Exhibit 99.5
WIPRO LIMITED
CIN: L32102KA1945PLC020800 ; Registered Office : Wipro Limited, Doddakannelli, Sarjapur Road, Bengaluru - 560035, India
Website: www.wipro.com ; Email id – info@wipro.com ; Tel: +91-80-2844 0011 ; Fax: +91-80-2844 0054
STATUTORILY AUDITED CONSOLIDATED FINANCIAL RESULTS FOR THE THREE MONTHS ENDED JUNE 30, 2021
UNDER IFRS (IASB)
(₹ in millions, except share and per share data, unless otherwise stated)
Particulars | Three months ended | Year ended | ||||||||||||||||
June 30, 2021 | March 31, 2021 | June 30, 2020 | March 31, 2021 | |||||||||||||||
Income from operations | ||||||||||||||||||
a) Revenue | 182,524 | 162,454 | 149,131 | 619,430 | ||||||||||||||
b) Other operating income/(loss), net | 2,150 | — | 97 | (81 | ) | |||||||||||||
c) Foreign exchange gains | 1,160 | 886 | 1,205 | 2,995 | ||||||||||||||
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I | Total income from operations | 185,834 | 163,340 | 150,433 | 622,344 | |||||||||||||
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Expenses | ||||||||||||||||||
a) Purchase of stock-in-trade | 1,437 | 2,064 | 1,766 | 6,957 | ||||||||||||||
b) Changes in inventories of finished goods and stock-in-trade | 68 | 36 | 176 | 315 | ||||||||||||||
c) Employee benefit expense | 102,711 | 86,172 | 80,262 | 332,371 | ||||||||||||||
d) Depreciation, amortization and impairment | 8,390 | 6,995 | 6,154 | 27,656 | ||||||||||||||
e) Sub-contracting/ technical fees | 24,619 | 21,494 | 21,218 | 83,609 | ||||||||||||||
f) Facility expenses | 5,650 | 5,288 | 4,627 | 20,255 | ||||||||||||||
g) Travel | 1,435 | 1,310 | 1,290 | 5,258 | ||||||||||||||
h) Communication | 1,516 | 1,452 | 1,354 | 6,069 | ||||||||||||||
i) Legal and professional fees | 2,207 | 1,589 | 1,311 | 5,561 | ||||||||||||||
j) Marketing and brand building | 425 | 332 | 129 | 1,011 | ||||||||||||||
k) Lifetime expected credit loss | (253 | ) | (109 | ) | 1,589 | 1,506 | ||||||||||||
l) Other expenses | 2,909 | 2,550 | 3,619 | 8,723 | ||||||||||||||
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II | Total expenses | 151,114 | 129,173 | 123,495 | 499,291 | |||||||||||||
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III | Finance expenses | 746 | 1,122 | 1,299 | 5,088 | |||||||||||||
IV | Finance and Other Income | 4,619 | 4,447 | 5,281 | 20,912 | |||||||||||||
V | Share of net profit of associates accounted for using the equity method | 7 | 4 | 31 | 130 | |||||||||||||
VI | Profit before tax [I-II-III+IV+V] | 38,600 | 37,496 | 30,951 | 139,007 | |||||||||||||
VII | Tax expense | 6,225 | 7,755 | 6,838 | 30,345 | |||||||||||||
VIII | Profit for the period [VI-VII] | 32,375 | 29,741 | 24,113 | 108,662 | |||||||||||||
IX | Total Other comprehensive income | 3,302 | (616 | ) | 4,989 | 6,679 | ||||||||||||
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Total comprehensive income for the period [VIII+IX] | 35,677 | 29,125 | 29,102 | 115,341 | ||||||||||||||
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X | Profit for the period attributable to: | |||||||||||||||||
Equity holders of the Company | 32,321 | 29,721 | 23,902 | 107,946 | ||||||||||||||
Non-controlling Interests | 54 | 20 | 211 | 716 | ||||||||||||||
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32,375 | 29,741 | 24,113 | 108,662 | |||||||||||||||
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Total comprehensive income for the period attributable to: | ||||||||||||||||||
Equity holders of the Company | 35,600 | 29,105 | 28,955 | 114,678 | ||||||||||||||
Non-controlling Interests | 77 | 20 | 147 | 663 | ||||||||||||||
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35,677 | 29,125 | 29,102 | 115,341 | |||||||||||||||
