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Wipro (WIT)

Filed: 19 Jul 21, 4:00pm

Exhibit 99.4

WIPRO LIMITED AND SUBSIDIARIES

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS UNDER IFRS

AS AT AND FOR THE THREE MONTHS ENDED JUNE 30, 2021


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, 2021   As at June 30, 2021 
               Convenience translation into
US dollar in millions
(unaudited) Refer to Note
2(iii)
 

ASSETS

        

Goodwill

   6    139,127   223,485   3,007

Intangible assets

   6    13,085   43,029   579

Property, plant and equipment

   4    85,192   86,720   1,167

Right-of-Use assets

   5    16,420   19,804   266

Financial assets

        

Derivative assets

   17    16   17   ^ 

Investments

   8    10,576   11,024   148

Trade receivables

     4,358   4,392   59

Other financial assets

   11    6,088   8,248   111

Investments accounted for using the equity method

     1,464   709   10

Deferred tax assets

     1,664   2,743   37

Non-current tax assets

     14,323   11,099   149

Other non-current assets

   12    15,935   11,795   159
    

 

 

   

 

 

   

 

 

 

Total non-current assets

     308,248   423,065   5,692
    

 

 

   

 

 

   

 

 

 

Inventories

   9    1,064   945   13

Financial assets

        

Derivative assets

   17    4,064   2,458   33

Investments

   8    175,707   167,034   2,247

Cash and cash equivalents

   10    169,793   140,617   1,892

Trade receivables

     94,298   104,377   1,404

Unbilled receivables

     27,124   33,663   453

Other financial assets

   11    7,245   8,670   117

Contract assets

     16,507   20,052   270

Current tax assets

     2,461   4,587   62

Other current assets

   12    24,923   25,966   349
    

 

 

   

 

 

   

 

 

 

Total current assets

     523,186   508,369   6,840
    

 

 

   

 

 

   

 

 

 

TOTAL ASSETS

     831,434   931,434   12,532
    

 

 

   

 

 

   

 

 

 

EQUITY

        

Share capital

     10,958   10,958   147

Share premium

     714   740   10

Retained earnings

     466,692   498,003   6,700

Share-based payment reserve

     3,071   3,884   52

SEZ Re-investment reserve

     41,154   42,297   569

Other components of equity

     30,506   33,785   455
    

 

 

   

 

 

   

 

 

 

Equity attributable to the equity holders of the Company

     553,095   589,667   7,933

Non-controlling interests

     1,498   1,095   15
    

 

 

   

 

 

   

 

 

 

TOTAL EQUITY

     554,593   590,762   7,948
    

 

 

   

 

 

   

 

 

 

LIABILITIES

        

Financial liabilities

        

Loans and borrowings

   13    7,458   55,392   745

Lease liabilities

     13,513   15,862   213

Other financial liabilities

   14    2,291   3,349   45

Deferred tax liabilities

     4,633   14,367   193

Non-current tax liabilities

     11,069   11,083   149

Other non-current liabilities

   15    7,835   10,082   136

Provisions

   16    2   1   ^ 
    

 

 

   

 

 

   

 

 

 

Total non-current liabilities

     46,801   110,136   1,481
    

 

 

   

 

 

   

 

 

 

Financial liabilities

        

Loans, borrowings and bank overdrafts

   13    75,874   60,105   809

Derivative liabilities

   17    1,070   1,218   16

Trade payables and accrued expenses

     78,870   88,941   1,197

Lease liabilities

     7,669   8,811   119

Other financial liabilities

   14    1,470   4,091   55

Contract liabilities

     22,535   21,153   286

Current tax liabilities

     17,324   18,088   243

Other current liabilities

   15    24,552   27,450   369

Provisions

   16    676   679   9
    

 

 

   

 

 

   

 

 

 

Total current liabilities

     230,040   230,536   3,103
    

 

 

   

 

 

   

 

 

 

TOTAL LIABILITIES

     276,841   340,672   4,584
    

 

 

   

 

 

   

 

 

 

TOTAL EQUITY AND LIABILITIES

     831,434   931,434   12,532
    

 

 

   

 

 

   

 

 

 

^ 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

Managing Director

Firm Registration No: 117366W/W - 100018      
Vikas Bagaria  Jatin Pravinchandra Dalal    M. Sanaulla Khan
Partner  Chief Financial Officer    Company Secretary
Membership No. 60408      
Bengaluru      
July 15, 2021      

 

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   2020  2021  2021 
             Convenience translation
into US dollar in millions
(unaudited) Refer to  Note
2(iii)
 

Revenues

   20    149,131  182,524  2,456

Cost of revenues

   21    (103,700  (127,567  (1,716
    

 

 

  

 

 

  

 

 

 

Gross profit

     45,431  54,957  740

Selling and marketing expenses

   21    (9,789  (13,017  (175

General and administrative expenses

   21    (10,006  (10,530  (142

Foreign exchange gains/(losses), net

   23    1,205  1,160  16

Other operating income/(loss), net

   26    97  2,150  29
    

 

 

  

 

 

  

 

 

 

Results from operating activities

     26,938  34,720  468

Finance expenses

   22    (1,299  (746  (10

Finance and other income

   23    5,281  4,619  62

Share of net profit of associates accounted for using the equity method

     31  7  ^ 
    

 

 

  

 

 

  

 

 

 

Profit before tax

     30,951  38,600  520

Income tax expense

   19    (6,838  (6,225  (84
    

 

 

  

 

 

  

 

 

 

Profit for the period

     24,113  32,375  436
    

 

 

  

 

 

  

 

 

 

Profit attributable to:

      

Equity holders of the Company

     23,902  32,321  435

Non-controlling interests

     211  54  1
    

 

 

  

 

 

  

 

 

 

Profit for the period

     24,113  32,375  436
    

 

 

  

 

 

  

 

 

 

Earnings per equity share:

   24     

Attributable to equity holders of the Company

      

Basic

     4.20  5.92  0.08

Diluted

     4.19  5.90  0.08

Weighted average number of equity shares used in computing earnings per equity share

      

Basic

     5,693,348,171  5,462,996,981  5,462,996,981

Diluted

     5,703,168,248  5,476,992,662  5,476,992,662

^ 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 Registration No: 117366W/W - 100018      Managing Director
Vikas Bagaria  Jatin Pravinchandra Dalal    M. Sanaulla Khan
Partner  Chief Financial Officer    Company Secretary
Membership No. 60408      
Bengaluru      
July 15, 2021      

 

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, 
   2020  2021  2021 
         Convenience
translation into US
dollar in millions
(unaudited) Refer to
Note 2(iii)
 

Profit for the period

   24,113  32,375  436

Other comprehensive income (OCI)

    

Items that will not be reclassified to profit or loss in subsequent periods

    

Remeasurements of the defined benefit plans, net

   (291  (935  (13

Net change in fair value of investment in equity instruments measured at fair value through OCI

   460  2,588  35
  

 

 

  

 

 

  

 

 

 
   169  1,653  22
  

 

 

  

 

 

  

 

 

 

Items that will be reclassified to profit or loss in subsequent periods

    

Foreign currency translation differences

   1,091  2,638  35

Reclassification of foreign currency translation differences on sale of investment in associates and liquidation of subsidiaries to statement of income

   —    (32  ^ 

Net change in time value of option contracts designated as cash flow hedges

   86  (13  ^ 

Net change in intrinsic value of option contracts designated as cash flow hedges

   626  (178  (2

Net change in fair value of forward contracts designated as cash flow hedges

   96  (725  (10

Net change in fair value of investment in debt instruments measured at fair value through OCI

   2,921  (41  (1
  

 

 

  

 

 

  

 

 

 
   4,820  1,649  22
  

 

 

  

 

 

  

 

 

 

Total other comprehensive income, net of taxes

   4,989  3,302  44
  

 

 

  

 

