Wipro - Annual Director's Report - 2009

WIPRO LIMITED

ANNUAL REPORT 2008-2009

DIRECTOR'S REPORT7

Dear Shareholders,

I am happy to present on behalf of the Board of Directors, the 63rd
Directors' Report for the year ended March 31, 2009, along with the Balance
Sheet and Profit and Loss Account for the year.

Financial Performance:

Key aspects of your Company's consolidated financial performance for Wipro
and its group companies and standalone financial results for Wipro Limited
for the year 2008-09 are tabulated below:

(Rs. in Million)
Consolidated Standalone
Results Results
2009 2008 2009 2008

Sales and Other Income 259,616 203,970 210,269 178,195

Profit before Tax 45,196 37,070 35,479 34,697

Provision for Tax 6,460 4,550 5,741 4,064

Minority interest and equity in 263 309 - -
earnings/(losses) in affiliates

Profit for the year* 38,999 32,829 29,738 30,633

Appropriations:

Interim Dividend - 2,919 - 2,919
Proposed Dividend on equity shares 5,860 5,846 5,860 5,846
Corporate Tax on distributed dividend 996 1,489 996 1,489
Transfer to General Reserve 32,143 22,575 22,882 20,379

* Profit for the year in Standalone Results is after Rs. 7,454 million of
losses relating to translation of foreign currency borrowings and mark to
market losses of related cross currency swaps. In the Consolidated
accounts, these are considered as hedges of net investment in overseas
operations and are recognized directly in shareholders' funds.

Global Economy:

The ongoing economic crisis has significantly impacted global economic
growth. According to World Economic Outlook Update published by the
International Monetary Fund in january 2009, the GDP of United States is
projected to contract by 1.6% in fiscal 2009 and during the same period the
GDP of Euro area is projected to contract by 2%. A significant portion of
our exports are to these economies.

Subsidiary Companies:

Wipro today is a global corporation having operations in more than 31
countries through 76 subsidiary companies, a few joint ventures and
associate companies. Section 212 of the Companies Act, 1956, requires that
we attach the Directors' Report, Balance Sheet and Profit and Loss Account
of our subsidiary companies. We believe that the Consolidated Financial
Statements present a more comprehensive picture rather than the standalone
financial statements of Wipro Limited and each of its subsidiaries. We,
therefore, applied to the Ministry of Corporate Affairs, Government of
India and sought an exemption from the requirement to present detailed
financial statements of each subsidiary. The Ministry of Corporate Affairs,
Government of India has granted the exemption. As permitted by SEBI
guidelines and Companies Act, 1956, we have included the abridged financial
statements of Wipro Limited in this annual report. The detailed financial
statements and audit reports of Wipro Limited and each of the subsidiaries
are available for inspection at the registered office of the Company and
upon written request from a shareholder, we will arrange to send the
unabridged financial statements to the said shareholder.

Consolidated Results:

Our Sales and Other Income for the current year grew by 27% to Rs. 259,616
million and our Profit for the year was Rs. 38,999 million, increase of 19%
over the previous year. Over the last 10 years, our Sales have grown at a
compounded annual growth rate (CAGR) of 30% and Profit after Tax at 37%.

Dividend:

Your Directors recommend a final Dividend of 200% (Rs.4 per equity share of
Rs. 2/- each) to be appropriated from the profits of the year 2008-09
subject to the approval of the shareholders at the ensuing Annual General
Meeting. The Dividend will be paid in compliance with applicable
regulations.

During the year 2008-09, unclaimed dividend of Rs.88,824/was transferred to
the Investor Education and Protection Fund, as required by the Investor
Education and Protection Fund (Awareness and Protection of Investor) Rules,
2001.

Preferential issue:

On March 26, 2009, the Company allotted 968,803 equity shares of Rs.2/-
each to Wipro Inc Benefit Trust pursuant to the orders of the Hon'ble High
Court of Karnataka and Hon'ble High Court of Bombay and in terms of the
approval by National Stock Exchange and Bombay Stock Exchange approving the
scheme of amalgamation for merger of Mpact Technology Services Private
Limited, Mpower Software Services (India) Private Limited and Cmango India
Private Limited with Wipro Limited.

Mergers and Acquisitions:

We have continued to pursue the strategy of 'string of pearls acquisitions'
by acquiring businesses which complement our service offerings, provide
access to niche skill sets and expand our presence in select geographies.
We have a dedicated team of professionals who identify businesses which
meet our strategic requirements and are cultural fit to Wipro.

In January 2009, your Company acquired Wipro Technology Services Limited
(formerly called as Citi Technology Services Limited 'CTS') for US $127
million. CTS is an India based captive provider of information technology
services and solutions to Citi Group worldwide. CTS has a strong competency
in Technology Infrastructure Services and application development and
maintenance for cards, capital markets and corporate banking. The
acquisition is expected to enhance Wipro's capabilities to address
Technology Infrastructure Services business in the financial service
industry.

During the year, the Company also re-structured a few of its overseas
subsidiaries and merged them with their holding company in the US.

All the subsidiaries of the Company are unlisted and none of them are
material unlisted subsidiaries as per Clause 49 of the Listing Agreement.

Investments in direct subsidiaries:

During the year under review, your Company had invested an aggregate of US
$432 million as equity, in its direct subsidiaries Wipro Cyprus Private
Limited, Wipro Holdings (Mauritius) Limited, Wipro Inc and Wipro Technology
Services Limited.

Corporate Governance:

We believe Corporate Governance is at the heart of Shareholder value
creation. Our governance practices are described separately in pages 17
through 40 of this annual report. We have obtained a certification from a
practising Company Secretary on our compliance with clause 49 of the
listing agreement with Indian Stock Exchanges. This certificate is given in
page 40 of this Annual Report.

Personnel:

We present the abridged accounts under Section 219 of the Companies Act,
1956. Pursuant to the Rules and Forms read with Section 219 of the
Companies Act, 1956, the particulars of employees as required by Section
217 (2A) of the Companies Act, 1956, read with the Companies (Particulars
of Employee) Rules, 1975) have not been provided. However, these
particulars are available for inspection at the Registered Office of the
Company and upon written request from a shareholder, we will arrange to
mail these details.

Wipro Employee Stock Option Plans (WESOP):

Information relating to stock options program of the Company is provided in
pages 6 through 8. The information is being provided in compliance with
Clause 12 of the Securities and Exchange Board of India (Employee Stock
Option Scheme) and (Employee Stock Purchase Scheme) Guidelines, 1999, as
amended. No employee was issued Stock Option, during the year equal to or
exceeding 1% of the issued capital of the Company at the time of grant.

Foreign Exchange Earnings and Outgoings:

During the year we. earned foreign exchange of Rs.166,229 million and the
outgoings in foreign exchange were Rs. 70,256 million, including outgoings
on materials imported and dividend.

Research & Development:

Requirement under Rule 2 of Companies (Disclosure of Particulars in the
Report of Board of Directors) Rules, 1988 regarding Technical Absorption
and Research & Development in Form B is given in page 4 to the extent
applicable.

Conservation of Energy:

The Company has taken several steps to conserve energy through its 'Eco
Eye' initiatives disclosed separately as part of this Annual Report. The
information on Conservation of Energy required under Section 217(1)(e) of
the Companies Act, 1956 read with Rule 2 of the Companies (Disclosure of
Particulars in the Report of Board of Directors) Rules, 1988 is provided in
page 4 of this annual report.

Directors' Re-appointment:

Articles of Association of the Company provide-that at least two-thirds of
our Directors shall be subject to retirement by rotation. One third of
these retiring Directors must retire from office at each Annual General
Meeting of the shareholders. A retiring Director is eligible for
re-election. Mr. B.C. Prabhakar, Dr. Jagdish N. Sheth and Mr. William
Arthur Owens, retire by rotation and being eligible offer themselves for
reappointment at this Annual General Meeting. The Board Governance and
Compensation Committee have recommended their re-appointment for
consideration of the Shareholders.

Board of Directors vide circular resolution of June 16, 2009 re-appointed
Mr. Azim H. Premji as Chairman and Managing Director of the Company
(designated as 'Chairman') for a further period of 2 years with effect from
July 31, 2009. This re-appointment is subject to the approval of the
shareholders of the Company at the ensuing Annual General Meeting.

