UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F

(Mark One)


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, ~~2007~~2009


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 1934

Commission File Number 001-16139

WIPRO LIMITED

(Exact name of Registrant as specified in its charter)

Not Applicable
(Translation of Registrant’s name into English)

Bangalore, Karnataka, India
(Jurisdiction of incorporation or organization)

Doddakannelli
Sarjapur Road
Bangalore, Karnataka 560035, India
+~~91-80-2844-0011~~91-80-2844-0055
(Address of principal executive offices)

Suresh C Senapaty, Chief Financial Officer and Director
Phone: +91 80 28440055; Fax: +91 80 28440104

(Name, telephone, email and/or facsimile number and address of contact person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:


Title of ~~Each Class~~each class American Depositary Shares, each represented by one Equity Share, par value Rs. 2 per share.		Name of ~~Each~~each exchange on which registered New York Stock Exchange ~~on Which Registered~~
~~None~~		~~Not applicable~~

Securities registered or to be registered pursuant to Section 12(g) of the Act:

~~American Depositary Shares,~~None
~~each represented by one Equity Share, par value Rs. 2 per share.~~

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

Not Applicable

(Title of Class)

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report: ~~1,458,999,650~~1,464,980,746Equity ~~Shares.~~Shares.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act

Yesþ Noo

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act, 1934

Yeso Noþ

Note – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yesþ Noo

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files) Yeso Noo

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a ~~non-accelerated filer.~~smaller reporting company. See ~~definition~~the definitions of “large accelerated filer,” “accelerated ~~filer~~filer” and ~~large accelerated filer”~~“smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

~~Large Accelerated Filer~~þ ~~Accelerated Filer~~o ~~Non – Accelerated Filer~~


Large accelerated filerþ		Accelerated filero		Non-accelerated filer o (Do not check if a smaller reporting company)		Smaller reporting companyo

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing


U.S. GAAP		þ		International Financial Reporting Standards as issued by the International Accounting Standards Board				Other

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

Item 17o Item 18þo

If this is an annual report, indicate by check mark whether the registrant is a shell company ~~(As~~(as defined in Rule 12b-2 of the ~~Securities~~ Exchange ~~Act of 1934~~Act)

Yeso Noþ

Year ended March 31,
2003 2004 2005 2006 2007 2007
Convenience
translation into
US$
Basic
Income before cumulative effect of change in accounting principle 6.11 7.20 11.38 14.41 20.42 0.47
Cumulative effect of change in accounting principle — — — — 0.03 0.00
Net income 6.11 7.20 11.38 14.41 20.45 0.47

Diluted
Income before cumulative effect of change in accounting principle 6.10 7.20 11.29 14.24 20.17 0.47
Cumulative effect of change in accounting principle — — — — 0.03 0.00
Net income 6.10 7.20 11.29 14.24 20.20 0.47

Cash dividend per equity share 0.17 0.17 4.84 2.50 10 0.23
Additional data:
Revenue by segment
IT Services and Products Rs. 28,949 Rs. 39,412 Rs. 54,256 Rs. 72,888 Rs. 101,353 $ 2,351
BPO Services 1,644 4,363 6,433 7,626 9,389 218
Global IT Services and Products Rs. 30,593 Rs. 43,775 Rs. 60,689 Rs. 80,514 Rs. 110,742 $ 2,569
India and AsiaPac IT Services and Products 8,046 9,445 13,395 16,475 23,863 554
Consumer Care and Lighting 2,942 3,567 4,555 5,625 7,563 175
Others 1,268 1,646 2,714 3,493 7,263 169

Total Rs. 42,849 Rs. 58,433 Rs. 81,353 Rs. 106,107 Rs. 149,431 $ 3,467

Operating income by segment
IT Services and Products Rs. 8,034 Rs. 8,505 Rs. 14,817 Rs. 18,398 Rs. 24,399 $ 566
BPO Services 247 795 1,008 1,011 2,129 50
Global IT Services and Products Rs. 8,281 Rs. 9,300 Rs. 15,825 Rs. 19,409 Rs. 26,528 $ 616
India and AsiaPac IT Services and Products 539 761 970 1,405 2,039 47
Consumer Care and Lighting 422 546 671 798 1,069 25
Others 256 308 466 487 433 10
Reconciling items (12 ) (14 ) (75 ) (127 ) (201 ) (5 )

Total Rs. 9,486 Rs. 10,901 Rs. 17,857 Rs. 21,972 Rs. 29,868 $ 693

Consolidated Balance Sheet Data:

Cash and cash equivalents Rs. 6,283 Rs. 3,297 Rs. 5,671 Rs. 8,858 Rs. 12,412 $ 288
Restricted cash — — — — 7,238 168
Investments in liquid and short-term mutual funds 7,813 18,479 22,958 30,315 32,410 752
Working capital (2) 21,473 30,649 36,449 50,691 58,575 1,359
Total assets 42,781 57,738 72,075 102,827 146,102 3,390
Total debt 537 969 564 705 3,781 88
Total stockholders equity 35,431 46,364 56,729 78,764 101,468 2,354


	2005			2006			2007			2008			2009			2009
																Convenience
																translation into
																US$
Additional data:
Revenue by segment
IT Services	Rs.	65,398		Rs.	86,610		Rs.	117,640		Rs.	146,260		Rs.	191,193		$	3,758
IT Products		8,686			10,378			16,965			24,619			33,424			657
Consumer Care and Lighting		4,555			5,625			7,563			14,619			19,243			378
Others		2,674			3,285			7,066			12,055			8,958			176
Reconciling items		40			209			197			(125	)		1,746			34

Total	Rs.	81,353		Rs.	106,107		Rs.	149,431		Rs.	197,428		Rs.	254,564		$	5,004

Operating income by segment
IT Services	Rs.	16,363		Rs.	20,238		Rs.	27,927		Rs.	30,488		Rs.	38,810		$	763
IT Products		432			575			639			869			1,218			24
Consumer Care and Lighting		671			799			1,067			1,842			2,294			45
Others		466			487			384			878			(326	)		(6	)
Reconciling items		(75	)		(46	)		(111	)		(363	)		(606	)		(12	)

Total	Rs.	17,857		Rs.	22,053		Rs.	29,906		Rs.	33,714		Rs.	41,390		$	814


Consolidated Balance Sheet Data:
Cash and cash equivalents	Rs.	5,671		Rs.	8,858		Rs.	12,412		Rs.	39,270		Rs.	49,117		$	966
Restricted cash		—			—			7,238			—			—			—
Short-term Investments		22,958			30,315			32,410			14,808			16,180			318
Working capital⁽¹⁾		36,449			50,691			57,444			53,643			52,154			1,025
Total assets		72,075			102,827			146,084			224,502			291,087			5,722
Total debt (excluding capital lease obligation)		564			705			3,757			43,732			55,388			1,089
Total stockholders equity		56,729			78,764			101,468			129,354			150,182			2,952



Notes:

1.		Minority interest represents the share of minority in the profits of Wipro BPO Solutions Limited (formerly Wipro Spectramind Services Limited) and Wipro Healthcare IT Limited. The minority interest in Wipro Healthcare IT Limited 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.		Working capital equals current assets ~~less~~minus current liabilities.

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Exchange Rates

Fluctuations in the exchange rate between the Indian rupee and the U.S. dollar will affect the U.S. dollar equivalent of the Indian rupee price of our equity shares on the Indian stock exchanges and, as a result, will likely affect the market price of our American Depositary Shares, or ADSs, listed on the New York Stock Exchange, and vice versa. Such fluctuations will also affect the U.S. dollar conversion by our ~~depository~~depositary for the ADSs, Morgan Guaranty Trust Company of New York, or Depositary, of any cash dividends paid in Indian rupees on our equity shares represented by the ADSs.

The following table sets forth, for the fiscal years indicated, information concerning the ~~number~~amount of Indian rupees for which one U.S. dollar could be exchanged based on the ~~average of the noon buying rate in the City of New York on the last business day of each month during the period for cable transfers in Indian rupees as~~ certified ~~for customs purposes~~foreign exchange rates published by ~~the~~ Federal Reserve ~~Bank~~Board of New York. The column titled “Average” in the table below is the average of the ~~daily noon buying rate~~certified foreign exchange rates on the last business day of each month during the year.


Fiscal Year Ended March 31,	Period End		Average		High		Low		Period End		Average		High		Low
2009									Rs. 50.87		Rs. 46.32		Rs. 51.96		Rs. 39.73
2008										40.02		40.13		43.05		38.48
2007	Rs.	43.10	Rs.	45.06	Rs.	46.83	Rs.	42.78		43.10		45.06		46.83		42.78
2006		44.48		44.21		46.26		43.05		44.48		44.21		46.26		43.05
2005		43.62		44.87		46.45		43.27		43.62		44.87		46.45		43.27
2004		43.40		45.78		47.46		43.40
2003		47.53		48.36		49.07		47.53

RISK FACTORS

This Annual Report contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth in the following risk factors and elsewhere in this Annual Report. The following risk factors should be considered carefully in evaluating us and our business.

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.

Our revenue historically has fluctuated and may fluctuate in the future depending on a number of factors, including:

	•		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.

~~Approximately 53%~~A significant portion of our total operating expenses in our IT Services and IT Products business, particularly personnel and facilities, are fixed in advance of any particular quarter. As a result, unanticipated variations in the number and timing of our projects or employee utilization rates, in our IT Services business excluding BPO Services, Indian IT Services and Infocrossing, may cause significant variations in operating results in any particular quarter. (Utilization is the proportion of billed resources to total resources. Our total resources for the purpose of computing utilization include resources in administration and general support function excluding corporate activities)

Therefore, we believe that period-to-period comparisons of our results of operations are not necessarily meaningful and should not be relied upon as indications of future performance. Thus, it is possible that in the future some of our periodic results of operations may be below the expectations of public market analysts and investors, and the market price of our equity shares and ADSs could decline.

Our net income increased ~~44%~~by 7% in the year ended March 31, ~~2007,~~2009, as compared to the year ended March 31, ~~2006.~~2008. We continue to face increasing competition, pricing pressures for our products and services and ~~wage pressures~~reduced demand for ~~our work force in India primarily due to large U.S. multinational corporations establishing offshore operations in India.~~IT Services. We are ~~also~~ investing in developing capabilities in new technology areas and deepening our domain expertise. While we believe that ~~our global delivery~~we have a flexible business model ~~allows us to manage costs efficiently, as the proportion of our services delivered at client sites increases,~~which can mitigate this impact, we may not be able to ~~keep our operating costs as low in the future.~~sustain historical levels of profitability. In our Business Process Outsourcing, or BPO, business, we are diversifying our service offerings to ~~include process transformation services. High attrition levels and higher~~reduce the proportion of revenues from customer interaction services. Continued attrition levels in our customer interaction services could adversely impact our operating margins. As a result, there can be no assurance that we will be able to sustain our historic levels of profitability.

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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.

~~We have~~Until fiscal 2009, we had experienced significant growth in all our businesses. WeIn fiscal 2009, we experienced lower growth rates. However we expect our growth to continue to place significant demands on our management and other resources. This will require us to continue to develop and improve our operational, financial and other internal controls, both in India and elsewhere. In particular, our continued growth will increase the challenges involved in:

	•		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.

If we are unable to manage our growth effectively, the quality of our services and products may decline, and our ability to attract clients and skilled personnel may be negatively affected. These factors in turn could negatively affect the growth of our Global IT Services and Products business and harm the value of our shareholders’ investment.

Intense competition in the market for IT and ITES services could adversely affect our cost advantages, and, as a result, decrease our revenues.

The market for IT services is highly competitive. Our competitors include software companies, IT companies, systems consulting and integration firms, other technology companies and client in-house information services departments. We may also face competition from IT and ITES companies operating from China and the Philippines. Many of our competitors command significantly greater financial, technical and marketing resources and generate greater revenue than we do. We cannot be reasonably certain that we will be able to compete successfully against such competitors or that we will not lose our key employees or clients to such competitors. Additionally, we believe that our ability to compete also depends in part on factors outside our control, such as the availability of skilled resources, the price at which our competitors offer comparable services, and the extent of our competitors’ responsiveness to their clients’ needs.

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.

We have been expanding the nature and scope of our engagements and have added new service offerings, such as IT consulting, business process management, systems integration and outsourcing of entire portions of IT infrastructure. The success of these service offerings is dependent, in part, upon continued demand for such services by our existing and new clients and our ability to meet this demand in a cost-competitive and effective manner. In addition, our ability to effectively offer a wider breadth of end-to-end business solutions depends on our ability to attract existing or new clients to these service offerings. To obtain engagements for such end-to-end solutions, we also are more likely to compete with large, well-established international consulting firms, resulting in increased compensation and marketing costs. Accordingly, we cannot be certain that our new service offerings will effectively meet client needs or that we will be able to attract existing and new clients to these service offerings.

The increased breadth of our service offerings may result in larger and more complex projects with our clients. This will require us to establish closer relationships with our clients and a thorough understanding of their operations. Our ability to establish such relationships will depend on a number of factors, including the proficiency of our IT professionals and our management personnel. Our failure to understand our client requirements or our failure to deliver services which meet the requirements specified by our clients could result in termination of client contracts, and we could be liable to our clients for significant penalties or damages.

Larger projects may involve multiple engagements or stages, and there is a risk that a client may choose not to retain us for additional stages or may cancel or delay additional planned engagements. These terminations, cancellations or delays may result from the business or financial condition of our clients or the economy generally, as opposed to factors related to the quality of our services. Such cancellations or delays make it difficult to plan for project resource requirements, and inaccuracies in such resource planning may have a negative impact on our profitability.

89

Our success depends in large part upon the ability of 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.

We are highly dependent on the senior members of our management team, including the continued efforts of our Chairman and Managing Director. Our ability to execute project engagements and to obtain new clients depends in large part on our ability to attract, train, motivate and retain highly skilled professionals, especially project managers, software engineers and other senior technical personnel. If we cannot hire and retain additional qualified personnel, our ability to bid on and obtain new projects and to continue to expand our business will be impaired and our revenue could decline. We believe that there is significant competition for professionals with the skills necessary to perform the services we offer. We may not be able to hire and retain enough skilled and experienced employees to replace those who leave. Additionally, we may not be able to re-deploy and retain our employees to keep pace with continuing changes in technology, evolving standards and changing client preferences. We are experiencing high employee attrition rates, in line with the industry, in customer interaction service offering in our BPO services business. Continued employee attrition rates in this business may adversely affect our revenues and profitability.

The Central Government in India is considering introducing legislation mandating employers to give preferential hiring treatment to under-represented groups. State Governments in India may also introduce such legislation. The quality of our work force is critical to our business. The legislation may affect our ability to hire the most qualified and competent technology and other professionals.

Changes in government policies ~~also~~ affect our ability to hire, attract and retain personnel. For instance, the Finance ~~Bill,~~Act, 2007 ~~seeks to impose~~has imposed a fringe benefit tax (FBT) on companies in respect of specified securities or equity shares allotted or transferred, directly or indirectly, by the company free of cost or at a concessional rate to its ~~employees. The FBT could act as deterrent on~~employees reducing our ability to use stock option grants to attract, hire and retain qualified personnel.

~~Appreciation of Indian Rupee against major~~Currency exchange rate fluctuations in various currencies ~~of the world~~in which we do business, could negatively impact our revenue and operating results.

~~Approximately 73%~~Our IT Services business is approximately 75% of our revenues. Our revenues from this business are ~~earned~~derived in major currencies of the world while a significant portion of ~~our~~its costs are in Indian rupees. The exchange rate between the rupee and major currencies of the world has fluctuated significantly in recent years and may continue to fluctuate in the future. Appreciation of the rupee against the major currencies of the world can adversely affect our revenues and competitive positioning, and can adversely impact our gross margins. We derive 26% of our IT services revenue from Europe. Exchange rate fluctuations between Euro and Pound sterling against the U.S. dollars can effect our revenues and growth expressed in USD terms. We enter into forward exchange contracts to minimize the impact of currency fluctuations on our revenues. However, volatility in exchange rate movement and/or sustained rupee appreciation will negatively impact our revenue and operating results.

A significant portion of our debt is in various foreign currencies. We also undertake hedging strategies to mitigate exposure of exchange rate risk relating to foreign currency borrowing including entering into cross-currency interest rate swaps. As mentioned above, the exchange rate between the rupee and major currencies of the world has fluctuated significantly in recent years and will likely continue to fluctuate in the future. Volatility in exchange rate movement and/or rupee depreciation may negatively impact our operating results.

~~An economic slowdown, terrorist attacks~~Our revenues are highly dependent on clients primarily located in the United States and ~~other acts~~Europe, as well as on clients concentrated in certain industries, and economic slowdowns or factors that affect the economic health of ~~violence~~the United States, Europe or ~~war could delay or reduce~~these industries may affect our business.

We derive approximately 60% of our IT Services revenues from United States and 26% of our IT Services revenues from Europe. The recent crisis in the ~~number of new purchase orders we receive~~financial and ~~disrupt our operations~~credit markets in the United States, ~~thereby negatively affecting our financial results~~Europe and ~~prospects.~~

~~Approximately 66%~~Asia have contributed significantly to a global economic slowdown, with the economies of ~~our Global IT Services and Products revenue is from~~ the United States and Europe showing significant signs of weakness. Over the past few months there has been a significant reduction in consumer spending in the United States. ~~During~~

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

Further, ~~terrorist attacks in the United States could cause clients in the U.S. to delay their decisions on IT spending, which could affect our financial results. Any~~any significant decrease in the ~~IT industry,~~growth of the industries on which we focus, or a significant consolidation in ~~that~~any such industry, ~~or decrease in growth or consolidation in other industry segments on which we focus,~~ may reduce the demand for our services and negatively affect our revenues and profitability. ~~Although~~For instance we ~~continue to believe that we have a strong competitive position~~derive about 26% of our revenues in IT Services from clients in financial services sector. The recent crisis in the ~~United States, we have increased~~mortgage-backed securities markets has impacted companies in the financial services sector, which could result in reduction or postponement of their IT spending and thus may adversely affect our ~~efforts to geographically diversify our clients and revenue.~~business.

10

Our ~~Global~~ IT Services ~~and Products service~~ revenue depends to a large extent on a small number of clients, and our revenue could decline if we lose a major client.

We currently derive, and believe that we will continue to derive, a significant portion of our ~~Global~~ IT Services ~~and Products service~~ revenue from a limited number of corporate clients. The loss of a major client or a significant reduction in the service performed for a major client could result in a reduction of our revenue. Our largest client for the years ended March 31, ~~2005,~~2007, March 31, ~~2006~~2008 and March 31, ~~2007,~~2009, accounted for ~~4%, 3% and~~ 3% of our ~~Global~~ IT Services ~~and Products revenue, respectively.~~revenue. For the same periods, our ten largest clients accounted for ~~27%~~25%, ~~27%~~21% and ~~25%~~20 % of our ~~Global~~ IT Services ~~and Products~~ revenue. The volume of work we perform for specific clients may vary from year to year, particularly since we typically are not the ~~only~~sole outside service provider for our clients. Thus, aany major client inof one year may not provide the same level of revenue in a subsequent year.

9

the performance of our obligations to our clients also could result in liability for monetary damages, fines and/or criminal prosecution, unfavorable publicity, restrictions on our ability to process information and allegations by our clients that we have not performed our contractual obligations. Due to the varying degree of development of the legal systems of the countries in which we operate, local laws might be insufficient to protect our rights.

We have approximately 13,000 employees located outside India. We are subject to risks relating to compliance with a variety of national and local laws including multiple tax regimes, labour laws, employee health safety and wages and benefits. We may from time to time be subject to litigation or administrative actions resulting from claims against us by current or former employees individually or as part of class actions, including claims of wrongful terminations, discrimination, misclassification or other violation of labour law or other alleged conduct. Our failure to comply with applicable regulatory requirements could have a material adverse effect on our business, results of operations and financial condition.

Legislation in certain countries, in which we operate, including the United States may restrict companies in those countries from outsourcing work to us.

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

The recent credit crisis in the United States has also resulted in the United States federal government and governments in Europe acquiring or proposing to acquire equity positions in leading financial institutions and banks. If either the United States federal government or a government in Europe acquires equity positions in any of our clients, any resulting changes in management or reorganizations may result in deferrals or cancellations of projects or delays in purchase decisions, which may adversely affect our business, results of operations or financial condition.

Moreover, equity holdings by governmental entities in our clients may increase the ability of the respective governments to influence the decisions of these financial institutions to outsource or obtain services from outside of United States which may in turn affect our business with these entities.

In addition, from time to time there has been publicity about negative experiences associated with offshore outsourcing, such as theft and misappropriation of sensitive client data (including reports involving service providers in India). Our current or prospective clients may elect to perform certain services themselves or may be discouraged from transferring services from onshore to offshore providers to avoid negative perceptions that may be associated with using an offshore provider. Any slowdown or reversal of existing industry trends toward offshore outsourcing would seriously harm our ability to compete effectively with competitors that provide services from within the country in which our clients operate.

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.

Approximately ~~35%~~29% of our IT Services ~~and Products~~ business is derived from clients in high growth industries who use our IT services for networking and communications equipment. These industries have experienced periods of above normal growth and periods of contraction. Any significant decrease in the growth of these industries will decrease the demand for our services and could reduce our revenue.

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.

10

A significant element of our business strategy is to continue to leverage and expand our software development centers inat Bangalore, Chennai, Hyderabad and Pune in India, as well as overseas. We believe that the use of a strategically located network of software development centers will provide us with cost advantages, the ability to attract highly skilled personnel in various regions of the country and the world, the ability to service clients on a regional and global basis and the ability to provide services to our clients 24 hours a day, seven days a week. Part of our service model is to maintain active voice and data communications between our main offices in Bangalore, our clients’ offices, and our other software development and support facilities. Although we maintain redundancy facilities and satellite communications links, any significant loss in our ability to transmit voice and data through satellite and telephone communications could result in a disruption in business, thereby hindering our performance or our ability to complete client projects on time. This, in turn, could lead to a reduction of our revenue.

~~The markets in which we operate are subject to the risk of earthquakes, floods and other natural disasters.~~

Some of the regions that we operate in are prone to earthquakes, flooding and other natural disasters. In the event that any of our business centers are affected by any such disasters, we may sustain damage to our operations and properties, suffer significant financial losses and be unable to complete our client engagements in a timely manner, if at all. Further, we may also incur costs in redeploying personnel and property. In addition, if there is a major earthquake, flood or other natural disaster in any of the locations in which our significant customers are located, we face the risk that our customers may incur losses, or sustained business interruption and/or loss which may materially impair their ability to continue their purchase of products or services from us. A major earthquake, flood or other natural disaster in the markets in which we operate could have a material adverse effect on our business, financial condition, results of operations and cash flows.

We may be liable to our clients for damages caused by disclosure of confidential information or system failures.

We often have access to or are required to collect and store confidential client and customer data. Many of our client agreements do not limit our potential liability for breaches of confidentiality. If any person, including any of our employees, penetrates our network security or misappropriates sensitive data, we could be subject to significant liability from our clients or from our clients’ customers for breaching contractual confidentiality provisions or privacy laws. Unauthorized disclosure of sensitive or confidential client and customer data, whether through breach of our computer systems, systems failure or otherwise, could damage our reputation and cause us to lose clients.

Disclosure about our vendor status with World Bank could adversely affect our business and results of operations

On January 13, 2009, we filed on Form 6-K our press release clarifying our vendor status with the World Bank. The World Bank had determined Wipro to be ineligible to contest direct contracts from the World Bank for the period 2007 — 2011. Even though our revenue from the World Bank is insignificant and our inability to contract future business from the World Bank will not adversely affect our business and results of operations, the negative publicity resulting from this disclosure could cause existing and potential customers to alter their relationship with Wipro in a manner, which could adversely affect our business and results of operations.

We are investing substantial cash assets in new facilities and physical ~~infrastructure,~~infrastructures and our profitability could be reduced if our business does not grow proportionately.

AsWe have invested substantially on construction or expansion of new software development facilities and physical infrastructure during fiscal 2009 in anticipation of growth in our business. The total amount of investment made to purchase property, plant and equipment in fiscal 2009 was Rs. 16,592 million ($ 326 million). Additionally, as of March 31, ~~2007,~~2009, we had contractual commitments of approximately Rs. ~~3,432~~5,371 million ($ 80106 million) related to capital expenditures on construction or expansion of our software development facilities. We may encounter cost overruns or project delays in connection with new facilities. These expansions may increase our fixed costs. If we are unable to grow our business and revenues proportionately, our profitability will be reduced.

Our international operations subject us to risks inherent in doing business on an international level that could harm our operating results.

Currently, we have software development facilities in ~~eight~~several countries around the world. The majority of our software development facilities are located in India. We intend to establish new development facilities in Southeast Asia and Europe. We have not yet made substantial contractual commitments to establish any new facilities and we cannot assure you that we will not significantly alter ~~or reduce~~ our proposed expansion plans. Because of our limited experience with facilities outside of India, we are subject to additional risks related to our international expansion strategy, including risks related to complying with a wide variety of national and local laws, restrictions on the import and export of certain technologies and multiple and possibly overlapping tax structures. In addition, we may face competition in other countries from companies that may have more experience with operations in such countries or with

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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.

Our clients typically retain us on a non-exclusive, project-by-project basis. Most of our client contracts, including those that are on a fixed-price, fixed-timeframe basis, can be terminated with or without cause, ~~with between zero and~~in as few as ninety days’ notice and without termination-related penalties. Additionally, most of our contracts with clients are typically limited to discrete projects without any commitment to a specific volume of business or future work. Our business is dependent on the decisions and actions of our clients, and there are a number of factors relating to our clients that are outside our control that might result in the termination of a project or the loss of a client, including:

	•		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.

We have acquired and in the future may acquire or make investments in complementary businesses, technologies, services or products, or enter into strategic partnerships with parties who can provide access to those assets. For example, in ~~November 2006,~~January 2009, we acquired 100% of ~~the~~ equity of ~~Hydrauto Group AB (Hydrauto), a~~the Citi Technology Services Limited, an India based company engaged in ~~the production, marketing~~providing Technology Infrastructure Services (TIS), application development and ~~development of customized hydraulic cylinders solutions~~maintenance services for ~~mobile applications such as mobile cranes, excavator, dumpers~~cards, capital markets and trucks. Also in November 2006, we acquired 100% of the India, Middle East and SAARC operations of 3D Networks and Planet PSG. 3D Networks provides business communication solutions that include consulting, voice, data and converged solutions, and managed services.corporate banking. In the future, we may not identify suitable acquisition, investment or strategic partnership candidates, or if we do identify suitable candidates, we may not complete those transactions on terms commercially acceptable to ~~us or at all.~~us. We could have difficulty in assimilating the personnel, operations, technology and software of the acquired companies. In addition, the key personnel of an acquired company may decide not to work for us. If we make other types of acquisitions, we could have difficulty in integrating the acquired products, services or technologies into our operations. These difficulties could disrupt our ongoing business, distract our management and employees and increase our expenses. Changes in competition laws in India and abroad could also impact our acquisition plans.

~~Our revenues could be significantly affected if the governments, in geographies we operate in, restrict companies from outsourcing work to foreign corporations~~

In the United States, despite economic recovery, unemployment levels have not declined significantly from pre-economic recovery levels. There has been concern among the legislators about the impact of outsourcing on unemployment levels in the United States. Legislation has been proposed to prohibit federal and state governments from outsourcing IT and IT enabled services to foreign corporations. Legislators have also proposed to introduce economic deterrents for U.S. companies outsourcing work to foreign corporations.

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Compliance with new and changing corporate governance and public disclosure requirements adds uncertainty to our compliance policies and increases our costs of compliance.

Changing laws, regulations and standards relating to accounting, corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002, new SEC regulations, NYSE rules, Securities and Exchange Board of India rules and Indian stock market listing regulations, are creating uncertainty for companies like ours. These new or changed laws, regulations and standards may lack specificity and are subject to varying interpretations. Their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs of compliance as a result of ongoing revisions to such governance standards.

In particular, continuing compliance with Section 404 of the Sarbanes-Oxley Act of 2002 and the related regulations regarding our required assessment of our internal controls over financial reporting requires the commitment of significant financial and managerial resources. With respect to our Form 20-F for the year ended March 31, ~~2007,~~2009, our management has performed an assessment of the effectiveness of the internal control over financial reporting. We have determined that the internal controls are effective.

We are committed to maintaining high standards of corporate governance and public disclosure, and our efforts to comply with evolving laws, regulations and standards in this regard have resulted in, and are likely to continue to result in, increased general and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance activities. In addition, the new laws, regulations and standards regarding corporate governance may make it more difficult for us to obtain director and officer liability insurance.

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Our profitability could suffer if we are not able to maintain favorable utilization rates.

The cost of providing our services, including the utilization rate of our professionals, affects our profitability. If we are not able to maintain an appropriate utilization rate for our professionals, our profit margin and our profitability may suffer. Our utilization rates are affected by a number of factors, including:

	•		our ability to transition employees from completed projects to new assignments and to hire and assimilate new employees,

	•		our ability to forecast demand for our services and thereby maintain an appropriate headcount in each of our geographies and workforces,

	•		our ability to manage attrition; and

	•		our need to devote time and resources to training, professional development and other non-chargeable activities.

We are exposed to fluctuations in the market values of our investment portfolio.

Recent turmoil in the financial markets has adversely affected economic activity in the United States and other regions of the world in which we do business. Continued deterioration of the credit and capital markets could result in volatility of our investment earnings and impairments to our investment portfolio, which could negatively impact our financial condition and reported income.

Risks Related to Investments in Indian Companies and International Operations generally.

We are incorporated in India, and ~~substantially all~~a substantial portion of our assets and our employees are located in India. Consequently, our financial performance and the market price of our ADSs will be affected by political, social and economic developments affecting India, Government of India policies, including taxation and foreign investment policies, Government currency exchange control, as well as changes in exchange rates and interest rates.

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.

Our wage costs in India have historically been significantly lower than wage costs in the United States and Europe for comparably skilled professionals, and this has been one of our competitive advantages. However, wage increases in India may prevent us from sustaining this competitive advantage and may negatively affect our profit margins. We may need to increase the levels of our employee compensation more rapidly than in the past to retain talent. Unless we are able to continue to increase the efficiency and productivity of our employees, increase in proportion of employees with lower experience, or source talent from other low cost locations, like Eastern Europe, China or South-East ~~Asia,~~Asia; wage increases in the long term may reduce our profit margins.

We would realize lower tax benefits if the special tax holiday scheme for units set up in special economic zones is substantially ~~modified~~modified.

The Government of India introduced a separate tax holiday scheme for units set up in special economic zones. Under this scheme, units in designated special economic zones which began providing services on or after April 1, 2005 will be eligible for a deduction of 100 percent of profits or gains derived from the export of services for the first five years from commencement of provision of services and 50 percent of such profits or gains for a further five years.

Recently there have been demands by legislators and various political parties in India that the Government of India should actively regulate the development of special economic zones by private entities. There have been demands to impose strict conditions which need to be complied with before an economic zone developed by a private entity is designated as special economic zone. If such regulations or conditions are imposed it would adversely impact our ability to set up new units in such designated special economic zones and avail ourselves of tax benefits.

Our net income would decrease if the Government of India imposes additional taxes or withdraws or reduces tax benefits or other incentives

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Currently, we benefit from certain tax incentives under Indian tax laws. As a result of these incentives, our operations have not been subject to significant Indian tax liabilities. These tax incentives currently include a tax holiday from payment of Indian corporate income taxes for our Global IT Services and Products business operated from specially designated “Software Technology Parks” and “Special Economic Zones” in India and an income tax deduction of 100% for profits derived from exporting information technology services. As a result, a substantial portion of our pre-tax income has not been subject to significant tax in India in recent years.

The Finance ~~Bill,~~Act, 2000 phases out the 10-year tax holiday available to Companies that export software from specially designated software technology parks in India, or STPs, such that it is available only until the earlier of fiscal year 2009 or 10 years after the commencement of a Company’s undertaking. On May 10, 2008, the Finance Minister of India announced that the Government of India has extended the availability of the 10-year tax holiday by a period of one year such that the tax holiday will be available until the earlier of fiscal year 2010 or 10 years after the commencement of a Company’s undertaking.

The Finance Act, 2007 has ~~proposed to include~~included income eligible for deductions under sections 10A and 10B of the Indian Income Tax Act (sections that provide tax holiday benefits) in the computation of book profits for the levy of a Minimum Alternative Tax, or MAT. The rate of MAT, effective April 1, 2007, would be 11.33% (including a surcharge and education cess) on our book profits determined after including income eligible for deductions under Sections 10A and 10B of the Indian Income Tax Act. The Income Tax Act provides that the MAT paid ~~by us~~over normal tax payable that could be carried forward can be adjusted against our tax liability over the next ~~five~~seven years. Although MAT paid by us can be set off against our future income tax liability, our cash flows could be adversely affected.

In the event that the Government of India or the government of another country changes its tax policies in a manner that is adverse to us, our tax expense may materially increase, reducing our profitability.

In the recent years, the Government of India has introduced tax on various services provided within India including the maintenance and repair of software. The Government of India has in the Finance Act, 2008, included services provided in relation to information technology software under the ambit of service tax, if it is in the course or furtherance of the business. Under this tax, service providers are required to pay a tax of 10% (excluding applicable education cess) on the value of services provided to customers. The Government of India may expand the services covered under the ambit of this tax to include various services provided by us. This tax, if expanded, could increase our expenses, and could adversely affect our operating margins and revenues. Although currently there is no material pending or threatened claims against us for service taxes, such claims may be asserted against us in the future. Defending these claims would be expensive and divert our attention and resources from operating our company.

We are subject to a 15% Branch Profit Tax, or BPT, in the United States to the extent that the after-tax net profits of our United States branch during a fiscal year exceeds the increase in the United States branch net assets, the net profits and net assets being calculated in accordance with the Internal Revenue Code. Based on the net profits of our United States branch for fiscal 2009 and the net assets held as of March 31, 2009 and March 31, 2008, we are not currently subject to BPT. In the event that BPT is triggered, then such after-tax net profits not represented by an increase in net assets would be treated as a deemed distribution of accumulated profits and we would be liable to pay additional taxes on all such deemed distributions, thereby increasing our income tax expenses and affecting our profits negatively.

We operate in jurisdictions that impose transfer pricing and other tax-related regulations on us, and any failure to comply could materially and adversely affect our profitability.

We are required to comply with various transfer pricing regulations in India and other countries. Failure to comply with such regulations may impact our effective tax rates and consequently affect our net margins. Additionally, we operate in several countries and our failure to comply with the local tax regime may result in additional taxes, penalties and enforcement actions from such authorities. In the event that we do not properly comply with transfer pricing and tax-related regulations, our profitability may be adversely affected.

Terrorist attacks or a war could adversely affect our business, results of operations and financial condition.

Terrorist attacks, such as the attacks of September 11, 2001 in the United States, the attacks of July 7, 2005 in London, the attacks of June 30, 2007 in Glasgow, the attacks in November 2008 in Mumbai and other acts of violence or war, such as the continuing conflict in Iraq and Afghanistan, have the potential to have a direct impact on our clients. To the extent that such attacks affect or involve the United States or Europe, our business may be significantly impacted, as the majority of our revenues are derived from clients located in the United States and Europe. In addition, such attacks may make travel more difficult, may make it more difficult to obtain work visas for many of our technology professionals who are required to work in the United States or Europe, and may effectively curtail our ability to deliver our services to our clients. Such obstacles to business may increase our expenses and negatively affect the results of our operations. Furthermore, any attacks in India could cause a disruption in the delivery of our services to our clients, and could have a negative impact on our business, personnel, assets and results of operations, and could cause our clients or potential clients to choose other vendors for the services we provide. Terrorist threats, attacks or war could also delay, postpone or cancel our clients’ decisions to use our services.

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The markets in which we operate are subject to the risk of earthquakes, floods and other natural disasters.

Some of the regions that we operate in are prone to earthquakes, flooding and other natural disasters. In the event that any of our business centers are affected by any such disasters, we may sustain damage to our operations and properties, suffer significant financial losses and be unable to complete our client engagements in a timely manner, if at all. Further, in the event of a natural disaster, we may also incur costs in redeploying personnel and property. In addition if there is a major earthquake, flood or other natural disaster in any of the locations in which our significant customers are located, we face the risk that our customers may incur losses, or sustained business interruption and/or loss which may materially impair their ability to continue their purchase of products or services from us. A major earthquake, flood or other natural disaster in the markets in which we operate could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Regional conflicts in South Asia could adversely affect the Indian economy, disrupt our operations and cause our business to suffer.

South Asia has from time to time experienced instances of civil unrest and hostilities among neighboring countries, including between India and Pakistan. In recent years there have been military confrontations between India and Pakistan that have occurred in the region of Kashmir and along the India-Pakistan border. The potential for hostilities between the two countries are high due to terrorist incidents in India and the aggravated geopolitical situation

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The Ministry of Finance of the Government of India and/or the Reserve Bank of India must approve our acquisition of any company organized outside of India or grant general or special permission for such acquisition. The ~~regulatory authority has recently issued a policy statement permitting the acquisition~~Reserve Bank of India permits acquisitions of companies organized outside of India ~~for a transaction value not exceeding 300% of~~by an Indian party without approval in the ~~net worth of the acquiring company and:~~following circumstances:

	•		if the transaction consideration is paid in cash, ~~with proceeds of ADS,~~ up to ~~100%~~400% of the networth of the acquiring Company;

	•		Acquisition is funded with cash from the acquiring company’s existing foreign currency accounts or with cash proceeds from ~~an ADS offering; and~~the issue of ADRs/GDRs; or

	•		if the transaction consideration is paid in stock (i.e., by issue of ADRs/GDRs), up to ten times the acquiring company’s previous fiscal year’s export earnings.

We cannot assure you that any required approval from the Reserve Bank of India and or the Ministry of Finance or any other Government agency can be obtained. Our failure to obtain ~~approval~~such approvals from the Government of India for acquisitions of companies organized outside India may restrict our international growth, which could negatively affect our revenue.

It may be difficult for you to enforce any judgment obtained in the United States against us, the selling shareholders or our affiliates.

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Although we believe that our intellectual property rights do not infringe on the intellectual property rights of any other party, infringement claims may be asserted against us in the future. If we become liable to third parties for infringing their intellectual property rights, we could be required to pay a substantial damage award and be forced to develop non-infringing technology, obtain a license or cease selling the applications or products that contain the infringing technology. We may be unable to develop non-infringing technology or to obtain a license on commercially reasonable terms, or at all.

Risks Related to the ADSs

Sales of our equity shares may adversely affect the prices of our equity shares and the ADSs.

Sales of substantial amounts of our equity shares, including sales by insiders, in the public market, or the perception that such sales may occur, could adversely affect the prevailing market price of our equity shares or our ADSs or our ability to raise capital through an offering of our securities. In the future, we may also sponsor the sale of shares currently held by some of our shareholders, or issue new shares. We can make no prediction as to the timing of any such sales or the effect, if any, that future sales of our equity shares, or the availability of our equity shares for future sale, will have on the market price of our equity shares or ADSs prevailing from time to time.

An active or liquid trading market for our ADSs is not assured.

An active, liquid trading market for our ADSs may not be maintained in the long term. Loss of liquidity could increase the price volatility of our ADSs.

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instructions to the Depositary in a timely manner. Securities for which no voting instructions have been received will not be voted. There may be other communications, notices or offerings that we only make to holders of our equity shares, which will not be forwarded to holders of ADSs. Accordingly, you may not be able to participate in all offerings, transactions or votes that are made available to holders of our equity shares.

Item 4. Information on the Company

History and Development of the Company

Wipro Limited was incorporated in 1945 as Western India Vegetable Products Limited under the Indian Companies Act, VII of 1913, which is now superseded by the Companies Act, 1956. We are deemed to be registered under the Companies Act, 1956, or the Companies Act. We are registered with the Registrar of Companies, Karnataka, Bangalore, India as Company No. 20800. Our registered office is located at Doddakannelli, Sarjapur Road, Bangalore 560 035, and the telephone number of our registered office is +91-80-2844-0011. In October 2000, we raised gross aggregate proceeds of approximately $ 131 million in our initial U.S. public offering of our ADSs on the New York Stock Exchange. The name and address of our registered agent in the United States is CT Corporation, located at 1350 Treat Blvd., Suite 100, Walnut Creek, California 94596.

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	•		India based sourcing offers significant cost advantages in terms of accessing highly skilled talent at lower wage costs and productivity gains that can be derived from having a very competent employee base. According to NASSCOM’s Strategic Review 2007, the cost advantage achievable from outsourcing to India is unlikely to go away due to an absolute cost advantage vis-à-vis other key markets and the prospect of further reductions in infrastructure and overhead costs.

	•		India-based IT companies have proven their ability to deliver IT services that satisfy the requirements of international clients who expect the highest quality standards. According to NASSCOM’s Strategic Review Report ~~2007,~~2009, India based centers (both Indian firms as well as MNC owned captives) ~~constitute the largest number of~~have earned more quality certifications ~~achieved by~~than any ~~single country. As of December 2006,~~other country, over ~~440~~498 India based centers (both Indian ~~companies~~firms as well as MNC owned captives) had acquired quality certifications with 9085 companies certified at SEI CMM ~~level~~Level 5.

	•		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 ~~2007,~~2009, the Indian IT industry employed nearly ~~1,080,000~~2,230,000 software professionals as of ~~2006-07,~~2008-09, making it one of the largest employers in the IT services industry. According to the same report, India has the largest pool of suitable off-shore talent – accounting for over 28% of the suitable pool available across all offshore destinations.

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

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

The traditional model for most large companies has been to manage most functions internally. However, current global macroeconomic conditions and intense competitive pressures have forced companies to pursue new business models. Companies are focusing on their core activities and outsourcing critical but non-core activities to companies that specialize in such non-core functions. Outsourcing enables companies to reduce their operating costs, realize benefits of scale and flexible cost structures and achieve significant process improvements.

~~BPO Services~~

India is also a leading destination for ~~BPO~~IT enabled services. The proven track record and client relationships of established Indian IT services companies, favorable wage differentials, availability of a large, high quality, English speaking talent pool and a regulatory environment more friendly to investment are facilitating India’s emergence as a global outsourcing hub. According to ~~the March 2005 report published by IDC, titled “Worldwide and US Business Process Outsourcing (BPO) 2004-2008 forecast”,~~NASSCOM Strategic Review Report 2009, the worldwide ~~spending on~~ BPO ~~services~~market is expected to ~~grow from~~touch $ ~~448 billion in 2004 to approximately $ 682~~181 billion by ~~2008,~~2012, representing a compounded annual growth rate, or CAGR, of ~~11%~~11.9%.

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

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

IT Products

According to NASSCOM Strategic Review Report 2009, IDC forecasts that worldwide hardware spending will increase from $570 billion in 2007 ~~the worldwide spending on ITeS-BPO services is expected~~ to ~~grow at~~$683 billion in 2012, representing a compounded annual growth rate, or CAGR, of ~~around 10% for the period 2005-2009.~~

~~India and Asia Pac IT Services and Products~~3.68%

According to ~~IDC,~~NASSCOM Strategic Review Report 2009, the domestic IT market in India grew by 22.4% in 2006. The estimated year-on-year growth in 2007 is estimated to be 21.5% in 2007 making it the fastest growing market in the Asia-Pacific region. The domestic Indian IT industry is primarily composed of hardware ~~packaged software and IT services~~.

The domestic IT packaged software market is expected to grow at a CAGR of 20.9% during the period of 2006-2010. Application software will continue to account for the largest portion of the packaged software market. The hardware market is expected to grow at a CAGR of 17.5% during the same period. Within hardware market, the PC market has grown to 5.5 million units in 2006. Desktops constitute the largest component of the market, followed by laptops and servers, in unit and value terms. In unit terms, the PC market in India is estimated to ~~grow at a CAGR~~account for 49% of ~~19.9% over the next 5 years.~~

~~Domestic IT services Market in India has witnessed good growth in the last one year. According to IDC estimates,~~ the domestic IT ~~services market for~~industry, growing at about 3% in 2009. Personal computers (including desktops and notebooks) continue to be purchased at higher rates than other products in the ~~year 2006 is estimated at US$ 3.5 Billion. The market is estimated to grow at a CAGR~~hardware market. As prices come down, notebooks are increasingly being adopted as the computing device of ~~16.6% over~~choice. For the ~~next 5 years. According to~~desktop segment, consumers are showing an IDC study, the retail vertical is expected to witness the maximum growth, followed by utility and healthcare. The key verticals to date – BFSI, Manufacturing, telecom, government – are expected to maintain their positions as good IT spenders.increasing trend of moving away from locally assembled items towards branded products with relatively higher end configurations.

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

We expect to increase our market share organically in our identified geographies. In addition we continue to look at acquiring established brands which complement our brand presence and distribution strengths. In lighting, we operate in the domestic market for household lamps as well as the institutional market for luminaries and lamps. The market for lighting is led by Philips India (subsidiary of Philips NV). We have a strong brand presence in select regional geographies for domestic lighting, as well as an established institutional presence in offering lighting solutions to select segments including retail, pharma and software development centers. Our business to business (B2B) portfolio has been strengthened, to offer existing customers, office modular furniture and modular light switches.

Business Overview

We are a leading global IT services company. We also provide outsourced research and development, infrastructure outsourcing and business consulting services. We have been acknowledged among leading offshore providers of technology services by Gartner Inc, Forrester Research Inc and other leading research and advisory firms. ~~We are~~In April 2009, Forrester ranked Wipro as the ~~only Indian company to be ranked among the ‘Top 10~~leader in Global IT Infrastructure Outsourcing ~~Providers’ in the International Association~~services based on an evaluation of ~~Outsourcing Professionals — Fortune Global 100 listings. We are also a winner of NASSCOM’s Technology Innovation Award 2005.~~various criteria including client references.

We provide a comprehensive range of IT services, software solutions, IT consulting, business process outsourcing, or BPO, services and research and development services in the areas of hardware and software design to leading companies worldwide. We combine the business knowledge and industry expertise of our domain specialists and the technical knowledge and implementation skills of our delivery team in our development centers located in India and around the world, to develop and integrate solutions which enable our clients to leverage IT for achieving their business objectives. We use our quality processes and global talent pool for delivering time to development advantage, cost savings and productivity improvements.

Our objective is to be a world leader in providing a comprehensive range of IT services to our clients. The markets we address are undergoing rapid change due to the pace of developments in technology, changes in business models and changes in the sourcing strategies of clients. We believe that these trends provide us with significant growth opportunities.

Our overall business strategy

Aggressively build awareness of the Wipro brand name

We ~~plan~~continue to ~~continue~~ aggressively ~~building~~build awareness among clients and consumers both domestically and internationally of the Wipro brand name. We believe we can leverage the strength of an international brand name across all of our businesses by ensuring that our brand name is associated with Wipro’s position as a market leader that is committed to high quality standards. ToAnd to achieve this objective, we intend to expand our marketing efforts with advertising campaigns and promotional efforts that are targeted at specific groups.

Pursue selective acquisition of IT companies

An active acquisition program is an important element of our corporate strategy. In the last three fiscal years, we have made several acquisitions, including the acquisition of Infocrossing Inc and its subsidiaries (“Infocrossing”) and Unza Holding Limited (“Unza”). In January 2009, we acquired Citi Technology Services Limited, an India based provider of information technology services and solutions to CITI Group worldwide. We ~~continue to pursue selective acquisitions of IT service companies that will allow us~~believe our acquisition program supports our long-term strategic direction, strengthens our competitive position, particularly in acquiring new domain expertise, expands our customer base, increases our ability to expand our service ~~portfolio~~offerings and ~~acquire additional skills that are valued by~~provides greater scale to grow our ~~clients. We believe this will strengthen our relationships with clients~~earnings and ~~allow us to realize higher revenues from them.~~increase stockholder value. In pursuing acquisitions, we also focus on companies where we can leverage domain expertise and specific skill sets, and where a significant portion of the work can be moved offshore to India to leverage our low cost offshore delivery model and realize higher margins.

~~We have made the following acquisitions:~~

	•		~~mPower Software Services Inc. and subsidiaries (mPower) in December 2005~~

	•		~~BVPENTE Beteiligungsverwaltung GmbH and subsidiaries (New Logic) in December 2005~~

	•		~~cMango Inc. and subsidiaries (cMango) in April 2006~~

	•		~~RetailBox BV and subsidiaries (Enabler) in June 2006~~

	•		~~Saraware Oy (Saraware) in June 2006~~

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Innovate new service models

We have developed a new service model — PACE to facilitate performance optimization and improve efficiency of IT assets. We offer new service delivery models that minimize risks and improves efficiency of processes and productivity of IT infrastructure. We deliver these benefits through – process / application optimization and infrastructure consolidation.

Segment 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~~provide a range of ~~our~~IT and IT enabled services which 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.~~

Business lines with similar economic characteristics and which comply with segment aggregation criteria specified in U.S. GAAP have been combined to form our reportable segments. Consequently, IT Services and Products and BPO Services qualify as separate reportable segments.

The operations of mPower, New Logic, cMango, Enabler, Saraware and Quantech Global Service, which were acquired through 2005 and 2006 are part of 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 segment information.

Our ~~Global~~ IT Services ~~and Products~~ segment accounted for 79%, 74% and 75% of our total revenues for the years ended March 31, 2007, 2008 and ~~89%~~2009, respectively. Our IT Services segment accounted for 94%, 90% and 94% of our total operating income for the ~~year ended March 31, 2007. Of these percentages, our IT Services and Products segment accounted for 68% of our revenue and 82% of our operating income for the year~~years ended March 31, 2007, 2008 and ~~our BPO Services segment accounted for 6% of our revenue and 7% of our operating income for the year ended March 31, 2007.~~2009, respectively.

Our strategy

Significantly expand our IT Services ~~and Products~~ business ~~and our BPO Services Business~~

We expect to continue to grow ~~each of~~ our IT ~~Services and Products business and our BPO~~ Services business and the percentage of our total revenues and profits contributed by ~~these businesses~~this business over the next few years. We believe that we can achieve this objective through the following means:

	•		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;

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Increase the number of clients and penetration with such clients of our IT Services ~~and Products and our BPO Services~~business

We intend to increase the number of our clients through a dedicated sales team focused on new client acquisition and increasing our presence in Europe and Asia. Our goal is to make new client accounts generate at least $ 1 million in annual revenues within twelve months of opening each account. ~~We intend~~Through our MEGA and GAMA account initiative our dedicated key account management team focuses on growing identified customers to ~~increase our share~~over $ 100 million and $ 50 million of ~~business with existing clients by expanding our range~~annualized revenues, respectively. The number of ~~IT solutions and by increasing our knowledge~~customers from whom we derived annualized revenues in excess of ~~industry segments and individual client businesses~~$ 50 million increased to ~~allow us to better understand client needs and requirements. We intend to grow our BPO Services business by leveraging our existing client relationships to offer BPO Services to clients~~17 as of our IT Services and Products segment. We intend to expand our range of service offerings, migrate from providing solely rules-based processing activities to offering an entire set of enhanced processes, provide value-added services and partner with clients in business transformation initiatives.March 31, 2009.

Service offering

~~IT Services and Products~~

Our IT Services ~~and Products~~ business segment ~~which we call Wipro Technologies,~~ is a leader in providing IT services to ~~international companies.~~companies across the globe. We provide our clients customized IT solutions to improve their business competitiveness. ~~Our IT services are focused on the following areas:~~

	•		~~enterprise IT services;~~

	•		~~technology infrastructure support services; and~~

	•		~~research and development services;~~

~~In our IT service offerings, we typically assume primary project management responsibility.~~ We offer these services globally through a team of over ~~50,350 professionals.~~61,190 professionals excluding associates in BPO Services, Indian IT Services and Infocrossing. This business segment accounted for 75% of our revenue and 94% of our operating income for the year ended March 31, 2009. Our service offerings include

Enterprise Solutions ~~Business~~Offerings

We provide a comprehensive range of enterprise solutions primarily to Fortune 1000 and Global 500 companies to meet their business needs. Our services ~~extend~~range from Enterprise Application Services (CRM, ERP, e-Procurement and SCM), to e-Business solutions. ~~We combine the business knowledge~~Our enterprise solutions have served clients from a range of industries including Energy and ~~industry expertise of our domain specialists~~Utilities, Retail, Financial Services, Technology, Media and ~~the technical knowledge~~Entertainment and ~~implementation skills of our delivery team to create customized solutions for delivering time to development advantage, cost savings and productivity enhancements.~~Healthcare. Our delivery capabilities are supplemented by a holistic quality approach that integrates quality processes like Six Sigma, SEI CMM Level 5 and CMM to eliminate ~~deficiencies~~defects in execution.

Our enterprise solutions ~~have served clients from a range of industries including Energy and Utilities, Finance, Telecom, and Media and Entertainment. Our enterprise solutions~~ division accounted for ~~63%~~65%, ~~63%~~67% and ~~65%~~71% of our IT ~~Services and Products~~services revenues for the fiscal years ended March 31, ~~2005, 2006,~~2007, 2008 and ~~2007,~~2009, respectively.

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Business technology services.We perform application management services through innovative factory model and unified security solutions for the complete lifecycle of audit, legal compliance, security management services and managed services for technology domain, business intelligence portals and content management. For example, we are engaged by a leading energy and utility company to configure, integrate ~~information in~~and monitor business critical database servers with an ~~organization~~existing SIM solution to comply with ~~key business processes to improve the efficiency~~Sarbanes Oxley (SOX) requirements, enable auditing / logging functions monitor security events, and ~~effectiveness of our clients. Through strategic alliances with other vendors, we assist our clients in implementing services in the areas of enterprise resource planning, supply chain management~~provide database security and ~~customer relationship management.~~operational reports.

Business intelligence and data warehousing.We develop strategies and implement solutions for our clients to manage multiple sources of data for use in their decision-making processes. For example, a large auto maker that was working on a Supply Chain Information Visibility project, wanted to streamline its inventory requirements, improve its supplier visualization for its long term requirements, all in order to avoid short supply or surplus inventory situations. We deployed an EAI tool known as e*Gate from See Beyond, that helped the client to send its part requirements, supplier schedule, details of advance shipment notices (ASNs), receipts, alarms and inventory status.

Package implementation.We use our expertise in package software to ~~architect,~~design, implement and maintain client specific solutions. For example, we partnered with a leading global manufacturer of digital cameras and consumer products in to help it roll out a standardized, automated and integrated SAP module to replace its existing manual accounting process. We carried out an extensive business process study across functional areas and engineered substantial process re-engineering to ensure optimal deployment of the ERP application.

Consulting.We leverage our domain expertise and knowledge base in specific areas to provide consulting services. For example, for a large semiconductor manufacturer, we ~~worked with one~~improved the global supply chain and related governance processes and rationalized information flow leading to significant reduction in lead times and improved customer loyalty.

For a Hi–Tech manufacturer, we standardized the business process for global logistics. This has significantly reduced the carton handling cost and reduced the number of ~~the largest foreign exchange~~track and ~~travel companies~~trace cases due to design the architecture of a global, online commercial foreign exchange system. The system was intended to facilitate end-to-end automatic foreign exchange transactions with minimal manual intervention and delays. The system also included customer relationship management functionality and provided value added services to members. We defined a multi-tiered, multi-layered architecture to meet these requirements. The architecture was comprised of disparate software technologies such as J2EE, XML, CORBA, VB and COM-Java/EJB bridging.improved shipment visibility.

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Multimedia.Our multimedia team works actively on multimedia product realization and provides re-usable Audio, Video and Speech codecs optimized on different platforms suitable for different application areas and end-to-end HW development of video codec solutions.

Telecommunications and service providers.We provide software application integration, network integration and maintenance services to telecommunications service providers, Internet service providers, application service providers and Internet data centers.

Semiconductor IP.We offer an industry leading portfolio of semiconductor Intellectual Property (IP) cores for complex wireless and wireline applications including Wireless LAN, Bluetooth, Ultra wideband, Wireless USB and Firewire. Our portfolio of IP cores also contains software, silicon proven Wireless LAN, multiband radio module and analog / mixed-signal / digital blocks such as AFEs, synthesizers, PLLs and LVDS driver / receiver.

Technology Infrastructure Support Services

Our service offerings include help desk management, systems management and migration, network management and messaging services. We are able to provide our IT Services and Products clients with high quality, 24-hour, seven-day-a-week support services by leveraging our expertise in managing IT infrastructures for our clients in India. Our offerings are powered by ~~the skills of~~ over ~~6,500~~7,300 technical specialists and ~~state-of-the-art~~one of the world’s first BS 15000 and ISO 20000 certified ~~infrastructure~~infrastructures for operations support. This is service line which serves customer across Enterprise Solution Offerings and Research and Development Services.

For example, ~~for~~we were engaged by a ~~leading global Electronic trading~~utility company in the U.K. to overhaul its legacy applications without impacting its day-to-day operations. We created resilient and ~~securities firm, we manage the IT infrastructure through a dedicated help desk. We have deployed sophisticated software to offer a~~scalable network structures, created single ~~point of contact~~interface for all ~~IT requirements — installation, configuration, troubleshooting~~network services and ~~procurement of IT assets. We have been able~~defined a clear technology roadmap for wide area acceleration, IP etc. This network transformation was carried out without any impact on the service levels to ~~significantly reduce the response~~end users and ~~resolution time and improve the user satisfaction score.~~led to a significant reduction in operational expenses.

We formed ~~this~~the Technology Infrastructure Support Services division at the end of 1998, and it accounted for 7%14%, ~~8%, 11%~~17% and 20% of our IT Services ~~and Products~~ revenues for the year ended March 31, ~~2005, March 31, 2006~~2007, 2008 and ~~March 31, 2007,~~2009, respectively. ~~We anticipate that this division of our Global IT Services business will continue to grow over the next few years.~~

~~Research and Development~~Business Process Outsourcing (BPO) Services

We provide product development services for both hardware and software systems that are implemented in computers and communications equipment. We acquired these skill sets from earlier research and development efforts inWipro BPO is one of India’s leading offshore BPO providers. Wipro BPO enables clients to improve the design of computer hardware products for the Indian market when the Government of India did not allow these products to be imported. We have leveraged our research and development skills to become an outsourcing resource for companies that seek highly skilled product development services for somequality of their ~~core technologies.~~processes, reduce costs and realize benefits of scale. Wipro BPO is uniquely positioned to service customer requirements by leveraging its quality and innovation, talented employees, self sustaining process framework and domain knowledge. We ~~are able to assume complete responsibility for all phases~~offer customized service offerings; that translate into flexible and cost effective services of the ~~development, beginning with~~highest quality for our customers. For a leading online mortgage lender, we transitioned the ~~requirements analysis~~loan approval process and re-engineered the process applying six sigma methodologies to reduce cycle time for processing and ensure the ~~transfer~~highest level of ~~technology~~accuracy. We segregated the entire processing into three phases to ensure smoother workflow, improved efficiency and ~~information to the client.~~minimal processing lead time.

Our ~~research and development services division accounted for 37%, 37% and 35% of our IT Services and Products revenue for the fiscal years ended March 31, 2005, 2006 and 2007. Our services~~service offerings include:

~~Hardware design and development.~~We design and develop various types of integrated electronic circuits, or ICs, including application specific integrated circuits, or ASICs and field programmable gate arrays, or FPGAs. We offer our services over a broad spectrum of technology areas, and are able to provide our clients complete subsystems or entire products.

	•		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;

	•		process improvement services that provide benefits of scale for repetitive processes like claims processing, mortgage processing and document management; and

	•		knowledge process outsourcing services which involve high-end knowledge work on intellectual property, equity and finance, analytics, market research and data management.

~~Software system design and development.~~We develop software applications, including computer operating system software applications commonly known as middleware, electronics communication protocols and software that helps computers manage networks and control peripheral devices such as printers and monitors. We focus on embedded software technologies that involve the design and development of software solutions that are embedded in the hardware of a particular device.

~~IT Professionals.~~We have approximately 14,000 IT professionals trained in a broad array of computing platforms and communication technologies. By focusing on selected markets and technologies we are able to leverage our expertise and create greater efficiencies as well as faster delivery times. Our research and development services are organized into three areas of focus, which are described below with illustrative examples ofFor BPO projects, we have ~~completed for~~a defined framework to manage the complete BPO process migration and transition. The process has been developed based on our ~~clients:~~experience over the past several years in migrating remote business processes to India. This defined framework is designed to ensure process integrity and minimize inherent migration risks. The framework includes a proprietary transition toolkit, which ensures that there is a documented methodology with formats, tools, guidelines and a repository of past experiences to aid the transition team during the transition phase.

~~Telecommunications~~In BPO Services, we primarily compete against the in-house business process outsourcing units of international companies, other Indian IT service providers, global competitors and ~~inter-networking.~~competitors from other offshore locations like the Philippines and Ireland. In many large outsourcing deals, BPO services are an integral part of the total services outsourced. Integrating BPO services into our portfolio of service offerings has provided us with a strong competitive advantage over other IT services providers. We ~~provide software and hardware design, development and implementation services~~had over 22,800 employees in ~~areas such~~our BPO Services as ~~fiber optics communication networks, wireless networks, data networks, voice switching networks and networking protocols. For example, one~~ of our clients, a European leader in telematics products, wanted to develop a fully integrated infotainment system featuring a global navigation system, GSM phone, audio, emergency services, internet access, voice activation and climate control. We designed a software application interface, using Object Oriented Design methodology, integrating multiple functionalities, comprised of human machine interface, functional modules (API layers), resource schedulers and graphics library.

~~Embedded systems and Internet access devices.~~The software solutions we provide are programmed into the hardware IC or ASIC to eliminate the need for running the software through an external source. The technology is particularly important to portable computers, hand held devices, consumer electronics, computer peripherals,March 31, 2009.

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~~automotive electronics and mobile phones, as well as other machines such as process-controlled equipment. For example, we helped one~~ Our BPO services business accounted for 8% of our ~~customers in Japan by providing mobile printing solution~~IT Services revenues for ~~business travelers. We created an extensive architecture, used device simulators for development~~the years ended March 31, 2007, 2008 and ~~testing~~2009, respectively. This is a service line which serves customer across Enterprise Solution Offerings and ~~managed the seamless migration of the solution to a real-time environment. The solution interfaces with laptops~~Research and ~~multiple other mobile devices to cater to needs of ‘anywhere printing’ solutions for an estimated 45 million business travelers across the globe every year.~~

~~Telecommunications and service providers.~~We provide software application integration, network integration and maintenance services to telecommunications service providers, Internet service providers, application service providers and Internet data centers.

~~Semiconductor IP.~~We offer an industry leading portfolio of Semiconductor Intellectual Property (IP) cores for complex wireless and wireline applications; these include Wireless LAN, Bluetooth, Ultra wideband, Wireless USB and Firewire. Our portfolio of IP cores also contains software, silicon proven Wireless LAN, multiband radio module and analog / mixed-signal / digital blocks such as AFEs, synthesizers, PLLs and LVDS driver / receiver.Development services.

Our Global Delivery Model

In our IT service offerings, we ~~typically~~ assume primary project management responsibility for all stages of implementation of a project. Typically, a project team consists of a small number of IT professionals based at the client’s location, who define the scope of the project, track changes to specifications and requirements during project implementation, assist in installing the software or system at the client’s site and ensure its continued operation. ~~The~~A large proportion of the development work on a project is performed at one of our dedicated offshore development centers, or ODCs, located in India. Our project management techniques, risk management processes and quality control measures enable us to complete projects on time, seamlessly and ~~seamlessly~~qualitatively across multiple ~~locations with a high level of quality.~~locations.

The Offshore Development Center.We ~~were one of~~are among the ~~first Indian~~few IT services companies ~~to implement~~in India which pioneered the offshore development model ~~as a method~~ for delivering high-quality services at a relatively low cost to our international clients. Our ODC is a virtual extension of the client’s working environment with a dedicated facility and dedicated hardware and software infrastructure that replicates the client’s facilities. ~~Certain clients have had ODCs with us over thirteen years.~~ This is further enhanced by a dedicated high-speed telecommunication link with the client’s onsite facilities and a secure working environment. In all our projects, we endeavor to increase the proportion of work performed at the ODCs in order to be able to take advantage of the various benefits associated with this approach, including higher gross margins and increased process control. Due to the level of investment required by our clients in an ODC and the quality of services we provide, the ODC model has provided us a high percentage of repeat business and a stable revenue stream.

The Nearshore Development Center.Based on specific client needs, we have established dedicated development centers in close proximity to our clients’ business locations, which we call nearshore development centers. These nearshore development centers have employees with specialized functional expertise and provide on-call support to our customers. We currently have nearshore development centers in Atlanta in USA, Monterry in Mexico, Cairo in Egypt, Curitiba in Brazil. Reading, in the U.K., Windsor and Ontario in Canada, Kiel in Germany, Tampere in Finland, Shanghai in China, Cebu in Philippines, Bucharest in Romania, Sydney in Australia and Yokohama in Japan. In addition to providing software development services, these centers, with their significant local talent, also provide a local customer interface.

Our Clients

We provide IT software solutions to clients from a broad array of industry sectors. Several of our clients purchase our services across several of our business divisions. We seek to expand the level of business with our existing clients by increasing the type and range of services we provide to them. The table below illustrates the size of our client project engagement size as measured by revenues.

Number of clients in
Year ended Year ended Year ended
March 31, March 31, March 31,
Per client revenue($) 2005 2006 2007
1-3 million 64 103 119

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	•		~~by the vertical market segment of the client’s business;~~

	•		by the geographic region in which ~~the~~our client is located; and

	•		by the specific practice specialization or skill set that ~~the~~our client requires.

We use an integrated team sales approach that allows our sales teams to pass a client over to an execution team once the sale is completed. Our sales personnel work together with the appropriate software professionals and technical managers in analyzing potential projects and selling our expertise to potential clients. ~~Global~~Through our MEGA and GAMA account initiatives our dedicated key account management team focuses on growing identified customers to over U.S. $ 100 million and U.S. $ 50 million of annualized revenues, respectively. Our IT Services ~~and Products~~ also gets support from our corporate marketing team to assist in brand building and other corporate level marketing efforts. Our sales and marketing team in IT Services excluding Indian IT Services and ~~Products~~Infocrossing has increased from ~~213~~425 to ~~340~~498 personnel from March 31, ~~2006~~2008 to March 31, ~~2007.~~2009. We intend to expand our global marketing efforts through increased presence in targeted geographical regions. In addition, we have a global programs team which is focussed on identifying and winning large outsourcing engagements across verticals.

Competition

The market for IT services is highly competitive and rapidly changing. Our competitors in this market include consulting firms, big four accounting firms, global IT services companies, such as Accenture, ~~EDS,~~ IBM Global Services and India based IT services companies such as Cognizant, Infosys ~~Satyam~~ and Tata Consultancy Services.

These competitors are located internationally as well as in India. We expect that ~~further~~ competition will further increase and will potentially include companies from other countries that have lower personnel costs than those currently in India. A significant part of our competitive advantage has historically been a wage cost advantage relative to companies in the United States and Europe. Because wage costs in India are presently increasing at a faster rate than those in the United States our ability to compete effectively will increasingly become dependent on our ability to provide high quality, on-time, complex deliverables that depend on increased expertise in certain technical areas. We also believe that our ability to compete will depend on a number of factors not within our control, including:

	•		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.

We believe we compete favorably with respect to each of these factors and believe our success has been driven by quality leadership, our ability to create client loyalty and our expertise in targeted select markets.

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New Alliances – partner with emerging technology providers to improve market address and develop new streams of revenue.

Products

Our range of IT Product comprises the following:

Wipro Manufactured Products. Our manufactured range of products comprises of desktops, notebooks, NetPower servers and super computers. To cater to a wider range of customer, under the personal computing category, we have launched a new series branded as “e.GO”. We now offer form, factors and functionalities that cater to the entire spectrum of users – individuals to high-end corporate users.

Enterprise Platform.Our products under this category comprise design and deployment services for RISC servers, Application servers, Databases, Unix OS, Server computing resource management software

Networking Solutions.Our products under this category comprise design, deployment and audit of enterprise wide area network (WAN), wireless LAN, unified communication systems

Software Products. Our products in this category comprise enterprise application, datawarehousing and business intelligence softwares from world’s leading software product companies.

Data Storage.Our products under this category comprise network storage, secondary and near line storage, backup and storage fabrics

Contact Centre Infrastructure.Our offerings include Switch Integration, Voice Response Solutions, Computer Telephony Interface (CTI), Customized Agent Desktop Application, Predictive Dialer, Customer Relationship Management, Multiple Host Integration, Voice Logger interface

Enterprise Information Security. Security products include single signon, firewalls

Emerging Technologies. Technology optimization in web and WAN acceleration, virtual computing in data centre, IP video solutions

Our Clients

The clients for our IT Products segment range from single users to large enterprises. We provide ~~products and services~~our offerings to ~~clients~~enterprises in ~~a variety of areas such as manufacturing, banking, financial services and insurance,~~the Government, defence, IT and ~~IT-enabled~~IT- enabled services, telecommunications, manufacturing, and ~~education. Our clients also include channel partners, who are value-added resellers of our services and products. As of March 31, 2007, we had close to 163 channel partners throughout India.~~banking sectors. We have a diverse range of clients, none of whom account for more than 5%10% of our ~~India and AsiaPac~~ IT ~~Services and~~ Products business segment revenues.

Sales and Marketing

We sell and market our manufactured products ~~and services to major corporate clients~~ through our direct sales force, national distributor network and ~~to smaller clients~~resellers. The direct and ~~retail clients~~indirect teams are distributed geographically. We resell the enterprise products through ~~an extensive network of channel partners. Sales~~our direct sales force.

Our direct sales teams are organized ~~based on vertical segments, geographies, client size or product or service segment. Compensation of~~in three ways:

	•		by customer segment – Mega, Enterprise and Mid-market;

	•		by geography — region in which our client is located; and

	•		by specific practice — specialization or skill set that our client requires.

We use an integrated team sales approach that allows our sales teams to pass a client over to an execution team once the sale is ~~comprised of salary and additional compensation linked to achievement of revenue or profit targets and collections that a particular sales team produces. Sales efforts are supplemented through a~~completed. Global Products gets support from our corporate ~~wide web based ordering system and a~~ marketing team ~~that assists~~to assist in brand building and other corporate level marketing ~~efforts. As of March 31, 2007, we had 500 sales and marketing staff.~~efforts for various market segments.

Competition

The IT products market ~~for our services~~is a dynamic and ~~products is~~ highly competitive market. In the marketplace, we compete with both international and ~~rapidly changing.~~local providers. Our local competition comes from HCL, TCS, CMC and Redington. The international competitors ~~include global players like~~are IBM, ~~Hewlett Packard, EDS,~~Esys, Ingram, Dell, HP, Lenovo, Acer, Sony, and Indian companies such as TCS, HCL Infosystems and Infosys. We anticipate that Lenovo, which has acquired the PC business of IBM, will be a significant player in Indian IT products market. Global players like IBM and Hewlett Packard and to some extent Sun Microsystems have been increasingly focusing on increasing their presence in the Indian markets. Some of these competitors have secured large IT services contracts in India. We anticipate this competition to continue to grow as the demand for these services increases and we also expect additional companies to enter the Indian market.Toshiba.

