WIT Wipro Ltd

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Form 6-K

 

 

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16

under the Securities Exchange Act of 1934

For the month of January 2015

Commission File Number 001-16139

 

 

Wipro Limited

(Exact name of Registrant as specified in its charter)

 

 

Not Applicable

(Translation of Registrant’s name into English)

Karnataka, India

(Jurisdiction of incorporation or organization)

Doddakannelli

Sarjapur Road

Bangalore, Karnataka 560035, India +91-80-2844-0011

(Address of principal executive offices)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F:

Form 20-F  x             Form 40-F  ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Yes  ¨            No   x

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Yes  ¨            No   x

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

 

 

 

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DISCLOSURE OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION

We hereby furnish the Commission with copies of the following information concerning our public disclosures regarding our results of operations for three and nine months ended December 31, 2014. The following information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

On January 16, 2015, we announced our results of operations for the three and nine months ended December 31, 2014. We issued a press release announcing our results under IFRS, a copy of which is attached to this Form 6-K as Item 99.1.

On January 16, 2015, we held a press conference to announce our results. The presentation made by the registrant at the press conference is attached to this Form 6-K as Item 99.2.

We placed advertisements in certain Indian newspapers concerning our results of operations for three and nine months ended December 31, 2014 under IFRS. A copy of the form of this advertisement is attached to this Form 6-K as Item 99.3.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly organized.

 

Dated: January 20, 2015

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INDEX TO EXHIBITS

 

Item
99.1.		IFRS Press Release
99.2.		Presentation made by the Company at the Press Conference on January 16, 2015
99.3.		Form of Advertisement Placed in Indian Newspapers

Exhibit 99.1

 

FOR IMMEDIATE RELEASE

Results for the quarter ended December 31, 2014 under IFRS

IT Services Revenue grew 3.7% sequentially in constant currency

Net Income for the quarter grew 9% YoY

Bangalore, India and East Brunswick, New Jersey, USA – January 16, 2015 – Wipro Limited (NYSE:WIT) today announced financial results under International Financial Reporting Standards (IFRS) for its third quarter ended December 31, 2014.

Highlights of the Results for the Quarter ended December 31, 2014:

 

•

Total Revenues were 119.9 billion ($1.9 billion1), an increase of 6% YoY.

 

•

Net Income2 was 21.9 billion ($348 million1), an increase of 9% YoY.

 

•

Non-GAAP constant currency IT Services Revenue in dollar terms grew 3.7% to $1,836.2 million, within our guidance range of $1,808 million to $1,842 million.

 

•

IT Services Revenue was $1,795.4 million, a sequential increase of 1.3% and YoY increase of 7.0%.

 

•

IT Services Margins was 21.8%.

 

•

Wipro declared an interim dividend of 5 ($0.081) per share /ADS.

Performance for the quarter ended December 31, 2014

Azim Premji, Chairman of Wipro, said, “Developments in the Global currency and commodity markets are affecting major economies unevenly even as India anticipates growth led by next-generation of economic reforms.”

T K Kurien, Executive Director & Chief Executive Officer of Wipro, said, “We had a very satisfying quarter in terms of sequential revenue growth. We continue to see strong deal momentum as we are seen as the partner of choice for customers seeking to differentiate by using digital technologies as well as save costs in the traditional business.”

Suresh Senapaty, Executive Director & Chief Financial Officer of Wipro, said – “During the quarter, we saw all round growth led by growth in our Healthcare & Life Sciences business and Global Infrastructure Services. The share of fixed price contracts increased to over 55% of engagements – a reflection of the maturity of Wipro’s customer engagement model.”

 

1.

For the convenience of the reader, the amounts in Indian rupees in this release have been translated into United States dollars at the noon buying rate in New York City on December 31, 2014, for cable transfers in Indian rupees, as certified by the Federal Reserve Board of New York, which was US $1= 63.04. However, the realized exchange rate in our IT Services business segment for the quarter ended December 31, 2014 was US$1= 63.19

2.	Refers to ‘Profit for the period attributable to equity holders of the company’

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Outlook for the Quarter ending March 31, 2015

We expect Revenues from our IT Services business to be in the range of $ 1,814 million to $ 1,850 million*.

 

*	Guidance is based on the following exchange rates: GBP/USD at 1.56, Euro/USD at 1.23, AUD/USD at 0.84, USD/INR at 62.90 and USD/CAD at 1.15

IT Services

 

•

IT Services Segment Revenues in Rupee terms was 113.4 billion ($1.8 billion1), an increase of 10% YoY.

 

•

IT Services Segment Result was 24.7 billion ($392 million1), an increase of 4% YoY.

 

•

Non-GAAP constant currency IT Services Revenue in dollar terms grew 3.7% to $1,836.2 million, within our guidance range of $1,808 million to $1,842 million.

 

•

IT Services Revenue was $1,795.4 million, a sequential increase of 1.3% and YoY increase of 7.0%.

The IT Services segment had a headcount of 156,866 as of December 31, 2014. We added 44 new customers during the quarter.

