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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 20-F
  o
    
    Registration statement pursuant to section 12(b) or (g) of the Securities Exchange Act of 1934
 þ
    
    Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the fiscal year ended March 31, 2006
 o
    
    Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the transition period from  to
 o
    
    Shell Company Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934Date of event requiring this shell company report
 Commission File Number 001-16139
 WIPRO LIMITED
  Not Applicable
 
 Karnataka, India
 
 Doddakannelli
Sarjapur Road
Bangalore, Karnataka 560035, India
+91-80-2844-0011   
 Securities registered or to be registered pursuant to Section 12(b) of the Act:
 Title of Each Class
    
    Name of Each Exchange on Which RegisteredNone
    
    Not applicable
 Securities registered pursuant to Section 12(g) of the Act:
 American Depositary Shares,
 each represented by one Equity Share, par value Rs. 2 per share.
  Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
 Not Applicable
 (Title of Class)
 1,425,754,267 Equity Shares.
  þ o
  o þ
  þ o
  Large Accelerated Filer þ
    
    Accelerated Filer o
    
    Non  Accelerated Filer o
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Currency of Presentation and Certain Defined Terms
    Forward-Looking Statements May Prove Inaccurate
   2




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##### 



TABLE OF CONTENTS
 Part I -
    
    
    4Item 1. Identity of Directors, Senior Management and Advisers
    
    
    4Item 2. Offer Statistics and Expected Timetable
    
    
    4Item 3. Key Information
    
    
    5Item 4. Information on the Company
    
    
    19Item 5. Operating and Financial Review and Prospects
    
    
    42Item 6. Directors, Senior Management and Employees
    
    
    67Item 7. Major Shareholders and Related Party Transactions
    
    
    79Item 8. Financial Information
    
    
    80Item 9. The Offer and Listing
    
    
    81Item 10. Additional Information
    
    
    84Item 11. Quantitative and Qualitative Disclosure About Market Risk
    
    
    105Item 12. Description of Securities Other Than Equity Securities
    
    
    106Part II -
    
    
    106Item 13. Defaults, Dividend Arrearages and Delinquencies
    
    
    106Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds
    
    
    106Item 15. Controls and Procedures
    
    
    106Item 16 A. Audit Committee Financial Expert
    
    
    106Item 16 B. Code of Ethics
    
    
    107Item 16 C. Principal Accountant Fees and Services
    
    
    107Item 16 D. Exemptions from the Listing Standards for Audit Committees
    
    
    108Item 16 E. Purchase of Equity Securities by the Issuer and Affiliated Purchasers
    
    
    108Part III -
    
    
    108Item 17. Financial Statements
    
    
    108Item 18. Financial Statements
    
    
    108Item 19. Exhibits
    
    
    146EXHIBIT 4.10EXHIBIT 12.1EXHIBIT 12.2EXHIBIT 13EXHIBIT 23.1EXHIBIT 99.4
  3




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PART I
 
 Item 1. Identity of Directors, Senior Management and Advisers
  
 Item 2. Offer Statistics and Expected Timetable
  4




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Item 3. Key Information
 Summary of Selected Consolidated Financial Data
  (In millions, except per equity share data)Year ended March 31,2002
    
    
    2003
    
    
    2004
    
    
    2005
    
    
    2006
    
    
    2006Conveniencetranslation intoUS$Consolidated statements of
Income data:Revenues:Global IT
Services & Products
IT Services and Products
    
    Rs.  22,412
    
    
    Rs.   28,623
    
    
    Rs.    39,102
    
    
    Rs.    54,280
    
    
    Rs.    73,061
    
    
    $
    1,642BPO Services
    
    
    
    
    
    
    1,644
    
    
    
    4,363
    
    
    
    6,433
    
    
    
    7,664
    
    
    
    172India and AsiaPac IT Services
and ProductsServices
    
    
    1,914
    
    
    
    2,240
    
    
    
    3,109
    
    
    
    4,709
    
    
    
    6,097
    
    
    
    137Products
    
    
    5,037
    
    
    
    5,801
    
    
    
    6,305
    
    
    
    8,694
    
    
    
    10,380
    
    
    
    233Consumer Care and Lighting
    
    
    2,939
    
    
    
    2,942
    
    
    
    3,567
    
    
    
    4,555
    
    
    
    5,625
    
    
    
    126Others
    
    
    1,171
    
    
    
    1,599
    
    
    
    1,987
    
    
    
    2,681
    
    
    
    3,279
    
    
    
    74Total
    
    
    33,473
    
    
    
    42,849
    
    
    
    58,433
    
    
    
    81,353
    
    
    
    106,107
    
    
    
    2,385Cost of revenues:IT Services and Products
    
    
    12,310
    
    
    
    16,763
    
    
    
    25,047
    
    
    
    33,780
    
    
    
    46,986
    
    
    
    1,056BPO Services
    
    
    
    
    
    
    975
    
    
    
    2884
    
    
    
    4740
    
    
    
    5810
    
    
    
    131Global IT Services & Products
    
    
    12,310
    
    
    
    17,738
    
    
    
    27,931
    
    
    
    38,520
    
    
    
    52,796
    
    
    
    1,187India and AsiaPac IT Services
and ProductsServices
    
    
    1,160
    
    
    
    1,187
    
    
    
    1,661
    
    
    
    2,679
    
    
    
    3,549
    
    
    
    80Products
    
    
    4,268
    
    
    
    5,100
    
    
    
    5,643
    
    
    
    7,815
    
    
    
    9,286
    
    
    
    209Consumer Care and Lighting
    
    
    1,999
    
    
    
    2,008
    
    
    
    2,355
    
    
    
    2,926
    
    
    
    3,556
    
    
    
    80Others
    
    
    924
    
    
    
    1,143
    
    
    
    1,410
    
    
    
    1,914
    
    
    
    2,460
    
    
    
    55Total
    
    
    20,661
    
    
    
    27,176
    
    
    
    39,000
    
    
    
    53,855
    
    
    
    71,647
    
    
    
    1,611Gross Profit
    
    
    12,812
    
    
    
    15,673
    
    
    
    19,433
    
    
    
    27,498
    
    
    
    34,460
    
    
    
    775Operating expenses:Selling and marketing expenses
    
    
    (2,601
    )
    
    
    (2,916
    )
    
    
    (5,278
    )
    
    
    (5,466
    )
    
    
    (6,764
    )
    
    
    (152
    )General and administrative
expenses
    
    
    (1,758
    )
    
    
    (3,277
    )
    
    
    (3,172
    )
    
    
    (3,744
    )
    
    
    (5,239
    )
    
    
    (118
    )Amortization of intangible
assets
    
    
    
    
    
    
    (166
    )
    
    
    (308
    )
    
    
    (140
    )
    
    
    (64
    )
    
    
    (1
    )Other operating income/
(expenses)
    
    
    (11
    )
    
    
    172
    
    
    
    226
    
    
    
    (291
    )
    
    
    (421
    )
    
    
    (9
    )Operating income
    
    
    8,442
    
    
    
    9,486
    
    
    
    10,901
    
    
    
    17,857
    
    
    
    21,972
    
    
    
    494Gain/ (loss) on sale of stock
by affiliates, including direct
issue of stock by affiliate
    
    
    
    
    
    
    
    
    
    
    (206
    )
    
    
    (207
    )
    
    
    
    
    
    
    Other income/ (expense), (net)
    
    
    838
    
    
    
    718
    
    
    
    868
    
    
    
    800
    
    
    
    1276
    
    
    
    29Equity in earnings of affiliates
    
    
    147
    
    
    
    (355
    )
    
    
    96
    
    
    
    158
    
    
    
    288
    
    
    
    6Income before taxes and
minority interest
    
    
    9,427
    
    
    
    9,849
    
    
    
    11,659
    
    
    
    18,608
    
    
    
    23,536
    
    
    
    529Income taxes
    
    
    (1,016
    )
    
    
    (1,342
    )
    
    
    (1,611
    )
    
    
    (2,694
    )
    
    
    (3,265
    )
    
    
    (73
    )Minority interest (1)
    
    
    
    
    
    
    (30
    )
    
    
    (56
    )
    
    
    (81
    )
    
    
    (1
    )
    
    
    (0
    )Income from continuing
operations (4)
    
    Rs.   8,411
    
    
    Rs. 8,477
    
    
    Rs. 9,992
    
    
    Rs. 15,833
    
    
    Rs. 20,270
    
    
    $
    456Earnings per share from
continuing operations:Basic
    
    
    6.07
    
    
    
    6.11
    
    
    
    7.20
    
    
    
    11.38
    
    
    
    14.41
    
    
    
    0.32Diluted
    
    
    6.06
    
    
    
    6.10
    
    
    
    7.20
    
    
    
    11.29
    
    
    
    14.24
    
    
    
    0.32Cash dividend per equity share
    
    
    0.09
    
    
    
    0.17
    
    
    
    0.17
    
    
    
    4.84
    
    
    
    2.50
    
    
    
    0.12Additional data:Revenue by
Segment
IT Services and Products
    
    Rs.  22,668
    
    
    Rs. 28,949
    
    
    Rs. 39,412
    
    
    Rs. 54,256
    
    
    Rs. 72,888
    
    
    $
    1,639
 5




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Year ended March 31,2002
    
    
    2003
    
    
    2004
    
    
    2005
    
    
    2006
    
    
    2006Conveniencetranslation intoUS$BPO Services
    
    
    
    
    
    
    1,644
    
    
    
    4,363
    
    
    
    6,433
    
    
    
    7,626
    
    
    
    171Global IT Services and
Products
    
    Rs.  22,668
    
    
    Rs. 30,593
    
    
    Rs. 43,775
    
    
    Rs. 60,689
    
    
    Rs. 80,514
    
    
    $
    1,810India and AsiaPac IT Services
and Products
    
    
    6,950
    
    
    
    8,046
    
    
    
    9,445
    
    
    
    13,395
    
    
    
    16,475
    
    
    
    370Consumer Care and Lighting
    
    
    2,939
    
    
    
    2,942
    
    
    
    3,567
    
    
    
    4,555
    
    
    
    5,625
    
    
    
    126Others
    
    
    916
    
    
    
    1,268
    
    
    
    1,646
    
    
    
    2,714
    
    
    
    3,493
    
    
    
    79Total
    
    Rs. 33,473
    
    
    Rs. 42,849
    
    
    Rs. 58,433
    
    
    Rs. 81,353
    
    
    Rs. 106,107
    
    
    $
    2,385Operating
Income by Segment
     IT Services and Products
    
    Rs.  7,609
    
    
    Rs.   8,034
    
    
    Rs.   8,505
    
    
    Rs.   14,817
    
    
    Rs.   18,398
    
    
    $
    414BPO Services
    
    
    
    
    
    
    247
    
    
    
    795
    
    
    
    1,008
    
    
    
    1,011
    
    
    
    22Global IT Services and
Products
    
    Rs.  7,609
    
    
    Rs.   8,281
    
    
    Rs.   9,300
    
    
    Rs.   15,825
    
    
    Rs.   19,409
    
    
    $
    436India and AsiaPac IT Services
and Products
    
    
    578
    
    
    
    539
    
    
    
    761
    
    
    
    970
    
    
    
    1,405
    
    
    
    32Consumer Care and Lighting
    
    
    404
    
    
    
    422
    
    
    
    546
    
    
    
    671
    
    
    
    798
    
    
    
    18Others
    
    
    41
    
    
    
    256
    
    
    
    308
    
    
    
    466
    
    
    
    487
    
    
    
    11Reconciling items (2)
    
    
    (190
    )
    
    
    (12
    )
    
    
    (14
    )
    
    
    (75
    )
    
    
    (127
    )
    
    
    (3
    )Total
    
    Rs. 8,442
    
    
    Rs.  9,486
    
    
    Rs.  10,901
    
    
    Rs.  17,857
    
    
    Rs.  21,972
    
    
    $
    494
 Transitional disclosures pertaining to adoption of SFAS No. 142, Goodwill and Other Intangible Assets.
 2002Income from continuing
operations, as reported
    
    Rs. 8,411Add: Amortization of goodwill
    
    
    175Income from continuing
operations, adjusted
    
    
    8,586Earnings per
share: Basic
Continuing operations, as
reported
    
    
    6.07Add: Amortization of goodwill
    
    
    0.12Continuing operations, adjusted
    
    
    6.19Earnings per
share: Diluted
Continuing operations, as
reported
    
    
    6.06Add: Amortization of goodwill
    
    
    0.12Continuing operations, adjusted
    
    
    6.18Consolidated Balance Sheet Data:Cash and Cash equivalents
    
    Rs. 3,251
    
    
    Rs. 6,283
    
    
    Rs. 3,297
    
    
    Rs. 5,671
    
    
    Rs. 8,858
    
    
    $
    199Investments in liquid and
short-term mutual funds
    
    
    4,126
    
    
    
    7,813
    
    
    
    18,479
    
    
    
    22,958
    
    
    
    30,328
    
    
    
    682Working Capital (3)
    
    
    18,495
    
    
    
    21,473
    
    
    
    30,649
    
    
    
    36,449
    
    
    
    50,704
    
    
    
    1,140Total assets
    
    
    33,639
    
    
    
    42,781
    
    
    
    57,738
    
    
    
    72,075
    
    
    
    100,394
    
    
    
    2,257Total debt
    
    
    291
    
    
    
    537
    
    
    
    969
    
    
    
    564
    
    
    
    705
    
    
    
    16Total stockholders equity
    
    
    27,457
    
    
    
    35,431
    
    
    
    46,364
    
    
    
    56,729
    
    
    
    78,764
    
    
    
    1,771
 
 Notes:1.
    
    Minority interest represents the share of minority in the profits of Wipro BPO
(formerly Wipro Spectramind Services Limited) and Wipro Healthcare IT. The minority
interest in Wipro Healthcare IT was acquired in the year ended March 31, 2003. The minority
interest in Wipro BPO was acquired in the year ended March 31,
2006.2.
    
    In the operating income by segment, amortization of goodwill is included in reconciling
items for the year ended March 31, 2002.3.
    
    Working Capital equals current assets less current liabilities.4.
    
    Losses from discontinued operations, net of tax for the years ended March 31, 2002 and
2003, were Rs. 127 million and Rs. 377 million respectively.5.
    
    Segment data for previous periods have been reclassified to conform to the current
period presentation. 6




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Exchange Rates
   Fiscal Year Ended March 31,
    
    Period End
    
    Average
    
    High
    
    Low2006
    
    Rs.
    44.48
    
    
    Rs.
    44.21
    
    
    Rs.
    46.26
    
    
    Rs.
    43.052005
    
    
    43.62
    
    
    
    44.87
    
    
    
    46.45
    
    
    
    43.272004
    
    
    43.40
    
    
    
    45.78
    
    
    
    47.46
    
    
    
    43.402003
    
    
    47.53
    
    
    
    48.36
    
    
    
    49.07
    
    
    
    47.532002
    
    
    48.83
    
    
    
    47.81
    
    
    
    48.91
    
    
    
    46.58
   Month
    
    High
    
    LowMay 2006
    
    Rs.
    46.22
    

    Rs.
    44.69April 2006
    
    
    45.09
    
    
    
    44.39March 2006
    
    
    44.58
    
    
    
    44.09February 2006
    
    
    44.54
    
    
    
    44.10January 2006
    
    
    44.92
    
    
    
    43.89December 2005
    
    
    46.26
    
    
    
    44.94
 Capitalization and Indebtedness
  Reasons for the Offer and Use of Proceeds
  7




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RISK FACTORS
  Risks Related to our Company and our Industry
 Our revenues and expenses are difficult to predict because they can fluctuate significantly
given the nature of the markets in which we operate. This increases the likelihood that our
results could fall below the expectation of market analysts, which could cause the price of our
equity shares and ADSs to decline.
  
    
    the size, complexity, timing, pricing terms and profitability of significant projects or product orders;
    
    changes in our pricing policies or those of our competitors;
    
    the proportion of services we perform at our clients sites rather than at our offshore facilities;
    
    seasonal changes that affect the mix of services we provide to our clients or the
relative proportion of services and product revenue;
    
    seasonal changes that affect purchasing patterns among our consumers of desktops,
notebooks, servers, communication devices, consumer care and other products;
    
    unanticipated cancellations, contract terminations or deferral of projects or those
occurring as a result of our clients reorganizing their operations;
    
    the duration of tax holidays or exemptions and the availability of other Government
of India incentives;
    
    the effect of seasonal hiring patterns and the time we require to train and
productively utilize our new employees;
    
    unanticipated variations in the duration, size and scope of our projects, as well as
changes in the corporate decision-making process of our clients;
    
    currency exchange fluctuations; and
    
    other economic and political factors.
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If we do not continue to improve our administrative, operational and financial personnel and
systems to manage our growth, the value of our shareholders investment may be harmed.
  
    
    recruiting and retaining sufficiently skilled technical, marketing and management personnel;
    
    adhering to our high quality standards;
    
    maintaining high levels of client satisfaction;
    
    developing and improving our internal administrative infrastructure, particularly
our financial, operational, communications and other internal systems; and
    
    preserving our culture, values and entrepreneurial environment.
  Intense competition in the market for IT services could adversely affect our cost advantages,
and, as a result, decrease our revenues.
  We may face difficulties in providing end-to-end business solutions for our clients that could
cause clients to discontinue their work with us, which in turn could harm our business.
   9




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Our success depends in large part upon our management team and other highly skilled
professionals. If we fail to retain and attract these personnel, our business may be unable to
grow and our revenue could decline, which may decrease the value of our shareholders investment.
   Appreciation of Indian Rupee against major currencies of the world could negatively impact our
revenue and operating results.
  Our hedging strategy could negatively impact our competitive positioning.
  An economic slowdown, terrorist attacks in the United States, and other acts of violence or
war could delay or reduce the number of new purchase orders we receive and disrupt our operations
in the United States, thereby negatively affecting our financial results and prospects.
  10




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Our Global IT Services and Products service revenue depend to a large extent on a small number
of clients, and our revenue could decline if we lose a major client.
   Restrictions on immigration may affect our ability to compete for and provide services to
clients in the United States, which could hamper our growth and cause our revenue to decline.
       11




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We focus on high-growth industries, such as networking and communications. Any decrease in
demand for technology in such industries may significantly decrease the demand for our services,
which may impair our growth and cause our revenue to decline.
  Our failure to complete fixed-price, fixed-timeframe contracts on budget and on time may
negatively affect our profitability, which could decrease the value of our shareholders
investment.
  Disruptions in telecommunications could harm our service model, which could result in a
reduction of our revenue.
  The markets in which we operate are subject to the risk of earthquakes, floods and other
natural disasters.
  We may be liable to our clients for damages caused by disclosure of confidential
information or system failures.
  12




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We are investing substantial cash assets in new facilities and physical infrastructure, and
our profitability could be reduced if our business does not grow proportionately.
  Our international operations subject us to risks inherent in doing business on an
international level that could harm our operating results.
  Our business will suffer if we fail to anticipate and develop new services and enhance
existing services in order to keep pace with rapid changes in technology and the industries on
which we focus.
  Most of our client contracts can typically be terminated without cause and with little or no
notice or penalty, which could negatively impact our revenue and profitability.
  
    
    financial difficulties for a client;
    
    a change in strategic priorities, resulting in a reduced level of IT spending;
    
    a demand for price reductions; and
    
    a change in outsourcing strategy by moving more work to client in-house IT
departments or to our competitors.
 We may engage in future acquisitions, investments, strategic partnerships or other ventures
that may harm our performance, dilute our shareholders ownership and cause us to incur debt or
assume contingent liabilities.
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Our revenues could be significantly affected if the governments, in geographies we operate in,
restrict companies from outsourcing work to foreign corporations
   Our BPO services revenue depend to a large extent on a small number of clients, and our
revenue could decline if a major client reduces the volume of services obtained from us.
   Some of our long-term client contracts contain benchmarking provisions which, if triggered
could result in lower contractual revenues and profitability in the future.
  We may be liable to our clients for damages caused by system failures, which could damage our
reputation and cause us to lose customers.
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Our earnings will be adversely affected upon adoption of an accounting policy to expense stock
options based on fair value method.
  Compliance with new and changing corporate governance and public disclosure requirements adds
uncertainty to our compliance policies and increases our costs of compliance.
    Risks Related to Investments in Indian Companies and International Operations generally.
  Wages in India have historically been lower than wages in the United States and Europe, which
has been one of our competitive advantages. Wage increases in India may prevent us from sustaining
this competitive advantage and may reduce our profit margins.
  15




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Our costs could increase if the Government of India reduces or withholds tax benefits and
other incentives it provides to us.
         Regional conflicts in South Asia could adversely affect the Indian economy, disrupt our
operations and cause our business to suffer.
  16




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Political instability in the Indian Government could delay the liberalization of the Indian
economy and adversely affect economic conditions in India generally, which could impact our
financial results and prospects.
   Indian law limits our ability to raise capital outside India and may limit the ability of
others to acquire us, which could prevent us from operating our business or entering into a
transaction that is in the best interests of our shareholders.
  Our ability to acquire companies organized outside India depends on the approval of the
Government of India. Our failure to obtain approval from the Government of India for acquisition of
companies organized outside India may restrict our international growth, which could negatively
affect our revenue.
  
    
    if the transaction consideration is paid in cash, up to 100% of the proceeds from an
ADS offering; and
    
    if the transaction consideration is paid in stock (i.e., by issue of ADRs/GDRs), the
greater of $ 100 million or ten times the acquiring companys previous fiscal years
export earnings.
  17




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It may be difficult for you to enforce any judgment obtained in the United States against us,
the selling shareholders or our affiliates.
   The laws of India do not protect intellectual property rights to the same extent as those of
the United States, and we may be unsuccessful in protecting our intellectual property rights.
Unauthorized use of our intellectual property may result in development of technology, products or
services which compete with our products. We may also be subject to third-party claims of
intellectual property infringement.
    Risks Related to the ADSs
 Sales of our equity shares may adversely affect the prices of our equity shares and the
ADSs.
  18




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An active or liquid trading market for our ADSs is not assured.
  Indian law imposes foreign investment restrictions that limit a holders ability to convert
equity shares into ADSs, which may cause our ADSs to trade at a premium or discount to the market
price of our equity shares.
   An investor in our ADSs may not be able to exercise preemptive rights for additional shares
and may thereby suffer dilution of his or her equity interest in us.
  ADS holders may be restricted in their ability to exercise voting rights.
  
