EX-19.1 2 f34894exv19w1.htm EXHIBIT 19.1

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				2007				2006				2007
SOURCES OF FUNDS
SHAREHOLDERS’ FUNDS
Share capital			1				2,919				2,869				2,918
Share application money pending allotment							36				61				35
Reserves and surplus			2				104,499				79,772				93,042
							107,454				82,702				95,995
LOAN FUNDS
Secured loans			3				2,792				715				1,489
Unsecured loans			4				26,512				337				2,338
							29,304				1,052				3,827
Minority Interest							117				—				29
							136,875				83,754				99,851
APPLICATION OF FUNDS
FIXED ASSETS
Goodwill [refer note 19(8), (9), (13),& (14)]							41,309				7,899				9,477
Gross block			5				49,492				30,767				37,287
Less: Accumulated depreciation							24,198				15,526				18,993
Net block							25,294				15,241				18,294
Capital work-in-progress and advances							10,818				7,409				10,191
							77,421				30,549				37,962
INVESTMENTS			6				24,301				33,550				33,249
DEFERRED TAX ASSET (NET)							643				440				590
CURRENT ASSETS, LOANS AND ADVANCES
Inventories			7				5,935				2,426				4,150
Sundry debtors			8				33,385				25,437				29,007
Cash and bank balances			9				20,488				4,144				19,822
Loans and advances			10				26,358				20,738				17,454
							86,166				52,745				70,433
Less: CURRENT LIABILITIES AND PROVISIONS
Liabilities			11				41,445				23,803				34,350
Provisions			12				10,211				9,727				8,033
							51,656				33,530				42,383
NET CURRENT ASSETS							34,510				19,215				28,050
							136,875				83,754				99,851
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 BSR & Co.		Azim Premji		B C Prabhakar
Chartered Accountants		Chairman		Director
Zubin Shekary		Suresh C Senapaty		V Ramachandran
Partner		Executive Vice President		Company Secretary
Membership No. 48814		& Chief Financial Officer
Bangalore
October 19, 2007

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF WIPRO LIMITED AND SUBSIDIARIES

CONDENSED CONSOLIDATED PROFIT AND LOSS ACCOUNT

																		(Rs. in Million except share data)
						Quarter ended September 30,								Six months ended September 30,								Year ended Mar 31,
		Schedule				2007				2006				2007				2006				2007
INCOME
Gross sales and services							48,003				35,982				90,759				67,652				151,330
Less: Excise duty							429				406				825				620				1,348
Net sales and services							47,574				35,576				89,934				67,032				149,982
Other income			13				1,262				694				1,934				1,172				2,732
							48,836				36,270				91,868				68,204				152,714
EXPENDITURE
Cost of sales and services			14				33,303				24,215				63,118				45,389				102,420
Selling and marketing expenses			15				3,374				2,263				6,255				4,375				9,547
General and administrative expenses			16				2,643				1,798				4,687				3,265				7,635
Interest			17				330				34				461				36				124
							39,650				28,310				74,521				53,065				119,726
PROFIT BEFORE TAXATION							9,186				7,960				17,347				15,139				32,988
Provision for taxation including fringe benefit tax							1,046				1,050				2,050				2,090				3,868
Profit before minority interest / share in earnings of associates:							8,140				6,910				15,297				13,049				29,120
Minority interest							1				—				3				—				6
Share in earnings of associates							96				92				193				157				295
PROFIT FOR THE PERIOD							8,237				7,002				15,493				13,206				29,421
Appropriations
Interim dividend							2,919				—				2,919				—				7,238
Proposed dividend							—				—				—				—				1,459
Tax on dividend							496				—				496				—				1,268
TRANSFER TO GENERAL RESERVE							4,822				7,002				12,078				13,206				19,456
EARNINGS PER SHARE — EPS
Equity shares of par value Rs. 2/- each
Basic (in Rs.)							5.68				4.91				10.68				9.29				20.62
Diluted (in Rs.)							5.65				4.84				10.63				9.15				20.41
Number of shares for calculating EPS
Basic							1,451,197,279				1,424,691,434				1,451,197,279				1,422,047,916				1,426,966,318
Diluted							1,457,143,452				1,445,598,654				1,457,861,033				1,443,393,468				1,441,469,652
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 BSR & Co.		Azim Premji		B C Prabhakar
Chartered Accountants		Chairman		Director
Zubin Shekary		Suresh C Senapaty		V Ramachandran
Partner		Executive Vice President		Company Secretary
Membership No. 48814		& Chief Financial Officer
Bangalore
October 19, 2007

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF WIPRO LIMITED AND SUBSIDIARIES

