BSE Prices delayed by 5 minutes... << Prices as on Nov 29, 2022 - 1:03PM >>   ABB  3034.1 ATS - Market Arrow  [-2.27]  ACC  2532 ATS - Market Arrow  [0.19]  AMBUJA CEM  568.45 ATS - Market Arrow  [-0.06]  ASIAN PAINTS  3144 ATS - Market Arrow  [-0.25]  AXIS BANK  894.5 ATS - Market Arrow  [0.35]  BAJAJ AUTO  3672 ATS - Market Arrow  [-0.08]  BANKOFBARODA  169.4 ATS - Market Arrow  [0.95]  BHARTI AIRTE  838 ATS - Market Arrow  [0.07]  BHEL  81.3 ATS - Market Arrow  [-0.06]  BPCL  337.75 ATS - Market Arrow  [-0.81]  BRITANIAINDS  4257.2 ATS - Market Arrow  [1.07]  CAIRN INDIA  285.4 ATS - Market Arrow  [0.90]  CIPLA  1112.55 ATS - Market Arrow  [1.02]  COAL INDIA  228.3 ATS - Market Arrow  [-0.70]  COLGATEPALMO  1603 ATS - Market Arrow  [1.54]  DABUR INDIA  595.9 ATS - Market Arrow  [6.66]  DLF  392.35 ATS - Market Arrow  [-0.73]  DRREDDYSLAB  4455.5 ATS - Market Arrow  [1.23]  GAIL  93 ATS - Market Arrow  [0.38]  GRASIM INDS  1720.2 ATS - Market Arrow  [0.25]  HCLTECHNOLOG  1134.5 ATS - Market Arrow  [1.39]  HDFC  2665.95 ATS - Market Arrow  [0.27]  HDFC BANK  1600.5 ATS - Market Arrow  [0.05]  HEROMOTOCORP  2815 ATS - Market Arrow  [1.11]  HIND.UNILEV  2612.65 ATS - Market Arrow  [3.45]  HINDALCO  437.4 ATS - Market Arrow  [1.47]  ICICI BANK  948.5 ATS - Market Arrow  [1.29]  IDFC  81.35 ATS - Market Arrow  [-1.15]  INDIANHOTELS  320.4 ATS - Market Arrow  [-1.72]  INDUSINDBANK  1186.05 ATS - Market Arrow  [-0.99]  INFOSYS  1632.35 ATS - Market Arrow  [0.56]  ITC LTD  344.2 ATS - Market Arrow  [1.25]  JINDALSTLPOW  513.15 ATS - Market Arrow  [1.17]  KOTAK BANK  1928.95 ATS - Market Arrow  [0.02]  L&T  2054 ATS - Market Arrow  [-0.49]  LUPIN  746.5 ATS - Market Arrow  [1.74]  MAH&MAH  1250.6 ATS - Market Arrow  [-0.01]  MARUTI SUZUK  8959.9 ATS - Market Arrow  [-0.50]  MTNL  24.5 ATS - Market Arrow  [-1.80]  NESTLE  20163 ATS - Market Arrow  [1.73]  NIIT  314.45 ATS - Market Arrow  [-1.72]  NMDC  117.1 ATS - Market Arrow  [0.00]  NTPC  170.95 ATS - Market Arrow  [0.38]  ONGC  139.95 ATS - Market Arrow  [0.29]  PNB  53.85 ATS - Market Arrow  [0.84]  POWER GRID  219.25 ATS - Market Arrow  [-0.99]  RIL  2721 ATS - Market Arrow  [0.48]  SBI  610.6 ATS - Market Arrow  [0.31]  SESA GOA  302 ATS - Market Arrow  [-2.71]  SHIPPINGCORP  138.4 ATS - Market Arrow  [0.00]  SUNPHRMINDS  1041.5 ATS - Market Arrow  [0.72]  TATA CHEM  1035.55 ATS - Market Arrow  [-0.32]  TATA GLOBAL  804.05 ATS - Market Arrow  [-0.04]  TATA MOTORS  435.35 ATS - Market Arrow  [0.50]  TATA STEEL  106.5 ATS - Market Arrow  [1.53]  TATAPOWERCOM  223.5 ATS - Market Arrow  [-0.51]  TCS  3424.4 ATS - Market Arrow  [0.79]  TECH MAHINDR  1082.5 ATS - Market Arrow  [0.48]  ULTRATECHCEM  6937.35 ATS - Market Arrow  [0.66]  UNITED SPIRI  913.85 ATS - Market Arrow  [1.64]  WIPRO  407.45 ATS - Market Arrow  [0.43]  ZEETELEFILMS  262 ATS - Market Arrow  [0.60]  

Wipro Ltd.