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We are witnessing higher pricing pressures due to:

	•		commoditization of manufactured products business; and

	•		higher focus on Indian markets by all leading IT companies

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

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 including modular switches and modular furniture for the Indian market. ~~This business~~Our Santoor brand is the third largest brand in India in the soap category. With the acquisition of Unza group, we are increasing our presence in personal care products sector in South-East Asia. Our Consumer Care and Lighting segment accounted for 5%, 7% and 8% of our total revenue for the years ended March 31, 2007, 2008 and 4%2009, respectively. Our Consumer Care and Lighting segment accounted for 3%, 5% and 5% of our operating income for the year ended March 31, ~~2007.~~2007, 2008 and 2009, respectively.

Our ~~consumer care~~Consumer Care and ~~lighting~~Lighting business segment focuses on niche profitable market ~~segments and has historically generated cash to support the growth of our other business~~ segments. We began with the hydrogenated oil business in ~~1946,~~1945, and have continued to expand our business, currently offering a mix of consumer products including hydrogenated cooking oil, soaps and toiletries, wellness products, light bulbs and fluorescent tubes, and lighting accessories.

Products

Personal care products.Our range of personal care products include deodorants and fragrances, hair care, bath and shower, skin care and other personal care products. We have about 48 brands including brands like Enchanteur, Safi, Eversoft and Romano.

Soaps and toiletries. Our product lines include soaps and toiletries, as well as baby products, using ethnic ingredients. Our umbrella brands include Santoor, Chandrika, ~~and~~ Wipro ~~Active. The~~Active, Wipro Baby Soft line of infant and child care products, which includes soap, talcum powder, oil, diapers and feeding bottles and the Wipro Sanjeevani line of wellness products.

Lighting. Our product line includes modular switches, incandescent light bulbs, compact fluorescent lamps and luminaries. We operate both in commercial and retail markets. We have also developed commercial lighting solutions for pharmaceutical production centers, retail stores, software development centers and other industries.

~~Hydrogenated cooking oils~~Office Modular Furniture. Our product line ~~consists of hydrogenated cooking oils, a cooking medium used~~modular furniture for office use like workstations, storage and chairs. We operate both in ~~homes,~~commercial and ~~bulk consumption points like bakeries and restaurants.~~retail markets. We sell ~~this product under~~ our ~~brand name Wipro Sunflower, which was launched~~products to software development centre, banks and financial institutions, insurance companies and manufacturing companies who are in the ~~1950s and has been a leading brand in western and southern India.~~process of setting up new facilities or expanding their current workspaces.

Sales and Marketing

We market and sell our personal care products through a host of distribution channels which include modern retail outlets, hypermarts, supermarts, traditional retailers, van operators and wholesalers. We sell and market our consumer care products primarily through our distribution network in India, which has access to ~~2.4~~3,500 distributors and 2.1 million retail outlets throughout the country. We sell significant portion of our lighting products to major industrial and commercial customers through our direct sales force, from 31 sales offices located throughout India. ~~We also~~

In our other geographies, led by Malaysia, Vietnam, Indonesia and Greater China, we have direct access to over ~~250,000~~60,000 retail outlets, ~~for our lighting products.~~with a significant presence in the fast growing modern trade.

WeIn India, we leverage our brand recognition by successfully incorporating the Wipro identity with our consumer brands. We intend to expand our marketing efforts with the aid of advertising campaigns and promotional efforts targeted to specific regions of India. We intend to introduce acquired personal care product brands to establish our presence in the markets for personal care products in India.

Competition

We face competition primarily from multinational companies like Unilever, Proctor and Gamble, Johnson & Johnson, Loreal in the personal care products market. Our competitors in the consumer care and lighting are located primarily in India, and include multinational and Indian companies such as Hindustan Unilever for soaps, toiletries and ~~General Electric and~~

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Philips for lighting. Certain competitors have recently focused on sales strategies ~~on increasing~~designed to increase sales volumes through lower prices. Sustained price pressures by competitors may require us to respond with similar or different pricing strategies. We cannot be reasonably certain that we will be able to compete successfully against such competitors or that continued competition may not adversely affect our gross and operating profits.

Raw Materials and Manufacturing

The primary raw materials for ~~many of~~ our soap and ~~hydrogenated oil~~personal care products are agricultural commodities, such as vegetable oils. We ~~normally~~ purchase these raw materials domestically and internationally through various ~~suppliers’~~supplier contracts. Prices of vegetable oils and other agricultural commodities tend to fluctuate due to seasonal, climatic and economic ~~factors, which generally also affect our competitors.~~factors.

Our lighting products are manufactured from glass and industrialized parts. We purchase these parts from various domestic and foreign distributors and manufacturers, pursuant to a combination of requirement and other supply contracts.

Our furniture products are manufactured from Wood in form of particle or medium density fiber boards, steel, aluminum, fabric, plastics and glass. We purchase these items from various domestic and foreign distributors and manufacturers, pursuant to a combination of requirement and other supply contracts.

We have ~~six~~13 manufacturing locations with 8 factories in India, 2 in Malaysia and 1 each in Vietnam, Indonesia and China, and deal with over 60 third party manufacturers to source our extensive product range.

Others

Our Others segment includes our infrastructure engineering business. We are the world’s second largest third-party manufacturer of hydraulic cylinders. The Others segment is centered on our mobile construction equipment business and our material handling business. We manufacture and sell cylinders and truck hydraulics, and we also distribute hydraulic steering equipment and pumps, motors and valves for international companies. We have a global footprint in terms of manufacturing facilities ~~located~~in Europe and India and sell to customers across ~~India.~~the globe. Our main competitors include, UT Limited (India), Dongyong, Sundaram Hydraulics and Dantal and overseas suppliers such as the Kayaba, Precision Hydraulics Company, Hyva (in tipping business).

While the current financial year has seen a decline in global sales volumes, we believe that the fundamentals of infrastructure engineering business remain intact. Our strategy is to gain share globally through:

	•		strengthening relationship with global original equipment manufacturers (OEMs) who are likely to seek stable suppliers like Wipro in the current economic environment; and

	•		diversification into newer segments organically and/or inorganically.

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

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

Our Others, including reconciling items segment accounted for 5%, 6% and 4% of our total revenues for the year ended March 31 2007, 2008 and 2009, respectively. Our Others, including reconciling items segment accounted for 1%, 2% and (2)% of our operating income for the year ended March 31 2007, 2008 and 2009, respectively.

Raw Materials and Manufacturing

The primary raw material for our hydraulic cylinder products are steel tubes, rods, casting and cylinder bottom. We purchase these raw materials domestically and internationally through various supplier contracts. Prices of most raw material vary due to various economic factors.

We have 8 manufacturing facilities across Asia and Europe with 3 facilities in India, 4 in Sweden and 1 in Finland. We also have sales office in china.

Investment in Affiliates

In 1990, we formed a joint venture with General Electric called Wipro GE Medical Systems Private Limited to learn new technologies and management processes from world class companies like General Electric and to enter new markets. General Electric currently holds 51% of the equity in the joint venture and we hold 49%. The joint venture partners have equal representation on the board of directors and the chairman of the joint venture is the chairman of Wipro

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Limited. The joint venture provides customers in the South Asian markets after-sales services for all GE Medical Systems products sold to them. Products offered in this market consist of GE Medical Systems products manufactured world wide and portable ultrasound equipment manufactured in India by this joint venture for the global markets. This venture also leverages our strength in software development to develop embedded software for medical equipment designed and developed by General Electric for their global product portfolio. The main competitors of Wipro GE Medical Systems Private Limited include Siemens and Philips.

Our Competitive Strengths

We believe that the following are our principal competitive strengths:

Comprehensive range of IT services

We provide a comprehensive and integrated suite of IT solutions, ranging from consulting to application development and maintenance and take end-to-end responsibility for project execution and delivery. We have ~~over 16 years~~more than two decades of experience in product engineering, software development, re-engineering and maintenance for our corporate customers and provide managed IT support services at the client’s site through our offshore development centers in India and several near shore development centers located in countries closer to our clients’ offices. We believe that this integrated approach positions us to take advantage of key growth areas in enterprise solutions, including IT services data warehousing, implementation of enterprise package application software such as enterprise resource planning, or ERP, supply chain management or SCM and customer relationship management or CRM. In many large outsourcing deals, BPO services are an integral part of the total services outsourced. Integrating BPO services into our portfolio of service offerings has provided us with a strong competitive advantage over other IT services providers.

World-class quality as measured by SEI-CMM and Six Sigma initiatives

One of the crucial factors in our success has been our commitment to pursue the highest quality standards in all aspects of our business. We were assessed at SEI-CMM Level 5, the highest level of quality certification, in January 1999, making us the first IT services provider in the world to achieve this standard. SEI-CMM is widely accepted in the software industry as a standard to measure the maturity and effectiveness of software processes. Our SEI-CMM Level 5 rating is supported by our Six Sigma initiative, which is an internationally recognized program focusing on defect reduction and cycle time reduction. Our Six Sigma program was launched in 1998. Six Sigma represents a quality standard of less than 3.4 defects per million opportunities in which a defect may arise. In our continuous quest ~~of doing~~to do more with less, we pioneered the application of LEAN thinking in software services and support transactions. We believe that LEAN is a proven manufacturing philosophy that has been sustained over several decades. The focus is on streamlining activities solely from the customer’s viewpoint, eliminating waste, and a collaborative way of ~~working. We~~working and have found that this enhances productivity. We believe that our approach of continuous enrichment through effective experimentation has proven fruitful.

Service offerings in emerging growth areas

We focus on identifying emerging growth areas and developing service offerings in these areas. For example, we identified technology infrastructure outsourcing as an emerging growth area in 1998. We developed service offerings in this area and familiarized customers with the concept of remote network management. Today this comprises ~~11%~~20% of our revenues from IT ~~Services and Products.~~Services. We have recently been ranked by Forrester as the leader in providing IT infrastructure outsourcing services. We have established centers of excellence in emerging growth areas. These centers focus on understanding technology and developing customized business solutions for our customers.

33

Broad range of research and development services

~~Our~~Due to our strengths in research and development services ~~position us~~we are well positioned to ~~take advantage of a~~benefit from the recovery in global research and development spending. We are one of a few major IT services companies in the world capable of providing an entire range of research and development services from concept to product realization. According to NASSCOM’s Strategic Review Report ~~2005,~~2009, Indian Research and Development and Engineering services ~~and software products exports are expected~~comprising embedded systems/solution as well as other product engineering development services is estimated to ~~grow from~~reach U.S. $ ~~2.3~~4.9 billion in ~~2004 to grow to $ 8 billion by 2008, a CAGR of 37%. This is higher than the 28% CAGR projected for IT / ITeS Services by NASSCOM~~revenues in ~~the same strategic review report.~~2009. The recurring nature of revenues from research and development services helps in mitigating the cyclic nature of IT services. We provide IT services for designing, enhancing and maintaining platform technologies including servers and operating systems, communication subsystems, local area and wide area network protocols, optical networking systems, Internet protocol based switches, routers and embedded software, including software used in mobile phones, home or office appliances, industrial automation and automobiles. We acquired these skill sets through our earlier research and development efforts in the design of computer hardware products for the Indian market when the Government of India did not allow these products to be imported.

Global delivery model

One of our strengths is our global delivery model, which includes our offshore development centers, or ODCs, and our ~~near shore~~nearshore development centers. We were among the first India-based IT services companies to implement the

32

Robust systems and processes to support growth in business

We have proactively invested in systems, processes and infrastructure to support growth in our business. We have developed systems and processes to ensure that we have adequate infrastructure, robust recruitment systems and processes to maintain our culture of ethical behavior, openness and transparency. We calibrate our recruitment strategies based on the demand outlook. This has resulted in industry leading resource utilization levels. Our employee base in our IT Services segment excluding BPO Services, Indian IT Services and ~~Products segment~~Infocrossing, grew from approximately 9,900 employees as of March 31, 2001 to approximately ~~50,350~~61,190 employees as of March 31, ~~2007 and our employee base in BPO Services stands at approximately 17,450 employees as of March 31, 2007.~~2009. During the same period, our revenues from our IT Services ~~and Products~~ segment have grown from Rs. 17,816 million to Rs. ~~101,353~~191,193 million. ~~Our revenues from BPO Services have grown from Rs. 1,644 million for the year ending March 31, 2003 to Rs. 9,389 million for the year ending March 31, 2007.~~

Broad distribution network and strong sales force in India

We have a large and growing distribution network for our domestic businesses. For our Indian IT Services and Products business segment, our direct sales force targets large corporate clients and over 190 channel partners throughout India, and focuses on medium and small enterprises. For our ~~consumer care~~Consumer Care and ~~lighting~~Lighting products segment, we have access to more than ~~2.4~~2.1 million retail ~~outlets.~~outlets in India. This distribution reach provides us with a significant competitive advantage and allows us to grow our business with minimal increases in personnel.

33

selling the applications that contain the infringing technology. The loss of some of our existing licenses could delay the introduction of software enhancements, interactive tools and other new products and services until equivalent technology could be licensed or developed. We may be unable to develop non-infringing technology or obtain a license on commercially reasonable terms, if at all.

As of March 31, ~~2007, Wipro Limited and its subsidiaries (Wipro)~~2009, we hold more than ~~450~~1100 registered trademarks including registered community trademarks in India, ~~including Wipro, Santoor~~Japan, U.S., Malaysia and ~~Wipro Babysoft. Wipro holds four~~the British Virgin Islands. We also have 18 registered ~~trademarks~~copy rights and 11 registered Designs. We have about 12 applications and 5 applications pending for registration of Designs and Copyrights respectively.

We have 115 registrations completed with respect to WIPRO and Flower logo trade marks in ~~Japan, five registered trademarks~~80 territories across the world (including Madrid protocol countries) and more than 200 trademark applications pending registration. These overseas registrations also include our applications in the ~~United States and five registered community trademarks. Wipro has~~EU (via the Community Trade Mark). We have also more than ~~400~~200 trademark applications pending in India, ~~two trade marks applications pending in the United States, one trademark application pending registration in~~Iran, Vietnam, Iraq, Malaysia, Singapore, Nepal, ~~twelve trademark applications in~~ Sri Lanka, ~~and four community trademark applications pending in Europe.~~

~~Wipro~~etc. We have ~~one registered patent for hydraulic tipping valve, two~~been granted 80 registered patents ~~in Germany for Electric compensation circuit~~(including patents granted to our subsidiaries) and ~~Monolithically integrated transformer and one registered~~have about 15 pending patent in France for Radar Detector and Radar detecting method for WLAN Systems according to 802.11 Standards. Wipro have three patent applications that are currently pending in India, twenty six patent applications that are currently pending in the US and sixteen of them in Germany.

~~Wipro have twenty three registered copyrights and five pending copyright registrations in India. Wipro also have ten designs registered in India.~~

applications. We cannot guarantee that we will obtain registration for trademarks including service marks, patent, design and copyright registration for any of our pending applications.

Effect of Government Regulation on our Business

Regulation of our business by the Indian Government affects our business in several ways. We benefit from certain tax incentives promulgated by the Government of India, including a ten-year tax holiday from Indian corporate income taxes for the operation of most of our Indian facilities and a partial taxable income deduction for profits derived from exported IT services under Indian tax laws and tax holiday for operations in notified economic ~~zones..~~zones. The tax holiday for our facilities located in STPs is due to expire in fiscal 2010. As a result of these incentives, our operations have been subject to relatively insignificant Indian tax liabilities. We have also benefited from the liberalization and deregulation of the Indian economy by the successive Indian Governments since 1991, including the current Indian Government. Further, there are restrictive parts of the Indian law that affect our business, including the fact that we are generally required to obtain approval under the Factories Act and the Shops and Establishment Act, from the Reserve Bank of India and/or the Ministry of Finance of the Government of India to acquire companies organized outside India, and we are generally required, subject to some exceptions, to obtain approval from relevant Government authorities in India in order to raise capital outside India. The conversion of our equity shares into ADSs is governed by guidelines issued by the Reserve Bank of India.

Finally, we are subject to several legislative provisions relating to the Prevention of Food Adulteration, Weights and Measures, Drugs and Cosmetics, Storage of Explosives, Environmental Protection, Pollution Control, Essential Commodities and operation of manufacturing facilities. Non-compliance with these provisions may lead to civil and criminal liability. We are and generally have been in compliance with these provisions.

Please see the section titled “Risk Factors” in Item 3, Key Information, as well as the section titled “Additional Information” in Item 10, for more information on the effects of Governmental regulation of our business.

35

Country of

Direct Subsidiaries

Step Subsidiaries

Incorporation

Beteiligungsverwaltung

GmbH^(A)

3D Networks FZ-LLC

Dubai

3D Networks (UK) Limited

U.K.

Wipro Cyprus Private Limited

Cyprus

Wipro Technologies S.A DE C. V

Mexico

Wipro BPO Philippines LTD Inc

Philippines

Wipro Holdings Hungary

Hungary

Korlátolt Felelõsségû

Társaság

Wipro Technologies Argentina

Argentina

SA

Wipro Information Technology

Egypt

Egypt SAE

Wipro Arabia Limited

Dubai

Wipro Poland Sp Zoo

Poland

Wipro Information Technology

Netherland

Netherlands BV

(formerly RetailBox BV)

Enabler Informatica SA^(A)

Portugal

Wipro Technologies Limited, Russia

Russia

Wipro Technologies Oy

Finland

(formerly Saraware Oy)

Wipro Infrastructure

Sweden

Engineering AB

Wipro Infrastructure Engineering Oy

Finland

Hydrauto Celka San ve Tic

Turkey

Wipro Technologies SRL

Romania

Wipro Singapore Pte Limited

Singapore

Unza Holdings Limited^(A)

Singapore

Wipro Technocentre (Singapore) Pte

Singapore

Limited

Wipro (Thailand) Co Limited

Thailand

Wipro Australia Pty Limited

Australia

Wipro Networks Pte Limited

Singapore

(formerly 3D Networks Pte Limited)

Planet PSG Pte Limited

Singapore

Planet PSG SDN BHD

Malaysia

Wipro Chengdu Limited

China

Wipro Chandrika Limited

India

WMNETSERV Limited

Cyprus

WMNETSERV (U.K.) Limited.

U.K.

WMNETSERV INC

U.S.

Wipro Technology Services Limited

India

All the above direct subsidiaries are 100% held by the Company except that we hold 66.67% of the equity securities of Wipro Arabia Limited and 90% of the equity securities of Wipro Chandrika Limited.

As of March 31, ~~2007.~~2009, we also held 49% of the equity securities of Wipro GE Medical Systems Private Limited that is accounted for as an equity method investment.

^(A)

Step Subsidiary details of Unza Holdings Limited, BVPENTE Beteiligungsverwaltung GmbH and Enabler Informatica SA are as follows :


			Country of
~~Direct~~Step Subsidiaries	Step ~~subsidiaries~~Subsidiaries		Incorporation
~~Wipro Infrastructure Engineering Ltd~~			~~India~~
~~Wipro Inc.~~			~~USA~~
	~~Enthink Inc.~~		~~USA~~
	~~mPower Software Services~~		~~India~~
	~~(India) Private Limited~~
	~~MPact Technologies Services~~		~~India~~
	~~Private Limited~~
	~~cMango Inc.~~		~~USA~~
		~~cMango India Private Limited~~	~~India~~
	~~Quantech Global Services LLC~~		~~USA~~
~~cMango~~Unza Company Pte Limited			Singapore
~~Wipro Japan KK~~			~~Japan~~
~~Wipro Shanghai Limited~~			~~China~~
~~Wipro Trademarks Holding Limited~~			~~India~~
	~~Cygnus Negri Investments~~		~~India~~
	~~Private Limited~~
~~Wipro Travel Services Limited~~			~~India~~
~~Wipro HealthCare IT Limited~~			~~India~~
~~Wipro Consumer Care Limited~~			~~India~~
~~Wipro Chandrika Limited~~			~~India~~
~~Wipro Holdings (Mauritius) Limited~~			~~Mauritius~~
	~~Wipro Holdings UK Limited~~		UK
		~~Wipro Technologies UK~~	UK
		~~Limited~~
		~~BVPENTE~~	~~Austria~~
		~~Beteiligungsverwaltung GmbH~~
		~~New Logic Technologies GmbH~~	~~Austria~~
		~~NewLogic Technologies SARL~~	~~France~~
		~~NewLogic Technologies S.A.~~	~~Switzerland~~
		~~3D Networks FZ-LLC~~	~~Dubai~~
		~~3D Networks (UK) Limited~~	UK
~~Wipro Cyprus Private Limited~~			~~Cyprus~~
	~~RetailBox BV~~		~~Netherlands~~
		~~Enabler Informatica SA~~	~~Portugal~~
		~~Enabler France SAS~~	~~France~~
		~~Enabler UK Ltd~~	UK
		~~Enabler Brasil Ltd~~	~~Brazil~~
		~~Enabler & Retail Consult~~ ~~GmbH~~	~~Germany~~
	~~Saraware Oy~~		~~Finland~~
	~~Hydrauto Group AB~~		~~Sweden~~
		~~Hydrauto Medium cylinders~~	~~Sweden~~
		~~Skelleftteas AB~~
		~~Hydrauto Engineering AB~~	~~Sweden~~
		~~Hydrauto Light Cylinders~~	~~Sweden~~
		~~Bispgarden AB~~
		~~Hydrauto Light Cylinders~~	~~Sweden~~
		~~Ostersund AB~~
		~~Hydrauto Big Cylinders~~	~~Sweden~~
		~~Ljungby AB~~
		~~Hydrauto Logistics AB~~	~~Sweden~~
		~~Hydrauto Oy Ab Pernion~~	~~Finland~~
		~~Hydrauto Celka Hidrolic San~~	~~Turkey~~
		~~ve Tic a.s~~
	~~Wipro Technologies SRL~~		~~Romania~~
~~Quantech Global Services Limited~~			~~India~~
~~Wipro Australia Pty Limited~~			~~Australia~~
~~3D Networks~~Unza Indochina Pte Limited			Singapore
~~Planet PSG Pte~~	Unza Vietnam Co., Limited		Vietnam
Unza Cathay Limited			~~Singapore~~Hong Kong
Unza China Limited			Hong Kong

3637


			Country of
~~Direct~~Step Subsidiaries	Step ~~subsidiaries~~Subsidiaries		Incorporation
	~~Planet PSG Pte Limited~~Dongguan Unza Consumer Products Limited.		~~Malaysia~~China
~~Spectramind Inc.~~PT Unza Vitalis			~~USA~~Indonesia
Unza Thailand Limited			Thailand
Unza Overseas Limited			British virgin islands
Unza Africa Limited			Nigeria
Unza Middle East Limited			British virgin islands
Unza International Limited			British virgin islands
Positive Equity Sdn Bhd			Malaysia
Unza Nusantara Sdn Bhd			Malaysia
	Unza Holdings Sdn Bhd		Malaysia
	Unza Malaysia Sdn Bhd		Malaysia
		UAA (M) Sdn Bhd	Malaysia
	Manufacturing Services Sdn Bhd		Malaysia
		Shubido Pacific Sdn Bhd^(a)	Malaysia
	Gervas Corporation Sdn Bhd		Malaysia
		Gervas (B) Sdn Bhd	Malaysia
	Formapac Sdn Bhd		Malaysia
BVPENTE Beteiligungsverwaltung GmbH			Austria
	New Logic Technologies GmbH		Austria
	New Logic Technologies SARL		France
Enabler Informatica SA
	Enabler France SAS		France
	Enabler UK Limited		U.K.
	Wipro do Brasil Technologia Ltda		Brazil
	Wipro Technologies Gmbh (formerly Enabler & Retail Consult GmbH		Germany

~~All the above direct subsidiaries are 100% held by the Company except that we hold 90% in Wipro Chandrika Limited.~~

~~As at March 31, 2007 we also held 49% in Wipro GE Medical Systems Private Limited and 80.1% in WM Net Serv Limited, both of which are accounted for as equity method investments.~~


a)		All the above subsidiaries are 100% held by the Company except Shubido Pacific Sdn Bhd in which the Company holds 62.55% of the equity securities.

Property, Plant and Equipment

Our headquarters and corporate offices are located at Doddakannelli, Sarjapur Road, Bangalore, India. The offices are approximately 300,000 square feet. We have ~~purchased~~ approximately 21.3 million square feet of land adjoining our corporate offices for future expansion plans.

In addition we have approximately 1140 million square feet of land and approximately 69.6 million square feet of owned software development facilities in India and approximately 1 million square feet of leased software development premises in India. We have ~~80,000~~approximately 1,100,000 square feet of leased software development facilities in 711 countries outside India. We have approximately 313,000 square feet of leased data center facilities at various locations in United States of America.

We have one sales and marketing office located in each of the following countries: Canada, France, Germany, Japan, Sweden, Italy, Switzerland, Finland, the Netherlands, the United Kingdom ~~China~~ and ~~Japan.~~China. In addition, we have eleven sales and marketing offices in the United States.

We operate ~~ten~~fifteen manufacturing sites, aggregating approximately ~~1.3~~1.4 million square feet and approximately 44.2 million square feet of land. We own ~~seven~~eight of these facilities, located in Amalner, Tumkur, Bangalore, Mysore, Hindupur, Mumbai, Chennai and Pondicherry, India. We have leased on a long-term basis ~~two~~three facilities located in Waluj, Haridwar and Baddi, India. We own approximately 946,090 square feet of production and warehousing facilities in Indonesia, Vietnam and Malaysia. We also own approximately 344,000 square feet of production facilities in Sweden.

38

Our software development and manufacturing facilities are equipped with a world class technology infrastructure that includes networked workstations, servers, data communication links, captive power generators and other plants and machinery.

We believe that our facilities are optimally utilized and that appropriate expansion plans are being planned and undertaken to meet our future growth.

37

Material Plans to Construct, Expand and Improve Facilities

As of March 31, ~~2007,~~2009, we have capital commitments of Rs. ~~3,432~~5,371 million ($ 80106 million) related to the construction or expansion of our software development facilities. We currently intend to finance our additional expansion plans entirely through our cash and cash equivalents and investments in liquid and short term mutual funds as of March 31, ~~2007.~~2009.

Legal Proceedings

In the ordinary course of business, we may from time to time become involved in certain legal proceedings. ~~Except as otherwise described herein, Wipro Limited, our directors, executive officers and subsidiaries~~As of the date of this Annual Report on Form 20-F, we are not ~~currently a~~ party to any pending legal proceedings whose resolution could have a material ~~legal proceedings.~~impact on our financial position. Please see the description of our tax proceedings, ~~before the Deputy Commissioner of Income, Tax, Bangalore, India,~~ under the section titled “Income Taxes” under Item 5 of this Annual Report.

Item 4A. Unresolved Staff Comments

None.

Item 5. Operating and Financial Review and Prospects

(in millions, except share data and where otherwise stated)

***

Management’s Discussion and Analysis of Financial Condition and Results of Operations

~~Readers are cautioned that~~As discussed elsewhere in this ~~discussion~~report, in addition to historical information, this Annual Report on Form 20-F contains certain forward-looking statements ~~that involve~~within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements are not historical facts but instead represent our beliefs regarding future events, many of which are, by their nature, inherently uncertain and outside our control. As a result, the forward-looking statements contained herein are subject to certain risks and ~~uncertainties. When used~~uncertainties that could cause actual results to differ materially from those reflected in ~~this~~the forward-looking statements, and reported results should not be viewed as an indication of future performance. For a discussion of some of the ~~words~~risks and important factors that could affect the firm’s future results and financial condition, please see the sections entitled “Risk Factors.”

The forward-looking statements contained herein are identified by the use of terms and phrases such as “anticipate”, “believe”, “could”, “estimate”, “expect”, “intend” ~~,”could”~~, “may”, “plan”, ~~“predict”~~“objectives”, ~~“should”~~“outlook”, ~~“would”~~“probably”, “project”, “will”, “seek”, “target” and ~~“expect”~~similar terms and ~~other similar expressions~~phrases. Such forward-looking statements include, but are not limited to, all of the statements set forth above under the heading “Forward-Looking Statements May Prove Inaccurate.”

We wish to ensure that all forward-looking statements are accompanied by meaningful cautionary statements, so as ~~they relate~~to ensure to the ~~company or our business are intended to identify such forward-looking statements. These forward–looking statements speak only as~~fullest extent possible the protections of the ~~date~~safe harbor established in the Private Securities Litigation Reform Act of ~~this report, and we undertake no obligation to publicly update or revise any~~1995. Accordingly, all forward-looking statements ~~whether as a result~~are qualified in their entirety by reference to, and are accompanied by, the discussion of ~~new information, future events, or otherwise. Actual~~certain important factors that could cause actual results ~~performances or achievements could~~to differ materially from those ~~expressed or implied~~projected 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~~statements in this ~~report. Readers are cautioned~~report, including the section entitled “Risk Factors” and this section. We caution the reader that this list of important factors may not be exhaustive. We operate in rapidly changing businesses, and new risk factors emerge from time to ~~place undue reliance~~time. We cannot predict every risk factor, nor can we assess the impact, if any, of all such risk factors on ~~these~~our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those projected in any forward-looking statements. ~~The following discussion and analysis should be read in conjunction with our financial statements included herein and the notes thereto.~~

Overview

We are a leading global information technology, or IT, services company, ~~founded in 1945, and~~ headquartered in Bangalore, India. We provide a comprehensive range of IT services, software solutions and research and development services in the areas of hardware and software design to leading companies worldwide. We use our development centers located in India and around the world, quality processes and global resource pool to provide cost effective IT solutions and deliver time-to-market and time-to-development advantages to our clients. We also provide business process outsourcing, or BPO, services.

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

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

Until March 31, 2008, our reportable segments, were Global IT Services and Products (comprising of IT Services and BPO Services segments), India and AsiaPac IT Services and Products, Consumer Care and Lighting and ‘Others’. The Chairman of the Company has been identified as the Chief Operating Decision Maker (“CODM”) as defined by SFAS No. 131, Disclosure about Segments of an Enterprise and Related Information. The Chairman of the Company evaluates the segments based on their revenue growth, operating income and return on capital employed.

39

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

Our revenue and net income for the years ended March 31, ~~2005, 2006~~2007, 2008 and ~~2007~~2009 are provided below.


	Wipro Limited and subsidiaries									Wipro Limited and subsidiaries
	Years ended March 31,									Years ended March 31,
	2005			2006			2007			2009			2008			2007			Year on Year change
	(in millions except earnings per share data)									(in millions except earnings per share data)									2009-08			2008-07
Revenue	Rs. 81,353			Rs. 106,107				149,431		Rs.	254,564		Rs.	197,428		Rs.	149,431			29	%		32	%
Cost of revenue		(53,895	)		(71,647	)		(102,200	)		(178,176	)		(139,236	)		(102,468	)		28	%		36	%
Gross profit		27,458			34,460			47,231			76,388			58,192			46,963			31	%		24	%
Selling and marketing expenses											(17,762	)		(13,807	)		(9,173	)		29	%		51	%
General and administrative expenses											(14,696	)		(10,820	)		(7,639	)		36	%		42	%
Operating income											41,390			33,714			29,906			23	%		13	%
Net income											34,415			32,241			29,168			7	%⁽¹⁾		11	%⁽¹⁾

As a Percentage of Revenue:
Selling and marketing expenses											6.98	%		6.99	%		6.14	%	1		bps	(85		) bps
General and administrative expenses											5.77	%		5.48	%		5.11	%	(29		) bps	(37		) bps
Gross margins		34	%		33	%		32	%		30.01	%		29.48	%		31.43	%	53		bps	(195) bps
Operating income		17,857			21,972			29,868
Loss on direct issue of stock by subsidiary		(207	)		—			—
Net income		15,833			20,270			29,169
Operating Margin											16.26	%		17.08	%		20.01	%	(82		) bps	(293		) bps

Earnings per share
Basic		11.38			14.41			20.45			23.67			22.23			20.45
Diluted		11.29			14.24			20.20			23.63			22.16			20.20

38

⁽¹⁾

Our adjusted non-GAAP net income for the year ended March 31, 2009, 2008, 2007 is Rs. 37,656, Rs. 32,322 and Rs. 29,168, respectively, a growth of 17% and 11% over the year ended March 31, 2008 and 2007, respectively. See discussion below.

Our revenue and operating income by business segment expressed in terms of percentages are provided below for the years ended March 31, ~~2005, 2006~~2007, 2008 and ~~2007:~~2009:


	Year ended March 31,						Year ended March 31,
	2005		2006		2007		2009			2008			2007
	Percentage		Percentage		Percentage		(In Percentage)
Revenue:
Global IT Services and Products
IT Services and Products		67		68		65
BPO Services		8		7		6
Acquisitions		—		1		3
IT Services								75			74			79
IT Products								13			13			11
Total		75		76		74		88			87			90
India and AsiaPac IT Services and Products		16		16		16
Consumer Care and Lighting		6		5		5		8			7			5
Others		3		3		5		4			6			5
		100		100		100		100			100			100

Operating Income:
Global IT Services and Products
IT Services and Products		83		84		82
BPO Services		6		5		7
Acquisitions		0		0		0
IT Services								94			90			94
IT Products								3			3			2
Total		89		88		89		97			93	��		96
India and AsiaPac IT Services and Products		5		6		7
Consumer Care and Lighting		4		4		3		5			5			3
Others		2		2		1		(2	)		2			1
		100		100		100		100			100			100

(which did not qualify as hedging of net investments, under GAAP), and certain stock-related fringe benefit tax expenses paid in India. This non GAAP net income is a measure defined by the SEC as a non-GAAP financial measure. This non-GAAP financial measure is not based on any comprehensive set of accounting rules or principles and should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and may be different from non-GAAP measures used by other companies. In addition to this non-GAAP measure, the financial statements prepared in accordance with GAAP and reconciliations of our GAAP financial statements to such non-GAAP measure should be carefully evaluated.

A reconciliation of net income as reported and adjusted non-GAAP net income, excluding impact of currency translation on foreign currency loan, related cross-currency interest rate swaps and certain stock-related fringe benefit tax, is as follows:


			Year ended March 31,
	2009		2008		2007
Net income as per GAAP	Rs.	34,415	Rs.	32,241	Rs.	29,168
Adjustments:
Translation loss on a foreign currency loan and changes in fair value of cross-currency interest rate swap		3,044		—		—
Stock-related fringe benefit tax expense paid in India⁽¹⁾		197		81		—

Adjusted Non-GAAP net income	Rs.	37,656	Rs.	32,322	Rs.	29,168


⁽¹⁾		Relates to stock options granted prior to April 1, 2007, where application of GAAP results in a permanent mismatch between the fringe benefit tax expense recorded through the income statement and the related recovery of the fringe benefit tax from the employees by modifying the grants outstanding as of April 1, 2007, which is recorded through equity.

The Company believes that the presentation of this non-GAAP adjusted net income, when shown in conjunction with the corresponding GAAP measures, provides useful information to investors and management regarding financial and business trends relating to its net income. The Company believes that foreign currency borrowing in combination with related cross-currency interest rate swap are in substance, economic hedges of net investment in foreign operations, though for GAAP reporting the impact of translation and fair value measurements are recorded in the income statement. In addition, certain stock-based fringe benefit tax expenses are fully reimbursed by our employees, but for GAAP reporting the reimbursement is recorded in stockholders’ equity. Therefore, we believe that making available an adjusted net income number that excludes the impact of these items from net income provides useful supplemental information to both management and investors about our financial and business trends.

For our internal budgeting process, our management also uses financial statements that do not include the impact of periodic translation of such specific foreign currency borrowings and fair value re-measurement of related cross-currency interest rate swaps and certain stock-based fringe benefit tax expenses. The management of the Company also uses non-GAAP adjusted net income, in addition to the corresponding GAAP measures, in reviewing our financial results.

A material limitation associated with the use of non-GAAP net income as compared to the GAAP measures of net income is that it does not include costs which are recurring in nature and may not be comparable with the calculation of net income for other companies in our industry. The Company compensates for these limitations by providing full disclosure of the effects of non-GAAP measures, by presenting the corresponding GAAP financial measures and by providing a reconciliation to the corresponding GAAP measure.

Analysis of ~~year~~years ended March 31, ~~2007~~2009 and ~~2006~~2008

	§		~~Total~~Our total revenues increased by ~~41% from Rs. 106,107 million for the year ended March 31, 2006 to Rs. 149,431 million for the year ended March 31, 2007.~~29%. This was driven primarily by a ~~39%~~31%, ~~23%, 45%, 34%~~36% and ~~115%~~32% increase in revenue from our IT Services, ~~and~~IT Products ~~BPO Services, India~~ and ~~AsiaPac IT Services and Products,~~ Consumer Care and Lighting business segments respectively. This increased revenue was partially offset by a decline of 10% in revenue from our Others, including reconciling items segment.

	§		Our gross profit as percentage of our total revenue increased by 53 basis points (bps). This was primarily on account of an increase in gross profit as a percentage of revenue from our Consumer Care and Lighting business segment by 333 bps and increase in gross profit as a percentage of revenue from our IT Services segment by 29 bps. This increase was partially offset by a decline in gross profit as a percentage of revenue from our IT Products segment by 77 bps and a decline in gross profit as a percentage of revenue from our Others segment, including reconciling items, by 51 bps.

	§		Our selling and marketing expenses as a percentage of revenue has almost remained constant for the year ended March 31, 2009 and 2008, respectively. In absolute terms selling and marketing expenses have increased by 29%, primarily due to an increase in the IT Services segment.

41

	§		Our general and administrative expenses as a percentage of revenue has increased from 5.48% for the year ended March 31, 2008 to 5.77% for the year ended March 31, 2009. In absolute terms the general and administrative expenses have increased by 36%, primarily due to an increase in the IT Services segment.

	§		The increase of Rs. 872 in the amortization of intangible assets was primarily due to an increase in the amortization of intangibles of our IT Services segment by Rs. 620 and an increase in the amortization of intangibles of our Consumer Care and Lighting segment by Rs. 254. This increase is primarily attributable to the amortization of determinable life intangibles of Infocrossing and Unza which were acquired in fiscal 2008.

	§		As a result of the foregoing factors, our operating income increased by 23% from Rs. 33,714 for the year ended March 31, 2008 to Rs. 41,390 for the year ended March 31, 2009.

	§		Our Other income, net, decreased from Rs. 2,167 for the year ended March 31, 2008 to Rs. (1,816) for the year ended March 31, 2009. This decrease is primarily on account of an increase in foreign exchange loss attributable to restatement of debt denominated in foreign currency and change in the fair value of cross-currency interest rate swaps of Rs. 3,973. Excluding this impact, other income decreased from Rs. 2,167 for the year ended March 31, 2008 to Rs. 2,157 for the year ended March 31, 2009.

	§		Our income taxes increased by Rs. 1,549, from Rs. 3,873 for the year ended March 31, 2008 to Rs. 5,422 for the year ended March 31, 2009. Our effective tax rate increased from 10.7% for the year ended March 31, 2008 to 13.6% for the year ended March 31, 2009. This increase is primarily due to expiry of tax holiday period in respect of certain units and increase in the proportion of income subject to taxation in foreign jurisdictions. The translation loss on foreign currency loan and change in fair value of cross-currency interest rate swap is not deductable for tax purposes. Adjusted for the impact of translation loss on a foreign currency loan and changes in fair value of cross-currency interest rate swap and tax write-backs, our effective tax rate was 13.5% for the year ended March 31, 2009 as compared to 12.2% for the year ended March 31, 2008.

	§		Our equity in earnings of affiliates for the year ended March 31, 2008 and 2009 was Rs. 257 and Rs. 362 respectively. Equity in earnings of affiliates primarily relates to the equity in earnings of Wipro GE.

	§		As a result of the foregoing factors, our net income increased by Rs. 2,174 or 7%, from Rs. 32,241 for the year ended March 31, 2008 to Rs. 34,415 for the year ended March 31, 2009.

Analysis of years ended March 31, 2008 and 2007

	§		Our total revenues increased by 32%. This increase was driven primarily by an increase of 24%, 45% and 93% in revenues from our IT Services, IT Products and Consumer Care and Lighting business segments respectively.

	§		AsOur gross profit as a percentage of our total revenue ~~gross profit~~ declined ~~marginally~~ by ~~1% from 33% for the year ended March 31, 2006 to 32% for the year ended March 31, 2007.~~195 bps. This was primarily on account of a decline in gross profit as a percentage of revenue from our IT Services ~~and Products~~ segment ~~from 36% for the year ended March 31, 2006 to 34% for the year ended March 31, 2007 and Others from 25% for the year ended March 31, 2006 to 19% for the year ended March 31, 2007 which~~by 226 bps. This was partially offset by an increase in gross profit as a percentage of revenue from our BPO services from 24% for the year ended March 31, 2006 to 34% for the year ended March 31, 2007. Gross profit as a percentage of total revenue for Consumer Care and Lighting segment declined by 2% from 37% for the year ended March 31, 2006 to 35% for the year ended March 31, 2007. Gross profit as a percentage of revenues from our India and AsiaPac IT ~~Services and Products remained constant at 22% for the years ended March 31, 2005 and 2006.~~

§		Selling and marketing expenses increased by 44% from Rs. 6,764 million for the year ended March 31, 2006 to Rs. 9,173 million for the year ended March 31, 2007. This increase was primarily on account of an increase in selling and marketing expenses in our IT Services business by Rs. 1,107 million, an increase in selling and marketing expenses in our India and AsiaPac IT Services and Products business by Rs. 676 million, an increase in the selling and marketing expenses in our Consumer Care and Lighting business by Rs. 322 million and an increase in selling and marketing expenses in Others including reconciling items by Rs. 253 million.

§		General and administrative expenses increased by 46% from Rs. 5,239 million for the year ended March 31, 2006 to Rs. 7,639 million for the year ended March 31, 2007. This increase was primarily on account of an increase in general and administrative expenses of our IT Services and Products business by Rs. 1,350 million, an increase in BPO Services by Rs. 231 million, an increase in general and administrative expenses of our India and AsiaPac IT Services and Products business by Rs. 357 million, and an increase in general and administrative expenses of Others including reconciling items by Rs. 444 million.

39

	§		Our income taxes increased by Rs. 150 from Rs. 3,723 for the year ended March 31, 2007 to Rs. 3,873 for the year ended March 31, 2008. Our effective tax rate decreased from 11.3% for the year ended March 31, 2007 to 10.7% for the year ended March 31, 2008. Adjusted for tax write-backs our effective tax rate declined from 13.5% for the year ended March 31, 2007 to 12.2% for the year ended March 31, 2008. This decline was primarily due to decrease in proportion of income ~~being~~ subject to ~~tax.~~taxation in foreign jurisdictions.

	§		~~Equity~~Our equity in earnings of affiliates for the year ended March 31, ~~2005~~2007 and ~~2006~~2008 was Rs. ~~158 million~~318 and Rs. ~~288 million~~257, respectively. Equity in earnings of affiliates of Rs. ~~288 million~~318 for the year ended March 31, ~~2006~~2007 comprises equity in earnings of Wipro GE of Rs. ~~259 million and equity~~302, net gain on sale of a portion of the interest in ~~earnings of~~ WeP Peripherals of Rs. ~~29 million.~~40 and equity in loss of WM Net Serv of Rs. 24. Equity in earnings of affiliates of Rs. ~~158 million~~257 for the year ended March 31, ~~2005~~2008 comprises equity in earnings of Wipro ~~GE of Rs. 126 million and equity in earnings of WeP Peripherals of Rs. 32 million.~~GE.

	§		As a result of the foregoing factors, our net income increased by ~~28%~~Rs. 3,072 or 11% from Rs. ~~15,832 million~~29,169 for the year ended March 31, ~~2005~~2007 to Rs. ~~20,270 million~~32,241 for the year ended March 31, ~~2006.~~2008.

Segment ~~analysis~~Analysis

~~Reorganization of segments:~~IT Services

Until June 30, 2005, we reported Global IT Services and Products as an integrated business segment. Effective 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 reportable segments. Consequently, IT Services and Products, and BPO Services qualify as reportable segments and are reported separately. Segment data for fiscal 2005 have been reclassified to conform to the fiscal 2006 and 2007 presentation.

~~Global IT Services and Products~~

~~Our Global IT Services and Products segment provides~~We provide IT services to our customers located in various markets around the ~~Americas, Europe and Japan and BPO Services to clients in North America, Europe, Australia and other markets.~~world. The range of IT services we provide includes IT consulting, custom application design, development, re-engineering and maintenance, systems integration, package implementation, technology infrastructure total outsourcing, testing services and research and development services in the areas of hardware and software design. We also provide business process outsourcing services, or BPO, services. Our services offerings ~~in BPO Services~~within the business process outsourcing area include customer interaction services, finance and accounting services and business process improvement services for repetitive processes.

~~The operations of most of the companies acquired through 2005 and 2006 consisting of mPower, New Logic, cMango, Enabler, Saraware and Quantech Global Service which are part of our~~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.

Our Global IT Services and Products segment accounted for 74% of our revenue and 89% of our operating income for the year ended March 31, 2007. Of these percentages, our IT Services and Products segment accounted for 68% of our revenue and 82% of our operating income for the year ended March 31, 2007 and our BPO Services segment accounted for 6%79%, 74% and 75% of our total revenue ~~and 7% of our operating income for the year ended March 31, 2007.~~

~~Global IT Services and Products~~

Year ended March 31,
2005 2006 2007
(in millions)
Revenue
IT Services and Products
Rs. 54,256 Rs. 72,887 101,353
BPO Services
6,433 7,626 9,389
Total 60,689 80,513 110,742
Gross profit
IT Services and Products
20,476 25,901 34,536
BPO Services
1,693 1,817 3,216
Total 22,169 27,718 37,752
Selling and marketing expenses (3,223 ) (3,942 ) (5,100 )

41

healthcare services, a 9% increase in revenue from ~~enterprise~~energy and utility services ~~was primarily driven by increased revenue from services provided to customers in the financial services, healthcare~~ and ~~retail sectors. The~~a 6% increase in revenue from technology, media and telecom services. Our price realization increased by 3.8% and 3.2% on a year on year basis for our offshore and onsite services was primarily driven by increased revenue from services provided to customers in the telecom sector and from the design and development of embedded software solutions for customers in the consumer electronics sector.respectively. In our IT Services ~~and Products business~~ segment, we added ~~194~~110 new clients during the year ended March 31, ~~2007.~~2009. The total number of clients that individually accounted for over US $1 million run rate in revenue increased from ~~195~~362 as of March 31, ~~2006~~2008 to ~~233~~427 as of March 31, ~~2007.~~2009.

	•		Our gross profit as a percentage of our revenue from our IT Services segment increased by 29 bps. The improvement in gross margin as percentage of revenue is primarily on account of improvement in utilization rates and better exchange rate realization. Our average utilization of billable employees improved from 67% for the year ended March 31, 2008 to 69% for the year ended March 31, 2009. These improvements were offset by the increase in personnel costs due to increased compensation based on promotions.

	•		Selling and marketing expenses as a percentage of revenue from our IT Services segment decreased marginally from 6.16% for the year ended March 31, 2008 to 5.89% for the year ended March 31, 2009. However in absolute terms, selling and marketing expenses have increased by 25%. This increase was primarily due to an increase in personnel costs, certain employees being classified as sales and marketing personnel during the year, an increase in compensation costs as part of our compensation review and grant of additional stock options.

	•		General and administrative expenses as a percentage of revenue from our IT Services segment has increased from 5.68% for the year ended March 31, 2008 to 6.40% for the year ended March 31, 2009. This increase was primarily due to an increase in personnel costs by Rs. 1,451 and an increase in the provision for doubtful debts by Rs 658. Personnel costs have increased from Rs. 3,509 for the year ended March 31, 2008 to Rs. 4,960 for the year ended March 31, 2009, which is attributable to the increase in the support staff consistent with the increase in volume and operations and increase in compensation cost as part of our compensation review, grant of additional stock options and acquisition of Infocrossing. The increase in the provision for doubtful debts was primarily due to additional reserve recorded upon a major customer opting for bankruptcy protection.

	•		Increase in amortization of intangibles is primarily attributable to amortization of customer-related intangible arising on acquisition of Infocrossing.

	•		As a result of the above, operating income from our IT Services segment increased by 27%.

Analysis of years ended March 31, 2008 and 2007

§		Our revenue from the IT Services segment grew by 24%. In USD terms our revenue grew by 40% from $ 2,601 to $3,647. Our average USD/INR realization decreased from Rs. 45.2 for the year ended March 31, 2007 to Rs. 40.1 for the year ended March 31, 2008.

	~~BPO Services revenue increased by 23% from Rs. 7,626 million for the year ended March 31, 2006 to Rs. 9,389 million for the year ended March 31, 2007.~~	This ~~increase in revenue from our BPO Services business segment~~growth of 40% was primarily due to anthe acquisition of Infocrossing in September 2007, about 38% increase in revenues from retail and transportation business and about 50% increase in revenues from financial services and manufacturing & healthcare services. Integration of acquisitions during the year contributed to a 4% increase in the ~~number of clients~~revenues. Our price realization increased by 1.2% and ~~an increase in the scope~~2.6% on a year on year basis for our offshore and ~~volume of~~onsite services ~~provided to existing clients.~~respectively. In our ~~BPO~~IT Services ~~business~~ segment, we added 2185 new clients during the year ended March 31, ~~2007.~~2008. The total number of clients that individually accounted for over US $ 1 million run rate in revenue increased from 17255 as of March 31, ~~2006~~2007 to 22362 as of March 31, ~~2007.~~2008.

§		Our gross profit as a percentage of ~~revenues of~~ our ~~Global~~revenue from our IT Services ~~and Products has decreased marginally from 35% of revenue for the year ended March 31, 2006 to 34% of revenue for the year ended March 31 2007 primarily on account of:~~

	~~Our~~segment declined by 226 bps. The decline in gross ~~profit~~margin as a percentage of ~~revenues of our IT services and products declined by 2% from 36% for the year ended March 31, 2006 to 34% for the year ended March 31, 2007. The decrease was~~revenue is primarily due to adverse impact of appreciation of the Indian rupee against the US dollar, an increase in compensation costs for offshore and onsite employees as a part of our compensation review and lower gross margins in ~~January 2006, September 2006, November 2006~~Infocrossing. Based on average exchange rates in fiscal 2007 and ~~January 2007, compensation costs arising from~~2008, the ~~grant of additional stock options, lower~~Indian rupee has appreciated by over 10.9% against the U.S. dollar in fiscal 2008. This is partially offset by improvement in the average utilization rates of our IT professionals, and changes in the onsite-offshore mix during the year as compared to the same period last year. Our gross profit as a percentage of revenues was also impacted by acquisitions which have lower gross profit margins.

	~~Our gross profit as a percentage of revenues of our BPO services increased~~billable employees from ~~24%~~64% for the year ended March 31, ~~2006~~2007 to ~~34%~~67% for the year ended March 31, 2007. The increase in gross profit percentage as a percentage of revenue was primarily due to the rationalization of low-margin projects, higher billing rates and the result of our cost containment initiatives.2008.

43

	§		~~Selling~~General and ~~marketing~~administrative expenses ~~for~~as a percentage of revenue from our ~~Global~~ IT Services ~~and Products business~~ segment has increased ~~by 22%~~marginally from ~~Rs. 3,223 million~~5.51% for the year ended March 31, ~~2005~~2007 to ~~Rs. 3,942 million~~5.68% for the year ended March 31, ~~2006.~~2008. This ~~was primarily due to a 25%~~ increase in the selling and marketing expenses in our IT Services and Products business from Rs. 3,122 million for the year ended March 31, 2005 to Rs. 3,893 million for the year ended March 31, 2006, partially offset by a decline of 52% in the selling and marketing expenses in BPO Services, from Rs. 102 million for the year ended March 31, 2005 to Rs. 49 million for the year ended March 31, 2006. The increase of Rs. 771 million in selling and marketing expenses in our IT Services and Products business was primarily due to an increase in personnel cost by Rs. 862. Personnel cost increased from Rs. 2,647 for the ~~number of our sales and marketing personnel from 173 as of~~year ended March 31, ~~2005~~2007 to ~~213 as of~~Rs. 3,509 for the year ended March 31, ~~2006, an~~2008, which is attributable to the increase in our support staff consistent with the increase in volume and operations, increase in compensation ~~costs~~cost as a part of our compensation review, ~~in January 2006,~~grants of additional stock options and ~~an increase in the amortization~~acquisition of ~~deferred compensation costs. The decline of Rs. 52 million in the selling and marketing expenses in our BPO Services business is primarily on account of a rationalization of the sales force.~~Infocrossing.

	§		~~General and administrative expenses for our Global IT Services and Products business segment increased by 51% from Rs. 2,739 million~~Increase in amortization of intangibles is primarily attributable to amortization of customer-related intangible arising on acquisition of Infocrossing.

	§		Others, net for the year ended March 31, ~~2005~~2008, include Rs. 269 of insurance recoveries relating to ~~Rs. 4,144 million for~~certain costs incurred by the year ended March 31, 2006. The increase of Rs. 1,405 million in general and administrative expenses is primarily due to an increase in general and administrative expenses of our IT Services and Products business by Rs. 1,167 million and an increase in general and administrative expenses of our BPO Services business by Rs. 238 million. The increase of Rs. 1,167 million in the general and administrative expenses in our IT Services and Products business was primarily due to an increase in compensation costs as part of our compensation review from November 2005 at offshore and January 2006 at onsite, an increase in provision for doubtful receivables and an increase in recruitment expenditure due to increase in the number of hires. The increase of Rs. 238 million in the general and administrative expenses in our BPO Services business is primarily due to an increase in compensation costs as part of our compensation review effective October 2005, higher occupancy costs and increase in expenditure on recruiting employees.Company.

	§		~~Operating~~As a result of the above, operating income offrom our IT Services ~~and Products business~~segment increased by 24% from Rs. 14,817 million for the year ended March 31, 2005 to Rs. 18,399 million for the year ended March 31, 2006. Operating income of our BPO services increased from Rs. 1,008 million for the year ended March 31, 2005 to Rs. 1,011 million for the year ended March 31, 2006.9%.

~~India~~IT Products

We leverage our strong distribution channel to sell a range of Wipro personal desktop computers, Wipro servers and ~~AsiaPac~~Wipro notebooks. We are also a value added reseller of desktops, servers, notebooks, storage products, networking solution and packaged software. Our 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 requirements for IT products and services of companies in India, AsiaPacific and the Middle East region. Our India and AsiaPac IT Services and Products segment accounted for ~~16%~~11%, 13% and 13% of our total revenue for the years ended March 31, 2007, 2008 and 7%2009, respectively. Our IT Products segment accounted for 2%, 3% and 3% of our operating income for the ~~year~~years ended March 31, ~~2007.~~2007, 2008 and 2009, respectively.

The operations of 3D Networks are currently reviewed by our Chief Operating Decision Maker, or CODM, as a integral part of India and AsiaPac IT Services and Products segment, and have accordingly been reported under this segment.


	Year ended March 31,									Year on Year change
	2009			2008			2007			2009-08			2008-07
				(in millions)
Revenue	Rs.	33,424		Rs.	24,619		Rs.	16,965			36	%		45	%
Gross profit		3,249			2,583			1,640			26	%		58	%
Selling and marketing expenses		(1,335	)		(852	)		(581	)		57	%		47	%
General and administrative expenses		(717	)		(894	)		(436	)		(20	)%		105	%
Amortization of intangibles		(23	)		(30	)		(13	)		(23	)%		131	%
Others, net		44			62			29		No			no
Operating income		1,218			869			639			40	%		36	%

As a Percentage of Revenue:
Selling and marketing expenses		3.99	%		3.46	%		3.42	%	(53		) bps	(4		) bps
General and administrative expenses		2.15	%		3.63	%		2.57	%	148		bps	(106		) bps
Gross margin		9.72	%		10.49	%		9.67	%	(77		) bps	82		bps
Operating margin		3.64	%		3.53	%		3.77	%	11		bps	(24		) bps

Year ended March 31,
2005 2006 2007
(in millions)
Revenue
Services Rs. 4,709 Rs. 6,097 Rs. 8,369
Products 8,686 10,378 15,494
Total 13,395 16,475 23,863
Gross profit
Services 2,030 2,548 3,757
Products 871 1092 1,551
Total 2,901 3,640 5,308
Selling and marketing expenses (1,150 ) (1,392 ) (2,068 )
General and administrative expenses (788 ) (841 ) (1,198 )
Amortization of intangibles — (12 ) (32 )
Others, net 7 9 29
Operating income 970 1404 2,039
Revenue growth rate over prior period 42 % 23 % 45 %
Gross margin 22 % 22 % 22 %
Operating margin 7 % 9 % 9 %

45

	•		General and administrative expenses as a percentage of revenue from our IT Products segment has decreased from 3.63% for the year ended March 31, 2008 to 2.15% for the year ended March 31, 2009. This decline of Rs. 177 is primarily due to certain cost containment measures.

	•		As a result of the above, operating income from our IT Products segment increased by 40%.

Analysis of years ended March 31, 2008 and 2007

	§		~~India and AsiaPac IT Services and Products~~Our revenue ~~increased by 45% from Rs. 16,477 million for the year ended March 31, 2006 to Rs. 23,888 million for the year ended March 31, 2007. Revenue~~ from the ~~products component of our India and AsiaPac~~ IT ~~Services and~~ Products business segment increased by 50% from Rs. 10,380 million for the year ended March 31, 2006 to Rs. 15,520 million for the year ended March 31, 2007. The increase is attributable to an increase in revenue from traded products by 42% and in manufactured products by 35%.

			~~Revenue from the services component of our India and AsiaPac IT Services and Products business~~ segment grew by ~~37% from Rs. 6,097 million in the year ended March 31, 2006 to Rs. 8,369 million for the year ended March 31, 2007. The~~45%. This increase ~~was~~is primarily due to ~~an increase in revenue from service lines including consulting services, system integration services and total outsourcing services, and~~ growth in revenues across all product lines and integration of our ~~core business~~acquisition of ~~hardware and software support and maintenance services.~~3D Networks.

	§		~~As a percentage of India and AsiaPac IT Services and Products revenue, gross profit remained constant at 22% for the years ended March 31, 2006 and 2007.~~ Our gross ~~profit~~profits as a percentage of our revenues offrom our ~~services~~IT Products segment ~~of our India and AsiaPac IT Services and Products improved~~increased by ~~3% from 42% for the year ended March 31, 2006 to 45% for the year ended March 31, 2007. This~~82 bps. The improvement ~~was~~is primarily ~~due to higher realization rates and better utilization of the personnel.~~

			This decline was offset by a marginal decline in gross profit as a percentage of revenues of our products segment of our India and AsiaPac IT Services and Products from 11% for the year ended March 31, 2006 to 10% for the year ended March 31, 2007. Our gross margin for Products has declined dueattributable to an increase in ~~the~~ proportion of revenues from traded products, ~~with lower~~which typically have higher gross margins.

	§		Selling and marketing expenses ~~for~~as a percentage of revenue from our ~~India and AsiaPac~~ IT ~~Services and~~ Products ~~business~~ segment has increased ~~by 49%~~marginally from ~~Rs. 1,392 million~~3.42% for the year ended March 31, ~~2006~~2007 to ~~Rs. 2,068 million~~3.46% for the year ended March 31, ~~2007. This was~~2008. However, in absolute terms our selling and marketing expenses have increased by 47%, primarily due to ~~an increase in compensation costs due to an~~ increase in the number of sales and marketing personnel for this business segment, an increase in compensation costs as part of our compensation review in October 2006, an increase in dealer commission consequent to an increase in proportion of sales initiated through distribution channels and an increase in a marketing activities which is in line with the increase in the business volumes.segment.

	§		General and administrative expenses ~~for~~as a percentage of revenue from our ~~India and AsiaPac~~ IT ~~Services and~~ Products ~~business~~ segment increased ~~by 42%~~ from ~~Rs. 841 million~~2.57% for the year ended March 31, ~~2006~~2007 to ~~Rs. 1,198 million~~3.63% for the year ended March 31, ~~2007.~~2008. This was primarily due to an increase in ~~compensation costs as part~~the volume of operations and integration of our ~~compensation review in October 2006.~~acquisition of 3D Networks.

	§		As a result of the above, operating income offrom our ~~India and AsiaPac~~ IT ~~Services and~~ Products ~~increased by 46% from Rs. 1,404 million for the year ended March 31, 2006 to Rs. 2,039 million for the year ended March 31, 2007.~~

~~Analysis of year ended March 31, 2006 and 2005~~

	§		India and AsiaPac IT Services and Products revenue increased by 23% from Rs. 13,403 million for the year ended March 31, 2005 to Rs. 16,477 million for the year ended March 31, 2006. Revenue from the products component of our India and AsiaPac IT Services and Products business segment increased by 19% from Rs. 8,694 million for the year ended March 31, 2005 to Rs. 10,380 million for the year ended March 31, 2006. The increase was attributable to an increase in revenue from traded products by 22% and in manufactured products by 11%36%.

			Revenue from the services component of our India and AsiaPac IT Services and Products business segment grew by 29% from Rs. 4,709 million in the year ended March 31, 2005 to Rs. 6,097 million for the year ended March 31, 2006. The increase was primarily due to an increase in revenue from service lines like consulting

46

Analysis of years ended March 31, 2009 and 2008

§

~~Consumer Care and Lighting revenue increased by 34% from Rs. 5,625 million for the year ended March 31, 2006 to Rs. 7,563 million for the year March 31, 2007.~~

Our Consumer Care and Lighting revenue increased by 32%. The increase in revenue is attributable to an increase in the volume of our soap, lighting, furniture products and Personal Care Products of Unza.

Our gross profit as a percentage of our revenues from the Consumer Care and Lighting segment increased by 333 bps. This increase was primarily due to an increase in the proportion of revenue from the range of products manufactured by Unza, which typically have higher gross margins.

Selling and marketing expense as percentage of revenue from our Consumer Care and Lighting segment has increased from 22.04% for the year ended March 31, 2008 to 24.22% for the year ended March 31, 2009. This increase is primarily due to increase in proportion of revenues from Unza. Selling and distribution expense as a percentage of our revenue is typically higher in Unza products. Further in fiscal 2009, we incurred higher brand promotion and advertisement spends in Indian market.

General and administrative expense as percentage of revenue from our Consumer Care and Lighting segment has increased from 5.58% for the year ended March 31, 2008 to 6.25% for the year ended March 31, 2009. This increase is primarily due to Unza. General and administrative expense as a percentage of our revenue is typically higher in Unza products.

As a result of the above, operating income from our Consumer Care and Lighting segment increased by 25%.

Analysis of years ended March 31, 2008 and 2007

	§		Our Consumer Care and Lighting revenue increased by 93%. This increase in revenue is attributable to an increase in sales volume of our soap, lighting and furniture products, an increase in ~~the~~ prices of certain products and the integration of ~~sales~~Unza from ~~our acquisition~~August 2007, which contributed additional revenues of ~~Northwest.~~Rs 4,823.

§

AsOur gross profits as a percentage of our revenues from the Consumer Care and Lighting ~~revenue, gross profit decreased~~segment increased by ~~2% from 37% for the year ended March 31, 2006 to 35% for the year ended March 31, 2007.~~548 bps. This increase was primarily due to an increase in the

47

			proportion of ~~revenue~~revenues from ~~furniture and lighting~~the range of products manufactured by Unza, which typically have ~~lower~~higher gross ~~margins as compared to soap products.~~margins.

§

Selling and marketing expenses ~~for~~of our Consumer Care and Lighting ~~business~~segment increased by ~~28% from Rs. 1,160 million for the year ended March 31, 2006 to Rs. 1,483 million for the year ended March 31, 2007.~~117%. This was primarily due anto the increase in sales promotion expenses for building brands and expanding market share in select geographies and the integration of our acquisition of Unza group from August 2007 which resulted in ~~this business segment~~additional selling and ~~increase in sales personnel and increase in compensation costs.~~marketing expenses of Rs. 1,630.

§

General and administrative expenses of our Consumer Care and Lighting segment increased by 580%. This is primarily attributable to integration of our acquisition of Unza group from August 2007 which resulted in additional general and administrative expenses of Rs. 600.

§

As a result of the above, operating income of our Consumer Care and Lighting business increased by ~~34% from Rs. 799 million for the year ended March 31, 2006 to Rs. 1,069 million for the year ended March 31, 2007.~~

~~Analysis of year ended March 31, 2006 and 2005~~

	§		Consumer Care and Lighting revenue increased by 23% from Rs. 4,555 million for the year ended March 31, 2005 to Rs. 5,625 million for the year March 31, 2006. This was primarily due to increased efforts on expanding market presence in select geographies which resulted in higher sales of soap products, lighting (luminous and compact fluorescent lamp)73%.

	§		As a percentage of Consumer Care and Lighting revenue, gross profit increased by 1% from 36% for the year ended March 31, 2005 to 37% for the year ended March 31, 2006. This was due to an increase in the proportion of revenues from soap products which typically have higher margins than lighting products.

	§		Selling and marketing expenses for our Consumer Care and Lighting business increased by 32% from Rs. 877 million for the year ended March 31, 2005 to Rs. 1,160 million for the year ended March 31, 2006. This was primarily due an increase in sales promotion expenses for building brands and expanding market share in select geographies in this business segment and an increase in sales personnel and an increase in compensation costs.

	§		General and administrative expenses for Consumer Care and Lighting increased by 24% from Rs. 82 million for the year ended March 31, 2005 to Rs. 102 million for the year ended March 31, 2006. The increase was primarily due to an increase in compensation costs as part of our compensation review which is effective from November 2005.

	§		As a result of the above, operating income of our Consumer Care and Lighting increased by 19% from Rs. 671 million for the year ended March 31, 2005 to Rs. 798 million for the year ended March 31, 2006.

Others, including reconciling items

Analysis of year ended March 31, 2009 and 2008

Revenue from our Others segment, including reconciling items, decreased by 10%, from Rs. 11,930 for the year ended March 31, 2008 to Rs. 10,704 for the year ended March 31, 2009. This decrease was primarily driven by a decrease in revenue from our hydraulic cylinders and tipping gear systems business. The decline in the revenues is attributable to slowdown in the global markets which has impacted the market for infrastructure engineering products in Indian and European markets.

Operating income from our Others segment, including reconciling items, decreased from Rs. 515 for the year ended March 31, 2008 to Rs. (932) for the year ended March 31, 2009. This is primarily due to loss Rs. 281 in our hydraulic cylinders and tipping gear systems business as against income of Rs. 1,006 in the corresponding previous year. This loss is attributable to the contraction in the sales volume of infrastructure engineering business due to the slowdown in the global market.

Analysis of year ended March 31, 2008 and 2007

Revenue from our Others segment, including reconciling items, increased by 64%, from Rs. 7,263 for the year ended March 31, 2007 ~~and 2006~~to Rs. 11,930 for the year ended March 31, 2008. This was primarily due to

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	§		~~Revenue from Others increased from Rs. 3,279 million for the year ended March 31, 2006 to Rs. 7,063 million for the year ended March 31, 2007. This was primarily due to~~ integration of ~~the revenues arising from~~ our acquisition of Hydrauto Group for the full year in fiscal 2008 as compared to a part of ~~Rs. 2,756 million~~the year in fiscal 2007, and an increase in revenue from the sale of hydraulic cylinders and tipping gear systems.

	§		As a percentage of revenue, gross profit declined from 25% of revenue for the year ended March 31, 2006 to 19% of revenue for the year ended March 31, 2007. This was primarily due to integration of our acquisition of Hydrauto Group, which reported a gross profit of 13% during the year ended March 31, 2007.

	§		Selling and marketing expenses for Others, including reconciling items, have increased from Rs. 270 million for the year ended March 31, 2006 to Rs. 523 million for the year ended March 31, 2007. This increase is attributable to an increase in use of premium distribution channel for deliveries and due to integration of Hydrauto Group during the year ended March 31, 2007.

	§		General and administrative expenses for Others, including reconciling items, have increased from Rs. 151 million for the year ended March 31, 2006 to Rs. 596 million for the year ended March 31, 2007. This was primarily due to integration of our acquisition of Hydrauto Group during the year ended March 31, 2007.

	§		As a result of the above, operating income of Others, including reconciling items, declined from Rs. 360 million for the year ended March 31, 2006 to Rs. 231 million for the year ended March 31, 2007.

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~~Analysis of year ended March 31, 2006 and 2005~~

	•		Revenue from Others increased by 22% from Rs. 2,681 million for the year ended March 31, 2005 to Rs. 3,279 million for the year ended March 31, 2006. This was primarily due to a 37% increase in the revenues from the sale of hydraulic cylinders and tipping gear systems in our Wipro Infrastructure Engineering business.

	•		Selling and marketing expenses for Others, including reconciling items, increased by 25% from Rs. 216 million for the year ended March 31, 2005 to Rs. 270 million for the year ended March 31, 2006.

	•		General and administrative expenses for Others, including reconciling items, increased by 12% from Rs. 135 million for the year ended March 31, 2005 to Rs. 151 million for the year ended March 31, 2006.

	•		As a result of the above, operating income of Others, including reconciling items, declined by Rs. 31 million from Rs. 391 million for the year ended March 31, 2005 to Rs. 360 million for the year ended March 31, 2006.

~~Acquisitions~~

~~Acquisition of Ownership Interest in a Subsidiary~~

As of March 31, 2005, we held approximately 93% of the outstanding equity shares of Wipro BPO Solutions Limited which we refer to as Wipro BPO. The remaining shares were held by employee shareholders.

During the year ended March 31, 2006, we acquired the 7% balance from the employee shareholders at fair value for an aggregate consideration of Rs. 852 million. This step-acquisition resulted in goodwill and intangibles of Rs. 304 million and Rs. 15 million respectively. As a result of ~~this transaction, Wipro BPO became our wholly owned subsidiary.~~

~~We completed~~ the ~~following acquisitions during the year ended March 31, 2006.~~

~~mPower Software Services Inc. and subsidiaries~~

~~In December 2005, we acquired 100%~~above, operating income of ~~the equity of mPower Software Services Inc. and subsidiaries (mPower)~~Others, including ~~the minority shareholding held by MasterCard International in mPact India, a joint venture between MasterCard International and mPower Inc,~~reconciling items, increased from Rs. 273 for ~~an aggregate cash consideration of Rs. 1,275 million. mPower Software Services Inc. is a US based Company engaged in providing IT services in the payments service sector.~~

As a part of this acquisition, we plan to provide MasterCard a wide range of services including application development and maintenance, infrastructure services, package implementation, BPO and testing. We believe that through this acquisition, we will be able to expand domain expertise in the payment service sector and increase the addressable market for IT services.

~~The total purchase price has been allocated to the acquired assets and liabilities as follows:~~


~~Description~~	~~Fair value~~
	~~(in millions)~~
~~Net tangible assets~~	~~Rs.~~	~~185~~
~~Customer-related intangibles~~		~~513~~
~~Deferred tax liabilities~~		~~(177~~	)
~~Goodwill~~		~~754~~

~~Total~~	~~Rs.~~	~~1,275~~

~~BVPENTE Beteiligungsverwaltung GmbH and subsidiaries~~

In December 2005, we acquired 100% of the equity of BVPENTE Beteiligungsverwaltung GmbH and subsidiaries (New Logic). New Logic is a European system-on-chip design company. The consideration included an upfront consideration of Rs. 1,156 million, subject to working capital adjustments, and an earn-out of Euro 27 million to be determined and paid in the future based on financial targets being achieved over a 3 year period. During the year ended March 31, 2007 ~~we paid an additional consideration of~~to Rs. 69 million towards the working capital adjustment. We have determined that a portion of the earn-out, up to a maximum of Euro 2 million is linked to the continuing employment of one of the selling shareholders. The balance earn-out will be recorded as additional purchase price when the contingency is resolved.

49

We believe that through this acquisition, we have acquired strong domain expertise in semiconductor Intellectual Property (IP) cores and complete system-on-chip solutions with digital, analog mixed signal and Radio Frequency (RF) design services. The acquisition also enables us to access over 20 customers in the product engineering space.