Group:

The names of the Promoters and entities comprising 'group' as defined under
the Monopolies and Restrictive Trade Practices ('MRTP') Act, 1969 read with
Section 3(1)(e)(i) of the SEBI (Substantial Acquisition of Shares and
Takeover) Regulations, 19.97 are disclosed below:

Name No. of Shares

1. Azim H. Premji 56,043,060
2. Yasmeen A. Premji 637,600
3. Rishad Azim Premji 618,000
4. Tariq Azim Premji 159,000
5. Mr. Azim H. Premji partner representing Hasham Traders 326,259,000
6. Mr. Azim H. Premji partner representing Prazim Traders 325,017,000
7. Mr. Azim H. Premji partner representing Zash Traders 324,244,800
8. Regal Investment Trading Company Pvt. Ltd. 51,014,200
9. Vidya Investment Trading Company Pvt. Ltd. 38,860,600
10. Napean Trading Investment Company Pvt. Ltd. 38,263,000

Management's Discussion and Analysis Report:

The Management's Discussion and Analysis on Company's performance -
industry trends and other material changes with respect to the Company and
its subsidiaries, wherever applicable are presented on pages 9 through 16
of this annual report.

Re-appointment of Statutory Auditor:

The auditors, M/s. BSR & Co., Chartered Accountants, retire at the ensuing
Annual General Meeting and have confirmed their eligibility and willingness
to accept office, if re-appointed. The proposal for their re-appointment is
included in the notice for Annual General Meeting sent herewith.

Re-appointment of Cost Auditor:

Pursuant to the direction from the Department of Corporate Affairs for
appointment of Cost Auditors, your Board of Directors has re-appointed M/s.
P.D. Dani & Co., as the Cost Auditor for the year ended March 31, 2010.

Fixed Deposits:

We have not accepted any fixed deposits. Hence, there is no outstanding
amount as on the Balance Sheet date.

Directors' Responsibility Statement:

On behalf of the Directors I confirm that as required under Section
217(2AA) of the Companies Act, 1956.

a) In the preparation of the annual accounts, the applicable accounting
standards have been followed and that no material departures are made from
the same;

b) We have selected such accounting policies and applied them consistently
and made judgements and estimates that are reasonable and prudent so as to
give true and fair view of the state of affairs of the Company at the end
of the financial year and of the profits of the Company for the period;

c) We have taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of the Companies Act,
1956 for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities; and

d) We have prepared the annual accounts on a going concern basis.

Acknowledgements and Appreciation:

Your Directors take this opportunity to thank the customers, shareholders,
suppliers, bankers, business partners/associates, financial institutions
and Central and State Governments for their consistent support and
encouragement to the Company. I am sure you will join our Directors in
conveying our sincere appreciation to all employees of the Company for
their hard work and commitment. Their dedication and competence has ensured
that the Company continues be a significant and leading player in the IT
services industry.

For and on behalf of the Board of Directors

Place: Bangalore Azim H. Premji
Dated: June 39, 2009 Chairman

ANNEXURE-'A' FORMING PART OF THE DIRECTORS' REPORT

A. DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY (Wipro
Consumer Care and Lighting):

2008-2009 2007-2008
Electricity:
a) Purchased:
Unit KWH 14,848,463 13,095,941
Total Amount Rs. 65,068,207 56,338,693
Rate/unit Rs. 4.38 4.30
b) Own generation:
Through Diesel Generator:
Unit KWH 859,456 906,745
Unit/litre of diesel Units 3.04 3.02
Cost per unit Rs. 11.27 10.38
Coal:
Quantity Tones 3,187 3,333
Total Cost Rs. 15,909,865 13,141,189
Av. Rate Rs. 4,992 3,943
Furnace Oil:
Quantity FO Ltrs. 3,903,204 3,101,420
Total Cost Rs. 113,006,503 68,855,390
Av. Rate Rs. 28.95 22.20
LPG & Propane:
Quantity Kgs. 594,221 659,601
Total Cost Rs. 24,718,033 23,416,392
Av. Rate Rs. 41.60 35.50
H2 Gas:
Quantity CMT 109,981 169,622
Total Cost Rs. 3,672,356 5,510,025
Av. Rate Rs. 33.39 32.48

B. DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY (Wipro
Infrastructure Engineering):

ELECTRICITY 2008-09 2007-08

a. Purchased:
Unit KWH 4,872,613 7,568,441
Total Amount Rs. 23,746,108 35,467,862
Rate/Unit Rs. 4.87 4.69
b. Own Generation through DG:
Unit KWH 398,638 431,734
Unit/Ltr. of Diesel Units 2.17 2.64
Cost per unit Rs. 16.68 12.45

C. CONSUMPTION PER UNIT PRODUCTION (Wipro Consumer Care and lighting):

Vanaspati Electricity Liquid Diesel Oil
KWH one (Litres/Tonne)
Standard Standard

2008/09 109 138.42 - NA
2007-08 - 135.51 - NA
2006-07 - 128 - NA

General Lighting System Electricity Liquid Diesel Oil
(KWH/000 nos) (Litres/000 nos)
Standard Standard
2008/09 16 15.41 - 0.44
2007/08 - 19.00 - 0.53
2006/07 - 16.65 - 0.50

Flourescent Tube Light Electricity Liquid Diesel Oil
(KWH/000 nos) (Litres/000 nos)
Standard Standard

2008/09 138 144.67 - 2.74
2007/08 - 160.83 - 3.71
2006 07 - 149.62 - 2.61

D. CONSUMPTION PER UNIT PRODUCTION (Wipro Infrastructure Engineering):

Hydraulic Cylinder Standard Electricity Standard Diesel
(kwh/cyl.) (Lts/Cyl.)

2008-09 17 kwh 19.05 0.40 ltrs 0.66
2007-08 - 17.39 0.36

FORM B:

Wipro's R&D Activities: 2008-09

A. Specific areas in which R&D is being carried out in the Company:

Wipro's R&D focus is to strengthen the portfolio of Centers of Excellence
(CoE), Solution Accelerators and Software Engineering Tools &
Methodologies. In financial year 2008-09, your Company incubated Applied
Research group to investigate & analyze potential impact and business
prospect of technologies which are in the early stage of adoption.

B. Benefits derived as a result of R&D, Technology Absorption, Adaptation
and Innovation:

Centers of Excellence (CoE):

The goal of CoE is to create competencies in emerging areas of technologies
& industry and incubate new practices for business growth. In order to
enhance focus, few technologies are driven centrally as Theme initiatives.
The technology themes identified are SOA (Service Oriented Architecture),
SaaS (Software as a Service), Virtualization, Unified Communication, Next
Gen Web, Mobility, Business Analytics and Green IT.

Solution Accelerators:

Industry solution accelerators are specific to a particular industry
segment whereas functional and technology solution accelerators can be used
across industry segments.

Sample list of solution accelerators incubated in Financial Year 08-09:

* Order to Bill solution for mobile operators in emerging markets.

* Business Analytics solution for Retail and Healthcare Industry.

* Reference Data Management solution for Securities Industry.

* Intuitive Customer Experience solution for Banking Industry.

* Identity and Access Management solution.

* Document Management Solution.

* SaaS enablement solution We have also invested in innovative delivery
models targeted towards outcome based (and not head count based) service
delivery & pricing. Examples include: Flex Delivery for applications like
SAP and CIGMA for Integrated Application Management.

Software Engineering Tools & Methodologies:

We developed a unique approach with a blend of tools, frameworks and
methodologies to provide value engineering services to clients and built
capability to do deep structural analysis of an application and provide
insights on Scalability, Maintainability, Complexity etc. and aid retain/
sunset decisions.

We continued to study the interplay between Software delivery and team
composition. Unique insights from the study have been incorporated into our
resourcing model to maximize performance and optimize costs. Our joint work
with Harvard business school in this area has been published in Management
science - a leading management journal.

Patents:

During the financial year 2008-09, Wipro has filed for 13 patents, during
the year we were granted 1 patent in respect of prior patent applications.
Process innovations in SOA and BPO domains, in respect of which patent
applications have been filed, have already been deployed in various
customer engagements.

C. Future plan of action:

We will continue to invest in in-house development of Software Engineering
Tools to improve productivity and Quality; Examples include Wipro style,
Deep Check, Wipro Accelerator, Wipro Unit Test and Wipro code checker,
reusable IP's/assets (components, tools, frameworks) which help in
accelerating the implementation of solutions in customer engagements.

We have chosen Enterprise Information Management as one of the areas of
focus in Applied Research.

D. Expenditure on R&D:

During the year under review, we have incurred an expenditure of Rs.492
million including capital expenditure. in continued developement of R&D
activities.