 

  

 

 

 

Total comprehensive income for the period

   29,102  35,677  480
  

 

 

  

 

 

  

 

 

 

Total comprehensive income attributable to:

    

Equity holders of the Company

   28,955  35,600  479

Non-controlling interests

   147  77  1
  

 

 

  

 

 

  

 

 

 
   29,102  35,677  480
  

 

 

  

 

 

  

 

 

 

^ 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 Registration No: 117366W/W - 100018      Managing Director
Vikas Bagaria  Jatin Pravinchandra Dalal    M. Sanaulla Khan
Partner  Chief Financial Officer    Company Secretary
Membership No. 60408      
Bengaluru      
July 15, 2021      

 

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  Equity
attributable to
the equity
holders of the
Company
  Non-controlling
interests
  Total
equity
 

Particulars

 Number of
shares*
  Share
capital,
fully
paid-up
  Share
premium
  Retained
earnings
  Share-
based

payment
reserve
  SEZ
Re-investment
reserve
  Foreign
currency
translation
reserve
  Cash flow
hedging
reserve
  Other
reserves**
 

As at April 1, 2020

  5,713,357,390  11,427  1,275  476,103  1,550  43,804  23,539  (2,315  2,075  557,458  1,875  559,333

Comprehensive income for the period

            

Profit for the period

  —     —     —     23,902  —     —     —     —     —     23,902  211  24,113

Other comprehensive income

  —     —      —     —     —     1,155  808  3,090  5,053  (64  4,989
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Total comprehensive income for the period

  —     —     —     23,902  —     —     1,155  808  3,090  28,955  147  29,102
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Transaction with owners of the Company, recognized directly in equity

            

Issue of equity shares on exercise of options*

  1,081,494  2  293  —     (293  —     —     —     —     2  —     2

Issue of shares by controlled trust on exercise of options

  —     —     —     83  (83  —     —     —     —     —     —     —   

Compensation cost related to employee share-based payment

  —     —     —     1  338  —     —     —     —     339  —     339

Transferred to Special economic zone reinvestment reserve

  —     —     —     (5,430  —     5,430  —     —     —     —     —     —   

Cash dividend paid

  —     —     —     —     —     —     —     —     —     —     (960  (960
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Total transactions with owners of the Company

  1,081,494  2  293  (5,346  (38  5,430  —     —     —     341  (960  (619
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

As at June 30, 2020

  5,714,438,884  11,429  1,568  494,659  1,512  49,234  24,694  (1,507  5,165  586,754  1,062  587,816
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

 

*

Includes 22,356,667 treasury shares held as at June 30, 2020 by a controlled trust. 389,414 shares have been transferred by the controlled trust to eligible employees on exercise of options during the three months ended June 30, 2020.

**

Refer to Note 18

 

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  Equity
attributable to

the equity
holders of the
Company
  Non-controlling
interests
  Total
equity
 

Particulars

 Number of
shares*
  Share
capital,
fully
paid-up
  Share
premium
  Retained
earnings
  Share-
based
payment
reserve
  SEZ
Re-investment
reserve
  Foreign
currency
translation
reserve
  Cash
flow
hedging
reserve
  Other
reserves**
 

As at April 1, 2021

  5,479,138,555  10,958  714  466,692  3,071  41,154  22,936  1,730  5,840  553,095  1,498  554,593

Comprehensive income for the period

            

Profit for the period

  —     —     —     32,321  —     —     —     —     —     32,321  54  32,375

Other comprehensive income

  —     —     —     —     —     —     2,583  (916  1,612  3,279  23  3,302
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Total comprehensive income for the period

  —     —     —     32,321  —     —     2,583  (916  1,612  35,600  77  35,677
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Transaction with owners of the Company, recognized directly in equity

            

Issue of equity shares on exercise of options

  101,334  ^   26  —     (26  —     —     —     —     —     —     —   

Issue of shares by controlled trust on exercise of
options *

  —     —     —     132  (132  —     —     —     —     —     —     —   

Compensation cost related to employee share-based payment

  —     —     —     1  971  —     —     —     —     972  —     972

Transferred to Special economic zone reinvestment reserve

  —     —     —     (1,143  —     1,143  —     —     —     —     —     —   

Cash dividend paid

  —     —     —     —     —     —     —     —     —     —     (442  (442

Others

  —     —     —     —     —     —     —     —     —     —     (38  (38
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Total transactions with owners of the Company

  101,334  —     26  (1,010  813  1,143  —     —     —     972  (480  492
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

As at June 30, 2021

  5,479,239,889  10,958  740  498,003  3,884  42,297  25,519  814  7,452  589,667  1,095  590,762
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Convenience translation into US dollar in millions (unaudited) Refer to Note 2(iii)

   147  10  6,700  52  569  344  11  100  7,933  15  7,948
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

^ Value is less than 1

*

Includes 18,725,758 treasury shares held as at June 30, 2021 by a controlled trust. 675,457 shares have been transferred by the controlled trust to eligible employees on exercise of options during the three months ended June 30, 2021.

**

Refer to Note 18

 

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 Registration No: 117366W/W - 100018      Managing Director
Vikas Bagaria  Jatin Pravinchandra Dalal    M. Sanaulla Khan
Partner  Chief Financial Officer    Company Secretary
Membership No. 60408      
Bengaluru      
July 15, 2021      

 

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, 
   2020  2021  2021 
         Convenience
translation into US
dollar in millions
(unaudited) Refer to
Note 2(iii)
 

Cash flows from operating activities:

    

Profit for the period

   24,113  32,375  436

Adjustments to reconcile profit for the period to net cash generated from operating activities:

    

(Gain)/loss on sale of property, plant and equipment, net

   12  (101  (1

Depreciation, amortization and impairment expense

   6,154  8,390  113

Unrealized exchange gain, net and exchange gain on borrowings

   (2,493  (439  (6

Share-based compensation expense

   360  971  13

Share of net profit of associates accounted for using equity method

   (31  (7  ^ 

Income tax expense

   6,838  6,225  84

Finance and other income, net of finance expenses

   (4,279  (2,383  (32

Gain from sale of business and investment accounted for using the equity method

   (97  (2,150  (29

Changes in operating assets and liabilities, net of effects from acquisitions

    

Trade receivables

   11,651  (3,128  (42

Unbilled receivables and contract assets

   1,411  (4,125  (55

Inventories

   299  124  2

Other assets

   192  3,017  41

Trade payables, accrued expenses, other liabilities and provisions

   1,502  1,645  22

Contract liabilities

   (507  (1,744  (23
  

 

 

  

 

 

  

 

 

 

Cash generated from operating activities before taxes

   45,125  38,670  523

Income taxes paid, net

   (3,313  (5,140  (69
  

 

 

  

 

 

  

 

 

 

Net cash generated from operating activities

   41,812  33,530  454
  

 

 

  

 

 

  

 

 

 

Cash flows from investing activities:

    

Purchase of property, plant and equipment

   (4,257  (4,630  (62

Proceeds from sale of property, plant and equipment

   85  52  1

Purchase of investments

   (261,826  (250,673  (3,372

Proceeds from sale of investments

   241,018  262,334  3,529

Payment for business acquisitions including deposits and escrow, net of cash acquired

   —     (105,358  (1,417

Proceeds from sale of investment accounted for using the equity method

   —     1,629  22

Interest received

   5,573  4,138  56

Dividend received

   —     2  ^ 
  

 

 

  

 

 

  

 

 

 

Net cash used in investing activities

   (19,407  (92,506  (1,243
  

 

 

  

 

 

  

 

 

 

Cash flows from financing activities:

    

Proceeds from issuance of equity shares and shares pending allotment

   2  ^   ^ 

Repayment of loans and borrowings

   (24,638  (113,471  (1,527

Proceeds from loans and borrowings

   21,690  146,725  1,974

Repayment of lease liabilities

   (2,320  (2,349  (32

Interest and finance expenses paid

   (850  (1,372  (18

Payment of cash dividend to Non-controlling interests holders

   (960  (442  (6
  

 

 

  

 

 

  

 

 

 

Net cash (used in)/ generated from financing activities

   (7,076  29,091  391
  

 

 

  

 

 

  

 

 

 

Net increase/(decrease) in cash and cash equivalents during the period

   15,329  (29,885  (398

Effect of exchange rate changes on cash and cash equivalents

   (138  795  11

Cash and cash equivalents at the beginning of the period

   144,104  169,663  2,283
  

 

 

  

 

 

  

 

 

 

Cash and cash equivalents at the end of the period (Note 10)

   159,295  140,573  1,896
  

 

 

  

 

 

  

 

 

 

^ 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 Registration No: 117366W/W - 100018      Managing Director
Vikas Bagaria  Jatin Pravinchandra Dalal    M. Sanaulla Khan
Partner  Chief Financial Officer    Company Secretary
Membership No. 60408      
Bengaluru      
July 15, 2021      

 

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 Ltd. 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 15, 2021.