~~The purchase price has been allocated to the acquired assets and liabilities as follows:~~


~~Description~~	~~Fair value~~
	~~(in millions)~~
~~Net tangible assets~~	~~Rs.~~	~~307~~
~~Customer-related intangibles~~		~~117~~
~~Technology-related intangibles~~		96
~~Deferred tax liabilities~~		~~(53~~	)
~~Goodwill~~		~~758~~

~~Total~~	~~Rs.~~	~~1,225~~

~~We completed the following acquisitions during~~515 for the year ended March 31, ~~2007.~~

~~cMango Inc. and subsidiaries~~

~~In April 2006, we acquired 100%~~2008. This increase in operating income was primarily due to increase in profits of our infrastructure engineering business on account of increase in the ~~equity~~volume of ~~cMango Inc. and subsidiaries (cMango). cMango is a provider of Business Service Management (BSM) solutions. The consideration (including direct acquisition costs) included a cash~~operations. This increase was partially offset by the fringe benefit tax payment of Rs. ~~884 million and~~375.

Acquisitions

An active acquisition program is an ~~earn-out~~important element of ~~USD 12 million to be determined and paid~~our corporate strategy. In the last three fiscal years, we have invested over Rs. 47,268 in the ~~future~~aggregate, to acquire companies including the acquisitions of Infocrossing and Unza. In January 2009, we acquired Citi Technology Services Limited (Subsequently renamed as Wipro Technology Services Limited — WTS), an India based ~~on specific financial targets being achieved over~~provider of information technology services and solutions. WTS has a ~~two year period. The earn-out will be recorded as additional purchase price when~~strong competency in Technology Infrastructure Services (TIS), application development and maintenance services (ADM) for cards, capital markets and corporate banking. Typically, the ~~contingency is resolved.~~significant majority of our integration activities related to an acquisition are substantially completed within three to six months after the closing of the acquisition.

We believe ~~that through this~~our acquisition ~~we will expand~~program supports our ~~operations~~long-term strategic direction, strengthens our competitive position, particularly in ~~the Business Management Services sector. This acquisition also enables us to access over 20 customers in the Business Management services sector.~~

~~The purchase price has been preliminarily allocated to the acquired assets and liabilities as follows:~~


~~Description~~	~~Fair value~~
	~~(in millions)~~
~~Net tangible assets/(liabilities)~~	~~Rs.~~	~~(23~~	)
~~Customer-related intangibles~~		~~132~~
~~Deferred tax liabilities~~		~~(46~~	)
~~Goodwill~~		~~821~~

~~Total~~	~~Rs.~~	~~884~~

~~RetailBox BV and subsidiaries~~

In June 2006, we acquired 100% of the equity of RetailBox BV and subsidiaries (Enabler). Enabler is in the business of providing comprehensive IT solutions and services. The consideration (including direct acquisition costs) included a cash payment of Rs. 2,442 million and an earn-out of Euro 11 million to be determined and paid in the future based on specific financial targets being achieved over a two year period. The earn-out will be recorded as additional purchase price when the contingency is resolved.

Through this acquisition we aim to provide a wide range of services including Oracle retail implementation, digital supply chain, business optimization and integration. Further, through this acquisition, we aim to expandacquiring new domain expertise, ~~both in the retail and technology sectors and obtain a presence in five different geographical locations.~~

~~The purchase price has been preliminarily allocated to the acquired assets and liabilities as follows:~~


~~Description~~	~~Fair value~~
	~~(in millions)~~
~~Net tangible assets~~	~~Rs.~~	~~389~~
~~Customer-related intangibles~~		~~298~~
~~Deferred tax liabilities~~		~~(104~~	)
~~Goodwill~~		~~1,859~~

~~Total~~	~~Rs.~~	~~2,442~~

~~Northwest Switchgear Limited~~

In May 2006, we acquired a substantial portion of the business of North-west Switchgear Limited a manufacturer and distributor of switches, sockets and miniature circuit breakers (collectively ‘the products’) under the trademark/ brand name North-West. The consideration (including direct acquisition costs) included a cash payment of

50

Rs 1,132 million and an earn-out of Rs. 200 million to be determined and paid in the future based on achievement of a specified revenue levels over a period of four years. Further, we have entered into a non-compete and manufacturing agreement with the sellers. Under the manufacturing agreement, the seller will manufacture the products for us using certain assets and employees retained by the seller. The manufacturing agreement is for a period of five years. Amounts paid by us for such manufacturing services will be recorded through the income statement. The earn-outs which are not linked to any post-acquisition services by the seller will be recorded as additional purchase consideration when the contingency is resolved.

Based on the guidance in EITF Issue No. 98-3, Determining Whether a Non-monetary Transaction Involves Receipt of Productive Assets of a Business, we have accounted for this transaction as an acquisition of a business. A significant portion of the consideration has been allocated to the trademark/brand name North-West.

~~The purchase price has been preliminarily allocated to the acquired assets and liabilities as follows:~~


~~Description~~	~~Fair value~~
	~~(in millions)~~
~~Net tangible assets~~	~~Rs.~~	34
~~Marketing-related intangibles~~		~~1,098~~

~~Total~~	~~Rs.~~	~~1,132~~

~~Saraware Oy~~

In June 2006, we acquired 100% of the equity of Saraware Oy (Saraware) a Company involved in providing design and engineering services to telecom companies. We acquired Saraware for an aggregate consideration of Rs. 947 million and an earn-out of Euro 7 million to be determined and paid in future based on financial targets being achieved over a period of 18 months. In addition, amounts collected against certain specific reward/ incentive assets at the acquisition date are payable to the sellers. We have paid Rs. 149 million against specific reward/ incentives collected and Rs. 19 million as earn-out against targets achieved during the period ended March 31, 2007. The earn-out and the additional payments are recorded as additional purchase price when the related contingencies are resolved.

~~Through this acquisition we aim~~expands our customer base, increases our ability to expand our ~~presence~~service offerings and greater scale to grow our earnings and increase stockholders’ value. See Note 3 of our Notes to Consolidated Financial Statements for additional information related to our acquisitions.

We routinely review potential acquisitions. We currently expect to finance our acquisitions through cash generated from operations, cash and cash equivalents and investments in ~~the engineering services space in Finland~~liquid and ~~the Nordic region.~~

~~The purchase price has been preliminarily allocated~~short-term mutual funds as of March 31, 2009. However, for strategic acquisitions, we could decide to ~~the acquired assets and liabilities as follows:~~


~~Description~~	~~Fair value~~
	~~(in millions)~~
~~Net tangible assets/(liabilities)~~	~~Rs.~~	~~187~~
~~Customer-related intangibles~~		~~254~~
~~Deferred tax liabilities~~		~~(89~~	)
~~Goodwill~~		~~763~~

~~Total~~	~~Rs.~~	~~1,115~~

~~Quantech Global Services~~

~~In July 2006, we acquired 100% of the~~or be required to obtain additional debt or equity of Quantech Global Services LLC and Quantech Global Services Ltd (Quantech). Quantech provides computer aided design and engineering services. The consideration includes upfront cash payment of Rs. 142 million, a deferred cash payment of USD 3 million and an earn-out tofinancing. We cannot be ~~determined and paid in the future based~~certain that additional financing, if needed, will be available on ~~specific financial targets being achieved over a period of 36 months.~~

~~Through this acquisition, we aim to strengthen our presence in the mechanical engineering design and analysis services sector.~~

~~The purchase price has been preliminarily allocated to the acquired assets and liabilities as follows:~~


~~Description~~	~~Fair value~~
	~~(in millions)~~
~~Net tangible assets/(liabilities)~~	~~Rs.~~	~~(230~~	)
~~Customer-related intangibles~~		45
~~Deferred tax liabilities~~		~~(16~~	)
~~Goodwill~~		~~482~~

~~Total~~	~~Rs.~~	~~281~~

~~Hydrauto Group~~

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In November 2006, we acquired 100% of the equity of Hydrauto Group AB (Hydrauto). Hydrauto is engaged in the production, marketing and development of customized hydraulic cylinders solution for mobile applications such as mobile cranes, excavator, dumpers and trucks. The consideration (including direct acquisition cost) included cash payment of Rs. 1,412 million. Through this acquisition we aim to gain an entry into Europe, access to a customer base built over the past few decades and complementary engineering skills.

~~The purchase price has been preliminarily allocated to the acquired assets and liabilities as follows:~~


~~Description~~	~~Fair value~~
	~~(in millions)~~
~~Net tangible assets/(liabilities)~~	~~Rs.~~	~~202~~
~~Customer-related intangibles~~		74
~~Deferred tax liabilities~~		~~(25~~	)
~~Goodwill~~		~~1,161~~

~~Total~~	~~Rs.~~	~~1,412~~

~~3D Networks~~

In November 2006, we acquired 100% of the equity of the India, Middle East and South Asian operations of 3D Networks and Planet PSG. 3D Networks provides business communication solutions that include consulting, voice, data and converged solutions and managed services. These specialized solutions are deployed in the ITES/IT, Telecom, Banking and Finance, Government and Service verticals. Planet PSG provides professional services on voice and speech platforms in the Asia Pacific region. The consideration (including direct acquisition cost) included upfront cash payment of Rs. 904 million and a maximum earn-out of USD 44 million to be determined and paid in the future based on achieving certain agreed financial targets over a 24 months period. We believe that this acquisition is a strategic fit as it complements Wipro’s existing practice capabilities and differentiates Wipro as the most comprehensive IT Solutions provider across segments.

~~The purchase price has been preliminarily allocated to the acquired assets and liabilities as follows:~~


~~Description~~	~~Fair value~~
	~~(in millions)~~
~~Net tangible assets/(liabilities)~~	~~Rs.~~	~~508~~
~~Customer-related intangibles~~		~~136~~
~~Deferred tax liabilities~~		~~(46~~	)
~~Goodwill~~		~~306~~

~~Total~~	~~Rs.~~	~~904~~

For all the above acquisitions except New Logic and mPower, the purchase consideration has been allocated on a preliminary basis based on management’s estimates. We are in the process of making a final determination of the carrying value of assets and liabilities, which may result in changes in the carrying value of net assets recorded. Finalization of the purchase price allocation, which is expected to be completed during the period ending June 30, 2007 may result in certain adjustments to the above allocations.favorable terms, or if at all.

Stock compensation expense

Effective April 1, 2006, we adopted SFAS No. 123 (revised 2004), Share-Based Payment, (SFAS No. 123 (R)), which requires the measurement and recognition of compensation expense for all stock-based payment awards based on the grant-date fair value of those awards. Previously, we used the intrinsic value based method, permitted by Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock issued to Employees, to account for ~~its~~our employee stock-based compensation plans and had adopted the pro-forma disclosure provisions of SFAS No. 123, Accounting for Stock-Based Compensation.

We have adopted SFAS No. 123(R) using the modified prospective application method. Under this approach we have recognized compensation ~~expense~~expenses for share-based payment awards granted prior to, but not yet vested as of April 1, 2006, based on the grant date fair value estimated in accordance with the provisions of SFAS No. 123. Pursuant to adoption of SFAS No. 123(R), we ~~have~~ recognized an additional compensation expense of Rs. ~~165.00~~165 million for the year ended March 31, 2007.

As of March 31, ~~2007, there were 7,499,980~~2009, 122,746 options are outstanding under our ~~WRSUP 2004~~stock option plan and ~~1,551,330~~16,270,226 options are outstanding under our ~~WARSUP 2004~~restricted stock unit option plan. The compensation cost arising from such grants is being amortized over the relevant vesting ~~period of five years.~~

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period. As a result of the above, we have amortized stock compensation expenses of Rs. ~~354 million,~~1,336, Rs. ~~652 million~~1,076 and Rs. ~~1,336 million~~1,636 for the years ended March 31, ~~2005, 2006~~2007, 2008 and ~~2007~~2009, respectively.

The stock compensation charge has been allocated to cost of revenue and selling and marketing expenses and general and administrative expenses in line with the nature of the service rendered by the employee who received the benefit.

The allocation is as follows:


	Year ended March 31,						Year ended March 31,
	2005		2006		2007		2009		2008		2007
			(in millions)						(in millions)
Cost of revenue	Rs.	238	Rs.	437	Rs.	1,045	Rs.	1,232	Rs.	840	Rs.	1,044
Selling and marketing expenses		49		75		169		197		137		169
General and administrative expenses		67		140		122		166		99		122

	Rs.	354	Rs.	652	Rs.	1,336	Rs.	1,595	Rs.	1,076	Rs.	1,336

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The Indian Finance Act, 2005 imposes an additional income tax on companies called a “Fringe Benefits Tax”, or FBT. Pursuant to this Act, companies are deemed to have provided fringe benefits to their employees if certain defined expenses and employee stock option expenses are incurred. These expenses, or a portion thereof, are deemed to be a fringe benefit to the employees and subjects a company to tax at a rate of 30%, exclusive of applicable surcharge and cess. FBT on all stock options is assessed that are exercised on or after April 1, 2007, and is based on the intrinsic value of the stock options on the vesting date. We record the FBT liability for employee stock options at the time of exercise of employee stock options. The FBT and other similar taxes enacted in the future by the Government of India could adversely affect our profitability. In our income statement, the FBT is allocated as cost of revenues, selling and marketing expenses and general and administrative expenses on the basis of its nature.

The Indian tax laws permit the employer to recover the FBT from the employee as the tax relates to benefits accruing to the employees. Pursuant to such law, we have amended our stock option plans to recover the amount from the employees relating to employee stock options. For options granted prior to March 31, 2007, although the FBT expense will be recorded through our income statement, the corresponding recovery, which is directly linked to exercise of stock options, will be recorded as additional exercise price. The FBT liability for outstanding options as of March 31, 2009, based on market price of our shares is approximately Rs. 1,281.

Amortization of Intangible Assets

Intangible assets are amortized over their estimated useful lives in proportion to the economic benefits consumed in each period. We have amortized intangible assets of Rs. ~~140 million,~~379, Rs. ~~94 million~~724 and Rs. ~~379 million~~1,535 for the years ended March 31, ~~2005, 2006~~2007, 2008 and ~~2007~~2009, respectively. The increase is due to amortization of intangibles of Infocrossing, Unza and CTS.

Foreign Exchange Gains/(Losses), net

Foreign exchange ~~gains,~~gains/ (losses), net, comprise:

	•		~~exchange differences arising from the translation or settlement of transactions in foreign currency; and~~

	•		Exchange differences arising from the translation or settlement of transactions in foreign currency, except for exchange differences on debt denominated in foreign currency (which are reported within Other income, net); 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 and subsequently recorded ~~in the income statement when the hedged transaction occurs along with the hedged item.~~

~~Others, net~~

~~Others, net, include net gains on the sale of property, plant, equipment, and other operating income.~~

~~Loss on Direct Issue of Stock by Subsidiary~~

As of March 31, 2004, Wipro BPO had 4,745,731 employee stock options outstanding under the Wipro BPO option plan. During the year ended March 31, 2005, 4,637,375 options vested and were exercised at a price of Rs. 57 per share.

~~As the exercise price per option was less than our carrying value per share, the decline~~ in the ~~carrying~~income statement when the hedged transaction occurs, along with the hedged item. Changes in the fair value of ~~our ownership interest~~derivative instruments which are economic hedges in respect of ~~Rs. 207 million has been included~~debt denominated in ~~the statement of~~foreign currency are reported in Other income, ~~for the year ended March 31, 2005 as a loss on the direct issue of stock by a subsidiary.~~net.

The shares issued as a result of the option exercises are covered by a share repurchase feature that entitles us to repurchase these shares at the then fair value and also gives the employee the right to sell the shares back to us at the then fair value. Both we and the employee can exercise this repurchase right after six months from the date of option exercise. During the year ended March 31, 2005, we acquired 4,147,561 shares from the employees of Wipro BPO for an aggregate consideration of Rs. 618 million, pursuant to the repurchase right. The excess of consideration paid over the value of minority interest acquired amounting to Rs. 189 million has been recorded as goodwill.

Other Income, net

Our other income, net includes interest income on liquid and short-term investments, ~~net of~~ interest and related expense on short-term borrowings from banks, short-term and long-term debt, dividend income, exchange differences arising from the translation or settlement of debt denominated in foreign currency and changes in fair value of related derivative instruments and realized gains/losses on the sale of investment securities.

Equity in Earnings/Losses of Affiliates

Wipro GE Medical Systems Private Limited. (Wipro GE).We hold a 49% equity interest in Wipro GE Medical Systems Private Limited, a venture where General Electric, USA holds the balance of 51%.

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~~WeP Peripherals (WeP).~~We held a 36.9% interest as of March 31, 2006 in WeP Peripherals. In December 2006, we sold a portion of our interest in WeP Peripherals subsequent to which, our ownership interest in WeP Peripherals reduced to 15% and we do not have the ability to exercise significant influence over the operating and financial policies of WeP Peripherals. Accordingly, we now account for our investment under the cost method.

~~W M Netserv.~~We record our 80.1% ownership interest in WM Netserv by the equity method as the minority shareholder in the investee has substantive participative rights as specified in EITF Issue No. 96-16, Investor’s Accounting for an Investee When the Investor Has a Majority of the Voting Interest but the Minority Shareholder or Shareholders Have Certain Approval or Veto Right.

Income Taxes

Our net income earned from providing services at client premises outside India is subject to tax in the country where we perform the work. Most of our tax paid in countries other than India can be applied as a credit against our Indian tax liability to the extent that the same income is liable to tax in India.

Currently, we benefit from certain tax incentives under Indian tax laws. As a result of these incentives, our operations have not been subject to significant Indian tax liabilities. These tax incentives currently include a tax holiday from payment of Indian corporate income taxes for our ~~Global IT Services and Products business operated~~businesses operating from specially designated ~~“Software~~Software Technology ~~Parks”~~ and ~~“Special~~Hardware Technology Parks and Special Economic Zones” in India and an income tax deduction of 100% for profits derived from exporting information technology services. As a result, a substantial portion of our pre-tax income has not been subject to significant tax in recent years. For the years ended March 31, 2005, 2006 and 2007 our tax benefits were Rs. 4,591 million, Rs. 4,721 million and Rs. 6,464 million respectively, from such tax incentives.Zones. We are currently also eligible for exemptions from other taxes, including customs duties.

49

InSoftware Technology and Hardware Technology Parks.Under this scheme there is provision for an income tax deduction of 100 percent for profits derived from exporting information technology services for the ~~Finance Act, 2005,~~first ten years from the ~~Government~~commencement of ~~India introduced a separate tax holiday scheme for units set up under designated special economic zones engaged in manufacture of articles or in~~ provision of services. Previously, the tax holiday for these parks was scheduled to expire in stages with a mandated maximum expiry period of March 31, 2009. The Finance Act, 2008 has extended the availability of the ten year tax holiday by period of one year such that the tax holiday will be available until the earlier of fiscal year 2010 or ten years.

Special Economic Zone.Under this scheme, units in designated special economic zones which begin providing services on or after April 1, 2005 will be eligible for a deduction of 100 percent of profits or gains derived from the export of services for the first five years from commencement of provision of services and 50 percent of such profits or gains for a further five years. Certain tax benefits are also available for a further five years subject to the unit meeting defined conditions.

As a result, a substantial portion of our pre-tax income has not been subject to a significant tax in India in recent years. When our tax holiday and income tax deduction exemptions expire or terminate, our costs will increase. Additionally, the Government of India could enact ~~similar~~ laws in the future, which could ~~further~~ impair the tax incentives which benefit our business.

Profits from certain other undertakings are also eligible for preferential tax treatment. In addition, dividend income from certain category of investments is exempt from tax.

For the years ended March 31, 2007, 2008 and 2009 our tax benefits were Rs. 7,948, Rs. 8,450 and Rs. 10,368, respectively, from such tax incentives. ~~When our tax holiday and income tax deduction exemptions expire or terminate, our costs will increase.~~

~~We have~~The Company received tax demands from the Indian income tax authorities for the financial years ended March 31, 2001, 2002, 2003 and ~~2003~~2004, respectively aggregating to Rs. ~~8,100 million~~11,127 (including interest of Rs. ~~750 million)~~1,503). The tax ~~demands were~~demand was primarily on account of denial of deduction claimed by usthe Company under Section 10A of the Income Tax Act 1961, ~~(Act),~~ in respect of profits earned by ~~our~~its undertakings in Software Technology Park at Bangalore. ~~We had appealed against these demands. In March 2006,~~The appeals filed by the Company for the above years to the first appellate authority ~~vacated~~were allowed in favor of the Company, thus deleting substantial portion of the demand raised by the Income tax ~~demands~~authorities. On further appeal filed by the income tax authorities, the second appellate authority upheld the claim of the company for the years ended March 31, 2001, 2002, 2003 and ~~2002. The income tax authorities have filed an appeal.~~

In March 2007, the first Income tax appellate authority upheld the deductions claimed by us under Section 10A of the Act, which vacates a substantial portion of the demand for the year ended March 31, 2003.

2004. In December ~~2006, we~~2008, the Company received, on similar grounds, an additional tax demand of Rs. ~~3,027 million~~5,388 (including interest of Rs. ~~753 million)~~1,615) for the financial year ended March 31, ~~2004 on similar grounds as earlier years. We have~~2005. The Company has filed an appeal against ~~this demand.~~the said demand within the time limits permitted under the statute.

Considering the facts and nature of disallowance and the order of the appellate ~~authority~~authorities upholding our claims for earlier years, we believe that the final outcome of the above ~~dispute~~disputes should be in our favor and there ~~will~~should not be any material impact on ~~our~~the financial statements. The range of loss relating to these contingencies is between zero and the amount of the ~~demand raised.~~demand.

Although we currently believe we will ultimately prevail in our appeals, the ~~results~~result of such appeals, and any subsequent appeals, cannot be predicted with certainty. Should we fail to prevail in our ~~appeals,~~appeal, or any subsequent appeals, in any reporting period, the operating results of such reporting period could be materially adversely affected.

~~The~~Pursuant to the changes in the Indian ~~Finance Act, 2005 imposes an additional~~ income tax ~~on companies called~~laws, Minimum Alternate Tax (MAT) has been extended to income in respect of which a ~~“Fringe Benefits Tax”, or FBT. Pursuant~~deduction is claimed under section 10A and 10B; consequently, we have calculated our domestic tax liability for fiscal 2009 after considering MAT. The excess tax paid under MAT provisions over and above normal tax liability can be carried forward and set-off against future tax liabilities computed under normal tax provisions.

The unrecognized tax benefits has increased by Rs. 2,429 during the year ended March 31, 2009 primarily due to ~~this Act, companies are deemed to have provided fringe benefits to their employees if~~ certain ~~defined expenses are incurred. A portion~~additional tax credit carryforward of these expenses is deemed to be a fringe benefit to the employees and subjects a company to tax at a rate of 30%, exclusive of applicable surcharge and cess. The Fringe Benefits Tax and other similar taxes enactedRs. 918 reported in the ~~future by~~income tax filings for the ~~Government~~year ended March 31, 2008 and on account of ~~India could adversely affect our profitability.~~additional impact in the current year in relation to uncertain tax positions taken in the current year.

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Liquidity and Capital Resources

The Company’s cash flow from operating, investing and financing activities, as reflected in the Consolidated Statement of Cash Flows on page 99, is summarized in the table below:

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	Year ended March 31,									Year on Year Change
	2009			2008			2007			2009-08			2008-07
Net cash provided by/(used in) continuing operations:
Operating activities	Rs.	36,832		Rs.	24,595		Rs.	30,161		Rs.	12,237		Rs.	(5,566	)
Investing activities		(27,693	)		(28,505	)		(21,377	)		812			(7,128	)
Financing activities		44			30,798			(5,180	)		(30,754	)		35,978
Net change in cash and cash equivalents		9,184			26,888			3,604			(17,704	)		23,284
Effect of exchange rate changes on cash and cash equivalent		663			(30	)		(50	)		693			20

As of March 31, 2009, we had cash and cash equivalent, short-term investments, and short-term deposits of Rs. 69,547. Cash and cash equivalent, short-term investments and short-term deposits, net of debt was Rs. 12,741. In addition we have unused credit lines of Rs. 19,160. To utilize these lines of credit we require the consent of the lender and compliance with certain financial covenants. We have historically financed our working capital and capital expenditure ~~significantly~~ through our operating cash ~~flows. As of March 31, 2007, we had cash~~flows and cash equivalents of Rs. 12,418 million, investments in liquid and short-term mutual funds of Rs. 32,410 million and unused lines of credit of approximately Rs. 3,204 million, US$ 25 million and GBP 6 million from our bankers for working capital requirements. To utilize this line of credit we need to comply with certain financial covenants. As of March 31, 2007 we were in compliance with such financial covenants.through bank debt, as required.

Cash provided by operating activities increased by Rs. 12,237, while net income increased by Rs. 2,174 during the same period. The increase in cash provided by operating activities was primarily due to reduction in receivable days in the IT Services segment from 67 days in March 2008 to 60 days in March 2009 and greater focus on strengthening our working capital position resulting in increase in accounts payable and accrued expenses. Receivable days as of a reporting date is the proportion of receivables, including unbilled and unearned revenue to the revenues for the respective fiscal quarter multiplied by 90.

Further, our net income included Rs. 3,973 of non-cash charge relating to reinstatement of foreign currency loan and mark to market gains/losses on related cross-currency interest rate swaps. These were offset by Rs. 12,196 of cash losses on roll-over of cash flow hedges and hedge of net investment in foreign operation.

Cash provided by operating activities decreased from Rs. 30,161 for the year ended March 31, 2007 to Rs. 24,595 for the year ended March 31, 2008. Our net income increased by 11% during the year ended March 31, 2008. The decline was primarily due to increases in our accounts receivable, unbilled revenues, deferred contract costs and inventories. Increase in accounts receivable was primarily due to an increase in receivable days in IT Services and Products. Unbilled revenues increased due to an increase in the proportion of revenues from fixed price projects. This is partially offset by the increase in unearned revenue and advance from customers. Inventories in our infrastructure engineering products business increased due to our strategy to reduce impact of procurement lead time.

Cash used in investing activities for the year ended March 31, ~~2007~~2009 was Rs. ~~30,162 million~~(27,693). Cash provided by operating activities was utilized for the net purchase of investments amounting to Rs. (1,030), the purchase of property, plant and equipment amounting to Rs. (16,234) and payments made in connection with acquisitions of Rs. (6,679).

Cash used in investing activities for the year ended March 31, 2008 was Rs. (28,505) against Rs. ~~20,192 million~~(21,377) in the year ended March 31, ~~2006. This increase~~2007. Cash provided by operating activities, net proceeds from sale/maturity of ~~49% was~~investments and net proceeds from short-term borrowings/long-term debt were utilized to finance the acquisitions amounting to Rs. (32,789) and purchase of property, plant and equipment amounting to Rs. (14,674) which is primarily driven by ~~a 44% increase in net income from Rs. 20,270 million~~the growth strategy of the Company.

Cash provided by financing activities for the year ended March 31, ~~2006 to~~2009 was Rs. ~~29,169 million~~44.

Cash provided by financing activities for the year ended March 31, ~~2007. Depreciation and amortization increased from~~2008 was Rs. ~~3,195 million for the year ended March 31, 2006 to~~30,798 against Rs. ~~4,309 million for the year ended March 31, 2007. Similarly stock based compensation increased from Rs. 662 million for the year ended March 31, 2006 to Rs. 1,336 million for~~(5,180) of cash used in financing activities during the year ended March 31, 2007. This increase is primarily due to ~~new stock options granted during the year. The~~ increase in ~~individual line under operating asset and liability was generally consistent with the increase in business volumes during the year.~~

Cash used in investing activities for the year ended March 31, 2007 was Rs. 21,377 million against Rs. 17,299 million in the year ended March 31, 2006. During the year ended March 31, 2007, Rs. 7,800 million was utilized for acquisitions against Rs. 2,777 million utilized during the year ended March 31, 2006. This increase was primarily driven by our business growth strategies. We expect to continue fund acquisitions through cash generatednet proceeds from operations. During the year ended March 31, 2007, we utilized Rs. 11,392 million for acquiring property, plant and equipment which was consistent with an increase in operations and business volumes. The remaining amounts were invested in liquid and short-term ~~mutual funds.~~

Cash used in financing activities for the year ended March 31, 2007 was Rs. 5,180 million against Rs. 305 million of cash provided by financing activities during the year ended March 31, 2006. This increase was primarily due to dividends paid amounting to Rs. 16,111 million which isborrowings/long-term debt partially offset by ~~cash receipts on~~lower proceeds from issuance of equity ~~shares amounting~~shares. The funds were utilized to ~~Rs. 8,894 million and short-term borrowings amounting to Rs. 1,825 million.~~fund the acquisitions.

We have proposed to pay a cash dividend of ~~Re. 1~~Rs. 4 per share on our equity shares and ~~ADRs.~~AD Rs. This proposal is subject to approval by the shareholders of the Company. We expect a dividend payout (excluding corporate dividend tax) of approximately Rs. ~~1,459~~5,860 million.

We maintain debt/borrowing level that we have established through consideration of a number of factors including cash flow expectations, cash required for operations and investment plans. We continually monitor our funding requirement and strategies are executed to maintain sufficient flexibility to access global funding sources, as needed. The increase in our outstanding debt and borrowings is primarily due to depreciation of Indian rupee against the U.S. dollars and Japanese Yen (JPY). Please refer to Note 16 of our Notes to the Consolidated Financial Statements for more details on borrowings.

As discussed above, cash generated from operations is our primary source of liquidity. We believe that our cash and cash equivalent along with cash generated from operations would be sufficient to meet the repayment obligations in respect of debt / borrowings.

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As of March 31, ~~2007~~2009, we had contractual commitments of Rs. ~~3,432 million~~5,371 ($ ~~80 million)~~106) related to capital expenditures on construction or expansion of software development facilities, Rs. 7,091 ($ 139) related to non-cancelable operating lease obligations and Rs. 3,255 ($ 64) related to other purchase obligations. Plans to construct or expand our software development facilities are dictated by business requirements.

In relation to our acquisitions, a portion of the purchase consideration is payable upon achievement of specified earnings targets in future. ~~Details are given below.~~ We ~~currently intend to finance our planned construction and expansion entirely through~~expect that our cash and cash equivalents, ~~and~~ investments in liquid and ~~short term~~short-term mutual funds ~~as of March 31, 2007.~~and the cash flows expected to be generated from our operations in future would generally be sufficient to fund the earn-out payments and our expansion plans.


		~~Maximum Earn-out payable~~
~~Acquired entity~~		~~Earn-out Period~~
~~RetailBox BV and subsidiaries (Enabler)~~		~~Euro 11 Million~~
		~~2 years~~
~~BVPENTE Beteiligungsverwaltung GmbH and its~~		~~Euro 27 Million~~
~~subsidiaries (New Logic)~~		~~3 years~~
~~North-West Switchgear Limited~~		~~Rs. 200 Million~~
		~~4 years~~
~~India, Middle East and SAARC operations of 3D~~		~~USD 44 million~~
~~Networks and Planet PSG~~		~~2 years~~
~~Saraware Oy~~		~~Euro 7 Million~~
		~~1.5 years~~
~~cMango Inc and subsidiaries (cMango)~~		~~USD 12 Million~~
		~~2 years~~
~~Quantech Global Services (Quantech)~~		~~To be determined~~
		~~3 years~~

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In the normal course of business, we transfer accounts receivables, net investment in sale-type finance receivable and employee advances (financial assets). These transfers can be with or without recourse. As at March 31, ~~2007,~~2009, we had transferred financial assets of Rs. ~~480 million.~~539 without recourse.

Our liquidity and capital requirements are affected by many factors, some of which are based on the normal ongoing operations of our businesses and some of which arise from uncertainties related to global economies and the markets that we target for our services. ~~In addition, we routinely review potential acquisitions. In the future, we may require or choose to obtain additional debt or equity financing.~~ We cannot be certain that additional financing, if needed, will be available on favorable terms, if at all.

Off-Balance Sheet Arrangements

We have not entered into any off-balance sheet arrangements as defined by SEC Final Rule 67 (FR-67), “Disclosure in Management’s Discussion and Analysis about Off-Balance Sheet Arrangements and Aggregate Contractual Obligations”.

Contractual obligations

The table of future payments due under known contractual commitments as of March 31, ~~2007,~~2009, aggregated by type of contractual obligation, is given below:

~~In Rs. million~~


	Total		Payments due in								Total
	contractual								2012-13		contractual				Payments due in				2014-15
	payment		2007-08		2008-10		2010-12		onwards
Particulars											payment		2009-10		2010-12		2012-14		onwards
Short-term borrowings												36,472		36,472		—		—		—
Long-term debt		888		328		530		30		—		18,916		235		411		18,270		—
Obligations under capital leases												1,418		504		513		334		67
Estimated interest payment⁽¹⁾												2,277		511		1,132		634		—
Capital commitments												5,371		5,371		—		—		—
Non-cancelable operating lease obligation		2,573		395		699		526		953		7,901		1,064		2,020		1,649		3,168
Capital Commitments		3,432		3,432		—		—		—
Purchase obligations		3,160		3,160		—		—		—		3,255		3,255		—		—		—
Other long-term liabilities⁽¹⁾		277		128		149		—		—
Other long-term liabilities⁽²⁾												932		786		41	��	10		95

~~Purchase~~Our purchase obligations include all commitments to purchase goods or services of either a fixed or minimum quantity that meet any of the following criteria: (1) they are non-cancelable, or (2) we would incur a penalty if the agreement was terminated. If the obligation to purchase goods or services is non-cancelable, the entire value of the contract ~~was~~has been included in the above table. If the obligation is cancelable, but we would incur a penalty if cancelled, the amount of the penalty is included as a purchase obligation.

⁽¹⁾In accordance with SFAS No. 87, “Employers’ Accounting for Pensions,” and SFAS No. 106, “Employers’ Accounting for Postretirement Benefits Other Than Pensions,” as amended by SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans — an amendment of FASB Statements No. 87, 88, 106, and 132(R),” the total accrued benefit liability for defined benefit and contribution plans recognized as of March 31, 2007, was Rs. 492 million. This accrued liability is included under other long-term liabilities in the consolidated balance sheet. This amount is impacted by, among other items, pension expense funding levels, change in plan demographics and assumptions, return on plan assets etc. Because the accrued liability does not represent expected liquidity needs, we did not include this amount in the contractual obligation table. This was completely funded in April 2007.

⁽¹⁾

Interest payments for long-term fixed rate debts have been calculated based on applicable rates and payment dates.Interest payments on floating rate debt have been calculated based on the payment dates and interest rates as of March 31, 2009 for each relevant debt instrument.

⁽²⁾

In accordance with SFAS No. 87, Employers’ Accounting for Pensions, and SFAS No. 106, “Employers’ Accounting for Postretirement Benefits Other Than Pensions,” as amended by SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans — an amendment of FASB Statements No. 87, 88, 106, and 132(R),” the net accrued benefit liability for defined benefit recognized as of March 31, 2009, was Rs. 269, which is reported as a component of other liabilities in the balance sheet. Other liabilities in the balance sheet also include amount of Rs. 2,321 towards uncertain tax positions. For these amounts, the extent of the amount and timing of payment/cash settlement is not reliably estimable or determinable, at present, and accordingly have not been disclosed in the table above.

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Research and Development

Research and Development investments in IT Services and Products business is directed towards developing solutions that have broad applications across various industry segments and developing expertise in emerging technologies. Over a period of two to three years Research and Development efforts in identified areas are focused on developing in-depth solutions, frameworks and applications.

Research and Development initiatives are executed through Centers of Excellence or CoE and Innovation Initiative.

CoEs are designed to enable growth of existing practice and/or create a new practice. CoEs focus on creating competencies in specific existing and emerging technologies and domains. CoEs create thought leadership by publishing white papers and participating in industry forums. Currently, we have CoEs focusing on Wireless and

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Broadband Communication, Computing Platforms like Grid Computing, e-Biz technologies like Web services, Retail Supply chain management and other similar areas.

Innovation initiative is directed towards creating new solutions and intellectual property which potentially expand our service offerings.

Innovation initiative covers the entire cycle of Idea Generation, Incubation and Successful Execution. We focus on Process Innovations, Delivery Innovations, Technology Innovations, Product Innovations and Business Innovations. ~~We were awarded the NASSCOM’s IT Innovation Award 2005 for our pioneering work in next generation managed services platform.~~

~~Research and development expenditures for the years ended March 31, 2005, 2006 and 2007 were Rs. 274 million, Rs. 202 million and Rs. 268 million, respectively.~~

Trend Information

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

However the recent crisis in the financial and credit markets in the United States, Europe and Asia have resulted in global economic slowdown. According to World Economic Outlook Update published by the International Monetary Fund in January 2009, the GDP of United States is projected to contract by 1.6% in fiscal 2009 and during the same period the GDP of Euro area is projected to contract by 2%.

In an economic slowdown our value proposition of delivering significant cost benefits through superior execution, delivery of services through optimal mix of low cost and nearshore centers and assuming responsibility for delivering targeted savings from defined baseline costs is very compelling to our customers. However, in an economic slowdown, our clients could reduce, postpone or defer decisions on IT spending and outsourcing. This could result in lower IT spending in the near term. Our outlook on revenues for the IT Services ~~and Products.We believe that~~segment for the three months ending June 30, 2009 in some measure reflects these factors.

Further, we expect increased competition among IT companies, ~~commoditization of services and high volume transactions in IT services limits~~which may limit our ability to increase ~~our prices and improve our profits.~~prices. We continually strive to differentiate ourselves from the competition ~~innovate~~by innovating service delivery models, ~~adopt~~adopting new pricing strategies and ~~demonstrate~~demonstrating our value proposition to ~~the client~~clients to sustain prices and profits. We have also acquired businesses to augment our existing services and capabilities. ~~Our acquisitions have also allowed us to sustain and in certain circumstances improve our prices and profits.~~

Gross profit as a percentage of revenues in our IT Services ~~and Products business decreased from 36% in~~segment for the year ended March 31, ~~2006~~2009 is 33%. We anticipate difficulties in significantly improving our gross profits, among other things, due to ~~34%~~the following reasons:

Our limited ability to increase prices;

Increases in the ~~year ended March 31, 2007. We anticipate difficulty in sustaining or improving~~proportion of services performed at client location; and

The impact of exchange rate fluctuations on our ~~profits due to:~~rupee realizations

	•		~~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;~~

~~We expect these trends to continue for the foreseeable future.~~ In response to the possible reduction in demand for IT services, pressure on gross margins and the increased competition from other IT services companies, we are focusing ~~on offering services with higher margins,~~ on;

Performance And Capital Efficiency (PACE) program- reduce capex spends, deliver process and application optimization and assume ownership of specific IT areas to reduce baseline IT spends for the client;

strengthening our delivery ~~model, increasing~~model;

cost containment initiatives and driving higher employee ~~productivity, investing in emerging technology areas, managing our cost structure,~~ productivity;

aligning our resources to expected ~~demand~~demand; and

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increasing the utilization of our IT professionals.

To remain competitive, we believe that we need to innovate, identify and position ourselves in emerging technology areas and increase our understanding of industry, business and impact of IT on the business.

~~Our IT Services and Products business segment is also subject to fluctuations primarily resulting from factors such as:~~

	•		~~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~~. Although we believe that the increasing acceptance of outsourcing and offshoring as an economic necessity has contributed to continued growth in our revenue, we have experienced pricing pressures in our BPO Services business due to increased competition among IT companies. Gross profit as a percentage of revenues in BPO Services increased from 24% in the year ended March 31, 2006 to 34% in the year ended March 31, 2007. We anticipate difficulty in sustaining or improving our profits due to, among other things, the impact of the high percentage on fixed costs, attrition rates and composition of voice based services in our revenues from BPO services. Our BPO Services business segment is also subject to seasonal fluctuations.

~~India and AsiaPac IT Services and~~ Products.In our ~~India and AsiaPac~~ IT ~~Services and~~ Products business segment, we have experienced pricing pressures due to increased competition among IT companies. Large multinational

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corporations like IBM, HP and HPDell have identified India as a key focus area. ~~The~~Our gross ~~margins~~margin in ~~the products component of~~ this business segment ~~decreased~~is also impacted by 1%the proportion of our business derived from ~~11%~~the sale of traded and manufactured products.

Our IT Products business segment is also subject to seasonal fluctuations. Our revenue in this business segment is driven by the capital expenditure budgets and spending patterns of our clients, who often delay or accelerate purchases in reaction to tax depreciation benefits on capital equipment. As a result revenue from our IT Product business segment for the ~~year~~quarters ended March 31 ~~2006 to 10% for~~and December 31 are typically higher than other quarters of the ~~year ended March 31, 2007.~~year.

Consumer Care and Lighting.Our Consumer Care and Lighting business segment is also subject to seasonal fluctuations. Our revenues in this segment are also subject to commodity price fluctuations.

Our quarterly revenue, operating income and net income have varied significantly in the past and we expect that they are likely to vary in the future. You should not rely on our quarterly operating results as an indication of future performance. Such quarterly fluctuations may have an impact on the price of our equity shares and ADSs.

Dividends.Final dividends on common stock are recorded as a liability on the date of declaration by the stockholders and ~~the~~ interim dividends are recorded as a liability on the date of declaration by the board of directors.

Recent accounting pronouncements

~~FASB Interpretation No. 48. .~~In July 2006, the FASB issued Interpretation (FIN) No. 48, Uncertainty in Income Taxes. FIN 48 applies to all tax positions within the scope of SFAS No. 109, Accounting for Income Taxes, and clarifies when and how to recognize tax benefits in the financial statements with a two-step approach of recognition and measurement. FIN 48 is effective for fiscal years beginning after December 15, 2006, and, as a result, is effective for the Company commencing April 1, 2007. FIN 48 also requires the enterprise to make explicit disclosures about uncertainties in their income tax positions, including a detailed roll-forward of tax benefits taken that do not qualify for financial statement recognition. The Company is currently evaluating the impact of FIN 48 on the consolidated financial statements.

SFAS No. ~~157.~~141R.In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (SFAS No. 157). SFAS No. 157 defines ‘fair value’ as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. SFAS No. 157 provides guidance on determination of fair value and lays down the fair value hierarchy to classify the source of information used in fair value measurement. We are currently evaluating the impact of SFAS No. 157 on our financial statements and will adopt the provisions of SFAS No. 157 for the fiscal year beginning April 1, 2008.

~~SFAS No. 159.~~~~In February~~December 2007, the FASB issued SFAS No. ~~159, The Fair Value Option for Financial Assets and Financial Liabilities (SFAS~~141 (revised 2007),“Business Combinations”(SFAS No. ~~159)~~141R), which is a revision of SFAS No. 141,“Business Combinations”. This statement ~~permits entities~~establishes principles and requirements for how an acquirer: recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed and any non-controlling interest in the acquiree; recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase; and determines what information to ~~choose~~disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. We are required to apply this new standard prospectively to business combinations for which the acquisition date is on or after the beginning of the annual reporting period beginning on or after December 15, 2008. Early adoption is prohibited. We will adopt this statement effective April 1, 2009 and its effects on future periods will depend on the nature and significance of business combinations subject to SFAS No. 141R.

On April 1, 2009, the Financial Accounting Standards Board (FASB) issued FASB Staff Position No. FAS 141(R)-1, “Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies”(the FSP), to amend and clarify the initial recognition and measurement, subsequent measurement and accounting, and related disclosures arising from contingencies in a business combination under SFAS No. 141R. The effects of this FSP on future periods will depend on the nature and specific facts of business combinations subject to SFAS No. 141R.

SFAS No. 160.In December 2007, the FASB issued SFAS No. 160,“Non-controlling Interests in Consolidated Financial Statements” (SFAS No. 160 — an amendment of ARB No. 51). SFAS No. 160 establishes accounting and reporting standards for ownership interests in subsidiaries held by parties other than the parent, the amount of consolidated net income attributable to the parent and to the non-controlling interest, changes in a parent’s ownership interest and the valuation of retained non-controlling equity investments when a subsidiary is deconsolidated. SFAS No. 160 also establishes disclosure requirements that clearly identify and distinguish between the interests of the parent and the interests of the non-controlling owners. We are required to adopt this new standard for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. We do not expect the adoption of this statement to have a material effect on the Consolidated Financial Statements.

SFAS No. 161.In March 2008, the FASB issued SFAS No. 161,“Disclosures about Derivative Instruments and Hedging Activities — An Amendment of FASB Statement No. 133” (SFAS No. 161). SFAS No. 161 requires enhanced disclosures on derivative and hedging activities by requiring objectives to be disclosed for using derivative instruments in terms of underlying risk and accounting designation. This statement requires disclosures on the need of using derivative instruments, accounting of derivative instruments and related hedged items, if any, under SFAS No. 133 and the effect of such instruments and related hedge items, if any, on the financial position, financial performance and cash flows. We are required to adopt this new statement for fiscal years beginning after November 15, 2008. Pursuant to the transition provisions of the statement, we will adopt SFAS No. 161 in fiscal year 2009 and will present the required disclosures in the prescribed format on a prospective basis. This statement does not impact the consolidated financial results as it is disclosure-only in nature.

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FSP SFAS 142-3In April 2008, the FASB issued FSP SFAS 142-3, “Determination of the Useful Life of Intangible Assets”(FSP 142-3). This guidance is intended to improve the consistency between the useful life of a recognized intangible asset under SFAS No. 142, “Goodwill and Other Intangible Assets”(SFAS 142), and the period of expected cash flows used to measure ~~many financial instruments and certain other items at~~the fair ~~value. The objective is~~value of the asset under SFAS 141R when the underlying arrangement includes renewal or extension of terms that would require substantial costs or result in a material modification to ~~improve financial reporting by providing entities with~~ the ~~opportunity to mitigate volatility~~asset upon renewal or extension. Companies estimating the useful life of a recognized intangible asset must now consider their historical experience in ~~reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions.~~renewing or extending similar arrangements or, in the absence of historical experience, must consider assumptions that market participants would use about renewal or extension as adjusted for SFAS ~~No. 159~~142’s entity-specific factors. FSP 142-3 is effective for ~~the fiscal year~~us beginning April 1, ~~2008.~~2009. We ~~are currently evaluating~~would be required to adopt this FSP prospectively for all assets acquired after April 1, 2009 and early adoption is prohibited. Its effects on future periods will depend on the ~~impact that the adoption~~nature and specific facts of assets acquired subject to SFAS No. ~~159 will have~~142.

FSP 132 (R)-1In December 2008, the FASB issued FSP SFAS 132(R)-1, “Employers’ Disclosures about Postretirement Benefit Plan Assets”(FSP 132(R)-1). This guidance amends SFAS No. 132(R), “Employers’ Disclosures about Pensions and Other Postretirement Benefits”, to require more detailed disclosures about the fair value measurements of employers’ plan assets including (a) investment policies and strategies; (b) major categories of plan assets; (c) information about valuation techniques and inputs to those techniques, including the fair value hierarchy classifications (as defined by SFAS No. 157) of the major categories of plan assets; (d) the effects of fair value measurements using significant unobservable inputs (Level 3) on ~~our~~changes in plan assets; and (e) significant concentrations of risk within plan assets. The disclosures required by the FSP is effective for us beginning April 1, 2009. This statement does not impact the consolidated financial ~~statements.~~results as it is disclosure-only in nature.

Critical accounting policies

Critical accounting policies are defined as those that in our view are the most important ~~to the~~for portrayal of the Company’s financial condition and results and ~~that~~which place the most significant demands on management’s judgment. For a detailed discussion on the application of these and other accounting policies, please refer to Note 2 to the Notes to Consolidated Financial Statements.

Revenue Recognition

We derive our revenues primarily from two sources: (i) product revenue and (ii) service revenue.

Product Revenue

Product revenue is recognized when there is persuasive evidence of an arrangement, the product has been delivered in accordance with the sales contract, the sales price is fixed or determinable, and ~~collectibility~~collectability is reasonably assured. ~~The product is considered delivered to the customer once it has been shipped, and title and risk of loss has been transferred.~~

We generally consider a binding purchase order or a signed contract as persuasive evidence of an arrangement. Persuasive evidence of an arrangement may take different forms depending upon the customary practices of a specific class of customers.

We provide lease financing for our products primarily through sales-type leases. We classify our leases in accordance with SFAS No. 13, Accounting for Leases. The vast majority of our leases qualify as sales-type leases using the present value of minimum lease payments classification criteria outlined in SFAS No. 13. We believe that our sales-type lease portfolio contains only normal collection risk with no important uncertainties with respect to future costs. Accordingly, we record the fair value of equipment as sales revenue, the cost of equipment as cost of sales and the minimum lease payments plus the estimated residual value as gross finance receivables. The difference between the gross finance receivable and the equipment fair value is recorded as unearned income and is amortized as income over the lease term using the interest rate implicit in the lease. Equipment residual values are determined at inception of the lease using estimates of equipment fair value at the end of the lease term.

Revenue from sale of software products is recognized in accordance with SOP 97-2, Software Revenue Recognition. In multiple element software arrangements, revenue is allocated to each element based on fair value. The fair value of elements within the scope of SOP 97-2 is determined using Vendor-Specific Objective Evidence (VSOE). In the absence of VSOE for all elements, the residual method is used where VSOE exists for all the undelivered elements. Where VSOE of the undelivered element cannot be determined, revenue for the delivered elements is deferred until the undelivered elements are delivered. If sufficient VSOE does not exist to allocate revenue to the elements and Post-Contract Customer Support (PCS) is the only undelivered element, the entire arrangement fee is recognized ratably over the PCS term. Since there is no reasonable basis of separating the license revenue from PCS, the entire revenue is classified as product revenues.

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Service Revenue

Service revenue is recognized when there is persuasive evidence of ~~a contract,~~an arrangement, the sales price is fixed or determinable, and ~~collectibility~~collectability is reasonably assured. Time-and-materials service contract revenue is recognized as the services are rendered. Revenue from fixed-price, fixed-timeframe contracts that involve significant production, modification or customization of the software is accounted for in conformity with ARB No. 45, using the guidance in Statement of Position (SOP) 81-1, and the Accounting Standards Executive Committee’s conclusion in paragraph 95 of SOP 97-2, Software Revenue Recognition. Fixed-price, fixed-timeframe contracts, which are similar to “contracts to design, develop, manufacture, or modify complex aerospace or electronic equipment to a buyer’s specification or to provide services related to the performance of such contracts” and “contracts for services performed by architects, engineers, or architectural or engineering design firms” as laid out in paragraph 13 of SOP 81-1, are also accounted for in conformity with SOP 81-1. In these ~~Fixed-price,~~fixed-price, fixed-timeframe contracts revenue is recognized using the percentage-of-completion method.

We use the input (cost expended) method to measure progress towards completion. Percentage of completion method accounting relies on estimates of total expected contract revenue and costs. We follow this method when reasonably dependable estimates of the revenues and costs applicable to various elements of the contract can be made. Key factors we review to estimate the future costs to complete include estimates of future labor costs and productivity efficiencies. Because the financial reporting of these contracts depends on estimates that are assessed continually during the term of these contracts, recognized revenue and profit are subject to revisions as the contract progresses to completion. When estimates indicate that a loss will be incurred, the loss is provided for in the period in which the loss becomes evident. To date, we have not had any fixed-price, fixed-timeframe contracts that resulted in a material loss.

We evaluate change orders to determine whether such change orders are normal element and form part of the original scope of the contract. If the change orders are part of the original scope of the contract, no changes are made to the contract price. For other change orders, contract revenue and costs are adjusted only after the approval of the changes to the scope and price by us and the client. Costs that are incurred for a specific anticipated contract and that will result in no future benefits unless the contract is obtained are not included in contract costs before the receipt of the contract. However, such costs are deferred only if the cost can be directly associated with specific anticipated contract and the recoverability from that contract is deemed to be probable.

Maintenance revenue is recognized ratably over the term of the agreement. Revenue from certain service arrangement involving defined but dissimilar acts is generally recognized using the proportional performance method. We defer certain upfront non-recurring costs incurred in the initial phases of outsourcing contracts to the extent that such costs represent costs of initial set-up activities or customer ~~training, support~~acquisition costs. The deferred costs are specific internal costs or external costs directly related to set-up activities necessary to execute the outsourced services. Deferred amounts are protected in the event of early termination of the contract and ~~other services~~are monitored regularly for impairment. Impairment is ~~recognized as~~evaluated for a particular contract by comparing the ~~related services are performed.~~estimated undiscounted cash flows from the arrangement with the unamortized costs. If the unamortized costs exceed the undiscounted cash-flow, a loss is recognized.

Revenues from BPO Services are derived from both time-based and unit-priced contracts. Revenue is recognized as services are performed, under ~~the~~ specific terms of the contracts with the customers. We have determined that certain process transition activities performed in the initial phases of certain BPO service contracts do not represent the culmination of a separate earning process. Revenue and related costs of such activities are deferred and recognized ratably over the period in which the subsequent BPO services are performed. Deferred costs are limited to the amount of deferred revenues.

Revenue Arrangements with Multiple Deliverables

~~Based~~For all revenue arrangements with multiple deliverables, based on the guidance in EITF Issue No. 00-21 we ~~recognize~~recognizes revenues on the delivered products or services only if:

•		~~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.~~

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.

The arrangement consideration is allocated to the units of accounting based on their fair values. The revenue recognized for the delivered items is limited to the amount that is not contingent upon the delivery or performance of the undelivered items. In certain cases, the application of the contingent revenue provisions of EITF Issue No. 00-21 could result in recognizing a loss on the delivered element. In such cases, the cost recognized is limited to the amount of non-contingent revenues recognized and the balance of costs are recorded as an asset and are reviewed for impairment based on the estimated net cash flows to be received for future deliverables under the contract. These costs are subsequently recognized on recognition of the revenue allocable to the balance of deliverables.

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Assessments about whether the delivered units have a value to the customer on a standalone basis, impact of ~~forfeiture~~returns and similar contractual provisions, and determination of fair value of each unit would affect the timing of revenue recognition and would impact our results of operations.

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~~Volume discount.~~

We account for volume discounts and pricing incentives to customers using the guidance in EITF Issue 01-09, Accounting for Consideration Given by a Vendor to a Customer (Including a Reseller of the Vendor’s Products). The discount terms in our arrangements with customers generally entitle the customer to discounts, if the customer completes a specified level of revenue transactions. In some arrangements, the level of discount varies with increases in the levels of revenue transactions. We recognize discount obligations as a reduction of revenue based on the ratable allocation of the discount to each of the underlying revenue transactions that result in progress by the customer toward earning the discount. We recognize the liability based on its estimate of the customer’s future purchases. If we cannot reasonably estimate the customer’s future purchases, then the liability is recorded based on the maximum potential level of discount. We recognize changes in the estimated amount of obligations for discounts using a cumulative catch-up adjustment.

Accounting Estimates

While preparing financial statements we make estimates and assumptions that affect the reported amount of assets, liabilities, disclosure of contingent liabilities at the date of financial statements and the reported amount of revenues and expenses for the reporting period. Specifically, we make estimates of the uncollectability of our accounts receivable by analyzing historical payment patterns, customer concentrations, customer credit-worthiness and current economic trends. If the financial condition of a customer deteriorates, additional allowances may be required.

~~Our~~In accounting for amortization of stock compensation, we estimate stock option forfeitures. Any revisions of liability relating to pending litigation is based on currently available facts and our assessment of the probability of an unfavorable outcome. Considering the uncertainties about the ultimate outcome and the amount of losses, we re-assess our estimates ~~as additional information becomes available. Such revisions in our estimates~~ could ~~materially~~ impact our results of operations and our financial position.

We provide for inventory obsolescence, excess inventory and inventories with carrying values in excess of market values based on our assessment of the future demands, market conditions and our specific inventory management initiatives. If market conditions and actual demands are less favorable than our estimates, additional inventory write-downs may be required. In all cases inventory is carried at the lower of historical cost or market value.

Accounting for Income taxes

As part of the process of preparing our consolidated financial statements we are required to estimate our income taxes in each of the jurisdictions in which we operate. We are subject to tax assessments in each of these jurisdictions. A tax assessment can involve complex issues, which can only be resolved over extended time periods. Though we have considered all these issues in estimating our income taxes, there could be an unfavorable resolution of such issues that may affect results of our operations.

We also assess the temporary differences resulting from differential treatment of certain items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are recognized in our consolidated financial statements. We assess our deferred tax assets on an ongoing basis by assessing our valuation allowance and adjusting the valuation allowance appropriately. In calculating our valuation allowance we consider the future taxable incomes and the feasibility of tax planning initiatives. If we estimate that the deferred tax asset cannot be realized at the recorded value, a valuation allowance is created with a charge to the statement of income in the period in which such assessment is made. We have not created a deferred tax liability in respect of the basis difference in the carrying value of investments in domestic subsidiaries, since we expect to realize this in a tax-free manner and the current tax laws in India provide means by which we can realize our investment in a tax-free manner.

We are subject to a 15% branch profit tax in the United States to the extent the net profit attributable to our U.S. branch for the fiscal year is greater than the increase in the net assets of the U.S. branch for the fiscal year, as computed in accordance with the Internal Revenue Code. ~~As of March 31, 2007, the U.S. branch’s net assets amounted to approximately $ 155 million.~~ We have not triggered the branch profit tax and, consistent with our business plan, we intend to maintain the current level of our net assets in the United States. Accordingly, we did not record a provision for branch profit tax as of March 31, ~~2007.~~2009.

We account for uncertainty in income taxes in the financial statements in accordance with Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes — an Interpretation of FASB Statement No. 109 (FIN 48). The accounting and disclosure of tax positions taken or expected to be taken on a tax return are based on the recognition threshold and measurement attribute as prescribed by FIN 48. We recognize penalties and interest related to unrecognized tax benefits as a component of other income, net.

Derivatives and Hedge Accounting, and Exchange Rate Risk

Although our functional currency is the Indian rupee, we transact a significant portion of our business in foreign currencies, particularly the U.S. dollar. The exchange rate between the rupee and the dollar has changed substantially in recent years and may fluctuate substantially in the future. Consequently, the results of our operations are affected as the rupee fluctuates against the U.S. dollar. Our exchange rate risk primarily arises from our foreign currency revenues, cash balances, payables and debt. We enter into derivative instruments to primarily hedge our forecasted cash flows denominated in certain foreign currencies, foreign currency debt and net investment in overseas operations. The derivative instruments also include short term forward foreign exchange contracts pursuant to a roll-over hedging strategy which are replaced with successive new contracts up to the period in which the forecasted transactions are expected to occur. We also designate zero-cost collars, which qualify as net purchased options, to hedge the exposure to variability in expected future foreign currency cash inflows due to exchange rate movements.

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We designate the derivatives in respect of forecasted transactions, which meet the hedging criteria, as cash flow hedges. Changes in the derivative fair values that are designated, effective and qualify as cash flow hedges, under SFAS No. 133 Accounting for Derivative Instruments and Hedging Activities, are deferred and recorded as a component of accumulated other comprehensive income until the hedged transactions occur. On occurrence of the hedge transaction, these amounts are reclassified to the consolidated statements of income and reported along with the hedged item. With respect to derivatives acquired pursuant to the roll-over hedging strategy, the changes in the fair value of discount or forward premium points are recognized in consolidated statements of income of each period.

Gains and losses upon roll-over of derivatives acquired pursuant to the roll-over hedging strategy are deferred and recorded as a component of accumulated other comprehensive income until the hedged transactions occur and are reclassified to the consolidated statements of income and reported along with the hedged item.

We have also hedged the foreign currency risk relating to a portion of our investment in overseas operations through foreign exchange derivative contracts and net purchased options. The entire mark to market and realized gains/losses relating to the effective portion of the hedges is recognized in other comprehensive income to offset the translation gains/losses relating to the hedged investments. This would be transferred to the income statement upon sale or disposal of foreign operation.

Changes in fair value for derivatives not designated as hedging derivatives and ineffective portion of the hedging instruments are recognized in consolidated statements of income of each period. We assess the hedge effectiveness at the end of each reporting period generally using the dollar offset method.

Hedge ineffectiveness could result from forecasted transactions not happening in the same amounts or in the same periods as forecasted or changes in the counterparty credit rating. Further, change in the basis of designating derivatives as hedges of forecasted transactions could alter the proportion of derivatives which are ineffective as hedges. Hedge ineffectiveness increases volatility of the consolidated statements of income since the changes in fair value of an ineffective portion of derivatives is immediately recognized in the consolidated statements of income.

As of March 31, 2009, there were no significant gains or losses on derivative transactions or portions thereof that have become ineffective as hedges, or associated with an underlying exposure that did not occur.

Business Combinations, Goodwill and Intangible Assets

We allocate the purchase price of acquired companies to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values. We may engage third-party appraisal firms to assist us in determining the fair values of certain assets acquired and liabilities assumed. Such valuations require us to make significant estimates and assumptions, especially with respect to intangible assets. Acquired intangible assets may represent indefinite-life intangibles (e.g., certain brands), determinable life intangibles (e.g., customer-related intangibles) or residual goodwill. Of these, only the costs of determinable life intangibles are amortized to expense over their estimated useful life. The estimated useful life determined based on a number of factors, ranges from two to thirty years. The value of indefinite life intangible assets and residual goodwill is not amortized, but is tested at least annually for impairment.

In accordance with SFAS No. 142, Goodwill and Other Intangible Assets, we have assigned all the assets and liabilities, including goodwill, to the reporting units. We review goodwill for impairment annually and whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. The provisions of SFAS No. 142 require that a two-step impairment test be performed on goodwill. In the first step, we compare the fair value of the reporting unit to its carrying value. We determine the fair value of our reporting units using the income approach.

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Under the income approach, we calculate the fair value of a reporting unit based on measurement techniques such as discounted cash flow analyses. If the fair value of the reporting unit exceeds the carrying value of the net assets assigned to that unit, goodwill is not impaired and we are not required to perform further testing. If the carrying value of the net assets assigned to the reporting unit exceeds the fair value of the reporting unit, then we must perform the second step in order to determine the implied fair value of the reporting unit’s goodwill and compare it to the carrying value of the reporting unit’s goodwill. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination. That is, the fair value of the reporting unit is allocated to all of the assets and liabilities of that unit (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination and the fair value of the reporting unit was the purchase price paid to acquire the reporting unit. If the carrying value of a reporting unit’s goodwill exceeds its implied fair value, then we must record an impairment loss equal to the difference.

To assist in the process of determining goodwill impairment, we ~~obtain appraisals from independent valuation firms. In addition we~~ perform internal valuation analyses and consider other market information that is publicly available. We may also obtain appraisals from independent valuation firms in certain cases. The discounted cash flow approach and the income approach, which we use to estimate the fair value of our

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reporting units, are dependent on a number of factors including estimates of future market growth and trends, forecasted revenue and costs, appropriate discount rates and other variables. We base our fair value estimates on assumptions we believe to be reasonable, but which are unpredictable and inherently uncertain. Actual future results may differ from those estimates.

~~Derivatives and Hedge Accounting, and Exchange Rate Risk~~Goodwill Impairment Testing

~~Although our functional currency~~We test goodwill for impairment at least on an annual basis. In accordance with the guidance in paragraph 20 of SFAS No. 142, “Goodwill and Other Intangible Assets” we also evaluate goodwill for impairment, if there are events and conditions which require evaluation for impairment. Determining whether an impairment has occurred requires valuation of the respective reporting unit, which we estimate using the discounted cash flow method. Valuation of reporting unit is judgmental in nature and involves the ~~Indian rupee, we transact a major portion~~use of ~~our business in foreign currencies, particularly the U.S. dollar.~~significant estimates and assumptions which includes revenue growth rates and operating margins used to calculate projected future cash flows, risk-adjusted discount rate, future economic and market conditions. The ~~exchange rate between the rupee and the dollar has changed substantially in recent years and may fluctuate substantially in the future. Consequently, the~~ results of our operations are adversely affected as the rupee appreciates against the U.S. dollar. Our exchange rate risk primarily arises from our foreign currency revenues, receivables and payables. We enter into forward foreign exchange contracts (derivatives) to mitigate the risk of changes in foreign exchange rates on accounts receivables and forecasted cash flows denominated in certain foreign currencies. The derivatives also include short term forward foreign exchange contracts pursuant to a roll-over hedging strategy which are replaced with successive new contracts up to the period in which the forecasted transactions are expected to occur. We also designate zero-cost collars, which qualify as net purchased options, to hedge the exposure to variability in expected future foreign currency cash inflows due to exchange rate movements beyond a defined range. The range comprises an upper and lower strike price. At maturity, if the exchange rate remains within the range the cash inflows are realized at the spot rate, otherwise the cash inflows are realized at the upper or lower strike price.

~~We designate the derivatives in respect of forecasted transactions, which meet the hedging criteria, as cash flow hedges. Changes in the derivative fair values~~evaluation showed that are designated, effective and qualify as cash flow hedges, under SFAS No. 133 Accounting for Derivative Instruments and Hedging Activities, are deferred and recorded as a component of accumulated other comprehensive income until the hedged transactions occur and are then recognized in the consolidated statements of income. With respect to derivatives acquired pursuant to the roll-over hedging strategy, the changes in the fair value of ~~discount or forward premium points are recognized in consolidated statements of income of each period.~~

Gains and losses upon roll-over of derivatives acquired pursuant to the roll-over hedging strategy are deferred and recorded as a component of accumulated other comprehensive income until the hedged transactions occur and are then recognized in the consolidated statements of income.

Changes in fair value for derivatives not designated as hedging derivatives and ineffective portion of the hedging instruments are recognized in consolidated statements of income of each period. We assess the hedge effectiveness at the end of eachall our reporting ~~period.~~units exceeded their book values.

Hedge ineffectiveness could result from forecasted transactions not happening in the same amounts or in the same periods as forecasted or changes in the counterparty credit rating. Further, change in the basis of designating derivatives as hedges of forecasted transactions could alter the proportion of derivatives which are ineffective as hedges. Hedge ineffectiveness increases volatility of the consolidated statements of income since the changes in fair value of an ineffective portion of derivatives is immediately recognized in the consolidated statements of income.

We may not purchase adequate instruments to insulate ourselves from foreign exchange currency risks. The policies of the Reserve Bank of India may change from time to time which may limit our ability to hedge our foreign currency exposures adequately. In addition, any such instruments may not perform adequately as a hedging mechanism. We may, in the future, adopt more active hedging policies, and have done so in the past.

As of March 31, 2007 there were no significant gains or losses on derivative transactions or portions thereof that have become ineffective as hedges, or associated with an underlying exposure that did not occur.

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Item 6. Directors, Senior Management and Employees

Directors and Senior Management

Our directors and executive officers, their respective ages and positions as of March 31, ~~2007 are~~2009 were as follows:


Name	Age		Position
Azim H. Premji		6163	Chief Executive Officer, Chairman of the Board and Managing Director (designated as “Chairman”)
Dr. Ashok S Ganguly		7173	Director
B.C. Prabhakar		6365	Director
Dr. Jagdish N. Sheth		6870	Director
Narayanan Vaghul		7072	Director
~~Bill~~William Arthur Owens		6769	Director
P.M. Sinha		6668	Director
Suresh C. Senapaty		5052	CFO and Director
Suresh Vaswani		49	Joint CEO, IT Business and Director
Girish S Paranjpe		51	Joint CEO, IT Business and Director
Anurag Behar		40	Chief ~~Financial Officer, and~~ Executive, ~~Vice President, Finance~~Wipro Infrastructure Engineering
~~Pratik Kumar~~		41	~~Executive Vice President, Human Resources~~
~~Suresh Vaswani~~Vineet Agrawal		47	~~President-Global IT Service Lines,~~President, Wipro ~~Technologies; President-Wipro Infotech~~Consumer Care and Lighting
~~Vineet Agrawal~~Pratik Kumar		4543	Executive Vice President — HR, Brand and Corp. Communication
T K Kurien		49	President, Global Programs, Consulting Practice and New Initiatives, Wipro ~~Consumer Care & Lighting~~Limited
Ranjan Acharya		4648	Senior Vice President, Human Resources Development, Wipro Limited
~~Girish~~ S ~~Paranjpe~~Deb		4951	~~President-Banking, Finance and Insurance Vertical, Wipro Technologies~~
~~Sudip Banerjee~~		47	~~President-Enterprise Solutions, Wipro Technologies~~
~~Dr. A.L. Rao~~		58	~~President, Technology Services and~~ Chief ~~Operating~~Global Delivery Officer,
~~Ramesh Emani~~		50	~~President-Embedded & Product Engineering Solutions,~~ Wipro Technologies

Azim H. Premjihas served as our Chief Executive Officer, Chairman of our Board of Directors and Managing Director (designated as Chairman) since September 1968. Mr. Premji holds a Bachelor of Science, or B.S. in Electrical Engineering from Stanford ~~University.~~University, U.S.A.

Dr Ashok Gangulyhas served as a Director on our Board since 1999. He is currently the Chairman of Firstsource Solutions ~~Ltd (formerly ICICI OneSource Ltd)~~Limited and ABP ~~Pvt Ltd~~Private Limited (Ananda Bazar Patrika Group) and has been a Director on the Central Board of ~~the~~ Reserve Bank of India, since November 2000. Dr Ganguly also currently serves as a non-executive director of Mahindra & Mahindra, ICICI Knowledge Park and Tata AIG Life Insurance Co ~~Ltd~~Limited and a Director on the Advisory Board of Microsoft Corporation (India) ~~Pvt Ltd.~~Private Limited and Hemogenomics Private Limited. He is a member of the Prime Minister’s Council on Trade and Industry as well as the Investment Commission and the India-USA CEO Council, set up by the Prime Minister of India and the President of the ~~USA.~~U.S.A. He is also a member of the National Knowledge Commission to the Prime ~~Minister.~~Minister of India. He is a former member of the Board of British Airways Plc ~~(1996-2005)~~(1996-

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2005) and Unilever Plc/NV (1990-97). Dr Ganguly was formerly Chairman of Hindustan Unilever Limited (1980-90). In 2006, Dr Ganguly was awarded the CBE (Hon) by the United Kingdom. In 2008, Dr Ganguly received the Economic Times Lifetime Achievement Award and, more recently, he was the recipient of the Padma Vibhushan, India’s second highest civilian award.

��B.C. Prabhakarhas served as a Director on our Board since February 1997. He ishas been a practicing lawyer since April 1970. Mr. Prabhakar holds a B.A. in Political Science and Sociology and ~~an LL.B.~~a BL. from Mysore ~~University.~~University, India. Mr. B C Prabhakar serves as a non-executive Director of Automotive Axles Limited and 3M India Limited

Dr. Jagdish N. Shethhas served as a Director on our Board since January 1999. He ishas been a professor at Emory University since July 1991. Dr Sheth is also on the Boards of ~~Cryo-Cell International Inc,~~Innovolt Inc., Adayana Inc, Shasun Chemicals and Drugs Limited and ~~Manipal AcuNova Private Limited.~~Shasun Pharma Solutions Limited (UK). Dr. Sheth holds a B. Com (Honors) from Madras University, anIndia, a M.B.A. and a Ph.D in Behavioral Sciences from the University of ~~Pittsburgh.~~Pittsburgh, U.S.A.