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XI | Paid up equity share capital (Par value ₹ 2 per share) | 10,958 | 10,958 | 11,429 | 10,958 | |||||||||||||
XII | Reserves excluding revaluation reserves and Non-controlling Interests as per balance sheet | 542,137 | ||||||||||||||||
XIII | Earnings per share (EPS) | |||||||||||||||||
(Equity shares of par value of ₹ 2/- each) | ||||||||||||||||||
(EPS for the three months ended periods is not annualized) | ||||||||||||||||||
Basic (in ₹) | 5.92 | 5.39 | 4.20 | 19.11 | ||||||||||||||
Diluted (in ₹) | 5.90 | 5.38 | 4.19 | 19.07 |
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1. | The audited consolidated financial results of the Company for the three months ended June 30, 2021 have been approved by the Board of Directors of the Company at its meeting held on July 15, 2021. The Company confirms that its statutory auditors, Deloitte Haskins & Sells LLP have issued an audit report with unmodified opinion on the consolidated financial results. |
2. | The above consolidated financial results have been prepared from the interim condensed consolidated financial statements, which are prepared in accordance with International Financial Reporting Standards and its interpretations (“IFRS”), as issued by the International Accounting Standards Board (“IASB”). All amounts included in the consolidated financial results (including notes) are reported in millions of Indian rupees (₹ in millions) except share and per share data, unless otherwise stated. |
3. | Estimation uncertainty relating to the global health pandemic on COVID-19 |
In assessing the recoverability of receivables including unbilled receivables, contract assets and contract costs, goodwill, intangible assets, and certain investments, the Company has considered internal and external information up to the date of approval of these consolidated financial results including credit reports and economic forecasts. The Company has performed sensitivity analysis on the assumptions used herein. Based on the current indicators of future economic conditions, the Company expects to recover the carrying amount of these assets.
The Company basis its assessment believes that the probability of the occurrence of forecasted transactions is not impacted by COVID-19. The Company has also considered the effect of changes, if any, in both counterparty credit risk and own credit risk while assessing hedge effectiveness and measuring hedge ineffectiveness and continues to believe that there is no impact on effectiveness of its hedges.
The impact of COVID-19 remains uncertain and may be different from what we have estimated as of the date of approval of these consolidated financial results and the Company will continue to closely monitor any material changes to future economic conditions.
4. | List of subsidiaries and investments accounted for using equity method as at June 30, 2021 are provided in the table below: |
Subsidiaries | Subsidiaries | Subsidiaries | Country of | |||
Wipro, LLC | USA | |||||
Wipro Gallagher Solutions, LLC | USA | |||||
Wipro Opus Risk Solutions LLC (formerly known as Wipro Opus Mortgage Solutions LLC) | USA | |||||
Wipro Insurance Solutions, LLC | USA | |||||
Wipro IT Services, LLC | USA | |||||
HealthPlan Services, Inc. ** | USA | |||||
Wipro Appirio, Inc. ** | USA | |||||
Designit North America, Inc. | USA | |||||
Infocrossing, LLC | USA | |||||
Wipro US Foundation | USA | |||||
International TechneGroup Incorporated ** | USA | |||||
Wipro Designit Services, Inc. ** | USA | |||||
Wipro VLSI Design Services, LLC | USA | |||||
Cardinal US Holdings, Inc** | USA | |||||
Wipro Overseas IT Services Private Limited | India | |||||
Wipro Japan KK | Japan | |||||
Wipro Shanghai Limited | China | |||||
Wipro Trademarks Holding Limited | India | |||||
