EX-19.1 3 f83841exv19w1.txt EXHIBIT 19.1 EXHIBIT 19.1 FOR IMMEDIATE RELEASE [WIPRO LOGO] Results for the Quarter ended June 2002 under Consolidated Indian GAAP REVENUE(1) FOR QUARTER ENDED JUNE 2002 GREW 19% YEAR ON YEAR TO Rs. 9.3 BILLION. WIPRO ACQUIRES MAJORITY STAKE IN SPECTRAMIND e-SERVICES PRIVATE LIMITED BANGALORE, JULY 19 2002 - Wipro Limited today announced its audited results approved by the Board of Directors for the quarter ended June 2002 and acquisition of majority stake in Spectramind e-Services Private Limited. HIGHLIGHTS: RESULTS FOR THE QUARTER ENDED JUNE 30, 2002 - Revenue(1) from continuing operations for the quarter was Rs. 9.3 billion, an increase of 19% year on year. Profit Before Interest & Tax (PBIT) from continuing operations grew by 6% year on year to Rs. 2.2 billion. - Decrease in returns on cash surplus and higher tax charge resulted in Profit After Tax(2) being lower by 6% year on year at Rs. 2 billion. - Wipro Technologies Revenue increased 21% year on year, at Rs. 6.3 billion. - Wipro Technologies Profit Before Interest and Tax (PBIT) growth of 5% contributed by volume growth and increased utilization partially offset by pricing declines - Our shareholders approved a cash dividend of Rs. 1 (2 cents) per equity share in our Annual General Meeting on July 18, 2002. The dividend will be paid on July 19, 2002. - Decision to discontinue Wipro Net ISP access business. The cost of the discontinued business is recorded as an extraordinary loss of Rs. 389 million ($8 million). ACQUISITIONS - SPECTRAMIND - Wipro entered into a definitive agreement on July 18, 2002 to acquire an additional 66% stake in Spectramind e-Services Private Limited for Rs. 4,069 million ($83.04 million) in cash. Wipro's aggregate interest in Spectramind after the purchase will be around 90% of all outstanding equity shares, including convertible preference shares. - Spectramind, in its first full year of operations, for the year ended March 31, 2002, recorded Revenue of Rs. 500 million ($10 million) and loss of Rs. 115 million ($2 million). Revenue for the quarter ended June 30, 2002 was Rs. 309 million ($6 million) and Profit after Tax was Rs. 13 million ($0.3 million). As of June 30, 2002, Spectramind had 7 customers and over 2,700 employees. For the year ending March 2003, Spectramind is estimated to achieve Revenues of approximately $45 million. - GE MEDICAL SYSTEMS IT PRIVATE LIMITED - Wipro entered into a definitive agreement on July 18, 2002, to acquire Hyderabad based GE Medical Systems Information Technologies Private Limited for Rs. 281 million ($5.73 million) in cash subject to statutory approvals. Wipro will hold 100% of the company upon completion of the transaction. ---------------------------- (1) Excluding Revenues of Rs. 38 million for the quarter ended June 2002 from discontinued ISP business. Corresponding Revenue for the quarter ended June 30, 2001 was Rs. 169 million (2) Excluding loss (net of tax) of Rs. 389 million pertaining to discontinued ISP business which includes loss from operations (net of tax) of Rs. 84 million (Previous period - Rs. 14 million) and loss on write off of assets and exit costs of Rs. 305 million of the discontinued business OUTLOOK FOR THE QUARTER ENDED SEPTEMBER 2002 AZIM PREMJI, CHAIRMAN OF WIPRO COMMENTING ON THE RESULTS SAID, "THIS QUARTER WE SAW OUR STRATEGIC PLAN TRANSLATE TO BUSINESS INITIATIVES. ON THE ACQUISITION FRONT, WE COMPLETED TWO TRANSACTIONS, SPECTRAMIND AND GE MEDICAL SYSTEMS INFORMATION TECHNOLOGIES. WE WELCOME THE MEMBERS OF SPECTRAMIND AND GE MEDICAL SYSTEMS IT BUSINESS TEAMS INTO THE WIPRO FAMILY. OUR SERVICE PORTFOLIO DIVERSIFICATION IS BEGINNING TO REALIZE RESULTS. LOOKING AHEAD FOR THE QUARTER ENDING SEPTEMBER 2002, WE EXPECT REVENUE FROM THE IT SERVICES TO BE APPROXIMATELY $135 MILLION, INCLUDING REVENUE FROM HEALTHCARE AND LIFE SCIENCE OF $3 MILLION. REVENUE FROM SPECTRAMIND IS ESTIMATED AT $8 MILLION FOR THE QUARTER ENDING SEPTEMBER 2002. BOTH THE TRANSACTIONS ARE EXPECTED TO BE COMPLETED IN JULY 2002." VIVEK PAUL, VICE CHAIRMAN AND CEO OF WIPRO TECHNOLOGIES, GLOBAL IT BUSINESS, ADDED, "OUR PERFORMANCE FOR THE QUARTER WAS IN LINE WITH OUR EXPECTATION ON STRONG VOLUME GROWTH, PRICING ENVIRONMENT AND MARGIN PRESSURE. TEAM WIPRO CONTINUES TO WIN BY DELIVERING VALUE TO OUR CUSTOMERS. DURING THIS QUARTER WE WON A $20 MILLION FIVE YEAR CONTRACT FOR A UK BASED UTILITIES COMPANY TO REMOTE MANAGE 350 HETEROGENEOUS SERVERS, 3200 NETWORK ELEMENTS AND 44 DATABASES SPREAD ACROSS 118 LOCATIONS IN UK AND IRELAND." RAMAN ROY, CHIEF EXECUTIVE OFFICER OF SPECTRAMIND COMMENTING ON THE ACQUISITION SAID, "WE ARE EXCITED TO BE A PART OF THE WIPRO FAMILY. SPECTRAMIND'S DREAMS AND ASPIRATIONS MESH IN WELL WITH WIPRO'S VISION OF BEING AMONG THE TOP 10 GLOBAL IT SERVICES COMPANIES AND PROVIDES US THE PLATFORM TO MOVE FROM BEING THE LEADERS IN INDIA TO BEING THE GLOBAL LEADERS". WIPRO LIMITED Revenues(1) for the quarter ended June 30, 2002, were Rs.9.3 billion, representing a 19% increase over the previous year. Profit after Tax(2) was Rs. 2 billion, representing a decrease of 6% over Profit after Tax for quarter ended June 30, 2001. The decrease is primarily on account of decrease in returns on cash surplus and increase in tax charge. ISP Access business carried on in Wipro Net was discontinued with effect from June 2002. The cost of the discontinuance of Rs. 389 million has been provided for as an extraordinary loss on discontinuance of business. The Profit after Tax net of the charge for discontinuance of business was Rs. 1.6 billion. WIPRO TECHNOLOGIES - OUR GLOBAL IT BUSINESS Wipro Technologies accounted for 68% of the Revenue and 91% of the PBIT for the quarter ended June 30, 2002. Wipro Technologies grew its Revenue by 21% over Revenue for corresponding quarter last year to Rs. 6.3 billion and PBIT by 5% to Rs. 2 billion. Operating Margin to Revenue was 31%, a decline of 5% year on year and 1% sequentially. On the operational front, increase in IT professional utilization by 6% to 66% was offset by decrease in price realizations of 2.3% for Offshore projects and 4.4% for Onsite projects, as compared to the quarter ended June 30, 2001. Price realizations declined sequentially by 4.5% for Offshore projects and by 5.6% for Onsite projects. ---------------------- (1) Excluding Revenues of Rs. 38 million for the quarter ended June 2002 from discontinued ISP business. Corresponding Revenue for the quarter ended June 30, 2001 was Rs. 169 million (2) Excluding loss (net of tax) of Rs. 389 million pertaining to discontinued ISP business which includes loss from operations (net of tax) of Rs. 84 million (Previous period - Rs. 14 million) and loss on write off of assets and exit costs of Rs. 305 million of the discontinued business For the quarter ended June 30, 2002, the R&D Services business segment, consisting of Embedded Systems & Internet Access Devices practice (17% of Revenue), Telecom & Inter-networking practice (17% of Revenue) and Telecom & Internet Service Providers practice (7% of Revenue), contributed 41% of Global IT Services Revenue, a decline of 11% as compared to the corresponding period in the previous year and 4% sequentially. The Enterprise Solutions segment contributed 59% and Technology Infrastructure horizontal contributed 7% of Global IT Services Revenue across R&D and Enterprise solutions. The proportion of Revenues from Europe decreased from 33% for the quarter ended June 30, 2001, to 29% for the quarter ended June 30, 2002. Accordingly, the proportion of Revenue from North America increased to 63% from 60% in the previous year. Japan contributed 7% for the quarter ended June 30, 2002. Our largest customer, top 5 and top 10 customers accounted for 7%, 23% and 37%, respectively, of our total Revenue for the quarter ended June 30, 2002, as compared to 8%, 29% and 42% of our total Revenue of the quarter ended June 30, 2001. 