exv19w1

Exhibit 19.1

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF WIPRO LIMITED AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEET


						*(Rs. in Million)*
					As of September 30,				As of March 31,
	Schedule				2008		2007		2008
SOURCES OF FUNDS

SHAREHOLDERS’ FUNDS
Share capital		1				2,926		2,919		2,923
Shares issuable [Refer Note 19(7)]			540
Shares issuable to controlled trust			(540	)		—		—		—

Share application money pending allotment						21		36		40
Reserves and surplus		2				123,336		104,499		113,991

						126,283		107,454		116,954


LOAN FUNDS
Secured loans		3				2,088		2,792		2,072
Unsecured loans		4				51,689		26,512		42,778

						53,777		29,304		44,850
Minority interest						169		117		116

						180,229		136,875		161,920


APPLICATION OF FUNDS
FIXED ASSETS
Goodwill						48,977		41,309		42,209
Gross block		5				65,260		49,492		56,280
Less: Accumulated depreciation						32,367		24,198		28,067

Net block						32,893		25,294		28,213
Capital work-in-progress and advances						15,692		10,818		13,370

						97,562		77,421		83,792


INVESTMENTS		6				41,451		24,301		16,022

DEFERRED TAX ASSET (NET)						638		643		529

CURRENT ASSETS, LOANS AND ADVANCES
Inventories		7				8,669		5,935		6,664
Sundry debtors		8				50,337		33,385		40,453
Cash and bank balances		9				20,157		20,488		39,270
Loans and advances		10				39,599		26,358		29,610

						118,762		86,166		115,997


LESS: CURRENT LIABILITIES AND PROVISIONS
Liabilities		11				68,159		41,445		39,890
Provisions		12				10,025		10,211		14,530

						78,184		51,656		54,420

NET CURRENT ASSETS						40,578		34,510		61,577

						180,229		136,875		161,920

Notes to Accounts		19

The schedules referred to above form an integral part of the condensed consolidated balance sheet


As per our report attached	For and on behalf of the Board of Directors

for B S R & Co.	Azim Premji	B C Prabhakar	Girish S Paranjpe	Suresh Vaswani
Chartered Accountants	Chairman	Director	Jt CEO, IT Business &	Jt CEO, IT Business &
			Director	Director


Natrajan Ramkrishna	Suresh C Senapaty	V Ramachandran
Partner	Chief Financial Officer	Company Secretary
Membership No. 32815	& Director
Bangalore
October 22, 2008

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF WIPRO LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED PROFIT AND LOSS ACCOUNT


						*(Rs. in Million except share data)*
														Year ended
				Quarter ended September 30,					Six months ended September 30,					March 31,
	Schedule			2008			2007		2008			2007		2008
INCOME
Gross sales and services					65,655			48,003		126,353			90,759		201,451
Less: Excise duty					301			429		635			825		1,655

Net sales and services					65,354			47,574		125,718			89,934		199,796
Other income		13			754			1,262		1,121			1,934		4,174

					66,108			48,836		126,839			91,868		203,970


EXPENDITURE
Cost of sales and services		14			45,941			33,303		87,719			63,118		140,244
Selling and marketing expenses		15			4,737			3,374		9,329			6,255		14,216
General and administrative expenses		16			3,461			2,643		6,679			4,687		10,750
Interest		17			612			330		1,248			461		1,690

					54,751			39,650		104,975			74,521		166,900


PROFIT BEFORE TAXATION					11,357			9,186		21,864			17,347		37,070
Provision for taxation including fringe benefit tax		19	(9)		1,659			1,046		3,185			2,050		4,550

Profit before minority interest / share in earnings of associates					9,698			8,140		18,679			15,297		32,520

Minority interest					(22	)		1		(34	)		3		(24	)
Share in earnings of associates					106			96		213			193		333

PROFIT FOR THE PERIOD					9,782			8,237		18,858			15,493		32,829

Appropriations
Interim dividend					—			2,919		—			2,919		2,919
Proposed dividend					—			—		—			—		5,846
Tax on dividend					—			496		—			496		1,489

TRANSFER TO GENERAL RESERVE					9,782			4,822		18,858			12,078		22,575

EARNINGS PER SHARE — EPS
Equity shares of par value Rs. 2/- each
Basic (in Rs.)					6.73			5.68		12.97			10.68		22.62
Diluted (in Rs.)					6.70			5.65		12.92			10.63		22.51
Number of shares for calculating EPS
Basic					1,454,349,548			1,451,197,279		1,453,986,894			1,451,197,279		1,451,127,719
Diluted					1,460,517,330			1,457,143,452		1,460,121,584			1,457,861,033		1,458,239,060

Notes to Accounts		19

The schedules referred to above form an integral part of the condensed consolidated profit and loss account


As per our report attached	For and on behalf of the Board of Directors

for B S R & Co.	Azim Premji	B C Prabhakar	Girish S Paranjpe	Suresh Vaswani
Chartered Accountants	Chairman	Director	Jt CEO, IT Business &	Jt CEO, IT Business &
			Director	Director


Natrajan Ramkrishna	Suresh C Senapaty	V Ramachandran
Partner	Chief Financial Officer	Company Secretary
Membership No. 32815	& Director
Bangalore
October 22, 2008

CONSOLIDATED FINANCIAL STATEMENTS OF WIPRO LIMITED AND SUBSIDIARIES

CONDENSED CONSOLIDATED CASH FLOW STATEMENT


	(Rs. in Million)
													Year ended
	Quarter Ended September 30,						Six months Ended September 30,						March 31,
	2008			2007			2008			2007			2008
A. Cash flows from operating activities:
Profit before tax		11,357			9,186			21,864			17,347			37,070
Adjustments:

Depreciation and amortization		1,661			1,246			3,239			2,421			5,359
Amortisation of stock compensation		455			286			888			572			1,166
Exchange differences — net		(927	)		(671	)		(230	)		(1,108	)		(595	)
Interest on borrowings		612			330			1,248			461			1,690
Dividend / interest — net		(1,023	)		(790	)		(1,941	)		(1,437	)		(2,802	)
(Profit) / Loss on sale of investments		(428	)		(199	)		(570	)		(550	)		(771	)
Gain on sale of fixed assets		(4	)		(6	)		(9	)		(165	)		(174	)
Working capital changes :
Trade and other receivable		(7,110	)		(3,642	)		(12,541	)		(4,738	)		(11,885	)
Loans and advances		(1,543	)		(861	)		(3,523	)		(1,823	)		(5,157	)
Inventories		(909	)		(836	)		(2,005	)		(855	)		(1,565	)
Trade and other payables		7,353			5,450			11,345			3,936			6,182

Net cash generated from operations		9,494			9,493			17,765			14,061			28,518
Direct taxes paid		(2,386	)		(1,410	)		(959	)		(2,674	)		(5,459	)

Net cash generated by operating activities		7,108			8,083			16,806			11,387			23,059

B. Cash flows from investing activities:
Acquisition of property, fixed assets plant and equipment (including advances)		(4,344	)		(3,336	)		(8,552	)		(6,315	)		(14,226	)
Proceeds from sale of fixed assets		72			91			163			323			479
Purchase of investments		(77,544	)		(67,472	)		(208,640	)		(99,845	)		(231,684	)
Proceeds on sale / from maturities on investments		84,085			70,098			183,997			109,536			250,013
Intercorporate deposit		—			(100	)		(250	)		50			150
Net payment for acquisition of businesses		(1,110	)		(26,323	)		(1,192	)		(26,388	)		(32,790	)
Dividend / interest income received		1,023			790			1,941			1,292			2,490