Notes to Accounts

NSE: WIPROEQ BSE: 507685ISIN: INE075A01022INDUSTRY: IT Consulting & Software

BSE   Rs 407.45   Open: 403.55   Today's Range 402.80
408.10
 
NSE
Rs 407.60
+1.95 (+ 0.48 %)
+1.75 (+ 0.43 %) Prev Close: 405.70 52 Week Range 372.40
726.70
You can view the entire text of Notes to accounts of the company for the latest year
Market Cap. (Rs.) 223618.55 Cr. P/BV 3.42 Book Value (Rs.) 119.21
52 Week High/Low (Rs.) 727/372 FV/ML 2/1 P/E(X) 18.29
Bookclosure 19/07/2022 EPS (Rs.) 22.29 Div Yield (%) 0.49
Year End :2022-03 

For impairment testing, goodwill is allocated to a CGU representing the lowest level within the Company at which goodwill is monitored for internal management purposes, and which is not higher than the Company’s operating segment. Goodwill is tested for impairment at least annually in accordance with the Company’s procedure for determining the recoverable value of each CGU.

The recoverable amount of the CGU is determined based on FVLCD. The FVLCD of the CGU is determined based on the market capitalisation approach, using the turnover and earnings multiples derived from observable market data. The fair value measurement is categorised as a level 2 fair value based on the inputs in the valuation techniques used.

Based on the above testing, no impairment was identified as at March 31,2022 and 2021 as the recoverable value of the CGUs exceeded the carrying value. A sensitivity analysis to the change in the key parameters (turnover and earnings multiples), did not identify any probable scenarios where the CGU’s recoverable amount would fall below its carrying amount.

Provision for warranty represents cost associated with providing sales support services which are accrued at the time of recognition of revenues and are expected to be utilised over a period of 1 to 2 years.

Provision for onerous contracts is recognised when the expected benefit by the company from a contract are lower than the unavoidable costs of meeting the future obligations under the contract.

Other provisions primarily include provisions for compliance related contingencies. The timing of cash outflows in respect of such provision cannot be reasonably determined.

For the financial assets and [labilities subject to offsetting or similar arrangements, each agreement between the Company and the counterparty allows for net settlement of the relevant financial assets and liabilities when both elect to settle on a net basis. In the absence of such an election, financial assets and liabilities will be settled on a gross basis and hence are not offset.

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, borrowings, trade payables, and eligible current liabilities and non-current liabilities.

The fair value of cash and cash equivalents, trade receivables, unbilled receivables, finance lease receivables, 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. The Company’s long-term debt has been contracted at market rates of interest. Accordingly, the carrying value of such long-term debt approximates fair value. Further, finance lease receivables are periodically evaluated based on individual credit worthiness of customers. Based on this evaluation, the Company records allowance for estimated losses on these receivables. As at March 31,2022, and 2021 the carrying value of such receivables, net of allowances approximates the fair value.

Investments in short-term mutual funds and fixed maturity plans, 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 multiples method.

The fair value of derivative financial instruments is determined based on observable market inputs including currency spot and forward rates, yield curves, currency volatility etc.

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 transfers between Level 1,2 and 3 during the year ended March 31,2022.

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 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 March 31, 2022, 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 recognised at fair value.

Investment in non-convertible debentures, government securities, commercial papers, certificate of deposits 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 equity instruments and 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 multiples method.

Derivative assets and liabilities:

The Company is exposed to foreign currency fluctuations on foreign currency assets/liabilities, forecasted cash flows denominated in foreign currency and net investment in foreign operations. The Company follows established risk management policies, including the use of derivatives to hedge foreign currency assets / liabilities, foreign currency forecasted cash flows and net investment in foreign operations. The counterparties in these derivative instruments are primarily banks and the Company considers the risks of non-performance by the counterparty as non-material.

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.

