On behalf of the Board of Directors, I am happy to present the 65th
Directors Report of your Company along with the Balance Sheet and
Profit and Loss Account for the year ended March 31, 2011.
Financial Performance
Key aspects of consolidated fnancial performance for Wipro and its
group companies and standalone fnancial results for Wipro Limited for
the fnancial year 2010-11 are tabulated below:
(Rs. in Mn)
Consolidated Standalone
2010-11 2009-10 2010-11 2009-10
Sales and Other
income 316,938 276,505 269,038 237,887
Profit before Tax 62,348 55,095 57,055 56,888
Provision for Tax 9,695 9,163 8,618 7,908
Minority interest
and equity in
earnings/(losses) in
afliates 271 378 - -
Profit for the year* 52,924 46,310 48,437 48,980
Appropriations
Interim Dividend 4,908 - 4,908 -
Proposed Dividend
on equity shares 9,818 8,809 9,818 8,809
Corporate tax
on distributed
dividend 2,204 1,283 2,204 1,283
Transfer to General
Reserve 4,844 36,218 4,844 38,888
Balance retained
in Profit & Loss
account 31,150 - 26,663 -
* Profit for the year in standalone result is after Rs. 326 million (March
2010: Rs. 4,534 million of gains/(losses) relating to changes in fair
value of forward contracts designated as hedges of net investment in
non-integral foreign operations, translation of foreign currency
borrowings and changes in fair value of related cross currency swaps
together designated as hedges of net investment in non-integral foreign
operations. In the consolidated Accounts, these are considered as
hedges of net investment in non-integral foreign operations and are
recognized directly in shareholders funds. (Refer note 6 on page 112)
Global and Industry outlook
According to NASSCOM Strategic Review 2011, IT spend in 2011 is
expected to grow about 4%. It is expected that in 2011, there will be
increased use of Cloud and Mobile Computing. IT Services is expected to
grow by about 3.5% in 2011 and 4.5% in 2012. Organisations will look
for alternative IT models like Cloud, On-demand Services, SaaS, etc, –
in order to reduce hardware infrastructure costs and achieve
scalability on demand.
The Forrester US and Global IT market Outlook Q3, 2010- 11 predicts
that U.S. IT market will grow by 6.6% in 2011. Companies are
increasingly turning to Ofshore Technology Service providers in order
to meet their needs for high quality, cost competitive technology
solutions. As a result, spending in several IT categories is expected
to expand.
Subsidiary Companies
The Ministry of Corporate Afairs, Government of India, has granted a
general exemption under section 212(8) of the Companies Act, 1956 from
the requirement to attach detailed fnancial statements of each
subsidiary. In compliance with the exemption granted, we have presented
in page 163 & 164 summary fnancial information for each subsidiary.
The detailed fnancial statements and audit reports of each of the
subsidiaries are available for inspection at the registered ofce of the
company during ofce hours between 11 am to 1 pm and upon written
request from a shareholder, your company will arrange to send the
fnancial statements of subsidiary companies to the said shareholder.
Consolidated Results
Our Sales for the current year grew by 15% to Rs.. 316,938 million and
our Profit for the year was Rs. 52,924 million, recording an increase of
14% over the previous year. Over the last 10 years, our Sales and Profit
after Tax have grown at a CAGR (compounded annual growth rate) of 26%
and 23% respectively.
Dividend
Your Directors recommend a fnal Dividend of 200% (Rs. 4/- per equity
share of Rs. 2/- each) to be appropriated from the Profits of the year
2010-11, 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 2010-11, unclaimed dividend of Rs. 1,37,605/- was
transferred to the Investor Education and Protection Fund, as required
under the Investor Education and Protection Fund (Awareness and
Protection of Investor) Rules, 2001.
Interim Dividend
Pursuant to the approval of Board of Directors on January 21, 2011,
your company had distributed an interim dividend of Rs. 2/- per share, of
face value of Rs. 2/- each, to shareholders, who were on the Register of
Members of the company as at closing hours of January 28, 2011, being
the record date fixed by the Board of Directors for this purpose.
