 200 people working on 10 innovation projects. We are
encouraged with the results of the Innovation initiative, which reaffirms our
faith in this initiative.
Digitization for the future
Over the past two years, we have been rapidly digitizing all our critical
business processes, thereby touching employees, clients, business partners,
vendors and stakeholders. We began by building a suite of employee self-service
applications that would help our employees transact easier and faster. Not only
did this eliminate almost all paperwork in Wipro, but has also improved the
productivity of our operations support staff by 25%.
Today, Wipro's private network connects all locations of Wipro for data, video
and voice, thus transforming Wipro into a truly global company. Our multi-point
audio and video conferencing facilities have bridged the oceans and cut down the
need for travel. Our overseas clients rely on this for project reviews.
Our employee portal, designed by the employee for the employee, has become an
arena for learning, fun and employee bonding. It has brought quality processes,
knowledge management systems, and project management systems to the employee
desktop, thus enriching the work environment at Wipro and improving employee
productivity and work Quality.
While our web enabled billing and collection process is providing transparency
to our customers, our dealer portals provide the convenience of on-line
configuration and anytime order booking. Even our procurement process has become
more transparent to our vendors, as we use the digitized reverse auction process
to get the best prices. With bandwidth prices falling, we expect our
digitization initiative to gather even greater momentum, as more of our
stakeholders connect
Contributing to a Quality environment and society
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At Wipro, we are highly sensitive to the impact of our business activities on
environment and society. This is reflected in the measures taken to monitor and
control resources and activities that interact with nature and people.
Wipro's environment, health and safety policy
At Wipro, we are committed to providing a safe and healthy work environment to
all the employees and associates. This is done with the help of suitable
management systems that are aimed at:
Prevention of accidents - through fire, security losses, damages to property,
personal injuries and loss of life
- Conservation of natural resources - by efficient use of energy, water and
effective utilization of waste
- Prevention of pollution and hazards
- Compliance with legislation and regulations that are relevant to our
organization
- Development of safe work practices by regular training to employees and
support staff
- Periodic review of systems and processes aimed at continual improvement
Our efforts to improve our standards continuously and an effective Environmental
Management System (EMS) in place has resulted in us being awarded the ISO 14001
certification.
This in effect certifies that Wipro as an organisation has a series of
International Standards for EMS, voluntary standards that establish and
objectively evaluate EMS, `Process Standards' and not just `Performance
Standards', a standardized and internationally recognized blue print for
effective EMS and a frame work for setting and establishing EMS. Wipro's EMS
initiatives are designed for optimum utilization of natural resources and
constant monitoring of environmental impact while providing service.
Some of the initiatives under this umbrella include:
Energy audit - Energy conservation - Water management - Land contamination
management - Waste management - Employee health and safety - Adoption of parks -
Effective stationery usage - Overcoming resource depletion
The benefits of these initiatives are:
- Products/services are processed under a controlled environment
- Reduction of energy consumption by 10%
- Better monitoring and control systems
- Increased awareness among employees resulting in 38% reduction in food
wastage
- Quarter on quarter reduction of 10% in water consumption from conservation
measures
Wipro Applying Thought in Schools
[picture]
To Wipro, the future of the society depends on the ability of its children to
think analytically and creatively, and be a lifelong learner. Wipro believes
that the conventional education system is not equipping children with such
abilities. Children must acquire the skill of how to learn, rather than being
overwhelmed with a large amount of information, and must enjoy the process of
learning, so that what is learnt is retained.
We believe that the factors, which have led to the current state of education
are: examination boards test only the child's ability to recall facts, thus
reinforcing rote learning; curriculum is
designed to transfer maximum amount of information to the child, disregarding
the fact that it is impossible to do so given the rate at which "knowledge" is
growing; school managements are focused on delivering best results on board
examinations; teacher does not have an option but to focus on completing the
syllabus; parents want the child to get maximum marks so that more doors are
opened for the child. In the process, the real purpose of education is getting
lost. Therefore, we must influence changes with every stakeholder in the
education system.
The mission of the `Wipro Applying Thought in Schools' program is enhancing
creativity and problem solving skills among children by catalyzing systemic
changes. Recognizing that the teacher has the most profound influence on a
child's learning ability, at the heart of our program is teacher empowerment and
re-skilling. The teacher re-skilling program was launched in May 2001, to
provide comprehensive training on innovative teaching and assessment methods,
and support their active implementation within the classroom. Begun first in
Bangalore, its success has enabled us to take it forward to other cities in
India.
We are reaching out to parents in an attempt to change their world-view of the
purpose of education. A program to train parents is being put together, to
enable them to help their children acquire life skills, and support the changes
being brought about in the school.
[picture]
The School management, including the Principal, is the integral part of the
program to bring about systemic changes within the school to create an
environment for quality education. Wipro is helping the school management
recognize specific systemic changes and assist in its implementation. As the
program scales up, Wipro would lead changes in the curriculum and examination
system. For accelerating the systemic changes at the national level, we have
launched the Wipro Forum on Quality in Education. The Forum is intended to work
as a platform for sharing ideas and as a pressure group to bring about systemic
changes.
Wipro Applying Thought in promoting mind leaders
At Wipro, a natural extension of Applying Thought was to promote the many
talented youngsters in India, in the field of chess. While we took many
promising youngsters under our wing, our ambition saw fruition when P
Harikrishna, at 15, became India's youngest chess Grandmaster. His victory bore
testimony to the fact that `Applying Thought' is not just a business philosophy,
but also an approach to success in all human endeavor, be it at work or play.
This has further strengthened our resolve to make India a chess superpower. And
thus, we are nurturing five more budding talents in the future.
The Quality minds that lead Wipro -
Corporate Executive Council
Azim H Premji
Chairman and Managing Director
[picture]
Vivek Paul
Vice Chairman and Executive Officer - Wipro Technologies
[picture]
P S Pai
Vice Chairman and Executive Officer, Wipro Consumer Care and Lighting
[picture]
D A Prasanna
Vice Chairman and Executive Officer, Wipro Healthcare and Life Science
[picture]
Ranjan Acharya
Corporate Vice President, Corporate Human Resources Development
[picture]
Vineet Agrawal Corporate Executive Vice President, Mission: Quality, Innovation,
Brand and Corporate Communication
[picture]
Sudip Banerjee
President Enterprise Solutions, Wipro Technologies
[picture]
Tamal Das Gupta
Chief Information Officer
[picture]
Pratik Kumar
Corporate Vice President, Human Resources
[picture]
Girish S Paranjpe
President Finance Solutions Wipro Technologies
[picture]
Dr. A L Rao
President, Telecom and Internetworking Group Wipro Technologies
[picture]
M Seethapathy Rao
Managing Director, Wipro Fluid Power Limited
[picture]
Suresh C Senapaty
Corporate Executive Vice President, Finance and Chief Finance Officer
[picture]
Suresh Vaswani
President, Wipro Infotech
[picture]
As on April 30, 2002
REGISTERED AND CORPORATE OFFICE
WIPRO LIMITED
Doddakannelli, Sarjapur Road, Bangalore - 560 035, India
Tel: 91-80-8440011 Fax: 91-80-8440054
WIPRO TECHNOLOGIES
1995, El Camino Real, Suite 2000, Santa Clara,
CA-95050 USA.
Tel: 001-408-2496345 Fax: 001-408-6157174
WIPRO INFOTECH
Doddakannelli, Sarjapur Road, Bangalore - 560 035
Tel: 91-80-8440011 Fax: 91-80-8440216
WIPRO HEALTHCARE AND LIFE SCIENCE
Doddakannelli, Sarjapur Road, Bangalore - 560 035
Tel: 91-80-8440011 Fax: 91-80-8440054
WIPRO CONSUMER CARE AND LIGHTING
Doddakannelli, Sarjapur Road, Bangalore - 560 035
Tel: 91-80-8440011 Fax: 91-80-8440057
WIPRO FLUID POWER LIMITED
9B/10A, Peenya Industrial Area,
Phase 1, Bangalore - 560 058
Tel: 91-80-8394982 Fax: 91-80-8396450
WIPRO GE MEDICAL SYSTEMS LIMITED
4, Kadugodi Industrial Area
Sadaramangala, Bangalore - 560 067
Tel: 91-80-8452923 Fax: 91-80-8452924
Visit us at
www.wiprocorporate.com
www.wipro.com
www.wipro.co.in
WIPRO LIMITED
DIRECTORS' REPORT
Dear Shareholders,
The Directors present the Annual Report together with the audited Balance Sheet
and Profit and Loss Account of Wipro Limited for the year ended March 31, 2002.
AMALGAMATION/TRANSFER OF BUSINESS
The Scheme of Amalgamation of Wipro Net Limited with your Company has been
approved by the Hon'ble High Court of Karnataka on April 5, 2002. The erstwhile
Wipro Net Limited stands merged with your Company with retroactive effect from
April 1, 2001.
The shareholders of the Company had approved Ordinary Resolutions for transfer
of the Company's Fluid Power Business to Netkracker Limited with effect from the
opening hours of March 1, 2002 under Section 293(1)(a) of the Companies Act,
1956, by means of a Postal Ballot in accordance with the provisions contained in
Section 192A of the Companies Act, 1956 read with the Companies (Passing of the
Resolution by Postal Ballot) Rules, 2001. The name of Netkracker Limited has
since been changed to Wipro Fluid Power Limited.
The Annual Report of Wipro Limited for the year 2001-2002 has been prepared
after giving effect to the amalgamation of Wipro Net Limited as well as the
transfer of its Fluid Power Business.
FINANCIAL RESULTS
(Rs. in Millions)
--------------------
2002 2001
------ ------
SALES AND OTHER INCOME 34,677 30,863
PROFIT BEFORE TAX 9,501 7,656
Provision for tax 840 992
PROFIT AFTER TAX BEFORE EXTRAORDINARY ITEMS 8,661 6,664
Extraordinary gains -- 16
PROFIT FOR THE YEAR 8,661 6,680
Appropriations:
Interim dividend on preference shares -- 18
Proposed dividend on equity shares 232 116
Corporate tax on distributed dividend -- 14
Transfer to Capital Redemption Reserve -- 250
Transfer to General Reserve 8,428 6,282
|
Sales of the Company for the year ended March 31, 2002 were Rs. 34,677 mns up by
12% and Profit after Tax before extraordinary items was Rs. 8,661 mns up by 30%
over the previous year. Over the last 10 years, the sales have grown at an
average annual rate of 22% and Profit after Tax at 53%. The Company's earnings
in foreign exchange of Rs. 23,495 million has recorded a growth of 30% over the
previous year.
DIVIDEND
The Directors recommend a dividend of Re. 1/- per equity share to be
appropriated from the profits of the year 2001-2002 subject to the approval by
the shareholders at the ensuing Annual General Meeting. After the approval of
the shareholders at the ensuing Annual General Meeting, the dividend will be
paid in line with the applicable regulations.
DIRECTORS
Mr. Hamir K. Vissanji, retired as a Director of the Company with effect from
January 15, 2002. During the year, the nomination of Dr. Nachiket Mor, Nominee
Director on behalf of a Financial Institution was withdrawn by the Financial
Institution as per the Reserve Bank of India guidelines, consequent to his
appointment as a Director of ICICI Bank Limited. The Directors place on record
their appreciation of the invaluable contributions made by Mr. Hamir K. Vissanji
and Dr. Nachiket Mor during their tenure as Directors on the Board of Directors
of the Company.
Dr. Ashok Ganguly, Mr. B.C. Prabhakar and Mr. N. Vaghul, retire by rotation and
being eligible offer themselves for re-appointment.
Prof. Eisuke Sakakibara and Mr. P.M. Sinha were appointed as Additional
Directors of the Company with effect from January 1, 2002 till the conclusion of
the ensuing Annual General Meeting.
Mr. D.A. Prasanna was appointed as Additional Director of the Company with
effect from April 15, 2002 till the conclusion of the ensuing Annual General
Meeting. Mr. D.A. Prasanna was also appointed as a whole-time Director of the
Company designated as Vice Chairman and Chief Executive Officer of the Company's
Health Care & Life Science business with effect from April 19, 2002.
33
WIPRO LIMITED
Shareholders' consent is requested for re-appointment of Prof. Eisuke
Sakakibara, Mr. P.M. Sinha and Mr. D.A. Prasanna as Directors of the Company as
per the resolutions contained in the Notice convening the Annual General
Meeting.
FIXED DEPOSITS
Fixed deposits from the public as at March 31, 2002 were Rs. 0.84 mns and the
unclaimed deposits as on that date were Rs. 0.84 mns.
SUBSIDIARY COMPANIES
As required under Section 212 of the Companies Act, 1956, the Annual Reports
together with Balance Sheet and Profit and Loss Account for the year ended
2001-2002, of the subsidiary companies, Wipro Trademarks Holding Limited, Wipro
Prosper Limited, Wipro Fluid Power Limited, Wipro Welfare Limited, Wipro Inc.,
Enthink Inc., and Wipro Japan KK are attached.
AUDITORS
The auditors M/s. N.M. Raiji & Co., retire at the conclusion of ensuing Annual
General Meeting. The Audit Committee of the Board recommends the re-appointment
of M/s. N.M. Raiji & Co. as Auditors for a further period of one year.
PERSONNEL
Information as per Section 217(2A) of the Companies Act, 1956, read with the
Companies (Particulars of Employees) Rules, 1975 is given in the Annexure
forming part of this report.
WIPRO EMPLOYEE STOCK OPTION PLAN (WESOP)
The Wipro Employee Stock Option Plan 1999 and 2000 were successful in enhancing
employee commitment. The details of options granted under WESOP 1999 and 2000
are given below:
SL. NO. DESCRIPTION WESOP 1999 WESOP 2000
------- --------------- ---------- -----------
a. Options granted 5,230,150 9,266,144
b. Pricing formula Fair Market Value i.e., the market Fair Market Value i.e., the
price as defined by Securities and market price as defined by
Exchange Board of India from Securities and Exchange Board
time to time. of India from time to time.
c. Options vested 816,571 411,414
d. Options exercised 146,839 --
e. Total number of shares 146,839 --
arising as a result of
exercise of option
f. Options lapsed* -- --
g. Variation of terms of options NIL NIL
h. Money realized by exercise Rs. 160,120,926 --
of options
i. Total number of options in force 3,885,958 8,472,514
Employee wise details of options
granted to:
(i) Senior Management No. of Options
Vivek Paul 55,000 --
P.S. Pai 25,000 --
Dileep K. Ranjekar 16,000 --
Suresh C. Senapaty 16,000 12,500
Suresh Vaswani 13,500 12,500
M.S. Rao 4,000 --
Vineet Agrawal 9,000 12,500
(ii) Employees holding 5% or more NIL NIL
of the total number of options
granted during the year
|
34
WIPRO LIMITED
SL. NO. DESCRIPTION WESOP 1999 WESOP 2000
------- --------------- ---------- -----------
(iii) Identified employees who were NIL NIL
granted option, during any one
year, equal to or exceeding 1%
of the issued capital (excluding
outstanding warrants and
conversions) of the Company
at the time of grant
AS OF MARCH 31, 2002
j. Diluted Earnings Per Share pursuant
to issue of shares on exercise of
option calculated in accordance with
International Accounting
Standard (IAS) 33. 37.41
|
* As per the Plan, options lapse only on termination of the Plan. If an Option
expires or becomes unexercisable without having been exercised in full, the
unpurchased shares, which were subject thereto, shall become available for
future grant or sale under the Plan.
ADS 2000 STOCK OPTION PLAN
Under the ADS 2000 Stock Option Plan, 677,450 stock options representing 677,450
American Depository Shares each representing one equity share of Rs. 2/- each
were granted to the employees. The details of options granted under the ADS 2000
Stock Option Plan to Senior Management are given below:
OPTIONS GRANTED TO SENIOR MANAGEMENT
NAME OPTIONS
---- -------
Vivek Paul 160,000
Suresh C. Senapaty 3,000
|
RESEARCH AND DEVELOPMENT
Our R&D efforts continued in the area of Routing and QoS protocols for the Edge
Routers. (Mpls, Ospf, Bgp4, Rsvp-TE, Cops and Sip). We have set up a lab for the
testing and integration of the above protocols, their inter-working and a lab
for Enterprise application testing with Rational under Interop.
We also built capabilities in 3G Core Networks (UMTS), 3G Testing, NGN
Applications, Management of Convergent Neworks, Metro Optical Networks and
Gigabit Ethernet by Standards body participation, reference solution building
and creating internal technology forums.
We have also envisioned and conceptualized a workflow solution "Flow-briX" to
address the comprehensive need for Publishing and Media segment.
The total expenditure on R&D during the year was Rs. 150 million including
capital expenditure of Rs. 23 million.
FOREIGN EXCHANGE EARNINGS AND OUTGOINGS
The foreign exchange earnings of the Company during the year were Rs. 23,495
million while the outgoings were Rs. 11,963 million (including materials
imported).
REPORT ON CORPORATE GOVERNANCE
A detailed report on Corporate Governance has been included separately in the
Annual Report.
DIRECTORS RESPONSIBILITY STATEMENT
As required under Section 217(2AA) of the Companies Act, 1956, it is hereby
stated that:
a) in the preparation of the annual accounts, the applicable accounting
standards had been followed along with proper explanation relating to
material departures;
b) the Directors had 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 profit or loss of the
Company for that period;
35
WIPRO LIMITED
c) the Directors had taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of this Act
for safeguarding the assets of the Company and for preventing and detecting
fraud and other irregularities; and
d) the Directors had prepared the annual accounts on a going concern basis.
ACKNOWLEDGEMENTS
The Directors thank the Company's customers, suppliers, bankers, financial
institutions, Central and State Governments and shareholders for their
consistent support to the Company. The Directors also sincerely acknowledge the
significant contributions made by all the employees for their dedicated services
to the Company.
ON BEHALF OF THE BOARD
AZIM H. PREMJI
Bangalore, April 19, 2002 Chairman
36
WIPRO LIMITED
REPORT ON CORPORATE GOVERNANCE
INTRODUCTION
"Good Corporate Governance" is governance with the highest standards of
professionalism, integrity, accountability, fairness, transparency, social
responsiveness and business ethics. Good Corporate Governance, is a critical
doctrine to the global economic system, enabling the business to not only
effectively and efficiently achieve its corporate objectives but also provides
it the structure and methodology to sustain its survival in a globally
competitive environment. Your Company has always been managed with the
principles of "Good Corporate Governance".
CORPORATE GOVERNANCE AT WIPRO
In 1999-2000, your Company initiated the process of making substantial
disclosures on the Company and its Board of Directors in the Annual Report and
strengthened it further during 2000-2001. While continuing to make similar
disclosures, we have benchmarked your Company's corporate practices with the
guidelines recommended by the SEBI Committee on Corporate Governance. We are
glad to inform you that the Company adheres to all the mandatory recommendations
made by the SEBI Committee.
I BOARD OF DIRECTORS
A THE BOARD OF DIRECTORS OF THE COMPANY SHALL HAVE AN OPTIMUM COMBINATION OF
EXECUTIVE AND NON-EXECUTIVE DIRECTORS WITH NOT LESS THAN FIFTY PER CENT OF
THE BOARD OF DIRECTORS COMPRISING OF NON-EXECUTIVE DIRECTORS. IN CASE THE
COMPANY HAS AN EXECUTIVE CHAIRMAN, AT LEAST HALF OF THE BOARD SHOULD
COMPRISE OF INDEPENDENT DIRECTORS.
The details of the Directors on the Board of your Company for the year
2001-2002 are given below:
NUMBER OF
MEMBERSHIP IN
DATE OF BOARDS OF OTHER
NAME CATEGORY DESIGNATION APPOINTMENT PUBLIC COMPANIES
---- -------- ----------- ----------- ----------------
Azim H. Premji Promoter Chairman & 01.09.1968 11
Director Managing Director
P.S. Pai Executive Director Vice Chairman 01.12.1998 Nil
Vivek Paul Executive Director Vice Chairman 26.07.1999 1
Hamir K. Vissanji* Non-Executive Director 21.09.1956 4
Director
N. Vaghul Non-Executive Director 09.06.1997 12
Director
B.C. Prabhakar Non-Executive Director 20.02.1997 Nil
Director
Jagdish N. Sheth Non-Executive Director 01.01.1999 2
Director
Ashok Ganguly Non-Executive Director 01.01.1999 7
Director
Eisuke Sakakibara** Non-Executive Additional Director 01.01.2002 Nil
Director
P.M. Sinha** Non-Executive Additional Director 01.01.2002 4
Director
Nachiket Mor*** Nominee Director 27.11.1996 3
Director
|
* resigned from the Board effective January 15, 2002.
** appointed as Additional Directors with effect from January 1, 2002.
*** resigned from the Board effective July 19, 2001.
37
WIPRO LIMITED
B ALL PECUNIARY RELATIONSHIP OR TRANSACTIONS OF THE NON-EXECUTIVE DIRECTORS
VIS A VIS THE COMPANY SHOULD BE DISCLOSED IN THE ANNUAL REPORT.
None of the non-executive directors have any pecuniary relationship or
transaction with the Company.
II AUDIT COMMITTEE
A QUALIFIED AND INDEPENDENT AUDIT COMMITTEE SHALL BE SET UP HAVING A MINIMUM
OF THREE INDEPENDENT NON-EXECUTIVE DIRECTORS AS MEMBERS. THE ROLE OF THE
AUDIT COMMITTEE SHALL INCLUDE THE FOLLOWING:
- OVERSIGHT OF THE COMPANY'S FINANCIAL REPORTING PROCESS AND THE
DISCLOSURE OF ITS FINANCIAL INFORMATION TO ENSURE THAT THE FINANCIAL
STATEMENT IS CORRECT, SUFFICIENT AND CREDIBLE
- RECOMMENDING THE APPOINTMENT AND REMOVAL OF EXTERNAL AUDITOR, FIXATION
OF AUDIT FEE AND ALSO APPROVAL FOR REPAYMENT FOR ANY OTHER SERVICES
- REVIEWING WITH MANAGEMENT THE ANNUAL FINANCIAL STATEMENTS BEFORE
SUBMISSION TO THE BOARD
The Audit Committee of the Board of Directors reviews, acts and reports to
the Board of Directors with respect to various auditing and accounting
matters, including the recommendation for appointment of our independent
auditors, the scope of the annual audits, fees to be paid to the independent
auditors, the performance of our independent auditors and our accounting
practices.
The Audit Committee also reviews audit observations of Wipro's Internal
Audit department pertaining to various Business Units (BU) and discusses the
same with BU Management. Wipro's Internal Audit is an ISO 9001:2000
certified function.
The Audit Committee comprises of the following three non-executive
directors. The Audit Committee reviews the audited quarterly and yearly
financial results with the Management before being submitted to the Board
for its consideration and approval.
Mr. N. Vaghul - Chairman
Messrs B.C. Prabhakar and P.M. Sinha - Members
NUMBER OF MEETINGS HELD NUMBER OF MEETINGS ATTENDED
NAME DURING THE YEAR DURING THE YEAR
---- ----------------------- ---------------------------
N. Vaghul 4 4
Nachiket Mor* 4 1
Hamir K. Vissanji** 4 2
B.C. Prabhakar*** 4 3
P.M. Sinha**** 4 1
|
* resigned with effect from July 19, 2001 and attended the meeting held up
to that date.
** resigned with effect from January 15, 2002.
*** co-opted with effect from July 19, 2001 and attended all the meetings
held after that date.
**** co-opted with effect from January 1, 2002 and attended all the meetings
held after that date.
III REMUNERATION OF DIRECTORS
A. THE REMUNERATION OF THE NON-EXECUTIVE DIRECTORS SHALL BE DECIDED BY THE
BOARD OF DIRECTORS.
Non-executive directors were paid professional fees for the services
rendered by them to the Company during the year 2001-02 which was approved
by the Board of Directors of the Company at their meetings held on April 19,
2001 and September 3, 2001.
38
WIPRO LIMITED
B. APPROPRIATE DISCLOSURES ON THE REMUNERATION OF DIRECTORS HAVE TO BE MADE IN
THE SECTION ON THE CORPORATE GOVERNANCE OF THE ANNUAL REPORT;
The details of actual payments made during the financial year 2001-02 to the
directors of the Company are given below:
a) REMUNERATION PAID TO PROMOTER AND EXECUTIVE DIRECTORS
(Rs. in 000s)
------------------------------------------------------------------------------------------------------------
OTHER NO. OF NO. OF ADS
BASIC COMMISSION/ ANNUAL DEFERRED OPTIONS OPTIONS EXPIRATION
NAME SALARY INCENTIVES ALLOWANCE COMPENSATION* BENEFITS GRANTED GRANTED DATE
---- ------- ----------- --------- -------------- -------- -------- ---------- ---------
Azim H. Premji 2,100 9,717 -- 2,172 2,883 -- -- --
Vivek Paul ** 15,463 29,152 -- 1,533 2,319 55,000 160,000 Feb. 2009
P.S. Pai 2,280 9,717 1,500 1,509 616 25,000 -- June 2006
|
* In addition, the above directors were entitled to rent free furnished
residential accommodation or house rent allowance, leave travel concession,
reimbursement of medical expenses, personal accident insurance, fully
maintained Company car with driver, interest subsidy on housing loan,
gardener, watchman, electricity, servant and gratuity as per Company
policy. Deferred benefits in the case of Mr. Vivek Paul was Company's
contribution to Deferred Compensation Plan. In the case of others, it was
Company's contribution to Pension and Provident Fund.
