Exhibit 19.1

WIPRO LIMITED — CONSOLIDATED

CONSOLIDATED BALANCE SHEET

(Rs. in Million)

			As of September 30,				As of March 31,
	Schedule		2004		2003		2004
SOURCES OF FUNDS
SHAREHOLDERS’ FUNDS
Share Capital		1		1,397.90		465.13		465.52
Reserves and Surplus		2		44,259.15		38,602.24		37,083.97
				45,657.05		39,067.37		37,549.49
Loan Funds
Secured loans		3		664.63		424.77		947.47
Unsecured loans		4		106.47		94.24		105.88
Minority Interest				378.20		93.22		163.84
				1,149.30		612.23		1,217.19
TOTAL				46,806.35		39,679.60		38,766.68
APPLICATION OF FUNDS
FIXED ASSETS
Goodwill (refer Note 1)				5,360.86		5,324.43		5,252.36
Gross block		5		17,938.70		14,080.99		15,607.11
Less : Depreciation				8,655.15		6,604.11		7,599.48
Net Block				14,644.41		12,801.31		13,259.99
Capital work-in-progress and advances				2,242.88		998.24		1,427.28
				16,887.29		13,799.55		14,687.27
INVESTMENTS		6		18,656.22		15,757.54		19,058.83
DEFERRED TAX ASSETS (refer note 7)				524.03		465.91		486.30
CURRENT ASSETS, LOANS AND ADVANCES
Inventories		7		1,262.55		1,241.91		1,292.02
Sundry Debtors		8		12,421.75		8,824.50		11,865.56
Cash and Bank balances		9		2,313.50		2,198.49		3,242.70
Loans and advances		10		7,339.24		5,398.64		5,683.78
				23,337.04		17,663.54		22,084.06
Less : CURRENT LIABILITIES AND PROVISIONS
Liabilities		11		11,624.99		7,314.73		9,251.56
Provisions		12		973.24		693.19		8,298.22
				12,598.23		8,007.92		17,549.78
NET CURRENT ASSETS				10,738.81		9,655.62		4,534.28
Miscellaneous expenditure (to the extent not written off / adjusted)				—		0.98		—
TOTAL				46,806.35		39,679.60		38,766.68
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
	Azim Hasham Premji	Vivek Paul		P. M. Sinha
	Chairman and Managing Director	Vice Chairman and Executive Officer		Director
J.M. Gandhi
Partner	Suresh C. Senapaty	V. Ramachandran		B.C. Prabhakar
Membership No. 37924	Corporate Executive	Company Secretary		Director
	Vice President – Finance
Mumbai, October 15, 2004			Bangalore, October 15, 2004

WIPRO LIMITED — CONSOLIDATED

CONSOLIDATED PROFIT AND LOSS ACCOUNT

(Rs. in Million, except per share data)

				Quarter ended September 30,						Half Year ended September 30,						Year ended
		Schedule		2004			2003			2004			2003			March 31, 2004
INCOME
Gross Sales and Services					20,068.60			13,876.83			37,946.95			26,114.44			59,111.07
Less: Excise Duty					183.32			232.04			391.16			603.13			760.84
Net Sales and Services					19,885.28			13,644.79			37,555.79			25,511.31			58,350.23
Other Income			13		75.85			306.20			360.30			580.31			1,365.99
Total					19,961.13			13,950.99			37,916.09			26,091.62			59,716.22
EXPENDITURE
Cost of goods sold			14		12,935.90			9,141.94			24,410.60			16,760.57			39,280.54
Selling and Marketing Expenses			15		1,334.19			1,489.37			2,660.23			2,762.07			5,612.65
General and Administration Expenses			16		866.72			647.02			1,836.38			1,540.31			2,756.14
Interest			17		15.27			5.60			26.74			11.38			35.07
Total					15,152.08			11,283.93			28,933.95			21,074.33			47,684.40
PROFIT BEFORE TAXATION:					4,809.05			2,667.06			8,982.14			5,017.29			12,031.82
Provision for Taxation (refer Note 8)					702.08			360.26			1,313.15			592.16			1,680.56
PROFIT AFTER TAXATION					4,106.97			2,306.80			7,668.99			4,425.13			10,351.26
PROFIT BEFORE MINORITY INTEREST / EQUITY IN EARNINGS OF AFFILIATES:	}				4,106.97			2,306.80			7,668.99			4,425.13			10,351.26
Minority Interest					(22.33	)		(10.83	)		(44.62	)		(14.48	)		(59.19	)
Equity in earnings / (losses) of affiliates					32.50			6.01			62.10			(47.94	)		22.92
PROFIT FOR THE PERIOD					4,117.14			2,301.98			7,686.47			4,362.71			10,314.99
Appropriations
Proposed Dividend					—			—			—			—			931.04
Proposed One-Time Dividend					—			—			—			—			5,818.98
Total Dividend					—			—			—			—			6,750.02
Tax on distribution of Dividend					—			—			—			—			864.85
Transfer to general reserve					4,117.14			2,301.98			7,686.47			4,362.71			2,700.12
EARNINGS PER SHARE - EPS (PY : Adjusted EPS for bonus issue in ratio of 2:1) - in Rs.
Basic					5.93			3.32			11.07			6.29			14.87
Diluted					5.91			3.32			11.04			6.29			14.85
Number of shares for calculating EPS (PY : Adjusted for bonus issue in ratio of 2:1)
Basic					694,565,136			693,777,045			694,468,816			693,782,832			693,870,390
Diluted					696,889,088			693,777,045			696,270,795			693,832,932			694,545,321
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
	Azim Hasham Premji	Vivek Paul		P. M. Sinha
	Chairman and Managing Director	Vice Chairman and Executive Officer		Director
J.M. Gandhi
Partner	Suresh C. Senapaty	V. Ramachandran		B.C. Prabhakar
Membership No. 37924	Corporate Executive	Company Secretary		Director
	Vice President – Finance
Mumbai, October 15, 2004			Bangalore, October 15, 2004

WIPRO LIMITED — CONSOLIDATED

SCHEDULE 1 SHARE CAPITAL

(Rs. in Million, except share numbers)