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, 2021. 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 statements of income and statements of financial position. These items are disaggregated separately in the notes to the financial statement, 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, 2021.

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.

(ii) Basis of measurement

The 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, 2021, have been translated into United States dollars at the certified foreign exchange rate of US$1 =  74.33 as published by Federal Reserve Board of Governors on June 30, 2021. 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, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from those estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revision to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. In particular, information about significant areas of estimation, uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the interim condensed consolidated financial statements are included in the following notes:

 

 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. The Company allocates the arrangement consideration 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

 

7


 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 and intangible assets with indefinite useful life recognized on business combination are tested for impairment at least annually and when events occur or changes in circumstances indicate that the recoverable amount of an asset or a cash generating unit to which an asset pertain 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.

 

 d)

Deferred taxes: 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.

 

 e)

Business combinations: In accounting for business combinations, judgment is required in identifying 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.

 

 f)

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.

 

 g)

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.

 

 h)

Measurement of fair value of non-marketable equity investments: These instruments are initially recorded at cost and subsequently measured at fair value. Fair value of investments is determined using the market and income approaches. The market approach includes the use of financial metrics and ratios of comparable companies, such as revenue, earnings, comparable performance multiples, recent financial rounds and the level of marketability of the investments. The selection of comparable companies requires management judgment and is based on a number of factors, including comparable company sizes, growth rates, and development stages. The income approach includes the use of discounted cash flow model, which requires significant estimates regarding the investees’ revenue, costs, and discount rates based on the risk profile of comparable companies. Estimates of revenue and costs are developed using available historical and forecast data.

 

 i)

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.

 

 j)

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


 k)

Leases: IFRS 16 defines a lease term as the non-cancellable period for which the lessee has the right to use an underlying asset including optional periods, when an entity is reasonably certain to exercise an option to extend (or not to terminate) a lease. The Company considers all relevant facts and circumstances that create an economic incentive for the lessee to exercise the option when determining the lease term. The option to extend lease is included in the lease term, if it is reasonably certain that the lessee will exercise the option. The Company reassesses the option upon occurrence of either a significant event or change in circumstances that are within the control of the lessee.

 

 l)

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.

 

 m)

Other estimates: The share-based compensation expense is determined based on the Company’s estimate of equity instruments that will eventually vest. Fair valuation of derivative hedging instruments designated as cash flow hedges involves significant estimates relating to the occurrence of forecasted transactions.

 

 n)

Uncertainty relating to the global health pandemic on COVID-19: In assessing the recoverability of receivables including unbilled receivables, contract assets and contract costs, goodwill, intangible assets, and certain investments, the Company has considered internal and external information up to the date of approval of these interim condensed consolidated financial statements including credit reports and economic forecasts. The Company has performed sensitivity analysis on the assumptions used herein. Based on the current indicators of future economic conditions, the Company expects to recover the carrying amount of these assets.

The Company bases its assessment on the belief that the probability of occurrence of forecasted transactions is not impacted by COVID-19. The Company has considered the effect of changes, if any, in both counterparty credit risk and its own credit risk while assessing hedge effectiveness and measuring hedge ineffectiveness and continues to believe that COVID-19 has no impact on effectiveness of its hedges.

The impact of COVID-19 remains uncertain and may be different from what we have estimated as of the date of approval of these interim condensed consolidated financial statements and the Company will continue to closely monitor any material changes to future economic conditions.

3. Significant accounting policies

Please refer to the Company’s Annual report for the year ended March 31, 2021, for a discussion of the Company’s other critical accounting policies except for the adoption of new accounting standards, amendments and interpretations effective on or after April 1, 2021.

New Accounting standards, amendments and interpretations adopted by the Company effective from April 1, 2021:

Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 – Interest Rate Benchmark Reform (Phase 2)

The IASB issued Interest Rate Benchmark Reform (Phase 2), which amends IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16. The amendments complement those issued in 2019 and focus on the effects on financial statements when a company replaces the old interest rate benchmark with an alternative benchmark rate as a result of the reform. The amendments in this final phase relate to the modification of financial assets, financial liabilities and lease liabilities, specific hedge accounting requirements, and disclosure requirements applying IFRS 7 to accompany the amendments regarding modifications and hedge accounting. The adoption of the amendment to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 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, 2021 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:

Amendment 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 is not expected to have any material impact on the consolidated financial statements.

 

9


Amendment to IAS 37 – Onerous Contracts – Cost of Fulfilling a Contract

On May 14, 2020, the IASB issued “Onerous Contracts — Cost of Fulfilling a Contract (Amendments to IAS 37)”, amending the standard regarding costs a company should include as the cost of fulfilling a contract when assessing whether a contract is onerous. The amendment specifies that the “cost of fulfilling” a contract comprises the “costs that relate directly to the contract”. Costs that relate directly to a contract can either be incremental costs of fulfilling that contract or an allocation of other costs that relate directly to fulfilling contracts. These amendments are effective for annual reporting periods beginning on or after January 1, 2022, with earlier application permitted. The Company is currently evaluating the impact of amendment to IAS 37 on the consolidated financial statements.

IFRS 9 – Annual Improvements to IFRS Standards—2018-2020

On May 14, 2020, IASB amended IFRS 9 as part of its Annual Improvements to IFRS Standards 2018-2020. The amendment clarifies which fees an entity includes when it applies the ‘10 percent’ test in paragraph B3.3.6 of IFRS 9 in assessing whether to derecognize a financial liability. This amendment is effective for annual reporting periods beginning on or after January 1, 2022, with earlier application permitted. The Company is currently evaluating the impact of amendment to IFRS 9 on the consolidated financial statements.

Amendment to IAS 1 – Presentation of Financial Statements

On February 12, 2021, the IASB amended IAS 1 “Presentation of Financial Statements”. The amendments require companies to disclose their material accounting policy information rather than their significant accounting policies. The amendments clarify that accounting policy information may be material because of its nature, even if the related amounts are immaterial. The amendments also clarified that accounting policy information is material if users of an entity’s financial statements would need it to understand other material information in the financial statements; and the amendments clarify that if an entity discloses immaterial accounting policy information, such information shall not obscure material accounting policy information. 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 Company is currently evaluating the impact of amendment to IAS 1 on the consolidated financial statements.

Amendment to IAS 8 – Accounting Policies, Changes in Accounting Estimates and Errors

On February 12, 2021, the IASB amended IAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors”. The amendments clarify how companies should distinguish changes in accounting policies from changes in accounting estimates. That distinction is important because changes in accounting estimates are applied prospectively only to future transactions and other future events, but changes in accounting policies are generally also applied retrospectively to past transactions and other past events. 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 Company is currently evaluating the impact of amendment to IAS 8 on the 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 Company is currently evaluating the impact of amendment to IAS 12 on the consolidated financial statements.