22 new clients were added in the quarter ended June 30, 2002 and they contributed 1% of total Revenue for the quarter ended June 30, 2002. Customers with annual Revenue run rate of $1 million and $5 million plus increased year on year from 74 to 87 and 22 to 26 in the quarter ended June 30, 2002 respectively. Offshore Revenue for the year was 48% of services Revenue, compared with 50% of Revenue in the quarter ended June 30, 2001. Fixed Price projects were at 30% of the Revenue for the year, up from 20% for the quarter ended June 30, 2001. We had 10,545 employees as of June 30, 2002, an increase of 919 employees compared with March 31, 2002. WIPRO INFOTECH - OUR INDIA & ASIA PACIFIC IT SERVICES & PRODUCTS BUSINESS Wipro Infotech recorded Revenues of Rs. 1.9 billion and Profit before Interest and Tax of Rs. 87 million for the quarter. Services business contributed to 26% of the total Revenues this quarter. During the quarter, the value added services (excluding agency income and component from SI) business grew by 22% compared to the same quarter previous year. The growth in infrastructure management services was 34%, where 9 new customers were added during the quarter. The Software Services business saw several new customer wins in the high end space. In APAC and Middle East, key orders included an end-to-end ERP implementation for Saudi Polyolefins Limited (Saudi Arabia) an e-Governance Software development project from Dubai e-Government and a portal development for a major Telecom company in Taiwan. In India, customer wins were in areas of dealer management, data warehousing, SAP implementation and Telecom mediation. Other notable wins in India include a prestigious Six Sigma consulting order and an e-procurement consulting and solutions order. The growth in Software Services business was 33%. Wipro Infotech consolidated its position as a leading Systems Integrator. During the quarter, Union Bank of India chose Wipro Infotech as the prime integrator, responsible for end to end implementation and integration of IT infrastructure and centralized core banking solution. The networking business grew by 104%, while the enterprise sever and storage business grew by 48%. Large Telecom SI projects contributed to this growth. Wipro Infotech received the "Network Integrator of the Year" award from Voice & Data magazine for the fifth year in a row, and was recognized as the "Largest Enterprise Distributor in Asia South" by Sun Microsystems for the second consecutive year. Wipro Infotech accounted for 21% of Revenue and 4% of the PBIT for the quarter ended June 30, 2002. WIPRO HEALTHCARE AND LIFE SCIENCE In its first quarter of operations as a separate business segment, the Wipro Healthcare and Life Science segment strengthened its value proposition to customers in the Healthcare IT space with the acquisition of Hyderabad based GE Medical Systems Information Technologies Private Limited. The business acquired four new global customers (two from Fortune 1000 list) including one for Clinical Process Outsourcing covering radiology reading ranging from X-ray to CT scan. For the quarter ended June 30, 2002, Wipro Healthcare and Life Sciences recorded Revenue of Rs. 122 million and Loss before Interest and Tax of Rs. 22 million. Beginning in the quarter ended September 30, 2002, Wipro Healthcare and Life Science Revenue will include Revenues from the Healthcare vertical of the Global IT Services business segment and Revenues from Hyderabad based GE Medical Systems Information Technologies. WIPRO CONSUMER CARE & LIGHTING Wipro Consumer Care and Lighting business recorded Revenue of Rs. 730 million with PBIT of Rs. 129 million contributing 8% of total Revenue and 6% of the Profit before Interest and Taxes for the quarter. PBIT to Revenue was 18% for the quarter. WIPRO LIMITED For the quarter ended June 30, 2002, the Return on Capital Employed in Wipro Technologies was 92%, Wipro Infotech was 27%, Consumer Care and Lighting was 71%. At the Company level, the Return on Capital Employed was 30%, lower due to inclusion of cash and cash equivalents of Rs. 17 billion in Capital Employed (60% of Capital Employed). FOR WIPRO LIMITED, PROFIT AFTER TAX FROM CONTINUING OPERATIONS COMPUTED IN ACCORDANCE WITH US GAAP FOR THE QUARTER ENDED JUNE 2002 WAS RS. 2.2 BILLION, AN INCREASE OF 17% OVER THE PROFITS FOR THE CORRESPONDING QUARTER ENDED JUNE 2001. THE NET DIFFERENCE BETWEEN PROFITS COMPUTED IN ACCORDANCE WITH INDIAN GAAP AND US GAAP IS PRIMARILY DUE TO DIFFERENT REVENUE RECOGNITION STANDARDS AND ACCOUNTING FOR DEFERRED STOCK COMPENSATION EXPENSES. Wipro Technologies segment Revenues were Rs. 6.55 billion for the quarter ended June 30, 2002, under US GAAP. The difference of Rs. 0.2 billion ($4.7 million) is attributable to different Revenue recognition standards under Indian GAAP and USGAAP. QUARTERLY CONFERENCE CALL Wipro will hold conference calls today at 11:45 AM Indian Standard Time (2:15 AM Eastern Time) and at 7:00 PM Indian Standard Time (9:30 AM Eastern) to discuss the company's performance for the quarter and answer questions sent to email ID: Lakshminarayana.lan@wipro.com. An audio recording of the management discussions and the question and answer session will be available online and will be accessible in the Investor Relations section of the company website at www.wipro.com shortly after the live broadcast. US GAAP FINANCIALS ON WEBSITE WIPRO LIMITED RESULTS COMPUTED UNDER THE US GAAP ALONG WITH INDIVIDUAL BUSINESS SEGMENT REPORTS ARE AVAILABLE IN THE INVESTOR RELATIONS SECTION AT WWW.WIPRO.COM. Effective quarter ending September 30,2002, Wipro will post its financial statements prepared in accordance with US GAAP together with complete set of notes after filing its periodical reports with the SEC on Form 6-K/Form 20-F. However, immediately after the announcement of its results to the Stock Exchanges, Wipro will post on its web site its Balance Sheet, Income Statement, Cash Flow statement and selected notes including Segment information for the period. ABOUT SPECTRAMIND Spectramind is India's largest third party provider of BPO services with a wide range of processes in production (both voice and non-voice based). Spectramind is a full spectrum service provider offering end-to-end solutions to organizations across a wide range of industries. Spectramind has offices in India and in the US. It has two state-of-the-art production facilities in New Delhi and Mumbai with a combined capacity that can accommodate over 5000 people. CONTACT FOR INVESTOR RELATION CONTACT FOR MEDIA & PRESS K R Lakshminarayana Vijay K Gupta Manager - Treasury Vice President -Corporate Communications Phone: ++91-80-844-0079 ++91-80-844-0076 Fax: ++91-80-844-0051 ++91-80-844-0350 lakshminarayana.lan@wipro.com vijayk.gupta@wipro.com