Wipro continued its momentum in winning Large Deals globally as listed below:

Wipro was selected by Levi Strauss & Co. (LS&Co), one of the world’s largest brand-name apparel companies and global leader in Jeanswear, as its primary partner for global applications maintenance and development, infrastructure and BPO services. The five-year contract is geared towards bringing cost efficiencies and enabling enhanced optimization of applications, infrastructure, and BPO services within HR, Finance, IT, Customer Service, and Consumer Relations areas, thereby helping Levi Strauss & Co with their ongoing efficiency and cost saving measures to improve profitability.

Wipro has been selected by a large global food company as its partner for all its infrastructure and hosting needs. Wipro will leverage its US-based data centers and industry leading ServiceNXT Framework to enable world class Infrastructure services to support the customer’s evolving business needs. The five-year contract will optimize applications and infrastructure across the entire enterprise, thereby helping the client with its ongoing business and technology needs.

Wipro has won a multi-year payments transformation and platform management deal with a top 10 bank and card issuer in the US. The deal further enhances Wipro’s leadership position in the growing payments space and strengthens its consulting and delivery capabilities in payments and cards.

Wipro has been chosen as a strategic partner by a global leader in payments technology as part of their transformation strategy. The multi-year deal will result in Wipro partnering with the payments major across application development, maintenance, testing and infrastructure services.

Advanced Technologies & Solutions continued its traction with customers in the areas of Cloud, Mobility, Analytics, Big Data, and Workplace Collaboration, across verticals. Some marquee wins in Q3 include engineering of a big data platform on public cloud for a pharma major, financial risk and compliance analytics for a leading global investment bank.

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Wipro has been empaneled by one of the world’s largest providers of financial services as one of its IT services providers. Wipro was selected for its depth and breadth of services and its ability to scale and support the customer’s goal of consolidation and growth, as the latter continues to invest in IT.

Wipro has been chosen by Cairn India Limited, India’s largest independent oil and gas exploration and production company as its IT partner for a business transformation program. Through this program Cairn India limited will achieve improved service delivery and meet its expansion plans.

Wipro has been chosen by the Government of Assam to design, develop and maintain an IT Solution for the state’s National Register of Citizens (NRC). The company will support the setting-up of the NRC Data Center, ‘Seva Kendras’ and digitization of the citizen application forms for updating the data.

Wipro has been selected to provide advisory and project management services to help set-up the IT landscape of a new bank, being launched by IDFC Limited, a leading Indian infrastructure finance company.

Awards and accolades

Wipro Digital has been named to the ‘Winner’s Circle’ by the analyst firm HfS Research in its inaugural Marketing Operations and Digital Customer Experience Management Blueprint Report. The report evaluates service providers on their execution and innovation capabilities across marketing content development and management, campaign management, digital customer relationship management services and marketing analytics services. As per the report, Wipro Digital is a leader at developing strong client relationships, executing services beyond expectations and is highly flexible when meeting client needs. The report further states that Wipro Digital has a strong vision for the future, invests in future capabilities, works across verticals and with external partners to increase value for clients.

Wipro has been positioned as a ‘Leader’ in the first ever published Gartner Magic Quadrant for Application Testing Services, Worldwide 2014 authored by Susanne Matson and Patrick J. Sullivan, published on 25 November 2014. The report evaluated 16 different software vendors on 15 criteria and placed Wipro Ltd. in the Leaders quadrant. Gartner defines “Application testing services” as a comprehensive term used to capture all types of verification and validation services for the purposes of supporting clients’ applications quality control and quality assurance (QA). Verification assesses the technical behavior, and validation assesses the functional behavior of tested elements.

Wipro was positioned as a ‘Leader’ in Gartner Magic Quadrant Oracle Application Implementation Services, Worldwide 2014 authored by Alex Soejarto and Susanne Matson, published on 04 December 2014. The report evaluated 14 different software vendors on their completeness of vision and ability to execute and placed Wipro Ltd. in the Leaders quadrant. Gartner defines, “Leaders are performing well today, gaining traction and mind share in the market; they have a clear vision of the market’s direction, are helping clients beyond product road maps, and are actively building competencies to sustain their leadership position in the market.

Wipro has been named a “Leader” by technology global research and advisory firm Forrester Research Inc. in its report, “The Forrester Wave™: Business Intelligence Service Providers, Q4 2014”. The report states that Wipro is amongst vendors that present formidable management consulting capabilities, capable of tackling not just tactical, but strategic and advisory initiatives.

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IT Products

 

•

Our IT Products Segment delivered Revenue of 7.7 billion ($123 million1) for the quarter ended December 31, 2014.

 

•

IT Products Segment results for the quarter ended December 31, 2014 was 89 million ($1 million1).

 

•

IT Products Revenues for the fiscal year ended March 31, 2014 included sales of Wipro branded desktops, laptops and servers which Wipro ceased manufacturing in the quarter ended December 31, 2013.

Please refer the table on page 7 for reconciliation between IFRS IT Services Revenue and IT Services Revenue on a non-GAAP constant currency basis.

Pursuant to the announcement issued as part of the press release on October 22, 2014, Wipro Inc. Benefit Trust sold 1.8 million shares of Wipro Limited and the same is reflected in the financial statements of the quarter ended December 31, 2014.

About Non-GAAP financial measures

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

The table on page 7 provides IT Services Revenue on a constant currency basis, which is a non-GAAP measure that is calculated by translating IT Services Revenue from the current reporting period into U.S. dollars based on the currency conversion rate in effect for the prior reporting period. We refer to growth rates in constant currency so that business results may be viewed without the impact of fluctuations in foreign currency exchange rates, thereby facilitating period-to-period comparisons of our business performance.