 

10


4. Property, plant and equipment

 

   Land  Buildings  Plant and
equipment *
  Furniture
fixtures and
equipment
  Vehicles  Total 

Gross carrying value:

       

As at April 1, 2020

   3,761  36,510  100,695  19,870  808  161,644

Additions

   —     479  3,761  549  —     4,789

Disposals

   —     —     (1,064  (23  (3  (1,090

Translation adjustment

   3  36  383  28  —     450
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

As at June 30, 2020

   3,764  37,025  103,775  20,424  805  165,793

Accumulated depreciation/ impairment:

 

     

As at April 1, 2020

   —     7,948  78,056  14,141  727  100,872

Depreciation and impairment **

   —     381  2,657  452  25  3,515

Disposals

   —     —     (990  (2  (3  (995

Translation adjustment

   —     13  273  17  —     303
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

As at June 30, 2020

   —     8,342  79,996  14,608  749  103,695

Capital work-in-progress

        19,745
       

 

 

 

Net carrying value including Capital work-in-progress as at June 30, 2020

 

  81,843
       

 

 

 

Gross carrying value:

       

As at April 1, 2020

   3,761  36,510  100,695  19,870  808  161,644

Additions

   107  3,569  14,362  1,958  9  20,005

Additions through Business combinations

   —     —     27  57  —     84

Disposals

   (58  (765  (4,532  (1,218  (398  (6,971

Translation adjustment

   5  100  303  25  (1  432
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

As at March 31, 2021

   3,815  39,414  110,855  20,692  418  175,194

Accumulated depreciation/ impairment:

 

     

As at April 1, 2020

   —     7,948  78,056  14,141  727  100,872

Depreciation and impairment **

   —     1,500  11,123  1,845  61  14,529

Disposals

   —     (695  (4,313  (908  (391  (6,307

Translation adjustment

   —     32  174  11  —     217
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

As at March 31, 2021

   —     8,785  85,040  15,089  397  109,311

Capital work-in-progress

        19,309
       

 

 

 

Net carrying value including Capital work-in-progress as at March 31, 2021

 

  85,192
       

 

 

 

Gross carrying value:

       

As at April 1, 2021

   3,815  39,414  110,855  20,692  418  175,194

Additions

   —     129  3,420  350  1  3,900

Additions through Business combinations

   —     —     289  334  2  625

Disposals

   —     (181  (134  (304  (47  (666

Translation adjustment

   5  83  689  74  2  853
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

As at June 30, 2021

   3,820  39,445  115,119  21,146  376  179,906

Accumulated depreciation/ impairment:

 

     

As at April 1, 2021

   —     8,785  85,040  15,089  397  109,311

Depreciation and impairment

   —     466  2,969  511  3  3,949

Disposals

   —     (181  (118  (287  (47  (633

Translation adjustment

   —     37  502  56  2  597
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

As at June 30, 2021

   —     9,107  88,393  15,369  355  113,224

Capital work-in-progress

        20,038
       

 

 

 

Net carrying value including Capital work-in-progress as at June 30, 2021

 

  86,720
       

 

 

 

 

*

Includes computer equipment and software.

**

Includes impairment charge on certain software platforms amounting to  194 and  285 for the three months ended June 30, 2020 and year ended March 31, 2021, respectively.

5. Right-of-Use assets

 

   Category of Right-of-Use asset 
   Land   Buildings  Plant and
equipment *
   Vehicles  Total 

Gross carrying value:

        

As at April 1, 2020

   2,003   15,624  4,236   826  22,689

Additions

   —      742  66   4  812

Disposals

   —      (12  —      (18  (30

Translation adjustment

   —      101  28   7  136
  

 

 

   

 

 

  

 

 

   

 

 

  

 

 

 

As at June 30, 2020

   2,003   16,455  4,330   819  23,607

 

11


Accumulated depreciation:

       

As at April 1, 2020

   27   3,928  1,721  265  5,941

Depreciation

   7   1,119  427  64  1,617

Disposals

   —      (5  —     (6  (11

Translation adjustment

   —      29  10  3  42
  

 

 

   

 

 

 ��

 

 

  

 

 

  

 

 

 

As at June 30, 2020

   34   5,071  2,158  326  7,589
       

 

 

 

Net carrying value as at June 30, 2020

        16,018
       

 

 

 

Gross carrying value:

       

As at April 1, 2020

   2,003   15,624  4,236  826  22,689

Additions

   79   5,323  770  162  6,334

Additions through Business combinations

   —      352  —     84  436

Disposals

   —      (2,503  (1,103  (154  (3,760

Translation adjustment

   —      48  15  8  71
  

 

 

   

 

 

  

 

 

  

 

 

  

 

 

 

As at March 31, 2021

   2,082   18,844  3,918  926  25,770

Accumulated depreciation:

       

As at April 1, 2020

   27   3,928  1,721  265  5,941

Depreciation

   28   4,487  1,465  285  6,265

Disposals

   —      (1,703  (1,023  (119  (2,845

Translation adjustment

   —      (9  (6  4  (11
  

 

 

   

 

 

  

 

 

  

 

 

  

 

 

 

As at March 31, 2021

   55   6,703  2,157  435  9,350
       

 

 

 

Net carrying value as at March 31, 2021

        16,420
       

 

 

 

Gross carrying value:

       

As at April 1, 2021

   2,082   18,844  3,918  926  25,770

Additions

   —      2,063  383  35  2,481

Disposals

   —      (828  (539  (30  (1,397

Additions through Business combinations

   —      2,986  —     36  3,022

Translation adjustment

   —      220  78  13  311
  

 

 

   

 

 

  

 

 

  

 

 

  

 

 

 

As at June 30, 2021

   2,082   23,285  3,840  980  30,187

Accumulated depreciation:

       

As at April 1, 2021

   55   6,703  2,157  435  9,350

Depreciation

   7   1,321  248  73  1,649

Disposals

   —      (548  (189  (22  (759

Translation adjustment

   —      92  46  5  143
  

 

 

   

 

 

  

 

 

  

 

 

  

 

 

 

As at June 30, 2021

   62   7,568  2,262  491  10,383
       

 

 

 

Net carrying value as at June 30, 2021

        19,804
       

 

 

 

 

*

Includes computer equipment.

6. Goodwill and intangible assets

The movement in goodwill balance is given below:

 

   For the period ended 
   March 31, 2021   June 30, 2021 

Balance at the beginning of the period

   131,012   139,127

Acquisition through business combinations* (Refer to Note 7)

   9,472   82,310

Translation adjustment

   (1,357   2,048
  

 

 

   

 

 

 

Balance at the end of the period

   139,127   223,485
  

 

 

   

 

 

 

 

*

Acquisition through business combinations for the year ended March 31, 2021 and three months ended June 30, 2021 is net of  (72) and  57 towards changes in the purchase price allocation of acquisitions made during the year ended March 31, 2020 and 2021, respectively.

