On behalf of the Board of Directors (the "Board") it gives me greatpleasure to present the 72nd Board's Report of your Company along with theBalance Sheet Statement of Profit and Loss and Statement of Cash Flow for the financialyear ended March 31 2018.
I. Financial Performance
The standalone and consolidated financial statements for the financial year ended March31 2018 forming part of this Annual Report have been prepared in accordance with theIndian Accounting Standards (Ind AS) as notified by the Ministry of Corporate Affairs.
On a consolidated basis our sales declined to `_ 544871 million for the current yearas against `_550402 million in the previous year recording a decline of 1%. Our netprofits declined to `80031 million for the current year as against `85179 million in theprevious year recording a decline of 6.04%.
On a standalone basis our sales declined to `_ 447100 million for the current yearas against ` 456396 million in the previous year recording a decline of 2.04%. Our netprofits declined to ` 77228 million in the current year as against `81617 million in theprevious year recording a decline of 5.38%.
Key highlights of financial performance of your Company for the financial year 2017-18are provided below: (` in millions)
| || |
| ||2017-18 ||2016-17 ||2017-18 ||2016-17 |
|Sales and Other ||471896 ||486937 ||570358 ||580710 |
|Profit before Tax ||100343 ||106871 ||102422 ||110393 |
|Provision for Tax ||23115 ||25254 ||22391 ||25214 |
|Net profit for the year* ||77228 ||81617 ||80031 ||85179 |
|Other comprehensive (loss)/income for the year ||(7300) ||5154 ||(3127) ||2184 |
|Total comprehensive income for the year* ||69928 ||86771 ||76094 ||87363 |
|Total comprehensive income for the period attributable to: || || || || |
|Minority Interest ||- ||- ||19 ||(179) |
|Equity holders ||69928 ||86771 ||76885 ||87184 |
( ` in millions)
| || |
| ||2017-18 ||2016-17 ||2017-18 ||2016-17 |
|Appropriations || || || || |
|Dividend ||4525 ||7291 ||4499 ||7249 |
|Corporate tax on dividend distribution ||921 ||1485 ||921 ||1485 |
|EPS || || || || |
|- Basic ||16.26 ||16.80 ||16.85 ||17.49 |
|- Diluted ||16.23 ||16.75 ||16.82 ||17.43 |
* profit for the standalone results is after considering a loss of `49 million (2017:Profit of `210 million) relating to changes in fair value of forward contracts designatedas hedges of net investment in non-integral foreign operations translation of foreigncurrency borrowings and changes in fair value of related cross currency swaps togetherdesignated as hedges of net investment in non-integral foreign operations. In theconsolidated financial statements these are considered as hedges of net investment innon-integral foreign operations.
Pursuant to regulation 43A of Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 ("ListingRegulations") the Board has approved and adopted a Dividend Distribution Policy.The policy details various considerations based on which the Board may recommend ordeclare dividend current dividend track record usage of retained earnings for corporateactions etc. The policy is available on the Company's website athttps://www.wipro.com/corporate-governance.
Pursuant to the approval of the Board of Directors on January 19 2018 your Companypaid an interim dividend of `1/- per equity share of face value of `2/- each toshareholders who were on the register of members as on February 1 2018 being the recorddate fixed for this purpose. The Board did not recommend a final dividend and thereforetotal dividend for the year ended March 31 2018 will be `1/- per equity share of facevalue of `2/- each.
Issue of Bonus Equity Shares
The Board of Directors at their meeting held on April 25 2017 recommended issue ofbonus equity shares in the proportion of 1:1 i.e. 1 (One) bonus equity share of `2/-each for every 1 (one) fully paid-up equity share held (including ADS holders) as of June14 2017 the record date fixed for this purpose. This was approved by the members of theCompany through resolution dated June 3 2017 passed through postal ballot/e-votingsubsequent to which the bonus shares were allotted to the shareholders.
Buyback of Equity Shares
Pursuant to the approval of the Board on July 20 2017 and approval of shareholdersthrough special resolution dated August 28 2017 passed through postal ballot/e-votingyour Company completed buyback of 343750000 equity shares of the Company for anaggregate amount of `110000000000/- being 7.06% of the total paid up equity sharecapital at `320 per equity share in December 2017. The buyback was made from allexisting shareholders of the Company as on September 15 2017 being the record date forthe purpose on a proportionate basis under the tender offer route in accordance with theprovisions contained in the Securities and Exchange Board of India (Buy Back ofSecurities) Regulations 1998 and the Companies Act 2013 and rules made thereunder.
