Exhibit 99.3
WIPRO LIMITED AND SUBSIDIARIES
INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS UNDER IFRS
AS AT AND FOR THE THREE MONTHS ENDED JUNE 30, 2023
WIPRO LIMITED AND SUBSIDIARIES
INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(₹ in millions, except share and per share data, unless otherwise stated)
Notes | As at March 31, 2023 | As at June 30, 2023 | ||||||||||||||
Convenience translation into US dollar in millions (unaudited) Refer to Note 2(iii) | ||||||||||||||||
ASSETS | ||||||||||||||||
Goodwill | 6 | 307,970 | 306,970 | 3,741 | ||||||||||||
Intangible assets | 6 | 43,045 | 41,155 | 502 | ||||||||||||
Property, plant and equipment | 4 | 88,659 | 86,464 | 1,054 | ||||||||||||
Right-of-Use assets | 5 | 18,702 | 18,448 | 225 | ||||||||||||
Financial assets | ||||||||||||||||
Derivative assets | 17 | 29 | 193 | 2 | ||||||||||||
Investments | 8 | 20,720 | 20,782 | 253 | ||||||||||||
Trade receivables | 863 | 861 | 10 | |||||||||||||
Other financial assets | 11 | 6,330 | 6,368 | 78 | ||||||||||||
Investments accounted for using the equity method | 780 | 782 | 10 | |||||||||||||
Deferred tax assets | 2,100 | 1,942 | 24 | |||||||||||||
Non-current tax assets | 11,922 | 12,295 | 150 | |||||||||||||
Other non-current assets | 12 | 13,606 | 13,247 | 161 | ||||||||||||
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Total non-current assets | 514,726 | 509,507 | 6,210 | |||||||||||||
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Inventories | 9 | 1,188 | 1,375 | 17 | ||||||||||||
Financial assets | ||||||||||||||||
Derivative assets | 17 | 1,844 | 3,297 | 40 | ||||||||||||
Investments | 8 | 309,232 | 351,156 | 4,279 | ||||||||||||
Cash and cash equivalents | 10 | 91,880 | 83,616 | 1,019 | ||||||||||||
Trade receivables | 126,350 | 114,457 | 1,395 | |||||||||||||
Unbilled receivables | 60,515 | 64,467 | 786 | |||||||||||||
Other financial assets | 11 | 9,096 | 12,478 | 152 | ||||||||||||
Contract assets | 23,001 | 25,168 | 307 | |||||||||||||
Current tax assets | 5,091 | 4,750 | 58 | |||||||||||||
Other current assets | 12 | 32,899 | 30,344 | 370 | ||||||||||||
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Total current assets | 661,096 | 691,108 | 8,423 | |||||||||||||
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TOTAL ASSETS | 1,175,822 | 1,200,615 | 14,633 | |||||||||||||
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EQUITY | ||||||||||||||||
Share capital | 10,976 | 10,978 | 134 | |||||||||||||
Share premium | 3,689 | 4,155 | 51 | |||||||||||||
Retained earnings | 660,964 | 545,698 | 6,650 | |||||||||||||
Share-based payment reserve | 5,632 | 6,268 | 76 | |||||||||||||
Special Economic Zone re-investment reserve | 46,803 | 45,891 | 559 | |||||||||||||
Other components of equity | 53,100 | 56,039 | 683 | |||||||||||||
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Equity attributable to the equity holders of the Company | 781,164 | 669,029 | 8,153 | |||||||||||||
Non-controlling interests | 589 | 624 | 8 | |||||||||||||
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TOTAL EQUITY | 781,753 | 669,653 | 8,161 | |||||||||||||
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LIABILITIES | ||||||||||||||||
Financial liabilities | ||||||||||||||||
Loans and borrowings | 13 | 61,272 | 61,197 | 746 | ||||||||||||
Lease liabilities | 15,953 | 16,079 | 196 | |||||||||||||
Derivative liabilities | 17 | 179 | 45 | 1 | ||||||||||||
Other financial liabilities | 14 | 2,649 | 1,547 | 19 | ||||||||||||
Deferred tax liabilities | 15,153 | 15,772 | 192 | |||||||||||||
Non-current tax liabilities | 21,777 | 23,504 | 286 | |||||||||||||
Other non-current liabilities | 15 | 9,333 | 10,151 | 124 | ||||||||||||
Provisions | 16 | ^ | — | — | ||||||||||||
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Total non-current liabilities | 126,316 | 128,295 | 1,564 | |||||||||||||
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Financial liabilities | ||||||||||||||||
Loans, borrowings and bank overdrafts | 13 | 88,821 | 88,712 | 1,081 | ||||||||||||
Lease liabilities | 8,620 | 8,706 | 106 | |||||||||||||
Derivative liabilities | 17 | 2,825 | 1,448 | 18 | ||||||||||||
Trade payables and accrued expenses | 89,054 | 80,735 | 984 | |||||||||||||
Other financial liabilities | 14 | 4,141 | 123,413 | 1,504 | ||||||||||||
Contract liabilities | 22,682 | 19,595 | 239 | |||||||||||||
Current tax liabilities | 18,846 | 20,898 | 255 | |||||||||||||
Other current liabilities | 15 | 30,215 | 56,760 | 692 | ||||||||||||
Provisions | 16 | 2,549 | 2,400 | 29 | ||||||||||||
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Total current liabilities | 267,753 | 402,667 | 4,908 | |||||||||||||
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TOTAL LIABILITIES | 394,069 | 530,962 | 6,472 | |||||||||||||
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TOTAL EQUITY AND LIABILITIES | 1,175,822 | 1,200,615 | 14,633 | |||||||||||||
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^ | Value is less than 1 |
The accompanying notes form an integral part of these interim condensed consolidated financial statements | ||
As per our report of even date attached | For and on behalf of the Board of Directors |
for Deloitte Haskins & Sells LLP | Rishad A. Premji | Deepak M. Satwalekar | Thierry Delaporte | |||
Chartered Accountants | Chairman | Director | Chief Executive Officer and | |||
Firm’s Registration No: 117366W/W - 100018 | Managing Director | |||||
Anand Subramanian | Jatin Pravinchandra Dalal | M. Sanaulla Khan | ||||
Partner | Chief Financial Officer | Company Secretary | ||||
Membership No.: 110815 | ||||||
Bengaluru July 13, 2023 |
1
WIPRO LIMITED AND SUBSIDIARIES
INTERIM CONDENSED CONSOLIDATED STATEMENT OF INCOME
(₹ in millions, except share and per share data, unless otherwise stated)
Three months ended June 30, | ||||||||||||||||
Notes | 2022 | 2023 | 2023 | |||||||||||||
Convenience translation into US dollar in millions (unaudited) Refer to Note 2(iii) | ||||||||||||||||
Revenues | 20 | 215,286 | 228,310 | 2,782 | ||||||||||||
Cost of revenues | 21 | (155,600 | ) | (161,261 | ) | (1,965 | ) | |||||||||
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Gross profit | 59,686 | 67,049 | 817 | |||||||||||||
Selling and marketing expenses | 21 | (15,359 | ) | (16,584 | ) | (202 | ) | |||||||||
General and administrative expenses | 21 | (13,471 | ) | (15,887 | ) | (194 | ) | |||||||||
Foreign exchange gains/(losses), net | 23 | 1,034 | (62 | ) | (1 | ) | ||||||||||
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Results from operating activities | 31,890 | 34,516 | 420 | |||||||||||||
Finance expenses | 22 | (2,045 | ) | (3,086 | ) | (38 | ) | |||||||||
Finance and other income | 23 | 3,690 | 6,542 | 80 | ||||||||||||
Share of net profit/ (loss) of associates accounted for using the equity method | (15 | ) | 3 | ^ | ||||||||||||
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Profit before tax | 33,520 | 37,975 | 462 | |||||||||||||
Income tax expense | 19 | (7,931 | ) | (9,115 | ) | (111 | ) | |||||||||
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Profit for the period | 25,589 | 28,860 | 351 | |||||||||||||
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Profit attributable to: | ||||||||||||||||
Equity holders of the Company | 25,636 | 28,701 | 349 | |||||||||||||
Non-controlling interests | (47 | ) | 159 | 2 | ||||||||||||
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Profit for the period | 25,589 | 28,860 | 351 | |||||||||||||
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Earnings per equity share: | 24 | |||||||||||||||
Attributable to equity holders of the Company | ||||||||||||||||
Basic | 4.69 | 5.23 | 0.06 | |||||||||||||
Diluted | 4.67 | 5.12 | 0.06 | |||||||||||||
Weighted average number of equity shares used in computing earnings per equity share | ||||||||||||||||
Basic | 5,471,449,783 | 5,482,733,329 | 5,482,733,329 | |||||||||||||
Diluted | 5,485,057,994 | 5,600,307,315 | 5,600,307,315 |
^ | Value is less than 1 |
The accompanying notes form an integral part of these interim condensed consolidated financial statements | ||
As per our report of even date attached | For and on behalf of the Board of Directors |
for Deloitte Haskins & Sells LLP | Rishad A. Premji | Deepak M. Satwalekar | Thierry Delaporte | |||
Chartered Accountants | Chairman | Director | Chief Executive Officer and | |||
Firm’s Registration No: 117366W/W - 100018 | Managing Director | |||||
Anand Subramanian | Jatin Pravinchandra Dalal | M. Sanaulla Khan | ||||
Partner | Chief Financial Officer | Company Secretary | ||||
Membership No.: 110815 | ||||||
Bengaluru July 13, 2023 |
2
WIPRO LIMITED AND SUBSIDIARIES
INTERIM CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(₹ in millions, except share and per share data, unless otherwise stated)
Three months ended June 30, | ||||||||||||
2022 | 2023 | 2023 | ||||||||||
Convenience translation into US dollar in millions (unaudited) Refer to Note 2(iii) | ||||||||||||
Profit for the period | 25,589 | 28,860 | 351 | |||||||||
Other comprehensive income (OCI) | ||||||||||||
Items that will not be reclassified to profit or loss in subsequent periods | ||||||||||||
Remeasurements of the defined benefit plans, net | 312 | (45 | ) | ^ | ||||||||
Net change in fair value of investment in equity instruments measured at fair value through OCI | 1,333 | 16 | ^ | |||||||||
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1,645 | (29 | ) | ^ | |||||||||
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Items that will be reclassified to profit or loss in subsequent periods | ||||||||||||
Foreign currency translation differences | 5,631 | (362 | ) | (4 | ) | |||||||
Reclassification of foreign currency translation differences on liquidation of subsidiaries to statement of income | — | 2 | ^ | |||||||||
Net change in time value of option contracts designated as cash flow hedges | (246 | ) | 40 | ^ | ||||||||
Net change in intrinsic value of option contracts designated as cash flow hedges | (206 | ) | 512 | 6 | ||||||||
Net change in fair value of forward contracts designated as cash flow hedges | (983 | ) | 1,648 | 20 | ||||||||
Net change in fair value of investment in debt instruments measured at fair value through OCI | (4,102 | ) | 1,039 | 13 | ||||||||
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94 | 2,879 | 35 | ||||||||||
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Total other comprehensive income, net of taxes | 1,739 | 2,850 | 35 | |||||||||
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Total comprehensive income for the period | 27,328 | 31,710 | 386 | |||||||||
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Total comprehensive income attributable to: | ||||||||||||
Equity holders of the Company | 27,351 | 31,640 | 385 | |||||||||
Non-controlling interests | (23 | ) | 70 | 1 | ||||||||
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27,328 | 31,710 | 386 | ||||||||||
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^ | Value is less than 1 |
The accompanying notes form an integral part of these interim condensed consolidated financial statements | ||
As per our report of even date attached | For and on behalf of the Board of Directors |
for Deloitte Haskins & Sells LLP | Rishad A. Premji | Deepak M. Satwalekar | Thierry Delaporte | |||
Chartered Accountants | Chairman | Director | Chief Executive Officer and | |||
Firm’s Registration No: 117366W/W - 100018 | Managing Director | |||||
Anand Subramanian | Jatin Pravinchandra Dalal | M. Sanaulla Khan | ||||
Partner | Chief Financial Officer | Company Secretary | ||||
Membership No.: 110815 | ||||||
Bengaluru July 13, 2023 |
3
WIPRO LIMITED AND SUBSIDIARIES
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(₹ in millions, except share and per share data, unless otherwise stated)
Other components of equity | ||||||||||||||||||||||||||||||||||||||||||||||||
Particulars | Number of shares (1) | Share capital, fully paid-up | Share premium | Retained earnings | Share- based payment reserve | Special Economic Zone re- investment reserve | Foreign currency translation reserve (2) | Cash flow hedging reserve (3) | Other reserves (2) | Equity attributable to the equity holders of the Company | Non- controlling interests | Total equity | ||||||||||||||||||||||||||||||||||||
As at April 1, 2022 | 5,482,070,115 | 10,964 | 1,566 | 551,252 | 5,258 | 47,061 | 26,850 | 1,477 | 13,730 | 658,158 | 515 | 658,673 | ||||||||||||||||||||||||||||||||||||
Adjustment on adoption of amendments to IAS 37 | — | — | — | (51 | ) | — | — | — | — | — | (51 | ) | — | (51 | ) | |||||||||||||||||||||||||||||||||
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Adjusted balance as at April 1, 2022 | 5,482,070,115 | 10,964 | 1,566 | 551,201 | 5,258 | 47,061 | 26,850 | 1,477 | 13,730 | 658,107 | 515 | 658,622 | ||||||||||||||||||||||||||||||||||||
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Comprehensive income for the period | ||||||||||||||||||||||||||||||||||||||||||||||||
Profit for the period | — | — | 25,636 | — | — | — | — | — | 25,636 | (47 | ) | 25,589 | ||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | 5,607 | (1,435 | ) | (2,457 | ) | 1,715 | 24 | 1,739 | |||||||||||||||||||||||||||||||||||
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Total comprehensive income for the period | — | — | 25,636 | — | — | 5,607 | (1,435 | ) | (2,457 | ) | 27,351 | (23 | ) | 27,328 | ||||||||||||||||||||||||||||||||||
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Issue of equity shares on exercise of options | 276,665 | 1 | 92 | — | (92 | ) | — | — | — | — | 1 | — | 1 | |||||||||||||||||||||||||||||||||||
Issue of shares by controlled trust on exercise of options (1) | — | — | 186 | (186 | ) | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Compensation cost related to employee share-based payment | — | — | 2 | 1,430 | — | — | — | — | 1,432 | — | 1,432 | |||||||||||||||||||||||||||||||||||||
Transferred to Special Economic Zone re-investment reserve | — | — | (931 | ) | — | 931 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Others | — | — | — | — | — | — | — | — | — | (77 | ) | (77 | ) | |||||||||||||||||||||||||||||||||||