CONDENSED CONSOLIDATED CASH FLOW STATEMENT

																		(Rs. in Million)
		Quarter Ended September 30,								Six months ended September 30,								Year Ended
		2007				2006				2007				2006				March 31, 2007
A. Cash flows from operating activities:
Profit before tax			9,186				7,960				17,347				15,139				32,988
Adjustments:
Depreciation and amortization			1,246				982				2,421				1,877				3,978
Amortisation of stock compensation			286				448				572				596				1,078
Unrealised exchange differences — net			(671	)			(24	)			(1,108	)			354				457
Interest on borrowings			330				34				461				36				125
Dividend / interest — net			(790	)			(493	)			(1,437	)			(880	)			(2,118	)
(Profit) / Loss on sale of investments			(199	)			(53	)			(550	)			(175	)			(588	)
Gain on sale of fixed assets			(6	)			(4	)			(165	)			(5	)			(10	)
Working capital changes :
Trade and other receivable			(3,642	)			(3,005	)			(4,738	)			(4,316	)			(7,358	)
Loans and advances			(861	)			(247	)			(1,823	)			(955	)			(283	)
Inventories			(836	)			(118	)			(855	)			(361	)			(1,120	)
Trade and other payables			5,450				2,289				3,936				2,932				5,156
Net cash generated from operations			9,493				7,770				14,061				14,243				32,304
Direct taxes paid			(1,410	)			(1,156	)			(2,674	)			(1,760	)			(4,252	)
Net cash generated by operating activities			8,083				6,614				11,387				12,483				28,052
B. Cash flows from investing activities:
Acquisition of property, fixed assets plant and equipment (including advances)			(3,336	)			(2,827	)			(6,315	)			(6,215	)			(13,005	)
Proceeds from sale of fixed assets			91				154				323				183				149
Purchase of investments			(67,472	)			(19,118	)			(99,845	)			(46,959	)			(123,579	)
Proceeds on sale / from maturities on investments			70,098				22,194				109,536				44,569				122,042
Intercorporate deposit			(100	)			—				50				—				(650	)
Net payment for acquisition of businesses			(26,323	)			(602	)			(26,388	)			(4,153	)			(6,608	)
Dividend / interest income received			790				492				1,292				880				2,118
Net cash generated by / (used in) investing activities			(26,252	)			295				(21,347	)			(11,696	)			(19,533	)
C. Cash flows from financing activities:
Proceeds from exercise of employee stock option			7				815				56				2,649				9,458
Share application money pending allotment			36				29				36				61				35
Interest paid on borrowings			(330	)			(34	)			(461	)			(36	)			(125	)
Dividends paid (including distribution tax)			(1,706	)			(8,125	)			(9,215	)			(8,125	)			(8,875	)
Repayment of borrowings / loans			(17,125	)			(3,452	)			(20,102	)			(3,510	)			(5,915	)
Proceeds of borrowings / loans			39,625				3,653				40,272				3,452				7,882
Proceeds from issuance of shares by subsidiary			—				—				55				—				35
Net cash generated by / (used in) financing activities			20,507				(7,114	)			10,641				(5,509	)			2,495
Net (decrease) / increase in cash and cash equivalents during the period			2,338				(205	)			681				(4,722	)			11,014
Cash and cash equivalents at the beginning of the period			18,181				4,347				19,822				8,858				8,858
Effect of translation of cash balance			(31	)			2				(15	)			7				(50	)
Cash and cash equivalents at the end of the period			20,488				4,144				20,488				4,144				19,822

As per our report attached		for and on behalf of the Board of Directors
for BSR & Co.		Azim Premji		B C Prabhakar
Chartered Accountants		Chairman		Director
Zubin Shekary		Suresh C Senapaty		V Ramachandran
Partner		Executive Vice President		Company Secretary
Membership No. 48814		& Chief Financial Officer
Bangalore
October 19, 2007

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,
		2007				2006				2007
SCHEDULE 1 SHARE CAPITAL
Authorised capital
1,650,000,000 (2006 & 2007: 1,650,000,000) equity shares of Rs. 2 each			3,300				3,300				3,300
25,000,000 (2006 & 2007: 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
1,459,261,169 (2006: 1,434,563,895, 2007: 1,458,999,650) equity shares of Rs. 2 each [refer note 19 (2)]			2,919				2,869				2,918
			2,919				2,869				2,918

		As of September 30,								As of March 31,
		2007				2006				2007
SCHEDULE 2 RESERVES AND SURPLUS
Capital reserve
Balance brought forward from previous period			47				47				47
			47				47				47
Securities premium account
Balance brought forward from previous period			24,530				14,378				14,378
Add: Exercise of stock options by employees			98				2,780				10,152
			24,628				17,158				24,530
Translation reserve
Balance brought forward from previous period			(247	)			(111	)			(111	)
Movement during the period			(605	)			87				(136	)
			(852	)			(24	)			(247	)
Restricted stock units reserve
Employee Stock Options Outstanding			5,046				6,051				5,273
Less: Deferred Employee Compensation Expense			3,560				5,000				4,351
			1,486				1,051				922
General reserve
Balance brought forward from previous period			67,790				48,357				48,357
Additions [refer note 19 (3)]			10,702				13,183				19,433
			78,492				61,540				67,790
Unrealised gains on cash flow hedges, net			698				—				—
Summary of reserves and surplus
Balance brought forward from previous period			93,042				63,201				63,202
Additions			12,062				16,571				29,977
Deletions			(605	)			—				(137	)
			104,499				79,772				93,042

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF WIPRO LIMITED AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEET

										(Rs. in Million)
		As of September 30,								As of March 31,
		2007				2006				2007
SCHEDULE 3 SECURED LOANS
Term loans1,2			1,961				370				698
Cash credit facility1			539				345				791
Others2			292				—				—
			2,792				715				1,489
1 Term loans and cash credit facility are secured by hypothecation of stock-in-trade, book debts, immovable/movable properties and other assets
2 Term loans and others include Rs. 1,352 Million of borrowings of entities acquired during the period.
SCHEDULE 4 UNSECURED LOANS
Borrowing from banks 3			16,369				288				2,240
Loan from financial institutions 4			10,042				—				52
Interest free loan from State Governments			46				48				46
Others			55				1				—
			26,512				337				2,338

3		Borrowing from banks include Rs. 1,745 Million of borrowings of entities acquired during the period.
4		Loan from financial institutions include Rs. 2,082 Million of borrowings of entities acquired during the period.

