EX-99.1 2 dex991.htm IFRS PRESS RELEASE IFRS Press Release

Exhibit 99.1

LOGO

FOR IMMEDIATE RELEASE

Results for the quarter ended June 30, 2011 under IFRS

Bangalore, India and East Brunswick, New Jersey, USA – July 20, 2011 — Wipro Limited (NYSE: WIT) today announced financial results under International Financial Reporting Standards (IFRS) for its first quarter ended June 30, 2011.

Highlights of the Results:

 

   

IT Services Revenue was $1,408 million, a sequential increase of 0.5% and YoY increase of 16.9%.

 

   

Total Revenues were LOGO 85.64 billion ($1.92 billion1), an increase of 18% YoY.

 

   

Net Income was LOGO 13.35 billion ($299 million1), an increase of 1% YoY. Non-GAAP Adjusted Net Income was LOGO 13.18 billion ($295 million1), an increase of 1% YoY.

 

   

IT Services Revenues were LOGO 64.05 billion ($1,436 million1), an increase of 16% YoY.

 

   

IT Services Earnings Before Interest and Tax (EBIT) was LOGO 14.07 billion ($315 million1), an increase of 4% YoY.

 

   

Our Operating Income to Revenue for IT Services was 22% for the quarter.

Performance for the quarter ended June 30, 2011.

Azim Premji, Chairman of Wipro, commenting on the results said – “We are seeing early signs of positive momentum after the re-organization. Clients continue to focus on optimizing operations, creating new products and getting access to newer markets. We will continue to make investments that bring superior value to our clients as they try to win in this market.”

Suresh Senapaty, Executive Director & Chief Financial Officer of Wipro, said – “Our investments in client mining are starting to show results, with 4 customers contributing more than $100 million of revenues. We have maintained our operating margins in the current quarter despite one month impact of salary revision.”

T K Kurien, Executive Director & Chief Executive Officer, IT Business, said – “Enterprises are variabalizing their IT to position themselves better for winning in the world of constraints. We are building assets that allow consumerization of enterprise technology and performance analytics, two trends that will help us differentiate.”

Outlook for the Quarter ending September 30, 2011

We expect Revenues from our IT Services business to be in the range of $1,436 million to $1,464 million*.

 

*

Guidance is based on the following exchange rates: GBP/USD at 1.63, Euro/USD at 1.43, AUD/USD at 1.08, USD/INR at 44.9.

1.

For the convenience of the reader, the amounts in Indian rupees in this release have been translated into United States dollars at the noon buying rate in New York City on June 30, 2011, for cable transfers in Indian rupees, as certified by the Federal Reserve Board of New York, which was US $1= LOGO 44.59. However, the realized exchange rate in our IT Services business segment for the quarter ended June 30, 2011 was US$1= LOGO 45.50


IT Services (75% of Total Revenue and 94% of Operating Income for the quarter ended June 30, 2011)

The IT Services segment had 126,490 employees as of June 30, 2011, an increase of 4,105 people this quarter. We added 49 new customers for the quarter.

Wipro has won a multi-year engagement with a top 10 universal bank for modernizing their core banking platform. This will involve replacement of their legacy platform by a new one with more contemporary technology. This transformational program will enable the bank to launch new products quickly and go to market faster with new functionality to its customers. Besides this program, the bank has also chosen Wipro as their strategic partner for application development and maintenance work for their retail banking business.

As macroeconomic environment continues to be unpredictable, enterprises are simplifying and variablizing their IT. Some of the deals won in the market support this growing trend.

Wipro has entered into a multi-year outsourcing engagement with one of the world’s leading mail stream management companies for data center consolidation and provisioning of infrastructure on cloud based models.

As IT budgets come under pressure, businesses are demanding more accountability and value from investments in IT. Wipro has introduced the IT 360TM framework that helps customers define, measure and maximize value from IT investments. The framework which helps customers measure the Return on their IT Investments evaluates the benefits and value of each individual component in the IT landscape, to maximize the value that IT delivers to business. Wipro has used this framework for a leading provider of commercial cleaning and hygiene solutions to demonstrate IT Cost Transparency.

For one of UK’s largest Water and Sewerage Services organization, Wipro will provide end-to-end delivery of Applications & Infrastructure Managed Services and undertake a series of technology and process transformation initiatives to better align IT services to the customer’s business dynamics.

Analytics continues to be one of the fastest growing services and Wipro has been able to capitalize on this market opportunity. Customers are increasingly looking to analytics to help them win in the world of constraints. Wipro partnered with a hi-tech manufacturing company to establish a quality analytics program. By integrating available data on products and components, the program can provide early visibility into product quality issues.

Wipro has won a Price Optimization consulting engagement with a leading drug retailer in US. Through a partnership with Revionics, a leading provider of life cycle price optimization solutions, Wipro will bring its capabilities in Everyday Pricing and Markdown Optimization and deep expertise in retail domain to this engagement.