FORWARD LOOKING AND CAUTIONARY STATEMENTS Certain statements in this release concerning our future growth prospects are forward looking statements, which involve a number of risks, and uncertainties that could cause actual results to differ materially from those in such forward looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding fluctuations in earnings, our ability to manage growth, intense competition in IT services including those factors which may affect our cost advantage, wage increases in India, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on immigration, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks, our ability to successfully complete and integrate potential acquisitions, liability for damages on our service contracts, the success of the companies in which Wipro has made strategic investments, withdrawal of fiscal governmental incentives, political instability, legal restrictions on raising capital or acquiring companies outside India, unauthorized use of our intellectual property and general economic conditions affecting our industry. Additional risks that could affect our future operating results are more fully described in our filings with the United States Securities and Exchange Commission. These filings are available at www.sec.gov. Wipro may, from time to time, make additional written and oral forward looking statements, including statements contained in the company's filings with the Securities and Exchange Commission and our reports to shareholders. Wipro does not undertake to update any forward-looking statement that may be made from time to time by or on behalf of the company. WIPRO LIMITED - CONSOLIDATED (IN RUPESS MILLIONS) AUDITED SEGMENT WISE BUSINESS PERFORMANCE FOR THE THREE MONTHS PERIOD ENDED JUNE 30, 2002
INDIA & ASIAPAC WIPRO GLOBAL IT IT HEALTHCARE SERVICES SERVICES CONSUMER & DISCONTINUED & & CARE & LIFE CONTINUING ISP WIPRO PRODUCTS PRODUCTS LIGHTING SCIENCES OTHERS OPERATIONS BUSINESS LIMITED ----------------------------------------------------------------------------------------------------------------------------------- REVENUE External Sales & Services 6,321 1,862 730 122 229 9,264 38 9,302 Internal Sales & Services 45 (45) -- -- 0 TOTAL 6,321 1,907 730 122 184 9,264 38 9,302 GROWTH IN REVENUES 21% 20% (4%) 6% 19% -- 16% % of total revenues 68% 21% 8% 1% 2% 100% -- -- PROFIT BEFORE INTEREST AND TAX (PBIT) 1,988 87 129 (22) 6 2,188 (133) 2,055 GROWTH IN PBIT 5% 9% 33% -- -- 6% -- -- % of total PBIT 91% 4% 6% (1%) -- 100% -- -- OPERATING MARGINS 31% 5% 18% -- -- 24% -- 22% Interest income (net of interest expense Rs.8 mn) 142 -- 142 PROFIT BEFORE TAX 2,330 (133) 2,197 Income Tax expense (291) 49 (242) PROFIT BEFORE EXTRAORDINARY ITEMS 2,039 (84) 1,955 GROWTH (5.4%) (8.7%) Discontinuance of ISP business (net of tax benefit of Rs.103 mn) (refer note 7) -- (305) (305) PROFIT BEFORE EQUITY IN EARNINGS / (LOSSES) OF AFFILIATES & MINORITY INTEREST 2,039 (389) 1,650 Equity in earnings affiliates (20) (20) Minority interest (3) (3) PROFIT AFTER TAX 2,016 (389) 1,627 OTHER INFORMATION Net fixed assets 4,420 357 428 21 949 6,175 34 6,209 Trade receivables 3,940 2,121 150 136 126 6,473 23 6,496 Cash balances/Investments 527 141 188 3 16,382 17,241 17,241 Other assets 2,097 936 351 98 1,114 4,596 4 4,600 Current Liabilities (2,309) (1,988) (428) (132) (578) (5,435) (211) (5,646) Capital employed 8,675 1,567 689 126 17,993 29,050 (150) 28,900 % of capital employed 30% 5% 2% -- 63% 100% -- Capital expenditure 340 27 5 4 19 395 Depreciation 220 74 15 1 20 330 Return on average capital employed from continuing business 92% 27% 71% 30%
1. The segment report of Wipro Limited and its consolidated subsidiaries and associates has been prepared in accordance with the Accounting Standard 17 "Segment Reporting" issued by the Institute of Chartered Accountants of India. 2. The Company has three geographic segments; India, USA and Rest of the World. Significant portion of the segment assets are in India. Revenue from geographic segments based on domicile of the customers is outlined below:
GEOGRAPHY RS. MN India 2,758 USA 3,907 Rest of the World 2,637 Total 9,302
3. For the purpose of reporting, business segments are considered as primary segments and geographic segments are considered as secondary segment. 4. 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. 5. The company has a 49% equity interest in Wipro GE Medical Systems Limited (WGE), a joint venture with General Electric, USA. The joint venture agreement provides specific rights to the joint venture partners. The rights conferred to Wipro are primarily protective in nature. Therefore, in accordance with the guidance in Accounting Standard 27 "Financial Reporting of Investments in Joint Ventures" the investments in Wipro GE have been accounted for by equity method and not by proportionate consolidation method. 6. In accordance with the guidance provided in Accounting Standard 23 "Accounting for Investments in Associates in Consolidated Financial Statements" Wipro ePeripherals have been accounted for by equity method of accounting. 7. The Company was engaged in the business of providing corporate ISP services. Based on a review of this business, the company decided to discontinue the existing infrastructure based ISP business, but continue with the managed network and remote management services. Managed network and remote management services are currently being offered as part of total IT solutions. In June 2002, the management formally approved a plan to discontinue the infrastructure based corporate ISP services. The costs associated with the discontinuance including asset impairment charges and other exit costs have been reflected as extraordinary expenses. The customers are being transitioned to an independent service provider. The consideration payable by the service provider to the Company is dependent on the occurrence of certain contingent events. Amounts, if any, received from the service provider will be reflected as extraordinary gains. WIPRO LIMITED CONSOLIDATED BALANCE SHEET
(Rs. In 000s) ------------------------------------------------- AS OF JUNE 30, AS OF MARCH 31, ------------------------------------------------- SCHEDULE 2002 2001 2002 ---------------------------------------------------------------------------------------------------------------------------- SOURCES OF FUNDS SHAREHOLDERS' FUNDS Share Capital 1 464,986 464,873 464,931 Share application money pending allotment (refer note 9) 283 - 2,399 Reserves and Surplus 2 27,911,524 19,867,265 25,460,163 ------------------------------------------------- 28,376,793 20,332,138 25,927,493 ------------------------------------------------- LOAN FUNDS Secured loans 3 431,506 324,786 254,872 Unsecured loans 4 61,214 51,721 60,563 Minority Interest 30,000 - 27,542 ------------------------------------------------- 522,720 376,507 342,977 ------------------------------------------------- TOTAL 28,899,513 20,708,645 26,270,470 ---------------------------------------------------------------------------------------------------------------------------- APPLICATION OF FUNDS FIXED ASSETS Goodwill - refer note 1 12,670 - 12,670 Gross block 5 10,021,674 9,836,139 10,069,036 Less : Depreciation 5,132,150 4,279,077 4,770,280 ------------------------------------------------- Net