Net cash generated by / (used in) investing activities		2,182			(26,252	)		(32,533	)		(21,347	)		(25,568	)

C. Cash flows from financing activities:
Proceeds from exercise of employee stock option		2			7			50			56			541
Share application money pending allotment		21			36			21			36			40
Interest paid on borrowings		(612	)		(330	)		(1,248	)		(461	)		(1,690	)
Dividends paid (including distribution tax)		(6,828	)		(1,706	)		(6,828	)		(9,215	)		(12,632	)
Repayment of borrowings / loans		(17,558	)		(17,125	)		(33,061	)		(20,102	)		(74,970	)
Proceeds of borrowings / loans		17,426			39,625			37,208			40,272			110,641
Proceeds from issuance of shares by subsidiary		—			—			—			55			55

Net cash generated by / (used in) financing activities		(7,549	)		20,507			(3,858	)		10,641			21,985

Net (decrease) / increase in cash and cash equivalents during the period		1,741			2,338			(19,585	)		681			19,476
Cash and cash equivalents at the beginning of the period		18,348			18,181			39,270			19,822			19,822
Effect of translation of cash balance		68			(31	)		472			(15	)		(28	)


Cash and cash equivalents at the end of the period		20,157			20,488			20,157			20,488			39,270


As per our report attached	For and on behalf of the Board of Directors

for B S R & Co.	Azim Premji	B C Prabhakar	Girish S Paranjpe	Suresh Vaswani
Chartered Accountants	Chairman	Director	Jt CEO, IT Business &	Jt CEO, IT Business &
			Director	Director


Natrajan Ramkrishna	Suresh C Senapaty	V Ramachandran
Partner	Chief Financial Officer	Company Secretary
Membership No. 32815	& Director
Bangalore
October 22, 2008

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF WIPRO LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET


	*(Rs. in Million except share data)*
	As of September 30,						As of March 31,
	2008			2007			2008
SCHEDULE 1 SHARE CAPITAL
Authorised capital
1,650,000,000 (2007 & 2008: 1,650,000,000) equity shares of Rs. 2 each		3,300			3,300			3,300
25,000,000 (2007 & 2008: 25,000,000) 10.25% redeemable cumulative preference shares of Rs. 10 each		250			250			250

		3,550			3,550			3,550


Issued, subscribed and paid-up capital
1,463,003,208 ( 2007: 1,459,261,169 2008: 1,461,453,320) equity shares of Rs. 2 each [Refer Note 19 (2)]		2,926			2,919			2,923


		2,926			2,919			2,923


SCHEDULE 2 RESERVES AND SURPLUS
Capital reserve
Balance brought forward from previous year		1,144			47			47
Addition during the period		—			—			1,097

		1,144			47			1,144

Securities premium account
Balance brought forward from previous year		25,373			24,530			24,530
Add: Exercise of stock options by employees		763			98			843

		26,136			24,628			25,373

Translation reserve
Balance brought forward from previous year		(10	)		(247	)		(247	)
Movement during the period		2,331			(605	)		237

		2,321			(852	)		(10	)

Restricted stock units reserve [Refer note 19(8)]
Employee stock options outstanding		7,544			5,046			5,023
Less: Deferred employee compensation expense		5,516			3,560			3,206

		2,028			1,486			1,817

General reserve
Balance brought forward from previous year		86,764			67,790			67,790
Additions [Refer note 19 (3) (ii)]		18,766			10,702			18,974

		105,530			78,492			86,764

Hedging reserve [Refer note 19(5)]
Balance brought forward from previous year		(1,097	)		—			—
Movement during the period		(12,726	)		698			(1,097	)

Unrealised gain/ (loss) on cash flow hedging derivatives, net		(13,823	)		698			(1,097	)

Summary of reserves and surplus
Balance brought forward from previous year		113,991			93,042			93,042
Movement during the period		9,345			11,457			20,949

		123,336			104,499			113,991

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF WIPRO LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET


	*(Rs. in Million)*
	As of September 30,				As of March 31,
	2008		2007		2008

SCHEDULE 3 SECURED LOANS

Term loans ¹		337		834		513
Cash credit facilities ¹		625		539		535
Finance lease obligation		1,126		1,127		1,024
Others		—		292		—

		2,088		2,792		2,072

Term loans and cash credit facility are secured by hypothecation of stock-in-trade, book debts, immovable/movable properties and other assets


SCHEDULE 4 UNSECURED LOANS
External commercial borrowings	15,527	—	14,070
Borrowing from banks	35,635	16,369	28,368
Loan from financial institutions	440	10,042	245
Interest free loan from state governments	39	46	41
Others	48	55	54

	51,689	26,512	42,778

SCHEDULE 5 FIXED ASSETS


																					*(Rs. in Million)*
PARTICULARS	GROSS BLOCK									ACCUMULATED DEPRECIATION									NET BLOCK
	As of April				Deductions/			As of September		As of April		Depreciation		Deductions /			As of September		As of September		As of March 31,
	1, 2008		Additions		adjustments ²			30, 2008		1, 2008		for the period		adjustments ²			30, 2008		30, 2008		2008
(a) Tangible fixed assets
Land (including leasehold)		2,744		542		(7	)		3,293		8		—		—			8		3,285		2,736
Buildings		10,000		1,697		(232	)		11,929		1,238		141		87			1,466		10,463		8,762
Plant & machinery³		31,029		3,845		(1,178	)		36,052		20,162		2,403		789			23,354		12,698		10,867
Furniture, fixture and equipments		7,302		879		(241	)		8,422		4,368		370		202			4,940		3,482		2,934
Vehicles		2,566		349		119			2,796		1,416		258		(64	)		1,610		1,186		1,150
(b) Intangible fixed assets
Technical know-how		359		—		(21	)		380		345		—		34			379		1		14
Brands, patents, trade marks and rights		2,280		—		(108	)		2,388		530		67		13			610		1,778		1,750

		56,280		7,312		(1,668	)		65,260		28,067		3,239		1,061			32,367		32,893		28,213

Previous year - 31 March 2008		37,287		19,729		736			56,280		18,993		5,359		3,715			28,067		28,213


²		- Adjustments include effect of foreign exchange translation

³		- Plant and machinery includes computers and computer software.