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

Results for the quarter ended December 31, 2014, prepared under IFRS, along with individual business segment reports, are available in the Investors section of our website www.wipro.com.

Quarterly Conference Call

We will hold an earnings conference call today at 07:15 p.m. Indian Standard Time (08:45 a.m. US Eastern Time) to discuss our performance for the quarter. An audio recording of the management discussions and the question and answer session will be available online and will be accessible in the Investor Relations section of our website at www.wipro.com.

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About Wipro Limited (NYSE: WIT)

Wipro Ltd. (NYSE:WIT) is a leading Information Technology, Consulting and Business Process Services company that delivers solutions to enable its clients do business better. Wipro delivers winning business outcomes through its deep industry experience and a 360 degree view of “Business through Technology” - helping clients create successful and adaptive businesses. A company recognized globally for its comprehensive portfolio of services, a practitioner’s approach to delivering innovation, and an organization wide commitment to sustainability, Wipro has a workforce of over 150,000, serving clients in 175+ cities across 6 continents.

For more information, please visit www.wipro.com

 

Contact for Investor Relations				Contact for Media & Press
Aravind V S		Vaibhav Saha		Vipin Nair
Phone: +91-80-2505 6186		Phone:+1 732-509-1362		Phone: +91-80-3991-6154
aravind.viswanathan@wipro.com		vaibhav.saha@wipro.com		vipin.nair1@wipro.com

Forward-looking statements

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

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(Tables to follow)

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Wipro limited and subsidiaries

CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION

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

 

						As of March 31,				As of December 31,
		Notes				2014				2014				2014
														Convenience translation into US dollar in millions (unaudited) Refer Note 2(iv)
ASSETS
Goodwill			5				63,422				69,327				1,100
Intangible assets			5				1,936				8,798				140
Property, plant and equipment			4				51,449				54,168				859
Derivative assets			13				286				576				9
Available for sale investments			7				2,676				3,029				48
Non-current tax assets							10,192				10,122				161
Deferred tax assets							3,362				3,579				57
Other non-current assets			10				14,295				14,449				229
Total non-current assets							147,618				164,048				2,603
Inventories			8				2,293				4,361				69
Trade receivables							85,392				93,757				1,487
Other current assets			10				39,474				57,270				908
Unbilled revenues							39,334				42,238				670
Available for sale investments			7				60,557				82,985				1,316
Current tax assets							9,774				6,123				97
Derivative assets			13				3,661				2,511				40
Cash and cash equivalents			9				114,201				122,113				1,937
Total current assets							354,686				411,358				6,524
TOTAL ASSETS							502,304				575,406				9,127
EQUITY
Share capital							4,932				4,937				78
Share premium							12,664				13,903				221
Retained earnings							314,952				364,399				5,780
Share based payment reserve							1,021				1,186				19
Other components of equity							10,472				14,120				224
Shares held by controlled trust							(542	)			—				—
Equity attributable to the equity holders of the company							343,499				398,545				6,322
Non-controlling interest							1,387				1,504				24
Total equity							344,886				400,049				6,346
LIABILITIES Long - term loans and borrowings			11				10,909				12,522				199
Deferred tax liabilities							1,796				2,861				45
Derivative liabilities			13				629				310				5
Non-current tax liability							3,448				6,361				101
Other non-current liabilities			12				4,174				4,273				68
Provisions			12				6				7				—
Total non-current liabilities							20,962				26,334				418
Loans and borrowings and bank overdrafts			11				40,683				57,084				906
Trade payables and accrued expenses							52,256				53,677				852
Unearned revenues							12,767				15,838				249
Current tax liabilities							12,482				7,489				119
Derivative liabilities			13				2,504				1,833				29
Other current liabilities			12				14,394				11,765				187
Provisions			12				1,370				1,337				21
Total current liabilities							136,456				149,023				2,363
TOTAL LIABILITIES							157,418				175,357				2,781
TOTAL EQUITY AND LIABILITIES							502,304				575,406				9,127

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Wipro limited and subsidiaries

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF INCOME

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

 