Wipro Travel Services Limited | India | |||||
Wipro Holdings (UK) Limited | U.K. | |||||
Designit A/S | Denmark | |||||
Designit Denmark A/S | Denmark | |||||
Designit Germany GmbH | Germany | |||||
Designit Oslo A/S | Norway | |||||
Designit Sweden AB | Sweden | |||||
Designit T.L.V Ltd. | Israel | |||||
Designit Tokyo Ltd. | Japan | |||||
Designit Spain Digital, S.L. ** | Spain | |||||
Wipro Europe Limited | U.K. | |||||
Wipro UK Limited | U.K. |
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Wipro Financial Services UK Limited | U.K. | |||||
Wipro IT Services S.R.L. | Romania | |||||
Wipro Gulf LLC | Sultanate of Oman | |||||
Wipro 4C NV | Belgium | |||||
Wipro 4C Danmark ApS | Denmark | |||||
4C Nederland B.V | Netherlands | |||||
Wipro Weare4C UK Limited ** | U.K. | |||||
Wipro 4C Consulting France SAS | France | |||||
Wipro IT Services UK Societas | U.K. | |||||
Wipro Doha LLC # | Qatar | |||||
Wipro Technologies SA DE CV | Mexico | |||||
Wipro Holdings Hungary Korlátolt Felelősségű Társaság | Hungary | |||||
Wipro Holdings Investment Korlátolt Felelősségű Társaság | Hungary | |||||
Wipro Information Technology Egypt SAE | Egypt | |||||
Wipro Arabia Co. Limited * | Saudi Arabia | |||||
Women’s Business Park Technologies Limited * | Saudi Arabia | |||||
Wipro Poland SP Z.O.O | Poland | |||||
Wipro IT Services Poland SP Z.O.O | Poland | |||||
Wipro Technologies Australia Pty Ltd | Australia | |||||
Wipro Corporate Technologies Ghana Limited | Ghana | |||||
Wipro Technologies South Africa (Proprietary) Limited | South Africa | |||||
Wipro Technologies Nigeria Limited | Nigeria | |||||
Wipro IT Service Ukraine, LLC | Ukraine | |||||
Wipro Information Technology Netherlands BV. | Netherlands | |||||
Wipro Portugal S.A. ** | Portugal | |||||
Wipro Technologies Limited | Russia | |||||
Wipro Technology Chile SPA | Chile | |||||
Wipro Solutions Canada Limited | Canada | |||||
Wipro Information Technology Kazakhstan LLP | Kazakhstan | |||||
Wipro Technologies W.T. Sociedad Anonima | Costa Rica | |||||
Wipro Outsourcing Services (Ireland) Limited | Ireland | |||||
Wipro Technologies VZ, C.A. | Venezuela | |||||
Wipro Technologies Peru SAC | Peru | |||||
Wipro do Brasil Technologia Ltda ** | Brazil | |||||
Wipro Technologies SA | Argentina | |||||
Wipro Technologies SRL | Romania | |||||
PT. WT Indonesia | Indonesia | |||||
Wipro (Thailand) Co. Limited | Thailand | |||||
Wipro Bahrain Limited Co. W.L.L | Bahrain | |||||
Rainbow Software LLC | Iraq | |||||
Cardinal Foreign Holdings S.á.r.l | Luxembourg | |||||
Cardinal Foreign Holdings 2 S.á.r.l ** | Luxembourg | |||||
Wipro Networks Pte Limited | Singapore | |||||
Wipro (Dalian) Limited | China | |||||
Wipro Technologies SDN BHD | Malaysia | |||||
Wipro Chengdu Limited | China | |||||
Wipro Philippines, Inc. | Philippines | |||||
Wipro IT Services Bangladesh Limited | Bangladesh | |||||
Wipro HR Services India Private Limited | India | |||||
Encore Theme Technologies Private Limited * | India | |||||
Wipro VLSI Design Services India Private Limited (Formerly known as Eximius Design India Private Limited) | India | |||||
Capco Technologies Private Limited | India |
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* | All the above direct subsidiaries are 100% held by the Company except that the Company holds 83.4% of the equity securities of Encore Theme Technologies Private Limited, 66.67% of the equity securities of Wipro Arabia Co. Limited and 55% of the equity securities of Women’s Business Park Technologies Limited are held by Wipro Arabia Co. Limited. |
The remaining 16.6% equity securities of Encore Theme Technologies Private Limited will be acquired subject to and after receipt of certain regulatory approvals/confirmations.