** Figures mentioned are rupee equivalent - as amounts were paid in US
Dollars.
b) PROFESSIONAL FEES PAID TO NON-EXECUTIVE DIRECTORS
Six of our non-executive directors were paid professional fees as detailed
hereunder:
Professional fees paid for the full year (2001-02)
(Rs. in 000s)
ASHOK GANGULY B.C. PRABHAKAR N. VAGHUL DR. JAGDISH N. SHETH *
------------- -------------- --------- ----------------------
Professional fees 800 400 800 1,221
|
* Figures mentioned above are Rupee equivalent - as amounts were paid in US
Dollars.
Professional fees paid for part of the year (2001-02) **
PROF. EISUKE SAKAKIBARA *** P.M. SINHA
---------------------------- ----------
Professional fees 486 250
|
** Professional fees paid only with effect from date of appointment i.e.
January 1, 2002.
*** Figures mentioned above are Rupee equivalent - as amounts were paid in
Yen.
IV COMPENSATION AND BENEFITS COMMITTEE
The Compensation and Benefit Committee of the Board of Directors, which was
formed in 1987, determines the salaries, benefits and stock option grants
for our employees, directors and other individuals compensated by our
Company. The Compensation Committee also administers our compensation
plans. The Compensation & Benefits Committee comprises of the following
three non-executive directors:
Mr. N. Vaghul - Chairman
Messrs B.C. Prabhakar and P.M. Sinha - Members
39
WIPRO LIMITED
NUMBER OF MEETINGS HELD NUMBER OF MEETINGS ATTENDED
NAME DURING THE YEAR DURING THE YEAR
---- ----------------------- ---------------------------
N. Vaghul 4 4
Hamir K. Vissanji * 4 2
B.C. Prabhakar 4 4
P.M. Sinha** 4 1
|
* resigned with effect from January 15, 2002.
** co-opted with effect from January 1, 2002 and attended all the meetings
held after that date.
V BOARD PROCEDURE
A. THE BOARD OF DIRECTORS OF A COMPANY SHALL MEET AT LEAST FOUR TIMES A YEAR,
WITH A MAXIMUM TIME GAP OF FOUR MONTHS BETWEEN ANY TWO MEETINGS.
During the last financial year, our Board met at four meetings held on
April 19, 2001, July 19, 2001, October 17, 2001 and January 17, 2002. All
the Board meetings were held at our Registered Office at Bangalore.
Agenda papers along with explanatory statements were circulated to the
Directors in advance for each of these meetings. All relevant information,
as recommended by the SEBI Committee on Corporate Governance as well as
items required under Clause 49 of the Listing Agreement were placed before
the Board from time to time. The details of Board meetings held during
2001-02 and attendance record of each of the Directors are given below:
NAME OF THE DIRECTOR NUMBER OF MEETINGS HELD NUMBER OF MEETINGS ATTENDED
-------------------- ----------------------- ---------------------------
Azim H. Premji 4 4
P.S. Pai 4 4
Vivek Paul 4 4
Hamir K. Vissanji * 4 2
N. Vaghul 4 4
B.C. Prabhakar 4 4
Jagdish N. Sheth 4 3
Ashok Ganguly 4 4
Eisuke Sakakibara ** 4 1
P.M. Sinha** 4 1
Nachiket Mor*** 4 1
|
* resigned with effect from January 15, 2002.
** appointed with effect from January 1, 2002 and attended all meetings held
after that date. (***) resigned with effect from July 19, 2001 and attended
all meetings up to that date.
B. COMPANY FURTHER AGREES THAT A DIRECTOR SHALL NOT BE A MEMBER IN MORE THAN
10 COMMITTEES OR ACT AS CHAIRMAN OF MORE THAN FIVE COMMITTEES ACROSS ALL
COMPANIES IN WHICH HE IS A DIRECTOR.
None of the Directors of our Company were members in more than 10
committees nor acted as chairman of more than five committees across all
companies in which they were directors. Details of Board memberships
positions occupied by the Directors, across all companies, have been given
at the beginning of the section.
40
WIPRO LIMITED
VI MANAGEMENT
A MANAGEMENT DISCUSSION AND ANALYSIS REPORT SHALL FORM PART OF THE ANNUAL
REPORT TO THE SHAREHOLDERS
The Company has provided a detailed Management Discussion and Analysis in
its Annual Report for the year 2001-02 in pages 82 through 89.
B DISCLOSURES MUST BE MADE BY THE MANAGEMENT TO THE BOARD RELATING TO ALL
MATERIAL FINANCIAL AND COMMERCIAL TRANSACTIONS, WHERE THEY HAVE PERSONAL
INTEREST, THAT MAY HAVE A POTENTIAL CONFLICT WITH THE INTEREST OF THE
COMPANY AT LARGE.
During 2001-02, 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 interests of the Company.
VII SHAREHOLDERS
A IN THE CASE OF APPOINTMENT OF A NEW DIRECTOR OR RE-APPOINTMENT OF A
DIRECTOR, THE SHAREHOLDERS MUST BE PROVIDED WITH THE FOLLOWING INFORMATION:
- A BRIEF RESUME OF THE DIRECTOR
- NATURE OF HIS EXPERTISE IN SPECIFIC FUNCTIONAL AREAS
- NAMES OF COMPANIES IN WHICH THE PERSON ALSO HOLDS THE DIRECTORSHIP AND
THE MEMBERSHIP OF COMMITTEES OF THE BOARD
The notice for the Annual General Meeting held on July 19, 2001 complied
with this requirement.
B ALL INFORMATION LIKE QUARTERLY RESULT, PRESENTATION MADE BY COMPANIES TO
ANALYST SHALL BE PUT ON COMPANY'S WEBSITE
Our Quarterly and Annual results as well as copies of the Press Releases
and Company Presentations were displayed on the following web-sites i.e.
www.wiproindia.com and www.wipro.com
Apart from the above, we also regularly provided the information to the
stock exchanges as per the requirements of the Listing Agreements and
updated our websites periodically to include information on new
developments and business opportunities of the Company.
C A BOARD COMMITTEE UNDER THE CHAIRMANSHIP OF A NON-EXECUTIVE DIRECTOR SHALL
BE FORMED TO SPECIFICALLY LOOK INTO THE REDRESSING OF SHAREHOLDERS' AND
INVESTORS' COMPLAINTS LIKE TRANSFER OF SHARES, NON RECEIPT OF BALANCE
SHEET, NON RECEIPT OF DECLARED DIVIDENDS, ETC. THIS COMMITTEE SHALL BE
DESIGNATED AS 'SHAREHOLDERS/INVESTORS GRIEVANCE COMMITTEE'
ADMINISTRATIVE AND SHAREHOLDERS'/INVESTORS' GRIEVANCES COMMITTEE
The Administrative and Shareholders/Investors Grievance Committee
administered the following:
a. redress shareholder and investor's compliants etc. relating to transfer
of shares, non receipt of balance sheet, non receipt of declared
dividends
b. consolidate and sub-divide share certificates
c. approve transmission and issue of duplicate/fresh share certificate
d. open and close Bank accounts
e. grant and revoke general, specific and banking powers of attorney
The composition of the Administrative and Shareholders/Investors Grievances
Committee is as follows:
Mr. B.C. Prabhakar - Chairman
Mr. Azim H. Premji - Member
D THE BOARD OF THE COMPANY SHALL DELEGATE THE POWER OF SHARE TRANSFER TO AN
OFFICER OR A COMMITTEE OR TO THE REGISTRAR AND SHARE TRANSFER AGENTS SO AS
TO EXPEDITE THE PROCESS OF SHARE TRANSFERS.
The Board has delegated the power of share transfer to Registrar and Share
Transfer Agents who processes share transfers in less than 7 days from the
date of lodgement in the case of shares held in physical form.
41
WIPRO LIMITED
VIII COMPLIANCE
A CERTIFICATION SHALL BE OBTAINED FROM THE AUDITORS OF THE COMPANY
REGARDING COMPLIANCE OF CONDITIONS OF CORPORATE GOVERNANCE AS STIPULATED
AND THE SAME SENT TO THE SHAREHOLDERS ALONG WITH THE DIRECTORS' REPORT
WHICH IS SENT ANNUALLY TO ALL THE SHAREHOLDERS OF THE COMPANY.
The certificate obtained from our statutory Auditors M/s. N.M. Raiji & Co.,
dated April 19, 2002 appears at page 50 of the Annual Report.
IX COMPLIANCE OFFICER AND ADDRESS FOR CORRESPONDENCE
The name and designation of the Compliance Officer of the Company is Mr.
Suresh C. Senapaty, Corporate Executive Vice President - Finance.
In addition, shareholders/ADR holders can contact Mr. J. Shankar, Corporate
Treasurer in India and Mr. R. Sridhar in USA on financial matters and Mr.
Satish Menon, Corporate Vice President-Legal & Company Secretary on all
legal and secretarial matters.
Their contact details are given below:
NAME TELEPHONE NUMBER EMAIL ID FAX NO.
---- ---------------- -------- -------
S.C. Senapaty 91-080-8440011-Extn 113
91-080-8440055 (Direct) suresh.senapaty@wipro.com 91-080-8440104
J. Shankar 91-080-8440011-Extn 170
91-080-8440079 (Direct) shankar.jaganathan@wipro.com 91-080-8440051
Satish Menon 91-080-8440011-Extn 180
91-080-8440078 (Direct) satish.menon@wipro.com 91-080-8440051
R. Sridhar 001-408 557 4402 sridhar.ramabsubbu@wipro.com 001 408 615 7178
|
X GENERAL BODY MEETINGS
1. DETAILS ON ANNUAL GENERAL MEETINGS (AGM):
1.1 Location and time, where last three AGMs held:
YEAR LOCATION DATE TIME
---- -------- ---- ----
1998-99 Taj Residency, Bangalore July 29, 1999 4.30 pm
1999-00 Taj Residency, Bangalore July 27, 2000 4.30 pm
2000-01 Doddakannelli, July 19, 2001 4.30 pm
Sarjapur Road, Bangalore
|
1.2 Whether special resolutions were put through postal ballot last year?
No
Generally, all the resolutions in the AGM are passed through show of hands.
Attendance at AGMs and EGMs during the last financial year:
July 19, 2001 At the Annual General Meeting, all the Directors were
present.
July 19, 2001 At the Extra-Ordinary General Meeting, all the
Directors were present.
|
42
WIPRO LIMITED
2. DETAILS ON EXTRAORDINARY GENERAL MEETINGS (EGM):
2.1 Location and time, where last three EGMs held:
YEAR LOCATION DATE TIME
---- -------- ---- ----
1998-99 Ganesha Complex, December 13, 1999 11.00 am
Madiwala, Bangalore
1999-00 Taj Residency, Bangalore April 26, 2000 4.30 pm
2000-01 Doddakannelli, July 19, 2001 5.30 pm
Sarjapur Road, Bangalore
|
3. DETAILS ON RESOLUTIONS PASSED THROUGH POSTAL BALLOT:
Pursuant to the provisions of Section 192A of the Companies Act, 1956 read
with the Companies (Passing of the Resolution by Postal Ballot) Rules,
2001, consent of the shareholders was obtained by way of Ordinary
Resolutions passed under Section 293(1)(a) of the Companies Act, 1956, for
transfer of one of the Company's undertaking engaged in the business of
Fluid Power to Netkracker Limited with effect from opening hours of March
1, 2002. The name of Netkracker Limited has since been changed to Wipro
Fluid Power Limited.
The Scrutinizer appointed for the purpose of conducting the Postal Ballot
exercise was Mr. T.S. Suresh, Partner, King & Partridge, Advocates &
Solicitors.
The Company complied with all the procedural formalities for the conduct of
Postal Ballot.
XI GENERAL SHAREHOLDERS INFORMATION
The following information would be useful to our shareholders:
Sl. No. Information
1. Annual General Meeting
- Date and Time July 18, 2002 at 4.30 pm
- Venue Wipro Limited
Doddakannelli
Sarjapur Road
Bangalore 560 035
2. Financial Calendar (Tentative schedule)
- Financial reporting for the quarter ended June 30, 2002 Second fortnight of July 2002
- Financial reporting for the half year ending
September 30, 2002 Second fortnight of October 2002
- Financial reporting for the half year ending
December 31, 2002 Second fortnight of January 2003
- Financial reporting for the year ending
March 31, 2003 Second fortnight of April 2003
- Annual General Meeting for the year ending
March 31, 2003 Second fortnight of July 2003
3. Book Closure Date
(Both days inclusive) July 3-July 18, 2002
4. Dividend Payment Date Dividend as recommended by the Board of
Directors, if declared at the meeting, will
be payable on or after July 18, 2002, subject
to deduction of tax, if any.
|
43
WIPRO LIMITED
5. Listing on Stock Exchanges at:
EQUITY SHARES
Bangalore Stock Exchange Limited Stock Exchange, Ahmedabad
No. 51, First Cross, J.C. Road, Bangalore 560 027 Opp. Sahajanand College
Kamadhenu Complex
The Stock Exchange, Mumbai Panjara Pole
Phiroze Jeejeebhoy Towers, Dalal Street Ahmedabad 380 015
Mumbai 400 023
The Kolkatta Stock Exchange Association Ltd.
National Stock Exchange of India Ltd. 7, Lyons Range
Exchange Plaza, 5th Floor, Plot No. C/1, G Block Kolkatta 700 001
Bandra East, Mumbai 400 051
Cochin Stock Exchange Ltd.
The Delhi Stock Exchange Association Ltd. 36/165, 4th Floor, MES Building
3/1, Asaf Ali Road, DSE House Judges Avenue, Kaloor
New Delhi 110 002 Cochin 682 017
AMERICAN DEPOSITORY RECEIPTS (ADRS)
New York Stock Exchange
60 Wall Street
New York
|
Listing fees for the year 2001-02 and 2002-03 have been paid to the Indian
Stock Exchanges Listing fees to New York Stock Exchange for listing of ADRs
has been paid for the calendar year 2002.
6. Stock Code:
The Stock Exchange, Mumbai Wipro
National Stock Exchange of India Ltd. Wipro
New York Stock Exchange (ADRs) WIT
|
7. Stock Market Data:
PRICE IN NSE S&P CNX NIFTY INDEX
DURING EACH MONTH DURING EACH MONTH WIPRO PRICE NIFTY INDEX
----------------- ------------------- MOVEMENT % MOVEMENT %
HIGH LOW HIGH LOW ---------------- ---------------
MONTH Rs. Rs. Rs. Rs. HIGH LOW HIGH LOW
----- ----- ----- ------ ------ ---- --- ---- ---
April '01 1,588 759 1,172 1,000
May '01 1,868 1,451 1,226 1,096 18 91 5 10
June '01 1,774 1,221 1,176 1,060 -5 -16 -4 -3
July '01 1,459 1,367 1,127 1,047 -18 12 -4 -1
Aug '01 1,565 1,362 1,084 1,052 7 0 -4 0
Sept '01 1,525 802 1,059 849 -3 -41 -2 -19
Oct '01 1,199 812 1,000 884 -21 1 -6 4
Nov '01 1,564 1,010 1,098 974 30 24 10 10
Dec '01 1,974 1,421 1,133 1,010 26 41 3 4
Jan '02 1,875 1,461 1,122 1,052 -5 3 -1 4
Feb '02 1,785 1,562 1,206 1,069 -5 7 8 2
Mar '02 1,894 1,550 1,201 1,118 6 -1 0 5
|
44
WIPRO LIMITED
RELATIVE PERFORMANCE OF WIPRO SHARE PRICE VS. S&P CNX NIFTY INDEX
[PERFORMANCE GRAPH]
8. Registrar & Share Transfer Agents : Karvy Consultants Limited
51/2, Vanivilas Road
T.K.N. Complex
Opp. National College
Basavangudi
Bangalore
Tel: 080-6613400/6621192/93
Fax: 080-6621169
9. Share Transfer System : The turnaround time for completion of
transfer of shares in physical form
is generally less than 7 days from
the date of receipt, if the
documents are clear in all respects.
We have internally fixed turnaround
time for closing the queries/
complaints received from the
shareholders.
|
45
WIPRO LIMITED
10. Details of queries/complaints received and resolved during the year
2001-2002.
NAME OF QUERIES/COMPLAINTS RECEIVED RESOLVED UNRESOLVED
-------------------------- -------- -------- ----------
No. of requests for change of address 122 122 --
No. of requests for transmission 9 9 --
Non receipt of share certificates/bonus shares 13 13 --
Non receipt of Dividend/Revalidation of
Dividend Warrants 131 131 --
Letters from SEBI & Stock Exchanges 3 3 --
Issue of duplicate share certificates 6 5 1*
Splitting of shares 17 17 --
|
* Pending completion of formalities by the shareholder. Duplicate share
certificate would be issued thereafter.
11. Distribution of Shareholding as of March 31, 2002:
NO. OF
CATEGORY SHAREHOLDERS PERCENTAGE NO. OF SHARES PERCENTAGE
-------- ------------ ---------- ------------- ----------
1-500 54,729 96.26 1,514,402 0.65
501-1000 785 1.38 620,322 0.27
1001-2000 475 0.84 707,370 0.30
2001-3000 196 0.34 513,792 0.22
3001-4000 88 0.15 314,386 0.14
4001-5000 84 0.11 297,703 0.13
5001-10000 174 0.31 1,271,609 0.55
Above 10001 348 0.61 227,226,105 97.74
TOTAL 56,879 100.00 232,465,689 100.00
|
46
WIPRO LIMITED
12. Categories of Shareholding as on March 31, 2002:
NO. OF % OF
Sl. NO. CATEGORY SHARES HELD SHAREHOLDING
------- -------- ------------- ------------
A PROMOTERS HOLDING
1. Promoters
- Promoter in his capacity as partner of Partnership firms 162,586,800 69.94
- Promoter in his capacity as director of Private Limited
Companies 22,746,300 9.78
- Promoter in his individual capacity 9,340,510 4.02
- Promoter Directors' Relatives 453,500 0.20
B NON PROMOTER HOLDING
INSTITUTIONAL INVESTORS
Mutual Funds and UTI 1,713,774 0.74
Banks, Financial Institutions, Insurance Companies
(Central/State Government Institutions/Non Government
Institutions) 1,210,715 0.52
FIIs* 6,806,985 2.93
C OTHERS
Private Corporate Bodies 4,007,959 1.72
Indian Public 16,549,183 7.11
NRIs/OCBs 5,083,140 2.19
Directors and Relatives 617,875 0.27
Trusts 1,348,948 0.58
TOTAL 232,465,689 100.00
|
* includes 2,587,080 shares traded as ADRs.
47
WIPRO LIMITED
13. Dematerialisation of Shares and Liquidity : Over 96% of our outstanding
equity shares have been
dematerialized upto March 31,
2002.
14. Outstanding convertible instruments : As of March 31, 2002, there are
no outstanding convertible
instruments.
15. Outstanding ADRs as of March 31, 2002 : Outstanding ADRs as of March
31,2002 are 2,587,080.
Each ADR represents one
underlying Equity Share.
16. Address of our depository for ADS : Morgan Guaranty Trust Company
of New York
60, Wall Street
New York, NY 10260
Tel: 001-(212) 648-3208
Fax: 001-(212) 648-5576
17. Name and address of the custodian : ICICI Limited
for ADS in India ICICI Towers
Bandra Kurla Complex
Bandra East
Mumbai 400 051.
Tel: 91-22-6531414
Fax: 91-22-6531165
|
18. Plant locations :
a. Our Software Development Facilities are located at:
Sl. NO. ADDRESS CITY
------- ------- ----
1 S B Towers, 88, M G Road Bangalore 560 001
2 Information Technology Park, Whitefield Bangalore 560 066
3 8, 7th Main Block, Koramangala Bangalore 560 095
4 K-312, Koramangala Industrial Layout, V Block, Koramangala Bangalore 560 095
5 271-271A, Sri Ganesh Complex, Hosur Main Road, Madiwala I Bangalore 560 068
6 26, Sri Chamundi Complex, Madiwala II, Bommanahalli,
Hosur Main Road Bangalore 560 068
7 Madiwala Village, Bangalore-Hosur Road, Madiwala III Bangalore 560 068
8 111, Mount Road, Guindy Chennai 600 032
9 138, Shollinganallur, Old Mahabalipuram Road Chennai 600 019
10 A314, Block III, KSSIDC Multistoried Complex,
Keonics Electronic City Bangalore 561 229
11 1-8-448, Lakshmi Buildings, S P Road, Begumpet Secunderabad 500 016
12 Survey Nos. 64, Serilingampali Mandal, Madhapur Hyderabad 500 033
13 Sharada Arcade, 685/2B & 685/2C, Satara Road Pune 411 037
14 Plot No. 2, MIDC, Infotech Park, Hingewadi Pune 411 027
15 3rd Floor, International Technology Centre,
Belapur, Navi Mumbai Mumbai 400 614
16 Plot No. 480-481, Section 20, Udyog Vihar
Phase II Gurgaon 122 015
|
48
WIPRO LIMITED
b. Our manufacturing facilities are located at:
Sl. NO. ADDRESS CITY
------- ------- ----
1 P O Box No.12, Dist. Jalgaon Amalner 425 401
2 L-8, MIDC, Waluj Aurangabad 431 136
3 105, Hootagalli Industrial Area Mysore 571 186
4 A-28, Thattanchavady Industrial Estate Pondicherry 605 102
5 10, Thiruvandar Koil Village, Thirubhuvanai, Villainur Taluk Pondicherry 605 102
6 120/1, Vellancheri Guduvanchery 603 202
7 Plot No. 4, Anthrasanahalli Industrial Area Tumkur 572 106
|
19 Members can contact us at our registered office:
Wipro Limited
Doddakannelli
Sarjapur Road
Bangalore 560 035.
Telephone: (91-80) 8440011. Fax: (91-80) 8440051.
49
WIPRO LIMITED
AUDITOR'S CERTIFICATE ON CORPORATE GOVERNANCE
TO THE MEMBERS OF WIPRO LIMITED
We have examined the compliance of conditions of Corporate Governance by Wipro
Limited (the Company) for the year ended on March 31, 2002, as stipulated in
Clause 49 of the Listing Agreements of the Company with the stock exchanges.
The compliance of conditions of Corporate Governance is the responsibility of
the Management. Our examination was limited to procedures and implementation
thereof, adopted by the Company for ensuring the compliance of the conditions of
Corporate Governance. It is neither an audit nor an expression of opinion on the
financial statement 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
conditions of Corporate Governance as stipulated in the above mentioned Listing
Agreements.
We have been explained that no investor grievances are pending for a period
exceeding one month against the Company as per the records maintained by the
Company.
We further state that such compliance is neither an assurance as to the future
viability of the Company nor the efficiency or effectiveness with which the
Management has conducted the affairs of the Company.
FOR N.M. RAIJI & CO.,
Chartered Accountants
J.M. GANDHI
Mumbai, April 19, 2002 Partner
50
WIPRO LIMITED
INDEX TO FINANCIAL STATEMENTS
INDIAN GAAP FINANCIAL STATEMENTS
Financial Statements - Wipro Limited
Auditors' Report 53-55
Financial Statements 56-81
Management Discussion & Analysis 82-89
Reconciliation of Profits between
Indian GAAP and US GAAP 90-91
Information about Subsidiaries 92
Consolidated Financial Statements (Indian GAAP) 93-100
Financial Statements of Subsidiaries 101-161
US GAAP FINANCIAL STATEMENTS
Summary of Selected Consolidated Financial Data 163
Management Discussion & Analysis 164-178
Risk Factors 179-184
Financial Statements 185-210
|
51
WIPRO LIMITED
WIPRO LIMITED
FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2002
(IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES IN INDIA)
52
WIPRO LIMITED
AUDITOR'S REPORT
TO THE MEMBERS OF WIPRO LIMITED
We have audited the attached Balance Sheet of Wipro Limited, as at March 31,
2002 and also the Profit and Loss Account 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 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
mis-statement. 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.
As required by the Manufacturing and Other Companies (Auditor's Report) Order,
1988 issued by the Central Government of India in terms of sub-section (4A) of
Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement
on the matters specified in paragraphs 4 and 5 of the said Order.
Further to our comments in the Annexure referred to above, we report that:
(i) We have obtained all the information and explanations, which to the best
of our knowledge and belief were necessary for the purpose of our audit;
(ii) 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;
(iii) The Balance Sheet and Profit and Loss Account dealt with by this report
are in agreement with the books of account and with the audited returns
from the branches;
(iv) In our opinion, the Balance Sheet and Profit and Loss Account dealt with
by this report comply with the accounting standards referred to in
sub-section (3C) of Section 211 of the Companies Act, 1956;
(v) On the basis of written representations received from the directors, we
report that none of the directors is disqualified as on March 31, 2002
from being appointed as a director in terms of clause (g) of sub-section
(1) of Section 274 of the Companies Act, 1956;
(vi) 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 Companies Act, 1956, in the manner so required and give a true and
fair view in conformity with the accounting principles generally accepted
in India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2002; and
(b) in the case of Profit and Loss Account, of the profit for the year
ended on that date.
FOR N.M. RAIJI & CO.,
Chartered Accountants
J.M. GANDHI
Mumbai, April 19, 2002 Partner
53
WIPRO LIMITED
ANNEXURE TO AUDITOR'S REPORT OF EVEN DATE FOR THE MEMBERS OF WIPRO LIMITED
(i) The Company has maintained proper records showing quantitative details
and the situation of its fixed assets. A major portion of fixed assets
have been physically verified by the management during the year. In our
opinion, the frequency of verification of fixed assets by the management
is reasonable, having regard to the size of the Company and the nature
of its assets. No material discrepancy has been noticed between the book
records and the assets physically verified.