Narayanan Vaghulhas served as a Director on our Board since June 1997. He was the Chairman of the Board of ICICI Bank Limited ~~since~~from September 1985 ~~and after its merger with ICICI Bank Limited continues to be the Chairman of the combined entity.~~till April 2009. Mr. Vaghul is also on the Boards of Mahindra and Mahindra Ltd., Mahindra World City Developers Limited, ~~Nicholas~~ Piramal Healthcare Limited, National Aviation Company of India ~~Ltd., Hemogenomics Pvt. Ltd., Himatsingka Seide~~ Limited, ~~Asset Reconstruction Company~~IAL Airport Services Limited, Air India Air Transport Services Limited, Air India Engineering Services Limited ~~Azim Premji Foundation, Air India Air Transport Services Limited,~~and Apollo Hospitals Enterprise ~~Limited and Air India~~ Limited. Mr. Vaghul is ~~also~~ the Chairman of the Compensation Committee of Mahindra and Mahindra Limited ~~Apollo Hospitals~~ and Nicholas Piramal India ~~Ltd.~~Limited. Mr. N Vaghul is also a member of the Audit Committee in ~~Arcelor Mittal, Air India Limited,~~ Nicholas Piramal India ~~Limited and Mahindra World City Developers~~ Limited. MrMr. N. Vaghul is also the lead independent Director of our Company. Mr. Vaghul holds Bachelor (Honors) degree in Commerce from Madras ~~University.~~

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~~Priya Mohan Sinha~~became a Director of our company on January 1, 2002. He has served as the Chairman of PepsiCo India Holdings Limited and President of Pepsi Foods Limited since July 1992. From October 1981 to November 1992, he was on the Executive Board of Directors of Hindustan Lever Limited. From 1981 to 1985 he also served as Sales Director of Hindustan Lever. Currently, he is also on the Boards of ICICI Bank Limited, Bata India Limited, Indian Oil Corporation Limited, Lafarge India Pvt. Limited and Azim Premji Foundation. Mr. Sinha holds a Bachelor of Arts from Patna University ~~and he has also attended Advanced Management Program in the Sloan School of Management, Massachusetts Institute of Technology.~~

~~Mr. Bill~~William Arthur Owenshas held senior leadership positions at large multinational corporations. From April 2004 to November 2005, Mr. Owens served as Chief Executive Officer and Vice Chairman of the Board of Directors of Nortel Networks Corporation, a networking communications company. From August 1998 to April 2004, Mr. Owens served as Chairman of the Board of Directors and Chief Executive Officer of Teledesic LLC, a satellite communications company. From June 1996 to August 1998, Mr. Owens served as President, Chief Operating Officer and Vice Chairman of the Board of Directors of Science Applications International Corporation (SAIC), a research and engineering firm. Presently, Mr. Owens serves as a member of the Board of Directors of Polycom Inc., a media communications company; ~~Daimler Chrysler AG, an automotive company;~~ Embarq, Intelius and Force 10. Mr. Owens holds a M.B.A. (Honors) degree from George Washington University, a B.S. in Mathematics from the U.S. Naval Academy and a B.A. and M.A. in Politics, Philosophy and Economics from Oxford University. Mr Owens ishas been a director in ~~our~~the company from July 1, 2006.

Priya Mohan Sinhabecame a Director of our Company on January 1, 2002. He has served as the Chairman of PepsiCo India Holdings Limited and President of Pepsi Foods Limited since July 1992. From October 1981 to November 1992, he was on the Executive Board of Directors of Hindustan Lever Limited. From 1981 to 1985 he also served as Sales Director of Hindustan Lever. Currently, he is also on the Boards of ICICI Bank Limited, Bata India Limited, Lafarge India Pvt. Limited and Azim Premji Foundation. Mr. Sinha holds a Bachelor of Arts from Patna University and he has also attended Advanced Management Program in the Sloan School of Management, Massachusetts Institute of Technology, U.S.A. Mr Sinha is also the Chairman of the Nomination, Governance and Compensation Committee of Bata India Limited. Mr. Sinha is also on the Advisory Board of Rieter.

Suresh C. Senapatyhas served as our Chief Financial Officer and Executive ~~Vice President, Finance,~~Director since ~~January 1995~~April 2008 and served with us in other positions since April 1980. Mr. Senapaty holds a B. Com. from Utkal University in India, and is a Fellow Member of the Institute of Chartered Accountants of India.

Suresh Vaswanihas served as Joint CEO, IT Business and Executive Director since April 2008 and has served with us in other positions since June 1987. Mr. Vaswani holds a Bachelor of Technology, or B.Tech. from the Indian Institute of Technology, or IIT, Kharagpur, India and a Post Graduate Diploma in Management from the Indian Institute of Management, Ahmedabad, India.

Girish S Paranjpehas served as Joint CEO, IT Business and Executive Director since April 2008 and has served with us in other positions since July 1990. Mr. Paranjpe holds a B.Com. from Bombay University, India and is a Fellow Member of Institute of Chartered Accountants of India and Institute of Cost and Works Accountants of India.

Anurag Beharhas served as CEO of Wipro Infrastructure Engineering since March 20, 2008 and has served with us in other positions since May 20, 2002. Mr. Anurag Behar holds a Masters Degree in Business Administration (MBA) from XLRI-Jamshedpur and Bachelors degree in Engineering from Regional Engineering College, Trichy.

Vineet Agrawalhas served as President of Wipro Consumer Care and Lighting since July 2002 and has served with us in other positions since December 1985. Mr. Agrawal holds a B.Tech. from IIT, New Delhi, India and an M.B.A from Bajaj Institute of Management Studies, Mumbai, India.

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Pratik Kumarhas served as our Executive ~~Vice President,~~Vice-President, Human Resources, since April 2002, and has served with us in other positions since November 1991. Mr. Pratik Kumar holds a B. A. from Delhi University and an M.B.A. from Xavier Labour Relations Institute (XLRI), Jamshedpur, India.

~~Suresh Vaswani~~T K Kurienhas served as ~~President-Global IT Service Lines, Wipro Technologies and~~ President WCS, Global Programs & Strategic Initiative of Wipro ~~Infotech~~ since ~~December 2000,~~23^rd June, 2008 and has served with us in other positions since ~~June 1987.~~February 11, 2000. Mr. ~~Vaswani~~Kurien is a Chartered Accountant and holds a ~~Bachelor of Technology, or B.Tech. from the Indian Institute of Technology, or IIT, Kharagpur, and a Post Graduate Diploma in Management from the Indian Institute of Management, Ahmedabad.~~

~~Vineet Agrawal~~has served as President of Wipro Consumer Care and Lighting since July 2002 and has served with us in other positions since December 1985. Mr. Agrawal holds a B.Tech. from IIT, New Delhi, and an M.B.A from Bajaj Institute of Management Studies, Mumbai.B. Com.

Ranjan Acharyahas served as Senior ~~Vice President-Human~~Vice-President-Human Resources Development since April 2002, and has served with us in other positions since July 1994. Mr. ~~Ranjan~~ Acharya holds a B.S. from Pune University, India and an M.B.A. from Symbiosis Institute of Business Management, Pune, India.

~~Girish S Paranjpe~~S. Debhas served as ~~President – Banking, Finance and Insurance Vertical~~Chief Global Delivery Officer of Wipro ~~Technologies~~ since ~~October 2000,~~April 30, 2008 and has served with us in other positions since ~~July 1990.~~June 29, 1982. Mr. ~~Paranjpe holds a B.Com. from Bombay University and~~S Deb is a ~~Fellow Member of Institute of Chartered Accountants of India~~Management Graduate and ~~Institute of Cost~~holds MBA Degree from IIM Ahmedabad and ~~Works Accountants of India.~~

~~Sudip Banerjee~~has served as President-Enterprise Solutions of Wipro Technologies since February 2002 and has served with us in other positions since November 1983. Mr. Sudip holds a B.A. from Delhi University and Diploma in Management from All India Management Association.

~~Dr. A.L. Rao~~has served as President-Technology Services and Chief Operating Officer of Wipro Technologies since October 2000 and has served with us in other positions since August 1980. Dr. Rao holds a B.S., M.S. and Ph.D. in Nuclear Physics from Andhra University in India.

~~Ramesh Emani~~has served as President-Embedded and Product Engineering Solutions of Wipro Technologies since October 2003, and has served with us in other positions since November 1983. Mr. Emani holds a B.Tech. from Jawaharlal Nehru Technology University, Hyderabad and Master of Technology, or M.Tech.B.Tech from IIT ~~Kanpur.~~Kharagpur.

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Compensation

Director Compensation

Our Board Governance and Compensation Committee determines and recommends to our Board of Directors the compensation payable to our directors. All board-level compensation is subject to approval by our shareholders. Each of our non-employee directors receive an attendance fee per meeting of ~~$ 224.82~~$393 (Rs. 20,000 wef August 1, 2008 and prior to that Rs 10,000) during the current year for every Board and Committee meeting they attend. Our directors are reimbursed for travel and out-of-pocket expenses in connection with their attendance at Board and Committee meetings. Additionally, we also compensate non-employee directors by way of commission, which is limited to a fixed sum payable as approved by the Board subject to a maximum of 1% of the net profits of the Company as approved by the ~~shareholders, as follows:~~

1.		~~Dr. Ashok S Ganguly receives approximately $ 27,842 (Rs. 1,200,000) per year.~~

2.		~~Narayan Vaghul receives approximately $ 32,482 (Rs. 1,400,000) per year.~~

3.		~~Dr. Jagdish N. Sheth receives approximately $ 50,000 (Rs. 2,155,000) per year.~~

4.		~~P. M. Sinha receives approximately $ 23,201 (Rs. 1,000,000) per year.~~

5.		~~B. C. Prabhakar receives approximately $ 13,921 (Rs. 600,000) per year.~~

6.		~~Bill Owens receives approximately $60,000 (Rs. 2,568,000) per year.~~

shareholders.

In the fiscal year ended March 31, ~~2007,~~2009, we paid an aggregate of $ ~~207,446~~0.28 million (Rs. ~~8,923,000)~~14.6 million) as commission to our non-employee directors.

Executive Compensation

The annual compensation of our executive directors is approved by our Board Governance and Compensation Committee, within the parameters set by the shareholders at the shareholders meetings, and the annual compensation of our other executive officers is approved by our Board Governance and Compensation Committee. Remuneration of our executive officers, including our employee directors, consists of a fixed component, performance bonus and a variable performance linked incentive. The following two tables present the annual and ~~long term~~long-term compensation earned, awarded or paid for services rendered to us for the fiscal year ~~ended March 31, 2007~~2009 by our Executive Directors and members of our administrative, supervisory or management bodies.


	Annual Compensation ($)
	Annual Compensation ($)
	Salary and		Commission/In						Salary and		Commission/						Long-term compensation
Name	allowances		centives (1)		Housing (2)		Others		allowances		Incentives (1)		Housing (2)		Others		(Deferred Benefit (3)&(4))
Azim H. Premji	$	100,004	$	556,845	$	48,724	$	15,949	$	84,729	$	105,710	$	58,974	$	12,947		$	33,782

Suresh C. Senapaty		168,295		55,899		25,058		2,891		215,388		119,443		29,486		433			33,496

Pratik Kumar		140,902		46,753		—		9,372		183,234		86,914		—		770			19,283

Vineet Agrawal		148,779		56,562		—		3,336		190,562		58,097		—		4,682			27,740

Suresh Vaswani		166,254		53,627		5,068		734		209,035		161,979		10,967		2,327			36,299

Sudip Banerjee		154,082		46,344		—		480

Ranjan Acharya										141,485		50,413		—		95			11,877
Girish S. Paranjpe		149,327		71,261		10,900		519		202,368		150,944		10,084		159			35,097

Dr. A.L. Rao		158,676		60,853				1,791

Ranjan Acharya		106,621		37,547				43

Ramesh Emani		154,859		53,997				864
S Deb										106,280		91,808		—		1,067			19,013
Anurag Behar										100,181		56,229		—		1,165			14,142
T K Kurien										169,679		151,182		10,615		1,286			19,446

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1.		Azim H. Premji was paid commissions at the rate of 0.3% on incremental ~~Net Profits~~net profits of the Company over the previous ~~year. Net Profits are~~year computed based on the method approved by the Board Governance and Compensation Committee and in accordance with the provisions of the Indian Companies Act, 1956. All other executives were paid incentives under a Quarterly Performance Linked Scheme based on achievement of pre-defined profit targets.

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2.

The value of ~~this~~housing perquisite accounts for more than 25% of the total value of all perquisites and personal benefits received in fiscal ~~2007.~~

Long Term Compensation ($)
No. of RSUs
No. of Equity granted
Deferred Shares Granted Grant during the
Name benefits(1)(2) during the year Price year Grant price
Azim H. Premji 109,426 — — — —

Suresh C. Senapaty 13,193 — — 14,000 0.05

Pratik Kumar 12,111 — — 14,000 0.05

Vineet Agrawal 9,285 — — 14,000 0.05

Suresh Vaswani 13,015 — — 14,000 0.05

Sudip Banerjee 13,833 — — 14,000 0.05

Girish S. Paranjpe 13,520 — — 14,000 0.05

Dr. A.L. Rao 12,385 — — 7,000 0.05

Ranjan Acharya 9,771 — — 9,000 0.05

Ramesh Emani 13,088 — — 14,000 0.05

		2009.
~~(1)~~
3.		Deferred benefits are payable to 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~~pension payment on attaining the age of superannuation are payable from the balance standing to the credit of the Fund, as per the Employee Provident Fund and Miscellaneous Provisions Act, 1952.

~~(2)~~4.		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.

We operate in numerous countries and compensation for our officers and employees may vary significantly from country to country. As a general matter, we seek to pay competitive salaries in all the countries in which we operate.

Board Composition

Our Articles of Association provide that the minimum number of directors on our board of directors shall be four and the maximum number ~~of directors~~ shall be ~~twelve.~~fifteen. As of March 31, ~~2007,~~2009, we had ~~seven~~ten directors on our Board. Our Articles of Association provide that at least two-thirds of our directors shall be subject to retirement by rotation. One third of these

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directors must retire from office at ~~each annual general~~the Annual General meeting of the shareholders. Mr. B C Prabhakar, Dr Jagdish N Sheth and Mr. William Arthur Owens, the three directors who will retire by rotation at the next annual General meeting of shareholders, are eligible for reelection. It has been proposed that they be reappointed at the forthcoming Annual General meeting of the Company to be held in July, 2009. A retiring director is eligible for re-election. Up to one-third of our directors can be appointed as non-retiring directors. Currently, Azim H. Premji is a non-retiring director.

The term of the non-retiring director expires on July 30, 2009. The terms of each of our directors and their expiration dates are:


~~Name~~	Expiration of current term of
Name	office	Term of office
Azim H. Premji	July 30, ~~2007~~2009	2 years ~~and seven months~~
Dr. Jagdish Sheth	Annual General Meeting ~~2008~~2009	Retirement by rotation
Dr. Ashok S Ganguly	Annual General Meeting ~~2008~~2010	Retirement by rotation
B. C. Prabhakar	Annual General Meeting ~~2007~~2009	Retirement by rotation
N. Vaghul	Annual General Meeting ~~2007~~2010	Retirement by rotation
P. M. Sinha	Annual General Meeting ~~2009~~2010	Retirement by rotation
~~Bill~~William Arthur Owens	Annual General Meeting 2009	Retirement by rotation
Suresh C Senapaty	April 17, 2013	5 years from the date of appointment
Girish S Paranjpe	April 17, 2013	5 years from the date of appointment
Suresh Vaswani	April 17, 2013	5 years from the date of appointment

Option Grants

There were no option grants to our Chief Executive Officer, Chairman and Managing Director (designated as “Chairman”) in the fiscal years ~~ended March 31, 2006~~2008 and ~~2007.~~2009. Details of options granted to other senior management executives till March 31, 2009 are reported elsewhere in this Item 6 under the section titled “Share Ownership.”

Option Exercises and Holdings

Our Chairman did not exercise or hold any options during the fiscal year ended March 31, ~~2007.~~2009. The details of stock options held and exercised till March 31, 2009 with respect to other senior management executives are reported elsewhere in this Item 6 under the section titled “Share Ownership.”

Terms of Employment Arrangements and Indemnification Agreements

Under the Companies Act, our shareholders must approve the salary, bonus and benefits of all employee directors at a General Meeting of Shareholders. Each of our employee directors have signed an agreement containing the terms and conditions of employment, including a monthly salary, performance bonus and benefits including vacation, medical reimbursement and pension fund contributions. These agreements have varying terms ranging from a two to five year period, but either we or the employee director may generally terminate the agreement upon six months notice to the other party.

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The terms of our employment arrangements with Azim H. Premji, Pratik Kumar, Suresh C. Senapaty, Ranjan Acharya, Suresh Vaswani, ~~Sudip Banerjee, Dr. A.L. Rao,~~Anurag Behar, Girish S Paranjpe, T K Kurien, S Deb and Vineet Agrawal ~~and Ramesh Emani~~ provide for up to a 180-day notice period, up to 21 days of leave per year in addition to statutory holidays, and an annual compensation review. Additionally, employees are required to relocate as we may determine, and to comply with confidentiality provisions.

We also have entered into agreements to indemnify our directors and officers for claims brought under any rule of law to the fullest extent permitted by applicable law. These agreements, among other things, indemnify our directors and officers for certain expenses, judgments, fines and settlement amounts incurred by any such person in any action or proceeding, including any action by or in the right of Wipro Limited, arising out of such person’s services as our director or officer, including claims which are covered by the Insurance Policy on Director’s and Officer’s Liability Insurance taken by the Company.

Board Committee Information

~~Audit~~Audit/Risk and Compliance Committee

The Audit Committee of our Board of Directors, which was formed in 1987, reviews, acts on and reports to our Board of Directors with respect to various auditing and accounting matters. This Committee was renamed as Audit/Risk and Compliance Committee with effect from April 22, 2009. The primary responsibilities are:

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•		~~Auditing and accounting matters, including recommending the appointment of our independent auditors to the shareholders~~

•		~~Compliance with legal and statutory requirements~~

•		~~Integrity of the Company’s financial statements, discussing with the independent auditors the scope of the annual audits, and fees to be paid to the independent auditors.~~

•		~~Performance of the Company’s Internal Audit function, Independent Auditors and accounting practices.~~

•		~~Review of related party transactions, functioning of Whistle Blower mechanism, and~~

•		Implementation of the applicable provisions of the Sarbanes Oxley Act 2002 including review on the progress of internal control mechanisms to prepare for certification under Section 404 of the Sarbanes Oxley Act 2002.

Auditing and accounting matters, including recommending the appointment of our independent auditors to the shareholders,

~~The Chairman~~

Compliance with legal and statutory requirements,

Integrity of the Company’s financial statements, discussing with the independent auditors the scope of the annual audits, and fees to be paid to the independent auditors,

Performance of the Company’s Internal Audit ~~Committee is present at~~function, Independent Auditors and accounting practices,

Review of related party transactions, functioning of Whistle Blower mechanism, and

Implementation of the ~~Annual General Meeting.~~applicable provisions of the Sarbanes Oxley Act, 2002 including review on the progress of internal control mechanisms to prepare for certification under Section 404 of the Sarbanes Oxley Act, 2002.

All members of our ~~Audit~~Audit/Risk and Compliance Committee are independent ~~non executive~~non-executive directors and financially literate. The Chairman of our ~~Audit~~Audit/Risk and Compliance Committee has the accounting or related financial management expertise.

Independent Auditors as well as Internal Auditors always have independent meetings with the ~~Audit~~Audit/Risk and Compliance Committee and also participate in the ~~Audit~~Audit/Risk and Compliance Committee meetings.

Our ~~Executive Vice President-Finance~~CFO & ~~CFO~~Director and other Corporate Officers make periodic presentations to the ~~Audit~~Audit/Risk and Compliance Committee on various issues.

The ~~Audit~~Audit/Risk and Compliance Committee is comprised of the following three non-executive directors:

Our ~~Audit~~Audit/Risk and Compliance Committee held five meetings during our ~~2007~~2009 fiscal year. Our ~~Audit~~Audit/Risk and Compliance Committee has adopted ~~a charter.~~an amended charter in April 2009. The amended charter of the Audit/Risk and Compliance Committee is available under the investor relations section on our website at ~~www.wipro.com.~~www.wipro.com.

Board Governance and Nomination Committee

In April 2009, the Board Governance and Compensation Committee was split into two separate committees and reconstituted as Board Governance & Nomination Committee and Compensation Committee. The amended charters of these two Committees were approved by the Board in April 2009 and this reconstitution is with effect from April 22, 2009. These charters committees are available on our website under www.wipro.com. After this reconstitution, the members of the Board Governance & Nomination Committee are as follows:

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Dr. Ashok S Ganguly Chairman of the Board Governance and Nomination Committee

Mr. N. Vaghul, P.M. Sinha and Bill Owens Members of the Board Governance and Nomination Committee

All members of the Board Governance and Nomination Committee are independent non-executive directors

The primary responsibilities of the Board Governance and ~~Compensation~~Nomination Committee are:

	•		~~Determine and approve salaries, benefits and stock option grants to Senior Management employees and Directors of our Company.~~

	•		~~Act as Administrator of the Company’s Employee Stock Option Plans and Employee Stock Purchase Plans drawn up from time to time~~

	•		~~Develop and recommend to the Board Corporate Governance Guidelines applicable to the Company~~

	•		~~Evaluation of the Board on a continuing basis including an assessment of the effectiveness of the full Board, operations of the Board Committees and contributions of individual directors~~

Develop and recommend to the Board Corporate Governance Guidelines applicable to the Company,

Evaluation of the Board on a continuing basis including an assessment of the effectiveness of the full Board, operations of the Board Committees and contributions of individual directors, and

Lay down policies and procedures to assess the requirements for induction of new members on the Board.

Implementing policies and processes relating to corporate governance principles

Ensuring that appropriate procedures are in place to assess Board membership needs and Board effectiveness

Reviewing the Company’s policies that relate to matters of Corporate Social Responsibility, including public issues of significance to the Company and its stakeholders

Developing and recommending to the Board of Directors for its approval an annual evaluation process of the Board and its Committees.

Formulating the Disclosure Policy, its review and approval of disclosures; Overseeing

Compensation Committee

The members of the Compensation Committee are as under:

Dr. Ashok S Ganguly Chairman of the Board Governance and Compensation Committee

Mr. N. Vaghul and P.M. Sinha Members of the Board Governance and Compensation Committee

The primary responsibilities of the Compensation Committee are:

Determine and approve salaries, benefits and stock option grants to senior management employees and Directors of our Company.

Approve and evaluate the compensation plans, policies and programs for Whole-time Directors and Senior Management.

Act as Administrator of the Company’s Employee Stock Option Plans and Employee Stock Purchase Plans drawn up from time to time,

Our Executive Vice President-Human Resources makes periodic presentations to the ~~Board Governance and~~ Compensation Committee on compensation reviews and performance linked compensation recommendations.

All members of the ~~Board Governance and~~ Compensation Committee are independent non-executive directors.


		~~Dr. Ashok S Ganguly~~		~~Chairman of the Board Governance and Compensation Committee~~

		~~Messrs. N. Vaghul and P.M. Sinha~~		~~Members of the Board Governance and Compensation Committee~~

~~Our~~ During the year 2008-09, our erstwhile Board Governance and Compensation Committee held four meetings during our 2007 fiscal year. Our Board Governance & Compensation Corporate Governance Committee has adopted a charter. The charter is available under the investor relations section on our website at www.wipro.com.meetings.

Employees

~~Employees~~

As of March 31, 2009, we had over 100,000 employees, including over 70,000 IT professionals. Highly trained and motivated people are critical to the success of our business. To achieve this, we focus on attracting and retaining the best people possible. A combination of strong brand name, a congenial working environment and competitive compensation programs enables us to attract and retain these talented people.

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Our human resources department is centralized at our corporate headquarters in Bangalore and functions across all of our business segments. We have implemented corporate-wide recruiting, training, performance evaluation, compensation and ~~compensation~~benefit programs that are tailored to address the needs of each of our business segments.

Recruiting

We hire entry level graduates from both the top engineering and management universities in India, as well as more experienced lateral hires through employee referral programs, advertisements, placement consultants, our website postings and walk-ins. To facilitate employee growth within Wipro Limited, all new openings are first offered to our employees. The nature of work, skill sets requirements and experience levels are highlighted to the employees. Applicants undergo the regular recruitment process and, if selected, get assigned to their new roles.

Training

Each of our new recruits must attend an ~~eight week~~ intensive training program when they begin working with us. New or recent graduates must also attend additional training programs that are tailored to their area of technology. We also have a mandatory continuing education program that requires each IT professional to attend at least 40 hours of continuing education classes to improve their understanding and competency of new technologies, as well as to develop leadership and personal self-development skills. ~~We currently have 82 full-time faculty members to provide these training courses.~~ We supplement our continuing education program for existing employees by sponsoring special programs at leading educational institutions, such as the Indian Institute of Management, Bangalore, Birla Institute of Technology and Science, Pilani, Symbiosis Institute of Business Management, Pune and others, to provide special skill set training in areas such as Business Skills and Project management to any of our IT professionals who choose to enroll and meet the eligibility criteria of these Institutes.

Performance Evaluations

Employees receive written performance objectives that they develop in cooperation with their respective managers. They are measured against these criteria annually in a formal review process which includes self-reviews and reviews from peers, managers and subordinates.

Compensation

We continually strive to provide our employees with competitive and innovative compensation packages. Our compensation packages include a combination of salary, stock options, pension, and health and disability insurance. We measure our compensation packages against industry standards and seek to match or exceed them. We adopted an employee stock purchase plan in ~~1984.~~1984, employee stock option plan in 1999 and 2000 and restricted stock unit option plan in 2004, 2005 and 2007. We have devised both business segment performance and individual performance linked incentive programs that we believe more accurately link performance to compensation for each employee. For example, we link cash compensation to a business segment’s quarterly operating margin objectives. We have started an in-house wellness program called Fit for Life aimed at increasing health quotient of employees.

Share Ownership

The following table sets forth, as of March 31, ~~2007,~~2009, for each director and executive officer, the total number of equity shares, ADSs and vested and unexercised options to purchase equity shares and ADSs. Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission. All information with respect to the beneficial ownership of any principal shareholder has been furnished by such shareholder and, unless otherwise indicated below, we believe that persons named in the table have sole voting and sole investment power with respect to all the shares shown as beneficially owned, subject to community property laws, where applicable.

The shares beneficially owned by the directors include the equity shares owned by their family members to which such directors disclaim beneficial ownership. The number of shares beneficially owned includes equity shares, equity shares underlying ADSs and the shares subject to vested options that are currently exercisable. For the convenience of the readers, the stock option grant price has been translated into U.S. dollars based on the ~~noon buying rate in the City~~certified foreign exchange rates published by Federal Reserve Board of New York on March ~~30, 2007, for cable transfers in Indian rupees as certified for customs purposes by the Federal Reserve Bank of New York~~31, 2009, which was Rs. ~~43.10~~50.87 per $ 1.00. The share numbers and percentages listed below are based on ~~1,458,999,650~~1,464,980,746 equity shares outstanding as of March 31, ~~2007.~~2009.

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			Percentage		Equity								Percentage		Equity
			of Equity		Shares								of Total		Shares
	Equity Shares		Shares		Underlying						Equity Shares		Equity		Underlying
	beneficially		Beneficially		Options		Grant				beneficially		Shares		Options		Exercise
Name	owned		Owned		Granted		Price ($)		Date of expiration		owned		Outstanding		Granted		Price($)		Date of expiration
Azim H. Premji (1)		1,161,136,260		79.58		—		—		—		1,161,116,260		79.25		—		—		—
B. C. Prabhakar (2)		3,000		*		—		—		—		3,000		*		—		—		—
Dr. Jagdish Sheth		—		—		—		—		—		—		—		—		—		—
Dr. Ashok S Ganguly		—		—		—		—		—		1,000		*		—		—		—
N. Vaghul		—		—		—		—		—		—		—		—		—		—
P. M. Sinha(3)		20,000		*		—		—		—		20,000		*		—		—		—
Suresh C. Senapaty		122,300		*		14,400		0.05	October 2010			115,250		*		4,800		0.05	October 2010
						14,000		0.05	July 2011							8,400		0.05	July 2011
																50,000		0.05	May 2013
Pratik Kumar		59,100		*		14,400		0.05	October 2010			32,800		*		4,800		0.05	October 2010
																8,400		0.05	July 2011
						14,000		0.05	July 2011							30,000		0.05	May 2013
Vineet Agrawal		138,600		*		14,400		0.05	October 2010			141,020		*		4,800		0.05	October 2010
						14,000		0.05	July 2011							8,400		0.05	July 2011
																40,000		0.05	May 2013
Suresh Vaswani		96,948		*		16,800		0.05	October 2010			57,168		*		5,600		0.05	October 2010
						14,000		0.05	July 2001							8,400		0.05	July 2011
Sudip Banerjee		52,000		*		16,800		0.05	October 2010
																50,000		0.05	May 2013
																60,000		9.61	May 2013
S Deb												72,000		*		4,000		0.05	October 2010
																7,200		0.05	July 2011
						14,000		0.05	July 2011							18,000		0.05	May 2013
Girish S. Paranjpe		49,000		*		16,800		0.05	October 2010			28,800		*		5,600		0.05	October 2010
						14,000		0.05	July 2011							8,400		0.05	July 2011
Dr. A.L. Rao		82,360		*		16,800		0.05	October 2010
																50,000		0.05	May 2013
																60,000		9.61	May 2013
T K Kurien												64,808		*		3,200		0.05	October 2010
																7,200		0.05	July 2011
						7,000		0.05	July 2011							50,000		0.05	May 2013
Ranjan Acharya		21,000		*		12,000		0.05	October 2010			21,100		*		4,000		0.05	October 2010
						9,000		0.05	July 2011							5,400		0.05	July 2011
Ramesh Emani		24,700		*		16,800		0.05	October 2010
						14,000		0.05	July 2011							9,000		0.05	May 2013
Anurag Behar												30,866		*		4,000		0.05	October 2010
																6,000		0.05	July 2011
																20,000		0.05	May 2013


*		Represents less than 1% of the ~~shares.~~total equity shares outstanding as of March 31, 2009.

(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~~1,414,600 shares held jointly by Mr. Premji and members of his immediately ~~family and~~family. In addition 8,316,000 shares ~~held by the Azim Premji Foundation (I) Pvt. Ltd and 10,000 shares~~are held by Azim Premji Foundation (I) Pvt. Ltd. Mr. Premji disclaims beneficial ownership of 8,316,000 shares held by Azim Premji Foundation (I) Pvt. ~~Ltd and 10,000 shares held by Azim Premji Foundation Pvt.~~ Ltd.

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(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.

EMPLOYEE STOCK OPTION PLANS

~~Wipro Employee Restricted Stock Unit Plan 2005~~

We have various employee stock options and restricted stock unit option plans (collectively referred to as ‘stock option plans’). Our ~~Wipro Restricted Stock Unit Plan 2005, or 2005 unit plan,~~stock option plans provides for ~~the~~ grant of options to eligible employees and directors. ~~The creation of our 2005 unit plan was approved~~Our stock option plans are administered by our Board of Directors on June 14, 2005 and by our shareholders on July 21, 2005. Our 2005 unit plan became effective on July 21, 2005, and unless terminated sooner, the plan will terminate automatically on July 20, 2015. A total of 12,000,000 equity shares (as adjusted for corporate actions from time to time) are currently reserved for issuance pursuant to the plan.

~~Our~~ Board Governance and Compensation Committee (by the Compensation Committee wef April 22, 2009) (‘the Committee’) appointed by our Board of ~~Directors administer our 2005 unit plan.~~Directors. The committee has the sole power to determine the

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terms of the units granted, including the exercise price, selection of eligible employees and directors, the number of equity shares to be covered by each option, the vesting and exercise periods, and the form of consideration payable upon such exercise. In addition, the committee has the authority to amend, suspend or terminate the ~~2005~~ stock plan with the approval of the shareholders, provided that no such action may adversely affect the rights of any participant under the plan. The Committee has the powers to interpret the terms of the Plan and options granted pursuant to the Plan. The plan does not confer any right to the participant with respect to continuing the participant’s status as an employee with the Company.

Our 2005 unit plan does not allow for the transfer of options and only the participant may exercise an option during his or her lifetime. The vesting period for the options under the plan shall range from 12 months to not more than 84 months. A participant must exercise any vested units prior to termination of service with us and within a specified period post separation as per the Plan. The exercise price of options granted under our 2005 unit plan will be determined by the committee.

Our 2005 unit plan provides that in the event of our merger with or into another corporation or a sale of substantially all of our assets, the successor corporation shall either assume the outstanding units or grant equivalent units to the holders. If the successor corporation neither assumes the outstanding units nor grants equivalent units, such outstanding units shall vest immediately, and become exercisable in full.

~~ADS Restricted Stock Unit Plan 2004 (ADS option)~~

Our ADS Restricted Stock Unit Plan 2004, or 2004 ADS unit plan, provides for the grant of options to our eligible employees and directors. The creation of our 2004 ADS unit plan was approved by our Board of Directors on April 16, 2004 and by our shareholders on June 11, 2004. The 2004 ADS unit plan became effective on June 11, 2004, and unless terminated sooner, the 2004 ADS unit plan will terminate automatically on June 10, 2014. A total of 12,000,000 ADSs, representing 12,000,000 equity shares (as adjusted for corporate action from time to time), are currently reserved for issuance pursuant to the plan.

Our Board Governance and Compensation Committee appointed by our Board of Directors administer the 2004 ADS unit plan. The committee has the sole power to determine the terms of the units granted, including the exercise price, selection of eligible employees, the number of ADSs to be covered by each ADS option, the vesting and exercise periods, and the form of consideration payable upon such exercise. In addition, the committee has the authority to amend, suspend or terminate the stock plan provided that no such action may adversely affect the rights of any participant under the plan. The Committee has the powers to interpret the terms of the plan and the ADS options granted pursuant to the plan. The plan does not confer any right to the participant with respect to participant’s status as an employee with the Company.

Our 2004 ADS unit plan does not allow for the transfer of units and only the participant may exercise an option during his or her lifetime. The vesting period for the options under the plan shall range from 12 months to not more than 84 months. A participant must exercise any vested options prior to termination of service with us and within a specified period post separation as per the Plan. The exercise price of options granted under our 2004 ADS unit plan will be determined by the committee.

Our 2004 ADS unit plan provides that in the event of our merger with or into another corporation or a sale of substantially all of our assets, the successor corporation shall either assume the outstanding units or grant equivalent units to the holders. If the successor corporation neither assumes the outstanding units nor grants equivalent units, such outstanding units shall vest immediately, and become exercisable in full.

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~~Wipro Employee Restricted Stock Unit Plan 2004~~

Our Wipro Restricted Stock Unit Plan 2004, or 2004 unit plan, provides for the grant of options to eligible employees and directors. The creation of our 2004 unit plan was approved by our Board of Directors on April 16, 2004 and by our shareholders on June 11, 2004. Our 2004 unit plan became effective on June 11, 2004, and unless terminated sooner, the plan will terminate automatically on June 10, 2014. A total of 12,000,000 equity shares (as adjusted for corporate actions from time to time) are currently reserved for issuance pursuant to the plan.

Our Board Governance and Compensation Committee appointed by our Board of Directors administer the 2004 unit plan. The committee has the sole power to determine the terms of the units granted, including the exercise price, selection of eligible employees, the number of equity shares to be covered by each option, the vesting and exercise periods, and the form of consideration payable upon such exercise. In addition, the committee has the authority to amend, suspend or terminate the 2004 stock plan with the approval of the shareholders, provided that no such action may adversely affect the rights of any participant under the plan. The Committee has the powers to interpret the terms of the Plan and options granted pursuant to the Plan. The plan does not confer any right to the participant with respect to continuing the participant’s status as an employee with the Company.

Our 2004 unit plan does not allow for the transfer of options and only the participant may exercise an option during his or her lifetime. The vesting period for the options under the plan shall range from 12 months to not more than 84 months. A participant must exercise any vested options prior to termination of service with us and within a specified period post separation as per the Plan. The exercise price of options granted under our 2004 unit plan will be determined by the committee.

Our 2004 unit plan provides that in the event of our merger with or into another corporation or a sale of substantially all of our assets, the successor corporation shall either assume the outstanding units or grant equivalent units to the holders. If the successor corporation neither assumes the outstanding units nor grants equivalent units, such outstanding units shall vest immediately, and become exercisable in full.

~~2000 ADS Option Plan~~

Our 2000 ADS option plan provides for the grant of two types of options to our employees and directors: incentive stock options, which may provide our employees with beneficial U.S. tax treatment, and non-statutory stock options. Our 2000 ADS option plan was approved by our Board of Directors in September 2000 and by our shareholders on April 26, 2000. Unless terminated sooner by our Board, our 2000 ADS option plan will terminate automatically in September 2010. A total of 9,000,000 ADSs, representing 9,000,000 equity shares (as adjusted for corporate actions from time to time), are currently reserved for issuance under our 2000 ADS option plan. All options under our 2000 ADS option plan will be exercisable for ADSs. Either our Board of Directors or a committee of our Board of Directors administers our 2000 ADS option plan. The committee has the power to determine the terms of the options granted, including the exercise prices, the number of ADSs subject to each option, the exercisability thereof, and the form of consideration payable upon such exercise. In addition, the committee has the authority to amend, suspend, or terminate our 2000 ADS option plan, provided that no such action may affect any ADS previously issued and sold or any option previously granted under our 2000 ADS option plan.

~~Our 2000 ADS~~ option plan generally does not allow for the transfer of options and only the optionee may exercise an option during his or her lifetime. An optionee generally must exercise an option within three months of termination of service. If an optionee’s termination is due to death or disability, his or her option will fully vest and become exercisable and the option must be exercised within twelve months after such termination. The exercise price of incentive stock options granted under our 2000 ADS option plan must at least equal the fair market value of the ADSs on the date of grant. The exercise price of non-statutory stock options granted under our 2000 ADS option plan must at least equal 90% of the fair market value of the ADSs on the date of grant. The term of options granted under our 2000 ADS option plan may not exceed ten years. Our 2000 ADS option plan provides that in the event of our merger with or into another corporation or a sale of substantially all of our assets, the successor corporation shall either assume the outstanding options or grant equivalent options to the holders. If the successor corporation neither assumes the outstanding options nor grants equivalent options, such outstanding options shall vest immediately, and become exercisable in full.

~~2000 Employee Stock Option Plan~~

~~Our 2000 stock plan provides~~vesting period for the grant of stock options to eligible employees and directors. The creation of our 2000 stock plan was approved by our Board of Directors on April 26, 2000, and by our shareholders on July 27, 2000. Our 2000 stock plan became effective on September 15, 2000, and unless terminated sooner, our 2000 stock plan will terminate automatically on September 15, 2010. A total of 150,000,000 equity shares (as adjusted for corporate

71

~~actions from time to time) are currently reserved for issuance pursuant to our 2000 stock plan. All~~ options under ~~our 2000 stock plan will be exercisable for our equity shares.~~

~~Our Board Governance & Compensation Committee appointed by our Board of Directors administers our 2000 stock plan. The committee has~~ the ~~power~~plan(s) range from 12 months to determine the terms of the options granted, including the exercise price, the number of shares subject to each option, the exercisability thereof, and the form of consideration payable upon such exercise. In addition, the committee has the authority to amend, suspend or terminate our 2000 stock plan, provided that no such action may adversely affect the rights of any optionee under our 2000 stock plan.

~~Our 2000 stock plan generally does~~ not ~~allow for the transfer of options and only the optionee may exercise an option during his or her lifetime.~~more than 84 months. An optionee generally must exercise any vested options within ~~seven days~~a prescribed period as per the respective stock option plans generally before termination date of the stock option plan. A participant must exercise any vested options prior to termination of ~~service~~the services with ~~us.~~us and within a specified post-separation period generally within three months from date of the separation. If an optionee’s termination is due to death, disability or retirement, his or her option will fully vest and become exercisable. ~~Generally, such options must be exercised within six months after termination.~~

The ~~exercise price of stock options granted under our 2000 stock plan will be determined by the committee. Normally, the term of options granted under our 2000 stock plan may not exceed seven years.~~

~~Our 2000 stock plan provides that in the event~~salient features of our ~~merger with or into another corporation or a sale of substantially all of our assets, each option shall be proportionately adjusted to give effect to the merger or asset sale.~~stock plans are as follows:

~~1999 Employee Stock Option Plan~~

Range of

Authorized

exercise

Termination

Name of Plan

Shares⁽¹⁾

prices

Effective date

date

Other remarks

1999 Employee Stock option Plan

30,000,000

Rs.

171 – 490

July 29, 1999

July 28, 2009

There are no stock options outstanding under this plan

Wipro Employee Stock Option Plan 2000 (2000 Plan)

150,000,000

Rs.

171 – 490

September 15, 2000

September 15, 2010

In the event of our merger with or into another corporation or a sale of substantially all of our assets, each option under this plan, shall be proportionately adjusted to give effect to the merger or asset sale.

There are no stock options outstanding under this plan.

Stock Option Plan (2000 ADS Plan)

9,000,000

$

3 – 7

September, 2000

September, 2010

In event of merger of the Company with other corporation or sale of substantially of all our assets, the successor corporation shall either assume the outstanding units or grant equivalent units to the holders. If the successor corporation neither assumes the outstanding units nor grants equivalent units, such outstanding units shall vest immediately, and become exercisable in full.

Wipro Restricted Stock Unit Plan (WRSUP 2004 plan)

12,000,000

Rs.

2

June 11, 2004

June 10, 2014

Wipro ADS Restricted Stock Unit Plan (WARSUP 2004 plan)

12,000,000

$

0.04

June 11, 2004

June 10, 2014

Wipro employee Restricted Stock Unit Plan 2005 (WSRUP 2005 plan)

12,000,000

Rs.

2

July 21, 2005

July 20, 2015

Wipro employee Restricted Stock Unit Pl 2007 (WSRUP 2007 plan)

10,000,000

Rs.

2

July 18, 2007

July 17, 2017

Our 1999 stock plan provides for the grant of stock options to eligible employees and directors. Our 1999 stock plan was approved by our Board of Directors on April 30, 1999 and by our shareholders on July 29, 1999. Unless terminated sooner, our 1999 stock plan will terminate automatically on July 28, 2009. A total of 30,000,000 equity shares (as adjusted for corporate actions from time to time) are currently reserved for issuance pursuant to our 1999 stock plan. All options under our 1999 stock plan will be exercisable for our equity shares.

~~There are no stock options outstanding under this plan and we do not intend to grant options under this plan.~~


⁽¹⁾		Subject to adjustment for corporate action from time to time.

Wipro Equity Reward Trust

We established the Wipro Equity Reward Trust, or WERT, in 1984 to allow our employees to acquire a greater proprietary stake in our success and growth, and to encourage our employees to continue their association with us. The WERT, which is administered by a Board of Trustees is designed to give eligible employees the right to receive restricted shares and other compensation benefits at the times and on the conditions that we specify. Such compensation benefits include voluntary contributions, loans, interest and dividends on investments in the WERT and other similar benefits.

The WERT is administered by a board of trustees that generally consists of between two and six members as appointed by us. We select eligible employees to receive grants of shares and other compensation from the WERT and communicate this information to the WERT. We select employees based upon various factors, including, without limitation, an employee’s performance, period of service and status. The WERT awards the number of shares that each employee is entitled to receive out of the shares we issued to the WERT at its formation. We also determine the time intervals that an employee may elect to receive them. The shares issued under the WERT are generally not transferable for a period of four years after the date of issuance to the employee. Shares from the WERT are issued in the joint names of the WERT and the employee until such restrictions and obligations are fulfilled by the employee. After the four-year period, complete ownership of the shares is transferred to the employee.

If employment is terminated by death, disability or retirement, his or her restricted shares are transferred to the employee’s legal heirs or continue to be held by the employee, as the case may be, and such individuals may exercise any rights to those shares for up to ninety days after employment has ceased.

The Trustees of the WERT have the authority to amend or terminate the WERT at any time and for any reason. ~~The WERT is subject to all applicable laws, rules, regulations and approvals by any governmental agencies as may be required.~~

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Item 7. Major Shareholders ~~And~~and Related Party Transactions

Major Shareholders

The following table sets forth certain information regarding the beneficial ownership of our equity shares as of March 31, ~~2007,~~2009, of each person or group known by us to own beneficially 5% or more of our outstanding equity shares.

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Beneficial ownership is determined in accordance with the rules of the SEC and includes voting and investment power with respect to such shares. Shares subject to vested options that are currently exercisable are deemed to be outstanding or to be beneficially owned by the person holding such options for the purpose of computing the percentage ownership of such person, but are not deemed to be outstanding or to be beneficially owned for the purpose of computing the percentage ownership of any other person. All information with respect to the beneficial ownership of any principal shareholder has been furnished by such shareholder and, unless otherwise indicated below, we believe that persons named in the table have sole voting and sole investment power with respect to all the shares shown as beneficially owned, subject to community property laws, where applicable. The number of shares and percentage ownership are based on ~~1,458,999,650~~1,464,980,746 equity shares outstanding as of March 31, ~~2007.~~2009.

Number of Shares

beneficially held as of

Number of Shares beneficially

Name of Beneficial Owner

Class of Security

March 31, 2007

% of Class

Name of Beneficial Owner

Class of Security

held as of March 31, 2009

% of Class

Azim H. Premji (1)

Equity

1,161,136,260

79.58

Azim H. Premji (1)

Equity

1,161,116,260

79.25

Hasham Traders

Equity

326,259,000

22.36

Hasham Traders

Equity

326,259,000

22.27

Prazim Traders

Equity

325,017,000

22.28

Prazim Traders

Equity

325,017,000

22.18

Zash Traders

Equity

324,244,800

22.22

Zash Traders

Equity

324,244,800

22.13


(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~~1,414,600 shares held jointly by Mr. Premji and members of his immediately ~~family and~~family. In addition 8,316,000 shares ~~held by the Azim Premji Foundation (I) Pvt. Ltd and 10,000 shares~~are held by Azim Premji Foundation (I) Pvt. Ltd. Mr. Premji disclaims beneficial ownership of 8,316,000 shares held by Azim Premji Foundation (I) ~~Pvt. Ltd and 10,000 shares held by Azim Premji Foundation~~ Pvt. Ltd.

Our American Depositary Shares are listed on the New York Stock Exchange. Each ADS represents one equity share of par value Rs. 2 per share. Our ADSs are registered pursuant to Section ~~12(g)~~12(b) of the Securities Exchange Act of 1934 and, as of March 31, ~~2007,~~2009, are held by approximately ~~20,229~~14,945 holders of record in the United States.

Our equity shares can be held by Foreign Institutional Investors, or FIIs, and Non-resident Indians, or NRIs, who are registered with the Securities and Exchange Board of India, or SEBI, and the Reserve Bank of India, or RBI. Currently, ~~7.85%~~7.53% of the Company’s equity shares are held by these FIIs, and NRIs, some of which may be residents or corporate entities registered in the United States ~~of America~~ and elsewhere. We are ~~not aware~~unaware of ~~which~~whether FIIs, and/or NRIs hold our equity shares as residents or as corporate entities registered in the United States.

Our major shareholders do not have a differential voting right with respect to their equity shares. To the best of our knowledge, we are not owned or controlled directly or indirectly by any Government or by any other corporation. We are not aware of any arrangement, the operation of which may at a subsequent date result in a change in control, of our Company.

Related Party Transactions

Terms of Employment Arrangements and Indemnification Agreements.We are a party to various employment and indemnification agreements with our directors and executive officers. See “Terms of Employment Arrangements and Indemnification Agreements” under Item 6 of this Annual Report for a description of the agreements that we have entered into with our directors and executive officers.

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Item 8. Financial Information

Consolidated Statements and Other Financial Information

Please refer the following financial statements and the Auditor’s Report under item 18 in this Annual Report for the fiscal year ended March 31, ~~2007:~~2009:

Report of the independent registered public accounting firm;

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	•		~~Consolidated Balance Sheet as of March 31, 2006 and 2007;~~

	•		~~Consolidated Statements of Income for the years ended March 31, 2005, 2006 and 2007;~~

	•		~~Consolidated Statements of Stockholders’ Equity and comprehensive income for the years ended March 31, 2005, 2006 and 2007;~~

	•		~~Consolidated statements of Cash Flows for the years ended March 31, 2005, 2006 and 2007; and~~

	•		~~Notes to the Consolidated Financial Statements.~~

Consolidated Balance Sheets as of March 31, 2008 and 2009;

Consolidated Statements of Income for the years ended March 31, 2007, 2008 and 2009;

Consolidated Statements of Stockholders’ Equity and Comprehensive income for the years ended March 31, 2007, 2008 and 2009;

Consolidated Statements of Cash Flows for the years ended March 31, 2007, 2008 and 2009; and

Notes to the Consolidated Financial Statements.

Legal Proceedings

Please see the section ~~tiled~~titled “Legal Proceedings” under Item 4 of this Annual Report for this information.

Dividends

~~Although the amount varies,~~The public companies in India typically pay cash ~~dividends.~~dividends even though the amount of such dividends varies from company to company. Under Indian law, a corporation ~~pays~~can pay dividends upon a recommendation by the Board of Directors and approval by a majority of the shareholders, who have the right to decrease but not increase the amount of the dividend recommended by the Board of Directors. Under the Indian Companies Act, 1956, dividends may be paid out of profits of a company in the year in which the dividend is declared or out of the undistributed profits of previous fiscal years.

~~For the year ended March 31, 2005,~~During fiscal 2007, we paid ~~a final dividend of Rs. 2.50 per equity share. For the year ended March 31, 2006, we paid a final dividend of Rs. 5 per equity share.~~

~~For the year ended March 31, 2007, the Board of Directors approved~~ an interim cash dividend of Rs. 5 per share ~~totaling to~~and a final cash dividend of Rs. ~~8,253.05. In accordance with Indian regulations~~5 per share. During fiscal 2008, we paid an ~~amount equivalent to the~~ interim cash dividend ~~net~~ of ~~taxes amounting to~~ Rs. ~~7,237.88 has been transferred to~~2 per share and a ~~specific bank account pending payment to the shareholders. The balance in this bank account can only be used~~final dividend of Rs. 1 per share. During fiscal 2009, we paid a final cash dividend of Rs. 4 per share.

We have proposed to pay a cash dividend of Rs. 4 per share on our equity shares and ADRs. This proposal is subject to approval by the ~~specified~~shareholders of the Company. We expect a dividend ~~are not available for general use and are accordingly reflected as restricted cash in the consolidated balance sheet.~~payout (excluding corporate dividend tax) of approximately Rs. 5,860 million.

Although we have no current intention to discontinue dividend payments, we cannot assure you that any future dividends will be declared or paid or that the amount thereof will not be decreased. Holders of ADSs will be entitled to receive dividends payable on equity shares represented by such ADSs. Cash dividends on equity shares represented by ADSs are paid to the Depositary in rupees and are generally converted by the Depositary into U.S. dollars and distributed, net of depositary fees, taxes, if any, and expenses, to the holders of such ADSs.

The Board of Directors has, subject to the approval of shareholders at the forthcoming Annual General Meeting in July 18, 2007, recommended a final dividend of Re. 1 per share on equity shares and ADSs for the year ended March 31, 2007. The dividend, if declared, will be payable to the shareholders who are on the records of the Company as on the opening hours of July 1, 2007.

Significant Changes

None.

Item 9. The Offer and Listing

Price History

Our equity shares are traded on The Stock Exchange, Mumbai or BSE and The National Stock Exchange of India Limited, or NSE. WeDuring the year we have ~~also applied~~obtained approval for de-listing our equity shares from the ~~Kolkatta~~Kolkata Stock Exchange Association ~~Limited and await the approval.~~Limited. Our American ~~Depository~~Depositary Shares, as evidenced by American ~~Depository~~Depositary Receipts, or ADRs, are traded in the U.S. on the New York Stock Exchange, or NYSE, under the ticker symbol “WIT”. Each ADS represents one equity share. Our ADSs began trading on the NYSE on October 19, 2000.

69

As of March 31, ~~2007,~~2009, we had ~~1,458,999,650~~1,464,980,746 issued and outstanding equity shares. ~~This includes 22,573,070~~As of March 31, 2009, there were approximately 14,945 record holders of ADRs evidencing 23,692,051 ADSs (equivalent to ~~22,573,070~~23,692,051 equity shares). As of March 31, ~~2007,~~2009, there were approximately ~~197,774~~228,457 record holders of our equity shares listed and traded on the Indian Stock ~~Exchanges and approximately 20,229 record holders of ADSs.~~Exchanges.

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The following tables set forth for the periods indicated the price history of our equity shares and ADSs on the BSE, NSE and the NYSE. The stock prices for the prior periods ~~prior to July 2005~~ are ~~re-stated~~restated to reflect ~~the~~ stock dividend issued by the Company ~~in July 2005 in the ratio of 1:1.~~from time to time.

BSE NSE NYSE
Price per equity share Price per equity share Price per ADS
High (Rs.) Low (Rs.) High ($) Low ($) High (Rs.) Low (Rs.) High ($) Low ($) High ($) Low ($)
Fiscal Year ended March 31,
2007 690.00 383.00 16.01 8.89 691.00 381.25 16.03 8.80 18.44 10.18
2006 573.00 285.55 12.88 6.41 585.90 272.00 13.17 8.65 22.38 9.62
2005 389.00 200.00 8.91 4.59 387.50 198.00 8.88 4.54 12.85 5.81
2004 310.17 131.88 7.15 3.04 311.67 132.90 7.18 3.06 9.90 3.05
2003 312.50 177.17 6.58 3.73 312.50 177.17 6.58 3.73 6.72 3.71
2002 327.50 127.50 6.89 2.69 329.00 126.50 6.92 2.66 7.34 2.83
Quarter Ended

March 31, 2007 690.00 531.00 16.01 12.32 691.00 527.15 16.03 12.23 18.44 14.62
December 31, 2006 614.00 507.65 14.25 11.78 670.00 449.50 15.55 10.43 16.39 12.96
September 30, 2006 533.90 441.25 12.39 10.24 533.65 442.30 12.38 10.26 13.31 11.23
June 30, 2006 598.90 383.00 13.90 8.89 599.00 381.25 13.90 8.80 15.50 10.18
March 31, 2006 573.00 440.20 12.88 9.89 585.90 385.00 13.17 8.66 15.49 11.90
December 31, 2005 470.00 355.00 10.57 7.98 470.00 355.75 10.57 8.00 12.75 9.62
September 30, 2005 385.80 350.05 8.67 7.87 384.80 345.20 8.65 7.76 21.60 9.59
June 30, 2005 388.00 285.55 8.72 6.42 384.90 272.00 8.65 6.12 22.38 17.59
March 31, 2005 382.50 312.50 8.77 7.17 380.00 305.18 8.71 7.00 12.55 9.81
Six Months Ended

(monthly for last six months)
April 30, 2007 600.00 515.00 13.92 11.95 604.80 515.00 14.03 11.95 17.24 15.13
March 31, 2007 618.80 531.00 14.36 12.32 609.50 527.15 14.14 12.23 16.92 14.62
February 28, 2007 690.00 536.55 16.01 12.45 691.00 549.75 16.03 12.76 18.44 15.52
January 31, 2007 660.00 566.10 15.31 13.13 675.00 561.35 15.66 13.02 18.00 15.25
December 31, 2006 614.00 542.00 14.25 12.58 613.90 521.65 14.24 12.10 16.39 14.76
November 30, 2006 604.00 523.10 14.01 12.14 670.00 449.50 15.55 10.43 16.12 14.00


	BSE								NSE								NYSE
	Price per equity share								Price per equity share								Price per ADS
	High (Rs.)		Low (Rs.)		High ($)		Low ($)		High (Rs.)		Low (Rs.)		High ($)		Low ($)		High ($)		Low ($)
Fiscal Year ended March 31,
2009		537.90		181.70		10.57		3.57		535.00		180.40		10.52		3.55		14.53		5.04
2008		600.00		325.00		14.99		8.12		635.00		324.00		15.87		8.10		17.24		9.85
2007		690.00		383.00		16.01		8.89		691.00		381.25		16.03		8.80		18.44		10.18
2006		573.00		285.55		12.88		6.41		585.90		272.00		13.17		8.65		22.38		9.62
2005		389.00		200.00		8.91		4.59		387.50		198.00		8.88		4.54		12.85		5.81

Quarter Ended
March 31, 2009		261.40		195.00		5.14		3.83		263.8		196.50		5.19		3.86		8.75		5.04
December 31, 2008		351.70		181.70		6.91		3.57		364.40		180.40		7.16		3.55		9.98		5.66
September 30, 2008		460.90		317.00		9.06		6.23		465.00		320.10		9.14		6.29		12.18		8.88
June 30, 2008		537.90		402.00		10.57		7.90		535.00		401.10		10.52		7.88		14.53		10.89
March 31, 2008		528.00		325.00		13.19		8.12		529.05		324.00		13.22		8.10		14.99		9.85
December 31, 2007		552.00		428.00		13.79		10.69		552.00		426.15		13.79		10.65		16.49		12.81
September 30, 2007		530.50		425.00		13.26		10.62		532.00		425.00		13.29		10.62		16.40		12.49
June 30, 2007		600.00		507.10		14.99		12.67		635.00		505.00		15.89		12.62		17.24		15.13

Six Months Ended
April 30, 2009		332.00		240.00		6.53		4.72		333.45		240.15		6.55		4.72		9.60		6.90
March 31, 2009		261.40		195.00		5.14		3.83		263.80		196.50		5.19		3.86		7.82		5.04
February 28, 2009		231.90		204.25		4.56		4.02		232.00		204.05		4.56		4.01		7.33		5.69
January 31, 2009		255.00		200.00		5.01		3.93		255.00		201.00		5.01		3.95		8.75		6.09
December 31, 2008		264.25		214.20		5.19		4.21		265.00		214.00		5.21		4.21		8.49		6.1
November 30, 2008		289.90		208.00		5.70		4.09		286.00		206.80		5.62		4.07		8.74		5.66


The $ figure under BSE and NSE columns denote the share price in rupees converted to US $ at the rate of exchange of 1 US$ = Rs. 50.87

(1)		Source: BSE data was obtained fromwww.bseindia.com and NSE data was obtained fromwww.nseindia.com. NYSE data was obtained from~~www.finance.yahoo.com.~~www.finance.yahoo.com.

Plan of Distribution

Not applicable.

Markets

Trading Practices and Procedures on the Indian Stock Exchanges

BSE and NSE (Exchanges) together account for more than ~~80%~~90% of the total trading volume on the Indian Stock Exchanges. Trading on both of these exchanges is accomplished on electronic trading platforms. Trading is done on a two-day fixed settlement basis on all of the exchanges. Any outstanding amount at the end of the settlement period is settled by delivery and payment. However, institutional investors are not permitted to ‘net out’ their transactions and must trade on a delivery basis.

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Orders can be entered with a specified term of validity that may last until the end of the session, day or settlement period. Dealers must specify whether orders are for a proprietary account or for a client. Exchanges specify certain margin requirements for trades executed on the exchange, including margins based on the volume or quantity of exposure that the broker has on the market, as well as market-to-market margins payable on a daily basis for all outstanding trades. Trading on Exchanges normally takes place from 10:00 a.m. to 3:30 p.m. on all weekdays, except holidays. Exchanges do not permit carry forward trades. They have separate margin requirements based on the net

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exposure of the broker on the exchange. Exchanges also have separate online trading systems and separate clearing houses.

BSE was closed from January 11 through January 13, 1993 due to a riot in Mumbai. It was also closed on March 12, 1993 due to a bomb explosion within its premises. From December 14 through December 23, 1993 the BSE was closed due to a brokers’ strike, and from March 20 through March 22, 1995, the governing board of the BSE closed the market due to a default of one of the broker members and due to which the trading of equity shares on the BSE has been suspended. There have been no closures of the Indian Stock Exchanges in response to “panic” trading or large fluctuations. On May 17, 2004, Exchanges have observed that there were wide fluctuations in the prices of various securities / SENSEX/Nifty, thereby resulting in a halt in the trading activity at the exchanges on two occasions, as per the Securities and Exchange Board of India or SEBI prescribed guidelines on Circuit Breakers. BSE and NSE were closed on ~~July 28, 2005~~a few occasions, in the interest of protection of investor interests, due to ~~rain~~fluctuation in ~~Mumbai.~~prices caused by various events from time to time. On ~~May~~January 22, ~~2006 Exchanges have observed that there were~~2008, the market tumbled in opening trade due to panic selling triggering the market wide ~~fluctuations~~circuit filter after the intra-day 10% fall. On November 27, 2008, due to terrorist attack in the ~~prices~~city of ~~various securities / SENSEX/Nifty, thereby resulting in a halt in~~Mumbai, the ~~trading activity,~~BSE and NSE were closed.

The stock exchanges in India now operate on a trading day plus two, or T+2 rolling settlement systems. At the end of the T+2 period, obligations are settled with buyers of securities paying for and receiving securities, while sellers transfer and receive payment for securities. The SEBI has moved to a T+2 settlement system, and is subsequently planning to move to a T+1 settlement system.

In order to contain the risk arising out of the transactions entered into by the members in various securities either on their own account or on behalf of their clients, the largest exchanges have designed risk management procedures, which include compulsory prescribed margins on the individual broker members, based on their outstanding exposure in the market, as well as stock specific margins from the members. There are generally no restrictions on price movements of any security on any given day. In order to restrict abnormal price volatility, ~~the~~ SEBI has instructed the stock exchanges to apply the following price bands, calculated at the previous day’s closing price as follows:

~~Market Wide Circuit Breakers~~~~: Market wide~~Market-wide circuit breakers are applied to the market for movements by 10%, 15% and 20% for two prescribed market indices; the ~~Sensex~~SENSEX for the BSE and the Nifty for the NSE. If any of these circuit breaker thresholds are reached, trading on all equity and equity derivates markets nationwide is halted.

~~Price Bands~~~~: Price Bands are~~ This circuit ~~filters~~breaker brings about a coordinated trading halt in all equity and equity derivative markets nationwide. The market wide circuit breakers would be triggered by movement of ~~20% movements~~ either upSENSEX or ~~down and are applied to most securities traded in~~ the ~~markets, excluding securities included in~~NSE S&P CNX Nifty whichever is breached earlier. In case of a 10% movement of either of these indices, there would be a 1-hour market halt if the ~~BSE Sensex~~movement takes place before 1 p.m. In case the movement takes place at or after 1 p.m. but before 2.30 p.m. there will be a trading halt for half an hour. In case the movement takes place at or after 2.30 p.m. there will be no trading halt at the 10% level and the ~~NSE Nifty indices and derivatives products.~~

~~Amendments to SEBI (DIP) Guidelines, 2000;~~

~~In the event~~market will continue trading. If there is a 15% movement of book built issues in an Initial Public Offering, or IPO, it has been decided to increase the allocation to Retail Individual Investors (RIIs) from the existing 25% to 35%, and to correspondingly reduce the allocation to Non-Institutional Investors (NIIs) from the existing 25% to 15%. Further,either index, there will be a 2-hour market halt if the ~~book built issues~~movement takes place before 1 p.m. If the 15% trigger is reached on or after 1 p.m. but before 2 p.m., there will be a 1 hour halt. If the 15% trigger is reached on or after 2 p.m. the trading will halt for the remainder of the day. In case of a 20% movement of the index, the trading will be halted for the remainder of the day. The percentages are ~~made pursuant~~calculated on the closing index value of the quarter. These percentages are translated into absolute points of index variations (rounded off to the ~~requirement of mandatory allocation of 60% to QIBs in terms of Rule 19(2)(b) of the Securities Contract Regulations Rules, 1956, the respective figures shall be 30% of the RIIs and 10% for NIIs.~~

~~The RII at present is defined in value terms as one who can apply for shares up to a maximum amount of Rs.1,00,000.~~

The Securities and Exchange Board of India or SEBI has introduced the regime of private placements of securities by Indian listed companies called Qualified Institutions Placements or QIP. The new regime has been introduced in the form of Chapter XIIIA of the SEBI (Disclosures and Investor Protection) Guidelines, 2000, or DIP Guidelines, on May 8, 2006 or the Amendment.

QIPs are basically the issue of “specified securities” by Indian companies to Qualified Institutional Buyers, QIBs. The Amendment defines the specified securities as equity shares, fully convertible debentures, partly convertible debentures or any securities other than warrants, which are convertible into or exchangeable with equity shares at a later date.

~~Reduction in the bidding period~~

~~To effect a change in the existing bidding period, which may not exceed 10 business days subject to a three day extension~~nearest 25 points in case of ~~a revision in price bands, SEBI has decided to reduce~~SENSEX). At the ~~bidding period from~~end of each quarter, these absolute points of index variations are revised and made applicable for the ~~current 5-10 business day period (including holidays) to a 3-7 business day period.~~next quarter.

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~~Disclosure of Price Band/Floor Price in case of listed companies~~Index based market wide circuit breaker

The ~~existing DIP guidelines require all issuers (whether listed or unlisted) making~~Exchange implements on a ~~public issue through~~quarterly basis, the ~~book building process to disclose~~index based market wide circuit breaker system. The system is applicable at three stages of the ~~price band/floor price in the Red Herring Prospectus / application form. SEBI has also decided to give an option to listed issuers to~~index movement either ~~disclose the price band in the red herring prospectus or application form or to disclose the price band/floor price~~way at ~~least one day before the bid opens.~~10%, 15% and 20%.

Listing

The SEBI has promulgated regulations ~~creating an independent self-regulatory authority called~~for listing and is governed through circulars issued from time to time by amending the ~~Central~~ Listing ~~Authority, or~~Agreement entered into by listed companies with stock exchanges. The Stock Exchanges monitor the ~~CLA. No stock exchange can consider a listing application unless it is accompanied by a letter~~listed companies under the supervision of ~~recommendation from the CLA. However, currently the CLA is not fully operational. This law has since been repealed and the authority dissolved.~~SEBI.

The National Stock Exchange of India Limited

The market capitalization of the capital markets (equities) segment of the NSE as of ~~May 9, 2007~~March 31, 2009 was approximately Rs. ~~35.81~~28.96 trillion or approximately $ ~~831~~569 billion. The clearing and settlement operations of the NSE are managed by its wholly-owned subsidiary, the National Securities Clearing Corporation Limited. Funds settlement takes place through designated clearing banks. The National Securities Clearing Corporation Limited interfaces with the depositaries on the one hand and the clearing banks on the other to provide delivery versus payment settlement for depositary-enabled trades.

As of ~~May 9, 2007,~~March 31, 2009, the NSE had ~~798~~117 members comprised of 2996 corporate members, 11 individual members ~~736 companies, 33~~and 10 firms.

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Bombay Stock Exchange Limited

The estimated aggregate market capitalization of stocks trading on the BSE as of ~~May 9, 2007~~March 31, 2009 was approximately Rs. ~~8.77~~30.86 trillion or approximately $ ~~204~~606 billion. The BSE began allowing online trading in May 1995. As of ~~May 9, 2007,~~March 31, 2009, the BSE had ~~854~~1,007 members, comprised of ~~140~~175 individual members, ~~672~~809 Indian companies ~~22 partnership firms~~ and ~~20 composite corporate members.~~23 Foreign Institutional Investors. Only a member of the stock exchange has the right to trade in the stocks listed on the stock exchange.

Derivatives

Trading in derivatives in India takes place either on separate and independent derivatives exchanges or on a separate segment of an existing stock exchange. The derivative exchange or derivative segment of a stock exchange functions as a self-regulatory organization under the supervision of the SEBI.

Depositories

The National Securities Depository Limited and Central Depositary Services (India) Limited are the two depositories that provide electronic depositary facilities for trading in equity and debt securities in India. The SEBI mandates that a company making a public or rights issue or an offer for sale to enter into an agreement with a depository for dematerialization of securities already issued or proposed to be issued to the public or existing ~~shareholders;~~shareholders. The SEBI has also provided that the issue and allotment of shares in initial public offerings and/or the trading of shares shall only be in electronic form.

Securities Transaction Tax

A brief description of the securities transaction tax and capital gains treatment under India law is provided under the section “Taxation”.

Item 10. Additional Information

Share Capital

Our authorized share capital is Rs. ~~3,550,000,000~~3,300,000,000 divided into 1,650,000,000 equity shares of Rs. 2/- each and 25,000,000 preference shares of Rs. 10/- each. As of March 31, ~~2007, 1,458,999,650~~2009, 1,464,980,746 equity shares, par value Rs. 2 per share were issued, outstanding and fully paid. We currently have no convertible debentures or warrants ~~outstanding.~~outstanding, except options outstanding under our employee stock option plans.

Memorandum and Articles Of Association

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Set forth below is a brief summary of the material provisions of our Articles of Association and the Indian Companies Act, 1956 all as currently in effect. Wipro Limited is registered under the Companies Act, with the Registrar of Companies, Karnataka, Bangalore, India, with Company No. 20800. The following description of our Articles of Association does not purport to be complete and is qualified in its entirety by the Articles of Association, and Memorandum of Association, of Wipro Limited that are included as exhibits to our registration statement on Form F-1 filed with the Securities and Exchange Commission on September 26, 2000.

Our Articles of Association provide that the minimum number of directors shall be four and the maximum number of directors shall be ~~twelve.~~fifteen As of March 31, ~~2007,~~2009, we have ~~seven~~10 directors. Our Articles of Association provide that at least two-thirds of our directors shall be subject to retirement by rotation. One third of these directors must retire from office at each ~~annual general~~Annual General meeting of the shareholders. A retiring director is eligible for re-election. Up to one-third of our directors can be appointed as permanent directors. Currently, Azim H. Premji is a non-retiring director. The term of the office of our non-retiring director expires on July 30, 2009. Our Articles of Association do not mandate the retirement of our directors under an age limit requirement. Our Articles of Association do not require our Board members to be shareholders in our company.

Our Articles of Association provide that any director who has a personal interest in a transaction must disclose such interest, must abstain from voting on such transaction and may not be counted for purposes of determining whether a quorum is present at the meeting.

The remuneration payable to our directors may be fixed by our Board of Directors in accordance with provisions of the Indian Companies Act, 1956, and the rules and regulations prescribed by the Government of India.

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Objects and Purposes of Our Memorandum of Association

The following is a summary of our existing Objects as set forth in Section 3 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 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 to handle business process management, remote help desk management; remote management.

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	•		~~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.~~

	•		~~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 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.

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	•		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.~~

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 business as manufacturers, sellers, buyers, exporters, importers, and dealers of fluid power products.

To carry on the business of extracting vegetable oil, manufacture and deal in hydrogenated vegetable oil.

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 solutions for water treatment including but not limited to ultra pure water, waste water treatment, water reuse and desalination and related activities.

To carry on the business of renewable energy systems and food and agricultural product processing and related industries,

Borrowings Power Exercisable by the Directors

The Board of Directors have the authority to make borrowings upto a limit of one time the Companies paid-up capital and free reserves. Borrowings beyond this limit will require the approval of the shareholders of the Company.

Description of Equity Shares

Dividends

Under the Indian Companies Act, 1956, unless our Board of Directors recommends the payment of a dividend, we may not declare a dividend. Similarly, under our Articles of Association, although the shareholders may, at the ~~annual general~~Annual General meeting, approve a dividend in an amount less than that recommended by the Board of Directors, they cannot increase the amount of the dividend. In India, dividends ~~generally~~ are declared as a ~~percentage of~~fixed sum per share on the ~~par value of a~~ company’s equity shares. The dividend recommended by the Board, if any, and subject to the limitations described above, is distributed and paid to shareholders in proportion to the paid up value of their shares within 30 days of the approval by the shareholders at the ~~annual general~~Annual General meeting. Pursuant to our Articles of Association, our Board of Directors has discretion to declare and pay interim dividends without shareholder approval. Under the Indian Companies Act, 1956, read with the listing agreements entered into with Indian stock exchanges, dividends can only be paid in cash to the registered shareholder at a record date fixed on or prior to the ~~annual general~~Annual General meeting or to his order or his banker’s order.