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Other transactions for the period | 276,665 | 1 | 92 | (743 | ) | 1,152 | 931 | — | — | — | 1,433 | (77 | ) | 1,356 | ||||||||||||||||||||||||||||||||||
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As at June 30, 2022 | 5,482,346,780 | 10,965 | 1,658 | 576,094 | 6,410 | 47,992 | 32,457 | 42 | 11,273 | 686,891 | 415 | 687,306 | ||||||||||||||||||||||||||||||||||||
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(1) | Includes 13,979,651 treasury shares held as at June 30, 2022 by a controlled trust. 710,078 shares have been transferred by the controlled trust to eligible employees on exercise of options during the three months ended June 30, 2022. |
(2) | Refer to Note 18 |
(3) | Refer to Note 17 |
4
WIPRO LIMITED AND SUBSIDIARIES
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(₹ in millions, except share and per share data, unless otherwise stated)
Other components of equity | ||||||||||||||||||||||||||||||||||||||||||||||||
Particulars | Number of shares (1) | Share capital, fully paid- up | Share premium | Retained earnings | Share- based payment reserve | Special Economic Zone re- investment reserve | Foreign currency translation reserve (2) | Cash flow hedging reserve (3) | Other reserves (2) | Equity attributable to the equity holders of the Company | Non- controlling interests | Total equity | ||||||||||||||||||||||||||||||||||||
As at April 1, 2023 | 5,487,917,741 | 10,976 | 3,689 | 660,964 | 5,632 | 46,803 | 43,255 | (1,403 | ) | 11,248 | 781,164 | 589 | 781,753 | |||||||||||||||||||||||||||||||||||
Comprehensive income for the period | ||||||||||||||||||||||||||||||||||||||||||||||||
Profit for the period | — | — | — | 28,701 | — | — | — | — | — | 28,701 | 159 | 28,860 | ||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | — | (359 | ) | 2,200 | 1,098 | 2,939 | (89 | ) | 2,850 | ||||||||||||||||||||||||||||||||||
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Total comprehensive income for the period | — | — | — | 28,701 | — | — | (359 | ) | 2,200 | 1,098 | 31,640 | 70 | 31,710 | |||||||||||||||||||||||||||||||||||
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Issue of equity shares on exercise of options | 924,252 | 2 | 466 | — | (466 | ) | — | — | — | — | 2 | — | 2 | |||||||||||||||||||||||||||||||||||
Issue of shares by controlled trust on exercise of options (1) | — | — | — | 444 | (444 | ) | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Compensation cost related to employee share-based payment | — | — | — | 3 | 1,546 | — | — | — | — | 1,549 | — | 1,549 | ||||||||||||||||||||||||||||||||||||
Transferred from Special Economic Zone re-investment reserve | — | — | — | 912 | — | (912 | ) | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Liability for Buyback of equity shares, including tax thereon (4) | — | — | — | (144,978 | ) | — | — | — | — | — | (144,978 | ) | — | (144,978 | ) | |||||||||||||||||||||||||||||||||
Transaction costs related to Buyback | — | — | — | (348 | ) | — | — | — | — | — | (348 | ) | — | (348 | ) | |||||||||||||||||||||||||||||||||
Others | — | — | — | — | — | — | — | — | — | — | (35 | ) | (35 | ) | ||||||||||||||||||||||||||||||||||
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Other transactions for the period | 924,252 | 2 | 466 | (143,967 | ) | 636 | (912 | ) | — | — | — | (143,775 | ) | (35 | ) | (143,810 | ) | |||||||||||||||||||||||||||||||
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As at June 30, 2023 | 5,488,841,993 | 10,978 | 4,155 | 545,698 | 6,268 | 45,891 | 42,896 | 797 | 12,346 | 669,029 | 624 | 669,653 | ||||||||||||||||||||||||||||||||||||
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Convenience translation into US dollar in millions (unaudited) Refer to | 134 | 51 | 6,650 | 76 | 559 | 523 | 10 | 150 | 8,153 | 8 | 8,161 | |||||||||||||||||||||||||||||||||||||
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(1) | Includes 8,607,941 treasury shares held as at June 30, 2023 by a controlled trust. 1,287,895 shares have been transferred by the controlled trust to eligible employees on exercise of options during the three months ended June 30, 2023. |
(2) | Refer to Note 18 |
(3) | Refer to Note 17 |
(4) | Refer to Note 29 |
The accompanying notes form an integral part of these interim condensed consolidated financial statements | ||||||
As per our report of even date attached | For and on behalf of the Board of Directors |
for Deloitte Haskins & Sells LLP | Rishad A. Premji | Deepak M. Satwalekar | Thierry Delaporte | |||
Chartered Accountants | Chairman | Director | Chief Executive Officer and | |||
Firm’s Registration No: 117366W/W - 100018 | Managing Director | |||||
Anand Subramanian | Jatin Pravinchandra Dalal | M. Sanaulla Khan | ||||
Partner | Chief Financial Officer | Company Secretary | ||||
Membership No.: 110815 | ||||||
Bengaluru | ||||||
July 13, 2023 |
5
WIPRO LIMITED AND SUBSIDIARIES
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(₹ in millions, except share and per share data, unless otherwise stated)
Three months ended June 30, | ||||||||||||
2022 | 2023 | 2023 | ||||||||||
Convenience translation into US dollar in millions (unaudited) Refer to Note 2(iii) | ||||||||||||
Cash flows from operating activities | ||||||||||||
Profit for the period | 25,589 | 28,860 | 351 | |||||||||
Adjustments to reconcile profit for the period to net cash generated from operating activities: | ||||||||||||
(Gain)/loss on sale of property, plant and equipment, net | (122 | ) | 78 | 1 | ||||||||
Depreciation, amortization and impairment expense | 7,738 | 7,380 | 90 | |||||||||
Unrealized exchange (gain)/loss, net and exchange (gain)/loss on borrowings | 1,944 | (226 | ) | (3 | ) | |||||||
Share-based compensation expense | 1,430 | 1,546 | 19 | |||||||||
Share of net (profit)/loss of associates accounted for using equity method | 15 | (3 | ) | ^ | ||||||||
Income tax expense | 7,931 | 9,115 | 111 | |||||||||
Finance and other income, net of finance expenses | (1,645 | ) | (3,456 | ) | (42 | ) | ||||||
Gain on derecognition of contingent consideration payable | (86 | ) | (16 | ) | ^ | |||||||
Changes in operating assets and liabilities, net of effects from acquisitions | ||||||||||||
Trade receivables | (7,348 | ) | 11,933 | 145 | ||||||||
Unbilled receivables and Contract assets | (7,966 | ) | (6,047 | ) | (74 | ) | ||||||
Inventories | (337 | ) | (182 | ) | (2 | ) | ||||||
Other assets | (3,642 | ) | 5,292 | 64 | ||||||||
Trade payables, accrued expenses, other liabilities and provisions | (14,740 | ) | (8,052 | ) | (98 | ) | ||||||
Contract liabilities | (2,534 | ) | (3,072 | ) | (37 | ) | ||||||
|
|
|
|
|
| |||||||
Cash generated from operating activities before taxes | 6,227 | 43,150 | 525 | |||||||||
Income taxes paid, net | (4,443 | ) | (5,637 | ) | (69 | ) | ||||||
|
|
|
|
|
| |||||||
Net cash generated from operating activities | 1,784 | 37,513 | 456 | |||||||||
|
|
|
|
|
| |||||||
Cash flows from investing activities: | ||||||||||||
Payment for purchase of property, plant and equipment | (4,862 | ) | (2,209 | ) | (27 | ) | ||||||
Proceeds from disposal of property, plant and equipment, including advances | 167 | 1,030 | 13 | |||||||||
Payment for purchase of investments | (166,530 | ) | (269,072 | ) | (3,279 | ) | ||||||
Proceeds from sale of investments | 176,501 | 239,800 | 2,922 | |||||||||
Proceeds from restricted interim dividend account | 27,410 | — | — | |||||||||
Payment for business acquisitions including deposits and escrow, net of cash acquired | (46,353 | ) | — | — | ||||||||
Payment into escrow and term deposits pertaining to Buyback | — | (15,230 | ) | (186 | ) | |||||||
Interest received | 3,764 | 6,869 | 84 | |||||||||
Dividend received | 2 | 1 | ^ | |||||||||
|
|
|
|
|
| |||||||
Net cash used in investing activities | (9,901 | ) | (38,811 | ) | (473 | ) | ||||||
|
|
|
|
|
| |||||||
Cash flows from financing activities: | ||||||||||||
Proceeds from issuance of equity shares and shares pending allotment | 1 | 2 | ^ | |||||||||
Repayment of loans and borrowings | (39,979 | ) | (15,000 | ) | (183 | ) | ||||||
Proceeds from loans and borrowings | 58,645 | 15,000 | 183 | |||||||||
Payment of lease liabilities | (2,681 | ) | (2,399 | ) | (29 | ) | ||||||
Payment for deferred contingent consideration | (227 | ) | (1,286 | ) | (15 | ) | ||||||
Interest and finance expenses paid | (1,787 | ) | (2,626 | ) | (32 | ) | ||||||
Payment of dividend | (27,337 | ) | — | — | ||||||||
Payment for transaction costs related to Buyback | — | (201 | ) | (2 | ) | |||||||
|
|
|
|
|
| |||||||
Net cash used in financing activities | (13,365 | ) | (6,510 | ) | (78 | ) | ||||||
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|
|
|
|
| |||||||
Net decrease in cash and cash equivalents during the period | (21,482 | ) | (7,808 | ) | (95 | ) | ||||||
Effect of exchange rate changes on cash and cash equivalents | 475 | (461 | ) | (5 | ) | |||||||
Cash and cash equivalents at the beginning of the period | 103,833 | 91,861 | 1,119 | |||||||||
|
|
|
|
|
| |||||||
Cash and cash equivalents at the end of the period (Note 10) | 82,826 | 83,592 | 1,019 | |||||||||
|
|
|
|
|
|
^ | Value is less than 1 |
The accompanying notes form an integral part of these interim condensed consolidated financial statements | ||||||
As per our report of even date attached | For and on behalf of the Board of Directors |
for Deloitte Haskins & Sells LLP | Rishad A. Premji | Deepak M. Satwalekar | Thierry Delaporte | |||
Chartered Accountants | Chairman | Director | Chief Executive Officer and | |||
Firm’s Registration No: 117366W/W - 100018 | Managing Director | |||||
Anand Subramanian | Jatin Pravinchandra Dalal | M. Sanaulla Khan | ||||
Partner | Chief Financial Officer | Company Secretary | ||||
Membership No.: 110815 | ||||||
Bengaluru | ||||||
July 13, 2023 |
6
WIPRO LIMITED AND SUBSIDIARIES
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(₹ in millions, except share and per share data, unless otherwise stated)
1. The Company overview
Wipro Limited (“Wipro” or the “Parent Company”), together with its subsidiaries and controlled trusts (collectively, “we”, “us”, “our”, “the Company” or the “Group”) is a global information technology (“IT”), consulting and business process services (“BPS”) company.
Wipro is a public limited company incorporated and domiciled in India. The address of its registered office is Wipro Limited, Doddakannelli, Sarjapur Road, Bengaluru – 560 035, Karnataka, India. The Company has its primary listing with BSE Ltd. and National Stock Exchange of India Limited. The Company’s American Depository Shares (“ADS”) representing equity shares are also listed on the New York Stock Exchange.
The Company’s Board of Directors authorized these interim condensed consolidated financial statements for issue on July 13, 2023.
2. Basis of preparation of interim condensed consolidated financial statements
(i) Statement of compliance and basis of preparation
These interim condensed consolidated financial statements have been prepared in compliance with IAS 34, “Interim Financial Reporting”, as issued by the International Accounting Standards Board (“IASB”). Selected explanatory notes are included to explain events and transactions that are significant to understand the changes in financial position and performance of the Company since the last annual consolidated financial statements as at and for the year ended March 31, 2023. These interim condensed consolidated financial statements do not include all the information required for full annual financial statements prepared in accordance with International Financial Reporting Standards and its interpretations (“IFRS”).
The interim condensed consolidated financial statements correspond to the classification provisions contained in IAS 1 (revised), “Presentation of Financial Statements”. For clarity, various items are aggregated in the interim condensed consolidated statements of income, interim condensed consolidated statements of comprehensive income and interim condensed consolidated statements of financial position. These items are disaggregated separately in the notes to the interim condensed consolidated financial statements, where applicable. The accounting policies have been consistently applied to all periods presented in these interim condensed consolidated financial statements except for the adoption of new accounting standards, amendments and interpretations effective from April 1, 2023.
All amounts included in the interim condensed consolidated financial statements are reported in millions of Indian rupees (₹ in millions) except share and per share data, unless otherwise stated. Due to rounding off, the numbers presented throughout the document may not add up precisely to the totals and percentages may not precisely reflect the absolute figures. Previous period figures have been regrouped/rearranged, wherever necessary.
(ii) Basis of measurement
These interim condensed consolidated financial statements have been prepared on a historical cost convention and on an accrual basis, except for the following material items which have been measured at fair value as required by relevant IFRS:
a. | Derivative financial instruments; |
b. | Financial instruments classified as fair value through other comprehensive income or fair value through profit or loss; |
c. | The defined benefit liability/(asset) recognized as the present value of defined benefit obligation less fair value of plan assets; and |
d. | Contingent consideration. |
(iii) Convenience translation (unaudited)
The accompanying interim condensed consolidated financial statements have been prepared and reported in Indian rupees, the functional currency of the Parent Company. Solely for the convenience of the readers, the interim condensed consolidated financial statements as at and for the three months ended June 30, 2023, have been translated into United States dollars at the certified foreign exchange rate of US$1 = ₹ 82.06 as published by Federal Reserve Board of Governors on June 30, 2023. No representation is made that the Indian rupee amounts have been, could have been or could be converted into United States dollars at such a rate or any other rate. Due to rounding off, the translated numbers presented throughout the document may not add up precisely to the totals.