Block 4,902,194 5,557,062 5,311,426 Capital work-in-progress and advances 1,319,296 1,203,714 1,164,327 ------------------------------------------------- 6,221,490 6,760,776 6,475,753 ------------------------------------------------- INVESTMENTS 6 6,805,202 413,194 4,680,822 DEFERRED TAX ASSETS 503,923 141,261 421,803 CURRENT ASSETS, LOANS AND ADVANCES Inventories 7 896,763 1,286,135 934,600 Sundry Debtors 8 6,495,885 5,897,560 6,546,160 Cash and Bank balances 9 5,406,484 2,172,852 3,031,909 Loans and advances 10 8,215,309 9,195,391 10,055,275 ------------------------------------------------- 21,014,441 18,551,938 20,567,944 ------------------------------------------------- CURRENT LIABILITIES AND PROVISIONS Liabilities 11 4,950,755 4,581,780 5,223,455 Provisions 12 695,547 577,500 653,156 ------------------------------------------------- 5,646,302 5,159,280 5,876,611 ------------------------------------------------- NET CURRENT ASSETS 15,368,139 13,392,658 14,691,333 ------------------------------------------------- Miscellaneous expenditure ( to the extent not written off or adjusted) 759 756 759 ------------------------------------------------- TOTAL 28,899,513 20,708,645 26,270,470 ---------------------------------------------------------------------------------------------------------------------------- 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 Vice Corporate Vice President - Finance President - Legal & Company Secretary Bangalore, July 19, 2002 Mumbai, July 19, 2002 WIPRO LIMITED
CONSOLIDATED PROFIT AND LOSS ACCOUNT (RS. IN 000S) ----------------------------------------------------- SCHEDULE THREE MONTHS ENDED JUNE 30, YEAR ENDED MARCH 31, ----------------------------------------------------- 2002 2001 2002 -------------------------------------------------------------------------------------------------------------------------- INCOME Sales and Services 9,218,305 8,063,866 35,032,098 LESS: Excise Duty 170,608 176,399 627,012 ----------------------------------------------------- Net Sales and Services 9,047,697 7,887,467 34,405,086 ----------------------------------------------------- Other Income 13 404,577 310,254 1,558,236 ----------------------------------------------------- 9,452,274 8,197,721 35,963,322 -------------------------------------------------------------------------------------------------------------------------- EXPENDITURE Cost of goods sold 14 5,831,548 4,802,201 20,831,431 Selling, general and administrative expenses 15 1,415,509 1,136,369 5,519,512 Interest 16 8,378 3,618 29,697 ----------------------------------------------------- 7,255,435 5,942,188 26,380,640 -------------------------------------------------------------------------------------------------------------------------- PROFIT BEFORE TAXATION: Continuing Operations 2,329,408 2,277,602 9,707,309 Discontinuing Operations (132,569) (22,069) (124,627) -------------------------------------------------------------------------------------------------------------------------- TOTAL 2,196,839 2,255,533 9,582,682 -------------------------------------------------------------------------------------------------------------------------- PROVISION FOR TAXATION: (refer note 6) Continuing Operations 290,881 123,564 773,492 Discontinuing Operations (48,719) (7,879) (44,492) -------------------------------------------------------------------------------------------------------------------------- TOTAL 242,162 115,685 729,000 -------------------------------------------------------------------------------------------------------------------------- PROFIT FOR THE PERIOD BEFORE EXTRAORDINARY ITEMS: Continuing Operations 2,038,527 2,154,038 8,933,817 Discontinuing Operations (83,850) (14,190) (80,135) -------------------------------------------------------------------------------------------------------------------------- TOTAL 1,954,677 2,139,848 8,853,682 -------------------------------------------------------------------------------------------------------------------------- Loss on discontinuance of ISPbusiness-refer note 3 18 (408,319) - - Tax benefit on above 103,500 - - -------------------------------------------------------------------------------------------------------------------------- Net loss on discontinuance of ISP business (304,819) - - -------------------------------------------------------------------------------------------------------------------------- PROFIT FOR THE PERIOD BEFORE MINORITY INTEREST / EQUITY IN EARNINGS OF AFFILIATES: 1,649,858 2,139,848 8,853,682 -------------------------------------------------------------------------------------------------------------------------- Minority Interest (2,458) - 808 Equity in earnings / (losses) of affiliates (20,310) - - -------------------------------------------------------------------------------------------------------------------------- PROFIT FOR THE PERIOD 1,627,090 2,139,848 8,854,490 -------------------------------------------------------------------------------------------------------------------------- EARNINGS PER SHARE ( IN RS.) BASIC On profit for the period from continuing operations 8.82 9.32 38.65 On losses of discontinued ISP business (1.68) (0.06) (0.35) On equity in earnings of affiliates / minority interest (0.10) - - On profit for the period 7.04 9.26 38.30 DILUTED On profit for the period from continuing operations 8.80 9.31 38.59 On losses of discontinued ISP business (1.68) (0.06) (0.35) On equity in earnings of affiliates / minority interest (0.10) - - On profit for the period 7.02 9.25 38.24 NUMBER OF SHARES Basic 231,161,319 231,027,843 231,132,500 Diluted 231,678,987 231,403,329 231,534,876 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 Director Director Managing Director SURESH C. SENAPATY SATISH MENON Corporate Executive Corporate Vice Vice President - President - Finance Legal & Company Secretary Mumbai, Banglore, July 19, 2002 July 19, 2002 WIPRO LIMITED
(Rs. In 000s, except share numbers) ---------------------------------------- AS OF JUNE 30, AS OF MARCH 31, ---------------------------------------- 2002 2001 2002 ---------------------------------------- SCHEDULE 1 SHARE CAPITAL AUTHORISED 375,000,000 (2002: 375,000,000; 2001: 375,000,000) Equity shares of Rs 2 each 750,000 750,000 750,000 2,500,000 (2002: 2,500,000; 2001: 2,500,000) 10.25 % Redeemable Cumulative Preference Shares of Rs 100 each 250,000 250,000 250,000 ---------------------------------------- 1,000,000 1,000,000 1,000,000 ---------------------------------------- ISSUED, SUBSCRIBED AND PAID-UP 232,492,943 (2002: 232,465,689; 2001: 232,436,379) equity shares of Rs 2 each 464,986 464,873 464,931 ---------------------------------------- 464,986 464,873 464,931 ========================================
Notes: 1. Of the above equity shares: i) 226,905,825 equity shares (2002: 226,905,825; 2001: 226,905,825), have been allotted as fully paid bonus shares by capitalization of Share Premium of Rs. 32,639 and General Reserves of Rs 421,173. ii) 1,325,525 equity shares (2002: 1,325,525; 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) 174,093 (2002: 146,839; 2001:3,360) equity share issued pursuant to Employee Stock Option Plan. SCHEDULE 2 RESERVES AND SURPLUS