 Item 4. Information on the Company
 History and Development of the Company
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Business Overview
     
    
    Global IT Services and Products.Our Global IT Services and Products segment
provides IT services to customers in the Americas, Europe and Japan. The range of our
services includes IT consulting, custom application design, development, re-engineering
and maintenance, systems integration, package implementation, technology infrastructure
outsourcing, BPO services and research and development services in the areas of
hardware and software design. Our service offerings in BPO services include customer
interaction services, finance and accounting services and process improvement services
for repetitive processes.
 o
    
    Until June 30, 2005, we reported Global IT Services and Products as an
integrated business segment. Effective as of July 1, 2005, we reorganized the
management structure of our Global IT Services and Products segment. Pursuant to
this reorganization, we have reorganized our business into new operating segments.
Business lines with similar economic characteristics and which comply with segment
aggregation criteria specified in U.S. GAAP have been combined to form our new
reportable segments. Consequently, IT Services and Products and BPO Services now
qualify as separate
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##### Table of Contents



reportable segments. Segment data for previous periods have
been reclassified to conform to the current period presentation.
 o
    
    In December 2005, we acquired 100% of the equity of mPower Software
Service Inc. and its subsidiaries, a U.S. based company in the payment processing
space, for an aggregate cash consideration equal to Rs. 1,275 million ($28
million). Pursuant to the terms of this acquisition, we also acquired 100% of the
equity of MPact India, a joint venture between MasterCard International and mPower
Software Services Inc..o
    
    In December 2005, we acquired 100% of the equity of BVPENTE
Beteiligungsverwaltung GmbH and its subsidiaries (NewLogic Technologies AG), a
European system-on-chip design company. The consideration included a cash payment
of Rs. 1,157 million and an earn-out of Euro 26 million to be determined and paid
in the future based on certain financial targets being achieved over a three-year
period. A portion of this earn-out, up to a maximum of Euro 3 million, is linked
to the continuing employment of one of the selling shareholders.o
    
    The operations of mPower and New Logic, which are now part of our IT
Services and Products, are currently reviewed by our Chief Operating Decision
Maker, or CODM, separately, and have accordingly been reported separately under
Acquisitions in the Notes to our Financial Statements. We intend to include all
acquisitions made within 2 to 4 quarters preceding the reporting date within
Acquisitions.o
    
    In April 2006, we acquired cMango Inc., a privately held California, US
 headquartered company, in an all cash deal. cMango is a provider of Business
Service Management (BSM) solutions. The consideration included a cash payment of
Rs.886 Million ($20 million) paid at the closing of the transaction and additional
earn-out payments based on achieving specified financial metrics over a two year
period.o
    
    In May 2006, we acquired, subject to completion of certain closing
conditions, US based Quantech Global Services LLC and India based Quantech Global
Services Limited for a total consideration of Rs. 444.80 million ($ 10 million) and
additional earn outs based on achieving specified financial targets over a three
year period.. Quantech, founded 16 years ago, is a leading provider of Computer
Aided Design and Engineering services to Fortune 500 companies, particularly in the
automotive, aerospace and consumer goods industries. We currently intend to fund
this acquisition through our internal accruals.o
    
    In May 2006, we acquired, subject to completion of certain closing
conditions, a Europe based retail solutions provider, Enabler for a consideration
of Euros 41 Million ($ 53 million) payable on closure of the transaction as well as
earn-outs on achieving agreed financial targets over a two year period. We
currently intend to fund this acquisition through our internal accruals. Enabler is
one of the leading specialists in consulting and implementation of integrated
solutions and effective support of retail systems.o
    
    Our Global IT Services and Products segment accounted for 76% of our
revenues and 88% of our operating income for the year ended March 31, 2006. Of
these percentages, our IT Services and Products segment accounted for 69% of our
revenue and 84% of our operating income for the year ended March 31, 2006, and our
BPO Services segment accounted for 7% of our revenue and 4% of our operating income
for the year ended March 31, 2006.
 
    
    India and AsiaPac IT Services and Products.Our India and AsiaPac IT Services and
Products segment is a leader in the Indian IT market and focuses primarily on meeting
the IT products and services requirements of companies in India, Asia-Pacific and the
Middle East region. This business segment accounted for 16% of our revenue and 6% of
our operating income for the year ended March 31, 2006.
    
    Consumer Care and Lighting.We leverage our brand name and distribution strengths
to sustain a profitable presence in niche markets in the areas of soaps, toiletries and
lighting products for the Indian market. This business segment accounted for 5% of our
revenue and 4% of our operating income for the year ended March 31, 2006.
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Industry Overview
 IT Services and Products
      
    
    providing decision makers with real-time data from disparate IT systems to enhance
the effectiveness of the decision making process;
    
    realizing measurable cost efficiencies;
    
    realizing a defined return on investment on their IT spending;
    
    reducing the cycle time of introducing new software applications, commonly known as
time-to-application advantage;
    
    reducing the time it takes to develop new technologies, commonly known as
time-to-market advantage;
    
    increasing the focus on core activities by outsourcing IT infrastructure to
integrated IT service providers; and
    
    strengthening individual portfolio and expanding geographic footprints through
cross-border mergers and acquisitions.
  22




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Increasing Trend Towards Offshore Technology Services.
    The India Advantage
   
    
    India-based IT companies have proven their capability to deliver IT services that
satisfy the requirements of international clients who expect the highest quality
standards. According to a report by Dataquest published in October 2003, 75% of the
worlds SEI-CMM Level 5-assessed development centers were located in India. According
to NASSCOMs Strategic Review Report 2006, out of the 400 companies which have various
quality certifications, 82 are assessed at SEI-CMM Level 5 and 90 more companies are
reported to be in the process of getting certified. SEI-CMM is the Software Engineering
Institutes Capability Maturity Model, which assesses the quality of organizations
management system processes and methodologies.
    
    India has a large, highly skilled English-speaking labor pool that is available at a
relatively low labor cost. According to NASSCOM Strategic Review Report 2006, the
Indian IT industry employed nearly 920,000 software professionals as of March 31, 2006,
making it the second largest employer in the IT services industry after the United
States. Approximately 280,000 engineering degree and diploma holders enter the
workforce annually, with a majority of them entering the IT industry. According to
this report, client organisations could expect total savings of 25% to 50% by using
offshore processes primarily because of
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the differential in wages paid by these
companies in comparison to their India-based counterparts. Although wages in India are rising at a faster pace, the labor rate differential is
currently anticipated to remain a competitive advantage for Indian companies.
 
    
    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.
    
    In addition to strong telecom links and physical connectivity to and within India
via road and air have also been stepped up over the past few years. According to the
mid term review of the Tenth Five Year Plan 2002-2007 India currently has the second
largest road network in the world totaling over 3.3 million kilometers.
  BPO Services
  India and Asia Pac IT Services and Products
 .
  Consumer Care and Lighting
  24




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Our Competitive Strengths
  Comprehensive range of IT services
  World-class quality as measured by SEI-CMM and Six Sigma initiatives
  Service offerings in emerging growth areas
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Broad range of research and development services
  Global delivery model
  
    
    a time difference between the client site and the ODC which allows a 24-hour work
schedule for specific projects;
    
    the ability to quickly increase the scale of development operations;
    
    increased access to our large pool of highly skilled IT professionals located in India; and
    
    physical and operational separation from all other client projects, providing
enhanced security for a clients intellectual property.
 Established track record with premier international customer base
  
    
    the type of clients we target are likely to maintain or increase their IT
outsourcing budgets;
    
    our ODCs support critical IT applications of our large clients, so the clients are
therefore likely to provide a high level of repeat business; and
    
    our IT professionals are consistently exposed to the latest technologies that we are
then able to leverage to procure business from other clients.
 Ability to access, attract and retain skilled IT professionals
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Robust systems and processes to support growth in business
  Broad distribution network and strong sales force in India
  Strong brand recognition in the Indian market
  Our Strategy
  Significantly expand our IT Services and Products business and our BPO Services Business
  
    
    Identify and develop service offerings in emerging growth areas as separate business
opportunities. Currently we are focusing on areas such as business intelligence
services, package implementation, niche consulting, data warehousing and network
storage;
    
    Increase our share of the total IT spending by our large customers through focused
account management and more effective selling of all service lines to our existing
customers;
    
    Develop industry specific point solutions and use them as entry strategies by
demonstrating industry knowledge and understanding of customer businesses and the
benefits of outsourcing;
    
    Offer new pricing models, sharing the risks and rewards of the impact of IT
solutions on business, productivity improvements and timeliness of delivery;
    
    Use efficient global sourcing models to source IT services from various geographies
and develop methodologies to develop and integrate solutions from around the globe.
    
    Leverage our experience in providing IT infrastructure management services in the
Indian market and our access to existing clients outside India to provide technology
infrastructure support services;
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##### Table of Contents




    
    Grow our research and development services by focusing on high growth markets such
as telecommunications, mobile communications and the Internet, and high growth
technologies such as embedded software;
    
    Expand our market presence by providing enterprise application integration and
system integration services; and
    
    Expand our business consulting services and position consulting services as
strategic differentiator over other competing entities.
 Increase the number and penetration of our IT Services and Products and our BPO Services
clients
  Focus on services-led growth in India and AsiaPac IT Services and Products segment
  Aggressively build awareness of the Wipro brand name
  Pursue selective acquisition of IT companies
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Sustain growth in operating income and cash flow of our traditional businesses
  Continue development of our deep industry knowledge
  IT Services and Products
  
    
    enterprise IT services;
    
    technology infrastructure support services; and
    
    research and development services;
  Enterprise Solutions Business
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Custom applications.
 
    
    Development.We offer our software development services over a broad spectrum of
technology areas that include client or server applications, object-oriented software,
Internet or intranet applications and mainframe applications. For example, a leading
electronics company in the United States used to sell products of a particular division
online. We helped the client to develop online sales capability at other divisions by
building an oracle application interface with EDI systems, third-party softwares and
third-party suppliers. Through this process, the client now obtains online information
about inventory levels of various products, reconciles sales returns, credits and
charge backs and generates automated invoices.
    
    Re-engineering.We study a clients business processes and existing systems and
convert or redevelop them to improve efficiency and reduce costs. For example, we
assisted one of the worlds largest water companies in a strategic re-engineering
initiative to streamline its IT operations to ensure better service delivery, improved
customer relationship and closer links with business. Over a two year period, through a
series of strategic initiatives, we enabled the client to realize significant cost
savings and improvements in the quality of the IT applications. We followed a cycle of
define, perform, review and refine for each of the IT applications assigned to us. We realized savings in the IT application support budget
by consolidating IT applications to derive economies of scale and redistributing IT
applications among third party vendors for optimum cost savings.
    
    Maintenance.To meet the needs of a changing business environment with limited
internal resource utilization, we address legacy software applications for our clients
that require upgrades. For example for a leading integrated utility company which
sells and delivers electricity and energy related products and services, we
significantly reduced the cost of maintaining IT applications by rationalizing
disparate IT applications, offshoring application maintenance work and automating
certain processes to improve process efficiency.
 Enterprise application integration services.
 Business intelligence and data warehousing.
 Package Implementation.
 Consulting.
 30




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Testing Services.
 Technology Infrastructure Support Services
  Research and Development Services
   Hardware design and development.
 Software system design and development.
 IT Professionals.
 Telecommunications and inter-networking.
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Embedded systems and Internet access devices.
 Telecommunications and service providers.
 Our Global Delivery Model
  The Offshore Development Center.
 The Nearshore Development Center.
 Our Clients
  Number of clients inYear ended
    
    Year ended
    
    Year endedMarch 31,
    
    March 31,
    
    March 31,Per client revenue($)
    
    2004
    
    2005
    
    20061-3 million
    
    
    74
    
    
    
    64
    
    
    
    1033-5 million
    
    
    19
    
    
    
    28
    
    
    
    30>5 million
    
    
    44
    
    
    
    65
    
    
    
    79Total
    
    
    137
    
    
    
    157
    
    
    
    212
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##### Table of Contents



Sales and Marketing
  
    
    by the vertical market segment of the clients business;
    
    by the geographic region in which the client is located; and
    
    by the specific practice specialization or skill set that the client requires.
  Competition
   
    
    the ability of our competitors to attract, retain and motivate highly skilled IT
services professionals;
    
    the extent to which our international competitors expand their operations in India
and benefit from the favorable wage differential;
    
    the price at which our competitors offer their services; and
    
    the extent to which our competitors can respond to a clients needs.
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##### Table of Contents



Business Process Outsourcing (BPO) Services
  
    
    customer interaction services, such as IT-enabled customer services, marketing
services, technical support services and IT helpdesks;
    
    finance and accounting services, such as accounts payable and accounts receivable
processing; and
    
    process improvement services that provide benefits of scale for repetitive
processes like claims processing, mortgage processing and document management.
    India and AsiaPac IT Services and Products
  
    
    technology products;
    
    technology integration, IT management and infrastructure outsourcing services;
    
    custom application development, application integration, package implementation and maintenance; and
    
    consulting.
  Services and Products
 Technology Products.
 Technology integration and management services and outsourcing services.
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##### Table of Contents




    
    Availability Services. Includes hardware and software maintenance, and network
availability services. We provide these services through an annual service or
maintenance contract with the client which provides for both preventive and breakdown
maintenance services.
    
    System Integration.We are one of the largest system integrators in India and our
services include integration of computing platforms, networks, storage, data center and
enterprise management software. These services are typically bundled with sales of our
technology products.
    
    Infrastructure Management and Total Outsourcing.Includes management and operations
of customers IT infrastructure on a day-to-day basis. Our Total Outsourcing practice
encompasses process, function or activity of the IT department in a clients
organization that can be outsourced to us by the client, through a long term
contractual agreement. The scope of outsourcing typically covers two or more of the
following areas: applications management, infrastructure management, asset outsourcing
and human resources transition.
    
    Technology Support Services.Includes technology support services for upgrades,
system migrations, messaging, network audits and new system implementation. When
combined with our expertise in availability and managed IT services, we can provide the client with a complete solution
for enhanced system performance.
  Custom application development, application integration, package implementation and
maintenance.
 Consulting.
 Clients
  Sales and Marketing
  Competition
  35




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Consumer Care and Lighting
  Products
 Soaps and toiletries
 Lighting
 Hydrogenated cooking oils
 Sales and Marketing
   Competition
  Raw Materials and Manufacturing
    36




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Wipro Infrastructure Engineering Limited
  Markets and Sales Revenue
  (In millions)
 Year ended March 31,2004
    
    
    2005
    
    
    2006India
    
    Rs.           14,783
    
    
    Rs.    19,350
    
    
    Rs.    21,804United States
    
    
    30,869
    
    
    
    41,812
    
    
    
    53,481Europe
    
    
    10,459
    
    
    
    16,602
    
    
    
    24,310Rest of the world
    
    
    2,323
    
    
    
    3,589
    
    
    
    6,512Rs.           58,434
    
    Rs.    81,353
    
    Rs.    106,107
 Wipro GE Medical Systems Private Limited
  Intellectual Property
    37




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Effect of Government Regulation of our Business
    38




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Organizational Structure
  Country of
    
    PercentageName
    
    Incorporation
    
    Held by WiproWipro Inc.
    
    United States
    
    
    100
    %Enthink Inc. (1)
    
    United States
    
    Wipro Japan KK
    
    Japan
    
    
    100
    %Wipro Chandrika Limited
    
    India
    
    
    90
    %Wipro Consumer Care Limited
    
    India
    
    
    100
    %Wipro Travel Services Limited
    
    India
    
    
    100
    %Wipro Trademarks Holding Limited
    
    India
    
    
    100
    %Wipro Holdings (Mauritius) Limited
    
    Mauritius
    
    
    100
    %Wipro Holdings (UK) Limited (2)
    
    United Kingdom
    
    Wipro Technologies UK Limited (3)
    
    United Kingdom
    
    Wipro HealthCare IT Limited
    
    India
    
    
    100
    %Wipro Infrastructure Engineering Limited
    
    India
    
    
    100
    %WeP Peripherals Limited
    
    India
    
    
    36.93
    %Wipro GE Medical Systems Private Limited
    
    India
    
    
    49
    %Wipro Shanghai Limited
    
    China
    
    
    100
    %Spectramind Inc.
    
    United States
    
    
    100
    %Cygnus Negri Investments Pvt. Ltd. (4)
    
    India
    
    BVPENTE Beteiligungsverwaltung GmbH (5)
    
    Austria
    
    New Logic Technologies AG (6)
    
    Austria
    
    New Logic Technologies SARL (7)
    
    France
    
    New Logic Technologies SA (7)
    
    Switzerland
    
    New Logic Technologies Inc. (7)
    
    United States
    
    mPower Software Services Inc. (8)
    
    USA
    
    mPower Software Services India Pvt Ltd. (9)
    
    India
    
    MPACT Technology Services Pvt. Ltd. (10)
    
    India
    
    
 
 1)
    
    Majority owned through Wipro Inc.2)
    
    Wholly owned through Wipro Holdings (Mauritius) Limited.3)
    
    Wholly owned through Wipro Holdings (UK) Limited.4)
    
    Wholly owned through Wipro Trademarks Holding Limited.5)
    
    Wholly owned through Wipro Holdings (UK) Limited.6)
    
    Wholly owned through BVPENTE Beteiligungsverwaltung GMBH.7)
    
    Wholly owned through New Logic Technologies AG.8)
    
    Wholly owned through Wipro Inc.9)
    
    Wholly owned through mPower Software Services Inc.10)
    
    51% held by mPower Software Services Inc. and 49% held by Wipro Inc. Property, Plant and Equipment
   39




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Building
    
    Land (1)Location
    
    Approx. Sq.ft.
    
    Approx. Sq.ft.
    
    OwnershipSoftware Development FacilitiesBangalore (M.G.Road), Karnataka
    
    
    56,000
    
    
    
    
    
    
    LeasedBangalore (ITPL), Karnataka
    
    
    45,000
    
    
    
    
    
    
    LeasedBangalore (Koramangala 1),
Karnataka
    
    
    48,000
    
    
    
    
    
    
    LeasedBangalore (Koramangala 2),
Karnataka
    
    
    52,500
    
    
    
    30,000
    
    
    OwnedBangalore (Madivala  1),
Karnataka
    
    
    48,000
    
    
    
    
    
    
    LeasedBangalore (Madivala  2),
Karnataka
    
    
    74,800
    
    
    
    
    
    
    LeasedBangalore (Madivala  3),
Karnataka
    
    
    70,000
    
    
    
    
    
    
    LeasedBangalore (Madivala  4),
Karnataka
    
    
    69,803
    
    
    
    
    
    
    LeasedBangalore (Electronic City 1),
Karnataka
    
    
    225,000
    
    
    
    217,800
    
    
    Long term leaseBangalore (Electronic City 2), Karnataka
(2)
    
    
    430,000
    
    
    
    522,000
    
    
    OwnedBangalore  SIRI Tech, Karnataka
    
    
    42,272
    
    
    
    
    
    
    LeasedBangalore (Electronic City 4), Karnataka
(2)
    
    
    1,000,000
    
    
    
    2,015,000
    
    
    OwnedBangalore (Sigma Infotech
Park-Whitefield),
Karnataka
    
    
    45,800
    
    
    
    
    
    
    LeasedBangalore (Ahmed Plaza)
    
    
    9,270
    
    
    
    
    
    
    LeasedBangalore (Subramanya Arcade)
    
    
    7,308
    
    
    
    
    
    
    LeasedChennai (Guindy), Tamil Nadu
    
    
    35,000
    
    
    
    16,000
    
    
    OwnedChennai (Guindy), Tamil Nadu
    
    
    78,000
    
    
    
    
    
    
    OwnedChennai (Sholinganalur), Tamil
Nadu
    
    
    450,000
    
    
    
    610,000
    
    
    OwnedChennai (Anna Salai), Tamil Nadu
    
    
    44,713
    
    
    
    
    
    
    LeasedCochin Info Park
    
    
    11,956
    
    
    
    
    
    
    LeasedCochin Info Park
    
    
    
    
    
    
    10,96,841
    
    
    Long term leaseMysore (Mettagalli Inudstrial Area),
Karnataka
    
    
    10,000
    
    
    
    
    
    
    OwnedCarlton Towers, Bangalore,
Karnataka
    
    
    4,100
    
    
    
    
    
    
    LeasedOkhla Industrial Estate, Delhi
    
    
    139,991
    
    
    
    
    
    
    LeasedGurgaon  2 and 3, Haryana
    
    
    74,624
    
    
    
    
    
    
    Long term leaseHyderabad (Madhapur), Andhra Pradesh
    
    
    250,000
    
    
    
    196,000
    
    
    Long term leaseHyderabad (Manikonda), Andhra Pradesh
(2)
    
    
    900,000
    
    
    
    1,300,000
    
    
    Long term leaseQueens Plaza, SP Road, Hyderabad
    
    
    55,970
    
    
    
    
    
    
    LeasedKolkatta (2)
    
    
    350,000
    
    
    
    522,000
    
    
    Long term leaseNew Mumbai (Belapur), Maharashtra
    
    
    156,000
    
    
    
    
    
    
    Long term leasePune, (Hinjawadi), Maharashtra
    
    
    270,000
    
    
    
    1,084,000
    
    
    Long term leaseSecunderabad (Begumpet), Andhra
Pradesh
    
    
    40,000
    
    
    
    
    
    
    Long term leaseReading, United Kingdom
    
    
    10,380
    
    
    
    
    
    
    LeasedStockholm, Sweden
    
    
    9,226
    
    
    
    
    
    
    LeasedWindsor, Canada
    
    
    24,662
    
    
    
    
    
    
    LeasedKiel, Germany
    
    
    3,745
    
    
    
    
    
    
    LeasedYokohoma, Japan
    
    
    5,328
    
    
    
    
    
    
    LeasedShanghai, China
    
    
    3,660
    
    
    
    
    
    
    LeasedTotal
    
    
    5,452,063
    
    
    
    6,512,800
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##### Table of Contents



Factories
    
    Building
    
    Land
    
    OwnershipApprox. Sq.ft.
    