Transfer to Reserves
Appropriations to general reserve for the financial year ended March 31 2018 as perstandalone and consolidated financial statements are as under: (` In millions)
| ||Standalone ||Consolidated |
|Net profit for the year ||77228 ||80031 |
|Balance of Reserve at the beginning of the year ||462195 ||511841 |
|Transfer to General ||- ||- |
|Reserve || || |
|Balance of Reserve at the end of the year ||413578 ||470215 |
In accordance with Section 129(3) of the Companies Act 2013 a statement containingsalient features of the financial statements of the subsidiary companies in Form AOC-1 isprovided from pages 250 to 253 of this Annual Report. The statement also provides detailsof performance and financial position of each of the subsidiaries.
In accordance with fourth proviso to Section 136(1) of the Companies Act 2013 theAnnual Report of your Company containing inter alia the audited standalone andconsolidated financial statements has been placed on the website of the Company atwipro.com. Further audited financial statements together with related information andother reports of each of the subsidiary companies have also been placed on the website ofthe Company at wipro.com.
During the financial year 2017-18 your Company invested an aggregate of `4558 millionin its direct subsidiaries. Apart from this your Company funded its subsidiaries fromtime to time as per the fund requirements through loans guarantees and other means tomeet working capital requirements.
During the year 2017-18 Wipro Australia Pty Limited and Wipro Technologies Norway ASwere de-registered Saaspoint Inc and Wipro Holdings (Mauritius) Limited were liquidatedand Wipro Retail UK Limited has been put into liquidation. Further HPH Holdings Corp.merged with and into Healthplan Services Inc and KI Management Company LLC merged withand into Appirio Inc.
During the year 2017-18 your Company set up new subsidiaries namely Women's BusinessPark Technologies Limited in Saudi Arabia and Wipro IT Services Bangladesh Limited inBangladesh to meet its business requirements.
Pursuant to the approval of shareholders through postal ballot/e-voting in June 2017the authorized share capital of your Company increased from `6100000000/- (Rupees SixHundred and Ten Crores) to `11265000000/- (Rupees One Thousand One Hundred and TwentySix Crores and Fifty Lakhs) by creation of additional 2582500000 (Two Hundred andFifty Eight Crores and Twenty Five Lakhs) equity shares of `2/- (Rupees Two each).
During the year 2017-18 the Company allotted 3559599 equity shares and transferred4351775 equity shares of `2/- each from Wipro Equity Reward Trust pursuant to exerciseof stock options by eligible employees and allotted 2433074327 equity shares of `2/-each as Bonus Equity Shares on June 15 2017. Also the Company extinguished 343750000equity shares consequent to buyback in December 2017. Consequently the paid-up equityshare capital of the Company as at March 31 2018 stood at `9047568982 consisting of4523784491 equity shares of `2/- each.
During the year under review the Company has not issued shares with differentialvoting rights and sweat equity shares.
Transfer to Investor Education and Protection Fund Authority
a. During the year 2017-18 unclaimed Dividend for financial year 2009-10 and 2010-11of `6397560/- and `3970354/- respectively were transferred to the Investor Educationand Protection Fund ("IEPF") as required under the Investor Educationand Protection Fund Authority (Accounting Audit Transfer and Refund) Rules 2016 ("IEPFAuthority").
b. During the year 2017-18 1.21 Million equity shares in respect of which dividend hasnot been claimed for the final dividend declared in financial year 2009-10 and interimdividend declared in financial year 2010-11 were transferred to the IEPF Authoritypursuant to the provisions of Section 124(6) of the Companies Act 2013 and the rulesthereunder.
Pursuant to Section 186 of Companies Act 2013 and Schedule V of the ListingRegulations disclosure on particulars relating to loans advances guarantees andinvestments are provided as part of the financial statements.
Your Company has not accepted any deposits from public and as such no amount onaccount of principal or interest on public deposits was outstanding as on the date of thebalance sheet.
Your Company is a leading global information technology ("IT")consulting and business process services company. Your Company harnesses the power ofCognitive Computing Hyper-Automation Robotics Cloud Analytics and EmergingTechnologies to help its clients adapt to the digital world and make them successful.