	As of September 30,				As of March 31,
	2004		2003		2004
Authorized
750,000,000 (2004: 375,000,000) Equity shares of Rs 2 each		1,500.00		750.00		750.00
25,000,000 (2004: 25,000,000) 10.25 % Redeemable Cumulative Preference Shares of Rs 10 each		250.00		250.00		250.00
		1,750.00		1,000.00		1,000.00
Issued, subscribed and paid-up
698,951,673 (2004: 232,759,152) equity shares of Rs 2 each		1,397.90		465.13		465.52
Total		1,397.90		465.13		465.52

Notes:
Of the above equity shares:

i)	692,537,085 equity shares / American Depository Receipts (ADRs) (2004: 226,905,825; 2003: 226,905,825), have been allotted as fully paid bonus shares / ADRs by capitalization of Share Premium of Rs. 32.64 and General Reserves of Rs. 1,352.44
ii)	1,325,525 equity shares (2004: 1,325,525; 2003: 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)	1,010,563 (2004: 449,302; 2003: 248,287) equity share issued pursuant to Employee Stock Option Plan.

SCHEDULE 2 RESERVES AND SURPLUS

(Rs. in Million)

	As of April 1, 2004			Additions			Deductions			As of September 30, 2004
Capital Reserves		9.50			—			—			9.50
		9.50			—			—			9.50
		9.50			—			—			9.50
Capital Redemption Reserve		250.04			—						250.04
		250.04			—			—			250.04
		250.04			—			—			250.04
Share Premium		6,732.28			294.93	(a)					7,027.21
		6,492.85			239.43						6,732.28
		6,492.85			3.41			—			6,496.26
Translation Reserve		(159.74	)		85.93	(b)					(73.81	)
		(0.57	)		—			159.18			(159.75	)
		(0.57	)		(67.52	)		—			(68.09	)
Deferred Stock Compensation		—			—			—			—
		4.40			—			4.40			—
		4.40			—			4.40			—
General Reserve		30,251.90			7,725.57	(c)		931.26	(d)		37,046.21
		27,551.77			2,700.13			—			30,251.90
		27,551.77			4,362.76			—			31,914.53
Total		37,083.98			8,106.43			931.26			44,259.15
		34,307.99			2,939.56			163.58			37,083.97
		34,307.99			4,298.65			4.40			38,602.24

Corresponding figures for 2004 and 2003 are given under current year’s figures. For Notes refer below.

(a)	Pursuant to issue of shares under Wipro Employee Stock Option Plan
(b)	Translation reserves arising on account of translation of foreign subsidiaries with non-integral operations.
(c)	Additions to General Reserve include:

	For the half year ended				For the year ended
	Sept’ 30, 2004		Sept 30, 2003		March 31, 2004
i) transfer from profit and loss account		7,686.47		4,362.76		2,700.13
ii) dividend distributed to Wipro Equity Reward Trust (WERT)		39.10		—		—
		7,725.57		4,362.76		2,700.13

(d) Deduction from General Reserve is on account of utilization for issue of bonus shares

WIPRO LIMITED — CONSOLIDATED

SCHEDULE 3 SECURED LOANS

(Rs. in Million)

				As of September 30,				As of March 31,
	Note Reference			2004		2003		2004
From Banks
Cash Credit facility		(a	)		662.95		394.89		945.79
From Financial Institutions
Asset Credit Scheme		(b	)		—		28.20		—
Development loan from Karnataka Government		(c	)		1.68		1.68		1.68
Total					664.63		424.77		947.47

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)	Secured by hypothecation of specific machinery / assets.
(c)	Secured by a pari-passu 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.

SCHEDULE 4 UNSECURED LOANS

(Rs. in Million)

	As of September 30,				As of March 31,
	2004		2003		2004
Other Loans and Advances
Interest free loan from State government		105.22		92.99		104.63
Interest free loan from state financial institutions		1.25		1.25		1.25
Total		106.47		94.24		105.88

WIPRO LIMITED — CONSOLIDATED

SCHEDULE 5 FIXED ASSETS

(Rs. in Million)

PARTICULARS	GROSS BLOCK
	As of April 1,				Deductions/		As of September
	2004		Additions		adjustments		30, 2004
Land		744.26		—		1.07		743.19
Buildings		3,034.44		382.83		—		3,417.27
Railway siding		0.01		—		—		0.01
Plant & Machinery		9,088.79		1,288.09		12.86		10,364.02
Furniture, Fixture and Equipments		1,895.61		237.93		14.68		2,118.86
Vehicles		781.93		172.04		23.08		930.89
Technical know-how		10.38		—		—		10.38
Patents, Trade marks & Rights		51.69		302.39		—		354.08
Total		15,607.11		2,383.28		51.69		17,938.70

[Additional columns below]

[Continued from above table, first column(s) repeated]

PARTICULARS	PROVISION FOR DEPRECIATION								NET BLOCK
	As of April 1,		Depreciation		Deductions /		As of September		As of September		As of March
	2004		for the period		adjustments		30, 2004		30, 2004		31, 2004
Land		12.58		0.22		—		12.80		730.39		731.68
Buildings		273.08		25.32		—		298.40		3,118.87		2,761.36
Railway siding		0.01		—		—		0.01		—		0.00
Plant & Machinery		5,850.47		759.00		12.83		6,596.64		3,767.38		3,238.32
Furniture, Fixture and Equipments		1,079.90		210.48		10.08		1,280.30		838.56		815.71
Vehicles		366.97		78.61		6.13		439.45		491.44		414.96
Technical know-how		10.38		—		—		10.38		—		—
Patents, Trade marks & Rights		6.09		11.08		—		17.17		336.91		45.60
Total		7,599.48		1,084.71		29.04		8,655.15		9,283.55		8,007.63

WIPRO LIMITED — CONSOLIDATED
SCHEDULE 6 INVESTMENTS

( Rs. in Million except share numbers and face value)