SCHEDULE 5 FIXED ASSETS

																																		(Rs. in Million)
		GROSS BLOCK																ACCUMULATED DEPRECIATION																NET BLOCK
														As of																As of				As of
		As of April								Deductions/				September				As of April				Depreciation				Deductions /				September				September				As of March
PARTICULARS		1, 2007				Additions5				adjustments				30, 2007				1, 2007				for the period				adjustments5				30, 2007				30, 2007				31,2007
(a) Tangible fixed assets
Land (including leasehold)			2,170				596				40				2,726				2				—				2				4				2,722				2,168
Buildings			6,198				2,441				7				8,632				669				59				356				1,084				7,548				5,529
Plant & machinery 6			21,125				6,953				127				27,951				14,072				1,779				1,979				17,830				10,121				7,053
Furniture, fixture and equipments			4,180				1,045				48				5,177				2,806				336				200				3,342				1,835				1,374
Vehicles			1,830				668				119				2,379				989				203				57				1,249				1,130				841
(b) Intangible fixed assets
Technical know-how			330				—				—				330				329				1				—				330				0				1
Patents, trade marks and rights			1,454				843				—				2,297				126				43				190				359				1,938				1,328
			37,287				12,546				341				49,492				18,993				2,421				2,784				24,198				25,294				18,294
Previous year - 31 March 2007			24,816				12,743				272				37,287				12,910				3,979				2,104				18,993				18,294

5		- Additions include Gross Block of Rs. 7,101 Million and adjustments include Accumulated depreciation of Rs. 2,973 Million in respect of assets of entities acquired during the period
6		- 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,
		2007				2006				2007
Investments- Long Term — unquoted
Investment in Associates
Wipro GE Medical Systems Private Ltd 7			1,203				931				1,043
WeP Peripherals Ltd			—				209				—
			1,203				1,140				1,043
Other Investments — unquoted			365				30				364
Current Investments — quoted
Investments in Indian money market mutual funds			22,733				32,380				31,842
			24,301				33,550				33,249
7 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			2,084				1,156				1,777
Raw materials			2,868				667				1,584
Stock in process			646				373				491
Stores and spares			337				230				298
			5,935				2,426				4,150
SCHEDULE 8 SUNDRY DEBTORS
(Unsecured)
Debts outstanding for a period exceeding six months
Considered good			2,041				1,154				919
Considered doubtful			1,317				1,385				1,388
			3,358				2,539				2,307
Other debts
Considered good			31,344				24,283				28,088
Considered doubtful			—				—				—
			34,702				26,822				30,395
Less: Provision for doubtful debts			1,317				1,385				1,388
			33,385				25,437				29,007

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF WIPRO LIMITED AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEET

										(Rs. in Million)
		As of September 30,								As of March 31,
		2007				2006				2007
SCHEDULE 9 CASH AND BANK BALANCES
Balances with bank:
In current account 8			7,089				4,012				16,784
In deposit account			11,721				9				2,355
Cash and cheques on hand			1,678				123				683
			20,488				4,144				19,822
8 Balance as on March 31,2007 includes Rs. 7,278 Million in a restricted designated bank account for payment of interim dividend for the period ended March 31, 2007
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			3,690				2,733				2,049
- Advance to suppliers / expenses			1,203				559				753
- Employee travel & other advances			1,338				998				885
- Others			3,400				1,130				1,471
			9,631				5,420				5,158
Considered doubtful			189				136				194
			9,820				5,556				5,352
Less: Provision for doubtful advances			189				136				194
			9,631				5,420				5,158
Other deposits			1,730				1,561				1,613
Advance income tax			6,063				8,208				4,730
Inter corporate deposit			600				—				650
Balances with excise and customs			407				109				207
Unbilled revenue			7,927				5,440				5,096
			26,358				20,738				17,454
SCHEDULE 11 LIABILITIES
Acquisition related liabilities			6,123				—				—
Accrued expenses and statutory liabilities			17,010				13,903				13,776
Sundry creditors			14,227				7,687				10,202
Unearned revenues			2,553				1,051				1,761
Advances from customers			1,528				1,158				1,369
Unclaimed dividends			4				4				4
Unpaid interim dividends			—				—				7,238
			41,445				23,803				34,350
SCHEDULE 12 PROVISIONS
Employee retirement benefits			2,128				1,697				2,118
Warranty provision			854				882				831
Provision for tax			3,814				7,148				3,106
Proposed dividend			2,919				—				1,459
Tax on dividend			496				—				519
			10,211				9,727				8,033

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF WIPRO LIMITED AND SUBSIDIARIES

CONDENSED CONSOLIDATED PROFIT AND LOSS ACCOUNT

																		(Rs. in Million)
		Quarter ended September 30,								Six months ended September 30,								Year ended
		2007				2006				2007				2006				March 31, 2007
SCHEDULE 13 OTHER INCOME
Dividend on mutual fund units			437				356				791				695				1,686
Profit on sale of investments			199				53				550				175				588
Interest on debt instruments and others			353				136				646				185				432
Exchange differences — net			185				(138	)			(386	)			(195	)			(231	)
Miscellaneous income			88				287				333				312				257
			1,262				694				1,934				1,172				2,732
SCHEDULE 14 COST OF SALES AND SERVICES
Employee compensation costs			16,701				13,193				32,431				24,986				54,239
Raw materials, finished and process stocks (refer Schedule 18)			8,905				4,770				16,202				8,673				23,182
Sub contracting / technical fees			2,431				1,719				4,503				3,188				6,677
Travel			1,277				1,201				2,305				2,319				5,084
Depreciation			1,140				916				2,235				1,754				3,696
Communication			477				378				865				746				1,620
Repairs			602				655				1,181				1,057				2,645
Power and fuel			359				263				697				528				1,062
Outsourced technical services			282				210				520				398				842
Rent			281				314				549				500				1,009
Stores and spares			221				144				447				284				676
Insurance			46				55				95				102				186
Rates and taxes			17				74				38				177				198
Miscellaneous			564				323				1,050				677				1,304
			33,303				24,215				63,118				45,389				102,420