Your Company is recognized globally for its comprehensive portfolio of services strongcommitment to sustainability and good corporate citizenship and your Company has over160000 dedicated employees serving clients across six continents. Together your Companydiscovers ideas and connects the dots to build a better and a bold new future.
Your Company develops and integrates innovative solutions that enable its clients toleverage IT to achieve their business objectives at competitive costs. Your Company usesits quality processes and global talent pool to deliver "time to development"advantages cost savings and productivity improvements.
Your Company's IT Services business provides a range of IT and IT-Enabled Serviceswhich include Digital Strategy Advisory Customer-Centric Design Technology ConsultingIT Consulting Custom Application Design Development Re-engineering and maintenanceSystems Integration Package Implementation Global Infrastructure Services AnalyticsServices Business Process Services Research and Development and Hardware and Softwaredesign to leading enterprises worldwide._ Your Company offers these services globally byleveraging its Products Platforms Partnerships and Solutions including state of the artautomation technologies such as its proprietary cognitive intelligence tool Wipro HOLMESTMArtificial Intelligence Platform (Wipro HOLMES'). Wipro is recognizedglobally for its comprehensive portfolio of services and a strong commitment tosustainability and corporate citizenship.
The vision for your Company's business is "To earn our clients' trust and maximizethe value of their businesses by providing solutions that integrate its deep industryinsights its leading technology and best-in-class execution". Your Company seeks toemphasize its core values of being passionate about its client's success treating eachperson with respect being global and responsible and maintaining unyielding integrity ineverything it does.
On the technology front Digital business has changed the nature of demand for ITservices. Development of advanced technologies such as Cloud based offerings Big DataAnalytics Mobile Applications and the emergence of Social Media is making technology anintegral part of the business model of your Company's clients. In addition to the ChiefInformation Officer newer stakeholders such as Chief Marketing Officer Chief DigitalOfficer and Chief Risk Officer play a key role in shaping the technology roadmap of itsclients. These trends on newer business models emerging technologies and sourcingpatterns provide Wipro with significant growth opportunities.__
YourCompany'sITProductssegmentprovidesarangeofthird-party IT products which allows itto offer comprehensive IT system integration services. These products include computingplatforms and storage networking solutions enterprise information security and softwareproducts including databases and operating systems. Your Company has a diverse range ofclients primarily in the India and Middle East markets from small and medium enterprisesto large enterprises in all major industries. Your Company continues to focus on being asystem integrator of choice where it provides IT products as a complement to its ITservices offerings rather than sell standalone IT products.
In May 2017 to keep your Company's brand contemporary your Company unveiled its newbrand identity including a new company logo.
According to the Strategic Review 2018 of NASSCOM in FY'18 IT export revenue fromIndia grew by 7.8% to an estimated $126 billion. In FY'19 NASSCOM expects revenue fromIT exports to grow by 7% to 9%.
Acquisitions Investments and Divestments
Acquisitions are a key enabler for driving your Company's capability to build industrydomain focus on key strategic areas strengthen its presence in emerging technology areasincluding Digital and increase market footprint in newer markets. Your Company focuses onopportunities where it can further develop its domain expertise specific skill sets andits global delivery model to maximize service and product enhancements and higher margins.
Acquisitions consummated during the year ended March 31 2018 included Infoserver S.A.and Cooper Software Inc. Infoserver S. A. is a Brazilian IT Services company thatpredominantly caters to the Banking Financial Services and Insurance markets in Brazil.With this acquisition your Company and Infoserver S. A. will be able to deliver a fullsuite of integrated IT services across Digital Consulting and Business Process Servicesto four of the top five banks in Brazil. Cooper Software Inc. is an award winning designand business strategy consultancy. Cooper Software Inc. will further strengthen designand innovation capabilities and expand reach in North America besides adding capabilitiesin professional design education. By adding Cooper Software's skills and expertise yourCompany will be better positioned to support its clients' digital programs.
Your Company also made minority investments in Denim Group Ltd. a leading independentapplication security firm serving as a trusted advisor to customers on matters ofapplication risk and security and Harte Hanks Inc. a US based global digital marketingservices company specializing in omni-channel marketing solutions including consultingstrategic assessment data analytics digital social mobile print direct mail andcontact center. Also during the year ended March 31 2018 your Company has increased itsownership in Drivestream Inc. from 19% to 43.7%.
