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Wipro Directors Report, Wipro Reports by Directors

Wipro

BSE: 507685  |  NSE: WIPRO  |  ISIN: INE075A01022  |  Computers - Software

Explore Wipro connections « Mar 07
Directors Report Year End : Mar '08
I am happy to present on behalf of the Board of Directors, the
 Directors Report for the year ended March 31, 2008, along with the
 Balance Sheet and Profit and Loss Account for the year.
 
 Financial Performance
 
 Key aspects of your Companys consolidated financial performance for
 Wipro and its group companies and standalone financial results for
 Wipro Limited for the year 2007-08 are tabulated below :
 
                                                    (Rs. in Million)
 
 Consolidated                                           Parent
 
                                           2008    2007    2008     2007
 
 Sales and Other Income                  201,970 152,714 178,195 139,526
 Profit before Tax                        17,070  32,988  34,697  31,762
 Provision for Tax                         4,550   3,868   4,064   3,341
 Minority interest and equity 
 in earnings/(losses) in affiliates          109     301       -       -
 Profit for the year                      12,829  29,421  30,633  28,421
 Appropriations
 Interim Dividend                          2,919   7,278   2,919   7,278
 Proposed Dividend on equity shares        5,846   1,459   5,846   1,459
 Corporate Tax on distributed dividend     1,489   1,268   1,489   1,268
 Transfer to General Reserve              22,575  19,456  20,379  18,416
 
 Amalgamation of Companies
 
 The Scheme of Amalgamation for merger of Wipro Infrastructure
 Engineering Limited, Wipro Healthcare IT Limited, Quantech Global
 Services Limited (subsidiary companies) with Wipro Limited was approved
 during the financial year 2007-08 by the Honourable High Court of
 Karnataka and the Honourable High Court of Andhra Pradesh.
 
 The Scheme of Amalgamation for merger of mPact Technology Services
 Private Limited, mPower Software Services (India) Private Limited and
 cMango India Private Limited (step subsidiary companies) with Wipro
 Limited was approved during the financial year 2007-08 by the
 Honourable High Court of Karnataka and the Honourable High Court of
 Bombay.
 
 Pursuant to filing of certified copies of orders of the High Court of
 Karnataka, High Court of Bombay and High Court of Andhra Pradesh with
 the respective Offices of the Registrar of Companies, the above direct
 and step subsidiary companies of Wipro Limited are merged with Wipro
 Limited. The merger comes into effect from the Appointed
 
 Date i.e. April 1, 2007. The Annual Report of Wipro Limited for the
 year 2007 -08 has been prepared after giving effect to these
 amalgamations.
 
 Subsidiary Companies
 
 Your Company today is a global corporation having operations in more
 than 35 countries through more than 75 subsidiary companies, joint
 ventures and associate companies. Section 212 of the Companies Act,
 1956, requires that we attach the Directors Report, Balance Sheet and
 Profit and Loss Account of our subsidiary companies. We believe that
 the Consolidated Financial Statements present a more comprehensive
 picture rather than the standalone financial statements of Wipro
 Limited and each of its subsidiaries. We, therefore, applied to the
 Ministry of Corporate Affairs, Government of India and sought exemption
 from the requirement to present detailed financial statements of each
 subsidiary. The Ministry of Corporate Affairs, Government of India has
 granted the exemption. In compliance with the terms of the exemption we
 have presented in pages 85 through 87, summary financial information
 for each subsidiary. Summary financial information includes Share
 Capital, Reserves and
 
 Surplus, Total Assets, Total Liabilities, our holding in the
 subsidiary, Sales and other income, profit before taxation, provision
 for taxation, profit after taxation and proposed dividend. As permitted
 by SEB1 guidelines and Companies Act, 1956, we have included the
 abridged financial statements of Wipro Limited in this annual report.
 The detailed financial statements and audit reports of Wipro Limited
 and subsidiaries are available for inspection at the registered office
 of the Company and upon written request from a shareholder, we will
 arrange to deliver copies of the detailed financial statements.
 