(ii) None of the fixed assets of the Company have been revalued during the
year.
(iii) Stocks of finished goods, stores, spare parts and raw materials other
than with the third parties have been physically verified by the
management at reasonable intervals. There is a process of obtaining
confirmation in respect of stocks with third parties.
(iv) In our opinion and according to the information and explanations given
to us, the procedures for physical verification of stocks followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
(v) The discrepancies between the physical stocks and the book stocks were
not material and have been properly dealt within the books of account.
(vi) In our opinion, the valuation of stocks is fair and proper in accordance
with the normally accepted accounting principles, and is on the same
basis as in the preceding year.
(vii) The Company has not taken any loans secured or unsecured from companies,
firms or other parties listed in the register maintained under Section
301 of the Companies Act, 1956. We have been informed that there are no
companies under the same management as defined under Section 370(1-B) of
the Companies Act, 1956.
(viii) The Company has granted unsecured interest free/interest-bearing loans
to its subsidiaries and to companies which are listed in the register
maintained under Section 301 of the Companies Act, 1956. The terms and
conditions of such loans are, prima facie, not prejudicial to the
interest of the Company.
(ix) In respect of loans and advances in the nature of loans given by the
Company, the parties/employees have generally repaid the principle
amount and interest as per terms, wherever stipulated.
(x) The Company has adequate internal control procedures commensurate with
its size and nature of its business for the purchase of stores, raw
materials including components, plant and machinery, equipment and other
assets and for the sale of goods.
(xi) The transactions for purchase of goods and materials and sale of goods,
materials and services, made in pursuance of contracts or agreements
entered in the register maintained under Section 301 of the Companies
Act, 1956, as aggregating during the year to Rs. 50,000/- or more in
respect of each party, have been made at prices which are generally
reasonable having regard to prevailing market prices for such goods,
materials, or services or the prices at which transactions for similar
goods or services have been made with other parties.
(xii) As explained to us, the Company has a regular procedure for
determination of unserviceable or damaged stores and raw material. In
our opinion, adequate provision has been made in the accounts for the
estimated loss on the items so determined.
(xiii) The Company has not accepted any public deposits during the year. The
amount outstanding as on the balance sheet date is only in respect of
unclaimed deposits accepted in earlier years. On account of this no
comment is called for in respect of the compliance of Section 58A of the
Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules,
1975.
(xiv) In our opinion, the Company has maintained reasonable records for the
sale and disposal of realisable by-products and scrap.
(xv) The Company has a system of internal audit which, in our opinion, is
commensurate with its size and nature of its business.
(xvi) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government under
Section 209(1)(d) of the Companies Act, 1956 for maintenance of Cost
records in respect of the Vanaspati, Soaps, Lighting and Electronic
products and are of opinion that, prima facie, the prescribed accounts
and records have been maintained. We have not, however, made a detailed
examination of the records with a view to determining whether they are
accurate or complete.
54
WIPRO LIMITED
(xvii) The Company has been generally regular in depositing Provident Fund and
Employees State Insurance dues with the appropriate authorities, except
that in a few cases there were minor delays in depositing the dues.
(xviii) There are no undisputed amounts in respect of Income Tax, Wealth Tax,
Sales Tax, Customs Duty and Excise Duty which, as at the Balance Sheet
date, were outstanding for a period of more than six months from the
date they became payable.
(xix) On the basis of our examination of the books of account and the
information and explanations given to us, there are no personal expenses
which have been charged to the revenue account other than those incurred
in terms of contractual obligations or in accordance with generally
accepted business practice.
(xx) The Company is not a sick industrial company within the meaning of
Section 3 (1) (o) of the Sick Industrial Companies (Special Provisions)
Act, 1985.
(xxi) In respect of service activities, the Company has a reasonable system,
commensurate with its size and nature of business for:
(a) recording receipts, issues and consumption of materials and
allocating materials consumed to the relative jobs/projects.
(b) allocating man-hours utilised to the respective jobs/projects.
(c) authorisation at appropriate levels and an adequate system of
internal control on issue of stores and allocation of stores and man
power to jobs/projects.
(xxii) The business activity carried on by the Company includes letting out
immovable property on rental basis. For such activities, maintenance of
records of materials, stores, man-hours etc., is not considered
necessary.
(xxiii) As regards the trading activity of the Company, during the year the
damaged goods have been determined and suitable value adjustment has
been made in the books of account.
FOR N.M. RAIJI & CO.,
Chartered Accountants
J.M. GANDHI
Mumbai, April 19, 2002 Partner
55
WIPRO LIMITED
BALANCE SHEET
(Rs. in 000s)
----------------------------
AS OF MARCH 31,
----------------------------
SCHEDULE 2002 2001
-------- ---------- ----------
SOURCES OF FUNDS
SHAREHOLDERS' FUNDS
Share Capital 1 464,931 464,866
Share application money pending allotment (refer note 11) 2,399 2,345
Reserves and Surplus 2 24,860,451 19,184,623
---------- ----------
25,327,781 19,651,834
---------- ----------
LOAN FUNDS
Secured loans 3 254,872 400,644
Unsecured loans 4 13,659 47,397
---------- ----------
268,531 448,041
---------- ----------
TOTAL 25,596,312 20,099,875
========== ==========
APPLICATION OF FUNDS
FIXED ASSETS
Gross block 5 9,615,514 9,020,225
Less: Depreciation 4,503,870 3,793,678
---------- ----------
Net Block 5,111,644 5,226,547
Capital work-in-progress and advances 1,162,642 797,958
---------- ----------
6,274,286 6,024,505
---------- ----------
INVESTMENTS 6 4,784,557 1,636,443
DEFERRED TAX ASSETS 238,822 --
CURRENT ASSETS, LOANS AND ADVANCES
Inventories 7 748,364 1,152,530
Sundry Debtors 8 6,434,866 6,176,657
Cash and Bank balances 9 2,935,434 4,463,421
Loans and advances 10 10,177,581 5,992,691
---------- ----------
20,296,245 17,785,299
---------- ----------
CURRENT LIABILITIES AND PROVISIONS
Liabilities 11 5,366,645 4,813,400
Provisions 12 630,953 532,972
---------- ----------
5,997,598 5,346,372
---------- ----------
NET CURRENT ASSETS 14,298,647 12,438,927
---------- ----------
TOTAL 25,596,312 20,099,875
========== ==========
Significant accounting policies and notes to accounts 19
|
As per our report attached For and on behalf of the Board of Directors
FOR N.M. RAIJI & CO.,
Chartered Accountants
J.M. GANDHI AZIM HASHAM PREMJI N. VAGHUL B.C. PRABHAKAR
Partner Chairman and Managing Director Director Director
SURESH C. SENAPATY SATISH MENON
Corporate Executive Corporate Vice President -
Vice President - Finance Legal & Company Secretary
Mumbai, April 19, 2002 Bangalore, April 19, 2002
|
56
WIPRO LIMITED
PROFIT AND LOSS ACCOUNT
(Rs. in 000s)
-----------------------------------
YEAR ENDED MARCH 31,
-----------------------------------
SCHEDULE 2002 2001
-------- ---------- ---------
INCOME
Sales and Services 34,161,515 30,512,350
Other Income 13 1,553,060 695,463
---------- ---------
35,714,575 31,207,813
========== =========
EXPENDITURE
Cost of goods sold 14 20,779,161 18,076,507
Selling, general and administrative expenses 15 5,405,675 5,406,929
Interest 16 28,941 68,890
---------- ---------
26,213,777 23,552,326
========== =========
PROFIT BEFORE TAXATION AND NON-
RECURRING / EXTRAORDINARY ITEMS 9,500,798 7,655,487
========== =========
Provision for taxation (refer note 15) 839,707 992,000
PROFIT AFTER TAX BEFORE NON-
RECURRING / EXTRAORDINARY ITEMS 8,661,091 6,663,487
---------- ---------
Non recurring / extraordinary items 18 -- 16,036
========== =========
PROFIT FOR THE PERIOD 8,661,091 6,679,523
========== =========
APPROPRIATIONS
Interim Dividend on Preference Shares -- 18,043
Proposed Dividend on Equity Shares 232,466 116,217
Corporate tax on dividend -- 13,839
Transfer to Capital Redemption Reserve -- 250,000
TRANSFER TO GENERAL RESERVE 8,428,625 6,281,424
Significant accounting policies and notes to accounts 19
|
As per our report attached For and on behalf of the Board of Directors
FOR N.M. RAIJI & CO.,
Chartered Accountants
J.M. GANDHI AZIM HASHAM PREMJI N. VAGHUL B.C. PRABHAKAR
Partner Chairman and Managing Director Director Director
SURESH C. SENAPATY SATISH MENON
Corporate Executive Corporate Vice President -
Vice President - Finance Legal & Company Secretary
Mumbai, April 19, 2002 Bangalore, April 19, 2002
|
57
WIPRO LIMITED
(Rs. in 000s, except share numbers)
-----------------------------------
AS OF MARCH 31,
-----------------------------------
2002 2001
--------- ---------
SCHEDULE 1 SHARE CAPITAL
AUTHORISED
375,000,000 (2001: 375,000,000) Equity shares of Rs. 2 each 750,000 750,000
2,500,000 (2001: 2,500,000) 10.25% Redeemable Cumulative Preference 250,000 250,000
Shares of Rs. 100 each --------- ---------
1,000,000 1,000,000
--------- ---------
ISSUED, SUBSCRIBED AND PAID-UP
232,465,689 (2001: 232,433,019) equity shares of Rs. 2 each 464,931 464,866
--------- ---------
464,931 464,866
========= =========
|
Notes:
1. Of the above equity shares :
i) 226,905,825 equity shares (2001: 226,905,825), have been allotted as
fully paid bonus shares by capitalisation of Share Premium of Rs.
32,639 and General Reserves of Rs. 421,173.
ii) 1,325,525 equity shares (2001: 1,325,525) have been allotted as fully
paid-up, pursuant to a scheme of amalgamation, without payment being
received in cash.
iii) 3,162,500 shares representing 3,162,500 American Depository Receipts
issued during 2000-2001 pursuant to American Depository offering by
the Company.
iv) 146,839 (2001: 114,169) equity share issued pursuant to Employee Stock
Option Plan.
SCHEDULE 2 RESERVES AND SURPLUS
AS OF AS OF
APRIL 1, 2001 ADDITIONS DEDUCTIONS MARCH 31, 2002
------------- ---------- ----------- ---------------
Capital Reserves 9,500 -- -- 9,500
114,047 750(a) 105,297(b) 9,500
Capital Redemption Reserve 250,038 -- -- 250,038
38 250,000(c) -- 250,038
Share Premium 5,920,208 466,027(d) -- 6,386,235
-- 5,920,208 -- 5,920,208
Revaluation Reserve 890,072 -- 890,072(e) --
1,047,110 -- 157,038 890,072
Investment Allowance Reserve 14,500 -- 14,500(f) --
14,500 -- -- 14,500
General Reserve 12,100,305 8,546,418(f)(i)(g) 2,432,045(h) 18,214,678
5,818,881 6,281,424 -- 12,100,305
---------- ---------- --------- -----------
19,184,623 9,012,445 3,336,617 24,860,451
6,994,576 12,452,382 262,335 19,184,623
---------- ---------- --------- -----------
|
Corresponding figures for 2000-2001 are given below current year's figures
a) Capital subsidy received.
b) Refer note 2 of schedule 19.
c) Transfers from Profit and Loss account.
d) Rs. 35,414 (2001: 123,759) pursuant to issue of shares under Employee Stock
Option Plan and Rs. Nil (2001: Rs. 5,796,449) on account of American
Depository Offering by the Company, net of offering expenses of Rs. Nil
(2001: Rs. 273,429) and Rs. 430,613 on account of amalgamation of Wipro Net
Limited with Wipro Limited.
e) Transfer to Profit and Loss account Rs. 39,388 (2001: Rs. 58,843) and
reduction on account of sale of revalued assets and other adjustments Rs.
Nil (2001: Rs. 98,195). The net amount of Rs. 850,684 is adjusted against
revaluation reserve (refer note 5 of schedule 19).
f) Transfer to General Reserve Rs. 14,500 (2001: Rs. Nil).
g) Transfer from Profit and Loss account Rs. 8,428,625 (2001: Rs. 6,281,424).
h) Deficit arising on account of amalgamation of Wipro Net Limited with Wipro
Limited (refer note 6 of Schedule 19).
i) Benefits arising on employee stock incentive plans Rs. 55,646 (2001: Nil)
and deferred tax assets arising on temporary differences Rs. 47,647 (2001:
Nil).
58
WIPRO LIMITED
(Rs. in 000s)
--------------------------
AS OF MARCH 31,
Note --------------------------
SCHEDULE 3 SECURED LOANS Reference 2002 2001
------- -------
FROM BANKS
Cash credit facility a 204,997 203,187
EXTERNAL COMMERCIAL BORROWINGS b -- 127,582
FROM FINANCIAL INSTITUTIONS
Asset Credit Scheme c 48,200 68,200
DEVELOPMENT LOAN FROM
GOVERNMENT OF KARNATAKA d 1,675 1,675
------- -------
254,872 400,644
======= =======
|
NOTES:
a. Secured by hypothecation of stock-in-trade, book debts, stores and spares,
and secured/to be secured by a second mortgage over certain immovable
properties.
b. Foreign currency loan secured by hypothecation of movable fixed assets in
certain software development centres at Bangalore and specific plant and
machinery of erstwhile Fluid Power unit.
c. Secured by hypothecation of specific machinery/assets.
d. Secured by a pari-passu second mortgage over immovable properties at Mysore
and hypothecation of movable properties other than inventories, book debts
and specific equipments referred to in Note a above.
AS OF MARCH 31,
------------------------
SCHEDULE 4 UNSECURED LOANS 2002 2001
------ ------
FIXED DEPOSITS 843 886
OTHER LOANS AND ADVANCES
Interest free loan from government 11,566 45,261
Loans from state financial institutions 1,250 1,250
------ ------
13,659 47,397
====== ======
|
59
SCHEDULE 5 FIXED ASSETS (Rs. in 000s)
--------------------------------------------------------------------------------------------------------------------------------
PARTICULARS GROSS BLOCK PROVISION FOR DEPRECIATION
----------------------------------------------------------------------------------------------- --------------------------
As on AS ON As on Depreciation
April 1, Deductions/ MARCH 31, April 1, for the
2001 Additions adjustments 2002 2001 period
---------- ----------- ----------- ---------- ----------- ------------
Land 513,285 231,676 160,045 584,916 241 5,269
Buildings 1,713,059 375,983 630,423 1,458,619 154,923 35,548
Railway siding 4,000 -- 3,988 12 3,800 --
Plant and Machinery 5,453,816 1,599,553 1,167,848 5,885,521 3,078,388 1,098,352
Furniture, fixture and
equipment 1,016,421 287,421 41,250 1,262,592 405,258 205,873
Vehicles 316,568 149,742 52,834 413,476 148,881 73,391
Technical Know-how 3,076 -- (7,302) 10,378 2,187 464
---------- ---------- ---------- ---------- ---------- ----------
TOTAL 9,020,225 2,644,375 2,049,086 9,615,514 3,793,678 1,418,897
---------- ---------- ---------- ---------- ---------- ----------
March 31, 2001 6,757,891 2,576,521 314,187 9,020,225 2,928,679 1,038,267
---------- ---------- ---------- ---------- ---------- ----------
|
(Rs. in 000s)
----------------------------------------------------------------
PROVISION FOR DEPRECIATION NET BLOCK
--------------------------- -----------------------------
AS ON AS ON As on
Deductions/ MARCH 31, MARCH 31, March 31,
adjustments 2002 2002 2001
----------- ---------- ---------- ----------
Land -- 5,510 579,406 513,044
Buildings 99,505 90,966 1,367,653 1,558,136
Railway siding 3,788 12 -- 200
Plant and Machinery 554,649 3,622,091 2,263,430 2,375,428
Furniture, fixture and
equipment 20,910 590,221 672,371 611,163
Vehicles 37,151 185,121 228,355 167,687
Technical Know-how (7,298) 9,949 429 889
-------- ---------- ---------- ----------
TOTAL 708,705 4,503,870 5,111,644 5,226,547
-------- ---------- ---------- ----------
March 31, 2001 173,268 3,793,678 5,226,547
-------- ---------- ----------
|
a. Revaluation:
The fixed assets of the Company were revalued as at March 31, 1997, at
depreciated replacement values based on valuation by an independent firm of
chartered surveyors and valuers. The depreciated replacement values were
arrived on the basis of market values, present condition and balance
expected useful life of the asset. Where relevant, Indices published by the
Reserve Bank of India and Confederation of Indian Industry were used in the
valuation. The following amounts were added to the fixed assets on
revaluation.
GROSS DEPRECIATION REVALUED
BLOCK BLOCK NET BLOCK NET BLOCK
---------- ------------ ---------- ----------
Land 123,532 -- 123,532 166,097
Buildings (including tenancy rights) 685,341 37,541 647,800 791,034
Railway siding 3,988 2,988 1,000 1,000
Plant and Machinery 771,697 245,576 526,121 1,644,994
Furniture, fixture and equipment 128,543
Vehicles 84,405
Technical Know-how (7,302) (7,360) 58 2,808
Patents and trade marks 1
---------- ---------- ---------- ----------
TOTAL 1,577,256 278,745 1,298,511 2,818,882
---------- ---------- ---------- ----------
|
b. Land includes leasehold land Rs. 9,978 (2001: Rs. 9,978)
c. Buildings:
i) includes shares worth Rs. 2 (2001: Rs. 2)
ii) includes leasehold land/property Rs. 4,241 (2001: Rs. 4,241)
iii) is net of depreciation during construction period.
d. Additions to gross block and provision for depreciation includes Rs. 573,272
and Rs. 143,019 respectively on account of assets transferred on
amalgamation of Wipro Net.
e. Deduction/adjustment in value of land Rs. 10,302 and building Rs. 5,597
represents refund of stamp duty paid on acquisition, by the Government of
Tamil Nadu.
f. Deduction to gross block and provision for depreciation includes Rs. 449,603
and Rs. 241,210 on account of sale of Wipro Fluid Power business (refer note
10)
g. Deduction/adjustment in Gross Block and in provision for depreciation
includes Rs. Nil (2001: Rs. 123,818) pertaining to increased value of
revalued assets sold/ discarded. The net amount of Rs. Nil (2001: Rs.
98,195) has been adjusted from revaluation reserve.
h. Deduction/adjustment in gross block and provision for depreciation is net of
Rs. 850,684 of the amounts added on revaluation adjusted against the
revaluation reserve. (refer note 5).
i. Deductions to gross block and deductions/adjustments of provision for
depreciation of the previous year ended March 31, 2001 include Rs. 203,911
and Rs. 114,884 respectively on account of assets of erstwhile Peripherals
Division transferred to Wipro e-Peripherals Limited (refer note 9).
60
WIPRO LIMITED
SCHEDULE 6 INVESTMENTS AS OF MARCH 31,
(Rs. in 000s except share numbers and face value -----------------------
All shares are fully paid up unless otherwise stated NUMBER FACE VALUE 2002 2001
------ ---------- ---------- ----------
INVESTMENTS - LONG TERM (AT COST)
INVESTMENTS IN SUBSIDIARY COMPANIES
UNQUOTED
EQUITY SHARES
Wipro Prosper Ltd. 200 Rs. 10 2 2
Wipro Trademarks Holding Ltd. 200 Rs. 10 2 2
Wipro Inc, USA 1,200 US $ 2,500 129,270 129,270
Wipro Japan KK, Japan 650 JPY 50,000 9,738 9,738
Wipro Net Ltd. (refer note 6) 20,600,927 Rs. 10 -- 1,192,460
Wipro Welfare Ltd. 66,171 Rs. 10 662 662
Wipro Fluid Power Ltd. (2001: 1,863,520 shares) 7,296,520 Rs. 10 72,965 18,635
---------- ----------
212,639 1,350,769
---------- ----------
PREFERENCE SHARES
9% cumulative redeemable preference shares held in
Wipro Trademarks Holding Ltd. 1,800 Rs. 10 18 18
---------- ----------
18 18
---------- ----------
INVESTMENTS IN EQUITY SHARES OF OTHER COMPANIES
UNQUOTED
Wipro GE Medical Systems Ltd. # 4,900,000 Rs. 10 49,000 49,000
Spectramind eServices Pvt. Ltd. (Partly paid of Rs. 7.5) 6,221,741 Rs. 10 144,299 --
Wipro ePeripherals Ltd. 5,460,000 Rs. 10 54,600 54,600
247,899 103,600
QUOTED
TRADE INVESTMENTS
Dynamatic Technologies Ltd. 100 Rs. 10 1 1
HDFC Bank Ltd. 100 Rs. 10 1 1
---------- ----------
2 2
---------- ----------
INVESTMENTS IN PREFERENCE SHARES/DEBENTURES OF OTHER COMPANIES
UNQUOTED
Convertible preference shares in Wipro Fluid Power Ltd. 543,300 Rs. 100 -- 54,330
12.5% unsecured Non convertible debentures of
Wipro ePeripherals Ltd. 400,000 Rs. 100 40,000 40,000
Convertible preference shares in Spectramind eServices Pvt. Ltd. 28,760,140 Rs. 10 215,701 --
---------- ----------
(Partly paid of Rs. 7.5)
255,701 94,330
---------- ----------
OTHER INVESTMENTS (UNQUOTED)
Redeemable floating rate bonds of State Bank of India 2,500 Rs. 1,000 2,500 2,500
Indira Vikas Patra (maturity value Rs. 66,003) 47,952 47,952
Bonds of GE Capital Services India (refer note 12) -- 145,468
---------- ----------
50,452 195,920
---------- ----------
INVESTMENTS - SHORT TERM (AT MARKET VALUE):
IN MONEY MARKET LIQUID MUTUAL FUNDS
Alliance Capital Mutual Fund (39,960 units redeemed during the year) 265,857 265,910 --
Pioneer ITI Mutual Fund (103,376 units redeemed during the year) 389,279 452,168 --
Prudential ICICI Mutual Fund (9,306,496 units redeemed 78,253,001 924,966 --
during the year)
HDFC Mutual Fund (48,970,580 units redeemed during the year) 52,169,137 521,910 --
Standard Chartered Mutual Fund (47,000,000 units redeemed 23,032,046 230,320 --
during the year)
Reliance Mutual Fund 50,054,397 505,064 --
Zurich India Mutual Fund (4,973,145 units redeemed during the year) 39,832,390 400,499 --
Templeton India Mutual Fund (12,490,008 units redeemed 9,875,923 98,842 --
during the year)
Cholamandalam Mutual Fund (11,000,000 units redeemed 14,738,939 147,389 --
during the year)
Kotak Mutual Fund ( 8,694,609 units redeemed during the year) 22,490,420 225,154 --
Birla Mutual Fund (11,935,073 units redeemed during the year) 35,080,266 353,820 --
---------- ----------
4,126,042 --
---------- ----------
TOTAL 4,892,753 1,744,639
---------- ----------
Less: Provision for diminution in value of long term investments 108,196 108,196
---------- ----------
TOTAL 4,784,557 1,636,443
========== ==========
|
61
WIPRO LIMITED
(Rs. in 000s)
-----------------------
AS OF MARCH 31,
-----------------------
2002 2001
--------- ---------
Aggregate book value of quoted investments 2 2
Aggregate book value of unquoted investments (net of provision) 766,709 1,636,441
Aggregate market value of quoted investments and investments in
money market mutual funds 4,126,068 25
NOTES:
# Equity investments in this Company carry certain restrictions on transfer of
shares that are normally provided for in joint venture/venture funding
agreement.
Investment in equity and Preference shares of Wipro Finance Limited,
erstwhile subsidiary of the Company have been fully provided. The
investments and the provision for diminution is outlined below:
Redeemable preference shares -- 300,000
--------- ---------
-- 300,000
--------- ---------
Less: Provision for diminution in value of investments -- 300,000
========= =========
SCHEDULE 7 INVENTORIES
Stores and Spares 23,083 44,689
Raw Materials 400,569 499,536
Stock-in-process 21,344 121,190
Finished goods 303,368 487,115
--------- ---------
748,364 1,152,530
========= =========
Basis of stock valuation:
Raw materials, stock-in-process and stores and spares at or below cost.