ANNEXURE 'B' FORMING PART OF THE CORPORATE GOVERNANCE REPORT

Disclosure in compliance with Clause 12 of the SEBI (Employee Stock Option
Scheme) and (Employee Stock Purchase Scheme) Guidelines, 1999, as amended:

Description WESOP WESOP
1999 2000

1. Total number of 30,000,000 150,000,000
options under the Plan (adjusted for (adjusted for
the issue of the issue of
bonus shares bonus shares
in the years in the years
2004 and 2004 and
2005) 2005)

2. Options/RSUs grants approved - 120,000
during the year

3. Pricing formula Fair market Fair market
value i.e., the value i.e., the
market price market price
as defined by as defined by
the Securities the Securities
and Exchange and Exchange
Board of India Board of India

4. Options vested during the - -
year

5. Options exercised during - 345,099
the year

6. Total number of shares - 345,099
arising as a result of
exercise of option (as of
March 31, 2009)

7. Options lapsed/forfeited - 873,687
during the year*

8. Variation in terms of - -
options during the year
ended March 31, 2009

9. Money realised by - 92,523,633
exercise of options
during the year (Rs.)

10. Total number of options - 121,140
in force at the end of the
year (granted, vested and
unexercised/unvested and
unexercised)

11. Employee wise details
of options granted to:

i. Senior Management during
the year:

a. Suresh C. Senapaty Nil Nil
b. Suresh Vaswani Nil 60,000
c. Girish Paranjpe Nil 60,000
d. Pratik Kumar Nil Nil
e. Ranjan Acharya Nil Nil
f. T.K. Kurien Nil Nil
g. S. Deb Nil Nil
h. Vineet Agrawal Nil Nil
i. Anurag Behar Nil Nil

ii. Employees holding 5% or Nil Nil
more of the aggregate total
number of options granted
during the year under all
Plans

iii. Identified employees Nil Nil
who were granted option,
during any one year, equal
to or exceeding 1% of the
issued capital (excluding
outstanding warrants and
conversions) of the Company
at the time of grant

12. Diluted Earnings per 20.38 20.38
Share pursuant to issue of
shares on exercise of option
calculated in accordance
with Accounting Standard
(AS) 20

13. Where the Company has Not applicable Difference
calculated the employees as these pertain between cost as
compensation cost using the to options per fair value
instrinsic value of the granted prior and intrinsic
stock options, the to June 2003 value method is
difference between the Rs.5,136,895/-.
employee compensation cost Impact on EPS
so computed and the employee would be negligible
compensation cost that shall
have been recognised if it
had used the fair value of
the options. The impact of
this difference on profits
and on EPS of the Company

14. Weighted average exercise Not applicable Exercise price
prices and weighted average as these pertain Rs.489/- per
fair values of options to options option. Market
separately for options whose granted before price was lower
exercise price either equals June 30, 2003 than the exercise
or exceeds or is less than the price as on March
market price of the stock 31, 2009

15. A description of the method Not applicable
and significant assumptions used as these pertain
during the year to estimate the to options
fair values of options, granted before
including the following weighted June 30, 2003
average information:

(a) risk free interest rate 7.36%

(b) expected life 6 years

(c) expected volatility 36.21

(d) expected dividends and -

(e) the price of the Rs.489/-
underlying share in market
at the time of option grant

Description ADS 2000 Wipro
Stock Option Restricted
Plan Stock Unit
Plan 2004

1. Total number of options under 9,000,000 12,000,000
the Plan ADS represent- (Adjusted for
ing 9,000,000 the issue of
underlying bonus shares
equity shares of the years
(adjusted for 2004 and
the issue of 2005)
bonus shares of
the years 2004
and 2005)

2. Options/RSUs grants approved - 1,100,950
during the year

3. Pricing formula Exercise price Face value
being not less of the share
than 90% of
the market
price on the
date of grant

4. Options vested during the year - 2,293,960

5. Options exercised during the 4,400 1,284,450
year

6. Total number of shares 4,400 1,284,450
arising as a result of
exercise of option (as of
March 31, 2009)

7. Options lapsed/forfeited 2,700 412,415
during the year*

8. Variation in terms of - -
options during the year
ended March 31, 2009

9. Money realised by exercise 910,694 2,568,900
of options during the year
(Rs.)

10. Total number of options 1,606 5,970,309
in force at the end of the
year (granted, vested and
unexercised/unvested and
unexercised)

11. Employee wise details of
options granted to:

i. Senior Management during
the year:

a. Suresh C. Senapaty Nil Nil
b. Suresh Vaswani Nil Nil
c. Girish Paranjpe Nil Nil
d. Pratik Kumar Nil Nil
e. Ranjan Acharya Nil Nil
f. T.K. Kurien Nil Nil
g. S. Deb Nil Nil
h. Vineet Agrawal Nil Nil
i. Anurag Behar Nil Nil

ii. Employees holding 5% or Nil Nil
more of the aggregate total
number of options granted
during the year under all
Plans

iii. Identified employees Nil Nil
who were granted option,
during any one year, equal
to or exceeding 1% of the
issued capital (excluding
outstanding warrants and
conversions) of the
Company at the time of grant

12. Diluted Earnings per 20.38 20.38
Share pursuant to issue of
shares on exercise of option
calculated in accordance with
Accounting Standard (AS) 20

13. Where the Company has Not applicable Since these
calculated the employees as these pertain options were
compensation cost using the to options granted at a
instrinsic value of the stock granted prior nominal
options, the difference to June 2003 exercise price,
between the employee intrinsic value
compensation cost so computed on the date of
and the employee compensation grant approximates
cost that shall have been the fair value of
recognised if it had used the options
fair value of the options. The
impact of this difference on
profits and on EPS of the
Company

14. Weighted average exercise Not applicable Exercise price
prices and weighted average as these pertain Rs.2/- per
fair values of options to options option.
separately for options whose granted before Fair value
exercise price either equals June 30, 2003 Rs.243.90 as on
or exceeds or is less than the March 31, 2009
market price of the stock

15. A description of the method Not applicable Since these
and significant assumptions used as these pertain options were
during the year to estimate the to options granted at a
fair values of options, including granted before nominal
the following weighted average June 30, 2003 exercise price,
information: intrinsic value
on the date of grant
(a) risk free interest rate approximates the
the fair value of
(b) expected life options

(c) expected volatility

(d) expected dividends and

(e) the price of the underlying
share in market at the time of
option grant

Description Wipro ADS
Restricted Restricted
Stock Unit Stock Unit
Plan 2005 Plan 2004


1. Total number of options under 12,000,000 12,000,000
the Plan (Adjusted for ADS
the issue of representing
bonus shares 12,000,000
of the year underlying
2005) equity shares
(adjusted for
the issue of
bonus shares of
the years 2004
and 2005)

2. Options/RSUs grants 5,781,465 1,484,261
approved during the year

3. Pricing formula Face value Face value
of the share of the share

4. Options vested during the year 1,243,804 525,653

5. Options exercised during the 477,833 446,841
year

6. Total number of shares arising 477,833 446,841
as a result of exercise of
option (as of March 31, 2009)

7. Options lapsed/forfeited 608,295 452,015
during the year*

8. Variation in terms of options - -
during the year ended March
31, 2009

9. Money realised by exercise 955,666 893,682
of options during the year
(Rs.)

10. Total number of options 7,829,276 2,470,641
in force at the end of the
year (granted, vested and
unexercised/unvested and
unexercised)

11. Employee wise details of
options granted to:

i. Senior Management during
the year:

a. Suresh C. Senapaty 50,000 Nil
b. Suresh Vaswani 50,000 Nil
c. Girish Paranjpe 50,000 Nil
d. Pratik Kumar 30,000 Nil
e. Ranjan Acharya 9,000 Nil
f. T.K. Kurien 50,000 Nil
g. S. Deb 18,000 Nil
h. Vineet Agrawal 40,000 Nil
i. Anurag Behar 20,000 Nil

ii. Employees holding 5% or Nil Nil
more of the aggregate total
number of options granted
during the year under all
Plans

iii. Identified employees Nil Nil
who were granted option,
during any one year, equal
to or exceeding 1% of the
issued capital (excluding
outstanding warrants and
conversions) of the Company
at the time of grant

12. Diluted Earnings per Share 20.38 20.38
pursuant to issue of shares on
exercise of option calculated
in accordance with Accounting
Standard (AS) 20

13. Where the Company has Since these Since these
calculated the employees options were options were
compensation cost using the granted at a granted at a
instrinsic value of the nominal nominal
stock options, the difference exercise price, exercise price,
between the employee intrinsic value intrinsic value
compensation cost so computed on the date of on the date of
and the employee compensation grant approxi- grant approximates
cost that shall have been mates the fair the fair
recognised if it had used the value of options value of options
fair value of the options. The
impact of this difference on
profits and on EPS of the
Company