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF WIPRO LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET


SCHEDULE 6 INVESTMENTS	*(Rs. in Million)*
	As of September 30,				As of March 31,
	2008		2007		2008

Investments
Investments long term — unquoted
Investment in associates
Wipro GE Medical Systems Private Ltd ⁴[Refer note 19(6)]		1,521		1,203		1,343

		1,521		1,203		1,343


Other investments — unquoted		362		365		362

Current investments — quoted
Investments in Indian money market mutual funds		39,568		22,733		14,317


		39,568		22,733		14,317



		41,451		24,301		16,022


⁴ Equity investments in this company carry certain restrictions on transfer of shares that are normally provided for in shareholders’ agreements

SCHEDULE 7 INVENTORIES
Finished goods		3,687		2,238		2,370
Raw materials		3,631		2,714		2,761
Stock in process		823		646		1,078
Stores and spares		528		337		455

		8,669		5,935		6,664


SCHEDULE 8 SUNDRY DEBTORS
(Unsecured)
Debts outstanding for a period exceeding six months
Considered good		3,486		2,041		3,109
Considered doubtful		1,350		1,317		1,096

		4,836		3,358		4,205


Other debts
Considered good		46,851		31,344		37,344
Considered doubtful		—		—		—

		51,687		34,702		41,549

Less: Allowance for doubtful debts		1,350		1,317		1,096

		50,337		33,385		40,453


SCHEDULE 9 CASH AND BANK BALANCES
Balances with bank:
In current account		8,181		8,521		10,884
In deposit account		11,683		11,708		28,104
Cash and cheques on hand		293		259		282

		20,157		20,488		39,270

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF WIPRO LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET


	*(Rs. in Million)*
	As of September 30,				As of March 31,
	2008		2007		2008

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
- Prepaid expenses		4,700		2,742		2,800
- Advance to suppliers / expenses		1,576		1,203		1,402
- Employee travel & other advances		1,500		1,338		1,503
- Derivative asset		3,390		1,588		938
- Others		5,762		2,760		4,378

		16,928		9,631		11,021
Considered doubtful		159		189		169

		17,087		9,820		11,190
Less: Provision for doubtful advances		159		189		169

		16,928		9,631		11,021


Other deposits		1,490		1,730		1,911
Advance income tax		6,874		6,063		7,116
Inter corporate deposit		750		600		500
Balances with excise and customs		754		407		548
Unbilled revenue		12,803		7,927		8,514

		39,599		26,358		29,610


SCHEDULE 11 LIABILITIES
Acquisition related liabilities		—		6,123		207
Accrued expenses and statutory liabilities		25,113		16,407		18,115
Sundry creditors		18,142		14,227		13,082
Unearned revenues		5,846		2,553		4,269
Advances from customers		1,984		1,528		1,642
Derivative liability		17,055		603		2,571
Unclaimed dividends		19		4		4

		68,159		41,445		39,890


SCHEDULE 12 PROVISIONS
Employee retirement benefits		2,848		2,128		2,737
Warranty provision		949		854		941
Provision for tax		6,228		3,814		4,013
Proposed dividend		—		2,919		5,846
Tax on dividend		—		496		993

		10,025		10,211		14,530

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF WIPRO LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED PROFIT AND LOSS ACCOUNT


				*(Rs. in Million)*
												Year ended
	Quarter ended September 30,					Six months ended September 30,						March 31,
	2008			2007		2008			2007			2008
SCHEDULE 13 OTHER INCOME

Dividend on mutual fund units		620			437		1,194			791			1,428
Profit on sale of invetsments		428			199		570			550			771
Interest on debt instruments and others		403			353		747			646			1,576
Exchange differences — net		(281	)		185		(978	)		(386	)		(221	)
Foreign currency borrowings exchange fluctuations (net)		(539	)		—		(678	)		—			(202	)
Miscellaneous income		123			88		266			333			822

		754			1,262		1,121			1,934			4,174


SCHEDULE 14 COST OF SALES AND SERVICES
Employee compensation		22,205			16,701		43,564			32,431			70,655
Raw materials, finished and process stocks (refer Schedule 18)		13,031			8,905		23,614			16,202			36,263
Sub contracting / technical fees / third party application		3,098			2,431		5,880			4,503			10,911
Travel		1,741			1,277		3,261			2,305			5,010
Depreciation		1,526			1,140		2,997			2,235			4,965
Repairs		1,175			602		2,243			1,181			2,686
Communication		591			477		1,182			865			1,970
Power and fuel		472			359		896			697			1,532
Outsourced technical services		369			282		703			520			1,109
Rent		398			281		770			549			1,286
Stores and spares		258			221		500			447			946
Insurance		88			46		187			95			238
Rates and taxes		68			17		148			38			137
Miscellaneous		921			564		1,774			1,050			2,536

		45,941			33,303		87,719			63,118			140,244

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF WIPRO LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED PROFIT AND LOSS ACCOUNT


			*(Rs. in Million)*
									Year ended
	Quarter ended September 30,				Six months ended September 30,				March 31,
	2008		2007		2008		2007		2008
SCHEDULE 15 SELLING AND MARKETING EXPENSES
Employee compensation		2,487		1,648		4,772		3,065		7,045
Advertisement and sales promotion		925		585		1,856		980		2,385
Travel		294		193		601		502		1,023
Carriage and freight		250		285		515		560		1,137
Commission on sales		211		177		397		241		585
Rent		135		106		269		212		470
Communication		101		74		181		155		349
Conveyance		38		36		79		66		136
Depreciation		77		67		147		121		245
Repairs to buildings		14		21		43		32		79
Insurance		4		11		15		21		35
Rates and taxes		11		8		17		16		34
Miscellaneous expenses		190		163		437		284		693

		4,737		3,374		9,329		6,255		14,216


SCHEDULE 16 GENERAL AND ADMINISTRATIVE EXPENSES
Employee compensation		1,484		1,176		3,012		2,117		5,026
Travel		380		275		749		526		1,198
Legal and professional charges		363		167		683		316		905
Repairs and mantainance		243		139		397		264		565
Provision for bad debts		160		154		267		247		289
Staff recruitment		138		188		219		336		704
Manpower outside services		90		55		147		100		223
Depreciation		58		38		95		65		148
Rates and taxes		11		24		20		38		57
Insurance		32		15		58		34		81
Rent		78		27		139		47		124
Auditors’ remuneration
Audit fees		5		5		10		10		24
For certification including tax audit		—		—		—		1		2
Out of pocket expenses		1		—		2		1		2
Miscellaneous expenses		418		380		881		585		1,402

		3,461		2,643		6,679		4,687		10,750

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF WIPRO LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED PROFIT AND LOSS ACCOUNT


				*(Rs. in Million)*
													Year ended
	Quarter ended September 30,						Six months ended September 30,						March 31,
	2008			2007			2008			2007			2008
SCHEDULE 17 INTEREST

Cash credit and others		612			330			1,248			461			1,690

		612			330			1,248			461			1,690


SCHEDULE 18
RAW MATERIALS, FINISHED AND PROCESSED STOCKS
Consumption of raw materials and bought out components :

Opening stocks		3,518			1,890			2,761			1,584			1,584
Add: Stock taken over on acquisition		—			375			—			375			380
Add: Purchases		7,855			4,642			13,206			9,276			18,076
Less: Closing stocks		3,631			2,714			3,631			2,714			2,761

		7,742			4,193			12,336			8,521			17,279


Purchase of finished products for sale		6,018			5,040			12,340			7,732			19,576


(Increase) / Decrease in finished and process stocks :

Opening stock
In process		664			638			1,078			491			491
Finished products		3,117			1,353			2,370			1,777			1,777

Stock taken over on acquisition
In process		—			8			—			8			8
Finished products		—			557			—			557			580

Less: Closing stock
In process		823			646			823			646			1,078
Finished products		3,687			2,238			3,687			2,238			2,370

		(729	)		(328	)		(1,062	)		(51	)		(592	)

		13,031			8,905			23,614			16,202			36,263

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF WIPRO LIMITED AND SUBSIDIARIES

		SCHEDULE 19 – NOTES TO ACCOUNTS

		Company overview

		Wipro Limited (Wipro), together with its subsidiaries and associates (collectively, the Company or the group) is a leading India based provider of IT Services, including Business Process Outsourcing (BPO) services, globally. Further, Wipro has other businesses such as IT Products and Consumer Care and Lighting. Wipro is headquartered in Bangalore, India.