 Consolidated Results
 
 Our Sales and other income for the current year grew by 34% to Rs.
 203,970 million and our Profit for the year was Rs. 32,829 million, an
 increase of 12% over the previous year. Over the last 10 years, our
 Sales have grown at a Compounded Annual Growth Rate (CAGR) of 31% and
 Profit after Tax at 41%.
 
 Dividend
 
 Your Directors declared an Interim Dividend of Rs. 2 per equity share
 of Rs. 2 each on October 19,2007- The record date for the purpose of
 payment of Interim Dividend was fixed as October 26, 2007 and was paid
 to our shareholders who were on the Register of Members as at the
 closing hours of October 26, 2007.
 
 Your Directors have recommended a final Dividend of Rs. 4 per equity
 share of Rs. 2 each to be appropriated from the profits of the year
 2007-08 subject to the approval of the shareholders at the ensuing
 Annual General Meeting. The Dividend will be paid in compliance with
 applicable regulations.
 
 During the year 2007-08, unclaimed dividend of Rs. 54,725 was
 transferred to the Investor Eduction and Protection Fund, as required
 by the Investor Education and Protection Fund (Awareness and Protection
 of Investor) Rules, 2001.
 
 Acquisitions and Joint Ventures
 
 We have continued to pursue the strategy of acquiring businesses which
 complement our service offerings, provide access to niche skill sets
 and expand our presence in select geographies. We have a dedicated team
 of professionals who identify businesses which meet our strategic
 requirements and are cultural fit to Wipro. The following businesses
 have joined the Wipro family during the year :
 
 1.  Acquired 100%o shareholding in Unza Holdings Limted (Unza), a
 Singapore based Fast Moving
 
 Consumer Goods (FMCG) company together with its subsidiaries for an all
 cash consideration of approximately USD 246 million. This transaction
 establishes our presence in market for personal care products in South
 East Asia. We have introduced some of these brands in India.
 
 2.  Acquired Infocrossing, Inc., a NASDAQ listed US-based provider of
 IT infrastructure management, enterprise application and business
 process outsourcing services, for an acquisition price of about USD 600
 million in an all cash deal.  This acquisition created one of the world
 leaders in end-to-end IT infrastructure management solutions.
 
 3.  We acquired OKI Techno Centre Singapore Pte.  Ltd.  (now called as
 Wipro Techno Centre
 
 Singapore Pte. Ltd.) in an all cash deal of USD 2.5 million. This
 acquisition facilitated a strategic partnership in the area of design
 services for the semiconductor market.
 
 4.  Wipro partnered with DAR Al-Riyadh Holding Co.  Limited to form a
 joint venture namely Wipro Arabia Limited. The purpose of this Joint
 Venture is to provide software application development, implementation
 and maintenance services, systems integration and data storage services
 in the Kingdom of Saudi Arabia.
 
 Wipros R&D Activities : 2007-08
 
 Wipros R&D focus has been to strengthen the portfolio of Centers of
 Excellence (CoE) and Innovation projects. As part of this focus, over
 600 people have been engaged across 60 CoEs and 40 Innovation projects.
 Our R&D efforts have contributed revenues of USD 368 million which is
 approximately 11% of our Global IT Services and Products revenue for
 the year.
 
 At Wipro, we have institutionalised the spirit of Innovation through
 our corporate Innovation initiative which began in 2000. We are now
 deriving business value from these investments.
 
 Apart from solutions that span across Process, Delivery, Business and
 Technology domains, we added portfolio of quantum innovation projects
 in financial year 2006-07 and in financial year 2007-08, we included
 talent supply chain management into the innovation initiative.
 
 Process Innovation
 
 We have pioneered the adoption of Lean & Six Sigma principles into
 software development life cycle. Lean techniques have been adopted in
 over 340 projects. This has resulted in 20-30% of productivity
 improvements and 15% saving in efforts involved and better schedule
 adherence.
 
 Delivery Innovation
 
 Innovations under this category include Software Factory model &.
 Global Command Centre (GCC) for standardised delivery of Application
 Development and IT Infrastructure Management respectively.
 