14. Weighted average exercise Exercise price Exercise price
prices and weighted average Rs.2/- per $ equivalent
fair values of options option. of Rs.2/-
separately for options whose Fair value per option.
exercise price either equals Rs.243.90 as on Fair value
or exceeds or is less than the March 31, 2009 $7.11 as on
market price of the stock March 31, 2009

15. A description of the method Since these Since these
and significant assumptions options were options were
used during the year to estimate granted at a granted at a
the fair values of options, nominal nominal
including the following weighted exercise price, exercise price,
average information: intrinsic value intrinsic value
on the date of on the date of
(a) risk free interest rate grant grant
approximates approximates
(b) expected life the fair value the fair value
of options of options
(c) expected volatility

(d) expected dividends and

(e) the price of the underlying
share in market at the time of
option grant

Description Wipro
Restricted
Stock Unit
Plan 2007

1. Total number of options under the Plan 10,000,000

2. Options/RSUs grants approved during -
the year

3. Pricing formula Face value of the share

4. Options vested during the year -

5. Options exercised during the year -

6. Total number of shares arising as a -
result of exercise of option (as of
March 31, 2009)

7. Options lapsed/forfeited during the -
year*

8. Variation in terms of options during -
the year ended March 31, 2009

9. Money realised by exercise of options -
during the year (Rs.)

10. Total number of options in force -
at the end of the year (granted, vested
and unexercised/unvested and unexercised)

11. Employee wise details of options
granted to:

i. Senior Management during the year:
a. Suresh C. Senapaty Nil
b. Suresh Vaswani Nil
c. Girish Paranjpe Nil
d. Pratik Kumar Nil
e. Ranjan Acharya Nil
f. T.K. Kurien Nil
g. S. Deb Nil
h. Vineet Agrawal Nil
i. Anurag Behar Nil

ii. Employees holding 5% or more of the Nil
aggregate total number of options
granted during the year under all Plans

iii. Identified employees who were Nil
granted option, during any one year,
equal to or exceeding 1% of the issued
capital (excluding outstanding warrants
and conversions) of the Company at the
time of grant

12. Diluted Earnings per Share pursuant 20.38
to issue of shares on exercise of option
calculated in accordance with Accounting
Standard (AS) 20

13. Where the Company has calculated the Not applicable
employees compensation cost using the as no options
instrinsic value of the stock options, the are granted
difference between the employee under this
compensation cost so computed and the Plan
employee compensation cost that shall
have been recognised if it had used the
fair value of the options. The impact
of this difference on profits and on
EPS of the Company

14. Weighted average exercise prices and Not applicable
weighted average fair values of options no options
as separately for options whose exercise are granted
price either equals or exceeds or is less under this
than the market price of the stock plan

15. A description of the method and Not applicable
significant assumptions used during as no options
the year to estimate the fair values of are granted
options, including the following weighted under this
average information: plan

(a) risk free interest rate

(b) expected life

(c) expected volatility

(d) expected dividends and

(e) the price of the underlying share in
market at the time of option grant

* As per the Plan, Options/RSUs lapse only on termination of the Plan. If
an Option/RSU expires or becomes unexercisable without having been
exercised in full, such options shall become available for future grant
under the Plan.

MANAGEMENT'S DISCUSSION AND ANALYSIS:

1. Segment-wise performance:

Segment-wise contributions in 2008-09:

Segment-wise contribution to Revenue:

IT Products 14%
Consumer Care and Lighting & Others 11%
IT Services 75%

Segment-wise contribution to EBIT:

IT Services 92%
IT Products 3%
Consumer Care and Lighting & Others 5%

We are a leading global information technology, or IT, services company,
headquartered in Bangalore, India. We provide a comprehensive range of IT
services, software solutions and research and development services in the
areas of hardware and software design to leading companies worldwide. We
use our development centers located in India and around the world, quality
processes and global resource pool to provide cost effective IT solutions
and deliver time-to-market and time-to-development advantages to our
clients. We also provide business process outsourcing, or BPO, services.

Our IT Products segment is a leader in the Indian IT market and focuses
primarily on meeting requirements for IT products of companies in India and
the Middle East region.

We also have a notable presence in the markets for consumer products and
lighting and infrastructure engineering.

Until March 31, 2008, our reportable segments, were Global IT Services and
Products (comprising of IT Services and BPO Services segments), India and
AsiaPac IT Services and Products, Consumer Care and Lighting and 'Others'.

In April 2008, we re-organized our IT business by combining the Global IT
Services and Products business and the India and AsiaPac IT Services and
Products business and appointed joint Segment Chief Executive Officers for
the combined IT business. Consequent to the reorganization, we identified
IT Services and IT Products as the new operating and reportable segments
within our IT business. There was no change in the reportable segments for
our other businesses.

In the subsequent section of this report, we will report for each of our
business segment separately, the industry structure and developments,
opportunities and threats, and risk and concerns.

II. Industry Overview:

IT Services:

The shift in the role of Information and Technology (IT) from merely
supporting business to transforming business, is driving productivity gains
and helping create new business models. This has led to an increase in the
importance of IT The increasing acceptance of outsourcing and off-shoring
of activities as an economic necessity has contributed to the continued
growth in our revenue.

According to NASSCOM Strategic Review Report 2009, IDC estimates total
spending of $ 557 billion on IT services in 2008, an increase of 5.5% over
last year. Within the IT services market, outsourcing was the fastest
growing segment in 2008, estimated to have grown by 21%.

IDC forecasts worldwide IT services spending of approximately $672 billion
by 2012, reflecting a compound annual growth rate, or CAGR, of 4.8%.
However, Forrester Global IT 2009 Market Outlook, predicts that U.S. IT
purchases will slowdown from 4.05% growth in 2008 to 1.6% growth in 2009.

According to NASSCOM Strategic Review Report 2009, IDC forecasts a
cumulative annual growth rate (CAGR) of over 6.21% in worldwide IT services
and IT enabled services (IT ITeS) spending and a CAGR of over 18.79% in
offshore IT spending, for the period 2007-12. The combined market for
Indian IT ITeS exports in fiscal 2009 was nearly $ 60 billion. Key factors
supporting this projection are the growing impact of technology led
innovation, the increasing demand for global sourcing and gradually
evolving socio-political attitudes. Key factors contributing to the growth
of India-based IT services are:

* India based sourcing offers significant cost advantages in terms of
accessing highly skilled talent at lower wage costs and productivity gains
that can be derived from having a very competent employee base. According
to NASSCOM's Strategic Review Report 2009, the cost advantage achievable
from outsourcing to India is unlikely to go away due to an absolute cost
advantage vis-a-vis other key markets and the prospect of further
reductions in infrastructure and overhead costs.

* India-based IT companies have proven their ability to deliver IT services
that satisfy the requirements of international clients who expect the
highest quality standards. According to NASSCOM's Strategic Review Report
2009, India based centers (both Indian firms as well as MNC owned captives)
have earned more quality certifications than any other country, over 498
India based centers (both Indian firms as well as MNC owned captives) had
acquired quality certifications with 85 companies certified SEI CMM Level
5.

* India has a large, highly skilled english-speaking labour pool that is
available at a relatively low labor cost. According to NASSCOM Strategic
Review Report 2009, the Indian IT industry employed nearly 2,230,000
software professionals as of 2008-09, making it one of the largest
employers in the IT services industry. According to the same report, India
has the largest pool of suitable off-shore talent - accounting for over 28%
of the suitable pool available across all offshore destinations.

* With the time differential between India and its largest market, the
United States, Indian companies are able to provide a combination of onsite
and offshore services on a 24-hour basis on specific projects.

* The Indian IT industry has been the primary beneficiary of the rapid
transformation of the telecom sector since it was deregulated to allow
private participation, with the cost of international connectivity
declining rapidly and service level quality improving significantly. This
cost advantage is likely to continue due to lower penetration levels and a
growing consumer base.

According to IDC's report - India domestic IT/ITeS market top 10
predictions for 2009, the India domestic IT/ITeS market growth rate will
come down from an average of 24.3% recorded during 2003-08 to 16.4% over
the next five years.

In India, the IT services market is estimated to account for 34% of the
domestic IT industry. The growth in the IT services market is estimated to
be around 14% in US$ terms. The key verticals driving the growth of the IT
services market are Retail, BFSI, Telecom and Manufacturing.

BPO Services:

India is also a leading destination for IT enabled services. The proven
track record and client relationships of established Indian IT services
companies, favorable wage differentials, availability of a large, high
quality, english speaking talent pool and a regulatory environment more
friendly to investment are facilitating India's emergence as a global
outsourcing hub. According to NASSCOM Strategic Review Report 2009, the
worldwide BPO market is expected to touch $181 billion by 2012,
representing a compounded annual growth rate, or CAGR, of 11.9%.