Finished products at cost or net realisable value, whichever is lower
SCHEDULE 8 SUNDRY DEBTORS
(UNSECURED)
OVER SIX MONTHS
Considered good 675,017 448,945
Considered doubtful 483,200 292,593
--------- ---------
1,158,217 741,538
--------- ---------
OTHERS
Considered good 5,759,849 5,727,712
Considered doubtful 5,737 5,291
--------- ---------
5,765,586 5,733,003
--------- ---------
Less: Provision for doubtful debts 488,937 297,884
--------- ---------
6,434,866 6,176,657
========= =========
|
62
WIPRO LIMITED
(Rs. in 000s)
-------------------------
AS OF MARCH 31,
-------------------------
2002 2001
---------- ----------
SCHEDULE 9 CASH AND BANK BALANCES
CASH AND CHEQUES ON HAND 299,390 661,678
BALANCES WITH SCHEDULED BANKS
On Current account 587,578 527,989
In Deposit account 100,295 84,091
BALANCES WITH OTHER BANKS IN CURRENT ACCOUNT
Inkom Bank -- 43
Midland Bank 146,146 52,122
Wells Fargo 986,037 597,294
Nations Bank 97,627 --
Deutsche Bank 487,942 --
Societe General 198,324 460,378
Bank of America 27,142 10
First Chicago 976 390,806
Citibank 1,952 875,432
FCC National Bank 976 391,739
Chase Manhattan 1,025 421,815
Great Western Bank 24 24
---------- ----------
2,935,434 4,463,421
========== ==========
Maximum balances during the year
Inkom Bank -- 43
Midland Bank 387,177 362,362
Wells Fargo 986,037 770,615
Nations Bank 97,627 13
Deutsche Bank 487,942 --
Socite General 460,378 460,378
Bank of America 36,958 10
First Chicago 390,806 390,806
Citibank 875,432 875,432
FCC National Bank 391,739 391,739
Chase Manhattan 421,815 421,815
Great Western Bank 24 24
SCHEDULE 10 LOANS AND ADVANCES
(Unsecured, considered good unless otherwise stated)
Advances recoverable in cash or in kind or for value to be received
Considered good 857,413 1,089,193
Considered doubtful 70,193 125,483
---------- ----------
927,606 1,214,676
---------- ----------
Less: Provision for doubtful advances 70,193 125,483
---------- ----------
857,413 1,089,193
---------- ----------
Share application money pending allotment (refer note 10) 360,000 --
Certificate of deposits with foreign banks 5,287,219 3,326,108
Inter Corporate Deposits:
GE Capital Services India 770,100 367,500
ICICI Limited 1,245,200 684,500
---------- ----------
2,015,300 1,052,000
---------- ----------
Other Deposits 544,966 490,329
Advance income-tax (net of provision) 155,240 19,067
Balances with excise and customs 35,170 15,994
Unbilled Services 922,273 --
---------- ----------
10,177,581 5,992,691
========== ==========
|
Note:
a) Other Deposits include Rs. 25,000 (2001: Rs. 25,000) security deposits for
premises with a firm in which a director is interested.
63
WIPRO LIMITED
(Rs. in 000s)
-----------------------------------
AS OF MARCH 31,
-----------------------------------
2002 2001
----------- -----------
SCHEDULE 11 LIABILITIES
Sundry Creditors 2,148,315 1,607,681
Unclaimed dividends 1,588 180
Advances from customers 866,006 847,732
Other liabilities 2,009,452 2,016,355
Interest accrued but not due on loans 301 469
Other deposits 340,983 340,983
----------- -----------
5,366,645 4,813,400
=========== ===========
SCHEDULE 12 PROVISIONS
Employee retirement benefits 398,487 404,901
Proposed dividend 232,466 116,217
Tax on proposed dividend -- 11,854
----------- -----------
630,953 532,972
=========== ===========
YEAR ENDED MARCH 31,
-----------------------------------
SCHEDULE 13 OTHER INCOME 2002 2001
----------- -----------
Dividend from mutual funds 279,549 --
Dividend from companies 5,096 31,853
Interest on debt instruments 753,287 313,005
Rental Income 19,227 15,610
Profit on Sale of Investments -- 4,000
Profit on disposal of fixed assets 36,251 49,162
Difference in exchange 214,187 86,399
Royalty & Brand fees 92,360 30,789
Provision no longer required written back 115,354 53,662
Miscellaneous Income 37,749 110,983
----------- -----------
1,553,060 695,463
=========== ===========
Notes: Tax deducted at source Rs. 130,897 (2001: Rs. 65,183)
SCHEDULE 14 COST OF GOODS SOLD
Raw materials, Finished and Process Stocks (refer Schedule 17) 7,930,913 8,180,176
Stores & Spares 182,674 174,555
Power and Fuel 321,028 310,441
Salaries, wages and bonus 3,497,485 2,733,429
Contribution to provident and other funds 133,385 103,362
Gratuity and pension 120,595 78,239
Workmen and Staff welfare 139,054 188,220
Insurance 16,631 6,660
Repairs to Factory Buildings 10,773 38,554
Repairs to Plant & Machinery 115,919 73,655
Rent 201,944 196,129
Rates & Taxes 11,667 13,450
Packing 15,436 28,669
Travelling and allowances 5,831,446 4,956,452
Depreciation 1,106,297 738,582
Miscellaneous 1,220,182 373,812
Less: Capitalized (refer note 14) (76,268) (117,878)
----------- -----------
20,779,161 18,076,507
=========== ===========
|
64
WIPRO LIMITED
(Rs. in 000s)
---------------------------------
YEAR ENDED MARCH 31,
---------------------------------
2002 2001
---------- ----------
SCHEDULE 15 SELLING GENERAL AND ADMINISTRATIVE EXPENSES
Salaries, wages and bonus 995,591 924,346
Contribution to provident and other funds 34,934 40,131
Gratuity and pension 33,510 27,609
Workmen and Staff welfare 129,173 123,640
Insurance 6,108 20,676
Repairs to buildings 3,781 4,596
Rent 118,079 80,889
Rates and taxes 12,785 90,141
Carriage and freight 212,278 223,745
Commission on sales 489,545 659,432
Auditors' remuneration and expenses
Audit fees 3,430 3,150
For certification including tax audit 969 1,162
Reimbursement of expenses 885 508
Advertisement and sales promotion 316,203 471,824
Loss on sale of fixed assets 10,648 803
Directors' fees 800 922
Depreciation 312,601 240,841
Travelling and allowances 1,571,629 1,075,868
Communication 112,213 326,311
Provision/write off of bad debts 248,442 266,516
Diminution in value of investments (mutual fund units) 163,147 --
Miscellaneous 628,924 823,819
---------- ----------
5,405,675 5,406,929
========== ==========
SCHEDULE 16 INTEREST
On fixed loans 9,124 16,354
Other 19,817 52,536
---------- ----------
28,941 68,890
========== ==========
SCHEDULE 17 RAW MATERIALS, FINISHED AND PROCESS STOCKS
CONSUMPTION OF RAW MATERIALS AND BOUGHT OUT COMPONENTS
Opening stocks 499,536 497,545
Add: Purchases 3,539,152 3,873,857
Less: Transfer on sale of undertaking 46,496 136,772
Less: Closing stocks 400,569 499,536
---------- ----------
3,591,623 3,735,094
---------- ----------
PURCHASE OF FINISHED PRODUCTS FOR SALE 4,200,978 4,466,964
---------- ----------
(INCREASE)/DECREASE IN FINISHED AND PROCESS STOCKS
Opening stock : In process 121,190 92,970
: Finished products 487,115 581,730
Less: Transfer on sale of undertaking: In Process 81,002 12,200
: Finished Products 64,279 95,780
Less: Closing stocks : In process 21,344 121,190
: Finished products 303,368 487,115
---------- ----------
138,312 (41,585)
---------- ----------
(INCREASE)/DECREASE IN STOCK-IN-TRADE: LAND
Opening Stock -- 125,000
Less: Closing stock -- --
Less: Drawn from Capital Reserve (refer note 2) -- 105,297
---------- ----------
-- 19,703
---------- ----------
7,930,913 8,180,176
========== ==========
|
65
WIPRO LIMITED
(Rs. in 000s)
---------------------------------
YEAR ENDED MARCH 31,
---------------------------------
2002 2001
---------- ----------
SCHEDULE 18 NON-RECURRING/EXTRAORDINARY ITEMS
Gain/(Loss) on Sale of shares -- 55
Gain on transfer of business (refer note 9) -- 15,981
---------- ----------
-- 16,036
========== ==========
|
66
WIPRO LIMITED
SCHEDULE - 19 SIGNIFICANT ACCOUNTING POLICIES
ACCOUNTING CONVENTION
Accounts are maintained on an accrual basis under the historical cost
convention.
REVENUE RECOGNITION
- Sales include applicable sales tax unless separately charged, and are net of
discounts.
- Sales are recognized on despatch, except in the following cases:
- Consignment sales are recognized on receipt of statement of account from
the agent
- Sales, which are subject to detailed acceptance tests, revenue is
reckoned based on milestones for billing, as provided in the contracts
- Revenue from software development services includes revenue from time
and material and fixed price contracts. Revenue from time and material
contracts are recognized as related services are performed. Revenue on
fixed price contracts is recognized in accordance with percentage of
completion method of accounting
- Export incentives are accounted on accrual basis and include estimated
realizable values/benefits from special import licenses and Advance
licenses.
- Agency commission is accrued on shipment of consignment by principal.
- Maintenance revenue is considered on acceptance of the contract and is
accrued over the period of the contract.
- Other income is recognized on accrual basis.
RESEARCH AND DEVELOPMENT
Revenue expenditure on research and development is charged to Profit and Loss
account and capital expenditure is shown as addition to fixed assets.
PROVISION FOR RETIREMENT BENEFITS
For employees covered under group gratuity scheme of LIC, gratuity charged to
Profit and Loss account is on the basis of premium demanded by LIC. Provision
for gratuity (for certain category of employees) and leave benefit for
employee's is determined as per actuarial valuation at the year end. Defined
contributions for provident fund and pension are charged to the Profit and Loss
account based on contributions made in terms of applicable schemes, after
netting off the amounts rendered surplus on account of employees separated from
the Company.
FIXED ASSETS AND DEPRECIATION
Fixed assets were revalued in March 1997 and stated at revalued cost less
depreciation. Depreciation was provided on revalued amounts. The additional
depreciation charge on amounts added on revaluation was drawn out of revaluation
reserves. In January 2002 the revaluation reserves were reversed out against the
carrying value of fixed assets. Consequently fixed assets are now stated at
historical costs less depreciation.
Interest on funds borrowed and allocated for acquiring fixed assets, pertaining
to the period up to the date of capitalization and other revenue expenditure
incurred on new projects is capitalized. Assets acquired on hire purchase are
capitalized at the gross value and interest thereon is charged to Profit and
Loss account. Renewals and replacement are either capitalized or charged to
revenue as appropriate, depending upon their nature and long term utility.
In respect of leased assets, lease rentals payable during the year is charged to
Profit and Loss account.
Depreciation is provided on straight line method at rates specified in Schedule
XIV to the Companies Act, 1956, except on data processing equipment and
software, furniture and fixture, office equipment, electrical installations
(other than those at factories) and vehicles for which commercial rates are
applied. Technical know-how is amortized over six years.
FOREIGN CURRENCY TRANSACTIONS
Foreign currency transactions are recorded at the spot rate prevailing at the
beginning of the concerned month. Year end balances of foreign currency assets
and liabilities are restated at the closing rate/forward contract rate, as
applicable. Resultant differences in respect of liabilities relating to
acquisition of fixed assets are capitalized. Other differences on restatement or
payment are adjusted to revenue account.
Forward premiums in respect of forward exchange contracts are recognized over
the life of the contract, except that premiums relating to foreign currency
loans for the acquisition of fixed assets are capitalized.
67
WIPRO LIMITED
DEFERRED TAX
Tax expenses charged to Profit and Loss account is after considering deferred
tax impact for the timing difference between accounting income and tax income.
INVENTORIES
Finished goods are valued at cost or net realizable value, whichever is lower.
Other inventories are valued at cost less provision for obsolescence. Small
value tools and consumables are charged to consumption on purchase.
INVESTMENTS
Long term Investments are stated at cost and short term investments are valued
at lower of cost and net realizable value. Diminution in value is provided for
where the management is of the opinion that the diminution is of permanent
nature.
NOTES TO ACCOUNTS
(All figures are reported in rupees thousands, except data relating to share or
unless stated otherwise)
1. i) The Company has provided depreciation at the rates specified in
Schedule XIV to the Companies Act, 1956, except in cases of the
following assets which are depreciated at commercial rates which are
higher than the rates specified in Schedule XIV. Depreciation over the
years is provided up to total cost of assets.
Depreciation rate
applied Per Schedule
Class of Asset % XIV
--------------- ------------------ ------------
Data Processing equipment & Software 50.00 16.21
Plant & Machinery of ISP business 20.00 16.21
Furniture and fixtures 19.00 6.33
Electrical Installations 19.00 4.75
Office equipment 19.00 4.75
Vehicles 24.00 9.50
Plant and Machinery 4.75 4.75
|
ii) Depreciation at 100% have been provided on assets costing less
than Rs. 5.
2. (i) In fiscal 1995, the Company had converted a fixed asset (consisting
of land) into stock-in-trade at the then fair market value. The surplus
(market price less original cost) arising on such conversion was
credited to Capital Reserve. In fiscal 2000, there was a further
reduction of Rs. 52,000 in the value of said land compared to carrying
value at the beginning of the previous year. This reduction in value was
recognized in the Profit and Loss account and an equivalent amount was
drawn from the Capital Reserve created on the conversion, to offset the
impact of such reduction on the Profit and Loss account.
(ii) In fiscal 2001 the aforesaid land has been sold and realized
profit on sale of land of Rs. 105,297, considering its original
cost, as represented by the residual amount in Capital Reserve
is transferred to the Profit and Loss account.
3. Estimated amount of contracts remaining to be executed on Capital
account and not provided for is Rs. 241,338 (2001: Rs. 400,280)
4. Contingent liabilities in respect of:
i) Uncalled liability on partly paid equity shares is Rs. 48,100
(2001: Rs. Nil) and on convertible preference shares is Rs.
71,900 (2001: Rs. Nil)
ii) Disputed demands for excise, customs, income tax, sales tax and
other matters Rs. 199,530 (2001: Rs. 221,060)
iii) Guarantees given by Banks on behalf of the Company Rs. 361,058
5. Depreciation for the year on revalued assets has been provided up to
31st December, 2001. However, depreciation of Rs. 39,388 (2001: Rs.
58,843) provided on increase in value on account of revaluation and the
net amount has been charged to the Profit and Loss Account. In January
2002 the Company decided to reverse the revaluation reserve by reducing
the carrying value of the fixed assets by the amount of revaluation
reserve. Consequently net amount of Rs. 850,684 has been adjusted
against the gross block/provision for depreciation of fixed assets. On
account of this from 1st January, 2002, depreciation is provided on
original cost of fixed assets.
68
WIPRO LIMITED
6. During the year, the Company acquired 1,791,385 shares, representing 8% of
the equity capital of Wipro Net Limited (WNL). Consequent to this
investment, WNL has become a fully owned subsidiary of the Company. The
Board of Directors of both the companies decided to amalgamate WNL into
the Company with effect from April 2001. Accordingly, the Karnataka High
Court approved the scheme of amalgamation. The scheme of amalgamation has
been given effect to in the accounts of the Company for the year ended
March 31, 2002, on the pooling of interest method. The share premium of
Wipro Net Limited is credit to Wipro Limited. The deficit of Rs. 2,432,045
arising on amalgamation as detailed below is transferred to General
Reserve:
(Rs. in 000s)
----------------------------
Fixed Assets 433,507 --
Net Current Assets 71,753 --
Less: Loans 90,000 --
Net Tangible assets as of March 31, 2001 -- 415,260
Less: Investments in WNL by the Company -- 2,416,692
Less: Share premium -- 430,613
Deficit transferred to General Reserve -- 2,432,045
|
7. In fiscal 2001 the Company acquired 10,076,542 equity shares of Wipro Net
Limited representing 45% of interest held by KPN Group for Rs. 1,087,216.
Contemporaneously, equity of Wipro Net Limited (WNL) was restructured by
spinning off its retail ISP segment into a separate company Net Kracker
Limited. The Company has invested Rs. 18,635 in equity shares and Rs.
54,330 in convertible preference shares of Net Kracker Limited and the
same has been converted into 5,433,000 equity shares during the year.
8. In fiscal 2000, the Company sold 4,694,795 equity shares in Wipro Net
Limited (WNL) resulting in an extraordinary income of Rs. 1,095,449. Of
the total shares sold, on 1,791,385 shares, the buyer had a put option and
the Company had call option for a specified period. In June 2001 the buyer
exercised the put option at Rs. 680 per equity share.
9. With effect from 1st September, 2000, the Company transferred the business
of manufacturing and distribution of Computer Peripherals to Wipro
ePeripherals Limited (WeP) for a consideration of Rs. 270,880 received by
way of - 5,460,000 equity shares of Rs. 10 each in Wipro ePeripherals
Limited, 1,000,000 12.5% unsecured non-convertible debentures of Rs. 100
each in WeP and cash of Rs. 116,280. The transaction resulted in a gain of
Rs. 15,981 which has been shown as extraordinary item during the year
ended March 31, 2001.
10. In March 2002 the Company transferred the Fluid Power business to Wipro
Fluid Power Limited (formerly known as Netkracker Limited) for Rs.
363,137. In consideration of this transfer the Company will receive
3,600,000, 1% redeemable Preference Shares of Rs. 100 each of Wipro Fluid
Power Limited. The balance has been received in cash in March 2002.
11. Amount received from employees on exercise of stock option, pending
allotment of shares is shown as share application money pending allotment.
12. Company had, in October 1999, an ECB of USD 8,150 ('000s) equivalent to
Rs. 354,364. At that time, the Company entered into an arrangement with a
Bank (counter party) for the structured repayment of this loan. As per the
agreement, Company made an investment in deep discount bonds of a
corporate, with highest credit rating. The maturity value of such bonds
have been assigned to the counter party which has, in turn, agreed to
discharge the Company's ECB liability on the scheduled due dates.
Consequent to this, exchange risk of the ECB liability was crystallized in
the hands of the Company and the premium paid at the time of structured
payment has been amortized in the books of account over the balance tenure
of ECB loan. The bonds in which the Company has invested have varying
maturity dates. The amount due on maturity is offset against ECB loan
liabilities. During the year all the bonds have matured and have been
offset against ECB loan liability.
13. Company has instituted various Employee Stock Option Plans. 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
is tabulated below.
69
WIPRO LIMITED
Stock option activity under the 1999 plan is as follows:
YEAR ENDED MARCH 31, 2002
-------------------------------------------------------------------
WEIGHTED WEIGHTED
RANGE OF AVERAGE AVERAGE
EXERCISE PRICES EXERCISE PRICE REMAINING
AND GRANT DATE AND GRANT DATE CONTRACTUAL LIFE
SHARES ARISING FAIR VALUES FAIR VALUES
OUT OF OPTIONS RS. RS. (MONTHS)
-------------- --------------- -------------- ----------------
Outstanding at the beginning of the period 4,564,431 1,024 to 2,522 1,542 59
Granted during the period --
Forfeited during the period (645,803) 1,086 to 1,853 1,542
Exercised during the period (32,670) 1,086 1,086
Outstanding at the end of the period 3,885,958 1,024 to 2,522 1,550 47
Exercisable at the end of the period 637,062 1,024 to 2,522 1,385 46
|
Stock option activity under the 2000 Plan is as follows:
YEAR ENDED MARCH 31, 2002
-------------------------------------------------------------------
WEIGHTED WEIGHTED
RANGE OF AVERAGE AVERAGE
EXERCISE PRICES EXERCISE PRICE REMAINING
AND GRANT DATE AND GRANT DATE CONTRACTUAL LIFE
SHARES ARISING FAIR VALUES FAIR VALUES
OUT OF OPTIONS RS. RS. (MONTHS)
-------------- --------------- -------------- ----------------
Outstanding at the beginning of the period 3,214,350 2,382 to 2,746 2,397 67
Granted during the period 5,745,844 1,032 to 1,670 1,582 60
Forfeited during the period (487,680) 1,032 to 2,651 2,397
Exercised during the period --
Outstanding at the end of the period 8,472,514 1,032 to 2,746 1,846 58
Exercisable at the end of the period 411,414 2,375 to 2,651 2,397 55
|
Stock option activity under the 2000 ADS Plan is as follows:
YEAR ENDED MARCH 31, 2002
-------------------------------------------------------------------
WEIGHTED WEIGHTED
RANGE OF AVERAGE AVERAGE
EXERCISE PRICES EXERCISE PRICE REMAINING
AND GRANT DATE AND GRANT DATE CONTRACTUAL LIFE
SHARES ARISING FAIR VALUES FAIR VALUES
OUT OF OPTIONS $ $ (MONTHS)
-------------- --------------- -------------- ----------------
Outstanding at the beginning of the period 264,750 41.375 41.375 67
Granted during the period 409,200 20.75 to 36.400 35.490 61
Forfeited during the period (26,500) 41.375 41.375 --
Outstanding at the end of the period 647,450 20.75 to 41.375 37.660 55
Exercisable at the end of the period 35,738 41.375 41.375 44
------- --------------- ------ --
|
14. Amount capitalized comprise following revenue expenditure incurred during
the construction period.
(Rs. in 000s)
-------------------------------
YEAR ENDED MARCH 31,
-------------------------------
2002 2001
------ -------
Raw material, finished goods (including 76,268 104,461
manufactured products) and process stock
Pre-operative expenses
Power and Fuel -- 10,995
Conveyance expenses -- 233
Professional expenses -- 2,189
-------
76,268 117,878
------ -------
|
70
WIPRO LIMITED
15. Provision for taxation comprises of following:
(i) Rs. 392,831(2001: Rs. 377,676) in respect of foreign taxes, net of
deferred tax of Rs. 6,049 and write back of provision of Rs. 87,189
(2001: Rs. 18,000) in respect of earlier year.
(ii) Rs. 443,876 (2001: Rs. 611,324) in respect of Indian Income Tax, net
of deferred tax of Rs. 129,480 and write back of provision of Rs.
19,921 (2001: Rs. 60,000) in respect of earlier years.
(iii) Rs. 3,000 (2001: Rs. 3,000) in respect of Wealth Tax.
16. To comply with the newly introduced Accounting Standard 22 - Taxes on
Income issued by the Institute of the Chartered Accountants of India which
is mandatory with effect from April 1, 2001, the Company has made
provision for taxation after considering deferred tax to recognize timing
difference in tax. As per the requirement of the standard, the effect of
deferred tax upto March 31, 2001 has been worked out at Rs. 103,293 and
has been adjusted from the balance in General Reserve. The Company has
also created net deferred tax for the period of Rs. 135,529 on account of
which the profit for the period is higher by the equivalent amount.
17. Deferred tax comprise of:
Deferred tax assets: (Rs. in 000s)
-------------------- -------------
Allowance for doubtful debts 76,761
Employee stock incentive plan 61,695
Provision for diminution of investments 58,333
Accrued expenses 48,842
-------
245,631
-------
Less: Deferred tax liability - Depreciation differential 6,809
-------
238,822
-------
|
18. Sundry creditors include an amount of Rs. 20,310 (2001: 36,801) being
amount payable to suppliers, who are Small Scale Industrial Undertakings
(SSI) as defined under the Industrial (Development and Regulation) Act,
1951, exceeding Rs. 100 in aggregate and outstanding for a period in
excess of 30 days as at the date of Balance Sheet. The list of such SSI's
is attached.
19. Computation of net profit in accordance with Section 198 read with Section
349 of the Companies Act, 1956
(Rs. in 000s)
---------------------------------------------------------------
MARCH 31, 2002 March 31, 2001
-------------- --------------
PROFIT BEFORE TAXATION 9,500,798 7,655,487
-------------- --------------
ADD: Depreciation as per accounts (*)
Managerial Remuneration 78,170 107,431
Provision for doubtful debts/Advances 247,122 325,292 278,021 385,452
LESS: Bad debts written off 109,077 122,189
Amount drawn from Capital Reserve -- 109,077 -- 122,189
Net profit for Section 198 of the Companies Act, 1956 9,717,013 7,918,750
COMMISSION PAYABLE:
@ 0.10% (2001: 0.40%) of the above profits to the
Chairman & Managing Director 9,717 31,675
@ 0.30% to Vice Chairman and 29,152 23,756
@ 0.10% to Vice Chairman and 9,717 7,919
@ 0.10% pro rata to a Vice Chairman -- 5,279
MANAGERIAL REMUNERATION COMPRISES:
Salaries and allowances 23,000 20,378
Commission 48,586 68,628
Pension Contribution 2,973 11,991
Contribution to Provident Fund 526 640
Perquisites 3,085 5,794
--------- ---------
TOTAL 78,170 107,431
--------- ---------
|
(*)For the year 2001-02, net profit is computed on book depreciation
which is lower than depreciation computed under Section 350 of
Companies Act, 1956.
Fees paid to the Non-executive directors in the professional capacity is
subject to approval of the Central Government and has not been considered
in the Managing Director remuneration.
71
WIPRO LIMITED
20. Related Party Transactions
The following are related parties where control exists:
Entities controlled by
Subsidiaries Affiliates Directors
------------ ---------- ----------------------
Wipro Japan KK Wipro GE Medical Systems Ltd. Azim Premji Foundation Pvt. Ltd.(*)
Enthink Inc. Wipro ePeripherals Ltd. Hasham Premji
Wipro Inc. (Partnership firm)(*)
Wipro Prosper Ltd.
Wipro Trademarks Holding Ltd.
Wipro Welfare Ltd.
Wipro Fluid Power Ltd.
(*) Major shareholder or director has control over these entities.
|
The Company has the following transactions with related parties.