    Approx. Sq.ft.Amalner, Maharashtra
    
    
    727,000
    
    
    
    1,108,000
    
    
    OwnedBangalore, Karnataka
    
    
    63,000
    
    
    
    397,000
    
    
    OwnedTumkur, Karnataka
    
    
    139,000
    
    
    
    736,000
    
    
    OwnedHindupur, Andhra Pradesh
    
    
    31,000
    
    
    
    114,000
    
    
    OwnedGuduvancherry, Chennai
    
    
    90,000
    
    
    
    80,000
    
    
    OwnedMysore, Karnataka
    
    
    60,000
    
    
    
    327,000
    
    
    OwnedThirubhvanai, Pondicherry
    
    
    20,000
    
    
    
    400,000
    
    
    OwnedWaluj, Aurangabad
    
    
    124,000
    
    
    
    767,000
    
    
    Long term leaseBaddi , Himachal Pradesh
    
    
    10,871
    
    
    
    108,979
    
    
    Long term leaseTotal
    
    
    1,264,871
    
    
    
    4,037,979
 
 (1)
    
    Includes land owned or held by us pursuant to a long term lease.(2)
    
    Facility partially completed Material Plans to Construct, Expand and Improve Facilities
  Legal Proceedings
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Item 5. Operating and Financial Review and Prospects
 Managements Discussion and Analysis of Financial Condition and Results of Operations
 Readers are cautioned that this discussion contains forward-looking statements that involve
risks and uncertainties. When used in this discussion, the words anticipate, believe,
estimate, intend ,could, may, plan, predict, should, would, will and expect
and other similar expressions as they relate to the company or our business are intended to
identify such forward-looking statements. These forwardlooking statements speak only as of the
date of this report, and we undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future events, or otherwise.
Actual results, performances or achievements could differ materially from those expressed or
implied in such forward-looking statements. Factors that could cause or contribute to such
differences include those described under the heading Risk Factors, as well as the other factors
discussed in this report. Readers are cautioned not to place undue reliance on these
forward-looking statements. The following discussion and analysis should be read in conjunction
with our financial statements included herein and the notes thereto.
 Overview
    Global IT Services and Products
    42




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##### Table of Contents



India and AsiaPac IT Services and Products
 Consumer Care and Lighting
  Wipro Limited and its subsidiariesYears ended March 31,2004
    
    2005
    
    2006(in millions except earnings per sharedata)Revenue
    
    Rs.
    58,433
    
    
    Rs.
    81,353
    
    
    Rs.
    106,107Cost of revenue
    
    
    (39,000
    )
    
    
    (53,895
    )
    
    
    (71,647
    )Gross profit
    
    
    19,433
    
    
    
    27,458
    
    
    
    34,460Gross margins
    
    
    33
    %
    
    
    34
    %
    
    
    32
    %Operating income
    
    
    10,901
    
    
    
    17,857
    
    
    
    21,972Loss on direct issue
of stock by subsidiary
    
    
    (206
    )
    
    
    (207
    )
    
    
    Net income
    
    
    9,992
    
    
    
    15,833
    
    
    
    20,270Earnings per shareBasic
    
    
    7.20
    
    
    
    11.38
    
    
    
    14.41Diluted
    
    
    7.20
    
    
    
    11.29
    
    
    
    14.24
  43




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##### Table of Contents



44




---



##### Table of Contents



Acquisitions
 Acquisition of Ownership Interest in a Subsidiary
    mPower Software Services Inc. and subsidiaries
    Description
    
    Fair valueNet tangible assets
    
    Rs. 185Customer Related Intangibles
    
    
    357Deferred tax liability
    
    
    (125
    )Goodwill
    
    
    857Total
    
    Rs. 1,274
   45




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##### Table of Contents



BVPENTE Beteiligungsverwaltung GmbH and subsidiaries
    Description
    
    Fair valueNet tangible assets
    
    Rs. 307Customer Related Intangibles
    
    
    147Technology Related Intangibles
    
    
    67Deferred Tax Liability
    
    
    (53
    )Goodwill
    
    
    690Total
    
    Rs.          1,158
  46




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##### Table of Contents



Year ended March 31,2004
    
    2005
    
    2006Revenue:Global IT Services and ProductsIT Services and Products
    
    
    67
    %
    
    
    67
    %
    
    
    68
    %BPO Services
    
    
    8
    %
    
    
    8
    %
    
    
    7
    %Acquisitions
    
    
    
    
    
    
    
    
    
    
    1
    %Total
    
    
    75
    %
    
    
    75
    %
    
    
    76
    %India and AsiaPac IT Services and Products
    
    
    16
    
    
    
    16
    
    
    
    16Consumer Care and Lighting
    
    
    6
    
    
    
    6
    
    
    
    5Others
    
    
    3
    
    
    
    3
    
    
    
    3100
    %
    
    
    100
    %
    
    
    100
    %Operating Income:Global IT Services and ProductsIT Services and Products
    
    
    78
    %
    
    
    83
    %
    
    
    84
    %BPO Services
    
    
    7
    %
    
    
    6
    %
    
    
    5
    %Acquisitions
    
    
    0
    %
    
    
    0
    %
    
    
    0
    %Total
    
    
    85
    %
    
    
    89
    %
    
    
    88
    %India and AsiaPac IT Services and Products
    
    
    7
    
    
    
    5
    
    
    
    6Consumer Care and Lighting
    
    
    5
    
    
    
    4
    
    
    
    4Others
    
    
    3
    
    
    
    2
    
    
    
    2100
    %
    
    
    100
    %
    
    
    100
    %
  Global IT Services and Products
 Year ended March 31,2004
    
    2005
    
    2006(in millions)RevenueIT Services and Products
    
    Rs.
    39,412
    
    
    Rs.
    54,256
    
    
    Rs.
    72,887BPO Services
    
    
    4,363
    
    
    
    6,433
    
    
    
    7,626Total
    
    
    43,775
    
    
    
    60,689
    
    
    
    80,513Gross profitIT Services and Products
    
    
    14,364
    
    
    
    20,476
    
    
    
    25,901BPO Services
    
    
    1,480
    
    
    
    1,693
    
    
    
    1,817Total
    
    
    15,844
    
    
    
    22,169
    
    
    
    27,718Selling and marketing expenses
    
    
    (3,520
    )
    
    
    (3,223
    )
    
    
    (3,942
    )General and administrative expenses
    
    
    (2,493
    )
    
    
    (2,739
    )
    
    
    (4,144
    )Research and Development expenses
    
    
    (232
    )
    
    
    (274
    )
    
    
    (202
    )Amortization of intangibles
    
    
    (300
    )
    
    
    (122
    )
    
    
    (31
    )Others, net
    
    
    1
    
    
    
    14
    
    
    
    10Operating income
    
    
    9,300
    
    
    
    15,825
    
    
    
    19,409Revenue growth rate over prior period
    
    
    43
    %
    
    
    39
    %
    
    
    33
    %Gross margin
    
    
    36
    %
    
    
    37
    %
    
    
    34
    %Operating margin
    
    
    21
    %
    
    
    26
    %
    
    
    24
    %
 47




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##### Table of Contents



IT Services and Products
 Year ended March 31,2004
    
    2005
    
    2006(in millions)
    
    (in millions)
    
    
    
    
    
    (in millions)IT Services
    
    Acquisitions
    
    TotalRevenue
    
    Rs.
    39,412
    
    
    Rs.
    54,256
    
    
    Rs.
    72,419
    
    
    
    Rs.468
    
    
    Rs.
    72,887Gross profit
    
    
    14,364
    
    
    
    20,476
    
    
    
    25,813
    
    
    
    88
    
    
    
    25,901Selling and marketing expenses
    
    
    (3,418
    )
    
    
    (3,122
    )
    
    
    (3864
    )
    
    
    (29
    )
    
    
    (3,893
    )General and administrative expenses
    
    
    (2,126
    )
    
    
    (2,226
    )
    
    
    (3345
    )
    
    
    (47
    )
    
    
    (3,392
    )Research and Development expenses
    
    
    (232
    )
    
    
    (274
    )
    
    
    (202
    )
    
    
    
    
    
    
    (202
    )Amortization of intangibles
    
    
    (84
    )
    
    
    (52
    )
    
    
    (8
    )
    
    
    (18
    )
    
    
    (26
    )Others, net
    
    
    1
    
    
    
    15
    
    
    
    7
    
    
    
    3
    
    
    
    10Operating income
    
    
    8,505
    
    
    
    14,817
    
    
    
    18,401
    
    
    
    (3
    )
    
    
    18,398Revenue growth rate over prior
period
    
    
    38
    %
    
    
    38
    %
    
    
    33
    %
    
    
    0
    
    
    
    34
    %Gross margin
    
    
    36
    %
    
    
    38
    %
    
    
    36
    %
    
    
    19
    %
    
    
    36
    %Operating margin
    
    
    22
    %
    
    
    27
    %
    
    
    25
    %
    
    
    (1
    )%
    
    
    25
    %
     48




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##### Table of Contents



BPO Services
 Year ended March 31,2004
    
    2005
    
    2006(in millions)Revenue
    
    Rs.
    4,363
    
    
    
    6,433
    
    
    
    7,626Gross profit
    
    
    1,480
    
    
    
    1,693
    
    
    
    1,817Selling and marketing expenses
    
    
    (102
    )
    
    
    (102
    )
    
    
    (49
    )General and administrative expenses
    
    
    (367
    )
    
    
    (513
    )
    
    
    (752
    )Research and Development expenses
    
    
    0
    
    
    
    0
    
    
    
    0Amortization of intangibles
    
    
    (216
    )
    
    
    (70
    )
    
    
    (5
    )Others, net
    
    
    0
    
    
    
    0
    
    
    
    0Operating income
    
    
    795
    
    
    
    1,008
    
    
    
    1,011Revenue growth rate over prior period
    
    
    165
    %
    
    
    47
    %
    
    
    19
    %Gross margin
    
    
    34
    %
    
    
    26
    %
    
    
    24
    %Operating margin
    
    
    18
    %
    
    
    16
    %
    
    
    13
    %
      49




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##### Table of Contents



India and AsiaPac IT Services and Products
 Year ended March 31,2004
    
    2005
    
    2006(in millions)RevenueServices
    
    Rs.
    3,109
    
    
    Rs.
    4,709
    
    
    Rs.
    6,097Products
    
    
    6,336
    
    
    
    8,686
    
    
    
    10,378Total
    
    
    9,445
    
    
    
    13,395
    
    
    
    16,475Gross profitServices
    
    
    1,448
    
    
    
    2,030
    
    
    
    2,548Products
    
    
    693
    
    
    
    871
    
    
    
    1092Total
    
    
    2,141
    
    
    
    2,901
    
    
    
    3,640Selling and marketing expenses
    
    
    (919
    )
    
    
    (1,150
    )
    
    
    (1,392
    )General and administrative expenses
    
    
    (492
    )
    
    
    (788
    )
    
    
    (841
    )Others, net
    
    
    31
    
    
    
    7
    
    
    
    (3
    )Operating income
    
    
    761
    
    
    
    970
    
    
    
    1404Revenue growth rate over prior period
    
    
    17
    %
    
    
    42
    %
    
    
    23
    %Gross margin
    
    
    23
    %
    
    
    22
    %
    
    
    22
    %Operating margin
    
    
    8
    %
    
    
    7
    %
    
    
    9
    %
      Consumer Care and Lighting
 Year ended March 31,2004
    
    2005
    
    2006(in millions)Revenue
    
    Rs.
    3,567
    
    
    Rs.
    4,555
    
    
    Rs.
    5,625Gross profit
    
    
    1,212
    
    
    
    1,629
    
    
    
    2,069Selling and marketing expenses
    
    
    (596
    )
    
    
    (877
    )
    
    
    (1,160
    )General and administrative expenses
    
    
    (72
    )
    
    
    (82
    )
    
    
    (102
    )Amortization of intangible assets
    
    
    (8
    )
    
    
    (18
    )
    
    
    (21
    )Others, net
    
    
    10
    
    
    
    19
    
    
    
    13Operating income
    
    
    546
    
    
    
    671
    
    
    
    799Revenue growth rate over prior period
    
    
    21
    %
    
    
    28
    %
    
    
    23
    %Gross margin
    
    
    34
    %
    
    
    36
    %
    
    
    37
    %Operating margin
    
    
    15
    %
    
    
    15
    %
    
    
    14
    %
 50




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##### Table of Contents



Amortization of Deferred Stock Compensation
       Year ended March 31,2003
    
    
    2004
    
    
    2005(in millions)Cost of revenue
    
    Rs.
    15
    
    
    Rs.
    238
    
    
    Rs.
    437Selling and marketing expenses
    
    
    14
    
    
    
    49
    
    
    
    75General and administrative expenses
    
    
    16
    
    
    
    67
    
    
    
    140Rs.
    45
    
    
    Rs.
    354
    
    
    Rs.
    652
 Amortization of Intangible Assets
  Foreign Exchange Gains/(Losses), net
  
    
    exchange differences arising from the translation or settlement of transactions in
foreign currency; and
    
    The changes in fair value for derivatives not designated as hedging derivatives and
ineffective portion of the hedging instruments. For forward foreign exchange contracts
which are designated and effective as accounting hedges, the marked to market gains and
losses are deferred and reported as a component of other comprehensive income in
stockholders equity.
 51




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##### Table of Contents



Others, net
  Loss on Direct Issue of Stock by Subsidiary
          Other Income, net
  Equity in Earnings/Losses of Affiliates
 Wipro GE Medical Systems Private Limited. (Wipro GE).
 WeP Peripherals Ltd. (WeP).
 52




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##### Table of Contents



Income Taxes
         Results of Operations
 Years ended March 31, 2006 and 2005
 Revenue.
 53




---



##### Table of Contents



.
   Gross Profit.
   54




---



##### Table of Contents



Selling and marketing expenses
     General and administrative expenses.
 55




---



##### Table of Contents



Operating income
 Other income, net
 Income taxes
 Equity in earnings / losses of affiliates
  Net Income
 56




---



##### Table of Contents



Years ended March 31, 2005 and 2004
 Revenue.
    .
   Gross Profit.
  57




---



##### Table of Contents



Selling and marketing expenses
   .
  General and administrative expenses.
  58




---



##### Table of Contents



Operating income
 Other income, net
 Income taxes
 Equity in earnings / losses of affiliates
  Net Income
 Liquidity and Capital Resources
   59




---



##### Table of Contents



60




---



##### Table of Contents



Off-Balance Sheet Arrangements
  Contractual obligations
  In Rs. millionTotalcontractualpayment
    

    Payments
due in2006-07
    
    2007-09
    
    2009-11
    
    2011 onwardsCapital Commitments
    
    
    1714
    
    

    
    
    1714
    
    
    
    
    
    
    
    
    
    
    
    Non-cancelable
operating lease
obligation
    
    
    2996
    
    

    
    
    396
    
    
    
    735
    
    
    
    611
    
    
    
    1254Purchase obligations
    
    
    1,946
    
    

    
    
    1,946
    
    
    
    
    
    
    
    
    
    
    
    
  Research and Development
      61




---



##### Table of Contents



Trend Information
 IT Services and Products.
  
    
    pricing pressures;
    
    increases in proportion of services performed at client location  some of our newer
service offerings, such as consulting and package implementation, require a higher
proportion of services to be performed at the clients premises;
    
    increases in wages for our IT professionals;
    
    the impact of amortization of stock compensation cost; and
    
    the impact of exchange rate fluctuations on our rupee realizations;
    
    
    the effect of seasonal hiring which occurs in the quarter ended September 30;
    
    the time required to train and productively use new employees;
    
    the proportion of services we perform at client sites for a particular project;
    
    exchange rate fluctuations; and
    
    the size, timing and profitability of new projects.
 BPO Services
 India and AsiaPac IT Services and Products.
  62




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##### Table of Contents



Consumer Care and Lighting.
  Recent accounting pronouncements .
         63




---



##### Table of Contents



Critical accounting policies
  Revenue Recognition
  Product Revenue
   Service Revenue
      Revenue Arrangements with Multiple Deliverables
 64




---



##### Table of Contents




    
    The revenue recognition criteria applicable to the unit of accounting is met;
    
    The delivered element has value to the customer on a standalone basis. The delivered
unit will have value on a standalone basis if it is being sold separately by other
vendors or the customer could resell the deliverable on a standalone basis;
    
    There is objective and reliable evidence of the fair value of the undelivered
item(s); and
    
    If the arrangement includes a general right of return relative to the delivered
item, delivery or performance of the undelivered item(s) is considered probable and
substantially in our control.
   Accounting Estimates
    Accounting for Income taxes
   65




---



##### Table of Contents



Business Combinations, Goodwill and Intangible Assets
   Derivatives and Hedge Accounting, and Exchange Rate Risk
   66




---



##### Table of Contents



Item 6. Directors, Senior Management and Employees
 Directors and Senior Management
  Name
    
    Age
    
    PositionAzim H. Premji
    
    
    60
    
    
    Chief Executive Officer, Chairman of the Board and
Managing Director (designated as Chairman)Dr. Ashok S Ganguly
    
    
    70
    
    
    DirectorB.C. Prabhakar
    
    
    62
    
    
    DirectorDr. Jagdish N. Sheth
    
    
    67
    
    
    DirectorNarayanan Vaghul
    
    
    69
    
    
    DirectorP.M. Sinha
    
    
    65
    
    
    DirectorSuresh C. Senapaty
    
    
    49
    
    
    Chief Financial Officer, and Executive Vice President,
FinancePratik Kumar
    
    
    40
    
    
    Executive Vice President, Human ResourcesSuresh Vaswani
    
    
    46
    
    
    President-Global IT Service Lines, Wipro Technologies;
President-Wipro InfotechVineet Agrawal
    
    
    44
    
    
    President, Wipro Consumer Care & LightingRanjan Acharya
    
    
    48
    
    
    Senior Vice President, Human Resources DevelopmentTamal Dasgupta
    
    
    55
    
    
    Head  Energy and UtilitiesGirish S. Paranjpe
    
    
    48
    
    
    President-Banking, Finance and Insurance Vertical, Wipro
TechnologiesSudip Banerjee
    
    
    46
    
    
    President-Enterprise Solutions, Wipro TechnologiesDr. A.L. Rao
    
    
    57
    
    
    President, Technology Services and Chief Operating OfficerRamesh Emani
    
    
    49
    
    
    President-Embedded & Product Engineering Solutions, Wipro
Technologies
 Azim H. Premji
 Dr. Ashok S Ganguly
 67




---



##### Table of Contents



B.C. Prabhakar
 Dr. Jagdish N. Sheth
 Narayanan Vaghul
 Priya Mohan Sinha
 Suresh C. Senapaty
 Pratik Kumar
 Suresh Vaswani
 Vineet Agrawal
 Ranjan Acharya
 68




---



##### Table of Contents



Tamal Dasgupta
 Girish S. Paranjpe
 Sudip Banerjee
 Dr. A.L. Rao
 Ramesh Emani
 New Director Appointment
   Resignation of director
   Compensation
 Director Compensation
  1.
    
    Dr. Ashok S Ganguly receives approximately $26,978 (Rs. 1,200,000) per year.
 69




---



##### Table of Contents



2.
    
    Narayan Vaghul receives approximately $31,474 (Rs. 1,400,000) per year.3.
    
    Dr. Jagdish N. Sheth receives approximately $50,000 (Rs. 2,224,000) per year.4.
    
    P. M. Sinha receives approximately $22,482 (Rs. 1,000,000) per year.5.
    
    B. C. Prabhakar receives approximately $13,489 (Rs. 600,000) per year.
   Executive Compensation
  Annual Compensation ($)Salary and
    
    Commission/InName
    
    allowances
    
    centives (1)
    
    Housing (2)
    
    Others (3)Azim H. Premji
    
    $
    96,775
    
    
    $
    392,195
    
    
    
    
    
    
    $
    340Vivek Paul
    
    
    268,765
    
    
    
    1,030,137
    
    
    
    
    
    
    
    Pratik Kumar
    
    
    102,415
    
    
    
    34,947
    
    
    
    
    
    
    
    941Suresh C. Senapaty
    
    
    123,624
    
    
    
    51,266
    
    
    
    24,280
    
    
    
    2,794Vineet Agrawal
    
    
    142,086
    
    
    
    5,551
    
    
    
    
    
    
    
    4,401Sudip Banerjee
    
    
    114,246
    
    
    
    40,146
    
    
    
    
    
    
    
    617Girish S. Paranjpe
    
    
    112,670
    
    
    
    45,589
    
    
    
    8,511
    
    
    
    313Tamal Dasgupta
    
    
    89,346
    
    
    
    28,725
    
    
    
    
    
    
    
    2,148Dr. A.L. Rao
    
    
    120,023
    
    
    
    49,090
    
    
    
    
    
    
    
    536Ranjan Acharya
    
    
    81,919
    
    
    
    30,359
    
    
    
    
    
    
    
    42Suresh Vaswani
    
    
    126,482
    
    
    
    47,863
    
    
    
    4,626
    
    
    
    773Ramesh Emani
    
    
    122,810
    
    
    
    47,527
    
    
    
    
    
    
    
    6,984
 
 1.
    
    Azim H. Premji and Vivek Paul were paid commissions at the rate of 0.1% on incremental
profits and 0.3% on net profits respectively. Profits are computed in accordance with the
provisions of the Indian Companies Act, 1956. Mr Vivek Paul was paid a commission up to the
date of his resignation of employment as our Vice Chairman in October 2005. All other
executives were paid incentives under a Quarterly Performance Linked Scheme based on their
achievement of pre-defined profit targets.2.
    
    The value of this perquisite accounts for more than 25% of the total value of all perquisites
and personal benefits received in fiscal 2006. 70




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##### Table of Contents



Long Term Compensation ($)No. ofEquity
    
    
    
    
    
    No. ofShare/AD
    
    
    
    
    
    RSU/ADSS Options
    
    
    
    
    
    RSUsGranted
    
    
    
    
    
    grantedDeferred
    
    during the
    
    Grant
    
    during the
    
    Grant
    
    ExpirationName
    
    benefits(1)(2)
    
    year
    
    Price
    
    year
    
    price
    
    DateAzim H. Premji
    
    
    79,303
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Vivek Paul
    
    
    40,314Pratik Kumar
    
    
    10,509
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Suresh C. Senapaty
    
    
    20,719
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Vineet Agrawal
    
    
    12,568
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Sudip Banerjee
    
    
    20,383
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Girish S. Paranjpe
    
    
    20,916
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Tamal Dasgupta
    
    
    8,875
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Dr. A.L. Rao
    
    
    23,133
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Ranjan Acharya
    
    
    8,978
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Suresh Vaswani
    
    
    19,178
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Ramesh Emani
    
    
    20,728
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 
 1.
    
    Deferred benefits payable to other employees by way of our contribution to the Provident Fund
and Pension Fund. The Provided Fund is a statutory fund to which Wipro and our employees
contribute every month. A lump sum payment on separation and a Pension payment on attaining
the age of superannuation are payable from the balance standing to the credit of the Fund, as
per the Employee Providend Fund and Miscellaneous Provisions Act, 1952.Deferred benefits, in the case of Mr. Vivek Paul, are comprised of our contribution to a
Deferred Compensation Plan. We have a Deferred Compensation Plan in place and a
Participation Agreement with Mr. Paul. Contributions made by us under this Deferred
Compensation Plan are managed by an irrevocable Trust whose trustees are appointed by us
under a Trust Agreement. Wells Fargo NA has been appointed as a Trustee of the Trust. We
make a contribution of 15% of the base salary of Mr. Paul to the Trust and Mr. Paul was also
eligible to contribute up to 15% of his base salary and up to 100% of his commission under
the Deferred Compensation Plan to the Trust. The Trust has made payouts of Deferred
Compensation to Mr. Vivek Paul upon compliance with specific conditions prescribed in the
Plan and related agreements. Upon resignation of Mr. Paul, the investments of the Trust are
liquidated and remitted to Mr. Paul offsetting the deferred compensation. As on March 31,
2006, there is no other Participant in the said Plan.Under our pension plans, any pension that is payable to an employee is not computed on the
basis of final compensation, but on the accumulated pension fund to the credit of the
employee as the date of separation, death, disability or retirement. We annually contribute
15% of Mr. Premjis base salary and commission earned for that year to our pension fund for
the benefit of Mr. Premji. For all other employees, we contribute 15% of their respective
base salaries to our pension for their benefit. These contributions are included in this
column.2.
    