The related hedge transactions for balance in cash flow hedging reserves as at March 31,2022 are expected to occur and be reclassified to the statement of profit and loss over a period of one year.

As at March 31,2022 and 2021 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.

Sale of financial assets

From time to time, in the normal course of business, the Company transfers accounts receivables, unbilled receivables, net investment in finance lease receivables (financial assets) to banks. Under the terms of the arrangements, the Company surrenders control over the financial assets and transfer is without recourse. Accordingly, such transfers are recorded as sale

of financial assets. Gains and losses on sale of financial assets without recourse are recorded at the time of sale based on the carrying value of the financial assets and fair value of servicing liability. The incremental impact of such transactions on our cash flow and liquidity for the year ended March 31,2022 and March 31,2021 is not material.

In certain cases, transfer of financial assets may be with recourse. Under arrangements with recourse, the Company is obligated to repurchase the uncollected financial assets, subject to limits specified in the agreement with the banks. These are reflected as part of borrowings in the balance sheet.

Financial risk management

Market Risk

Market risk is the risk of loss of future earnings, to fair values or to future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments, foreign currency receivables, payables and loans and borrowings.

The Company’s exposure to market risk is a function of investment and borrowing activities and revenue generating activities in foreign currency. The objective of market risk management is to avoid excessive exposure of the Company’s earnings and equity to losses.

Risk Management Procedures

The Company manages market risk through a corporate treasury department, which evaluates and exercises independent control over the entire process of market risk management. The corporate treasury department recommends risk management objectives and policies, which are approved by senior management and Audit Committee. The activities of this department include management of cash resources, implementing hedging strategies for foreign currency exposures, borrowing strategies, and ensuring compliance with market risk limits and policies.

Foreign currency risk

The Company operates internationally, and a major portion of its business is transacted in several currencies. Consequently, the Company is exposed to foreign exchange risk through receiving payment for sales and services in the United States of America and elsewhere and making purchases from overseas suppliers in various foreign currencies. The exchange rate risk primarily arises from foreign exchange revenue, receivables, cash balances, forecasted cash flows, payables and foreign currency loans and borrowings. A significant portion of the Company’s revenue is in the US Dollar, the Pound Sterling, the Euro, the Canadian Dollar and the Australian Dollar, while a large portion of costs are in Indian rupees. The exchange rate between the rupee and these currencies has fluctuated significantly in recent years and may continue to fluctuate in the future. Appreciation of the rupee against these currencies can adversely affect the Company’s results of operations.

The Company evaluates exchange rate exposure arising from these transactions and enters foreign currency derivative instruments to mitigate such exposure. The Company follows established risk management policies, including the use of derivatives like foreign exchange forward/option contracts to hedge forecasted cash flows denominated in foreign currency.

The Company has designated certain derivative instruments as cash flow hedges to mitigate the foreign exchange exposure of forecasted highly probable cash flows.

As at March 31,2022, a ' 1 increase in the spot exchange rate of the Indian rupee with the US dollar would result in approximately ' 3,159 (statement of profit and loss ' 1,366 and other comprehensive income ' 1,793) decrease in the fair value, and a ' 1 decrease would result in approximately ' 3,165 (statement of profit and loss ' 1,366 and other comprehensive income ' 1,799) increase in the fair value of foreign currency dollar denominated derivative instruments (forward and option contracts).

As at March 31, 2022 and 2021, respectively, every 1% increase/decrease in the respective foreign currencies compared to functional currency of the Company would impact results by approximately ' 1,239 and ' 1,041, respectively.

Interest rate risk

Interest rate risk primarily arises from floating rate borrowing, including various revolving and other lines of credit. The Company’s investments are primarily in short-term investments, which do not expose it to significant interest rate risk. From time to time, the Company manages its net exposure to interest rate risk relating to borrowings by entering into interest rate swap agreements, which allows it to exchange periodic payments based on a notional amount and agreed upon fixed and floating interest rates. Certain borrowings are also transacted at fixed interest rates. If interest rates were to increase by 100 bps as on March 31,2022, additional net annual interest expense on floating rate borrowing would amount to approximately ' 767.