		Three Months ended December 31,												Nine Months ended December 31,
		2013				2014				2014				2013				2014				2014
										Convenience translation into US dollar in millions (unaudited)												Convenience translation into US dollar in millions (unaudited)
Gross revenues			112,713				119,929				1,902				317,734				348,125				5,522
Cost of revenues			(76,365	)			(82,867	)			(1,315	)			(217,788	)			(238,675	)			(3,786	)
Gross profit			36,348				37,062				587				99,946				109,451				1,736
Selling and marketing expenses			(7,759	)			(7,524	)			(119	)			(22,224	)			(22,709	)			(360	)
General and administrative expenses			(5,775	)			(6,426	)			(102	)			(17,028	)			(19,217	)			(305	)
Foreign exchange gains/(losses), net			604				922				15				2,849				3,343				53
Results from operating activities			23,418				24,034				381				63,543				70,867				1,124
Finance expenses			(898	)			(810	)			(13	)			(2,049	)			(2,687	)			(43	)
Finance and other income			3,812				5,035				81				10,585				14,383				228
Profit before tax			26,332				28,259				449				72,079				82,563				1,309
Income tax expense			(6,060	)			(6,228	)			(99	)			(16,064	)			(18,369	)			(291	)
Profit for the period			20,272				22,031				350				56,015				64,194				1,018
Attributable to:
Equity holders of the company			20,147				21,928				348				55,703				63,808				1,012
Non-controlling interest			125				103				2				312				386				6
Profit for the period			20,272				22,031				350				56,015				64,194				1,018
Earnings per equity share:
Attributable to equity share holders of the company
Basic			8.20				8.92				0.14				22.69				25.97				0.41
Diluted			8.18				8.88				0.14				22.63				25.85				0.41
Weighted average number of equity shares used in computing earnings per equity share
Basic			2,455,541,979				2,457,766,859				2,457,766,859				2,454,745,433				2,457,491,867				2,457,491,867
Diluted			2,462,432,622				2,469,323,243				2,469,323,243				2,462,073,492				2,468,262,835				2,468,262,835
Additional Information
Segment Revenue
IT Services Business Units
BFSI			27,305				29,177				463				77,567				85,653				1,359
HLS			10,914				13,247				210				29,855				36,713				582
RCTG			15,116				16,005				254				43,481				45,951				729
ENU			16,625				18,637				296				46,750				53,792				853
MFG			19,199				20,718				329				55,328				59,721				947
GMT			14,115				15,661				248				40,335				45,933				729
IT SERVICES TOTAL			103,274				113,445				1,800				293,316				327,763				5,199
IT PRODUCTS			10,155				7,740				123				27,695				24,552				389
RECONCILING ITEM			(112	)			(334	)			(5	)			(428	)			(847	)			(13	)
TOTAL			113,317				120,851				1,917				320,583				351,468				5,575
Segment Result
IT Services Business Units
BFSI			6,377				7,035				112				17,148				19,904				316
HLS			1,847				2,981				47				5,155				7,534				120
RCTG			3,164				3,255				52				8,964				9,648				153
ENU			4,683				4,262				68				12,531				13,483				214
MFG			4,565				4,228				67				12,439				12,630				200
GMT			2,845				3,438				55				8,237				10,696				170
OTHERS							—				—								583				9
UNALLOCATED			309				(458	)			(7	)			(195	)			(1,606	)			(25	)
TOTAL IT SERVICES			23,790				24,741				392				64,279				72,872				1,156
IT PRODUCTS			(116	)			89				1				167				316				5
RECONCILING ITEM			(256	)			(796	)			(13	)			(903	)			(2,321	)			(37	)
TOTAL			23,418				24,034				381				63,543				70,867				1,124
FINANCE EXPENSE			(898	)			(810	)			(13	)			(2,049	)			(2,687	)			(43	)
FINANCE AND OTHER INCOME			3,812				5,035				81				10,585				14,383				228
PROFIT BEFORE TAX			26,332				28,259				449				72,079				82,563				1,309
INCOME TAX EXPENSE			(6,060	)			(6,228	)			(99	)			(16,064	)			(18,369	)			(291	)
PROFIT FOR THE PERIOD			20,272				22,031				350				56,015				64,194				1,018

Segment result represents operating profits of the segments and dividend income and gains or losses (net) relating to strategic investments, which are presented within “Finance and other income” in the statement of Income.

The Company is organized by the following operating segments; IT Services and IT Products.

IT Services: The IT Services segment primarily consists of IT Service offerings to our customers organized by industry verticals as follows: Banking, Financial Services and Insurance (BFSI), Healthcare and Life Sciences (HLS), Retail, Consumer, Transport and Government (RCTG), Energy, Natural Resources and Utilities (ENU), Manufacturing (MFG), Global Media and Telecom (GMT). Starting with quarter ended September 30, 2014, it also includes Others which comprises dividend income and gains or losses (net) relating to strategic investments, which are presented within “Finance and other income” in the statement of Income. Key service offering to customers includes software application development and maintenance, research and development services for hardware and software design, business application services, analytics, consulting, infrastructure outsourcing services and business process outsourcing services.

The IT Products segment sells a range of Wipro personal desktop computers, Wipro servers and Wipro notebooks. The Company is also a value added reseller of desktops, servers, notebooks, storage products, networking solutions and packaged software for leading international brands. In certain total outsourcing contracts of the IT Services segment, the Company delivers hardware, software products and other related deliverables. During the fiscal year ended March 31, 2014 the Company ceased the manufacturing of ‘Wipro branded desktops, laptops and servers’. Revenue relating to the above items is reported as revenue from the sale of IT Products.