---------------------------------------------------------------- AS OF APRIL ADDITIONS DEDUCTIONS AS OF JUNE 1, 2002 30, 2002 ---------------------------------------------------------------- CAPITAL RESERVES 9,500 - 9,500 9,500 9,500 9,500 - - 9,500 CAPITAL REDEMPTION RESERVE 250,038 - - 250,038 250,038 250,038 250,038 - - 250,038 SHARE PREMIUM 6,386,235 29,553(a) - 6,415,788 5,920,208 434,255 6,354,463 5,920,208 466,027 - 6,386,235 REVALUATION RESERVE - - - - 890,072 25,920(b) 864,152 890,072 - 890,072 - INVESTMENT ALLOWANCE RESERVE - - - - 14,500 14,500 14,500 - 14,500(c) - PROFIT & LOSS ACCOUNT 1,627,090 1,627,090 2,139,848 2,139,848 GENERAL RESERVE 18,814,390 794,718(e) - 19,609,108 12,100,305 566,504 2,432,045(d) 10,234,764 12,100,305 9,146,130(c)(e) 2,432,045 18,814,390 ---------------------------------------------------------------- 25,460,163 2,451,361 - 27,911,524 19,184,623 3,140,607 2,457,965 19,867,265 19,184,623 9,612,157 3,336,617 25,460,163 ================================================================
Corresponding figures for 2001 and 2002 are given below current year's figures a) Rs. 29,553 ( 2002 : 35,414; 2001:3,642 ) pursuant to issue of shares under Employee Stock Option Plan Rs. Nil (2002:Rs. 430,613; 2001: Rs. 430,613) on account of amalgamation of Wipro Net Limited with Wipro Limited. b) Transfer to Profit and Loss account Rs. Nil ( 2002: Rs. 39,388; 2001: Rs. 13,050 ) and reduction on account of sale of revalued assets and other adjustments Rs. Nil ( 2002: Rs. Nil; 2001 : Rs. 12,867 ). The net difference of Rs. 850,684 was adjusted against revaluation reserve as on March 31, 2002. c) Transfer to General Reserve Rs. Nil (2002: Rs. 14,500 ;2001: Rs. Nil) d) Deficit arising on account of amalgamation of Wipro Net Limited with Wipro Limited (refer note 3 of schedule 19). e) Additions to General Reserves includes:
------------------------------------------------------------------------------------------------------------- June 30, 2002 March 31, 2002 June 30, 2001 ------------------------------------------------------------------------------------------------------------- Accumulated losses of subsidiaries as on March 31, 2001 (99,274) (99,274) Write bank of diminution in value of investment in 108,196 108,196 subsidiaries Benefits arising on employee stock incentive plans 55,646 55,646 Deferred tax assets (net) as of March 31, 2001 47,647 31,581 Reserves of Wipro Equity Reward Trust as at March 31, 2001 470,355 470,355 Transfer from investment allowance reserve 14,500 - Transfer from profit and loss account 8,549,060 - Equity in earnings of affiliates as of March 31, 2002: Wipro GE medicals systems Ltd. 771,849 Wipro ePeripherals Ltd. 22,869 ------------------------------------------------------------------------------------------------------------- Total 794,718 9,146,130 566,504 -------------------------------------------------------------------------------------------------------------
WIPRO LIMITED
(Rs. In 000s) ----------------------------------------- Note AS OF JUNE 30, AS OF MARCH 31, ----------------------------------------- SCHEDULE 3 SECURED LOANS Reference 2002 2001 2002 ----------------------------------------- FROM BANKS Cash credit facility a 381,631 127,329 204,997 EXTERNAL COMMERCIAL BORROWINGS b - 127,582 - FROM FINANCIAL INSTITUTIONS Asset Credit Scheme c 48,200 68,200 48,200 DEVELOPMENT LOAN FROM GOVERNMENT OF KARNATAKA d 1,675 1,675 1,675 ----------------------------------------- 431,506 324,786 254,872 =========================================
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 centers 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 JUNE 30, AS OF MARCH 31, ------------------------------------------- SCHEDULE 4 UNSECURED LOANS 2002 2001 2002 ------------------------------------------- FIXED DEPOSITS - 865 843 OTHER LOANS AND ADVANCES Interest free loan from Government 59,964 49,606 58,470 Loans from state financial institutions 1,250 1,250 1,250 ------------------------------------------- 61,214 51,721 60,563 ===========================================
WIPRO LIMITED (Rs. In 000s) SCHEDULE 5 FIXED ASSETS
Particulars GROSS BLOCK ----------------------------------------------------- AS OF Additions Deductions / AS OF APRIL 1, adjustments JUNE 30, 2002 2002 ----------------------------------------------------- Land 584,916 26,307 - 611,223 Buildings 1,470,580 70 3,037 1,467,613 Railway siding 12 - - 12 Plant and Machinery 6,299,405 153,074 258,282 6,194,197 Furniture fixture and equipment 1,280,868 26,954 8,660 1,299,162 Vehicles 420,843 33,952 17,740 437,055 Technical Know-how 10,378 - - 10,378 Patents and trademark 2,034 - - 2,034 ----------------------------------------------------- Total 10,069,036 240,357 287,719 10,021,674 -----------------------------------------------------
------------------------------------------------------------------------------------------- Particulars PROVISION FOR DEPRECIATION NET BLOCK ------------------------------------------------------------------------------------------- AS OF Depreciation Deductions / AS OF AS OF AS OF APRIL 1, for the adjustments JUNE 30, 2002 JUNE 30,2002 MARCH 31, 2002 2001 period ------------------------------------------------------------------------------------------- Land 5,510 884 - 6,394 604,829 579,406 Buildings 93,446 7,157 4,528 96,075 1,371,538 1,377,134 Railway siding 12 - - 12 - - Plant and Machinery 3,869,116 514,594 224,616 4,159,094 2,035,103 2,430,289 Furniture fixture and equipment 601,525 60,022 6,600 654,947 644,215 679,343 Vehicles 189,832 21,543 6,760 204,615 232,440 231,011 Technical Know-how 9,949 174 - 10,123 255 429 Patents and trademark 890 - - 890 1,144 1,144 ------------------------------------------------------------------------------------------- Total 4,770,280 604,374 242,504 5,132,150 4,889,524 5,298,756 -------------------------------------------------------------------------------------------
a. Land includes leasehold land Rs. 9,978 ( 2002: 9,978; 2001 : Rs. 9,978 ) b. Buildings: i) Includes shares worth Rs. 2 (2002: Rs.2 ; 2001: Rs. 2) ii) Includes leasehold land / property Rs. 4,241 (2002: Rs. 4,241; 2001: Rs. 4,241) iii) Is net of depreciation during construction period. WIPRO LIMITED SCHEDULE 6 INVESTMENTS
---------------------------------------------------------------- (RS. IN 000S EXCEPT SHARE NUMBERS AND FACE VALUE) AS OF JUNE 30, AS OF MARCH 31, ---------------------------------------------------------------- ALL SHARES ARE FULLY PAID UP UNLESS OTHERWISE STATED FACE NUMBER VALUE 2002 2001 2002 ---------------------------------------------------------------- INVESTMENTS - LONG TERM (AT COST) INVESTMENT IN AFFILIATES Wipro GE Medical Systems Ltd 753,849 - - Wipro ePeripherals Ltd 115,160 - - ------------------------------------- 869,009 - - ------------------------------------- INVESTMENTS IN EQUITY SHARES OF OTHER COMPANIES QUOTED TRADE INVESTMENTS Dynamatic Technologies Ltd 3732 Rs 10 66 66 66 Rasoi Ltd 112 Rs 10 2 2 2 Mannesmann Rexorth (India) Ltd 50 Rs 10 1 1 1 Oswal Agro Mills Ltd 80 Rs 10 3 3 3 DCM Ltd 31 Rs 10 1 1 1 DCM Shriram Industries Ltd 55 Rs 10 2 2 2 DCM Shriram Consolidated Ltd 41 Rs 10 2 2 2 Shriram Industrial Enterprises Ltd 74 Rs 10 1 1 1 Accel - ICIM Ltd. 75 Rs 10 2 2 2 The National Radio and Electronics Co. Ltd. 100 Rs 10 2 2 2 Hindustan Lever Ltd. 6,240 Rs 10 17 17 17 Hindustan Motors Ltd. 200 Rs 10 4 4 4 Tata Engineering and Locomotive Co. Ltd. 80 Rs 10 2 2 2 