(iv) Use of estimates and judgment
The preparation of the interim condensed consolidated financial statements in conformity with IFRS requires the management to make judgments, accounting estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Accounting estimates are monetary amounts in the interim condensed consolidated financial statements that are subject to measurement uncertainty. An accounting policy may require items in the interim condensed consolidated financial statements to be measured at monetary amounts that cannot be observed directly and must instead be estimated. In such a case, management develops an accounting estimate to achieve the objective set out by the accounting policy. Developing accounting estimates involves the use of judgements or assumptions based on the latest available and reliable information. Actual results may differ from those accounting estimates.
Accounting estimates and underlying assumptions are reviewed on an ongoing basis. Changes to accounting estimates are recognized in the period in which the estimates are changed and in any future periods affected. In particular, information about material areas of estimation, uncertainty and critical judgments in applying accounting policies that have material effect on the amounts recognized in the interim condensed consolidated financial statements are included in the following notes:
7
a) | Revenue recognition: The Company applies judgement to determine whether each product or service promised to a customer is capable of being distinct, and is distinct in the context of the contract, if not, the promised product or service is combined and accounted as a single performance obligation. Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration the Company expects to receive (the “Transaction Price”). The Company allocates the Transaction Price to separately identifiable performance obligation deliverables based on their relative stand-alone selling price. In cases where the Company is unable to determine the stand-alone selling price the Company uses expected cost-plus margin approach in estimating the stand-alone selling price. The Company uses the percentage of completion method using the input (cost expended) method to measure progress towards completion in respect of fixed price contracts. Percentage of completion method accounting relies on estimates of total expected contract revenue and costs. This method is followed when reasonably dependable estimates of the revenues and costs applicable to various elements of the contract can be made. Key factors that are reviewed in estimating 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, revenue recognized, profit and timing of revenue for remaining performance obligations 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 probable. Volume discounts are recorded as a reduction of revenue. When the amount of discount varies with the levels of revenue, volume discount is recorded based on estimate of future revenue from the customer. |
b) | Impairment testing: Goodwill recognized on business combination is tested for impairment at least annually and when events occur or changes in circumstances indicate that the recoverable amount of goodwill or a cash generating unit to which goodwill pertains, is less than the carrying value. The Company assesses acquired intangible assets with finite useful life for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The recoverable amount of an asset or a cash generating unit is higher of value-in-use and fair value less cost of disposal. The calculation of value in use of an asset or a cash generating unit involves use of significant estimates and assumptions which include turnover, growth rates and net margins used to calculate projected future cash flows, risk-adjusted discount rate, future economic and market conditions. |
c) | Income taxes: The major tax jurisdictions for the Company are India and the United States of America. |
Significant judgments are involved in determining the provision for income taxes including judgment on whether tax positions are probable of being sustained in tax assessments. A tax assessment can involve complex issues, which can only be resolved over extended time periods.
Deferred tax is recorded on temporary differences between the tax bases of assets and liabilities and their carrying amounts, at the rates that have been enacted or substantively enacted at the reporting date. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable profits during the periods in which those temporary differences and tax loss carry-forwards become deductible. The Company considers expected reversal of deferred tax liabilities and projected future taxable income in making this assessment. The amount of deferred tax assets considered realizable, however, could reduce in the near term if estimates of future taxable income during the carry-forward period are reduced.
d) | Business combinations: In accounting for business combinations, judgment is required to assess whether an identifiable intangible asset is to be recorded separately from goodwill. Additionally, estimating the acquisition date fair value of the identifiable assets acquired (including useful life estimates), liabilities assumed, and contingent consideration assumed involves management judgment. These measurements are based on information available at the acquisition date and are based on expectations and assumptions that have been deemed reasonable by management. Changes in these judgments, estimates, and assumptions can materially affect the results of operations. |
e) | Defined benefit plans and compensated absences: The cost of the defined benefit plans, compensated absences and the present value of the defined benefit obligations are based on actuarial valuation using the projected unit credit method. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. |
f) | Expected credit losses on financial assets: The impairment provisions of financial assets are based on assumptions about risk of default and expected timing of collection. The Company uses judgment in making these assumptions and selecting the inputs to the expected credit loss calculation based on the Company’s history of collections, customer’s creditworthiness, existing market conditions as well as forward looking estimates at the end of each reporting period. |
g) | Useful lives of property, plant and equipment: The Company depreciates property, plant and equipment on a straight-line basis over estimated useful lives of the assets. The charge in respect of periodic depreciation is derived based on an estimate of an asset’s expected useful life and the expected residual value at the end of its life. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technology. The estimated useful life is reviewed at least annually. |
h) | Useful lives of intangible assets: The Company amortizes intangible assets on a straight-line basis over estimated useful lives of the assets. The useful life is estimated based on a number of factors including the effects of obsolescence, demand, competition and other economic factors such as the stability of the industry and known technological advances and the level of maintenance expenditures required to obtain the expected future cash flows from the assets. The estimated useful life is reviewed at least annually. |
8
i) | Provisions and contingent liabilities: The Company estimates the provisions that have present obligations as a result of past events and it is probable that outflow of resources will be required to settle the obligations. These provisions are reviewed at the end of each reporting date and are adjusted to reflect the current best estimates. |
The Company uses significant judgement to disclose contingent liabilities. Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount cannot be made. Contingent assets are neither recognized nor disclosed in the financial statements.
3. Material accounting policy information
Please refer to the Company’s Annual report for the year ended March 31, 2023, for a discussion of the Company’s other material accounting policy information except for the adoption of new accounting standards, amendments and interpretations effective on or after April 1, 2023.
New amendment adopted by the Company effective from April 1, 2023:
Amendments to IAS 1 – Presentation of Financial Statements: On January 23, 2020, the IASB issued “Classification of liabilities as Current or Non-Current (Amendments to IAS 1)” providing a more general approach to the classification of liabilities under IAS 1 based on the contractual arrangement in place at the reporting date. The amendments aim to promote consistency in applying the requirements by helping companies to determine whether, in the statement of financial position, debt and other liabilities with an uncertain settlement date should be classified as current (due or potentially due to be settled within one year) or non-current. The amendments also clarified the classification requirements for debt a company might settle by converting it into equity. These amendments are effective for annual reporting periods beginning on or after January 1, 2023, and are to be applied retrospectively, with earlier application permitted. The adoption of amendments to IAS 1 did not have any material impact on the interim condensed consolidated financial statements.
Amendments to IAS 1 – Presentation of Financial Statements: On October 31, 2022, IASB issued ‘Non-current Liabilities with Covenants (Amendments to IAS 1)’. The amendments specify that covenants to be complied with after the reporting date do not affect the classification of debt as current or non-current at the reporting date. Instead, the amendments require a company to disclose information about these covenants in the notes to the financial statements. The amendments are effective for reporting periods beginning on or after January 1, 2024, with earlier application permitted. The adoption of these amendments to IAS 1 did not have any material impact on the interim condensed consolidated financial statements.
Amendments to IAS 12 – “Income Taxes”: On May 7, 2021, the IASB amended IAS 12 “Income Taxes” and published ‘Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12)’ that clarify how companies account for deferred tax on transactions such as leases and decommissioning obligations. In specified circumstances, companies are exempt from recognizing deferred tax when they recognize assets or liabilities for the first time. The amendments clarify that this exemption does not apply to transactions such as leases and decommissioning obligations and companies are required to recognize deferred tax on such transactions. These amendments are effective for annual reporting periods beginning on or after January 1, 2023 and are to be applied retrospectively, with earlier application permitted. The adoption of these amendments to IAS 12 did not have any material impact on the interim condensed consolidated financial statements.
New amendments not yet adopted:
Certain new standards, amendments to standards and interpretations are not yet effective for annual periods beginning after April 1, 2023 and have not been applied in preparing these interim condensed consolidated financial statements. New standards, amendments to standards and interpretations that could have potential impact on the interim condensed consolidated financial statements of the Company are:
Amendments to IAS 12 – “Income Taxes”: On 23 May 2023, the IASB issued International Tax Reform—Pillar Two Model Rules—Amendments to IAS 12 “Income Taxes” to clarify the application of IAS 12 to income taxes arising from tax law enacted or substantively enacted to implement the Organization for Economic Co-operation and Development (OECD)/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) Pillar Two model rules (Pillar Two income taxes). The Amendments introduced:
a) | a mandatory temporary exception to the accounting for deferred taxes arising from the jurisdictional implementation of the Pillar Two model rules; and |
b) | disclosure requirements for affected entities to help users of the financial statements better understand an entity’s exposure to Pillar Two income taxes arising from that legislation, particularly before its effective date. |
The mandatory temporary exception – the use of which is required to be disclosed – applies immediately. The remaining disclosure requirements apply for annual reporting periods beginning on or after 1 January 2023, but not for any interim periods ending on or before 31 December 2023. The Company is currently evaluating the impact of these amendments on the consolidated financial statements.
Amendments to IFRS 16 – Leases: On September 22, 2022, IASB issued ‘Lease Liability in a Sale and Leaseback (Amendments to IFRS 16)’ that specifies the requirements that a seller-lessee uses in measuring the lease liability arising in a sale and leaseback transaction, to ensure the seller-lessee does not recognize any amount of the gain or loss that relates to the right of use it retains. The amendment is intended to improve the requirements for sale and leaseback transactions in IFRS 16 and will not change the accounting for leases unrelated to sale and leaseback transactions. These amendments are effective for annual reporting periods beginning on or after January 1, 2024, and are to be applied retrospectively, with earlier application permitted. The adoption of amendments to IFRS 16 is not expected to have any material impact on the interim condensed consolidated financial statements.
9
4. Property, plant and equipment
Land | Buildings | Plant and | Furniture | Office | Vehicles | Total | ||||||||||||||||||||||
equipment (1) | fixtures | equipment | ||||||||||||||||||||||||||
Gross carrying value: | ||||||||||||||||||||||||||||
As at April 1, 2022 | ₹ | 4,813 | ₹ | 40,686 | ₹ | 123,471 | ₹ | 15,386 | ₹ | 7,259 | ₹ | 317 | ₹ | 191,932 | ||||||||||||||
Additions | — | 38 | 3,720 | 242 | 84 | 1 | 4,085 | |||||||||||||||||||||