 

Reconciliation of Non-GAAP Constant Currency IT Services Revenue to IT Services Revenue as per IFRS ($MN)
IT Services Revenue as per IFRS		$	1,795			IT Services Revenue as per IFRS		$	1,795
Effect of Foreign currency exchange movement		$	41			Effect of Foreign currency exchange movement		$	47
Non-GAAP Constant Currency IT Services Revenue based on previous quarter exchange rates		$	1,836			Non-GAAP Constant Currency IT Services Revenue based on previous year exchange rates		$	1,842

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Exhibit 99.3

WIPRO LIMITED – CONSOLIDATED

CIN: L32102KA1945PLC020800 ; Registered Office : Wipro Limited, Doddakanneli, Sarjapur Road, Bangalore – 560035, India

Website: www.wipro.com ; Email id – info@wipro.com ; Tel: +91-80-2844 0011 ; Fax: +91-80-2844 0054

CONSOLIDATED STATUTORILY AUDITED FINANCIAL RESULTS FOR THE QUARTER AND NINE MONTHS ENDED DECEMBER 31, 2014

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

 

		Particulars		Quarter ended												Nine months ended								Year ended
				December 31, 2014				September 30, 2014				December 31, 2013				December 31, 2014				December 31, 2013				March 31, 2014
1		Income from operations
		a) Net Sales/income from operations (net of excise duty)			120,851				118,160				113,274				351,466				320,513				437,549
		b) Other operating income			—				—				—				—				—				—
		Total income from operations (net)			120,851				118,160				113,274				351,466				320,513				437,549
2		Expenses
		a) Cost of materials consumed			5				10				627				34				781				2,054
		b) Purchase of stock-in-trade			7,392				7,401				7,002				21,345				20,322				27,670
		c) (Increase)/Decrease in inventories of finished stock,
		work-in-progress and stock in process			(1,622	)			(381	)			(131	)			(2,080	)			(468	)			54
		d) Employee compensation			57,175				56,947				52,788				168,011				153,846				206,568
		e) Depreciation and amortisation expense			3,647				3,075				3,109				9,556				8,226				11,106
		f) Sub contracting/technical fees/third party application			14,123				13,067				11,174				38,868				31,921				43,521
		g) Other expenditure			16,097				14,979				15,287				44,865				42,342				57,222
		Total expense			96,817				95,098				89,856				280,599				256,970				348,195
3		Profit from operations before other income, finance costs and exceptional items (1-2)			24,034				23,062				23,418				70,867				63,543				89,354
4		Other Income			5,035				5,109				3,812				14,383				10,585				14,542
5		Profit from ordinary activities before finance costs and exceptional items (3+4)			29,069				28,171				27,230				85,250				74,128				103,896
6		Finance Cost			810				989				898				2,687				2,049				2,891
7		Profit from ordinary activities after finance costs but before exceptional items (5-6)			28,259				27,182				26,332				82,563				72,079				101,005
8		Exceptional items			—				—				—				—				—				—
9		Profit from ordinary activities before tax (7+8)			28,259				27,182				26,332				82,563				72,079				101,005
10		Tax expense			6,228				6,199				6,060				18,369				16,064				22,600
11		Net profit from ordinary activities after tax (9-10)			22,031				20,983				20,272				64,194				56,015				78,405
12		Extraordinary items (net of tax expense)			—				—				—				—				—				—
13		Net profit for the period (11+12)			22,031				20,983				20,272				64,194				56,015				78,405
14		Share in earnings of associates			—				—				—				—				—				—
15		Minority interest			(103	)			(135	)			(125	)			(386	)			(312	)			(438	)
16		Net profit after taxes, minority interest and share of profit of associates (13+14+15)			21,928				20,848				20,147				63,808				55,703				77,967
17		Paid up equity share capital (Face value 2 per share)			4,937				4,935				4,931				4,937				4,931				4,932
18		Reserves excluding revaluation reserves as per balance sheet of previous accounting year																							338,567
19		EARNINGS PER SHARE (EPS)
		Before extraordinary items
		Basic (in )			8.92				8.49				8.20				25.97				22.69				31.76
		Diluted (in )			8.88				8.45				8.18				25.85				22.62				31.66
		After extraordinary items
		Basic (in )			8.92				8.49				8.20				25.97				22.69				31.76
		Diluted (in )			8.88				8.45				8.18				25.85				22.62				31.66
20		Public shareholding (1)
		Number of shares			608,391,868				607,829,785				605,731,374				608,391,868				605,731,374				606,514,878
		Percentage of holding (as a % of total public shareholding)			25.14	%			25.12	%			25.05	%			25.14	%			25.05	%			25.08	%
21		Promoters and promoter group shareholding
		a) Pledged/ Encumbered
		-Number of shares			Nil				Nil				Nil				Nil				Nil				Nil
		-Percentage of shares (as a % of the total shareholding of promoter and promoter group)			Nil				Nil				Nil				Nil				Nil				Nil
		-Percentage of shares (as a % of the total share capital of the company)			Nil				Nil				Nil				Nil				Nil				Nil
		b) Non-encumbered
		-Number of shares (2)			1,812,022,464				1,812,022,464				1,812,022,464				1,812,022,464				1,812,022,464				1,812,022,464
		-Percentage of shares (as a % of the total shareholding of promoter and promoter group)			100	%			100	%			100	%			100	%			100	%			100	%
		-Percentage of shares (as a % of the total share capital of the company, excluding ADS Shareholding)			74.86	%			74.88	%			74.95	%			74.86	%			74.95	%			74.92	%

 

(1)	Public shareholding as defined under clause 40A of the listing agreement (excludes shares beneficially held by promoters and holders of American Depository Receipt)

(2)	Includes 440,557,453 (September 30, 2014: 440,557,453 ; December 31, 2013: 440,557,453; March 31, 2014: 440,557,453) equity shares on which Promoter does not have beneficiary interest.