Issue of Bonus equity shares/American Depository Shares
In terms of approval of the shareholders of the company through Postal
Ballot pursuant to Section 192 A(2) of the Companies Act, 1956 read
with the companies (Passing of the Resolutions by Postal Ballot) on
June 4, 2010, the Company had allotted Bonus equity shares of Rs. 2/-
each in the ratio of 2:3 (two bonus shares for every three shares held)
to the shareholders of the Company who were on the Register of Members
of the Company as on June 16, 2010, being the Record Date fixed by the
Board of the Directors of the Company for this purpose.
Mergers and Acquisitions
During the year, the Company re-structured a few of its subsidiaries
including overseas subsidiaries through merger/ other legal process.
Wipro Yardley Consumer Care Private Limited, a subsidiary Company got
merged with Wipro Limited w.e.f. April 1, 2010, being the Appointed
Date.
Investments in direct subsidiaries
During the year under review, your Company had invested an aggregate of
USD 34 Mn as equity in its direct subsidiaries i.e. Wipro Cyprus
Private Limited, Wipro Inc, Wipro Holdings Mauritius Limited and Wipro
Infrastructure Engineering Machinery (Changzhou) Co., Ltd. Apart from
this, your Company had funded its subsidiaries, from time to time, as
per the fund requirements, through loans, guarantees and other means.
Corporate Governance & Corporate Social Responsibility
Your company believes that Corporate Governance is the basis of
stakeholder satisfaction. Your companys governance practices are
described separately in page 63 of this annual report. Your company has
obtained a certifcation from V. Sreedharan & Associates, Company
Secretaries on compliance with clause 49 of the listing agreement with
Indian Stock Exchanges. This certifcate is given in page 92.
With a view to strengthen the Corporate Governance framework, the
Ministry of Corporate Afairs has incorporated certain provisions in the
Companies Bill 2009. The Ministry of Corporate Afairs has also issued a
set of Voluntary Guidelines on Corporate Governance and Corporate
Social Responsibility in December 2009 for adoption by companies. The
Guidelines broadly outline conditions for appointment of directors,
guiding principles to remunerate directors, responsibilities of the
Board, Risk Management, rotation of audit partners, audit frms and
conduct of secretarial audit and other Corporate Governance and
Corporate Social Responsibility related disclosures. Your Company has
by and large complied with various requirements and is in the process
of initiating appropriate action for other applicable requirements.
Corporate Governance is also related to Innovation and strategy as the
organizations ideas of Innovation and strategies are driven to enhance
stakeholder satisfaction.
Personnel
The particulars of employees as required by Section 217 (2A) of the
Companies Act, 1956, read with the Companies (Particulars of Employee)
Rules, 1975 as amended have been provided as Annexure C to this
report.
Wipro Employee Stock Option Plans (WESOP) / Restricted Stock Unit Plans
Information relating to stock options program of the Company is
provided as Annexure B of this report. 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 1% of the issued
capital of the Company at the time of grant.
Foreign Exchange Earnings and Outgoings
During the year, your company has earned foreign exchange of Rs. 183,771
million and the outgoings in foreign exchange were Rs. 85,642 million,
including outgoings on materials imported and dividend.
Research and Development
Requirement under Rule 2 of Companies (Disclosure of particulars in the
report of Board of Directors) Rules, 1988 regarding Technical
Absorption and Research and Development in Form B is given in Page 54
of the Annual Report, to the extent applicable.
Conservation of Energy
The Company has taken several steps to conserve energy through its “Eco
Eye and Sustainability” initiatives disclosed separately as part of
this Annual Report. 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 Annexure A in page 53 of this
annual report.