# | 51% of equity securities of Wipro Doha LLC are held by a local shareholder. However, the beneficial interest in these holdings is with the Company. |
The Company controls ‘The Wipro SA Broad Based Ownership Scheme Trust’, ‘Wipro SA Broad Based Ownership Scheme SPV (RF) (PTY) LTD incorporated in South Africa and Wipro Foundation in India.
** | Step Subsidiary details of Wipro Portugal S.A, Wipro do Brasil Technologia Ltda, Designit Spain Digital, S.L, HealthPlan Services, Inc, International TechneGroup Incorporated, Wipro Appirio, Inc., Wipro Designit Services, Inc and Wipro Weare4C UK Limited, Cardinal US Holdings, Inc, Cardinal Foreign Holdings 2 S.á.r.l are as follows: |
Subsidiaries | Subsidiaries | Subsidiaries | Country of Incorporation | |||
Wipro Portugal S.A. | Portugal | |||||
Wipro Technologies GmbH | Germany | |||||
Wipro IT Services Austria GmbH | Austria | |||||
Wipro Business Solutions GmbH (formerly known as Metro-nom GmbH)*** | Germany | |||||
Wipro do Brasil Technologia Ltda | Brazil | |||||
Wipro Do Brasil Sistemetas De Informatica Ltd | Brazil | |||||
Wipro do Brasil Servicos Ltda | Brazil | |||||
Designit Spain Digital, S.L. | Spain | |||||
Designit Colombia S A S | Colombia | |||||
Designit Peru SAC | Peru | |||||
HealthPlan Services, Inc. | USA | |||||
HealthPlan Services Insurance Agency, LLC | USA | |||||
International TechneGroup Incorporated | USA | |||||
International TechneGroup Ltd. | U.K. | |||||
ITI Proficiency Ltd | Israel | |||||
International TechneGroup S.R.L. | Italy | |||||
MechWorks S.R.L. | Italy | |||||
Wipro Appirio, Inc. | USA | |||||
Wipro Appirio, K.K. | Japan | |||||
Topcoder, LLC. | USA | |||||
Wipro Appirio (Ireland) Limited | Ireland | |||||
Wipro Appirio UK Limited | U.K. | |||||
Wipro Designit Services, Inc | USA | |||||
Wipro Designit Services Limited | Ireland | |||||
Wipro Weare4C UK Limited | U.K. | |||||
CloudSocius DMCC | UAE | |||||
Cardinal Foreign Holdings 2 S.á.r.l | Luxembourg | |||||
Grove Holdings 2 S.á.r.l | Luxembourg | |||||
The Capital Markets Company BV*** | Belgium | |||||
Capco Brasil Serviços E Consultoria Em Informática Ltda | Brazil | |||||
Cardinal US Holdings, Inc | USA | |||||
The Capital Markets Company LLC | USA | |||||
CAPCO (US) LLC | USA | |||||
Capco Consulting Services LLC | USA | |||||
Capco RISC Consulting LLC | USA | |||||
ATOM Solutions LLC | USA | |||||
NEOS Holdings LLC | USA | |||||
NEOS LLC | USA | |||||
NEOS Software LLC | USA | |||||
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*** | Step Subsidiary details of The Capital Markets Company BV and Wipro Business Solutions GmbH (formerly known as Metro-nom GmbH) are as follows: |
Subsidiaries | Subsidiaries | Subsidiaries | Country of Incorporation | |||
The Capital Markets Company BV | Belgium | |||||
Capco Belgium BV | Belgium | |||||
The Capital Markets Company (UK) Ltd | UK | |||||
Capco (UK) 1, Limited | UK | |||||
The Capital Markets Company Limited | Canada | |||||
Capco (US) GP LLC**** | USA | |||||
The Capital Markets Company Limited | Hong Kong | |||||
Capco Consulting Services (Guangzhou) Company Limited | China | |||||
The Capital Markets Company s.r.o | Slovakia | |||||
The Capital Markets Company S.A.S | France | |||||
Capco Poland sp. z.o.o | Poland | |||||
The Capital Markets Company S.á.r.l | Switzerland | |||||
Andrion AG | Switzerland | |||||
The Capital Markets Company BV | Netherlands | |||||
CapAfric Consulting (Pty) Ltd | South Africa | |||||
Capco Consulting Singapore Pte. Ltd | Singapore | |||||
Capco Sweden AB | Sweden | |||||
The Capital Markets Company GmbH | Germany | |||||
Capco Austria GmbH | Austria | |||||
Capco Consultancy (Malaysia) Sdn. Bhd | Malaysia | |||||
Capco Greece Single Member P.C | Greece | |||||
Capco Consultancy (Thailand) Ltd | Thailand | |||||
Wipro Business Solutions GmbH (formerly known as Metro-nom GmbH) | Germany | |||||
Metro Systems Romania S.R.L | Romania | |||||
**** | Step Subsidiary details of Capco (US) GP LLC is as follows: |
Subsidiaries | Subsidiaries | Subsidiaries | Country of Incorporation | |||
Capco (US) GP LLC | USA | |||||
Capco (Canada) GP ULC | Canada |
As at June 30, 2021, the Company held 43.7% interest in Drivestream Inc, accounted for using the equity method.