Additions through Business | 373 | |||||||||||||||||||||||||||
combinations | — | 7 | 357 | 6 | — | 3 | ||||||||||||||||||||||
Disposals | (3 | ) | (7 | ) | (490 | ) | (2 | ) | (6 | ) | — | (508 | ) | |||||||||||||||
Translation adjustment | (4 | ) | (18 | ) | 319 | 6 | (3 | ) | — | 300 | ||||||||||||||||||
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| |||||||||||||||
As at June 30, 2022 | ₹ | 4,806 | ₹ | 40,706 | ₹ | 127,377 | ₹ | 15,638 | ₹ | 7,334 | ₹ | 321 | ₹ | 196,182 | ||||||||||||||
Accumulated depreciation/ impairment: | ||||||||||||||||||||||||||||
As at April 1, 2022 | ₹ | — | ₹ | 10,003 | ₹ | 90,465 | ₹ | 10,814 | ₹ | 5,743 | ₹ | 297 | ₹ | 117,322 | ||||||||||||||
Depreciation and impairment | — | 318 | 3,390 | 395 | 150 | 2 | 4,255 | |||||||||||||||||||||
Disposals | — | (1 | ) | (439 | ) | (1 | ) | (6 | ) | — | (447 | ) | ||||||||||||||||
Translation adjustment | — | 3 | 320 | 9 | (3 | ) | — | 329 | ||||||||||||||||||||
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| |||||||||||||||
As at June 30, 2022 | ₹ | — | ₹ | 10,323 | ₹ | 93,736 | ₹ | 11,217 | ₹ | 5,884 | ₹ | 299 | ₹ | 121,459 | ||||||||||||||
Capital work-in-progress | ₹ | 16,953 | ||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||
Net carrying value including Capital work-in-progress as at June 30, 2022 |
| ₹ | 91,676 | |||||||||||||||||||||||||
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| |||||||||||||||||||||||||||
Gross carrying value: | ||||||||||||||||||||||||||||
As at April 1, 2022 | ₹ | 4,813 | ₹ | 40,686 | ₹ | 123,471 | ₹ | 15,386 | ₹ | 7,259 | ₹ | 317 | ₹ | 191,932 | ||||||||||||||
Additions | 40 | 7,269 | 12,191 | 3,917 | 964 | 7 | 24,388 | |||||||||||||||||||||
Additions through Business combinations | — | 7 | 357 | 6 | — | 3 | 373 | |||||||||||||||||||||
Disposals | (3 | ) | (435 | ) | (20,016 | ) | (1,325 | ) | (474 | ) | (168 | ) | (22,421 | ) | ||||||||||||||
Translation adjustment | 10 | 173 | 1,729 | 102 | 69 | 2 | 2,085 | |||||||||||||||||||||
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As at March 31, 2023 | ₹ | 4,860 | ₹ | 47,700 | ₹ | 117,732 | ₹ | 18,086 | ₹ | 7,818 | ₹ | 161 | ₹ | 196,357 | ||||||||||||||
Accumulated depreciation/ impairment: | ||||||||||||||||||||||||||||
As at April 1, 2022 | ₹ | — | ₹ | 10,003 | ₹ | 90,465 | ₹ | 10,814 | ₹ | 5,743 | ₹ | 297 | ₹ | 117,322 | ||||||||||||||
Depreciation and impairment | — | 1,217 | 13,305 | 1,794 | 600 | 10 | 16,926 | |||||||||||||||||||||
Disposals | — | (395 | ) | (19,655 | ) | (1,158 | ) | (463 | ) | (163 | ) | (21,834 | ) | |||||||||||||||
Translation adjustment | — | 102 | 1,386 | 70 | 48 | 1 | 1,607 | |||||||||||||||||||||
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As at March 31, 2023 | ₹ | — | ₹ | 10,927 | ₹ | 85,501 | ₹ | 11,520 | ₹ | 5,928 | ₹ | 145 | ₹ | 114,021 | ||||||||||||||
Capital work-in-progress | ₹ | 6,323 | ||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||
Net carrying value including Capital work-in-progress as at March 31, 2023 |
| ₹ | 88,659 | |||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||
Gross carrying value: | ||||||||||||||||||||||||||||
As at April 1, 2023 | ₹ | 4,860 | ₹ | 47,700 | ₹ | 117,732 | ₹ | 18,086 | ₹ | 7,818 | ₹ | 161 | ₹ | 196,357 | ||||||||||||||
Additions | — | 97 | 1,176 | 446 | 60 | 1 | 1,780 | |||||||||||||||||||||
Disposals | — | (1 | ) | (3,661 | ) | (38 | ) | (1 | ) | — | (3,701 | ) | ||||||||||||||||
Translation adjustment | (1 | ) | 26 | (16 | ) | (6 | ) | (14 | ) | 1 | (10 | ) | ||||||||||||||||
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As at June 30, 2023 | ₹ | 4,859 | ₹ | 47,822 | ₹ | 115,231 | ₹ | 18,488 | ₹ | 7,863 | ₹ | 163 | ₹ | 194,426 | ||||||||||||||
Accumulated depreciation/ impairment: | ||||||||||||||||||||||||||||
As at April 1, 2023 | ₹ | — | ₹ | 10,927 | ₹ | 85,501 | ₹ | 11,520 | ₹ | 5,928 | ₹ | 145 | ₹ | 114,021 | ||||||||||||||
Depreciation and impairment | — | 358 | 2,993 | 532 | 162 | 2 | 4,047 | |||||||||||||||||||||
Disposals | — | (1 | ) | (3,312 | ) | (26 | ) | (1 | ) | — | (3,340 | ) | ||||||||||||||||
Translation adjustment | — | 13 | (14 | ) | — | (9 | ) | 1 | (9 | ) | ||||||||||||||||||
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As at June 30, 2023 | ₹ | — | ₹ | 11,297 | ₹ | 85,168 | ₹ | 12,026 | ₹ | 6,080 | ₹ | 148 | ₹ | 114,719 | ||||||||||||||
Capital work-in-progress | ₹ | 6,757 | ||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||
Net carrying value including Capital work-in-progress as at June 30, 2023 |
| ₹ | 86,464 | |||||||||||||||||||||||||
|
|
(1) | Including net carrying value of computer equipment and software amounting to ₹ 25,828, ₹ 22,425 and ₹ 20,495, as at June 30, 2022, March 31, 2023 and June 30, 2023, respectively. |
10
5. Right-of-Use assets
Category of Right-of-Use asset | ||||||||||||||||||||
Land | Buildings | Plant and equipment (1) | Vehicles | Total | ||||||||||||||||
Gross carrying value: | ||||||||||||||||||||
As at April 1, 2022 | ₹ | 1,278 | ₹ | 25,993 | ₹ | 2,511 | ₹ | 904 | ₹ | 30,686 | ||||||||||
Additions | — | 1,433 | 45 | 72 | 1,550 | |||||||||||||||
Additions through business combinations | — | 201 | — | — | 201 | |||||||||||||||
Disposals | — | (919 | ) | — | (88 | ) | (1,007 | ) | ||||||||||||
Translation adjustment | — | (23 | ) | — | (14 | ) | (37 | ) | ||||||||||||
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|
|
|
|
|
| |||||||||||
As at June 30, 2022 | ₹ | 1,278 | ₹ | 26,685 | ₹ | 2,556 | ₹ | 874 | ₹ | 31,393 | ||||||||||
Accumulated depreciation: | ||||||||||||||||||||
As at April 1, 2022 | ₹ | 58 | ₹ | 9,676 | ₹ | 1,512 | ₹ | 570 | ₹ | 11,816 | ||||||||||
Depreciation | 5 | 1,386 | 125 | 74 | 1,590 | |||||||||||||||
Disposals | — | (739 | ) | — | (81 | ) | (820 | ) | ||||||||||||
Translation adjustment | — | 17 | 9 | (8 | ) | 18 | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
As at June 30, 2022 | ₹ | 63 | ₹ | 10,340 | ₹ | 1,646 | ₹ | 555 | ₹ | 12,604 | ||||||||||
|
| |||||||||||||||||||
Net carrying value as at June 30, 2022 | ₹ | 18,789 | ||||||||||||||||||
|
| |||||||||||||||||||
Gross carrying value: | ||||||||||||||||||||
As at April 1, 2022 | ₹ | 1,278 | ₹ | 25,993 | ₹ | 2,511 | ₹ | 904 | ₹ | 30,686 | ||||||||||
Additions | — | 6,015 | 1,109 | 236 | 7,360 | |||||||||||||||
Additions through business combinations | — | 201 | — | — | 201 | |||||||||||||||
Disposals | — | (5,085 | ) | (1,160 | ) | (317 | ) | (6,562 | ) | |||||||||||
Translation adjustment | — | 822 | 120 | 42 | 984 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
As at March 31, 2023 | ₹ | 1,278 | ₹ | 27,946 | ₹ | 2,580 | ₹ | 865 | ₹ | 32,669 | ||||||||||
Accumulated depreciation: | ||||||||||||||||||||
As at April 1, 2022 | ₹ | 58 | ₹ | 9,676 | ₹ | 1,512 | ₹ | 570 | ₹ | 11,816 | ||||||||||
Depreciation | 19 | 5,651 | 614 | 238 | 6,522 | |||||||||||||||
Disposals | — | (3,564 | ) | (1,003 | ) | (263 | ) | (4,830 | ) | |||||||||||
Translation adjustment | — | 364 | 69 | 26 | 459 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
As at March 31, 2023 | ₹ | 77 | ₹ | 12,127 | ₹ | 1,192 | ₹ | 571 | ₹ | 13,967 | ||||||||||
|
| |||||||||||||||||||
Net carrying value as at March 31, 2023 | ₹ | 18,702 | ||||||||||||||||||
|
| |||||||||||||||||||
Gross carrying value: | ||||||||||||||||||||
As at April 1, 2023 | ₹ | 1,278 | ₹ | 27,946 | ₹ | 2,580 | ₹ | 865 | ₹ | 32,669 | ||||||||||
Additions | — | 1,520 | — | 64 | 1,584 | |||||||||||||||
Disposals | — | (934 | ) | (367 | ) | (42 | ) | (1,343 | ) | |||||||||||
Translation adjustment | — | (20 | ) | 6 | (3 | ) | (17 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
As at June 30, 2023 | ₹ | 1,278 | ₹ | 28,512 | ₹ | 2,219 | ₹ | 884 | ₹ | 32,893 | ||||||||||
Accumulated depreciation: | ||||||||||||||||||||
As at April 1, 2023 | ₹ | 77 | ₹ | 12,127 | ₹ | 1,192 | ₹ | 571 | ₹ | 13,967 | ||||||||||
Depreciation | 5 | 1,361 | 109 | 48 | 1,523 | |||||||||||||||
Disposals | — | (706 | ) | (292 | ) | (35 | ) | (1,033 | ) | |||||||||||
Translation adjustment | — | (10 | ) | — | (2 | ) | (12 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
As at June 30, 2023 | ₹ | 82 | ₹ | 12,772 | ₹ | 1,009 | ₹ | 582 | ₹ | 14,445 | ||||||||||
|
| |||||||||||||||||||
Net carrying value as at June 30, 2023 | ₹ | 18,448 | ||||||||||||||||||
|
|
(1) | Comprised of net carrying value of computer equipment. |
6. Goodwill and intangible assets
The movement in goodwill balance is given below:
For the period ended | ||||||||
March 31, 2023 | June 30, 2023 | |||||||
Balance at the beginning of the period | ₹ | 246,989 | ₹ | 307,970 | ||||
Translation adjustment | 20,335 | (511 | ) | |||||
Acquisition through business combinations(1) | 40,687 | (489 | ) | |||||
Disposals | (41 | ) | — | |||||
|
|
|
| |||||
Balance at the end of the period | ₹ | 307,970 | ₹ | 306,970 | ||||
|
|
|
|
11
(1) | Acquisition through business combinations for the year ended March 31, 2023 and three months ended June 30, 2023 is after considering the impact of ₹ 57 and ₹ 489 towards measurement period changes in purchase price allocation of acquisitions made during the year ended March 31, 2022 and 2023, respectively. |
The movement in intangible assets is given below:
Intangible assets | ||||||||||||
Customer-related | Marketing- related | Total | ||||||||||
Gross carrying value: | ||||||||||||
As at April 1, 2022 | ₹ | 43,366 | ₹ | 11,428 | ₹ | 54,794 | ||||||
Acquisition through business combinations | 5,480 | 482 | 5,962 | |||||||||
Deductions/adjustments (1) | (38 | ) | — | (38 | ) | |||||||
Translation adjustment | 1,522 | 411 | 1,933 | |||||||||
|
|
|
|
|
| |||||||
As at June 30, 2022 | ₹ | 50,330 | ₹ | 12,321 | ₹ | 62,651 | ||||||
Accumulated amortization/ impairment: | ||||||||||||
As at April 1, 2022 | ₹ | 9,483 | ₹ | 1,756 | ₹ | 11,239 | ||||||
Amortization and impairment | 1,455 | 438 | 1,893 | |||||||||
Translation adjustment | 266 | 54 | 320 | |||||||||
|
|
|
|
|
| |||||||
As at June 30, 2022 | ₹ | 11,204 | ₹ | 2,248 | ₹ | 13,452 | ||||||
|
|
|
|
|
| |||||||
Net carrying value as at June 30, 2022 | ₹ | 39,126 | ₹ | 10,073 | ₹ | 49,199 | ||||||
|
|
|
|
|
| |||||||
Gross carrying value: | ||||||||||||
As at April 1, 2022 | ₹ | 43,366 | ₹ | 11,428 | ₹ | 54,794 | ||||||
Acquisition through business combinations | 5,602 | 482 | 6,084 | |||||||||
Deductions/adjustments (1) | (2,555 | ) | (862 | ) | (3,417 | ) | ||||||
Translation adjustment | 3,400 | 876 | 4,276 | |||||||||
|
|
|
|
|
| |||||||
As at March 31, 2023 | ₹ | 49,813 | ₹ | 11,924 | ₹ | 61,737 | ||||||
Accumulated amortization/ impairment: | ||||||||||||
As at April 1, 2022 | ₹ | 9,483 | ₹ | 1,756 | ₹ | 11,239 | ||||||
Amortization and impairment (2) | 7,718 | 2,236 | 9,954 | |||||||||
Deductions/adjustments | (2,519 | ) | (862 | ) | (3,381 | ) | ||||||
Translation adjustment | 735 | 145 | 880 | |||||||||
|
|
|
|
|
| |||||||
As at March 31, 2023 | ₹ | 15,417 | ₹ | 3,275 | ₹ | 18,692 | ||||||
|
|
|
|
|
| |||||||
Net carrying value as at March 31, 2023 | ₹ | 34,396 | ₹ | 8,649 | ₹ | 43,045 | ||||||
|
|
|
|
|
| |||||||
Gross carrying value: | ||||||||||||
As at April 1, 2023 | ₹ | 49,813 | ₹ | 11,924 | ₹ | 61,737 | ||||||
Translation adjustment | (98 | ) | (25 | ) | (123 | ) | ||||||
|
|
|
|
|
| |||||||
As at June 30, 2023 | ₹ | 49,715 | ₹ | 11,899 | ₹ | 61,614 | ||||||
Accumulated amortization/ impairment: | ||||||||||||
As at April 1, 2023 | ₹ | 15,417 | ₹ | 3,275 | ₹ | 18,692 | ||||||
Amortization and impairment | 1,420 | 390 | 1,810 | |||||||||
Translation adjustment | (34 | ) | (9 | ) | (43 | ) | ||||||
|
|
|
|
|
| |||||||
As at June 30, 2023 | ₹ | 16,803 | ₹ | 3,656 | ₹ | 20,459 | ||||||
|
|
|
|
|
| |||||||
Net carrying value as at June 30, 2023 | ₹ | 32,912 | ₹ | 8,243 | ₹ | 41,155 | ||||||
|
|
|
|
|
|
(1) | Includes ₹ 38 and ₹ 36 for the period ended June 30, 2022 and March 31, 2023 respectively, towards measurement period adjustment in customer-related intangible in an acquisition completed during the year ended March 31, 2022. |
(2) | During the year ended March 31, 2023, decline in the revenue and earnings estimates led to revision of recoverable value of customer-relationship intangible assets and marketing related intangible assets recognized on business combinations. Consequently, the Company has recognized impairment charge of ₹ 1,816 for the year ended March 31, 2023, as part of amortization and impairment. |
Amortization expense on intangible assets is included in selling and marketing expenses in the interim condensed consolidated statement of income. |
12
7. Business combinations
Rizing Intermediate Holdings, Inc and its subsidiaries (“Rizing”), a global SAP consulting firm with industry expertise and consulting capabilities in enterprise asset management, consumer industries, and human experience management. Rizing complements the Company in capabilities (EAM, HCM and S/4HANA), in industries such as Energy and Utilities, Retail and Consumer Products, Manufacturing and Hi Tech in geographies across North America, Europe, Asia, and Australia. The acquisition was consummated on May 20, 2022, for total cash consideration of ₹ 43,845. During the three months ended June 30, 2023, the Company finalized the purchase price allocation as below.
Description | Amount | |||
Net assets | ₹ | 4,425 | ||
Fair value of customer-related intangibles | 3,894 | |||
Fair value of marketing-related intangibles | 482 | |||
Deferred tax liabilities on intangible assets | (1,750 | ) | ||
|
| |||
Total | ₹ | 7,051 | ||
Goodwill | 36,794 | |||
|
| |||
Total purchase price | ₹ | 43,845 | �� | |
|
| |||
Net Assets include: | ||||
Cash and cash equivalents | ₹ | 2,114 | ||
Fair value of acquired trade receivables included in net assets | ₹ | 3,220 | ||
Gross contractual amount of acquired trade receivables | ₹ | 3,233 | ||
Less: Allowance for lifetime expected credit loss | (13 | ) |
The goodwill of ₹ 36,794 comprises value of acquired workforce and expected synergies arising from the business combination. Goodwill is allocated to IT Services segment and is not deductible for income tax purposes.