    In addition to the deferred benefits indicated above, we are also required by Indian law to
pay a one time only lump sum of $8,023 (Rs. 350,000) as a gratuity payment for each of our
employees, other than Mr. Paul, at the time of separation, death, disability or retirement,
subject to complying with certain conditions. 71




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##### Table of Contents



Board Composition
   Name
    
    Expiration of current term of office
    
    Term of officeAzim H. Premji
    
    July 30, 2007
    
    2 years and seven monthsDr. Jagdish Sheth
    
    Annual General Meeting 2006
    
    Retirement by rotationDr. Ashok S Ganguly
    
    Annual General Meeting 2008
    
    Retirement by rotationB. C. Prabhakar
    
    Annual General Meeting 2007
    
    Retirement by rotationN. Vaghul
    
    Annual General Meeting 2007
    
    Retirement by rotationP. M. Sinha
    
    Annual General Meeting 2006
    
    Retirement by rotation
 Option Grants
  Option Exercises and Holdings
  Terms of Employment Arrangements and Indemnification Agreements
  72




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##### Table of Contents



Board Committee Information
 Audit Committee
  Mr. N. Vaghul
    
    -
    
    Chairman of the Audit CommitteeMessrs. P. M. Sinha and B. C. Prabhakar
    
    -
    
    Members of the Audit Committee
 .
 Board Governance and Compensation Committee
  Dr. Ashok S Ganguly
    
    - Chairman of the Board Governance and Compensation CommitteeMessrs. N. Vaghul and P.M. Sinha
    
    - Members of the Board Governance and Compensation
Committee
  73




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##### Table of Contents



Employees
   Recruiting
  Training
  Performance Evaluations
  Compensation
  Share Ownership
   74




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##### Table of Contents



Percentage
    
    Equityof Equity
    
    SharesEquity Shares
    
    Shares
    
    Underlyingbeneficially
    
    Beneficially
    
    Options
    
    Grant PriceName
    
    owned
    
    Owned
    
    Granted
    
    ($)
    
    Date of expirationAzim H. Premji (1)
    
    
    1,161,136,260
    
    
    
    81.44
    
    
    
    
    
    
    B. C. Prabhakar (2)
    
    
    3,000
    
    
    
    *
    
    
    
    
    
    
    Dr. Jagdish Sheth
    
    
    
    
    
    
    
    
    
    
    
    
    
    Dr. Ashok S Ganguly
    
    
    
    
    
    
    
    
    
    
    
    
    
    N. Vaghul
    
    
    
    
    
    
    
    
    
    
    
    
    
    P. M. Sinha
    
    
    20,000
    
    
    
    *
    
    
    
    
    
    
    Suresh C. Senapaty
    
    
    97,700
    
    
    
    *
    
    
    15,000
19,200
    
    5.94
0.05
    
    February 2009
October 2010Pratik Kumar
    
    
    51,300
    
    
    
    *
    
    
    12,000
19,200
    
    5.94
0.05
    
    February 2009
October 2010Vineet Agrawal
    
    
    145,220
    
    
    
    *
    
    
    15,000
19,200
    
    5.94
0.05
    
    February, 2009
October 2010Suresh Vaswani
    
    
    91,992
    
    
    
    *
    
    
    15,000
22,400
    
    5.94
0.05
    
    February 2009
October 2010Sudip Banerjee
    
    
    40,000
    
    
    
    *
    
    
    10,800
22,400
    
    5.94
0.04
    
    February 2009
October 2010Girish S. Paranjpe
    
    
    25,700
    
    
    
    *
    
    
    15,000
22,400
    
    5.94
0.05
    
    February 2009
October 2010Dr. A.L. Rao
    
    
    129,460
    
    
    
    *
    
    
    9,000
22,400
    
    5.94
0.05
    
    February 2009
October 2010Tamal Dasgupta
    
    
    11,600
    
    
    
    *
    
    
    8,400
12,800
    
    5.94
0.05
    
    February 2009
October 2010Ranjan Acharya
    
    
    13,400
    
    
    
    *
    
    
    9,000
16,000
    
    5.94
0.05
    
    February 2009
October 2010Ramesh Emani
    
    
    25,700
    
    
    
    *
    
    
    12,000
22,400
    
    5.94
0.05
    
    February 2009
October 2010
 
 *
    
    Represents less than 1% of the shares. 75




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##### Table of Contents



(1)
    
    Includes 326,259,000 shares held by Hasham Traders (a partnership), of which Mr. Premji is
a partner, 325,017,000 shares held by Prazim Traders (a partnership), of which Mr. Premji is a
partner, 324,244,800 shares held by Zash Traders (a partnership), of which Mr. Premji is a partner,
38,263,000 shares held by Napean Trading Investment Co. Pvt. Ltd., of which Mr. Premji is a
director, 51,014,200 shares held by Regal Investments Trading Co. Pvt. Ltd., of which Mr. Premji is
a director, 38,860,600 shares held by Vidya Investment Trading Co. Pvt. Ltd., of which Mr. Premji
is a director, 1,434,600 shares held jointly by Mr. Premji and members of his immediately
family and 8,451,000 shares held by the Azim Premji Foundation (I) Pvt. Ltd. Mr. Premji disclaims
beneficial ownership, the 8,451,000 shares held by the Azim Premji Foundation (I) Pvt. Ltd.(2)
    
    The shares are jointly held with an immediate family member of Mr. Prabhakar.(3)
    
    The shares are jointly held with an immediate family member of Mr. P M Sinha. OPTION PLANS
 Wipro Employee Restricted Stock Unit Plan 2005
     ADS Restricted Stock Unit Plan 2004 (ADS option)
  76




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##### Table of Contents



Wipro Employee Restricted Stock Unit Plan 2004
     2000 ADS Option Plan
  77




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##### Table of Contents



2000 Employee Stock Option Plan
     1999 Employee Stock Option Plan
    78




---



##### Table of Contents



Wipro Equity Reward Trust
     
 Item 7. Major Shareholders And Related Party Transactions
 Major Shareholders
   79




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##### Table of Contents



Number of SharesClass of
    
    beneficially held as ofName of Beneficial Owner
    
    Security
    
    March 31, 2006
    
    % of ClassAzim H. Premji (1)
    
    Equity
    
    
    1,161,136,260
    
    
    
    81.44Hasham Traders
    
    Equity
    
    
    326,259,000
    
    
    
    22.88Prazim Traders
    
    Equity
    
    
    325,017,000
    
    
    
    22.80Zash Traders
    
    Equity
    
    
    324,244,800
    
    
    
    22.74
 
 (1)
    
    Includes 326,259,000 shares held by Hasham Traders (a partnership), of which Mr. Premji is a
partner, 325,017,000 shares held by Prazim Traders (a partnership), of which Mr. Premji is a
partner, 324,244,800 shares held by Zash Traders (a partnership), of which Mr. Premji is a
partner, 38,263,000 shares held by Napean
Trading Investment Co. Pvt. Ltd., of which Mr. Premji is a director, 51,014,200 shares held
by Regal Investments Trading Co. Pvt. Ltd., of which Mr. Premji is a director, 38,860,600
shares held by Vidya Investment Trading Co. Pvt. Ltd., of which Mr. Premji is a director,
1,434,600 shares held jointly by Mr. Premji and members of his immediately family and
8,451,000 shares held by the Azim Premji Foundation (I) Pvt. Ltd. Mr. Premji disclaims
beneficial ownership of 8,451,000 shares held by the Azim Premji Foundation (I) Pvt. Ltd.    Related Party Transactions
 Terms of Employment Arrangements and Indemnification Agreements.
 
 Item 8. Financial Information
 Consolidated Statements and Other Financial Information
  
    
    Report of the independent registered public accounting firm;
    
    Consolidated Balance Sheet as of March 31, 2005 and 2006;
    
    Consolidated Statements of Income for the years ended March 31, 2004, 2005 and 2006;
    
    Consolidated Statements of Stockholders Equity and comprehensive income for the
years ended March 31, 2004, 2005 and 2006; and
    
    Notes to the Consolidated Financial Statements.
 80




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##### Table of Contents



Legal Proceedings
  Dividends
    Significant Changes
  
 Item 9. The Offer and Listing
  Price History
    BSE
    
    NSE
    
    NYSEPrice per equity share
    
    Price per equity share
    
    Price per ADSHigh (Rs.)
    
    Low (Rs.)
    
    High ($)
    
    Low ($)
    

High (Rs.)
    

Low (Rs.)
    
    High ($)
    
    Low ($)
    
    High ($)
    
    Low ($)Fiscal Year
ended March 31,2006
    
    
    573.00
    
    
    
    285.55
    
    
    
    12.88
    
    
    
    6.41
    
    
    
    585.90
    
    
    
    272.00
    
    
    
    13.17
    
    
    
    8.65
    
    
    
    22.38
    
    
    
    9.622005
    
    
    389.00
    
    
    
    200.00
    
    
    
    8.91
    
    
    
    4.59
    
    
    
    387.50
    
    
    
    198.00
    
    
    
    8.88
    
    
    
    4.54
    
    
    
    12.85
    
    
    
    5.812004
    
    
    310.17
    
    
    
    131.88
    
    
    
    7.15
    
    
    
    3.04
    
    
    
    311.67
    
    
    
    132.90
    
    
    
    7.18
    
    
    
    3.06
    
    
    
    9.90
    
    
    
    3.052003
    
    
    312.50
    
    
    
    177.17
    
    
    
    6.58
    
    
    
    3.73
    
    
    
    312.50
    
    
    
    177.17
    
    
    
    6.58
    
    
    
    3.73
    
    
    
    6.72
    
    
    
    3.712002
    
    
    327.50
    
    
    
    127.50
    
    
    
    6.89
    
    
    
    2.69
    
    
    
    329.00
    
    
    
    126.50
    
    
    
    6.92
    
    
    
    2.66
    
    
    
    7.34
    
    
    
    2.83
 81




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##### Table of Contents



BSE
    
    NSE
    
    NYSEPrice per equity share
    
    Price per equity share
    
    Price per ADSHigh (Rs.)
    
    Low (Rs.)
    
    High ($)
    
    Low ($)
    

High (Rs.)
    

Low (Rs.)
    
    High ($)
    
    Low ($)
    
    High ($)
    
    Low ($)Quarter EndedMarch 31, 2006
    
    
    573.00
    
    
    
    440.20
    
    
    
    12.88
    
    
    
    9.89
    
    
    
    585.90
    
    
    
    385.00
    
    
    
    13.17
    
    
    
    8.66
    
    
    
    15.49
    
    
    
    11.90December 31, 2005
    
    
    470.00
    
    
    
    355.00
    
    
    
    10.57
    
    
    
    7.98
    
    
    
    470.00
    
    
    
    355.75
    
    
    
    10.57
    
    
    
    8.00
    
    
    
    12.75
    
    
    
    9.62September 30, 2005
    
    
    385.80
    
    
    
    350.05
    
    
    
    8.67
    
    
    
    7.87
    
    
    
    384.80
    
    
    
    345.20
    
    
    
    8.65
    
    
    
    7.76
    
    
    
    21.60
    
    
    
    9.59June 30, 2005
    
    
    388.00
    
    
    
    285.55
    
    
    
    8.72
    
    
    
    6.42
    
    
    
    384.90
    
    
    
    272.00
    
    
    
    8.65
    
    
    
    6.12
    
    
    
    22.38
    
    
    
    17.59March 31, 2005
    
    
    382.50
    
    
    
    312.50
    
    
    
    8.77
    
    
    
    7.17
    
    
    
    380.00
    
    
    
    305.18
    
    
    
    8.71
    
    
    
    7.00
    
    
    
    12.55
    
    
    
    9.81Six Months Ended(monthly for last
six months)May 31, 2006
    
    
    469.00
    
    
    
    436.10
    
    
    
    10.54
    
    
    
    9.80
    
    
    
    544.85
    
    
    
    441.80
    
    
    
    12.25
    
    
    
    9.93
    
    
    
    12.18
    
    
    
    11.74April 30, 2006
    
    
    598.90
    
    
    
    495.00
    
    
    
    13.46
    
    
    
    11.13
    
    
    
    568.70
    
    
    
    524.00
    
    
    
    12.78
    
    
    
    11.78
    
    
    
    15.50
    
    
    
    13.30March 31, 2006
    
    
    573.00
    
    
    
    498.00
    
    
    
    12.88
    
    
    
    11.20
    
    
    
    585.90
    
    
    
    483.65
    
    
    
    13.17
    
    
    
    10.87
    
    
    
    15.00
    
    
    
    13.23February 28, 2006
    
    
    544.70
    
    
    
    488.00
    
    
    
    12.25
    
    
    
    10.97
    
    
    
    545.40
    
    
    
    488.25
    
    
    
    12.26
    
    
    
    10.98
    
    
    
    15.28
    
    
    
    13.11January 31, 2006
    
    
    532.50
    
    
    
    440.20
    
    
    
    11.97
    
    
    
    9.90
    
    
    
    548.00
    
    
    
    385.00
    
    
    
    12.32
    
    
    
    8.22
    
    
    
    15.49
    
    
    
    11.90December 31, 2005
    
    
    470.00
    
    
    
    420.00
    
    
    
    10.57
    
    
    
    9.44
    
    
    
    470.00
    
    
    
    385.00
    
    
    
    10.57
    
    
    
    8.66
    
    
    
    12.75
    
    
    
    11.10
 
 (1)
    
    Source: BSE data obtained from www.bseindia.com and NSE data obtained from
www.nseindia.com. NYSE data obtained from www.finance.yahoo.com. Plan of Distribution
  Markets
 Trading Practices and Procedures on the Indian Stock Exchanges
      82




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##### Table of Contents



Market Wide Circuit Breakers
 Price Bands
 Amendments to SEBI (DIP) Guidelines, 2000;
     Reduction in the bidding period
  Disclosure of Price Band/Floor Price in case of listed companies
  Listing
  The National Stock Exchange of India Limited
  83




---



##### Table of Contents



Bombay Stock Exchange Limited
  Derivatives
  Depositories
  Securities Transaction Tax
  
 Item 10. Additional Information
 Share Capital
  Memorandum and Articles Of Association
    84




---



##### Table of Contents



Objects and Purposes of Our Memorandum of Association
  
    
    To purchase or otherwise acquire and take over any lands.
    
    To carry on the business of extracting vegetable oil.
    
    To manufacture and deal in hydrogenated vegetable oil.
    
    To carry on business as manufacturers, sellers, buyers, exporters, importers, and
dealers of fluid power products.
    
    To carry on business as mechanical engineers, tool makers, brass and metal
founders, mill-makers, mill-wrighters, machinists and metallurgists.
    
    To carry on the trade or business of manufacturing and distributing chemical,
synthetic and organic products.
    
    To carry on business as manufacturers, exporters, sellers, dealers and buyers in
all types and kinds of goods, articles and things.
    
    To carry on business in India and elsewhere as manufacturer, assembler, designer,
builder, seller, buyer, exporter, importer, factors, agents, hirers and dealers of
computer hardware and software and any related aspects thereof.
    
    To carry on research and development activities on all aspects related to products
business and objects of our company.
    
    To construct, equip and maintain mills, factories, warehouses, godowns, jetties and
wharves, and any other conveniences or erection suitable for any of the purpose of our
company.
    
    To carry on all or any of the business of soap and candle makers, tallow merchants,
chemists, druggists, dry salters, oil-merchants, manufacturers of dyes, paints,
chemicals and explosives and manufacturers of and dealers in pharmaceutical, chemical,
medicinal and other preparations or compounds, perfumery and proprietary articles and
photographic materials and derivatives and other similar articles of every description.
    
    To carry on any other trade or business whatsoever as can in the opinion of us be
advantageously or conveniently carried on by us.
    
    To carry on the business of metal working and manufacturing.
    
    To acquire and take over the whole or any part of the business, property and
liabilities of any person or persons, firm or corporation carrying on any business
which we are authorized to carry on or possessed of any property or rights suitable for
our purposes.
    
    To manufacture or otherwise acquire and deal in containers and packing materials of
any kind.
    
    To apply for, purchase or otherwise acquire any patents, inventions, licenses,
concessions and the like conferring an exclusive or non-exclusive or limited right to
use, any secret or other information as to any invention.
    
    To purchase or otherwise acquire, manufacture, and deal in all raw materials,
stores, stock-in-trade, goods, chattels and effects.
 85




---



##### Table of Contents




    
    To enter into any partnership or any arrangement for sharing profits, union of
interests, joint ventures, reciprocal concession or otherwise.
    
    To purchase or otherwise acquire all or any part of the business, property and
liabilities of any person, company, society, for all or any of the purposes within the
objects of our company.
    
    To enter into any arrangement with any Governments or authorities.
    
    To provide for the welfare of persons in the employment of our company, or formerly
engaged in any business acquired by our company, and the wives, widows, families or
dependants of such persons.
    
    To undertake, carry out, promote and sponsor rural development, including any
program for promoting the social and economic welfare or uplift of the public in any
rural area.
    
    To undertake, carry out, promote and sponsor or assist in any activity for the
promotion and growth of the national economy and for discharging what the directors may
consider to be the social and moral responsibilities of our company to the public or
any section of the public.
    
    To undertake and carry on the business of providing all kinds of information
technology based and enabled services in India and internationally, electronic remote
processing services, eServices, including all types of Internet-based/ Web enabled
services, transaction processing, fulfillment services, business support services
including but not limited to providing financial and related services of all kinds and
description including billing services, processing services, database services, data
entry business-marketing services, business information and management services,
training and consultancy services to businesses, organizations, concerns, firms,
corporations, trusts, local bodies, states, governments and other entities; to
establish and operate service processing centers for providing services for back office
and processing requirements, marketing, sales, credit collection services for companies
engaged in the business of remote processing and IT enabled services from a place of
business in India or elsewhere, contacting and communicating to and on behalf of
overseas customers by voice, data image, letters using dedicated international private
lines; and to handle business process management, remote help desk management; remote
management; remote customer interaction, customer relationship management and customer
servicing through call centers, email based activities and letter/fax based
communication, knowledge storage and management, data management, warehousing, search,
integration and analysis for financial and non financial data.
    
    To act as information technology consultants and to operate a high technology data
processing center for providing information processing, analysis, development,
accounting and business information and data to customers in India and internationally;
to carry on the business of gathering, collating, compiling, processing, analyzing,
distributing, selling, publishing data and information and including conduct of studies
and research, and marketing of information and services and providing access to
information regarding financial operations and management, financial services,
investment services business and commercial operations, financial status,
creditworthiness and rating, consumer responses and management of businesses of all
kinds and descriptions by whatever name called.
    
    To carry on the business as Internet service provider and undertake any and all
kinds of Internet/web based activities and transactions; to design, develop, sell,
provide, maintain, market, buy, import, export, sell and license computer software,
hardware, computer systems and programs products, services and to give out computer
machine time and to carry on the business of collecting, collating, storing, devising
other systems including software programs and systems.
    
    From time to time, to subscribe or contribute to any charitable, benevolent or
useful object of a public nature.
 Description of Equity Shares
 Dividends
  86




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##### Table of Contents




    
    the rate of dividend to be declared may not exceed 10% of its paid up capital or the
average of the rate at which dividends were declared by the company in the prior five
years, whichever is less;
    
    the total amount to be drawn from the accumulated profits earned in the previous
years and transferred to the reserves may not exceed an amount equivalent to 10% of its
paid up capital and free reserves, and the amount so drawn is to be used first to set
off the losses incurred in the fiscal year before any dividends in respect of
preference or equity shares are declared; and
    
    the balance of reserves after withdrawals shall not fall below 15% of its paid up
capital.
  Bonus Shares
  Audit and Annual Report
   87




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##### Table of Contents



Consolidation and Subdivision of Shares
  Preemptive Rights, Issue of Additional Shares and Distribution of Rights
     
    
    we do not timely request that the rights be distributed to you or we request that
the rights not be distributed to you;
    
    we fail to deliver satisfactory documents to the depositary bank; or
    
    it is not reasonably practicable to distribute the rights.
  Voting Rights
   88




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##### Table of Contents



Liquidation Rights
  Preference Shares
  Redemption of Equity Shares
  Liability on Calls
  Discriminatory Provisions in Articles
  Alteration of Shareholder Rights
   Meetings of Shareholders
   89




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##### Table of Contents



Limitations on the Rights to Own Securities
  Voting Rights of Deposited Equity Shares Represented by ADSs
      Register of Shareholders; Record Dates; Transfer of Shares
   90




---



##### Table of Contents



Company Acquisition of Equity Shares
   Disclosure of Ownership Interest
  91




---



##### Table of Contents



Provisions on Changes in Capital
  Takeover Code and Listing Agreements
       92




---



##### Table of Contents




    
    by allotment in a public/rights issue (subject to compliance with certain terms and conditions);
    
    pursuant to an underwriting agreement;
    
    by registered stockbrokers in the ordinary course of business on behalf of customers;
    
    in unlisted companies provided it does not result in an indirect acquisition of a listed entity;
    
    pursuant to a scheme of reconstruction or amalgamation;
    
    pursuant to a scheme under Section 18 of the Sick Industrial Companies (Special Provisions) Act, 1985; or
    
    in terms of the guidelines or regulations regarding delisting of securities specified or framed by SEBI.
   Amendment to the SEBI (Delisting of Securities) Guidelines, 2003
  Minimum Level of public shareholding
   
    
    Companies which, at the time of initial listing, had offered less than 25% but not less than 10% of the total number of issued shares of a class or kind, in terms of Rule 19(2)(b) of Securities Contract (Regulation) Rules 1957 (SCRR) or companies desiring to list their shares by making an Initial Public Offering (IPO) of at least 10% in terms of Rule 19(2)(b) of SCRR.
    
    Companies which have, irrespective of the percentage of their shares with public at the time of initial listing, reached a size of 20 million or more in terms of number of listed shares and Rs. 10 billion or more in terms of market capitalization.
  93




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Increasing the public shareholding to the minimum level
   Material Contracts
  Currency Exchange Controls
   General
  94




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##### Table of Contents



Transfer of ADSs and Surrender of ADSs
  Sponsored ADS
  
    
    the price of the offering is determined by the managing underwriters of the offering;
    
    the ADS offering is approved by the FIPB;
    
    the ADS offering is approved by a special resolution of the shareholders of the
issuer in a general meeting;
    
    the facility is made available to all the equity shareholders of the issuer;
    
    the proceeds of the offering are repatriated into India within one month of the closing of the offering;
    
    the sales of the existing equity shares are made in compliance with the Foreign
Direct Investment Policy (as described above) in India;
    
    the number of shares offered by selling shareholders are subject to limits in
proportion to the existing holdings of the selling shareholders when the offer is
oversubscribed; and
 95




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##### Table of Contents




    
    the offering expenses do not exceed 7% of the offering proceeds and are paid by
shareholders on a pro-rata basis.
  Conditions for issuance of ADS/GDS outside India by Indian Companies
 Eligibility of issuer
 Eligibility of subscriber
 Pricing
 (i)
    
    The average of the weekly high and low of the closing prices of the related shares quoted on the stock exchange in India during the six months preceding the
relevant date; and(ii)
    
    The average of the weekly high and low of the closing prices of the related shares quoted on a stock exchange in India during the two weeks preceding the relevant
date.
  Foreign Direct Investment
   96




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Subsequent Transfers
   Investment by Non-Resident Indians
   Investment By Foreign Institutional Investors
  97




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##### Table of Contents



Ownership Restrictions
      Government of India Approvals
  
    
    any renunciation of rights in the underlying equity shares in favor of a person
resident in India; and
    
    the sale of the underlying equity shares by a person resident outside India to a
person resident in India and vice versa if the prescribed conditions for such
sale/purchase are not met.
  98




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##### Table of Contents



Overseas investment  Liberalisation
 
    
    Regulation 6 of the Notification No.FEMA.120/RB-2004 dated July 7, 2004 to read with
Circular No. 42 dated May 12, 2005 in terms of which an Indian entity is permitted to
invest upto 200 per cent of their net worth in overseas Joint Ventures and/or Wholly
Owned Subsidiaries (JV/WOS) in any bonafide business activity under automatic route.
Accordingly, under the automatic route for overseas investment, eligible Indian
companies are permitted to invest in overseas in JV/WOS upto 200 per cent of their net
worth. It was further clarified by the Reserve Bank of India that the ceiling is not
applicable to the investments made out of balances held in EEFC accounts and out of the
proceeds of ADR / GDR issue, as hitherto. This enables Authorized Dealers to allow
remittances under automatic route upto 200 per cent of the net worth as on the date of
the last audited balance sheet of the investing companies, after considering the
proposals received in form ODA.
    