	As of September 30,				As of March 31,
All shares are fully paid up unless otherwise stated	Number		2004		2003		2004
Investments - Long Term (at cost)
Investment in Affiliates
Wipro GE Medical Systems private Ltd # (refer Note below)		4,900,000		426.55		344.27		380.80
WeP Peripherals Ltd		7,059,580		168.99		136.91		160.74
				595.54		481.18		541.54
Investments – short term:
In money market mutual funds
IL & FS		572,097		572.11		453.43		562.63
Alliance Capital Mutual Fund (50,143,931 units purchased / 35,694,601 redeemed during the year)		—		—		—		505.19
Prudential ICICI Mutual Fund (295,017,558 units purchased / 348,829,592 units redeemed during the year)		157,082,587		1,939.94		2,556.12		2,371.52
HDFC Mutual Fund (83,405,159 units purchased / 209,973,225 units redeemed during the year)		151,650,062		1,734.04		1,711.48		2,602.87
Standard Chartered Mutual Fund (420,846,558 units purchased / 443,195,040 units redeemed during the year)		180,473,584		1,805.00		1,884.18		2,066.53
Reliance Mutual Fund (80,680,099 units purchased / 66,958,673 units during the year)		149,474,257		2,134.74		1,023.74		1,785.40
Zurich India Mutual Fund (437,506,511 units redeemed during the year ended March 31, 2004)		—		—		455.77		—
Templeton India		117,448		146.16		—		163.34
Templeton TMA (2,117,179 units purchased / 1,446,322 units redeemed during the year)		1,631,600		1,647.40		1,722.24		1,576.41
Templeton Floating Fund (83,145,821 units purchased / 394,892 units redeemed during the year)		86,630,922		866.70		—		157.79
Franklin Templeton India Mutual Fund (9,371,984 units purchased during the year ended March 31, 2004)		23,532,808		236.42		—		102.87
Deutsche MF (118,335,536 units purchased / 107,396,540 units redeemed during the year)		69,370,244		698.20		511.25		577.80
ING MF (56,410,148 units purchased / 43,752,625 units redeemed during the year)		47,584,680		475.85		282.94		367.94
Can Liquid MF (44,615,737 units purchased / 45,007,909 redeemed during the year ended March 31, 2004)		—		—		237.68		499.25
Sundaram MF (98,313,228 units purchased / 64,273,561 redeemed during the year)		51,937,149		670.76		205.30		172.34
Cholamandalam Mutual Fund (27,883,771 units purchased during the year)		46,034,783		460.51		48.73		176.57
Kotak Mutual Fund (22,912,466 units purchased / 77,666,667 redeemed during the year)		50,709,958		563.97		1,143.37		1,317.54
J M Mutual Fund (430,412,638 units purchased / 497,344,609 units redeemed during the year)		75,970,611		760.78		871.42		1,406.31
DSP Merrill Lynch Mutual Fund (76,923,077 units purchased / 57,442,557 during the year)		65,951,383		660.17		260.26		459.33
SBI Insta Cash (134,265,755 units purchased / 135,023,507 redeemed during the year)		—		—		206.27		—
HSBC Cash fund (111,952,100 units purchased / 89,999,820 units redeemed during the year)		130,710,404		1,307.10		479.29		206.76
Birla Mutual Fund (53,836,348 units purchased / 191,333,864 units redeemed during the year)		934,421		10.09		1,222.89		1,438.90
Tata Mutual Fund (87,931,958 units purchased during year)		88,308,082		989.21		—		—
Principal AMC Mutual Fund (188,047,647 units purchased / 163,467,587 units redeemed during year)		24,908,337.00		250.53		—		—
Investment with Wells Fargo, USA				131.00		—		—
				18,060.68		15,276.36		18,517.29
Total				18,656.22		15,757.54		19,058.83

Note : Equity investments in this company carry certain restrictions on transfer of shares that is normally provided for in join venture / venture funding agreement

WIPRO LIMITED — CONSOLIDATED

SCHEDULE 7 INVENTORIES

(Rs. in Million)

	As of September 30,				As of March 31,
	2004		2003		2004
Stores and Spares		30.95		32.24		31.51
Raw Materials		537.31		411.07		551.40
Stock in Progress		216.82		144.25		159.52
Finished Goods		477.47		654.35		549.59
Total		1,262.55		1,241.91		1,292.02
Basis of stock valuation :
i) Raw materials, stock in progress and Stores & Spares at or below cost.
ii) Finished Goods at cost or net realizable value, whichever is lower
SCHEDULE 8 SUNDRY DEBTORS (Unsecured)
Over Six Months
Considered Good		593.57		683.13		459.41
Considered Doubtful		878.43		752.52		720.02
		1,472.00		1,435.65		1,179.43
Others
Considered Good		11,828.18		8,141.37		11,406.15
Considered Doubtful		—		—		30.76
		11,828.18		8,141.37		11,436.91
Less : Provision for Doubtful Debts		878.43		752.52		750.78
Total		12,421.75		8,824.50		11,865.56
SCHEDULE 9 CASH AND BANK BALANCES
Cash and Cheques on hand		229.94		267.36		220.17
Balance with scheduled banks
On Current Account		1,273.52		849.54		690.52
In Deposit Account		45.46		107.93		51.01
Balance with other banks in Current Account
Bank of America, USA		4.25		121.56		183.99
Bank of Montreal		—		—		1.68
Citibank		—		—		0.10
Hong Kong & Shanghai Bank		13.97		17.00		13.75
Midland Bank, U K		269.32		117.31		437.76
Nations Bank		—		—		5.65
Saudi British Bank		18.93		—		24.57
Standchart UAE		4.63		4.44		0.97
Wells Fargo, U S A		414.84		711.41		1,612.53
Bank of Tokyo		1.89		—		—
Great Western Bank		3.85		0.02		—
SBI Singapore -USD Account		15.18		—		—
CCF Paris AG Centrale		1.34		1.92		—
RABO Bank, Netherlands		12.10		—		—
Uni Credit Banca - Italy		4.28		—
Total		2,313.50		2,198.49		3,242.70

WIPRO LIMITED — CONSOLIDATED

SCHEDULE 10 LOANS AND ADVANCES

(Rs. in Million)