Ashok Leyland Ltd. 50 Rs 10 1 1 1 Ambalal Sarabhai Enterprises Ltd. 42 Rs 10 1 1 1 Nestle India Ltd. 300 Rs 10 4 4 4 Surya Roshni Ltd. 87 Rs 10 4 4 4 Cadbury India Ltd. 80 Rs 10 10 10 10 Hindustan Dor Oliver Ltd. 50 Rs 10 5 5 5 KSB Pumps Ltd. 50 Rs 10 11 11 11 Britannia Industries Ltd. 150 Rs 10 24 24 24 Exide Industries Ltd. 200 Rs 10 15 15 15 Amrit Banaspati Co. Ltd. 100 Rs 10 8 8 8 Procter & Gamble India Ltd. 50 Rs 10 13 13 13 Crompton Greaves Ltd. 50 Rs 10 7 7 7 Phillips (India) Ltd. 100 Rs 10 13 13 13 Velvette International Pharma Products Ltd. 100 Rs 10 2 2 2 International Best Foods Ltd. 240 Rs 10 12 12 12 Dynamatic Technologies Ltd 100 Rs 10 1 1 1 HDFC Bank Ltd 100 Rs 10 1 1 1 ------------------------------------- 237 237 237 ------------------------------------- - UNQUOTED Wipro GE Medical Systems Ltd. # 4,900,000 Rs 10 - 49,000 49,000 Wipro Fluid Power Ltd 1,863,520 Rs. 10 - 18,635 Spectramind eServices Pvt. Ltd. 6,221,741 Rs 10 192,399 - 144,299 Wipro e-Peripherals Limited 5,460,000 Rs 10 - 54,600 54,600 All Seasons Foods Ltd. 100 Rs. 10 2 2 2 Stylantro 1,00,000 US$ 0.1 489 470 489 ------------------------------------- 192,890 122,707 248,390 ------------------------------------- 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 convertible debentures of Wipro ePeripherals Ltd. 4,00,000 Rs. 100 - 40,000 40,000 Convertible preference shares in Spectramind eServices pvt. Ltd. 28,760,140 Rs. 10 287,601 - 215,701 ------------------------------------- 287,601 94,330 255,701 ------------------------------------- OTHER INVESTMENTS (UNQUOTED) Redeemable floating rate bonds of State Bank of India 2,500 Rs 1,000 2,500 2,500 2,500 Indira Vikas Patra (maturity value Rs 66,003) 47,952 47,952 47,952 Bonds of GE Capital Services India - 145,468 - ------------------------------------- 50,452 195,920 50,452 ------------------------------------- INVESTMENTS - SHORT TERM: IN MONEY MARKET MUTUAL FUNDS Alliance Capital Mutual Fund (267,012 units redeemed during the period) 262,558 367,392 - 265,910 Pioneer ITI Mutual Fund (233,413 units redeemed during the period) 377,904 495,537 - 452,168 Prudential ICICI Mutual Fund (114,261,685 units redeemed during the period) 88,972,087 1,086,532 - 924,966 HDFC Mutual Fund (87,554,434 units redeemed during the period ) 70,656,612 759,270 - 521,910 Standard Chartered Mutual Fund (41,836,511 units redeemed - during the period) 31,336,790 345,522 230,320 Reliance Mutual Fund 53,665,259 550,160 - 505,064 Zurich India Mutual Fund (39,995,102 units redeemed during the period) 89,079,560 1,018,532 - 400,499 Templeton India Mutual Fund (9,955,251) units redeemed during the period) - - - 98,842 Cholamandalam Mutual Fund (19,982,949) units redeemed during the period) 7,717,377 88,660 - 147,389 Kotak Mutual Fund (22,672,637 units redeemed during the period) 29,129,190 333,169 - 225,154 Birla Mutual Fund 35,080,267 360,239 - 353,820 ------------------------------------- 5,405,013 - 4,126,042 ------------------------------------- Total 6,805,202 413,194 4,680,822 =====================================
NOTES: # Equity investments in this company carry certain restrictions on transfer of shares that are normally provided for in joint venture / venture funding Agreement. WIPRO LIMITED
(RS. IN 000s) ------------------------------------------------ AS OF JUNE 30, AS OF MARCH 31, ------------------------------------------------ 2002 2001 2002 ------------------------------------------------ SCHEDULE 7 INVENTORIES Stores and Spares 37,197 40,902 31,425 Raw Materials 366,784 513,753 453,018 Stock-in-process 112,745 113,995 84,722 Finished goods 380,037 617,485 365,435 ------------------------------------------------ 896,763 1,286,135 934,600 ================================================ 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 491,235 437,720 686,166 Considered doubtful 546,938 344,268 506,630 ------------------------------------------------ 1,038,173 781,988 1,192,796 ------------------------------------------------ OTHERS Considered good 6,004,650 5,459,840 5,859,994 Considered doubtful - 35,698 5,737 ------------------------------------------------ 6,004,650 5,495,538 5,865,731 ------------------------------------------------ Less: Provision for doubtful debts 546,938 379,966 512,367 ------------------------------------------------ 6,495,885 5,897,560 6,546,160 SCHEDULE 9 CASH AND BANK BALANCES CASH AND CHEQUES ON HAND 152,897 397,630 299,481 BALANCES WITH SCHEDULED BANKS On Current account 493,226 398,800 588,229 In Deposit account 2,145,695 150,091 100,295 BALANCES WITH OTHER BANKS IN CURRENT ACCOUNT Midland Bank, U K 12,809 62,912 146,146 Wells Fargo, U S A 188,069 353,011 1,081,773 Nations Bank - - 97,627 Deutsche Bank 244,356 - 487,942 Societe General 244,350 168,544 198,324 Bank of America 47,626 3,412 27,142 Standard Chartered Bank 4,553 - - Shanghai C&S Bank 1,952 - - Danske Bank 488,700 - - National City Bank 451,950 - - Barclays Bank 390,967 - - Canadian imperial 244,362 - - Dresdner Bank 244,356 - - Bank of Tokyo 50,593 First Chicago - 151,140 976 Citibank - 222,123 1,949 FCC National Bank - 168,215 976 Chase Manhattan - 96,949 1,025 Great Western Bank 23 25 24 ------------------------------------------------ 5,406,484 2,172,852 3,031,909 ================================================ Maximum balances during the year Inkom Bank, Russia - Midland Bank, U K 387,177 Wells Fargo, U S A 986,037 Nations Bank 97,627 Deutsche Bank 487,942 Societe General 460,378 Bank of America 36,958 First Chicago 390,806 Citibank 875,432 FCC National Bank 391,739 Chase Manhattan 421,815 Great Western Bank 24
WIPRO LIMITED
(Rs. In 000s) ----------------------------------------------- AS OF JUNE 30, AS OF MARCH 31, ----------------------------------------------- 2002 2001 2002 ----------------------------------------------- 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 1,070,142 1,297,277 949,297 Considered doubtful 73,295 125,848 71,451 ----------------------------------------------- 1,143,437 1,423,125 1,020,748 ----------------------------------------------- Less: Provision for doubtful advances 73,295 125,848 71,451 ----------------------------------------------- 1,070,142 1,297,277 949,297 ----------------------------------------------- Certificate of deposits with foreign banks 4,195,295 5,208,592 5,287,219 Inter Corporate Deposits: GE Capital Services India 884,841 1,570,913 819,891 ICICI Limited -- 459,600 1,245,200 ----------------------------------------------- 884,841 2,030,513 2,065,091 ----------------------------------------------- Other Deposits 562,095 539,089 549,089 Advance income-tax (net of provision) 183,567 115,951 243,485 Balances with excise and customs 24,745 3,969 38,821 Unbilled Services 1,294,624 922,273 ----------------------------------------------- 8,215,309 9,195,391 10,055,275 ===============================================
Note: a) Other Deposits include Rs 25,000 ( 2002 :Rs. 25,000; 2001: 25,000) security deposits for premises with a firm in which a director is Interested SCHEDULE 11 LIABILITIES Sundry Creditors 1,707,736 1,592,625 2,268,027 Unclaimed dividends 1,588 180 1,588 Advances from customers 808,641 948,800 870,030 Other liabilities 2,432,508 2,039,706 2,083,509 Interest accrued but not due on loans 282 469 301 ------------------------------------------- 4,950,755 4,581,780 5,223,455 =========================================== SCHEDULE 12 PROVISIONS Employee retirement benefits 453,281 448,051 408,990 Proposed dividend 232,466 117,491 232,466 Tax on proposed dividend -- 11,958 -- Other Provision 9,800 -- 11,700 ------------------------------------------- 695,547 577,500 653,156 ===========================================