    With a view to grant more operational flexibility to the corporates in India it has
been decided to further liberalise the various Regulations as under:
    
    Presently, only promoter corporates are permitted to offer guarantees on behalf of
their Wholly Owned Subsidiaries (WOSs) or Joint Ventures (JVs), under the Automatic
Route and issue of personal, collateral and third party guarantees requires prior
approval of Reserve Bank (RBI) and is considered by them, on a case by case basis.
    
    With a view to simplify the procedure, RBI has decided to enlarge the scope of
guarantees covered under the Automatic Route. Accordingly, Indian entities may offer
any forms of guarantee  corporate or personal, primary or collateral, guarantee by the
promoter company, guarantee by group company, sister concern or associate company in
India, provided that :
 o
    
    All financial commitments including all forms of guarantees are
within the overall prescribed ceiling for overseas investment of the Indian party,
for example, currently within 200% of the net worth of the investing company
(Indian party),o
    
    No guarantee is open ended, for example, the amount of the guarantee
should be specified upfront; ando
    
    As in the case of corporate guarantees, all guarantees are required to
be reported to RBI, in Form ODR.
 General Permission for disinvestment
 Notification No.FEMA 120/RB-2004 dated July 7,
2004
 
    
    in cases where the JV / WOS is listed in the overseas stock exchange.
    
    in cases where the Indian promoter company is listed on a stock exchange in India
and has a networth of not less than Rs.1,000 million; or
    
    where the Indian promoter is an unlisted company and the investment in overseas
venture does not exceed USD 10 million.
 99




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Taxation
   Residence
 
    
    a period or periods amounting to 182 days or more; or
    
    60 days or more and, within the four preceding years has been in India for a period
or periods amounting to 365 days or more.
   Taxation of Distributions.
  Taxation of Capital Gains
  
    
    Gains from a sale of ADSs outside India, by a non-resident to another non-resident
are not taxable in India.
    
    Long term capital gains realized by a resident employee from the transfer of the
ADSs will be subject to tax at the rate of 10%. Short-term capital gains on such a
transfer will be taxed at graduated rates with a maximum of 30%.
    
    Long-term capital gains realized by non-resident upon the sale of equity shares
obtained through the redemption of ADSs, settlement of such sale being made off a
recognized stock exchange, are subject to tax
 100




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##### Table of Contents



at a rate of 10%. Short-term capital gains on such transfer will be taxed at graduated
rates with a maximum of 30%.
    
    Long-term capital gains realized by a non-resident upon the sale of equity shares
obtained through the redemption of ADSs, settlement of such sale being made on a
recognized stock exchange, is exempt from tax and the Short-term capital gains on such
sale will be taxed at 10%. An additional tax called Securities Transaction Tax, or
STT (described in detail below will be levied at the time of settlement.
        Securities Transaction Tax:
 101




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##### Table of Contents



Withholding Tax on Capital Gains
 Buy-back of Securities
 Stamp Duty and Transfer Tax
 Wealth Tax
 Gift Tax and Estate Duty
 Service Tax
  Material United States Federal Tax Consequences
   102




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##### Table of Contents



Each prospective investor should consult his, her or its own tax advisor with respect to the
U.S. federal, state, local and foreign tax consequences of acquiring, owning or disposing of equity
shares or ADSs.
 Ownership of ADSs
 Dividends
    103




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Sale or Exchange of Equity Shares or ADSs
 Estate Taxes
 Backup Withholding Tax and Information Reporting.
 Passive Foreign Investment Company
 
    
    75% or more of its gross income for the taxable year is passive income; or
    
    on average for the taxable year by value, or, if it is not a publicly traded
corporation and so elects, by adjusted basis, if 50% or more of its assets produce or
are held for the production of passive income.
  
    
    pay an interest charge together with tax calculated at an ordinary income rates on
excess distributions, as the term is defined in relevant provisions of U.S. tax laws,
and on any gain on a sale or other disposition of equity shares;
    
    if an election is made, a qualified electing fund (as the term is defined in
relevant provisions of the U.S. tax laws), include in their taxable income their pro
rata share of undistributed amounts of our income; or
    
    if the equity shares are marketable and a mark-to-market election is made,
mark-to-market the equity shares each taxable year and recognize ordinary gain and, to
the extent of prior ordinary gain, ordinary loss for the increase or decrease in market
value for such taxable year.
   104




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Documents on Display
  
    
    Judiciary Plaza
450 Fifth Street, N.W.
Room 1024
Washington, D.C. 20529, and
    
    Northwestern Atrium Center
500 West Madison Street
Suite 1400
Chicago, Illinois 60661-2511
    
 Item 11. Quantitative and Qualitative Disclosures About Market Risk
 General
   Risk Management Procedures
  Components of Market Risk
  Exchange rate risk
  105




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Sensitivity analysis of exchange rate risk
  Interest rate risk.
 Fair value
 
 Item 12. Description of Securities Other Than Equity Securities
  
 PART II
 
 Item 13. Defaults, Dividend Arrearages and Delinquencies
  
 Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds
  
 Item 15. Controls and Procedures
 Evaluation of disclosure controls and procedures.
  Change in internal controls.
  
 Item 16 A. Audit Committee Financial Expert
  106




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Item 16 B. Code of Ethics
    
 Item 16 C. Principal Accountant Fees and Services
   In millionsYear ended March 31,2005
    
    2006Audit fees
    
    Rs.
    11.00
    
    
    Rs.
    17.67Audit related fees
    
    
    3.75
    
    
    
    0.00Tax fees
    
    
    23.75
    
    
    
    22.31Total
    
    Rs.
    38.50
    
    
        Rs.
    39.98
 Description of Non-Audit Services
 Audit related fees 
 Tax Fees
 107




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##### Table of Contents



Item 16 D. Exemptions from the Listing Standards for Audit Committees
  
 Item 16 E. Purchase of Equity Securities by the Issuer and Affiliated Purchasers
  
 Part III
 
 Item 17. Financial Statements
  
 Item 18. Financial Statements
 CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION
 108




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##### Table of Contents



REPORT OF AUDIT COMMITTEE
   Bangalore, India
    
    N.Vaghul
    
    P. M. Sinha
    
    B. C. PrabhakarJune 12, 2006
    
    Chairman
    
    Member
    
    Member
 109




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##### Table of Contents



REPORT OF MANAGEMENT
      Azim H. PremjiChairman and Chief Executive OfficerS.C. SenapatyExecutive Vice President  FinanceBangalore, India
    
    Chief Financial OfficerJune 12, 2006
 110




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##### Table of Contents



REPORT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
       111




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##### Table of Contents



WIPRO LIMITED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in millions, except share data)
 As of March 31,2005
    
    
    2006
    
    
    2006Conveniencetranslation intoUS$ASSETSCurrent assets:Cash and cash equivalents (Note 5)
    
    Rs.
    5,670.76
    
    
    Rs.
    8,857.70
    
    
    $
    199.14Investments in liquid and short-term mutual funds (Note 9)
    
    
    22,957.59
    
    
    
    30,328.42
    
    
    
    681.84Accounts receivable, net of allowances (Note 6)
    
    
    14,806.36
    
    
    
    20,593.11
    
    
    
    462.97Costs and earnings in excess of billings on contracts in progress
    
    
    2,739.65
    
    
    
    4,336.06
    
    
    
    97.48Inventories (Note 7)
    
    
    1,769.16
    
    
    
    2,064.61
    
    
    
    46.42Deferred income taxes (Note 22)
    
    
    242.17
    
    
    
    168.28
    
    
    
    3.78Other current assets (Note 8)
    
    
    2,950.58
    
    
    
    5,463.04
    
    
    
    122.82Total current assets
    
    
    51,136.27
    
    
    
    71,811.22
    
    
    
    1614.46Property, plant and equipment, net (Note 10)
    
    
    13,201.28
    
    
    
    17,777.40
    
    
    
    399.67Investments in affiliates (Note 14)
    
    
    769.24
    
    
    
    1,043.09
    
    
    
    23.45Deferred income taxes (Note 22)
    
    
    209.31
    
    
    
    182.91
    
    
    
    4.11Intangible assets, net (Note 11)
    
    
    363.11
    
    
    
    854.33
    
    
    
    19.21Goodwill (Note 3,4, 11)
    
    
    5,614.98
    
    
    
    7,480.85
    
    
    
    168.18Other assets (Note 8)
    
    
    780.92
    
    
    
    1,243.98
    
    
    
    27.97Total assets
    
    Rs.
    72,075.11
    
    
    Rs.
    100,393.78
    
    
    $
    2,257.05LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Borrowings from banks (Note 16)
    
    Rs.
    563.97
    
    
    Rs.
    704.55
    
    
    $
    15.84Accounts payable
    
    
    3,713.22
    
    
    
    4,145.96
    
    
    
    93.21Accrued expenses
    
    
    3,882.00
    
    
    
    6,600.63
    
    
    
    148.40Accrued employee costs
    
    
    3,112.94
    
    
    
    4,425.12
    
    
    
    99.49Advances from customers
    
    
    1,279.64
    
    
    
    1,616.26
    
    
    
    36.34Other current liabilities (Note 12)
    
    
    2,135.16
    
    
    
    3,614.42
    
    
    
    81.26Total current liabilities
    
    
    14,686.93
    
    
    
    21,106.94
    
    
    
    474.53Deferred income taxes (Note 22)
    
    
    
    
    
    
    127.46
    
    
    
    2.87Other liabilities
    
    
    126.20
    
    
    
    395.04
    
    
    
    8.88Total liabilities
    
    
    14,813.13
    
    
    
    21,629.44
    
    
    
    486.27Minority interest
    
    
    533.03
    
    
    
    
    
    
    
    Stockholders equity: (Note 17,18)Equity shares at Rs. 2 par value: 1,650,000,000 shares
authorized; Issued and outstanding: 1,407,141,044 and
1,425,754,267 and shares as of March 31, 2005 and 2006
    
    
    1,407.14
    
    
    
    2,851.51
    
    
    
    64.11Additional paid-in capital (Note 23)
    
    
    13,272.57
    
    
    
    16,521.07
    
    
    
    371.43Deferred stock compensation (Note 23)
    
    
    (3,185.14
    )
    
    
    (2,202.42
    )
    
    
    (49.51
    )Accumulated other comprehensive income
    
    
    96.09
    
    
    
    433.70
    
    
    
    9.75Retained earnings (Note 19)
    
    
    45,138.37
    
    
    
    61,160.56
    
    
    
    1,375.01Equity shares held by a controlled Trust: 7,893,060 and 7,869,060
shares as of March 31, 2005 and 2006 (Note 23)
    
    
    (0.08
    )
    
    
    (0.08
    )
    
    
    Total stockholders equity
    
    
    56,728.95
    
    
    
    78,764.34
    
    
    
    1,770.78Total liabilities and stockholders equity
    
    Rs.
    72,075.11
    
    
    Rs.
    100,393.78
    
    
    $
    2,257.05
  112




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##### Table of Contents



WIPRO LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in millions, except share data)
 Year ended March 31,2004
    
    
    2005
    
    
    2006
    
    
    2006Conveniencetranslation into US$Revenues:Global IT Services and ProductsIT Services
    
    Rs.
    39,102.00
    
    
    Rs.
    54,280.19
    
    
    Rs.
    73,061.33
    
    
    $
    1,642.57BPO Services
    
    
    4,363.34
    
    
    
    6,433.03
    
    
    
    7,664.23
    
    
    
    172.31India and AsiaPac IT Services and ProductsServices
    
    
    3,108.51
    
    
    
    4,709.07
    
    
    
    6,096.68
    
    
    
    137.07Products
    
    
    6,304.75
    
    
    
    8,694.10
    
    
    
    10,380.40
    
    
    
    233.37Consumer Care and Lighting
    
    
    3,567.44
    
    
    
    4,555.38
    
    
    
    5,625.04
    
    
    
    126.46Others
    
    
    1,987.32
    
    
    
    2,680.73
    
    
    
    3,279.20
    
    
    
    73.72Total
    
    
    58,433.36
    
    
    
    81,352.50
    
    
    
    106,106.88
    
    
    
    2,385.50Cost of revenues:Global IT Services and ProductsIT Services
    
    
    25,047.34
    
    
    
    33,780.07
    
    
    
    46,986.13
    
    
    
    1,056.34BPO Services
    
    
    2,883.75
    
    
    
    4,740.25
    
    
    
    5,809.54
    
    
    
    130.61India and AsiaPac IT Services and ProductsServices
    
    
    1,661.00
    
    
    
    2,679.35
    
    
    
    3,548.82
    
    
    
    79.78Products
    
    
    5,642.53
    
    
    
    7,814.82
    
    
    
    9,285.88
    
    
    
    208.77Consumer Care and Lighting
    
    
    2,354.82
    
    
    
    2,926.22
    
    
    
    3,556.43
    
    
    
    79.96Others
    
    
    1,410.50
    
    
    
    1,914.06
    
    
    
    2,459.93
    
    
    
    55.30Total
    
    
    38,999.94
    
    
    
    53,854.77
    
    
    
    71,646.73
    
    
    
    1,610.76Gross profit
    
    
    19,433.42
    
    
    
    27,497.73
    
    
    
    34,460.15
    
    
    
    774.73Operating expenses:Selling and marketing expenses
    
    
    (5,278.39
    )
    
    
    (5,466.26
    )
    
    
    (6,764.35
    )
    
    
    (152.08
    )General and administrative expenses
    
    
    (3,171.68
    )
    
    
    (3,743.60
    )
    
    
    (5,238.97
    )
    
    
    (117.78
    )Research and development expenses
    
    
    (232.05
    )
    
    
    (273.54
    )
    
    
    (202.26
    )
    
    
    (4.55
    )Amortization of intangible assets (Note 11)
    
    
    (308.23
    )
    
    
    (140.29
    )
    
    
    (63.95
    )
    
    
    (1.44
    )Foreign exchange gains/(losses), net
    
    
    377.56
    
    
    
    (92.12
    )
    
    
    (288.49
    )
    
    
    (6.49
    )Others, net
    
    
    80.65
    
    
    
    75.29
    
    
    
    70.14
    
    
    
    1.58Operating income
    
    
    10,901.28
    
    
    
    17,857.21
    
    
    
    21,972.27
    
    
    
    493.98Loss on direct issue of stock by subsidiary (Note 4)
    
    
    (206.00
    )
    
    
    (206.58
    )
    
    
    
    
    
    
    Other income, net (Note 20)
    
    
    868.21
    
    
    
    798.82
    
    
    
    1,275.86
    
    
    
    28.68Equity in earnings of affiliates (Note 14)
    
    
    95.99
    
    
    
    158.08
    
    
    
    287.97
    
    
    
    6.47Income before income taxes and minority interest
    
    
    11,659.48
    
    
    
    18,607.53
    
    
    
    23,536.10
    
    
    
    529.14Income taxes (Note 22)
    
    
    (1,611.39
    )
    
    
    (2,693.57
    )
    
    
    (3,264.73
    )
    
    
    (73.40
    )Minority interest
    
    
    (56.05
    )
    
    
    (81.21
    )
    
    
    (1.40
    )
    
    
    (0.03
    )Net income
    
    Rs.
    9,992.04
    
    
    Rs.
    15,832.75
    
    
    Rs.
    20,269.97
    
    
    $
    455.71Earnings per equity share: (Note 24)Basic
    
    
    7.20
    
    
    
    11.38
    
    
    
    14.41
    
    
    
    0.32Diluted
    
    
    7.20
    
    
    
    11.29
    
    
    
    14.24
    
    
    
    0.32Weighted-average number of equity shares used in
computing earnings per equity share:Basic
    
    
    1,387,740,780
    
    
    
    1,391,554,372
    
    
    
    1,406,505,974
    
    
    
    1,406,505,974Diluted
    
    
    1,389,090,642
    
    
    
    1,399,846,782
    
    
    
    1,423,679,230
    
    
    
    1,423,679,230
  113




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WIPRO LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY AND COMPREHENSIVE INCOME
(in millions, except share data)
 Additional
    
    
    
    
    
    
    
    
    
    
    Accumulated Other
    
    
    
    
    
    
    Equity Shares held by a
    
    
    TotalEquity Shares
    
    
    Paid in
    
    
    Deferred Stock
    
    
    Comprehensive
    
    
    Comprehensive
    
    
    Retained
    
    
    Controlled Trust
    
    
    StockholdersNo. of Shares
    
    
    Amount
    
    
    Capital
    
    
    Compensation
    
    
    Income
    
    
    Income/(loss)
    
    
    Earnings
    
    
    No. of Shares
    
    
    Amount
    
    
    EquityBalance as of March 31, 2003
    
    
    1,395,383,952
    
    
    
    465.13
    
    
    
    6,946.63
    
    
    
    (64.01
    )
    
    
    
    
    
    
    0.69
    
    
    
    28,083.19
    
    
    
    (7,821,660
    )
    
    
    (0.08
    )
    
    
    35,431.55Cash dividends paid
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (262.36
    )
    
    
    
    
    
    
    
    
    
    
    (262.36
    )Issuance of equity shares on exercise of
options
    
    
    1,170,960
    
    
    
    0.39
    
    
    
    239.31
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    239.70Equity shares forfeited, net of issuance
by Trust
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (65,400
    )
    
    
    
    
    
    
    Compensation related to employee stock
incentive plan, net of reversals
    
    
    
    
    
    
    
    
    
    
    (9.26
    )
    
    
    1.11
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8.15
    )Amortization of compensation related to
employee stock incentive plan
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    53.02
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    53.02Comprehensive incomeNet income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Rs.
    9,992.04
    
    
    
    
    
    
    
    9,992.04
    
    
    
    
    
    
    
    
    
    
    
    9,992.04Other comprehensive incomeTranslation adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (150.43
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Unrealized gain on investment
securities, net (net of tax effect of
Rs. 5.08)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9.41
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Unrealized gain on cash flow hedging
derivatives, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,058.97
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total other comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    917.95
    
    
    
    917.95
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    917.95Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Rs.
    10,909.99Balance as of March 31, 2004
    
    
    1,396,554,912
    
    
    
    465.52
    
    
    
    7,176.68
    
    
    
    (9.88
    )
    
    
    
    
    
    
    918.64
    
    
    
    37,812.87
    
    
    
    (7,887,060
    )
    
    
    (0.08
    )
    
    
    46,363.75Cash dividends paid
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,575.99
    )
    
    
    
    
    
    
    
    
    
    
    (7,575.99
    )Issuance of equity shares on exercise of
options
    
    
    10,586,132
    
    
    
    10.36
    
    
    
    2,566.77
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,577.13Equity shares forfeited, net of issuance
by Trust
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,000
    )
    
    
    
    
    
    
    Stock split effected in the form of
stock dividend (Note 17)
    
    
    
    
    
    
    931.26
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (931.26
    )
    
    
    
    
    
    
    
    
    
    
    Compensation related to employee stock
incentive plan, net of reversals
(Note 23)
    
    
    
    
    
    
    
    
    
    
    3,529.12
    
    
    
    (3,529.12
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Amortization of compensation related to
employee stock incentive plan
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    353.86
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    353.86Comprehensive incomeNet income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Rs.
    15,832.75
    
    
    
    
    
    
    
    15,832.75
    
    
    
    
    
    
    
    
    
    
    
    15,832.75Other comprehensive incomeTranslation adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    29.69
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Unrealized gain on investment
securities, net (net of tax effect of
Rs. 59.59)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    92.92
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Unrealized loss on cash flow hedging

derivatives, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (945.16
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total other comprehensive income/ (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (822.55
    )
    
    
    (822.55
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (822.55
    )Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Rs.
    15,010.20Balance as of March 31, 2005
    
    
    1,407,141,044
    
    
    Rs.
    1,407.14
    
    
    Rs.
    13,272.57
    
    
    Rs.
    (3,185.14
    )
    
    
    
    
    
    Rs.
    96.09
    
    
    Rs.
    45,138.37
    
    
    
    (7,893,060
    )
    
    Rs.
    (0.08
    )
    
    Rs.
    56,728.95
 114




---



##### Table of Contents



Additional
    
    
    
    
    
    
    
    
    
    
    Accumulated Other
    
    
    
    
    
    
    Equity Shares held by a
    
    
    TotalEquity Shares
    
    
    Paid in
    
    
    Deferred Stock
    
    
    Comprehensive
    
    
    Comprehensive
    
    
    Retained
    
    
    Controlled Trust
    
    
    StockholdersNo. of Shares
    
    
    Amount
    
    
    Capital
    
    
    Compensation
    
    
    Income
    
    
    Income/(loss)
    
    
    Earnings
    
    
    No. of Shares
    
    
    Amount
    
    
    EquityCash dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,997.74
    )
    
    
    
    
    
    
    
    
    
    
    (3,997.74
    )Issuance of equity shares on exercise of
options
    
    
    18,613,223
    
    
    
    32.58
    
    
    
    4,671.40
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,703.98Stock split effected in the form of
stock dividend (Note 17)
    
    
    
    
    
    
    1,411.79
    
    
    
    (1,161.75
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (250.04
    )
    
    
    
    
    
    
    
    
    
    
    Equity shares granted to employees by
Trust
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    24,000
    
    
    
    
    
    
    
    Reversals related to employee stock
incentive plan, net of issuances (Note
23)
    
    
    
    
    
    
    
    
    
    
    (330.49
    )
    
    
    298.94
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (31.55
    )Amortization of compensation related to
employee stock incentive plan
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    683.78
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    683.78Excess income tax benefit related to
employee stock incentive plan
    
    
    
    
    
    
    
    
    
    
    69.34
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    69.34Comprehensive incomeNet income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Rs.
    20,269.97
    
    
    
    
    
    
    
    20,269.97
    
    
    
    
    
    
    
    
    
    
    
    20,269.97Other comprehensive incomeTranslation adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19.97
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Unrealized gain on investment
securities, net (net of tax effect of
Rs. 114.94)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    229.11
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Unrealized gain on cash flow hedging
derivatives, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    88.53
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total other comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    337.61
    
    
    
    337.61
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    337.61Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Rs.
    20,607.58Balance as of March 31, 2006
    
    
    1,425,754,267
    
    
    Rs.
    2,851.51
    
    
    Rs.
    16,521.07
    
    
    Rs.
    (2,202.42
    )
    
    
    
    
    
    Rs.
    433.70
    
    
    Rs.
    61,160.56
    
    
    
    (7,869,060
    )
    
    Rs.
    (0.08
    )
    
    Rs.
    78,764.34Balance as of March 31, 2006 ($)
    
    
    
    
    
    $
    64.11
    
    
    $
    371.43
    
    
    $
    (49.51
    )
    
    
    
    
    
    $
    9.75
    
    
    $
    1,375.01
    
    
    
    
    
    
    $
    
    
    
    $
    1,770.78
  115




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##### Table of Contents



WIPRO LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
 Year ended March 31,2004
    
    
    2005
    
    
    2006
    
    
    2006Conveniencetranslation into US$Cash flows from operating activities:Net income
    
    Rs.
    9,992.04
    
    
    Rs.
    15,832.75
    
    
    Rs.
    20,269.97
    
    
    $
    455.71Adjustments to reconcile net income to net cash provided by
operating activities:(Gain)/loss on sale of property, plant and equipment
    