The movement in intangible assets is given below:

 

   Intangible assets 
   Customer-
related
   Marketing-
related
   Total 

Gross carrying value:

      

As at April 1, 2020

   32,490   6,698   39,188

Translation adjustment

   158   (1   157
  

 

 

   

 

 

   

 

 

 

As at June 30, 2020

   32,648   6,697   39,345

Accumulated amortization/ impairment:

      

As at April 1, 2020

   17,898   4,928   22,826

Amortization

   748   274   1,022

Translation adjustment

   (2   (2   (4
  

 

 

   

 

 

   

 

 

 

As at June 30, 2020

   18,644   5,200   23,844
  

 

 

   

 

 

   

 

 

 

Net carrying value as at June 30, 2020

   14,004   1,497   15,501
  

 

 

   

 

 

   

 

 

 

 

12


Gross carrying value:

      

As at April 1, 2020

   32,490   6,698   39,188

Acquisition through business combinations (Refer to Note 7)

   2,460   828   3,288

Deductions/Adjustments

   (8,568   (5,756   (14,324

Translation adjustment

   (56   (159   (215
  

 

 

   

 

 

   

 

 

 

As at March 31, 2021

   26,326   1,611   27,937

Accumulated amortization/ impairment:

      

As at April 1, 2020

   17,898   4,928   22,826

Amortization and impairment *

   5,060   1,548   6,608

Deductions/Adjustments

   (8,568   (5,756   (14,324

Translation adjustment

   (142   (116   (258
  

 

 

   

 

 

   

 

 

 

As at March 31, 2021

   14,248   604   14,852
  

 

 

   

 

 

   

 

 

 

Net carrying value as at March 31, 2021

   12,078   1,007   13,085
  

 

 

   

 

 

   

 

 

 

Gross carrying value:

      

As at April 1, 2021

   26,326   1,611   27,937

Acquisition through business combinations (Refer to Note 7)

   24,392   8,083   32,475

Deductions/Adjustments

   (556   (215   (771

Translation adjustment

   620   28   648
  

 

 

   

 

 

   

 

 

 

As at June 30, 2021

   50,782   9,507   60,289

Accumulated amortization/ impairment:

      

As at April 1, 2021

   14,248   604   14,852

Amortization and impairment

   2,546   246   2,792

Deductions/Adjustments

   (556   (215   (771

Translation adjustment

   374   13   387
  

 

 

   

 

 

   

 

 

 

As at June 30, 2021

   16,612   648   17,260
  

 

 

   

 

 

   

 

 

 

Net carrying value as at June 30, 2021

   34,170   8,859   43,029
  

 

 

   

 

 

   

 

 

 

 

*

During the year ended March 31, 2021, change in business strategy of a customer led to a significant decline in the revenue and earnings estimates, resulting in revision of recoverable value of customer-relationship intangible assets recognized on business combination. Further, the Company integrated certain brands acquired as part of a business combination, resulting in discontinuance of the acquired brands. Consequently, the Company has recognized impairment charge  1,879 for the year ended March 31, 2021 respectively, as part of amortization and impairment.

*

Due to change in our estimate of useful life of customer-related intangibles in an earlier business combination, the Company has recognized additional amortization charge of  795 for the year ended March 31, 2021, 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.

 

7.

Business combinations

Summary of acquisitions during the three months ended June 30, 2021 is given below:

On March 4, 2021, the Company entered into a definitive agreement to acquire 100% equity interest in Capco, a global management and technology consultancy company providing digital, consulting and technology services to financial institutions in the Americas, Europe and Asia Pacific, and its subsidiaries. The acquisition was consummated on April 29, 2021 and total cash consideration paid was  109,636. The following table presents the provisional purchase price allocation:

 

Description  Acquiree’s
carrying amount
   Fair value
adjustments
   Purchase price
allocated
 

Net assets

   4,326   —     4,326

Customer-related intangibles

   —     24,392   24,392

Marketing-related intangibles

   —     8,083   8,083

Deferred tax liabilities on intangible assets

   —     (9,418   (9,418
  

 

 

   

 

 

   

 

 

 

Total

   4,326   23,057   27,383
  

 

 

   

 

 

   

 

 

 

Goodwill

       82,253
      

 

 

 

Total purchase price

       109,636
      

 

 

 

The goodwill of  82,253 comprises value of acquired workforce and expected synergies arising from the business combinations. This acquisition will make the Company one of the largest end-to-end global consulting, technology and transformation service providers to the banking and financial services industry. By combining our capabilities in strategic design, digital transformation, cloud, cybersecurity, IT and operations services with Capco’s domain and consulting strength, clients will gain access to a partner who can deliver integrated, bespoke solutions to help fuel growth and achieve their transformation objectives.

 

13


Net assets acquired include  4,278 of cash and cash equivalents and trade receivables valued at  6,167.

Goodwill is allocated to IT Services segment and is not deductible for income tax purposes.

The transaction costs of  358 related to the above acquisition has been included in general and administrative expenses in the interim condensed consolidated statement of income.

The acquired business contributed revenues of  11,558 and profit after taxes of  539 for the Company during the three months ended June 30, 2021.

If the acquisition had been consummated on April 1, 2021, management estimates that consolidated revenue for the Company would have been  187,653 and the profit after taxes would have been  32,523 for the three months ended June 30, 2021. The pro-forma amounts are not necessarily indicative of the results that would have occurred if the acquisition had occurred on date indicated or that may result in the future.

8. Investments

 

   As at 
   March 31, 2021   June 30, 2021 

Non-current

    

Financial instruments at FVTPL

    

Equity instruments

   —     377

Fixed maturity plan mutual funds

   —     251

Financial instruments at FVTOCI

    

Equity instruments

   10,572   9,790

Financial instruments at amortized cost

    

Inter corporate and term deposits *

   4   606
  

 

 

   

 

 

 
   10,576   11,024

Current

    

Financial instruments at FVTPL

    

Short-term mutual funds

   23,502   30,186

Financial instruments at FVTOCI

    

Non-convertible debentures, government securities, commercial papers and bonds

   131,382   119,956

Financial instruments at amortized cost

    

Inter corporate and term deposits *

   20,823   16,892
  

 

 

   

 

 

 
   175,707   167,034
  

 

 

   

 

 

 
   186,283   178,058
  

 

 

   

 

 

 

 

*

These deposits earn a fixed rate of interest. Term deposits include non-current and current deposits in lien with banks primarily on account of term deposits held as margin money deposits against guarantees amounting to  2, and  619, respectively (March 31, 2021: Term deposits non-current of  4 and Term deposits current of  615).

9. Inventories

 

   As at 
   March 31, 2021   June 30, 2021 

Stores and spare parts

   127   76

Finished and traded goods

   937   869
  

 

 

   

 

 

 
   1,064   945
  

 

 

   

 

 

 

 

10.

Cash and cash equivalents

 

   As at 
   March 31, 2021   June 30, 2021 

Cash and bank balances

   68,842   54,687

Demand deposits with banks *

   100,951   85,930
  

 

 

   

 

 

 
   169,793   140,617
  

 

 

   

 

 

 

 

*

These deposits can be withdrawn by the Company at any time without prior notice and without any penalty on the principal.

Cash and cash equivalents consist of the following for the purpose of the statement of cash flows:

 

   As at 
   June 30, 2020   June 30, 2021 

Cash and cash equivalents (as above)

   159,443   140,617

Bank overdrafts

   (148   (44
  

 

 

   

 

 

 
   159,295   140,573
  

 

 

   

 

 

 

 

14


11. Other financial assets

 

   As at 
   March 31, 2021   June 30, 2021 

Non-current

    

Security deposits

   1,477   1,468

Interest receivables

   1,139   1,139

Finance lease receivables

   3,144   5,292

Others

   328   349
  

 

 

   

 

 

 
   6,088   8,248

Current

    

Security deposits

   1,149   1,255

Dues from officers and employees

   411   638

Interest receivables

   1,628   1,827

Finance lease receivables

   3,438   4,241

Others

   619   709
  

 

 

   

 

 

 
   7,245   8,670
  

 

 

   

 

 

 
   13,333   16,918
  

 

 

   

 

 

 

12. Other assets

 

   As at 
   March 31, 2021   June 30, 2021 

Non-current

    

Prepaid expenses

   3,417   3,940

Costs to obtain contract*

   3,413   3,540

Costs to fulfil contract**

   337   330

Others (Refer to Note 31)

   8,768   3,985
  

 

 

   

 

 

 
   15,935   11,795

Current

    

Prepaid expenses

   12,121   15,291

Dues from officers and employees

   105   70

Advance to suppliers

   3,199   2,599

Balance with GST and other authorities

   7,903   7,056

Costs to obtain contract*

   759   830

Costs to fulfil contract**

   53   53

Others

   783   67
  

 

 

   

 

 

 
   24,923   25,966
  

 

 

   

 

 

 
   40,858   37,761
  

 

 

   

 

 

 

 

*

Costs to obtain contract amortization of  365 and  228 during the three months ended June 30, 2020 and 2021 respectively.