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Status of redressal of complaints received for the period October 1, 2014 to December 31, 2014
Sl No.		Nature of the complaint		Nature		Unresolved as at 01.10.2014				Complaints received during the quarter				Complaints disposed during the quarter				Unresolved as at 31.12.2014
1		Non-Receipt of Securities		Complaint			—				1				1				—
2		Non Receipt of Annual Reports		Complaint			—				11				11				—
3		Correction / Duplicate / Revalidation of dividend warrants / Demerger Fractional Payout Warrants		Request			—				167				167				—
4		SEBI/Stock Exchange Complaints		Complaint			—				2				2				—
5		Non Receipt of Dividend warrants		Complaint			—				59				59				—
		TOTAL					—				240				240				—

Note: There are certain pending cases relating to disputes over title to shares in which the company has been made a party. However these cases are not material in nature.

 

1.	The condensed consolidated interim financial results of the Company for the quarter ended December 31, 2014 have been approved by the directors of the Company at its meeting held on January 16, 2015. The statutory auditors have expressed an unqualified audit opinion.

 

2.

The above consolidated interim financial results have been prepared from the condensed consolidated interim financial statements, which are prepared in accordance with International Financial Reporting Standards and its interpretations (“IFRS”), as issued by the International Accounting Standards Board (“IASB”).

 

3.

The total revenue from operations represent the aggregate revenue and includes foreign exchange gains / (losses), net and is net of excise duty amounting to Nil, 1 and 43 for the quarter ended December 31, 2014, September 30, 2014 and December 31, 2013, respectively, 2 and 70 for the nine months ended December 31, 2014 and December 31, 2013, respectively and 79 for the year ended March 31, 2014.

 

4.	Derivatives

The Company is exposed to foreign currency fluctuations on foreign currency assets / liabilities, forecasted cash flows denominated in foreign currency and net investment in foreign operations. The Company follows established risk management policies, including the use of derivatives to hedge foreign currency assets / liabilities, foreign currency forecasted cash flows and net investment in foreign operations. The counter party in these derivative instruments is a bank and the Company considers the risks of non-performance by the counterparty as non-material.

The following table presents the aggregate contracted principal amounts of the Company’s derivative contracts outstanding:

 

		(In Millions)
		As at
		December 31, 2014				March 31, 2014
Designated derivative instruments
Sell		$	977			$	516
		£	186			£	51
		€	159			€	78
		AUD	23			AUD	9
Interest rate swaps		$	150			$	150

 

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		(In Millions)
		As at
		December 31, 2014				March 31, 2014
Net investment hedges in foreign operations
Others		$	220			$	220
		€	—			€	25
Non designated derivative instruments
Sell		$	824			$	1,061
		£	64			£	112
		€	57			€	63
		AUD	53			AUD	99
		¥	490			¥	490
		SGD	13			SGD	8
		ZAR	69			ZAR	223
		CAD	24			CAD	10
		CHF	10			CHF	—
Buy		$	600			$	585

 

5.	The list of subsidiaries is included in the condensed consolidated financial statements of Wipro Limited and subsidiaries for the quarter ended December 31, 2014, are available on our company website www.wipro.com

 

6.	Segment Information

The Company is organized by the following operating segments; IT Services and IT Products.

IT Services: The IT Services segment primarily consists of IT Service offerings to our customers organized by industry verticals as follows: Banking, Financial Services and Insurance (BFSI), Healthcare and Life Sciences (HLS), Retail, Consumer, Transport and Government (RCTG), Energy, Natural Resources and Utilities (ENU), Manufacturing (MFG), Global Media and Telecom (GMT). Starting with quarter ended September 30, 2014, it also includes Others which comprises dividend income and gains or losses (net) relating to strategic investments, which are presented within “Finance and other income” in the statement of Income. Key service offering to customers includes software application development and maintenance, research and development services for hardware and software design, business application services, analytics, consulting, infrastructure outsourcing services and business process outsourcing services.

IT Products: The IT Products segment sells a range of Wipro personal desktop computers, Wipro servers and Wipro notebooks. The Company is also a value added reseller of desktops, servers, notebooks, storage products, networking solutions and packaged software for leading international brands. In certain total outsourcing contracts of the IT Services segment, the Company delivers hardware, software products and other related deliverables. During FY 2013-14, the Company ceased the manufacturing of ‘Wipro branded desktops, laptops and servers’. Revenue relating to the above items is reported as revenue from the sale of IT Products.

The Chairman of the Company has been identified as the Chief Operating Decision Maker (CODM) as defined by IFRS 8, “Operating Segments”. The Chairman of the Company evaluates the segments based on their revenue growth and operating income.

Assets and liabilities used in the Company’s business are not identified to any of the reportable segments, as these are used interchangeably between segments. Management believes that it is currently not practicable to provide segment disclosures relating to total assets and liabilities since a meaningful segregation of the available data is onerous.