THREE MONTHS ENDED JUNE 30, YEAR ENDED MARCH 31, ------------------------------------------- SCHEDULE 13 OTHER INCOME 2002 2001 2002 ------------------------------------------- Dividend from mutual funds 20,545 -- 279,549 Dividend from companies -- -- 5,096 Interest on debt instruments 114,429 213,566 753,287 Rental Income 4,452 3,566 19,227 Profit on Sale of Investments 15,507 -- -- Profit on disposal of fixed assets 1,118 13,625 36,251 Difference in exchange 194,137 42,365 214,187 Royalty & Brand fees 18,254 -- 92,360 Provision no longer required written back 14,180 -- 115,354 Miscellaneous Income 21,955 37,132 42,925 ------------------------------------------- 404,577 310,254 1,558,236 ===========================================
Notes : Tax deducted at source Rs. 25,659 ( 2002 : Rs. 130,897; 2001: 9,671) WIPRO LIMITED
(Rs. In 000s) --------------------------------------------------- THREE MONTHS ENDED JUNE 30, YEAR ENDED MARCH 31, --------------------------------------------------- 2002 2001 2002 --------------------------------------------------- SCHEDULE 14 COST OF GOODS SOLD Raw materials, Finished and Process Stocks (refer - schedule 17) 1,850,120 1,509,702 7,952,910 Stores & Spares 43,739 56,690 184,958 Power and Fuel 83,583 90,542 322,164 Salaries, wages and bonus 981,791 941,016 3,503,398 Contribution to provident and other funds 37,986 36,037 133,716 Gratuity and pension 39,131 28,214 120,741 Workmen and Staff welfare 30,790 41,658 139,388 Insurance 5,173 4,761 16,797 Repairs to factory buildings 1,309 2,870 10,790 Repairs to Plant & Machinery 80,899 40,131 116,510 Rent 42,676 51,896 202,116 Rates & Taxes 11,491 2,941 11,933 Packing 15,660 14,037 15,436 Travelling and allowances 1,865,840 1,394,658 5,501,529 Depreciation 222,180 238,176 1,108,743 Technical fees 106,094 30,656 136,439 Miscellaneous 442,326 328,058 1,430,131 Less: Capitalized (29,240) (9,842) (76,268) --------------------------------------------------- 5,831,548 4,802,201 20,831,431 =================================================== SCHEDULE 15 SELLING GENERAL AND ADMINISTRATIVE EXPENSES Salaries, wages and bonus 228,649 218,411 1,059,461 Contribution to provident and other funds 8,233 5,568 34,934 Gratuity and pension 12,512 8,679 33,510 Workmen and Staff welfare 25,386 24,976 129,173 Insurance 1,832 1,495 6,108 Repairs to buildings 2,567 453 3,781 Rent 31,984 29,837 121,202 Rates and taxes 18,016 10,614 21,764 Carriage and freight 31,022 42,358 214,698 Commission on sales 14,678 17,854 489,688 Auditors' remuneration and expenses Audit fees 923 813 3,522 For certification including tax audit - - 969 Reimbursement of expenses 59 68 859 Advertisement and sales promotion 97,005 80,150 316,252 Loss on sale of fixed assets 1,264 177 10,648 Directors' fees 18 20 800 Depreciation 107,414 74,939 319,495 Travelling and allowances 514,659 396,881 1,577,051 Communication 79,679 39,363 112,765 Provision/write off of bad debts 82,357 56,144 265,224 Diminution in value of investments (mutual fund units) - - 163,147 Miscellaneous 157,252 127,569 634,461 --------------------------------------------------- 1,415,509 1,136,369 5,519,512 ===================================================
(Rs. In 000s) ---------------------------------------------- THREE MONTHS ENDED JUNE 30, YEAR ENDED MARCH 31, ---------------------------------------------- 2002 2001 2002 ---------------------------------------------- SCHEDULE 16 INTEREST On fixed loans 1,712 3,426 9,124 Other 6,666 192 20,573 ---------------------------------------------- 8,378 3,618 29,697 ============================================== SCHEDULE 17 RAW MATERIALS, FINISHED AND PROCESS STOCKS CONSUMPTION OF RAW MATERIALS AND BOUGHT OUT COMPONENTS Opening stocks 439,930 499,536 499,536 Add: Purchases 953,577 776,393 3,733,611 Less: Transfer on sale of undertaking - - 46,496 Less: Closing stocks 366,784 513,753 453,018 ---------------------------------------------- 1,026,723 762,176 3,733,633 ---------------------------------------------- PURCHASE OF FINISHED PRODUCTS FOR SALE 866,022 870,701 4,206,410 ---------------------------------------------- (INCREASE)/DECREASE IN FINISHED AND PROCESS STOCKS Opening stock : In process 84,722 121,190 121,190 : Finished products 365,435 487,115 487,115 Less: Transfer on sale of undertaking : In Process - - 81,002 : Finished Products - - 64,279 Less: Closing stocks : In process 112,745 113,995 84,722 : Finished products 380,037 617,485 365,435 ---------------------------------------------- (42,625) (123,175) 12,867 ---------------------------------------------- 1,850,120 1,509,702 7,952,910 ============================================== SCHEDULE 18 NON - RECURRING / EXTRAORDINARY ITEMS Loss of discontinued ISP business 408,319 ---------------------------------------------- 408,319 ==============================================
WIPRO LIMITED SCHEDULE - 19 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 and its affiliates where the Company holds more than 20% control. 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, export incentives, 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. With reference to 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. FIXED ASSETS AND DEPRECIATION Fixed assets were revalued in March 1997. In January 2002 the revaluation reserves were reversed against the carrying value of fixed assets. Consequently, fixed assets are now stated at historical cost 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. 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) 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 depreciation is provided on Written Down Value method. 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. INVENTORIES Finished goods are valued at cost or net realizable value, whichever is lower. Other inventories are valued at cost less provision for obsolescence. Indigenously developed software products are valued at cost, which reflects their remaining economic life. Small value tools and consumables are charged to consumption on purchase. Cost is computed on weighted average basis. 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. 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. FOREIGN CURRENCY TRANSACTIONS Foreign currency transactions are recorded at the spot rate 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 premium in respect of forward exchange contracts are recognized over the life of the contract, except that premium relating to foreign currency loans for the acquisition of fixed assets are capitalized 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. NOTES TO ACCOUNTS For preparation of interim financial statements, the same policies, which have been followed in the most recent annual financial statements, have been followed. 1. Goodwill arising on account of acquisition of subsidiaries and affiliates is not being amortized. Goodwill in the balance sheet represents goodwill arising on acquisition of Wipro Fluid Power Limited of Rs. 12,670. 