**

Costs to fulfil contract amortization of  Nil and  13 during the three months ended June 30, 2020 and 2021 respectively.

13. Loans, borrowings and bank overdrafts

 

   As at 
   March 31, 2021   June 30, 2021 

Borrowings from banks

   82,895   59,928

Unsecured Notes 2026

   —     55,245

Loans from institutions other than banks

   307   280

Bank overdrafts

   130   44
  

 

 

   

 

 

 
   83,332   115,497
  

 

 

   

 

 

 

Non-current

   7,458   55,392

Current

   75,874   60,105

On June 23, 2021, Wipro IT Services LLC, a wholly owned step down subsidiary of Wipro Limited, issued  55,744 (US$ 750 million) in unsecured notes 2026 (the “Notes”). The Notes bear interest at a rate of 1.50% per annum and will mature on June 23, 2026. The notes were issued at the discounted price of 99.636% against par value and have an effective interest rate of 1.6939% after considering the issue expenses and discount of  500 (US$6.7 million). Interest on the Notes is payable semi-annually on June 23 and December 23 of each year, commencing from December 23, 2021. The Notes are listed on Singapore Exchange Securities Trading Limited (SGX-ST).

 

15


14. Other financial liabilities

 

   As at 
   March 31, 2021   June 30, 2021 

Non-current

    

Contingent consideration

   2,158   1,839

Advance from customers

   123   106

Cash Settled ADS RSUs

   7   10

Deposits and others

   3   1,394
  

 

 

   

 

 

 
   2,291   3,349

Current

    

Contingent consideration

   135   1,517

Advance from customers

   496   1,068

Cash Settled ADS RSUs

   24   18

Deposits and others

   815   1,488
  

 

 

   

 

 

 
   1,470   4,091
  

 

 

   

 

 

 
   3,761   7,440
  

 

 

   

 

 

 

15. Other liabilities

 

   As at 
   March 31, 2021   June 30, 2021 

Non-current

    

Employee benefits obligations

   3,055   5,644

Others

   4,780   4,438
  

 

 

   

 

 

 
   7,835   10,082

Current

    

Statutory and other liabilities

   9,266   9,661

Employee benefits obligations

   14,401   17,124

Advance from customers

   362   144

Others

   523   521
  

 

 

   

 

 

 
   24,552   27,450
  

 

 

   

 

 

 
   32,387   37,532
  

 

 

   

 

 

 

16. Provisions

 

   As at 
   March 31, 2021   June 30, 2021 

Non-current

    

Provision for warranty

   2   1
  

 

 

   

 

 

 
   2   1

Current

    

Provision for warranty

   213   216

Others

   463   463
  

 

 

   

 

 

 
   676   679
  

 

 

   

 

 

 
   678   680
  

 

 

   

 

 

 

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 utilized over a period of 1 to 2 years. Other provisions primarily include provisions for compliance related contingencies. The timing of cash outflows in respect of such provision cannot be reasonably determined.

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 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 counter parties in these derivative instruments are primarily banks and the Company considers the risks of non-performance by the counterparty as non-material.

 

16


The following table presents the aggregate contracted principal amounts of the Company’s derivative contracts outstanding:

 

               (in millions) 
   As at 
   March 31, 2021   June 30, 2021 
   Notional   Fair value   Notional   Fair value 
Designated derivative instruments        

Sell: Forward contracts

  USD1,577  2,293  USD1,612   1,060
  109  114  109  119
  £96  (254  £107  (153
  AUD103  (246  AUD103  26

Range forward option contracts

  USD138  385  USD174  104
  20  24  20  10
  £55  (116  £56  (77
  AUD34  (18  AUD39  (2

Non-designated derivative instruments

        

Sell: Forward contracts *

  USD1,638  480  USD1,696  (95
  99  202  107  163
  £104  98  £105  58
  AUD29  11  AUD35  38
  SGD9  5  SGD9  4
  ZAR22  (1  ZAR22  1
  CAD30  3  CAD31  12
  SAR137  (1  SAR57  ^ 
  PLN8  2  PLN8  1
  CHF10  13  CHF8  10
  QAR15  (6  QAR11  (7
  TRY47  42  TRY30  5
  NOK4  ^   NOK—     —   
  OMR2  (1  OMR2  ^ 
  SEK42  10  SEK19  ^ 
  JPY370  6  JPY—     —   
  DKK—     —     DKK11  2

Buy: Forward contracts

  SEK37  (15  SEK38  (6
  DKK45  (12  DKK38  (5
  CHF2  (6  CHF2  (5
  RMB30  (2  RMB—     —   
  AED9  ^   AED19  ^ 
  JPY—     —     JPY1,115  (7
  CNH—     —     CNH71  3
  NOK—     —     NOK6  (2
    

 

 

     

 

 

 
    3,010    1,257
    

 

 

     

 

 

 

 

^

Value is less than 1.

*

USD 1,638 and USD 1,696 includes USD/PHP sell forward of USD 244 and USD 251 as at March 31, 2021 and June 30, 2021, 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.

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, 
   2020   2021 

Balance as at the beginning of the period

  (2,876  2,182 

Deferred cancellation gain/(loss), net

   112   —   

Changes in fair value of effective portion of derivatives

   146   (196

Net (gain)/loss reclassified to statement of income on occurrence of hedged transactions *

   743   (892
  

 

 

   

 

 

 

Gain/(loss) on cash flow hedging derivatives, net

  1,001   (1,088
  

 

 

   

 

 

 

Balance as at the end of the period

  (1,875  1,094 

Deferred tax thereon

   368   (280
  

 

 

   

 

 

 

Balance as at the end of the period, net of deferred tax

  (1,507   814 
  

 

 

   

 

 

 

 

*

Includes net (gain)/loss reclassified to revenue of  (955) and  1,200 for the three months ended June 30, 2020 and 2021, respectively and net (gain)/loss reclassified to cost of revenues of  212 and  (308) for the three months ended June 30, 2020 and 2021, respectively.

During the three months ended June 30, 2021,  7 relating to loss on ineffective portion of derivatives has been reclassified from other comprehensive income to interim condensed consolidated statement of income.

Apart from above, as at June 30, 2020 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.

 

17


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, 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. 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, 2021 and June 30, 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 deposits 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 and income approaches.

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).

The following table presents fair value hierarchy of assets and liabilities measured at fair value on a recurring basis:

 

Particular  As at March 31, 2021  As at June 30, 2021 
  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

   2,998  —     2,998  —    1,675  —     1,675  —  

Others

   1,082  —     1,082  —    800  —     800  —  

Investments:

           

Short-term mutual funds

   23,502  23,502   —    —    30,186  30,186   —    —  

Equity instruments

   10,572  26   319  10,227  10,167  41   432  9,694

Non-convertible debentures, government securities, commercial papers and bonds

   131,382  2,217   129,165  —    119,956  2,152   117,804  —  

Fixed maturity plan mutual funds

   —    —     —    —    251  —     251  —  

Liabilities

           

Derivative instruments:

           

Cash flow hedges

  (816  —    (816  —   (581  —    (581  —  

Others

   (254  —     (254  —    (637  —     (637  —  

Contingent consideration

   (2,293  —     —    (2,293  (3,356  —     —    (3,356

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, 2021, 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 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.

The following methods and assumptions were used to estimate the fair value of the level 3 financial instruments included in the above table.