As at June 30, 2021, The Capital Markets Company Limited (Canada) and Capco (Canada) GP ULC act as Limited and General Partners, respectively in Capco (Canada) LP.
The list of controlled trusts are:
Name of the entity | Country of incorporation | |||||
Wipro Equity Reward Trust | India | |||||
Wipro Foundation | India |
5. | Segment Information |
The Company is organized into the following operating segments: IT Services, IT Products and India State Run Enterprise segment (“ISRE”).
IT Services: During the year ended March 31, 2021, in order to broad base our growth, the Company re-organized IT Services segment to four Strategic Market Units (“SMUs”) - Americas 1, Americas 2, Europe and Asia Pacific Middle East Africa (“APMEA”).
Americas 1 and Americas 2 are primarily organized by industry sector, while Europe and APMEA are organized by countries.
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Americas 1 includes the entire business of Latin America (“LATAM”) and the following industry sectors in the United States of America: healthcare and medical devices, consumer goods and life sciences, retail, transportation and services, communications, media and information services, technology products and platforms. Americas 2 includes the entire business in Canada and the following industry sectors in the United States of America: banking, financial services and insurance, manufacturing, hi-tech, energy and utilities. Europe consists of the United Kingdom and Ireland, Switzerland, Germany, Benelux, the Nordics and Southern Europe. APMEA consists of Australia and New Zealand, India, Middle East, South East Asia, Japan and Africa.
The corresponding information for the three months ended June 30, 2020 has been re-stated to give effect to the above changes.
Revenue from each customer is attributed to the respective SMUs based on the location of the customer’s primary buying center of such services. With respect to certain strategic global customers, revenue may be generated from multiple countries based on such customer’s buying centers, but the total revenue related to these strategic global customers are attributed to a single SMU based on the geographical location of key decision makers.
Prior to the Company’s re-organization of its IT services segment, the IT services segment was organized by seven industry verticals: Banking, Financial Services and Insurance (“BFSI”), Health Business unit (“Health BU”), Consumer Business unit (“CBU”), Energy, Natural Resources & Utilities (“ENU”), Manufacturing (“MFG”), Technology (“TECH”) and Communications (“COMM”).
Our IT Services segment provides a range of IT and IT enabled services which include digital strategy advisory, customer centric design, technology consulting, IT consulting, custom application design, development, re-engineering and maintenance, systems integration, package implementation, cloud and infrastructure services, business process services, cloud, mobility and analytics services, research and development and hardware and software design.
IT Products: The Company is a value-added reseller of security, packaged and SaaS software for leading international brands. In certain total outsourcing contracts of the IT Services segment, the Company delivers hardware, software products and other related deliverables. Revenue relating to these items is reported as revenue from the sale of IT Products.
ISRE: This segment consists of IT Services offerings to entities and/or departments owned or controlled by Government of India and/or any State Governments.
The Chairman of the Company has been identified as the Chief Operating Decision Maker (“CODM”) as defined by IFRS 8, “Operating Segments”. The Chairman of the Company evaluates the segments based on their revenue growth and operating income.