Credit risk

Credit risk arises from the possibility that customers may not be able to settle their obligations as agreed. To manage this, the Company periodically assesses the credit rating and financial reliability of customers, considering the financial condition, current economic trends, forward looking macroeconomic information, analysis of historical bad debts and ageing of accounts receivable. Individual risk limits are set accordingly. No single customer accounted for more than 10% of the accounts receivable as at March 31,2022 and 2021, and revenues for the year ended March 31,2022 and 2021. There is no significant concentration of credit risk.

Counterparty risk

Counterparty risk encompasses issuer risk on marketable securities, settlement risk on derivative and money market contracts and credit risk on cash and time deposits. Issuer risk is minimised by only buying securities which are at least AA rated in India based on Indian rating agencies. Settlement and credit risk is reduced by the policy of entering into transactions with counterparties that are usually banks or financial institutions with acceptable credit ratings. Exposure to these risks are closely monitored and maintained within predetermined parameters. There are limits on credit exposure to any financial institution. The limits are regularly assessed and determined based upon credit analysis including financial statements and capital adequacy ratio reviews.

Liquidity risk

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at a reasonable price. The Company’s corporate treasury department is responsible for liquidity and funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Company’s net liquidity position through rolling forecasts based on the expected cash flows. As at March 31,2022, cash and cash equivalents are held with major banks and financial institutions.

Deferred taxes on unrealised foreign exchange gain / loss relating to cash flow hedges, fair value movements in investments and remeasurements of the defined benefit plans are recognised in other comprehensive income and presented within equity. Other than these, the change in deferred tax assets and liabilities is primarily recorded in the statement of profit and loss.

In assessing the reafisabifity of deferred tax assets, the Company considers the extent to which it is probable that the deferred tax asset will be realised. The ultimate realisation 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 the expected reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on this, the Company believes that it is probable that the Company will realise the benefits of these deductible differences. The amount of deferred tax asset considered realisable, however, could be reduced in the near term if the estimates of future taxable income during the carry-forward period are reduced.

The Company has recognised deferred tax assets of ' 1,169 and ' 548 as at March 31,2022 and 2021 primarily in respect of capital loss incurred on account of liquidation of an investment. Management’s projections of future taxable capital gain support the assumption that it is probable that sufficient taxable income will be available to utilise this deferred tax asset.

We have calculated our domestic tax liability under normal provisions. Accordingly, no deferred tax asset has been recognised towards MAT in the balance sheet for the years ended March 31,2022 and 2021. The effective MAT rate is 17.47%. The excess tax paid under MAT provisions over and above normal tax liability can be carried forward for a period of fifteen years and set-off against future tax liabilities computed under normal tax provisions.

A substantial portion of the profits of the Company’s India operations are exempt from Indian income taxes being profits attributable to export operations and profits from units established under Special Economic Zone Act, 2005 scheme. Units in designated special economic zones providing service on or after April 1, 2005 will be eligible for a deduction of 100 percent of profits or gains derived from the export of services for the first five years from commencement of provision of services and 50 percent of such profits and gains for a further five years. Certain tax benefits are also available for a further five years. 50% tax deduction is available for a further five years subject to the unit meeting certain defined conditions. Profits from certain other undertakings are also eligible for preferential tax treatment. New SEZ units set up on or after April 1, 2021 are not eligible for aforesaid deduction. The tax holiday period being currently available to the Company expires in various years through fiscal 2034-35. The impact of tax holidays has resulted in a decrease of current tax expense of ' 16,483 and ' 11,458 for the years ended March 31, 2022 and 2021, respectively, compared to the effective tax amounts that we estimate we would have been required to pay if these incentives had not been available. The per share effect of these tax incentives for the years ended March 31,2022 and 2021 was ' 2.95 and ' 2.03, respectively.

Deferred income tax liabilities are recognised for all taxable temporary differences except in respect of taxable temporary differences associated with US branch profit tax where the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future. Accordingly, deferred income tax liabilities on branch profit tax @ 15% of the US branch profits have not been recognised. Further, it is not practicable to estimate the amount of the unrecognised deferred tax liabilities for these undistributed earnings.

A. Contract Assets and Liabilities

The Company classifies its right to consideration in exchange for deliverables as either a receivable or a contract asset.

A receivable is a right to consideration that is unconditional. A right to consideration is unconditional if only the passage of time is required before payment of that consideration is due. For example, the Company recognises a receivable for revenues related to time and materials contracts or volume-based contracts. The Company presents such receivables as part of unbilled receivables at their net estimated realisable value. The same is tested for impairment as per the guidance in Ind AS 109 using expected credit loss method.