 

18


Investment in equity instruments: Fair value of these instruments is determined using market and income approaches

Details of assets and liabilities considered under Level 3 classification

 

   As at 
     March 31, 2021     June 30, 2021 

Investment in equity instruments

    

Balance at the beginning of the period

   9,178   10,227

Additions

   1,575   2,069

Disposals

   (1,256   (5,662

Transfers out of Level 3

   (27   —  

Gain recognized in other comprehensive income

   1,009   2,893

Translation adjustment

   (252   167
  

 

 

   

 

 

 

Balance at the end of the period

   10,227   9,694
  

 

 

   

 

 

 

 

   As at 
   March 31, 2021   June 30, 2021 

Contingent consideration

    

Balance at the beginning of the period

   —    (2,293

Additions

   (2,293   —  

Additions through business combinations

   —     (940

Finance expense recognized in statement of income

   (25   (45

Translation adjustment

   25   (78
  

 

 

   

 

 

 

Balance at the end of the period

  (2,293  (3,356
  

 

 

   

 

 

 

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, 
           2020                   2021         

Balance at the beginning of the period

   23,539   22,936

Translation difference related to foreign operations, net

   1,155   2,615

Reclassification of foreign currency translation differences on sale of investment in associates and liquidation of subsidiaries to statement of income

   —     (32
  

 

 

   

 

 

 

Balance at the end of the period

   24,694   25,519
  

 

 

   

 

 

 

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, 2020

   (1,120   2,386   162   647

Other comprehensive income

   (291   2,921   460   —  

As at June 30, 2020

   (1,411   5,307   622   647

As at April 1, 2021

   (897   4,237   1,378   1,122

Other comprehensive income

   (935   (41   2,588   —  

As at June 30, 2021

   (1,832   4,196   3,966   1,122

19. Income taxes

 

   Three months ended June 30, 
           2020                   2021         

Income tax expense as per the interim condensed consolidated statement of income

   6,838   6,225

Income tax included in other comprehensive income on:

    

Gains on investment securities

   646   387

Gains/(losses) on cash flow hedging derivatives

   193   (172

Remeasurements of the defined benefit plans

   (73   (322
  

 

 

   

 

 

 
   7,604   6,118
  

 

 

   

 

 

 

 

19


Income tax expense consists of the following:

 

   Three months ended June 30, 
           2020                   2021         

Current taxes

    

Domestic

   4,069   12,148

Foreign

   1,345   (5,407
  

 

 

   

 

 

 
   5,414   6,741

Deferred taxes

    

Domestic

   1,983   236

Foreign

   (559   (752
  

 

 

   

 

 

 
   1,424   (516
  

 

 

   

 

 

 
   6,838   6,225
  

 

 

   

 

 

 

Income tax expenses are net of (provision recorded)/reversal of taxes pertaining to earlier periods, amounting to  1,112 and  2,767 for the three months ended June 30, 2020 and 2021 respectively. The reversal of  2,767 includes a reversal on account of closure of tax assessments of the Company for earlier years.

20. Revenues

The tables below present disaggregated revenue from contracts with customers by business segment, sector and contract-type. The Company believes that the below disaggregation best depicts the nature, amount, timing and uncertainty of revenue and cash flows from economic factors.

 

20


Information on disaggregation of revenues for the three months ended June 30, 2020 is as follows:

 

   IT Services   IT Products   ISRE   Total 
  Americas 1   Americas 2   Europe   APMEA   Total 

A. Revenue

                

Rendering of services

   42,324   43,823   38,573   20,003   144,723   —     2,111   146,834

Sale of products

   —     —     —     —     —     2,297   —     2,297
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
   42,324   43,823   38,573   20,003   144,723   2,297   2,111   149,131
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

B. Revenue by sector

                

Banking, Financial Services and Insurance

   357   25,591   13,127   5,360   44,435      

Health

   15,523   9   2,811   1,270   19,613      

Consumer

   15,868   572   3,914   2,652   23,006      

Communications

   1,291   275   1,874   3,916   7,356      

Energy, Natural Resources and Utilities

   88   6,394   7,568   5,052   19,102      

Manufacturing

   60   5,786   5,130   738   11,714      

Technology

   9,137   5,196   4,149   1,015   19,497      
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
   42,324   43,823   38,573   20,003   144,723   2,297   2,111   149,131
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

C. Revenue by nature of contract

                

Fixed price and volume based

   24,256   27,376   25,397   13,347   90,376   —     1,602   91,978

Time and materials

   18,068   16,447   13,176   6,656   54,347   —     509   54,856

Products

   —     —     —     —     —     2,297   —     2,297
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
   42,324   43,823   38,573   20,003   144,723   2,297   2,111   149,131
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Information on disaggregation of revenues for the three months ended June 30, 2021 is as follows:

 

   IT Services   IT Products   ISRE   Total 
  Americas 1   Americas 2   Europe   APMEA   Total 

A. Revenue

                

Rendering of services

   49,411   54,744   54,064   21,057   179,276   —     1,937   181,213

Sale of products

   —     —     —     —     —     1,311   —     1,311
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
   49,411   54,744   54,064   21,057   179,276   1,311   1,937   182,524
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

B. Revenue by sector

                

Banking, Financial Services and Insurance

   598   31,943   20,765   6,567   59,873      

Health

   17,278   20   3,237   735   21,270      

Consumer

   20,143   575   7,619   2,725   31,062      

Communications

   2,015   302   2,875   3,893   9,085      

Energy, Natural Resources and Utilities

   169   9,409   9,237   4,733   23,548      

Manufacturing

   48   5,939   5,792   745   12,524      

Technology

   9,160   6,556   4,539   1,659   21,914      
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
   49,411   54,744   54,064   21,057   179,276   1,311   1,937   182,524
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

C. Revenue by nature of contract

                

Fixed price and volume based

   27,006   31,709   33,524   13,683   105,922   —     1,665   107,587

Time and materials

   22,405   23,035   20,540   7,374   73,354   —     272   73,626

Products

   —     —     —     —     —     1,311   —     1,311
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
   49,411   54,744   54,064   21,057   179,276   1,311   1,937   182,524
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

21


21. Expenses by nature

 

   Three months ended June 30, 
              2020                         2021            

Employee compensation

   80,262   102,711

Sub-contracting/ technical fees

   21,218   24,619

Cost of hardware and software

   2,009   1,568

Travel

   1,290   1,435

Facility expenses

   4,627   5,650

Depreciation, amortization and impairment*

   6,154   8,390

Communication

   1,354   1,516

Legal and professional fees

   1,311   2,207

Rates, taxes and insurance

   1,030   1,001

Marketing and brand building

   129   425

Lifetime expected credit loss

   1,589   (253

Miscellaneous expenses**

   2,522   1,845
  

 

 

   

 

 

 

Total cost of revenues, selling and marketing expenses and general and administrative expenses

   123,495   151,114
  

 

 

   

 

 

 

 

*

Depreciation, amortization and impairment includes impairment charge on certain software platforms amounting to  194 for the three months ended June 30, 2020.

**

Miscellaneous expenses for the three months ended June 30, 2020, includes an amount of  991 towards COVID-19 contributions.