 Business Innovation
 
 Innovations under this category include solution frameworks and
 methodologies to develop industry specific solutions. Examples in this
 portfolio are Sub Daily Production Planning & Scheduling, Mobile
 Workforce Management, Warranty Management, Business Analytics and
 Platform BPO.
 
 Technology Innovation
 
 Innovations under this category include solutions with high
 Intellectual Property (IP) component, which can be delivered as a
 service thus giving the benefit of time to market for the customers.
 Examples include IP components for IEEE 1394, Wireless LAN (802.11
 a/b/g and the upcoming 802 A In), Bluetooth, Ultra Wide Band (UWB),
 Wireless USB, Arwdog/MixedSignallP cores and DTV middleware.
 
 Supply Chain Innovation
 
 These innovations are related to inputs which are brought into the
 organization. Within IT service context, talent is one of the key
 inputs. Innovation under this category includes Magnum Opus and
 Mission lOx. Magnum Opus is a distributed cost effective model to
 nurture young university talent pool across India by using open source
 environment. It was launched in 2006-07. Mission Wx is one of the
 Quantum Innovation projects to increase the employability of
 engineering graduates by promoting systemic changes to current
 teaching-learning paradigm in higher education system in India. It was
 formally launched on Teachers Day — September 5, 2007.
 
 Quantum Innovation
 
 At present we have 8 Quantum Innovation projects out of which 4 were
 initiated in 2006-07. Of these 8 projects, 6 are in different stages of
 prototype while for the remaining 2, breakthrough propositions are
 being evolved.
 
 Centers of Excellence (CoE)
 
 The goal of a CoE is to create competencies in emerging areas of
 technologies & industry and incubate new practices for business growth.
 We currently manage 60 CoEs across different technologies and industry
 verticals. Some examples of the CoE topics are SOA (Service Oriented
 Architecture), Virtualisation, Unified Communication, SaaS (Software as
 a Service), Data Privacy & Protection, IMS (IP multimedia subsystem),
 Remote Patient Monitoring, Image Processing, Supply Chain, Retail In-
 Store, Retail Pharmacy, Automotive, Open Source and Gaming.
 
 Patents
 
 Wipro has been granted 40 registered patents and has 62 pending
 applications. This includes 33 registered patents and 51 patent
 applications of OKI Techno Centre Singapore Pte. Limited (now called as
 Wipro Techno Centre Singapore Pte. Ltd.) acquired during the year.
 
 Corporate Governance
 
 We believe Corporate Governance is at the heart of Stakeholder value
 creation. Our governance practices are described separately in pages 21
 through 39 of this annual report. We have obtained a certification from
 a Practising Company Secretary on our compliance with Clause 49 of the
 listing agreement with Indian Stock Exchanges. This certificate is
 given in page 39.
 
 Personnel
 
 Our Company is presenting the abridged accounts under Section 219 of
 the Companies Act, 1956. Pursuant to the Rules and Forms read with
 Section 219 of the Companies Act, 1956, the particulars of employees as
 required by Section 217(2A) of the Companies Act, 1956, read with the
 Companies (Particulars of Employee) Rules, 1975) have not been
 provided. However, the particulars of employees as required by Section
 217 (2A) of the Companies Act, 1956,read with the Companies
 (Particulars of Employee) Rules, 1975, are available for inspection at
 the Registered Office of the Company and upon written request from a
 shareholder, we will arrange to deliver these details.
 
 Wipro Employee Stock Option Plans (WESOP)
 
 Information relating to stock options program of the Company is
 provided in pages 7 through 9. The information is being provided in
 compliance with Clause 12 of the Securities and Exchange Board of India
 (Employee Stock Option Scheme) and (Employee Stock Purchase Scheme)
 
 Guidelines, 1999, as amended. No employee was issued Stock Option,
 during the year equal to or exceeding l%of the issued capital of the
 Company at the time of grant.
 
 Foreign Exchange Earnings and Outgoings
 
 During the year our Company earned foreign exchange of Rs. 128,852
 million and used in foreign exchange of Rs. 52,028 million, including
 expenditure on materials imported, dividend.
 