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF WIPRO LIMITED AND SUBSIDIARIES

CONDENSED CONSOLIDATED PROFIT AND LOSS ACCOUNT

																		(Rs. in Million)
		Quarter ended September 30,								Six months ended September 30,								Year ended
		2007				2006				2007				2006				March 31, 2007
SCHEDULE 15 SELLING AND MARKETING EXPENSES
Employee compensation costs			1,648				1,206				3,065				2,196				4,728
Advertisement and sales promotion			585				338				980				693				1,400
Travel			193				160				502				403				790
Carriage and freight			285				144				560				321				885
Commission on sales			177				55				241				140				275
Rent			106				87				212				146				326
Communication			74				72				155				124				294
Conveyance			36				31				66				52				111
Depreciation			67				47				121				82				190
Repairs to buildings			21				3				32				5				60
Insurance			11				6				21				13				25
Rates and taxes			8				7				16				12				26
Miscellaneous expenses			163				107				284				188				437
			3,374				2,263				6,255				4,375				9,547
SCHEDULE 16 GENERAL AND ADMINISTRATIVE EXPENSES
Employee compensation costs			1,176				790				2,117				1,368				3,430
Travel			275				234				526				424				909
Repairs and mantainance			139				80				264				137				321
Provision for bad debts			154				71				247				144				294
Manpower outside services			55				32				100				63				142
Depreciation			38				20				65				41				93
Rates and taxes			24				3				38				43				63
Insurance			15				13				34				20				57
Rent			27				10				47				22				77
Auditors’ remuneration
Audit fees			12				5				17				11				13
For certification including tax audit			—				1				1				1				1
Out of pocket expenses			—				1				1				1				1
Miscellaneous expenses			728				538				1,230				990				2,234
			2,643				1,798				4,687				3,265				7,635

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF WIPRO LIMITED AND SUBSIDIARIES

CONDENSED CONSOLIDATED PROFIT AND LOSS ACCOUNT

																		(Rs. in Million)
		Quarter ended September 30,								Six months ended September 30,								Year ended
		2007				2006				2007				2006				March 31, 2007
SCHEDULE 17 INTEREST
Cash credit and others 9			330				34				461				36				124
9 Includes Rs.95 Million and Rs.198 Million for the quarter ended and six month ended September 30,2007 (2006 & 2007: Nil) of interest borne by Wipro Equity Reward Trust in respect of loans availed by employees from third party financial institution/bank in March 2007 for the exercise of vested employee stock options.
SCHEDULE 18
RAW MATERIALS, FINISHED AND PROCESSED STOCKS
Consumption of raw materials and bought out components :
Opening stocks			1,890				699				1,584				692				692
Add: Stock taken over on acquisition			375				—				375				—				651
Add: Purchases			4,642				1,216				9,276				3,324				11,701
Less: Closing stocks			2,868				667				2,868				667				1,584
			4,039				1,248				8,367				3,349				11,460
Purchase of finished products for sale			5,040				3,668				7,732				5,678				12,471
(Increase) / Decrease in finished and process stocks :
Opening stock :                                    In process			638				337				491				289				289
: Finished products			1,353				1,046				1,777				886				886
Stock taken over on acquisition :      In process			8				—				8				—				194
: Finished products			557				—				557				—				150
Less: Closing stock :                           In process			646				373				646				373				491
: Finished products			2,084				1,156				2,084				1,156				1,777
			(174	)			(146	)			103				(354	)			(749	)
			8,905				4,770				16,202				8,673				23,182

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 and Products, including Business Process Outsourcing (BPO) services, globally. Further, Wipro has other businesses such as India and AsiaPac IT Services and 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 financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis. GAAP comprises accounting standards notified by the Central Government of India under section 211(3C) of the Companies Act, 1956, other pronouncements of the Institute of Chartered Accountants of India, the provisions of the Companies Act, 1956 and guidelines issued by the Securities and Exchange Board of India. The recognition, measurement and disclosure provisions of AS 25, Interim Financial Reporting, have been followed for these condensed interim financial statements.
ii.		Principles of consolidation
		The consolidated 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 consolidated 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 contin gent 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 period up to the date of capitalization is capitalized. Assets acquired on direct finance lease are capitalized at the gross value and interest thereon is charged to profit and loss account.
		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.

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF WIPRO LIMITED AND SUBSIDIARIES

		Payments for leasehold land are amortised 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.
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 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 maintenance services is accrued 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.
		‘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.

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF WIPRO LIMITED AND SUBSIDIARIES

		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. Other income includes unrealized losses on short-term investments.
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.
		Derivative instruments and Hedge accounting:
		The Company is exposed to foreign currency fluctuations on foreign currency assets 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 forward exchange and option contracts, where the counterparty is a bank.
		Since March 2004, the Company has designated forward contracts and options to hedge highly probable forecasted transactions as cash flow hedges based on the principles set out in International Accounting Standard (IAS 39) on Financial Instruments.
		The exchange differences relating to these forward contracts and gains/losses on such options were being recognised in the period in which the forecasted transaction was expected to occur. The exchange differences relating to ineffective portion of the cash flow hedges and forward contracts / options not designated as cash flow hedges were recognised in the profit and loss account as they arose.
		Effective April 1, 2007, based on the recognition and measurement principles set out in the Exposure Draft of the proposed Accounting Standard (AS -30) on Financial Instruments: Recognition and Measurement, the changes in the fair values of forward contracts and options designated as cash flow hedges are recognised directly in shareholders’ funds and are reclassified into the profit and loss account upon the occurrence of the hedged transaction. The changes in fair