IT Products:

According to NASSCOM Strategic Review Report 2009, IDC forecasts that
worldwide hardware spending will increase from $570 billion in 2007 to $683
billion in 2012, representing a compounded annual growth rate, or CAGR, of
3.68%

According to NASSCOM Strategic Review Report 2009, the hardware market in
India is estimated to account for 49% of the domestic IT industry, growing
at about 3% in 2009. Personal computers (including desktops and notebooks)
continue to be purchased at higher rates than other products in the
hardware market. As prices come down, notebooks are increasingly being
adopted as the computing device of choice. For the desktop segment,
consumers are showing an increasing trend of moving away from locally
assembled items towards branded products with relatively higher end
configurations.

Consumer Care and Lighting:

The consumer care market includes personal care products, soaps,
toiletries, infant care products, modular switch lights and modular office
furniture. Our Santoor brand is the third biggest soap brand in India. The
market for soaps in India is dominated by established players like
Hindustan Unilever (a subsidiary of Unilever). We have a strong brand
presence in a niche segment and have significant market share in select
regions in India. In addition, we have a strong presence in the market for
personal care products in south-east Asia.

AC Nielsen estimates that India is amongst the fastest growing geographies
for FMCG, with a 2008 growth rate of 15.8% for the non-food segment,
largely led by price increases. This market is estimated to grow at a CAGR
of 10% -12% for the period 20092012. The household and personal care FMCG
market in the other Asian countries in which we operate including Malaysia,
Vietnam and Indonesia, are expected to grow at a CAGR of 6% for the period
2009-2013.

The Indian domestic market for institutional lighting and office modular
furniture is estimated at $ 675 million and is expected to grow at the rate
of 10% for the period 2009-2010. Key sectors contributing to the growth are
expected to be modem work spaces, IT-ITeS, Retail, Healthcare and
Government Infrastructure spending.

We expect to increase our market share organically in our identified
geographies. In addition we continue to look at acquiring established
brands which complement our brand presence and distribution strengths.

Others:

In the other segment, Wipro Infrastructure Engineering (WIN) is the key
business segment. We sell hydraulic cylinders and truck tipping systems
that are used in variety of earth moving, material handling, mining and
construction equipments.

III. Opportunity and Threats:

IT Services:

Global companies are increasingly turning to offshore technology service
providers in order to meet their need for high quality, cost competitive
technology solutions. Technology companies have been outsourcing software
research and development and related support functions to offshore
technology service providers to reduce cycle time for introducing new
products and services. According to NASSCOM Strategic Review Report 2009,
IDC forecasts CAGR of over 18.79% in offshore IT spending, for the period
2007-12.

As a de-risking strategy, companies have moved over to multivendor IT
outsourcing from sole sourcing, this has opened up opportunities for Indian
IT companies to participate in large multi-million dollar deals. Global
companies are expanding their outsourcing activities to leverage the high
quality, cost competitive IT services from India.

We believe our strong brand, robust quality process and access to skilled
talent base at lower costs places us in a unique position to take advantage
of the trend towards outsourcing IT services.

We believe that our global delivery model allows us to provide services on
a best shore basis. Customers benefit from round the clock execution
schedules, quality control measures and best in class resources pooled in
across geographies for high quality delivery and risk management practices
to ensure uninterrupted services.

Risk factors:

Our revenues from this business are derived in major currencies of the
world while a significant portion of its costs are in Indian rupees. The
exchange rate between the rupee and major currencies of the world has
fluctuated significantly in recent years and may continue to fluctuate in
the future. Currency fluctuations can adversely affect our revenues and
gross margins.

In an economic slowdown, our clients may reduce or postpone their
technology spending significantly: Reduction in spending on IT services may
lower the demand for our services- 'and negatively affect our revenues and
profitability. According to World Economic Outlook Update published by
International Monetary Fund in April 2009, GDP of United States is
projected to contract by 2.8% in calendar 2009 and during the same period
GDP of Euro area is projected to contract by 4.2%. Forrester Global IT 2009
Market Outlook, predicts that U.S. IT purchases will slowdown from 4.05%
growth in 2008 to 1.6% growth in 2009.

Further, any significant decrease in the growth of the industries. on which
we focus, or a significant consolidation in any such industry, may reduce
the demand for our services and negatively affect our revenues and
profitability. For instance, we derive about 26% of our revenues in IT
Services from clients in financial services sector. The recent crisis in
the mortgage-backed securities markets has impacted companies in the
financial services sector, which could result in reduction or postponement
of their IT spending and thus may adversely affect our business.

Recently, some countries and organizations have expressed concerns about a
perceived association between offshore outsourcing and the loss of jobs.
With the growth of offshore outsourcing receiving increasing political and
media attention there have been concerted efforts to enact new legislation
to restrict offshore outsourcing or impose disincentives on companies which
have been outsourcing. This may adversely impact our ability to do business
in these jurisdictions and could adversely affect our revenues and
operating profitability.

We manage mission critical IT infrastructure/applications and therefore
maintaining stable communication links with our clients is imperative.
Breakdown in telecommunication links, geopolitical disturbances or natural
disaster could temporarily impact our ability to service customers. This
could adversely affect the customer decision to procure IT services from
India or increase the nature and scope of services sourced from India.

These risks are broadly country risks. At an organisational level, we have
a well-defined business contingency plan and disaster recovery plan to
address these unforeseen events and minimize the impact on services
delivered from our development centers based in India or abroad.

IT products:

Our IT Products segment provides a range of IT products encompassing
computing, storage, networking, security and software products. Under this
segment, we sell IT products manufactured by us and third-party IT
products. We provide our offerings to enterprises in the Government,
defence, IT and IT enabled services, telecommunications/telecom service
providers, manufacturing and banking sectors.

For the last several years, India has achieved healthy economic growth
rates in the range 7.5-8%. The growth has been contributed by robust
services sector performance as well as cyclically. strong, manufacturing
output. Increased revenue and profitability growth has created
opportunities for companies to invest in IT infrastructure. Some sectors
such as Telecom service providers, Banking, Retail and IT/ITES require
significantly higher per capita IT investment.

India is being viewed as a key market among the emerging economies. Several
multinational IT Companies and Indian IT Services companies are focusing on
the Indian markets. This could affect our growth and profitability.

The IT products market is a dynamic and highly competitive market, In the
marketplace, we compete with both international and local providers. We are
witnessing higher pricing pressures due to commoditization of manufactured
products business and higher focus on Indian markets by all leading IT
companies.

We are favorably positioned due to our quality leadership, our ability to
create client loyalty and our expertise in select markets.

Consumer care arid lighting:

We leverage our brand name and distribution strengths to sustain a
profitable, presence in niche markets in the areas of soaps, toiletries,
lighting products including modular switches and modular furniture for the
Indian market. Our Santoor brand is the third largest brand in India in the
soap category. With the acquisition of Unza group, we are increasing our
presence in personal care products sector in South-East Asia.

We are among the top 5 companies with a Pan-India Sales and Distribution
Infrastructure, which enables us to effectively penetrate fast growing
Indian market.

We have constantly expanded our brand portfolio by entering newer
categories. We have successfully built brands both organically and through
acquisition. Each brand in our Brand basket-has a distinctive positioning,
catered to and addressing a specific consumer need.

Our competitors in the consumer care and lighting are located primarily in
India, and include multinational and Indian companies. Certain competitors
have recently focused on sales strategies designed to increase sales
volumes through lower prices, Sustained price pressures by competitors may
require us to respond with similar or different pricing strategies. This
may adversely affect our gross and operating profits in future periods.

Others:

Our Others segment includes our infrastructure engineering business. We are
the world's second largest third-party manufacturer of hydraulic cylinders.
The Others segment is centered on our mobile construction equipment
business and our material handling business. We manufacture and sell
cylinders and truck hydraulics, and we also distribute hydraulic steering
equipment and pumps, motors and valves for international companies. We have
a global footprint in terms of manufacturing facilities in Europe and India
and sell to customers across the globe.

While the current financial year has seen a decline in global sales
volumes, we believe that the fundamentals of infrastructure engineering
business remain intact.

We are also in the water solutions business, which addresses the entire
spectrum of treatment solutions, systems and plants for water and waste
water for industries.

We also provide consulting on comprehensive renewable energy and efficiency
solutions.

If current slowdown is prolonged it would translate in to lower growth for
our customers and in turn reduce our growth prospects.