Assets and liabilities used in the Company’s business are not identified to any of the operating segments, as these are used interchangeably between segments. Management believes that it is currently not practicable to provide segment disclosures relating to total assets and liabilities since a meaningful segregation of the available data is onerous.
Information on reportable segments for the three months ended June 30, 2021, March 31, 2021 and June 30, 2020, and year ended March 31, 2021 are as follows:
Particulars | Three months ended | Year ended | ||||||||||||||
June 30, 2021 | March 31, 2021 | June 30, 2020 | March 31, 2021 | |||||||||||||
Audited | Audited | Audited | Audited | |||||||||||||
Revenue | ||||||||||||||||
IT Services | ||||||||||||||||
Americas 1 | 49,683 | 46,510 | 42,612 | 178,091 | ||||||||||||
Americas 2 | 55,105 | 46,475 | 44,194 | 179,821 | ||||||||||||
Europe | 54,461 | 45,107 | 38,944 | 165,441 | ||||||||||||
APMEA | 21,232 | 20,825 | 20,158 | 82,462 | ||||||||||||
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Total of IT Services | 180,481 | 158,917 | 145,908 | 605,815 | ||||||||||||
IT Products | 1,311 | 2,117 | 2,306 | 7,685 | ||||||||||||
ISRE | 1,937 | 2,302 | 2,111 | 8,912 | ||||||||||||
Reconciling Items | (45 | ) | 4 | 11 | 13 | |||||||||||
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Total Revenue | 183,684 | 163,340 | 150,336 | 622,425 | ||||||||||||
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Other operating income/(loss), net | ||||||||||||||||
IT Services | 2,150 | — | 97 | (81 | ) | |||||||||||
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Total Other operating income/(loss), net | 2,150 | — | 97 | (81 | ) | |||||||||||
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Segment Result | ||||||||||||||||
IT Services | ||||||||||||||||
Americas 1 | 9,379 | 9,863 | 6,504 | 33,040 | ||||||||||||
Americas 2 | 11,350 | 10,500 | 10,422 | 41,589 | ||||||||||||
Europe | 8,325 | 8,704 | 7,547 | 31,673 | ||||||||||||
APMEA | 3,066 | 3,074 | 2,546 | 11,476 | ||||||||||||
Unallocated | 56 | 1,257 | 748 | 5,153 | ||||||||||||
Other operating income/(loss), net | 2,150 | — | 97 | (81 | ) | |||||||||||
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Total of IT Services | 34,326 | 33,398 | 27,864 | 122,850 | ||||||||||||
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IT Products | (53 | ) | 145 | 123 | 45 | |||||||||||
ISRE | 475 | 587 | (106 | ) | 1,061 | |||||||||||
Reconciling Items | (28 | ) | 37 | (943 | ) | (903 | ) | |||||||||
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Total | 34,720 | 34,167 | 26,938 | 123,053 | ||||||||||||
Finance expenses | (746 | ) | (1,122 | ) | (1,299 | ) | (5,088 | ) | ||||||||
Finance and Other Income | 4,619 | 4,447 | 5,281 | 20,912 | ||||||||||||
Share of net profit of associates accounted for using the equity method | 7 | 4 | 31 | 130 | ||||||||||||
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Profit before tax | 38,600 | 37,496 | 30,951 | 139,007 | ||||||||||||
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Notes
a) | Effective beginning of fiscal year ended March 31, 2021, revenue from sale of traded cloud-based licenses is no longer reported in IT Services revenue and finance income on deferred consideration earned under total outsourcing contracts is not included in segment revenue. Further, for evaluating performance of the individual operating segments, stock compensation expense is allocated based on the accelerated amortization as per IFRS 2. Segment information for the three months ended June 30, 2020 has been re-stated to give effect to these changes. |
b) | “Reconciling items” includes elimination of inter-segment transactions and other corporate activities. |
c) | Revenue from sale of company owned intellectual properties is reported as part of IT Services revenues. |
d) | For the purpose of segment reporting, the Company has included the impact of “foreign exchange gains / (losses), net” in revenues amounting to ₹ 1,160, ₹ 886 and ₹ 1,205 for the three months ended June 30, 2021, March 31, 2021, and June 30, 2020 respectively, and ₹ 2,995 for the year ended March 31, 2021, which is reported as a part of operating profit in the interim condensed consolidated statement of income. |
e) | During the three months ended June 30, 2020, and year ended March 31, 2021 the Company has contributed ₹ 991 towards COVID-19 and is reported in Reconciling items. |