	As of September 30,				As of March 31,
	2004		2003		2004
(Unsecured, considered good unless otherwise stated)
Advances and loans to Subsidiaries		—		—		—
Advances recoverable in cash or in kind or for value to be received
Considered Good		2,373.64		1,787.07		2,126.28
Considered Doubtful		45.78		76.85		77.36
		2,419.42		1,863.92		2,203.64
Less : Provision for Doubtful Advances		45.78		76.85		77.36
		2,373.64		1,787.07		2,126.28
Inter Corporate Deposits
GE Capital Services India		—		25.41		—
Other Deposits		866.49		660.44		854.77
Advance Income Tax (net of provision)		429.20		753.94		587.66
Balances with Excise and Customs		16.75		15.28		29.67
Unbilled Services		3,653.16		2,156.50		2,085.40
Total		7,339.24		5,398.64		5,683.78
SCHEDULE 11 CURRENT LIABILITIES
Sundry Creditors		2,997.13		2,208.44		3,153.47
Unclaimed Dividends		1.48		1.49		1.49
Advances from customers		998.70		745.64		874.08
Unearned Revenues		444.86		398.47		363.33
Other Liabilities		7,182.82		3,960.69		4,859.19
Total		11,624.99		7,314.73		9,251.56
SCHEDULE 12 PROVISIONS
Employee retirement benefits		973.24		693.19		683.35
Proposed dividend		—		—		931.04
Proposed one-time dividend		—		—		5,818.98
Tax on proposed dividend		—		—		864.85
Total		973.24		693.19		8,298.22

WIPRO LIMITED — CONSOLIDATED

SCHEDULE 13 OTHER INCOME

(Rs. in Million)

	Quarter ended September 30,						Half Year ended September 30,						Year ended
	2004			2003			2004			2003			March 31, 2004
Dividend on Mutual Fund Units		165.87			188.80			369.28			363.35			779.98
Interest on debt instruments and others		1.50			8.37			8.58			17.59			25.98
Rental Income		5.27			11.19			11.31			20.74			45.03
Profit on sale of Mutual Fund Units		(3.01	)		6.17			(34.95	)		(25.36	)		(43.55	)
Profit on disposal of Fixed Assets		11.89			(0.90	)		99.99			—			108.34
Brand Fees		—			8.79			—			22.04			22.05
Provision no longer required written back		1.32			0.88			1.32			0.94			33.65
Exchange differences - Net		(116.79	)		70.15			(113.34	)		148.99			297.32
Miscellaneous Income		9.80			12.75			18.11			32.02			97.19
Total		75.85			306.20			360.30			580.31			1,365.99
SCHEDULE 14 COST OF GOODS SOLD
Raw materials, Finished and Process Stocks *		2,710.75			2,026.88			5,172.30			3,509.85			8,945.74
Stores & Spares		83.95			47.00			142.58			93.06			200.29
Power and Fuel		154.33			113.18			294.29			223.52			461.64
Salaries, Wages and bonus including onsite allowance }		6,642.22			4,681.57			12,711.12			8,762.03			20,152.55
Contribution to provident and other funds		107.27			63.11			198.37			124.47			294.38
Gratuity and pension		106.29			64.33			195.28			125.63			288.00
Workmen and Staff welfare		75.17			47.30			148.49			104.57			248.03
Insurance		35.67			13.68			63.56			21.24			87.99
Repairs to factory buildings		20.31			2.11			36.64			12.16			14.72
Repairs to Plant & Machinery		352.92			96.57			496.01			168.85			442.88
Rent		104.58			66.24			195.30			143.85			323.11
Rates & Taxes		10.09			6.38			20.36			9.51			7.62
Packing & Freight Inward		38.62			23.74			67.12			38.93			95.09
Traveling		669.71			438.85			1,235.57			760.60			1,535.13
Communication		291.29			253.87			585.72			427.32			987.69
Depreciation		531.34			417.76			998.90			770.38			1,759.91
Sub contracting / technical fees		589.23			450.15			1,051.11			773.31			2,047.70
Miscellaneous		487.39			369.30			936.52			778.50			1,528.02
Less : Capitalized		(75.23	)		(40.09	)		(138.64	)		(87.21	)		(139.95	)
Total		12,935.90			9,141.93			24,410.60			16,760.57			39,280.54

* For details refer Schedule 18

WIPRO LIMITED — CONSOLIDATED

SCHEDULE 15 SELLING AND MARKETING EXPENSES

(Rs. in Million)

	Quarter ended September 30,				Half Year ended September 30,				Year ended
	2004		2003		2004		2003		March 31, 2004
Salaries, wages and bonus		217.81		379.04		438.63		581.01		1,147.43
Contribution to provident and other funds		4.74		4.50		9.00		8.34		16.90
Gratuity and pension		5.32		2.71		13.27		5.21		28.88
Workmen and Staff welfare		12.17		7.74		22.11		15.39		34.93
Insurance		1.49		1.66		2.62		2.90		36.01
Repairs to buildings		0.68		1.89		3.14		2.43		12.22
Rent		27.33		18.55		53.13		34.97		117.03
Rates and taxes		5.90		3.54		11.17		12.39		22.71
Carriage and freight		46.00		48.44		96.51		78.62		155.11
Commission on sales		18.72		22.98		40.14		37.89		98.88
Advertisement and sales promotion		184.21		120.45		354.34		286.75		571.49
Depreciation		19.32		22.35		36.41		36.82		72.46
Travel		730.01		737.57		1,387.64		1,459.09		2,854.64
Communication		16.61		28.29		34.67		41.78		54.67
Miscellaneous Expenses		43.88		89.66		157.45		158.48		389.30
Total		1,334.19		1,489.37		2,660.23		2,762.07		5,612.65
SCHEDULE 16 GENERAL AND ADMINISTRATIVE EXPENSES
Salaries, wages and bonus		267.00		285.71		516.48		573.33		889.88
Contribution to provident and other funds		12.42		9.60		23.12		20.28		35.63
Gratuity and pension		14.78		14.95		23.56		25.61		41.46
Workmen and Staff welfare		56.18		48.71		100.19		83.41		173.17
Insurance		10.44		1.88		23.73		2.00		14.13
Repairs to buildings		1.20		0.53		5.73		3.50		4.07
Rent		8.25		9.19		15.07		14.66		35.24
Rates and taxes		1.74		9.23		16.08		12.28		24.96
Auditors’ remuneration and expenses										—
Audit fees		2.81		1.50		5.33		3.33		7.08
For certification including tax audit		0.03		0.36		0.06		0.36		1.03
Reimbursement of expenses		0.14		0.26		0.23		0.37		0.28
Loss on disposal of Fixed Assets		0.17		6.04		0.33		6.22		6.90
Directors’ fees		0.06		0.07		0.12		0.11		0.19
Depreciation		19.83		31.61		49.39		68.41		121.29
Travel		99.92		124.36		186.71		199.36		287.17
Communication		21.27		15.00		37.78		32.35		85.52
Provision / write off of bad debts		39.43		26.43		147.84		132.07		123.64
Miscellaneous Expenses		311.05		61.59		684.63		362.66		904.51
Total		866.72		647.02		1,836.38		1,540.31		2,756.14