The Companies Act provides that any dividends that remain unpaid or unclaimed ~~after the 30-day period~~ are to be transferred ~~to a special bank account. We transfer any dividends that remain unclaimed for seven years from the date of the transfer~~ to the Investor Education and Protection Fund created by the Indian ~~Government. After~~Government after the ~~transfer to this fund, such unclaimed dividends can not be claimed.~~

stipulated time. Under the Companies Act, dividends may be paid out of profits of a company in the year in which the dividend is declared or out of the undistributed profits of previous fiscal ~~years.~~years subject to transfer of a portion. Before declaring a dividend greater than 10% of the par value of its equity shares, a company is required under the Companies Act to transfer to its reserves a minimum percentage of its profits for that year, ranging from 2.5% to 10%, depending upon the dividend percentage to be declared in such year.

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The Companies Act further provides that, in the event of an inadequacy or absence of profits in any year, a dividend may be declared for such year out of the company’s accumulated profits, subject to the ~~following conditions:~~fulfillment of certain conditions.

	•		~~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.~~

We are subject to taxation for each dividend declared, distributed or paid for a relevant period by our company.

Bonus Shares

In addition to permitting dividends to be paid out of current or retained earnings as described above, the Companies Act permits a company to distribute an amount transferred from the general reserve or other permitted reserves, including share premium account and surplus in the company’s profit and loss account, to its shareholders in the form of bonus shares (similar to a stock dividend). ~~The Companies Act also permits the issuance of bonus shares from a share premium account.~~ Bonus shares are distributed to shareholders in the proportion recommended by the Board of ~~Directors. Shareholders on record~~Directors to such shareholders on a fixed record date when they are entitled to receive such bonus shares.

Audit and Annual Report

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At least 21 days before the Annual General Meeting of shareholders (excluding the days of mailing and date of the meeting,), we must distribute to our shareholders ~~a detailed version of our~~ audited Indian GAAP balance sheet and profit and loss account and the related reports of our Board of Directors and the Auditors, together with a notice convening the general meeting. ~~Securities and Exchange Board of India (SEBI)~~SEBI has permitted dispatch of abridged financial statements to shareholders in India in lieu of detailed version of financial statements. Under the Companies Act, a company must file the balance sheet and annual profit and loss account presented to the shareholders within 30 days of the conclusion of the Annual General Meeting with the Registrar of Companies.

A company must also file an annual return containing a list of the company’s shareholders and other company information within 60 days of the conclusion of the meeting.

Consolidation and Subdivision of Shares

The Indian Companies Act permits a company to split or combine the par value of its shares, provided such split or combination is not made in fractions. Shareholders of record on a fixed record date are entitled to receive the split or combination.

Preemptive Rights, Issue of Additional Shares and Distribution of Rights

The Companies Act gives shareholders the right to subscribe for new shares in proportion to their respective existing shareholdings ~~unless~~(unless otherwise determined by a special resolution passed by a General Meeting of the shareholders. Under the Companies Act, in the event of an issuance of securities, subject to the limitations set forth above, a company must first offer the new shares to the shareholders on a fixed record date. The offer must include: (i)) and the right, ~~exercisable by the shareholders of record,~~ to renounce ~~the shares offered~~such subscription right in favor of any other person; and (ii) the number of shares offered and the period of the offer, which may not be less than 15 days from the date of offer. If the offer is not accepted, it is deemed to have been declined. The Board of Directors is authorized under the Companies Act to distribute any new shares not purchased by the preemptive rights holders in the manner that it deems most beneficial to the company. Holders of ADSs may not be permitted to participate in any such offer.

If we ever plan to distribute additional rights to purchase our equity shares, we will give prior written notice to the depositary bank and we will assist the depositary bank in determining whether it is lawful and reasonably practicable to distribute rights to purchase additional ADSs to holders.

The depositary bank will establish procedures to distribute rights to purchase additional ADSs to holders and to enable such holders to exercise such rights if it is lawful and reasonably practicable to make the rights available to holders of ADSs, subject to all of the documentation contemplated in the deposit agreement (such as opinions to address the lawfulness of the transaction). You may have to pay fees, expenses, taxes and other governmental charges to subscribe for the new ADSs upon the exercise of your rights. The depositary bank is not obligated to establish procedures to facilitate the distribution and exercise by holders of rights to purchase new equity shares directly, rather than new ADSs.

The depositary bank will not distribute the rights to you if:

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.

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	•		~~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.~~

The depositary bank will sell the rights that are not exercised or not distributed if such sale is lawful and reasonably practicable. The proceeds of such sale will be distributed to holders as in the case of a cash distribution. If the depositary bank is unable to sell the rights, it will allow the rights to lapse.

Voting Rights

At any General Meeting, voting is by show of hands unless a poll is demanded by a shareholder or shareholders present in person or by proxy holding at least 10% of the total shares entitled to vote on the resolution or by those holding shares with an aggregate paid up capital of at least Rs. 50,000. Upon a show of hands, every shareholder entitled to vote and present in person has one vote and, on a poll, every shareholder entitled to vote and present in person or by proxy has voting rights in proportion to the paid up capital held by such shareholders. The Chairman of the Board has a deciding vote in the case of any tie. Any shareholder of the company may appoint a proxy. The instrument appointing a proxy must be delivered to the company at least 48 hours prior to the meeting. A proxy

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may not vote except on a poll. A corporate shareholder may appoint an authorized representative who can vote on behalf of the shareholder, both upon a show of hands and upon a poll.

Ordinary resolutions may be passed by simple majority of those present and voting at any General Meeting for which the required period of notice has been given. However, certain resolutions ~~such as~~called special resolutions in many instances like for example amendments ofto the Articles of Association and changes into certain clauses in the Memorandum of Association, the commencement of a new line of business, ~~the waiver of preemptive rights for the issuance of any new shares and a reduction of share capital,~~etc require that votes cast in favor of the resolution (whether by show of hands or poll) are not less than three times the number of votes, if any, cast against the resolution. ~~As per the Companies Act, not less than two-third of the directors of a public company shall retire by rotation and be appointed by the shareholders in the general meeting.~~

Liquidation Rights

Subject to the rights of creditors, employees and the holders of any shares entitled by their terms to preferential repayment over the equity shares, if any, in the event of our winding-up, the holders of the equity shares are entitled to be repaid the amounts of paid up capital or credited as paid up on those equity shares. All surplus assets after payments to the holders of any preference shares at the commencement of the winding-up shall be paid to holders of equity shares in proportion to their shareholdings.

Preference Shares

Preference shares have preferential dividend and liquidation rights. Preference shares may be redeemed if they are fully paid, and only out of our profits, or out of the proceeds of the sale of shares issued for purposes of such redemption. Holders of preference shares do not have the right to vote at shareholder meetings, except on resolutions which directly affect the rights of their preference shares. However, holders of cumulative preference shares have the right to vote on every resolution at any meeting of the shareholders if the dividends due on the preference shares have not been paid, in whole or in part, for a period of at least two years prior to the date of the meeting. Currently, we have no preference shares issued and outstanding.

Redemption of Equity Shares

Under the Companies Act, unlike preference shares, equity shares are not redeemable.

Liability on Calls

Not applicable.

Discriminatory Provisions in Articles

There are no provisions in our Articles of Association discriminating against any existing or prospective holder of such securities as a result of such shareholder owning a substantial number of shares.

Alteration of Shareholder Rights

Under the Companies Act, the rights of any class of shareholders can be altered or varied with the consent in writing of the holder of not less than three-fourths of the issued shares of that class or with the sanction of a special resolution passed at a separate meeting of the holders of the issued shares of that class if the provisions with respect to such variation isare contained in the ~~memorandum~~Memorandum of Association or ~~articles~~Articles of Association of the ~~company,~~Company, or in the absence of any such provision in the ~~memorandum~~Memorandum of Association or ~~articles,~~Articles of Association, if such variation is not prohibited by the terms of issue of the shares of that class.

Under the Companies Act, the Articles of Association may be altered only by way of a special resolution.

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Meetings of Shareholders

We must convene an ~~annual general~~Annual General meeting of shareholders within six months after the end of each fiscal year and may convene an extraordinary general meeting of shareholders when necessary or at the request of a shareholder or shareholders holding at least 10% of our paid up capital carrying voting rights. The ~~annual general~~Annual General meeting of the shareholders is generally convened by our Secretary pursuant to a resolution of our Board of Directors. Written notice setting out the agenda of the meeting must be given at least 21 days, excluding the days of mailing and date of the meeting, prior to the date of the general meeting to the shareholders of record. Shareholders who are registered as shareholders on a pre-determined date are entitled to such notice or their proxies and have a right to attend or vote at such meeting. The ~~annual general~~Annual General meeting of shareholders must be held at our registered office or at such other place within the city in which the registered office is located. Meetings other than the ~~annual general~~Annual General meeting may be held at

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any other place if so determined by our Board of Directors. Our Articles of Association provide that a quorum for a general meeting is the presence of at least five shareholders in person.

Additionally, shareholder consent for certain items or special business is required to be obtained by a postal ballot. In order to obtain the shareholders’ consent, our Board of Directors ~~appoint~~appoints a scrutinizer, who is not in our employment, who, in the opinion of the Board, can conduct the postal ballot voting process in a fair and transparent manner in accordance with the provisions of Companies (Passing of the Resolution by Postal Ballot) Rules, 2001.

Limitations on the Rights to Own Securities

The limitations on the rights to own securities, including the rights of non-resident or foreign shareholders to hold the securities, imposed by Indian law are discussed in Item 10 of this Annual Report, under the section titled “Currency Exchange Controls” and is incorporated herein by reference.

Voting Rights of Deposited Equity Shares Represented by ADSs

Under Indian law, voting of the equity shares is by show of hands unless a poll is demanded by a member or members present in person or by proxy holding at least 10% of the total shares entitled to vote on the resolution or by those holding an aggregate paid up capital of at least Rs. 50,000. A proxy may not vote except on a poll.

As soon as practicable after receipt of notice of any meetings or solicitation of consents or proxies of holders of shares or other deposited securities, our Depositary shall fix a record date for determining the holders entitled to give instructions for the exercise of voting rights. The Depositary shall then mail to the holders of ADSs a notice stating (a) such information as is contained in such notice of meeting and any solicitation materials, (b) that each holder on the record date set by the Depositary therefore will be entitled to instruct the Depositary as to the exercise of the voting rights, if any, pertaining to the deposited securities represented by the ADSs evidenced by such holders of ADRs, and (c) the manner in which such instruction may be given, including instructions to give discretionary proxy to a person designated by us.

On receipt of the aforesaid notice from the Depositary, our ADS holders may instruct the Depositary on how to exercise the voting rights for the shares that underlie their ADSs. For such instructions to be valid, the Depositary must receive them on or before a specified date.

The Depositary will try, as far as is ~~practical,~~practicable, and subject to the provisions of Indian law and our Memorandum of Association and our Articles of Association, to vote or to have its agents vote the shares or other deposited securities as per our ADS holders’ instructions. The Depositary will only vote or attempt to vote as per an ADS holder’s instructions. The Depositary will not itself exercise any voting discretion.

Neither the Depositary nor its agents are responsible for any failure to carry out any voting instructions, for the manner in which any vote is cast, or for the effect of any vote. There is no guarantee that our shareholders will receive voting materials in time to instruct the Depositary to vote and it is possible that ADS holders, or persons who hold their ADSs through brokers, dealers or other third parties, will not have the opportunity to exercise a right to vote.

Register of Shareholders; Record Dates; Transfer of Shares

We maintain a register of ~~shareholders. The register of~~our shareholders in electronic form ~~is maintained~~ through the National Securities Depository Limited and the Central Depository Services (India) Ltd. For the purpose of determining the shares entitled to annual dividends, the register is closed for a specified period prior to the ~~annual general~~Annual General meeting. The date on which this period begins is the record date. To determine which shareholders are entitled to specified shareholder rights, we may close the register of shareholders. The Companies Act requires us to give at least seven days’ prior notice to the public before such closure. We may not close the register of shareholders for more than thirty consecutive days, and in no event for more than forty-five days in a year. Trading of our equity shares, however, may continue while the register of shareholders is closed.

Shares held through depositaries are transferred in the form of book entries or in electronic form in accordance with the regulations laid down by SEBI. Transfers of beneficial ownership of shares held through a depository are exempt from stamp duty. Transfers of equity shares in book-entry form require both the seller and the purchaser of the equity shares to establish accounts with depository participants appointed by depositories established under the Depositories Act, 1996. Upon delivery, the equity shares shall be registered in the name of the relevant depository on our books and this depository shall enter the name of the investor in its records as the beneficial owner. The transfer of beneficial ownership shall be effected through the records of the depository. The beneficial owner shall be entitled to all rights and benefits and subject to all liabilities in respect of his securities held by a depository.

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The requirement to hold the equity shares in book-entry form will apply to the ADS holders when the equity shares are withdrawn from the depository facility upon surrender of the ADSs. In order to trade the equity shares in the Indian market, the withdrawing ADS holder will be required to comply with the procedures described above.

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Following the introduction of the Depositories Act, 1996, and the repeal of Section 22A of the Securities Contracts (Regulation) Act, 1956, which enabled companies to refuse to register transfers of shares in some circumstances, the equity shares of a public company are freely transferable, subject only to the provisions of Section 111A of the Companies Act. Since we are a public company, the provisions of Section 111A will apply to us. Our Articles of Association currently contain provisions which give our directors discretion to refuse to register a transfer of shares in some circumstances. Furthermore, in accordance with the provisions of Section 111A(2) of the Companies Act, our directors may refuse to register a transfer of shares if they have sufficient cause to do so. If our directors refuse to register a transfer of shares, the shareholder wishing to transfer his, her or its shares may file a civil suit or an appeal with the Company Law Board or National Company Law Tribunal.

Pursuant to Section 111A(3), if a transfer of shares contravenes any of the provisions of the Indian Securities and Exchange Board of India Act, 1992, or the regulations issued thereunder, or the Indian Sick Industrial Companies (Special Provisions) Act, 1985, or any other Indian laws, the Company Law Board or National Company Law Tribunal may, on application made by the ~~company,~~Company, a depositary incorporated in India, an investor, the Securities and Exchange Board of India or other parties, direct the rectification of the register of records. The Company Law Board or National Company Law Tribunal may, in its discretion, issue an interim order suspending the voting rights attached to the relevant shares before making or completing its investigation into the alleged contravention. Notwithstanding such investigation, the rights of a shareholder to transfer the shares will not be restricted.

Under the Companies Act, unless the shares of a company are held in a dematerialized form, a transfer of shares is effected by an instrument of transfer in the form prescribed by the Companies Act and the rules thereunder together with delivery of the share certificates. Our transfer agent for our equity shares is Karvy Computershare Pvt. Limited located in ~~Bangalore, Karnataka,~~Hyderabad, India.

Company Acquisition of Equity Shares

Under the Companies Act, ~~approval~~the Company can reduce its Company’s share capital subject to fulfillment of at least 75% of a company’s shareholders voting on the matter and approval of the High Court or National Company Law Tribunal of the state in which the registered office of the company is situated is required to reduce a company’s share capital. A company may, under some circumstances, acquire its own equity shares without seeking the approval of the High Court or National Company Law Tribunal. However, a company would have to extinguish the shares it has so acquired within the prescribed time period.conditions. A company is not permitted to acquire its own shares for treasury operations.

An acquisition by a company of its own shares that does not rely on an approval of the High Court/National Company Law Tribunal must comply with prescribed rules, regulations and conditions of the Companies Act. In addition, public companies which are listed on a recognized stock exchange in India must comply with the provisions of the Securities and Exchange Board of India (Buy-back of Securities) Regulations, 1998, or Buy-back Regulations. Since we are a public company listed on two recognized stock exchanges in India, we would have to comply with the relevant provisions of the Companies Act and the provisions of the Buy-back Regulations.

Disclosure of Ownership Interest

Section 187C of the Indian Companies Act requires beneficial owners of shares of Indian companies who are not holders of record to declare to the company details of the beneficial owner. Any person who fails to make the required declaration within 30 days may be liable for a fine of up to Rs. 1,000 for each day the declaration is not made. Any lien, promissory note or other collateral agreement created, executed or entered into with respect to any share by the registered owner thereof, or any hypothecation by the registered owner of any share, pursuant to which a declaration is required to be made under Section 187C, shall not be enforceable by the beneficial owner or any person claiming through the beneficial owner if such declaration is not made. Failure to comply with Section 187C will not affect the obligation of the company to register a transfer of shares or to pay any dividends to the registered holder of any shares. While it is unclear under Indian law whether Section 187C applies to holders of ADSs of the company, investors who exchange ADSs for the underlying Equity Shares of the Company will be subject to the restrictions of Section 187C. Additionally, holders of ADSs may be required to comply with such notification and disclosure obligations pursuant to the provisions of the Depositary Agreement to be entered into by such holders, the company and a depositary.

Provisions on Changes in Capital

Our authorized capital can be altered by an ordinary resolution of the shareholders in a General Meeting. The additional issue of shares is subject to the preemptive rights of the shareholders and provisions governing the issue of

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additional shares are discussed in Item 10 of this Annual Report. In addition, a company may increase its share capital, consolidate its share capital into shares of larger face value than its existing shares or sub-divide its shares by reducing their par value, subject to an ordinary resolution of the shareholders in a General Meeting.

Takeover Code and Listing Agreements

Under the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, or Takeover Code, upon the acquisition of more than 5%~~,10%,14%,54%~~, 10%, 14%, 54% or 74% of the outstanding shares or voting rights of a publicly-listed Indian company, a purchaser is required to notify the company and the company and the purchaser is required to notify all the stock exchanges on which the shares of such company are listed. An ADS holder would be subject to these notification requirements.

Upon the acquisition of 15% or more of such shares or voting rights, or a change in control of the company, the purchaser is required to make an open offer to the other shareholders, offering to purchase 20% of all the outstanding shares of the company or such number of shares that will result in the public shareholding not falling below the minimum public holding requirement, whichever is lower. SEBI has recently amended the Takeover Code to relax any of the provisions of the Takeover Code if the Directors of the Company have been removed by the Government or statutory authority and new Directors appointed by the Government or statutory authority provided the new Directors have devised a plan providing for transparent, open and competitive process of bidding for continued operations of the Company and for smooth takeover by an acquirer, Since we are a listed company in India, the provisions of the Takeover Code will apply to us. If an acquirer holding more than 15% but less than 55% of shares acquires 5% or more shares during a fiscal year, the acquirer is required to make a public announcement offering to purchase from the other shareholders at least 20% of all the outstanding shares of the company at a minimum offer price determined pursuant to the Takeover Code. Any further acquisition of outstanding shares or voting rights of a publicly listed company by an acquirer who holds more than 55% but less than 75% of shares or voting rights also requires the making of an open offer to acquire such number of shares as would not result in the public shareholding being reduced to below the minimum specified in the listing agreement. As per the amendment effective May 26, 2006, if a Company has made a public issue offering 10% capital to public in India or has obtained relaxation from SEBI, the above limits of 75% shall be read as 90% in such cases. Where the public shareholding in a target company may be reduced to a level below the limit specified in the listing agreement the acquirer may acquire such shares or voting rights only in accordance with guidelines or regulations regarding delisting of securities specified by the Securities and Exchange Board of India. In addition, no acquirer may acquire more than 55% of the outstanding shares or voting rights of a publicly listed company through market purchases or preferential allotments. Any such acquisition beyond 55% is required to be divested in a manner specified in the Takeover Code. Since we are a listed company in India, the provisions of the Takeover Code will apply to us and to any person acquiring our equity shares or voting rights in our company. However, the Takeover Code provides for a specific exemption from this provision to an ADS holder and states that this provision will apply to an ADS holder only once he or she converts the ADSs into the underlying ~~equity shares.~~

An acquirer is required to disclose the aggregate of the pre and post acquisition of shareholding and voting rights of the acquirer to the target company when such acquisition aggregates to 5%, 10%,14%,54% and 74% of the voting rights. The creeping acquisition limits provided under SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, have been changed to 5% with effect from October 1, 2002 in any fiscal year.

Although the provisions of the listing agreements entered into between us and the Indian Stock Exchanges on which our equity shares are listed will not apply to equity shares represented by ADSs, holders of ADSs may be required to comply with such notification and disclosure obligations pursuant to the provisions of the Depository Agreement to be entered into by such holders, our company and a depositary.

The Takeover Code permits conditional offers as well as the acquisition and subsequent delisting of all shares of a company, and provides specific guidelines for the gradual acquisition of shares or voting rights. Specific obligations of the acquirer and the Board of Directors of a target company in the offer process have also been set out. Acquirers making a public offer are also required to deposit into an escrow account a percentage of the total consideration, which amount will be forfeited if the acquire does not fulfill his obligations. In addition, the Takeover Code introduces the “chain principle” by which the acquisition of a holding company will obligate the acquirer to make a public offer to the shareholders of each listed subsidiary companies.

The general requirements to make such a public announcement do not, however, apply entirely to bail-out takeovers when a promoter is taking over a financial weak company, but not to a “sick industrial company” pursuant to a rehabilitation scheme approved by a public financial institution or a scheduled bank. A “financial weak company” is a company which has at the end of the previous financial year accumulated losses, which have resulted in the erosion of more than 50% but less than 100% of the total sum of its paid up capital and free reserves at the end of the previous financial year. A “sick industrial company” is a company registered for more than five years which has at the end of any financial year accumulated losses equal to or exceeding its entire net worth.

~~The Takeover Code does not apply to acquisitions involving the acquisition of shares, as follows;~~

~~by allotment in a public/rights issue (subject to compliance with certain terms and conditions);~~

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	•		~~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.~~

The Takeover Code does not apply to acquisitions in the ordinary course of business by public financial institutions either on their own account or as a pledge. The tender offer requirements under the Takeover Code do not apply to the acquisition of ADSs so long as such ADSs are not converted into equity shares. However, the acquisition of ADSs (irrespective of conversion into underlying equity shares) is subject to disclosure and reporting requirements under the Takeover Code.

A listed company can be delisted under the provisions of the SEBI (Delisting of Securities) Guidelines, 2003, which govern voluntary and compulsory delisting of shares of Indian companies from the stock exchanges.

~~Amendment to the SEBI (Delisting of Securities) Guidelines, 2003~~

In order to simplify the existing framework with respect to Compulsory Delisting and make it possible for stock exchanges to delist the Companies which are noncompliant with the provisions of Listing Agreement, it has been decided to amend the SEBI (Delisting Of Securities) Guidelines, 2003. The amendment seeks to ensure adequate and wide public notice of the fact of delisting and disclosure of the fair value through newspapers and notice boards/trading systems of the stock exchange upon delisting of a security. The amendment also seeks to determine the fair value of securities by persons appointed by the stock exchange out of a panel of experts, which shall also be selected by the stock exchange.

~~Minimum Level of public shareholding~~

In order to ensure availability of floating stock on a continuous basis and to bring about greater transparency in respect of disclosure of shareholding pattern of companies, Securities and Exchange Board of India (SEBI) vide its circular dated April 13, 2006, (as amended), has decided to bring in the following policy changes to the continuous listing requirements:

All listed companies , other than those mentioned hereunder, will be required to ensure minimum level of public shareholding at 25% of the total number of issued shares of a class or kind for the purpose of continuous listing:

	•		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.

The companies falling in the above categories will be required to maintain the minimum level of public shareholding at 10% of the total number of issued shares of a class or kind for the purpose of continuous listing. The aforesaid requirement of maintaining minimum level of public shareholding on a continuous basis will not be applicable to government companies (as defined under Section 617 of the Companies Act, 1956), infrastructure companies (as defined under clause 1.2.1(xv) of the SEBI (DIP) Guidelines, 2000) and companies referred to the Board for Industrial and Financial Reconstruction.

The “public shareholding” for the purpose of continuous listing, will continue to comprise of shares held by entities other than promoters and promoter group. It shall not include the shares held by custodians against which depository receipts are issued overseas. The terms “Promoter” and “Promoter group” shall have the same meaning as is assigned to them under the SEBI (Disclosure & Investor Protection) Guidelines, 2000.

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~~Increasing the public shareholding to the minimum level~~

As a result of the above circular there may be two categories of companies, viz., those which are non-compliant and those which may subsequently become non-compliant on account of factors such as compliance with directions of a court, tribunal, regulatory or statutory authority, compliance with SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, re-organization of capital by way of a scheme of arrangement, etc.

SEBI decided to provide a transparent mechanism to such noncompliant companies for enabling them to graduate to the level of compliant companies. The mechanism for increasing the public shareholding to the minimum level will inter alia provide for various modes of issuing shares in domestic market and reasonable time period, as approved by Specified Stock Exchange. This disclosure requirement applies to Wipro and we are complaint with this regulation.

Material Contracts

We are a party to various employment arrangements and indemnification agreements with our directors and executive officers. See “Terms of Employment Arrangements and Indemnification Agreements” under Item 6 of this Annual Report for a further description of the employment arrangements and indemnification agreements that we have entered into with our directors and executive officers.

Currency Exchange Controls

Foreign Investments in India are governed by the provisions ~~of Section 6 of~~ the Foreign Exchange Management Act (FEMA) 1999 and are subject to the Regulations issued by the Reserve Bank of India ~~under FEMA 1999. The Regulations have been published pursuant~~from time to ~~Notification No. FEMA 20/2000-RB dated May 3, 2000.~~time. The Foreign Direct Investment Scheme under the Reserve Bank’s Automatic Route enables Indian Companies (other than those specifically excluded in the scheme) to issue shares to persons resident outside India without prior permission from the RBI, subject to certain conditions. General permission has been granted for the transfer of shares and convertible debentures by a person resident outside India as follows: (i) for transfers of shares or convertible debentures held by a person resident outside India other than NRI, to any person resident outside India and (ii) NRIs are permitted to transfer shares or convertible debentures of Indian company to other NRIs.

~~A person resident outside India may transfer securities of an Indian company to~~ General permission has also been given for transfers between a person resident in India by way of gift. However, where such transfer is not by way of gift, prior approval of the RBI is necessary only if certain prescribed conditions are not met. . For transfer of existing shares or convertible debentures of an Indian company by a person resident in India toand a person resident outside India ~~by way of sale, the transferor shall make an application to Authorized Dealer for permission~~ subject to ~~certain conditions being met.~~stipulated conditions.

In cases where such conditions are not met, approval of the Central Government and the Reserve Bank of India may be also required.

Banks in India may now allow remittance from India by a person resident in India up to USD 200,000, per financial year, for any permitted current or capital account transaction or a combination of both.

General

Shares of Indian companies represented by ADSs may be approved for issuance to foreign investors by the Government of India under the Issue of Foreign Currency Convertible Bonds and Equity Shares (through Depositary Receipt Mechanism) Scheme, 1993, or the 1993 Regulation, as modified from time to time, promulgated by the Government of India. The 1993 Regulation is distinct from other policies or facilities, as described below, relating to investments in Indian companies by foreign investors. The issuance of ADSs pursuant to the 1993 Regulation also affords to holders of the ADSs the benefits of Section 115AC of the Indian Income Tax Act, 1961 for purposes of the application of Indian tax law.

~~The Reserve Bank of India, or RBI, has issued a notification directing that Indian companies may utilize up-to 100 percent of proceeds realized from the sale of ADSs for overseas investments.~~

In February 2002, the RBI issued a circular stating that the terms of Regulation 4A of the Reserve Bank of India Notification No. FEMA 20/2000-RB dated May 3, 2000, as amended by Notification No. FEMA 41/2001-RB dated March 2, 2001, allow aA registered broker is permitted to purchase shares of an Indian company on behalf of a person resident outside of India for the purpose of converting those shares into ADSs/GDSs. However, such conversion is subject to compliance with the provisions of the Issue of Foreign Currency Convertible Bonds and Ordinary Shares (Through ~~Depository~~Depositary Receipt Mechanism) Scheme 1993 and the periodic guidelines issued by the Central Government. This would mean that ADSs converted into Indian shares may be converted back into ADSs, subject to the limits of sectoral caps.

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The Operative Guidelines for the limited two-way fungibility under the “Issue of Foreign Currency Convertible Bonds and Ordinary Shares” (Through ~~Depository~~Depositary Receipt Mechanism) Scheme 1993 has also been approved by the Government of India.

These guidelines provide that a re-issuance of ADSs/GDSs is permitted to the extent of ADSs/GDSs, have been redeemed for underlying shares and sold in the domestic market. The re-issuance must be within the specified limits. The conditions to be satisfied in this regard are: (i) the shares are purchased on a recognized stock exchange; (ii) the Indian company has issued ADS/GDS, (iii) the shares are purchased with the permission of the custodian of the ADSs/GDSs of the Indian company and are deposited with the custodian; ~~and~~ (iv) the number of shares so purchased shall not exceed the number of ADSs/GDSs converted into underlying ~~shares.~~

~~The procedure for~~shares pursuant to conversion of ADS into equity shares ~~into ADSs/GDSs is as follows: (i) on request by~~under the ~~overseas~~Depositary Agreement and (v) investor ~~for the acquisition of shares for re-issuance of ADSs/GDSs, the SEBI registered broker will purchase shares from a stock exchange after verifying~~and other intermediaries comply with the ~~custodian as~~provisions of 1993 Scheme and related guidelines issued from time to the availability of “Head Room” (i.e., the number of ADSs/GDSs originally issued minus number of ADSs/GDSs outstanding further adjusted for ADSs/GDSs redeemed into underlying shares and registered in the name of the non-resident investor(s)); (ii) an Indian broker purchases the shares in the name of the overseas depository; (iii) after the purchase, the Indian broker places the domestic shares with the custodian; (iv) the custodian advises the overseas depository on the custody of domestic shares and to issue corresponding ADSs/GDSs to the investor; and (v) the overseas depository issues ADSs/GDSs to the investor.time.

Transfer of ADSs and Surrender of ADSs

A person resident outside India may transfer the ADSs held in Indian companies to another person resident outside India without any permission. ~~A person resident in India is not permitted to hold ADSs of an Indian company, except in connection with the exercise of stock options.~~ An ADS holder is permitted to surrender the ADSs held by him in an Indian company and to receive the underlying equity shares under the terms of the Deposit Agreement. Under Indian regulations, the re-deposit of these equity shares with the depositary to ADSs may not be permitted.

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Sponsored ADS

The amendment to the FEMA regulations permit an issuer in India to sponsor the issue of ADSs through an overseas depositary against underlying equity shares accepted from holders of its equity shares in India for offering outside of India. The sponsored issue of ADSs was possible only if the following conditions are satisfied:

There have been amendments to the Issue of Foreign Currency Convertible Bonds and Ordinary Shares (through ~~Depository~~Depositary Receipt Mechanism), Scheme 1993 and primarily the amendments were on the Eligibility of Issuer, Eligibility of Subscriber, Pricing of the offerings, and Voting ~~Rights.~~Rights,

	•		~~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~~

	•		~~the offering expenses do not exceed 7% of the offering proceeds and are paid by shareholders on a pro-rata basis.~~

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 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

the offering expenses do not exceed 7% of the offering proceeds and are paid by shareholders on a pro-rata basis.

The issuer is also required to furnish a report to the RBI specifying the details of the offering, including the amount raised through the offering, the number of ADSs issued, the underlying shares offered and the percentage of equity in the issuer represented by the ADSs.

Conditions for issuance of ADS/GDS outside India by Indian Companies

Eligibility of issuer: An Indian Company, which is not eligible to raise funds from the Indian Capital Market including a company which has been restrained from accessing the securities market by the Securities and Exchange Board of India (SEBI) will not be eligible to issue ADS/GDS apart from Foreign Currency Convertible Bonds.

Eligibility of subscriber: Erstwhile Overseas Corporate Bodies (OCBs) who are not eligible to invest in India through the portfolio route and entities prohibited to buy, sell or deal in securities by SEBI will not be eligible to subscribe to (i) Foreign Currency Convertible Bonds and (ii) ADS/GDS

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Pricing: The pricing of ADS/GDS and Foreign Currency Convertible Bonds should be made at a price not less than the higher of the following two averages:

~~(i)~~

(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; or

~~(ii)~~

(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.

The “relevant date” means the date thirty days prior to the date on which the meeting of the general body of shareholders is held, in terms of section 81 (IA) of the Companies Act, 1956, to consider the proposed issue.

Foreign Direct Investment

In July 1991, the Government of India raised the limit on foreign equity holdings in Indian companies from 40% to 51% in certain high priority industries. The RBI gives automatic approval for such foreign equity holdings. The Foreign Investment Promotion Board, or FIPB, currently under the Ministry of Finance, was thereafter formed to facilitate companies to make long-term investments in India. Foreign equity participation in excess of 51% in such high priority industries or in any other industries up to Rs. 6 billion is currently allowed only with the approval of the FIPB. Proposals in excess of Rs. 6 billion require the approval of the Cabinet Committee on Foreign Investment. Proposals involving the public sector and other sensitive areas require the approval of Cabinet Committee on Economic Affairs. These facilities are designed for direct foreign investments by persons who are not residents of India who are not NRIs, or FIIs (as each term is defined below), or foreign direct investors. The Department of Industrial Policy and Promotion, a part of the Ministry of Industry, issued detailed guidelines in January 1998 for consideration of foreign direct investment proposals by the FIPB, or the Guidelines. Under the Guidelines, sector specific guidelines for foreign direct investment and the levels of permitted equity participation have been established. In March 2000, the RBI issued a notification that foreign ownership of up to 49%, 50%, 51%, 74% or 100%, depending on the category of industry, would be allowed without prior permission of the RBI. The issues to be considered by the FIPB, and the FIPB’s areas of priority in granting approvals are also set out in the Guidelines. The basic objective of the Guidelines is to improve the transparency and objectivity of the FIPB’s consideration of proposals. However, because the Guidelines are administrative guidelines and have not been codified as either law or regulations, they are not legally binding with respect to any recommendation made by the FIPB or with respect to any decision taken by the Government of India in cases involving foreign direct investment.

In May 1994, the Government of India announced that purchases by foreign investors of ADSs as evidenced by ADRs and foreign currency convertible bonds of Indian companies will be treated as direct foreign investment in the equity issued by Indian companies for such offerings. Therefore, offerings that involve the issuance of equity that results in Foreign Direct Investors holding more than the stipulated percentage of direct foreign investments (which depends on the category of industry) would require approval from the FIPB. In addition, in connection with offerings of any such securities to foreign investors, approval of the FIPB is required for Indian companies whether or not the stipulated percentage limit would be reached, if the proceeds therefrom are to be used for investment in non-high priority industries.

In July 1998, the Government of India issued guidelines to the effect that foreign investment in preferred shares will be considered as part of the share capital of a company and will be processed through the automatic RBI route or will require the approval of the FIPB, as the case may be. Investments in preferred shares are included as foreign direct investment for the purposes of sectoral caps on foreign equity, if such preferred shares carry a conversion option. If the preferred shares are structured without a conversion option, they would fall outside the foreign direct investment limit but would be treated as debt and would be subject to special Government of India guidelines and approvals.

Over a period of time particularly since 1991, the Government of India has relaxed the restrictions on foreign ~~investment. Subject to certain conditions, under current regulations, foreign direct~~ investment inand most industry sectors does not require prior approval of the FIPB or RBI, if the percentage of equity holding by all foreign investors ~~does~~do not exceed specified industry specific thresholds. Purchases by foreign investors of ADSs are treated as direct foreign investment in the equity issued by Indian companies for such offerings. Foreign investment up to 100% of company’s share capital is currently permitted in the IT industry.

~~Subsequent Transfers~~

~~Restrictions for subsequent transfers~~ Government of ~~shares~~India has recently clarified about the calculation of ~~Indian companies between residents and non-residents were relaxed significantly as of October 2004~~foreign investment in ~~sectors other than the financial services sector. As a result, for a transfer between a resident and a non-resident of securities of~~ an Indian ~~in the IT sector, no prior approval of either the RBI~~Company through direct or indirect routes for such investment.

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the Government of India is required, as long as certain conditions are met. These conditions include compliance, as applicable, with pricing guidelines and the ownership restrictions based on the nature of the foreign investor. Transfers of shares from residents to non-residents which trigger the provision of the Takeover Code require prior approval of the Government of India or the RBI. If a sale or purchase is conducted on a stock exchange at prevailing market prices, the pricing guidelines will be deemed satisfied. For off-market, negotiated transactions, the guidelines require a transaction price based on the prevailing market price.

Transfers between two non-residents are not subject to RBI approvals or compliance with pricing guidelines. However, for industries other than the IT sector, approval of the Government of India would be required if the transferee of shares have an existing venture in India in the same field, unless the existing venture is sick or defunct or the investment of the parties in the existing venture is less than 3%.

Investment by Non-Resident Indians

A variety of facilities for making investments in shares of Indian companies is available to individuals of Indian nationality or origin residing outside India, or NRIs. These facilities permit NRIs to make portfolio investments in shares and other securities of Indian companies on a basis that is not generally available to other foreign investors. A Non-Resident Indian (NRI) or a Person of Indian Origin (PIO) resident outside India may invest by way of contribution to the capital of a firm or a proprietary concern in India on a non-repatriation basis. These facilities are different and distinct from investments by Foreign Direct Investors described above. Indian companies are now allowed, without prior Government of India approval, to invest in joint ventures or wholly-owned subsidiaries outside India. The amount invested may not exceed ~~two~~four times the net worth of the company or its equivalent in a financial year. RBI no longer recognizes Overseas Corporate Bodies, or OCBs as an eligible class of investment vehicle under various routes and schemes under the foreign exchange regulations.

NRIs are permitted to make investments through a stock exchange, or Portfolio Investments on favorable tax and other terms under India’s Portfolio Investment Scheme. Under the scheme, an NRI can purchase up to 5% of the paid up value of the shares issued by a company, subject to the condition that the aggregate paid up value of shares purchased by all NRIs does not exceed 10% of the paid up capital of the company. The 10% ceiling may be exceeded if a special resolution is passed in a general meeting of the shareholders of a company, subject to the overall ceiling of Foreign Direct Investment limit.

In terms of Schedule 1 of the Notification No. FEMA 20/2000-RB dated May 3, 2000, a person resident outside India can purchase equity shares / compulsorily convertible preference shares and compulsorily convertible debentures (equity instruments) issued by an Indian company under the FDI policy and the Indian company is allowed to receive the amount of consideration in advance towards issue of such equity instruments, subject to the terms and conditions laid down therein. Further, general permission is available to Indian companies to refund the amounts received towards purchase of shares under Regulation 5 (1) of Notification No. FEMA 20/2000-RB dated May 3, 2000, as amended from time to time. Reserve Bank of India vide circular No. 20 dated December 14, 2007 decided that with effect from November 29, 2007, the equity instruments should be issued within 180 days of the receipt of the inward remittance. In case, the equity instruments are not issued within 180 days from the date of receipt of the inward remittance or date of debit to the NRE/FCNR (B) account, the amount of consideration so received should be refunded immediately to the non-resident investor by outward remittance through normal banking channels or by credit to the NRE/FCNR (B) account, as the case may be or approach Reserve Bank of India with an action plan for allotment of equity shares.

It is also clarified that the advances against equity instruments may be received only where the FDI is allowed under the automatic route.

Investment Byby Foreign Institutional Investors

In September 1992, the Government of India issued guidelines which enable foreign institutional investors or FIIs, including institutions such as pension funds, investment trusts, asset management companies, nominee companies and incorporated/institutional portfolio managers, to invest in all the securities traded on the primary and secondary markets in India. Under the guidelines, FIIs are required to obtain an initial registration from the SEBI and a general permission from the RBI to engage in transactions regulated under FEMA. FIIs must also comply with the provisions of the SEBI Foreign Institutional Investors Regulations, 1995. When it receives the initial registration, the FII also obtains general permission from the RBI to engage in transactions regulated under FEMA. Together, the initial registration and the RBI’s general permission enable the registered FII to buy (subject to the ownership restrictions discussed below) and sell freely tradable securities issued by Indian companies; realize capital gains on investments made through the initial amount invested in India; subscribe or renounce rights offerings for shares; appoint a domestic custodian for custody of investments held; and repatriate the capital, capital gains, dividends, income received by way of interest and any other compensation received towards the sale or renunciation of rights offerings of shares. As of December 2003, the RBI vide A.P. circulars No. 53 and 54 have permitted such registered FIIs or sub- accounts of FIIs as well as unincorporated entities abroad to buy or sell equity shares and debentures of Indian companies (excluding those in the print media sector), units of domestic mutual funds, dated Government Securities and Treasury Bills through stock exchanges in India at the ruling market price, invest or trade in exchange traded derivative contracts, and also to buy or sell shares and debentures etc. of listed and unlisted companies otherwise than on stock exchanges at a price approved by SEBI/ RBI as per the terms and conditions prescribed.

Ownership Restrictions

SEBI and RBI regulations restrict investments in Indian companies by FIIs and NRIs or collectively, Foreign Direct Investors. Under current SEBI regulations applicable to Wipro Limited, subject to the requisite approvals of the shareholders in a General Meeting, Foreign Direct Investors in aggregate may hold no more than 49% of a company’s equity shares, excluding the equity shares underlying the ADSs. However, under Vide Notification No. FEMA.45/2001-RB dated September 20, 2001 under Foreign Exchange Management (Transfer or Issue of Security by a person resident outside India) Regulations, 2001, theThe limit of FII investment in a company has been linked to sectoral caps/statutory ceiling as applicable to the concerned industry subject to obtaining the approval of the shareholders by a special resolution. NRIs in aggregate may hold no more than 24% of a company’s equity shares, (subject to obtaining

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the approval of the shareholders by a special resolution) excluding the equity shares underlying the ADSs. Furthermore, SEBI regulations provide that no single FII may hold more than 10% of a company’s total equity shares and no single NRI may hold more than 5% of a company’s total equity shares. There is uncertainty under Indian law about the tax regime applicable to FIIs which hold and trade ADSs. FIIs are urged to consult with their Indian legal and tax advisers about the relationship between the FII guidelines and the ADSs and any equity shares withdrawn upon surrender of ADSs.

More detailed provisions relating to FII investment have been introduced by the SEBI and RBI with the introduction of the SEBI Foreign Institutional Investors Regulations, 1995 and the RBI circulars in this regard. These provisions relate to the registration of FIIs, their general obligations and responsibilities, and certain investment conditions and restrictions. The SEBI registered FII shall restrict allocation of its total investment between equities and debt in the Indian capital market in the ratio of 70:30. The FII may form a 100% debt fund and get such fund registered with SEBI.

Registered FIIs may trade in all exchange traded derivative contracts on the stock exchanges in India subject to the position limits as prescribed by SEBI from time to time. The SEBI has also permitted private placements of shares by listed companies with FIIs, subject to the prior approval of the RBI under FEMA. Such private placement must be made at the average of the weekly highs and lows of the closing price over the preceding six months or the preceding two weeks, whichever is higher.

Open market purchases of securities of Indian companies in India by Foreign Direct Investors or investments by NRIs and FIIs above the ownership levels set forth above require Government of India approval on a case-by-case basis.

~~The Reserve Bank of India in circular No. 44 dated December 8, 2003 has imposed certain restrictions on OCBs in making any new investments as well as on the sale or transfer of shares held by them.~~

~~Government of India Approvals~~

Approval of the Foreign Investment Promotion Board, or FIPB, for foreign direct investment by ADS holders is required. Specific approval of the Reserve Bank of India, or RBI, will have to be obtained for:

	•		~~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.~~

In such cases, the foreign investor would have to apply to the Reserve Bank of India by submitting Form TS1, which requires information as to the transferor, the transferee, the shareholding structure of the company whose shares are to be sold, the proposed price and other information. The Reserve Bank of India is not required to respond to a Form TS1 application within any specific time period and may grant or deny the application at its discretion. Exceptions to this requirement of Reserve Bank of India approval include sales made in the stock market through a registered Indian broker, through a recognized stock exchange in India at the prevailing market rates, or if the shares are offered in accordance with the terms of an offer under the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997. The proceeds from any sale of the underlying equity shares by a person resident outside India to a person resident in India may be transferred outside India after receipt of Reserve Bank of India approval (if required), and the payment of applicable taxes and stamp duties.

No approval is required for transfers of ADSs outside India between two non-residents. Any person resident outside India who desires to sell equity shares received upon surrender of ADSs or otherwise transfer such equity shares within India should seek the advice of Indian counsel as to the requirements applicable at that time.

Overseas investment — Liberalization

Regulation 6 of the Notification No.FEMA.120/RB-2004 dated July 7, 2004 to read with Circular No. 42 dated May 12, 2005 and ~~monetary policy pronouncement of April,~~dated Sep 26, 2007 of Reserve Bank of India in terms of which an Indian entity iswas permitted to invest up to ~~300~~400 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 up to 300 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 up to 400 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 from such companies.

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			to allow remittances under automatic route up to 300 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 liberalize 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 300% 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; and~~

	o		~~As in the case of corporate guarantees, all guarantees are required to be reported to RBI, in Form ODR.~~

~~General Permission for disinvestment~~

~~Currently, in terms of Regulation 16 ofNotification No.FEMA 120/RB-2004 dated July 7, 2004, all disinvestments that involve a ‘write off’ i.e. where the amount repatriated on disinvestment is less than the amount of the original investment, can be made by the Company.~~

	•		~~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 net worth 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.~~

Taxation

The following summary is based on the law and practice of the Indian Income-tax Act, 1961, or Income-Tax Act, including the special tax regime contained in Sections 115AC and 115ACA of the Income-tax Act read with the Issue of Foreign Currency Convertible Bonds and Ordinary Shares (through Depositary Receipt Mechanism) Scheme, 1993, as amended on, January 19, 2000, or the Issue of Foreign Currency Convertible bonds and Ordinary Shares Scheme. The Income-tax Act is amended every year by the Finance Act of the relevant year. Some or all of the tax consequences of Sections 115AC and 115ACA may be amended or changed by future amendments to the Income-tax Act.

We believe this information is materially complete as of the date hereof, however, this summary is not intended to constitute a complete analysis of the individual tax consequences to non-resident holders or employees under Indian law for the acquisition, ownership and sale of ADSs and equity shares.

Residence. For purposes of the Income-tax Act, an individual is considered to be a resident of India during any fiscal year if he or she is in India in that year for:

	•		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.~~

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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.

The period of 60 days referred to above shall be read as 182 days (i) in case of a citizen of India who leaves India in a fiscal year for the purposes of employment outside of India or (ii) in case of a citizen of India or a person of Indian origin living abroad who visits India and within the four preceding years has been in India for a period or periods amounting to 365 days or more.

A company is a resident of India if it is incorporated in India or the control and the management of its affairs is situated wholly in India. Companies that are not residents of India would be treated as non-residents for purposes of the Income-tax Act.

Taxation of Distributions.As per Section 10(34) of the Income Tax Act, dividends paid by Indian Companies on or after April 1, 2003 to ~~its~~their shareholders (whether resident in India or not) are not subject to tax. However, the Company paying the dividend is currently subject to a dividend distribution tax of ~~12.50%~~15% on the total amount it distributes, declares or pays as a dividend, in addition to the normal corporate tax. Additionally, the Finance Act, 2006 levies a surcharge of 10% on such tax and an additional surcharge namely “education cess” of 2%3% on such tax and surcharge, after which the dividend distribution tax payable would be ~~14.03%~~17%.

Any distributions of additional ADSs or equity shares to resident or non- resident holders will not be subject to Indian tax.

Taxation of Capital Gains. The following is a brief summary of capital gains taxation of non-resident holders and resident employees in respect of the sale of ADSs and equity shares received upon redemption of ADSs. The relevant provisions are contained mainly in sections 45, 47(vii)(a), 115AC and 115ACA, of the Income Tax Act, in conjunction with the Issue of Foreign Currency Convertible Bonds and Ordinary Shares Scheme.

Gains realized upon the sale of ADSs orand shares that have been held for a period of more than thirty-six months and twelve months, respectively, are considered ~~long term~~long-term capital gains. Gains realized upon the sale of ADSs orand shares that have been held for a period of thirty six months or less and twelve months or less, respectively, are considered short term capital gains. Capital gains are taxed as follows:

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 at a rate of 10%. Short-term capital gains on such transfer will be taxed at graduated rates with a maximum of 30%.

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	•		~~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 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.

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 15%. An additional tax called “Securities Transaction Tax”, or “STT” (described in detail below will be levied at the time of settlement.

In addition to the above rates, ~~the Finance Act 2006 levies~~ a surcharge of 10% will be levied on the above taxes, in the case of resident employees orand 2.5% in the case of non-resident individuals, in case their aggregate taxable income exceed Rs. 10,00,000 during the relevant financial year and an additional surcharge called “education cess” of 2%3% on the above tax and surcharge.

The above rates may be reduced by the applicable tax treaty in case of non-residents. The capital gains tax is computed by applying the appropriate tax rates to the difference between the sale price and the purchase price of the equity shares or ADSs. ~~Under~~In 1992, the ~~Issue~~Government allowed established Indian Companies to issue foreign currency convertible bonds (FCCB). Effective April 2008, the conversion of ~~Foreign Currency Convertible Bonds~~FCCB’s into shares or debentures of any company shall not be treated as a ‘transfer’ and ~~Ordinary Shares Scheme,~~consequently will not be subject to capital gains tax upon conversion. Further, the ~~purchase price~~cost of ~~equity~~acquisition of the shares ~~in an Indian listed company~~ received ~~in exchange for ADSs will~~upon conversion of the bond shall be the ~~market~~ price ~~of the underlying shares on the date that the depository gives notice to the custodian of the delivery of the equity shares in exchange for~~at which the corresponding ~~ADSs’ or the “stepped up” basis purchase price. The market price will be~~bond was acquired. Prior to this amendment, the price of the ~~equity~~ shares ~~prevailing~~received on ~~The Stock Exchange, Mumbai or the National Stock Exchange. There is no corresponding provision under the Income Tax Act in relation to~~conversion was arrived by using the “stepped up” basis for the purchase price of equity shares. However the tax department in India has not denied this benefit. In the event that the tax department denies this benefit, the original purchase price of ADSs would be considered the purchase price for computing the capital gains tax.basis.

According to the Issue of Foreign Currency Convertible Bonds and Ordinary Shares Scheme, a non-resident holder’s holding period for the purposes of determining the applicable Indian capital gains tax rate in respect of equity

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shares received in exchange for ADSs commences on the date of the notice of the redemption by the ~~depository~~depositary to the custodian. However, the Issue of Foreign Currency Convertible Bonds and Ordinary Shares Scheme does not address this issue in the case of resident employees, and it is therefore unclear as to when the holding period for the purposes of determining capital gains tax commences for such a resident employee.

The Issue of Foreign Currency Convertible Bonds and Ordinary Shares Scheme provides that if the equity shares are sold on a recognized stock exchange in India against payment in Indian rupees, they will no longer be eligible for the preferential tax treatment.

It is unclear as to whether section 115AC and the Issue of Foreign Currency Convertible Bonds and Ordinary Shares Scheme are applicable to a non-resident who acquires equity shares outside India from a non-resident holder of equity shares after receipt of the equity shares upon redemption of the ADSs.

It is unclear as to whether capital gains derived from the sale of subscription rights or other rights by a non-resident holder not entitled to an exemption under a tax treaty will be subject to Indian capital gains tax. If such subscription rights or other rights are deemed by the Indian tax authorities to be situated within India, the gains realized on the sale of such subscription rights or other rights will be subject to Indian taxation. The capital gains realized on the sale of such subscription rights or other rights, which will generally be in the nature of short term capital gains, will be subject to tax at variable rates with a maximum rate of 40% in case of a foreign company and at graduated rate with a maximum of 30%, in case of resident employees and non-resident individuals. In addition to this, there will be a surcharge of ~~10%~~2.5% in the case of all corporate holders and in the case of non-corporate holders with an aggregate taxable income exceeding Rs. ~~10,00,000~~1,000,000 and an additional surcharge called “education cess” of 2%3% on the above tax and surcharge.

As per Section 55(2) of the Income Tax Act, the cost of any share (commonly called a “bonus share”) allotted to any shareholder without any payment and on the basis of such shareholder’s share holdings, shall be nil. The holding period of bonus shares for the purpose of determining the nature of capital gains shall commence on the date of allotment of such shares by the company.

Securities Transaction Tax:The Finance Act, 2004 has introduced certain new provisions with regard to taxes on the sale and purchase of securities, including equity shares. On and after October 1, 2004, in respect of a sale and purchase of equity shares entered into on a recognized stock exchange, (i) both the buyer and seller are required to pay each a Securities Transaction Tax, or STT at the rate of ~~0.075%~~0.125% of the transaction value of the securities, if a transaction is a delivery based transaction i.e. the transaction involves actual delivery or transfer of shares; (ii) the seller of the shares is required to pay a STT at the rate of ~~0.015%~~0.025% of the transaction value of the securities, if the transaction is a non-delivery based transaction, i.e. a transaction settled without taking delivery of the shares. The Finance Act, 2005 has increased the rate STT, with effect from April 1, 2005, in respect of a sale and purchase of equity shares entered into on a recognized stock exchange, to 0.1% for delivery based transactions and 0.02% for non-delivery based transactions.

Withholding Tax on Capital Gains. Any gain realized by a non-resident or resident employee on the sale of equity shares is subject to Indian capital gains tax, which, in the case of a non-resident is to be withheld at the source by the buyer. However, as per the provisions of Section 196D(2) of the Income Tax Act, no withholding tax is required to be deducted by way of capital gains arising to Foreign Institutional Investors as defined in Section 115AD of the Income Tax Act on the transfer of securities defined in Section 115AD of the Income Tax Act.

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Buy-back of Securities. Indian companies are not subject to any tax on the buy-back of their shares. However, the shareholders will be taxed on any resulting gains. Our company would be required to deduct tax at source according to the capital gains tax liability of a non-resident shareholder.

Stamp Duty and Transfer Tax. Upon issuance of the equity shares underlying our ADSs, companies will be required to pay a stamp duty of 0.1% per share of the issue price of the underlying equity shares. A transfer of ADSs is not subject to Indian stamp duty. However, upon the acquisition of equity shares from the ~~depository~~depositary in exchange for ADSs, the non-resident holder will be liable for Indian stamp duty at the rate of 0.25% of the market value of the ADSs or equity shares exchanged. A sale of equity shares by a non-resident holder will also be subject to Indian stamp duty at the rate of 0.25% of the market value of the equity shares on the trade date, although customarily such tax is borne by the transferee. Shares must be traded in dematerialized form. The transfer of shares in dematerialized form is currently not subject to stamp duty.

Wealth Tax. The holding of the ADSs and the holding of underlying equity shares by resident and non-resident holders will be exempt from Indian wealth tax. Non-resident holders are advised to consult their own tax advisors regarding this issue.

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Gift Tax and Estate Duty. Indian gift tax was abolished as of October 1998. Indian Estate Duty was abolished as of March 1985. On and after September 1, 2004, a sum of money exceeding Rs. 25,000 (approx $ 570), received by aan individual without consideration will be subject to tax at graduated rates with a maximum of 30% (excluding applicable surcharge and education cess), unless the same was received from a relative as defined in Explanation under Section 56(v), or on the occasion of the marriage of the Individual or under a will or by way of inheritance or in contemplation of death of the payer. The Taxation Laws Amendment Bill, 2005 introduced in the Parliament on May 12, 2005 proposes to levy the above tax in case the sum of money exceeds in aggregate Rs. 50,000 in a fiscal year. We cannot assure that these provisions will not be amended further in future. Non-resident holders are advised to consult their own tax advisors regarding this issue.

Service Tax. Brokerage or commission paid to stock brokers in connection with the sale or purchase of shares is subject to a service tax of ~~12%~~10% excluding surcharges and education cess. The stock broker is responsible for collecting the service tax from the shareholder and paying it to the relevant authority.

PROSPECTIVE PURCHASERS SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE INDIAN AND THEIR LOCAL TAX CONSEQUENCES OF ACQUIRING, OWNING OR DISPOSING OF EQUITY SHARES OR ADSs.

Material United States Federal Tax Consequences

The following is a summary of the material U.S. federal income and estate tax consequences that may be relevant with respect to the acquisition, ownership and disposition of equity shares or ADSs and is for general information only. This summary addresses the U.S. federal income and estate tax considerations of holders that are U.S. persons. U.S. persons are citizens or residents of the United States, or corporations (or other entities treated as corporations for United States federal income tax purposes) created in or under the laws of the United States or any political subdivision thereof or therein, estates, the income of which is subject to U.S. federal income taxation regardless of its source and trusts for which a U.S. court exercises primary supervision and a U.S. person has the authority to control all substantial decisions. This summary is limited to U.S. persons who will hold equity shares or ADSs as capital assets.

This summary is limited to U.S. persons who will hold equity shares or ADSs as capital assets. In addition, this summary is limited to U.S. persons who are not residents in India for purposes of the Convention between the Government of the United States of America and the Government of the Republic of India for the avoidance of Double Taxation and the prevention of Fiscal Evasion with respect to taxes on income. If a partnership holds the equity shares or ADSs, the tax treatment of a partner will generally depend upon the status of the partner and upon the activities of the partnership. A partner in a partnership holding equity shares or ADSs should consult his/her/its own tax advisor.

This summary does not address tax considerations applicable to holders that may be subject to special tax rules, such as banks, insurance companies, financial institutions, dealers in securities or currencies, tax-exempt entities, persons that will hold equity shares or ADSs as a position in a “straddle” or as part of a “hedging” or “conversion” transaction for tax purposes, persons that have a “functional currency” other than the U.S. dollar or holders of 10% or more, by voting power or value, of the shares of our company. This summary is based on the tax laws of the United States as in effect on the date of this document and on United States Treasury Regulations in effect or, in some cases, proposed, as of the date of this document , as well as judicial and administrative interpretations thereof available on or before such date and is based in part on the assumption that each obligation in the deposit agreement and any related agreement will be performed in accordance with its terms. All of the foregoing is subject to change, which change could apply retroactively and could affect the tax consequences described below.

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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. For U.S. federal income tax purposes, holders of ADSs will be treated as the owners of equity shares represented by such ADSs.

Dividends. Except for equity shares, if any, distributed pro rata to all shareholders of our company, including holders of ADSs, the gross amount of any distributions of cash or property with respect to equity shares or ADSs will generally be included in income by a U.S. holder as foreign source dividend income at the time of receipt, which in the case of a U.S. holder of ADSs generally should be the date of receipt by the ~~depository,~~depositary, to the extent such distributions are made from the current or accumulated earnings and profits (as determined under U.S. federal income tax principles) of our company. Such dividends will not be eligible for the dividends received deduction generally allowed to corporate U.S. holders. To the extent, if any, that the amount of any distribution by our company exceeds our company’s current and accumulated earnings and profits as determined under U.S. federal income tax principles, such

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excess will be treated first as a tax-free return of the U.S. holder’s tax basis in the equity shares or ADSs and thereafter as capital gain.

Subject to certain conditions and limitations, dividends paid to non-corporate U.S. holders, including individuals, may be eligible for a reduced rate of taxation if we are deemed to be a “qualified foreign corporation” for United States federal income tax purposes. A qualified foreign corporation includes a foreign corporation if (1) its shares (or, according to legislative history, its ADSs) are readily tradable on an established securities market in the United States, or (2) it is eligible for the benefits under a comprehensive income tax treaty with the United States. In addition, a corporation is not a qualified foreign corporation if it is a passive foreign investment company (as discussed below). The ADSs are traded on the New York Stock Exchange. Due to the absence of specific statutory provisions addressing ADSs, however, there can be no assurance that we are qualified foreign corporation solely as a result of our listing on New York Stock Exchange. Nonetheless, we may be eligible for benefits under the comprehensive income tax treaty between India and the United States. The reduced rate of taxation will not apply to dividends received in taxable years beginning after December 31, ~~2010.Each~~2010. Each U.S. holder should consult its own tax advisor regarding the treatment of dividends and such holder’s eligibility for reduced rate of taxation.

Subject to certain conditions and limitations, any Indian dividend withholding tax imposed upon distributions paid to a U.S. holder should be eligible for credit against the U.S. holder’s federal income tax liability. Alternatively, a U.S. holder may claim a deduction for such amount, but only for a year in which a U.S. holder does not claim a credit with respect to any foreign income taxes. The overall limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. For this purpose, distributions on equity shares or ADSs will be income from sources outside the United States, and, for tax years beginning before January 1, 2007, will generally be “passive income”, or “financial services income”, and for tax years beginning after December 31, 2006, will generally be “passive category income” or “general category income” for purposes of computing the United States foreign tax credit allowable to a U.S. holder.

If dividends are paid in Indian rupees, the amount of the dividend distribution included in the income of a U.S. holder will be in the U.S. dollar value of the payments made in Indian rupees, determined at a spot exchange rate between Indian rupees and U.S. dollars applicable to the date such dividend is included in the income of the U.S. holder, regardless of whether the payment is in fact converted into U.S. dollars. Generally, gain or loss, if any, resulting from currency exchange fluctuations during the period from the date the dividend is paid to the date such payment is converted into U.S. dollars will be treated as U.S. source ordinary income or loss.

Sale or Exchange of Equity Shares or ADSs. A U.S. holder generally will recognize gain or loss on the sale or exchange of equity shares or ADSs equal to the difference between the amount realized on such sale or exchange and the U.S. holder’s tax basis in the equity shares or ADSs, as the case may be. Such gain or loss will be capital gain or loss, and will be long-term capital gain or loss if the equity shares or ADSs, as the case may be, were held for more than one year. Gain or loss, if any, recognized by a U.S. holder generally will be treated as U.S. source passive category income or loss for U.S. foreign tax credit purposes. Capital gains realized by a U.S. holder upon sale of equity shares (but not ADSs) may be subject to certain tax in India. See taxation –— “Taxation of Distributions –— Taxation of Capital Gains”. Due to limitations on foreign tax credits, however, a U.S. holder may not be able to utilize any such taxes as a credit against the U.S. holder’s federal income tax liability.

Estate Taxes. An individual shareholder who is a citizen or resident of the United States for U.S. federal estate tax purposes will have the value of the equity shares or ADSs held by such holder included in his or her gross estate for U.S. federal estate tax purposes. An individual holder who actually pays Indian estate tax with respect to the equity shares will, however, be entitled to credit the amount of such tax against his or her U.S. federal estate tax liability, subject to a number of conditions and limitations.

84

Backup Withholding Tax and Information ~~Reporting.~~Reporting. Any dividends paid, or proceeds on a sale of, equity shares or ADSs to or by a U.S. holder may be subject to U.S. information reporting, and a backup withholding tax (currently at a rate of 28%) may apply unless the holder is an exempt recipient or provides a U.S. taxpayer identification number, certifies that such holder is not subject to backup withholding and otherwise complies with any applicable backup withholding requirements. Any amount withheld under the backup withholding rules will be allowed as a refund or credit against the holder’s U.S. federal income tax, provided that the required information is furnished to the Internal Revenue Service.

Passive Foreign Investment Company. A non-U.S. corporation will be classified as a passive foreign investment company for U.S. Federal income tax purposes if either:

~~75% or more of its gross income for the taxable year is passive income; or~~

96

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.

	•		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.

We do not believe that we satisfy either of the tests for passive foreign investment company status for 2005. Since this determination is made on an annual basis, however, no assurance can be given that we will not be considered a passive foreign investment company in future taxable years. If we were to be a passive foreign investment company for any taxable year, U.S. holders would be required to either:

	•		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.

If we are treated as a passive foreign investment company, we do not plan to provide information necessary for the ‘qualified electing fund’ election.

The above summary is not intended to constitute a complete analysis of all tax consequences relating to ownership of equity shares or ADSs. You should consult your own tax advisor concerning the tax consequences of your particular situation.

Documents on Display

This report and other information filed or to be filed by Wipro Limited can be inspected and copied at the public reference facilities maintained by the SEC at:

	•		100 F Street, NE Washington D.C, 20549

	•		Northwestern Atrium Center 500 West Madison Street Suite 1400 Chicago, Illinois 60661-2511

Copies of these materials can also be obtained from the Public Reference Section of the SEC, 100 F Street, NE., Washington, DC 20549, at prescribed rates.

The SEC maintains a website atwww.sec.gov that contains reports, proxy and information statements, and other information regarding registrants that make electronic filings with the SEC using its EDGAR system.

Additionally, documents referred to in this Form 20-F may be inspected at our corporate offices which are located at Doddakannelli, Sarjapur Road, Bangalore, Karnataka, 560035, India.

Item 11. Quantitative and Qualitative Disclosures About Market Risk

(in millions, except share data and where otherwise stated)

General

85

Market risk is the risk of loss of future earnings, to fair values or to future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, commodity prices, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments, foreign currency receivables, ~~and~~ payables and ~~long-term~~ debt.

Our exposure to market risk is a function of our investment and borrowing activities and our revenue generating activities in foreign currency. The objective of market risk management is to avoid excessive exposure of our earnings and equity to loss. ~~Most of our exposure to market risk arises out of our foreign currency account receivables.~~

97

Risk Management Procedures

We manage market risk through a corporate treasury department, which evaluates and exercises independent control over the entire process of market risk management. Our corporate treasury department recommends risk management objectives and policies which are approved by senior management and our Audit Committee. The activities of this department include management of cash resources, implementing hedging strategies for foreign currency exposures, borrowing strategies, and ensuring compliance with market risk limits and policies on a daily basis.

Components of Market Risk

Our exposure to market risk arises principally from exchange rate ~~risk.~~risk and Interest rate risk. Other sources of risk ~~is the other component of our market~~include credit risk, counter-party risk and liquidity risk.

Exchange rate ~~risk~~.risk. Our exchange rate risk primarily arises from our foreign exchange revenue, receivables, cash balances, forecasted cash flows, payables and foreign currency debt. A significant portion of our revenue is in U.S. dollars, euro and pound sterling, while a significant portion of our costs are in Indian rupees. The exchange rate between the rupee and dollar, euro and pound sterling has fluctuated significantly in recent years and may continue to fluctuate in the future. Appreciation of the rupee against ~~the dollar~~these currencies can adversely affect our results of operations.

We evaluate our exchange rate exposure arising from these transactions and enter into foreign currency ~~forward contracts~~derivative instruments to mitigate such exposure. We follow established risk management policies, including the use of derivatives like forward foreign exchange contracts to hedge forecasted cash flows denominated in foreign currency. AsSee Note 14 of our Notes to the Audited Consolidated Financial Statements for information relating to outstanding derivative contracts as of March 31, ~~2006, we had forward contracts to sell amounting to $592 million~~2009.

All derivative instruments are recognized in the balance sheet and ~~£4 million and net purchased options to sell $254 million and £8 million. As~~measured at fair value. Changes in fair value for foreign currency derivative instruments that do not qualify as hedges and/ or any ineffective portion of ~~March 31, 2007, we had forward contracts to sell amounting to $345 million,~~€~~16 million and £88 million and forward contracts to buy amounting to $185 million. In addition, we also had net purchased options to sell $36 million and~~€ ~~13 million.~~

hedges are recognized in our consolidated income statement in the current period. In connection with cash flow hedges, we have recorded Rs. ~~114,~~72, Rs. ~~202,~~(1,097) and Rs. 72(16,859) of net gains/(losses) as a component of accumulated and other comprehensive income within stockholders’ equity as ~~at March 31, 2005, 2006 and 2007.~~

~~Sensitivity analysis~~ of ~~exchange rate risk~~

~~As at~~ March 31, 2007, ~~a Rs.1~~2008 and 2009.

As of March 31, 2009, Rs. 1 increase / decrease in the spot rate for exchange of Indian Rupee with U.S. dollar would result in approximately Rs. ~~160 million~~1,498 decrease / increase in the fair value of the Company’s ~~forward contracts.~~foreign currency dollar denominated derivative instruments.

As of March 31, 2009, 1% movement in the exchange rate between U.S. Dollar and Yen would result in approximately Rs. 183 increase/decrease in the fair value of cross-currency interest rate swaps.

Interest rate risk.Our interest rate risk primarily arises from our investment ~~securities.~~securities and floating rate debt, including various revolving and other lines of credit (refer note 16 to the financial statements). Our investments are primarily in short-term investments, which do not expose us to significant interest rate risk. We manage our net exposure to interest rate risk relating to borrowings, through the proportion of fixed rate borrowing and floating rate borrowing in its total borrowing portfolio. To manage this mix, we may enter into interest rate swap agreements, which allows us to exchange periodic payments based on a notional amount and agreed upon fixed and floating interest rates. As of March 31, 2009, substantially all of our debt was subject to floating interest rates, which reset at short intervals. Accordingly, the carrying value of such debt approximates fair values. If interest rates were to increase by 100 bps from March 31, 2009, an additional annual interest expenses on our floating rate debt would amount to approximately Rs. 2,276 on a pre-tax basis.

Credit risk. Our credit risk arises from the possibility that customers may not be able to settle their obligations as agreed. To manage this, we periodically assess the financial reliability of customers, taking into account the financial position, past experience and other factors. Individual risk limits are set accordingly. No single customer accounted for 5% or more of the accounts receivable as of March 31, 2008 and 2009 and revenues for the years ended March 31, 2007, 2008 and 2009 and there is no significant concentration of credit risk.

86

Counterparty risk. Counterparty risk encompasses issuer risk on marketable securities, settlement risk on derivative and money market contracts and credit risk on cash and time deposits. Issuer risk is minimized by only buying securities which are at least AA rated. Settlement and credit risk is reduced by the policy of entering into transactions with counterparties that are usually at highly rated banks or financial institutions. Exposure to these risks is closely monitored and kept within predetermined parameters. We have policies that limit the amount of credit exposure to any financial institution. The limits are regularly assessed and determined based upon credit analysis including financial statements and capital adequacy ratio reviews. In addition, net settlement agreements are contracted with significant counterparties.

Liquidity risk. Liquidity risk is defined as the risk that we would not be able to settle or meet our obligations on time or at a reasonable price. Our corporate treasury department is responsible for liquidity, funding as well as settlement management. In addition, liquidity and funding risks, related processes and policies are overseen by management. Management monitors our net liquidity position through rolling forecasts on the basis of expected cash flows. As on March 31, 2009, our cash and cash equivalents are held with major regulated financial institutions.

Fair ~~value~~.value. The fair value of our market rate risk sensitive instruments, other than ~~forward contracts and option contracts,~~derivative instruments, closely approximates their carrying value.

Item 12. Description of Securities Other Than Equity Securities

Not applicable.

PART II

Item 13. Defaults, Dividend Arrearages and Delinquencies

Not applicable.

Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds

Not Applicable

Item 15. Controls and Procedures

~~Evaluation of disclosure~~Disclosure controls and procedures.

Based on their evaluation as of March 31, ~~2007,~~2009, our ~~Chief Executive Officer~~principal executive officer and ~~Chief Financial Officer~~principal financial officer have concluded that our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, are effective to ensure that information required to be

98

disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms and that material information related to us and our consolidated subsidiaries is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions about required disclosures.

~~Change in internal controls.~~

During the period covered by this Annual Report, there were no changes in our internal control over financial reporting that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

~~Compliance with the New York Stock Exchange Corporate Governance Rules~~

The Company presently complies with all the practices as described in the final Corporate Governance Rules and Listing Standards of the New York Stock Exchange as approved by the Securities and Exchange Commission on November 4, 2003 and codified in Section 303A of the NYSE Listed Company Manual.

~~A detailed compliance report with the final Corporate Governance rules of the New York Stock Exchange will be separately filed with the New York Stock Exchange.~~forms.