    
    (107.00
    )
    
    
    (108.82
    )
    
    
    (7.75
    )
    
    
    (0.17
    )Depreciation and amortization
    
    
    2,280.08
    
    
    
    2,578.25
    
    
    
    3,195.03
    
    
    
    71.83Deferred tax charge/(benefit)
    
    
    (76.22
    )
    
    
    (83.05
    )
    
    
    14.97
    
    
    
    0.34Unrealized exchange (gain) / loss
    
    
    
    
    
    
    
    
    
    
    74.71
    
    
    
    1.68(Gain)/loss on sale of investment securities
    
    
    2.07
    
    
    
    
    
    
    
    (237.72
    )
    
    
    (5.34
    )Loss on direct issue of stock by subsidiary
    
    
    206.00
    
    
    
    206.58
    
    
    
    
    
    
    
    Amortization of deferred stock compensation
    
    
    44.87
    
    
    
    353.86
    
    
    
    662.37
    
    
    
    14.89Equity in losses/(earnings) of affiliates,
    
    
    (95.99
    )
    
    
    (158.08
    )
    
    
    (287.97
    )
    
    
    (6.47
    )Minority interest
    
    
    56.05
    
    
    
    81.21
    
    
    
    1.40
    
    
    
    0.03Changes in operating assets and liabilities:Accounts receivable
    
    
    (2,935.54
    )
    
    
    (3,833.42
    )
    
    
    (5,362.82
    )
    
    
    (120.57
    )Costs and earnings in excess of billings on contracts in
progress
    
    
    (640.87
    )
    
    
    (639.81
    )
    
    
    (1,596.41
    )
    
    
    (35.89
    )Inventories
    
    
    11.31
    
    
    
    (330.97
    )
    
    
    (295.45
    )
    
    
    (6.64
    )Other assets
    
    
    (877.76
    )
    
    
    856.35
    
    
    
    (2,215.06
    )
    
    
    (49.80
    )Accounts payable
    
    
    267.70
    
    
    
    980.64
    
    
    
    28.23
    
    
    
    0.63Accrued expenses and employee costs
    
    
    1,989.17
    
    
    
    2,317.30
    
    
    
    3,990.98
    
    
    
    89.73Advances from customers
    
    
    65.76
    
    
    
    316.89
    
    
    
    336.62
    
    
    
    7.57Other liabilities
    
    
    633.52
    
    
    
    636.76
    
    
    
    1,620.57
    
    
    
    36.43Net cash provided by operating activities
    
    
    10,815.19
    
    
    
    19,006.44
    
    
    
    20,191.67
    
    
    
    453.95Cash flows from investing activities:Expenditure on property, plant and equipment
    
    
    (4,134.67
    )
    
    
    (6,612.81
    )
    
    
    (7,485.94
    )
    
    
    (168.30
    )Proceeds from sale of property, plant and equipment
    
    
    122.83
    
    
    
    322.00
    
    
    
    113.25
    
    
    
    2.55Dividends received from affiliates
    
    
    10.50
    
    
    
    8.40
    
    
    
    14.12
    
    
    
    0.32Purchase of investments in liquid and short-term mutual funds
    
    
    (18546.15
    )
    
    
    (70,698.67
    )
    
    
    (58,706.63
    )
    
    
    (1,319.84
    )Proceeds from sale of investments in liquid and short-term mutual
funds
    
    
    7,894.99
    
    
    
    66,383.54
    
    
    
    52,043.18
    
    
    
    1,170.04Proceeds from sale and maturities of other investment securities
    
    
    526.97
    
    
    
    
    
    
    
    
    
    
    
    (Investments in)/redemption of inter-corporate deposits
    
    
    285.80
    
    
    
    
    
    
    
    (500.00
    )
    
    
    (11.24
    )Purchase of intangible assets
    
    
    (50.00
    )
    
    
    (280.54
    )
    
    
    
    
    
    
    Payment for acquisitions, net of cash acquired
    
    
    (458.25
    )
    
    
    (617.99
    )
    
    
    (2,777.03
    )
    
    
    (62.43
    )Net cash used in investing activities
    
    
    (14,347.98
    )
    
    
    (11,496.07
    )
    
    
    (17,299.05
    )
    
    
    (388.92
    )Cash flows from financing activities:Proceeds from issuance of equity shares
    
    
    239.70
    
    
    
    2,577.13
    
    
    
    4,766.79
    
    
    
    107.17Proceeds from issuance of equity shares by a subsidiary
    
    
    145.87
    
    
    
    266.25
    
    
    
    
    
    
    
    Proceeds from/(repayments of) short-term borrowing from banks, net
    
    
    460.53
    
    
    
    (405.08
    )
    
    
    (196.06
    )
    
    
    (4.41
    )Repayment of long-term debt
    
    
    (28.20
    )
    
    
    
    
    
    
    (268.36
    )
    
    
    (6.03
    )Payment of cash dividends
    
    
    (262.36
    )
    
    
    (7,575.99
    )
    
    
    (3,997.74
    )
    
    
    (89.88
    )Net cash provided by/(used in) financing activities
    
    
    555.54
    
    
    
    (5,137.69
    )
    
    
    304.63
    
    
    
    6.85Net increase/(decrease) in cash and cash equivalents during the year
    
    
    (2,977.25
    )
    
    
    2,372.68
    
    
    
    3,197.25
    
    
    
    71.88Effect of exchange rate changes on cash
    
    
    (8.60
    )
    
    
    0.92
    
    
    
    (10.31
    )
    
    
    (0.23
    )Cash and cash equivalents at the beginning of the year
    
    
    6,283.01
    
    
    
    3,297.16
    
    
    
    5,670.76
    
    
    
    127.49Cash and cash equivalents at the end of the year
    
    Rs.
    3,297.16
    
    
    Rs.
    5,670.76
    
    
    Rs.
    8,857.70
    
    
    $
    199.14Supplementary information:Cash paid for interest
    
    Rs.
    35.07
    
    
    Rs.
    56.12
    
    
    Rs.
    34.95
    
    
    $
    0.79Cash paid for taxes
    
    
    1,499.46
    
    
    
    2,354.70
    
    
    
    4,542.59
    
    
    
    102.13
  116




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##### Table of Contents



WIPRO LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
 (in millions, except share data and where otherwise stated)
 1. Overview
  2. Significant Accounting Policies
  Basis of preparation of financial statements
 Functional currency and exchange rate translation
  Convenience translation
 Principles of consolidation
 Cash equivalents
 Revenue recognition
 117




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##### Table of Contents




    
    The revenue recognition criteria applicable to the unit of accounting is met;
 
    
    The delivered element has value to the customer on a standalone basis. The delivered unit will have value on a
standalone basis if it is being sold separately by other vendors or the customer could resell the deliverable on a
standalone basis;
 
    
    There is objective and reliable evidence of the fair value of the undelivered item(s); and
 
    
    If the arrangement includes a general right of return relative to the delivered item, delivery or performance of the
undelivered item(s) is considered probable and substantially in control of the Company.
      Warranty costs.
 Shipping and handling costs.
 Inventories
 Investment securities
 118




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##### Table of Contents



Investments in affiliates
 Shares issued by subsidiary/affiliate
 Property, plant and equipment.
 Buildings
    
    
    30 to 60 yearsPlant and machinery
    
    
    2 to 20 yearsFurniture, fixtures and equipment
    
    
    5 yearsVehicles
    
    
    4 yearsComputer software
    
    
    2 years
   Business combinations, goodwill and intangible assets
     Technology-based intangibles
    
    
    5   yearsCustomer-related intangibles
    
    
    2 to 5   yearsMarketing-related intangibles
    
    
    2 to 25 years
 119




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##### Table of Contents



Start-up costs
 Research and development
 Impairment or disposal of long-lived assets
  Earnings per share
 Income taxes
 Stock-based compensation.
   120




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##### Table of Contents



Year ended March 31,2004
    
    
    2005
    
    
    2006Net income, as reported
    
    Rs.
    9,992.04
    
    
    Rs.
    15,832.75
    
    
    Rs.
    20,269.97Add: Stockbased employee
compensation expense
included in reported net
income, net of tax
effects
    
    
    44.87
    
    
    
    353.86
    
    
    
    619.43Less: Stock-based employee
compensation expense
determined under fair
value based method, net of
tax effects
    
    
    (2,124.47
    )
    
    
    (1,598.10
    )
    
    
    (1,190.50
    )Pro-forma net income
    
    Rs.
    7,912.44
    
    
    Rs.
    14,588.51
    
    
    Rs.
    19,698.90Earnings per share: BasicAs reported
    
    
    7.20
    
    
    
    11.38
    
    
    
    14.41Pro-forma
    
    
    5.70
    
    
    
    10.49
    
    
    
    14.01Earnings per share: DilutedAs reported
    
    
    7.20
    
    
    
    11.29
    
    
    
    14.24Pro-forma
    
    
    5.70
    
    
    
    10.44
    
    
    
    13.87
  Derivatives and hedge accounting.
     Recent accounting pronouncement
 121




---



##### Table of Contents



Reclassifications
 3. Acquisitions
 mPower Software Services Inc. and subsidiaries
    Description
    
    Fair valueNet tangible assets
    
    Rs.
    185.23Customer- related intangibles
    
    
    356.96Deferred tax liabilities
    
    
    (124.94
    )Goodwill
    
    
    857.32Total
    
    Rs.
    1,274.57
  122




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##### Table of Contents



BVPENTE Beteiligungsverwaltung GmbH and subsidiaries
    Description
    
    Fair valueNet tangible assets
    
    Rs.
    307.15Customer-related intangibles
    
    
    146.52Technology-related intangibles
    
    
    66.60Deferred tax liabilities
    
    
    (53.28
    )Goodwill
    
    
    689.55Total
    
    Rs.
    1,156.54
  4. Acquisition of Ownership Interest in a Subsidiary
       123




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##### Table of Contents



5.
    
    Cash and Cash Equivalents
  6.
    
    Accounts Receivable
  Year ended March 31,2005
    
    
    2006Balance at the beginning of the year
    
    Rs.
    720.02
    
    
    Rs.
    846.54Additional provision during the period, net of collections
    
    
    151.89
    
    
    
    275.24Bad debts charged to provision
    
    
    (25.37
    )
    
    
    (6.00
    )Balance at the end of the year
    
    Rs.
    846.54
    
    
    Rs.
    1,115.78
 7.
    
    Inventories
  As of March 31,2005
    
    
    2006Stores and spare parts
    
    Rs.
    179.27
    
    
    Rs.
    198.02Raw materials and components
    
    
    688.91
    
    
    
    692.01Work-in-process
    
    
    212.51
    
    
    
    288.73Finished goods
    
    
    688.47
    
    
    
    885.85Rs.
    1,769.16
    
    
    Rs.
    2,064.61
 8.
    
    Other Assets
  As of March 31,2005
    
    
    2006Prepaid expenses
    
    Rs.
    851.80
    
    
    Rs.
    1,182.07Due from officers and employees
    
    
    603.44
    
    
    
    753.68Advances to suppliers
    
    
    227.10
    
    
    
    467.19Balances with statutory authorities
    
    
    20.20
    
    
    
    130.76Deposits
    
    
    888.62
    
    
    
    1,388.89Corporate Deposits
    
    
    
    
    
    
    500.00Advance income taxes
    
    
    166.76
    
    
    
    1,237.33Derivative asset
    
    
    379.69
    
    
    
    338.11Others
    
    
    593.89
    
    
    
    708.993,731.50
    
    
    
    6,707.02Less: Current assets
    
    
    (2,950.58
    )
    
    
    (5,463.04
    )Rs.
    780.92
    
    
    Rs.
    1,243.98
 124




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9. Investment Securities
  As of March 31, 2005
    
    
    As of March 31, 2006Gross Unrealized
    
    
    
    
    
    
    
    
    
    
    Gross UnrealizedCarrying Value
    
    
    Holding Gains
    
    
    Fair Value
    
    
    Carrying Value
    
    
    Holding Gains
    
    
    Fair ValueAvailable-for-sale:Investments in
liquid and
short-term mutual
funds
    
    Rs.
    22,794.72
    
    
    Rs.
    162.87
    
    
    Rs.
    22,957.59
    
    
    Rs.
    29,821.50
    
    
    Rs.
    506.92
    
    
    Rs.
    30,328.42
  10.
    
    Property, Plant and Equipment
  As of March 31,2005
    
    
    2006Land
    
    Rs.
    1,206.85
    
    
    Rs.
    1,261.14Buildings
    
    
    3,980.05
    
    
    
    4,590.53Plant and machinery
    
    
    10,308.62
    
    
    
    12,474.35Furniture, fixtures and equipment
    
    
    2,494.39
    
    
    
    2,996.87Vehicles
    
    
    1,053.28
    
    
    
    1,324.31Computer software for internal use
    
    
    1,354.81
    
    
    
    1,625.77Capital work-in-progress
    
    
    2,603.85
    
    
    
    6,248.5223,001.85
    
    
    
    30,521.48Accumulated depreciation and amortization
    
    
    (9,800.57
    )
    
    
    (12,744.08
    )Rs.
    13,201.28
    
    
    Rs.
    17,777.40
  11.
    
    Goodwill and Intangible Assets
  As of March 31,2005
    
    
    2006Gross carrying
    
    
    Accumulated
    
    
    Net
    
    
    Gross carrying
    
    
    Accumulated
    
    
    Netamount
    
    
    amortization
    
    
    
    
    
    
    amount
    
    
    AmortizationTechnology-based intangibles
    
    Rs.
    34.30
    
    
    Rs.
    19.68
    
    
    Rs.
    14.62
    
    
    Rs.
    101.00
    
    
    Rs.
    34.07
    
    
    Rs.
    66.93Customer-related intangibles
    
    
    560.97
    
    
    
    542.18
    
    
    
    18.79
    
    
    
    1,079.29
    
    
    
    600.39
    
    
    
    478.90Marketing-related intangibles
    
    
    382.43
    
    
    
    52.73
    
    
    
    329.70
    
    
    
    382.43
    
    
    
    73.93
    
    
    
    308.50Others
    
    
    0.95
    
    
    
    0.95
    
    
    
    
    
    
    
    0.95
    
    
    
    0.95
    
    
    
    Rs.
    978.65
    
    
    Rs.
    615.54
    
    
    Rs.
    363.11
    
    
    Rs.
    1,563.67
    
    
    Rs.
    709.34
    
    
    Rs.
    854.33
  Year ending March 31,
    
    Amount2007
    
    Rs.
    200.552008
    
    
    187.192009
    
    
    161.692010
    
    
    81.202011
    
    
    21.20Thereafter
    
    
    202.50Total
    
    Rs.
    854.33
 125




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##### Table of Contents



Year ended March 31,2005
    
    
    2006Balance at the beginning of the year
    
    Rs.
    5,368.70
    
    
    Rs.
    5,614.98Goodwill relating to acquisitions (refer note 3 and 4)
    
    
    206.72
    
    
    
    1,851.01Effect of translation adjustments
    
    
    39.56
    
    
    
    14.86Balance at the end of the year
    
    Rs.
    5,614.98
    
    
    Rs.
    7,480.85
  As of March 31,Segment
    
    2005
    
    
    2006Global IT Services and Products
    
    Rs.
    4,958.74
    
    
    Rs.
    6,724.39India and AsiaPac IT Services and Products
    
    
    656.24
    
    
    
    756.46Total
    
    Rs.
    5,614.98
    
    
    Rs.
    7,480.85
 12.
    
    Other Current Liabilities
  As of March 31,2005
    
    
    2006Statutory dues payable
    
    Rs.
    1,484.20
    
    
    Rs.
    1,820.99Taxes payable
    
    
    19.67
    
    
    
    610.54Warranty obligations
    
    
    361.08
    
    
    
    664.86Others
    
    
    270.21
    
    
    
    518.03Rs.
    2,135.16
    
    
    Rs.
    3,614.42
  Year ended March 31,2005
    
    
    2006Balance at the beginning of the year
    
    Rs.
    357.36
    
    
    Rs.
    361.08Additional provision during the year
    
    
    373.46
    
    
    
    601.20Reduction due to payments
    
    
    (369.74
    )
    
    
    (297.42
    )Balance at the end of the year
    
    Rs.
    361.08
    
    
    Rs.
    664.86
  13.
    
    Operating Leases
   Year ending March 31,2007
    
    Rs.
    395.612008
    
    
    379.152009
    
    
    355.662010
    
    
    327.542011
    
    
    283.65Thereafter
    
    
    1,254.27Total
    
    Rs.
    2,995.88
  14.
    
    Investments in Affiliates
 Wipro GE Medical Systems (Wipro GE)
  126




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WeP Peripherals
  127




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##### Table of Contents



15.
    
    Financial Instruments and Concentration of Risk
 Concentration of risk
 Derivative financial instruments
  As of March 31,2005
    
    2006Forward contractsSell
    
    $
    855.70
    
    
    $
    592.23£
    11.00
    
    
    £
    4.00Buy
    
    $
    4.00Net purchased options (sell)
    
    
    
    
    
    $
    254.00
    
    
    £
    8.00Net written options (sell)
    
    $
    8.00
    
    
    $
    6.00
    
    
    £
    5.00
   As of March 31,2005
    
    
    2006Balance as at the beginning of the year
    
    Rs.
    1,058.97
    
    
    Rs.
    113.81Net gains reclassified into net income on occurrence of hedged
transactions
    
    
    (1,058.97
    )
    
    
    (113.81
    )Deferred cancellation gains/(losses) relating to roll-over hedging
    
    
    (159.60
    )
    
    
    Changes in fair value of effective portion of outstanding derivatives
    
    
    273.41
    
    
    
    202.34Unrealized gain/(losses) on cash flow hedging derivatives, net
    
    
    (945.16
    )
    
    
    88.53Balance as at the end of the year
    
    Rs.
    113.81
    
    
    Rs.
    202.34
  16.
    
    Borrowings from Banks
  128




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17.
    
    Stock Dividend
   18.
    
    Equity Shares and Dividends
       19.
    
    Retained Earnings
   129




---



##### Table of Contents



20.
    
    Other Income, Net
  Year ended March 31,2004
    
    
    2005
    
    
    2006Interest income
    
    Rs.
    28.05
    
    
    Rs.
    35.79
    
    
    Rs.
    198.09Interest expense
    
    
    (35.07
    )
    
    
    (56.12
    )
    
    
    (34.95
    )Dividend income
    
    
    736.43
    
    
    
    679.36
    
    
    
    862.60Gain/(loss) on sale of investment securities, net
    
    
    (2.07
    )
    
    
    35.59
    
    
    
    237.72Others
    
    
    140.87
    
    
    
    104.20
    
    
    
    12.40Rs.
    868.21
    
    
    Rs.
    798.82
    
    
    Rs.
    1,275.86
 21. Shipping and Handling Costs
  22.
    
    Income Taxes
  Year ended March 31,2004
    
    
    2005
    
    
    2006On net income
    
    Rs.
    1,611.39
    
    
    Rs.
    2,693.57
    
    
    Rs.
    3,264.73On stockholders equity for:Unrealized gains on investment securities, net
    
    
    5.08
    
    
    
    59.59
    
    
    
    114.94Total income taxes
    
    Rs.
    1,616.47
    
    
    Rs.
    2,753.16
    
    
    Rs.
    3,379.67
  Year ended March 31,2004
    
    
    2005
    
    
    2006Current taxesDomestic
    
    Rs.
    867.61
    
    
    Rs.
    1,642.97
    
    
    Rs.
    1,605.19Foreign
    
    
    820.00
    
    
    
    1,133.65
    
    
    
    1,644.57Rs.
    1,687.61
    
    
    Rs.
    2,776.62
    
    
    Rs.
    3,249.76Deferred taxesDomestic
    
    
    5.00
    
    
    
    (70.45
    )
    
    
    (7.82
    )Foreign
    
    
    (81.22
    )
    
    
    (12.60
    )
    
    
    22.79(76.22
    )
    
    
    (83.05
    )
    
    
    14.97Total income tax expense
    
    Rs.
    1,611.39
    
    
    Rs.
    2,693.57
    
    
    Rs.
    3,264.73
  Year ended March 31,2004
    
    
    2005
    
    
    2006Income before taxes and minority interest
    
    Rs.
    11,659.48
    
    
    Rs.
    18,607.53
    
    
    Rs.
    23,536.10Enacted income tax rate in India
    
    
    35.88
    %
    
    
    36.59
    %
    
    
    33.66
    %Computed expected tax expense
    
    
    4,182.84
    
    
    
    6,808.50
    
    
    
    7,922.25Effect of:Income exempt from tax
    
    
    (3,002.98
    )
    
    
    (4,836.12
    )
    
    
    (5,322.48
    )Basis differences that will reverse during the tax holiday
period
    
    
    77.66
    
    
    
    245.03
    
    
    
    291.24Income taxed at higher rates in foreign jurisdiction
    
    
    
    
    
    
    111.59
    
    
    
    229.95Loss on direct issue of stock by subsidiary
    
    
    73.54
    
    
    
    75.74
    
    
    
    Amortization of deferred stock compensation
    
    
    16.10
    
    
    
    129.48
    
    
    
    193.22Changes in valuation allowances
    
    
    
    
    
    
    69.41
    
    
    
    29.40Income taxes relating to prior years
    
    
    274.02
    
    
    
    122.23
    
    
    
    (175.15
    )Effect of change in tax rates
    
    
    11.03
    
    
    
    (9.62
    )
    
    
    17.14Expenses disallowed for tax purposes
    
    
    
    
    
    
    
    
    
    
    111.37Others, net
    
    
    (20.82
    )
    
    
    (22.67
    )
    
    
    (32.21
    )Total income tax expense
    
    Rs.
    1,611.39
    
    
    Rs.
    2,693.57
    
    
    Rs.
    3,264.73
 130




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##### Table of Contents



As of March 31,2005
    
    
    2006Deferred tax assetsAllowance for doubtful accounts
    
    Rs.
    134.08
    
    
    Rs.
    105.44Accrued expenses and liabilities
    
    
    202.19
    
    
    
    224.28Carry-forward capital losses
    
    
    56.26
    
    
    
    56.26Carry-forward business losses
    
    
    603.01
    
    
    
    917.37Others
    
    
    70.53
    
    
    
    60.91Total gross deferred tax assets
    
    
    1,066.07
    
    
    
    1,364.26Less: valuation allowance
    
    
    (295.39
    )
    
    
    (524.55
    )Net deferred tax assets
    
    Rs.
    770.68
    
    
    Rs.
    839.71Deferred tax liabilitiesProperty, plant and equipment
    
    Rs.
    96.15
    
    
    Rs.
    22.43Intangible assets
    
    
    24.75
    
    
    
    202.01Amortizable goodwill
    
    
    42.40
    
    
    
    63.60Undistributed earnings of affiliates
    
    
    96.39
    
    
    
    153.49Unrealized gains on investment securities,
net
    
    
    59.51
    
    
    
    174.45Total gross deferred tax liability
    
    
    319.20
    
    
    
    615.98Net deferred tax assets
    
    Rs.
    451.48
    
    
    Rs.
    223.73
    131




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##### Table of Contents



Year ending March 31:2013
    
    Rs.
    22.522020
    
    
    71.972021
    
    
    79.512022
    
    
    43.042023
    
    
    85.442024
    
    
    409.442025
    
    
    325.482027
    
    
    778.10Thereafter
    
    
    1,181.13Rs.
    2,996.63
 
  23.
    