WIPRO LIMITED — CONSOLIDATED

SCHEDULE 17 INTEREST

(Rs. in Million)

	Quarter ended September 30,					Half Year ended September 30,					Year ended
	2004		2003			2004		2003			March 31, 2004
On fixed Loans		—		1.02			—		1.94			8.77
Other		15.27		4.58			26.74		9.44			26.30
Total		15.27		5.60			26.74		11.38			35.07
SCHEDULE 18 RAW MATERIALS, FINISHED AND PROCESSED STOCKS
Consumption of raw materials and bought out components :
Opening Stocks		520.87		420.74			551.40		398.22			398.22
Add : Purchases		2,035.91		1,348.78			3,666.69		2,311.58			5,728.84
Less : Closing Stocks		537.31		411.07			537.31		411.07			551.40
		2,019.47		1,358.45			3,680.78		2,298.73			5,575.66
Purchase of Finished Products for sale		610.20		743.47			1,476.70		1,423.36			3,492.83
(Increase) / Decrease in finished and process Stocks :
Opening Stock : In process		189.35		137.41			159.52		119.03			119.03
: Finished products		586.02		586.15			549.59		467.33			467.33
Less : Closing Stock : In process		216.82		144.25			216.82		144.25			159.52
: Finished products		477.47		654.35			477.47		654.35			549.59
		81.08		(75.04	)		14.82		(212.24	)		(122.75	)
Total		2,710.75		2,026.88			5,172.30		3,509.85			8,945.74

WIPRO LIMITED — CONSOLIDATED

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 Accounting Standard 21 ‘Consolidated Financial Statements’ and Accounting Standard 23 ‘Accounting for Investments in Associates in Consolidated Financial Statements.

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 group holds more than 20% of voting power and has significant influence. All material inter-company accounts and transactions are eliminated on consolidation. The group, accounts for investments in affiliates by the equity method.

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 revenue 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 are 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 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. In Wipro Inc, Enthink Inc and Wipro Japan KK depreciation is provided on Written Down Value method.

Intangible Assets

Intangible assets are stated at cost less accumulated amortization. Intangible assets are amortized over their estimated useful life ranging between 5 years and 20 years.

Goodwill

The goodwill arising on consolidation / acquisition is not being amortised. It is tested for impairment on a periodic basis and written off if found impaired.

WIPRO LIMITED — CONSOLIDATED

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. Certain categories of employees are entitled to pension benefits which are determined based on factors like years of services and cumulative basic salary. The company has provided for the liability based on an actuarial valuation. The compensation paid if any, on voluntary retirement to the employees is charged off as an expense in the year of Incurrence.

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. Deferred tax assets are recognized when there is a reasonable certainty that they will be realized. Deferred tax asset relating to unabsorbed business losses are recognized when there is a virtual certainty that there will be sufficient taxable profits to utilize them.

Foreign currency transactions

The Company is exposed to currency fluctuations on foreign currency transactions. With a view to minimize the volatility in financial statements arising from fluctuations in the currency rates, the Company follows established risk management policies, including the use of foreign exchange forward contracts.

As a part of the Risk Management Policies, the forward contracts are designated as hedge of highly probable forecasted transactions. The accounting standard on “The effects of changes on foreign exchange rates”, which was amended with effect from April 1, 2004 provides guidance on accounting for forward contracts. Further to that, the Institute of Chartered Accountants of India has clarified that this accounting standard is not applicable to the forward contracts which are for hedging highly probable forecasted transactions.

Foreign currency transactions are recorded at the spot rate at the beginning of the concerned month. Period-end balances of foreign currency assets and liabilities are restated at the closing rate/forward contract rate, as applicable. The exchange difference arising from restatement or settlement is recognized in the profit and loss account.

Gains/losses, including gains/losses on intermediary roll over/cancellation, of Forward contracts designated as hedge of highly probable forecasted transactions are recognised in the profit and loss account in the period in which the forecasted transaction is expected to occur.

Other forward contracts, options etc. which are not designated as hedge of forecasted transaction, are marked to market on the balance sheet date and the resultant gain/loss is accounted in the profit and loss account for the period.

In respect of non-integral operations assets and liabilities are translated at the exchange rate prevailing at the date of the balance sheet. The items in the profit & loss account are translated at the average exchange rate during the period. The differences arising out of the translation are included in translation reserve.

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.