 

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Information on reportable segment for the quarter ended December 31, 2014, September 30, 2014 and December 31, 2013, and nine months ended December 31, 2014 and December 31, 2013, and year ended March 31, 2014 is as follows:

 

		Quarter ended												Nine months ended								Year ended
Particulars		December 31, 2014				September 30, 2014				December 31, 2013				December 31, 2014				December 31, 2013				March 31, 2014
Revenue
IT Services
BFSI			29,177				28,411				27,305				85,653				77,567				106,035
HLS			13,247				12,176				10,914				36,713				29,855				41,130
RCTG			16,005				15,218				15,116				45,951				43,481				58,893
ENU			18,637				18,333				16,625				53,792				46,750				63,923
MFG			20,718				19,894				19,199				59,721				55,328				74,423
GMT			15,661				15,203				14,115				45,933				40,335				55,105
Others			—				—				—				—				—				—
Total of IT Services			113,445				109,235				103,274				327,763				293,316				399,509
IT Products			7,740				9,152				10,155				24,552				27,695				38,785
Reconciling Items			(334	)			(226	)			(112	)			(847	)			(428	)			(666	)
Total			120,851				118,161				113,317				351,468				320,583				437,628
Segment Result
IT Services
BFSI			7,035				6,245				6,377				19,904				17,148				24,153
HLS			2,981				2,422				1,847				7,534				5,155				7,637
RCTG			3,255				3,205				3,164				9,648				8,964				13,012
ENU			4,262				4,668				4,683				13,483				12,531				17,418
MFG			4,228				4,034				4,565				12,630				12,439				17,348
GMT			3,438				3,496				2,845				10,696				8,237				11,569
Others			—				608				—				583				—				—
Unallocated			(458	)			(524	)			309				(1,606	)			(195	)			(804	)
Total of IT Services			24,741				24,154				23,790				72,872				64,279				90,333
IT Products			89				62				(116	)			316				167				310
Reconciling Items			(796	)			(1,154	)			(256	)			(2,321	)			(903	)			(1,289	)
Total			24,034				23,062				23,418				70,867				63,543				89,354
Finance Expense			(810	)			(989	)			(898	)			(2,687	)			(2,049	)			(2,891	)
Finance and Other Income			5,035				5,109				3,812				14,383				10,585				14,542
Profit before tax			28,259				27,182				26,332				82,563				72,079				101,005
Income tax expense			(6,228	)			(6,199	)			(6,060	)			(18,369	)			(16,064	)			(22,600	)
Profit for the period			22,031				20,983				20,272				64,194				56,015				78,405

 

4

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The Company has four geographic segments: India, Americas, Europe and Rest of the world. Revenues from the geographic segments based on domicile of the customer are as follows:

 

		Quarter ended												Nine months ended								Year ended
		December 31, 2014				September 30, 2014				December 31, 2013				December 31, 2014				December 31, 2013				March 31, 2014
India			10,649				10,668				11,592				32,388				33,591				46,235
Americas			58,735				57,133				51,751				168,744				146,839				200,343
Europe			31,818				30,884				31,543				94,069				88,265				120,868
Rest of the world			19,649				19,476				18,431				56,267				51,888				70,182
			120,851				118,161				113,317				351,468				320,583				437,628

Management believes that it is currently not practicable to provide disclosure of geographical location wise assets, since the meaningful segregation of the available information is onerous.

No client individually accounted for more than 10% of the revenues during the quarter ended December 31, 2014, September 30, 2014 and December 31, 2013, nine months ended December 31, 2014 and December 31, 2013 and year ended March 31, 2014.

Notes:

 

a)

‘Reconciling items’ includes elimination of inter-segment transactions, dividend income/ gains/ losses relating to strategic investments and other corporate activities.

 

b)

Segment result represents operating profits of the segments and dividend income and gains or losses (net) relating to strategic investments, which are presented within “Finance and other income” in the statement of Income.

 

c)

Revenues include excise duty amounting to Nil, 1 and 43 for the quarter ended December 31, 2014, September 30, 2014 and December 31, 2013, respectively, 2 and 70 for the nine months ended December 31, 2014 and December 31, 2013, respectively and 79 for the year ended March 31, 2014. For the purpose of segment reporting, the segment revenues are net of excise duty. Excise duty is reported in reconciling items.

 

d)

For the purpose of segment reporting, the Company has included the impact of ‘foreign exchange gains / (losses), net’ in revenues (which is reported as a part of operating profit in the statement of income).

 

e)

For evaluating performance of the individual business segments, stock compensation expense is allocated on the basis of straight line amortization. The differential impact of accelerated amortization of stock compensation expense over stock compensation expense allocated to the individual business segments is reported in reconciling items.

 

f)

For evaluating the performance of the individual business segments, amortization of customer related intangibles acquired through business combinations are reported in reconciling items.

 

g)

The Company generally offers multi-year payment terms in certain total outsourcing contracts. These payment terms primarily relate to IT hardware, software and certain transformation services in outsourcing contracts. Corporate treasury provides internal financing to the business units offering multi-year payment terms. The finance income on deferred consideration earned under these contracts is included in the revenue of the respective segment and is eliminated under reconciling items.

 

7.

The Company has granted Nil, Nil and 30,000 options under RSU Options Plan and Nil, 35,000 and Nil options under ADS during the quarter ended December 31, 2014, September 30, 2014 and December 31, 2013 and 2,480,000 and 30,000 options under RSU Plan and 1,689,500 and Nil options under ADS during the nine months ended December 31, 2014 and 2013, respectively and 30,000 options under RSU Plan and Nil options under ADS during the year ended March 31, 2014.