1.		Significant accounting policies

i.		Basis of preparation of financial statements

		The condensed consolidated financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on accrual basis, except for certain financial instruments, which are measured on a fair value basis. GAAP comprises Accounting Standards (AS), issued by the Institute of Chartered Accountants of India (ICAI) and other generally accepted accounting principles in India.

		This interim financial statement has been prepared in accordance with the recognition, measurement and disclosure provisions of AS 25, Interim Financial Reporting issued pursuant to the Companies (Accounting Standards) Rules, 2006 and by the ICAI. These financial statements should be read in conjunction with the consolidated annual financial statements of the Company for the year ended as at March 31, 2008. The accounting policies followed in preparation of the financial statements are consistent with those followed in the preparation of the consolidated Annual financial statements, except the adoption of AS 30, Financial Instruments: Recognition and Measurement. Effective April 1, 2008 the Company adopted AS 30 . The adoption of AS 30 along with limited revision to other accounting standards has been described in Note 4 of the notes to accounts.

ii.		Principles of consolidation

		The financial statements include the financial statements of Wipro and all its subsidiaries, which are more than 50% owned or controlled.

		The financial statements of the parent company and its majority owned / controlled subsidiaries have been combined on a line by line basis by adding together the book values of all items of assets, liabilities, incomes and expenses after eliminating all inter -company balances / transactions and resulting unrealized gain / loss.

		The financial statements are prepared using uniform accounting policies for similar transactions and other events in similar circumstances.

iii.		Use of estimates

		The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities on the date of the financial statements and reported amounts of revenues and expenses during the period reported. Actual results could differ from those estimates.

iv.		Goodwill

		Goodwill arising on consolidation / acquisition of assets is not amortised. It is tested for impairment on a periodic basis and written-off if found impaired.

v.		Fixed assets, intangible assets and work-in-progress

		Fixed assets are stated at historical cost less accumulated depreciation.

		Interest on borrowed money allocated to and utilized for qualifying fixed assets, pertaining to the

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF WIPRO LIMITED AND SUBSIDIARIES

		Intangible assets are stated at the consideration paid for acquisition less accumulated amortization.

		Advances paid towards the acquisition of fixed assets outstanding as of each balance sheet date and the cost of fixed assets not ready for use before such date are disclosed under capital work-in-progress. Lease payments under operating lease are recognised as an expense in the profit and loss account.

		Payments for leasehold land are amortized over the period of lease.

vi.		Investments

		Long term investments (other than investment in associate) are stated at cost less provision for diminution in the value of such investments. Diminution in value is provided for where the management is of the opinion that the diminution is of other than temporary nature. Short term investments are valued at lower of cost and net realizable value. Investment in associate is accounted under the equity method.

vii.		Inventories

		Finished goods are valued at cost or net realizable value, whichever is lower. Other inventories are valued at cost less provision for obsolescence. Small value tools and consumables are charged to consumption on purchase. Cost is determined using weighted average method.

viii.		Provisions and contingent liabilities

		The Company creates a provision when there is a present obligation as a result of an obligating event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the outflow.

		A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

		The company recognises provision for onerous contracts based on the estimate of excess of unavoidable costs of meeting obligations under the contracts over the expected economic benefits.

ix.		Revenue recognition

		Services:

		Revenue from Software development services comprises revenue from time and material and fixed-price contracts. Revenue from time and material contracts is recognised as related services are performed. Revenue from fixed-price, fixed-time frame contracts is generally recognised in accordance with the “Percentage of Completion” method.

		Revenues from BPO services are derived from both time-based and unit-priced contracts. Revenue is recognised as the related services are performed, in accordance with the specific terms of the contract with the customers.

		Revenue from application maintenance services is recognized over the period of the contract.

		Revenue from customer training, support and other services is recognised as the related services are performed.

		Provision for estimated losses, if any, on incomplete contracts are recorded in the period in which such losses become probable based on the current contract estimates.

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF WIPRO LIMITED AND SUBSIDIARIES

		‘Unbilled revenues’ included in loans and advances represent cost and earnings in excess of billings as at the balance sheet date. ‘Unearned revenues’ included in current liabilities represent billing in excess of revenue recognised.

		Products:

		Revenue from sale of products is recognised, in accordance with the sales contract, on dispatch from the factories/ warehouse of the Company. Revenues from product sales are shown as net of excise duty, sales tax separately charged and applicable discounts.

		Others:

		Agency commission is accrued when shipment of consignment is dispatched by the principal.

		Profit on sale of investments is recorded upon transfer of title by the Company. It is determined as the difference between the sales price and the then carrying amount of the investment.

		Interest is recognised using the time-proportion method, based on rates implicit in the transaction. Dividend income is recognised where the Company’s right to receive dividend is established.

		Export incentives are accounted on accrual basis and include estimated realizable values/ benefits from special import licenses and advance licenses.

		Other income is recognised on accrual basis.

x.		Warranty cost

		The Company accrues the estimated cost of warranties at the time when the revenue is recognised. The accruals are based on the Company’s historical experience of material usage and service delivery costs.

xi.		Foreign currency transactions

		The Company is exposed to currency fluctuations on foreign currency transactions. Foreign currency transactions are accounted in the books of accounts at the average rate for the month.

		Transaction:

		The difference between the rate at which foreign currency transactions are accounted and the rate at which they are realized is recognised in the profit and loss account.

		Translation:

		Monetary foreign currency assets and liabilities at period-end are translated at the closing rate. The difference arising from the translation is recognised in the profit and loss account, except for the exchange difference arising on monetary items that qualify as hedging instruments in a cash flow hedge or hedge of a net investment. In such cases the exchange difference is initially recognized in hedging reserve or translation reserve respectively. Such exchange differences are subsequently recognized in the profit and loss account on occurrence of the underlying hedged transaction or on disposal of the investment respectively.

		Integral operations:

		In respect of integral operations, monetary assets and liabilities are translated at the exchange rate prevailing at the date of the balance sheet. Non-monetary items are translated at the historical rate. The items in the profit and loss account are translated at the average exchange rate during the period. The differences arising out of the translation are recognised in the profit and loss account.

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF WIPRO LIMITED AND SUBSIDIARIES

		Non-integral operations:

		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 and loss account are translated at the average exchange rate during the period. The differences arising out of the translation are transferred to translation reserve.

xii.		Financial Instruments

		Derivative financial instruments and Hedge accounting:

		The Company is exposed to foreign currency fluctuations on foreign currency assets, liabilities, net investment in a foreign operation and forecasted cash flows denominated in foreign currency. The Company limits the effects of foreign exchange rate fluctuations by following established risk management policies including the use of derivatives. The Company enters into derivative financial instruments, where the counterparty is a bank.

		Effective April 1, 2007, based on the recognition and measurement principles set out in the AS 30, changes in the fair values of derivative financial instruments designated as cash flow hedges were recognized directly in shareholders’ funds and are reclassified into the profit and loss account upon the occurrence of the hedged transaction. The Company also designated derivative financial instruments as hedges of net investment in non-integral foreign operation. The portion of the changes in fair value of derivative financial instruments that was determined to be an effective hedge was recognised in the shareholders’ funds and would be recognised in the profit and loss account upon sale or disposal of related non-integral foreign operation. Changes in fair value relating to the ineffective portion of the hedges and derivatives not designated as hedges were recognized in the profit and loss account as they arose.