MANAGEMENT’S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Management is responsible for establishing and maintaining adequate internal control over financial reporting ofas defined in Rules 13a-15(f) and 15(d)-15(f) under the ~~company. Internal~~Exchange Act. The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.

The ~~company’s~~Company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the ~~company;~~Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the ~~company~~Company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

87

Management, ~~conducted an evaluation~~with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of internal control over financial reporting as of March 31, 2009. In conducting this assessment of internal control over financial reporting, management based its evaluation on the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this ~~evaluation,~~assessment, management concluded that the company’s internal control over financial reporting was effective as of March 31, ~~2007.~~

Management’s assessment does not include an assessment of the internal control over financial reporting of two entities acquired during the year ended March 31, 2007, Hydrauto Group AB and subsidiaries and Retailbox B.V and subsidiaries, with total assets of Rs 3,842.01 million and net revenues of Rs 4,243.85 million included in the consolidated financial statements of the Company as of and for the year ended March 31, 2007.2009.

Our independent registered public accounting firm, KPMG, has audited the consolidated financial statements in this ~~annual report~~Annual Report on Form 20-F, and as part of their audit, has issued their report, included herein, on ~~(1) our management’s assessment of the effectiveness of our internal control over financial reporting and (2)~~ the effectiveness of our internal control over financial reporting as of March 31, ~~2007.~~2009.

88

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders
Wipro Limited

We have audited ~~management’s assessment, included in the accompanying Management’s Report on Internal Control Over Financial Reporting~~,~~that~~ Wipro Limited and ~~subsidiaries~~subsidiaries’ (the ~~Company) maintained effective~~“Company”) internal control over financial reporting as of March 31, ~~2007,~~2009, based on criteria established inInternal ~~Control—~~Control - Integrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).The management of the Company is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial ~~reporting.~~reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion

99

on ~~management’s assessment and an opinion on the effectiveness of~~ the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, ~~evaluating management’s assessment,~~assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control ~~and~~based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, management’s assessment that the Company maintained effective internal control over financial reporting as of March 31, 2007, is fairly stated, in all material respects, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of March 31, ~~2007,~~2009, based on criteria established inInternal ~~Control—~~Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

The Company acquired Hydrauto Group AB and subsidiaries (Hydrauto) and RetailBox BV and subsidiaries (RetailBox) during the year ended March 31, 2007 and management excluded from its assessment of the effectiveness of the Company’s internal control over financial reporting as of March 31, 2007, Hydrauto and RetailBox’s internal control over financial reporting associated with total assets of Rs 3,842.01 million and net revenues of Rs 4,243.85 million included in the consolidated financial statements of the Company as of and for the year ended March 31, 2007. Our audit of internal control over financial reporting of the Company also excluded an evaluation of the internal control over financial reporting of Hydrauto and RetailBox.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of the Company as of March 31, ~~2007~~2009 and ~~2006,~~2008, and the related consolidated statements of income, stockholders’ equity and comprehensive income, and cash flows for each of the years in the three-year period ended March 31, ~~2007,~~2009, and our report dated May ~~21, 2007~~15, 2009 expressed an unqualified opinion on those consolidated financial statements.

KPMG

Bangalore, India

May ~~21, 2007~~15, 2009

~~100~~89

Change in internal controls over financial reporting.

During the period covered by this Annual Report, there were no changes in our internal control over financial reporting that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

Compliance with the New York Stock Exchange Corporate Governance Rules

The Company presently complies with all the practices as described in the final Corporate Governance Rules and Listing standards of the New York Stock Exchange as approved by the Securities and Exchange Commission on November 4, 2003 and codified in Section 303A of the NYSE Listed Company Manual.

A detailed compliance report with the final Corporate Governance rules of the New York Stock Exchange will be separately filed with the New York Stock Exchange.

Item 16 A. Audit Committee Financial Expert

The Audit Committee is responsible for reviewing reports of our financial results, audits, internal controls, and compliance with federal procurement laws and regulations. The committee selects the independent registered public accounting firm and approves all related fees and compensation and reviews their selection with the Board of Directors. The committee also reviews the services proposed to be performed by the independent registered public accounting firm to ensure their independence with respect to such services.

Members of the committee are non-management directors who, in the opinion of the Company’s Board of Directors, are independent as defined under the applicable rules of the New York Stock Exchange. The Board has determined that Mr. Narayan Vaghul qualifies as an Audit Committee Financial Expert as defined by the applicable rules of the SEC.

Item 16 B. Code of Ethics

Our Audit Committee has adopted a written Code of Ethics, as defined in Item 406 of Regulation S-K, applicable to our principal executive officer, principal financial officer, principal accounting officer and all officers working in our finance, accounting, treasury, internal audit, tax, legal, purchase, financial analyst, investor relations functions, disclosure committee members, and senior management, as well as members of the Audit Committee and the ~~board~~Board of ~~directors.~~Directors. Our Code of Ethics is available under the investor relations section on our website at ~~www.wipro.com.~~www.wipro.com. We will post any amendments to, or waivers from, our Code of Ethics at that location on our website.

Our Audit Committee has also adopted an Ombuds process policy wherein it has established procedures for receiving, retaining and treating complaints received, and procedures for the confidential, anonymous submission by employees of complaints regarding questionable accounting or auditing matters, conduct which results in a violation of law by Wipro or in a substantial mismanagement of ~~company~~Company resources. Under this policy, our employees are encouraged to report questionable accounting matters, any reporting of fraudulent financial information to our shareholders, the government or the financial markets any conduct that results in a violation of law by Wipro to our management (on an anonymous basis, if employees so desire). Likewise, under this policy, we have prohibited discrimination, retaliation or harassment of any kind against any employee who, based on the employee’s reasonable belief that such conduct or practices have occurred or are occurring, reports that information or participates in an investigation. Our Ombuds process policy is available under the investor relations section on our website at ~~www.wipro.com.~~www.wipro.com.

We have also adopted an updated Code of Business Conduct and Ethics, applicable to all officers, directors and employees. Our updated Code of Business Conduct and Ethics is available under the investor relations section on our website at ~~www.wipro.com.~~www.wipro.com.

Item 16 C. Principal Accountant Fees and Services

Our Audit Committee charter requires us to obtain the prior approval of our audit committee on every occasion that we engage our principal accountants or their associated entities and on every occasion that they provide us with any non-audit services. At the beginning of each year, the Audit Committee reviews the proposed services, including the nature, type and scope of services contemplated and approves the related fees, to be rendered by these firms during the year. In addition, Audit Committee pre-approval is also required for those engagements that may arise during the course of the year that are outside the scope of the initial services and fees pre-approved by the Audit Committee.

The following table presents fee for professional audit services rendered by KPMG for the audit of the Company’s annual financial statements and fees billed for other services rendered by KPMG.

In millions
Year ended March 31,
2006 2007
Audit fees Rs. 17.67 Rs. 48.20
Tax fees 22.31 18.69
All other fess — 2.04

Total
Rs. 39.98 Rs. 68.93

~~101~~90

In millions


	Year ended March 31,
	2007		2008		2009
Audit fees	Rs.	48.20	Rs.	62.21	Rs.	74.69
Audit related fees		—		6.07		—
Tax fees		18.69		14.12		37.25
All other fees		2.04		2.20		3.36

Total	Rs.	68.93	Rs.	84.60	Rs.	115.30

Audit services —comprise fees for professional services in connection with the audit of Company’s annual consolidated financial statements and their attestation and report concerning internal control over financial reporting and reviews of interim financial ~~statement, as well as audits~~statement.

Audit related fees —relate to financial due–diligence services provided in connection with the acquisition of ~~statutory financial statements of Wipro Limited and its subsidiaries.~~Infocrossing Inc.

Tax services—- comprise fees for tax compliance, tax assessment and tax planning services rendered by the independent registered public accounting firm. These services include corporate tax services like assistance with foreign income tax, value added tax, transfer pricing study, ~~Government~~government sales tax and equivalent tax matters in local jurisdictions and assistance with local tax authority reporting requirements for tax compliance purposes.

Our Audit Committee charter requires us to take the prior approval of our Audit Committee on every occasion we engage our principal accountants or their associated entities to provide us any audit or non-audit services. We disclose to our Audit Committee the nature of services that are provided and the fees to be paid for the services. All of the audit or non-audit services provided by our principal accountants or their associated entities ~~in the previous two fiscal years~~ have been pre-approved by our Audit Committee.

Item 16 D. Exemptions from the Listing Standards for Audit Committees

We have not sought any exemption from the listing standards for Audit Committees applicable to us as foreign private issuer, pursuant to Rule 10(A)-3(d) of the Securities Exchange Act of 1934.

Item 16 E. Purchase of Equity Securities by the Issuer and Affiliated Purchasers

None.

Item 16 F. Changes in registrant’s Certifying Accountant

None.

Item 16 G. Corporate Governance

Beacause our securities are listed on a national securities exchange, we are required to provide a concise summary of any significant ways in which our corporate governance practices differ from those followed by domestic companies under the listing standards of that exchange. Being a foreign private issuer, we are permitted to follow home country practice in lieu of the provisions of this Section 303A of the NYSE Listed Company Manual, except that we are required to comply with the requirements of Sections 303A.06, 303A.11 and 303A.12(b) and (c) thereof. With regard to Section 303A.11, although the Company’s required home country standards on corporate governance may differ from the NYSE listing standards, the Company’s actual corporate governance policies and practices are generally in compliance with the NYSE listing standards applicable to domestic companies. Some of the key practices followed in the home country as per home country laws are disclosed elsewhere in this report.

Part III

Item 17. Financial Statements

See Item 18.

~~102~~91

Item 18. Financial Statements

CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION

REPORT OF AUDIT COMMITTEE

The Board of Directors and Stockholders of Wipro Limited

In connection with the March 31, ~~2007~~2009 consolidated financial statements prepared under United States Generally Accepted Accounting Principles, the Audit Committee: (1) reviewed and discussed the consolidated financial statements with management; (2) discussed with the auditors the matters required by Statement on Auditing Standards No. ~~61, as amended,~~114, and the Sarbanes-Oxley Act of 2002; and (3) reviewed and discussed with the auditors the matters required by NYSE ~~listing standards.~~Listing Standards. Based upon these reviews and discussions, the Audit Committee recommended to the board of directors that the audited consolidated financial statements be included in the Annual Report on Form 20-F to be filed with the Securities and Exchange Commission of the United States of America.


Bangalore, India ~~May 21, 2007~~	~~N.Vaghul~~ N. Vaghul	P. M. Sinha	B. C. Prabhakar
May 15, 2009	Chairman	~~P. M. Sinha~~ Member	~~B. C. Prabhakar~~ Member

~~103~~92

REPORT OF MANAGEMENT

Management of Wipro is responsible for the integrity and objectivity of the consolidated financial statements and related notes. The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) and include amounts based on judgments and estimates by management. Management is also responsible for the accuracy of the related data in the annual report and its consistency with the financial statements.

Management maintains internal control systems designed to provide reasonable assurance that assets are safeguarded, transactions are executed in accordance with management’s authorization and properly recorded, and accounting records are adequate for preparation of financial statements and other financial information. These are reviewed at regular intervals to ascertain their adequacy and effectiveness.

In addition to the system of internal controls, the Company has articulated its vision and core values which permeate all its activities. It also has corporate policies to ensure highest standards of integrity in all business transactions, eliminate possible conflicts of interest, ensure compliance with laws, and protect confidentiality of proprietary information. These are reviewed at periodic intervals.

The consolidated financial statements have been audited by the Company’s independent registered public accounting firm, KPMG. Their responsibility is to audit these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States) and express their opinion on the fairness of presentation of the statements.

The Audit Committee of the board ~~comprising~~comprised entirely of independent directors conducts an ongoing appraisal of the independence and performance of the Company’s internal and external auditors and monitors the integrity of Company’s financial statements. The Audit Committee meets several times during the year with management, internal auditors and the independent registered public accounting firm to discuss audit activities, internal controls and financial reporting matters.



		Azim H. Premji
		Chairman and Chief Executive Officer

		S.C. Senapaty
		~~Executive Vice President – Finance~~
~~Bangalore, India~~		Chief Financial Officer
~~May 21, 2007~~
		and Director

Bangalore, India

May 15, 2009

~~104~~93

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders
Wipro Limited

We have audited the accompanying consolidated balance sheets of Wipro Limited and subsidiaries (the Company) as of March 31, ~~2007~~2009 and ~~2006,~~2008, and the related consolidated statements of income, stockholders’ equity and comprehensive income, and cash flows for each of the years in the three-year period ended March 31, ~~2007.~~2009. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of March 31, ~~2007~~2009 and ~~2006,~~2008, and the results of their operations and their cash flows for each of the years in the three-year period ended March 31, ~~2007,~~2009, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the ~~effectiveness of the~~ Company’s internal control over financial reporting as of March 31, ~~2007,~~2009, based on criteria established in Internal ~~Control-Integrated~~Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated May ~~21, 2007~~15, 2009 expressed an unqualified opinion ~~management’s assessment~~on the effectiveness of ~~and~~ the ~~effective operation of,~~Company’s internal control over financial reporting.

KPMG

Bangalore, India

May ~~21, 2007~~15, 2009

~~105~~94

WIPRO LIMITED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in millions, except share data)


	As of March 31,									As of March 31,
	2006			2007			2007			2008			2009			2009
							Convenience									Convenience
							translation into									translation
							US$									into US$
							(Unaudited)									(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents (Note 4)	Rs.	8,857.70			12,412.17			287.98		Rs.	39,270		Rs.	49,117		$	966
Restricted cash (Note 17)		—			7,237.88			167.93
Investments in liquid and short-term mutual funds (Note 8)		30,315.25			32,410.43			751.98
Short-term investments (Note 8)											14,808			16,180			318
Accounts receivable, net of allowances (Note 5)		20,593.11			28,466.58			660.47			38,908			46,217			909
Costs and earnings in excess of billings on contracts in progress		4,336.06			5,096.48			118.25
Unbilled revenue											8,305			13,843			272
Inventories (Note 6)		2,064.61			4,150.37			96.30			7,172			8,686			171
Deferred income taxes (Note 21)		168.28			381.71			8.86			790			3,639			72
Other current assets (Note 7)		7,896.60			10,411.97			241.58			19,092			27,040			532

Total current assets		74,231.61			100,567.59			2,333.35			128,345			164,722			3,238
Property, plant and equipment, net (Note 9)		17,777.40			26,541.43			615.81			39,822			49,862			980
Investments in affiliates (Note 13)		1,043.09			1,241.79			28.81			1,343			1,670			33
Investment securities		13.17			357.32			8.29			355			338			7
Deferred income taxes (Note 21)		182.91			48.53			1.13			—			169			3
Intangible assets, net (Note 10)		854.33			2,670.84			61.97			12,480			17,604			346
Goodwill (Note 3,10)		7,480.85			12,697.71			294.61			38,943			49,502			973
Other assets (Note 7)		1,243.97			1,958.92			45.45			3,214			6,681			131

Total assets	Rs.	102,827.33		Rs.	146,084.13		$	3,389.42		Rs.	224,502		Rs.	290,548		$	5,712


LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Borrowings from banks (Note 15)	Rs.	448.91			2,892.77			67.12
Current portion of long-term debt		135.70			327.79			7.61
Short-term borrowings (Note 16)										Rs.	28,804		Rs.	36,472		$	717
Current portion of long-term debt (Note 16)											406			235			5
Current portion of obligations under capital leases (Note 9)											323			504			10
Accounts payable		4,145.96			7,060.49			163.82			13,082			18,017			354
Accrued expenses		6,600.63			7,597.94			176.29			8,110			14,452			284
Accrued employee costs		4,425.13			5,186.57			120.34			5,160			7,035			138
Advances from customers		1,015.75			1,314.52			30.50			2,136			3,127			61
Billings in excess of costs and earnings on contracts in progress		600.51			1,818.48			42.19
Unearned revenue											4,162			6,918			136
Other current liabilities (Note 11)		6,047.95			16,623.16			385.68			12,519			26,121			513

Total current liabilities		23,420.54			42,821.72			993.55			74,702			112,881			2,220
Long-term debt, excluding current portion		119.95			560.46			13.00
Long-term debt, excluding current portion (Note 16)											14,522			18,681			367
Obligations under capital leases, excluding current portion (Note 9)											701			914			18
Deferred income taxes (Note 21)		127.46			463.98			10.77			2,098			4,023			79
Other liabilities		395.04			769.91			17.86
Other liabilities (Note 11)											3,011			3,632			71

Total liabilities		24,062.99			44,616.07			1,035.18			95,034			140,131			2,755


Minority interest											114			235			5

Stockholders’ equity:
Equity shares at Rs. 2 par value: 1,650,000,000 shares authorized; Issued and outstanding: 1,425,754,267 and 1,458,999,650 shares as of March 31, 2006 and 2007 (Note 16,17)		2,851.51			2,918.00			67.70
Equity shares at Rs. 2 par value: 1,650,000,000 shares authorized; Issued and outstanding: 1,461,453,320 and 1,464,980,746 shares as of March 31, 2008 and 2009 (Note 17)											2,923			2,930			58
Additional paid-in capital (Note 22)		16,521.07			24,508.45			568.64			26,441			29,025			571
Deferred stock compensation		(2,202.42	)		—			—
Accumulated other comprehensive income		433.70			93.77			2.18
Accumulated other comprehensive loss											(1,076	)		(9,873	)		(194	)
Retained earnings (Note 18)		61,160.56			73,947.92			1,715.72			101,066			128,642			2,529
Equity shares held by a controlled Trust: 7,869,060 and 7,961,760 shares as of March 31, 2006 and 2007 (Note 22)		(0.08	)		(0.08	)		(0.00	)
Equity shares held by controlled Trusts: 7,961,760 and 8,930,563 shares as of March 31, 2008 and 2009 (Note 22)											—			(542	)		(11	)

Total stockholders’ equity		78,764.34			101,468.06			2,354.24			129,354			150,182			2,952

Total liabilities and stockholders’ equity	Rs.	102,827.33		Rs.	146,084.13		$	3,389.42		Rs.	224,502		Rs.	290,548		$	5,712

See accompanying notes to the consolidated financial statements.

~~106~~95

WIPRO LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in millions, except share and per share data)


	Year ended March 31,												Year ended March 31,
	2005			2006			2007			2007			2007			2008			2009			2009
										Convenience												Convenience
										translation												translation into
										into US$												US$
										(Unaudited)												(Unaudited)
Revenues:
Global IT Services and Products
IT Services	Rs.	54,280.19		Rs.	73,061.33		Rs.	101,508.81			2,355.19
BPO Services		6,433.03			7,664.23			9,412.80			218.39
India and AsiaPac IT Services and Products
Services		4,709.07			6,096.68			8,368.81			194.17		Rs.	117,819		Rs.	146,170		Rs.	193,924		$	3,787
Products		8,694.10			10,380.40			15,519.67			360.09			31,612			51,258			60,640			1,217
Consumer Care and Lighting		4,555.38			5,625.04			7,558.50			175.37
Others		2,680.73			3,279.20			7,062.74			163.87

Total		81,352.50			106,106.88			149,431.33			3,467.08			149,431			197,428			254,564			5,004

Cost of revenues:
Global IT Services and Products
IT Services		33,780.07			46,986.13			66,817.77			1,550.30
BPO Services		4,740.25			5,809.54			6,172.97			143.22
India and AsiaPac IT Services and Products
Services		2,679.35			3,548.82			4,611.64			107.00			(76,488	)		(98,606	)		(129,769	)		(2,527	)
Products		7,814.82			9,285.88			13,943.47			323.51			(25,980	)		(40,630	)		(48,407	)		(976	)
Consumer Care and Lighting		2,926.22			3,556.43			4,905.14			113.81
Others		1,914.06			2,459.93			5,749.25			133.39

Total		53,854.77			71,646.73			102,200.24			2,371.23			(102,468	)		(139,236	)		(178,176	)		(3,503	)

Gross profit		27,497.73			34,460.15			47,231.09			1,095.85			46,963			58,192			76,388			1,502
Operating expenses:
Selling and marketing expenses		(5,466.26	)		(6,764.35	)		(9,172.92	)		(212.83	)		(9,173	)		(13,807	)		(17,762	)		(349	)
General and administrative expenses		(3,743.60	)		(5,238.97	)		(7,639.23	)		(177.24	)		(7,639	)		(10,820	)		(14,696	)		(289	)
Research and development expenses		(273.54	)		(202.26	)		(267.71	)		(6.21	)
Amortization of intangible assets (Note 10)		(140.29	)		(63.95	)		(269.23	)		(6.25	)		(269	)		(616	)		(1,488	)		(29	)
Foreign exchange losses, net		(92.12	)		(288.49	)		(235.69	)		(5.47	)
Foreign exchange gains/(losses), net														(197	)		125			(1,596	)		(31	)
Others, net		75.29			70.14			221.48			5.14			221			640			544			11

Operating income		17,857.21			21,972.27			29,867.79			692.99			29,906			33,714			41,390			814
Loss on direct issue of stock by subsidiary		(206.58	)		—			—			—
Other income, net (Note 19)		798.82			1,275.86			2,666.84			61.87			2,628			2,167			(1,816	)		(36	)
Equity in earnings of affiliates (Note 13)		158.08			287.97			317.88			7.38			318			257			362			7

Income before income taxes , minority interest and cumulative effect of change in accounting principle		18,607.53			23,536.10			32,852.51			762.24
Income before income taxes, minority interest and cumulative effect of change in accounting principle														32,852			36,138			39,936			785
Income taxes (Note 21)		(2,693.57	)		(3,264.73	)		(3,722.61	)		(86.37	)		(3,723	)		(3,873	)		(5,422	)		(107	)
Minority interest		(81.21	)		(1.40	)		—			—			—			(24	)		(99	)		(2	)

Income before cumulative effect of change in accounting principle		15,832.75			20,269.97			29,129.90			675.87			29,129			32,241			34,415			677
Cumulative effect of change in accounting principle (Note 2)		—			—			39.09			0.90			39			—			—			—

Net income	Rs.	15,832.75		Rs.	20,269.97		Rs.	29,168.99			676.77		Rs.	29,168		Rs.	32,241		Rs.	34,415		$	677

Earnings per equity share: (Note 23)
Basic
Income before cumulative effect of change in accounting principle		11.38			14.41			20.42			0.47			20.42			22.23			23.67			0.47
Cumulative effect of change in accounting principle		—			—			0.03			0.00			0.03			—			—			—
Net income		11.38			14.41			20.45			0.47			20.45			22.23			23.67			0.47

Diluted
Income before cumulative effect of change in accounting principle		11.29			14.24			20.17			0.47			20.17			22.16			23.63			0.46
Cumulative effect of change in accounting principle		—			—			0.03			0.00			0.03			—			—			—
Net income		11.29			14.24			20.20			0.47			20.20			22.16			23.63			0.46
Weighted-average number of equity shares used in computing earnings per equity share:
Basic		1,391,554,372			1,406,505,974			1,426,709,163						1,426,709,163			1,450,604,615			1,454,010,222
Diluted		1,399,846,782			1,423,679,230			1,444,467,557						1,444,467,557			1,454,780,607			1,456,290,715

See accompanying notes to the consolidated financial statements.

~~107~~96

WIPRO LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY AND COMPREHENSIVE INCOME
(in millions, except share and per share data)

Accumulated
Additional Other Equity Shares held by a Total
Equity 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 Equity
Balance 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 ) 46,363.75

Cash dividends (Note 17) — — — — — — (7,575.99 ) — — (7,575.99 )

Issuance of equity shares on exercise of options 10,586,132 10.36 2,566.77 — — — — — — 2,577.13

Equity shares forfeited, net of issuance by Trust — — — — — — — (6,000 ) — —

Stock split effected in the form of stock dividend (Note 16) — 931.26 — — — — (931.26 ) — — —
Compensation related to employee stock incentive plan, net of reversals (Note 22) — — 3,529.12 (3,529.12 ) — — — — — —
Amortization of compensation related to employee stock incentive plan — — — 353.86 — — — — — 353.86
Comprehensive income
Net income — — — — Rs. 15,832.75 — 15,832.75 — — 15,832.75
Other comprehensive income
Translation 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. 15,010.20

Balance 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

Cash dividends (Note 17) — — — — — (3,997.74 ) — — (3,997.74 )

Issuance of equity shares on exercise of options 18,613,223 32.58 4,671.40 — — — — — 4,703.98

Stock split effected in the form of stock dividend (Note 16) — 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 22) — — (330.49 ) 298.94 — — — — (31.55 )
Amortization of compensation related to employee stock incentive plan — — — 683.78 — — — — 683.78
Excess income tax benefit related to employee stock incentive plan — — 69.34 — — — — — 69.34

Comprehensive income

Net income — — — — Rs. 20,269.97 — 20,269.97 — — 20,269.97

Other comprehensive income

Translation adjustments — — — — 19.97 — — — — —


					Additional								Accumulated Other						Equity Shares held by					Total
	Equity Shares				Paid in			Deferred Stock		Comprehensive			Comprehensive			Retained			controlled Trusts					Stockholders’
	No. of Shares		Amount		Capital			Compensation		Income			Income/(loss)			Earnings			No. of Shares			Amount		Equity
Balance as of March 31, 2006		1,425,754,267	Rs.	2,852	Rs.	16,521		Rs.	(2,202)				Rs.	434		Rs.	61,161			(7,869,060	)	Rs.	—	Rs.	78,764

Cash dividends (Note 17)		—		—		—			—		—			—			(16,382	)		—			—		(16,382	)
Elimination of deferred stock compensation balance on adoption of SFAS No. 123 (R) (Note 2)		—		—		(2,202	)		2,202		—			—			—			—			—		—
Cumulative effect of change in accounting principle (Note 2)		—		—		(39	)		—		—			—			—			—			—		(39	)
Issuance of equity shares on exercise of options (Note 22)		32,095,328		64		8,830			—		—			—			—			—			—		8,894
Issuance of equity shares on exercise of options through non-recourse note (Note 22)		1,150,055		2		(2	)		—		—			—			—			—			—		—
Equity shares forfeited, net of issuance by Trust		—		—		—			—		—			—			—			(92,700	)		—		—
Compensation cost related to employee stock incentive plan		—		—		1,336			—		—			—			—			—			—		1,336
Excess income tax benefit related to employees stock incentive plan		—		—		65			—		—			—			—			—			—		65
Comprehensive income
Net income		—		—		—			—		29,169			—			29,169			—			—		29,169
Other comprehensive income / (loss)																									—
Translation adjustments (Note 15)		—		—		—			—		(131	)		—			—			—			—		—
Unrealized gain on investment securities, net (net of tax effect of Rs. 25)		—		—		—			—		45			—			—			—			—		—
Unrealized gain on cash flow hedging derivatives, net (Note 14)		—		—		—			—		(130	)		—			—			—			—		—

Total other comprehensive loss		—		—		—			—		(216	)		(216	)		—			—			—		(216	)

Comprehensive income		—		—		—			—		28,953			—			—			—			—		—

Adjustment to initially apply SFAS No. 158 (net of tax effect of Rs. (18))		—		—		—			—		—			(124	)		—			—			—		(124	)
Balance as of March 31, 2007		1,458,999,650	Rs.	2,918	Rs.	24,508		Rs.	—		—		Rs.	94		Rs.	73,948			(7,961,760	)	Rs.	—	Rs.	101,468

Cash dividends (Note 17)		—		—		—			—		—			—			(5,123	)		—			—		(5,123	)
Issuance of equity shares on exercise of options (Note 22)		2,453,670		5		687			—		—			—			—			—			—		692
Compensation cost related to employee stock incentive plan		—		—		1,076			—		—			—			—			—			—		1,076
Gain on sale of long-lived assets to the controlling shareholder,(net of tax effect of Rs. 52)		—		—		102			—		—			—			—			—			—		102
Excess income tax benefit related to employees stock incentive plan		—		—		68			—		—			—			—			—			—		68
Comprehensive income

~~108~~97

Accumulated
Additional Other Equity Shares held by a Total
Equity 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 Equity
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 — — — 337.61

Comprehensive income Rs. 20,607.58

Balance 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. 78,764.34
��

Cash dividends (Note 17) — — — — — — (16,381.63 ) — — (16,381.63 )
Elimination of deferred stock compensation balance on adoption of SFAS No. 123 (R) — — (2,202.42 ) 2,202.42 — — — — — —

Cumulative effect of change in accounting principle (Note 2) — — (39.09 ) — — — — — — (39.09 )

Issuance of equity shares on exercise of options 32,095,328 64.19 8,830.25 — — — — — — 8,894.44
Issuance of equity shares on exercise of options through non-recourse note (Note 22) 1,150,055 2.30 (2.30 ) — — — — — — —

Equity shares forfeited, net of issuance by Trust — — — — — — — (92,700 ) — —

Compensation cost related to employee stock incentive plan — — 1,336.40 — — — — — — 1,336.40
Excess income tax benefit related to employees stock incentive plan — — 64.54 — — — — — — 64.54

Comprehensive income

Net income — — — — 29,168.99 — 29,168.99 — — 29,168.99

Other comprehensive loss —

Translation adjustments — — — — (130.81 ) — — — — —
Unrealized gain on investment securities, net (net of tax effect of Rs. 25.48) — — — — 45.06 — — — — —
Unrealized gain on cash flow hedging derivatives, net (Note 14) — — — — (130.48 ) — — — — —

Total other comprehensive loss — — — — (216.23 ) (216.23 ) — — — (216.23 )

Comprehensive income — — — — 28,952.76 — — — — —

Adjustment to initially apply SFAS No. 158 (net of tax effect of Rs. 18.05) — — — — — (123.70 ) — — — (123.70 )

Balance as of March 31, 2007 1,458,999,650 2,918.00 24,508.45 — 93.77 73,947.92 (7,961,760 ) (0.08 ) 101,468.06

Balance as of March 31, 2007 ($) (Unaudited) 67.70 568.64 — 2.18 1,715.72 — 2,354.24


					Additional								Accumulated Other						Equity Shares held by						Total
	Equity Shares				Paid in		Deferred Stock		Comprehensive				Comprehensive			Retained			controlled Trusts						Stockholders’
	No. of Shares		Amount		Capital		Compensation		Income				Income/(loss)			Earnings			No. of Shares			Amount			Equity
Net income		—		—		—		—		32,241				—			32,241			—			—			32,241
Other comprehensive income / (loss)
Translation adjustments (Note 15)		—		—		—		—		110				—			—			—			—			—
Unrecognized actuarial loss, net [net of tax effect of Rs. (17) ]		—		—		—		—		(59	)	��		—			—			—			—			—
Unrealized loss on investment securities, net [net of tax effect of Rs. (25)]		—		—		—		—		(52	)			—			—			—			—			—
Unrealized loss on cash flow hedging derivatives, net (Note 14 )		—		—		—		—		(1,169	)			—			—			—			—			—

Total other comprehensive loss		—		—		—		—		(1,170	)			(1,170	)		—			—			—			(1,170	)

Comprehensive income		—		—		—		—		31,071

Balance as of March 31, 2008		1,461,453,320	Rs.	2,923	Rs.	26,441	Rs.	—					Rs.	(1,076)		Rs.	101,066			(7,961,760	)	Rs.	—		Rs.	129,354

Cash dividend (Note 17)		—		—		—		—		—				—			(6,839	)		—			—			(6839	)
Issuance of equity shares to wholly owned trust (Note 17)		968,803		2		540		—		—				—			—			(968,803	)		(542	)		—
Issuance of equity shares on exercise of options (Note 22)		2,558,623		5		431		—		—				—			—			—			—			436
Compensation cost related to employee stock incentive plan (Note 22)		—		—		1,595		—		—				—			—			—			—			1,595
Excess income tax benefit related to employee stock incentive plan		—		—		18		—		—				—			—			—			—			18
Comprehensive income / (loss)								—
Net income		—		—		—		—		34,415				—			34,415			—			—			34,415
Other comprehensive income / (loss)
Translation adjustments (Note 15)		—		—		—		—		4,771				—			—			—			—			—
Unrecognized actuarial gain, net [net of tax effect of Rs. 27]		—		—		—		—		101				—			—			—			—			—
Unrealized loss on investment securities, net (net of tax effect of Rs. (131)) (Note 8)		—		—		—		—		(260	)			—			—			—			—			—
Unrealized loss on cash flow hedging derivatives, net (net of tax effect of Rs. (2,353)) (Note 14)		—		—		—		—		(13,409	)			—			—			—			—			—

Total other comprehensive loss								—		(8,797	)			(8,797	)		—			—			—			(8,797	)

Comprehensive income								—		25,618

Balance as of March 31, 2009		1,464,980,746	Rs.	2,930	Rs.	29,025	Rs.	—					Rs.	(9,873)		Rs.	128,642			(8,930,563	)	Rs.	(542	)	Rs.	150,182

Balance as of March 31, 2009 ($)			$	58	$	571	$	—					$	(194	)	$	2,529					$	(11	)	$	2,952

See accompanying notes to the consolidated financial statements

~~109~~98

WIPRO LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)


	Year ended March 31,												Year ended March 31,
	2005			2006			2007			2007			2007			2008			2009			2009
										Convenience												Convenience
										translation into												translation into
										US$												US$
										(Unaudited)												(Unaudited)
Cash flows from operating activities:
Net income	Rs.	15,832.75		Rs.	20,269.97		Rs.	29,168.99			676.79		Rs.	29,168		Rs.	32,241		Rs.	34,415		$	677
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on sale of property, plant and equipment		(108.82	)		(7.75	)		(9.98	)		(0.23	)		(10	)		(20	)		(28	)		(1	)
Cumulative effect of change in accounting principle		—			—			(39.09	)		(0.91	)		(39	)		—			—			—
Depreciation and amortization		2,578.25			3,195.03			4,309.28			99.98			4,309			6,067			8,357			164
Deferred tax charge/(benefit)		(83.05	)		14.97			(28.76	)		(0.67	)
Unrealized exchange gain		—			74.71			470.20			10.91
Gain on sale of investment securities, net		—			(237.72	)		(549.27	)		(12.74	)
Loss on direct issue of stock by subsidiary		206.58			—			—			—
Deferred tax expense/(benefit)														(29	)		(409	)		(799	)		(16	)
Unrealized exchange (gain) / loss														470			(596	)		6,770			133
Deferred cancellation losses relating to roll-over cash flow hedges														—			—			(11,357	)		(223	)
Cancellation losses relating to net investment in foreign operations														—			—			(839	)		(16	)
Gain on sale of investment securities														(549	)		(771	)		(681	)		(13	)
Stock based compensation		353.86			652.23			1,336.40			31.01			1,336			1,076			1,595			31
Excess income tax benefit related to employee stock incentive plan		—			69.34			—			—
Equity in earnings of affiliates		(158.08	)		(287.97	)		(317.88	)		(7.38	)		(318	)		(257	)		(362	)		(7	)
Minority interest		81.21			1.40			—			—			—			24			99			2
Changes in operating assets and liabilities:
Accounts receivable		(3,833.42	)		(5,362.82	)		(6,551.18	)		(152.00	)
Costs and earnings in excess of billings on contracts in progress		(639.81	)		(1,596.41	)		(760.42	)		(17.64	)
Accounts receivable, net of allowances														(6,167	)		(7,720	)		(6,460	)		(127	)
Unbilled revenue														(760	)		(3,208	)		(5,538	)		(109	)
Inventories		(330.97	)		(295.45	)		(1,060.34	)		(24.60	)		(1,060	)		(1,842	)		(1,513	)		(30	)
Other assets		856.35			(2,284.40	)		(1,767.84	)		(41.02	)		(2,152	)		(7,738	)		(4,120	)		(81	)
Accounts payable		980.64			28.23			1,497.43			34.74			1,497			2,211			3,707			73
Accrued expenses and employee costs		2,317.30			3,990.98			892.79			20.71			893			4,157			8,204			161
Advances from customers		316.89			336.62			1,383.51			32.10
Advances from customers and unearned revenue														1,384			3,153			3,604			71
Other liabilities		636.76			1,630.71			2,187.77			50.76			2,188			(1,773	)		1,778			35

Net cash provided by operating activities		19,006.44			20,191.67			30,161.61			699.81			30,161			24,595			36,832			724


Cash flows from investing activities:
Expenditure on property, plant and equipment		(6,612.81	)		(7,485.94	)		(11,391.63	)		(264.31	)		(11,392	)		(14,674	)		(16,592	)		(326	)
Proceeds from sale of property, plant and equipment		322.00			113.25			148.87			3.45			149			479			358			7
Dividends received from affiliates		8.40			14.12			—			—
Purchase of investments		(70,698.67	)		(58,706.63	)		(123,725.63	)		(2,870.66	)		(123,726	)		(231,684	)		(342,717	)		(6,737	)
Proceeds from sale of investments		66,383.54			52,043.18			121,541.75			2,820.00			121,542			250,013			341,687			6,717
Investments in inter-corporate deposits		—			(500.00	)		(250.00	)		(5.80	)
Redemption of inter-corporate deposits		—			—			100.00			2.32
Purchase of intangible assets		(280.54	)		—			—			—
Investments in interest–bearing deposits with corporates														(250	)		(500	)		(3,750	)		(74	)
Redemption of interest-bearing deposits with corporates														100			650			—			—
Payment for acquisitions, net of cash acquired		(617.99	)		(2,777.03	)		(7,800.14	)		(180.98	)		(7,800	)		(32,789	)		(6,679	)		(131	)

Net cash used in investing activities		(11,496.07	)		(17,299.05	)		(21,376.78	)		(495.98	)
Net cash provided by / (used in) investing activities														(21,377	)		(28,505	)		(27,693	)		(544	)


Cash flows from financing activities:
Proceeds from issuance of equity shares		2,577.13			4,766.79			8,894.44			206.37			8,894			692			436			9
Proceeds from issuance of equity shares by a subsidiary		266.25			—			—			—			—			55			—			—
Proceeds from/(repayments of) short-term borrowing from banks, net		(405.08	)		(196.06	)		1,825.19			42.35
Repayment of long-term debt		—			(268.36	)		146.78			3.41
Proceeds/(repayment) from/of short-term borrowings, net														1,825			21,370			6,454			127
Repayment of long-term debt and obligation under capital leases														—			(1,081	)		(460	)		(9	)
Proceeds from long-term debt														147			15,087			425			8
Payment of cash dividends		(7,575.99	)		(3,997.74	)		(8,873.30	)		(205.89	)		(8,873	)		(5,393	)		(6,829	)		(134	)
Movement in restricted cash relating to cash dividends		—			—			(7,237.88	)		(167.93	)		(7,238	)		—			—			—
Excess income tax benefit related to employee stock incentive plan		—			—			64.54			1.50			65			68			18			—

Net cash provided by/(used in) financing activities		(5,137.69	)		304.63			(5,180.23	)		(120.19	)
Net cash provided / (used in) financing activities														(5,180	)		30,798			44			1


Net increase in cash and cash equivalents during the year		2,372.68			3,197.25			3,604.60			83.63			3,604			26,888			9,184			181
Effect of exchange rate changes on cash		0.92			(10.31	)		(50.13	)		(1.16	)		(50	)		(30	)		663			13
Cash and cash equivalents at the beginning of the year		3,297.16			5,670.76			8,857.70			205.52			8,858			12,412			39,270			773

Cash and cash equivalents at the end of the year	Rs.	5,670.76		Rs.	8,857.70		Rs.	12,412.17			287.99		Rs.	12,412		Rs.	39,270		Rs.	49,117		$	966


Supplementary information:
Cash paid for interest	Rs.	56.12		Rs.	34.95		Rs.	124.63			2.89		Rs.	125		Rs.	1,440		Rs.	2,400		$	47
Cash paid for taxes		2,354.70			4,542.59			4,251.82			98.65
Cash paid for income taxes														4,252			5,459			7,798			153

See accompanying notes to the consolidated financial statements

~~110~~99

WIPRO LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share data and where otherwise stated)

1. Overview

Wipro Limited (Wipro), together with its subsidiaries (collectively, the Company) is a leading India based provider of IT Services, ~~and Products,~~ including Business Process Outsourcing (BPO) services, globally. Further, Wipro has other businesses such as ~~India and AsiaPac~~ IT ~~Services and~~ Products, ~~and~~ Consumer Care and ~~Lighting.~~Lighting and Infrastructure Engineering. Wipro is headquartered in Bangalore, India.

2. Significant Accounting Policies

The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles (U.S. GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and disclosure of contingent assets and liabilities. Actual results could differ from these estimates.

Basis of preparation of financial statements. The accompanying consolidated financial statements of the Company have been prepared in accordance with U.S. GAAP.

Functional currency and exchange rate translation. The functional currency of Wipro and its domestic subsidiaries is the Indian rupee, the national currency of India. The functional currency of ~~the~~Wipro’s foreign subsidiaries is determined based on an evaluation of the individual and collective economic factors as discussed in Statement of Financial Accounting Standard (SFAS) No. 52, Foreign Currency Translation. The ~~translation~~assets and liabilities of ~~the~~subsidiaries that have local functional currency ~~of these foreign subsidiaries~~are translated into Indian ~~rupee is performed for balance sheet accounts using~~rupees at the exchange rate in effect at the balance sheet ~~date and for revenue~~date. Revenue and expense accounts ~~using an appropriate~~are translated at monthly weighted-average exchange rate for the respective periods. The gains or losses resulting from such translation are reported as a separate component of stockholders’ ~~equity.~~equity under accumulated other comprehensive income.

Foreign currency transactions are translated into the functional currency at the rates of exchange prevailing on the date of respective transactions. Monetary assets and liabilities in foreign currency are translated into the functional currency at the exchange rates prevailing on the balance sheet date. The resulting exchange gains/(losses) are included in the statement of income. Gains/(losses) relating to debt denominated in foreign currency are included in Other income, net. All other exchange gains/(losses) are reported in comprehensive income/(loss).

Convenience translation. The accompanying consolidated financial statements have been reported in Indian ~~rupees.~~rupees, the national currency of India. Solely for the convenience of the readers, the financial statements as of and for the year ended March 31, ~~2007,~~2009, have been translated into ~~U.S.~~US dollars at the ~~noon buying rate in~~certified foreign exchange rates published by Federal Reserve Board of New York ~~City~~ on March ~~30, 2007, for cable transfers in Indian rupees, as certified for customs purposes by the Federal Reserve Bank of New York~~31, 2009, of $ 1 = Rs. ~~43.10.~~50.87. No representation is made that the Indian rupee amounts have been, could have been or could be converted into ~~U.S.~~United States dollars at such a rate or any other rate.

Recently adopted accounting pronouncements.In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”. SFAS No. 157 defines “fair value”, establishes a framework for the measurement of fair value and enhances disclosures about fair value measurements. The statement does not require any new fair value measures but its provisions apply when fair value measurements are performed as required or permitted under other accounting pronouncements. In February 2008, the FASB approved FASB Staff Position No.157-2, “Effective Date of FASB statement No. 157”, which grants a one-year deferral of SFAS No. 157’s fair-value measurement requirements for non-financial assets and liabilities, except for items that are measured or disclosed at fair value in the financial statements on a recurring basis.

Effective April 1, 2008, the Company adopted SFAS No. 157 for financial assets and liabilities recognized at fair value on a recurring basis. The partial adoption of SFAS No. 157 for financial assets and liabilities did not have a material impact on the Company’s financial position and results of operations.

The valuation techniques required by SFAS No. 157 are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions. These two types of inputs create the following fair value hierarchy:

Level 1			Quoted prices for identical instruments in active markets.

Level 2			Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

Level 3			Significant inputs to the valuation model are unobservable

The Company adopted SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities (SFAS No. 159) effective April 1, 2008. Adoption of SFAS No. 159 did not have a material effect on the Company’s consolidated financial statements.

Principles of consolidation. The consolidated financial statements include the financial statements of Wipro and all of its subsidiaries, which are more than 50% owned and controlled. All inter-company accounts and transactions are eliminated on consolidation. The Company accounts for investments by the equity method where its investment in the voting stock gives it the ability to exercise significant influence over the investee. The Company does not consolidate entities where the minority shareholders have certain significant participative rights which provide for effective involvement in significant decisions in the ordinary course of business, Such investments are accounted by the equity method of accounting.

100

Cash equivalents. The Company considers investments in highly liquid ~~investments~~instruments that are purchased with remaining maturities, ~~at the date of purchase/investment,~~ of three months or less to be cash equivalents.

Revenue recognition.

Services.Revenue from services, as rendered, are recognized when persuasive evidence of an arrangement exists, the sales price is fixed or determinable and collectibility is reasonably assured. Revenues from software development services comprise revenues from time-and-material and fixed-price contracts. Revenue on time-and-material contracts is recognized as the related services are performed. Revenue from fixed-price, fixed-time frame contracts is recognized in accordance with the percentage of completion method. Guidance has been drawn from the Accounting Standards Executive Committee’s conclusion in paragraph 95 of Statement of Position (SOP) 97-2, Software Revenue Recognition, to account for revenue from fixed price arrangements for software development and

~~111~~

related services in conformity with SOP 81-1, Accounting for Performance of Construction-Type and Certain Production-Type Contracts. The input (cost expended) method has been used to measure progress towards completion as there is a direct relationship between input and productivity. Provisions for estimated losses on contracts-in-progress are recorded in the period in which such losses become probable based on the current contract estimates. Maintenance revenue is ~~deferred and~~ recognized ratably over the term of the agreement. Revenue from ~~customer training, support~~certain service arrangement involving defined but dissimilar acts is generally recognized using the proportional performance method.

Revenues from BPO Services are derived from both time-based and ~~other services~~unit-priced contracts. Revenue is recognized as the related ~~service is performed. Costs that~~services are ~~incurred for a~~performed, in accordance with the specific ~~anticipated contract and that will result in no future benefits unless~~terms of the contract ~~is obtained~~with the customers. Revenue and costs attributable to certain process transition activities are deferred where such activities do not ~~included in contract costs before~~represent the ~~receipt~~culmination of ~~the contract. However, such~~a separate earnings process. Such revenue and related costs are recognized ratably over the period in which the related services are performed. Deferred costs are limited to the amount of deferred ~~only if the cost can be directly associated with a specific anticipated contract and the recoverability from that contract is deemed to be probable.~~revenues.

Products.Revenue from sale of products is recognized when persuasive evidence of an arrangement exists, the product has been delivered in accordance with the sales contract, the sales price is fixed or determinable and collectibility is reasonably assured.

Revenue from sales of equipment under sales-type lease is recorded at the inception of lease. The Company ~~has adopted~~records the gross finance receivable, unearned income and the estimated residual value of the leased equipment on consummation of sales-type lease. Residual values are estimated based upon the average expected proceeds to be received at the end of the lease term. Unearned income represents the excess of the gross finance receivable plus the estimated residual value over the sales price of the equipment. The Company recognizes unearned income as financing revenue using the interest method over the lease term.

Revenue from sale of third-party software products is recognized in accordance with SOP 97-2, Software Revenue Recognition. In multiple element software arrangements, revenue is allocated to each element based on fair value. The fair value of elements within the scope of SOP 97-2 is determined using Vendor-Specific Objective Evidence (VSOE). In the absence of VSOE for all elements, the residual method is used where VSOE exists for all the undelivered elements. Where VSOE of the undelivered element cannot be determined, revenue for the delivered elements is deferred until the undelivered elements are delivered. If sufficient VSOE does not exist to allocate revenue to the elements and Post-Contract Customer Support (PCS) is the only undelivered element, the entire arrangement fee is recognized ratably over the PCS term. Since there is no reasonable basis of separating the license revenue from PCS, the entire revenue is classified as product revenues.

Multiple Element.For all revenue arrangements with multiple deliverables, based on the guidance in EITF Issue No. 00-21 ~~for all revenue arrangements with multiple deliverables.~~

~~Based on this guidance,~~ the Company recognizes revenues on the delivered products or services only if:

	•		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.

101

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.

The arrangement consideration is allocated to the units of accounting based on their fair values. The revenue recognized for the delivered items is limited to the amount that is not contingent upon the delivery or performance of the undelivered items.

In certain cases, the application of the contingent revenue provisions of EITF Issue No. 00-21 could result in recognizing a loss on the delivered element. In such cases, the cost recognized is limited to the amount of non-contingent revenues recognized and the balance costs are recorded as an asset and are reviewed for impairment based on the estimated net cash flows to be received for future deliverables under the contract. These costs are subsequently recognized on recognition of the revenue allocable to the ~~balance~~remaining deliverables.

Revenues from BPO Services are derived from both time-based and unit-priced contracts. Revenue is recognized as the related services are performed, in accordance with the specific terms of the contract with the customers.

Others. Revenues are shown net of excise duty, sales tax, value added tax, service tax and applicable discounts and allowances.

Recurring operating costs are expensed as incurred. Certain upfront non-recurring costs incurred in the initial phases of outsourcing contracts and contract acquisition costs, are deferred and amortized usually on a straight line basis over the term of the contract. The Company periodically estimates the undiscounted cash flows from the arrangement and compares it with the unamortized costs. If the unamortized costs exceed the undiscounted cash flow, a loss is recognized. Costs that are incurred for a specific anticipated software development services contract and that will result in no future benefits unless the contract is obtained are not included in contract costs. However, such costs are deferred if the cost can be directly associated with a specific anticipated contract and the recoverability from that contract is deemed to be probable.

When the Company receives advance payments from customers for sale of products or provision of services, such payments are reported as advances from customers until all conditions for revenue recognition are met.

~~Volume discount.~~The Company accounts for volume discounts and pricing incentives to customers using the guidance in EITF Issue 01-09, Accounting for Consideration Given by a Vendor to a Customer (Including a Reseller of the Vendor’s Products). The discount terms in the Company’s arrangements with customers generally entitle the customer to discounts, if the customer completes a specified level of revenue transactions. In some arrangements, the level of discount varies with increases in the levels of revenue transactions. The Company recognizes discount obligations as a reduction of revenue based on the ratable allocation of the discount to each of the underlying revenue transactions that result in progress by the customer toward earning the discount. The Company recognizes the liability based on its estimate of the customer’s future purchases. If the Company cannot reasonably estimate the customer’s future purchases, then the liability is recorded based on the maximum potential level of discount. The Company recognizes changes in the estimated amount of obligations for discounts using a cumulative catch-up adjustment.

~~112~~

Warranty costs.The Company accrues the estimated cost of warranties at the time when the revenue is recognized. The accruals are based on the Company’s historical experience of material usage and service delivery costs.

Shipping and handling costs.Shipping and handling costs are included in selling and marketing expenses.

Inventories. Inventories are stated at the lower of cost and market value. Cost is determined using the weighted-average method for all categories of inventories.

Investment securities. The Company classifies its debt and equity securities in one of the three categories: trading, held-to-maturity or available-for-sale, at the time of purchase and re-evaluates such classifications as of each balance sheet date. Trading and available-for-sale securities are recorded at fair value. Held-to-maturity securities are recorded at amortized cost, adjusted for the amortization or accretion of premiums or discounts. Unrealized holding gains and losses on trading securities are included in income. Temporary unrealized holding gains and losses, net of the related tax effect, on available-for-sale securities are excluded from income and are reported as a part of other comprehensive ~~income~~income/(loss) in stockholders’ equity until realized. Realized gains and losses from the sale of trading and available-for-sale securities are determined on a first-in-first out basis and are included in income. A decline in the fair value of any available-for-sale or held-to-maturity security below cost that is deemed to be other than temporary results in a reduction in carrying amount to fair value with a charge to the income statement. Fair value for mutual fund units is based on published per unit value, which is the basis for current transactions. Non-readily marketable equity securities for which there is no readily determinable fair value are recorded at cost, subject to an impairment charge to the income statement for any other than temporary decline in value.

Investments in affiliates. The Company’s equity in the earnings/(losses) of affiliates is included in the statement of income and the Company’s share of net assets of affiliates is included in the balance ~~sheet.~~sheet, subject to an impairment charge to the income statement for any other than temporary decline in value.

102

Shares issued by subsidiary/affiliate. The issuance of stock by a subsidiary/affiliate to third parties reduces the proportionate ownership interest in the investee. Unless the issuance of such stock is part of a broader corporate reorganization or unless realization is not assured, the Company recognizes a gain or loss, equal to the difference between the issuance price per share and the Company’s carrying amount per share. Such gain or loss is recognized in the statement of income when the transaction occurs.

Property, plant and equipment.Property, plant and equipment are stated at cost. The Company depreciates property, plant and equipment over the estimated useful life using the straight-line method. Assets under capital lease and leasehold improvements are amortized over ~~their~~the shorter of estimated useful life or the related lease ~~term, as appropriate.~~term. The estimated useful lives of assets are as follows:


Buildings		30 to 60	years
Plant and machinery		2 to 20 21	years
Computer equipment		2 to 3 6	years
Furniture, fixtures and equipment	5	3 to 10	years
Vehicles		4	years
Computer software for internal use		2 to 6	years

Software for internal use is primarily acquired from third-party vendors and is in ready to use condition. Costs for acquiring this software are capitalized and subsequent costs are charged to the statement of income. The capitalized costs are amortized on a straight-line basis over the estimated useful life of the software.

Deposits paid towards the acquisition of property, plant and equipment outstanding as of each balance sheet date and the cost of property, plant and equipment not ready for use before such date are disclosed under capital work-in-progress. The interest cost incurred for funding an asset during its construction period is capitalized based on the ~~actual investment in the asset~~average accumulated expenditure and the average cost of funds. The capitalized interest is included in the cost of the relevant asset and is depreciated over the estimated useful life of the asset.

Business combinations, goodwill and intangible assets. In accordance with SFAS No. 141, Business Combinations, the Company uses the purchase method of accounting for all business ~~combinations.~~combinations consummated after June 30, 2001. Intangible assets acquired in a business combination are recognized and reported apart from goodwill if they meet the criteria specified in SFAS No. 141. Any purchase price allocated to an assembled workforce is not accounted separately.

In accordance with SFAS No. 142, Goodwill and Other Intangible Assets, all assets and liabilities of the acquired business including goodwill are assigned to the reporting units. The Company does not amortize goodwill but instead tests goodwill for impairment at least annually, using athe two step impairment process.

The fair value of the reporting unit is first compared to its carrying value. The fair value of reporting units is determined using the income ~~approach based on measurement techniques such as discounted cash flow analyses.~~approach. If the

~~113~~

fair value of the reporting unit exceeds the carrying value of the net assets assigned to that unit, goodwill is not impaired. If the carrying value of the net assets assigned to the reporting unit exceeds the fair value of the reporting unit, then the implied fair value of the reporting unit’s goodwill is compared with the carrying value of the reporting unit’s goodwill. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination. If the carrying value of a reporting unit’s goodwill exceeds its implied fair value, then an impairment loss equal to the difference is recorded.

~~Intangible~~The Company amortizes intangible assets ~~acquired individually, with a group of other assets or in a business combination~~over their estimated useful lives unless such lives are ~~carried at cost less accumulated amortization. The~~determined to be indefinite. Amortizable intangible assets are amortized over their estimated useful lives in proportion to the economic benefits consumed in each period. Intangible assets with indefinite lives are tested at least annually for impairment and written down to the fair value as required. The estimated useful lives of the amortizable intangible assets are as follows:


Customer-related intangibles	2 to 5	years

Marketing-related intangibles	2 to 20 30	years

Technology-based intangibles	5	years

Start-up costs. Cost of start-up activities including organization costs are expensed as incurred.

Research and development. Revenue expenditure on research and development is expensed as incurred. Capital expenditure incurred on equipment and facilities that are acquired or constructed for research and development activities and having alternative future uses, is capitalized as tangible assets when acquired or constructed. Software product development costs are expensed as incurred until technological feasibility is achieved.

103

Impairment or disposal of long-lived assets. Long-lived assets and assets group, including certain identifiable intangible assets, to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Such assets are considered to be impaired if the carrying amount of the assets is higher than the future undiscounted net cash flows expected to be generated from the assets. The impairment amount to be recognized is measured by the amount by which the carrying value of the assets exceeds its fair value.

The Company measures long-lived assets held-for-sale, at the lower of carrying amount or fair value, less costs to sell.

Earnings per share. In accordance with SFAS No. 128, Earnings Per Share, basic earnings per share is computed using the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed using the weighted-average number of common and dilutive common equivalent shares outstanding during the period, using the treasury stock method for options and warrants, except where the results would be anti-dilutive.

Dividends.Final dividend on the common stock is recorded as a liability on the date of declaration by the stockholders. Interim dividends are recorded as a liability on the date of declaration by the board of directors.

Income taxes. Income taxes are accounted for using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The deferred tax asset is reduced by a valuation allowance if it is more likely than not that some portion or all of the asset will not be realized. Excess income tax benefit on exercise of employee stock options is credited to additional paid-in capital. The Company recognizes penalties and interest related to unrecognized tax benefits as a component of Other income, net.

The Company adopted FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes - an Interpretation of FASB Statement No. 109 (FIN 48) on April 1, 2007. FIN 48 clarifies the accounting and reporting for uncertainties in income tax law. This Interpretation prescribes a comprehensive model for the financial statement recognition, measurement, presentation and disclosure of uncertain tax positions considered or to be considered in income tax returns. Refer note 21 for additional information relating to impact of adoption of FIN 48.

Stock-based compensation.Effective April 1, 2006, the Company adopted SFAS No. 123 (revised 2004), Share-Based Payment, (SFAS No. 123 (R)), which requires the measurement and recognition of compensation expense for all stock-based payment awards based on the grant-date fair value of those awards. Previously, the Company used the intrinsic value based method, permitted by Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock issued to Employees, to account for its employee stock-based compensation plans and had adopted the pro-forma disclosure provisions of SFAS No. 123, Accounting for Stock-Based Compensation (SFAS No. 123).

awards The Company adopted SFAS No. 123(R) using the modified prospective application method. Under this approach, the Company has recognized compensation expense for share-based payment awards granted prior to, but not yet vested as of April 1, 2006, based on the grant date fair value ~~under Black-Scholes model~~ estimated in accordance with the provisions of SFAS No. 123.

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~~The impact of adoption of SFAS 123 (R) using the modified prospective approach on the Company’s financial statement is given below:~~


	~~Year ended~~
~~Particulars~~	~~March 31, 2007~~

~~Operating Income~~		~~(165.00~~	)
~~Income before income taxes, minority interest and cumulative effect of change in accounting principle~~		~~(165.00~~	)
~~Income before cumulative effect of change in accounting principle~~		~~(165.00~~	)
~~Net Income~~		~~(125.91~~	)
~~Earnings per equity share~~
~~Basic~~		~~(0.09~~	)
~~Diluted~~		~~(0.09~~	)
~~Cash provided by operating activities~~		~~(64.54~~	)
~~Cash provided in financing activities~~		~~64.54~~

SFAS No. 123(R) requires that deferred stock-based compensation previously recorded under APB Opinion No. 25 and outstanding on the date of adoption be eliminated against additional paid-in capital. Accordingly, the deferred compensation balance of Rs. 2,202.42 was eliminated against additional paid-in capital on April 1, 2006.

Under APB Opinion No. 25, the Company had a policy of recognizing the effect of forfeitures only as they occurred. Accordingly, as required by SFAS No. 123 (R), on April 1, 2006, the Company estimated the number of outstanding instruments, which are not expected to vest and recognized a gain of Rs. ~~39.09~~39 representing the reversal of compensation cost for such instruments previously recognized in statement of income as cumulative effect of changes in accounting principle.

~~Had~~ For awards with a graded-vesting schedule, if vesting is based only on a service condition, the Company recognizes the compensation cost ~~for~~on a straight-line basis over the ~~year ended March 31, 2005 and 2006, been determined in a manner consistent with~~requisite service period of the ~~fair value approach described in SFAS No. 123, the Company’s net income and earnings per share as reported would have been reduced to the pro-forma amounts indicated below:~~

Year ended March 31,
2005 2006

Net income, as reported Rs. 15,832.75 Rs. 20,269.97
Add: Stock–based employee compensation expense included in reported net income, net of tax effects 353.86 619.43
Less: Stock-based employee compensation expense determined under fair value based method, net of tax effects (1,598.10 ) (1,190.50 )

Pro-forma net income Rs. 14,588.51 Rs. 19,698.90

Earnings per share: Basic
As reported 11.38 14.41

Pro-forma 10.49 14.01

Earnings per share: Diluted
As reported 11.29 14.24

Pro-forma 10.44 13.87

entire award.

The Company has granted ~~11,376,196, 55,500~~7,050,766, 746,686 and ~~7,056,766~~8,366,676 options under Restricted Stock Unit Plans, at a nominal exercise price of Rs. 2 per share, during the years ended March 31, ~~2005, 2006~~2007, 2008 and ~~2007.~~2009. Since these options have been granted at a nominal exercise price, the ~~intrinsic~~ value on the date of grant approximates the fair value of the ~~options.~~underlying stock.

Derivatives and hedge accounting.The Company purchases forward foreign exchange contracts/option contracts (derivatives) to mitigate the risk of changes in foreign exchange rates on ~~accounts receivable and~~ forecasted cash flows denominated in certain foreign currencies. The strategy also includes purchase of series of short-term forward foreign exchange contracts which are replaced with successive new contracts up to the period in which the forecasted transactions are expected to occur (roll-over hedging). The Company also designates zero-cost collars, which qualify as net purchased options, to hedge the exposure to variability in expected future foreign currency cash ~~inflows due to exchange rate movements beyond a defined range.~~inflows.

104

In accordance with SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended, the Company recognizes all derivatives as assets or liabilities measured at their fair value, regardless of the purpose or intent of holding them. In respect of derivatives designated and effective as cash flow hedges, gains or losses

~~115~~

resulting from changes in the fair value are deferred and recorded as a component of accumulated other comprehensive income within stockholder’s equity until the hedged transaction occurs and are then recognized in the consolidated statements of income along with the hedged item. The Company assesses hedge effectiveness based on overall change in fair value of derivative instrument. However, for derivatives acquired pursuant to roll-over hedging strategy, the forward premium/discount points are excluded from assessing hedge effectiveness.

Changes in fair value for derivatives not designated as hedging derivatives and ineffective portion of the hedging instruments are recognized in consolidated statements of income of each period and are reported within foreign exchange gains/ (losses), net under operating expenses.

In respect of derivatives designated as hedges, the Company formally documents all relationships between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. The Company also formally assesses both at the inception of the hedge and on an ongoing basis, whether each derivative is highly effective in offsetting changes in fair values or cash flows of the hedged item. If it is determined that a derivative is not highly effective as a hedge, or if a derivative ceases to be a highly effective hedge, the Company, prospectively, discontinues hedge accounting with respect to that derivative.

The Company also designates foreign currency forward contracts and net purchased options as hedges of net investments in foreign operations. The effective portion of the hedge is recognized in translation adjustments in other comprehensive income and transferred to consolidated statement of income upon sale or disposal of the foreign operation.

Reclassifications.Certain amounts in the prior years’ consolidated financial statements and notes have been reclassified to ~~confirm~~conform to the current ~~years~~year’s presentation.

Recent accounting pronouncements

~~FASB Interpretation No. 48.~~In July 2006, the FASB issued Interpretation (FIN) No. 48, Uncertainty in Income Taxes. FIN 48 applies to all tax positions within the scope of SFAS No. 109, Accounting for Income Taxes, and clarifies when and how to recognize tax benefits in the financial statements with a two-step approach of recognition and measurement. FIN 48 is effective for fiscal years beginning after December 15, 2006, and, as a result, is effective for the Company commencing April 1, 2007. FIN 48 also requires the enterprise to make explicit disclosures about uncertainties in their income tax positions, including a detailed roll-forward of tax benefits taken that do not qualify for financial statement recognition. The Company is currently evaluating the impact of FIN 48 on the consolidated financial statements.

SFAS No. ~~157.~~141R.In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (SFAS No. 157). SFAS No. 157 defines ‘fair value’ as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. SFAS No. 157 provides guidance on determination of fair value and lays down the fair value hierarchy to classify the source of information used in fair value measurement. The Company is currently evaluating the impact of SFAS No. 157 on its financial statements and will adopt the provisions of SFAS No. 157 for the fiscal year beginning April 1, 2008.

~~SFAS No. 159.~~~~In February~~December 2007, the FASB issued SFAS No. ~~159, The Fair Value Option for Financial Assets and Financial Liabilities (SFAS~~141 (revised 2007), “Business Combinations”(SFAS No. ~~159)~~141R), which is a revision of SFAS No. 141, “Business Combinations”. This statement ~~permits entities~~establishes principles and requirements for how an acquirer: recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed and any non-controlling interest in the acquiree; recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase; and determines what information to ~~choose~~disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. The Company will be required to apply this new standard prospectively to business combinations for which the acquisition date is on or after the beginning of the annual reporting period beginning on or after December 15, 2008. Early adoption is prohibited. The company will adopt this statement effective April 1, 2009 and its effects on future periods will depend on the nature and significance of business combinations subject to SFAS No. 141R.

On April 1, 2009, the Financial Accounting Standards Board (FASB) issued FASB Staff Position No. FAS 141(R)-1, “Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies”(the FSP), to amend and clarify the initial recognition and measurement, subsequent measurement and accounting, and related disclosures arising from contingencies in a business combination under SFAS No. 141R. The effects of this FSP on future periods will depend on the nature and specific facts of business combinations subject to SFAS No. 141R.

SFAS No. 160.In December 2007, the FASB issued SFAS No. 160, “Non-controlling Interests in Consolidated Financial Statements”(SFAS No. 160 — an amendment of ARB No. 51). SFAS No. 160 establishes accounting and reporting standards for ownership interests in subsidiaries held by parties other than the parent, the amount of consolidated net income attributable to the parent and to the non-controlling interest, changes in a parent’s ownership interest and the valuation of retained non-controlling equity investments when a subsidiary is deconsolidated. SFAS No. 160 also establishes disclosure requirements that clearly identify and distinguish between the interests of the parent and the interests of the non-controlling owners. The Company will be required to adopt this new standard for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. The company does not expect the adoption of this statement to have a material effect on the Consolidated Financial Statements.

SFAS No. 161.In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities – An Amendment of FASB Statement No. 133”(SFAS No. 161). SFAS No. 161 requires enhanced disclosures on derivative and hedging activities by requiring objectives to be disclosed for using derivative instruments in terms of underlying risk and accounting designation. This statement requires disclosures on the need of using derivative instruments, accounting of derivative instruments and related hedged items, if any, under SFAS No. 133 and the effect of such instruments and related hedge items, if any, on the financial position, financial performance and cash flows. The Company will be required to adopt this new statement for fiscal years beginning after November 15, 2008. Pursuant to the transition provisions of the statement, the company will adopt SFAS No. 161 in fiscal year 2009 and will present the required disclosures in the prescribed format on a prospective basis. This statement does not impact the consolidated financial results as it is disclosure-only in nature.

105

FSP SFAS 142-3In April 2008, the FASB issued FSP SFAS 142-3, “Determination of the Useful Life of Intangible Assets”(FSP 142-3). This guidance is intended to improve the consistency between the useful life of a recognized intangible asset under SFAS No. 142, “Goodwill and Other Intangible Assets”(SFAS 142), and the period of expected cash flows used to measure ~~many financial instruments and certain other items at~~the fair ~~value. The objective is~~value of the asset under SFAS 141R when the underlying arrangement includes renewal or extension of terms that would require substantial costs or result in a material modification to ~~improve financial reporting by providing entities with~~ the ~~opportunity to mitigate volatility~~asset upon renewal or extension. Companies estimating the useful life of a recognized intangible asset must now consider their historical experience in ~~reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions.~~renewing or extending similar arrangements or, in the absence of historical experience, must consider assumptions that market participants would use about renewal or extension as adjusted for SFAS ~~No. 159~~142’s entity-specific factors. FSP 142-3 is effective for the ~~fiscal year~~Company beginning April 1, ~~2008.~~2009. The Company would be required to adopt this FSP prospectively for all assets acquired after April 1, 2009 and early adoption is ~~currently evaluating~~prohibited. Its effects on future periods will depend on the ~~impact that the adoption~~nature and specific facts of assets acquired subject to SFAS No. ~~159 will have~~142.

FSP 132 (R)-1In December 2008, the FASB issued FSP SFAS 132(R)-1, “Employers’ Disclosures about Postretirement Benefit Plan Assets”(FSP 132(R)-1). This guidance amends SFAS No. 132(R), “Employers’ Disclosures about Pensions and Other Postretirement Benefits”, to require more detailed disclosures about the fair value measurements of employers’ plan assets including (a) investment policies and strategies; (b) major categories of plan assets; (c) information about valuation techniques and inputs to those techniques, including the fair value hierarchy classifications (as defined by SFAS No. 157) of the major categories of plan assets; (d) the effects of fair value measurements using significant unobservable inputs (Level 3) on ~~our~~changes in plan assets; and (e) significant concentrations of risk within plan assets. The disclosures required by the FSP is effective for the Company beginning April 1, 2009. This statement does not impact the consolidated financial ~~statements~~results as it is disclosure-only in nature.

3. Acquisitions

~~The Company completed the following acquisitions during the year ended March 31, 2006.~~Fiscal 2009

~~Wipro BPO~~Citi Technology Services Limited

As of March 31, 2005, the Company’s ownership interest in Wipro BPO was approximately 93%. During the year ended March 31, 2006, the Company acquired the balance 7% of the equity shares from the employee shareholders at fair value for an aggregate consideration of Rs.852.00 million. The step-acquisition resulted in goodwill and intangibles of Rs.304.14 million and Rs.14.86 million respectively.

~~mPower Software Services Inc. and subsidiaries~~

~~In December 2005,~~On January 1, 2009, the Company acquired 100% of the equity of ~~mPower Software~~Citi Technology Services ~~Inc. and subsidiaries (mPower) including the minority shareholding held by MasterCard International in mPact~~Limited (Subsequently renamed as Wipro Technology Services Limited — WTS). WTS is an India ~~a joint venture between MasterCard International and mPower Inc, for an aggregate cash consideration of Rs. 1,274.57 (including direct acquisition costs). mPower Software Services Inc. is a US~~ based ~~company engaged in providing IT services in the payments service sector.~~

As a part of this acquisition, the Company plans to provide MasterCard a wide range of services including application development and maintenance, infrastructure services, package implementation, BPO and testing. The Company believes that through this acquisition, it will be able to expand domain expertise in the payment service sector and increase the addressable market for IT services.

~~116~~

~~The total purchase price has been allocated to the acquired assets and liabilities as follows:~~


~~Description~~	~~Fair value~~

~~Net tangible assets~~	~~Rs.~~	~~185.39~~
~~Customer-related intangibles~~		~~513.13~~
~~Deferred tax liabilities~~		~~(177.50~~	)
~~Goodwill~~		~~753.55~~

~~Total~~	~~Rs.~~	~~1,274.57~~

~~BVPENTE Beteiligungsverwaltung GmbH and subsidiaries~~

In December 2005, the Company acquired 100% of the equity of BVPENTE Beteiligungsverwaltung GmbH and subsidiaries (New Logic). New Logic is a European system-on-chip design company. The consideration included a upfront consideration of Rs. 1,156.54 (including direct acquisition costs), subject to working capital adjustments, and an earn-out of Euro 26.70 to be determined and paid in the future based on financial targets being achieved over a 3 year period. During the year ended March 31, 2007, the Company paid an additional consideration of Rs. 68.76 (Euro 1.18) towards the working capital adjustment. The Company has determined that a portion of the earn-out, up to a maximum of Euro 2.50 is linked to the continuing employment of one of the selling shareholders. The balance earn-out will be recorded as additional purchase price when the contingency is resolved.