f) | Segment results for the three months ended March 31, 2021, and year ended March 31, 2021, are after considering the impact of impairment charge of ₹ Nil, and ₹ 1,250 in Americas 1 and ₹ Nil, and ₹ 192 in Europe, respectively. Further, an impairment charge of ₹ Nil, and ₹ 674 for the three months ended March 31, 2021, and year ended March 31, 2021, respectively towards certain marketing-related intangible assets and software platform recognized on acquisitions, is allocated to all IT Services SMUs. The remaining impairment charge of ₹ Nil, ₹ 194 and ₹ 302 for the three months ended March 31, 2021, June 30, 2020 and year ended March 31, 2021, respectively is included under unallocated. |
g) | Segment results for the three months and year ended March 31, 2021, are after considering additional amortization of ₹ 795 in Americas 2 due to change in our estimate of useful life of the customer-related intangibles in an earlier business combination. |
h) | Other operating income/(loss) of ₹ 2,150, ₹ Nil and ₹ 97 is included as part of IT Services segment results for the three months ended June 30, 2021, March 31, 2021 and June 30, 2020 respectively, and ₹ (81) for the year ended March 31, 2021. Refer to Note 6. |
i) | Segment results of IT Services segment are after recognition of share-based compensation expense ₹ 977, ₹ 1,091, and ₹ 360 for the three months ended June 30, 2021, March 31, 2021, and June 30, 2020 respectively and ₹ 2,897 for the year ended March 31, 2021. |
6. | Other operating income/(loss), net |
The Company has partially met the first and second-year business targets pertaining to sale of hosted data center business concluded during the year ended March 31, 2019. Change in fair value of the callable units pertaining to achievement of cumulative business targets amounting to ₹ Nil and ₹ 97 for the three months ended March 31, 2021 and June 30, 2020, respectively and ₹ (81) for the year ended March 31, 2021, has been recognized under other operating income/(loss), net.
During the three months ended June 30, 2021, as a result of acquisition by another investor, the Company sold its investment in Ensono Holdings, LLC for a consideration of ₹ 5,569 and recognized a cumulative gain of ₹ 1,240 (net of tax ₹ 425) in other comprehensive income being profit on sale of investment designated as FVTOCI. The Company also recognized ₹ 1,220 for the three months ended June 30, 2021 under other operating income/(loss), net towards change in fair value of callable units pertaining to achievement of cumulative business targets.
During the three months ended June 30, 2021, as a result of acquisition of by another investor, the Company sold its investment in Denim Group, Ltd. and Denim Group Management, LLC (“Denim Group”), accounted for using the equity method, for a consideration of ₹ 1,629 and recognized a cumulative gain of ₹ 930 in other operating income/(loss), net including reclassification of exchange differences on foreign currency translation.
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7. | Business combinations |
Summary of acquisitions during the three months ended June 30, 2021 is given below:
On March 4, 2021, the Company entered into a definitive agreement to acquire 100% equity interest in Capco, a global management and technology consultancy company providing digital, consulting and technology services to financial institutions in the Americas, Europe and Asia Pacific, and its subsidiaries. The acquisition was consummated on April 29, 2021 and total cash consideration paid was ₹ 109,636. The following table presents the provisional purchase price allocation:
Description | Acquiree’s carrying amount | Fair value adjustments | Purchase price allocated | |||||||||
Net assets | ₹ | 4,326 | ₹ | — | ₹ | 4,326 | ||||||
Customer-related intangibles | — | 24,392 | 24,392 | |||||||||
Marketing-related intangibles | — | 8,083 | 8,083 | |||||||||
Deferred tax liabilities on intangible assets | — | (9,418 | ) | (9,418 | ) | |||||||
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Total | ₹ | 4,326 | ₹ | 23,057 | ₹ | 27,383 | ||||||
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Goodwill | 82,253 | |||||||||||
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Total purchase price | ₹ | 109,636 | ||||||||||
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The goodwill of ₹ 82,253 comprises value of acquired workforce and expected synergies arising from the business combinations. This acquisition will make the Company one of the largest end-to-end global consulting, technology and transformation service providers to the banking and financial services industry. By combining our capabilities in strategic design, digital transformation, cloud, cybersecurity, IT and operations services with Capco’s domain and consulting strength, clients will gain access to a partner who can deliver integrated, bespoke solutions to help fuel growth and achieve their transformation objectives.