Further your Company has signed a definitive agreement to divest its data centerservices business to Ensono Holdings LLC ("Ensono") a leading hybrid ITservices provider. This divestment will help us focus on accelerating investments in thedigital space. At the same time your Company remains committed to serving its hosted datacenter customers and the market through its business partnership with Ensono. The sale isexpected to close during the quarter ending June 30 2018. Further we have entered intoan agreement with Ensono to acquire 10.2% stake in the entity. Ensono has a right torepurchase up to an aggregate of 5.5% of the above units if Wipro is not able to achievecertain joint business milestones agreed between the parties.
Additionally after March 31 2018 your Company has reduced its equity holding inWipro Airport IT Services Limited (WAISL) which was a joint venture between Wipro Limitedand Delhi International Airport Limited from 74% to 11% by selling its stake toAntariksh Softtech Private Limited on April 5 2018. Even after this divestment WAISLwill continue to outsource IT services of the airport to Wipro Limited as per the existingarrangement.
Merger of Wholly Owned Subsidiaries
At its meeting held on April 25 2018 the Board considered and approved a scheme ofamalgamation pursuant to Sections 230 to 232 read with Section 234 and other relevantprovisions of the Companies Act 2013 providing for the merger of its wholly ownedsubsidiaries Wipro Technologies Austria GmbH Wipro Information Technology Austria GmbHNewLogic Technologies SARL and Appirio India Cloud Solutions Private Limited with WiproLimited. The scheme of amalgamation is subject to necessary statutory and regulatoryapprovals under applicable laws including approval of the National Company Law Tribunalin India. The scheme of amalgamation will inter alia enable optimisation of legal entitystructure through rationalization of number of subsidiaries integration of businessoperations leading to operational synergies provide your Company seamless access to theassets of the subsidiaries and also result in reduction of the multiplicity of legal andregulatory compliances.
Management Discussion and Analysis Report
In terms of regulation 34 of the Listing Regulations and SEBI circular no.SEBI/HO/CFD/CMD/CIR/P/2017/10 dated February 6 2017 your Company has adopted salientfeatures of Integrated Reporting prescribed by the International Integrated ReportingCouncil (IIRC') as part of its Management Discussion and Analysis report ("MD&AReport"). The MD&A Report capturing your Company's performance industrytrends and other material changes with respect to your Companies and its subsidiarieswherever applicable are presented from pages 14 to 55 of this Annual Report. The MD&AReport provides a consolidated perspective of economic social and environmental aspectsmaterial to your Company's strategy and its ability to create and sustain value to yourCompany's key stakeholders and includes aspects of reporting as required by regulation 34of the Listing Regulations on Business Responsibility Report. Statutory section ofBusiness Responsibility Report is provided from pages 309 to 315 to this Annual Report.
Key Awards and Recognitions
Your Company is one of the most admired and recognized companies in the IT industry.Your Company won several awards and accolades out of which key recognitions are givenbelow:
1. Wipro was recognized as one of India's most innovative companies by Confederation ofIndian Industry (CII) at the Industrial Innovation Awards 2017.
2. Wipro's Open Banking API Platform won the 2017 API Awards at API World under theTravel APIs' category.
3. Wipro won the Best Blockchain Application of the Year' award at the GlobalLogistics Excellence Awards 2018.
4. Wipro is amongst the top 6 firms in the Constellation Research shortlist on"Synchronous Ledger Tech (Blockchain) Companies to Watch For".
5. Wipro has been recognized as Platform Partner of the Year 2017 by BMC Software andwon the highest number of accreditations for Security Operations at the BMC OutsourcersTech Summit (BOTS).
6. Wipro was ranked #2 in the list of Top 20 Service Outsourcing MNCs in China2017' in a study by Devott a leader in research and advisory of China's outsourcing andtechnology markets.
7. Wipro was recognized as the leading AI Partner for 2017
by Intel Corporation at the Intel AI and HPC Ecosystem Summit 2018 for drivingtransformational outcomes for clients.
8. Wipro has been recognized as a market leader in Digital Workplace Services byInformation Services Group (ISG) a leading global technology research and advisory firm.
9. Wipro has been named an IDC Health Insights HealthTech Rankings Enterprise 25Company. The rankings categorize and evaluate global providers of information technologyto healthcare payers and providers.