The Company believes that through this acquisition, it has acquired strong domain expertise in semiconductor Intellectual Property (IP) cores and complete system-on-chip solutions with digital, analog mixed signal and Radio Frequency (RF) design services. The acquisition also enables the Company to access over 20 customers in the product engineering space.

~~The purchase price has been allocated to the acquired assets and liabilities as follows:~~


~~Description~~	~~Fair value~~

~~Net tangible assets~~	~~Rs.~~	~~307.15~~
~~Customer-related intangibles~~		~~117.40~~
~~Technology-related intangibles~~		~~95.72~~
~~Deferred tax liabilities~~		~~(53.00~~	)
~~Goodwill~~		~~758.03~~

~~Total~~	~~Rs.~~	~~1,225.30~~

~~The Company completed the following acquisitions during the year ended March 31, 2007.~~

~~cMango Inc. and subsidiaries~~

~~In April 2006, the Company acquired 100% of the equity of cMango Inc. and subsidiaries (cMango). cMango is a~~ provider of ~~Business Service Management (BSM) solutions.~~information technology services and solutions to Citi Group worldwide. The consideration (including direct acquisition costs) ~~included~~was comprised of a cash payment of Rs. 884.25 and an earn-out of USD 12.00 to be determined and paid in the future based on specific financial targets being achieved over a two year period. The earn-out will be recorded as additional purchase price when the contingency is resolved.

6,205. The Company believes that ~~through this~~the acquisition it will ~~expand its operations~~enhance Wipro’s capabilities to address Technology Infrastructure Services (TIS) and Application Development and Maintenance Services (ADM) in the ~~Business Management Services sector. This acquisition also enables the Company to access over 20 customers in the Business Management~~financial services ~~sector.~~industry

The purchase price has been preliminarily allocated to the acquired assets and liabilities as follows:


Description	Fair value

~~Net tangible assets/(liabilities)~~Cash and cash equivalents	Rs.	~~(23.08~~1,342	)
Property, plant and equipment		403
Customer-related intangibles		~~132.64~~1,948
~~Deferred tax liabilities~~		~~(46.42~~	)
Goodwill		~~821.11~~3,186
Other assets		1,150
Short-term borrowings and long-term debt		(23	)
Deferred income taxes, net		(545	)
Other liabilities		(1,256	)

Total	Rs.	~~884.25~~6,205

~~RetailBox BV~~ The preliminary allocation of the purchase price included in the current period balance sheet is based on the best estimates of management. The completion of the purchase price allocation may result in adjustments to the carrying value of the WTS recorded assets and ~~subsidiaries~~liabilities, revisions of the useful lives of intangible assets and the determination of any residual amount that will be allocated to goodwill. The related depreciation and amortization from the acquired assets is also subject to revision based on the final allocation.

Others

~~In June 2006,~~During the year ended March 31, 2009, the Company ~~acquired 100% of the equity of RetailBox BV~~paid Rs. 656 towards other acquisitions and ~~subsidiaries (Enabler). Enabler is~~Rs. 816 in ~~the business of providing comprehensive IT solutions and services. The consideration (including direct acquisition costs) included a cash payment of Rs. 2,442.12 and an~~ earn-out ~~of Euro 11.00~~payments relating to ~~be determined and paid~~acquisitions consumated in ~~the future based on specific financial targets being achieved over a two year period. The earn-out will be recorded as additional purchase price when the contingency is resolved.~~prior years.

~~117~~106

~~Through this acquisition~~Fiscal 2008 and 2007

A summary of the Company aims to provide a wide range of services including Oracle retail implementation, digital supply chain, business optimization and integration. Further, through this acquisition, the Company aims to expand domain expertise bothacquisitions completed in the ~~retail~~fiscal 2008 and ~~technology sectors and obtain a presence in five different geographical locations.~~

~~The purchase price has been preliminarily allocated to the acquired assets and liabilities as follows:~~2007 is given below


~~Description~~Name of entity and effective	~~Fair value~~		Management’s assessment of business
date of acquisition	Nature of business		rationale

~~Net tangible assets~~ Unza Holdings Limited and subsidiaries (‘Unza’) (August 2007)	~~Rs.~~	~~388.88~~
~~Customer-related intangibles~~Manufacturer and marketer of personal care products		~~297.92~~	Strengthen the Company’s brand portfolio and market presence in South East Asia and provide synergy in terms of access to common vendors, formulation and brands
~~Deferred tax liabilities~~		~~(104.27~~	)
~~Goodwill~~		~~1,859.59~~

~~Total~~Infocrossing Inc. and subsidiaries (‘Infocrossing’) (September 2007)	~~Rs.~~	~~2,442.12~~IT infrastructure management, enterprise application and business process outsourcing services provider		Broadens the Company’s data center and mainframe capabilities and strengthens its competitive positioning in offering infrastructure management services

India, Middle East and SAARC operations of 3D Networks and Planet PSG (‘3D Group’) (November 2006)	Business communication solutions include consulting, voice, data and converged solutions, and managed services		Complements the Company’s existing practice capabilities and differentiates the Company as a comprehensive IT Solutions provider across segments.

Hydrauto Group AB (‘Hydrauto Group’) (November 2006)	Production, marketing and development of customized hydraulic cylinders solution		Provides an entry into European markets, access to customer base and complementary engineering skills.

Quantech Global Services LLC and Quantech Global Services Ltd (‘Quantech’) (July 2006)	Computer Aided Design and Engineering services		Strengthens Company’s presence in the mechanical engineering design and analysis services sector.

RetailBox BV and subsidiaries (‘Enabler Group’) (June 2006)	Software development services, implementation and support of IS systems for retail industry.		Expansion of the Company’s range of IT solution services (including Oracle retail implementation, digital supply chain, business optimization and integration.) and expand domain expertise.

Saraware Oy (‘Saraware’) (June 2006)	Providing design and engineering services to telecom industry.		Expansion of presence in the engineering services space in Finland and the Nordic region.

Business of North-West Switchgear Limited (‘North –West’) (May 2006)	Manufacturer and distributor of switches, sockets and miniature circuit breakers		Expansion of the presence in electrical product segment

cMango Inc and subsidiaries (‘cMango Group’) (April 2006)	Business management service solutions		Expansion of operations in the Business Management Services sector and access to customers in the Business Management services sector.

~~Northwest Switchgear Limited~~

In May 2006, the Company acquired a substantial portion of the business of North-west Switchgear Limited a manufacturer and distributor of switches, sockets and miniature circuit breakers (collectively ‘the products’) under the trademark/ brand name North-West. The consideration (including direct acquisition costs) included a cash payment of Rs 1,131.66 and an earn-out of Rs. 200.00 to be determined and paid in the future based on achievement of a specified revenue levels over a period of four years. Further, the Company has entered into a non-compete and manufacturing agreement with the sellers. Under the manufacturing agreement, the seller will manufacture the products for the Company based on certain assets and employee retained by the seller. The manufacturing agreement is for a period of five years. Amounts paid by the Company for such manufacturing services will be recorded through the income statement. The earn-outs which are not linked to any post-acquisition services by the seller will be recorded as additional purchase consideration when the contingency is resolved.

Based on the guidance in EITF Issue No. 98-3, Determining Whether a Non-monetary Transaction Involves Receipt of Productive Assets of a Business, the Company has accounted for this transaction as an acquisition of a business. A significant portion of the consideration has been allocated to the trademark/brand name North-West.

~~The~~total purchase price has been ~~preliminarily~~ allocated to the acquired assets and liabilities as follows:


~~Description~~	~~Fair value~~

~~Net tangible assets~~	~~Rs.~~	~~33.75~~
~~Marketing-related intangibles~~		~~1,097.91~~

~~Total~~	~~Rs.~~	~~1,131.66~~

~~Saraware Oy~~

In June 2006, the Company acquired 100% of the equity of Saraware Oy (Saraware) a Company involved in providing design and engineering services to telecom companies. The Company acquired Saraware for an aggregate consideration of Rs. 947.25 (including direct acquisition costs) and an earn-out of Euro 7 to be determined and paid in future based on financial targets being achieved over a period of 18 months. In addition, amounts collected against certain specific reward/ incentive assets at the acquisition date are payable to the sellers. The Company has paid Rs. 148.92 against specific reward/ incentives collected and Rs. 19.33 (Euro 0.33) as earn-out against targets achieved during the period ended March 31, 2007. The earn-out and the additional payments are recorded as additional purchase price when the related contingencies are resolved.

~~Through this acquisition the Company aims to expand its presence in the engineering services space in Finland and the Nordic region.~~

~~The purchase price has been preliminarily allocated to the acquired assets and liabilities as follows:~~


~~Description~~	~~Fair value~~

~~Net tangible assets/(liabilities)~~	~~Rs.~~	~~186.98~~
~~Customer-related intangibles~~		~~254.72~~
~~Deferred tax liabilities~~		~~(89.15~~	)
~~Goodwill~~		~~762.95~~

~~Total~~	~~Rs.~~	~~1,115.50~~

Purchase
consideration Deferred
including tax Intangible
Name of entity earn-outs Net assets liabilities assets Goodwill

Unza Rs. 10,254 Rs. (514 ) Rs. (812 ) Rs. 4,720 Rs. 6,860

Infocrossing 17,640 (5,684 ) (2,395 ) 7,618 18,101

3D Group 1,276 508 (46 ) 72 742

Hydrauto Group 1,412 498 (123 ) 136 901

Quantech 281 (230 ) (16 ) 46 481

Enabler Group 2,968 389 (104 ) 284 2,399

Saraware 1,326 187 (89 ) 338 890

North-West 1,132 34 — 1,098 —

cMango Group 884 (23 ) (46 ) 78 875

Total
Rs. 37,173 Rs. (4,835 ) Rs. (3,631 ) Rs. 14,390 Rs. 31,249

~~118~~107

~~Quantech Global Services~~

In July 2006, the Company acquired 100% of the equity of Quantech Global Services LLC and Quantech Global Services Ltd (Quantech). Quantech provides computer aided design and engineering services. The consideration includes upfront cash payment of Rs. 142.00 (including direct acquisition costs), a deferred cash payment of USD 3.00 and an earn-out to be determined and paid in the future based on specific financial targets being achieved over a period of 36 months. The earn-out will be recorded as additional purchase price when the contingency is resolved.

~~Through this acquisition, the Company aims to strengthen its presence in the mechanical engineering design and analysis services sector.~~

~~The purchase price has been preliminarily allocated to the acquired assets and liabilities as follows:~~


~~Description~~	~~Fair value~~

~~Net tangible assets/(liabilities)~~	~~Rs.~~	~~(230.33~~	)
~~Customer-related intangibles~~		~~45.92~~
~~Deferred tax liabilities~~		~~(16.07~~	)
~~Goodwill~~		~~481.77~~

~~Total~~	~~Rs.~~	~~281.29~~

~~Hydrauto Group~~

In November 2006, the Company acquired 100% of the equity of Hydrauto Group AB (Hydrauto). Hydrauto is engaged in the production, marketing and development of customized hydraulic cylinders solution for mobile applications such as mobile cranes, excavator, dumpers and trucks. The consideration (including direct acquisition cost) included cash payment of Rs. 1,412.17. Through this acquisition the Company aims to gain an entry into Europe, access to a customer base built over the past few decades and complementary engineering skills.

~~The purchase price has been preliminarily allocated to the acquired assets and liabilities as follows:~~


~~Description~~	~~Fair value~~

~~Net tangible assets/(liabilities)~~	~~Rs.~~	~~201.81~~
~~Customer-related intangibles~~		~~73.57~~
~~Deferred tax liabilities~~		~~(24.76~~	)
~~Goodwill~~		~~1,161.55~~

~~Total~~	~~Rs.~~	~~1,412.17~~

~~3D Networks~~

In November 2006, the Company acquired 100% of the equity of the India, Middle East and SAARC operations of 3D Networks and Planet PSG. 3D Networks provides business communication solutions that include consulting, voice, data and converged solutions and managed services. These specialized solutions are deployed in the ITES/IT, Telecom, Banking and Finance, Government and Service segments. Planet PSG provides professional services on voice and speech platforms in the Asia Pacific region. The consideration (including direct acquisition cost) included upfront cash payment of Rs. 903.95 and a maximum earn-out of U.S. dollars 43.78 to be determined and paid in the future based on achieving certain agreed financial targets over a 24 months period. The earn-out will be recorded as additional purchase price when the contingency is resolved. The Company believes that this acquisition is a strategic fit as it complements Wipro’s existing practice capabilities and differentiates Wipro as the most comprehensive IT Solutions provider across segments.

~~The purchase price has been preliminarily allocated to the acquired assets and liabilities as follows:~~


~~Description~~	~~Fair value~~

~~Net tangible assets/(liabilities)~~	~~Rs.~~	~~507.77~~
~~Customer-related intangibles~~		~~136.24~~
~~Deferred tax liabilities~~		~~(45.86~~	)
~~Goodwill~~		~~305.80~~

~~Total~~	~~Rs.~~	~~903.95~~

~~For all the above acquisitions completed during~~ During the year ended March 31, ~~2007,~~2009, the ~~purchase consideration has been allocated on a preliminary basis based on management’s estimates. The~~ Company ~~is in the process of making a final determination of the carrying value of assets and liabilities, which may result in changes in the carrying value of net assets recorded. Finalization of~~completed the purchase price allocation ~~which is expected to be completed during~~in respect of the ~~period ending June 30, 2007 may result in certain adjustments~~acquisitions of Infocrossing and Unza. The following table presents the final allocation of purchase price for Infocrossing and Unza:

Description Infocrossing Unza
Cash and cash equivalents Rs. 775 Rs. 619
Property, plant and equipment 2,038 1,310
Customer-related intangibles 7,618 1,318
Marketing-related intangibles — 3,402
Goodwill 18,101 6,860
Other assets 1,987 2,275
Short-term borrowings and long-term debt (5,326 ) (2,747 )
Deferred income taxes, net (2,395 ) (812 )
Other liabilities (5,158 ) (1,971 )

Total Rs. 17,640 Rs. 10,254

The purchase price allocation to the ~~above allocations.~~identifiable intangible assets included in these financial statements is as follows:

~~119~~

Infocrossing Unza
Intangible assets with determinable lives

Marketing-related intangibles Rs. — Rs. 1,250
Customer-related intangibles 7,618 1,318

Total
Rs. 7,618 Rs. 2,568

Intangible assets with indefinite lives

Marketing-related intangibles Rs. — Rs. 2,152

Total
Rs. — Rs. 2,152

Total intangible assets
Rs. 7,618 Rs. 4,720

The assessment of marketing-related intangibles (brands) that have an indefinite life and those that have a determinable life were based on a number of factors, including the competitive environment, market share, brand history, product life cycles, operating plan and macroeconomic environment of the countries in which the brands operate.

4. Cash and Cash Equivalents

Cash and cash equivalents as of March 31, ~~2006~~2008 and ~~2007 comprise~~2009 are comprised of cash and cash on deposit with ~~banks and highly liquid investments.~~banks.

5. Accounts Receivable

Accounts receivable are stated net of allowance for doubtful accounts. The Company maintains an allowance for doubtful accounts based on financial condition of its customers and aging of the accounts receivable. Accounts receivable are generally not collateralized. The activity in the allowance for doubtful accounts receivable is given below:


	Year ended March 31,									Year ended March 31,
	2005			2006			2007			2007			2008			2009
Balance at the beginning of the year	Rs.	720.02			846.54			1,115.78		Rs.	1,258		Rs.	1,388		Rs.	1,096
Additional provision during the year, net of collections		151.89			275.24			280.02			280			289			939
Bad debts charged to provision		(25.37	)		(6.00	)		(149.68	)
Uncollectable receivables charged against allowance											(150	)		(581	)		(116	)

Balance at the end of the year	Rs.	846.54			1,115.78			1,246.12		Rs.	1,388		Rs.	1,096		Rs.	1,919

108

The increase in provision during the year is primarily attributable to additional reserves recorded by the Company, pursuant to filing of credit protection arrangement by one of the Customer in Canada, the United States and Europe.

6. Inventories

Inventories consist of the following:


	As of March 31,				As of March 31,
	2006		2007		2008		2009
Stores and spare parts	Rs.	198.02	Rs.	297.72	Rs.	455	Rs.	691
Raw materials and components		692.01		1,584.13		2,950		2,668
Work-in-process		288.73		491.21		1,078		694
Finished goods		885.85		1,777.31		2,689		4,633

	Rs.	2,064.61		4,150.37	Rs.	7,172	Rs.	8,686

7. Other Assets

Other assets consist of the following:


	As of March 31,						As of March 31,
	2006			2007			2008			2009
Prepaid expenses	Rs.	1,107.18		Rs.	1,359.05		Rs.	2,800		Rs.	3,509
Prepaid rentals for leasehold land		74.89			596.53			645			1,293
Due from officers and employees		753.68			884.31			1,503			1,359
Advances to suppliers		467.19			711.45			1,373			753
Balances with statutory authorities		130.76			207.12			548			854
Deposits		1,388.89			1,591.01			1,889			2,274
Interest-bearing corporate deposits		500.00			650.00
Interest-bearing deposits with corporate⁽¹⁾								500			4,250
Advance income taxes		3,670.89			4,844.25			6,990			9,933
Deferred contract costs		339.59			397.44			2,864			2,524
Derivative asset		338.11			378.51			1,002			1,165
Others		369.39			751.22			2,192			5,807

		9,140.57			12,370.89			22,306			33,721

Less: Current assets		(7,896.60	)		(10,411.97	)		(19,092	)		(27,040	)

	Rs.	1,243.97		Rs.	1,958.92		Rs.	3,214		Rs.	6,681


(1)		Such deposits earn a fixed rate of interest and will be liquidated within 12 months.

Sales-type leases

Others include receivables on account of sales-type leases and are generally due in monthly, quarterly or semiannual installments over periods ranging from 3 to 5 years

Details of sales-type leases are given below:

As of March 31,
2008 2009
Gross finance receivables Rs. 323 Rs. 4,017
Unguaranteed residual value 84 172
Unearned income (79 ) (765 )

Net investment in finance receivables Rs. 328 Rs. 3,424

As of March 31, 2009, minimum lease receivable for each of the five succeeding fiscal years are as follows:

Year ending March 31, Amount
2010 Rs. 1,024
2011 840
2012 1,022
2013 881
2014 250

Total Rs. 4,017

109

8. ~~Investment~~Investments Securities

~~Investment~~Investments securities consist of the following:

As of March 31, 2006

As of March 31, 2007

As of March 31, 2008

As of March 31, 2009

Gross Unrealized

Gross

Carrying Value

Holding Gains

Fair Value

Carrying Value

Holding Gains

Fair Value

Carrying

Unrealized

Carrying

Unrealized

Value

Gains

Loss

Fair Value

Value

Gains

Loss

Fair Value

Available-for-sale:

Investments in liquid and short-term mutual funds

Rs.

29,816.83

Rs.

498.42

Rs.

30,315.25

Rs.

31,841.47

Rs.

568.96

Rs.

32,410.43

Investment in liquid and short-term mutual funds

Rs.

14,317

Rs.

491

Rs.

—

Rs.

14,808

Rs.

15,133

Rs.

300

Rs.

(221)

Rs.

15,212

Certificate of deposits

—

947

21

—

968

Total

Rs.

14,317

Rs.

491

Rs.

—

Rs.

14,808

Rs.

16,080

Rs.

321

Rs.

(221)

Rs.

16,180

~~120~~

Dividends from available-for-sale securities during the years ended March 31, ~~2005, 2006~~2007, 2008 and ~~2007~~2009 were Rs. ~~679.36,~~1,686, Rs. ~~862.60~~1,428 and Rs. ~~1,685.93~~2,265 respectively and are included in other income.

9. Property, Plant and Equipment

Property, plant and equipment consist of the following:


	As of March 31,						As of March 31,
	2006			2007			2008			2009
Land	Rs.	1,261.14		Rs.	1,571.07		Rs.	2,127		Rs.	2,775
Buildings		4,590.53			6,095.44			9,679			15,275
Plant and machinery		5,545.08			7,870.93			13,327			21,522
Furniture, fixtures and equipment		2,996.87			3,933.58			6,853			7,785
Computer equipment		6,761.66			8,732.29			10,518			12,621
Vehicles		1,324.31			1,821.38			2,417			2,715
Computer software for internal use		1,793.37			2,831.09			2,916			3,773
Capital work-in-progress		6,248.52			10,189.45			13,544			13,052

		30,521.48			43,045.23			61,381			79,518
Accumulated depreciation		(12,744.08	)		(16,503.80	)
Accumulated depreciation and amortization								(21,559	)		(29,656	)

	Rs.	17,777.40		Rs.	26,541.43		Rs.	39,822		Rs.	49,862

Depreciation expense for the years ended March 31, ~~2005, 2006~~2007, 2008 and ~~2007,~~2009 is Rs. ~~2,437.96,~~3,931, Rs. ~~3,101.23~~5,343 and Rs. ~~3,930.56~~6,821 respectively. This includes Rs. ~~194.91,~~400, Rs. ~~205.93~~752 and Rs. ~~385.61~~913 as depreciation of capitalized internal use software, during the years ended March 31, ~~2005, 2006~~2007, 2008 and 2009, respectively.

Property, plant and equipment include assets acquired under capital leases which consist of the following:

As of March 31,
2008 2009
Plant and machinery Rs. 201 Rs. 307
Software — 32
Furniture, fixtures and equipment — 2
Computer equipment 2,045 2,492

2,246 2,833
Accumulated depreciation and amortization (1,145 ) (1,769 )

Rs. 1,101 Rs. 1,064

Depreciation expense in respect of these assets was Rs. 5, Rs. 170 and Rs. 307 for the years ended March 31, 2007, 2008 and 2009 respectively.

110

The following is a schedule of future minimum lease payments under capital leases, together with the present value of the net minimum lease payments as of March 31, 2009.

Year ending March 31, Amount
2010 Rs. 547
2011 404
2012 277
2013 228
2014 135
Thereafter 70

Total minimum lease payments 1,661
Less: Amount representing interest (243 )

Present value of net minimum lease payments Rs. 1,418
Less: Current portion of obligation under capital leases (504 )

Obligations under capital leases, excluding current portion Rs. 914

10. Goodwill and Other Intangible Assets

~~Information regarding the~~The Company’s intangible assets acquired either individually or in a business combination consists of the following:


													As of March 31,
	As of March 31,												2008						2009
	2006						2007						Gross						Gross
	Gross carrying		Accumulated				Gross carrying		Accumulated				carrying		Accumulated				carrying		Accumulated
	amount		Amortization		Net		amount		Amortization		Net		amount		Amortization		Net		amount		Amortization		Net
Technology-based intangibles	Rs.	130.02	Rs.	34.07	Rs.	95.95	Rs.	130.02	Rs.	71.40	Rs.	58.62	Rs.	130	Rs.	103	Rs.	27	Rs.	130	Rs.	127	Rs.	3
Customer-related intangibles		1,050.27		600.39		449.88		2,147.45		937.29		1,210.16		4,585		1,518		3,067		13,175		2,758		10,417
Marketing-related intangibles		382.43		73.93		308.50		1,480.48		78.42		1,402.06
Marketing-related intangibles*														9,172		190		8,982		4,882		461		4,421
Effect of translation adjustment														464		60		404		3,371		608		2,763

	Rs.	1,562.72	Rs.	708.39	Rs.	854.33	Rs.	3,627.935	Rs.	1,087.11	Rs.	2,670.84	Rs.	14,351	Rs.	1,871	Rs.	12,480	Rs.	21,558	Rs.	3,954	Rs.	17,604


*		Gross carrying amount for marketing-related intangibles include indefinite life intangible asset of Rs. 4,873 and 2,152 as of March 31, 2008 and 2009 respectively.

During the year ended March 31, 2009, the Company completed the purchase price allocation of Infocrossing and Unza. Please refer to the discussion on finalization of purchase price allocation in Note 3 of the Notes to Consolidated Financial Statements.

The estimated amortization expense for intangible assets for the five succeeding years is set out below:


Year ending March 31,	Amount		Amount

2008	Rs.	492.02
2009		460.19
2010		350.57	Rs.	1,524
2011		152.75		1,390
2012		55.57		1,267
Thereafter		1,159.74
2013				1,242
2014				1,229

Total	Rs.	2,670.84	Rs.	6,652

The movement in goodwill balance is given below:


	Year ended March 31,					Year ended March 31,
	2006		2007			2008			2009
Balance at the beginning of the year	Rs.	5,614.98	Rs.	7,480.85		Rs.	12,706		Rs.	38,943
Goodwill relating to acquisitions (Note 3)		1,851.01		5,392.77
Goodwill relating to acquisitions including earn-out payments (Note 3, 13)							26,270			4,831
Adjustment relating to finalization of purchase price allocation		—		(103.60	)		(215	)		(635	)
Tax benefit allocated to goodwill		—		(14.40	)		(51	)		—
Effect of translation adjustments		14.86		(57.91	)		233			6,363

Balance at the end of the year	Rs.	7,480.85	Rs.	12,697.71		Rs.	38,943		Rs.	49,502

~~121~~111

Goodwill as of March 31, ~~2006~~2008 and ~~2007~~2009 has been allocated to the following ~~reportable~~ segments:


					As of March 31,
Segment	As of March 31,				2008		2009
	2006		2007
IT Services and Products	Rs.	2,742.39	Rs.	6,502.71
BPO Services		3,982.00		3,982.00
India and AsiaPac IT Services and Products		756.46		1,044.63
IT Services					Rs.	32,672	Rs.	39,724
IT Products						278		581
Consumer Care and Lighting						4,641		7,933
Others		—		1,168.37		1,352		1,264

Total	Rs.	7,480.85	Rs.	12,697.71	Rs.	38,943	Rs.	49,502

11. Other ~~Current~~ Liabilities

Other ~~current~~ liabilities consist of the following:


	As of March 31,				As of March 31,
	2006		2007		2008		2009
Statutory dues payable	Rs.	1,820.99	Rs.	2,634.92
Taxes payable		3,044.10		4,573.00
Dividends payable		—		7,237.88
Income taxes payable					Rs.	3,617	Rs.	5,852
Statutory dues and other taxes payable						5,663		8,370
Warranty obligations		664.86		742.03		924		969
Derivative liability		12.53		109.89		2,571		12,024
Liability for retirement benefits						479		652
Others		505.47		1,325.44		2,276		1,886

	Rs.	6,047.95	Rs.	16,623.16		15,530		29,753
Less: Current liabilities						12,519		26,121

					Rs.	3,011	Rs.	3,632

The activity in warranty obligations is given below:


	Year ended March 31,									Year ended March 31,
	2005			2006			2007			2007			2008			2009
Balance at the beginning of the year	Rs.	357.36			361.08			664.86		Rs.	665		Rs.	742		Rs.	924
Additional provision during the year		373.46			601.20			827.32			827			1,016			683
Reduction due to payments		(369.74	)		(297.42	)		(750.15	)		(750	)		(834	)		(638	)

Balance at the end of the year	Rs.	361.08			664.86			742.03		Rs.	742		Rs.	924		Rs.	969

12. Operating Leases

The Company leases office and residential facilities under cancelable and non-cancelable operating lease agreements that are renewable on a periodic basis at the option of both the lessor and the lessee. Rental payments under such leases were Rs. ~~566.85,~~1,412, Rs. ~~848.85~~1,880 and Rs. ~~1,412.25~~2,526 for the years ended March 31, ~~2005, 2006~~2007, 2008 and ~~2007,~~2009, respectively.

Details of contractual payments under non-cancelable leases are given below:


Year ending March 31, 2008		394.66
2009		358.07
Year ending March 31,			Amount
2010		340.91	Rs.	1,064
2011		279.35		1,018
2012		247.25		1,002
2013				820
2014				830
Thereafter		953.15		3,168

Total	Rs.	2,573.39	Rs.	7,902

Prepaid rentals for leasehold land included under Other assets, represent leases obtained for a period ofranging from 60 ~~years and~~to 90 years. The prepaid expense is being charged over the lease term ~~and is included under other assets.~~to the statement of income.

~~122~~

13. Investments in Affiliates

Wipro GE Medical Systems (Wipro GE)

The Company has accounted for its 49% interest in Wipro GE by the equity method. The carrying value of the investment in Wipro GE as of March 31, ~~2006~~2008 and ~~2007,~~2009 was Rs. ~~841.57~~1,343 and Rs. ~~1,119.65,~~1,670 respectively. The Company’s equity in the income of Wipro GE for ~~years~~year ended March 31, ~~2005, 2006~~2007, 2008 and ~~2007~~2009 was Rs. ~~125.95,~~302, Rs. ~~259.16~~257 and Rs. ~~302.22~~362 respectively.

112

     ~~In March 2004, 2005 and 2006,~~
     Wipro GE ~~had~~ received tax demands ~~aggregating Rs.843.81, including interest, from Indian income tax authorities~~ for the financial years ended March 31, 2001, 2002, 2003 and ~~2003.~~2004 aggregating to Rs 976, including interest. The tax demands were primarily on account of transfer pricing adjustments and denial of export benefits and tax holiday benefits claimed by Wipro GE under the Indian Income Tax Act, 1961 (the Act). ~~Additionally, in December 2006,~~ Wipro GE ~~received tax demands aggregating Rs.132.42, including interest, from Indian income tax authorities for the financial years ended March 31, 2004 on similar grounds. Wipro GE has~~ appealed against the said demands before the first appellate authority. The first appellate authority vacated the tax demands for the years ended March 31, 2001, 2002, 2003 and 2004. The income tax authorities have filed an appeal for the years ended March 31, 2001, 2002, 2003 and 2004. In December 2008, Wipro GE received, on similar grounds, an additional tax demand of Rs. 552 (including interest) for the financial year ended March 31, ~~2001.~~2005. Wipro GE has filed an appeal against the said demand within the time limits permitted under the statute.
     Considering the facts and nature of disallowance and the order of the appellate authority upholding the claims of Wipro GE, Wipro GE believes that the final outcome of the disputes should be in favour of Wipro GE and the contingency will not have any material adverse effect on ~~the~~its financial position and results of operations. The range of loss due to this contingency is between zero and the amount ofto which the demand ~~raised.~~
~~WeP Peripherals (WeP)~~
     The Company previously accounted for its 36.9% interest as of March 31, 2006 in WeP by the equity method. The carrying value of the equity investment in WeP Peripherals as of March 31, 2006 was Rs. 201.52.
     In December 2006, the Company sold a portion of its interest in WeP Peripherals for a consideration of Rs. 160.00 and recorded a net gain of Rs 40.16. Subsequent to this sale, the Company’s ownership interest in WeP Peripherals is reduced to 15% and the Company does not have the ability to exercise significant influence over the operating and financial policies of WeP Peripherals. Accordingly, the Company has subsequently accounted for the balance investment of Rs. 79.86 under the cost method.
~~WM Net Serv~~
     The Company has accounted for its 80.1% ownership interest in WM NetServ by the equity method as the minority shareholder in the investee has substantive participative rights as specified in EITF Issue No. 96-16, Investor’s Accounting for an Investee When the Investor Has a Majority of the Voting Interest but the Minority Shareholder or Shareholders Have Certain Approval or Veto Rights. The carrying value of the equity investment in WM Net Serv as of March 31, 2007 was Rs. 122.14. The Company’s equity in the loss of WM Net Serv for year ended March 31, 2007 was Rs. 24.50.raised.
14. Financial Instruments and Concentration of Risk
     Concentration of risk. Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, investments in liquid and short-term mutual funds, other investments securities, derivative financial instruments, accounts receivable and corporate deposits. The Company’s ~~cash resources~~funds are invested with financial institutions and commercial corporations with high investment grade credit ratings. Limits have been established by the Company as to the maximum amount of cash that may be invested with any such single entity. To reduce its credit risk, the Company performs ongoing credit evaluations of customers. No single customer accounted for ~~10%~~5% or more of the accounts receivable as of March 31, ~~2006~~2008 and ~~2007~~2009 and revenues for the years ended March 31, ~~2005, 2006~~2007, 2008 and ~~2007.~~2009.
     Derivative financial instruments. The Company is exposed to foreign currency fluctuations on foreign currency assets ~~and~~/ liabilities, forecasted ~~cash flows~~revenues denominated in foreign ~~currency.~~currency and net investments in foreign operations. The Company follows established risk management policies, including the use of derivatives to hedge foreign currency assets ~~and~~/ liabilities, foreign currency forecasted ~~cash flows. The~~revenues and net investments in foreign operations. In these derivative instruments a bank is generally the counter party ~~is a bank~~ and the Company considers the risks of non-performance by ~~the~~such counterparty as non-material. The Company enters into master agreements with the counter parties. These master agreements contain netting-off provisions, which partially mitigate the credit exposure to counter-parties. The company closely monitors the credit worthiness of counterparties. A majority of the forward foreign exchange/option contracts mature between one to twelve months and the forecasted transactions are expected to occur during the same period. The balance portions of these forward foreign exchange / option contracts mature between twelve to sixty months.
~~123~~

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


	As of March 31,				As of March 31,
	2006		2007		2008		2009
Forward contracts
Sell	$	592.23	$	345.00	$	2,775	$	1,374
	£	4.00	€	16.00	€	105	€	79
			£	87.6	£	61	£	53

Buy		—	$	184.56	$	435	$	438
					¥	7,580	¥	23,170
Net purchased options (sell)	$	254.00	$	36.00

Net purchased options (to sell)					$	641	$	562
	£	8.00	€	13.00	€	24	€	—
					£	84	£	54
Net written options (sell)	$	6.00		—
	£	5.00		—	¥	7,682	¥	6,130

Cross-currency interest rate swap					¥	—	¥	35,016

In connection with cash flow hedges, the Company has recorded Rs. ~~113.81,~~72, Rs. ~~202.34,~~(1,097) and Rs. ~~71.86~~(16,859) of net gains/(losses) as a component of accumulated ~~and~~ other comprehensive income within stockholders’ equity as at March 31, ~~2005, 2006~~2007, 2008 and 2009, respectively. Out of net losses in connection with cash flow hedges accumulated in other comprehensive income within shareholders equity Rs. 6,102 will be reclassified into earnings over the period of next 12 months. The Company has also recognized a mark to market loss of Rs. Nil, Rs. 495 and Rs. 4,410 for the period ended March 31, 2007, ~~respectively.~~2008 and 2009 respectively, relating to changes in fair value of derivative financial instruments, designated as hedges of net investment in non-integral foreign operations, in translation adjustments in other comprehensive income.

113

The following table summarizes activity in the accumulated ~~and~~ other comprehensive ~~income~~income/(loss) within stockholders’ equity related to all derivatives classified as cash flow hedges during the years ended March 31, ~~2005, 2006~~2007, 2008 and ~~2007.~~2009.


	As of March 31,									As of March 31,
	2005			2006			2007			2007			2008			2009
Balance as at the beginning of the year	Rs.	1,058.97		Rs.	113.81		Rs.	202.34		Rs.	202		Rs.	72		Rs.	(1,097	)

Net gains reclassified into net income on occurrence of hedged transactions		(1,058.97	)		(113.81	)		(202.34	)
Net (gain)/loss reclassified into net income on occurrence of hedged transactions											(202	)		(72	)		1,019
Deferred cancellation losses relating to roll-over hedging		(159.60	)		—			—			—			—			(11,357	)
Changes in fair value of effective portion of outstanding derivatives		273.41			202.34			71.86			72			(1,097	)		(5,424	)

Unrealized gain/(losses) on cash flow hedging derivatives, net		(945.16	)		88.53			(130.48	)
Unrealized gain/ (loss) on cash flow hedging derivatives, net											(130	)		(1,169	)		(15,762	)


Balance as at the end of the year	Rs.	113.81		Rs.	202.34		Rs.	71.86		Rs.	72		Rs.	(1,097	)	Rs.	(16,859	)

As of March 31, ~~2006~~2008 and ~~2007~~2009 there were no significant gains or losses on derivative transactions or portions thereof that have become ineffective as hedges, or associated with an underlying exposure that did not occur.

15. ~~Borrowings~~Accumulated Other Comprehensive Income

The accumulated other comprehensive income also includes the translation reserve. The opening and closing balance in translation reserve is given below:

Year ended March 31,
2007 2008 2009
Balance at the beginning of the period Rs. (89 ) Rs. (220 ) Rs. (110 )
Translation adjustments (131 ) 605 9,181
Movement in effective portion of hedges of net investment in foreign operations — (495 ) (4,410 )

Balance at the end of the period Rs. (220 ) Rs. (110 ) Rs. 4,661

16. Debt

Short-term borrowings from ~~Banks~~banks primarily consist of lines of credit of approximately Rs. 9,387, US$ 513, JPY 22,026, SEK 87, SAR 90 and RM (Malaysian Ringgit) 284 from bankers primarily for working capital requirements. Out of these, as of March 31, 2009, the Company has unutilized lines of credit aggregating Rs. 5,238, US$ 171, SEK 7, SAR 15 and RM 167 respectively. To utilize these unused lines of credit, we require consent of the lender and compliance with the certain financial covenants. Additionally, the Company has lines of credit in various other currencies equivalent to Rs. 2,468, of which Rs. 2,265 is unutilized as of March 31, 2009. Significant portion of the aforementioned lines of credit are revolving credit facilities and floating rate foreign currency loans, renewable quarterly. These facilities bear floating rate of interest, referenced to LIBOR and a spread, determined based on market condition.

The Company has ~~an Indian line~~non-fund based revolving credit facilities in various currencies equivalent to Rs. 10,663 for operational requirements that can be used for the issuance of letters of credit and bank guarantees. As of March 31, 2009, an amount of Rs. ~~6,985.50, a US line~~3,229 was unutilized out of ~~credit~~these non-fund based facilities.

A summary of ~~US$ 25.00 and a UK line of credit of GBP 6 from its bankers for working capital requirements. All~~long- term debt is as follows:

As of March 31, 2008 As of March 31, 2009
Foreign Indian Foreign Indian Final
Currency currency Rupee currency Rupee Interest rate maturity
Unsecured external commercial borrowing
Japanese Yen 35,016 Rs. 14,070 35,016 Rs. 18,052 3.56 % 2013
Unsecured term loan
Indian Rupee NA 245 NA 631 6.05 % 2014

114

As of March 31, 2008 As of March 31, 2009
Foreign Indian Foreign Indian Final
Currency currency Rupee currency Rupee Interest rate maturity
Euro 3 186 0.05 3 3.70 % 2010
Secured term loan
Swedish Krona 63 427 37 230 2.25 % 2013

14,928 18,916
Less: Current portion 406 235

Long term debt, less current portion Rs. 14,522 Rs. 18,681

The company has entered into cross-currency interest rate swap (CCIRS) in connection with the ~~lines of credit are renewable annually. The Indian line of credit bears interest at~~unsecured external commercial borrowing. Please refer to the ~~prime rate~~discussion on CCIRS in Note 19 of the ~~bank, which averaged 8.5% for~~Notes to Consolidated Financial Statements.

Principal payments required on long-term debt in each of the next five fiscal years ~~ended~~ending March 31 ~~2006~~are as follows

Year ending March 31, Amount
2010 Rs. 235
2011 227
2012 184
2013 18,210
2014 60

Total Rs. 18,916

The unsecured external commercial borrowing contains certain covenants that limit future borrowings and ~~2007.~~payments towards acquisitions in a financial year. The ~~US line~~terms of ~~credit bears interest at 60 basis points over~~ the ~~US$ London Inter-Bank Offered Rate~~other secured and ~~UK line~~unsecured debt and borrowings also contain certain restrictive covenants primarily requiring the Company to maintain certain financial ratios. As of ~~credit bears interest at 70 basis points over~~March 31, 2009, the ~~GBP London Inter-Bank Offered Rate. The facilities~~Company has met the relevant covenants.

A portion of the above short-term borrowings and long-term debt aggregating to Rs. 876 are secured by inventories, accounts receivable and certain property, plant and ~~contain financial covenants~~equipment.

Interest expense was Rs. 125, Rs. 1,440 and ~~restrictions on indebtedness. During~~Rs. 2,691 for the year ended March 31, 2007, ~~as a part of its acquisition,~~2008 and 2009 respectively. Interest capitalized by the Company ~~assumed bank borrowings amounting to~~was Rs. ~~366~~Nil, Rs. 419 and Rs. ~~459~~359 for ~~Saraware and Hydrauto Group respectively.~~

~~16. Stock Dividend~~

In June 2004, the members of the Company approved a stock dividend in the ratio of 2 additional equity shares or ADS for every equity share or ADS held. Accordingly, the Company has issued 465,631,260 additional shares and has transferred an amount of Rs. 931.26 from retained earnings to equity shares. Share and per share data for all periods reported have been adjusted to reflect the stock dividend. In accordance with the shareholder’s approval, capitalization of retained earnings aggregating Rs. 931.26 has been recorded during the year ended March 31, ~~2005.~~

~~124~~

In July 2005, the members of the Company approved a stock dividend, effective August 24, 2005, in the ratio of 1 additional equity shares or ADS for every equity share or ADS held. Accordingly, the Company issued 705,893,574 additional shares2007, 2008 and has transferred an amount of Rs. 1,161.75 from additional paid in capital and Rs. 250.04 from retained earnings, to equity shares. The allocation between additional paid in capital and retained earnings is in line with the local statutory accounts. Share and per share data for all periods reported have been adjusted to reflect the stock split effected in the form of stock dividend. In accordance with the shareholder’s approval, capitalization of additional paid in capital and retained earnings aggregating Rs. 1,411.79 has been recorded in the year ended March 31, 2006.2009 respectively.

17. Equity Shares and Dividends

Currently, the Company has only one class of equity shares. For all matters submitted to vote in the shareholders meeting, every holder of equity shares, as reflected in the records of the Company on the date of the shareholders meeting shall have one vote in respect of each share held.

~~In October 2000, the Company made a public offering of its American Depositary Shares, or ADSs, to international investors.~~ The ~~equity shares represented by the ADS carry similar rights as to voting and dividends as the other equity shares.~~

~~In July 2005, the members of the company approved for increase in~~ authorized capital of the ~~Company from 750,000,000 to 1,650,000,000.~~

~~Dividends are paid in Indian rupees. Indian law mandates that any dividend, exceeding 10% of the~~company is 1,650,000,000 equity shares ~~can~~of Rs. 2 each at par value as of March 31, 2009. During the year ended March 31, 2009, the company issued 968,803 shares to its wholly owned trust (Wipro Inc Benefit Trust) pursuant to a common control transaction.

During the year ended March 31, 2009, the Company completed the merger of a few of its subsidiaries with Wipro Limited, the parent entity. Pursuant to the terms of merger approved by the courts in India, Company issued 968,803 fully paid equity shares of Rs 542 to a controlled trust. This transaction was determined to be ~~declared out of distributable profits only after the~~a common control transfer, ~~of up to 10% of net income computed~~ in accordance with ~~current regulations~~the guidance in SFAS No. 141 and EITF 02-5, Definition of ‘Common Control’ in relation to ~~a general reserve. Also, the remittance of dividends outside India is governed by Indian law on foreign exchange. Dividend payments are also subject to applicable taxes.~~

In the event of liquidation of the affairs of the Company, all preferential amounts, if any, shall be discharged by the Company. The remaining assets of the Company, after such discharge, shall be distributedFASB Statement No. 141, Accordingly, no adjustments were made to the ~~holders~~carrying value of ~~equity shares in proportion to the number of shares held by them.~~assets and liabilities.

The Company paid cash dividends of Rs. ~~7,575.99,~~16,111, Rs. ~~3,997.74~~5,123 and Rs. ~~8,128.58~~6,829 during the years ended March 31, ~~2005, 2006~~2007, 2008 and ~~2007.~~2009 respectively. The dividends per share were Rs. ~~4.84,~~10, Rs. ~~2.50~~3 and Rs. 54 during the years ended March 31, ~~2005, 2006~~2007, 2008 and ~~2007,~~2009, respectively. Additionally, in March 2007, the Board of Directors of the Company approved an additional cash dividend of Rs. 5 per share totaling Rs. 8,253.05. In accordance with Indian regulations, an amount equivalent to the additional cash dividend, net of taxes, amounting to Rs. 7,237.88 has been transferred to a specific bank account pending payment to the shareholders. The balance in this bank account can only be used to pay the specified dividend, is not available for general use and is accordingly reflected as restricted cash in the consolidated balance sheet.

18. Retained Earnings

Retained earnings as of March 31, ~~2006~~2008 and ~~2007, also~~2009, include Rs. ~~922.01~~1,294 and Rs. ~~1,084.49~~1,621 respectively, of undistributed earnings in equity of affiliates.

115

19. Other Income, Net

Other income consists of the following:


	Year ended March 31,									Year ended March 31,
	2005			2006			2007			2007			2008			2009
Interest income	Rs.	35.79		Rs.	198.09		Rs.	682.51		Rs.	683		Rs.	1,505		Rs.	1,930
Interest expense		(56.12	)		(34.95	)		(260.81	)		(261	)		(1,064	)		(2,332	)
Dividend income		679.36			862.60			1,685.93			1,686			1,428			2,265
Gain on sale of investment securities, net		35.59			237.72			549.27
Gain on sale of investment securities											549			771			681
Foreign exchange loss, net											(39	)		(496	)		(4,535	)
Others		104.20			12.40			9.94			10			23			175
										Rs.	2,628		Rs.	2,167		Rs.	(1,816	)
	Rs.	798.82		Rs.	1,275.86		Rs.	2,666.84

~~125~~

Foreign exchange gain / (losses) relates to exchange gain/ (losses) on debt denominated in foreign currency and derivative financial instruments related to such foreign currency debt.

The Company purchased a CCIRS in conjunction with a Yen-denominated External Commercial Borrowing (ECB) to offset its U.S. Dollar denominated foreign currency exposure arising from its investment in Wipro Inc. (a subsidiary). While the CCIRS along with the Yen-denominated ECB, is an economic hedge of the net investment in the foreign operation, this combination does not qualify as a hedging instrument within SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities and its related guidance. Accordingly, the total mark to market losses on such CCIRS along with exchange loss on Yen-denominated ECB amounting to Rs 3,973 has been accounted for in the income statement within Other income, net above.

20.20. Shipping and Handling Costs

Selling and marketing expenses for the years ended March 31 ~~2005, 2006~~2007, 2008 and ~~2007,~~2009, include shipping and handling costs of Rs. ~~356.96,~~807, Rs. ~~555.37~~1,039 and Rs. ~~807.03~~885 respectively.

21. Income Taxes

Income taxes have been allocated as follows:


	Year ended March 31,								Year ended March 31,
	2005		2006			2007			2007			2008			2009
Income from continuing operations	Rs.	2,693.57	Rs.	3,264.73		Rs.	3,722.61		Rs.	3,723		Rs.	3,873		Rs.	5,422
Stockholders equity for:
Income tax benefits relating to employee stock options		—		(69.34	)		(64.54	)
Income tax benefits relating to employee stock incentive plans										(65	)		(68	)		(18	)
Gain on sale of long-lived asset to the controlling shareholder										—			52			—
Adjustments to initially apply SFAS No. 158		—		—			(18.05	)		(18	)		—			—
Unrealized gains on investment securities, net		59.59		114.94			25.48
Unrecognized actuarial (gain)/loss, net										—			(17	)		27
Unrealized gains / (loss) on investment securities, net										25			(25	)		(131	)
Unrealized gain / (loss) on cash flow hedging derivatives										—			—			(2,353	)
Tax benefit allocated to goodwill		—		—			(14.40	)		(14	)		(51	)		—

Total income taxes	Rs.	2,753.16	Rs.	3,310.33		Rs.	3,651.10		Rs.	3,651		Rs.	3,764		Rs.	2,947

Income taxes relating to continuing operations consist of the following:


	Year ended March 31,									Year ended March 31,
	2005			2006			2007			2007			2008			2009
Current taxes
Domestic	Rs.	1,642.97		Rs.	1,605.19		Rs.	1,574.59		Rs.	1,575		Rs.	2,641		Rs.	3,683
Foreign		1,133.65			1,644.57			2,176.78			2,177			1,641			2,538

	Rs.	2,776.62		Rs.	3,249.76		Rs.	3,751.37		Rs.	3,752		Rs.	4,282		Rs.	6,221


Deferred taxes
Domestic		(70.45	)		(7.82	)		(0.95	)		(1	)		(319	)		(291	)
Foreign		(12.60	)		22.79			(27.81	)		(28	)		(90	)		(508	)

		(83.05	)		14.97			(28.76	)		(29	)		(409	)		(799	)

Total income tax expense	Rs.	2,693.57		Rs.	3,264.73		Rs.	3,722.61		Rs.	3,723		Rs.	3,873		Rs.	5,422

116

The reconciliation between the provision of income tax of the Company and amounts computed by applying the Indian statutory income tax rate is as follows:


	Year ended March 31,									Year ended March 31,
	2005			2006			2007			2007			2008			2009
Income before taxes, minority interest and cumulative effect of change in accounting principle	Rs.	18,607.53		Rs.	23,536.10		Rs.	32,852.51
Income before taxes and minority interest										Rs.	32,852		Rs.	36,138		Rs.	39,936
Enacted income tax rate in India		36.59	%		33.66	%		33.66	%		33.66	%		33.99	%		33.99	%

Computed expected tax expense		6,808.50			7,922.25			11,058.15			11,058			12,283			13,574
Effect of:
Income exempt from tax		(4,706.64	)		(5,129.26	)		(7,498.43	)		(7,948	)		(8,450	)		(10,368	)
Basis differences that will reverse during the tax holiday period		245.03			291.24			526.12
Income taxed at higher rates		111.59			229.95			124.56
Loss on direct issue of stock by subsidiary		75.74			—			—
Basis differences that will reverse during a tax holiday period											526			(21	)		350
Income taxed at higher/ (lower) rates											125			(50	)		(229	)
Income taxes relating to prior years		122.23			(175.15	)		(701.90	)		(702	)		(530	)		(369	)
Effect of change in tax rates		(9.62	)		17.14			—			—			5			—
Changes in valuation allowances											7			138			314
Expenses disallowed for tax purposes		—			111.37			197.31			647			481			2150
Others, net		46.74			(2.81	)		16.80			10			17			—

Total income tax expense	Rs.	2,693.57		Rs.	3,264.73		Rs.	3,722.61		Rs.	3,723		Rs.	3,873		Rs 5,422

A substantial portion of the profits of the Company’s India operations are exempt from Indian income taxes being profits attributable to export operations and profits from undertakings situated in Software Technology and Hardware Technology Parks. Under the tax holiday, the taxpayer can utilize an exemption from income taxes for a period of any ten consecutive years. The ~~Company has opted for this exemption from the year ended March 31, 1997, for undertakings situated in~~tax holidays on all facilities under Software Technology and Hardware Technology ~~Parks.~~Parks were scheduled to expire in stages with a mandated maximum expiry period of March 31, 2009. However, on May 10, 2008, the Finance Act, 2008 extended the availability of the ten year tax holiday by a period of one year such that the tax holiday will now be available until the earlier of fiscal year 2010 or ten years after the commencement of a tax holiday for an individual undertaking. Additionally, under the Special Economic Zone Act, 2005 scheme, units in designated special economic zones which being providing services on or after April 1, 2005 will be eligible for a deduction of 100 percent of profits or gains derived from the export of services for the first five years from commencement of provision of services and 50 percent of such profits and gains for a further five years. Certain tax benefits are also available for a further five years subject to the unit meeting defined conditions. Profits from certain other undertakings are also eligible for preferential tax treatment. In addition, dividend income from certain category of investments is exempt from tax.

The aggregate rupee and per share (basic) effects of ~~these~~ tax exemptions, are Rs. ~~4,706.64~~7,948 and Rs. ~~3.39~~5.57 per share for the year ended March 31, ~~2005,~~2007 , Rs. ~~5,129.26~~8,450 and Rs. ~~3.64~~5.82 per share for the year ended March 31, ~~2006~~2008 and Rs. ~~7,498.43~~10,368 and Rs. ~~5.26~~7.13 per share for the year ended March 31, ~~2007.~~2009.

~~126~~

The components of the net deferred tax asset are as follows:


	As of March 31,						As of March 31,
	2006			2007			2008			2009
Deferred tax assets
Allowance for doubtful accounts	Rs.	105.44		Rs.	217.14		Rs.	193		Rs.	260
Accrued expenses and liabilities		224.28			313.46			553			766
Carry-forward capital losses		56.26			—
Carry-forward business losses		917.37			1,019.20			2,224			2,790
Minimum alternate tax								126			126
Loss on hedging derivatives								—			2,353
Deferred income								309			420
Others		60.91			69.06			35			7

Total gross deferred tax assets		1,364.26			1,618.86			3,440			6,722
Less: valuation allowance		(524.55	)		(531.13	)		(619	)		(932	)

Net deferred tax assets	Rs.	839.71		Rs.	1,087.73		Rs.	2,821		Rs.	5,790


Deferred tax liabilities
Property, plant and equipment	Rs.	22.43		Rs.	79.88		Rs.	419		Rs.	533
Intangible assets		202.01			560.03			2,760			4,464
Amortizable goodwill		63.60			84.80
Undistributed earnings of affiliates		153.49			196.83
Unrealized gains on investment securities, net		174.45			199.93

Total gross deferred tax liability		615.98		Rs.	1,121.47
Amortizable tax goodwill								472			527
Unrealized gains on investments securities								175			42
Investment in affiliates								246			320
Others								57			119
Total gross deferred tax liabilities							Rs.	4,129		Rs.	6,005

Net deferred tax assets / (liabilities)	Rs.	223.73		Rs.	(33.74	)	Rs.	(1,308	)	Rs.	(215)

117

In assessing the realizability of ~~remaining~~ deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences and loss carry-forwards become deductible or utilizable. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, management believes it is more likely than not that the Company will realize the benefits of these deductible differences and loss carry-forwards, ~~utilizable,~~ net of the existing valuation allowances at March 31, ~~2007.~~2009. The amount of the deferred tax asset considered realizable, however, could be reduced in the near term if estimates of future taxable income during the carry-forward period are reduced.

Upon acquisition of Wipro Nervewire, New Logic, Saraware and Hydrauto, the Company was entitled to utilize tax benefits of Rs. 264.55, Rs. 280.75, Rs. 26.60 and 74.80 respectively, on pre-acquisition carry-forward business losses. Based on projections of future taxable income and tax planning strategies management believes that the Company will be able to realize tax benefits onlyPursuant to the ~~extent~~changes in the Indian income tax laws in fiscal 2007, Minimum Alternate Tax (MAT) has been extended to income in respect of ~~Rs. 172.36 on~~which deduction is claimed under section 10A and 10B of the ~~pre-acquisition carry-forward losses. Consequently,~~Act; consequently, the Company has ~~recorded~~calculated its tax liability for current domestic taxes after considering MAT. The excess tax paid under MAT provisions over and above normal tax liability can be carried forward and set-off against future tax liabilities computed under normal tax provisions. The Company was required to pay MAT during fiscal 2008 and, accordingly, a ~~valuation allowance for~~deferred tax asset of Rs. 126 million has been recognized on the ~~remaining amount. Reversal, if any, of the valuation allowance would be recorded as a reduction of goodwill arising from the respective acquisitions.~~

~~The carry-forward business losses~~balance sheet as of March 31, ~~2007, expire as follows:~~

Year ending March 31:
2013 Rs. 24.00
2014 28.00
2015 66.00
2024 315.00
2025 209.00
Thereafter 2,703.14

Rs. 3,345.14

2008, which can be carried forward for a period of 7 years.

The ~~increase in valuation allowance~~tax loss carry-forwards of Rs. ~~229.16 for the year ended~~7,735 as of March 31, ~~2006~~2009 relates to certain subsidiaries. Approximately, Rs. 4,765 of these tax loss carry-forwards is ~~on account of valuation allowance of~~not currently subject to expiration dates. The remainder, approximately Rs. 199.76 recognized on the deferred tax assets on pre-acquisition carry-forward business losses of New Logic and valuation allowance of Rs. 29.40 recognized on operating losses of certain subsidiaries for the year ended March 31, 2006. The increase2,970 expires in valuation allowance of Rs. 6.58 for the year ended March 31, 2007 is on account of pre-acquisition losses / operating losses of subsidiaries of Rs. 62.84 offset by a reversal of valuation allowance, on realization, in respect of capital loss of Rs. 56.26.various years through fiscal 2029.

~~A significant portion of~~The income before income taxes, minority interest and cumulative effect of change in accounting principle for each of the fiscal years 2007, 2008 and 2009 is primarily from ~~Indian sources.~~domestic entities.

The Company indefinitely reinvests ~~eligible~~all the accumulated undistributed earnings of foreign subsidiaries, and accordingly, has not recorded any deferred taxes in relation to such undistributed ~~earning~~earnings of its foreign subsidiaries. It is impracticable to determine the undistributed ~~earning~~earnings and the additional taxes payable when these earnings are remitted.

~~127~~

The Company is subject to a 15% branch profit tax in the USU.S. to the extent the net profit during the fiscal year attributable to its USU.S. branch are greater than the increase in the net assets of the USU.S. branch during the fiscal year, computed in accordance with the Internal Revenue Code. As of March 31, ~~2007,~~2009, the USU.S. branch’s net assets amounted to approximately $ ~~155.~~249. The Company has not triggered the branch profit tax and intends to maintain the current level of its net assets in the USU.S. as is consistent with its business plan. Accordingly, a provision for branch profit tax has not been recorded as of March 31, 2009.

Effective April 1, 2007, the Company adopted Financial Accounting Standards Board Interpretation 48, Accounting for Uncertainty in Income Taxes — An Interpretation of Statement of Financial Accounting Standards No. 109 (FIN 48). The adoption of FIN 48 did not have any impact on the retained earnings or provision for taxation as of April 1, 2007.

A reconciliation of the beginning and ending balance of unrecognized tax benefits is as follows:

Year ended March 31,
Particulars 2008 2009
Beginning balance Rs. 3,378 Rs. 4,431
Increases related to current year tax positions 1,442 1,042
Increases related to prior year tax positions 135 1,387
Decreases related to prior year tax positions (253 ) (541 )
Reductions related to lapsing of statutes of limitation (162 ) (144 )
Impact of foreign currency translation (109 ) 199

Ending balance Rs. 4,431 Rs. 6,374

The unrecognized tax benefits has increased by Rs. 2,429 during the year ended March 31, 2009 primarily due to certain additional tax credit carry forward of Rs. 918 reported in the income tax filings for the year ended March 31, 2008 and on account of additional impact in the current year in relation to uncertain tax position taken in the current year. The unrecognized tax benefits decreased by Rs. 685 during the year ended March 31, 2009 due to reversal of tax provision upon completion of tax assessment by the tax authorities in a particular tax jurisdiction, expiry of statute of limitation and revision of tax accruals relating to transfer pricing.

118

The Companies’ total unrecognized tax benefits as of March 31, 2008 and March 31, 2009, if recognized, would reduce the tax provisions by Rs. 4,410 and Rs. 6,374, respectively and thereby would effect the Company’s effective tax rate.

Although it is difficult to anticipate the final outcome on timing of resolution of any particular uncertain tax position, the Company believes that the total amount of unrecognized tax benefits will be decreased by Rs. 160 during the next 12 months due to expiry of statue of limitation.

The Company’s policy is to include any penalties and interest related to unrecognized tax benefits as a component of other income, net. As of March 31, 2008 and as of March 31, 2009, the Company had provisions of Rs. 313 and Rs 374 respectively on account of accrued interest and penalties related to unrecognized tax benefits. Interest and penalties included in other income, net were Rs. 199 and Rs. 61 for the year ended March 31, 2008 and 2009, respectively.

For each major jurisdiction, we have listed out the periods for which the income tax authorities can review/audit Company’s income tax filings. Additionally, certain tax positions relate to earlier years, which are currently under appeallate authorities and courts and have been included in Note 26.


Jurisdiction		Open tax years
India		2004-05 to 2008-09
United States — federal taxes		2004-05 to 2008-09
United States — state taxes		2002-03 to 2008-09
United Kingdom		2002-03 to 2008-09
Japan		2002-03 to 2008-09
Canada		2000-01 to 2008-09

22. Employee Stock Incentive Plans

Wipro Equity Reward Trust (WERT).In 1984, the Company established a controlled trust called the WERT. Under this plan, the WERT would purchase shares of Wipro out of funds borrowed from Wipro. The Company’s Compensation Committee would recommend to the WERT, officers and key employees, to whom the WERT will grant shares from its holding. The shares have been granted at a nominal price. Such shares would be held by the employees subject to vesting conditions. The shares held by the WERT are reported as a reduction from stockholders’ equity.

The movement in the shares held by the WERT is given below:


	Year ended March 31,							Year ended March 31,
	2005		2006			2007		2007		2008		2009
Shares held at the beginning of the year		7,887,060		7,893,060			7,869,060		7,869,060		7,961,760		7,961,760
Shares granted to employees		—		(24,000	)		—		—		—		—
Grants forfeited by employees		6,000		—			92,700		92,700		—		—

Shares held at the end of the year		7,893,060		7,869,060			7,961,760		7,961,760		7,961,760		7,961,760

Wipro Employee Stock Option ~~Plan 1999 (1999 Plan).~~plan and Restricted Stock Unit Option Plan.~~In July 1999, the Company established the 1999 Plan. Under the 1999 Plan, the Company is authorized to issue up to 30 million equity shares to eligible employees.~~A summary of general terms of grants under stock option plans and restricted stock unit plans are as follows:

Range of Exercise
Name of Plan Authorized Shares Prices
Wipro Employee Stock Option Plan 1999 (1999 Plan) 30,000,000 Rs. 171 – 490

Wipro Employee Stock Option Plan 2000 (2000 Plan) 150,000,000 Rs. 171 – 490

Stock Option Plan (2000 ADS Plan) 9,000,000 $ 3 – 7

Wipro Restricted Stock Unit Plan (WRSUP 2004 plan) 12,000,000 Rs. 2

Wipro ADS Restricted Stock Unit Option Plan (WARSUP 2004 plan) 12,000,000 $ 0.04

Wipro employee Restricted Stock Unit Option Plan 2005 (WSRUP 2005 plan) 12,000,000 Rs. 2

Wipro employee Restricted Stock Unit Option Plan 2007 (WSRUP 2007 plan) 10,000,000 Rs. 2

119

Employees covered byunder the ~~1999 Plan~~stock option plans and restricted stock unit option plans (collectively stock option plans) are granted an option to purchase shares of the Company at the respective exercise prices, subject to ~~the requirements~~requirement of ~~vesting.~~

Year ended March 31, 2005
Weighted-
average
Weighted- remaining
Shares arising Range of exercise average exercise contractual
out of options prices price life(months)
Outstanding at the beginning of the year 8,365,265 Rs. 171 – 181 Rs. 181 18 months
11,916,150 309 – 421 311 26 months

Forfeited and lapsed 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 months
9,259,654 309 – 421 311 14 months

Exercisable at the end of the year 4,201,953 171 – 181 181 6 months
6,959,606 Rs. 309 – 421 Rs. 311 14 months

~~128~~

Year ended March 31, 2006
Weighted-
average
Weighted- remaining
Shares arising Range of exercise average exercise contractual
out of options prices price life(months)
Outstanding at the beginning of the year 4,201,953 Rs. 171 – 181 Rs. 181 6 months
9,259,654 309 – 421 311 14 months

Forfeited and lapsed during the year (91,462 ) 171 – 181 181 —
(224,530 ) 309 – 421 309 —

Exercised during the year (4,110,491 ) 171 – 181 181 —
(5,056,811 ) 309 – 421 310 —

Outstanding at the end of the year — 171 – 181 — —
3,978,313 309 – 421 312 3 months

Exercisable at the end of the year — 171 – 181 — —
3,978,313 Rs. 309 – 421 Rs. 312 3 months

Year ended March 31, 2007
Weighted-
average
Weighted- remaining
Shares arising Range of exercise average exercise contractual
out of options prices price life(months)
Outstanding at the beginning of the year 3,978,313 309 – 421 312 3 months

Forfeited and lapsed during the year (75,795 ) 309 – 421 309 —

Exercised during the year (3,902,518 ) 309 – 421 312 —

Outstanding at the end of the year — — — —

Exercisable at the end of the year — — — —

The total intrinsic value of options exercised during the years ended March 31, 2005, 2006, and 2007, was Rs. 702.25, Rs. 1,191.78, and Rs. 731.40, respectively. As of March 31, 2007 options outstanding and exercisable under the 1999 Plan had an intrinsic value of Rs Nil and Rs Nil, respectively. As of March 31, 2007, the unamortized stock compensation expense under the 1999 Plan is Rs Nil.

~~Wipro Employee Stock Option Plan 2000 (2000 Plan)~~vesting conditions (generally service conditions).In July 2000, the Company established the 2000 Plan. Under the 2000 Plan, the Company is authorized to issue up to 150 million equity shares to eligible employees. Employees covered by the 2000 Plan are granted options to purchase equity shares of the Company subject to vesting.

~~Stock option activity under the 2000 Plan is as follows:~~

Year ended March 31, 2005
Weighted-
average
Weighted- remaining
Shares arising Range of exercise average exercise contractual life
out of options prices price (months)
Outstanding at the beginning of the year 514,800 Rs. 172 – 255 Rs. 230 57 months
31,135,056 264 – 396 266 59 months
13,627,098 397 – 408 399 42 months

Forfeited and lapsed 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 —

~~129~~

Year ended March 31, 2005
Weighted-
average
Weighted- remaining
Shares arising Range of exercise average exercise contractual life
out of options prices price (months)
Outstanding at the end of the year 392,896 172 – 255 231 45 months
26,180,498 264 – 396 267 47 months
12,661,148 397 – 408 399 30 months

Exercisable at the end of the year 165,876 172 – 255 231 45 months
15,729,818 264 – 396 267 47 months
8,862,804 Rs. 397 – 408 Rs. 399 30 months

Year ended March 31, 2006
Weighted-
average
Weighted- remaining
Shares arising Range of exercise average exercise contractual life
out of options prices price (months)
Outstanding at the beginning of the year 392,896 Rs. 172 – 255 231 45 months
26,180,498 265 – 396 267 47 months
12,661,148 397 – 458 399 30 months

Forfeited and lapsed 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 37 months
20,146,257 265 – 396 267 35 months
9,899,967 397 – 458 399 19 months

Exercisable at the end of the year 186,732 172 – 255 233 36 months
16,165,662 265 – 396 267 38 months
9,899,967 Rs. 397 – 458 Rs. 399 19 months

Year ended March 31, 2007
Weighted-
average
Weighted- remaining
Shares arising Range of exercise average exercise contractual life
out of options prices price (months)
Outstanding at the beginning of the year 292,576 172-255 233 37 Months
20,146,257 265-396 267 35 Months
9,899,967 397-458 399 19 Months

Forfeited and lapsed during the year (91,924 ) 172-255 229 —
(973,249 ) 265-396 274 —
(100,634 ) 397-458 398 —

Exercised during the year (175,802 ) 172-255 228 —
(17,729,437 ) 265-396 266 —
(8,312,435 ) 397-458 399 —
Outstanding at the end of the year 24,850 172-255 236 23 Months
1,443,571 265-396 267 23 Months
1,486,898 397-458 399 7 Months

Exercisable at the end of the year 24,850 172-255 235 22 Months
1,443,571 265-396 267 23 Months
1,486,898 397-458 399 7 Months

The total intrinsic value of options exercised during the years ended March 31, 2005, 2006, and 2007, was Rs. 262.46, Rs. 985.69, and Rs. 7,240.43, respectively. As of March 31, 2007 options outstanding and exercisable under the 2000 Plan had an intrinsic value of Rs 668.18 and Rs 668.18, respectively. As of March 31, 2007, the unamortized stock compensation expense under the 2000 Plan is Rs Nil.

~~Stock Option Plan (2000 ADS Plan).~~~~In April 2000, the Company established the 2000 ADS Plan. Under the 2000 ADS Plan, the Company is authorized to issue options to purchase up to 9 million American Depositary Shares~~

~~130~~

~~(ADSs) to eligible employees. Employees covered by the 2000 ADS Plan are granted an option to purchase ADSs representing equity shares of the Company subject to the requirements of vesting.~~

~~Stock option activity under the 2000 ADS Plan is as follows:~~

Year ended March 31, 2005
Weighted-
average
Weighted- remaining
Shares arising out Range of exercise average contractual
of options prices exercise price life (months)
Outstanding at the beginning of the year 429,300 $ 3.46 – 5.01 $ 4.32 54 months
3,392,022 5.82 – 6.90 6.44 45 months

Forfeited and lapsed 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 42 months
2,030,700 5.82 – 6.90 6.50 33 months

Exercisable at the end of the year 197,956 3.46 – 5.01 4.37 42 months
1,546,300 $ 5.82 – 6.90 $ 6.51 33 months

Year ended March 31, 2006
Weighted-
average
Weighted- remaining
Shares arising out Range of exercise average contractual
of options prices exercise price life (months)
Outstanding at the beginning of the year 404,550 $ 3.46 – 5.01 $ 4.35 42 months
2,030,700 5.82 – 6.90 6.50 33 months

Forfeited and lapsed 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 31 months
1,208,842 5.82 – 6.90 6.50 21 months

Exercisable at the end of the year 176,938 3.46 – 5.01 4.33 31 months
911,621 $ 5.82 – 6.90 $ 6.45 21 months

Year ended March 31, 2007
Weighted-
average
Weighted- remaining
Shares arising out Range of exercise average contractual
of options prices exercise price life (months)
Outstanding at the beginning of the year 238,900 3.46 – 5.01 $ 4.38 31 months
1,208,842 5.82 – 6.90 6.50 21 months

Exercised during the year 122,250 3.46 – 5.01 4.41 —
769,403 5.82 – 6.90 6.51 —

Outstanding at the end of the year 116,650 3.46 – 5.01 4.39 19 months
439,439 5.82 – 6.90 6.15 11 months

Exercisable at the end of the year 116,650 3.46 – 5.01 4.39 19 months
439,439 5.82 – 6.90 $ 6.15 11 months

The total intrinsic value of options exercised during the years ended March 31, 2005, 2006, and 2007, was Rs. 232.55, Rs. 181.02, and Rs. 325.08, respectively. As of March 31, 2007 options outstanding and exercisable under the ADS Plan had an intrinsic value of Rs 241.27 and Rs 241.27, respectively. As of March 31, 2007, the unamortized stock compensation expense under the ADS Plan is Rs Nil.

~~131~~

~~Restricted Stock Unit Plans:~~In June 2004, the Company established a rupee option plan titled Wipro Restricted Stock Unit Plan (WRSUP 2004) and a dollar option plan titled Wipro ADS Restricted Stock Unit Plan (WARSUP 2004). The Company is authorized to issue up to 12 million options to eligible employees under each plan. Options under the plan will be granted at a nominal exercise price (par value of the equity shares).

These options ~~vest~~generally vests over a period of five years from the date of grant. Upon vesting, the employees can acquire one equity share for every option. The ~~options are subject to forfeiture if the employee terminates employment before vesting. The excess of market price on the date of grant over the exercise price payable by the employees~~maximum contractual term for aforementioned stock option plans is ~~recognized as compensation cost. The Company has elected to amortize the compensation cost on a straight-line basis over the vesting period.~~generally ten years.