IV. Outlook:

During the financial year ending March 2009, we grew our Revenues by 28% to
Rs. 255,442 million and Profit After Tax (PAT) by 19% to Rs. 38,999
million. Over the last decade, we have grown our Revenues at the CAGR of
30% and PAT at the CAGR of 37%.

We have followed a practice of providing only revenue guidance for our
largest business segment, namely, IT Services. The guidance is provided at
the release of every quarterly earnings when detailed Revenue outlook for
the succeeding quarter is shared. Over the years, the Company has
consistently exceeded its quarterly Revenue guidance.

On April 22, 2009, along with our earnings release for quarter ended March
31, 2009, we provided our most recent quarterly guidance. Revenue from IT
Services segment for the quarter ending June 30, 2009 is likely to be
ranged between USD 1,0091,025 million on a constant currency basis.

V. Risk and Concerns:

In the previous sections, we have discussed some of the key risks impacting
our business. The risks relating to our company, the industry we operate in
and country specific risks are dealt with in greater detail in the annual
report in Form 20-F filed with Securities and Exchange Commission, USA. The
report is also available on our website : www.wipro.com.

VI. Internal Control Systems and their adequacy:

We have presence across multiple countries, and a large number of
employees, suppliers and other partners collaborate to provide solutions to
our customer needs. Robust internal controls and scalable processes are
imperative to manage this global scale of operations.

Our listing on the New York Stock Exchange (NYSE) provided us an
opportunity to get our independent auditors assess and certify our internal
controls primarily in the areas impacting financial reporting. For the
companies listed in the United States of America, the Public Company
Accounting Reform and Investor Protection Act of 2002, more popularly known
as the Sarbanes-Oxley Act requires:

1. Management to establish, maintain, assess and report on effectiveness of
internal controls over financial reporting and;

2. Independent auditors to opine on effectiveness of internal controls over
financial reporting.

We adopted the COSO framework (Framework suggested by Company of Sponsoring
Trade way Organisation) for evaluating internal controls. COSO identifies
five layers of internal controls, namely, Control Environment, Risk
Assessment, Control Activity, Information and Communication and Monitoring.
Information Technology controls were documented, assessed and tested under
the COBIT framework.

The entire evaluation of internal controls was carried out by a central
team reporting into the Chief Financial Officer.

We have obtained a clean and unqualified report from our independent
auditors on the effectiveness of our internal controls.

VII. Discussion on financial performance with respect to operational
performance:

1. Authorised share capital:

The Company has an authorised share capital of Rs. 3,550 million comprising
1,650 million equity shares of Rs. 2/- each and 25 million 10.25%
redeemable cumulative preference shares of Rs. 10/- each as of March 31,
2009.

2. Paid up Share Capital:

The Company has a paid-up capital of Rs. 2,928 million, an increase of Rs.5
million during this year.

3. Equity Shares:

The Company has instituted various Employee Stock Option Plans (ESOP).
These options vest over a specified period subject to employee fulfilling
certain conditions. Upon vesting, the employees are eligible to apply and
secure allotment of the Company's equity shares at a price determined on
the date of grant of options. During the year, 2.6 million shares were
allotted on exercise of the options under various Employee Stock Option
Plans instituted by the Company.

4. Reserves and Surplus:

A. Securities Premium Account:

Addition to securities premium account comprises of premium received on
exercise of stock options, amounting to Rs. 1,366 million.

B. Restricted Stock Units:

The Company has granted total 14 million restricted stock units under the
Wipro Restricted Stock Unit Plan, 2004, 4 million restricted stock units
under the Wipro Restricted Stock Unit Plan, 2005 and 9 million restricted
stock units under the Wipro ADS Restricted Stock Unit Plan, 2004.

During the year ended March 31, 2009 the Company has charged to profit and
loss account Rs. 1,767 million of deferred compensation cost as employee
compensation. The cumulative charge to profit and loss account would be
treated as share premium on allotment of shares.

5. Secured Loan:

Secured loans have decreased by Rs. 214 million, primarily due to loans
repayments in the acquired entities.

6. Unsecured Loan

Unsecured loans have increased by Rs. 12,256 million. The increase is
mainly due to additional PCFC loan availed in the current year and impact
of reinstating ECB loan (denominated in Japanese Yen) at the exchange rates
prevailing on March 31, 2009.

7. Fixed Assets:

A. Goodwill on Consolidation:

The excess of consideration paid over the book value of assets acquired has
been recognised as goodwill in accordance with Accounting Standard (AS) 21
Consolidated Financial Statements'. Goodwill arising on account of
acquisition of subsidiaries and affiliates is not amortised but reviewed
for impairment if there are indicators of impairment. Upon review for
impairment, if the carrying value of the goodwill exceeds its fair value,
goodwill is considered to be impaired and the impairment is charged to the
income statement for the year.

Goodwill has increased by Rs. 14,312 million during the year mainly due to
acquisitions during the year and impact of reinstating goodwill relating to
non-integral overseas operations at the exchange rates prevailing on March
31, 2009.

B. Addition to Fixed Assets:

During the year, the Company invested Rs. 19,073 million on Fixed Assets.
The unit-wise spends are outlined below:

(Rs. in Million)
Business Unit 2009

IT services 16,475
IT products 449
Consumer Care and Lighting 1,112
Others 1,037

In our IT Services business we added 25,548 seats during the current
financial year. 40,200 seats are under construction as on March 31, 2009.

C. Depreciation:

The Company has provided depreciation either at the rates specified in
Schedule XIV of the Companies Act, 1956, or at commercial rates which are
higher than the rates specified in Schedule XIV Depreciation as a
percentage of sales remained at 3% in fiscal year 2009.

8. Investments:

Purchase of Investments - During the year surplus cash generated by
operations were invested in short-term mutual funds and term deposits with
financial institutions. The internal investment norms restrict investments
to only those mutual funds which have corpus in excess of a specific
threshold and the investment is limited to a specified percentage of
overall investments of Wipro. Further, we place deposits only with those
institutions having a specified credit rating and we have internal limits
of maximum deposit that can be placed with financial institutions.
Investments in units of liquid mutual funds have increased from Rs. 14,317
million in fiscal 2008 to Rs. 15,136 million in fiscal 2009.

9. Inventories:

Inventories comprises computers and spares of IT Products and raw material
and finished stocks of Wipro Consumer Care and Lighting and Wipro
Infrastructure Engineering (WIN). Inventories have increased from Rs. 6,664
million as on March 31, 2008 to Rs. 7,586 million as on March 31, 2009.

Inventory of IT products increased by Rs. 1,253 million in line with growth
in revenues of IT products and inventories sourced to service large total
outsourcing deals. This was offset by Rs. 412 million decrease in inventory
in WIN primarily due to decrease in revenues.

10. Sundry Debtors:

Sundry Debtors (net of provision) for the current year is at Rs. 48,859
million against Rs. 40,453 million in the previous year. Segment-wise
break-up of sundry debtors is outlined below:

(Rs. in Million)
Particulars Increase
2009 2008 (%)

IT Services and Products 45,677 36,785 24
Consumer Care and Lighting 2,414 2,246 7
Others 768 1,422 -46
Total 48,859 40,453 21

Revenue of IT Services and Products increased by 18% during the quarter
ended March 31, 2009.

Changes in sundry debtors in Consumer Care and Lighting and Others are in
line with the revenue growth/decline during the quarter ended March 31,
2009.

Provision for doubtful debts has increased from Rs 1,096 million to
Rs.1,919 million in fiscal 2009. The provision for doubtful debts includes
mainly due to provision recorded upon a major customer opting for
bankruptcy protection.

11. Cash and Bank Balances:

Cash and bank balances have increased from Rs. 39,270 million to Rs. 49,117
million, an increase by Rs. 9,847 million. The increase is primarily to
meet operational requirements and pursue strategic acquisition
opportunities.

12. Loans and advances:


(Rs. in Million)
Particulars Increase
2009 2008 (%)

Advances recoverable 13,229 10,083 32
Unbilled revenue 14,108 8,514 66
Others 18,336 11,013 66
Total 45,673 29,610 54

* Increase in advances recoverable is primarily due to increase in net
investment in lease by Rs. 2,940 million. The net investment in lease
primarily relate to equipments delivered in certain large IT outsourcing
contracts in India.

* Unbilled revenue has increased on account of increase in revenues from
Fixed Price Projects from 28% in the previous year to 34% in the current
year in IT Services where certain customers are billed after the end of the
month. This is offset by advances received from customers which is included
in unearned revenues. We have entered into several multi year large deals
(including infrastructure) with Telecom companies where the billings are
based on milestones and with deferred payment terms.