10. Wipro has been recognized in the "Leadership" category for corporategovernance practices on the basis of the Indian Corporate Governance Scorecard which is aframework developed jointly by International Finance Corporation a member of the WorldBank group BSE Limited and Institutional Investor Advisory Services based on globallyaccepted G20/OECD principles. 11. Wipro was included in the Dow Jones Sustainability Index(DJSI) World and Emerging Markets for the eighth time in succession.
12. Wipro was recognized as the 2018 World's Most Ethical Company for the seventhsuccessive year by the Ethisphere Institute the global leader in defining and advancingthe standards of ethical business practices.
III. Governance and Ethics
Your Company believes in adopting best practices of corporate governance. Corporategovernance principles are enshrined in the Spirit of Wipro which form the core values ofWipro. These guiding principles are also articulated through the Company's code ofbusiness conduct Corporate Governance guidelines charter of various sub-committees anddisclosure policy.
As per regulation 34 of the Listing Regulations a separate section on corporategovernance practices followed by your Company together with a certificate from V.Sreedharan & Associates Practising Company Secretaries on compliance with corporategovernance norms under the Listing Regulations is provided at page 101 to this AnnualReport.
Board of Directors
Board's Composition and Independence
Your Company's Board consists of global leaders and visionaries who provide strategicdirection and guidance to the organization. As on March 31 2018 the Board comprisedthree Executive Directors and seven Non-Executive Independent Directors.
Definition of Independence' of Directors is derived from regulation 16 of theListing Regulations NYSE Listed
Company Manual and Section 149(6) of the Companies Act 2013. The Company has receivednecessary declarations from the Independent Directors stating that they meet theprescribed criteria for independence.
Based on the confirmations/disclosures received from the Directors under Section 149(7)of the Companies Act 2013 and on evaluation of the relationships disclosed the followingNon-Executive Directors are considered as Independent Directors:
a. Mr. N Vaghul b. Dr. Ashok S Ganguly c. Mr. M K Sharma d. Ms. Ireena Vittal e. Mr.William Arthur Owens f. Dr. Patrick J Ennis g. Mr. Patrick Dupuis
Number of Meetings of the Board
The Board met five times during the financial year 2017-18 on April 24-25 2017 June2 2017 July 19-20 2017 October 16-17 2017 and January 18-19 2018. The maximuminterval between any two meetings did not exceed 120 days.
Directors and Key Managerial Personnel
At the 71st Annual General Meeting (AGM) held on July 19 2017 Mr Azim HPremji was re-appointed as Executive Chairman and Managing Director of the Company to holdoffice with effect from July 31 2017 to July 30 2019. Further Mr. William Arthur Owenswas re-appointed as Independent Director for a second term with effect from August 12017 to July 31 2022.
At the 68th AGM held on July 23 2014 Ms. Ireena Vittal was appointed as anIndependent Director to hold office up to September 30 2018.
Pursuant to the recommendation of Board Governance Nomination and CompensationCommittee and based on the report of performance evaluation the Board at its meeting heldon April 25 2018 decided to place the proposal for re-appointment of Ms. Ireena Vittal asan Independent Director for a further term of 5 years from October 1 2018 to September30 2023 for approval of the members at the 72nd AGM. The Company has receivedrequisite notice under Section 160 of the Companies Act 2013 from a member along withthe requisite deposit signifying his intention to propose re-appointment of Ms. IreenaVittal as mentioned above. Accordingly necessary resolutions are being placed forapproval of the members at the 72nd AGM of the Company.
Pursuant to the provisions of Section 152 of the Companies Act 2013 and the Articlesof Association of the Company Mr. Rishad A Premji will retire by rotation at the 72ndAGM and being eligible has offered himself for re-appointment.
Committees of the Board
The Company's Board has the following committees:
1. Audit Risk and Compliance Committee which also acts as the Risk ManagementCommittee
2. Board Governance Nomination and Compensation Committee which also acts as CSRCommittee
3. Strategy Committee
4. Administrative and Shareholders/Investors Grievance Committee (Stakeholders'Relationship Committee)
Details of terms of reference of the Committees Committee membership and attendance atmeetings of the Committees are provided in the Corporate Governance report from pages 106to 109 of this Annual Report.