8. Investments
As at | ||||||||
March 31, 2023 | June 30, 2023 | |||||||
Non-current | ||||||||
Financial instruments at FVTPL | ||||||||
Equity instruments | ₹ | 3,773 | ₹ | 3,812 | ||||
Fixed maturity plan mutual funds | 1,300 | 1,324 | ||||||
Financial instruments at FVTOCI | ||||||||
Equity instruments | 15,647 | 15,646 | ||||||
Financial instruments at amortized cost | ||||||||
Inter corporate and term deposits | ^ | ^ | ||||||
|
|
|
| |||||
₹ | 20,720 | ₹ | 20,782 | |||||
Current | ||||||||
Financial instruments at FVTPL | ||||||||
Short-term mutual funds | ₹ | 40,262 | ₹ | 157,972 | ||||
Financial instruments at FVTOCI | ||||||||
Non-convertible debentures, government securities, commercial papers, certificate of deposit and bonds | 245,195 | 160,675 | ||||||
Financial instruments at amortized cost | ||||||||
Inter corporate and term deposits (1) | 23,775 | 32,509 | ||||||
|
|
|
| |||||
₹ | 309,232 | ₹ | 351,156 | |||||
|
|
|
| |||||
₹ | 329,952 | ₹ | 371,938 | |||||
|
|
|
|
^ | Value is less than 1 |
(1) | These deposits earn a fixed rate of interest. Term deposits include current deposits in lien with banks primarily on account of term deposits of ₹ 12,951 (March 31, 2023: ₹ 653) held as margin money deposits against guarantees including ₹ 12,472 towards buyback of equity shares (Refer to Note 29). |
9. Inventories
As at | ||||||||
March 31, 2023 | June 30, 2023 | |||||||
Stores and spare parts | ₹ | 30 | ₹ | 33 | ||||
Finished and traded goods | 1,158 | 1,342 | ||||||
|
|
|
| |||||
₹ | 1,188 | ₹ | 1,375 | |||||
|
|
|
|
10. Cash and cash equivalents
As at | ||||||||
March 31, 2023 | June 30, 2023 | |||||||
Cash and bank balances | ₹ | 60,417 | ₹ | 61,996 | ||||
Demand deposits with banks (1) | 31,463 | 21,620 | ||||||
|
|
|
| |||||
₹ | 91,880 | ₹ | 83,616 | |||||
|
|
|
|
(1) | These deposits can be withdrawn by the Company at any time without prior notice and without any penalty on the principal. |
13
Cash and cash equivalents consist of the following for the purpose of the statement of cash flows:
As at | ||||||||
June 30, 2022 | June 30, 2023 | |||||||
Cash and cash equivalents | ₹ | 82,828 | ₹ | 83,616 | ||||
Bank overdrafts | (2 | ) | (24 | ) | ||||
|
|
|
| |||||
₹ | 82,826 | ₹ | 83,592 | |||||
|
|
|
|
11. Other financial assets
As at | ||||||||
March 31, 2023 | June 30, 2023 | |||||||
Non-current | ||||||||
Security deposits | ₹ | 1,566 | ₹ | 1,315 | ||||
Finance lease receivables | 4,742 | 5,035 | ||||||
Others | 22 | 18 | ||||||
|
|
|
| |||||
₹ | 6,330 | ₹ | 6,368 | |||||
Current | ||||||||
Security deposits | ₹ | 1,549 | ₹ | 1,964 | ||||
Dues from officers and employees | 735 | 731 | ||||||
Interest receivables | 386 | 635 | ||||||
Finance lease receivables | 5,672 | 5,604 | ||||||
Escrow balances with bank for buyback of equity shares | — | 3,000 | ||||||
Others | 754 | 544 | ||||||
|
|
|
| |||||
₹ | 9,096 | ₹ | 12,478 | |||||
|
|
|
| |||||
₹ | 15,426 | ₹ | 18,846 | |||||
|
|
|
|
12. Other assets
As at | ||||||||
March 31, 2023 | June 30, 2023 | |||||||
Non-current | ||||||||
Prepaid expenses | ₹ | 5,375 | ₹ | 5,120 | ||||
Costs to obtain contract (1) | 2,936 | 2,675 | ||||||
Costs to fulfil contract (2) | 261 | 246 | ||||||
Others | 5,034 | 5,206 | ||||||
|
|
|
| |||||
₹ | 13,606 | ₹ | 13,247 | |||||
Current | ||||||||
Prepaid expenses | ₹ | 19,164 | ₹ | 19,594 | ||||
Dues from officers and employees | 799 | 704 | ||||||
Advance to suppliers | 2,506 | 1,221 | ||||||
Balance with GST and other authorities | 7,929 | 6,431 | ||||||
Costs to obtain contract (1) | 978 | 970 | ||||||
Costs to fulfil contract (2) | 59 | 59 | ||||||
Others | 1,464 | 1,365 | ||||||
|
|
|
| |||||
₹ | 32,899 | ₹ | 30,344 | |||||
|
|
|
| |||||
₹ | 46,505 | ₹ | 43,591 | |||||
|
|
|
|
(1) | Costs to obtain contract amortization of ₹ 214 and ₹ 328 during the three months ended June 30, 2022 and 2023 respectively. |
(2) | Costs to fulfil contract amortization of ₹ 14 and ₹ 15 during the three months ended June 30, 2022 and 2023 respectively. |
13. Loans, borrowings and bank overdrafts
As at | ||||||||
March 31, 2023 | June 30, 2023 | |||||||
Non-current | ||||||||
Unsecured Notes 2026 | ₹ | 61,272 | ₹ | 61,197 | ||||
|
|
|
| |||||
₹ | 61,272 | ₹ | 61,197 | |||||
Current | ||||||||
Borrowings from banks | ₹ | 88,745 | ₹ | 88,631 | ||||
Loans from institutions other than banks | 57 | 57 | ||||||
Bank overdrafts | 19 | 24 | ||||||
|
|
|
| |||||
₹ | 88,821 | ₹ | 88,712 | |||||
|
|
|
| |||||
₹ | 150,093 | ₹ | 149,909 | |||||
|
|
|
|
14
14. Other financial liabilities
As at | ||||||||
March 31, 2023 | June 30, 2023 | |||||||
Non-current | ||||||||
Contingent consideration (Refer to Note 17) | ₹ | 1,545 | ₹ | 535 | ||||
Deposits and others | 1,104 | 1,012 | ||||||
|
|
|
| |||||
₹ | 2,649 | ₹ | 1,547 | |||||
Current | ||||||||
Liability towards buyback of equity shares | ₹ | — | ₹ | 120,000 | ||||
Contingent consideration (Refer to Note 17) | 1,508 | 1,234 | ||||||
Advance from customers | 1,373 | 1,095 | ||||||
Cash settled ADS RSUs | 6 | 4 | ||||||
Capital creditors | 215 | 220 | ||||||
Deposits and others | 1,039 | 860 | ||||||
|
|
|
| |||||
₹ | 4,141 | ₹ | 123,413 | |||||
|
|
|
| |||||
₹ | 6,790 | ₹ | 124,960 | |||||
|
|
|
|
15. Other liabilities
As at | ||||||||
March 31, 2023 | June 30, 2023 | |||||||
Non-current | ||||||||
Employee benefits obligations | ₹ | 2,947 | ₹ | 3,214 | ||||
Others | 6,386 | 6,937 | ||||||
|
|
|
| |||||
₹ | 9,333 | ₹ | 10,151 | |||||
Current | ||||||||
Tax on liability towards buyback of equity shares | ₹ | — | ₹ | 24,978 | ||||
Employee benefits obligations | 15,885 | 16,052 | ||||||
Statutory and other liabilities | 13,155 | 13,613 | ||||||
Advance from customers and others | 645 | 1,479 | ||||||
Others | 530 | 638 | ||||||
|
|
|
| |||||
₹ | 30,215 | ₹ | 56,760 | |||||
|
|
|
| |||||
₹ | 39,548 | ₹ | 66,911 | |||||
|
|
|
|
16. Provisions
As at | ||||||||
March 31, 2023 | June 30, 2023 | |||||||
Non-current | ||||||||
Provision for warranty | ₹ | ^ | ₹ | — | ||||
|
|
|
| |||||
₹ | ^ | ₹ | — | |||||
Current | ||||||||
Provision for onerous contracts | ₹ | 1,590 | ₹ | 1,672 | ||||
Provision for warranty | 456 | 230 | ||||||
Others | 503 | 498 | ||||||
|
|
|
| |||||
₹ | 2,549 | ₹ | 2,400 | |||||
|
|
|
| |||||
₹ | 2,549 | ₹ | 2,400 | |||||
|
|
|
|
^ | Value is less than 1 |
17. Financial instruments:
Derivative assets and liabilities:
The Company is exposed to currency fluctuations on foreign currency assets / liabilities, forecasted cash flows denominated in foreign currency and net investment in foreign operations. The Company is also exposed to interest rate fluctuations on investments in floating rate financial assets and floating rate borrowings. The Company follows established risk management policies, including the use of derivatives to hedge foreign currency assets / liabilities, interest rates, foreign currency forecasted cash flows and net investment in foreign operations. The counter parties in these derivative instruments are primarily banks and the Company considers the risks of non-performance by the counterparty as immaterial.
15
The following table presents the aggregate contracted principal amounts of the Company’s derivative contracts outstanding:
(in million)
As at | ||||||||||||||||||||||||
March 31, 2023 | June 30, 2023 | |||||||||||||||||||||||
Notional | Fair value | Notional | Fair value | |||||||||||||||||||||
Designated derivative instruments | ||||||||||||||||||||||||
Sell: Forward contracts | USD | 977 | ₹ | (262 | ) | USD | 1,179 | ₹ | 1,248 | |||||||||||||||
€ | 94 | ₹ | (497 | ) | € | 93 | ₹ | (249 | ) | |||||||||||||||
£ | 138 | ₹ | (728 | ) | £ | 152 | ₹ | (711 | ) | |||||||||||||||
AUD | 89 | ₹ | 9 | AUD | 65 | ₹ | 26 | |||||||||||||||||
Range forward option contracts | USD | 1,157 | ₹ | (19 | ) | USD | 958 | ₹ | 692 | |||||||||||||||
€ | 49 | ₹ | (112 | ) | € | 47 | ₹ | (3 | ) | |||||||||||||||
£ | 60 | ₹ | (69 | ) | £ | 47 | ₹ | (54 | ) | |||||||||||||||
AUD | 34 | ₹ | 29 | AUD | 58 | ₹ | (91 | ) | ||||||||||||||||
Interest rate swaps | INR | 4,750 | ₹ | (113 | ) | INR | 4,750 | ₹ | (94 | ) | ||||||||||||||
USD | — | ₹ | — | USD | 200 | ₹ | 333 | |||||||||||||||||
Non-designated derivative instruments | ||||||||||||||||||||||||
Sell: Forward contracts (1) | USD | 1,550 | ₹ | 736 | USD | 1,552 | ₹ | 713 | ||||||||||||||||
€ | 171 | ₹ | (176 | ) | € | 200 | ₹ | 126 | ||||||||||||||||
£ | 129 | ₹ | (100 | ) | £ | 114 | ₹ | 56 | ||||||||||||||||
AUD | 56 | ₹ | 69 | AUD | 41 | ₹ | (9 | ) | ||||||||||||||||
SGD | 14 | ₹ | 1 | SGD | 14 | ₹ | 8 | |||||||||||||||||
ZAR | 43 | ₹ | (7 | ) | ZAR | — | ₹ | — | ||||||||||||||||
CAD | 69 | ₹ | (25 | ) | CAD | 20 | ₹ | (7 | ) | |||||||||||||||
SAR | 147 | ₹ | (6 | ) | SAR | 206 | ₹ | (4 | ) | |||||||||||||||
CHF | 9 | ₹ | 5 | CHF | — | ₹ | — | |||||||||||||||||
QAR | 4 | ₹ | (2 | ) | QAR | — | ₹ | — | ||||||||||||||||
TRY | 30 | ₹ | (1 | ) | TRY | 86 | ₹ | 16 | ||||||||||||||||
NOK | 13 | ₹ | 6 | NOK | — | ₹ | — | |||||||||||||||||
OMR | 1 | ₹ | ^ | OMR | 2 | ₹ | (1 | ) | ||||||||||||||||
SEK | 3 | ₹ | ^ | SEK | — | ₹ | — | |||||||||||||||||
JPY | 784 | ₹ | 6 | JPY | 400 | ₹ | 8 | |||||||||||||||||
DKK | 33 | ₹ | (4 | ) | DKK | 33 | ₹ | 5 | ||||||||||||||||
AED | 20 | ₹ | ^ | AED | 5 | ₹ | ^ | |||||||||||||||||
CNH | 1 | ₹ | ^ | CNH | 1 | ₹ | 1 | |||||||||||||||||
Buy: Forward contracts | AED | 5 | ₹ | ^ | AED | — | ₹ | — | ||||||||||||||||
NOK | 12 | ₹ | ^ | NOK | 95 | ₹ | (10 | ) | ||||||||||||||||
QAR | 4 | ₹ | 2 | QAR | 11 | ₹ | 4 | |||||||||||||||||
ZAR | 7 | ₹ | 1 | ZAR | 51 | ₹ | ^ | |||||||||||||||||
PLN | 26 | ₹ | 13 | PLN | 18 | ₹ | 11 | |||||||||||||||||
SEK | — | ₹ | — | SEK | 15 | ₹ | (6 | ) | ||||||||||||||||
JPY | — | ₹ | — | JPY | 261 | ₹ | (11 | ) | ||||||||||||||||
Range forward option contracts | USD | 30 | ₹ | 31 | USD | — | ₹ | — | ||||||||||||||||
Interest rate swaps | USD | 200 | ₹ | 82 | USD | — | ₹ | — | ||||||||||||||||
|
|
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| |||||||||||||||||||||
₹ | (1,131 | ) | ₹ | 1,997 | ||||||||||||||||||||
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^ | Value is less than 1 |
(1) | USD 1,550 and USD 1,552 includes USD/PHP sell forward of USD 77 and USD 117 as at March 31, 2023 and June 30, 2023, respectively. |
Hedge effectiveness is determined at the inception of the hedge relationship, and through periodic prospective effectiveness assessments to ensure that an economic relationship exists between the hedged item and hedging instrument, including whether the hedging instrument is expected to offset changes in cash flows of hedged items.
16
The following table summarizes activity in the cash flow hedging reserve within equity related to all derivative instruments classified as cash flow hedges:
Three months ended June 30, | ||||||||
2022 | 2023 | |||||||
Balance as at the beginning of the period | ₹ | 1,943 | ₹ | (1,762 | ) | |||
Changes in fair value of effective portion of derivatives | (1,033 | ) | 1,846 | |||||
Net (gain)/loss reclassified to statement of income on occurrence of hedged transactions (1) | (855 | ) | 1,013 | |||||
Ineffective portion of derivative instruments classified to statement of income | — | (33 | ) | |||||
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| |||||
Gain/(loss) on cash flow hedging derivatives, net | ₹ | (1,888 | ) | ₹ | 2,826 | |||
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| |||||
Balance as at the end of the period | ₹ | 55 | ₹ | 1,064 | ||||
Deferred tax thereon | (13 | ) | (267 | ) | ||||
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Balance as at the end of the period, net of deferred tax | ₹ | 42 | ₹ | 797 | ||||
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(1) | Includes net (gain)/loss reclassified to revenue of ₹ (794) and ₹ 914 for the three months ended June 30, 2022, and 2023, respectively and net (gain)/loss reclassified to cost of revenues of ₹ (61) and ₹ 99 for the three months ended June 30, 2022, and 2023, respectively. |
As at June 30, 2022 and 2023, 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.