    Employee Stock Incentive Plans
 Wipro Equity Reward Trust (WERT).
  Year ended March 31,2004
    
    
    2005
    
    
    2006Shares held at the beginning of the year
    
    
    7,821,660
    
    
    
    7,887,060
    
    
    
    7,893,060Shares granted to employees
    
    
    
    
    
    
    
    
    
    
    (24,000
    )Grants forfeited by employees
    
    
    65,400
    
    
    
    6,000
    
    
    
    Shares held at the end of the year
    
    
    7,887,060
    
    
    
    7,893,060
    
    
    
    7,869,060
  Wipro Employee Stock Option Plan 1999 (1999 Plan).
 132




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##### Table of Contents



Year ended March 31, 2004Weighted-averageWeighted-
    
    
    remainingShares arising
    
    
    Range of exercise
    
    
    average exercise
    
    
    contractualout of options
    
    
    prices
    
    
    price
    
    
    life(months)Outstanding at the beginning of the year
    
    
    9,718,751
    
    
    Rs.
    171  181
    
    
    Rs.
    181
    
    
    30 months13,278,120
    
    
    
    309   421
    
    
    
    311
    
    
    38 monthsForfeited during the year
    
    
    (478,974
    )
    
    
    171  181
    
    
    
    181
    
    
    
    (681,900
    )
    
    
    309  421
    
    
    
    309
    
    
    
    Exercised during the year
    
    
    (874,512
    )
    
    
    171  181
    
    
    
    181
    
    
    
    Outstanding at the end of the year
    
    
    8,365,265
    
    
    
    171  181
    
    
    
    181
    
    
    18 months12,596,220
    
    
    
    309  421
    
    
    
    311
    
    
    26 monthsExercisable at the end of the year
    
    
    5,855,686
    
    
    
    171  181
    
    
    
    181
    
    
    18 months5,669,802
    
    
    Rs.
    309  421
    
    
    Rs.
    311
    
    
    26 months
 Year ended March 31, 2005Weighted-averageWeighted-
    
    
    remainingShares arising
    
    
    Range of exercise
    
    
    average exercise
    
    
    contractualout of options
    
    
    prices
    
    
    price
    
    
    life(months)Outstanding at the beginning of the year
    
    
    8,365,265
    
    
    Rs.
    171  181
    
    
    Rs.
    181
    
    
    18 months12,596,220
    
    
    
    309  421
    
    
    
    311
    
    
    26 monthsForfeited during the year
    
    
    (76,440
    )
    
    
    171  181
    
    
    
    181
    
    
    
    (600,138
    )
    
    
    309  421
    
    
    
    309
    
    
    
    Exercised during the year
    
    
    (4,086,872
    )
    
    
    171  181
    
    
    
    181
    
    
    
    (2,056,358
    )
    
    
    309  421
    
    
    
    309
    
    
    
    Outstanding at the end of the year
    
    
    4,201,953
    
    
    
    171  181
    
    
    
    181
    
    
    6 months9,939,724
    
    
    
    309  421
    
    
    
    311
    
    
    14 monthsExercisable at the end of the year
    
    
    4,201,953
    
    
    
    171  181
    
    
    
    181
    
    
    6 months6,959,606
    
    
    Rs.
    309  421
    
    
    Rs.
    311
    
    
    14 months
 Year ended March 31, 2006Weighted-averageWeighted-
    
    
    remainingShares arising
    
    
    Range of exercise
    
    
    average exercise
    
    
    contractualout of options
    
    
    prices
    
    
    price
    
    
    life(months)Outstanding at the beginning of the year
    
    
    4,201,953
    
    
    Rs.
    171  181
    
    
    Rs.
    181
    
    
    6 months9,939,724
    
    
    
    309  421
    
    
    
    311
    
    
    14 monthsForfeited during the year
    
    
    (40
    )
    
    
    171  181
    
    
    
    181
    
    
    
    (224,530
    )
    
    
    309  421
    
    
    
    309
    
    
    
    Exercised during the year
    
    
    (4,110,491
    )
    
    
    171  181
    
    
    
    181
    
    
    
    (5,056,811
    )
    
    
    309  421
    
    
    
    310
    
    
    
    Lapsed during the year
    
    
    (91,422
    )
    
    
    171  181
    
    
    
    181
    
    
    
    Outstanding at the end of the year
    
    
    
    
    
    
    171  181
    
    
    
    
    
    
    
    4,658,383
    
    
    
    309  421
    
    
    
    312
    
    
    3 monthsExercisable at the end of the year
    
    
    
    
    
    
    171  181
    
    
    
    
    
    
    
    4,658,383
    
    
    Rs.
    309  421
    
    
    Rs.
    312
    
    
    3 months
 133




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##### Table of Contents



Wipro Employee Stock Option Plan 2000 (2000 Plan).
  Year ended March 31, 2004Weighted-averageWeighted-
    
    
    remainingShares arising
    
    
    Range of exercise
    
    
    average exercise
    
    
    contractual lifeout of options
    
    
    prices
    
    
    price
    
    
    (months)Outstanding at the beginning of the year
    
    
    569,700
    
    
    Rs.
    172  255
    
    
    Rs.
    229
    
    
    57 months33,116,886
    
    
    
    264  396
    
    
    
    266
    
    
    59 months14,916,498
    
    
    
    397  408
    
    
    
    400
    
    
    42 monthsForfeited during the year
    
    
    (49,500
    )
    
    
    172  255
    
    
    
    221
    
    
    
    (1,966,560
    )
    
    
    264  396
    
    
    
    267
    
    
    
    (1,289,400
    )
    
    
    397  408
    
    
    
    400
    
    
    
    Exercised during the year
    
    
    (5,400
    )
    
    
    172  255
    
    
    
    209
    
    
    
    (15,270
    )
    
    
    264  396
    
    
    
    264
    
    
    
    Outstanding at the end of the year
    
    
    514,800
    
    
    
    172  255
    
    
    
    230
    
    
    45 months31,135,056
    
    
    
    264  396
    
    
    
    266
    
    
    47 months13,627,098
    
    
    
    397  408
    
    
    
    399
    
    
    30 monthsExercisable at the end of the year
    
    
    116,754
    
    
    
    172  255
    
    
    
    230
    
    
    45 months12,377,106
    
    
    
    264  396
    
    
    
    266
    
    
    47 months6,130,392
    
    
    Rs.
    397  408
    
    
    Rs.
    399
    
    
    30 months
 Year ended March 31, 2005Weighted-averageWeighted-
    
    
    remainingShares arising
    
    
    Range of exercise
    
    
    average exercise
    
    
    contractual lifeout of options
    
    
    prices
    
    
    price
    
    
    (months)Outstanding at the beginning of the year
    
    
    514,800
    
    
    Rs.
    172  255
    
    
    Rs.
    230
    
    
    45 months31,135,056
    
    
    
    264  396
    
    
    
    266
    
    
    47 months13,627,098
    
    
    
    397  408
    
    
    
    399
    
    
    30 monthsForfeited during the year
    
    
    (67,050
    )
    
    
    172  255
    
    
    
    231
    
    
    
    (1,892,582
    )
    
    
    264  396
    
    
    
    266
    
    
    
    (965,950
    )
    
    
    397  408
    
    
    
    400
    
    
    
    Exercised during the year
    
    
    (54,854
    )
    
    
    172  255
    
    
    
    226
    
    
    
    (3,061,976
    )
    
    
    264  396
    
    
    
    264
    
    
    
    Outstanding at the end of the year
    
    
    392,896
    
    
    
    172  255
    
    
    
    231
    
    
    33 months26,180,498
    
    
    
    264  396
    
    
    
    267
    
    
    35 months12,661,148
    
    
    
    397  408
    
    
    
    399
    
    
    18 monthsExercisable at the end of the year
    
    
    165,876
    
    
    
    172  255
    
    
    
    231
    
    
    33 months15,729,818
    
    
    
    264  396
    
    
    
    267
    
    
    35 months8,862,804
    
    
    Rs.
    397  408
    
    
    Rs.
    399
    
    
    18 months
 134




---



##### Table of Contents



Year ended March 31, 2006Weighted-averageWeighted-
    
    
    remainingShares arising
    
    
    Range of exercise
    
    
    average exercise
    
    
    contractual lifeout of options
    
    
    prices
    
    
    price
    
    
    (months)Outstanding at the beginning of the year
    
    
    392,896
    
    
    Rs.
    172  255
    
    
    
    231
    
    
    33 months26,180,498
    
    
    
    265  396
    
    
    
    267
    
    
    35 months12,661,148
    
    
    
    397  458
    
    
    
    399
    
    
    18 monthsForfeited during the year
    
    
    (18,000
    )
    
    
    172  255
    
    
    
    229
    
    
    
    (790,554
    )
    
    
    265  396
    
    
    
    267
    
    
    
    (831,625
    )
    
    
    397  458
    
    
    
    398
    
    
    
    Exercised during the year
    
    
    (82,320
    )
    
    
    172  255
    
    
    
    221
    
    
    
    (5,243,687
    )
    
    
    265  396
    
    
    
    266
    
    
    
    (1,929,556
    )
    
    
    397  458
    
    
    
    397
    
    
    
    Outstanding at the end of the year
    
    
    292,576
    
    
    
    172  255
    
    
    
    233
    
    
    25 months20,146,257
    
    
    
    265  396
    
    
    
    267
    
    
    23 months9,899,967
    
    
    
    397  458
    
    
    
    399
    
    
    7 monthsExercisable at the end of the year
    
    
    186,732
    
    
    
    172  255
    
    
    
    233
    
    
    24 months16,165,662
    
    
    
    265  396
    
    
    
    267
    
    
    26 months9,899,967
    
    
    Rs.
    397  458
    
    
    Rs.
    399
    
    
    7 months
 Stock Option Plan (2000 ADS Plan).
  Year ended March 31, 2004Weighted-averageWeighted-
    
    
    remainingShares arising out
    
    
    Range of exercise
    
    
    average
    
    
    contractualof options
    
    
    prices
    
    
    exercise price
    
    
    life (months)Outstanding at the beginning of the year
    
    
    502,800
    
    
    $
    3.46  5.01
    
    
    $
    4.33
    
    
    54 months3,699,300
    
    
    
    5.82  6.90
    
    
    
    6.44
    
    
    45 monthsForfeited during the year
    
    
    (40,200
    )
    
    
    3.46   5.01
    
    
    
    4.61
    
    
    
    (64,800
    )
    
    
    5.82   6.90
    
    
    
    6.64
    
    
    
    Exercised during the year
    
    
    (33,300
    )
    
    
    3.46   5.01
    
    
    
    4.15
    
    
    
    (242,478
    )
    
    
    5.82   6.90
    
    
    
    6.36
    
    
    
    Outstanding at the end of the year
    
    
    429,300
    
    
    
    3.46   5.01
    
    
    
    4.32
    
    
    42 months3,392,022
    
    
    
    5.82   6.90
    
    
    
    6.39
    
    
    33 monthsExercisable at the end of the year
    
    
    107,328
    
    
    
    3.46   5.01
    
    
    
    4.32
    
    
    42 months1,623,528
    
    
    $
    5.82  6.90
    
    
    $
    6.37
    
    
    33 months
 135




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##### Table of Contents



Year ended March 31, 2005Weighted-averageWeighted-
    
    
    remainingShares arising out
    
    
    Range of exercise
    
    
    average
    
    
    contractualof options
    
    
    prices
    
    
    exercise price
    
    
    life (months)Outstanding at the beginning of the year
    
    
    429,300
    
    
    $
    3.46  5.01
    
    
    $
    4.32
    
    
    42 months3,392,022
    
    
    
    5.82   6.90
    
    
    
    6.44
    
    
    33 monthsForfeited during the year
    
    
    (60,000
    )
    
    
    5.82   6.90
    
    
    
    6.53
    
    
    
    Exercised during the year
    
    
    (24,750
    )
    
    
    3.46   5.01
    
    
    
    3.77
    
    
    
    (1,301,322
    )
    
    
    5.82   6.90
    
    
    
    6.35
    
    
    
    Outstanding at the end of the year
    
    
    404,550
    
    
    
    3.46   5.01
    
    
    
    4.35
    
    
    30 months2,030,700
    
    
    
    5.82   6.90
    
    
    
    6.50
    
    
    21 monthsExercisable at the end of the year
    
    
    197,956
    
    
    
    3.46   5.01
    
    
    
    4.37
    
    
    30 months1,546,300
    
    
    $
    5.82  6.90
    
    
    $
    6.51
    
    
    21 months
 Year ended March 31, 2006Weighted-averageWeighted-
    
    
    remainingShares arising out
    
    
    Range of exercise
    
    
    average
    
    
    contractualof options
    
    
    prices
    
    
    exercise price
    
    
    life (months)Outstanding at the beginning of the year
    
    
    404,550
    
    
    $
    3.46  5.01
    
    
    $
    4.35
    
    
    30 months2,030,700
    
    
    
    5.82    6.90
    
    
    
    6.50
    
    
    21 monthsForfeited during the year
    
    
    (48,000
    )
    
    
    3.46    5.01
    
    
    
    4.00
    
    
    
    (180,000
    )
    
    
    5.82    6.90
    
    
    
    6.07
    
    
    
    Exercised during the year
    
    
    (117,650
    )
    
    
    3.46    5.01
    
    
    
    4.45(641,858
    )
    
    
    5.82    6.90
    
    
    
    6.53
    
    
    
    Outstanding at the end of the year
    
    
    238,900
    
    
    
    3.46    5.01
    
    
    
    4.38
    
    
    19 months1,208,842
    
    
    
    5.82    6.90
    
    
    
    6.50
    
    
    12 monthsExercisable at the end of the year
    
    
    176,938
    
    
    
    3.46    5.01
    
    
    
    4.33
    
    
    19 months911,621
    
    
    $
    5.82  6.90
    
    
    $
    6.45
    
    
    12 months
 Restricted Stock Unit Plans:
   Year ended March 31, 2005Weighted-averageremainingShares arising out
    
    
    
    
    
    
    contractual lifeof options
    
    
    Exercise price
    
    
    (months)Outstanding at the beginning of the year
    
    
    
    
    
    Rs.
    
    
    
    
    Granted during the year
    
    
    9,792,596
    
    
    
    2
    
    
    72 monthsForfeited during the year
    
    
    (272,940
    )
    
    
    2
    
    
    
    Outstanding at the end of the year
    
    
    9,519,656
    
    
    
    2
    
    
    66 monthsExercisable at the end of the year
    
    
    
    
    
    Rs.
    
    
    
    
    
 136




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##### Table of Contents



Year ended March 31, 2006Weighted-averageremainingShares arising out
    
    
    
    
    
    
    contractual lifeof options
    
    
    Exercise price
    
    
    (months)Outstanding at the beginning of the year
    
    
    9,519,656
    
    
    Rs.
    2
    
    
    66 monthsGranted during the year
    
    
    55,500
    
    
    
    2
    
    
    72 monthsForfeited during the year
    
    
    (694,572
    )
    
    
    2
    
    
    
    Exercised during the year
    
    
    (1,282,410
    )
    
    
    2
    
    
    
    Outstanding at the end of the year
    
    
    7,598,174
    
    
    
    2
    
    
    54 monthsExercisable at the end of the year
    
    
    518,321
    
    
    Rs.
    2
    
    
    54 months
  Year ended March 31, 2005Weighted-averageremainingShares arising out
    
    
    
    
    
    
    contractual lifeof options
    
    
    Exercise price
    
    
    (months)Outstanding at the beginning of the year
    
    
    
    
    
    $
    
    
    
    
    Granted during the year
    
    
    1,583,600
    
    
    
    0.04
    
    
    72 monthsForfeited during the year
    
    
    (47,500
    )
    
    
    0.04
    
    
    
    Outstanding at the end of the year
    
    
    1,536,100
    
    
    
    0.04
    
    
    60 monthsExercisable at the end of the year
    
    
    
    
    
    $
    
    
    
    
    
 Year ended March 31, 2006Weighted-averageremainingShares arising out
    
    
    
    
    
    
    contractual lifeof options
    
    
    Exercise price
    
    
    (months)Outstanding at the beginning of the year
    
    
    1,536,100
    
    
    $
    0.04
    
    
    66 monthsExercised during the year
    
    
    (148,440
    )
    
    
    0.04
    
    
    
    Forfeited during the year
    
    
    (386,940
    )
    
    
    0.04
    
    
    
    Outstanding at the end of the year
    
    
    1,000,720
    
    
    
    0.04
    
    
    54 monthsExercisable at the end of the year
    
    
    116,400
    
    
    $
    0.04
    
    
    54 months
 Restricted Stock Unit Plan 2005:
  Year ended March 31,
    
    
    Year ended March 31,2005
    
    
    2006Cost of revenues
    
    Rs.
    238.27
    
    
    Rs.
    437.20Selling and marketing expenses
    
    
    49.20
    
    
    
    75.16General and administrative expenses
    
    
    58.15
    
    
    
    139.87Rs.
    345.62
    
    
    Rs.
    652.23
 137




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##### Table of Contents



Wipro BPO Option Plan (Wipro BPO Plan).
  Year ended March 31, 2004Weighted- averageremainingShares arising out of
    
    
    Range of
    
    
    Weighted- average
    
    
    contractual lifeoptions
    
    
    exercise prices
    
    
    exercise price
    
    
    (months)Outstanding at the beginning of the year
    
    
    181,907
    
    
    Rs.
    1  13
    
    
    Rs.
    2
    
    
    3 months3,157,372
    
    
    
    31
    
    
    
    31
    
    
    6 months5,990,483
    
    
    
    57
    
    
    
    57
    
    
    22 monthsForfeited during the year
    
    
    (405,737
    )
    
    
    57
    
    
    
    57
    
    
    
    Exercised during the year
    
    
    (181,907
    )
    
    
    1  13
    
    
    
    8
    
    
    
    (3,157,372
    )
    
    
    31
    
    
    
    31
    
    
    
    (839,015
    )
    
    
    57
    
    
    
    57
    
    
    
    Outstanding at the end of the year
    
    
    4,745,731
    
    
    Rs.
    57
    
    
    Rs.
    57
    
    
    10 monthsExercisable at the end of the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 Year ended March 31, 2005Weighted- averageremainingShares arising out of
    
    
    Range of
    
    
    Weighted- average
    
    
    contractual lifeoptions
    
    
    exercise prices
    
    
    exercise price
    
    
    (months)Outstanding at the beginning of the year
    
    
    4,745,731
    
    
    Rs.
    57
    
    
    Rs.
    57
    
    
    10 monthsForfeited during the year
    
    
    (108,356
    )
    
    
    57
    
    
    
    57
    
    
    
    Exercised during the year
    
    
    (4,637,375
    )
    
    
    57
    
    
    
    57
    
    
    
    Outstanding at the end of the year
    
    
    
    
    
    Rs.
    
    
    
    Rs.
    
    
    
    
    
  24.
    
    Earnings Per Share
  Year ended March 31,2004
    
    
    2005
    
    
    2006EarningsNet income
    
    Rs.
    9,992.04
    
    
    Rs.
    15,832.75
    
    
    Rs.
    20,269.97Effect of dilutive instruments of subsidiary
    
    
    
    
    
    
    (27.97
    )
    
    
    Net income (adjusted for full dilution)
    
    Rs.
    9,992.04
    
    
    Rs.
    15,804.78
    
    
    Rs.
    20,269.97Equity sharesWeighted average number of equity shares outstanding
    
    
    1,387,740,780
    
    
    
    1,391,554,372
    
    
    
    1,406,505,974Effect of dilutive equivalent shares-stock options
    
    
    1,349,862
    
    
    
    8,292,410
    
    
    
    17,173,256Weighted average number of equity shares and equivalent shares outstanding
    
    
    1,389,090,642
    
    
    
    1,399,846,782
    
    
    
    1,423,679,230
   138




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##### Table of Contents



25.
    
    Employee Benefit Plans
 Gratuity
 As of March 31,2005
    
    
    2006Change in the benefit obligationProjected Benefit Obligation (PBO) at the beginning of the year
    
    Rs.
    115.04
    
    
    Rs.
    131.47Service cost
    
    
    8.07
    
    
    
    7.73Interest cost
    
    
    7.47
    
    
    
    9.95Benefits paid
    
    
    (12.12
    )
    
    
    (6.74
    )Actuarial loss/(gain)
    
    
    13.01
    
    
    
    7.71PBO at the end of the year
    
    
    131.47
    
    
    
    150.12Change in plan assetsFair value of plan assets at the beginning of the year
    
    
    32.53
    
    
    
    124.32Actual return on plan assets
    
    
    4.83
    
    
    
    8.94Employer contributions
    
    
    99.08
    
    
    
    2.07Benefits paid
    
    
    (12.12
    )
    
    
    (6.74
    )Plan assets at the end of the year
    
    
    124.32
    
    
    
    128.59Funded status
    
    
    (7.15
    )
    
    
    (21.53
    )Unrecognized actuarial loss/(gain)
    
    
    59.71
    
    
    
    55.53Unrecognized transition obligation
    
    
    3.46
    
    
    
    2.43Unrecognized actuarial cost
    
    
    5.19
    
    
    
    4.00Prepaid benefit
    
    Rs.
    61.21
    
    
    Rs.
    40.43
  Year ended March 31,2004
    
    
    2005
    
    
    2006Service cost
    
    Rs.
    5.92
    
    
    Rs.
    8.07
    
    
    Rs.
    7.73Interest cost
    
    
    4.53
    
    
    
    7.47
    
    
    
    9.95Expected return on assets
    
    
    (2.22
    )
    
    
    (1.96
    )
    
    
    (2.02
    )Amortization of transition liabilities
    
    
    2.05
    
    
    
    5.84
    
    
    
    7.19Net gratuity cost
    
    Rs.
    10.28
    
    
    Rs.
    19.42
    
    
    Rs.
    22.85
  Year ended March 31,2004
    
    2005
    
    2006Discount rate
    
    
    7
    %
    
    
    8
    %
    
    
    8
    %Rate of increase in compensation levels
    
    
    7
    %
    
    
    7
    %
    
    
    7
    %Rate of return on plan assets
    
    
    7
    %
    
    
    7
    %
    
    
    7
    %
   139




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##### Table of Contents



Expected contribution to the fund during the year ending March 31, 2007
    
    Rs.
    12.73Expected benefit payments from the fund during the year ending March 31:2007
    
    
    17.112008
    
    
    15.792009
    
    
    17.742010
    
    
    16.192011
    
    
    16.44Thereafter
    
    
    86.83Total
    
    Rs.
    170.10
   Superannuation
 Provident fund.
  26.
    