		On April 1, 2008, the Company early adopted AS 30 and the limited revisions to other accounting standards which come into effect upon adoption of AS 30. AS 30 states that particular sections of other accounting standards; AS 4, Contingencies and Events Occurring after Balance sheet Date, to the extent it deals with contingencies, AS 11 (revised 2003), The Effects of Changes in Foreign Exchange Rates, to the extent it deals with the ‘forward exchange contracts’ and AS 13, Accounting for Investments, except to the extent it relates to accounting for investment properties, will stand withdrawn only from the date AS 30 becomes mandatory (April 1, 2011 for the Company).

		Accordingly, the Company continues to comply with the guidance under these accounting standards; AS 4 – relating to Contingencies, AS 11 – relating to Forward contracts and AS 13 until AS 30 becomes mandatory.

		The impact of adoption of AS 30 has been described in Note 4 of the notes to accounts.

		Non-Derivative Financial Instruments

		A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial assets of the Company mainly include cash and bank balances, sundry debtors, unbilled revenues, finance lease receivables, employee travel and other advances, other loans and advances and derivative financial instruments with a positive fair value. Financial liabilities of the Company mainly comprise secured and unsecured loans, sundry creditors, accrued expenses and derivative financial instruments with a negative fair value. Financial assets / liabilities are recognized on the balance sheet when the Company becomes a party to the contractual provisions of the instrument. Financial assets are derecognized when all of risks and rewards of the ownership have been transferred. The transfer of risks and rewards is evaluated by comparing the exposure, before and after the transfer, with the variability in the amounts and timing of the net cash flows of the transferred assets

		Short-term receivables with no stated interest rates are measured at original invoice amount, if the effect of discounting is immaterial. Non-interest-bearing deposits are discounted to their present value.

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF WIPRO LIMITED AND SUBSIDIARIES

		The Company measures the financial liabilities, except for derivative financial liabilities at amortized cost using the effective interest method. The Company measures the short-term payables with no stated rate of interest at original invoice amount, if the effect of discounting is immaterial.

xiii.		Depreciation and amortization

		Depreciation is provided on straight line method at rates not lower than rates specified in Schedule XIV to the Companies Act, 1956. In some cases, assets are depreciated at the rates which are higher than Schedule XIV rates to reflect the economic life of asset. Management estimates the useful life of various assets as follows:


Nature of asset		Life of asset

Building		30 – 60 years
Plant and machinery		5 – 21 years
Office equipment		3 – 10 years
Vehicles		4 years
Furniture and fixtures		3 – 10 years
Data processing equipment and software		2 – 6 years

		Fixed assets individually costing Rs. 5,000/- or less are depreciated at 100%.

		Assets under capital lease are amortised over their estimated useful life or the lease term, whichever is lower. Intangible assets are amortized over their estimated useful life. For various brands acquired by the Company, the estimated useful life has been determined ranging between 20 to 25 years based on expected life, performance, market share, niche focus and longevity of the brand. Accordingly, such intangible assets are being amortised over the determined useful life.

xiv.		Impairment of assets

		Financial assets:

		The Company assesses at each balance sheet date whether there is any objective evidence that a financial asset or group of financial assets is impaired. If any such indication exists, the Company estimates the amount of impairment loss. The amount of loss for short-term receivables is measured as the difference between the assets carrying amount and undiscounted amount of future cash flows. Reduction, if any, is recognized in the profit and loss account. If at the balance sheet date there is any indication that if a previously assessed impairment loss no longer exists, the recognised impairment loss is reversed, subject to maximum of initial carrying amount of the short-term receivable.

		Other than financial assets:

		The Company assesses at each balance sheet date whether there is any indication that a non-financial asset including goodwill may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs to is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognised in the profit and loss account. If at the balance sheet date there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciated historical cost. In respect of goodwill the impairment loss will be reversed only when it was caused by specific external events and their effects have been reversed by subsequent external events.

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF WIPRO LIMITED AND SUBSIDIARIES

xv.		Provision for retirement benefits

		Provident fund:

		Employees receive benefits from a provident fund. The employee and employer each make monthly contributions to the plan equal to 12% of the covered employee’s salary. A portion of the contribution is made to the provident fund trust managed by the Company, while the remainder of the contribution is made to the Government’s provident fund.

		Compensated absences:

		The employees of the Company are entitled to compensated absence. The employees can carry -forward a portion of the unutilized accrued compensated absence and utilize it in future periods or receive cash compensation at retirement or termination of employment for the unutilized accrued compensated absence. The Company records an obligation for compensated absences in the period in which the employee renders the services that increase this entitlement. The Company measures the expected cost of compensated absence as the additional amount that the Company expects to pay as a result of the unused entitlement that has accumulated at the balance sheet date.

		Gratuity:

		In accordance with applicable Indian laws, the Company provides for gratuity, a defined benefit retirement plan (Gratuity Plan) covering certain categories of employees. The Gratuity Plan provides a lump sum payment to vested employees, at retirement or termination of employment, an amount based on the respective employee’s last drawn salary and the years of employment with the Company. Liability with regard to gratuity plan is accrued based on actuarial valuations at the balance sheet date, carried out by an independent actuary. Actuarial gain or loss is recognised immediately in the statement of profit and loss as income or expense. The Company has an employees’ gratuity fund managed by the Life Insurance Corporation of India (LIC).

		Superannuation:

		Apart from being covered under the Gratuity Plan described above, the employees of the Company also participate in a defined contribution plan maintained by the Company. This plan is administered by the LIC & ICICI Prudential Insurance Company Limited. The Company makes annual contributions based on a specified percentage of each covered employee’s salary.

xvi.		Employee stock options

		The Company determines the compensation cost based on the intrinsic value method. The compensation cost is amortised on a straight line basis over the vesting period.

xvii.		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.

xviii.		Income tax & Fringe benefit tax

		Income tax:

		The current charge for income taxes is calculated in accordance with the relevant tax regulations.

		The income tax provision for the interim period is made based on the best estimate of the annual average tax rate expected to be applicable for the full fiscal year.

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF WIPRO LIMITED AND SUBSIDIARIES

		Deferred tax assets and liabilities are recognised for the future tax consequences attributable to timing differences that result between the profit offered for income taxes and the profit as per the financial statements by each entity in the Company.

		Deferred taxes are recognised in respect of timing differences which originate during the tax holiday period but reverse after the tax holiday period. For this purpose, reversal of timing difference is determined using FIFO method.

		Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. The effect on deferred tax assets and liabilities of a change in tax rates is recognised in the period that includes the enactment/ substantive enactment date.

		Deferred tax assets on timing differences are recognised only if there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. However, deferred tax assets on the timing differences when unabsorbed depreciation and losses carried forward exist, are recognised only to the extent that there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

		Deferred tax assets are reassessed for the appropriateness of their respective carrying amounts at each balance sheet date.

		The Company offsets, on a year on year basis, the current tax assets and liabilities, where it has a legally enforceable right and where it intends to settle such assets and liabilities on a net basis.

		Fringe benefit tax:

		The Fringe Benefit Tax (FBT) is accounted for in accordance with the guidance note on accounting for fringe benefits tax issued by the ICAI. The provision for FBT is reported under income taxes.

xix.		Earnings per share

		Basic:

		The number of shares used in computing basic earnings per share is the weighted average number of shares outstanding during the period.