 Conservation of Energy
 
 The information on Conservation of Energy required under Section 217(1
 )(e) of the Companies Act, 1956 read with Rule 2 of the Companies
 (Disclosure of Particulars in the Report of Board of Directors) Rules,
 1988 is provided in page 6 of this annual report.
 
 Directors
 
 a) Re-appointment
 
 Articles of Association of the Company provide that at least two-thirds
 of our Directors shall be subject to retirement by rotation. One-third
 of these retiring Directors must retire from office at each Annual
 General Meeting of the shareholders. A retiring Director is eligible
 for re-election. Dr. Ashok S. Ganguly and Mr. P. M. Sinha, retire by
 rotation and being eligible offer themselves for reappointment at this
 Annual General Meeting. The Board Governance and Compensation Committee
 have recommended their re- appointment for consideration of the
 Shareholders.
 
 b) Appointment
 
 Mr. Suresh C. Senapaty, Mr. Girish S. Paranjpe and Mr. Suresh Vaswani
 were appointed as Additional Directors of the Company, in accordance
 with Section 260 of the Companies Act, 1956, by the Board of Directors
 at its meeting held on April 18, 2008, with effect from that date.
 These Additional Directors would hold office till the date of the
 Annual General Meeting of the Company scheduled to be held on July
 17,2008. The requisite notices together with necessary deposits have
 been received from members pursuant to Section 257 of the Companies
 Act, 1956 proposing the election of Mr. Suresh C. Senapaty, Mr.  Girish
 S. Paranjpe and Mr. Suresh Vaswani as Directors of the Company at the
 ensuing Annual General Meeting of the Company.
 
 Managements Discussion and Analysis Report
 
 The Managements Discussion and Analysis on Companys performance -
 industry trends and other material changes with respect to the Company
 and its subsidiaries, wherever applicable are presented on pages 10
 through 18 of this annual report.
 
 Re-appointment of Statutory Auditor
 
 The auditors, M/s. BSR 6k Co., Chartered Accountants, retire at the
 ensuing Annual General Meeting and have confirmed their eligibility and
 willingness to accept office, if re-appointed. The proposal for their
 re-appointment is included in the notice for Annual General Meeting
 sent herewith.
 
 Re-appointment of Cost Auditor
 
 Pursuant to the direction from the Department of Corporate Affairs for
 appointment of Cost Auditors, your Board of Directors have re-appointed
 M/s. P. D. Dani 6k Co., as the Cost Auditor for the financial year
 ending March 31, 2009.
 
 Fixed Deposits
 
 We have not accepted any fixed deposits. Hence, there is no outstanding
 amount as on the Balance Sheet date.
 
 Acknowledgements and Appreciation
 
 Your Directors take this opportunity to thank the customers,
 shareholders, suppliers, bankers, financial institutions and Central
 and State Governments for their consistent support to the Company. The
 Directors also wish to place on record their appreciation of the hard
 work, dedication and commitment of the employees. The enthusiasm and
 unstinting efforts of the employees has enabled the Company to continue
 to be a leader in all its businesses.
 
 Directors Responsibility Statement
 
 On behalf of the Directors, I confirm that:
 
 a) In the preparation of the annual accounts, the applicable accounting
 standards have been followed and that no material departures are made
 from the same;
 
 b) We have selected such accounting policies and applied them
 consistently and made judgements and estimates that are reasonable and
 prudent so as to give true and fair view of the state of affairs of the
 Company at the end of the financial year and of the profits of the
 Company for the period;
 
 c) We have taken proper and sufficient care for the maintenance of
 adequate accounting records in accordance with the provisions of the
 Companies Act, 1956 for safeguarding the assets of the Company and for
 preventing and detecting fraud and other irregularities; and
 
 d) We have prepared the annual accounts on a going concern basis.
 
                             For and on behalf of the Board of Directors
 
                                              Azim H. Premji
                                                  Chairman
 
 Bangalore, June  19, 2008
Source : Religare Technova

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