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF WIPRO LIMITED AND SUBSIDIARIES

		value relating to the ineffective portion of the cash flow hedges and forward contracts / options not designated as cash flow hedges are recognised in the profit and loss account as they arise.
		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.
		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.		Depreciation and amortisation
		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 – 3 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 25 to 40 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.
xiii.		Impairment of assets
		The Company assesses at each balance sheet date whether there is any indication that an 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.
xiv.		Provision for retirement benefits
		Provident fund:
		Employees receive benefits from a provident fund, a defined contribution plan. The employee and employer each make monthly contributions to the plan equal to 12% of the covered employee’s

     CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF WIPRO LIMITED AND SUBSIDIARIES

		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.
xv.		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.
xvi.		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.
xvii.		Income tax & Fringe benefit tax
		Income tax:
		The current charge for income taxes is calculated in accordance with the relevant tax regulations. 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 tax in respect of timing differences which originate during the tax holiday period but reverse after the tax holiday period is recognised in the period in which the timing differences originate. 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.

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF WIPRO LIMITED AND SUBSIDIARIES

		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 income tax provision for the interim period is made based on the best estimate of the annual average effective tax rate expected to be applicable for full fiscal year. Changes in interim periods to tax provisions, for changes in judgments or settlements relating to tax exposure items of earlier years, are recorded as discrete items in the interim period of change. A detailed bifurcation between current tax and deferred tax charge / (benefit) is made at the year end.
		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.
xviii.		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.
xix.		Cash flow statement
		Cash flows are reported using the indirect method, whereby net profits 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.
		NOTES TO ACCOUNTS
2.		The following are the details for 1,459,261,169 (2006: 1,434,563,895, 2007: 1,458,999,650) equity shares as of September 30, 2007.

		i)			1,398,430,659			Equity shares / American Depository Receipts (ADRs) (2006 & 2007: 1,398,430,659) have been allotted as fully paid bonus shares / ADRs by capitalization of Securities premium account and Capital redemption reserve.
		ii)			1,325,525			Equity shares (2006 & 2007: 1,325,525) have been allotted as fully paid-up, pursuant to a scheme of amalgamation, without payment being received in cash.
		iii)			3,162,500			Equity shares (2006 & 2007: 3,162,500) representing American Depository Receipts issued during 2000-2001 pursuant to American Depository offering by the Company.

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF WIPRO LIMITED AND SUBSIDIARIES

iv) 55,417,485 Equity shares (2006: 30,720,211, 2007: 55,155,966) issued pursuant to Employee Stock Option Plan.

3. Note on Reserves:

	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, 2007				30, 2006				2007
	a)	Transfer from Profit and Loss Account					12,078				13,206				19,456
	b)	Dividend distributed to Wipro Equity Reward Trust					—				40				40
	c)	Additional dividend paid for the previous year					—				(36	)			(36	)
	d)	Adjustment on account of amalgamation of cMango Inc & Quantech Global Services LLC with Wipro Inc [refer Note 19(8,9)]					(1,376	)			—				—
	e)	Transition liability for employee benefits					—				(27	)			(27	)
							10,702				13,183				19,433

4.		The Company has designated forward contracts and options to hedge highly probable forecasted transactions based on the principles set out in International Accounting Standard (IAS 39) on Financial Instruments: Recognition and Measurement. Until March 31, 2007, the exchange differences on the forward contracts and gain / loss on such options were recognised in the profit and loss account in the period in which the forecasted transaction is expected to occur. As of September 30, 2006 and March 31, 2007 the Company had forward /option contracts to sell USD 201 million and USD 87 million respectively, relating to highly probable forecasted transactions. The effect of mark to market of the designated contracts as of September 30, 2006 was a loss of Rs 27 million and as of March 31, 2007 was a gain of Rs 105 million. The premium / discount at inception of forward contracts was amortised over the life of the contract.
		Effective April 1, 2007, based on the recognition and measurement principles set out in the Exposure Draft of the proposed Accounting Standard (AS-30) on Financial Instruments: Recognition and Measurement, the changes in the derivative fair values relating to forward contracts and options that are designated as effective cash flow hedges of Rs 698 million, have been recognised directly in shareholders’ funds until the hedged transactions occur. Upon occurrence of the hedged transaction the amounts recognised in the shareholders’ funds would be reclassified into the profit and loss account.
		As a result of this change in the six month ended September 30, 2007, the shareholders’ funds and loans and advances have increased by Rs. 698 million.
5.		The Company has a 49% equity interest in Wipro GE Medical Systems 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 Accounting Standard 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 Accounting Standard 23 “Accounting for Investments in Associates in Consolidated Financial statements”.
6.		The Company has been granting restricted stock units (RSUs) since October 2004. The RSUs generally vest in a graded manner over a five year period. 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.