Directors:
(A) Appointment
1. Mr. T. K. Kurien was appointed as an Additional Director of the
Company with effect from February 1, 2011 in accordance with Section
260 of the Companies Act, 1956, by the Board of Directors at its
meeting held on January 21, 2011. Mr. T. K. Kurien will hold ofce till
the date of the Annual General Meeting of the Company scheduled to be
held on July 19, 2011. The requisite notices together with necessary
deposits have been received from a member pursuant to Section 257 of
the Companies Act, 1956 proposing the election of Mr. T.K. Kurien as a
Director of the Company. Accordingly, necessary resolution has been
included in the notice for calling Annual General Meeting, for his
appointment as a Director (designated as CEO (IT Business) and
Executive Director).
2. Mr. M.K. Sharma was appointed as an Additional Director of the
Company in accordance with Section 260 of the Companies Act, 1956, by
the Board of Directors with efect from July 1, 2011. The Additional
Director would hold ofce till the date of Annual General Meeting of the
Company scheduled to be held on July 19, 2011. The requisite notices
together with necessary deposits have been received from a member
pursuant to section 257 of the Companies Act, 1956 proposing the
election of Mr. M. K. Sharma, as a Director.
(B) Re-appointment
Articles of Association of the Company provide that at least two- third
of our Directors shall be subject to retirement by rotation. One third
of these retiring Directors must retire from ofce at each Annual
General Meeting of the shareholders. A retiring Director is eligible
for reelection. Mr. Suresh C Senapaty, Mr William Arthur Owens and Mr B
C Prabhakar retire by rotation and being eligible ofer themselves for
reappointment at the ensuing Annual General Meeting. The Board
Governance and Nomination Committee have recommended their
re-appointment for consideration of the Shareholders.
Board of Directors vide circular resolution of June 15, 2011,
re-appointed Mr. Azim H Premji as Chairman and Managing Director of the
Company (designated as “Chairman”) for a further period of two years
with efect from July 31, 2011. This re-appointment is subject to the
approval of the shareholders of the Company at the ensuing Annual
General Meeting.
(C) Cessation
During the year 2010-11 Mr. Girish S Paranjpe and Mr. Suresh Vaswani
resigned as Board members of the company with efect from closure of
business hours on January 31, 2011.
The Board places on record the valuable contributions of Mr. Girish S
Paranjpe and Mr. Suresh Vaswani during their tenure as Directors 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 32
through 48 of this annual report.
Re-appointment of Statutory Auditor
The auditors, M/s. BSR & Co., Chartered Accountants, retire at the
ensuing Annual General Meeting and have confrmed their eligibility and
willingness to accept ofce, 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 Ministry of Corporate Afairs for
appointment of Cost Auditors, your Board of Directors has re-appointed
M/s. P.D. Dani & Co., Cost Accountants, as the Cost Auditor for the
year ended March 31, 2012.
The Cost Audit report for the year ended March 31, 2010 was due on
September 30, 2010 and was fled by the cost Auditor on August 25, 2010.
Fixed Deposits
Your company has not accepted any fixed deposits. Hence, there is no
outstanding amount as on the Balance Sheet date.
Green Initiatives in Corporate Governance
Ministry of Corporate Afairs has recently permitted companies to send
electronic copies of Annual Report, notices etc., to the e-mail IDs of
shareholders. We have accordingly arranged to send the soft copies of
these documents to the e-mail IDs of shareholders wherever applicable.
In case any of the shareholder would like to receive physical copies of
these documents, the same shall be forwarded on written request to the
Registrars M/s. Karvy Computer Share Private Limited.
Directors Responsibility Statement
On behalf of the Directors I confrm that as required under Section 217
(2AA) of the Companies Act, 1956.
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 afairs of the
Company at the end of the fnancial year and of the Profits of the
Company for the period;
c) We have taken proper and sufcient 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.
Acknowledgements and Appreciation
Your Directors take this opportunity to thank the customers,
shareholders, suppliers, bankers, business partners/associates,
fnancial institutions and Central and State Governments for their
consistent support and encouragement to the Company. I am sure you
will join our Directors in conveying our sincere appreciation to all
employees of the Company for their hard work and commitment. Their
dedication and competence has ensured that the Company continues be a
signifcant and leading player in the IT services industry.
For and on behalf of the Board of Directors
Azim H. Premji,
Chairman
Bangalore, June 17, 2011
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