		Diluted:

		The number of shares used in computing diluted earnings per share comprises the weighted average shares considered for deriving basic earnings per share, and also the weighted average number of equity shares that could have been issued on the conversion of all dilutive potential equity shares.

		Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a later date. The number of shares and potentially dilutive equity shares are adjusted for any stock splits and bonus shares issued.

xx.		Cash flow statement

		Cash flows are reported using the indirect method, whereby net profit s before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from regular revenue generating, investing and financing activities of the Company are segregated.

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF WIPRO LIMITED AND SUBSIDIARIES

The following are the details for 1,463,003,208 (2007: 1,459,261,169, 2008: 1,461,453,320) equity shares as of September 30, 2008.


No. of shares		Description
	1,398,430,659	Equity shares / American Depository Receipts (ADRs) (2007 & 2008: 1,398,430,659) have been allotted as fully paid bonus shares / ADRs by capitalization of Securities premium account and Capital redemption reserve

	1,325,525	Equity shares (2007 & 2008: 1,325,525) have been allotted as fully paid -up, pursuant to a scheme of amalgamation, without payment being received in cash

	3,162,500	Equity shares (2007 & 2008: 3,162,500) representing American Depository Receipts issued during 2000-2001 pursuant to American Depository offering by the Company

	59,159,524	Equity shares (2007: 55,417,485 & 2008: 57,609,636) issued pursuant to Employee Stock Option Plan

3.		Note on Reserves and Surplus

i)		Restricted stock units reserve includes Deferred Employee Compensation, which represents future charge to profit and loss account and employee stock options outstanding to be treated as securities premium at the time of allotment of shares.

ii)		Additions to General Reserve include:


	*(Rs. in Million*)
							For the
	Six month ended						year ended
	September			September			March 31,
Particulars	30, 2008			30, 2007			2008

a) Transfer from profit and loss account		18,858			12,078			22,575
b) Adjustment on account of amalgamation		—			(1,376	)		(3,601	)
c) Transition adjustment on adoption of AS 30		(89	)		—			—
d) Others		(3	)		—			—

		18,766			10,702			18,974

4.		Adoption of AS 30

		In December 2007, the ICAI issued AS 30, Financial Instruments: Recognition and Measurement. Although AS 30 becomes recommendatory in respect of accounting periods commencing on or after April 1, 2009 and mandatory in respect of accounting periods commencing on or after April 1, 2011, in March 2008 the ICAI announced that the earlier adoption of AS 30 is encouraged. AS 30, along with limited revision to other accounting standards has currently not been notified pursuant to Companies (Accounting Standard) Rules, 2006.

		On April 1, 2008, the Company early adopted AS 30 and the limited revisions to other accounting standards which come into effect upon adoption of AS 30.

		AS 30 states that particular sections of other accounting standards; AS 4, Contingencies and Events Occurring after Balance sheet Date, to the extent it deals with contingencies, AS 11 (revised 2003), The Effects of Changes in Foreign Exchange Rates, to the extent it deals with the ‘forward exchange contracts’ and AS 13, Accounting for Investments, except to the extent it relates to accounting for investment properties, would stand withdrawn only from the date AS 30 becomes mandatory (April 1, 2011 for the Company).

		Accordingly, the Company continues to comply with the guidance under these accounting standards; AS 4 – relating to Contingencies, AS 11 – relating to Forward Contracts and AS 13 until AS 30 becomes mandatory.

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF WIPRO LIMITED AND SUBSIDIARIES

		Until March 31, 2008 the Company applied the recognition and measurement principles as set out in AS 30 in accounting for derivatives and hedge accounting. Changes in the fair values of derivative financial instruments designated as cash flow hedges were recognized directly in shareholders’ funds and reclassified into the profit and loss account upon the occurrence of the hedged transaction. The Company also designated derivative financial instruments as hedges of net investments in non-integral foreign operation. The portion of the changes in fair value of derivative financial instruments that was determined to be an effective hedge is recognised in the shareholders’ funds and was recognised in the profit and loss account upon sale or disposal of related non-integral foreign operation. Changes in fair value relating to the ineffective portion of the hedges and derivatives not designated as hedges were recognized in the profit and loss account as they arose.

		As the Company was already applying the principles of AS 30 in respect of its accounting for derivative financial instruments in relation to derivative and hedge accounting, the early adoption of AS 30 did not have a material impact on the Company.

		As permitted by AS 30 and the consequent limited revisions to other accounting standards; during the quarter and six month ended September 30, 2008 the Company designated a yen -denominated foreign currency borrowing amounting to JPY 28 billion, along with a Cross-Currency Swap (CCS), as a hedging instrument to hedge its net investment in a non-integral foreign operation. Accordingly the translation loss on the foreign currency borrowings and portion of the changes in fair value of CCS which are determined to be effective hedge of net investment in non-integral foreign operations aggregating to Rs 1,156 million and Rs 1,816 Million for the quarter and six month ended September 30, 2008 respectively was recognized in translation reserve in shareholders’ funds. The amounts recognised in translation reserve would be transferred to profit and loss account upon sale or disposal of non-integral foreign operations.

		In accordance with AS 11, if the Company had continued to recognize translation losses on foreign currency borrowing in the profit and loss account, the foreign currency borrowing would not have been eligible to be combined with CCS for hedge accounting. Consequently the CCS also would not have qualified for hedge accounting and changes in fair value of CCS would have been recognized in the profit and loss account. As a result profit after tax for the quarter and six months ended September 30, 2008 would have been lower by Rs. 1,156 million and Rs. 1,816 million respectively.

5.		Derivatives

		As of September 30, 2008 the Company had derivative financial instruments to sell USD 2,172 Million, GBP 65 Million, EUR 12 Million and JPY 6,906 Million relating to highly probable forecasted transactions. As of March 31, 2008 the Company had derivative financial instruments to sell USD 2,497 Million, GBP 84 Million, EUR 24 Million and JPY 7,682 Million relating to highly probable forecasted transactions. As of September 30, 2008 the Company has recognised mark-to-market losses of Rs 13,823 Million (2008: Rs. 1,097 Million) relating to derivative financial instruments that are designated as effective cash flow hedges in the shareholders’ funds.

		In addition to Yen denominated foreign currency borrowing and related CCS discussed in Note 4, the Company had derivative financial instruments to sell USD 305 Million and Euro 65 million designated as hedge of net investment in non-integral foreign operations as of September 30, 2008. The Company has recognised Mark to market losses of Rs. 2,494 million (2008: Rs 495 Million) relating to the above derivative financial instruments in translation reserve in the shareholders’ funds.

		As of September 30, 2008 the Company had undesignated derivative financial instruments to sell USD 320 Million, GBP 74 Million and EUR 47 Million. As of March 31, 2008 the Company had undesignated derivative financial instruments to sell USD 414 Million, GBP 58 Million and EUR 39 Million. As of September 30, 2008 the Company has recognized mark-to-market gain/ (losses) on such derivative financial instruments through the profit and loss account.

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF WIPRO LIMITED AND SUBSIDIARIES

6.		The Company has a 49% equity interest in Wipro GE Healthcare Private Limited (Wipro GE), an entity in which General Electric, USA holds the majority equity interest. The shareholders agreement provides specific rights to the two shareholders. Management believes that these specific rights do not confer joint control as defined in AS 27 “Financial Reporting of Interests in Joint Ventures”. Consequently, Wipro GE is not considered as a joint venture and consolidation of financial statements is carried out as per the equity method in terms of AS 23 “Accounting for Investments in Associates in Consolidated Financial statements”.