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF WIPRO LIMITED AND SUBSIDIARIES

		For the quarter and six month ended September 30, 2007, the Company has recorded stock compensation expense of Rs. 286 Million & Rs. 572 Million respectively.
		The Company has been advised by external counsel that the straight line amortization over the total vesting period complies with the SEBI Employee Stock Option Scheme Guidelines 1999, as amended. However, an alternative interpretation of the SEBI guidelines could result in amortization of the cost on an accelerated basis. If the Company were to amortize cost on an accelerated basis, profit before tax for the quarter ended September 30, 2006 and 2007 would have been lower by Rs.18 million and Rs. 79 million respectively and the profit before tax for the six months ended September 30, 2006 and 2007 would have been lower by Rs. 45 Million and Rs. 144 Million respectively. This would effectively increase the profit before tax in later periods by similar amounts.
7.		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 Company had appealed against these demands. In March 2006, the first appellate authority vacated the tax demands for the years ended March 31, 2001 and 2002. The income tax authorities have filed an appeal against the above order.
		In March 2007 and July 2007, the first Income tax appellate authority upheld the deductions claimed by the Company under Section 10A of the Act, which vacates a substantial portion of the demand for the year ended March 31, 2003 and 2004.
		Considering the facts and nature of disallowance and the order of the appellate authority 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.
8.		In the terms of the scheme of amalgamation filed with and endorsed by the State of Delaware, USA, cMango Inc amalgamated with Wipro Inc with effect from June 1, 2007. Wipro Inc has accounted for the amalgamation as an amalgamation in the nature of merger in accordance with Accounting Standard 14, Accounting for Amalgamations and goodwill amounting to Rs. 907 million has been adjusted against the general reserve of the Company.
9.		In the terms of the scheme of amalgamation filed with and endorsed by the State of Delaware, USA, Quantech Global services LLC amalgamated with Wipro Inc with effect from May 1, 2007. Wipro Inc has accounted for the amalgamation as an amalgamation in the nature of merger in accordance with Accounting Standard 14, Accounting for Amalgamations and goodwill amounting to Rs. 469 million has been adjusted against the general reserve of the Company.
10.		The Board of Directors of the Company has approved on June 6, 2007, the schemes of amalgamation of the following wholly owned subsidiaries with the Company. The amalgamation is subject to the applicable regulatory approvals.

	i)		Wipro Infrastructure Engineering Limited
	ii)		Wipro Healthcare IT Limited
	iii)		Quantech Global Services Limited
	iv)		Mpact Technology Services Private Limited
	v)		mPower Software Services (India) Private Limited; and
	vi)		cMango India Private Limited.

11.		The Guidance on implementing AS 15, Employee Benefits issued by the Accounting Standards Board (ASB) provides that exempt provident funds which require employers to meet the interest shortfall are in effect defined benefit plans. The Company’s actuary has informed that it is not practicable to actuarially determine the interest shortfall obligation.
12.		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 will recover such tax from the

		CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF WIPRO LIMITED AND SUBSIDIARIES
		employee. The Company’s obligation to pay FBT arises only upon the exercise of stock options and hence the FBT liability and the related recovery are recorded at the time of the exercise.
13.		In September 2007, the Company acquired Infocrossing, Inc. (Infocrossing), a US-based provider of IT infrastructure management, enterprise application and business process outsourcing services for a purchase consideration of USD 436 million (including direct cost of acquisition of USD 5 million). The acquisition was conducted by means of a tender offer for all of the outstanding shares of Infocrossing. This acquisition of Infocrossing broadens the data center and mainframe capabilities to uniquely position the Company in the remote infrastructure management space.
		The purchase consideration has been allocated on a preliminary basis based on managements’ estimates and goodwill of Rs. 22,368 Million has been recorded. The Company is in the process of making final determination of the carrying value of assets and liabilities, which may result in changes in the carrying value of net assets recorded.
14.		In July 2007, the Company acquired Unza Holdings (Unza), a Singapore-based FMCG firm for a purchase consideration of USD 246 million (including direct cost of acquisition of USD 1 million). Unza is one of South East Asia’s, largest independent manufacturer and marketer of personal care products, and has operations in over 40 countries. Unza has an excellent product range and a large portfolio of strong brands catering to Asian consumers. This acquisition would significantly increase the Company’s market size and provide significant synergy in terms of a ccess of common vendors, formulation and brands.
		The purchase consideration has been allocated on a preliminary basis based on managements’ estimates and goodwill of Rs. 10,233 Million has been recorded. The Company is in the process of making final determination of the carrying value of assets and liabilities, which may result in changes in the carrying value of net assets recorded
15.		During the quarter a relative of the Chairman of the Company, has been appointed to place of profit after special resolution of the shareholders. The Company has applied to the Central Government for approval of the appointment.
16.		The list of subsidiaries is given below :

						Country of
Direct Subsidiaries		Step Subsidiaries				Incorporation
Wipro Infrastructure Engineering Ltd						India
Wipro Inc.						USA
		Enthink Inc.				USA
		mPower Software Services (India) Private Limited				India
		MPact Technologies Services Private Limited				India
		cMango India Private Limited				India
		Infocrossing Inc				USA
				Infocrossing EAS, Inc.,		USA
				Infocrossing Services, Inc.		USA
				Infocrossing West, Inc. (A)		USA
						USA
				Infocrossing Healthcare Services, Inc.		USA
				Infocrossing, LLC, (A)		USA
						USA
				Infocrossing iConnection, Inc.,		USA
cMango Pte Limited						Singapore
Wipro Japan KK						Japan
Wipro Shanghai Limited						China

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF WIPRO LIMITED AND SUBSIDIARIES