(Rs. in 000s)
--------------------------------
AS OF MARCH 31,
--------------------------------
2002 2001
------- -------
Wipro Japan KK:
Revenues from services 383,950 394,054
Wipro GE Medical Systems Ltd.:
Revenues from sale of computer equipment and administrative
and management support services 26,208 17,396
Fees for usage of trade mark 39,344 8,820
Wipro Net Ltd.:
Fees for consultancy services -- 13,100
Fees for computer and network maintenance support -- 10,452
Revenues from sale of computer equipment -- 109,871
Wipro ePeripherals Ltd.:
Revenues from sale of computer equipment and services 9,230 13,984
Fees for usage of Brand/trade mark 53,016 30,789
Interest received on debentures 5,000 4,704
Payments for services 1,160 --
Purchase of printers 138,676 169,000
Wipro Fluid Power Ltd.:
Fees for technical and infrastructure support services 96,155 37,018
Revenues from sale of computer equipment and services 987 --
Azim Premji Foundation Pvt. Ltd.:
Revenues from sale of computer equipment and services 1,442 --
Chairman and Managing Director:
Payment of lease rentals 1,200 1,200
Payment to non-executive directors:
Dr. Ashok Ganguly 800 800
Narayan Vaghul 800 800
Prof. Eisuke Sakakibara $ 10 (*) --
Dr. Jagdish N. Sheth $ 25 $ 25
P.M. Sinha 250 (*) --
B.C. Prabhakar 400 400
(*) appointed effective January 1, 2002
The following is the listing of receivables and payables of
related party transactions
Receivables:
Wipro GE Medical Systems Ltd. 56,181 13,295
Wipro ePeripherals Ltd. 17,037 --
Azim Premji Foundation Pvt. Ltd. 348 --
Hasham Premji 25,000 25,000
Payables:
Wipro ePeripherals Ltd. 25,875 2,297
Wipro Fluid Power Ltd. -- 10,000
|
72
WIPRO LIMITED
The following table represents the annual and long term compensation
earned by our executive directors and members of our administrative, supervisory
or management bodies for the year ended March 31, 2002.
(Rs. in 000s)
------------------------------------------------------------------------------
Salary/Allowance Commission and Incentive Deferred benefits
---------------- ------------------------ -----------------
Azim H. Premji 2,100 9,717 2,883
Vivek Paul 17,120 29,152 --
P.S. Pai 3,780 9,717 616
Dileep K. Ranjekar 3,231 1,650 439
S.C. Senapaty 1,940 1,788 405
Vineet Agrawal 1,511 1,057 211
M.S. Rao 2,482 327 311
Suresh Vaswani 2,206 931 253
----- ------ -----
|
21. Corresponding figures for previous periods presented have been regrouped,
where necessary, to confirm to this year classification. Current period
figures are not comparable with the previous periods to the extent of
amalgamation of Wipro Net Limited with effect from April 2001, transfer of
peripherals business with effect from 1st September, 2000 and sale of
Fluid Power business with effect from 1st March, 2002.
73
WIPRO LIMITED
ADDITIONAL INFORMATION PURSUANT TO THE PROVISIONS OF PART II OF SCHEDULE VI TO
THE COMPANIES ACT, 1956
i) LICENSED/REGISTERED/INSTALLED CAPACITIES
REGISTERED CAPACITY INSTALLED CAPACITY @
----------------------------------------------------------------------------
MARCH 31, March 31, MARCH 31, March 31,
Unit 2002 2001 2002 2001
------------------------------ --------- --------- --------- ---------
Vanaspati/Hydrogenated oils T P A (*) 144,000 144,000 56,250 56,250
Toilet Soaps T P A (*) 42,750 42,750 28,000 28,000
Leather shoe uppers, leather shoes Pairs/Nos. (1000's) p.a 750 750 750 750
and allied articles in lakhs
Fatty acids T P A (*) 20,000 20,000 20,000 20,000
Glycerine T P A (*) 2,000 2,000 1,800 1,800
GLS lamps 000s 50,000 50,000 50,000 50,000
TL Shells 000s 12,694 12,694 12,694 12,694
Fluorescent tubelights 000s 10,694 10,694 10,694 10,694
Mini computers/micro processor based systems
and data communication systems N P A # 244,000 64,000 244,000 244,000
Micro processor based computers and peripherals
and communication boards N P A # 72,500 72,500 72,500 72,500
@ Installed capacities are as per certificate
given by management on which auditors have relied.
(*) TPA indicates tons per annum # NPA indicates nos. per annum
|
ii) PRODUCTION AND SALES
PRODUCTION # SALES
----------------------------------------------------------------------------
MARCH 31, March 31, MARCH 31, March 31,
2002 2001 2002 2001
Unit QUANTITY # Quantity # QUANTITY RS. IN 000s Quantity Rs. in 000s
---- ---------- ---------- -------- ----------- -------- -----------
Software services 22,509,262 17,540,755
Mini computers/micro processor based
Systems and data communication systems Nos. 61,652 62,779 87,719 4,985,869 62,321 6,368,530
Serial printers Nos. -- 28,422 -- -- 39,974 837,846
Toilet soaps Tons 19,353 23,274 19,795 1,420,831 23,853 1,738,022
Toiletries 299,512 226,189
Post sales support and related IT services 1,763,607 1,182,747
Corporate ISP Services 508,018 --
Vanaspati/hydrogenated oils Tons 11,722 16,098 11,897 407,602 15,918 488,464
Lighting products & -- & -- 929,929 -- 902,785
Hydraulic and pneumatic equipment Nos. 35,794 51,177 37,451 466,989 50,552 639,953
Tipping gear systems Nos. 4,289 3,788 4,289 148,110 3,788 148,278
Shoe uppers and full shoes (pairs) 000s 613 511 613 166,408 508 144,901
Fatty acids Tons 12,653$ 13,104$ 13,242 339 10,025
Glycerine Tons 594% 426% 492 28,074 459 32,076
Reagent kits/spares of analytical
instruments Nos. 2,338 6,722 44,677 407,706 31,539 377,519
Spares/components for cylinders/tippers & 91,306 83,041
Agency commission 182,355 346,216
Software products 444,283 146,270
Stock in trade Land -- 125,000
---------- -----------
TOTAL 34,773,103 31,338,617
---------- -----------
LESS:EXCISE DUTY 611,588 826,267
---------- -----------
TOTAL 34,161,515 30,512,350
---------- -----------
|
# includes samples and shortages
$ includes 12,668 tons (2001: 12,715) used for own consumption
% includes 111 tons (2001: Nil) used for own consumption
& it is not practicable to give quantitative information in the absence of
common expressible unit.
74
WIPRO LIMITED
iii) CLOSING STOCKS
(Rs. in 000s)
--------------------------------------------------------------
MARCH 31, 2002 March 31, 2001
-------------------------------- ------------------------
Unit QUANTITY RS. 000s Quantity Rs. 000s
---- -------- -------- -------- --------
Mini computers/micro processor Nos 1,135 61,985 556 165,771
based systems and data
communication systems(*)
Toilet Soaps Tons 531 24,959 973 40,674
Vanaspati/hydrogenated oils Tons 471 15,738 646 15,605
Lighting Products(*) 58,228 88,375
Hydraulic and pneumatic equipment Nos -- -- 4,322 71,793
Shoe Uppers and full shoes (pairs) 000s 8 207 8 109
Fatty acids Tons 105 2,540 121 1,997
Glycerine Tons 37 1,864 45 2,711
Others 67 3,245
165,588 390,280
CLOSING STOCK OF TRADED GOODS
Reagent Kits/Spares of Nos. 16,346 110,675 18,468 72,975
Analytical instruments
Others 27,105 23,860
------- -------
303,368 487,115
======= =======
|
(*) includes traded products; bifurcation between manufactured and traded
products not practicable
iv) PURCHASES FOR TRADING
MARCH 31, 2002 March 31, 2001
--------------------------------- -----------------------
Unit QUANTITY RS. 000s Quantity Rs. 000s
---- -------- --------- -------- ---------
Computer units /printers Nos 26,646 3,271,440 15,725 3,280,453
Lighting Products(*) 418,437 455,167
Reagent kits/Spares of
analytical instruments Nos. 40,217 324,547 23,891 299,564
Spares/Components for
tippers/cylinders(*) 30,294 35,218
Others(*) 156,260 396,562
--------- ---------
4,200,978 4,466,964
========= =========
|
(*) It is not practicable to give quantitative information in the absence of
common expressible unit.
v) RAW MATERIALS CONSUMED
MARCH 31, 2002 March 31, 2001
----------------------------------------- -------------------------
Unit QUANTITY RS. 000s Quantity Rs. 000s
------------- -------- --------- -------- ---------
Peripherals/Components for computers # 2,348,057 2,297,597
Oils and fats Tons 19,310 426,127 32,117 548,277
Components for cylinders # 271,620 327,633
Tinplates Tons -- -- 41 1,484
Components for lighting products # 176,705 176,439
Leather Sq.ft. (000s) 642 70,352 538 59,388
Others # 298,762 324,276
--------- ---------
3,591,623 3,735,094
========= =========
|
# It is not practicable to give quantitative information in the absence of
common expressible unit.
75
WIPRO LIMITED
vi) VALUE OF IMPORTED AND INDIGENOUS MATERIALS CONSUMED
(Rs. in 000s)
---------------- ------------------
MARCH 31, 2002 March 31, 2001
---------------- ------------------
% RS. 000s % Rs. 000s
--- --------- --- ---------
Raw Materials
Imported 43 1,553,780 53 1,961,729
Indigenous 57 2,037,843 47 1,773,365
--- --------- --- ---------
100 3,591,623 100 3,735,094
=== ========= === =========
Stores and Spares
Imported 5 8,805 7 11,878
Indigenous 95 173,869 93 162,677
--- --------- --- ---------
100 182,674 100 174,555
=== ========= === =========
|
vii) VALUE OF IMPORTS ON CIF BASIS
(does not include value of imported items locally purchased)
MARCH 31, March 31,
2002 2001
--------- ---------
Raw materials, components and peripherals 2,993,699 2,022,651
Stores and spares 237,480 218,763
Capital goods 12,696 366
Others -- --
--------- ---------
3,243,875 2,241,780
========= =========
|
viii) EXPENDITURE IN FOREIGN CURRENCY
MARCH 31, March 31,
2002 2001
--------- ---------
Travelling 6,687,444 5,572,870
Interest 506 --
Royalty 135,887 85,848
Professional fees 446,529 214,825
Others 1,448,156 214,591
--------- ---------
8,718,522 6,088,134
========= =========
|
ix) EARNINGS IN FOREIGN EXCHANGE
MARCH 31, March 31,
2002 2001
---------- ----------
Export of goods on F.O.B. basis 154,896 143,297
Services 22,626,917 17,608,373
Interest on deposits/investments outside India 520,052 38,552
Agency commission 192,885 343,738
---------- ----------
23,494,750 18,133,960
========== ==========
|
76
WIPRO LIMITED
ADDITIONAL INFORMATION PURSUANT TO THE PROVISIONS OF PART IV OF SCHEDULE VI TO
THE COMPANIES ACT, 1956
BALANCE SHEET ABSTRACT AND THE COMPANY'S GENERAL BUSINESS PROFILE
I REGISTRATION DETAILS
Registration No. 20800 State Code 08
Balance Sheet Date 31st March 2002
II CAPITAL RAISED DURING THE YEAR (Rs. in 000s)
Public issue Nil
Rights issue Nil
Bonus issue Nil
Issue of shares on exercise of
Employee Stock Options 35,479
American Depository Offering Nil
III POSITION OF MOBILISATION OF AND
DEPLOYMENT OF FUNDS (Rs. in 000s)
TOTAL LIABILITIES 25,596,312 TOTAL ASSETS 25,596,312
SOURCES OF FUNDS APPLICATION OF FUNDS
Paid-up capital 464,931 Net Fixed Assets 6,274,286
Share application money pending
allotment 2,399 Deferred tax assets 238,822
Reserves and Surplus 24,860,451 Investments 4,784,557
Secured Loans 254,872 Net Current Assets 14,298,647
Unsecured Loans 13,659
IV PERFORMANCE OF THE COMPANY (Rs. in 000s)
Turnover 35,714,575
Total Expenditure 26,213,777
Profit before Tax 9,500,798
Profit after Tax 8,661,091
Earnings per share (basic) 37.47
Dividend 50%
|
V Generic names of three principal products/services of the Company (as per monetary terms)
i) Item code no (ITC Code) 84714900.10
Product description Computer systems including personal computer and
units thereof
ii) Item code no (ITC Code) 85245309.10
Product description Computer software
iii) Item code no (ITC Code) 15162009.10
Product description Hydrogenated Vegetable oils
|
For and on behalf of the Board of Directors
AZIM HASHAM PREMJI N. VAGHUL B.C. PRABHAKAR
Chairman and Managing Director Director Director
SURESH C. SENAPATY SATISH MENON
Corporate Executive Corporate Vice President -
Vice President - Finance Legal & Company Secretary
Bangalore, April 19, 2002
|
77
WIPRO LIMITED
CASH FLOW STATEMENT
(Rs. in 000s)
----------------------------
YEAR ENDED MARCH 31,
---------------------------
2002 2001
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net profit before tax and non recurring items 9,500,798 7,655,487
Adjustments to reconcile Net profit before tax and non
recurring items to net cash provided by operating activities:
Depreciation and amortization 1,378,945 979,424
Foreign currency translation gains (115,088) (86,399)
Retirement benefits provision (6,413) 138,986
Interest accrued on discount bonds (71,653) (27,345)
Interest on borrowings 28,941 68,890
Dividend/interest (873,941) (342,310)
Loss/(Gain) on sale of short-term investments -- (4,000)
Loss/(Gain) on sale of property, plant and equipment (25,603) (49,162)
Realised Gain on sale of Stock-in-trade: Land -- (105,297)
---------- ----------
OPERATING CASH FLOW BEFORE CHANGES IN WORKING CAPITAL 9,815,986 8,228,274
Changes in operating assets and liabilities
Trade and other receivable (149,398) (1,770,267)
Loans and advances (673,121) (401,062)
Inventories ( other than stock-in-trade land ) 188,698 (51,958)
Trade and other payables 435,764 1,097,961
---------- ----------
NET CASH PROVIDED BY OPERATIONS 9,617,929 7,102,948
Direct taxes paid (1,039,758) (1,095,813)
Non recurring/extraordinary items -- 16,036
---------- ----------
NET CASH PROVIDED BY OPERATING ACTIVITIES 8,578,171 6,023,171
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Expenditure on property, plant and equipment (including advances) (2,432,540) (2,772,425)
Proceeds from sale of property, plant and equipment 194,650 91,886
Purchase of investments (5,350,271) (1,231,465)
Inter Corporate deposits placed (963,300) (1,152,000)
Certificate of Deposits with foreign banks (1,961,111) (3,326,108)
Proceeds from sales and maturities of investments 145,468 243,000
Proceeds from divestment of ePeripherals -- 116,281
Purchase of investment in Spectramind eServices Pvt. Ltd. (360,000) --
Dividends received 284,645 31,853
Interest received 560,355 310,457
---------- ----------
NET CASH USED IN INVESTING ACTIVITIES (9,882,104) (7,688,521)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Capital subsidy received -- 750
Proceeds from American Depository Offering -- 5,802,774
Proceeds from exercise of Stock Option Plan grants 33,080 123,987
Share application monies received pending allotment 2,399 2,345
Proceeds from issue redemption) of preference shares -- (250,000)
Proceeds from issuance/(repayment) of borrowings (136,744) (130,947)
Interest on borrowings -- (69,844)
Payment of cash dividends (116,217) (87,913)
Corporate tax on Dividend (11,854) (9,671)
---------- ----------
NET CASH PROVIDED BY/(USED IN) FINANCING ACTIVITIES (229,336) 5,381,481
---------- ----------
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS DURING THE YEAR (1,533,269) 3,716,131
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 4,468,703 747,290
---------- ----------
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 2,935,434 4,463,421
========== ==========
|
78
WIPRO LIMITED
Notes:
i) Opening cash and bank balances include cash balances of Wipro Net
Limited of Rs. 5,282.
i) Purchase of investments include Rs. 1,218,142 on acquisition of
minority interest of 8% in Wipro Net Limited.
iii) Figures for previous periods presented, have been regrouped wherever
necessary, to confirm to this period classification.
For and on behalf of the Board of Directors
AZIM HASHAM PREMJI N. VAGHUL B.C. PRABHAKAR
Chairman and Managing Director Director Director
SURESH C. SENAPATY SATISH MENON
Corporate Executive Corporate Vice President -
Vice President - Finance Legal & Company Secretary
Bangalore, April 19, 2002
|
AUDITOR'S CERTIFICATE
We have examined the above cash flow statement of Wipro Limited for the year
ended March 31, 2002. This statement has been prepared by the Company in
accordance with the requirement under clause 32 of the listing Agreement with
the Stock Exchanges and is based on and in agreement with the corresponding
Profit and Loss Account and Balance Sheet of the Company for the Year Ended
March 31, 2002.
FOR N.M. RAIJI & CO.,
Chartered Accountants
J.M. GANDHI
Mumbai, April 19, 2002 Partner
79
WIPRO LIMITED
ANNEXURE TO THE DIRECTORS' REPORT
FORM A
DISCLOSURE OF PARTICULARS WITH RESPECT
TO CONSERVATION OF ENERGY
A. POWER AND FUEL CONSUMPTION
2001-2002 2000-2001
------------------- ----------
1 ELECTRICITY
a) PURCHASED
Unit KWH 12,064,570 13,988,200
Total amount Rs. 52,676,133 60,188,828
Rate/Unit Rs. 4.37 4.3
b) OWN GENERATION
Through diesel generator
Unit KWH 693,567 1,426,906
Unit/litre of diesel oil Units 2.20 2.67
Cost/Unit Rs. 8.06 8.38
2 COAL (INCLUDING COCONUT SHELLS)
Quantity Tonnes 11,578 7,405
Total cost Rs. 17,069,027 15,919,792
Average rate Rs. 1,474.24 2,149.87
3 FURNACE OIL
Quantity - LDO Lts. 1,828,979 4,056,213
Total cost Rs. 22,187,370 47,264,083
Average rate Rs. 12.13 11.65
4 FURNACE OIL
Quantity - HSD Lts. 83,955 --
Total cost Rs. 1,442,856 --
Average rate Rs. 17.19 --
5. L.P.G.
Quantity Kgs. 575,964 972,374
Total cost Rs. 9,801,824 18,604,060
Average Rs. 17.02 19.13
|
B. CONSUMPTION PER UNIT PRODUCTION
VANASPATI ELECTRICITY LIQUID DIESEL OIL COAL
(KWH/TONNE) (LITRES/TONNE) (TONNES/TONNE)
2001-2002 146.87 12.8 0.25
2000-2001 150.86 9.34 0.3
G.L.S. ELECTRICITY LIQUID DIESEL OIL L.P.G.
(KWH/1000 GLS) (LITRES/TONNE) (KG/1000 GLS)
2001-2002 25.09 -- 5.09
2000-2001 25.46 -- 5.95
F.T.L. ELECTRICITY LIQUID DIESEL OIL L.P.G.
(KWH/1000 FTL) (LITRES/TONNE) (KG/1000 FTL)
2001-2002 164.69 -- 36.59
2000-2001 225.82 -- 29.62
|
80
WIPRO LIMITED
SSI DUES EXCEEDING RS. 100 IN AGGREGATE AND OUTSTANDING FOR A PERIOD IN EXCESS
OF 30 DAYS AS AT A DATE OF BALANCE SHEET - MARCH 31, 2002
TOTAL DUES
SUPPLIER RS. IN 000s
-------- -----------
Bhargava Rotopack Pvt. Ltd. 227
Meet Engineering Pvt. Ltd. 134
Prachi Industries 144
Triumph Pack Pvt. Ltd. 202
Unique Wires Pvt. Ltd. 112
Vijay Litetronics Comp Ltd. 514
Glostar Electricals Pvt. Ltd. 253
Kay Pee Industries 221
Karthiks 627
Mercury Lamps Pvt. Ltd. 347
Maharashtra Industries 2,319
Prospects Industries 2,387
R C Industries 1,969
Regal Luminaries 527
Sandesh Electricals 595
Superstars 5,785
Unilux 3,429
Ujas Electricals Pvt. Ltd. 237
Vossloh-Schabe India Pvt. Ltd. 281
20,310
|
81
WIPRO LIMITED
MANAGEMENT DISCUSSION AND ANALYSIS OF RESULTS FOR THE YEAR ENDED MARCH 31, 2002
1.0 INDUSTRY STRUCTURE AND DEVELOPMENTS
Please refer to our discussions in the section titled "Management
Discussion and Analysis of Financial Condition and Results of Operations
- US GAAP" in pages 164 through 178 of this report.
1.01 OPPORTUNITIES AND THREATS
Please refer to our discussions in the section titled "Management
Discussion and analysis of Financial condition and Results of operations
- US GAAP" in pages 164 through 178 of this report and in the section
titled "Risk Factors" in pages 179 through 184 of this report.
1.02 SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE
Please refer the "Segment Wise Business performance" report in pages 4
|
through 5 of this report.
1.03 OUTLOOK
Please refer to our discussions in the section titled "Management
Discussion and analysis of Financial condition and Results of operations
- US GAAP" in pages 164 through 178 of this report.
1.04 RISKS AND CONCERNS
Please refer to our discussions in the section titled "Risk Factors" in
pages 179 through 184 of this report.
2.0 INTERNAL CONTROL
Management maintains internal control systems designed to provide
reasonable assurance that assets are safeguarded, transactions are
executed in accordance with management's authorization and properly
recorded, and accounting records are adequate for preparation of
financial statements and other financial information. The internal audit
function performs internal audit periodically to ascertain their adequacy
and effectiveness. The internal audit function also carries out
Operations Review Audits. The "Quality System" of the audit function has
been certified under ISO 9001:2000. The audit committee periodically
reviews the functions of internal audit.
3.0 DISCUSSION ON FINANCIAL PERFORMANCE
3.1 The financial statements are prepared in compliance with the requirements
of the Companies Act, 1956, and Generally Accepted Accounting Principles
in India. The management of Wipro accepts the responsibility for the
integrity and objectivity of these financial statements and the basis for
various estimates and judgments used in preparing the financial
statements.
3.2 BALANCE SHEET AS AT MARCH 31, 2002
3.2.1 SHARE CAPITAL
The Company has an Authorised capital of Rs. 1,000 mn comprising 375
million Equity shares of Rs. 2 each and 2.5 million redeemable cumulative
preference shares of Rs. 100 each as of March 31, 2002.
EQUITY SHARES
- The Company has instituted various Employee Stock Option Plans
(ESOP), these options vest with the employees over a specified
period subject to employee fulfilling certain conditions. Upon
vesting, the employees are eligible to apply and secure allotment of
the Company's shares at a price determined on the date of grant of
options. During the year 32,670 shares were allotted on exercise of
the options, granted under 1999 Wipro Employee Stock Option Plan
(ESOP), by the eligible employees.
3.2.2 SHARE APPLICATION PENDING ALLOTMENT
Eligible employees have applied for allotment of 2,209 shares of Rs. 2
each. Pending allotment, amounts received from the employees are
reflected as share application money pending allotment.
82
|
WIPRO LIMITED
3.2.3 RESERVES AND SURPLUS
SHARE PREMIUM ACCOUNT:
- Under the employee stock option plan, eligible employees have
exercised their right to equity shares upon expiry of the vesting
period. Share premium includes premium received on exercise of stock
options, amounting to Rs. 34 million and the share premium of Wipro
Net of Rs. 431 million. Share premium of Wipro Net has been added to
share premium of Wipro Limited on amalgamation of Wipro Net Limited
with Wipro Limited.
REVALUATION RESERVE:
The fixed assets of the Company were revalued as at March 31, 1997.
- Depreciation for the year on revalued assets has been provided up to
31st December, 2001. Depreciation provided on the revalued portion
of the asset amounting to Rs. 39 million is drawn out of revaluation
reserve.
- Fixed assets were revalued to ensure that business units of Wipro
deliver return on capital employed based on the replacement value of
assets. The return on capital employed generated by the business
units has exceeded internal norms. The value drivers now are
operating margins and growth in operating income. Further, the
benefits from the revaluation exercise is not commensurate with the
additional costs and efforts required to perform the revaluation
exercise.
- Consequently, in January 2002, the Company decided to reverse the
revaluation reserve. The carrying value of the fixed assets was
reduced by the amount of revaluation reserves.
3.2.4 SECURED LOANS
- The Company has availed cash credit facilities of Rs. 205 million
from consortium of banks to bridge temporary mismatches in cash
flows.
- The Company had availed foreign currency denominated loans under the
external commercial borrowing scheme. This loan was fully repaid in
February 2002.
- The Company had availed a loan of Rs. 48 million from a financial
institution. This is secured by hypothecation of specific assets and
machinery. The Company has repaid Rs. 20 million during the fiscal
year and the balance would be repaid in fiscal 2003.
3.2.5 UNSECURED LOANS
- Fixed deposits which have matured but have not yet been claimed by
the depositors are reflected as fixed deposits. The Company has sent
communications to the depositors requesting them to claim these
deposits.
- The Company has availed certain incentives provided by the State
Governments. The Company collects sales tax on sales but is required
to remit it after a specified time period. Further, the Company has
also received certain interest free/nominal interest bearing loans
from State Financial Institutions.
3.2.6 FIXED ASSETS
During the year the Company invested Rs. 2,433 million on fixed assets.