2. The company has a 49% equity interest in Wipro GE Medical Systems Limited (WGE), a joint venture with General Electric, USA. The joint venture agreement provides specific rights to the joint venture partners. The rights conferred to Wipro are primarily protective in nature. Therefore, in accordance with the guidance in Accounting Standard 27 " Financial Reporting of Investments in Joint Ventures" the investments in Wipro GE have been accounted for by equity method and not by proportionate consolidation method. Investments in Wipro e Peripherals have been accounted for by equity method. 3. The Company was engaged in the business of providing corporate ISP services. Based on a review of this business, the company decided to discontinue the existing infrastructure based ISP business, but continue with the managed network and remote management services. Managed network and remote management services are currently being offered as part of total IT solutions. In June 2002, the management formally approved a plan to discontinue the infrastructure based corporate ISP services. The costs associated with the discontinuance including asset impairment charges and other exit costs have been reflected as extraordinary expenses. The customers are being transitioned to an independent service provider. The consideration payable by the service provider to the Company is dependent on the occurrence of certain contingent events. Amounts, if any, received from the service provider will be reflected as extraordinary gains. 4. During fiscal 2002, 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 WNL is credit to Wipro Limited. The deficit of Rs. 2,432,045 arising on amalgamation as detailed below was 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 -------------------------------------------------------------------------
5. Deferred tax comprise of:
(Rs. In 000s) -------------------------------------------------------------- Deferred tax assets: Allowance for doubtful debts 81,037 Property plant and equipment 89,362 Employee stock incentive plan 61,695 Provision for diminution of investments 53,431 Accrued expenses 43,877 Business losses carried forward 174,521 -------- 503,923 --------------------------------------------------------------
WIPRO LIMITED 6. Provision for taxation comprises of following: (i) Rs. 110,234 (2002: Rs. 388,837; 2001: Rs. 25,467) in respect of foreign taxes, net of deferred tax of Rs. Nil (2002: Rs. 53,967; 2001: Rs. 48,610) and write back of provision of Rs. Nil (2002: 87,189; 2001: Rs. 35,307) in respect of earlier year (ii) Rs. 27,678 (2002: 337,163; 2001: Rs. 89,468) in respect of Indian Income Tax, net of tax benefit from discontinued business of Rs. 152,219, net of deferred tax adjustment of Rs. 82,120 (2002: Rs. 236,120; 2001: Rs. Nil) and write back of provision of Rs.Nil (2002: Rs. 19,921; 2001: Rs. 34,000) in respect of earlier years. (iii) Rs.750 (2002: Rs. 3,000; 2001: Rs. 750) in respect of Wealth Tax. 7. The details of subsidiaries and affiliates 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 c) NAME OF THE AFFILIATE Wipro GE Medical Systems Limited India 49% Wipro ePeripherals Limited India 39.64% --------------------------------------------------------------------------------------------
* Fully owned by Wipro Inc. 8. Diluted EPS is calculated based on treasury stock method for ESOP outstanding. 9. Amount received from employees on exercise of stock option, pending allotment of shares is shown as share application money pending allotment. WIPRO LIMITED CASH FLOW STATEMENT
(Rs. In 000s) ------------------------------------------------- THREE MONTHS ENDED JUNE 30, YEAR ENDED MARCH 31, ------------------------------------------------- 2002 2001 2002 ------------------------------------------------- CASH FLOWS FROM OPERATING ACTIVITIES: Profit before tax from continuing operations 2,306,640 2,277,602 9,707,309 Adjustments to reconcile Net profit before tax and non recurring items to net cash provided by operating activities: Depreciation and amortization 282,035 313,115 1,378,945 Foreign currency translation gains (194,137) (42,365) (119,637) Loss of discontinued operations -- (22,069) (124,627) Minority interest 2,458 -- -- Equity in earnings of affiliates 69,310 -- -- Retirement benefits provision 32,590 43,149 (6,413) Others -- -- (12,676) Interest on borrowings 8,378 -- 28,941 Dividend / interest (150,481) (203,637) (873,941) Loss / (Gain) on sale of property, plant and equipment (1,118) (13,625) (25,603) Operating cash flow before changes in working capital 2,355,675 2,352,170 9,952,298 Trade and other receivable (208,149) 408,419 (236,983) Loans and advances (117,686) (79,250) (745,340) Inventories (other than stock-in-trade land) 37,836 (133,606) 217,929 Trade and other payables (377,547) (190,633) 519,631 ------------------------------------------------- Net cash provided by operations 1,690,129 2,357,100 9,707,535 Direct taxes paid (212,145) (202,850) (1,155,393) ------------------------------------------------- NET CASH PROVIDED BY CONTINUING OPERATIONS 1,477,984 2,154,250 8,552,142 ------------------------------------------------- NET CASH PROVIDED BY DISCONTINUING OPERATIONS 25,431 -- -- ------------------------------------------------- NET CASH PROVIDED BY OPERATIONS 1,503,415 2,154,250 8,552,142 ------------------------------------------------- CASH FLOWS FROM INVESTING ACTIVITIES: Expenditure on property, plant and equipment (including advances) (395,325) (649,514) (2,433,022) Proceeds from sale of property, plant and equipment 46,399 33,771 194,650 Purchase of investments (5,962,629) (4,071,302) (5,709,805) Inter Corporate deposits placed / matured 1,180,250 (978,513) (963,300) Certificate of Deposits with foreign banks 1,091,924 (1,882,484) (1,961,111) Sale / maturities on Investments 4,683,659 2,847,073 145,468 Investment in Spectra mind (120,000) -- -- Divided received 20,545 -- 284,645 Interest received 129,936 203,637 560,355 ------------------------------------------------- NET CASH USED IN INVESTING ACTIVITIES 674,759 (4,497,332) (9,882,120) ------------------------------------------------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from exercise of Stock Option Plan grants 29,607 3,649 35,479 Share application money pending allotment (2,116) -- -- Dividends paid -- -- (128,071) Proceeds from issuance / (repayment) of borrowings 168,910 (76,080) (133,886) ------------------------------------------------- Net cash provided by/(used in) financing activities 196,401 (72,431) (226,478) ------------------------------------------------- Net increase/ (decrease) in cash and cash equivalents during the year 2,374,575 (2,415,513) (1,556,456) Cash and cash equivalents at the beginning of the period 3,031,909 4,588,365 4,588,365 ------------------------------------------------- Cash and cash equivalents at the end of the period 5,406,484 2,172,852 3,031,909 =================================================
Notes: 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, July 19, 2002 WIPRO LIMITED AUDITOR'S CERTIFICATE We have examined the above cash flow statement of Wipro Limited for the period ended June 30, 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 period ended June 30, 2002. FOR N M RAIJI & CO., Chartered Accountants J M GANDHI Partner Mumbai, July 19, 2002.