Contract assets: During the years ended March 31,2022 and 2021, ' 9,978 and ' 11,451 of contract assets pertaining to fixed-price development contracts have been reclassified to receivables on completion of milestones.

Contract liabilities: During the years ended March 31, 2022 and 2021, the Company recognised revenue of ' 15,150 and ' 11,978 arising from contract liabilities as at March 31,2021 and 2020 respectively.

Contract assets and liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period.

B. Remaining Performance Obligations

Revenue allocated to remaining performance obligations represents contracted revenue that has not yet been recognised, which includes contract liabilities and amounts that will be invoiced and recognised as revenue in future periods. Applying the practical expedient, the Company has not disclosed its right to consideration from customers in an amount that corresponds directly with the value to the customer of the Company’s performance completed to date, which are contracts invoiced on time and material basis and volume based.

As at March 31,2022 and 2021, the aggregate amount of transaction price allocated to remaining performance obligations, other than those meeting the exclusion criteria above, were ' 171,136 and ' 224,746, respectively of which approximately 70% and 71%, respectively is expected to be recognised as revenues within two years, and the remainder thereafter. This includes contracts, with a substantive enforceable termination penalty if the contract is terminated without cause by the customer, based on an overall assessment of the contract carried out at the time of inception. Historically, customers have not terminated contracts without cause.

C. Disaggregation of Revenue

The tables below present disaggregated revenue from contracts with customers by business segment 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

The expected benefits are based on the same assumptions used to measure the Company’s benefit obligations as at March 31,2022.

Sensitivity for significant actuarial assumptions is computed to show the movement in defined benefit obligation by 1 percentage.

As at March 31,2022, every 1 percentage point increase / (decrease) in discount rate will result in (decrease) / increase of gratuity benefit obligation by approximately ' (730) and ' 634, respectively.

As at March 31,2022 every 1 percentage point increase / (decrease) in expected rate of salary will result in increase / (decrease) of gratuity benefit obligation by approximately ' 558 and ' (536), respectively.

The sensitivity analysis to significant actuarial assumptions may not be representative of the actual change in the defined benefit obligations as the change in assumptions may not occur in isolation since some of the assumptions may be correlated. Furthermore, in presenting the sensitivity analysis, the present value of the defined benefit obligations has been calculated using the Projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the statement of financial position.

28. Earnings per equity share

A reconciliation of profit for the year 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 year, excluding equity shares purchased by the Company and held as treasury shares.

Diluted: Diluted earnings per share is calculated by adjusting the weighted average number of equity shares outstanding during the year for assumed conversion of all dilutive potential equity shares. Employee share options are dilutive potential equity shares for the Company.

29. Dividends and Buyback of equity shares

The Company declares and pays dividends in Indian rupees. According to the Companies Act, 2013 any dividend should be declared out of accumulated distributable profits. A Company may, before the declaration of any dividend, transfer a percentage of its profits for that financial year as it may consider appropriate to the reserves.

The cash dividends paid per equity share were ' 1 and ' 1, during the year ended March 31,2022 and 2021, respectively, including an interim dividend of ' 1 and ' 1 for the year ended March 31,2022 and 2021, respectively.

The Board of Directors in their meeting held on March 25, 2022, declared an interim dividend of ' 5/- (US$ 0.07) per equity share and ADR (250% on an equity share of par value of ' 2/-). Consequently, the Company has recorded a liability of ' 27,410 as at March 31,2022 and this has been paid subsequently on April 19, 2022.

During the year ended March 31, 2021, the Company concluded the buyback of 237,500,000 equity shares as approved by the Board of Directors on October 13, 2020. This has resulted in a total cash outflow of ' 116,445 (including tax on buyback of ' 21,445). In line with the requirement of the Companies Act 2013, an amount of ' 1,427 and ' 115,018 has been utilised from securities premium and retained earnings respectively. Further, capital redemption reserve of ' 475 (representing the nominal value of the shares bought back) has been created as an apportionment from retained earnings. Consequent to such buyback, the paid-up equity share capital has reduced by ' 475.