WIPRO LIMITED — CONSOLIDATED

NOTES TO ACCOUNTS

1. Goodwill on consolidation as on the balance sheet date comprises of the following:

(Rs. in Million)

Wipro Fluid Power Limited	18.27
Wipro Spectramind Services Limited	3,743.54
Wipro Healthcare IT Limited	175.01
Cygnus Nigri Investments private Limited	16.26
Enterprise Services	1,102.11
Financial Services	305.67
Total	5,360.86

2.	As of September 30, 2004, forward contracts to the extent of USD 263 Mn have been assigned to the foreign currency assets as on the balance sheet date . These assets are valued at the forward contract rate, adjusted for premium / discount in respect of the expired period.
	The Company has designated certain forward contracts to hedge highly probable forecasted transactions. The gain or loss on these forward contracts is recognized in the profit and loss account in the period in which the forecasted transaction is expected to occur. In certain cases, the Company has entered into forward contracts having a maturity earlier than the period in which the hedged transaction is forecasted to occur. The gain / loss on roll over / cancellation / expiry of such contracts is recognized in the profit and loss account in the period in which the forecasted transaction is expected to occur, till such time the same is grouped under Loans and Advances.
	The Company has also entered into option contracts. These option contracts have not been designated as hedge and consequently, they are marked to market at each balance sheet date and the gains / loss is recognized in the profit and loss account of the respective period. The Company had forward contracts to sell of USD 860 Mn in respect of forecasted transactions as at the balance sheet date. The effect of marking to market and effect on intermediary roll over expiry of the said forward contracts is unfavorable exchange difference of Rs. 1,878 Mn, the final impact of which will be recognized in the profit and loss account of the respective periods in which the forecasted transactions are expected to occur.
	Had the Company continued to follow the earlier accounting policy, the profit would have been lower by Rs. 139 Mn for the quarter ended and Rs. 494 Mn for the six months ended September 30, 2004.
3.	In June 2004, the company acquired trademark / brand “Chandrika’ for an aggregate consideration of Rs. 238 Mn. The Company is entitled to use the trademark / brand in manufacturing, selling and distributing products in India and other SAARC countries. The company has further acquired rights to use the brand in Nepal by payment of Rs. 30 Mn.
	The Company has also entered into a non-compete agreement with the sellers of “Chandrika” brand, for which it has paid certain amount as up-front fee. In addition, the Company will be paying an annual non-compete fee computed as a specified percentage of the revenues from products sold under “Chandrika” trade-name , subject to a minimum annual payment.
	Based on the performance of various other comparable established brands in the market, the company estimates that the useful life of the brand is at least 20 years and hence the cost of the brand is amortized over the period of 20 years. Further, the upfront non-compete fee is amortized over the period of agreement and the annual non-compete fee is recognized in the respective years.
4.	During the six months ended September 30, 2004 the company acquired 797,038 shares from the employees of Wipro Spectramind Services Limited for a total consideration of Rs. 103.61 Mn .
5.	The company has a 49% equity interest in Wipro GE Medical Systems Private Limited (WGE), a joint venture with General Electric, USA. The joint venture agreement provides specific rights to the joint venture partners. The Management believes that these specific rights do not confer joint control as defined in Accounting Standard 27 “Financial Reporting of Interest in Joint Venture”. Consequently, WGE is not considered as a joint venture and consolidation of financial statements are carried out as per equity method in terms of Accounting Standard 23 “Accounting for Investments in Associates in Consolidated Financial statements”.
	Investments in WeP Peripherals Ltd have been accounted for by equity method.

WIPRO LIMITED — CONSOLIDATED

6.

Last year the company received a demand from the income tax department of Rs. 2,615 Mn (Including interest demand of Rs. 765 Mn) for one of its assessment years. Un -provided liability on this account is Rs. 2,316 Mn . The tax demand is mainly on account of disallowance of deduction claimed by the company under Section 10A of the Income Tax Act 1961, in respect of profits earned by its undertakings in software technology park at Bangalore. As per the opinion of the company’s legal counsel the said disallowance is not tenable. The management of the company has filed an appeal challenging the disallowance. Considering the facts and nature of disallowance, the management believes that final outcome of the dispute shall be positive and there will not be material impact on the financial statement.

7.

The breakup of accumulated net deferred t a x asset is given below:

(Rs .in Million)

	September		September		March
	30,2004		30,2003		31,2004
Deferred tax assets:
Allowance for doubtful debts		92.64		87.07		92.64
Property plant and equipment –		49.12		74.27		49.12
Depreciation differential
Employee stock incentive plan		9.39		38.91		9.39
Accrued expenses		166.27		103.13		166.27
Business losses carried forward		206.61		162.53		168.88
		524.03		465.91		486.30

8. a) Provision for taxation comprises of following:

(i)	Rs. 597.76 Mn (2004: Rs. 758.93 Mn) in respect of foreign taxes.
(ii)	Rs. 712.89 Mn (200 4: Rs. 918.63 Mn) in respect of Indian Income Tax, which includes provision of Rs. Nil (2004: Rs. 251. 39 Mn) in respect of earlier years.
(iii)	Rs. 2.5 Mn (2004: Rs. 3 Mn) in respect of Wealth Tax.

b) Tax expense for the quarter is based on the estimated effective tax rate for the year. The bifurcation between current tax and deferred tax assets will be made at the year end, based on the full year working.

9. The details of subsidiaries and affiliates are as follows :–

a) Name of the subsidiary	Country of Incorporation	% Holding
Wipro Fluid Power Limited	India		98	%
Wipro Inc.	USA		100	%
Enthink Inc. (a )	USA		–
Wipro Japan KK	Japan		100	%
Wipro Chandrika Limited	India		90	%
Wipro Trademarks Holding Limited	India		100	%
Wipro Travel Services Limited	India		100	%
Wipro HealthCare IT Limited	India		100	%
Spectramind Limited	Bermuda		100	%
Spectramind Limited (b )	Mauritius		–
Wipro Spectramind Services Limited (c)	India		88	%
Spectramind Inc. (d)	USA
Wipro Holdings (Mauritius) Limited	Mauritius		100	%
Wipro Holdings (UK) Limited (e)	UK		–
Wipro Technology UK Limited (f)	UK		–
Wipro Consumer Care Limited	India		100	%
Cygnus Nigri Investments private Limited (g )	India		–
Wipro Shanghai Limited	China		100	%
b) Wipro Equity Reward Trust	India	Fully controlled trust
c) Grantor Trust	USA	Fully controlled trust
d) Name of the affiliate
Wipro GE Medical Systems Private Limited	India		49	%
WeP Peripherals Limited	India		40.5	%

WIPRO LIMITED — CONSOLIDATED

Note:

a)	Majority owned by Wipro Inc.
b)	Fully owned by Spectramind Limited, Bermuda
c)	Owned through Spectramind Limited, Bermuda and Spectramind Limited, Mauritius
d)	Wholly owned through Wipro Spectramind Services Limited
e)	Fully owned by Wipro Holdings (Mauritius) Limited
f)	Fully owned by Wipro Holdings (UK) Limited
g)	Wholly owned by Wipro Trademarks Holding Limited.