These investments were primarily on creating software development
facilities for Global IT Services and Products. The unit wise spends are
|
outlined below:
(Rs. in millions)
BUSINESS UNIT AMOUNT
-----
Global IT Services and Products 1,896
India and AsiaPac IT Services and Products 165
Consumer Care & Lighting 46
Others 326
-----
TOTAL 2,433
-----
|
83
WIPRO LIMITED
The capital expenditure of Global IT Services and Products, project/asset
category wise, is outlined below:
(Rs. in millions)
PROJECT/ASSET CATEGORY AMOUNT
------
COMMISSIONED DURING THE YEAR
Electronic City Tower 5 193
Belapur 160
Chennai, Sholinganallur 55
Pune, Hinjewadi 1 55
Madivala 3 155
Electronic City Tower 6 191
Vashi, Mumbai 190
Electronic City 2 65
M G Road 92
Koramangala 2 44
Madivala 1 57
Sarjapur 43
Electronic City 1 164
Madhapur 29
United Kingdom 38
United States of America 26
Others 104
IN PROCESS
Chennai, Sholinganallur 187
Electronic city 48
-----
TOTAL 1,896
-----
|
DEPRECIATION
- The Company has provided depreciation either at the rates specified
in Schedule XIV of the Companies Act, 1956, or at commercial rates
which are higher than the rates specified by Schedule XIV.
- Depreciation is provided on the revalued amount up to 31st December,
2001. The depreciation provided on the amount added on revaluation
is drawn from revaluation reserve.
3.2.7 INVESTMENTS
PURCHASE OF INVESTMENTS DURING THE YEAR
- During the year the Company acquired 17% of Spectramind eServices
Pvt. Ltd. As of March 31, 2002 the Company held Rs. 144 million
(partly paid of Rs. 7.5) in the form of equity and Rs. 216 million
(partly paid of Rs. 7.5) in the form of convertible preference
shares.
84
|
WIPRO LIMITED
- During the year the Company transferred the business of Fluid Power
to Wipro Fluid Power Ltd. (formerly known as Netkracker Ltd.) for
Rs. 363 million. The name of Netkracker Limited has since been
changed to Wipro Fluid Power Limited. In consideration of this
transfer the Company will receive 3,600,000, 1% redeemable
Preference shares of Rs. 100 each of Wipro Fluid Power Limited. The
balance was received in cash in March 2002.
- During the year, the Company acquired 1,791,385 shares, representing
8% of the equity capital of Wipro Net Limited (WNL). Consequent to
this investment, WNL has become a fully owned subsidiary of the
Company. The board of directors of both the companies decided to
amalgamate WNL into the Company with effect from April 2001.
Accordingly, the Karnataka High Court approved the scheme of
amalgamation. The scheme of amalgamation has been given effect to in
the accounts of the Company for the year ended March 31, 2002, on
the pooling of interest method.
- During the year Company invested Rs. 4,126 million in short term
liquid money market instruments.
SALE OF INVESTMENTS DURING THE YEAR
- The Company had assigned the proceeds of certain investments to a
third party who had assumed the obligation of discharging our ECB
loan liability. During the year the proceeds from sale, on maturity,
of these investments has been offset against the ECB loan liability.
3.2.8 INVENTORIES
The Inventories comprise mainly computers, upgrades and spares of India
and AsiaPac IT Services and Products and raw material and finished stocks
of Consumer Care and Lighting. Stock of inventory has reduced from Rs.
1,153 million as of March 31, 2001 to Rs. 748 as of March 31, 2002.
The reduction in inventory is primarily due to the transfer of
inventories of Rs. 301 million of Fluid Power business to Wipro Fluid
Power Limited. In addition, inventories of India and AsiaPac IT Services
and Products has reduced by Rs. 94 million due to a 14% decline in
revenues.
3.2.9 SUNDRY DEBTORS
Sundry debtors (net of provision) for the current year is at 6,434
million as against 6,177 million in the previous year. Segment wise break
|
up of sundry debtors is outlined below:
(Rs. in millions)
BUSINESS UNIT 2002 2001 INCREASE
----- ----- ---
Global IT Services 3,730 3,540 190
India and AsiaPac IT Services and Products 2,311 2,089 222
Consumer Care and Lighting 181 159 22
Others 212 389 (177)
----- ----- ---
TOTAL 6,434 6,177 257
----- ----- ---
|
In Global IT Services and Products days of sales outstanding have
decreased from 61 days in fiscal 2001 to 57 days in fiscal 2002. In India
and AsiaPac IT Services and Products, days-of-sales outstanding has
increased from 62 days to 86 days.
Provision for doubtful debts has increased from 1% of sales in fiscal
2001 to 1.4% of sales in fiscal 2002. In absolute terms provision for
doubtful debts has increased from Rs. 298 million in fiscal 2001 to Rs.
489 million in fiscal 2002.
3.2.10 CASH AND BANK BALANCE
- Cash and cheques on hand of Rs. 299 million includes collections in
overseas branches which has been banked the first working day
following the date of receipt.
- Balances with foreign banks in current accounts are interest
bearing.
- In fiscal 2001 the Company made equity offering in overseas capital
markets. The proceeds of the offering are invested in highly liquid
money market instruments. Deposits with other banks include Rs.
1,179 million of such investments.
85
WIPRO LIMITED
3.2.11 LOANS AND ADVANCES
- In fiscal 2001 the year the Company made equity offering in overseas
capital markets. The proceeds of the offering are invested in highly
liquid money market instruments. Loan and advances include Rs. 5,287
million of such investments.
- Cash surplus generated by operations has been invested in Inter
Corporate deposits. These deposits are placed with financial
institutions/corporates with highest credit rating.
- Advances recoverable in cash or in kind have decreased from Rs.
1,089 million to Rs. 857 million. The decrease is primarily in
others. Interest accrued, at the beginning of the year, on certain
investments have been received in fiscal 2002. Certain advances
which were earlier grouped in other advances have now been
reclassified as capital advances and grouped under capital
work-in-progress.
3.2.12 CURRENT LIABILITIES AND PROVISIONS
CURRENT LIABILITIES
Sundry creditors have increased to Rs. 2,148 million from Rs. 1,607
million in line with the increase in operating expenses.
Other liabilities has decreased marginally from 2,016 million to 2,009
million.
PROVISIONS
- Provisions of Rs. 398 million for employee retirement benefit
represents Company's liability towards leave encashment and
gratuity, valued on an actuarial basis. Gratuity entitlement of most
of the employees and pension benefits are funded through
contribution to applicable schemes of LIC.
- For fiscal 2002, the Directors of the Company have proposed a
dividend of 50% on equity shares.
3.3 RESULTS OF OPERATIONS
3.3.1 INCOME FROM SALES AND SERVICES
Sales have grown by 12%. The increase was attributable to increases of
28% in revenues of Global IT Services and Products and decreases of 14%
and 9% in revenues of India and AsiaPac IT Services and Products and
Consumer Care & Lighting respectively.
GLOBAL IT SERVICES AND PRODUCTS
Global IT Services and Products accounts for 66% of the total revenue of
Wipro Limited. During the year revenues grew by 28% from Rs. 17,840
million to Rs. 22,909 million. Revenues from technology services grew by
28%. This was primarily driven by growth in revenues from the practice
addressing the requirements of telecom and internet service providers.
Revenues from Telecom and Internetworking practice, addressing the
requirements of telecom equipment manufacturers declined by 6% reflecting
the softness in demand from telecom equipment manufacturers. Revenues
from enterprise services grew by 28% primarily driven by growth in
revenues from practices addressing the requirements of financial services
and retail and utility companies.
We added over 107 new clients during the year, new clients accounted for
over 15% of the total revenues. The total number of clients who accounted
for over US $ 5 million in revenues increased from 15 in fiscal 2001 to
23 for fiscal 2002.
INDIA AND ASIAPAC IT SERVICES AND PRODUCTS
India and AsiaPac IT Services and Products accounted for 21% of the total
revenues of Wipro Limited. The decrease in revenue was primarily due to a
6% decline in revenues from manufactured products and a 29% decline in
revenues from traded products. This was partially offset by 2% growth in
Services revenue.
CONSUMER CARE AND LIGHTING
Consumer Care and Lighting accounts for 9% of total revenue. Sales of
Consumer Care and Lighting decreased by 9%. This was primarily
attributable to decline in revenues from soap products.
86
|
WIPRO LIMITED
3.3.2 OTHER INCOME
Other income of Rs. 1,553 million has increased by 123% as compared to last
year.
(Rs. in millions)
AMOUNT GROWTH
-----------------------------------------
PARTICULARS MARCH 31, 2002 March 31, 2001
-------------- -------------- ------
Dividend 285 32 791%
Interest 753 313 141%
Rental Income 19 16 19%
Profit on Sale of Investments -- 4 --
Profit on disposal of fixed assets 36 49 --
Difference in exchange 214 86 149%
Royalty 92 31 197%
Provision no longer required 115 54 113%
Miscellaneous Income 38 111 -65%
----- --- ---
TOTAL 1,553 696 123%
----- --- ---
|
- Dividends primarily comprise returns from investments in money
market mutual funds. A significant portion of our domestic
investments are in money market mutual funds. Returns received as
dividends are more tax efficient than returns received in the form
of interest.
- The interest income has increased from Rs. 313 million in fiscal
2001 to Rs. 753 million in fiscal 2002. The increase is primarily on
account of increase in absolute quantum of investments. The proceeds
from equity offering of the Company of Rs. 5,814 million and cash
surplus generated by operations has been invested in highly liquid
money market instruments or lent to corporate/financial institutions
of highest credit rating. The proceeds from equity offering has been
invested for the entire year in fiscal 2002 while it was invested
only for a portion of the year in fiscal 2001.
- Amounts received from Wipro ePeripherals Ltd. and Wipro GE Medical
Systems Ltd. for the use of proprietary intangible assets of the
Company is reflected as royalty income.
3.3.3 COST OF GOODS SOLD
(Rs. in millions)
PARTICULARS MARCH 31, 2002 MARCH 31, 2001 INCREASE
---------------------- ---------------------- --------
AMOUNT % AMOUNT %
------ ----- ------ ----- --
Raw materials, Finished and Process Stocks 7,931 23.22% 8,180 26.81% -3%
Stores & Spares 183 0.53% 175 0.57% --
Power and Fuel 321 0.94% 310 1.02% --
Salaries, wages and bonus 3,497 10.24% 2,733 8.96% 28%
Contribution to provident and other funds 133 0.39% 103 0.34% --
Gratuity and pension 121 0.35% 78 0.26% --
Workmen and Staff welfare 139 0.41% 188 0.62% --
Insurance 17 0.05% 7 0.02% --
Repairs to factory buildings 11 0.03% 39 0.13% --
Repairs to Plant & Machinery 116 0.34% 74 0.24% --
Rent 202 0.59% 196 0.64% --
Rates & Taxes 12 0.03% 13 0.04% --
Packing 15 0.05% 29 0.09% --
Travelling and allowance 5,831 17.07% 4,956 16.24% 18%
Depreciation 1,106 3.24% 739 2.42% 50%
Miscellaneous 1,220 3.57% 374 1.23% 226%
Capitalised (76) -0.22% (118) -0.39% --
------ ----- ------ ----- --
TOTAL 20,779 60.83% 18,077 59.24% 15%
------ ----- ------ ----- --
INCOME FROM SALES AND SERVICES 34,162 100.00% 30,512 100.00%
------ ----- ------ ----- --
|
87
WIPRO LIMITED
CONSUMPTION OF RAW MATERIALS, FINISHED AND PROCESS STOCKS
The decrease in consumption of raw materials, finished and process stocks
is primarily due to 18% decline in Indian IT Services and Products which
is partially offset by the bought out products in Global IT Services and
Products.
SALARIES AND OTHER MANPOWER RELATED COSTS
The compensation expenses has increased by 28% primarily due to the
annual compensation review in October 2000 and the increase in onsite
allowances effective October 2001. The impact of annual compensation
review is for the entire year in fiscal 2002 while the impact was only
for a portion of the year in fiscal 2001.
TRAVELLING AND ALLOWANCES
Travel and allowance has increased by 18% during the year to Rs. 5,381
million. This increase is primarily due to increase in number of
employees who have been deployed at customer premises, higher frequency
of travel and increase in travel allowances.
3.3.4 SELLING, GENERAL AND ADMINISTRATIVE EXPENSE
(Rs. in millions)
PARTICULARS MARCH 31, 2002 MARCH 31, 2001 INCREASE
--------------------- --------------------- --------
AMOUNT % AMOUNT %
------ ------ ------ ------ --
Salaries, wages and bonus 996 2.91% 924 3.03% 8%
Contribution to provident and other funds 35 0.10% 40 0.13% --
Gratuity and pension 34 0.10% 28 0.09% --
Workmen and Staff welfare 129 0.38% 124 0.41% --
Insurance 6 0.02% 21 0.07% --
Repairs to buildings 4 0.01% 5 0.02% --
Rent 118 0.35% 81 0.27% --
Rates and taxes 13 0.04% 90 0.30% --
Carriage and freight 212 0.62% 224 0.73% --
Commission on sales 490 1.43% 659 2.16% -26%
Auditors' remuneration and expenses
Audit fees 3 0.01% 3 0.01% --
For certification including tax audit 1 0.00% 1 0.00% --
Reimbursement of expenses 1 0.00% 1 0.00% --
Advertisement and sales promotion 316 0.93% 472 1.55% 33%
Loss on sale of fixed assets 11 0.03% 1 0.00% --
Directors' fees 1 0.00% 1 0.00% --
Depreciation 313 0.92% 241 0.79% --
Travelling and allowances 1,572 4.60% 1,076 3.53% 46%
Communication 112 0.33% 326 1.07% --
Provision/write off of bad debts 248 0.73% 267 0.87% --
Diminution in value of investments 163 0.48% -- 0.00%
(mutual fund units)
Miscellaneous 629 1.84% 824 2.70% -24%
------ ------ ------ ------ --
TOTAL 5,406 15.82% 5,407 17.72% 0%
------ ------ ------ ------ --
INCOME FROM SALES AND SERVICES 34,162 100.00% 30,512 100.00%
------ ------ ------ ------ --
|
88
WIPRO LIMITED
SALARIES AND OTHER MANPOWER RELATED COSTS
The increase is primarily due to annual compensation review in October
2000 and the increase in support staff head count. The impact of annual
compensation review is for the entire year in fiscal 2002 while the
impact was only for a portion of the year in fiscal 2001.
ADVERTISEMENT AND SALES PROMOTION
Advertisement and sales promotion have decreased by 33% during the year
to Rs. 316 million. The decrease is primarily due to reduction of
advertisement spends in Wipro Consumer Care.
TRAVELLING AND ALLOWANCES
Travel and allowance has increased by 46% during the year to Rs. 1,572
million. This is primarily due to increase in the Global IT Services and
Products Sales and Marketing Team from 67 in fiscal 2001 to 99 in fiscal
2002. Expenses of overseas sales and marketing team are included in
travel and allowances.
COMMISSION ON SALES
Commission on sales has declined by 26% to Rs. 490 million. The decline
is primarily in Global IT Services and Products. In Global IT Services
and Products we have discontinued certain sales channels and supplemented
them with our own sales efforts. This has facilitated the reduction in
commission expenses in Global IT Services and Products from Rs. 213
million in fiscal 2001 to Rs. 48 million in fiscal 2002.
3.3.5 INTEREST
Interest expense has reduced from Rs. 69 million in previous year to Rs.
29 million in the current year. The decrease is primarily on account of
reduction in absolute quantum of borrowings and partly due to reduction
in interest rates. Average borrowings in the current year are nearly 40%
lower than the average borrowings in the previous year.
3.3.6 INCOME TAXES
Effective tax rate has reduced to 9% from 13% in the previous year. The
reduction in the effective tax rate was primarily due to the following:
a) Increase in the proportion of revenues from Global IT Services and
Products.
b) Increase in the proportion of Global IT Services and Products
revenues from geographies having lower tax rates.
c) A significant portion of the income from domestic investments being
realised in a tax-free manner.
d) Write-back of tax provision of earlier periods on completion of
assessments.
3.3.7 APPROPRIATIONS FROM PROFIT
|
The Profit after tax of Rs. 8,661 million is appropriated as follows:
- Proposed dividend on equity shares Rs. 232 million
- Transfer to general reserve Rs. 8,429 million
4.0 MATERIAL DEVELOPMENTS IN HUMAN RESOURCES
Please refer to our discussions in the sub section titled "Human
Resources" in the section titled "Management Discussion and Analysis of
Financial Condition and Results of Operations - US GAAP" in pages 164
through 178 of this report.
5.0 TRANSACTIONS IN WHICH THE MANAGEMENT IS INTERESTED IN THEIR PERSONAL
CAPACITY
Refer note 20 in Notes to Accounts.
89
WIPRO LIMITED
RECONCILIATION OF PROFITS BETWEEN INDIAN GAAP AND US GAAP
(Rs. in million)
PARTICULARS NOTES MARCH 31, 2002 MARCH 31, 2001
----- -------------- --------------
PROFITS BEFORE EXTRAORDINARY/NON-RECURRING ITEMS 8,854 6,664
Net extraordinary/non-recurring items - 16
----- -----
PROFIT FOR THE YEAR 8,854 6,680
----- -----
Adjustments to reconcile profits for the year as per Indian
GAAP with net income as per US GAAP
Stock compensation expense A (79) (87)
Deferred tax expense B (200) (56)
Goodwill amortization C (175) (45)
Consolidation of subsidiaries D - 202
Share in Profit/(loss) of affiliates E 130 (54)
Deferral of revenue F (88) 41
Unrealised restatement gains G (52) -
Interest on secured borrowings H (40) (149)
Others I (20) (18)
Tax liability on sale of real estate property J - (78)
----- -----
Total (524) (244)
----- -----
INCOME FROM CONTINUING OPERATIONS 8,330 6,436
----- -----
Income tax benefits on sale of investments in
discontinued operations J - 78
Cumulative effect of change in accounting policy F - (59)
TOTAL - 19
----- -----
NET INCOME AS PER US GAAP 8,330 6,455
----- -----
|
NOTES:
A. Under US GAAP, compensation cost is recognized for shares granted to
employees as the excess of the quoted market price of the stock at the
date of grant over the amount to be paid by the employee. Such
compensation cost is amortized over the vesting period. Accordingly, Wipro
has recorded compensation cost for shares granted to employees from the
Wipro Equity Reward Trust set up in 1984. No such accounting is required
under Indian GAAP.
B. Under US GAAP, Income taxes are accounted using the asset liability
method. This method requires recognition of future tax consequences of
temporary differences between the book-base and the tax-base of assets and
liabilities and operating loss carry forwards. Under Indian GAAP income
taxes were accounted using the taxes payable method and the impact of
temporary differences was not recognized. From April 1, 2001, income taxes
are accounted using the asset liability method. In US GAAP, a deferred tax
asset of Rs. 200 million was recognized in the year ended March 31, 2000
for the difference between the tax basis carrying value of investments in
Wipro Net and the amounts for financial reporting. The deferred tax asset
has been reversed during the year ended March 31, 2002, on legal
re-organisation of Wipro Net as a result of which the benefit of the
deferred tax asset will no longer be available.
90
WIPRO LIMITED
C. In fiscal 2001, the Company recorded goodwill of Rs. 868 million on
acquisition of minority interest held by KPN group in Wipro Net. In fiscal
2000, the Company had also recorded goodwill of Rs. 10.5 million on
acquisition of minority interest in Wipro Computers Limited. Goodwill
resulting from these acquisitions is amortized over a period of 5 years.
In Indian GAAP, from April 1, 2001, cost of investments in excess of share
in the underlying assets will be recorded as goodwill.
D. Under US GAAP, the financial statements of all subsidiaries, which are
more than 50% owned and controlled are consolidated with the financial
statements of the parent. Accordingly, Wipro has consolidated the
financial statements of subsidiaries. In Indian GAAP financial statements
of subsidiaries have been consolidated from April 1, 2001.
E. Under US GAAP, the financial statements of affiliates (entities where the
investor has ability to exercise significant influence) are accounted by
the equity method whereby the share of the investor in the profits/losses
of the investee are recorded in the year such profits are earned or losses
incurred. Accordingly, Wipro has recorded it's share of profit/loss of
Wipro GE Medical Systems Ltd., Wipro Net Ltd., Netkracker Ltd. and Wipro
ePeripherals Ltd. Under Indian GAAP, dividends from affiliates are
recognized as income when received.
F. The Company has adopted the provisions of the Staff Accounting Bulletin
No. 101 (SAB 101) issued by the Securities Exchange Commission.
Accordingly, revenues from sale of goods, where a customer is not
obligated to pay a portion of contract price until the completion of
installation, is recognized only on completion of installation. The
cumulative effect of the applying this change to all prior years is
reflected separately as the cumulative effect of change in accounting
policy. In Indian GAAP revenue is recognized on dispatch. In addition, in
Indian GAAP, revenue has been recognised in respect of work performed in a
certain fixed price, fixed time frame arrangement where the discussions
with the customer on expanding the scope of work has not yet been
concluded. In US GAAP revenues on this arrangement will be recognized when
the final terms of the arrangement is contractually agreed upon with the
customer.
G. In US GAAP, unrealised foreign exchange restatement gains on certain
foreign currency denominated assets have been recognized directly in
Stockholders' equity.
H. In fiscal 2000 the Company transferred equity shares in Wipro Net to a
financial institution. The terms of the transfer provide Wipro with a call
option and the transferee with a put option. Further, the transferee is
restricted from selling the shares during the period of the option. Under
US GAAP, this transfer is not recorded as a sale but as a secured
borrowing. Interest is recognized at the effective yield on the put
option. A deferred tax asset of Rs 200 million was recognized in the year
ended March 31, 2000 for the difference between the tax basis carrying
value of investments in Wipro Net and the amounts for financial reporting.
In Indian GAAP the transfer of shares is recognized as sale.
I. Others include differences arising from accounting for interest
capitalization and exchange rate fluctuations of foreign currency liability
for capital goods. Under Indian GAAP, exchange rate fluctuations on foreign
currency liability for capital goods are included in the cost of the
relevant asset. Under US GAAP, such exchange rate fluctuations are charged
to income statement.
J. The tax liability arising on sale of certain real estate property is offset
against tax benefits arising on sale of investments in discontinued
operations. In Indian GAAP income tax expense is accounted using the taxes
payable method. The tax liability and tax benefit offset each other and is
not reported separately. Under US GAAP, tax liability arising on sale of
real estate property is reflected in income tax expense and tax benefits
arising from sale of investments in discontinued operations are reflected
separately after income from continuing operations.
91
WIPRO LIMITED
STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956 as at March 31,
2002
FOR FINANCIAL YEAR OF THE
SUBSIDIARY
------------------ ------------------
Name of the Subsidiary Financial Number of Extent of Profits/(losses) Profits/(losses)
Company year ending shares held holding so far it concerns so far it
of the the members concerns the
Subsidiary of the Holding members of the
Company and Holding Company
not dealt with and dealt with in
in the books of the books of
Accounts of Accounts of
Holding Company Holding
(Except to the extent Company
dealt with in F)
---------------------- -------------- ---------- --------- ----------------- ------------------
A B C D E F
---------------------- -------------- ---------- --------- ----------------- ------------------
Wipro Inc, USA March 31, 2002 1,200 100% 299 Nil
Enthink Inc, USA* March 31, 2002 - 0% (5,108) Nil
Wipro Japan KK, Japan March 31, 2002 650 100% 38,576 Nil
Wipro Prosper Limited March 31, 2002 200 100% 26 Nil
Wipro Trademarks
Holding Limited March 31, 2002 200 100% (217) Nil
Wipro Welfare Limited March 31, 2002 66,171 100% Nil Nil
Wipro Fluid Power Limited March 31, 2002 7,296,520 79% 94,728 Nil
|
(Rs. in 000s)
FOR PREVIOUS FINANCIAL
YEAR SINCE IT BECAME
A SUBSIDIARY
----------------- ------------------
Name of the Subsidiary Profits/(losses) Profits/(losses)
Company so far it so far it concerns
concerns the the members
members of of the Holding
the Holding Company and
Company and dealt with in the
not dealt with books of
in the books Accounts
of Accounts of of Holding
Holding Company Company
(Except to the
extent dealt with
in H)
---------------------- ----------------- ------------------
A G H
---------------------- ----------------- ------------------
Wipro Inc, USA (13,428) (108,122)
Enthink Inc, USA* (123,415) NA
Wipro Japan KK, Japan 39,032 NA
Wipro Prosper Limited 697 Nil
Wipro Trademarks
Holding Limited (363) Nil
Wipro Welfare Limited Nil Nil
Wipro Fluid Power Limited Nil Nil
|
* Wipro Inc, USA holds all the shares of Enthink Inc.
92
WIPRO LIMITED
The Board of Directors
Wipro Limited
Bangalore.
AUDITORS' REPORT ON CONSOLIDATED FINANCIAL STATEMENTS
We have examined the attached Consolidated Balance Sheet of Wipro Limited (the
Company) and its subsidiaries (the Wipro Group) as at March 31, 2002 and also
the Profit and Loss Account of the Group for the year ended on that date.
These financial statements are the responsibility of the management of Wipro
Limited. Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance with
generally accepted auditing standards in India. These standards require that we
plan and perform the audit to obtain reasonable assurance whether the financial
statements are prepared, in all material respects, in accordance with Accounting
Principles Generally Accepted in India and are free of material mis-statements.
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 issued and significant estimates made by management,
as well as evaluating the overall financial statements. We believe that our
audit provides a reasonable basis for our opinion.
We report that:
1. We have obtained all the information and explanations, which to the best of
our knowledge and belief were necessary for the purpose of our audit.
2. The consolidated financial statements have been prepared by the Company in
accordance with the requirements of Accounting Standard-21, consolidated
financial statements issued by the Institute of Chartered Accountants of
India and on the basis of the separate audited financial statements of Wipro
Limited and its subsidiaries.