~~Stock~~The following table summarizes stock option ~~activity under WRSUP 2004 plan is~~activity:

Year ended March 31,
2007 2008 2009
Weighted Weighted Weighted
Average Average Average
Range of Exercise Exercise Exercise
Exercise Prices Number Price Number Price Number Price

Outstanding at the Rs. 171 – 490 34,317,113 Rs. 310 2,955,319 Rs. 333 1,219,926 Rs. 264
beginning of the year $ 3 – 7 1,447,742 $ 6 556,089 $ 6 8,706 $ 5
Rs. 2 7,598,174 Rs. 2 10,946,864 Rs. 2 9,700,163 Rs. 2
$ 0.04 1,000,720 $ 0.04 1,551,330 $ 0.04 1,885,236 $ 0.04

Granted Rs. 171 – 490 — Rs. — — Rs. — 120,000 Rs. 489
$ 3 – 7 — $ — — $ — — $ —
Rs. 2 6,132,636 Rs. 2 81,300 Rs. 2 6,882,415 Rs. 2
$ 0.04 918,130 $ 0.04 665,386 $ 0.04 1,484,261 $ 0.04

Exercised Rs. 171 – 490 (30,120,192 ) Rs. 308 (1,211,880 ) Rs. 374 345,099 Rs. 263
$ 3 – 7 (891,653 ) $ 6 (500,199 ) $ 6 4,400 $ 4.7
Rs. 2 (2,036,918 ) Rs. 2 (574,051 ) Rs. 2 1,762,283 Rs. 2
$ 0.04 (196,620 ) $ 0.04 (167,540 ) $ 0.04 446,841 $ 0.04

Forfeited and lapsed Rs. 171 – 490 (1,241,602 ) Rs. 283 (523,513 ) Rs. 400 873,687 Rs. 264
$ 3 – 7 — $ — (47,184 ) $ 7 2,700 $ 5.82
Rs. 2 (747,028 ) Rs. 2 (753,950 ) Rs. 2 1,020,710 Rs. 2
$ 0.04 (170,900 ) $ 0.04 (163,940 ) $ 0.04 452,015 $ 0.04

Outstanding at the Rs. 171 – 490 2,955,319 Rs. 333 1,219,926 Rs. 264 121,140 Rs. 487
end of the year $ 3 – 7 556,089 $ 6 8,706 $ 5 1,606 $ 4.7
Rs. 2 10,946,864 Rs. 2 9,700,163 Rs. 2 13,799,585 Rs. 2
$ 0.04 1,551,330 $ 0.04 1,885,236 $ 0.04 2,470,641 $ 0.04

The following table summarizes information about stock options outstanding as ~~follows:~~of March 31, 2009

Year ended March 31, 2005
Weighted-
average
remaining
Shares arising out contractual life
of options Exercise price (months)
Outstanding at the beginning of the year — Rs. — —

Granted during the year 9,792,596 2 72 months

Forfeited during the year (272,940 ) 2 —

Outstanding at the end of the year 9,519,656 2 66 months

Exercisable at the end of the year — Rs. — —

Year ended March 31, 2006
Weighted-
average
remaining
Shares arising out contractual life
of options Exercise price (months)
Outstanding at the beginning of the year 9,519,656 Rs. 2 66 months

Granted during the year 55,500 2 72 months

Forfeited 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 months

Exercisable at the end of the year 518,321 Rs. 2 54 months

Year ended March 31, 2007
Weighted-
average
remaining
Shares arising out contractual life
of options Exercise price (months)
Outstanding at the beginning of the year 7,598,174 2 54

Granted during the year 2,492,560 2 72

Forfeited during the year (553,836 ) 2 —

Exercised during the year (2,036,918 ) 2 —

Outstanding at the end of the year 7,499,980 2 49

Exercisable at the end of the year 195,982 2 43

~~Stock option activity under WARSUP 2004 plan is as follows:~~

~~132~~

Year ended March 31, 2005
Weighted-
average
remaining
Shares arising out contractual life
of options Exercise price (months)
Outstanding at the beginning of the year — $ — —

Granted during the year 1,583,600 0.04 72 months
Forfeited during the year (47,500 ) 0.04 —

Outstanding at the end of the year 1,536,100 0.04 66 months

Exercisable at the end of the year — $ — —

Year ended March 31, 2006
Weighted-
average
remaining
contractual life
Shares arising out (months)
of options Exercise price
Outstanding at the beginning of the year 1,536,100 $ 0.04 66 months

Exercised 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 months

Exercisable at the end of the year 116,400 $ 0.04 54 months

Year ended March 31, 2007
Weighted-
average
remaining
Shares arising out contractual life
of options Exercise price (months)
Outstanding at the beginning of the year 1,000,720 $ 0.04 54

Granted during the year 918,130 $ 0.04 72
Exercised during the year (196,620 ) $ 0.04
Forfeited during the year (170,900 ) $ 0.04

Outstanding at the end of the year 1,551,330 $ 0.04 54

Exercisable at the end of the year 122,980 $ 0.04 54

~~Restricted Stock Unit Plan 2005:~~In July 2005, the Company established a new option plan titled Wipro employee Restricted Stock Unit Plan 2005 (WRSUP 2005). The Company is authorized to issue up to 12 million options to eligible employees under the plan. Options under the plan will be granted at a nominal exercise price (par value of the equity shares).

These options vest over a period of five years from the date of grant. Upon vesting the employees can acquire one equity share for every option. The options are subject to forfeiture if the employee terminates employment before vesting. The excess of market price on the date of grant over the exercise price payable by the employees is recognized as compensation cost. The Company has elected to amortize the compensation cost on a straight-line basis over the vesting period.

~~133~~

~~Stock option activity under WSRUP 2005 plan is as follows:~~

Year ended March 31, 2007
Weighted-
average
remaining
Shares arising out contractual life
of options Exercise price (months)
Outstanding at the beginning of the year — — —

Granted during the year 3,640,076 2 72
Exercised during the year — 2 —
Forfeited during the year (193,192 ) 2

Outstanding at the end of the year 3,446,884 2 63

Exercisable at the end of the year — 2 —

Options Outstanding Options Exercisable
Weighted Weighted
Average Weighted Average Weighted
Remaining Average Remaining Average
Range of Life Exercise Life Exercise
Exercise Prices Numbers (Months) Price Numbers (Months) Price

Rs. 171 – 490 121,140 63.4 Rs. 487 1,140 2.93 254
$            3 – 7 1,606 11.9 $ 4.70 1,606 11.9 4.70
Rs               2 13,799,585 44 Rs. 2 2,975,987 26 2
$             0.04 2,470,641 51 $ 0.04 208,412 27 $ 0.04

The weighted-average grant-date fair value of options granted during the ~~year ended March 31, 2005, 2006,~~years 2007, 2008 and ~~2007~~2009 was Rs. ~~319.23,~~512, Rs. ~~458.00~~578 and Rs. ~~511.92,~~319, for each option respectively.

The total intrinsic value of stock options exercised during the years ended March 31, ~~2005, 2006,~~2007, 2008, and ~~2007,~~2009, was Rs. ~~Nil,~~9,578, Rs. ~~632.22,~~713 and Rs. ~~1,282.41,~~654 respectively. As of March 31, ~~2007 options~~2009 stock option outstanding and exercisable ~~under the RSU Plan~~ had an aggregate intrinsic value of ~~Rs 7,162.67~~Rs. 2,976 and ~~Rs 193.34,~~Rs. 418 respectively. As of March 31, ~~2007,~~2009, the unamortized stock compensation expense under the ~~RSU Plan~~stock option plans is ~~Rs 4,198.59~~Rs. 3,327 and the same is expected to be amortized over a weighted average period of approximately ~~3.8~~3 years.

An amendment to the Indian tax regulations levies a tax titled Fringe Benefit Tax (FBT) on all employee stock options, that are exercised on or after April 1, 2007, and is based on the intrinsic value of the stock options on the vesting date. The FBT liability is triggered only if the options are exercised. Consistent with the guidance in EITF Issue No. 00-16, Recognition and Measurement of Employer Payroll Taxes on Employee Stock Based Compensation, the Company

120

records the FBT expense when the stock option is exercised since the FBT liability is triggered only subsequent to exercise. The tax laws permit the employer to recover the FBT from the employee as the tax relates to benefits that accrue to the employee. Consequent to the amendment in the tax regulations, the Company has modified its employee stock option plans to recover the FBT from the employees. The Company’s recovery of FBT from the employees is directly linked to the exercise of the stock option by such employee and is recorded as an additional component of the exercise price of the options based on the guidance previously provided by Issue 15 of EITF Issue No. 00-23, Issues Related to the Accounting for Stock Compensation under APB Opinion No. 25 and FASB Interpretation No. 44.

The fair value of each option granted has been determined using the Binomial option pricing model. The model includes assumptions regarding dividend yields, expected volatility, expected terms, risk free interest rates and expected FBT recovery. These assumptions reflect management’s best estimates, but involve inherent market uncertainties based on market conditions generally outside of the Company’s control. As a result, if other assumptions had been used in the current period, stock-based compensation expense may have been impacted. Further, if the management uses different assumptions in future periods, stock based compensation expense may be materially impacted in future years.

The fair value of each option is estimated on the date of grant using the Binomial model with the following assumptions:


	Year ended March 31,
	2009
Expected term		5 – 7 years
Risk free interest rates		7.36 – 7.42
Volatility		35.81 – 36.21
Dividend yield		—

Total stock compensation cost recognized under the employee stock incentive plans is Rs. ~~353.86,~~1,336, Rs. ~~652.23~~1,076 and Rs. ~~1,336.40, respectively~~1,595 during the year ended March 31, ~~2005, 2006~~2007, 2008 and ~~2007~~2009 respectively. The compensation cost has been allocated to cost of revenues and operating expenses as follows:

Year ended March 31,
2005 2006 2007
Cost of revenues Rs. 238.27 Rs. 437.20 Rs. 1,044.83
Selling and marketing expenses 49.20 75.16 168.95
General and administrative expenses 66.39 139.87 122.62

Rs. 353.86 Rs. 652.23 Rs. 1,336.40

In the stock option activity table for 1999 Plan, 2000 Plan and 2000 ADS Plan, the Company previously had not reflected the impact of options lapsed. Additionally, the Company had not reported the correct weighted average contractual life for the 2000 Plan and 2000 ADS Plan. During the year ended March 31, 2007, the disclosures have been suitably amended. These matters had no impact on the amounts reported in the financial statements.

Year ended March 31,
2007 2008 2009
Cost of revenues Rs. 1,044 Rs. 840 Rs. 1,232
Selling and marketing expenses 169 137 197
General and administrative expenses 123 99 166

Rs. 1,336 Rs. 1,076 Rs. 1,595

Modification of Employee Stock Incentive ~~Plans~~Plan

During the year ended March 31, 2007, through a short-term inducement offer, the Company agreed to an arrangement whereby if certain vested options were exercised within the offer period through financing by an independent third-party financial institution, the Company would bear the interest obligation relating to this financing. The loan by the third-party financial institution is with no recourse to the Company. 11,879,065 options were exercised during the offer period. The Company has accounted for this arrangement as a short-term inducement resulting in modification accounting. Accordingly, incremental compensation cost of Rs. ~~86.45~~86 had been recorded during the year ended March 31, 2007. During the year ended March 31, 2008 and 2009, the Company has ~~been recorded.~~revised the estimates of its interest obligation relating to the non-recourse financing and has accordingly recorded an additional compensation expense of Rs. 261 and 14 respectively.

Additionally, as a part of this arrangement 1,150,055 other vested options were exercised by certain employees through a non-recourse interest free loan aggregating Rs. ~~326.17~~326 by a controlled ~~trust.~~trust, during the year ended March 31, 2007. Even though this transaction does not represent an exercise for accounting purpose, to reflect the legal nature of shares issued, an amount of Rs. ~~2.30,~~2, equivalent to the par value of shares issued has been transferred from additional paid-in capital to common stock. During the year ended March 31, 2008 and 2009, the employees have repaid Rs. 34 and Rs. 142, respectively of the interest free loan. These amounts have been recognized as additional paid in capital in shareholders equity.

121

23. Earnings Per Share

A reconciliation of net income and equity shares used in the computation of basic and diluted earnings per equity share is set out below:

~~134~~


	Year ended March 31,							Year ended March 31,
	2005			2006		2007		2007		2008		2009
Earnings
Net income	Rs.	15,832.75		Rs.	20,269.97	Rs.	29,168.99	Rs.	29,168	Rs.	32,241	Rs.	34,415
Effect of dilutive instruments of subsidiary		(27.97	)		—		—

Net income (adjusted for full dilution)	Rs.	15,804.78		Rs.	20,269.97	Rs.	29,168.99


Equity shares
Weighted average number of equity shares outstanding		1,391,554,372			1,406,505,974		1,426,709,163		1,426,709,163		1,450,604,615		1,454,010,222
Effect of dilutive equivalent shares-stock options		8,292,410			17,173,256		17,758,394		17,758,394		4,175,992		2,280,493

Weighted average number of equity shares and equivalent shares outstanding...		1,399,846,782			1,423,679,230		1,444,467,557
Weighted average number of equity shares and equivalent shares outstanding									1,444,467,557		1,454,780,607		1,456,290,715

Shares held by the controlled WERT and Wipro Inc Benefit Trust (WIBT) have been reduced from the equity shares outstanding for computing basic and diluted earnings per share. Shares exercised through a non-recourse loan by the WERT, have been reduced from the equity shares outstanding ~~and shares held by employees subject to vesting conditions have been included in outstanding equity shares~~ for computing basic ~~and diluted~~ earnings per share.

Options to purchase 12,661,148, Nil and Nil equity shares were outstanding during the year ended March 31, 2005, 2006 and 2007, respectively, but were not included in the computation of diluted earnings per share because the exercise price of the options was greater than the average market price of the equity shares.

24. Employee Benefit Plans

Gratuity. In accordance with applicable Indian laws, the Company provides for gratuity, a defined benefit retirement plan (Gratuity Plan) covering certain categories of employees. The Gratuity Plan provides a lump sum payment to vested employees, at retirement or termination of employment, an amount based on the respective employee’s last drawn salary and the years of employment with the Company. The Company provides the gratuity benefit through annual contributions to a fund managed by the Life Insurance Corporation of India (LIC). Under this plan, the settlement obligation remains with the Company, although the Life Insurance Corporation of India administers the plan and determines the contribution premium required to be paid by the Company.

~~In September 2006,~~Effective March 31, 2007, the ~~Financial Accounting Standards Board (FASB) issued~~Company adopted SFAS No. 158, ~~Employers’ Accounting for Defined Benefit Pension~~which required the recognition in pension obligations and Other Postretirement Plans (SFAS No. 158), which amends SFAS No. 87, 88, 106, and 132(R). This standard requires that companies record an asset or liability on the consolidated balance sheet equal to the over or under funded status of their defined benefit and other postretirement benefit plans effective for fiscal years ending after December 15, 2006. For each plan, the funded status is defined by SFAS No. 158 as the difference between the fair value of plan assets (for funded plans) and the respective plan’s projected benefit obligation. The projected benefit obligation represents a liability based on the plan participant’s service to date and their expected future compensation at their projected retirement date. Upon adoption of SFAS No. 158 and recognition of the funded status on the company’s consolidated balance sheet, all previously unrecognized amounts (unrecognized gains or losses and prior service cost) as well as subsequent changes in funded status are reflected in accumulated other comprehensive income ~~(loss), net~~ of ~~tax, in~~actuarial gains or losses, prior service costs or credits and transition assets or obligations that had previously been deferred under the ~~stockholder’s equity.~~

~~The incremental impact~~reporting requirements of ~~applying~~ SFAS No. ~~158 on individual line items in~~87, SFAS No. 106 and SFAS No. 132(R). As a result of the ~~consolidated balance sheet~~adoption, the Company recorded Rs. 124 as a reduction of the March 31, 2007 ~~is given below:~~retained earnings.

Before After Application
Application of of SFAS No.
SFAS No. 158 Adjustments 158
Other current liabilities 16,481.41 141.75 16,623.16
Total current liabilities 42,679.97 141.75 42,821.72
Deferred income taxes 482.03 (18.05 ) 463.98
Total liabilities 44,492.37 123.70 44,616.07
Accumulated other comprehensive income 217.47 (123.70 ) 93.77
Total stockholder’s equity 101,591.76 (123.70 ) 101,468.06
Total liabilities and stockholder’s equity 146,084.13 — 146,084.13
Obligations and Funded Status

~~135~~


	As of March 31,						As of March 31,
	2006			2007			2008			2009
Change in the benefit obligation
Projected Benefit Obligation (PBO) at the beginning of the year	Rs.	634.46		Rs.	755.93		Rs.	1,027		Rs.	1,381
Service cost		163.52			192.67			258			347
Interest cost		45.66			55.16			89			146
Benefits paid		(47.08	)		(77.10	)		(135	)		(119	)
Actuarial loss/(gain)		(40.62	)		100.19			142			(89	)

PBO at the end of the year		755.93			1,026.85			1,381			1,666


Change in plan assets
Fair value of plan assets at the beginning of the year		597.73			656.16			727			1,250
Actual return on plan assets		53.11			58.82			104			112
Employer contributions		52.40			89.14			554			154
Benefits paid		(47.08	)		(77.10	)		(135	)		(119	)

Plan assets at the end of the year		656.16			727.03			1,250			1,397


Funded status		(99.77	)		(299.82	)		(131	)		(269	)

Unrecognized actuarial loss/(gain)		58.67			—
Unrecognized transition obligation		1.67			—
Unrecognized actuarial cost		2.31			—

Accrued liability	Rs.	(37.12	)	Rs.	(299.82	)

Following is the summary of amounts in accumulated other comprehensive income / (loss) as of March 31, ~~2006~~2008 and ~~2007~~2009 that have not yet been recognized in the consolidated statements of income as components of net gratuity cost:

122


	Year ended March 31,				Year ended March 31,
	2006		2007		2008		2009
Net actuarial loss	Rs.	—	Rs.	137.54	Rs.	217	Rs.	89
Net prior service cost		—		2.81		—		—
Net transitional obligation		—		1.40		—		—

Total accumulated other comprehensive income	Rs.	—	Rs.	141.75	Rs.	217	Rs.	89

Net gratuity cost for the years ended March 31, ~~2004, 2005~~2007, 2008 and ~~2006~~2009 included:


	Year ended March 31,									Year ended March 31,
	2005			2006			2007			2007			2008			2009
Service cost	Rs.	114.88		Rs.	163.52		Rs.	192.67		Rs.	193		Rs.	258		Rs.	347
Interest cost		31.56			45.66			55.16			55			89			146
Expected return on assets		(29.49	)		(30.58	)		(42.24	)		(42	)		(54	)		(89	)
Amortization of transition liabilities		10.96			10.34			(4.00	)
Amortization of transition liabilities/actuarial loss											(4	)		13			17
Adjustments⁽¹⁾		—			—			(77.55	)		(78	)		—			—

Net gratuity cost	Rs.	127.91		Rs.	188.94		Rs.	124.04		Rs.	124		Rs.	306		Rs.	421


⁽¹⁾		~~Till~~Through March 31, 2006, for a certain category of employees, the Company previously recorded and disclosed a defined benefit plan as a defined contribution plan. During the year ended March 31, 2007, the Company recorded an adjustment of Rs ~~77.55~~78 as a credit to the income statement to record this plan as a defined benefit plan. The impact of this adjustment is not material to the income statement, accrued liability/~~(prepaid~~ (prepaid asset) and the overall financial statement presentation.

~~136~~

The weighted average actuarial assumptions used to determine benefit obligations are:


	As of March 31,						As of March 31,
	2006			2007			2008			2009
Discount rate		8	%		9.6	%		9.35	%		8.85	%
Rate of increase in compensation levels		7	%		7	%		7	%		5	%
Rate of return on plan assets		7	%		7.5	%		7.5	%		8	%

The weighted average actuarial assumptions used to determine net periodic gratuity cost are:


	Year ended March 31,									Year ended March 31,
	2005			2006			2007			2007			2008			2009
Discount rate		8	%		8	%		8	%		8	%		9.6	%		8.85	%
Rate of increase in compensation levels		7	%		7	%		7	%		7	%		7	%		5	%
Rate of return on plan assets		7	%		7	%		7	%		7	%		7. 5	%		8	%

The Company assesses these assumptions with its projected long-term plans of growth and prevalent industry standards. The Company estimates the long-term return on plan assets based on the average rate of return expected to prevail over the next 15 to 20 years in the types of investments held. As of March 31, ~~2005, 2006~~2007, 2008 and ~~2007,~~2009, a significant portion of the plan assets were invested in debt securities.

Accumulated benefit obligation was Rs. ~~458.41~~988 and Rs. ~~737.63~~1,387 as of March 31, ~~2006~~2008 and ~~2007~~2009 respectively.


Expected contribution to the fund for the year ending March 31, 2008	Rs.	195.01
Expected contribution to the fund for the year ending March 31, 2010			Rs.	764


Expected benefit payments from the fund for the year ending March 31:
2008		216.84
2009		200.11
2010		219.80	Rs.	494
2011		270.31		445
2012		332.38		451
2013				471
2014				459
Thereafter		1,644.88		1,645

Total		2,884.32	Rs.	3,965

The expected benefits are based on the same assumptions used to measure the ~~company’s~~Company’s benefit obligations as of March 31, ~~2007.~~2009.

Superannuation. Apart from being covered under the Gratuity Plan described above, the ~~employees~~senior officers of the Company also participate in a defined contribution plan maintained by the Company. This plan is administered by the ~~LIC and ICICI.~~third-party agencies. The Company makes annual contributions based on a specified percentage of each covered employee’s salary. ~~From April 1, 2005, the Company discontinued superannuation contributions for certain category of employees and paid such contribution amounts as cash compensation to the employees.~~ The Company has no further obligations under the plan beyond its annual contributions.

123

Provident fund.In addition to the above benefits, all employees receive benefits from a provident fund, a defined contribution plan. The employee and employer each make monthly contributions to the plan equal to 12% of the covered employee’s salary. A portion of the contribution is made to the provident fund trust established by the Company, while the remainder of the contribution is made to the Government’s provident fund. The Government mandates the annual yield to be provided to the employees on their corpus. The Company has an obligation to make good the shortfall, if any, between the yield on the investments of trust and the yield mandated by the Government.

The Company ~~contributed~~recognized an expense of Rs. ~~995.93,~~1,407, Rs. ~~1,035.78~~2,383 and Rs. ~~1,407.00~~2,737 towards contribution to various defined contribution and benefit plans during the years ended March 31, ~~2005, 2006~~2007, 2008 and ~~2007 respectively as follows:~~2009 respectively.

Year ended March 31,
2005 2006 2007
Defined contribution Rs. 868.02 Rs. 846.84 Rs. 1,282.96
Defined benefit 127.91 188.94 124.04

Total Rs. 995.93 Rs. 1,035.78 Rs. 1,407.00

~~137~~

25. ~~Related Party Transactions~~

~~The Company has the following transactions with related parties:~~

Year ended March 31,
2005 2006 2007
Wipro GE:
Revenues from sale of computer equipment and administrative and management support services Rs. 111.68 Rs. 114.01 Rs. 29.24
Rent, travel and related expenses 1.61 — —
Purchase of software 0.45 — —

WeP Peripherals:
Revenues from sale of computer equipment and services 10.48 19.67 4.91
Fees received for usage of trade mark — — —
Payment for services 7.50 2.37 —
Purchase of printers 176.79 118.88 193.76

Azim Premji Foundation (entity controlled by principal shareholder of the Company):
Revenues from sale of computer equipment and services 6.71 3.64 3.35

Principal shareholder:
Payment of lease rentals 1.13 1.13 1.13

~~The Company has the following receivables from related parties, which are reported as other assets/other current assets in the balance sheet:~~

As of March 31,
2006 2007
Wipro GE Rs. 51.70 Rs. 3.88
WeP Peripherals 4.19 —
Azim Premji Foundation 0.04 —

Rs. 55.93 3.88

~~The Company has the following payables to related parties, which are reported as other current liabilities in the balance sheet:~~

As of March 31,
2006 2007
WeP Peripherals Rs. 38.85 —

Rs. 38.85 —

~~26.~~ Sale of ~~accounts receivable / employee advances~~financial assets

From time to time, in the normal course of business, the Company transfers accounts receivables, net investment in sales-type finance receivables and employee advances (financials assets) to banks. Under the terms of the arrangements, the Company surrenders control over the financial assets and accordingly the transfers are recorded as sale of financial assets. The sale of financial assets may be with or without recourse. Under arrangements with recourse, the Company is obligated to repurchase the uncollected financial assets, subject to limits specified in the agreement with the banks. Additionally, the Company retains servicing responsibility for the transferred financial assets. Gains and losses on sale of financial assets are recorded at the time of sale based on the carrying value of the financial assets, fair value of servicing liability and recourse obligations. ~~Loss on sale is recorded at the time of sale.~~

During the years ended March 31, ~~2005, 2006~~2007, 2008 and ~~2007,~~2009, the Company transferred financial assets of Rs. ~~737.80,~~480, Rs. ~~258.67~~1,625 and Rs. ~~480.00~~539 respectively, under such arrangements and has included the proceeds in net cash provided by operating activities in the consolidated statements of cash flows. This transfer resulted in loss of Rs. ~~42.03,~~9, Rs. ~~9.28~~41 and Rs. ~~8.60~~35 for the years ended March 31, ~~2005, 2006~~2007, 2008 and ~~2007~~2009 respectively, which is included in general and administrative expense. As at March 31, ~~2006~~2008 and ~~2007,~~2009, the maximum amounts of recourse obligation in respect of the transferred financial assets are Rs. ~~20.40~~Nil and Rs. ~~48.00~~Nil respectively.

~~138~~

~~27.~~26. Commitments and Contingencies

Capital commitments. As of March 31, ~~2006~~2008 and ~~2007,~~2009, the Company had committed to spend approximately Rs. ~~1,714.22~~Rs. 7,266 and Rs. ~~3,432.25~~5,371 respectively, under agreements to purchase property and equipment. These amounts are net of capital advances paid in respect of these purchases.

Other commitments. The Company’s Indian operations have been established as a Software Technology Park Unit under a plan formulated by the Government of India. As per the plan, the Company’s India operations have export obligations to the extent of 1.5 times the employee costs for the year on an annual basis and 5 times the amount of foreign exchange released for capital goods imported, over a five year period. The consequence of not meeting this commitment in the future, would be a retroactive levy of import duty on certain computer hardware previously imported duty free. As of March 31, ~~2007,~~2009, the Company has met ~~all~~ commitments required under the plan.

As of March 31, ~~2006~~2008 and ~~2007,~~2009, the Company had contractual obligations to spend approximately ~~Rs. 1,946~~Rs 3,256 and Rs. ~~3,160.18~~3,255 respectively; under purchase obligations which include commitments to purchase goods or services of either a fixed or minimum quantity that meet certain criteria.

Guarantees. As of March 31, ~~2006~~2008 and ~~2007,~~2009, performance and financial guarantees provided by banks on behalf of the Company to the Indian Government, customers and certain other agencies amount to approximately Rs. ~~2,941.20~~4,392 and Rs. ~~3,013.11~~6,103 respectively, as part of the bank line of credit.

Contingencies and ~~lawsuits.~~lawsuits

The Company ~~had~~ received tax demands from the Indian income tax authorities for the financial years ended March 31, 2001, 2002, 2003 and ~~2003~~2004 aggregating to Rs. ~~8,100.49~~11,127 (including interest of Rs. ~~750.38)~~1,503). The tax demand was primarily on account of denial of deduction claimed by the Company under Section 10A of the Income Tax Act 1961, in respect of profits earned by its undertakings in the Software Technology Park at Bangalore. The appeals filed by the Company ~~had appealed against these demands. The~~for the above years to the first appellate authority ~~has vacated~~were allowed in favour of the Company, thus deleting substantial portion of the demand raised by the Income tax ~~demands~~authorities. On further appeal filed by the income tax authorities, the second appellate authority upheld the claim of the Company for ~~the~~ years ended March 31, 2001, 2002, 2003 and ~~2003. The income tax authorities have filed an appeal for the year ended March 31, 2001 and 2002.~~

2004. In December ~~2006,~~2008, the Company received, anon similar grounds, additional tax demand of Rs. ~~3,027.20~~5,388 (including interest of Rs. ~~753.09)~~1,615) for the financial year ended March 31, ~~2004 on similar grounds as earlier years.~~2005. The Company has filed an appeal against ~~this demand.~~the said demand within the time limits permitted under the statute.

124

Considering the facts and nature of disallowance and the order of the appellate authority upholding the claims of the Company for earlier years, the Company believes that the final outcome of the above disputes should be in favor of the Company and there ~~will~~should not be any material impact on the ~~Company’s~~ financial ~~position and results of operations.~~statements. The range of loss ~~relating~~due to ~~these contingencies~~this contingency is between zero and the amount ofto which the demand is raised.

~~Certain other income-tax related~~The company is subject to legal proceedings ~~are pending against the Company. Potential liabilities, if any,~~and claims which have ~~been adequately provided for, and the Company does not currently estimate any incremental liability in respect of these proceedings.~~

~~Additionally, the Company is also involved in lawsuits, claims, investigations and proceedings, including patent and commercial matters, which arise~~arisen in the ordinary course of ~~business. There are no such matters pending that the Company expects to be material in relation to~~ its business. The company’s management does not reasonably expect that legal actions, when ultimately concluded and determined, will have a material and adverse effect on the results of operations or the financial position of the company.

~~28.~~27. Segment Information

The Company is currently organized by the following segments: (a) Global IT Services and Products (comprising of IT Services and BPO Services segments) (b) India and AsiaPac IT Services and Products (c) Consumer Care and Lighting and (d) ‘Others’.

The Chairman of the Company has been identified as the Chief Operating Decision Maker (CODM) as defined by SFAS No. 131, Disclosure about Segments of an Enterprise and Related Information. The Chairman of the Company evaluates the segments based on their revenue growth, operating income and return on capital employed. The management believes that return on capital employed is considered appropriate for evaluating the performance of its operating ~~segment.~~segments. Return on capital employed is calculated as ~~earnings from continuing operations before interest expenses, tax, minority interests and cumulative effect of change in accounting principle~~operating income divided by the average of the capital employed at the beginning and at the end of the ~~year.~~period. Capital employed includes total assets of the respective segments less all liabilities, except for short-term borrowings, long-term debt and obligations under capital leases.

~~Operating segments with similar economic characteristics and complying with other aggregation criteria specified in SFAS No. 131 have been combined to form~~In April 2008, the ~~Company’s reportable segments. Consequently,~~Company re-organized its IT ~~Services and BPO services qualify as reportable segments under~~businesses by combining the Global IT Services and ~~Products.~~Products business and the India and AsiaPac IT Services and Products business and appointed joint Segment Chief Executive Officers for the combined IT businesses. Consequent to the reorganization, the Company identified IT Services and IT Products as the new operating and reportable segments within its IT business. There is no change in the reportable segments for other businesses.

~~139~~

~~The~~ IT Services segment provides IT and IT enabled services to customers. Key service offering includes software application development, application maintenance, research and development services for hardware and software design, ~~to technology~~data center outsourcing services and ~~telecommunication companies~~business process outsourcing services.

IT Products segment sells a range of Wipro personal desktop computers, Wipro servers and Wipro notebooks. We are also value added reseller of desktops, servers, notebooks, storage products, networking solutions and packaged software ~~application development services to corporate enterprises. The BPO services segment provides Business Process Outsourcing services to large global corporations.~~

As discussed in Note 3 on Acquisitions, between March 2006 and March 2007, the Company made several acquisitions. The operations of mPower, New Logic, cMango, Enabler, Saraware Oy and Quantech, which represent a componentfor leading international brands. In certain total outsourcing contracts of IT Services segment, the company delivers hardware, software and ~~Products,~~other related deliverables. Revenue relating to these items are ~~currently being reviewed by the CODM separately and have accordingly been~~ reported ~~separately as ‘Acquisitions’.~~

~~The India and AsiaPac IT Services and Products segment focuses primarily on addressing~~in the IT ~~and electronic commerce requirements of companies in India, Middle East and Asia Pacific region.~~Products segment.

The Consumer Care and Lighting segment manufactures, distributes and sells ~~soaps, toiletries,~~personal care products, baby care products, lighting products and hydrogenated cooking oils for the Indian and Asian market.

‘Others’ consist of business segments that do not meet the requirements individually for a reportable segment as defined in SFAS No. 131. Corporate activities such as treasury, legal and accounting, which do not qualify as operating segments under SFAS No. 131 have been considered as reconciling items. Fringe benefit tax, which is an expenditure related tax, incurred by the Company is not allocated to individual segments and is reported as a reconciling item.

Segment data for previous periods has been reclassified on a comparable basis. Information on reportable segments is as follows:

Information on reportable segments is as follows:


	Year ended March 31, 2005
										India and															Year ended March 31, 2007
	Global IT Services and Products									AsiaPac IT			Consumer																					Consumer
				BPO						Services and			Care and						Reconciling						IT Services and Products									Care and						Reconciling
	IT Services			Services			Total			Products			Lighting			Others			Items			Entity Total			IT Services			IT Products			Total			Lighting			Others			Items			Entity Total
Revenues		54,236.07			6,477.15			60,713.22			13,403.17			4,555.38			2,680.73			—			81,352.50			117,819			16,990			134,809			7,559			7,063			—			149,431

Exchange rate fluctuations		20.01			(44.12	)		(24.11	)		(8.62	)		(0.23	)		(6.74	)		39.70			—			(179	)		(25	)		(204	)		4			3			197			—


Total revenues		54,256.08			6,433.03			60,689.11			13,394.55			4,555.15			2,673.99			39.70			81,352.50			117,640			16,965			134,605			7,563			7,066			197			149,431
Cost of revenues		(33,780.07	)		(4,740.25	)		(38,520.32	)		(10,494.17	)		(2,926.22	)		(1,914.06	)		—			(53,854.77	)		(76,488	)		(15,325	)		(91,813	)		(4,905	)		(5,748	)		—			(102,468	)
Selling and marketing expenses		(3,121.70	)		(101.77	)		(3,223.47	)		(1,150.26	)		(876.68	)		(184.10	)		(31.75	)		(5,466.26	)		(6,587	)		(581	)		(7,168	)		(1,483	)		(477	)		(45	)		(9,173	)

General and administrative expenses		(2,225.94	)		(513.16	)		(2,739.10	)		(787.66	)		(82.26	)		(126.93	)		(7.65	)		(3,743.60	)		(6,487	)		(436	)		(6,923	)		(120	)		(501	)		(95	)		(7,639	)
Research and development expenses		(273.54	)		—			(273.54	)		—			—			—			—			(273.54	)
Amortization of intangible assets		(52.00	)		(70.00	)		(122.00	)		—			(18.29	)		—			—			(140.29	)		(244	)		(13	)		(257	)		(5	)		(7	)		—			(269	)
Exchange rate fluctuations		—			—			—			—			—			—			(92.12	)		(92.12	)		—			—			—			—			—			(197	)		(197	)
Others, net		14.56			—			14.56			7.21			19.11			17.54			16.87			75.29			93			29			123			17			51			29			220

Operating income of segment (1)		14,817.39			1,007.85			15,825.24			969.67			670.81			466.44			(74.95	)		17,857.21


Total assets of segment		29,297.05			8,747.54			38,044.59			5,676.32			1,670.62			1,948.26			24,735.32			72,075.11
Capital employed		21,289.71			8,122.14			29,411.85			1,594.54			936.44			1,403.21			24,479.91			57,825.95
Return on capital employed		78	%		14	%		60	%		52	%		86	%
Accounts receivable		10,765.92			977.11			11,743.03			2,292.42			263.66			507.25			—			14,806.36

Cash 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			28,628.35
Depreciation		1,666.79			515.74			2,182.53			93.32			65.54			47.90			48.67			2,437.96

~~140~~125


	Year ended March 31, 2006																											Year ended March 31, 2007
																																					Consumer
																												IT Services and Products									Care and						Reconciling
																												IT Services			IT Products			Total			Lighting			Others			Items			Entity Total
Operating income of segment⁽¹⁾																													27,927			639			28,566			1,067			384			(111	)		29,906


Total assets of segment																																			85,905			4,677			7,742			48,443			146,767
Capital employed opening																																			44,939			1,310			2,833			30,387			79,469
Capital employed closing																																			59,835			3,094			5,659			36,662			105,250
Average capital employed																																			52,387			2,202			4,246			33,524			92,359
Return on capital employed																																			55	%		49	%		—			—			33	%-
Accounts receivable																																			26,139			723			1,221			—			28,083
Cash and cash equivalents and investments securities																																			9,902			358			251			34,312			44,823
Depreciation																																			3,673			103			139			16			3,931
													India and
													AsiaPac IT															Year ended March 31, 2008
	Global IT Services and Products												Services			Consumer																					Consumer
							BPO						and			Care and						Reconciling						IT Services and Products									Care and						Reconciling
	IT Services			Acquisitions			Services			Total			Products			Lighting			Others			Items			Entity Total			IT Services			IT Products			Total			Lighting			Others			Items			Entity Total
Revenues		72,591.13			470.20			7,664.23			80,725.56			16,477.08			5,625.04			3,279.20			—			106,106.88			146,170			24,545			170,715			14,639			12,074			—			197,428

Exchange rate fluctuations		(172.15	)		(1.88	)		(37.78	)		(211.81	)		(2.34	)		0.20			5.38			208.57			—			90			74			164			(20	)		(19	)		(125	)		—


Total revenues		72,418.98			468.32			7,626.45			80,513.75			16,474.74			5,625.24			3,284.58			208.57			106,106.88			146,260			24,619			170,879			14,619			12,055			(125	)		197,428
Cost of revenues		(46,605.98	)		(380.15	)		(5,809.54	)		(52,795.67	)		(12,834.70	)		(3,556.43	)		(2,459.93	)		—			(71,646.73	)		(98,407	)		(22,036	)		(120,443	)		(8,681	)		(9,913	)		(199	)		(139,236	)
Selling and marketing expenses		(3,863.85	)		(28.92	)		(49.45	)		(3,942.22	)		(1,391.59	)		(1,160.42	)		(236.26	)		(33.86	)		(6,764.35	)		(9,013	)		(852	)		(9,865	)		(3,222	)		(632	)		(88	)		(13,807	)
General and administrative expenses		(3,345.48	)		(47.01	)		(751.52	)		(4,144.01	)		(841.24	)		(102.22	)		(112.02	)		(39.48	)		(5,238.97	)		(8,312	)		(894	)		(9,206	)		(816	)		(704	)		(94	)		(10,820	)
Research and development expenses		(202.26	)		—			—			(202.26	)		—			—			—			—			(202.26	)
Amortization of intangible assets		(8.00	)		(17.76	)		(4.94	)		(30.70	)		(12.00	)		(21.25	)		—			—			(63.95	)		(441	)		(30	)		(471	)		(111	)		(34	)		—			(616	)
Exchange rate fluctuations		—			—			—			—			—			—			—			(288.49	)		(288.49	)		—			—			—			—			—			125			125
Others, net		7.09			3.47			—			10.56			9.27			13.21			11.11			25.99			70.14			401			62			463			53			106			18			640

Operating income of segmen(1)		18,400.50			(2.05	)		1,011.00			19,409.45			1,404.48			798.13			487.48			(127.27	)		21,972.27
Operating income of segment⁽¹⁾																													30,488			869			31,357			1,842			878			(363	)		33,714


Total assets of segment		40,062.66			3,341.01			11,426.57			54,830.24			8,322.33			2,344.75			2,410.94			34,919.08			102,827.34									138,879			23,137			16,250			46,603			224,869
Accounts receivable		14,674.20			432.35			849.12			15,955.67			3,350.62			563.75			723.07			—			20,593.11
Cash and cash equivalents and investments in liquid and short-term mutual funds		5,000.57			245.69			4,097.57			9,343.83			240.81			178.03			367.89			29,042.39			39,172.95
Depreciation		2,128.92			59.41			623.80			2,812.13			117.05			81.73			58.87			31.45			3,101.23
Capital employed opening		21,289.71			—			8,122.14			29.411.85			2,245.41			936.44			1,403.21			23,829.04			57,825.95									59,835			3,094			5,659			36,662			105,250
Capital employed closing		27,777.90			3,049.94			10,337.07			41,164.91			3,124.13			1,309.70			1,790.09			32,080.06			79,468.89									99,673			19,308			6,990			48,219			174,190
Average capital employed		24,533.81			1,524.97			9,229.61			35,288.38			2,684.77			1,123.07			1,596.65			27,954.55			68,647.42									79,754			11,201			6,325			42,440			139,720
Return on capital employed		75	%					11	%		55	%		52	%		71	%																	39	%		16	%		—			—			24	%
Accounts receivable																																			35,241			2,246			1,421			—			38,908
Cash and cash equivalents and investments securities																																			22,103			735			104			31,136			54,078
Depreciation																																			4,818			198			308			19			5,343

																												Year ended March 31, 2009
																																					Consumer
																												IT Services and Products									Care and						Reconciling
																												IT Services			IT Products			Total			Lighting			Others			Items			Entity Total
Revenues																												Rs.	192,635		Rs.	33,519		Rs.	226,154		Rs.	19,302		Rs.	9,108		Rs.	—		Rs.	254,564

Exchange rate fluctuations																													(1,442	)		(95	)		(1,537	)		(59	)		(150	)		1,746			—


Total revenues																													191,193			33,424			224,617			19,243			8,958			1,746		Rs.	254,564
Cost of revenues																													(128,089	)		(30,175	)		(158,264	)		(10,785	)		(8,672	)		(455	)		(178,176	)
Selling and marketing expenses																													(11,270	)		(1,335	)		(12,605	)		(4,660	)		(293	)		(204	)		(17,762	)
General and administrative expenses																													(12,234	)		(717	)		(12,951	)		(1,203	)		(416	)		(126	)		(14,696	)
Amortization of intangible assets																													(1,061	)		(23	)		(1,084	)		(365	)		(39	)		—			(1,488	)
Exchange rate fluctuations																													—			—			—			—			—			(1,596	)		(1,596	)
Others, net																													271			44			315			64			136			29			544

126

Year ended March 31, 2007
India and
AsiaPac
IT
Global IT Services and Products Services Consumer
BPO and Care and Reconciling
IT Services Acquisitions Services Total Products Lighting Others Items Entity Total
Revenues 96,688.37 4,820.44 9,412.80 110,921.61 23,888.48 7,558.50 7,062.74 — 149,431.33

Exchange rate fluctuations (140.57 ) (15.03 ) (23.85 ) (179.45 ) (25.07 ) 4.40 3.06 197.06 —

Total revenues 96,547.80 4,805.41 9,388.95 110,742.16 23,863.41 7,562.91 7,065.80 197.06 149,431.33
Cost of revenues (62,671.33 ) (4,146.44 ) (6,172.97 ) (72,990.74 ) (18,555.11 ) (4,905.14 ) (5,749.25 ) — 102,200.24
Selling and marketing expenses (4,882.83 ) (116.82 ) (100.02 ) (5,099.67 ) (2,067.89 ) (1,482.75 ) (477.84 ) (44.77 ) (9,172.92 )
General and administrative expenses (4,230.46 ) (511.59 ) (982.52 ) (5,724.57 ) (1,198.32 ) (120.04 ) (500.35 ) (95.95 ) (7,639.23 )
Research and development expenses (267.71 ) — — (267.71 ) — — — — (267.71 )
Amortization of intangible assets — (220.11 ) (5.09 ) (225.20 ) (32.04 ) (4.33 ) (7.66 ) — (269.23 )
Exchange rate fluctuations — — — — — — — (235.69 ) (235.69 )
Others, net 12.92 80.61 0.10 93.63 29.08 18.74 50.54 29.49 221.48

Operating income of segment(1) 24,508.39 (108.94 ) 2,128.45 26,527.90 2,039.13 1,069.38 381.24 (149.86 ) 29,867.79

Total assets of segment 53,475.17 11,406.08 7,816.36 72,697.61 12,525.54 4,676.63 6,499.63 49,684.73 146,084.13
Accounts receivable 19,275.43 1,095.75 1,097.06 21,468.24 5,053.64 723.33 1,221.37 — 28,466.58
Cash and cash equivalents and investments in liquid and short-term mutual funds 6,137.25 2,455.60 420.78 9,013.63 887.81 357.98 251.24 34,311.94 44,822.60
Depreciation 2,710.70 176.84 616.66 3,504.20 168.03 103.76 139.05 15.52 3,930.56
Capital employed opening 27,777.90 3,049.94 10,337.07 41,164.91 3,124.13 1,309.70 1,790.09 32,080.06 79,468.89
Capital employed closing 37,403.64 10,257.15 6,456.04 54,116.83 5,717.95 3,093.82 4,417.08 37,903.41 105,249.09
Average capital employed 32,590.78 6,653.54 8,396.55 47,640.87 4,421.04 2,201.76 3,103.59 34,991.73 92,358.99
Return on capital employed 75 % -2 % 25 % 56 % 46 % 49 % — — —

Year ended March 31, 2009
Consumer
IT Services and Products Care and Reconciling
IT Services IT Products Total Lighting Others Items Entity Total
Operating income of segment⁽¹⁾
Rs. 38,810 Rs. 1,218 Rs. 40,028 Rs. 2,294 Rs. (326) Rs. (606) Rs. 41,390

Total assets of segment Rs. 192,406 Rs. 22,574 Rs. 7,667 Rs. 68,440 Rs. 291,087
Capital employed opening 99,673 19,308 6,990 48,219 174,190
Capital employed closing 125,243 18,507 6,452 57,023 207,225
Average capital employed 112,458 18,908 6,721 52,621 190,708
Return on capital employed 36 % 12 % 22 %
Accounts receivable 43,034 2,414 769 — 46,217
Cash and cash equivalents and investments securities 23,163 881 32 41,221 65,297
Depreciation 6,198 298 306 19 6,821

⁽¹⁾ Operating income of segments is after recognition of stock compensation expense arising from the grant of options:
~~141~~


Segments	2005		2006		2007		2007		2008		2009
IT Services	Rs.	297.55	Rs.	539.71		1,151.06	Rs.	1,218	Rs.	948	Rs.	1,368
BPO Services		12.62		22.77		48.89
India and AsiaPac IT Services and Products		19.02		39.64		79.56
IT Products								62		59		102
Consumer Care and Lighting		5.84		9.02		23.29		23		42		75
Others		4.49		16.63		13.15		13		5		18
Reconciling items		14.34		35.10		20.45		20		22		32

Total								1,336		1,076		1,595

The Company has four geographic segments: India, the United States, Europe and Rest of the world.

Revenues from the geographic segments based on domicile of the customer are as follows:


	Year ended March 31,						Year ended March 31,
	2005		2006		2007		2007		2008		2009
India	Rs.	19,349.64	Rs.	21,803.91	Rs.	30,650.06	Rs.	30,650	Rs.	46,891	Rs.	52,908
United States		41,811.59		53,481.07		72,846.27		72,846		87,552		116,281
Europe		16,602.35		24,310.22		36,972.00		36,972		48,259		57,109
Rest of the world		3,588.92		6,511.68		8,963.00		8,963		14,726		28,266

	Rs.	81,352.50	Rs.	106,106.88	Rs.	149,431.33	Rs.	149,431	Rs.	197,428	Rs.	254,564

~~30.~~28. Fair Value ~~of Financial Instruments~~Disclosures

The Company measures certain financial assets and liabilities at fair value on a recurring basis, including derivative instruments and investment securities. The fair value measurements of these derivative instruments and investment securities using the following inputs as of March 31, 2009:

Fair value measurements at
reporting date
Particulars Total Level 1 Level 2 Level 3
Assets

Derivative instruments^(a)
Rs. 1,165 Rs. — Rs. 1,165 Rs. —
Investments in liquid and short-term mutual funds^(b)
15,212 15,212 —
Investments in Certificate of Deposits^(b)
968 — 968 —
Liabilities

Derivative instruments^(c)
12,024 — 12,024 —


(a)		Included in other current assets in the consolidated balance sheet

(b)		Included in short term investments in the consolidated balance sheet

(c)		Included in other current liabilities in the consolidated balance sheet

Derivatives.The Company involves independent appraisers to determine the fair value of derivative instruments. The fair value is determined based on observable market inputs including currency spot and forward rates, yield curves, currency volatility etc.

Investments.Investments in liquid & short-term mutual funds which are classified as available-for-sale are measured using quoted market prices at the reporting date multiplied by the quantity held. Fair value of investments in certificate of deposits, classified as available for sale is determined by an independent appraiser using the market observable yields.

Further, the fair value of the Company’s current assets and current liabilities approximate their carrying value because of their short term maturity. Such financial instruments are classified as current and are expected to be liquidated within the next twelve months. A substantial portion of the Company’s long-term debt has been contracted at floating rate of interest which is reset at short intervals. Accordingly, carrying value of such debt approximates fair value as of March 31, 2009.

~~142~~127

Item 19. Exhibits


Exhibit
Number		Description
1.1		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 (1999 plan) (1)

4.2		2000 Employee Stock Option Plan (2000 plan) (1)

4.3		Wipro Equity Reward Trust (1)

4.4		2000 ADS Option Plan (2000 ADS Plan) (3)

4.5		Wipro Employee ADS Restricted Stock Unit Plan 2004 (WARSUP 2004 plan) (4)

4.6		Wipro Employee Restricted Stock Unit Plan 2004 (WRSUP 2004 plan)(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 2005 (WRSUP 2005 plan) (6)

4.11		Wipro Employee Restricted Stock Unit Plan 2007 (WRSUP 2007 Plan) (9)

4.12		Amendment No. 1 to 1999 plan, 2000 plan, 2000 ADS plan, WRSUP 2004 Plan, WARSUP 2004 Plan and WRSUP 2005 Plan (9)

4.13		Amendment No. 2 to 1999 plan, 2000 plan, WRSUP 2004 Plan and WRSUP 2005 Plan (9)

4.14		Amendment No. 3 to WRSUP 2004 Plan and WRSUP 2005 Plan (9)

4.15		Amendment No. 2 to WARSUP 2004 Plan (9)

4.16		Amendment No. 3 to 2000 Plan (9)

11.1		Code of Ethics for Principal and Finance Officers (2)

12.1		Certification of Chief Executive Officer under Section 302 of the Sarbanes Oxley Act

12.2		Certification of Chief Financial Officer under Section 302 of the Sarbanes Oxley Act

13		Certification of Chief Executive Officer and Chief Financial Officer under Section 906 of the Sarbanes Oxley Act
~~23.1~~
15.1		Consent of Independent Registered Public Accounting Firm
~~99.1~~
15.2		Wipro’s Ombudsprocess (2)
~~99.2~~
15.3		Code of Business Conduct and Ethics (7)
~~99.3~~		~~Amendment No.1 to the Charter For The~~
15.4		Audit Committee ~~Of The Board Of Directors Of Wipro Limited filed as exhibit no. 99.3 of 20-F filed on June 13, 2005~~Charter (8)
~~99.4~~
15.5		Board Governance and Compensation Committee Charter (6)


(1)		Incorporated by reference to ~~exhibits~~Exhibits filed with the Registrant’s Registration Statement on Form F-1 (File No. 333-46278) in the form declared effective September 26, ~~2000.~~2000, and amended exhibits filed with the Registrant’s Form 6-K (File No. 001-16139) filed on July 30, 2008.

(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.

(6)		Incorporated by reference to Exhibits filed with the Registrant’s Annual Report on Form 20-F filed on June 22, 2006.

(7)		Incorporated by reference to Exhibits filed with the Registrant’s Annual Report on Form 20-F filed on May 30, 2007

(8)		Incorporated by reference to Exhibits filed with the Registrant’s Annual Report on Form 20-F filed on June 13, 2005, as amended by Exhibit with the Registrant’s Annual Report on Form 20-F filed on May 30, 2007

(9)		Incorporated by reference to Exhibits filed with the Registrant’s Annual Report on Form 20-F filed on May 30, 2008

~~143~~128

SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this Annual Report on its behalf.

For Wipro Limited


Bangalore, India	/s/ Azim H. Premji	/s/ Suresh C. Senapaty

Date: May ~~30, 2007~~18, 2009	Azim H. Premji,	Suresh C. Senapaty,

	Chairman and Managing Director	~~Suresh C. Senapaty,~~ ~~Executive Vice President, Finance~~Chief Financial Officer and Director

~~144~~129


~~PART I~~
	~~Item 1. Identity of Directors, Senior Management and Advisers~~
	~~Item 2. Offer Statistics and Expected Timetable~~
	~~Item 3. Key Information~~
	~~Item 4. Information on the Company~~
	~~Item 4A. Unresolved Staff Comments~~
	~~Item 5. Operating and Financial Review and Prospects~~
	~~Item 6. Directors, Senior Management and Employees~~
	~~Item 7. Major Shareholders And Related Party Transactions~~
	~~Item 8. Financial Information~~
	~~Item 9. The Offer and Listing~~
	~~Item 10. Additional Information~~
	~~Item 11. Quantitative and Qualitative Disclosures About Market Risk~~
	~~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~~
	~~Item 16 A. Audit Committee Financial Expert~~
	~~Item 16 B. Code of Ethics~~
	~~Item 16 C. Principal Accountant Fees and Services~~
	~~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~~
	~~Item 19. Exhibits~~
~~SIGNATURES~~
~~EXHIBIT 12.1~~
~~EXHIBIT 12.2~~
~~EXHIBIT 13~~
~~EXHIBIT 23.1~~
~~EXHIBIT 99.2~~
~~EXHIBIT 99.3~~

	•		our strategy to finance our operations, including our planned construction and expansion;

	•		future marketing efforts, advertising campaigns, and promotional efforts;

	•		future growth and market share projections, including projections regarding developments in technology and the effect of growth on our management and other resources;

	•		the effect of facility expansion on our fixed costs;

	•		our future expansion plans, including our intention to establish new development facilities in Southeast Asia and Europe;

	•		our future acquisition strategy, including plans to acquire or make investments in complementary businesses, technologies, services or products, or enter into strategic partnerships with parties who can provide access to those assets;

	•		the future impact of our acquisition;

	•		our strategy and intentions regarding new product branding, including intentions to introduce acquired personal care product brands to establish our presence in the markets for personal care products in India;

	•		the future competitive landscape and the effects of different pricing strategies;

	•		the effect of current tax laws, including the branch profit tax;

	•		the effect of future tax laws on our business;

	•		the outcome of any legal proceeding, hearing, or dispute (including tax hearings) and the resulting effects on our business;

	•		projections that the legal proceedings and claims that have arisen in the ordinary course of our business will not have a material and adverse effect on the results of operations or the financial position of the Company;

	•		expectations of future a dividend payout;

	•		projections that our cash and cash equivalent along with cash generated from operations will be sufficient to meet certain of our obligations;

	•		our compensation strategy;

	•		projections regarding currency transactions, including the effect of exchange rates on the Indian rupee and the U.S. dollar;

	•		the nature of our revenue streams, including the portion of our IT Services revenue generated from a limited number of corporate clients;

	•		the effect of a strategically located network of software development centers, and whether it will provide us with cost advantages;

	•		our ability to anticipate and develop new services and enhance existing services in order to keep pace with rapid changes in technology;

	•		projections regarding future economic policy, legislation, foreign investment, currency exchange and other policy matters that may affect our business;

	•		the nature and flexibility of our business model;

	•		expectations as to our future revenue, margins, expenses and capital requirements; and

	•		market risk in the section titled “Quantitative and Qualitative Disclosure About Market Risk” under Item 11 of this Annual Report on Form 20-F.


Part I -			4
Item 1. Identity of Directors, Senior Management and Advisers			4
Item 2. Offer Statistics and Expected Timetable			4
Item 3. Key Information			5
Item 4. Information on the Company			21
Item 4A Unresolved Staff Comments			39
Item 5. Operating and Financial Review and Prospects			39
Item 6. Directors, Senior Management and Employees			59
Item 7. Major Shareholders and Related Party Transactions			68
Item 8. Financial Information			69
Item 9. The Offer and Listing			69
Item 10. Additional Information			72
Item 11. Quantitative and Qualitative Disclosure About Market Risk			85
Item 12. Description of Securities Other than Equity Securities			87

Part II -			87
Item 13. Defaults, Dividend Arrearages and Delinquencies			87
Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds			87
Item 15. Controls and Procedures			87
Item 16 A. Audit Committee Financial Expert			90
Item 16 B. Code of Ethics			90
Item 16 C. Principal Accountant Fees and Services			90
Item 16 D. Exemptions from the Listing Standards for Audit Committees			91
Item 16 E. Purchase of Equity Securities by the Issuer and Affiliated Purchasers			91
Item 16 F. Changes in registrant’s Certifying Accountant			91
Item 16 G. Corporate Governance			91

Part III -			91
Item 17. Financial Statements			91
Item 18. Financial Statements			92
Item 19. Exhibits			128
EX-12.1
EX-12.2
EX-13
EX-15.1


Month	High		Low
April 2007		43.05		40.56
March 2007		44.43		42.78
February 2007		44.21		43.87
January 2007		44.49		44.07
December 2006		44.70		44.11
November 2006		45.26		44.46


Month	High		Low
April 2009		50.48		49.55
March 2009		51.96		50.21
February 2009		50.88		48.37
January 2009		49.07		48.25
December 2008		50.05		46.74
November 2008		50.12		47.25

	•		~~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; and~~

	•		~~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.~~


	•		Use efficient global sourcing models to source IT services from various geographies and develop methodologies to develop and integrate solutions from around the ~~globe.~~globe;

	•		Leverage our experience in providing IT infrastructure management services in the Indian market and ~~our access~~data center capabilities of Infocrossing Inc. to ~~existing clients outside India to provide~~expand our technology infrastructure support services;

	•		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 service line by investing onin eBusiness solutions around information security, business intelligence and information system, service oriented architecture and web based ~~applications.~~applications; and

	•		Expand our business consulting services and position consulting services as strategic differentiator over other competing entities.

	•		Development.We offer well-defined and mature application development processes 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, we were engaged by a ~~leading electronics~~gaming company to develop one of the world’s first physics processing solutions targeted at PC-based games market. We were involved in physics ASIC designing, deployment and functional validation of the ~~United States used to sell products of a particular division online.~~hardware, prototype. We ~~helped the~~facilitate manufacture, test and delivery in compliance with global certification standards. This enabled our client to ~~develop online sales capability at other divisions by building an oracle application interface~~focus on developing user market while we focused on delivering the solution in accordance with ~~EDI systems, third-party software 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.~~overall business strategy.

	•		~~Re-engineering.~~Re-engineering and maintenance.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~~were engaged by a utility company in U.K. for streamlining and reducing manual components in the business process of providing gas connections to customers. We reviewed the entire process of planning, scheduling and the final execution of the ~~world’s largest water companies~~requests of customers. Through our BPA/I expertise and our standard methodologies (six sigma / lean analysis, process modeling simulation), we were able to achieve significant reduction in ~~a strategic re-engineering initiative to streamline its IT operations to ensure better service~~ delivery ~~improved customer relationship~~costs, reduce handoffs 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~~provide visibility on bottlenecks 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.resource utilization.

	•		~~Maintenance.~~To meet the needs of a changing business environment with limited internal resource utilization, we maintain legacy software applications that require frequent upgrades. Our maintenance services also support a distributed delivery environment wherein work responsibilities can be effectively divided between the various organizations depending on the criticality of the requests. For example, we have assisted a leading owner, operator and developer of gas transportation systems in adopting an offshore development center model for maintaining and supporting its shipper services systems as well as other parts of its diverse business application portfolio. We gradually transitioned the client’s applications and have taken over the maintenance and support for the majority of the clients applications. The shipper services systems are now characterized by well defined roles and responsibilities, clear processes and closely coordinated on-site and offshore delivery.


	Number of clients in
	Year ended		Year ended		Year ended
	March 31,		March 31,		March 31,
Per client revenue($)	2005		2006		2007
1-3 million		64		103		119

	•		~~technology products;~~Positioning — build enhanced solution capabilities to position ourselves as a Valued Added System Integrator;

	•		~~technology integration, IT management and infrastructure outsourcing services;~~Geo expansion — we are expanding our market address into newer geographies;

	•		~~custom application development, application integration, package implementation~~Product-line expansion

	o		new form factors and ~~maintenance; and~~functionalities to address a broader spectrum of users branded under “e.GO”

	•o		~~consulting.~~high-end Itanium servers and modular storage

	•		~~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. Our total outsourcing proposition delivers improved business benefit by effectively managing the Information Technology life cycle of the organization and achieving maximum value by providing end-to-end best of breed IT practices for the clients’’ business. Through our acknowledged quality processes and program governance frameworks, we help our clients’ achieve and sustain business momentum.

	•		~~Managed Services.~~We manage, monitor and support our clients’ technology infrastructure. Our managed services portfolio includes IT Service Desk, End User Services, Data Centre Services, Contact Centre Technology Management Services, Application Management and Business Service Management.

	•		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.

	•		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.

§		~~As a result of the foregoing factors, operating income increased by 36% from Rs. 21,972 million for the year ended March 31, 2006 to Rs. 29,868 million for the year ended March 31, 2007.~~

§		Other income, net, increased from Rs. 1,276 million for the year ended March 31, 2006 to Rs. 2,667 million for the year ended March 31, 2007. The increase in other income was primarily due to an increase in the average quantum of investments and an increase in the average yield during the year ended March 31, 2007.

§		Income taxes increased by 14% from Rs. 3,265 million for the year ended March 31, 2006 to Rs. 3,723 million for the year ended March 31, 2007. Our effective tax rate decreased from 13.9% for the year ended March 31, 2006 to 11.3% for the year ended March 31, 2007. This decrease was primarily attributable to reversal of income taxes in respect of prior years and an increase in the share of income which is exempt from tax.

§		Equity in earnings of affiliates for the year ended March 31, 2006 and 2007 was Rs. 288 million and Rs. 318 million respectively. Equity in earnings of affiliates of Rs. 318 million for the year ended March 31, 2007 comprises equity in earnings of Wipro GE of Rs. 302 million, net gain on sale of a portion of the interest in WeP Peripherals of Rs. 40 million and equity in loss of WM Net Serv of Rs. 24 million. Equity in earnings of affiliates of Rs. 288 million for the year ended March 31, 2006 comprises equity in earnings of Wipro GE of Rs. 259 million and equity in earnings of WeP Peripherals of Rs. 29 million.

§		~~As a result of the foregoing factors, net income increased by 44% from Rs. 20,270 million for the year ended March 31, 2006 to Rs. 29,169 million for the year ended March 31, 2007.~~

§		Our total revenues increased by 30% from Rs. 81,353 million for the year ended March 31, 2005 to Rs. 106,107 million for the year ended March 31, 2006. This was driven primarily by a 34%, 19%, 23%, 23% and 23% increase in revenue from our IT Services and Products, BPO Services, India and AsiaPac IT Services and Products, Consumer Care and Lighting and Others business segments, respectively.

§		As a percentage of total revenue, gross profit declined marginally by 1% from 34% for the year ended March 31, 2005 to 33% for the year ended March 31, 2006. This was primarily on account of a decline in gross profit as a percentage of revenue from our IT Services and Products segment ~~from 38% for the year ended March 31, 2005 to 36% for the year ended March 31, 2006~~by 82 bps and ~~BPO Services from 26% for the year ended March 31, 2005 to 24% for the year ended March 31, 2006 which was partially offset by~~ an increase in gross profit as a percentage of revenue from our Consumer Care and Lighting segment by 1%548 bps.

	§		Our selling and marketing expenses as a percentage of revenue has increased from ~~36%~~6.14% for the year ended March 31, ~~2005~~2007 to ~~37%~~6.99% for the year ended March 31, ~~2006. Gross profit~~2008. In absolute terms selling and marketing expense have increased by 51%, primarily due to increase in the IT Services and Consumer Care and Lighting segments.

	§		Our general and administrative expenses as a percentage of ~~revenues~~revenue has increased from ~~our India and AsiaPac IT Services and Products remained constant at 22% for the years ended March 31, 2005 and 2006.~~

§		~~Selling and marketing expenses increased by 24% from Rs. 5,466 million~~5.11% for the year ended March 31, ~~2005~~2007 to ~~Rs. 6,764 million~~5.48% for the year ended March 31, ~~2006. This increase was~~2008.In absolute terms general and administrative expenses have increased by 42%, primarily on account of an increase in selling and marketing expenses in our IT Services business by Rs. 771 million, a decrease in BPO Services by Rs. 52 million, an increase in selling and marketing expenses in our India and AsiaPac IT Services and Products business by Rs. 241 million anddue to increase in the ~~selling~~IT Services and ~~marketing expenses in our~~ Consumer Care and Lighting ~~business by Rs. 284 million and an increase in selling and marketing expenses in Others including reconciling items by Rs. 54 million.~~segments.

§		General and administrative expenses increased 40% from Rs. 3,744 million for the year ended March 31, 2005 to Rs. 5,238 million for the year ended March 31, 2006. This increase was primarily on account of an increase in general and administrative expenses of our IT Services and Products business by Rs. 1,167 million, an increase in BPO Services by Rs. 238 million, an increase in general and administrative expenses of our India and AsiaPac IT Services and Products business by Rs. 53 million, an increase in general and administrative expenses of our Consumer Care and Lighting business by Rs. 20 million and an increase in general and administrative expenses of Others including reconciling items by Rs. 16 million.

§		As a result of the foregoing factors, our operating income increased by ~~23%~~13% from Rs. ~~17,857 million~~29,906 for the year ended March 31, ~~2005~~2007 to Rs. ~~21,972 million~~33,714 for the year ended March 31, ~~2006.~~2008.

	§		~~Other~~Our other income, net, ~~increased~~decreased from Rs. ~~799 million~~2,628 for the year ended March 31, ~~2005~~2007 to Rs. ~~1,276 million~~2,167 for the year ended March 31, ~~2006.~~2008. The ~~increase in other income is primarily due to an increase in the average quantum of investments and an increase in the average yield during the year ended March 31, 2006.~~

§	•	~~Global~~Our revenue from IT Services ~~and Products~~segment grew by 31%. In USD terms our revenue ~~increased~~grew by ~~37%~~19% from $3,647 to $4,323. Our average USD/INR realization increased from Rs. ~~80,726 million~~40.1 for the year ended March 31, ~~2006~~2008 to ~~Rs. 110,921 million~~Rs 44.2 for the year ended March 31, ~~2007. IT Services and Products revenue increased by 39% from Rs. 73,061 million for the year ended March 31, 2006~~2009.

		This growth of 19% was primarily due to Rs. 101,509 million for the year ended March 31, 2007. The increase in revenues from IT Services and Products is attributable primarily to two factors. First, we integrated the acquisitions of mPower, New logic, cMango, Saraware, Enabler and Quantech. Second, the increase in revenue from this business segment comprises a 41% increase in revenue from enterprise services and a 30% increase in revenue from ~~technology services. The~~retail and transportation services, a 27% increase in revenues from financial services, a 26% increase in revenues from manufacturing and

	§		Global IT Services and Products revenue increased by 33% from Rs. 60,713 million for the year ended March 31, 2005 to Rs. 80,726 million for the year ended March 31, 2006. IT Services and Products revenue increased by 34% from Rs. 54,256 million for the year ended March 31, 2005 to Rs. 73,061 million for the year ended March 31, 2006. This increase was attributable primarily to two factors. First, we acquired mPower and New Logic in December 2005. Second, the increase in revenues from IT Services comprises of a 36% increase in revenues from enterprise services and a 36% increase in revenue from technology services. The increase in revenue from enterprise services was primarily driven by increased revenue from services provided to customers in the financial services, energy and utilities and healthcare and other sectors. The increase in revenue from technology services was primarily driven by increased revenue from the design and development of embedded software solutions for customers in the consumer electronics sector. In our IT Services and Products business segment, we added 166 new clients during the year ended March 31, 2006. The total number of clients that individually accounted for over $ 1 million run rate in revenue increased from 144 as of March 31, 2005 to 195 as of March 31, 2006.

			BPO Services revenue increased by 19% from Rs. 6,433 million for the year ended March 31, 2005 to Rs. 7,626 million for the year ended March 31, 2006. This increase in revenue from our BPO Services business segment was primarily due to an increase in the number of clients and an increase in the scope and volume of services provided to existing clients. In our BPO Services business segment, we added 5 new clients during the year ended March 31, 2006. The total number of clients that individually accounted for over $ 1 million run rate in revenue increased from 13 as of March 31, 2005 to 17 as of March 31, 2006.

	§		Our gross profit as a percentage of revenues of our Global IT Services and Products has decreased by 2% from 37% of revenue for the year ended March 31, 2005 to 35% of revenue for the year ended March 31 2006 primarily on account of:

			Our gross profit as a percentage of revenues of our IT services and products declined by 2% from 38% for the year ended March 31, 2005 to 36% for the year ended March 31, 2006. The decrease was primarily due to an increase in compensation costs for offshore and onsite employees, as a part of our compensation review in November 2005 and January 2006 respectively, an increase in amortization of deferred compensation costs and impact of fringe benefit taxes. Our gross profit as a percentage of revenues was also impacted by the new acquisitions which have a lower gross profit margin.

			Our gross profit as a percentage of revenues of our BPO services declined by 2% from 26% for the year ended March 31, 2005 to 24% for the year ended March 31, 2006. The decrease was primarily due to increase in compensation costs as part of our compensation review in October 2005, an increase in amortization of deferred compensation costs and the impact of fringe benefit taxes.review.

	•		Our revenue from the IT Products segment grew by 36%. This increase is primarily due to growth in revenues across all product lines.

	•		Our gross profit as a percentage of our revenue from our IT Products segment decreased by 77 bps. This decline is primarily attributable to increase in the procurement cost of imported items due to depreciation of the Indian Rupee against U.S. Dollar during the year ended March 31, 2009.

	•		Selling and marketing expenses as a percentage of revenue from our IT Products segment has increased marginally from 3.46% for the year ended March 31, 2008 to 3.99% for the year ended March 31, 2009. In absolute terms selling and marketing expenses increased by 483. The increase in selling and marketing expenses in absolute terms was primarily due to focus on our increasing presence in select geographies.

			~~services and system integration services and growth in our core service business of hardware and software support and maintenance services~~.

	§		As a percentage of India and AsiaPac IT Services and Products revenue, gross profit remained constant at 22% for the years ended March 31, 2005 and 2006. Our gross profit as a percentage of revenues of our services segment of our India and AsiaPac IT Services and Products declined by 1% from 43% for the year ended March 31, 2005 to 42% for the year ended March 31, 2006. This decline was offset by an increase in the gross profit as a percentage of revenues of our products segment of our India and AsiaPac IT Services and Products by 1% from 10% for the year ended March 31, 2005 to 11% for the year ended March 31, 2006.

	§		Selling and marketing expenses for our India and AsiaPac IT Services and Products business segment increased by 21% from Rs. 1150 million for the year ended March 31, 2005 to Rs. 1,392 million for the year ended March 31, 2006. This was primarily due to two factors. First, an increase in compensation costs due to an increase in the number of sales and marketing personnel for this business segment and an increase in compensation costs as part of our compensation review in November 2005. Second, an increase in shipping and handling costs from Singapore to customer locations on account of an increase in proportion of revenues from our overseas manufacturing facilities.

	§		General and administrative expenses for our India and AsiaPac IT Services and Products business segment increased by 7% from Rs. 788 million for the year ended March 31, 2005 to Rs. 841 million for the year ended March 31, 2006. This was primarily due to an increase in compensation costs as part of our compensation review in November 2005.

	§		As a result of the above, operating income of our India and AsiaPac IT Services and Products increased by 45% from Rs. 970 million for the year ended March 31, 2005 to Rs. 1,404 million for the year ended March 31, 2006.

~~Mr. N. Vaghul~~

~~Chairman of the Audit Committee~~

~~Messrs. P. M. Sinha and B. C. Prabhakar~~

Mr. N. Vaghul — Chairman of the Audit Committee
Mr. P. M. Sinha and B. C. Prabhakar — Members of the Audit Committee