Wipro

Dear Fellow Stakeholders,
 
 The world, at lightning speed, continues to globalize and become
 interdependent. For those among us who had not quite appreciated the
 depth of this change, the 2008 global economic crisis drove home this
 message forcefully. Initially the experts believed that India and
 China, the two fastest growing and the most populous economies in the
 world, would be to a large extent insulated from this meltdown. As the
 subsequent events have shown, this belief was erroneous.
 
 The IT industry was no exception to this meltdown. Customers across all
 geographies and industries have been impacted and have moved quickly to
 re-prioritize and, re-focus on short-term survival resulting in a much
 lower growth for the industry than seen in recent years. Although the
 industry faced the brunt of budget freezes and cost cutting, leading to
 spending thaws in the short-run, the situation does appear to have
 stabilized in the last
 
 three months. We believe strongly in the fundamentals and the
 resilience of the IT industry and are confident that it will rebound
 from these short-term set-backs, better and stronger as it did
 successfully from the after-math of 2001.
 
 Despite this unprecedented and challenging environment, Wipro has
 performed admirably for the year 2008-09:
 
 - 28%YoY growth in Revenues at Rs 255 billion
 
 - 25%YoY growth in Profit Before Interest and Taxes at Rs 44 billion
 
 - 18.5%YoY revenue growth in US dollar, 22% growth in constant currency
 and 31% growth in Indian Rupee in our IT Services business
 
 - 19% YoY Profit After Tax growth. Profit for the year was Rs.39
 billion
 
 - Cash flow from Operations was Rs.36 billion, which is 92% of the
 Profit After Tax.
 
 We have performed better than our guidance in every quarter; which
 further reinforces the strength and diversity of our business model and
 our ability to grasp customer needs. Our strategy to limit
 over-exposure to a single Customer or a Vertical or a Service Line or
 Geography has proved a great advantage. This further reinforces our
 view that a business portfolio should deliver in both good and bad
 times and not just in one environment. Our relative performance was at
 the top end of the industry. Our other businesses, namely Consumer Care
 and Infrastructure Engineering, also were industry front- runners,
 leading growth and gaining market share across various segments.
 
 The year will also be remembered for several path-breaking deals in the
 Indian domestic IT space, where Wipro conclusively cemented its
 leadership position in several industry Verticals, partnering with
 leading Indian customers in their transformation to take on current
 developments. We believe our continued focus and investments in
 building capabilities are bearing fruit, and the domestic IT spends are
 on an upward trajectory, as Indian companies continue to increase
 spends aggressively.
 
 Tough times are good times
 
 Today, the cyclical nature of the global economy is a reality we have
 learnt to live with. Year 2008 saw the end of the expansion phase. The
 impact was visible in the real economy, the financial markets and the
 policy options available to the regulators. As the global economic
 growth gradually slowed to near zero levels, the hardest hit were the
 advanced economies.
 
 The end ofY2K saw the Financial Services customers expand their
 Offshore footprint. Likewise, the economic slowdown of the early 2000s
 led other industries to embrace Outsourcing in a big way. Our ability
 to grow aggressively during these years, has demonstrated our ability
 to re-invent ourselves and invest for the future, while continuing to
 serve the immediate concerns of our customers. In a similar way, the
 current phase, too, requires us to reinvent and address the new and
 immediate challenges that these tough times pose to our customers, as
 we judiciously invest for better times ahead.
 
 Our Strategy for the year 2009-10 builds on the three key choices we
 have made- one, Enhancing Customer Value; two, Enhancing Operational
 Efficiencies and three, Embracing Green.
 
 Three Key Choices
 
 I. Enhancing Customer Value - More for More
 
 Growth markets have customers asking more for more. They see
 opportunities ahead and have access to resources. Looking at a longer
 time horizon, they are willing to invest in building strong businesses.
 As the economic environment changes, the customer mindset shifts to a
 shorter timeframe, and they want same for less and some are even
 willing to settle at less for less. It is in this context, that we
 have made the choice to provide customers with More for More. We will
 provide them with more value and in return, place favorably for a
 bigger share of their wallet.
 