Net assets acquired include ₹ 4,278 of cash and cash equivalents and trade receivables valued at ₹ 6,167.
Goodwill is allocated to IT Services segment and is not deductible for income tax purposes.
The transaction costs of ₹ 358 related to the above acquisition has been included in general and administrative expenses in the interim condensed consolidated statement of income.
The acquired business contributed revenues of ₹ 11,558 and profit after taxes of ₹ 539 for the Company during the three months ended June 30, 2021.
If the acquisition had been consummated on April 1, 2021, management estimates that consolidated revenue for the Company would have been ₹ 187,653 and the profit after taxes would have been ₹ 32,523 for the three months ended June 30, 2021. The pro-forma amounts are not necessarily indicative of the results that would have occurred if the acquisition had occurred on date indicated or that may result in the future.
8. | The Indian Parliament has approved the Code on Social Security, 2020 which would impact the contributions by the Company towards Provident Fund and Gratuity. The Ministry of Labour and Employment has released draft rules for the Code on Social Security, 2020 on November 13, 2020, and has invited suggestions from stake holders which are under active consideration by the Ministry. Based on an initial assessment by the Company and its Indian subsidiaries, the additional impact on Provident Fund contributions by the Company and its Indian subsidiaries is not expected to be material, whereas, the likely additional impact on Gratuity liability / contributions by the Company and its Indian subsidiaries could be material. The Company and its Indian subsidiaries will complete their evaluation once the subject rules are notified and will give appropriate impact in the financial results in the period in which, the Code becomes effective and the related rules to determine the financial impact are published. |
9. | As part of customer contract with Metro AG, the Company has acquired Metro-nom GmbH (currently known as Wipro Business Solutions GmbH) and Metro Systems Romania S.R.L, the IT units of Metro AG in Germany and Romania, respectively, for a consideration of ₹ 5,110. Considering the terms and conditions of the agreement, the Company has concluded that this transaction does not meet the definition of Business under IFRS 3 “Business Combinations”. The transaction was consummated on April 1, 2021. The fair value of net assets acquired aggregating to ₹ 4,705 is allocated to respective assets and liabilities. The excess of consideration paid, and net assets taken over is accounted as ‘costs to obtain contract’, which will be amortized over the tenure of the contract as reduction in revenues. |
10. | On April 1, 2021, the Company entered into a definitive agreement to acquire Ampion, an Australia-based provider of cyber security, DevOps and quality engineering services for a total consideration of AUD 150 million. The acquisition is subject to customary closing conditions and regulatory approvals and is expected to be concluded in the quarter ending September 30, 2021. |
11. | On June 23, 2021, Wipro IT Services LLC, a wholly owned step down subsidiary of Wipro Limited, issued ₹ 55,744 (US$ 750 million) in unsecured notes 2026 (the “Notes”). The Notes bear interest at a rate of 1.50% per annum and will mature on June 23, 2026. The notes were issued at the discounted price of 99.636% against par value and have an effective interest rate of 1.6939% after considering the issue expenses and discount of ₹ 500 (US$6.7 million). Interest on the Notes is payable semi-annually on June 23 and December 23 of each year, commencing from December 23, 2021. The Notes are listed on Singapore Exchange Securities Trading Limited (SGX-ST). |
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By order of the Board, | For, Wipro Limited | |
Place: Bengaluru Date: July 15, 2021 | Rishad A. Premji Chairman |
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