In line with the Corporate Governance Guidelines of the Company Annual PerformanceEvaluation was conducted for all Board Members as well as the working of the Board and itsCommittees. This evaluation was led by the Chairman of the Board Governance Nominationand Compensation Committee with specific focus on the performance and effectivefunctioning of the Board. The Board evaluation framework has been designed in compliancewith the requirements under the Companies Act 2013 and the Listing Regulations and inconsonance with Guidance Note on Board Evaluation issued by SEBI in January 2017. TheBoard evaluation was conducted through questionnaire having qualitative parameters andfeedback based on ratings.
Evaluation of the Board was based on criteria such as composition and role of theBoard Board communication and relationships functioning of Board Committees review ofperformance and compensation to Executive Directors succession planning strategicplanning etc.
Evaluation of Directors was based on criteria such as participation and contribution inBoard and Committee meetings representation of shareholder interest and enhancingshareholder value experience and expertise to provide feedback and guidance to topmanagement on business strategy governance and risk understanding of the organization'sstrategy risk and environment etc.
Evaluation of Committees was based on criteria such as adequate independence of eachCommittee frequency of meetings and time allocated for discussions at meetingsfunctioning of Board Committees and effectiveness of its advice/recommendation to theBoard etc.
The outcome of the Board evaluation for financial year 2017-18 was discussed by theBoard Governance Nomination and Compensation Committee and the Board at their meetingheld in April 2018. The Board has received improved ratings on its overall effectivenessincluding higher rating on Board communication relationships and Board Committees. TheBoard has also noted areas requiring more focus in the future.
Policy on Director's Appointment and Remuneration
The Board Governance Nomination & CompensationCommitteehasframedapolicyforselectionandappointment of Directors including determiningqualifications and independence of a Director Key Managerial Personnel Senior ManagementPersonnel and their remuneration as part of its charter and other matters provided underSection 178(3) of the Companies Act 2013. The policy covering these requirements isprovided in the Corporate Governance report at page 104 to this Annual Report. We affirmthat the remuneration paid to Directors is as per the remuneration policy of the Company.
Your Company has adopted an Ombuds process as a channel for receiving and redressingcomplaints from employees and Directors as per the provisions of Section 177(9) and (10)of the Companies Act 2013 and regulation 22 of the Listing Regulations.
Under this policy your Company encourages its employees to report any reporting offraudulent financial or other information to the stakeholders and any conduct thatresults in violation of the Company's code of business conduct to the management (on ananonymous basis if employees so desire). Further your Company has prohibiteddiscrimination retaliation or harassment of any kind against any employees who based onthe employee's reasonable belief that such conduct or practice have occurred or areoccurring reports that information or participates in the investigation.
Mechanism followed under Ombuds process is appropriately communicated within theCompany across all levels and has been displayed on the Company's intranet and website athttps://www.wipro.com/corporate-governance/#WiprosOmb udsProcess.
The Audit Risk and Compliance Committee periodically reviews the functioning of thismechanism. No personnel of the Company were denied access to the Audit Risk &Compliance Committee.
Information Required under Sexual Harassment of Women at Work place (PreventionProhibition & Redressal) Act 2013
Your Company has a policy and framework for employees to report sexual harassment casesat workplace and its process ensures complete anonymity and confidentiality ofinformation. Adequate workshops and awareness programs against sexual harassment areconducted across the organization. A total of 101 complaints of sexual harassment wereraised in the calendar year 2017 of which 92 cases were disposed and appropriate actionswere taken in all cases within the statutory timelines.
Related Party Transactions
Your Company has historically adopted the practice of undertaking related partytransactions only in the ordinary and normal course of business and at arm's length aspart of its philosophy of adhering to highest ethical standards transparency andaccountability. In line with the provisions of the Companies Act 2013 and the ListingRegulations the Board has approved a policy on related party transactions. An abridgedpolicy on related party transactions has been placed on the Company's websitehttps://www.wipro.com/ corporate-governance.
All Related Party Transactions are placed on a quarterly basis before the Audit Riskand Compliance Committee and before the Board for approval. Prior omnibus approval of theAudit Risk and Compliance Committee and the Board is obtained for the transactions whichare of a foreseeable and repetitive nature.
The particulars of contracts or arrangements with related parties referred to inSection 188(1) and applicable rules of the Companies Act 2013 in Form AOC-2 is providedas Annexure I to this Report.