30. Additional capital disclosures

The key objective of the Company’s capital management is to ensure that it maintains a stable capital structure with the focus on total equity to uphold investor, creditor, and customer confidence and to ensure future development of its business. The Company’s focus is on keeping a strong total equity base to ensure independence, security, as well as a high financial flexibility for potential future borrowings, if required without impacting the risk profile of the Company.

The Company’s goal is to continue to be able to return excess liquidity to shareholders by continuing to distribute annual dividends in future periods.

The amount of future dividends / buyback of equity shares will be balanced with efforts to continue to maintain an adequate liquidity status.

31. Employee stock option

The stock compensation expense recognised for employee services received during the year ended year ended March 31,2022 and March 31,2021 were ' 3,706 and ' 2,814, respectively.

Wipro Equity Reward Trust (“WERT”)

In 1984, the Company established a controlled trust called the Wipro Equity Reward Trust (“WERT”). In the earlier years, WERT purchased shares of the Company out of funds borrowed from the Company. The Company’s Board Governance, Nomination and Compensation Committee recommends to WERT certain officers and key employees, to whom WERT issues shares from its holdings at nominal price subject to vesting conditions.

Employees covered under Stock Option Plans and Restricted Stock Unit (“RSU”) Option Plans (collectively “Stock Option Plans”) are granted an option to purchase shares of the Company at the respective exercise prices, subject to requirements of vesting conditions. These options generally vest in tranches over a period of one to four years from the date of grant. Upon vesting, the employees can acquire one equity share for every option.

* The maximum contractual term for these Stock Option Plans and RSU Option Plans is perpetual until the options are available for grant under the plan. ** The maximum contractual term for these Stock Option Plans is up to May 29, 2023 until the options are available for grant under the plan.

* Includes 1,135,949 and 2,969,860 Performance based stock options (RSU) granted during the year ended March 31, 2022 and 2021, respectively. 2,941,546 and 2,376,980 Performance based stock options (ADS) granted during the year ended March 31, 2022 and 2021, respectively. Performance based stock options (RSU) were issued under Wipro Employee Restricted Stock Unit plan 2007 (WSRUP 2007 plan) and Performance based stock options (ADS) were issued under Wipro ADS Restricted Stock Unit Plan (WARSUP 2004 plan). Such performance based stock options will vest based on the performance parameters of the Company.

** Restricted Stock Units arrangements that were modified during the year ended March 31,2021

Pursuant to the SEBI clarification dated December 18, 2020 the restriction under SEBI's circular dated October 10, 2019 “Framework of Depository Receipts" shall not apply in case of issue of Depository Receipts to Non-resident Indians (“NRIs”), pursuant to share based employee benefit schemes which are implemented by a company in terms of SEBI (Share Based Employee Benefits) Regulations 2014, the Board Governance, Nomination and Compensation Committee approved in January 2021, allotment of underlying equity shares in respect of ADSs to be issued and allocated to NRI employees upon exercise of vested ADS RSU under the Company's WARSUP 2004 Plan. This change was accounted as a modification and the fair value on the date of modification was determined based on prevailing market price and accordingly an amount of ' 739 has been recognised as equity with a corresponding adjustment to financial liability.

The weighted-average grant-date fair value of options granted during the year ended March 31,2022, and 2021 was ' 603.47 and ' 354.78 for each option, respectively. The weighted average share price of options exercised during the year ended March 31,2022 and 2021 was ' 604.47 and ' 354.45 for each option, respectively.

The carrying value of liability towards Cash Settled ADS RSU’s outstanding was ' 20 (including ' 2 towards exercisable units) and ' 31 (including ' 11 towards exercisable units) as at March 31,2022 and 2021, respectively.

* All the above direct subsidiaries are 100% held by the Company except that the Company holds 96.68% of the equity securities of Encore Theme Technologies Private Limited, 66.67% of the equity securities of Wipro Arabia Co. Limited and 55% of the equity securities of Women’s Business Park Technologies Limited are held by Wipro Arabia Co. Limited.

The remaining 3.32% equity securities of Encore Theme Technologies Private Limited will be acquired subject to and after receipt of certain regulatory approvals/confirmations.

# 51% of equity securities of Wipro Doha LLC are held by a local shareholder. However, the beneficial interest in these holdings is with the Company. The Company controls ‘The Wipro SA Broad Based Ownership Scheme Trust’, ‘Wipro SA Broad Based Ownership Scheme SPV (RF) (PTY) LTD incorporated in South Africa and Wipro Foundation in India.