Wipro has been chosen by one of largest food manufacturers in UK as a strategic IT partner. As part of the five year strategic relationship, Wipro will be responsible for supporting the SAP landscape for the customer. This partnership will achieve the strategic objective of standardizing systems and processes while reducing operating costs, achieving business productivity efficiencies and improving customer experience.

 

 

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The India and Middle East regions demonstrated strong wins across multiple segments. Wipro won a contract from the Jammu & Kashmir government under the Restructured Accelerated Power Development Reforms Program (R-APDRP) and also won a contract from Oriental Bank of Commerce, as the Enrolment Agency for the UID (Unique Identification Number) project enrolments for residents of Delhi & NCR, Punjab, Haryana and UP States.

In a further boost to our Eco-energy and System Integration credentials, Wipro, along with Consolidated Construction Consortium Ltd (CCCL), entered into an engagement for end-to-end Networking and setting up of Intelligent Building Management System for ONGC’s (Oil and Natural Gas Corporation) corporate office.

Awards and accolades

Wipro has been cited as a Leader in “The Forrester Wave™: SAP Services Providers, Q2 2011 (April 2011)” and has some of the strongest skills of Indian SAP service providers professionals based on scale, cross-industry expertise and global reach.

Wipro has also been cited as a Leader in “The Forrester Wave™: Salesforce.com implementation, Q2 2011 (May 2011) due to its practice maturity, depth and breadth of resources and suitability for large, complex engagements.

Wipro has won the 2011 Microsoft Software Development Partner of the Year Award. The company was among the top global Microsoft partners to be honored for demonstrating excellence in innovation and implementation of customer solutions based on Microsoft technology.

IT Products (12% of Total Revenue and 3% of Operating Income for the quarter ended June 30, 2011)

 

 

Our IT Products segment recorded Revenue of LOGO 10.06 billion ($226 million1) for the quarter ended June 30, 2011 an increase of 21% YoY.

 

 

EBIT was LOGO 423 million ($9 million1) for the quarter, an increase of 26% YoY.

 

 

The ratio of our Operating Income to Revenue for this segment was 4.2% for the quarter.

Consumer Care and Lighting (9% of Total Revenue and 6% of Operating Income for the quarter ended June 30, 2011)

 

 

Our Consumer Care and Lighting business segment recorded Revenue of LOGO 7.55 billion ($169 million1) for the quarter ended June 30, 2011, representing an increase of 18% YoY.

 

 

EBIT was LOGO 895 million ($20 million1) for the quarter, flat on a YoY basis.

 

 

Operating Income to Revenue for this segment was 11.9% for the quarter.

Wipro Limited

 

 

Total Revenue for the quarter ended June 30, 2011 was LOGO 85.64 billion ($1.92 billion1) representing an increase of 18% over the same period last year.

 

 

Net Income for the quarter ended June 30, 2011 was LOGO 13.35 billion ($299 million1) representing an increase of 1% over the same period last year.

 

 

Non-GAAP Adjusted Net Income (excluding impact of accelerated amortization of stock based compensation) for the quarter ended June 30, 2011 was LOGO 13.18 billion ($295 million1) representing an increase of 1% over the same period last year.

 

 

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Please see the table on page 7 for a reconciliation between (i) IFRS Net Income and non-GAAP Adjusted Net Income (excluding the impact of stock-based compensation) and (ii) IFRS IT Services Revenue and IT Services Revenue on a non-GAAP constant currency basis.

About Non-GAAP financial measures

This press release contains non-GAAP financial measures within the meaning of Regulation G and Item 10(e) of Regulation S-K. Such non-GAAP financial measures are measures of our historical or future performance, financial position or cash flows that are adjusted to exclude or include amounts that are excluded or included, as the case may be, from the most directly comparable financial measure calculated and presented in accordance with IFRS.

The table on page 7 provides Adjusted Net Income for the period, which is a non-GAAP measure that excludes the impact of accelerated amortization in respect of stock options that vest in a graded manner, and IT Services Revenue on a constant currency basis, which is a non-GAAP measure that is calculated by translating IT Services Revenue from the current reporting period into U.S. dollars based on the currency conversion rate in effect for the prior reporting period. We consider a stock option award with a graded vesting schedule to be in substance a single award not multiple stock option awards and accordingly believe the straight line amortization reflects the economic substance of the award. We refer to growth rates in constant currency so that business results may be viewed without the impact of fluctuations in foreign currency exchange rates, thereby facilitating period-to-period comparisons of our business performance. We believe that the presentation of this Non-GAAP Adjusted Net Income, when shown in conjunction with the corresponding IFRS measure, provides useful information to investors and management regarding financial and business trends relating to its Net Income for the period

These Non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles and should not be considered a substitute for, or superior to, the most directly comparable financial measure calculated in accordance with IFRS, and may be different from non-GAAP measures used by other companies. In addition to these non-GAAP measures, the financial statements prepared in accordance with IFRS and the reconciliation of these non-GAAP financial measures with the most directly comparable IFRS financial measure should be carefully evaluated.