Given the diversified scale of operations your Company has put in place an EnterpriseRisk Management (ERM) framework and adopted an enterprise risk management policy based onglobally recognized standards. The ERM framework is administered by the Audit Risk andCompliance Committee. The objective of the ERM framework is to enable and supportachievement of business objectives through risk-intelligent assessment while also placingsignificant focus on constantly identifying and mitigating risks within the business.TheERM Framework covers various categories of risks including inter alia informationsecurity and cyber security risks effectiveness of the controls that have beenimplemented to prevent such risks and continuous improvement of the systems and processesto mitigate such risks.
Further details on the Company's risk management framework is provided in the MD&AReport.
Compliance Management Framework
Your Company has a robust and effective framework for monitoring compliances withapplicable laws. The Board has approved a Global Statutory Compliance Policy providingguidance on broad categories of applicable laws and process for monitoring compliance. Infurtherance to this your Company has instituted an online compliance management systemwithin the organization to monitor compliances real-time and provide update to seniormanagement and Board on a periodic basis. The Audit Risk and Compliance Committee and theBoard periodically monitors status of compliances with applicable laws based on quarterlycertification provided by senior management.
Directors' Responsibility Statement
Your Directors hereby confirm that: a. in the preparation of the annual accounts theapplicable accounting standards have been followed along with proper explanation relatingto material departures; b. the Directors have selected such accounting policies andapplied them consistently and made judgments and estimates that are reasonable and prudentso as to give a true and fair view of the state of affairs of the Company at the end ofthe financial year and of the profit and loss of the Company for that period; c. theDirectors have taken proper and sufficient care for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities; d.the Directors have prepared the annual accounts on a going concern basis; and e. theDirectors have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and operating effectively; f. asrequired under Section 134(5)(f) of the Companies Act 2013 and according to theinformation and explanations presented to us based on the review done by the Audit Riskand Compliance Committee and as recommended by it we the Board hereby state thatadequate systems and processes commensurate with the size of the Company and the natureof its business have been put in place by the Company to ensure compliance with theprovisions of all applicable laws as per the Company's Global Statutory Compliance Policyand that such systems and processes are operating effectively.
Wipro Employee Stock Option Plans (WESOP)/Restricted Stock Unit Plans
In order to motivate incentivize and reward employees your Company has institutedvarious employee stock options plans/restricted stock unit plans from time to time. TheBoard Governance Nomination and Compensation Committee administers these plans. The stockoption plans are in compliance with Securities and Exchange Board of India (Share BasedEmployee Benefits) Regulations 2014
("Employee Benefits Regulations") and there have been no materialchanges to these plans during the financial year. Disclosures on various plans details ofoptions granted shares allotted upon exercise etc. as required under the EmployeeBenefits Regulations read with Securities and Exchange Board of India circular no.CIR/CFD/POLICY CELL/2/2015 dated June 16 2015 are available on the Company's website athttps://www.wipro.com/annual-reports. No employee was issued stock options during the yearequal to or exceeding 1% of the issued capital of the Company at the time of grant.
Wipro Equity Reward Trust (WERT) is an ESOP Trust set up by your Company. Pursuant toapproval by the shareholders at their meeting held in July 2014 the Company is authorizedto transfer shares from the WERT to employees on exercise of vested Indian RSUs.
Particulars of Employees
Information required pursuant to Section 197(12) of the Companies Act 2013 read withRule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 is provided as Annexure II to this report.
A statement containing inter alia the names of top ten employees in terms ofremuneration drawn and every employee employed throughout the financial year and inreceipt of remuneration of ` 102 lakhs or more and employees employed for part of theyear and in receipt of `8.50 lakhs or more per month pursuant to Rule 5(2) the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is provided as AnnexureIII to this report.
IV. Internal Financial Controls and Audit
Internal Financial Controls and their Adequacy
The Board of your Company has laid down internal financial controls to be followed bythe Company and that such internal financial controls are adequate and operatingeffectively. Your Company has adopted policies and procedures for ensuring the orderly andefficient conduct of its business including adherence to the Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial disclosures.
The term of BSR & Co. LLP (Registration No.101248W/ W-100022) CharteredAccountants Bengaluru ended with the conclusion of audit for the financial year 2016-17.After conducting a detailed evaluation and based on the recommendation of Audit Risk andCompliance Committee the Board approved the proposal for appointment of Deloitte Haskins& Sells LLP Chartered Accountants (Registration No. 117366W/W-100018) as statutoryauditors of the Company for a term of 5 years from the financial year 2017-18 onwards onsuch terms and conditions and remuneration as may be decided by the Audit Risk andCompliance Committee. The said appointment was approved by the members of the Company atthe 71st AGM held on July 19 2017.