10.	Diluted EPS is calculated based on treasury stock method for ESOP outstanding.
11.	Provision for retirement benefits are made on the estimated basis in the interim financial statement and acturial valuation is carried out at the year end.
12.	The segment report prepared in accordance with the accounting standard 17 ‘Segment reporting’ issued by the Institute of Chartered Accountants of India is given in the Annexure I.
13.	Corresponding figures for previous periods presented have been regrouped, where necessary, to confirm to this period classification. Current period figures are not comparable with the previous period figures on account of acquisition of Wipro Nerve wire (IT consulting business) with effect from May 2003.

WIPRO LIMITED - CONSOLIDATED

(Rs. in Million)

	Quarter ended September 30,						Half Year ended September 30,						Year ended
	2004			2003			2004			2003			March 31, 2004
A. Cash flows from operating activities:
Profit before tax		4,809.05			2,667.10			8,982.14			5,017.34			12,031.82
Adjustments:
Depreciation and amortization		570.50			477.46			1,084.71			882.91			1,971.85
Exchange differences - Net		175.13			(11.48	)		53.92			(90.32	)		(132.77	)
Retirement benefits provision		150.86			99.17			289.89			171.43			161.60
Interest on borrowings		15.27			5.60			26.74			11.38			—
Dividend / interest - Net		(164.19	)		(203.35	)		(342.74	)		(355.59	)		(762.41	)
Loss / (Gain) on sale of property, plant and equipment		(12.05	)		1.30			(99.99	)		6.22			(107.00	)
Working Capital Changes :
Trade and other receivable		(1,404.85	)		(319.09	)		(2,167.44	)		(692.44	)		(3,670.41	)
Loans and advances		(93.25	)		98.95			(261.42	)		(107.24	)		(359.89	)
Inventories		66.04			(64.99	)		29.47			(231.38	)		(281.50	)
Trade and other payables		1,323.06			649.12			2,373.43			752.64			2,748.13
Net cash generated from operations		5,435.57			3,399.79			9,968.71			5,364.95			11,599.42
Direct taxes paid		(740.32	)		(356.18	)		(1,192.42	)		(527.08	)		(1,568.36	)
Net cash generated from operations		4,695.25			3,043.61			8,776.29			4,837.87			10,031.06
B. Cash flows from investing activities:
Expenditure on property, plant and equipment (including advances)		(1,690.15	)		(1,036.70	)		(3,330.71	)		(1,870.96	)		(4,100.97	)
Proceeds from sale of property, plant and equipment		23.71			4.99			254.46			67.36			121.86
Purchase of investments		(10,702.45	)		(3,447.87	)		(29,654.74	)		(11,550.40	)		(10,706.51	)
Inter Corporate deposits placed / matured		—			50.57			—			260.39			285.30
Certificate of Deposits with foreign banks		—			—			—			2,463.06			2,463.06
Proceeds on Sale / from maturities on Investments		5,980.20			995.00			30,111.35			4,136.07			48.06
Net Payment for acquisition of businesses		(19.27	)		—			(104.27	)		(465.27	)		(465.27	)
Dividend / interest income received		148.92			202.68			324.40			349.15			777.85
Net cash generated from investing activities		(6,259.04	)		(3,231.33	)		(2,399.51	)		(6,610.60	)		(11,576.62	)
C. Cash flows from financing activities:
Proceeds from exercise of Stock Option Plan grants		233.53			1.93			296.05			3.41			238.60
Share application money pending allotment		—			(1.22	)		—			(1.22	)		—
Dividends paid (including distribution tax)		0.23			(361.67	)		(7,575.76	)		(262.36	)		(262.36	)
Proceeds from (issuance) / repayment of borrowings		452.70			286.35			(282.24	)		(72.00	)		463.02
Proceeds from issuance shares by subsidiary		253.98			99.31			253.98			99.31			147.53
Net cash provided by / (used in) financing activities		940.44			24.70			(7,307.97	)		(232.86	)		586.79
Net increase / (decrease) in cash and cash equivalents during the year		(623.35	)		(163.02	)		(931.19	)		(2,005.59	)		(958.77	)
Cash and cash equivalents at the beginning of the period		2,936.93			2,360.62			3,242.70			4,210.08			4,210.08
Effect of Translation of cash balance with foreign subsidiaries		(0.08	)		0.89			1.99			(6.00	)		(8.61	)
Cash and cash equivalents at the end of the period		2,313.50			2,198.49			2,313.50			2,198.49			3,242.70

     For and on behalf of the Board of Directors

Azim H. Premji	Vivek Paul	P. M. Sinha
Chairman and	Vice Chairman and	Director
Managing Director	Executive Officer
Suresh C. Senapaty	V. Ramachandran	B.C. Prabhakar
Corporate Executive	Company Secretary	Director
Vice President – Finance

Bangalore, October 15, 2004

WIPRO LIMITED - CONSOLIDATED

We have examined the above cash flow statement of Wipro Limited – consolidated for the half year ended September 30, 2004. This statement is based on and in agreement with the corresponding Profit and Loss Account and Balance Sheet of the Company for the half year

For N M Raiji & Co.,

Chartered Accountants

J M Gandhi

Partner

Membership No. 37924

Mumbai, October 15, 2004

Annexure I

WIPRO LIMITED, CONSOLIDATED
AUDITED SEGMENT WISE BUSINESS PERFORMANCE FOR THE QUARTER & SIX MONTHS ENDED SEPTEMBER 30, 2004