For internal budgeting process, our management also uses financial statements that exclude the impact of accelerated amortization relating to stock options that vest in a graded manner. Management of the Company also uses Non-GAAP Adjusted Net Income, in addition to the corresponding IFRS measure, in reviewing our financial results.

Results for the year ended June 30, 2011, computed under IFRS, along with individual business segment reports, are available in the Investors section of our website at www.wipro.com.

Quarterly Conference Calls

We will hold a conference call today at 02:00 p.m. Indian Standard Time (04:30 a.m. US Eastern Time) and at 6:45 p.m. Indian Standard Time (9:15 a.m. US Eastern Time) to discuss our performance for the quarter. An audio recording of the management discussions and the question and answer session will be available online and will be accessible in the Investor Relations section of our website at www.wipro.com.

About Wipro Limited (NYSE: WIT)

Wipro provides comprehensive IT solutions and services, including systems integration, Information Systems outsourcing, IT enabled services, package implementation, software application development and maintenance, and research and development services to corporations globally. Wipro Limited is the first

 

 

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PCMM Level 5 and SEI CMM Level 5 certified IT Services Company globally. Wipro also has a strong presence in niche market segments of Infrastructure Engineering and Consumer Products & Lighting. For more information, please visit our websites at www.wipro.com.

 

Contact for Investor Relations       Contact for Media & Press  
Rajendra Kumar Shreemal    Sridhar Ramasubbu       Sachin Mulay  
Phone: +91-80-2505-6186    Phone: +1 408-242-6285       Phone: 91-80-2505-6110  
rajendra.shreemal@wipro.com    sridhar.ramasubbu@wipro.com       sachin.mulay@wipro.com  

Forward-looking and Cautionary Statements

The forward-looking statements contained herein represent Wipro’s beliefs regarding future events, many of which are by their nature, inherently uncertain and outside Wipro’s control. Such statements include, but are not limited to, statements regarding Wipro’s growth prospects, its future financial operating results, and its plans, expectations and intentions. Wipro cautions readers that the forward-looking statements contained herein are subject to risks and uncertainties that could cause actual results to differ materially from the results anticipated by such statements. Such risks and uncertainties include, but are not limited to, risks and uncertainties regarding fluctuations in our earnings, revenue and profits, our ability to generate and manage growth, intense competition in IT services, our ability to maintain our cost advantage, wage increases in India, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on immigration, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks, our ability to successfully complete and integrate potential acquisitions, liability for damages on our service contracts, the success of the companies in which we make strategic investments, withdrawal of fiscal governmental incentives, political instability, war, legal restrictions on raising capital or acquiring companies outside India, unauthorized use of our intellectual property, and general economic conditions affecting our business and industry. Additional risks that could affect our future operating results are more fully described in our filings with the United States Securities and Exchange Commission, including, but not limited to, Annual Reports on Form 20-F. These filings are available at www.sec.gov. We may, from time to time, make additional written and oral forward-looking statements, including statements contained in the company’s filings with the Securities and Exchange Commission and our reports to shareholders. We do not undertake to update any forward-looking statement that may be made from time to time by us or on our behalf.

# # #

(Tables to follow)

 

 

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WIPRO LIMITED AND SUBSIDIARIES

AUDITED CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION

(Rupees in millions, except share and per share data, unless otherwise stated)

 

     As of March 31,     As of June 30,  
     2011     2011     2011  
                 Convenience
translation into
US$ in millions
 