Vide notification dated May 7 2018 issued by Ministry of Corporate Affairs therequirement of seeking ratification of appointment of statutory auditors by members ateach AGM has been done away with. Accordingly no such item has been considered in noticeof the 72nd AGM.
There are no qualifications reservations or adverse remarks made by Deloitte Haskins& Sells LLP Statutory Auditors in their report for the financial year ended March31 2018.
Pursuant to provisions of Section 143(12) of the Companies Act 2013 the StatutoryAuditors have not reported any incident of fraud to the Audit Risk and ComplianceCommittee during the year under review.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Mr. V Sreedharan Partner V Sreedharan & Associates a firm of CompanySecretaries in Practice to conduct Secretarial Audit of the Company. The Report of theSecretarial Audit in Form MR-3 for the financial year ended March 31 2018 is enclosed asAnnexure IV to this Report. There are no qualifications reservations or adverse remarksmade by the Secretarial Auditor in his report.
V. Social Responsibility and Sustainability
Corporate Social Responsibility
Your Company is at the forefront of Corporate Social Responsibility (CSR) andsustainability initiatives and practices. Your Company believes in making lasting impacttowards creating a just equitable humane and sustainable society. Your Company has beeninvolved with social initiatives for more than decade and a half and engages in variousactivities in the field of education primary healthcare and communities ecology andenvironment etc. Your Company has won several awards and accolades for its CSR andsustainability efforts.
As per the provisions of the Companies Act 2013 companies having net worth of `500crore or more or turnover of `1000 crore or more or net profit of `5 crore or moreduring the immediately preceding financial year are required to constitute a CorporateSocial Responsibility (CSR) committee of the Board comprising three or more directors atleast one of whom should be an independent director and such company shall spend at least2% of the average net profits of the company's three immediately preceding financial yearstowards CSR activities. Accordingly your Company has spent `1866 million towards CSRactivities during the financial year 2017-18. The contents of the CSR policy and CSRReport for the year 2017-18 is attached as Annexure V to this Report. Contents of the CSRpolicy is also available on the Company's website at https://www.wipro.com/corporate-governance. The terms of reference of CSR committee framed inaccordance with Section 135 of the Companies Act 2013 forms part of Board GovernanceNomination and Compensation Committee. The Committee consists of three independentdirectors Dr. Ashok S Ganguly Mr. N Vaghul and Mr. William Arthur Owens as its members.Dr. Ashok S Ganguly is the Chairman of the Committee.
Particulars Regarding Conservation of Energy and Research and Development andTechnology Absorption
Details of steps taken by your Company to conserve energy through its"Sustainability" initiatives Research and Development and Technology Absorptionhave been disclosed as part of the MD&A Report.
VI. Other Disclosures
Foreign Exchange Earnings and Outgoings
During the year 2017-18 your Company's foreign exchange earnings were `391807million and foreign exchange outgoings were `207831 million as against `404000 millionof foreign exchange earnings and `212910 million of foreign exchange outgoings for thefinancial year 2016-17.
Extract of Annual Return
Pursuant to Section 92(3) and Section 134(3)(a) of the Companies Act 2013 extract ofthe Annual Return as on March 31 2018 in form MGT-9 is enclosed as Annexure VI to thisreport.
Material Changes and Commitments Affecting the Financial Position of the Company
There have been no material changes and commitments affecting the financial positionof the Company which occurred between the end of the financial year to which the financialstatements relate and the date of this report.
Details of Significant and Material Orders Passed by the regulators/Courts/TribunalsImpacting the Going Concern Status and the Company's Operations in Future
There are no significant and material orders passed by the Regulators/Courts/Tribunalswhich would impact the going concern status of the Company and its future operations.
Acknowledgements and Appreciation
Your Directors take this opportunity to thank the customers shareholders suppliersbankers business partners/ associates financial institutions and Central and StateGovernmentsfortheirconsistentsupportandencouragement to the Company. I am sure you willjoin our Directors in conveying our sincere appreciation to all employees of the Companyand its subsidiaries and associates for their hard work and commitment. Their dedicationand competence has ensured that the Company continues to be a significant and leadingplayer in the IT Services industry.
| ||For and on behalf of the Board of Directors |
|Bengaluru ||Azim H Premji |
|June 8 2018 ||Executive Chairman |