 

5

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8.	Business Combination

Opus Capital Markets Consultants LLC

On January 14, 2014, the Company had obtained control of Opus Capital Markets Consultants LLC (‘Opus’) by acquiring 100% of its share capital. Opus is a US-based provider of mortgage due diligence and risk management services. The acquisition will strengthen Wipro’s mortgage solutions and complement its existing offerings in mortgage origination, servicing and secondary market.

The acquisition was executed through a share purchase agreement for a consideration of 4,589 million (US$ 75 million) which includes a deferred earn-out component of 1,285 million (US$ 21 million), which is dependent on achievement of revenues and earnings over a period of 3 years. This earn-out liability was fair valued at 782 million and recorded as part of preliminary purchase price allocation.

During the current period, the Company concluded the fair value adjustments of the assets acquired and liabilities assumed on acquisition. Consequently, the earn-out liability was recorded at 589 million. Comparatives have not been retrospectively revised as the amounts are not material.

The following table presents the allocation of purchase price:

 

Description		Pre-acquisition carrying amount				Fair value adjustments				Purchase price allocated
Assets
Cash and cash equivalents			22				—				22
Property, plant & equipment (including software)			160				—				160
Trade receivable			456				—				456
Other assets			20				—				20
Customer related intangibles			—				234				234
Non-compete arrangement			—				216				216
Liabilities
Other liabilities			(258	)			—				(258	)
Deferred income taxes, net			—				(133	)			(133	)
Total			400				317				717
Goodwill											2,810
Total purchase price											3,527

The goodwill of 2,810 comprises of value of expected synergies arising from the acquisition.

As at the period end, the fair value of earn-out liability was determined to be 144 as a result of changes in estimates of revenue and earnings over the earn-out period. The revision of the estimates inter alia has resulted in reduction in the carrying value of intangibles recognized on acquisition. Accordingly, a net gain of 470 has been recorded in the statement of income.

The fair value of earn-out consideration as at the period end was estimated by applying the Discounted Cash Flow approach. The fair value estimates are based on discount rate of 7% and probability adjusted revenue and earnings estimates.

 

6

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ATCO I-Tek Inc.

On August 15, 2014, the Company obtained control of ATCO I-Tek Inc. (‘ATCO I-Tek’) by acquiring 100% of its share capital. ATCO I-Tek is a Canada based provider of IT services to ATCO Ltd. The acquisition will strengthen Wipro’s IT services delivery model in North America and Australia.

The acquisition was executed through a share purchase and sale agreement for Canada and asset sale and purchase agreement for Australia for an all-cash consideration of 11,420 million (Canadian Dollars 204 million).

The following table presents the provisional allocation of purchase price:

 

Description		Purchase price allocated
Assets
Cash			71
Property, plant & equipment (including capital work-in-progress and software)			1,407
Trade receivables			210
Other assets			296
Customer related intangibles			8,073
Liabilities
Trade payables and accrued liabilities			(755	)
Deferred income taxes, net			(2,115	)
Total			7,187
Goodwill			4,233
Total purchase price			11,420

The goodwill of 4,233 comprises of value of expected synergies arising from the acquisition. Goodwill is not expected to be deductible for income tax purposes. The purchase consideration was settled in cash.

If the acquisition had occurred on April 1, 2014, management estimates that consolidated revenue for the Company would have been 354,062 and the profit after taxes would have been 64,638 for nine months ended December 31, 2014. The pro-forma amounts are not necessarily indicative of the results that would have occurred if the acquisition had occurred on dates indicated or that may result in the future.

The purchase consideration has been allocated on a provisional basis based on management’s estimates. The Company is in the process of making a final determination of the fair value of assets and liabilities. Finalization of the purchase price allocation based on an independent third party appraisal may result in certain adjustments to the above allocation.

 

9.	Subsequent Events

On January 16, 2015, the Board of Directors of the Company declared an interim dividend of 5 ($ 0.08) per equity share and ADR (250% on an equity share of par value of 2).

 

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10.	Stand-alone information (Audited)

 

Particulars		Quarter ended												Nine Months ended								Year ended
		December 31, 2014				September 30, 2014				December 31, 2013 *				December 31, 2014				December 31, 2013*				March 31, 2014
Income from Operations (Net)			105,212				103,582				101,020				309,835				287,315				391,333
Profit before tax			25,886				25,904				26,771				78,224				66,442				96,082
Profit after tax			19,923				19,920				20,633				60,515				50,345				73,874

 

*	Re-casted to give effect to the scheme of amalgamation of Wipro Energy IT Services India Private Limited and Wipro Technology Services Limited, (wholly owned subsidiaries) with Wipro Limited as approved by the Honorable High Court of Karnataka, with April 1, 2013 being the appointed date.

 

		By order of the Board,		WIPRO LIMITED
		for, Wipro Limited		Regd. Office: Doddakanneli,
Place: Bangalore		Azim H Premji		Sarjapur Road, Bangalore - 560 035,
Date: January 16, 2015		Chairman		www.wipro.com
CIN: L32102KA1945PLC020800; Registered Office: Wipro Limited, Doddakanneli, Sarjapur Road, Bangalore-560035, India Website: www.wipro.com; Email id - info@wipro.com; Tel: +91-80-2844 0011; Fax: +91-80-2844 0054

 

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