** Step Subsidiary details of Wipro Portugal S.A, Wipro do Brasil Technologia Ltda, HealthPlan Services, Inc, International TechneGroup Incorporated, Wipro Appirio, Inc., Wipro Designit Services, Inc., Wipro Weare4C UK Limited, Cardinal US Holdings, Inc, Cardinal Foreign Holdings 2 S.a.r.l, Ampion Holdings Pty Ltd, and LeanSwift Solutions, Inc are as follows:

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 31,2018. 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 by the Income tax authorities before the Supreme Court of India. Other claims relate to disallowance of tax benefits on profits earned from Software Technology Park and Special Economic Zone units, capitalisation of research and development expenses, transfer pricing adjustments on intercompany/interunit transactions and other issues.

Income tax claims against the Company amounting to ' 92,388 and ' 80,032 are not acknowledged as debt as at March 31,2022 and March 31,2021, 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 ' 12,092 and ' 11,413 as of March 31,2022 and March 31,2021, 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.

The Hon’ble Supreme Court of India, through a ruling in February 2019, provided interpretation on the components of Salary on which the Company and its employees are to contribute towards Provident Fund under the Employee’s Provident Fund Act. Based on the current evaluation, the Company believes it is not probable that certain components of Salary paid by the Company will be subject to contribution towards Provident Fund due to the Supreme Court order. The Company will continue to monitor and evaluate its position based on future events and developments.

5. Corporate social responsibility

a. Gross amount required to be spent by the Company is ' 1,832 and ' 1,656 for the year ended March 31,2022 and March 31,2021, respectively.

There is no shortfall out of the amount required to be spent by the Company during the year ended March 31,2022 and 2021. The nature of corporate social responsibility activities undertaken by the Company for the year ended March 31,2022 and 2021 includes education, sustainability initiatives, rural development, protection of national heritage, art and culture, healthcare and COVID-19 infrastructure.

36. Segment information

The Company publishes these standalone financial statements along with the consolidated financial statements. In accordance with Ind AS 108, Operating Segments, the Company has disclosed the segment information in the consolidated financial statements.

37. The Indian Parliament has approved the Code on Social Security, 2020 which would impact the contributions by the Company towards Provident Fund and Gratuity. The Ministry of Labour and Employment has released draft rules for the Code on Social Security, 2020 on November 13, 2020, and has invited suggestions from stake holders which are under active consideration by the Ministry. Based on an initial assessment by the Company and its Indian subsidiaries, the additional impact on Provident Fund contributions by the Company and its Indian subsidiaries is not expected to be material, whereas, the likely additional impact on Gratuity liability / contributions by the Company and its Indian subsidiaries could be material. The Company and its Indian subsidiaries will complete their evaluation once the subject rules are notified and will give appropriate impact in the standalone financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact are published.

38. In April 2021, the Company completed the acquisition of Capco Technologies Private Limited for an upfront cash consideration of ' 2,713.

39. In June 2021, the Company acquired 100% shareholding in Wipro Philippines, Inc. from a wholly owned subsidiary, for an upfront cash consideration of ' 47,299.

40. Events after the reporting period

On May 20, 2022, as part of acquisition of Rizing Intermediate Holdings, Inc and its subsidiaries by a wholly owned step-down subsidiary, the Company acquired 100% equity interest in Attune Consulting India Private Limited for an upfront cash consideration of ' 121.

 
STOCKS A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z|Others

Mutual Fund A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z | Others

SEBI Registration No's: NSE / BSE / MSEI / MCX / NCDEX : INZ000166638. Depository: IN- DP-224-2016.
Compliance Officer :- Name: Ch.V.A. Varaprasad, Mobile No.: 9393136201, E-mail: varaprasad.challa@rlpsec.com
Grievance Cell: rlpsec_grievancecell@yahoo.com , rlpdp_grievancecell@yahoo.com
Procedure to file a complaint on SEBI SCORES: Register on SCORES portal. Mandatory details for filing complaints on SCORES: Name, PAN, Address, Mobile Number, E-mail ID. Benefits: Effective Communication, Speedy redressal of the grievances.
Copyrights @ 2014 © RLP Securities. All Right Reserved Designed, developed and content provided by