						Country of
Direct Subsidiaries		Step Subsidiaries				Incorporation
Wipro Trademarks Holding Limited						India
		Cygnus Negri Investments Private Limited				India
Wipro Travel Services Limited						India
Wipro HealthCare IT Limited						India
Wipro Consumer Care Limited						India
Wipro Holdings (Mauritius) Limited						Mauritius
		Wipro Holdings UK Limited				UK
				Wipro Technologies UK Limited		UK
				BVPENTEBeteiligungsver waltung GmbH		Austria
				New Logic Technologies GmbH		Austria
				NewLogic Technologies SARL		France
				3D Networks FZ-LLC		Dubai
				3D Networks (UK) Limited		UK
Wipro Cyprus Private Limited						Cyprus
		Wipro Technologies S.A DE C.V				Mexico
		RetailBox BV				Netherlands
				Enabler Informatica SA		Portugal
				Enabler France SAS		France
				Enabler UK Ltd		UK
				Enabler Brasil Ltd		Brazil
				Enabler & Retail Consult
				GmbH		Germany
		Saraware Oy				Finland
		Hydrauto Group AB				Sweden
				Hydrauto Medium cylinders Skelleftteas AB		Sweden
				Hydrauto Engineering AB		Sweden
				Hydrauto Light Cylinders Bispgarden AB		Sweden
				Hydrauto Light Cylinders Ostersund AB Hydrauto Big Cylinders		Sweden
				Ljungby AB		Sweden
				Hydrauto Logistics AB		Sweden
				Hydrauto Oy Ab Pernion		Finland
				Hydrauto Celka Hidrolic San ve Tic a.s		Turkey
		Wipro Technologies SRL				Romania
		Wipro Singapore Pte Limited				Singapore
				Unza Holdings Limited (A)		Singapore
		Wipro Holdings Hungary Kft				Hungary
Quantech Global Services Limited						India
Wipro Australia Pty Limited						Australia
3D Networks Pte Limited						Singapore
Planet PSG Pte Limited						Singapore
		Planet PSG SDN BHD				Malaysia
Spectramind Inc						USA

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF WIPRO LIMITED AND SUBSIDIARIES

						Country of
Direct Subsidiaries		Step Subsidiaries				Incorporation
		WMNETSERV (UK) Ltd.				UK
		WMNETSERV INC.				USA
Wipro Chandrika Limited (a)						India
		Wipro Arabia Limited (c)				Dubai
WMNETSERV Limited (b)						Cyprus
		WMNETSERV (UK) Ltd.				UK
		WMNETSERV INC.				USA

All the above direct subsidiaries are 100% held by the Company except the following:
a) 90% held in Wipro Chandrika Limited
b) 81.1% held in WMNETSERV Limited
c) 66.67% held in Wipro Arabia Limited.

^(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,						USA
		Infocrossing Services Southeast, Inc.				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				China
PT Unza Vitalis						Indonesia
Unza Thailand Limited						Thailand
						British virgin
Unza Overseas Ltd						islands
UnzAfrica Limited						Nigeria
						British virgin
Unza Middle East Ltd						islands
Unza International						British virgin
Limited						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		Malaysia
		Gervas Corporation Sdn Bhd				Malaysia
				Gervas (B) Sdn Bhd		Malaysia
		Formapac Sdn Bhd				Malaysia

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF WIPRO LIMITED AND SUBSIDIARIES

17. The segment information for the quarter ended September 30,2007 follows:

																												Rs. in Million
																												Year ended
Particulars		Quarter ended September 30,													Six months ended Sept ember 30,													March 31,
		2007				2006				Growth %					2007				2006				Growth %					2007
Revenues
IT Services			29,452				24,906				18	%				56,436				47,313				19	%				101,554
Acquisitions			254													254
BPO Services			2,784				2,299				21	%				5,299				4,397				21	%				9,391
Global IT Services and Products			32,490				27,205				19	%				61,989				51,710				20	%				110,945
India & AsiaPac IT Services and Products			9,312				5,426				72	%				16,813				9,990				68	%				24,835
Consumer Care and Lighting			3,726				2,025				84	%				6,076				3,793				60	%				8,182
Others			2,587				1,098				136	%				5,541				1,902				191	%				7,130
Eliminations			(268	)			(292	)								(539	)			(508	)								(1,084	)
TOTAL			47,847				35,462				35	%				89,880				66,887				34	%				150,008
Profit before Interest and Tax — PBIT
IT Services			6,618				6,113				8	%				12,405				11,706				6	%				24,782
Acquisitions			22													22
BPO Services			625				526				19	%				1,199				952				26	%				2,157
Global IT Sendees and Products			7,265				6,639				9	%				13,626				12,658				8	%				26,939
India & AsiaPac IT Services and Products			691				468				48	%				1,259				821				53	%				2,139
Consumer Care and Lighting			440				246				79	%				745				477				56	%				1,006
Others			132				95				39	%				191				164				16	%				322
TOTAL			8,528				7,448				15	%				15,821				14,120				12	%				30,406
Interest (Net) and Other Income			658				512				29	%				1,526				1,019				50	%				2,582
Profit Before Tax			9,186				7,960				15	%				17,347				15,139				15	%				32,998
Income Tax expense including Fringe Benefit Tax			(1,046	)			(1,050	)								(2,050	)			(2,090	)								(3,868	)
Profit before Share in earnings of associates and minority interest			8,140				6510				18	%				15,297				13,049				17	%				29,120
Share in earnings of associates			96				92									193				157									295
Minority interest			1				—									3				—									6
PROFIT AFTER TAX			8,237				7,002				18	%				15,493				13,206				17	%				29,421
Operating Margin
IT Services			22	%			26	%								22	%			25	%								24	%
Acquisitions			9	%												9	%
BPO Services			22	%			23	%								23	%			22	%								23	%
Global IT Services and Products			22	%			24	%								22	%			24	%								24	%
India & AsiaPac IT Services and Products			7	%			9	%								7	%			8	%								9	%
Consumer Care and Lighting			12	%			12	%								12	%			13	%								12	%
TOTAL			18	%			21	%								18	%			21	%								20	%
CAPITAL EMPLOYED
IT Services			47,427				36,241									47,427				36,241									46,454
Acquisitions			22,088				—									22,088				—
BPO Services			3,055				1,991									3,055				1,991									2,493
Global IT Services and Products			72,570				38,232									72,570				38,232									48,947
India & AsiaPac IT Services and Products			6,652				2,372									6,652				2,372									5,363
Consumer Care and Lighting			16,612				2,488									16,612				2,488									2,957
Others			41,041				40,662									41,041				40,662									42,584
TOTAL			136,875				83,754									136,875				83,754									99,851
CAPITAL EMPLOYED COMPOSITION
IT Services			35	%			43	%								35	%			43	%								47	%
Acquisitions			16	%			—									16	%			—									—
BPO Services			2	%			2	%								2	%			2	%								2	%
Global IT Services and Products			53	%			45	%								53	%			45	%								49	%
India & AsiaPac IT Services and Products			5	%			3	%								5	%			3	%								5	%
Consumer Care and Lighting			12	%			3	%								12	%			3	%								3	%
Others			30	%			49	%								30	%			49	%								43	%
TOTAL			100	%			100	%								100	%			100	%								100	%
RETURN ON AVERAGE CAPITAL EMPLOYED
IT Services			58	%			71	%								53	%			70	%								64	%
Acquisitions			1	%			—									—				—
BPO Services			86	%			47	%								86	%			46	%								49	%
Global IT Services and Products			49	%			68	%								45	%			67	%								63	%
India & AsiaPac IT Services and Products			40	%			67	%								42	%			69	%								55	%
Consumer Care and Lighting			18	%			42	%								15	%			52	%								48	%
TOTAL			28	%			37	%								27	%			37	%								36	%