3. In our opinion and to the best of our information and according to the
explanations given to us, the said accounts, read together with the note
thereon give a true and fair view:
a. in the case of the balance sheet, of the state of affairs of the Wipro
Group as at March 31, 2002.
b. in the case of the Profit and Loss Account, of the profit of the Wipro
Group for the year ended on that date.
FOR N.M. RAIJI & CO.,
Chartered Accountants
J.M. GANDHI
Mumbai, April 19, 2002 Partner
93
WIPRO LIMITED
CONSOLIDATED BALANCE SHEET
(Rs. in 000s)
AS OF MARCH 31,
--------------------------
SOURCES OF FUNDS 2002 2001
---------- ----------
SHAREHOLDERS' FUNDS
Share Capital 464,931 464,866
Share application money pending allotment 2,399 4,797
Minority Interest 27,542 --
Reserves and Surplus 25,460,163 18,500,175
---------- ----------
25,955,035 18,969,838
---------- ----------
LOAN FUNDS
Secured Loans 254,872 400,644
Unsecured Loans 60,563 48,087
---------- ----------
315,435 448,731
---------- ----------
TOTAL 26,270,470 19,418,569
---------- ----------
APPLICATION OF FUNDS
FIXED ASSETS
Goodwill 12,670 --
Gross block 10,069,036 9,488,812
Less: Depreciation 4,770,280 3,818,627
---------- ----------
Net Block 5,311,426 5,670,185
Capital work-in-progress and advances 1,164,327 797,958
---------- ----------
6,475,753 6,468,143
---------- ----------
INVESTMENTS 4,680,822 499,474
DEFERRED TAX ASSETS 421,803 --
CURRENT ASSETS, LOANS AND ADVANCES
Inventories 934,600 1,152,530
Sundry Debtors 6,546,160 6,198,589
Cash and Bank balances 3,031,909 4,588,365
Loans and advances 10,055,275 6,117,725
---------- ----------
20,567,944 18,057,209
---------- ----------
CURRENT LIABILITIES AND PROVISIONS
Liabilities 5,223,455 5,052,456
Provisions 653,156 554,550
---------- ----------
5,876,611 5,607,006
========== ==========
NET CURRENT ASSETS 14,691,333 12,450,203
---------- ----------
MISCELLANEOUS EXPENDITURE (to the extent not written off or adjusted) 759 749
---------- ----------
TOTAL 26,270,470 19,418,569
---------- ----------
|
As per our Report attached For and on behalf of the Board of Directors
FOR N.M. RAIJI & CO.,
Chartered Accountants
AZIM HASHAM PREMJI N. VAGHUL B.C. PRABHAKAR
J.M. GANDHI Chairman and Managing Director Director Director
Partner
SURESH C. SENAPATY SATISH MENON
Corporate Executive Corporate Vice President -
Vice President - Finance Legal & Company Secretary
Mumbai, April 19, 2002 Bangalore, April 19, 2002
|
94
WIPRO LIMITED
CONSOLIDATED PROFIT AND LOSS ACCOUNT
(Rs. in 000s)
YEAR ENDED MARCH 31,
----------------------------
2002 2001
----------- -----------
INCOME
Sales and Services 34,405,086 30,813,117
Other Income 1,558,236 697,111
----------- -----------
35,963,322 31,510,228
----------- -----------
EXPENDITURE
Cost of goods sold 20,831,431 18,076,391
Selling, general and administrative expenses 5,519,512 5,638,956
Interest 29,697 71,877
----------- -----------
26,380,640 23,787,224
----------- -----------
PROFIT BEFORE TAXATION 9,582,682 7,723,003
----------- -----------
Provision for taxation (refer note 4) 729,000 1,012,000
Add: Minority Interest 808 --
----------- -----------
PROFIT AFTER TAX 8,854,490 6,711,003
----------- -----------
Earnings per share (in Rs.)
Basic 38.31 29.26
Diluted 38.24 29.02
Number of shares
Basic 231,132,500 229,325,989
Diluted 231,534,876 231,254,523
|
As per our Report attached For and on behalf of the Board of Directors
FOR N.M. RAIJI & CO.,
Chartered Accountants
AZIM HASHAM PREMJI N. VAGHUL B.C. PRABHAKAR
J.M. GANDHI Chairman and Managing Director Director Director
Partner
SURESH C. SENAPATY SATISH MENON
Corporate Executive Corporate Vice President -
Vice President - Finance Legal & Company Secretary
Bangalore, April 19, 2002
|
Mumbai, April 19, 2002
95
WIPRO LIMITED
SIGNIFICANT ACCOUNTING POLICIES
ACCOUNTING CONVENTION
The preparation of consolidated financial statements in conformity with Indian
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities,
revenues and expenses and disclosure of contingent assets and liabilities.
Actual results could differ from these estimates.
Basis of preparation of financial statements -
The accompanying consolidated financial statements have been prepared in
accordance with Indian generally accepted accounting principles.
Principles of consolidation -
The consolidated financial statements include the financial statements of Wipro
and all of its subsidiaries, which are more than 50% owned and controlled. All
material inter-Company accounts and transactions are eliminated on
consolidation. The Company accounts for investments by the equity method where
its investment in the voting stock gives it the ability to exercise significant
influence over the investee.
REVENUE RECOGNITION
- Sales include applicable sales tax unless separately charged and are net of
discounts.
- Sales are recognized on despatch, except in the following cases:
- Consignment sales are recognized on receipt of statement of account from
the agent.
- Sales, which are subject to detailed acceptance tests, revenue is
reckoned based on milestones for billing, as provided in the contracts.
- Revenue from software development services includes revenue from time
and material and fixed price contracts. Revenue from time and material
contracts are recognized as related services are performed. Revenue on
fixed price contracts is recognized in accordance with percentage of
completion method of accounting.
- Export incentives are accounted on accrual basis and include estimated
realizable values/benefits from special import licenses and Advance
licenses.
- Agency commission is accrued on shipment of consignment by principal.
- Maintenance revenue is considered on acceptance of the contract and is
accrued over the period of the contract.
- Other income is recognized on accrual basis.
RESEARCH AND DEVELOPMENT
Revenue expenditure on research and development is charged to Profit and Loss
account and capital expenditure is shown as addition to fixed assets.
PROVISION FOR RETIREMENT BENEFITS
For employees covered under group gratuity scheme of LIC, gratuity charged to
Profit and Loss account is on the basis of premium demanded by LIC. Provision
for gratuity (for certain category of employees) and leave benefit for
employee's is determined as per actuarial valuation at the year end. Defined
contributions for provident fund and pension are charged to the Profit and Loss
account based on contributions made in terms of applicable schemes, after
netting off the amounts rendered surplus on account of employees separated from
the Company.
FIXED ASSETS AND DEPRECIATION
Fixed assets were revalued in March 1997 and stated at revalued cost less
depreciation. Depreciation was provided on revalued amounts. The additional
depreciation charge on amounts added on revaluation was drawn out of revaluation
reserves. In January 2002 the revaluation reserves were reversed out against the
carrying value of fixed assets. Consequently fixed assets are now stated at
historical costs less depreciation.
Interest on borrowed money allocated to and utilized for fixed assets,
pertaining to the period up to the date of capitalization and other revenue
expenditure incurred on new projects is capitalized. Assets acquired on hire
purchase are capitalized at the gross value and interest thereon is charged to
Profit and Loss account. Renewals and replacement are either capitalized or
charged to revenue as appropriate, depending upon their nature and long term
utility.
In respect of leased assets, lease rentals payable during the year is charged to
Profit and Loss account.
96
WIPRO LIMITED
Depreciation is provided on straight line method at rates specified in Schedule
XIV to the Companies Act, 1956, except on data processing equipment and
software, furniture and fixture, office equipment, electrical installations
(other than those at factories) and vehicles for which commercial rates are
applied. Technical know-how is amortized over six years. In Wipro Inc, Enthink
Inc and Wipro Japan KK the depreciation is provided on Written Down Value
method.
FOREIGN CURRENCY TRANSACTIONS
Foreign currency transactions are recorded at the spot rate prevailing at the
beginning of the concerned month. Year end balances of foreign currency assets
and liabilities are restated at the closing rate/forward contract rate, as
applicable. Resultant differences in respect of liabilities relating to
acquisition of fixed assets are capitalized. Other differences on restatement or
payment are adjusted to revenue account.
Forward premiums in respect of forward exchange contracts are recognized over
the life of the contract, except that premiums relating to foreign currency
loans for the acquisition of fixed assets are capitalized.
DEFERRED TAX
Tax expenses charged to Profit and Loss account is after considering deferred
tax impact for the timing difference between accounting income and tax income.
INVENTORIES
Finished goods are valued at cost or net realizable value, whichever is lower.
Other inventories are valued at cost less provision for obsolescence. Small
value tools and consumables are charged to consumption on purchase. Cost is
computed on weighted average basis.
INVESTMENTS
Long term investments are stated at cost and short term investments are valued
at lower of cost and net realizable value. Diminution in value is provided for
where the management is of the opinion that the diminution is of permanent
nature.
NOTES TO ACCOUNTS
1. In accordance with Accounting Standard 21 "Consolidated Financial
Statements" issued by the Institute of Chartered Accountants of India, the
Consolidated Financial Statements of Wipro Limited include the financial
statements of all subsidiaries which are more than 50% owned and controlled.
2. Accounting Standard 21 does not deal with investments in associates and
joint ventures. At present such investment is accounted at cost as required
under Accounting Standard - 13. It means that the Company's proportionate
share in Profit or Loss of such companies are not recognized and only
dividend income is recognized. Consequently, Wipro GE Medical Systems Ltd.
has not been considered for consolidation.
3. During the year, the Company acquired 1,791,385 shares, representing 8% of
the equity capital of Wipro Net Limited (WNL). Consequent to this
investment, WNL has become a fully owned subsidiary of the Company. The
board of directors of both the companies decided to amalgamate WNL into the
Company with effect from April 2001. Accordingly, the Karnataka High Court
approved the scheme of amalgamation. The scheme of amalgamation has been
given effect to in the accounts of the Company for the year ended March 31,
2002, on the pooling of interest method. The share premium of Wipro Net
Limited is credited to Wipro Limited. The deficit of Rs. 2,432,045 arising
on amalgamation as detailed below is transferred to General Reserve:
(Rs. in 000s)
-------------
Fixed Assets 433,507
Net Current Assets 71,753
Less: Loans 90,000
Net Tangible Assets as of March 31, 2001 415,260
Less: Investments in WNL by the Company 2,416,692
Less: Share premium 430,613
Deficit transferred to General Reserve 2,432,045
|
4. Provision for taxation comprises of following:
(i) Rs. 388,837 in respect of foreign taxes, net of deferred tax of Rs.
53,967 and write back of provision of Rs. 87,189 in respect of earlier
year.
(ii) Rs. 337,163 in respect of Indian Income Tax, net of deferred tax
benefits of Rs. 236,130 and net of write back of provision of Rs.
19,921 in respect of earlier years.
(iii) Rs. 3,000 in respect of Wealth Tax.
97
WIPRO LIMITED
5. The details of subsidiaries are as follows:
a) NAME OF THE SUBSIDIARY COUNTRY OF INCORPORATION % HOLDING
Wipro Fluid Power Limited India 79%
Wipro Inc USA 100%
Enthink Inc USA - (*)
Wipro Japan KK Japan 100%
Wipro Prosper Limited India 100%
Wipro Trademarks Holding Limited India 100%
Wipro Welfare Limited India 100%
b) Wipro Equity Reward Trust India Fully controlled trust
|
(*) Fully owned by Wipro Inc.
98
WIPRO LIMITED
CASH FLOW STATEMENT
(Rs. in 000s)
-------------------------
YEAR ENDED MARCH 31, 2002
-------------------------
CASH FLOWS FROM OPERATING ACTIVITIES: 9,582,682
Net profit before tax and non recurring items
Adjustments to reconcile Net profit before tax and non recurring
items to net cash provided by operating activities:
Depreciation and amortization 1,378,945
Foreign currency translation gains (119,637)
Retirement benefits provision (6,413)
Others (12,676)
Interest on borrowings 28,941
Dividend/interest (873,941)
Loss/(Gain) on sale of property, plant and equipment (25,603)
----------
OPERATING CASH FLOW BEFORE CHANGES IN WORKING CAPITAL 9,952,298
Trade and other receivable (236,983)
Loans and advances (745,340)
Inventories (other than stock-in-trade land) 217,929
Trade and other payables 519,631
----------
Net cash provided by operations 9,707,535
Direct taxes paid (1,155,393)
----------
NET CASH PROVIDED BY OPERATING ACTIVITIES 8,552,142
----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Expenditure on property, plant and equipment (including advances) (2,433,022)
Proceeds from sale of property, plant and equipment 194,650
Purchase of investments (5,709,805)
Inter Corporate deposits placed (963,300)
Certificate of Deposits with foreign banks (1,961,111)
Sale/maturities on Investments 145,468
Divided received 284,645
Interest received 560,355
----------
NET CASH USED IN INVESTING ACTIVITIES (9,882,120)
----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of Stock Option Plan grants 35,479
Dividends paid (128,071)
Proceeds from issuance/(repayment) of borrowings (133,886)
----------
NET CASH PROVIDED BY/(USED IN) FINANCING ACTIVITIES (226,478)
----------
Net increase/(decrease) in cash and cash equivalents during the year (1,556,456)
Cash and cash equivalents at the beginning of the period 4,588,365
----------
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD 3,031,909
----------
|
99
WIPRO LIMITED
Notes:
i) Opening cash and bank balances include cash balances of subsidiaries of
Rs. 115,113 and Rs. 5,282 of Wipro Net Limited.
ii) Purchase of investments include Rs. 1,218,142 on acquisition of minority
interest of 8% in Wipro Net Limited.
iii) Figures for previous periods presented, have been regrouped wherever
necessary, to confirm to this period classification.
As per our Report attached For and on behalf of the Board of Directors
FOR N.M. RAIJI & CO.,
Chartered Accountants
AZIM HASHAM PREMJI N. VAGHUL B.C. PRABHAKAR
J.M. Gandhi Chairman and Managing Director Director Director
Partner
SURESH C. SENAPATY SATISH MENON
Corporate Executive Corporate Vice President -
Vice President - Finance Legal & Company Secretary
Mumbai, April 19, 2002 Bangalore, April 19, 2002
|
100
WIPRO LIMITED
FINANCIAL STATEMENTS OF SUBSIDIARIES OF WIPRO LIMITED
FOR THE YEAR ENDED MARCH 31, 2002
101
WIPRO FLUID POWER LIMITED (FORMERLY KNOWN AS NETKRACKER LIMITED)
DIRECTORS' REPORT
The Directors present the Annual Report of Wipro Fluid Power Limited for the
year ended March 31, 2002.
PURCHASE OF BUSINESS
The Company has purchased Wipro Limited's Fluid Power Business with effect from
the opening hours of March 1, 2002.
The Annual Report of Wipro Fluid Power Limited for the year 2001-2002 has been
prepared after giving effect to the said purchase of the Fluid Power Business.
The Company has obtained the approval for change of name from Netkracker Limited
to Wipro Fluid Power Limited as well as the fresh certificate of incorporation
dated April 16, 2002, consequent to change of name, from the Registrar of
Companies, Karnataka, Bangalore pursuant to an application made by the Company.
FINANCIAL RESULTS
(Rs. in Mns)
---------------------------
2002 2001
------- ------
Sales and Services 154.78 6.8
Loss (174.22) (229.3)
------- ------
|
The Profit and Loss account shows a loss of Rs. 174.22 Mns for the year.
DIRECTORS
Mr. M.S. Rao was appointed as Additional Director of the Company with effect
from March 1, 2002 till the conclusion of the ensuing Annual General Meeting.
Mr. M.S. Rao was also appointed as a whole-time Director of the Company
designated Managing Director of the Company with effect from March 1, 2002. Mr.
D.A. Prasanna and Mr. S.C. Senapaty were appointed as Additional Directors of
the Company with effect from April 15, 2002 till the conclusion of the ensuing
Annual General Meeting. Mr. D.A. Prasanna was also appointed as a whole-time
Director and Chairman with effect from April 15, 2002.
Mr. B.S. Shankaranarayanan retire by rotation and being eligible offers himself
for re-appointment.
AUDITORS
The Auditors, M/s. N.M. Raiji & Co., retire at the ensuing Annual General
Meeting and offer themselves for re-appointment.
PERSONNEL
Information as per Section 217(2A) of the Companies Act, 1956, read with the
Companies (Particulars of Employees) Rules, 1975 is given in the Annexure
forming part of this report.
DIRECTORS RESPONSIBILITY STATEMENT
As required under Section 217(2AA) of the Companies Act, 1956, it is hereby
stated that:
(a) in the preparation of the annual accounts, the applicable accounting
standards had been followed along with proper explanation relating to
material departures;
(b) the Directors had selected such accounting policies and applied them
consistently and made judgements and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of the
Company at the end of the financial year and of the profit or loss of the
Company for that period;
(c) the Directors had taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of this Act
for safeguarding the assets of the Company and for preventing and detecting
fraud and other irregularities;
(d) the Directors had prepared the annual accounts on a going concern basis.
ON BEHALF OF THE BOARD
D.A. PRASANNA
Bangalore, April 18, 2002 Chairman
102
WIPRO FLUID POWER LIMITED (FORMERLY KNOWN AS NETKRACKER LIMITED)
AUDITORS' REPORT
TO THE MEMBERS OF WIPRO FLUID POWER LIMITED (FORMERLY KNOWN AS NETKRACKER
LIMITED)
We have audited the attached Balance Sheet of Wipro Fluid Power Limited,
(formerly known as Netkracker Limited) as at 31st March, 2002 and also the
Profit and Loss Account 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 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.
As required by the Manufacturing and Other Companies (Auditor's Report) Order,
1988 issued by the Central Government of India in terms of sub-section (4A) of
Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement
on the matters specified in paragraphs 4 and 5 of the said Order.
Further to our comments in the Annexure referred to above, we report that:
(i) We have obtained all the information and explanations, which to the best
of our knowledge and belief were necessary for the purpose of our audit;
(ii) 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;
(iii) The Balance Sheet and Profit and Loss Account dealt with by this report
are in agreement with the books of account;
(iv) In our opinion, the Balance Sheet and Profit and Loss Account dealt with
by this report comply with the accounting standards referred to in
sub-section (3C) of Section 211 of the Companies Act, 1956;
(v) On the basis of written representations received from the directors, we
report that none of the directors is disqualified as on 31st March, 2002
from being appointed as a director in terms of clause (g) of sub-section
(1) of Section 274 of the Companies Act, 1956;
(vi) 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 Companies Act, 1956, in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2002; and
(b) in the case of Profit and Loss Account, of the loss for the year
ended on that date.
FOR N.M. RAIJI & CO.,
Chartered Accountants
J.M. GANDHI
Mumbai, April 18, 2002 Partner
103
WIPRO FLUID POWER LIMITED (FORMERLY KNOWN AS NETKRACKER LIMITED)
ANNEXURE TO AUDITOR'S REPORT OF EVEN DATE FOR THE MEMBERS OF WIPRO FLUID POWER
LIMITED (FORMERLY KNOWN AS NETKRACKER LIMITED)
(i) The Company has maintained proper records showing quantitative details
and the situation of its fixed assets. A major portion of fixed assets
have been physically verified by the management during the year. In our
opinion, the frequency of verification of fixed assets by the management
is reasonable, having regard to the size of the Company and the nature
of its assets. No material discrepancy has been noticed between the book
records and the assets physically verified.
(ii) None of the fixed assets of the Company have been revalued during the
year.
(iii) Stocks of finished goods, stores, spare parts and raw materials other
than with the third parties have been physically verified by the
management at reasonable intervals. There is a process of obtaining
confirmation in respect of stocks with third parties.
(iv) In our opinion and according to the information and explanations given
to us, the procedures for physical verification of stocks followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
(v) The discrepancies between the physical stocks and the book stocks were
not material and have been properly dealt within the books of account.
(vi) In our opinion, the valuation of stocks is fair and proper in accordance
with the normally accepted accounting principles.
(vii) The Company has not taken any loans secured or unsecured from companies,
firms or other parties listed in the register maintained under Section
301 of the Companies Act, 1956 and/or from the companies under the same
management as defined under sub-section (1-B) of Section 370 of the
Companies Act, 1956.
(viii) The Company has not granted any loans, secured or unsecured, to
companies, firms or other parties listed in the register maintained
under Section 301 of the Companies Act, 1956 or to the companies under
the same management as defined under sub-section (1-B) of Section 370 of
the Companies Act, 1956.
(ix) In respect of loans and advances in the nature of loans given by the
Company, the parties/employees have generally repaid the principle
amount and interest as per terms, wherever stipulated.
(x) The Company has adequate internal control procedures commensurate with
its size and nature of its business for the purchase of stores, raw
materials including components, plant and machinery, equipment and other
assets and for the sale of goods.
(xi) The transactions for purchase of goods and materials and sale of goods,
materials and services, made in pursuance of contracts or agreements
entered in the register maintained under Section 301 of the Companies
Act, 1956, as aggregating during the year to Rs. 50,000/- or more in
respect of each party, have been made at prices which are generally
reasonable having regard to prevailing market prices for such goods,
materials or services or the prices at which transactions for similar
goods or services have been made with other parties.
(xii) As explained to us, the Company has a regular procedure for
determination of unserviceable or damaged stores and raw material. In
our opinion, adequate provision has been made in the accounts for the
estimated loss on the items so determined.
(xiii) The Company has not accepted any public deposits to which the provisions
of Section 58A of Companies Act, 1956 and the rules made thereunder
would apply.
(xiv) In our opinion, the Company has maintained reasonable records for the
sale and disposal of realisable by-products and scrap.
(xv) The Company has a system of internal audit which, in our opinion, is
commensurate with its size and nature of its business.
(xvi) The Central Government has not prescribed the maintenance of Cost
records under Section 209 (1)(d) of the Companies Act, 1956.
(xvii) The Company has been generally regular in depositing Provident Fund and
Employees State Insurance dues with the appropriate authorities, except
that in a few cases there were minor delays in depositing the dues.
(xviii) There are no undisputed amounts in respect of Income Tax, Wealth Tax,
Sales Tax, Customs Duty and Excise Duty which, as at the Balance Sheet
date, were outstanding for a period of more than six months from the
date they became payable.
104
WIPRO FLUID POWER LIMITED (FORMERLY KNOWN AS NETKRACKER LIMITED)
(xix) On the basis of our examination of the books of account and the
information and explanations given to us, there are no personal expenses
which have been charged to the revenue account other than those incurred
in terms of contractual obligations or in accordance with generally
accepted business practice.
(xx) The Company is not a sick industrial company within the meaning of
Section 3(1)(o) of the Sick Industrial Companies (Special Provisions)
Act, 1985.
(xxi) The business activity carried on by the Company includes providing
internet access on rental basis. For such activities, records for
allocation of manpower, stores and other material is not considered
necessary. There is proper authorisation for issuance of material.
(xxii) As regards the trading activity of the Company, during the year the
damaged goods have been determined and suitable value adjustment has
been made in the books of account.