Fair value:
Financial assets and liabilities include cash and cash equivalents, trade receivables, unbilled receivables, finance lease receivables, employee and other advances, eligible current and non-current assets, loans, borrowings and bank overdrafts, trade payables and accrued expenses, and eligible current liabilities and non-current liabilities.
The fair value of cash and cash equivalents, trade receivables, unbilled receivables, short-term loans, borrowings and bank overdrafts, trade payables and accrued expenses, other current financial assets and liabilities approximate their carrying amount largely due to the short-term nature of these instruments. Finance lease receivables are periodically evaluated based on individual credit worthiness of customers. Based on this evaluation, the Company records allowance for estimated credit losses on these receivables. As at March 31, 2023 and June 30, 2023, the carrying value of such receivables, net of allowances approximates the fair value. The Company’s Unsecured Notes 2026 are contracted at fixed coupon rate of 1.50% and market yield of Unsecured Notes 2026 as of June 30, 2023 is 5.653%.
Investments in short-term mutual funds and fixed maturity plan mutual funds, which are classified as FVTPL are measured using net asset values at the reporting date multiplied by the quantity held. Fair value of investments in non-convertible debentures, government securities, commercial papers, certificate of deposit and bonds classified as FVTOCI is determined based on the indicative quotes of price and yields prevailing in the market at the reporting date. Fair value of investments in equity instruments classified as FVTOCI or FVTPL is determined using market approach primarily based on market multiples method.
The fair value of derivative financial instruments is determined based on observable market inputs including currency spot and forward rates, yield curves and currency volatility.
Fair value hierarchy
The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows:
Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 – Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).
There were no transfer between Level 1, 2 and 3 during the year ended March 31, 2023 and three months ended June 30, 2023.
17
The following table presents fair value hierarchy of assets and liabilities measured at fair value on a recurring basis:
As at | ||||||||||||||||||||||||||||||||
March 31, 2023 | June 30, 2023 | |||||||||||||||||||||||||||||||
Fair value measurements at reporting date | Fair value measurements at reporting date | |||||||||||||||||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||
Derivative instruments: | ||||||||||||||||||||||||||||||||
Cash flow hedges | ₹ | 772 | ₹ | — | ₹ | 772 | ₹ | — | ₹ | 2,380 | ₹ | — | ₹ | 2,380 | ₹ | — | ||||||||||||||||
Others | 1,101 | — | 1,101 | — | 1,110 | — | 1,110 | — | ||||||||||||||||||||||||
Investments: | ||||||||||||||||||||||||||||||||
Short-term mutual funds | 40,262 | 40,262 | — | — | 157,972 | 157,972 | — | — | ||||||||||||||||||||||||
Fixed maturity plan mutual funds | 1,300 | — | 1,300 | — | 1,324 | — | 1,324 | — | ||||||||||||||||||||||||
Equity instruments | 19,420 | 99 | — | 19,321 | 19,458 | 74 | — | 19,384 | ||||||||||||||||||||||||
Non-convertible debentures, government securities, commercial papers, certificate of deposit and bonds | 245,195 | 1,256 | 243,939 | — | 160,675 | 1,250 | 159,425 | — | ||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||
Derivative instruments: | ||||||||||||||||||||||||||||||||
Cash flow hedges | ₹ | (2,534 | ) | ₹ | — | ₹ | (2,534 | ) | ₹ | — | ₹ | (1,316 | ) | ₹ | — | ₹ | (1,316 | ) | ₹ | — | ||||||||||||
Others | (470 | ) | — | (470 | ) | — | (177 | ) | — | (177 | ) | — | ||||||||||||||||||||
Contingent consideration | (3,053 | ) | — | — | (3,053 | ) | (1,769 | ) | — | — | (1,769 | ) |
The following methods and assumptions were used to estimate the fair value of the level 2 financial instruments included in the above table.
Derivative instruments (assets and liabilities): The Company enters into derivative financial instruments with various counterparties, primarily banks with investment grade credit ratings. Derivatives valued using valuation techniques with market observable inputs are mainly interest rate swaps, foreign exchange forward contracts and foreign exchange option contracts. The most frequently applied valuation techniques include forward pricing, swap models and Black Scholes models (for option valuation), using present value calculations. The models incorporate various inputs including the credit quality of counterparties, foreign exchange spot and forward rates, interest rate curves and forward rate curves of the underlying. As at June 30, 2023, the changes in counterparty credit risk had no material effect on the hedge effectiveness assessment for derivatives designated in hedge relationships and other financial instruments recognized at fair value.
Investment in Non-convertible debentures, government securities, commercial papers, certificate of deposit and bonds: Fair value of these instruments is derived based on the indicative quotes of price and yields prevailing in the market as at reporting date.
Investment in fixed maturity plan mutual funds: Fair value of these instruments is derived based on the indicative quotes of price prevailing in the market as at reporting date.
The following methods and assumptions were used to estimate the fair value of the level 3 financial instruments included in the above table.
Investment in equity instruments: Fair value of these instruments is determined using market approach primarily based on market multiples method.
Details of assets and liabilities considered under Level 3 classification
As at | ||||||||
Investment in equity instruments | March 31, 2023 | June 30, 2023 | ||||||
Balance at the beginning of the period | ₹ | 16,324 | ₹ | 19,321 | ||||
Additions | 2,093 | 78 | ||||||
Disposals (1) | (632 | ) | (46 | ) | ||||
Unrealized gain/(loss) recognized in statement of income | (2 | ) | (12 | ) | ||||
Gain recognized in other comprehensive income | 291 | 19 | ||||||
Translation adjustment | 1,247 | 24 | ||||||
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Balance at the end of the period | ₹ | 19,321 | ₹ | 19,384 | ||||
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(1) | During the year ended March 31, 2023, the Company sold its shares in Vicarious FPC, Inc. and Harte Hanks Inc. at a fair value of ₹ 1,150 and recognized a cumulative gain of ₹30 in other comprehensive income. |
18
As at | ||||||||
Contingent consideration | March 31, 2023 | June 30, 2023 | ||||||
Balance at the beginning of the period | ₹ | (4,329 | ) | ₹ | (3,053 | ) | ||
Additions | (1,662 | ) | — | |||||
Reversals (1) | 1,671 | 16 | ||||||
Payouts | 1,784 | 1,286 | ||||||
Finance expense recognized in statement of income | (131 | ) | (20 | ) | ||||
Translation adjustment | (386 | ) | 2 | |||||
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Balance at the end of the period | ₹ | (3,053 | ) | ₹ | (1,769 | ) | ||
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(1) | Towards change in fair value of earn-out liability as a result of changes in estimates of revenue and earnings over the earn-out period. |
18. Foreign currency translation reserve and Other reserves
The movement in foreign currency translation reserve attributable to equity holders of the Company is summarized below:
Three months ended June 30, | ||||||||
2022 | 2023 | |||||||
Balance at the beginning of the period | ₹ | 26,850 | ₹ | 43,255 | ||||
Translation difference related to foreign operations, net | 5,607 | (361 | ) | |||||
Reclassification of foreign currency translation differences on liquidation of subsidiaries to statement of income | — | 2 | ||||||
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| |||||
Balance at the end of the period | ₹ | 32,457 | ₹ | 42,896 | ||||
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The movement in other reserves is summarized below:
Other Reserves | ||||||||||||||||
Particulars | Remeasurements of the defined benefit plans | Investment in debt instruments measured at fair value through OCI | Investment in equity instruments measured at fair value through OCI | Capital Redemption Reserve | ||||||||||||
As at April 1, 2022 | ₹ | (498 | ) | ₹ | 3,018 | ₹ | 10,088 | ₹ | 1,122 | |||||||
Other comprehensive income | 312 | (4,102 | ) | 1,333 | — | |||||||||||
As at June 30, 2022 | ₹ | (186 | ) | ₹ | (1,084 | ) | ₹ | 11,421 | ₹ | 1,122 | ||||||
As at April 1, 2023 | ₹ | (548 | ) | ₹ | (119 | ) | ₹ | 10,793 | ₹ | 1,122 | ||||||
Other comprehensive income | 43 | 1,039 | 16 | — | ||||||||||||
As at June 30, 2023 | ₹ | (505 | ) | ₹ | 920 | ₹ | 10,809 | ₹ | 1,122 |
19. Income taxes
Three months ended June 30, | ||||||||
2022 | 2023 | |||||||
Income tax expense as per the interim condensed consolidated statement of income | ₹ | 7,931 | ₹ | 9,115 | ||||
Income tax included in other comprehensive income on: | ||||||||
Gains/(losses) on investment securities | (393 | ) | 162 | |||||
Gains/(losses) on cash flow hedging derivatives | (453 | ) | 626 | |||||
Remeasurements of the defined benefit plans | 95 | 33 | ||||||
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₹ | 7,180 | ₹ | 9,936 | |||||
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Income tax expense consists of the following:
Three months ended June 30, | ||||||||
2022 | 2023 | |||||||
Current taxes | ₹ | 9,029 | ₹ | 9,135 | ||||
Deferred taxes | (1,098 | ) | (20 | ) | ||||
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₹ | 7,931 | ₹ | 9,115 | |||||
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Income tax expenses are net of reversal of taxes pertaining to earlier periods, amounting to ₹ (68) and ₹ (627) for the three months ended June 30, 2022 and 2023, respectively.
19
For the three months ended June 30, 2023, the Company has applied mandatory temporary exception to the accounting for deferred taxes arising from the jurisdictional implementation of the Pillar Two model rules under International Tax Reform – Pillar Two Model Rules – Amendments to IAS 12.
20. Revenues
The tables below present disaggregated revenue from contracts with customers by business segment (Refer to Note 27 “Segment Information”), sector and nature of contract. The Company believes that the below disaggregation best depicts the nature, amount, timing and uncertainty of revenue and cash flows from economic factors.
Effective April 1, 2023, the Company has reorganized its segments by merging India State Run Enterprises (“ISRE”) segment as part of its APMEA SMU within IT Services segment. Comparative period disaggregated revenue information has been restated to give effect to this change.
20
Information on disaggregation of revenues for the three months ended June 30, 2022 is as follows:
IT Services | IT Products | Total | ||||||||||||||||||||||||||
Americas 1 | Americas 2 | Europe | APMEA | Total | ||||||||||||||||||||||||
A. Revenue | ||||||||||||||||||||||||||||
Rendering of services | ₹ | 61,440 | ₹ | 66,300 | ₹ | 59,957 | ₹ | 25,643 | ₹ | 213,340 | ₹ | — | ₹ | 213,340 | ||||||||||||||
Sale of products | — | — | — | — | — | 1,946 | 1,946 | |||||||||||||||||||||
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₹ | 61,440 | ₹ | 66,300 | ₹ | 59,957 | ₹ | 25,643 | ₹ | 213,340 | ₹ | 1,946 | ₹ | 215,286 | |||||||||||||||
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B. Revenue by sector | ||||||||||||||||||||||||||||
Banking, Financial Services and Insurance | ₹ | 1,085 | ₹ | 40,988 | ₹ | 24,536 | ₹ | 9,094 | ₹ | 75,703 | ||||||||||||||||||
Health | 19,444 | 42 | 3,929 | 884 | 24,299 | |||||||||||||||||||||||
Consumer | 25,721 | 896 | 8,820 | 4,193 | 39,630 | |||||||||||||||||||||||
Communications | 3,192 | 341 | 3,134 | 3,883 | 10,550 | |||||||||||||||||||||||
Energy, Natural Resources and Utilities | 217 | 9,273 | 9,304 | 4,986 | 23,780 | |||||||||||||||||||||||
Manufacturing | 17 | 7,843 | 5,583 | 904 | 14,347 | |||||||||||||||||||||||
Technology | 11,764 | 6,917 | 4,651 | 1,699 | 25,031 | |||||||||||||||||||||||
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₹ | 61,440 | ₹ | 66,300 | ₹ | 59,957 | ₹ | 25,643 | ₹ | 213,340 | ₹ | 1,946 | ₹ | 215,286 | |||||||||||||||
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C. Revenue by nature of contract | ||||||||||||||||||||||||||||
Fixed price and volume based | ₹ | 35,884 | ₹ | 33,859 | ₹ | 33,977 | ₹ | 15,224 | ₹ | 118,944 | ₹ | — | ₹ | 118,944 | ||||||||||||||
Time and materials | 25,556 | 32,441 | 25,980 | 10,419 | 94,396 | — | 94,396 | |||||||||||||||||||||
Products | — | — | — | — | — | 1,946 | 1,946 | |||||||||||||||||||||
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₹ | 61,440 | ₹ | 66,300 | ₹ | 59,957 | ₹ | 25,643 | ₹ | 213,340 | ₹ | 1,946 | ₹ | 215,286 | |||||||||||||||
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Information on disaggregation of revenues for the three months ended June 30, 2023 is as follows:
IT Services | IT Products | Total | ||||||||||||||||||||||||||
Americas 1 | Americas 2 | Europe | APMEA | Total | ||||||||||||||||||||||||
A. Revenue | ||||||||||||||||||||||||||||
Rendering of services | ₹ | 65,622 | ₹ | 68,321 | ₹ | 67,155 | ₹ | 26,518 | ₹ | 227,616 | ₹ | — | ₹ | 227,616 | ||||||||||||||
Sale of products | — | — | — | — | — | 694 | 694 | |||||||||||||||||||||
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₹ | 65,622 | ₹ | 68,321 | ₹ | 67,155 | ₹ | 26,518 | ₹ | 227,616 | ₹ | 694 | ₹ | 228,310 | |||||||||||||||
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B. Revenue by sector | ||||||||||||||||||||||||||||
Banking, Financial Services and Insurance | ₹ | 784 | ₹ | 42,015 | ₹ | 25,522 | ₹ | 9,041 | ₹ | 77,362 | ||||||||||||||||||
Health | 21,727 | 85 | 4,823 | 1,250 | 27,885 | |||||||||||||||||||||||
Consumer | 26,355 | 1,114 | 10,799 | 4,269 | 42,537 | |||||||||||||||||||||||
Communications | 3,486 | 347 | 3,123 | 3,462 | 10,418 | |||||||||||||||||||||||
Energy, Natural Resources and Utilities | 106 | 10,294 | 11,111 | 5,845 | 27,356 | |||||||||||||||||||||||
Manufacturing | 47 | 8,484 | 6,893 | 1,038 | 16,462 | |||||||||||||||||||||||
Technology | 13,117 | 5,982 | 4,884 | 1,613 | 25,596 | |||||||||||||||||||||||
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₹ | 65,622 | ₹ | 68,321 | ₹ | 67,155 | ₹ | 26,518 | ₹ | 227,616 | ₹ | 694 | ₹ | 228,310 | |||||||||||||||
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C. Revenue by nature of contract | ||||||||||||||||||||||||||||
Fixed price and volume based | ₹ | 37,524 | ₹ | 35,450 | ₹ | 39,723 | ₹ | 15,942 | ₹ | 128,639 | ₹ | — | ₹ | 128,639 | ||||||||||||||
Time and materials | 28,098 | 32,871 | 27,432 | 10,576 | 98,977 | — | 98,977 | |||||||||||||||||||||
Products | — | — | — | — | — | 694 | 694 | |||||||||||||||||||||
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₹ | 65,622 | ₹ | 68,321 | ₹ | 67,155 | ₹ | 26,518 | ₹ | 227,616 | ₹ | 694 | ₹ | 228,310 | |||||||||||||||
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21
21. Expenses by nature
Three months ended June 30, | ||||||||
2022 | 2023 | |||||||
Employee compensation | ₹ | 126,134 | ₹ | 140,276 | ||||
Sub-contracting and technical fees | 29,454 | 26,385 | ||||||
Cost of hardware and software | 2,143 | 806 | ||||||
Travel | 3,070 | 4,175 | ||||||
Facility expenses (1) | 3,299 | 3,452 | ||||||
Software license expense for internal use (1) | 4,577 | 4,607 | ||||||
Depreciation, amortization and impairment | 7,738 | 7,380 | ||||||
Communication | 1,543 | 1,249 | ||||||
Legal and professional fees (2) | 3,893 | 2,251 | ||||||
Rates, taxes and insurance | 1,497 | 1,462 | ||||||
Marketing and brand building | 900 | 977 | ||||||
Lifetime expected credit loss/ (write-back) | (22 | ) | 300 | |||||
Miscellaneous expenses (2) | 204 | 412 | ||||||
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| |||||
Total cost of revenues, selling and marketing expenses and general and administrative expenses | ₹ | 184,430 | ₹ | 193,732 | ||||
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(1) | Software license expense for internal use has been reclassified from Facility expenses to a separate nature of expense for the three months ended June 30, 2022. |
(2) | Staff recruitment expense has been reclassified from Miscellaneous expenses to Legal and professional fees for the three months ended June 30, 2022. |
22. Finance expenses
Three months ended June 30, | ||||||||
2022 | 2023 | |||||||
Interest expense | ₹ | 2,045 | ₹ | 3,086 | ||||
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| |||||
₹ | 2,045 | ₹ | 3,086 | |||||
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23. Finance and other income and Foreign exchange gains/(losses), net
Three months ended June 30, | ||||||||
2022 | 2023 | |||||||
Interest income | ₹ | 3,579 | ₹ | 5,244 | ||||
Dividend income | 2 | 1 | ||||||
Net gain from investments classified as FVTPL | 116 | 1,336 | ||||||
Net loss from investments classified as FVTOCI | (7 | ) | (39 | ) | ||||
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| |||||
Finance and other income | ₹ | 3,690 | ₹ | 6,542 | ||||
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| |||||
Foreign exchange gains/(losses), net, on financial instruments measured at FVTPL | ₹ | (1,751 | ) | ₹ | 881 | |||
Other foreign exchange gains/(losses), net | 2,785 | (943 | ) | |||||
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| |||||
Foreign exchange gains/(losses), net | ₹ | 1,034 | ₹ | (62 | ) | |||
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24. Earnings per equity share:
A reconciliation of profit for the period and equity shares used in the computation of basic and diluted earnings per equity share is set out below:
Basic: Basic earnings per share is calculated by dividing the profit attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding during the period, excluding equity shares purchased by the Company and held as treasury shares.