* Increase of Rs. 7,323 million in Others' is mainly due to increase in
Advance' tax by Rs. 3,069 million and deposits with financial institutions
of Rs. 3,750 million.

13. Current Liabilities & Provisions:

A. Current Liabilities:


(Rs. in Million)
Particulars Increase
2009 2008 (%)

Sundry Creditors 3,111 3,082 38
Advances from customers 2,428 1,642 48
Unearned revenues 6,734 4,269 57
Other Liabilities 40,810 20,897 95
Total 67,989 39,890 70

Current liabilities have increased primarily due to our focus on improving
working capital position. Sundry Creditors represent the amount payable to
vendors and employees for supply of goods and services.

Other liabilities comprise amounts due for operational expenses. Other
liabilities have increased by Rs. 19,917 million during the year ended
March 31, 2009 primarily due to Rs. 9,686 million increase in derivative
liabilities relating to mark to market losses on derivative instruments
designated as cash flow/capital hedges and non-designated forward
contracts.

The remaining increase is primarily due to subcontracting expenses,
administrative expenses, withholding taxes, employee incentives etc., which
is in line with increase in employee base, infrastructure and business
growth.

B. Provisions:


(Rs. in Million)
Particulars Increase
2009 2008 (%)

Employee retirement benefits 3,111 2,737 14
Warranty provision 989 941 5
Provision for tax 6,726 4,013 68
Proposed Dividend 5,860 5,846 -
Tax on proposed dividend 996 993 -
Total 17,682 14,530 22

* Provisions of Rs. 3,111 million for employee retirement benefit relate to
liability for employee leave encashment, gratuity and superannuation
benefits.

* For fiscal 2009, the Directors of the Company have proposed a cash
dividend of Rs. 4/- per share on equity shares.

Revenue:

IT Service:

Our IT Services segment Revenue was Rs. 191,661 million as compared to
Rs.146,626 million in the last year, a growth of 31% as compared to last
year.

During the current year, we realised 53.1 % of revenue from work done in
locations outside India ('Onsite') and remaining 46.9% of revenue was
realised from the work performed from our development centers in India
('Offshore').

Onsite-Offshore Mix:

Onsite-Offshore Mix IT Services:

Offshore Onsite

Mar-08 45.6% 54.4%
Mar-09 46.9% 53.1%

Approximately 34% of our IT Services Revenues were from Fixed Priced
Projects ('FPP'). In FPP, we undertake to complete project within agreed
timeline for a given scope of work. The economic gains or losses realised
from completing the project earlier or later than initially projected
timelines accrues to us. Percentage of FPP in the previous year was lower
at 28%.

Revenue Mix Vertical Distribution:

Manufacturing & Health Care Services 20%
Retail 17%
Energy & Utilities 8%
Technology, Media, Telecom Services 29%
Financial Services 26%

In the current year, 45% of our IT Services revenues is derived from our
Enterprise Solutions Business, 2% increase over the previous year; 29% from
Technology Business a reduction of 4% over the previous year and 26% of
Revenues from Financial Solutions Business, an increase of 2% over the
previous year.

Our Enterprise Solutions Business serves customers in all the other
industry segments, principal being Retail, Manufacturing, Energy &
Utilities, Healthcare Services. Our Technology Business provides product
engineering services to product companies across the globe. It also
provides enterprise IT services offering to Telecom Service Providers
industry. Our Financial Solutions Business provides IT services to
customers in Financial Services industry - namely, Banking, Securities and
Insurance.

Revenue Mix Service Line wise Distribution:

Technology Infrastructure Services 20%
Testing 11%
Package implementation 12%
BPO 9%
Product Engineering 6%
Applications development & maintenance 40%
Consulting 2%

We continued to expand and grow our Services portfolio. For the current
financial year, we derived 20% of Revenues from Technology Infrastructure
Services, an increase of 3% from previous year; 11% from Testing Services
at the same level as previous year; 12% from Package Implementation
Services, a decrease of 1% over the previous year; 9% from BPO at th same
level as previous year; 43% from Application Development & Maintenance
(ADM) a reduction of 3% over the previous year; 2% Consulting Services, at
the same level in the previous year and 6% from product engineering at the
same level as previous year.

Based on geographical destination, 60% of our revenue came from the
Americas, at the same level previous year; 26% from Europe, 2% over the
previous year. Revenue from Japan at 3%, at the same level as in the
previous year. Revenue from India and Middle East region at 8%, a increase
of 1% over the previous year. Rest of the World contributed 4%, a decrease
of 1% over the previous year.

The contribution of our top customer is at the same level as in the
previous year. Our top customer contributed 396 of revenue, top 5 customers
11% of revenue, a decrease of 1% over the previous year and the top 10
customers accounted for 20% of the revenue, a decline of 1% over the
previous year.

Revenue contributed by the customers added during the year was at 2%, at
the same level as in the previous year.

IT Product:

During the current year we grew our Products segment Revenues by 31%.

We grew across the board. Revenue from Personal Computers was 17% higher
than in the previous year, Enterprise Products grew 27% and our network
products grew 23%.

Consumer Care and Lighting segment:

Revenues of our Consumer Care and Lighting segment grew by 37% in the
current year over the previous year.

Our revenue CAGR during last 4 years in this business has been 26%
excluding acquisition during the year. Our flagship brand Santoor' is now
India's 3rd largest soap brand by value.

Others segment:

Revenues from Wipro Infrastructure Engineering (WIN) reduced by 25% during
the current year over the previous year. This is mainly due to lower demand
of capital goods in the current year due to economic slowdown.

Acquisitions:

Details of the key acquisitions made by your Company during the year ended
March 31, 2009 are as follows:

Acquired Entity Acquired Nature of business
during

IT Services and Products:

1. Wipro Technology Jan-09 Engaged in Providing of
Services Information Technology
Service & solutions to
CITI Group

In addition, the company has paid Rs. 1,765 million relating to certain
other small acquisitions and earn-outs related to previous acquisitions.

Costs:

IT Services:

In our IT Services Business segment, manpower cost accounts for
approximately 53% of the Revenues. Other major costs included Sub-
contracted manpower cost, depreciation and employee-travel cost.

The operational drivers for these costs are Utilisation of employees,
Onsite: Offshore composition and the composition of experience profile of
employees called Bulge-mix'.

During the current year gross Utilisation was 69% compared to 67% an year
ago. Our Offshore mix is 47%, as compared to 46% in the previous year. As
of March 31, 2009 approximately 40% of our employees had less than 3 years
of work-experience, as compared to 47% as of March 31, 2008.

IT Product:

In our IT Products segment, material cost as a percentage of revenue was at
approximately 88%.

Consumer Care and Lighting segment:

In our Consumer Care and Lighting segment, the largest cost is packing
material and manufacturing cost, accounting for 49% of the Revenues. Other
key costs include advertising and sales promotion at 13% of Revenues and
manpower cost at 9% of the Revenues.

Others segment:

In this segment WIN is the largest component. For WIN the largest cost
component is raw materials, accounting for approximately 55% of the
Revenues, Material and manufacturing costs taken together accounts for 62%
of the Revenues. Other key costs include manpower cost at 25% of Revenues
and cost of sub-contracted processes at 4% of the Revenues.

Margins:

IT Services:

The gross margin was 32%, a marginal increase of 0.2% in comparison to last
year. The improvement in gross margin as percentage of revenue is primarily
on account of improvement in utilization rates and better exchange rate
realization. Our average utilization of billable employees improved from
67% for the year ended March 31, 2008 to 69% for the year ended March 31,
2009. These improvements were offset by the increase in personnel costs due
to annual salary increase.

At the Operating Margin (Profit before interest and tax) level the margins
have declined marginally by 0.3%, from 21.3% in last year to 21% for
financial year 2009.

IT Products:

In this segment our gross margins for the current year was 11% a decline of
1% compared to the last year. This decline is primarily attributable to
increase in the procurement cost of imported items due to depreciation of
the Indian Rupee against U.S. Dollar during the year ended March 31, 2009.
Our gross margin in this business segment is also impacted by the
proportion of our business derived from the sale of traded and manufactured
products.

Operating Margins during the year were at 4.3%, a decrease of 0.3% compared
to previous year.

Consumer Care and Lighting segment:

Our gross margin for this year was at 44% for this segment compared to 41 %
in the previous year, This increase was primarily due to an increase in the
proportion of revenue from the range of products manufactured by Unza,
which typically have higher gross margins.

Operating Margins for the current year was 12%, a decrease of 0.3% compared
to previous year.