    Related Party Transactions
  Year ended March 31,2004
    
    
    2005
    
    
    2006Wipro GE:Revenues from sale of computer
equipment and administrative and
management support services
    
    Rs.
    116.49
    
    
    Rs.
    111.68
    
    
    Rs.
    114.01Rent, travel and related expenses
    
    
    
    
    
    
    1.61
    
    
    
    Purchase of software
    
    
    
    
    
    
    0.45
    
    
    
    WeP Peripherals:Revenues from sale of computer
equipment and services
    
    
    8.00
    
    
    
    10.48
    
    
    
    19.67Fees received for usage of trade mark
    
    
    22.04
    
    
    
    
    
    
    
    Payment for services
    
    
    4.05
    
    
    
    7.50
    
    
    
    2.37Purchase of printers
    
    
    79.89
    
    
    
    176.79
    
    
    
    118.88Azim Premji Foundation (entity
controlled by Directors of the Company):Revenues from sale of computer
equipment and services
    
    
    1.97
    
    
    
    6.71
    
    
    
    3.64Principal shareholder:Payment of lease rentals
    
    
    1.43
    
    
    
    1.13
    
    
    
    1.13
  140




---



##### Table of Contents



As of March 31,2005
    
    
    2006Wipro GE
    
    Rs.
    20.94
    
    
    Rs.
    51.70WeP Peripherals
    
    
    1.90
    
    
    
    4.19Azim Premji Foundation
    
    
    6.71
    
    
    
    0.04Rs.
    29.55
    
    
    Rs.
    55.93
  As of March 31,2005
    
    
    2006WeP Peripherals
    
    Rs.
    
    
    
    Rs.
    38.85Rs.
    
    
    
    Rs.
    38.85
 27.
    
    Sale of accounts receivables/employee advances
   28.
    
    Commitments and Contingencies
 Capital commitments
 Other commitments
  Guarantees
 Contingencies and lawsuits
 141




---



##### Table of Contents



29.
    
    Segment Information
          142




---



##### Table of Contents



Year ended March 31, 2004India andGlobal IT Services and Products
    
    
    AsiaPac IT
    
    
    ConsumerBPO
    
    
    
    
    
    
    Services and
    
    
    Care and
    
    
    
    
    
    
    ReconcilingIT Services
    
    
    Services
    
    
    Total
    
    
    Products
    
    
    Lighting
    
    
    Others
    
    
    Items
    
    
    Entity TotalRevenues
    
    Rs.
    39,162.27
    
    
    Rs.
    4,303.07
    
    
    Rs.
    43,465.34
    
    
    Rs.
    9,413.26
    
    
    Rs.
    3,567.44
    
    
    Rs.
    1,987.32
    
    
    Rs.
    
    
    
    Rs.
    58,433.36Exchange rate fluctuations
    
    
    249.45
    
    
    
    60.27
    
    
    
    309.72
    
    
    
    32.19
    
    
    
    0.05
    
    
    
    (2.40
    )
    
    
    (339.56
    )
    
    
    Total revenues
    
    
    39,411.72
    
    
    
    4,363.34
    
    
    
    43,775.06
    
    
    
    9,445.45
    
    
    
    3,567.49
    
    
    
    1,984.92
    
    
    
    (339.56
    )
    
    
    58,433.36Cost of revenues
    
    
    (25,047.34
    )
    
    
    (2,883.75
    )
    
    
    (27,931.09
    )
    
    
    (7,303.53
    )
    
    
    (2,354.82
    )
    
    
    (1,410.50
    )
    
    
    
    
    
    
    (38,999.94
    )Selling and marketing
expenses
    
    
    (3,418.08
    )
    
    
    (102.00
    )
    
    
    (3,520.08
    )
    
    
    (919.04
    )
    
    
    (595.78
    )
    
    
    (218.34
    )
    
    
    (25.15
    )
    
    
    (5,278.39
    )General and administrative
expenses
    
    
    (2,125.81
    )
    
    
    (366.91
    )
    
    
    (2,492.72
    )
    
    
    (492.52
    )
    
    
    (72.16
    )
    
    
    (48.05
    )
    
    
    (66.23
    )
    
    
    (3,171.68
    )Research and development
expenses
    
    
    (232.05
    )
    
    
    
    
    
    
    (232.05
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (232.05
    )Amortization of intangible
assets .
    
    
    (83.54
    )
    
    
    (216.00
    )
    
    
    (299.54
    )
    
    
    
    
    
    
    (8.69
    )
    
    
    
    
    
    
    
    
    
    
    (308.23
    )Exchange rate fluctuations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    377.56
    
    
    
    377.56Others, net
    
    
    0.17
    
    
    
    0.36
    
    
    
    0.53
    
    
    
    31.10
    
    
    
    10.28
    
    
    
    (0.30
    )
    
    
    39.04
    
    
    
    80.65Operating income of
segment (1)
    
    Rs.
    8,505.07
    
    
    Rs.
    795.04
    
    
    Rs.
    9,300.11
    
    
    Rs.
    761.46
    
    
    Rs.
    546.32
    
    
    Rs.
    307.73
    
    
    Rs.
    (14.34
    )
    
    Rs.
    10,901.28Total assets of segment (3)
    
    Rs.
    21,962.15
    
    
    Rs.
    6,647.85
    
    
    Rs.
    28,610.00
    
    
    Rs.
    5,257.11
    
    
    Rs.
    1,199.67
    
    
    Rs.
    1,643.83
    
    
    Rs.
    21,027.70
    
    
    Rs.
    57,738.31Capital employed (3)
    
    
    16,896.30
    
    
    
    6,287.57
    
    
    
    23,183.87
    
    
    
    2,113.27
    
    
    
    622.19
    
    
    
    1,195.78
    
    
    
    20,625.61
    
    
    
    47,740.72Return on capital
employed (2),(3)
    
    
    
    
    
    
    
    
    
    
    44
    %
    
    
    49
    %
    
    
    85
    %
    
    
    
    
    
    
    
    
    
    
    Accounts receivable
    
    
    6,997.09
    
    
    
    661.22
    
    
    
    7,658.31
    
    
    
    2,688.38
    
    
    
    227.38
    
    
    
    398.87
    
    
    
    
    
    
    
    10,972.94Cash and cash equivalents
and investments in liquid
and short-term mutual funds
    
    
    2,471.98
    
    
    
    126.94
    
    
    
    2,598.92
    
    
    
    168.24
    
    
    
    167.30
    
    
    
    502.94
    
    
    
    18,338.81
    
    
    
    21,776.21Depreciation
    
    
    1,307.11
    
    
    
    379.39
    
    
    
    1,686.50
    
    
    
    131.81
    
    
    
    67.36
    
    
    
    38.28
    
    
    
    47.90
    
    
    
    1,971.85
 Year ended March 31, 2005India andGlobal IT Services and Products
    
    
    AsiaPac IT
    
    
    ConsumerBPO
    
    
    
    
    
    
    Services and
    
    
    Care and
    
    
    
    
    
    
    ReconcilingIT Services
    
    
    Services
    
    
    Total
    
    
    Products
    
    
    Lighting
    
    
    Others
    
    
    Items
    
    
    Entity TotalRevenues
    
    Rs.
    54,236.07
    
    
    Rs.
    6,477.15
    
    
    Rs.
    60,713.22
    
    
    Rs.
    13,403.17
    
    
    Rs.
    4,555.38
    
    
    Rs.
    2,680.73
    
    
    Rs.
    
    
    
    Rs.
    81,352.50Exchange rate fluctuations
    
    
    20.01
    
    
    
    (44.12
    )
    
    
    (24.11
    )
    
    
    (8.62
    )
    
    
    (0.23
    )
    
    
    (6.74
    )
    
    
    39.70
    
    
    
    Total revenues
    
    
    54,256.08
    
    
    
    6,433.03
    
    
    
    60,689.11
    
    
    
    13,394.55
    
    
    
    4,555.15
    
    
    
    2,673.99
    
    
    
    39.70
    
    
    
    81,352.50Cost of revenues
    
    
    (33,780.07
    )
    
    
    (4,740.25
    )
    
    
    (38,520.32
    )
    
    
    (10,494.17
    )
    
    
    (2,926.22
    )
    
    
    (1,914.06
    )
    
    
    
    
    
    
    (53,854.77
    )Selling and marketing
expenses
    
    
    (3,121.70
    )
    
    
    (101.77
    )
    
    
    (3,223.47
    )
    
    
    (1,150.26
    )
    
    
    (876.68
    )
    
    
    (184.10
    )
    
    
    (31.75
    )
    
    
    (5,466.26
    )General and administrative
expenses
    
    
    (2,225.94
    )
    
    
    (513.16
    )
    
    
    (2,739.10
    )
    
    
    (787.66
    )
    
    
    (82.26
    )
    
    
    (126.93
    )
    
    
    (7.65
    )
    
    
    (3,743.60
    )Research and development
expenses
    
    
    (273.54
    )
    
    
    
    
    
    
    (273.54
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (273.54
    )Amortization of intangible
assets
    
    
    (52.00
    )
    
    
    (70.00
    )
    
    
    (122.00
    )
    
    
    
    
    
    
    (18.29
    )
    
    
    
    
    
    
    
    
    
    
    (140.29
    )Exchange rate fluctuations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (92.12
    )
    
    
    (92.12
    )Others, net
    
    
    14.56
    
    
    
    
    
    
    
    14.56
    
    
    
    7.21
    
    
    
    19.11
    
    
    
    17.54
    
    
    
    16.87
    
    
    
    75.29Operating income of
segment (1)
    
    Rs.
    14,817.39
    
    
    Rs.
    1,007.85
    
    
    Rs.
    15,825.24
    
    
    Rs.
    969.67
    
    
    Rs.
    670.81
    
    
    Rs.
    466.44
    
    
    Rs.
    (74.95
    )
    
    Rs.
    17,857.21Total assets of segment (3)
    
    Rs.
    29,297.05
    
    
    Rs.
    8,747.54
    
    
    Rs.
    38,044.59
    
    
    Rs.
    5,676.32
    
    
    Rs.
    1,670.62
    
    
    Rs.
    1,948.26
    
    
    Rs.
    24,735.32
    
    
    Rs.
    72,075.11Capital employed (3)
    
    
    21,289.71
    
    
    
    8,122.14
    
    
    
    29,411.85
    
    
    
    1,594.54
    
    
    
    936.44
    
    
    
    1,403.21
    
    
    
    24,479.91
    
    
    
    57,825.95Return on capital
employed (2),(3)
    
    
    78
    %
    
    
    14
    %
    
    
    60
    %
    
    
    52
    %
    
    
    86
    %Accounts receivable
    
    
    10,765.92
    
    
    
    977.11
    
    
    
    11,743.03
    
    
    
    2,292.42
    
    
    
    263.66
    
    
    
    507.25
    
    
    
    
    
    
    
    14,806.36Cash and cash equivalents
and investments in liquid
and short-term mutual funds
    
    
    3,877.87
    
    
    
    1,519.93
    
    
    
    5,397.80
    
    
    
    101.85
    
    
    
    142.63
    
    
    
    493.40
    
    
    
    22,492.67
    
    
    
    28,628.35Depreciation
    
    
    1,666.79
    
    
    
    515.74
    
    
    
    2,182.53
    
    
    
    93.32
    
    
    
    65.54
    
    
    
    47.90
    
    
    
    48.67
    
    
    
    2,437.96
 143




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##### Table of Contents



Year ended March 31, 2006Global IT Services and ProductsIT Services
    
    
    Acquisitions
    
    
    BPO Services
    
    
    TotalRevenues
    
    Rs.
    72,591.13
    
    
    Rs.
    470.20
    
    
    Rs.
    7,664.23
    
    
    Rs.
    80,725.56Exchange rate fluctuations
    
    
    (172.15
    )
    
    
    (1.88
    )
    
    
    (37.78
    )
    
    
    (211.81
    )Total revenues
    
    
    72,418.98
    
    
    
    468.32
    
    
    
    7,626.45
    
    
    
    80,513.75Cost of revenues
    
    
    (46,605.98
    )
    
    
    (380.15
    )
    
    
    (5,809.54
    )
    
    
    (52,795.67
    )Selling and marketing expenses
    
    
    (3,863.85
    )
    
    
    (28.92
    )
    
    
    (49.45
    )
    
    
    (3,942.22
    )General and administrative expenses
    
    
    (3,345.48
    )
    
    
    (47.01
    )
    
    
    (751.52
    )
    
    
    (4,144.01
    )Research and development expenses
    
    
    (202.26
    )
    
    
    
    
    
    
    
    
    
    
    (202.26
    )Amortization of intangible assets
    
    
    (8.00
    )
    
    
    (17.76
    )
    
    
    (4.94
    )
    
    
    (30.70
    )Exchange rate fluctuations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Others, net
    
    
    7.09
    
    
    
    3.47
    
    
    
    
    
    
    
    10.56Operating income of segment (1)
    
    Rs.
    18,400.50
    
    
    Rs.
    (2.05
    )
    
    Rs.
    1,011.00
    
    
    Rs.
    19,409.45Total assets of segment (3)
    
    Rs.
    40,062.66
    
    
    Rs.
    3,341.01
    
    
    Rs.
    11,426.57
    
    
    Rs.
    54,830.24Capital employed (3)
    
    
    27,777.90
    
    
    
    3,049.94
    
    
    
    10,337.07
    
    
    
    41,164.91Return on capital employed (2),(3)
    
    
    75
    %
    
    
    
    
    
    
    11
    %
    
    
    55
    %Accounts receivable
    
    
    14,674.20
    
    
    
    432.35
    
    
    
    849.12
    
    
    
    15,955.67Cash and cash equivalents and
investments in liquid and short-term
mutual funds
    
    
    5,000.57
    
    
    
    245.69
    
    
    
    4,097.57
    
    
    
    9,343.83Depreciation
    
    
    2,128.92
    
    
    
    59.41
    
    
    
    623.80
    
    
    
    2,812.13
 Year ended March 31, 2006India and AsiaPacIT Services and
    
    
    Consumer Care
    
    
    
    
    
    
    ReconcilingProducts
    
    
    and Lighting
    
    
    Others
    
    
    Items
    
    
    Entity TotalRevenues
    
    Rs.
    16,477.08
    
    
    Rs.
    5,625.04
    
    
    Rs.
    3,279.20
    
    
    Rs.
    
    
    
    Rs.
    106,106.88Exchange rate fluctuations
    
    
    (2.34
    )
    
    
    0.20
    
    
    
    5.38
    
    
    
    208.57
    
    
    
    Total revenues
    
    
    16,474.74
    
    
    
    5,625.24
    
    
    
    3,284.58
    
    
    
    208.57
    
    
    
    106,106.88Cost of revenues
    
    
    (12,834.70
    )
    
    
    (3,556.43
    )
    
    
    (2,459.93
    )
    
    
    
    
    
    
    (71,646.73
    )Selling and marketing
expenses
    
    
    (1,391.59
    )
    
    
    (1,160.42
    )
    
    
    (236.26
    )
    
    
    (33.86
    )
    
    
    (6,764.35
    )General and administrative
expenses
    
    
    (841.24
    )
    
    
    (102.22
    )
    
    
    (112.02
    )
    
    
    (39.48
    )
    
    
    (5,238.97
    )Research and development
expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (202.26
    )Amortization of intangible
assets
    
    
    (12.00
    )
    
    
    (21.25
    )
    
    
    
    
    
    
    
    
    
    
    (63.95
    )Exchange rate fluctuations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (288.49
    )
    
    
    (288.49
    )Others, net
    
    
    9.27
    
    
    
    13.21
    
    
    
    11.11
    
    
    
    25.99
    
    
    
    70.14Operating income of
segment (1)
    
    Rs.
    1,404.48
    
    
    Rs.
    798.13
    
    
    Rs.
    487.48
    
    
    Rs.
    (127.27
    )
    
    Rs.
    21,972.27Total assets of segment (3)
    
    Rs.
    7,671.46
    
    
    Rs.
    2,344.75
    
    
    Rs.
    2,410.94
    
    
    Rs.
    33,136.39
    
    
    Rs.
    100,393.78Capital employed (3)
    
    
    2,473.26
    
    
    
    1,309.70
    
    
    
    1,790.09
    
    
    
    32,730.93
    
    
    
    79,468.89Return on capital
employed (2),(3)
    
    
    69
    %
    
    
    71
    %Accounts receivable
    
    
    3,350.62
    
    
    
    563.75
    
    
    
    723.07
    
    
    
    
    
    
    
    20,593.11Cash and cash equivalents
and investments in liquid
and short-term mutual funds
    
    
    240.81
    
    
    
    178.03
    
    
    
    367.89
    
    
    
    29,055.56
    
    
    
    39,186.12Depreciation
    
    
    117.05
    
    
    
    81.73
    
    
    
    58.87
    
    
    
    31.45
    
    
    
    3,101.23
 
 (1)

    
    Operating income of segments given below is after amortization of deferred stock
compensation cost arising from the grant of options :
 Segments
    
    2004
    
    2005
        
    2006IT Services
    
    Rs 44.87
    
    Rs    297.55
        
    Rs.
    539.71BPO Services
    
    
    
    

    
    
    12.62
    
    
    
    22.77India and AsiaPac IT Services and Products
    
    
    
    

    
    
    19.02
    
    
    
    39.64Consumer Care and Lighting
    
    
    
    

    
    
    5.84
    
    
    
    9.02Others
    
    
    
    

    
    
    4.49
    
    
    
    16.63Reconciling Items
    
    
    
    

    
    
    14.34
    
    
    
    35.10
 (2)

    
    Return on capital employed is computed based on the average of the capital
employed at the beginning and at the end of the year.
 144




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##### Table of Contents



(3)

    
    The total assets, capital employed and return on capital employed for the India
and AsiaPac IT Services and Products segment excludes the impact of certain
acquisition-related goodwill relating to the segment. This goodwill of Rs. 656.24
as of March 31, 2003, 2004 and 2005 has been reported as a component of reconciling
items.
   Year ended March 31,2004
    
    
    2005
    
    
    2006India
    
    Rs.
    14,782.65
    
    
    Rs.
    19,349.64
    
    
    Rs.
    21,803.91United States
    
    
    30,868.82
    
    
    
    41,811.59
    
    
    
    53,481.07Europe
    
    
    10,458.73
    
    
    
    16,602.35
    
    
    
    24,310.22Rest of the world
    
    
    2,323.16
    
    
    
    3,588.92
    
    
    
    6,511.68Rs.
    58,433.36
    
    
    Rs.
    81,352.50
    
    
    Rs.
    106,106.88
 30.
    
    Fair Value of Financial Instruments
  145




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##### Table of Contents



Item 19. Exhibits
 ExhibitNumber
    
    Description1.1
    
    Articles of Association of Wipro Limited, as amended (1)1.2
    
    Memorandum of Association of Wipro Limited, as amended (1)1.3
    
    Certificate of Incorporation of Wipro Limited, as amended (1)2.1
    
    Form of Deposit Agreement (including as an exhibit, the form of American Depositary Receipt) (1)2.2
    
    Wipros specimen certificate for equity shares (1)4.1
    
    1999 Employee Stock Option Plan (1)4.2
    
    2000 Employee Stock Option Plan (1)4.3
    
    Wipro Equity Reward Trust (1)4.4
    
    2000 ADS Option Plan (3)4.5
    
    Wipro Employee ADS Restricted Stock Unit Plan 2004 (4)4.6
    
    Wipro Employee Restricted Stock Unit Plan 2004 (5)4.7
    
    Form of Indemnification Agreement, as amended (3)4.8
    
    Form of Agreement for Appointment/Re-appointment of Executive Directors (5)4.9
    
    Sample Letter of appointment to Non Executive Directors (5)4.10
    
    Wipro Employee Restricted Stock Unit Plan 200511.1
    
    Code of Ethics for Principal and Finance Officers (2)12.1
    
    Certification of Chief Executive Officer under Section 302 of the Sarbanes Oxley Act12.2
    
    Certification of Chief Financial Officer under Section 302 of the Sarbanes Oxley Act13
    
    Certification of Chief Executive Officer and Chief Financial Officer under Section 906 of the
Sarbanes Oxley Act23.1
    
    Consent of Independent Registered Public Accounting Firm99.1
    
    Wipros Ombudsprocess (2)99.2
    
    Code of Business Conduct and Ethics (5)99.3
    
    Audit Committee Charter (5)99.4
    
    Board Governance and Compensation Committee Charter
 
 (1)
    
    Incorporated by reference to exhibits filed with the Registrants Registration Statement on
Form F-1 (File No. 333-46278) in the form declared effective September 26, 2000.(2)
    
    Incorporated by reference to Exhibits filed with the Registrants Annual Report on Form 20-F
filed on June 9, 2003.(3)
    
    Incorporated by reference to Exhibits filed with the Registrants Annual Report on Form 20-F
filed on May 17, 2004.(4)
    
    Incorporated by reference to Exhibits filed with the Registrants Registration Statement on
Form S-8 filed on February 28, 2005.(5)
    
    Incorporated by reference to Exhibits filed with the Registrants Annual Report on Form 20-F
filed on June 13, 2005. 146




---



##### Table of Contents



SIGNATURES
   Bangalore, India
    
    /s/ Azim H. Premji
    
    /s/ Suresh C. SenapatyDate: June 22, 2006
    
    Azim H. Premji,
    
    Suresh C. Senapaty,Chairman and Managing Director
    
    Executive Vice President, Finance
 147




---



##### Table of Contents



ExhibitNumber
    
    Description1.1
    
    Articles of Association of Wipro Limited, as amended (1)1.2
    
    Memorandum of Association of Wipro Limited, as amended (1)1.3
    
    Certificate of Incorporation of Wipro Limited, as amended (1)2.1
    
    Form of Deposit Agreement (including as an exhibit, the form of American Depositary Receipt) (1)2.2
    
    Wipros specimen certificate for equity shares (1)4.1
    
    1999 Employee Stock Option Plan (1)4.2
    
    2000 Employee Stock Option Plan (1)4.3
    
    Wipro Equity Reward Trust (1)4.4
    
    2000 ADS Option Plan (3)4.5
    
    Wipro Employee ADS Restricted Stock Unit Plan 2004 (4)4.6
    
    Wipro Employee Restricted Stock Unit Plan 2004 (5)4.7
    
    Form of Indemnification Agreement, as amended (3)4.8
    
    Form of Agreement for Appointment/Re-appointment of Executive Directors (5)4.9
    
    Sample Letter of appointment to Non Executive Directors (5)4.10
    
    Wipro Employee Restricted Stock Unit Plan 200511.1
    
    Code of Ethics for Principal and Finance Officers (2)12.1
    
    Certification of Chief Executive Officer under Section 302 of the Sarbanes Oxley Act12.2
    
    Certification of Chief Financial Officer under Section 302 of the Sarbanes Oxley Act13
    
    Certification of Chief Executive Officer and Chief Financial Officer under Section 906 of the Sarbanes Oxley Act23.1
    
    Consent of Independent Registered Public Accounting Firm99.1
    
    Wipros Ombudsprocess (2)99.2
    
    Code of Business Conduct and Ethics (5)99.3
    
    Audit Committee Charter (5)99.4
    
    Board Governance and Compensation Committee Charter
 
 (1)
    
    Incorporated by reference to exhibits filed with the Registrants Registration Statement on
Form F-1 (File No. 333-46278) in the form declared effective September 26, 2000.(2)
    
    Incorporated by reference to Exhibits filed with the Registrants Annual Report on Form 20-F
filed on June 9, 2003.(3)
    
    Incorporated by reference to Exhibits filed with the Registrants Annual Report on Form 20-F
filed on May 17, 2004.(4)
    
    Incorporated by reference to Exhibits filed with the Registrants Registration Statement on
Form S-8 filed on February 28, 2005.(5)
    
    Incorporated by reference to Exhibits filed with the Registrants Annual Report on Form 20-F
filed on June 13, 2005. 148