 We will deliver value to our Customers through a comprehensive
 portfolio of Services that meets the entire lifecycle needs of a
 business. Consulting, Business Process Outsourcing, Package
 Implementation, Bespoke Applications, Testing and Technology
 Infrastructure Services can be provided individually to a customer, or
 provide the customer with a Solution that answers their business
 challenge, as we are increasingly doing. The difference between
 providing a suite of services and offering a Business Solution lies in
 the domain expertise, revenue models and risk management systems along
 with overall program management. While the Customers gain by having
 access to a scalable, variable cost model with a best in class
 solution, we benefit by building stronger, deeper and long lasting
 partnerships with our Customers.
 
 Our effort in building Global Program -Transformational Outsourcing
 capabilities will stand us in good stead even when the economy changes
 gears and customer budgets start to grow. The advent of emerging
 technologies like Cloud Computing and SaaS (Software as a Service) will
 make configurable, multi-tenant and scalable IT infrastructure not just
 a potential option, but a critical technological necessity.  Customers
 who have moved to Solution oriented relationships from buying
 individual service offerings, will be better positioned to harvest the
 benefits of new technologies.
 
 2.  Enhancing Operational Efficiency - More for Less
 
 Global Delivery Model drives execution efficiency. Today, as Global
 Service Providers adopt Offshore led Outsourcing,the leaders need to
 constantly innovate. Our innovations in Flex Delivery and Shared
 Services Delivery models for Software maintenance and support, puts us
 ahead in this effort.
 
 We are conscious that we need to invest in, develop and refine
 innovative delivery models. We need to do both, optimize the service
 blend of Offshore, Nearshore, and Onsite services as well as enhance
 the productivity of each and every team member Thats the only way to
 ensure that our customers get More for Less.
 
 3.  Embrace Green - Less for Less
 
 The current economic crisis has sharply brought back the focus on cost
 efficiency . Cost reduction or containment is another variant of the
 Refuse, Reduce and Reuse approach which the Green strategy
 emphasizes. Energy for powering and cooling the assets is a significant
 portion of operating expense for organizations. Our initiative of Green
 IT aims to reduce and optimize energy consumption in using IT assets,
 especially data centers that account for the bulk of energy
 consumption. While data centers account for a major share of energy
 consumption amongst the IT assets, globally IT assets, by themselves,
 form only a minor portion of the GHG emissions. The larger portion is
 outside the ambit of IT assets.
 
 Today , almost every part of human activity or industry is touched by
 IT services. This provides us a huge opportunity to use IT solutions to
 enable, track, report and control GHG emissions. It allows us to build,
 design and manage smart grids, green supply chains and build simulation
 models that can enable a greener world.
 
 For us, Green IT and IT for Green are not mere Service Lines providing
 financial returns, it is also our contribution to the survival of our
 planet. This is one area where we want to draw less from the
 environment and give back solutions which are less energy intensive.
 Our desire is to contribute to maximum well being with minimum of
 consumption.
 
 Two Essentials Values
 
 Our strategy is adaptable and changes with the environment, but we have
 a strong and non negotiable foundation built over the last six decades.
 Our strategy walks on the two strong legs - our respect for the
 individual and a transparent Governance system.
 
 Today, we have almost a 100,000 strong workforce in Wipro. As we grow
 larger; it is critical that we have an institutionalized process to
 ensure that the individual is respected and that our transparent
 governance system is not compromised Our well articulated Value
 System,The Spirit of Wipro, is communicated extensively to all the
 employees and other stakeholders. We ensure that our Value system goes
 beyond talk, by taking periodic feedback from employees on its
 adherence. We complement it with a vibrant and effective Ombuds
 process. This process provides a simple, confidential and trusted
 route, to report any perceived violations or misalignments to our
 articulated Values due to any organizational or employee action.
 
 Any Ombusds process is only as effective as the openness with which it
 is embraced by the organization and its employees. The vibrancy of our
 system and the action taken status is reported in our Sustainability
 Report 2008-09, published in March 2009.
 
 One Goal
 
 Wipro is a six decade young, strong and learning organization.  Our
 rich experiences are embedded in our organizational systems, policies
 and processes. We have consistently reinvented ourselves by keeping the
 needs of our customers at the center and working towards creating value
 for all our other stakeholders.
 
 As we start the year, we are conscious of our goal and the means to
 achieve it: for Wipro to be a Young, Strong and Learning organization,
 we need to deliver value to all our stakeholders, value that is
 superior on a relative basis and significant on an absolute scale. We
 have done it in the past and will better it.
 
                                                            Regards,
                                                         Azim Premji 
                                                            Chairman
 
 June 16,2009