7.		In March 2008, pursuant to the scheme of amalgamation approved by the Honorable High Court of Karnataka and High Court of Judicature at Bombay, the Company has merged mPower Software Services India Private Limited (‘mPower’), mPact Technology Service Private Limited (‘mPact’) and cMango India Private Limited (‘cMango’) with the Company retrospectively from April 1, 2007, the Appointed Date. mPower, mPact and cMango were fully held by Wipro Inc, which in turn is a wholly owned subsidiary of the Company. Pursuant to the scheme of amalgamation, the Company will issue 968,803 fully-paid equity shares with a market value as on April 1, 2007 of Rs. 540 Million as consideration to a controlled trust to be held for the benefit of Wipro Inc.

8.		Employee stock option

i)		Employees covered under Stock Option Plans and Restricted Stock Unit (RSU) Option Plans are granted an option to purchase shares of the Company at the respective exercise prices, subject to requirements of vesting conditions. These options generally vest over a per iod of five years from the date of grant. Upon vesting, the employees can acquire one equity share for every option. The maximum contractual term for aforementioned stock option plans is generally 10 years.

ii)		The stock compensation cost is computed under the intrinsic value method and amortised on a straight line basis over the total vesting period of five years. The Company has granted 8,311,634 Options under RSU Options Plan and 120,000 options under Stock Options Plan during the six month ended September 30, 2008. For the quarter and six month ended September 30, 2008 the Company has recorded stock compensation expense of Rs. 455 Million and Rs 888 million respectively (2007: Rs. 286 Million and Rs. 572 million respectively, 2008: Rs. 1,166 Million).

iii)		The Finance Act, 2007 has introduced Fringe Benefit Tax (FBT) on employee stock options. The difference between the fair value of the underlying share on the date of vesting and the exercise price paid by the employee is subject to FBT. The Company recovers such tax from the employee. During the quarter and six month ended September 30, 2008 the Company has recognised FBT liability and related recovery of Rs 86 Million and Rs 132 Million respectively arising from the exercise of stock options. The Company’s obligation to pay FBT arises only upon the exercise of stock options.

9.		Income Tax

		Provision for tax has been allocated as follows:

(Rs in Million)

Quarter Ended

Six Month Ended

Year Ended

September

September 30,

September

March 31,

Particulars

30, 2008

30, 2007

2008

30, 2007

2008

Net current tax

1,660

933

3,111

1,872

4,194

Deferred tax

(85

)

(22

)

(109

)

(22

)

Fringe benefit tax

135

183

200

294

Total income taxes

1,659

1,046

3,185

2,050

4,550

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF WIPRO LIMITED AND SUBSIDIARIES

10.		The Company had received tax demands from the Indian income tax authorities for the financial years ended March 31, 2001, 2002, 2003 and 2004 aggregating to Rs. 11,127 Million (including interest of Rs. 1,503 Million). The tax demand was primarily on account of denial 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. The appeals filed by the Company for the above years to the first appellate authority were allowed in favour of the Company, thus deleting substantial portion of the demand raised by the Income tax authorities. On further appeal filed by the income tax authorities, in June 2008 the second appellate authority upheld the claim of the company for years ended March 31, 2001 and 2002. The Income tax authorities have filed similar appeals for years ended March 31, 2003 and 2004 which are pending before the second appellate authority.

		Considering the facts and nature of disallowance and the order of the appellate authorities upholding the claims of the Company for earlier years, the Company believes that the final outcome of the above disputes should be in favour of the Company and there should not be any material impact on the financial statements.

11.		The list of subsidiaries is given below :


			Country of
Direct Subsidiaries	Step Subsidiaries		Incorporation

Wipro Inc.			USA
	Wipro Gallagher Systems Inc		USA
	Enthink Inc.		USA
	Infocrossing Inc		USA
		Infocrossing EAS Inc.,	USA
		Infocrossing Services Inc.	USA
		Infocrossing West Inc. ^(A)	USA
		Infocrossing Healthcare Services, Inc.	USA
		Infocrossing, LLC ^(A)	USA
		Infocrossing iConnection, Inc.	USA
cMango Pte Limited			Singapore
Wipro Japan KK			Japan
Wipro Shanghai Limited			China
Wipro Trademarks Holding Limited			India
	Cygnus Negri Investments Private Limited		India
Wipro Travel Services Limited			India
Wipro Consumer Care Limited			India
Wipro Holdings (Mauritius) Limited			Mauritius
	Wipro Holdings UK Limited		UK
		Wipro Technologies UK Limited	UK
		BVPENTEBeteiligungsve rwaltung GmbH	Austria
		New Logic Technologies GmbH	Austria
		NewLogic Technologies SARL	France
		3D Networks FZ-LLC	Dubai

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF WIPRO LIMITED AND SUBSIDIARIES



		3D Networks (UK) Limited	UK
Wipro Cyprus Private Limited			Cyprus
	Wipro Technologies S.A DE C.V		Mexico
	Wipro BPO Philippines LTD. Inc		Philippines
	Wipro Holdings Hungary Korlátolt Felel• sség• Társaság		Hungary
	Wipro Technologies Argentina SA		Argentina
	Wipro Information Technology Egypt SAE		Egypt
	Wipro Arabia Limited ^(a)		Dubai
	Wipro Poland Sp Zoo		Poland
	RetailBox BV		Netherlands
		Enabler Informatica SA	Portugal
		Enabler France SAS	France
		Enabler UK Ltd	UK
		Enabler Brasil Ltd	Brazil
		Enabler & Retail Consult GmbH	Germany
		Wipro Technologies Limited, Russia	Russia
	Wipro Technologies OY (formerly Saraware OY)		Finland
	Wipro Infrastructure Engineering AB (formerly Hydrauto Group AB)		Sweden
		Wipro Infrastructure Engineering OY (formerly Hydrauto OY Ab Pernion)	Finland
		Hydrauto Celka San ve Tic	Turkey
	Wipro Technologies SRL		Romania
	Wipro Singapore Pte Limited		Singapore
		Unza Holdings Limited ^(A)	Singapore
		Wipro Technocentre (Singapore) Pte Limited	Singapore
Wipro Australia Pty Limited			Australia
3D Networks Pte Limited			Singapore
Planet PSG Pte Limited			Singapore
	Planet PSG SDN BHD		Malaysia
Spectramind Inc			USA
Wipro Chandrika Limited ^(b)			India
WMNETSERV Limited			Cyprus
	WMNETSERV (UK) Ltd.		UK
	WMNETSERV INC.		USA


All the above subsidiaries are 100% held by the Company except the following:

a)		66.67% held in Wipro Arabia Limited

b)		90% held in Wipro Chandrika Limited

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF WIPRO LIMITED AND SUBSIDIARIES

^(A) Step Subsidiary details of Infocrossing West Inc, Infocrossing LLC, and Unza Holdings Limited are as follows :