FOR N.M. RAIJI & CO.,
Chartered Accountants
J.M. GANDHI
Mumbai, April 18, 2002 Partner
105
WIPRO FLUID POWER LIMITED (FORMERLY KNOWN AS NETKRACKER LIMITED)
BALANCE SHEET
(Rs. in 000s)
-------------------------------
SCHEDULE AS AT MARCH 31,
-------------------------------
2002 2001
--------- ---------
SOURCES OF FUNDS
SHAREHOLDERS' FUNDS
Share Capital 1 92,361 92,361
Share application money pending allotment 360,000 --
Reserves and surplus 2 280,618 280,618
LOAN FUNDS
Unsecured Loans 3 46,904 --
--------- ---------
TOTAL 779,883 372,979
--------- ---------
APPLICATION OF FUNDS
FIXED ASSETS
Gross block 4 434,825 77,595
Less: Depreciation 252,610 4,144
--------- ---------
Net block 182,215 73,451
Capital work-in-progress and advances 1,685 663
--------- ---------
183,900 74,114
--------- ---------
INVESTMENTS -- --
Deferred Tax 134,515 --
CURRENT ASSETS, LOANS AND ADVANCES
Inventories 5 186,236 --
Sundry debtors 6 115,342 2,275
Cash and bank balances 7 253 1,770
Loans and advances 8 60,957 98,875
--------- ---------
362,788 102,920
--------- ---------
LESS: CURRENT LIABILITIES AND PROVISIONS
Liabilities 9 159,778 41,190
Provisions 10 10,523 485
--------- ---------
170,301 41,675
--------- ---------
NET CURRENT ASSETS 192,487 61,245
--------- ---------
Miscellaneous Expenditure -- 8,346
Debit Balance in Profit and Loss Account 268,980 229,274
--------- ---------
TOTAL 779,883 372,979
--------- ---------
Significant accounting policies and notes to accounts 16
|
The Schedule referred to above and notes thereon form an integral part of the
Balance Sheet
As per our Report attached For and on behalf of Board of Directors
FOR N.M. RAIJI & CO.,
Chartered Accountants
J.M. GANDHI D.A. PRASANNA M.S. RAO
Partner Chairman Managing Director
Bangalore, April 18, 2002 Bangalore, April 18, 2002
|
106
WIPRO FLUID POWER LIMITED (FORMERLY KNOWN AS NETKRACKER LIMITED)
PROFIT AND LOSS ACCOUNT
(Rs. in 000s)
-------------------------------
SCHEDULE YEAR ENDED MARCH 31,
-------------------------------
2002 2001
--------- ---------
INCOME
Sales and Services 139,358 6,808
Other Income 11 4,173 2,056
--------- ---------
143,531 8,864
--------- ---------
EXPENDITURE
Cost of Goods Sold 12 156,153 38,674
Operating, administrative and marketing expenses 13 83,285 26,896
Depreciation 18,501 4,144
Interest 14 754 --
--------- ---------
258,693 69,714
--------- ---------
PROFIT/(LOSS) BEFORE EXTRAORDINARY ITEMS (115,162) (60,850)
Extraordinary/Non-Recurring Items 15 59,060 168,424
--------- ---------
PROFIT/(LOSS) AFTER EXTRAORDINARY ITEMS (174,221) (229,274)
--------- ---------
PROFIT/(LOSS) BEFORE TAXATION (174,221) (229,274)
Provision for Taxation (refer note 10) (134,515) --
--------- ---------
PROFIT/(LOSS) AFTER TAXATION (39,706) (229,274)
Balance brought forward (refer note 10) (229,274) --
--------- ---------
BALANCE CARRIED TO BALANCE SHEET (268,980) (229,274)
--------- ---------
Significant accounting policies and notes to accounts 16
|
As per our Report attached For and on behalf of Board of Directors
FOR N.M. RAIJI & CO.,
Chartered Accountants
J.M. GANDHI D.A. PRASANNA M.S. RAO
Partner Chairman Managing Director
Bangalore, April 18, 2002 Bangalore, April 18, 2002
|
107
WIPRO FLUID POWER LIMITED (FORMERLY KNOWN AS NETKRACKER LIMITED)
SCHEDULES FORMING PART OF BALANCE SHEET
(Rs. in 000s)
------------------------------
SCHEDULE 1 SHARE CAPITAL AS AT MARCH 31,
------------------------------
2002 2001
-------- --------
AUTHORISED CAPITAL
94,30,000 Equity shares of Rs. 10 each 94,300 40,000
(2001: 40,00,000 Equity shares of Rs. 10 each)
570,000, 0% Fully Convertible cumulative preference shares of Rs. 10 each 5,700 60,000
(2001: 60,00,000, 0% Fully Convertible cumulative preference
shares of Rs. 10 each)
ISSUED, SUBSCRIBED AND PAID-UP
92,36,100 (2001: 3,803,100) Equity shares of Rs. 10 each 92,361 38,031
Of the above Equity shares 72,96,520 (2001: 1,863,520)
shares are held by the holding Company Wipro Limited
PREFERENCE SHARE CAPITAL
(54,33,000 shares converted into equity shares during the year) -- 54,330
------- -------
92,361 92,361
======= =======
SCHEDULE 2 RESERVES & SURPLUS
Share Premium 280,618 280,618
------- -------
280,618 280,618
======= =======
SCHEDULE 3 UNSECURED LOANS
Sales Tax Loan 46,904 --
------- -------
46,904 --
======= =======
|
SCHEDULE 4 FIXED ASSETS GROSS BLOCK
---------------------------------------------------------------------------
PARTICULARS AS ON AS ON
APRIL 1, MARCH 31,
2001 ADDITIONS DELETION 2002
-------- --------- -------- ---------
Building -- 11,960 -- 11,960
Plant & Machinery 63,960 380,687 47,158 397,487
Licence 9,976 -- 7,764 2,211
Dies, Jigs & Fixtures -- 4,310 -- 4,310
Furniture & Equipment 2,301 11,675 2,486 11,489
Vehicles 1,359 8,210 2,202 7,366
------- ------- ------- -------
TOTAL 77,595 416,841 59,611 434,825
------- ------- ------- -------
March 31, 2001 -- 77,595 -- 77,595
------- ------- ------- -------
|
108
WIPRO FLUID POWER LIMITED (formerly known as Netkracker Limited)
SCHEDULE 4 FIXED ASSETS (CONTD.) PROVISION FOR DEPRECIATION NET BLOCK
--------------------------------------- -----------------------------------------
PARTICULARS AS ON DEPRECIATION AS ON AS ON AS ON
APRIL 1, FOR THE MARCH 31, MARCH 31, MARCH 31,
2001 PERIOD DELETIONS 2002 2002 2001
-------- ------------ --------- --------- --------- ---------
Building -- 2,482 -- 2,482 9,478 --
Plant & Machinery 3,350 231,658 729 234,279 163,209 60,611
Licence 474 1,737 -- 2,211 -- 9,502
Dies, Jigs & Fixtures -- 1,806 -- 1,806 2,504 --
Furniture & Equipment 240 7,286 404 7,123 4,366 2,061
Vehicles 80 5,048 418 4,710 2,656 1,278
------- ------- ------- ------- ------- -------
TOTAL 4,144 250,017 1,551 252,610 182,214 73,451
------- ------- ------- ------- ------- -------
March 31, 2001 -- 4,144 -- 4,144 -- --
------- ------- ------- ------- ------- -------
|
Note:
Deletions includes assets written off during the year - Rs. 45,214
Addition for the period includes Rs. 412,798 being the gross value of assets of
Fluidpower division.
Depreciation for the period includes Rs. 231,516 being the accumulated
depreciation on assets taken over.
(Rs. in 000s)
-----------------------
AS AT MARCH 31,
-----------------------
2002 2001
------- -------
SCHEDULE 5 INVENTORIES
Stores and spares 8,342 --
Raw materials 39,361 --
Stock-in-process 63,378 --
Finished goods 62,067 --
Traded stock 13,088 --
------- -------
186,236 --
======= =======
SCHEDULE 6 SUNDRY DEBTORS
(Unsecured, unless otherwise stated)
Over six months
Considered good 14,550 174
Considered doubtful 3,794 --
------- -------
18,344 174
Others
Considered good 100,793 2,101
------- -------
119,136 2,275
Less: Provision for doubtful debts 3,794 --
------- -------
115,342 2,275
======= =======
|
109
WIPRO FLUID POWER LIMITED (FORMERLY KNOWN AS NETKRACKER LIMITED)
(Rs. in 000s)
-----------------------
AS AT MARCH 31,
-----------------------
2002 2001
------- -------
SCHEDULE 7 CASH AND BANK BALANCES
Cash and cheques on hand 60 956
Balances with scheduled banks
In current account 193 814
------- -------
253 1,770
======= =======
SCHEDULE 8 LOANS AND ADVANCES
(Unsecured, considered good unless otherwise stated)
Sundry deposits 3,933 96,979
Balance with Excise and Customs 3,651 --
Advances recoverable in cash or in kind or for
value to be received
Considered good 52,903 1,817
Considered doubtful 1,257 --
Less: Provision for doubtful advances 1,257 --
------- -------
52,903 1,817
------- -------
Advance Income Tax 470 79
------- -------
60,957 98,875
======= =======
SCHEDULE 9 LIABILITIES
Sundry creditors
Due to SSI Undertakings 33,600 --
Others 72,097 --
------- -------
105,697 15,762
======= =======
Income received in advance 11,967 20,752
Advance from Customers 3,992 --
Other Liabilities 38,122 5,143
------- -------
159,778 41,657
======= =======
SCHEDULE 10 PROVISIONS
Retirement Benefits 10,523 18
------- -------
10,523 18
======= =======
|
YEAR ENDED MARCH 31,
-----------------------
2002 2001
------- -------
SCHEDULE 11 OTHER INCOME
Interest on deposits with companies 1,698 2,056
(Tax deducted at source: 2002: Rs. 392; 2001: Rs. 79)
Miscellaneous Income 2,475 --
------- -------
4,173 2,056
======= =======
|
110
WIPRO FLUID POWER LIMITED (FORMERLY KNOWN AS NETKRACKER LIMITED)
(Rs. in 000s)
-----------------------
YEAR ENDED MARCH 31,
-----------------------
2002 2001
------- -------
SCHEDULE 12 COST OF GOODS SOLD
Consumption of raw materials and brought out components
Opening stocks 46,496 --
Add: Purchases 26,215 --
-------
72,711 --
Less: Closing stocks 39,361 --
-------
33,350 --
-------
Purchase of finished products for sale 5,688 --
Opening stock: In process 81,002 --
: Finished products 64,279 --
Less : Closing stocks : In process 63,378 --
: Finished products 62,067 --
-------
19,836 --
-------
58,874 --
Cost of Internet Services 97,279 38,674
------- -------
156,153 38,674
======= =======
SCHEDULE 13 OPERATING, ADMINISTRATIVE
AND MARKETING EXPENSES
Stores and spares 2,284 --
Sub contracting charges 7,190 --
Power and fuel 1,469 50
Salaries, wages and bonus 18,250 3,432
Contribution to Provident Fund 704 131
Gratuity and Leave Encashment 166 485
Workmen and Staff welfare 416 11
Insurance 327 6
Repairs to Buildings 17 --
Repairs to Machinery 2,417 95
Rent 2,872 1,126
Rates and Taxes 367 6
Carriage and Freight 4,120 1,228
Auditors' remuneration and expenses
Audit fees 100 100
Advertisement and sales promotion 18,413 14,545
Communication Expenses 4,895 1,141
Travelling and Conveyance 2,148 803
Office maintenance 180 86
Provision/write off of Bad debts 43 --
Manpower outside services 575 242
Selling and Distribution Expenses 5,375 1,337
Consultancy Charges 4,814 1,369
Loss on Sale/discarding of fixed assets 1,073 --
Miscellaneous 5,070 704
------- -------
83,285 26,897
======= =======
|
111
WIPRO FLUID POWER LIMITED (FORMERLY KNOWN AS NETKRACKER LIMITED)
(Rs. in 000s)
-----------------------
YEAR ENDED MARCH 31,
------- -------
2002 2001
------- -------
SCHEDULE 14 INTEREST
Others 754 --
------- -------
754 --
======= =======
SCHEDULE 15 EXTRAORDINARY/
NON-RECURRING ITEMS
Assets Written Off 45,214 --
Deferred Expenditure Written Off 8,346 1,067
Roc Fee and Stamp Fee for increase in Authorised Capital 5,500 --
Reimbursement of losses as per contractual obligations -- 166,767
Preliminary Expenses -- 590
------- -------
59,060 168,424
======= =======
|
SCHEDULE 16 SIGNIFICANT ACCOUNTING POLICIES
1. ACCOUNTING CONVENTION
The financial statements are prepared under the historical cost
convention, on the accrual basis of accounting and comply with the
mandatory accounting standards and statements issued by the Institute of
Chartered Accountants of India.
2. The significant accounting policies followed by the Company are as
stated below.
REVENUE RECOGNITION
- Sales does not include sales tax as the same is separately charged and
are net of discounts.
- Sales are recognised on despatch.
- Export incentives are accounted on accrual basis and include estimated
realizable values/benefits from special import licenses and Advance
licenses.
- Internet access is sold to customers for both limited and unlimited
number of hours, which is to be utilized within a specified period of
time. Revenue for limited hour pack is recognized based on usage by the
customer over the specified period. At the end of the specified time
frame, the remaining unutilized hours, if any, are recognized as revenue
thereon. In case for unlimited hour pack revenue is recognized based on
time elapsed and the total time for which it is valid.
- Agency commission is accrued on shipment of consignment by principal.
- Other income is recognized on accrual basis.
RESEARCH AND DEVELOPMENT
Revenue expenditure on research and development is charged to Profit and Loss
Account and capital expenditure is shown as addition to fixed assets.
PROVISION FOR RETIREMENT BENEFITS
For employees covered under group gratuity scheme of LIC, gratuity charged to
Profit and Loss Account is on the basis of premium demanded by LIC. Provision
for gratuity (for certain category of employees) and leave benefit for employees
is determined as per actuarial valuation at the year-end. Defined contributions
for provident fund and pension are charged to the Profit and Loss Account based
on contributions made in terms of applicable schemes, after netting off the
amounts rendered surplus on account of employees separated from the Company.
112
WIPRO FLUID POWER LIMITED (FORMERLY KNOWN AS NETKRACKER LIMITED)
FIXED ASSETS AND DEPRECIATION
Fixed assets are stated at cost less depreciation.
Interest on borrowed money allocated to and utilized for fixed assets,
pertaining to the period upto the date of capitalization and other revenue
expenditure incurred on new projects is capitalized. Assets acquired on hire
purchase are capitalized at the gross value and interest thereon is charged to
Profit and Loss Account. Renewals and replacement are either capitalized or
charged to revenue as appropriate, depending upon their nature and long term
utility.
In respect of leased assets, lease rentals payable during the year is charged to
Profit and Loss Account.
Depreciation is provided on straight line method at rates specified in Schedule
XIV to the Companies Act, 1956, except on computers, furniture and fixture,
office equipment, electrical installations (other than those at factories),
vehicles and machinery used for providing internet services, for which
commercial rates are applied.
FOREIGN CURRENCY TRANSACTIONS
Foreign currency transactions are recorded at the spot rate prevailing at the
beginning of the concerned month. Year-end balances of foreign currency assets
and liabilities are restated at the closing rate/forward contract rate, as
applicable. Resultant differences in respect of liabilities relating to
acquisition of fixed assets are capitalized other differences on restatement or
payment are adjusted to revenue account.
Forward premiums in respect of forward exchange contracts are recognized over
the life of the contract, except that premiums relating to foreign currency
loans for the acquisition of fixed assets are capitalized.
INVENTORIES
Finished goods are valued at cost or net realizable value, whichever is lower.
Other inventories are valued at cost less provision for obsolescence. Small
value tools and consumables are charged to consumption on purchase. Cost is
computed on weighted average basis. Inventories of compact discs are written off
in the year of purchase.
DEFERRED TAXES
Deferred Tax asset is recognised in the books of account for the accumulated
losses incurred by the Company on the basis of the management view that, the
losses will get offset in the future by way of profit earned by the fluid power
business which has been purchased on 1st March, 2002.
NOTES TO ACCOUNTS
(All figures are reported in rupees thousands, except data relating to equity
share or unless stated otherwise)
1. The Company has provided depreciation at the rates specified in Schedule
XIV to the Companies Act, 1956, except in cases of the following assets
which are depreciated at commercial rates which are higher than the
rates specified in Schedule XIV. Depreciation over the years is provided
upto total cost of assets.
DEPRECIATION PER SCHEDULE
CLASS OF ASSET RATE APPLIED (%) XIV (%)
-------------- ---------------- -------------
Data processing equipment & software 50.00 16.21
Furniture and fixtures 19.00 6.33
Electrical Installations (other than Factories) 19.00 4.75
Office equipment 19.00 4.75
Vehicles 24.00 9.50
Plant and Machinery (*) 20.00 4.75
License 20.00 Not Specified
|
(*) On assets used for internet services.
Depreciation at 100% have been provided on assets costing less than Rs. 5
113
WIPRO FLUID POWER LIMITED (formerly known as Netkracker Limited)
2. Services outsourced
The Company has outsourced the entire back end activities, which
includes bandwidth, infrastructure (2 mb lines, e1r2 lines), colocation
of servers and customer care activities.
3. Deferred Revenue Expenditure
Considering the future benefit from the expenditure incurred during the
previous year 2000-2001 for Web development/Product launch, which is
below expectation, it has been decided to charge off the balance of the
unamortized amount at the beginning of the year of Rs. 2,828 and Rs.
5,518 being the expenses towards Web development and Product launch.
4. Fixed Assets
Assets writeoff of Rs. 45,214 comprises of assets scrapped during the
year, since the management feels that these assets have no realizable
value.
5. Estimated amount of contracts remaining to be executed on Capital
account and not provided for is Rs. NIL (2001: Rs. Nil)
6. Contingent liabilities in respect of:
i. Claims against the Company not acknowledged as debts Rs. Nil.
(2001: Rs. NIL)
ii. Disputed demands for excise, customs, income tax, sales tax and
other matters Rs. Nil. (2001: Rs. NIL)
iii. Guarantees given by Banks on behalf of the Company Rs. 24,717.
(2001: Rs. 20,000)
7. No provision for income tax has been made during the period, as the
Company does not have any taxable income.
8. Auditor's remuneration
Statutory audit fees Rs. 100
(2001: Rs. 100)
|
9. To comply with the newly introduced Accounting Standard 22 - Taxes on
Income issued by the Institute of the Chartered Accountants of India
which is mandatory with effect from April 1, 2001, the Company has made
provision for taxation after considering deferred tax to recognize
timing difference in tax. The Company has created net deferred tax for
the period of Rs. 134,515 on account of which the loss for the period is
lower by an equivalent amount.
10. Deferred tax comprise of:
DEFERRED TAX ASSETS:
Depreciation differential 11,619
Brought forward business loss U/s. 72 122,896
Deferred tax liability NIL
Total 134,515
|
11. Sundry creditors include an amount of Rs. 17,805 being amount payable to
suppliers, who are Small Scale Industrial Undertakings (SSI) as defined
under the Industrial (Development and Regulation) Act 1951, exceeding
Rs. 100 in aggregate and outstanding for a period in excess of 30 days
as at the date of Balance Sheet. The list of such SSI's is attached.
12. Share application money pending allotment represents purchase
consideration payable to Wipro Limited on acquisition of Fluid Power
business from the said company.
13. Corresponding figures for previous periods have been regrouped wherever
necessary, to confirm to this year's classification. Current period
figures are not comparable with the previous period to the extent of
purchase of Wipro Fluid Power Division from Wipro Limited with effect
from March 1, 2002.
114
WIPRO FLUID POWER LIMITED (FORMERLY KNOWN AS NETKRACKER LIMITED)
SSI DUES EXCEEDING RS. 100 IN AGGREGATE AND OUTSTANDING FOR A PERIOD IN EXCESS
OF 30 DAYS AS AT A DATE OF BALANCE SHEET:
SUPPLIER TOTAL DUES RS. 000S
-------- -------------------
Shamban Seals 2,194
Karnataka Electrical 1,938
Kalpa Engineering 584
Malnad Alloy Castings 320
Pishey Industries 312
Pushpagiri Forgings Pvt. Ltd. 2,102
South India Auto 173
Sujatha Wood Industries 267
Unique Engineers 358
Vijay Spheroidals 1,351
Pavithra Engineering Work 101
Sujatha Enterprises 104
Hadid Tools Centre 104
SKC Tech Hi Precision 104
Vasanth Weld Industries 111
Madhu Engineering Works 116
Veekay Enterprises 121
SMB Trading Corporation 125
Ravikiran Mechanical 126
Myzas Engineers 128
Accurate Engineering 139
Universal Engineering 148
Precimax Devices 158
Excel Tools & Engineering 159
Texel Industries 183
A.P. Engineering Works 211
Sanghvi Lub. & Fasteners 298
Laveena Engineering 361
Fluorokraft Pvt. Ltd. 382
Turbotek Industries 420
As-met Industries 575
Bombay Oil Seals Co. 743
Tulip Engineers 883
Hydro-links Flexibles 1,073
Shantala Ductile & Grey 1,335
--------
17,805
========
|
115
WIPRO FLUID POWER LIMITED (FORMERLY KNOWN AS NETKRACKER LIMITED)
ADDITIONAL INFORMATION PURSUANT TO THE PROVISIONS OF PART II OF SCHEDULE VI TO
THE COMPANIES ACT, 1956
ALL DETAILS ARE FOR YEAR ENDED MARCH 31, 2002
Unit
-----
1 REGISTERED CAPACITY
Hydraulic and pneumatic equipment NPA # 40,000
Tipping gear systems NPA # 2,000
2 INSTALLED CAPACITY
Hydraulic and pneumatic equipment NPA # 40,000
Tipping gear systems NPA # 5,000
# NPA indicates numbers per annum
|
3 PRODUCTION AND SALES PRODUCTION SALES
----------------------- ---------------------------
UNIT QUANTITY # QUANTITY RS. IN 000S
---------- ---------- ---------- -----------
Hydraulic and pneumatic equipment Nos 5,734 5,815 80,915
Tipping gear systems Nos 703 766 23,300
Spares/components for tippers/cylinders 15,500
ISP services 35,042
Agency commission 983
Processing and service charges 25
Miscellaneous Income 3,190
Less: Excide Duty 15,424
-------
143,531
=======
4 CLOSING STOCK NOS
Hydraulic and pneumatic equipment 1,562 62,067
----- -------
1,562 62,067
===== =======
5 TRADED ITEM CONSUMED
Spares/components for tippers/cylinders 5,688
-------
5,688
=======
6 RAW MATERIAL CONSUMED
Components for cylinders 33,350
-------
33,350
=======
7 VALUE FOR IMPORTED AND INDIGENOUS MATERIAL CONSUMED
Raw materials
Imported 9,504
Indigenous 23,846
-------
33,350
=======
8 STORES AND SPARES CONSUMED
Imported 733
Indigenous 1,551
-------
2,284
=======
9 VALUE OF IMPORTS ON CIF BASIS
(excludes value of imported items locally purchased)
Raw materials, components and peripherals 5,332
Stores and Spares 145
-------
5,477
=======
10 EARNINGS IN FOREIGN CURRENCY
Export of goods on FOB basis 1,161
Agency commission 983
-------
2,144
=======
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116
WIPRO FLUID POWER LIMITED (formerly known as Netkracker Limited)
ADDITIONAL INFORMATION PURSUANT TO THE PROVISIONS OF PART IV OF SCHEDULE VI TO
THE COMPANIES ACT, 1956
BALANCE SHEET ABSTRACT AND THE COMPANY'S GENERAL BUSINESS PROFILE
I REGISTRATION DETAILS
Registration No. 27551 State Code 08
Balance Sheet Date 31st March 2002
II CAPITAL RAISED DURING THE YEAR (Rs. in 000s)
Public issue Nil
Rights issue Nil
Bonus issue Nil
III POSITION OF MOBILISATION OF AND
DEPLOYMENT OF FUNDS (Rs. in 000s)
TOTAL LIABILITIES 779,883 TOTAL ASSETS 779,883
SOURCES OF FUNDS APPLICATION OF FUNDS
Paid-up capital 92,361 Net Fixed Assets 183,900
Share application money pending
allotment 360,000 Deferred Tax Assets 134,515
Reserves and Surplus 280,618 Net Current Assets 192,487
Secured Loans -- Debit balance in Profit and Loss Account 268,980
Unsecured Loans 46,904
IV PERFORMANCE OF THE COMPANY (Rs. in 000s)
Turnover 143,531
Total Expenditure 258,693
Loss before Tax 174,221
Loss after Tax 39,706
Earnings per share (basic) --
Dividend --
V Generic names of two principal products/services of the Company (as per
monetary terms)
i) Item code no (ITC Code) 357000000
Product description Hydraulic and pneumatic equipment
ii) Item code no (ITC Code) 374840000
Product description Tipping system
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For and on behalf of the Board of Directors
D.A. PRASANNA
Chairman
M.S. RAO
Managing Director
Bangalore, April 18, 2002
117
WIPRO INC.
DIRECTORS' REPORT
The Directors present the Annual Report of Wipro Inc. for the year ended March
31, 2002.
FINANCIAL RESULTS
(Rs. in Mns)
-----------------------------
2002 2001
------- -------
Sales and services 58.43 24.38
Profit/(Loss) before tax 0.30 (7.86)
Profit/(Loss) after tax 0.30 (7.86)
Extraordinary items/Prior period items -- --
Profit/(Loss) for the year 0.30 (7.86)
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OPERATIONS
Wipro Inc. is a wholly owned subsidiary of Wipro Limited, incorporated with the
object of investing in various technology segments in USA.
AUDITORS
The Auditors, M/s. N.M. Raiji & Co., retire at the ensuing Annual General
Meeting and offer themselves for re-appointment.
DIRECTORS RESPONSIBILITY STATEMENT
As required under Section 217(2AA) of the Companies Act, 1956, it is hereby
stated that:
(a) in the preparation of the annual accounts, the applicable accounting
standards had been followed along with proper explanation relating to
material departures;
(b) the Directors had selected such accounting policies and applied them
consistently and made judgements and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company at the end of the financial year and of the profit or loss
of the Company for that period;
(c) the Directors had taken proper and sufficient care for the maintenance
of adequate accounting records in accordance with the provisions of this
Act for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities;
(d) the Directors had prepared the annual accounts on a going concern basis.
ON BEHALF OF THE BOARD
VIVEK PAUL
Bangalore, April 19, 2002 Director
118
WIPRO INC.
AUDITOR'S REPORT
TO THE MEMBERS OF WIPRO INC
We have audited the attached Balance Sheet of Wipro Inc, as at March 31, 2002
and also the Profit and Loss Account 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 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
mis-statement. 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.
As required by the Manufacturing and Other Companies (Auditor's Report) Order,
1988 issued by the Central Government of India in terms of sub-section (4A) of
Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement
on the matters specified in paragraphs 4 and 5 of the said Order.
Further to our comments in the Annexure referred to above, we report that:
(i) We have obtained all the information and explanations, which to the best
of our knowledge and belief were necessary for the purpose of our audit;
(ii) 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;
(iii) The Balance Sheet and Profit and Loss Account dealt with by this report
are in agreement with the books of account;
(iv) In our opinion, the Balance Sheet and Profit and Loss Account dealt with
by this report comply with the accounting standards referred to in
sub-section (3C) of Section 211 of the Companies Act, 1956;
(v) On the basis of written representations received from the directors, we
report that none of the directors is disqualified as on March 31, 2002
from being appointed as a director in terms of clause (g) of sub-section
(1) of Section 274 of the Companies Act, 1956;
(vi) 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 Com
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