Rs. in Million

Particulars	Quarter ended September 30,									Six months ended September 30,									Year ended
							Growth									Growth			March 31,
	2004			2003			%			2004			2003			%			2004
Segment Revenue
Global IT Services and Products		15,020			10,300			46	%		28,456			19,555			46	%		43,575
India & AsiaPac IT Services and Products		3,004			2,138			41	%		5,701			3,740			52	%		9,762
Consumer Care and Lighting		1,160			882			32	%		2,207			1,680			31	%		3,649
Others		601			425			41	%		1,112			760			46	%		1,826
TOTAL		19,785			13,745			44	%		37,476			25,735			46	%		58,812
Profit before Interest and Tax (PBIT)
Global IT Services and Products		4,132			2,140			93	%		7,754			4,060			91	%		9,539
India & AsiaPac IT Services and Products		220			140			57	%		356			232			53	%		792
Consumer Care and Lighting		167			137			22	%		320			274			17	%		551
Others		131			53			147	%		139			109			28	%		277
TOTAL		4,650			2,470			88	%		8,569			4,675			83	%		11,159
Interest and Other Income		159			197						413			343						873
Profit Before Tax		4,809			2,667			80	%		8,982			5,018			79	%		12,032
Income Tax expense		(702	)		(360	)					(1,313	)		(592	)					(1,681	)
Profit before equity in earnings / (losses) of Affiliates and minority interest		4,107			2,307			78	%		7,669			4,426			73	%		10,351
Equity in earnings of affiliates		32			6						62			(48	)					23
Minority interest		(22	)		(11	)					(44	)		(14	)					(59	)
PROFIT AFTER TAX		4,117			2,302			79	%		7,687			4,364			76	%		10,315
Operating Margin
Global IT Services and Products		28	%		21	%					27	%		21	%					22	%
India & AsiaPac IT Services and Products		7	%		7	%					6	%		6	%					8	%
Consumer Care and Lighting		14	%		16	%					14	%		16	%					15	%
TOTAL		24	%		18	%					23	%		18	%					19	%
CAPITAL EMPLOYED *
Global IT Services and Products		23,342			19,210						23,342			19,210						21,732
India & AsiaPac IT Services and Products		1,842			1,236						1,842			1,236						1,941
Consumer Care and Lighting		721			538						721			538						596
Others		20,901			18,695						20,901			18,695						14,498
TOTAL		46,806			39,679						46,806			39,679						38,767
CAPITAL EMPLOYED COMPOSITION
Global IT Services and Products		50	%		49	%					50	%		49	%					56	%
India & AsiaPac IT Services and Products		4	%		3	%					4	%		3	%					5	%
Consumer Care and Lighting		2	%		1	%					2	%		1	%					2	%
Others		44	%		47	%					44	%		47	%					37	%
TOTAL		100	%		100	%					100	%		100	%					100	%
RETURN ON AVERAGE CAPITAL EMPLOYED
Global IT Services and Products		73	%		44	%					69	%		43	%					47	%
India & AsiaPac IT Services and Products		42	%		42	%					38	%		40	%					53	%
Consumer Care and Lighting		89	%		98	%					97	%		90	%					86	%
TOTAL		42	%		26	%					40	%		25	%					30	%

* This includes cash and cash equivalents of Rs. 20,374 (2004: Rs. 21,760 & 2003: Rs. 17,475).

Notes to segment report:

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:

(Rs. in Million)

	Quarter ended September 30,										Six months ended September 30,
Geography	2004		%			2003		%			2004		%			2003		%
India		4,356		22	%		3,296		24	%		8,368		22	%		5,973		23	%
USA		10,441		53	%		7,347		53	%		19,736		53	%		13,855		54	%
Rest of the World		4,988		25	%		3,102		24	%		9,372		25	%		5,907		23	%
Total		19,785		100	%		13,745		100	%		37,476		100	%		25,735		100	%

3.		For the purpose of reporting, business segments are considered as primary segments and geographic segments are considered as secondary segment.
4.		As of September 30, 2004, forward contracts to the extent of USD 263 Mn have been assigned to the foreign currency assets as on the balance sheet date. These assets are valued at the forward contract rate, adjusted for premium / discount in respect of the expired period.
		The Company has designated certain forward contracts to hedge highly probable forecasted transactions. The gain or loss on these forward contracts is recognized in the profit and loss account in the period in which the forecasted transaction is expected to occur. In certain cases, the Company has entered into forward contracts having a maturity earlier than the period in which the hedged transaction is forecasted to occur. The gain / loss on rollover / cancellation / expiry of such contracts is recognized in the profit and loss account in the period in which the forecasted transaction is expected to occur, till such time the same is grouped under Loans and Advances.
		The Company has also entered into option contracts. These option contracts have not been designated as hedge and consequently, they are marked to market at each balance sheet date and the gains / loss is recognized in the profit and loss account of the respective period.
		The Company had forward contracts to sell of USD 860 Mn in respect of forecasted transactions as at the balance sheet date. The effect of marking to market and effect on intermediary rollover / expiry of the said forward contracts is unfavorable exchange difference of Rs. 1,878 Mn, the final impact of which will be recognized in the profit and loss account of the respective periods in which the forecasted transactions are expected to occur.
		Had the Company continued to follow the earlier accounting policy, the profit would have been lower by Rs. 139 Mn for the quarter ended and Rs. 494 Mn for the six months ended September 30, 2004.
5.	a)	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.
	b)	The company has a 49% equity interest in Wipro GE Medical Systems Private Limited (WGE), a joint venture with General Electric, USA. The joint venture agreement provides specific rights to the joint venture partners. The Management believes that these specific rights do not confer joint control as defined in Accounting Standard 27 “Financial Reporting of Interest in Joint Venture”. Consequently, WGE is not considered as a joint venture and consolidation of financial statements are carried out as per equity method in terms of Accounting Standard 23 “Accounting for Investments in Associates in Consolidated Financial statements”
	c)	In accordance with the guidance provided in Accounting Standard 23 “Accounting for Investments in Associates in Consolidated Financial Statements” WeP Peripherals have been accounted for by equity method of accounting.