			Country of
Step subsidiaries	Step subsidiaries		Incorporation

Infocrossing West Inc.			USA
	Infocrossing Services West Inc.		USA
Infocrossing, LLC	Infocrossing Services Southeast Inc.		USA USA
Unza Company Pte Ltd			Singapore
Unza Indochina Pte Ltd			Singapore
	Unza Vietnam Co., Ltd		Vietnam
Unza Cathay Ltd			Hong Kong
Unza China Ltd			Hong Kong
	Dongguan Unza Consumer Products Ltd.		China
PT Unza Vitalis			Indonesia
Unza Thailand Limited			Thailand
Unza Overseas Ltd			British virgin islands
Unza Africa Limited			Nigeria
Unza Middle East Ltd			British virgin islands
Unza International Limited			British virgin islands
Positive Equity Sdn Bhd			Malaysia
Unza Nusantara Sdn Bhd			Malaysia
	Unza Holdings Sdn Bhd		Malaysia
	Unza Malaysia Sdn Bhd		Malaysia
		UAA Sdn Bhd	Malaysia
	Manufacturing Services Sdn Bhd		Malaysia
		Shubido Pacific Sdn Bhd ^(a)	Malaysia
	Gervas Corporation Sdn Bhd		Malaysia
		Gervas (B) Sdn Bhd	Malaysia
	Formapac Sdn Bhd		Malaysia


All the above subsidiaries are 100% held by the Company except the following:

a)		50.1 % held in Shubido Pacific Sdn Bhd

12.		The segment information for the quarter and six month ended September 30, 2008, September 30, 2007 and year ended March 31, 2008 is as follows:

		Until March 31, 2008 the Company was reporting Global IT Services & Products (comprising of IT Services & Products and BPO Services segments), India & AsiaPac IT Services & Products, Consumer Care & Lighting and Others.

		In April 2008 the Company re-organized its IT businesses by combining the Global IT Services & Products and the India & AsiaPac IT Services & Products businesses and appointed joint CEOs for the combined IT business. Consequent to the re-organization of the Company, the Company changed its system of internal financial reporting to the board of directors and the chief executive officer wherein the financial results are reported as IT Services and IT Products. Accordingly, the Company identified IT services and IT products as reportable segments. There is no change in the reportable segments for other businesses.

		Segment information in respect of earlier period has been revised to conform to the presentation as per current reportable segments.

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF WIPRO LIMITED AND SUBSIDIARIES


*Rs. in Million*
																			Year ended
	Quarter ended September 30,									Six months ended September 30,									March 31,
Particulars	2008			2007			Growth %			2008			2007			Growth %			2008

Revenues
IT Services		47,500			34,919			36	%		91,545			66,516			38	%		146,626
IT Products		10,023			6,672			50	%		17,486			11,846			48	%		26,400
Consumer Care and Lighting		5,269			3,709			42	%		10,396			6,052			72	%		15,207
Others		2,470			2,559			-3	%		5,756			5,297			9	%		11,691
Eliminations		(189	)		(99	)					(443	)		(163	)					(349	)

TOTAL		65,073			47,760			36	%		124,740			89,548			39	%		199,575

Profit before Interest and Tax — PBIT
IT Services		9,959			7,637			30	%		19,144			14,332			34	%		31,290
IT Products		429			319			34	%		677			553			22	%		1,227
Consumer Care and Lighting		643			440			46	%		1,252			745			68	%		1,900
Others		25			132			-81	%		206			191			8	%		770

TOTAL		11,056			8,528			30	%		21,279			15,821			34	%		35,187

Interest (Net) and Other Income		301			658						585			1,526						1,883

Profit Before Tax		11,357			9,186			24	%		21,864			17,347			26	%		37,070

Income Tax expense including Fringe Benefit Tax		(1,659	)		(1,046	)					(3,185	)		(2,050	)					(4,550	)

Profit before Share in earnings of associates and minority interest		9,698			8,140			19	%		18,679			15,297			22	%		32,520
Share in earnings of associates		106			96						213			193						333
Minority interest		(22	)		1						(34	)		3						(24	)

PROFIT AFTER TAX		9,782			8,237			19	%		18,858			15,493			22	%		32,829

Operating Margin
IT Services		21.0	%		21.9	%					20.9	%		21.5	%					21.3	%
IT Products		4.3	%		4.8	%					3.9	%		4.7	%					4.6	%
Consumer Care and Lighting		12.2	%		11.9	%					12.0	%		12.3	%					12.5	%

TOTAL		17.0	%		17.9	%					17.1	%		17.7	%					17.6	%

CAPITAL EMPLOYED
IT Services and Products		97,104			79,222						97,104			79,222						93,969
Consumer Care and Lighting		18,942			16,612						18,942			16,612						17,292
Others		64,183			41,041						64,183			41,041						50,659

TOTAL		180,229			136,875						180,229			136,875						161,920

CAPITAL EMPLOYED COMPOSITION
IT Services and Products		54	%		58	%					54	%		58	%					58	%
Consumer Care and Lighting		10	%		12	%					10	%		12	%					11	%
Others		36	%		30	%					36	%		30	%					31	%

TOTAL		100	%		100	%					100	%		100	%					100	%

RETURN ON AVERAGE CAPITAL EMPLOYED
IT Services and Products		44	%		48	%					41	%		45	%					44	%
Consumer Care and Lighting		14	%		18	%					14	%		15	%					19	%

TOTAL		25	%		28	%					25	%		27	%					27	%

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF WIPRO LIMITED AND SUBSIDIARIES

Notes to Segment Report

	a)		The segment report of Wipro Limited and its consolidated subsidiaries and associates has been prepared in accordance with the AS 17 “Segment Reporting” issued pursuant to the Companies (Accounting Standard) Rules , 2006 and by The Institute of Chartered Accountants of India.

	b)		Segment revenue includes certain exchange differences which are reported in other income, in the financial statements. Segment PBIT for the quarter and six month ended September 30, 2008 includes certain operating other income which is outlined below.


	Quarter ended				Six month ended				As of
	September 30,				September 30				March 31,
Particulars	2008		2007		2008		2007		2008

IT Services		36		43		91		69		419
IT Products		16		1		28		29		53
Consumer Care & Lighting		25		17		42		24		71
Others		47		28		105		244		281

		124		89		266		366		824

	c)		PBIT for the quarter and six month ended September 30, 2008 is after considering restricted stock unit amortization of Rs 455 Million and Rs 888 Million respectively (2007: Rs 286 Million and Rs 572 Million respectively and 2008: 1,166 Million).

	d)		Capital employed of segments is net of current liabilities. The net current liability of segments is as follows :-


	As of				As of
	September		September		March 31,
Particulars	30, 2008		30, 2007		2008

IT Services and Products		56,227		38,347		30,456
Consumer Care and Lighting		4,015		3,356		3,382
Others		17,942		9,953		20,582

		78,184		51,656		54,420

The Company has four geographic segments: India, USA, Europe and Re st 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:


	Quarter ended								Six month ended								As of March
	September 30,								September 30								31,
Particulars	2008		%		2007		%		2008		%		2007		%		2008		%

India		15,354		24		11,914		25		27,912		23		22,100		25		48,847		24
USA		28,112		43		20,272		42		54,300		44		39,425		44		87,439		44
Europe		14,638		22		11,717		25		29,111		23		22,262		25		48,259		24
Rest of the world		6,969		11		3,857		8		13,417		10		5,761		6		15,030		8

		65,073		100		47,760		100		124,740		100		89,548		100		199,575		100

For the purpose of reporting, business segments are considered as primary segments and geographic segments are considered as secondary segments.

13.

Corresponding figures for previous periods presented have been regrouped, where necessary, to confirm to the current period classification.