Others:

Operating Margins for our Wipro Infrastructure Engineering business for the
current year was -2.5% against 9% in last financial year. This sector is
impacted by sharp global slowdown in investment in multiple sectors, driven
by economic uncertainty. However, fundamentals of this sector remains
intact. Infrastructure spends in India, China and US would positively
impact this business.

VIII. Liquidity and interest rate risk:

As of March 31, 2009, we had cash and bank balances of Rs. 49,117 million,
investments in liquid and short-term mutual funds and certificate of
deposits of Rs. 16,083 million.

This cash is retained in the business to ensure specified level of cash
balance to manage operations arid pursue strategic acquisition
opportunities. Our investment policy is to protect capital and focus on
liquidity while determining the class of instruments to invest in. We
primarily invest in debt mutual funds and deposits with financial
institutions.

IX. Material developments in Human resources/Industrial Relations front
(including number of people employed):

In our IT Services and Products Business segments, we had 97,810 employees,
comprising 22,824 employees in BPO.

Attrition for the year in our IT Services business segment (excluding BPO
operations, Indian IT operations and other overseas subsidiaries) was 13.2%
compared with 16.8% last year. Voluntary attrition stood at 11.3% compared
with 16.3% last year, while involuntary attrition was 1.9% compared with

0.5% last year.

Compensation/People practices:

We have continued to develop innovative methods for accessing and
attracting skilled professionals. We have designed our compensation to
attract and retain top quality talent and motivate higher levels of
performance. We have pioneered the concept of employee. stock purchase
program, we also have portion of compensation linked to performance of the
business unit to which the employee belongs. We periodically reward high
performers with long-term incentives in the form of restricted stock units
(RSU). RSU is a powerful retention tool and aligns employees with the long-
term goals of the Company.

Risk Management Initiatives:

Change the changeable, accept the unchangeable, and remove yourself from
the unacceptable.

- Denis Waitley

Environment:

We will remember 2008-09 as a traumatic period that saw several events
unfold at an astonishing pace leaving organizations, societies and even
nations severely scarred.

Over the past year enormous efforts have been demanded and invested by
organizations to manage the consequences of an unprecedented economic
crisis, address people safety concerns and reinforce stakeholder confidence
on corporate governance.

Sustainability risks associated with the environment pose the gravest
dangers to humanity. Organizations are being increasingly challenged to
contemplate, articulate and fulfill their commitments towards
sustainability

Risk Management System:

The formal Risk Management system in Wipro has completed 4 years and has
evolved to achieve enhanced business alignment and value.

Stakeholder Expectations:

Risk management expectations of key stakeholders are highlighted below:

Stakeholder Key Expectations

* Pro-Active Communication
Customers * Contractual Compliance
* No business disruptions
Shareholders * No negative surprises
Investors * Reputation enhancement
Insurers * Organisation Sustainability
* Risk factored decisions
Board, Top Management * Mitigation assurance
* Red-flags & probable issues
Business and Operations * Robust processes
Leadership * Early Warning mechanisms
* Crisis Handling
* Transparent processes
Employees * Communication
* Safety & Security

Risk Management vision and objectives at a strategic level are aligned to
the stakeholder expectations.

Roles & Responsibilities:

Risk Management roles are assigned and executed at various levels in the
organization.

Level Roles & Responsibilities

Board and a) Set Strategic Directions.
Audit Committee
b) Review Risk Management Policies.

c) Monitor Risk exposures and mitigation status.

Top Management a) Review the risk implications of Strategic
decisions.

b) Create Risk Management Environment & structure.

c) Provide assurance to the Board on the
effectiveness of the Risk Management & Compliance
systems.

Chief Risk Officer (CRO) a) Provide Re-Assurance to Audit Committee,
Customer, Investors on Risk Management.

b) Partner Business in Growth by Risk factored
decisions.

c) Implement risk management system to cover risk
identification to mitigation,

a) Execute Risk management
practices & models within the BU.
Business Unit (BU)
Risk Leaders b) Report Risk Profile of the BU.

c) Build a risk aware culture through appropriate
Training & Awareness efforts.

Wipro Top Risks Approach:

Wipro has adopted an integrated approach towards risk management that
mandates identification and mitigation of risks linked to key business
priorities by aligning business strategy with the corresponding risks.

While this provides a 'top down' approach towards distilling of major
risks, there is a complementary process that allows rolling up of risks
'from the ground'.

Wipro firmly believes in disseminating 'risk awareness' across all levels
through multi-layered training programs ensuring all managers and
executives are 'risk conscious'.

The process is Risk Aware Risk Conscious Risk Alert, to enable business
leaders to take risk factored decisions and optimize risk-rewards.

The identification and analysis covers risks related to strategy,
operations, reporting or compliance in line with the COSO framework.

Wipro Top risks are reviewed quarterly by the Audit Committee of the Board
of Directors.

Wipro Top Risks:

Key Risk Management Activities of the year:

Enterprise wide risk management (ERM) in Wipro has progressed to ensure a
holistic, consistent and comprehensive alignment of business strategy and
risk management.

Large Project Risk Management:

Expanded model spanning the entire lifecycle of large engagements. The
program has enabled to manage and optimise risks related to deal, bid
terms, customer credit worthiness, compliance requirements and service
level capabilities in complex engagements.

Employee Engagement:

Multi-layered approach to disseminate risk management and compliance
awareness at all levels of the organization.

All entry level employees are trained on key risk and compliance areas such
as Information security, code of business conduct & ethics.

Senior Managers are trained through workshops covering enterprise risk
management practices Intellectual Property guidelines including Data
Privacy and Business Continuity Planning.

Intellectual Property Risk:

Highest order of importance is attached to protect against intellectual
property exposures.

Information security compliance program has been extended to provide
customer re-assurance on information security, intellectual property and
data privacy.

Sustainability Risk:

A formal mechanism of assessing ecological risks was undertaken. The risks
that are being addressed in first phase are: i) climate change ii) water
scarcity and iii) e-waste.

Wipro is pro-active in addressing both the threats and opportunities that
have emerged on account of climate change.

As part of the 'Business Continuity Planning' framework, a broad range of
risk management procedures, processes and mitigation steps have been put in
place.

Way Forward:

The here and now situation presents an unprecdented combination of the
economic and ecological crises together. Needless to say the demands are
for organizations to make tough choices that favor long-term benefits while
optimizing achievement of short-term gains. Continued focus on increased
profitability, should be accompanied with efforts to cater to the need to
be more environmentally friendly and socially responsible.

Wipro firmly believes that this is an opportune moment to commit energies
towards managing risks in these transformed times.

The challenge today is the need for a framework that embraces environmental
and social responsibility along with profits. If not adequately met this
could become a significant risk that would cause stakeholders to question
the long-term viability of a company.

Wipro ERM sees a tremendous opportunity to contribute to overall management
strategy by implementing sound sustainability risk management practices.
Such practices can decrease sustainability risk costs, augment competitive
positions, protect reputation and improve bottom line.

In the coming years Wipro would accelerate its efforts to increasingly
consider triple bottom line dimensions in its Risk Management Framework to
strengthen its commitment to embrace sustainability.

Spirit of Wipro ERM:

Risk Management driving Assurance & Peace of Mind:

* For the customer
* For the management
* For the other stakeholders

Going beyond statutory & regulatory requirements.

Ratios:
Mar-09 Mar-08 Mar-07 Mar-07 Mar-06

Financial Performance-Growth (%):
Revenue 28 33 41 30 39
Profit Before Interest And Tax 25 16 35 24 63
Profit After Tax 19 12 42 27 58
Financial Position:
Cash and investments to capital 36 34 53 58 53
employed
Current Ratio 1.72 2.12 1.66 1.44 1.58
Days Sales Outstanding 67 64 60 62 61
(in days)
Returns-(%):
Return on Capital Employed 25 27 36 37 39
Return on Average Networth 31 36 35 36 29
Return on Invested Capital 37 45 80 84 86
Operating Cashflow to PBIT 82 66 92 87 99
Per Share - Rs.:
Book Value 93 80 66 46 38
Dividend Per Share 4 6 6 5 2.5
Market Price as on March 31 410* 529 559 560 335
PE Ratio 15 22 27 38 29
Market Cap in Rs. Million 600245 773255 816164 797995 472061
Segment Level:
IT Services:
Revenue growth (%) in $ 19 40 34 34 26
PBIT Growth (%) 29 11 36 25 72
ROCE(%)*-IT Services & IT 39 44 62 60 62
Products
Consumer Care & Lighting:
Revenue growth (%) 37 86 36 27 29
PBIT Growth (%) 34 89 25 20 22
ROCE(%) 14 19 48 76 89

* Based on closing price in NSE on June 12, 2009.