EX-99.1 3 f91681exv99w1.txt EXHIBIT 99.1 EXHIBIT 99.1 (WIPRO LOGO) CONTACT: SRIDHAR RAMASUBBU Wipro Limited 408-557-4402 Results for the Quarter Ended June 30, 2003 under US GAAP WIPRO RECORDS 5% GROWTH IN NET INCOME Bangalore, India and Mountain View, California - July 18, 2003-- Wipro Limited (NYSE:WIT) today announced financial results under US GAAP for its first fiscal quarter ended June 30, 2003. HIGHLIGHTS: - Net Income was Rs. 1.781 billion ($38.4 million), representing an increase of 5% over the same period last year. - Revenue was Rs. 11.693 billion ($251.99 million), representing an increase of 28% year over year. - Global IT Services Revenue & Products was Rs.9.223 billion ($198.77 million), representing an increase of 45.4% over the same period last year. - Global IT Services & Products Earnings Before Interest and Tax (EBIT) was Rs. 1.810 billion ($ 39.0 million), representing a decline of 11.5% over the same period last year. - Rs. 1.895 billion ($ 40.8 million) cash generated from continuing operations. - Global IT Services & Products added 38 new clients added in the quarter, including 2 in IT Enabled Services and 8 customers in Wipro Nervewire. - Consistent with prior years, our shareholders approved a cash dividend of Rs.1 (2 cents) per equity share in our Annual General Meeting on July 17, 2003. OUTLOOK FOR THE QUARTER ENDING SEPTEMBER 30, 2003 Azim Premji, Chairman of Wipro commenting on the results said "We see convergence in the business models of our Global IT Services and Products and IT Enabled Services segments from a customer standpoint. With our established track record in Wipro Technologies and Wipro Spectramind, we are well positioned to lead this convergence. The environment is one of volume growth coupled with an appreciating Rupee. Looking ahead, for the quarter ending September 2003, we currently expect our Revenue from our Global IT Services and Products segment, which also includes revenue from our IT-enabled services business as of June 30, 2003, to be approximately $210 million." Vivek Paul, Vice Chairman, said "During the quarter, we continued our success in selling Business Process Outsourcing (BPO) and Energy & Utilities Consulting Services to our existing clients. Our BPO business grew 19% over the prior quarter. Our Enterprise business sustained its momentum with a 8.3% growth in Revenues over the prior quarter. Going forward, this will be complemented well with increased traction in our Technology business. " Suresh Senapaty, Chief Financial Officer, said, "During the quarter, consistent with our plan, our Energy & Utilities Consulting Practice stabilized and posted profits. Effective for the quarter ending June 30, 2003, we have consolidated the results of our IT Enabled Services segment with the results of our Global IT Services and Products segment. We believe that this revised presentation reflects our view that our IT-enabled Services business is essentially a horizontal service that we are offering to existing and prospective clients of our Global IT Services and Products business segment. In an effort to provide greater transparency on our operational performance, we are also providing information regarding the performance of our subsidiary Wipro Nervewire separately." WIPRO LIMITED Total Revenues for the quarter ended June 30, 2003 were Rs.11.693 billion ($251.99 million), representing a 28% increase over the corresponding period in the previous year. Net Income was Rs. 1.781 billion ($38.4 million), representing an increase of 5% over the same period last year. Earnings per share from continuing operations were Rs. 7.70 ($0.17) for the quarter ended June 30, 2003, representing a decline of 14.6% over the earnings per share of Rs.9.02 for quarter ended June 30, 2002. GLOBAL IT SERVICES AND PRODUCTS (79% OF REVENUES AND 88% OF OPERATING INCOME FOR QUARTER ENDED JUNE 30, 2003) Effective for the quarter ending June 30, 2003, the results of our IT Enabled services business (Wipro Spectramind) are included in the results of Global IT Services and Products business segment. After completion of acquisition in May 2003, the operations of Wipro Nervewire, which is a component of Global IT Services and Products segment, are being reported separately in our financial statements in accordance with the company's decision to evaluate all critical acquisitions separately for a period of time ranging from two to four quarters. Our Global IT Services and Products business segment (excluding Wipro Nervewire, which is being reported separately) recorded Revenue(1) of Rs. 9.143 billion ($197.0 million) for the quarter ended June 30, 2003, representing an increase of 39.5% over the same period last year. EBIT was Rs.1.92 billion ($ 41.4 million) for the quarter ended June 30, 2003, representing a decline of 6% over the same period last year. Operating Margin to Revenue for the quarter ended June 30, 2003 was 21%, representing a decline of 10.2% from the quarter ended June 30, 2002. The decline was primarily due to lower price realization and higher Selling, General and Administrative costs, which were partially offset by increased utilization of professionals. EBIT includes acquisition related charges of Rs. 70.9 million ($1.53 million) from the amortization of intangibles. We had 21,080 employees in this business segment as of June 30, 2003, which includes 14,618 employees in our IT Services and Products business and 6,462 employees in our IT Enabled services business. Wipro Nervewire recorded Revenue of Rs. 118.54 