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 Accounting Standard 17 “Segment Reporting” issued by The Institute of Chartered Accountants of India.
b)		Segment revenue includes all allocable other income and exchange differences which are reported in other income.
c)		PBIT for the quarter and six month ended September 30, 2007 is after considering restricted stock unit amortisation of Rs. 286 Million (2006: Rs. 448 Million & 2007: Rs 1078 Million) and Rs. 572 Million (2006: Rs 596 Million & 2007: Rs 1078 Million). PBIT of Global IT Services and Products for the quarter and six month ended September 30, 2007, is after considering restricted stock unit amortisation of Rs. 250 Million (2006: Rs. 392 Million & 2007: Rs 936 Million) and Rs. 497 Million (2006: Rs.522 Million & 2007: Rs. 936 Million)
d)		Capital employed of segments is net of current liabilities which is as follows :–

		(Rs. in Million)
		As of Sep 30,								As of March 31,
Name of the Segment		2007				2006				2007
Global IT Services and Products			28,953				17,711				18,501
India & AsiaPac IT Services and Products			9,394				6,484				7,580
Consumer Care and Lighting			3,356				1,327				1,537
Others			9,953				8,008				14,765
			51,656				33,530				42,383

e)		Capital employed of ‘Others’ includes cash and cash equivalents including liquid mutual funds of Rs. 32,792 Million (2006: Rs. 33,826 Million & 2007 Rs. 42,652 Million).
f)		The Company has four geographic segments: India, USA, Europe and Rest 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:

		(Rs. in Million)
		Quarter ended																Six month ended September																Year ended March
		September 30,																30,																31,
Geography		2007				%				2006				%				2007				%				2006				%				2007				%
India			12,003				25	%			7,131				20	%			22,432				25	%			13,072				20	%			31,371				21	%
USA			20,272				42	%			18,063				51	%			39,425				44	%			34,453				52	%			72,702				48	%
Europe			11,717				25	%			8,181				23	%			22,262				25	%			15,697				23	%			36,972				25	%
Rest of the World			3,855				8	%			2,087				6	%			5,761				6	%			3,665				5	%			8,963				6	%
Total			47,847				100	%			35,462				100	%			89,880				100	%			66,887				100	%			150,008				100	%

g)		For the purpose of reporting, business segments are considered as primary segments and geographic segments are considered as secondary segments.
h)		The acquisitions consummated during the year ended March 31, 2006 and 2007 were reported separately in the segment report. The acquisitions have been completely integrated into Global IT Services and Products and hence not reported separately in the segment report. Segment information for the previous periods has accordingly been reclassified on a comparable basis.
i)		The Company has designated forward contracts and options to hedge highly probable forecasted transactions based on the principles set out in International Accounting Standard (IAS 39) on Financial Instruments. Until March 31, 2007, the exchange differences on the forward contracts and gain / loss on such options were recognised in the profit and loss account in the period in which the forecasted transaction is expected to occur. As of September 30, 2006 and March 31, 2007 the Company had forward /option contracts to sell USD 201 million and USD 87 million respectively, relating to highly probable forecasted transactions. The effect of mark to market of the designated contracts as of September 30, 2006 was a loss of Rs 27 million and as of March 31, 2007 was a gain of Rs 105 million. The premium / discount at inception of forward contracts was amortised over the life of the contract.

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF WIPRO LIMITED AND SUBSIDIARIES

Effective April 1, 2007, based on the recognition and measurement principles set out in the Exposure Draft of the proposed Accounting Standard (AS-30) on Financial Instruments: Recognition and Measurement, the changes in the derivative fair values relating to forward contracts and options that are designated as effective cash flow hedges of Rs 698 million, has been recognised directly in shareholders’ funds until the hedged transactions occur. Upon occurrence of the, hedged transaction the amounts recognised in the shareholders’ funds would be reclassified into the profit and loss account.

As a result of this change in the six month ended September 30, 2007, the shareholders’ funds and loans and advances have increased by Rs. 698 million.

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