ASSETS       

Goodwill

     54,818        60,460        1,356   

Intangible assets

     3,551        4,946        111   

Property, plant and equipment

     55,094        55,522        1,245   

Investment in equity accounted investee

     2,993        3,103        70   

Derivative assets

     2,984        3,432        77   

Non-current tax assets

     9,239        9,239        207   

Deferred tax assets

     1,467        1,773        40   

Other non-current assets

     8,983        9,993        224   
                        

Total non-current assets

     139,129        148,468        3,330   
                        

Inventories

     9,707        11,422        256   

Trade receivables

     61,627        68,391        1,534   

Other current assets

     19,744        24,584        551   

Unbilled revenues

     24,149        28,224        633   

Available for sale investments

     49,282        57,953        1,300   

Current tax assets

     4,955        5,532        124   

Derivative assets

     1,709        1,417        32   

Cash and cash equivalents

     61,141        50,752        1,138   
                        

Total current assets

     232,314        248,275        5,568   
                        

TOTAL ASSETS

     371,443        396,743        8,898   
                        
EQUITY       

Share capital

     4,908        4,911        110   

Share premium

     30,124        30,726        689   

Retained earnings

     203,250        216,599        4,858   

Share based payment reserve

     1,360        955        21   

Other components of equity

     580        1,183        27   

Shares held by controlled trust

     (542     (542     (12
                        

Equity attributable to the equity holders of the company

     239,680        253,832        5,693   

Non-controlling Interest

     691        751        17   
                        

Total equity

     240,371        254,583        5,709   
                        
LIABILITIES       

Long - term loans and borrowings

     19,759        20,217        453   

Deferred tax liabilities

     301        858        19   

Derivative liabilities

     2,586        2,230        50   

Non-current tax liability

     5,021        5,320        119   

Other non-current liabilities

     2,706        3,286        74   

Provisions

     81        101        2   
                        

Total non-current liabilities

     30,454        32,012        718   
                        

Loans and borrowings and bank overdrafts

     33,043        40,130        900   

Trade payables and accrued expenses

     44,052        46,135        1,035   

Unearned revenues

     6,595        6,845        154   

Current tax liabilities

     7,340        7,601        170   

Derivative liabilities

     1,358        1,181        26   

Other current liabilities

     5,906        6,141        138   

Provisions

     2,324        2,115        47   
                        

Total current liabilities

     100,618        110,148        2,470   
                        

TOTAL LIABILITIES

     131,072        142,160        3,188   
                        

TOTAL EQUITY AND LIABILITIES

     371,443        396,743        8,898   
                        

 

 

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WIPRO LIMITED AND SUBSIDIARIES

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF INCOME

(` in millions, except share and per share data, unless otherwise stated)

 

     Three months ended June 30,  
     2010     2011     2011  
                 Convenience
translation into
US$ in millions
 

Gross revenues

     71,906        84,929        1,905   

Cost of revenues

     (48,620     (60,021     (1,346

Gross profit

     23,286        24,908        559   

Selling and marketing expenses

     (5,387     (6,284     (141

General and administrative expenses

     (3,864     (4,383     (98

Foreign exchange gains/(losses), net

     458        711        16   

Results from operating activities

     14,493        14,952        335   

Finance expenses

     (403     (760     (17

Finance and other income

     1,351        2,192        49   

Share of profits of equity accounted investee

     157        110        2   

Profit before tax

     15,598        16,494        370   

Income tax expense

     (2,345     (3,096     (69
  

 

 

   

 

 

   

 

 

 

Profit for the period

     13,253        13,398        300   
  

 

 

   

 

 

   

 

 

 

Attributable to:

      

Equity holders of the company

     13,186        13,349        299   

Non-controlling interest

     67        49        1   
  

 

 

   

 

 

   

 

 

 

Profit for the period

     13,253        13,398        300   
  

 

 

   

 

 

   

 

 

 

Earnings per equity share:

      

Basic

     5.42        5.47        0.12   

Diluted

     5.42        5.44        0.12   

Weighted average number of equity shares used in computing earnings per equity share

      

Basic

     2,433,563,597        2,440,001,890        2,440,001,890   

Diluted

     2,434,085,523        2,453,938,371        2,453,938,371   

Additional Information

      

Segment Revenue

      

IT Services

     55,002        64,046        1,436   

IT Products

     8,320        10,058        226   

IT Services & Products

     63,322        74,104        1,662   

Consumer Care and Lighting

     6,414        7,545        169   

Others

     2,628        3,991        90   

Total

     72,364        85,640        1,921   

Operating Income

      

IT Services

     13,572        14,067        315   

IT Products

     337        423        9   

IT Services & Products

     13,909        14,490        325   

Consumer Care and Lighting

     894        895        20   

Others

     (311     (433     (10

Total

     14,493        14,952        335   

Reconciliation of adjusted Non-GAAP profit to profit as per IFRS

      

Profit for the period attributable to Equity holders of the Company

     13,186        13,349        299   

Adjustments:

      

Accelerated amortization of stock options that vest in a graded manner

     (122     (173     (4
  

 

 

   

 

 

   

 

 

 

Non-GAAP adjusted profit

     13,064        13,176        295   
  

 

 

   

 

 

   

 

 

 

Reconciliation of Non-GAAP Constant Currency IT Services Revenue to IT Services Revenue as per IFRS ($MN)

  

IT Services Revenue as per IFRS

     1,408       

Effect of Foreign currency exchange movement

     12       

Non-GAAP Constant Currency IT Services Revenue based on previous quarter exchange rates

     1,396       

IT Services Revenue as per IFRS

     1,408       

Effect of Foreign currency exchange movement

     53       

Non-GAAP Constant Currency IT Services Revenue based on previous year exchange rates

     1,355       

 

 

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