million ($2.55 million) and a loss of Rs. 109.86 million ($2.37 million) for the quarter ended June 30, 2003. INDIA AND ASIA-PAC IT SERVICES AND PRODUCTS (11% OF REVENUE AND 3% OF OPERATING INCOME FOR QUARTER ENDED JUNE 30, 2003) Our India and Asia-Pac Services and Products business segment (Wipro Infotech) recorded Revenue of Rs. 1.329 billion ($28.6 million) for the quarter ended June 30, 2003, representing a decline of 24% over the quarter ended June 30, 2002. EBIT for the quarter ended June 30, 2003, was Rs. 64 million ($1.4 million), representing a decrease of 22% over the same period last year. Operating Margin for the quarter ended June 30, 2003 was 4.8%, representing an increase of 0.1% compared to the quarter ended June 30, 2002. Return on Capital Employed (ROCE) was 21% for the quarter ended June 30, 2003, compared to 26% for the quarter ended June 30, 2002. CONSUMER CARE & LIGHTING (7% OF REVENUE AND 7% OF OPERATING INCOME FOR QUARTER ENDED JUNE 30, 2003) Our Consumer Care & Lighting business segment recorded Revenue of Rs. 781.5 million ($16.8 million) for the quarter ended June 30, 2003, representing a 9.2% increase over Revenue of Rs. 715.9 million for the quarter ended June 30, 2002. EBIT was Rs. 136.1 million ($2.9 million) for the quarter ended June 30, 2003, representing a 9.6% increase over EBIT of Rs.124.2 million for the quarter ended June 30, 2002. ---------- 1 Global IT Services & Products segment Revenues were Rs. 9.255 billion for the quarter ended June 30, 2003 under Indian GAAP. The difference of Rs. 6 million ($ 0.13 million) is attributable to different revenue recognition standards under Indian GAAP and US GAAP. ROCE was 89% for the quarter ended June 30,2003, compared to 73% for the quarter ended June 30, 2002. OUR RESULTS FOR THE QUARTER ENDED JUNE 30, 2003, COMPUTED UNDER THE INDIAN GAAP AND THE US GAAP, ALONG WITH INDIVIDUAL BUSINESS SEGMENT REPORTS ARE AVAILABLE IN THE INVESTOR RELATIONS SECTION OF OUR WEBSITE AT WWW.WIPRO.COM. QUARTERLY CONFERENCE CALL We will hold conference calls today at 11:45 AM Indian Standard Time (2:15 AM Eastern Time) and at 6:45 PM Indian Standard Time (9:15 AM Eastern) to discuss our 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 our website at www.wipro.com shortly after the live broadcast. ABOUT WIPRO LIMITED Wipro Limited is the first P CMM Level 5 and SEI CMM Level 5 certified IT Services company globally. We provide comprehensive IT solutions and services, including systems integration, information systems outsourcing, package implementation, software application development and maintenance, and research and development services to corporations globally. In the Indian market, we are a leader in providing IT solutions and services for the corporate segment in India offering system integration, network integration, software solutions and IT services. We also have a profitable presence in niche market segments of consumer products and lighting. In the Asia Pacific and Middle East markets, Wipro provides IT solutions and services for global corporations. Our ADSs are listed on the New York Stock Exchange, and our equity shares are listed in India on the Stock Exchange - Mumbai, and the National Stock Exchange, among others. For more information, please visit our websites at www.wipro.com and www.wipro.co.in 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 we make strategic investments, withdrawal of fiscal governmental incentives, political instability, war, 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. We 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. We do not undertake to update any forward-looking statement that may be made from time to time by us or on our behalf. # # # (Tables to follow) WIPRO LIMITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME (IN MILLIONS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED JUNE 30 ---------------------------------------------------- 2002 2003 2003 Convenience Translation into US$ (UNAUDITED) (UNAUDITED) (UNAUDITED) Revenues: Global IT Services and Products Services ................................. Rs. 6,309 RS. 9,187 $ 198 Products ................................. 35 36 1 India and AsiaPac IT Services and Products Services ................................. 468 586 13 Products ................................. 1,282 734 16 Consumer Care and Lighting .................. 716 781 17 Others ...................................... 339 368 8 --------- --------- ----- Total ............................. 9,149 11,692 252 --------- --------- ----- Cost of Revenues: Global IT Services and Products Services ................................. 3,636 5,752 124 Products ................................. 32 20 -- India and AsiaPac IT Services and Products Services ................................. 252 365 8 Products ................................. 1,140 596 13 Consumer Care and Lighting .................. 475 495 11 Others ...................................... 273 264 6 --------- --------- ----- Total ............................. 5,808 7,492 161 --------- --------- ----- Gross profit ................................... 3,341 4,200 91 Operating expenses: --------- --------- ----- Selling, general, and administrative exp ... (1,256) (2,099) (45) Research and development expenses .......... (39) (58) (1) Amortization of intangible assets ......... -- (76) (2) Foreign exchange gains, net ................ 202 51 1 Others, net ................................ 36 31 1 --------- --------- ----- Operating Income ............................... 