Three months ended June 30, | ||||||||
2022 | 2023 | |||||||
Profit attributable to equity holders of the Company | ₹ | 25,636 | ₹ | 28,701 | ||||
Weighted average number of equity shares outstanding | 5,471,449,783 | 5,482,733,329 | ||||||
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Basic earnings per equity share | ₹ | 4.69 | ₹ | 5.23 | ||||
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Diluted: Diluted earnings per share is calculated by adjusting the weighted average number of equity shares outstanding during the period for assumed conversion of all dilutive potential equity shares. Employee share options are dilutive potential equity shares for the Company.
The calculation is performed in respect of share options to determine the number of shares that could have been acquired at fair value (determined as the average market price of the Company’s shares during the period). The number of shares calculated as above is compared with the number of shares that would have been issued assuming the exercise of the share options.
22
The calculation of the potential dilutive effect on earnings per share on buyback of equity shares includes the incremental equity shares arrived as the difference between the number of ordinary shares assumed at the fair value (determined as the average market price of the Company’s shares during the period) and the number of ordinary shares received from satisfying the buyback offer.
Three months ended June 30, | ||||||||
2022 | 2023 | |||||||
Profit attributable to equity holders of the Company | ₹ | 25,636 | ₹ | 28,701 | ||||
Weighted average number of equity shares outstanding | 5,471,449,783 | 5,482,733,329 | ||||||
Effect of dilutive equivalent share options | 13,608,211 | 10,422,480 | ||||||
Dilutive effect from buyback of equity shares | — | 107,151,506 | ||||||
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| |||||
Weighted average number of equity shares for diluted earnings per share | 5,485,057,994 | 5,600,307,315 | ||||||
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Diluted earnings per equity share | ₹ | 4.67 | ₹ | 5.12 | ||||
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25. Employee compensation
Three months ended June 30, | ||||||||
2022 | 2023 | |||||||
Salaries and bonus | ₹ | 120,141 | ₹ | 133,800 | ||||
Employee benefits plans | 4,548 | 4,932 | ||||||
Share-based compensation (1) | 1,445 | 1,544 | ||||||
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| |||||
₹ | 126,134 | ₹ | 140,276 | |||||
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(1) | Includes ₹ 15 and ₹ (2) for the three months ended June 30, 2022, and 2023 respectively, towards cash settled ADS RSUs. |
The employee benefit cost is recognized in the following line items in the interim condensed consolidated statement of income:
Three months ended June 30, | ||||||||
2022 | 2023 | |||||||
Cost of revenues | ₹ | 107,864 | ₹ | 117,733 | ||||
Selling and marketing expenses | 11,122 | 12,612 | ||||||
General and administrative expenses | 7,148 | 9,931 | ||||||
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| |||||
₹ | 126,134 | ₹ | 140,276 | |||||
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The Company has granted 3,217,885 options under RSU option plan during the three months ended June 30, 2023 (173,269 for the three months ended June 30, 2022); 8,061,125 options under ADS option plan during the three months ended June 30, 2023 (1,113,342 for the three months ended June 30, 2022).
The Company has also granted 1,892,498 Performance based stock options (RSU) during the three months ended June 30, 2023, respectively (Nil for the three months ended June 30, 2022); 5,648,833 Performance based stock options (ADS) during the three months ended June 30, 2023, respectively (Nil for three months ended June 30, 2022).
The RSU grants were issued under Wipro Employee Restricted Stock Unit plan 2007 (WSRUP 2007 plan) and the ADS grants were issued under Wipro ADS Restricted Stock Unit Plan (WARSUP 2004 plan). Performance based stock options will vest based on the performance parameters of the Company.
26. Commitments and contingencies
Capital commitments: As at March 31, 2023 and June 30, 2023 the Company had committed to spend approximately ₹ 7,675 and ₹ 7,786 respectively, under agreements to purchase/ construct property and equipment. These amounts are net of capital advances paid in respect of these purchases.
Guarantees: As at March 31, 2023 and June 30, 2023, guarantees provided by banks on behalf of the Company to the Indian Government, customers and certain other agencies aggregate to ₹ 16,076 and ₹ 26,403 (including ₹ 12,150 towards Buyback as referred in Note 29) respectively, as part of the bank line of credit.
Contingencies and lawsuits: The Company is subject to legal proceedings and claims resulting from tax assessment orders/ penalty notices issued under the Income Tax Act, 1961, which have arisen in the ordinary course of its business. Some of the claims involve complex issues and it is not possible to make a reasonable estimate of the expected financial effect, if any, that will result from ultimate resolution of such proceedings. However, the resolution of these legal proceedings is not likely to have a material and adverse effect on the results of operations or the financial position of the Company.
The Company’s assessments are completed for the years up to March 31, 2019. The Company has received demands on multiple tax issues. These claims are primarily arising out of denial of deduction under section 10A of the Income Tax Act, 1961 in respect of profit earned by the Company’s undertaking in Software Technology Park at Bengaluru, the appeals filed against the said demand before the Appellate authorities have been allowed in favor of the Company by the second appellate authority for the years up to March 31, 2008 which either has been or may be contested
23
by the Income tax authorities before the Hon’ble Supreme Court of India. Other claims relate to disallowance of tax benefits on profits earned from Software Technology Park and Special Economic Zone units, capitalization of research and development expenses, transfer pricing adjustments on intercompany / inter unit transactions and other issues.
Income tax claims against the Company amounting to ₹ 91,465 and ₹ 92,491 are not acknowledged as debt as at March 31, 2023 and June 30, 2023, respectively. These matters are pending before various Appellate Authorities and the management expects its position will likely be upheld on ultimate resolution and will not have a material adverse effect on the Company’s financial position and results of operations.
The contingent liability in respect of disputed demands for excise duty, custom duty, sales tax and other matters amounting to ₹ 15,240 and ₹ 15,248 as of March 31, 2023, and June 30, 2023, respectively. However, the resolution of these disputed demands is not likely to have a material and adverse effect on the results of operations or the financial position of the Company.
27. Segment information
Effective April 1, 2023, the Company has reorganized its segments by merging ISRE segment as part of its APMEA SMU within IT Services segment. Comparative period segment information has been restated to give effect to this change.
The Company is now organized into the following operating segments: IT Services and IT Products.
IT Services: The IT Services segment primarily consists of IT services offerings to customers organized by four Strategic Market Units (“SMUs”) - Americas 1, Americas 2, Europe and Asia Pacific Middle East and Africa (“APMEA”). Americas 1 and Americas 2 are primarily organized by industry sector, while Europe and APMEA are organized by countries.
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.
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.
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.
The Chief Executive Officer (“CEO”) and Managing Director of the Company has been identified as the Chief Operating Decision Maker as defined by IFRS 8, “Operating Segments”. The CEO 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.
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Information on reportable segments for the three months ended June 30, 2022, is as follows:
IT Services | IT Products | Reconciling | Total | |||||||||||||||||||||||||||||
Americas 1 | Americas 2 | Europe | APMEA | Total | Items | |||||||||||||||||||||||||||
Revenue | ₹ | 61,702 | ₹ | 66,613 | ₹ | 60,276 | ₹ | 25,783 | ₹ | 214,374 | ₹ | 1,946 | ₹ | — | ₹ | 216,320 | ||||||||||||||||
Segment Result | 11,570 | 13,224 | 7,986 | 2,069 | 34,849 | (55 | ) | (60 | ) | 34,734 | ||||||||||||||||||||||
Unallocated | (2,844 | ) | — | — | (2,844 | ) | ||||||||||||||||||||||||||
|
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|
|
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Segment result total | ₹ | 32,005 | ₹ | (55 | ) | ₹ | (60 | ) | ₹ | 31,890 | ||||||||||||||||||||||
Finance expenses | (2,045 | ) | ||||||||||||||||||||||||||||||
Finance and other income | 3,690 | |||||||||||||||||||||||||||||||
Share of net profit/(loss) of associates accounted for using the equity method | (15 | ) | ||||||||||||||||||||||||||||||
|
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Profit before tax | ₹ | 33,520 | ||||||||||||||||||||||||||||||
Income tax expense | (7,931 | ) | ||||||||||||||||||||||||||||||
|
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Profit for the period | ₹ | 25,589 | ||||||||||||||||||||||||||||||
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Depreciation, amortization and impairment | ₹ | 7,738 | ||||||||||||||||||||||||||||||
|
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Information on reportable segments for the three months ended June 30, 2023, is as follows:
IT Services | IT Products | Reconciling | Total | |||||||||||||||||||||||||||||
Americas 1 | Americas 2 | Europe | APMEA | Total | Items | |||||||||||||||||||||||||||
Revenue | ₹ | 65,607 | ₹ | 68,303 | ₹ | 67,134 | ₹ | 26,510 | ₹ | 227,554 | ₹ | 694 | ₹ | — | ₹ | 228,248 | ||||||||||||||||
Segment Result | 13,537 | 14,169 | 9,968 | 2,800 | 40,474 | (161 | ) | (1,840 | ) | 38,473 | ||||||||||||||||||||||
Unallocated | (3,957 | ) | — | — | (3,957 | ) | ||||||||||||||||||||||||||
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Segment result total | ₹ | 36,517 | ₹ | (161 | ) | ₹ | (1,840 | ) | ₹ | 34,516 | ||||||||||||||||||||||
Finance expenses | (3,086 | ) | ||||||||||||||||||||||||||||||
Finance and other income | 6,542 | |||||||||||||||||||||||||||||||
Share of net profit/(loss) of associates accounted for using the equity method | 3 | |||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||
Profit before tax | ₹ | 37,975 | ||||||||||||||||||||||||||||||
Income tax expense | (9,115 | ) | ||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||
Profit for the period | ₹ | 28,860 | ||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||
Depreciation, amortization and impairment | ₹ | 7,380 | ||||||||||||||||||||||||||||||
|
|
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Revenues from India, being Company’s country of domicile, is ₹ 6,507 and ₹ 6,007 for the three months ended June 30, 2022, and 2023, respectively.
Revenues from United States of America and United Kingdom contributed more than 10% of Company’s total revenues as per table below:
Three months ended June 30, | ||||||||
2022 | 2023 | |||||||
United States of America | ₹ | 120,491 | ₹ | 126,497 | ||||
United Kingdom | 26,606 | ₹ | 29,763 | |||||
|
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₹ | 147,097 | ₹ | 156,260 | |||||
|
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|
No customer individually accounted for more than 10% of the revenues during the three months ended June 30, 2022, and 2023.
Management believes that it is currently not practicable to provide disclosure of geographical location wise assets, since the meaningful segregation of the available information is onerous.