2,284 2,049 44 Loss on direct issue of stock by subsidiary .... -- (176) (4) Other income, net .............................. 260 166 4 Equity in losses of affiliates ................. (206) (54) (1) --------- --------- ----- Income before income taxes and minority interest 2,338 1,984 43 Income taxes ................................... (254) (201) (4) Minority interest .............................. -- (3) -- --------- --------- ----- Income from continuing operations .............. 2,084 1,780 38 Discontinued operations: Loss from operations of discontinued corporate Internet services division (including loss on disposal of Rs. 275 for the period ended June 30, 2002) ............................. (541) -- -- Income tax benefit ......................... 152 -- -- --------- --------- ----- Net income ........................... Rs. 1,695 RS. 1,780 $ 38 ========= ========= ===== Earnings per equity share: Basic Continuing Operations ................... 9.02 7.70 0.17 Discontinued operations ................. (1.68) -- -- Net income ........................... 7.34 7.70 0.17 Earnings per equity share: Diluted Continuing operations ................... 9.00 7.68 0.17 Discontinued Operations ................. (1.68) -- -- Net Income ............................ 7.32 7.68 0.17 ========= ========= ===== ADDITIONAL INFORMATION Operating Income Global IT Services & Products IT Services & Products ...................... Rs. 2,046 RS. 1,921 $ 41 Wipro Nervewire ............................. -- (110) (2) Total ....................................... 2,046 1,811 39 India & AsiaPac IT Services & Products ......... 82 64 1 Consumer Care & Lighting ....................... 124 136 3 Others ......................................... 39 58 1 Reconciling Item ............................... (7) (20) -- --------- --------- ----- Total .......................................... Rs. 2,284 RS. 2,049 $ 44 ========= ========= =====
WIPRO LIMITED CONSOLIDATED BALANCE SHEETS (IN MILLIONS, EXCEPT SHARE DATA AND UNLESS STATED OTHERWISE)
AS OF JUNE 30, --------------------------------------------------- 2002 2003 2003 ---- ---- ---- Convenience translation into US$ (UNAUDITED) (UNAUDITED) (UNAUDITED) ASSETS Current assets: Cash and cash equivalents ........................... Rs. 5,503 RS. 2,382 $ 51 Investments in liquid and short term mutual funds ... 5,405 12,790 276 Accounts receivable, net of allowances .............. 6,110 7,634 165 Costs and earnings in excess of billings on contracts in progress ........................................ 1,295 2,070 45 Inventories ......................................... 1,429 1,778 38 Other investment securities ......................... 4,190 48 1 Deferred income taxes ............................... 168 222 5 Property, plant and equipment held for sale ......... 34 -- -- Other current assets ................................ 2,220 3,028 65 ---------- ---------- ---------- Total current assets .............................. 26,354 29,952 646 ---------- ---------- ---------- Other investment securities ......................... 530 -- -- Property, plant and equipment, net .................. 6,014 7,668 165 Investments in affiliates ........................... 683 480 10 Deferred income taxes ............................... 336 113 2 Intangible assets, net .............................. -- 463 10 Goodwill ............................................ 657 5,522 119 Other assets ........................................ 725 658 14 ---------- ---------- ---------- Total assets ..................................... Rs. 35,299 RS. 44,856 $ 967 ========== ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Borrowings from banks .............................. Rs. 443 RS. 125 $ 3 Current portion of long term debt .................. 82 20 -- Accounts Payable ................................... 1,626 1,801 39 Accrued expenses ................................... 1,181 1,699 37 Accrued employee cost .............................. 1,017 1,719 37 Advances from customers ............................ 933 929 20 Other current liabilities .......................... 757 857 18 ---------- ---------- ---------- Total current liabilities ........................ 6,039 7,150 154 ---------- ---------- ---------- Long-term debt, excluding current portion .............. 29 90 2 Other liabilities ...................................... 86 128 3 ---------- ---------- ---------- Total liabilities ................................ 6,154 7,368 159 ---------- ---------- ---------- Minority interest ...................................... 277 6 Stockholders' equity Equity shares at Rs. 2 par value: 375,000,000 shares authorized; Issued and outstanding: 232,492,943 and 232,566,482 shares as of June 30, 2002 and 2003 ..... 465 465 10 Additional paid-in capital ............................. 6,847 6,949 150 Deferred stock compensation ........................... (76) (35) (1) Accumulated other comprehensive loss .................. (3) (32) (1) Retained earnings ...................................... 21,912 29,864 644 Equity shares held by a controlled Trust: 1,321,460 and 1,303,610 shares as of June 30, 2002 and 2003 ...... * * * ---------- ---------- ---------- Total stockholders' equity ....................... 29,145 7,211 802 ---------- ---------- ---------- Total liabilities and stockholders' equity ............. Rs. 35,299 RS. 44,856 $ 967 ========== ========== ========== * Equity shares held by a controlled trust ............. Rs. 75,000 Rs. 75,000 Rs. 75,000