Notes:
a) | “Reconciling items” includes elimination of inter-segment transactions and other corporate activities. |
b) | Revenue from sale of Company owned intellectual properties is reported as part of IT Services revenues. |
c) | For the purpose of segment reporting, the Company has included the impact of foreign exchange gains/(losses), net in revenues (which is reported as a part of operating profit in the interim condensed consolidated statement of income). |
d) | Restructuring cost of ₹ Nil and ₹ 1,887 is included under Reconciling items for the three months ended June 30, 2022 and 2023 respectively. |
e) | Effective April 1, 2023, amortization and impairment of intangibles assets arising from business combination and change in fair value of contingent consideration due to change in estimates is included under “Unallocated” within IT Services segment. Comparative period has been restated to give effect to these changes. Accordingly, for the three months ended June 30, 2023, ₹ 1,810 and ₹ (16) towards amortization and impairment of intangible assets and change in fair value of contingent consideration, respectively, is included under “Unallocated” within IT Services segment. (₹ 1,893 and ₹ (86) for the three months ended June 30, 2022). |
f) | Segment results of IT Services segment are after recognition of share-based compensation expense ₹ 1,445 and ₹ 1,544 for the three months ended June 30, 2022 and 2023, respectively. |
28. List of subsidiaries and investments accounted for using equity method as at June 30, 2023 is provided below:
Subsidiaries | Subsidiaries | Subsidiaries | Country of | |||
Attune Consulting India Private Limited | India | |||||
Capco Technologies Private Limited | India | |||||
Encore Theme Technologies Private Limited | India | |||||
Wipro Chengdu Limited | China | |||||
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 Spain Digital, S.L.U | Spain | |||||
Designit Sweden AB | Sweden | |||||
Designit T.L.V Ltd. | Israel | |||||
Wipro 4C NV | Belgium | |||||
Wipro 4C Consulting France SAS | France | |||||
Wipro 4C Danmark ApS | Denmark | |||||
Wipro 4C Nederland B.V | Netherlands | |||||
Wipro Weare4C UK Limited (1) | U.K. | |||||
Wipro Bahrain Limited Co. W.L.L | Bahrain | |||||
Wipro Financial Outsourcing Services | U.K. | |||||
Limited | ||||||
Wipro UK Limited | U.K. | |||||
Wipro Gulf LLC | Sultanate of | |||||
Oman | ||||||
Wipro IT Services S.R.L. | Romania | |||||
Wipro HR Services India Private Limited | India |
26
Wipro IT Services Bangladesh Limited | Bangladesh | |||||
Wipro IT Services UK Societas | U.K. | |||||
Grove Holdings 2 S.á.r.l | Luxembourg | |||||
Capco Solution Services GmbH | Germany | |||||
The Capital Markets Company Italy Srl | Italy | |||||
Capco Brasil Serviços E Consultoria Em | Brazil | |||||
Informática Ltda | ||||||
The Capital Markets Company BV (1) | Belgium | |||||
PT. WT Indonesia | Indonesia | |||||
Rainbow Software LLC | Iraq | |||||
Wipro Arabia Limited (2) | Saudi Arabia | |||||
Women’s Business Park Technologies | Saudi Arabia | |||||
Limited (2) | ||||||
Wipro Doha LLC | Qatar | |||||
Wipro Holdings Hungary Korlátolt | Hungary | |||||
Felelősségű Társaság | ||||||
Wipro Holdings Investment Korlátolt | Hungary | |||||
Felelősségű Társaság | ||||||
Wipro Information Technology Egypt | Egypt | |||||
SAE | ||||||
Wipro Information Technology | Netherlands | |||||
Netherlands BV. | ||||||
Wipro do Brasil Technologia Ltda (1) | Brazil | |||||
Wipro Information Technology Kazakhstan | Kazakhstan | |||||
LLP | ||||||
Wipro Outsourcing Services (Ireland) Limited | Ireland | |||||
Wipro Portugal S.A. (1) | Portugal | |||||
Wipro Solutions Canada Limited | Canada | |||||
Wipro Technologies Limited | Russia | |||||
Wipro Technologies Peru SAC | Peru | |||||
Wipro Technologies W.T. Sociedad Anonima | Costa Rica | |||||
Wipro Technology Chile SPA | Chile | |||||
Wipro IT Service Ukraine, LLC | U.K.raine | |||||
Wipro IT Services Poland SP Z.O.O | Poland | |||||
Wipro Technologies Australia Pty Ltd | Australia | |||||
Wipro Ampion Holdings Pty Ltd (1) | Australia | |||||
Wipro Technologies SA | Argentina | |||||
Wipro Technologies SA DE CV | Mexico | |||||
Wipro Technologies South Africa | South Africa | |||||
(Proprietary) Limited | ||||||
Wipro Technologies Nigeria Limited | Nigeria | |||||
Wipro Technologies SRL | Romania | |||||
Wipro (Thailand) Co. Limited | Thailand | |||||
Wipro Japan KK | Japan | |||||
Designit Tokyo Co., Ltd. | Japan | |||||
Wipro Networks Pte Limited | Singapore | |||||
Wipro (Dalian) Limited | China | |||||
Wipro Technologies SDN BHD | Malaysia | |||||
Wipro Overseas IT Services Private Limited | India | |||||
Wipro Philippines, Inc. | Philippines | |||||
Wipro Shanghai Limited | China | |||||
Wipro Trademarks Holding Limited | India | |||||
Wipro Travel Services Limited | India | |||||
Wipro VLSI Design Services India Private Limited | India | |||||
Wipro, LLC | USA | |||||
Wipro Gallagher Solutions, LLC | USA | |||||
Wipro Insurance Solutions, LLC | USA | |||||
Wipro IT Services, LLC | USA |
27
Cardinal US Holdings, Inc.(1) | USA | |||||
Convergence Acceleration Solutions, LLC | USA | |||||
Designit North America, Inc. | USA | |||||
Edgile, LLC | USA | |||||
HealthPlan Services, Inc. (1) | USA | |||||
Infocrossing, LLC | USA | |||||
International TechneGroup Incorporated (1) | USA | |||||
LeanSwift Solutions, Inc.(1) | USA | |||||
Rizing Intermediate Holdings, Inc. (1) | USA | |||||
Wipro Appirio, Inc. (1) | USA | |||||
Wipro Designit Services, Inc. (1) | USA | |||||
Wipro VLSI Design Services, LLC | USA |
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.
(2) | All the above direct subsidiaries are 100% held by the Company except that the Company holds 66.67% of the equity securities of Wipro Arabia Limited and 55% of the equity securities of Women’s Business Park Technologies Limited are held by Wipro Arabia Limited. |
(1) | Step Subsidiary details of Cardinal US Holdings, Inc., HealthPlan Services, Inc., International TechneGroup Incorporated, LeanSwift Solutions, Inc., Rizing Intermediate Holdings, Inc., The Capital Markets Company BV, Wipro Ampion Holdings Pty Ltd, Wipro Appirio, Inc., Wipro Designit Services, Inc., Wipro do Brasil Technologia Ltda, Wipro Portugal S.A. and Wipro Weare4C UK Limited are as follows: |
Subsidiaries | Subsidiaries | Subsidiaries | Country of | |||
Cardinal US Holdings, Inc. | USA | |||||
ATOM Solutions LLC | USA | |||||
Capco Consulting Services LLC | USA | |||||
Capco RISC Consulting LLC | USA | |||||
The Capital Markets Company LLC | USA | |||||
HealthPlan Services, Inc. | USA | |||||
HealthPlan Services Insurance Agency, LLC | USA | |||||
International TechneGroup Incorporated | USA | |||||
International TechneGroup Ltd. | U.K. | |||||
ITI Proficiency Ltd | Israel | |||||
MechWorks S.R.L. | Italy | |||||
LeanSwift Solutions, Inc. | USA | |||||
LeanSwift AB | Sweden | |||||
Rizing Intermediate Holdings, Inc. | USA | |||||
Rizing Lanka (Pvt) Ltd | Sri Lanka | |||||
Attune Netherlands B.V. (3) | Netherlands | |||||
Rizing Solutions Canada Inc. | Canada | |||||
Rizing LLC | USA | |||||
Aasonn Philippines Inc. | Philippines | |||||
Rizing B.V. | Netherlands | |||||
Rizing Consulting Ireland Limited | Ireland | |||||
Rizing Consulting Pty Ltd. | Australia | |||||
Rizing Geospatial LLC | USA | |||||
Rizing GmbH | Germany | |||||
Rizing Limited | U.K. | |||||
Rizing Middle East DMCC | United Arab | |||||
Emirates | ||||||
Rizing Pte Ltd. (3) | Singapore | |||||
Vesta Middle East FZE | United Arab | |||||
Emirates | ||||||
The Capital Markets Company BV | Belgium | |||||
CapAfric Consulting (Pty) Ltd | South Africa | |||||
Capco Belgium BV | Belgium |
28
Capco Consultancy (Malaysia) Sdn. Bhd | Malaysia | |||||
Capco Consultancy (Thailand) Ltd | Thailand | |||||
Capco Consulting Singapore Pte. Ltd | Singapore | |||||
Capco Greece Single Member P.C | Greece | |||||
Capco Poland sp. z.o.o | Poland | |||||
The Capital Markets Company (UK) Ltd | U.K. | |||||
Capco (UK) 1, Limited | U.K. | |||||
The Capital Markets Company BV | Netherlands | |||||
The Capital Markets Company GmbH | Germany | |||||
Capco Austria GmbH | Austria | |||||
The Capital Markets Company Limited | Hong Kong | |||||
Capco Consulting Services (Guangzhou) | China | |||||
Company Limited | ||||||
The Capital Markets Company Limited | Canada | |||||
The Capital Markets Company S.á.r.l | Switzerland | |||||
Andrion AG | Switzerland | |||||
The Capital Markets Company S.A.S | France | |||||
The Capital Markets Company s.r.o | Slovakia | |||||
Wipro Ampion Holdings Pty Ltd | Australia | |||||
Wipro Ampion Pty Ltd | Australia | |||||
Wipro Iris Holdco Pty Ltd (3) | Australia | |||||
Wipro Revolution IT Pty Ltd | Australia | |||||
Crowdsprint Pty Ltd | Australia | |||||
Wipro Shelde Australia Pty Ltd | Australia | |||||
Wipro Appirio, Inc. | USA | |||||
Wipro Appirio (Ireland) Limited | Ireland | |||||
Wipro Appirio UK Limited | U.K. | |||||
Wipro Appirio, K.K. | Japan | |||||
Topcoder, LLC. | USA | |||||
Wipro Designit Services, Inc. | USA | |||||
Wipro Designit Services Limited | Ireland | |||||
Wipro do Brasil Technologia Ltda | Brazil | |||||
Wipro do Brasil Servicos Ltda | Brazil | |||||
Wipro Do Brasil Sistemetas De | Brazil | |||||
Informatica Ltda | ||||||
Wipro Portugal S.A. | Portugal | |||||
Wipro Technologies GmbH | Germany | |||||
Wipro Business Solutions GmbH (3) | Germany | |||||
Wipro IT Services Austria GmbH | Austria | |||||
Wipro Weare4C UK Limited | U.K. | |||||
CloudSocius DMCC | United Arab | |||||
Emirates |
(3) | Step Subsidiary details of Attune Netherlands B.V., Rizing Pte Ltd., Wipro Business Solutions GmbH and Wipro Iris Holdco Pty Ltd are as follows: |
Subsidiaries | Subsidiaries | Subsidiaries | Country of | |||
Attune Netherlands B.V. | Netherlands | |||||
Attune Australia Pty Ltd | Australia | |||||
Rizing Consulting USA, Inc. | USA | |||||
Rizing Germany GmbH | Germany | |||||
Attune Italia S.R.L | Italy | |||||
Rizing Management LLC | USA | |||||
Attune UK Ltd. | U.K. | |||||
Rizing Pte Ltd. | Singapore | |||||
Rizing New Zealand Ltd. | New Zealand | |||||
Rizing Philippines Inc. | Philippines | |||||
Rizing SDN BHD | Malaysia |
29
Rizing Solutions Pty Ltd | Australia | |||||
Synchrony Global SDN BHD | Malaysia | |||||
Wipro Business Solutions GmbH | Germany | |||||
Wipro Technology Solutions S.R.L | Romania | |||||
Wipro Iris Holdco Pty Ltd | Australia | |||||
Wipro Iris Bidco Pty Ltd | Australia |
As at June 30, 2023, the Company held 43.7% interest in Drivestream Inc., accounted for using the equity method.
The list of controlled trusts and firms are:
Name of the entity | Country of incorporation | |
Wipro Equity Reward Trust | India | |
Wipro Foundation | India |
29. Buyback of equity shares
On April 27, 2023, the Board of Directors approved a proposal to Buyback up to 269,662,921 fully paid-up equity shares of ₹ 2 each (representing up to 4.91% of the number of equity shares in the paid-up equity share capital as at March 31, 2023) from the shareholders of the Company on a proportionate basis by way of a tender offer at a price of ₹ 445 per equity share for an aggregate amount not exceeding ₹ 120,000 (“Buyback”), in accordance with the provisions contained in the Securities and Exchange Board of India (Buy-back of Securities) Regulations, 2018, as amended and the Companies Act, 2013 and rules made thereunder (“Buyback Regulations”). Subsequently, the shareholders of the Company approved the Buyback, by way of a special resolution, through a postal ballot.
In accordance with the provisions of the Buyback Regulations, the Letter of offer for the Buyback was filed with SEBI on June 20, 2023, and tender period for Buyback opened on June 22, 2023, and closed on June 30, 2023. The settlement of all valid bids was completed on July 4, 2023, and the equity shares bought back were extinguished on July 7, 2023. Pursuant to the issuance of Letter of Offer, the Company has recorded a liability towards Buyback of equity shares of ₹ 120,000 and the corresponding liability for tax on Buyback of ₹ 24,978 as at June 30, 2023.
As per our report of even date attached | For and on behalf of the Board of Directors | |||||
for Deloitte Haskins & Sells LLP | Rishad A. Premji | Deepak M. Satwalekar | Thierry Delaporte | |||
Chartered Accountants | Chairman | Director | Chief Executive Officer and | |||
Firm’s Registration No: 117366W/W - 100018 | Managing Director | |||||
Anand Subramanian | Jatin Pravinchandra Dalal | M. Sanaulla Khan | ||||
Partner | Chief Financial Officer | Company Secretary | ||||
Membership No. 110815 |
Bengaluru
July 13, 2023
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