22. Finance expenses

 

   Three months ended June 30, 
             2020                       2021           

Interest expense

   1,002   746

Exchange fluctuation loss on foreign currency borrowings

   297   —  
  

 

 

   

 

 

 
   1,299   746
  

 

 

   

 

 

 

23. Finance and other income and Foreign exchange gains/(losses), net

 

   Three months ended June 30, 
             2020                       2021           

Interest income

   4,853   2,609

Dividend income

   —     2

Exchange fluctuation gain on foreign currency borrowings

   —     1,490

Net gain from investments classified as FVTPL

   233   313

Net gain from investments classified as FVTOCI

   195   205
  

 

 

   

 

 

 

Finance and other income

   5,281   4,619
  

 

 

   

 

 

 

Foreign exchange gains/(losses), net, on financial instruments measured at FVTPL

   773  (716

Other foreign exchange gains/(losses), net

   432   1,876
  

 

 

   

 

 

 

Foreign exchange gains/(losses), net

   1,205   1,160
  

 

 

   

 

 

 

24. Earnings per 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, 
   2020   2021 

Profit attributable to equity holders of the Company

   23,902   32,321

Weighted average number of equity shares outstanding

   5,693,348,171   5,462,996,981
  

 

 

   

 

 

 

Basic earnings per share

   4.20   5.92
  

 

 

   

 

 

 

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


   Three months ended June 30, 
   2020   2021 

Profit attributable to equity holders of the Company

   23,902   32,321

Weighted average number of equity shares outstanding

   5,693,348,171   5,462,996,981

Effect of dilutive equivalent share options

   9,820,077   13,995,681
  

 

 

   

 

 

 

Weighted average number of equity shares for diluted earnings per share

   5,703,168,248   5,476,992,662
  

 

 

   

 

 

 

Diluted earnings per share

   4.19   5.90
  

 

 

   

 

 

 

25. Employee compensation

 

   Three months ended June 30, 
               2020                           2021             

Salaries and bonus

   77,202   98,199

Employee benefits plans

    

Gratuity and other defined benefit plans

   500   647

Defined contribution plans

   2,200   2,888

Share-based compensation*

   360   977
  

 

 

   

 

 

 
   80,262   102,711
  

 

 

   

 

 

 

 

*

Includes 22 and 6 for the three months ended June 30, 2020, and 2021, 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, 
               2020                           2021             

Cost of revenues

   68,345   87,692

Selling and marketing expenses

   7,909   9,122

General and administrative expenses

   4,008   5,897
  

 

 

   

 

 

 
   80,262   102,711
  

 

 

   

 

 

 

The Company has granted 38,454 options under RSU option plan during the three months ended June 30, 2021 (50,000 for the three months ended June 30, 2020); 516,842 options under ADS option plan during the three months ended June 30, 2021 (16,000 for the three months ended June 30, 2020).

The Company has also granted Nil Performance based stock options (RSU) during the three months ended June 30, 2021 (60,000 for the three months ended June 30, 2020); Nil Performance based stock options (ADS) during the three months ended June 30, 2021 (24,000 for the three months ended June 30, 2020).

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).

26. Other operating income/(loss), net

The Company has partially met the first and second-year business targets pertaining to sale of hosted data center business concluded during the year ended March 31, 2019. Change in fair value of the callable units pertaining to achievement of cumulative business targets amounting to  97 for the three months ended June 30, 2020 has been recognized under other operating income/(loss), net.

During the three months ended June 30, 2021, as a result of acquisition by another investor, the Company sold its investment in Ensono Holdings, LLC for a consideration of  5,569 and recognized a cumulative gain of  1,240 (net of tax  425) in other comprehensive income being profit on sale of investment designated as FVTOCI. The Company also recognized  1,220 for the three months ended June 30, 2021 under other operating income/(loss), net towards change in fair value of callable units pertaining to achievement of cumulative business targets.

During the three months ended June 30, 2021, as a result of acquisition of by another investor, the Company sold its investment in Denim Group, Ltd. and Denim Group Management, LLC (“Denim Group”), accounted for using the equity method, for a consideration of  1,629 and recognized a cumulative gain of  930 in other operating income/(loss), net including reclassification of exchange differences on foreign currency translation.

27. Commitments and contingencies

Capital commitments: As at March 31, 2021 and June 30, 2021 the Company had committed to spend  7,490 and  8,806 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, 2021 and June 30, 2021, guarantees provided by banks on behalf of the Company to the Indian Government, customers and certain other agencies aggregate to  17,128 and  17,515 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.

 

23


The Company’s assessments are completed for the years up to Mar 31, 2016. 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, 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  80,032 and  80,961 are not acknowledged as debt as at March 31, 2021 and June 30, 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  11,413 and  11,626 as of March 31, 2021 and June 30, 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.

28. Segment information

The Company is organized into the following operating segments: IT Services, IT Products and India State Run Enterprise segment (“ISRE”).

IT Services: During the year ended March 31, 2021, in order to broad base our growth, the Company re-organized IT Services segment to four Strategic Market Units (“SMUs”)—Americas 1, Americas 2, Europe and Asia Pacific Middle East Africa (“APMEA”).

Americas 1 and Americas 2 are primarily organized by industry sector, while Europe and APMEA are organized by countries.

Americas 1 includes the entire business of Latin America (“LATAM”) and the following industry sectors in the United States of America: healthcare and medical devices, consumer goods and life sciences, retail, transportation and services, communications, media and information services, technology products and platforms. Americas 2 includes the entire business in Canada and the following industry sectors in the United States of America: banking, financial services and insurance, manufacturing, hi-tech, energy and utilities. Europe consists of the United Kingdom and Ireland, Switzerland, Germany, Benelux, the Nordics and Southern Europe. APMEA consists of Australia and New Zealand, India, Middle East, South East Asia, Japan and Africa.

The corresponding information for the three months ended June 30, 2020 has been re-stated to give effect to the above changes.

Revenue from each customer is attributed to the respective SMUs based on the location of the customer’s primary buying center of such services. With respect to certain strategic global customers, revenue may be generated from multiple countries based on such customer’s buying centers, but the total revenue related to these strategic global customers are attributed to a single SMU based on the geographical location of key decision makers.

Prior to the Company’s re-organization of its IT services segment, the IT services segment was organized by seven industry verticals: Banking, Financial Services and Insurance (“BFSI”), Health Business unit (“Health BU”), Consumer Business unit (“CBU”), Energy, Natural Resources & Utilities (“ENU”), Manufacturing (“MFG”), Technology (“TECH”) and Communications (“COMM”).

Our IT Services segment provides a range of IT and IT enabled services which include digital strategy advisory, customer centric design, technology consulting, IT consulting, custom application design, development, re-engineering and maintenance, systems integration, package implementation, cloud and infrastructure services, business process services, cloud, mobility and analytics services, research and development and hardware and software design.

IT Products: The Company is a value-added reseller of security, packaged and SaaS software for leading international brands. In certain total outsourcing contracts of the IT Services segment, the Company delivers hardware, software products and other related deliverables. Revenue relating to these items is reported as revenue from the sale of IT Products.

ISRE: This segment consists of IT Services offerings to entities and/or departments owned or controlled by Government of India and/or any State Governments.

The Chairman of the Company has been identified as the Chief Operating Decision Maker (“CODM”) as defined by IFRS 8, “Operating Segments”. The Chairman of the Company evaluates the segments based on their revenue growth and operating income.

Assets and liabilities used in the Company’s business are not identified to any of the operating segments, as these are used interchangeably between segments. Management believes that it is currently not practicable to provide segment disclosures relating to total assets and liabilities since a meaningful segregation of the available data is onerous.

 

24


Information on reportable segments for the three months ended June 30, 2020, is as follows:

 

   IT Services   IT Products   ISRE  Reconciling
Items
  Total 
  Americas 1   Americas 2   Europe   APMEA   Total 

Revenue

   42,612   44,194   38,944   20,158   145,908   2,306   2,111  11  150,336

Other operating income/(loss), net

   —     —     —     —     97   —     —    —    97

Segment Result

   6,504   10,422   7,547   2,546   27,019   123   (106  (943  26,093

Unallocated

           748   —     —    —    748
          

 

 

   

 

 

   

 

 

  

 

 

  

 

 

 

Segment Result Total

           27,864   123   (106  (943  26,938

Finance expenses

                 (1,299

Finance and other income

                 5,281

Share of net profit of associates accounted for using the equity method

                 31
                

 

 

 

Profit before tax

                 30,951

Income tax expense

                 (6,838
                

 

 

 

Profit for the period

                 24,113
                

 

 

 

Depreciation, amortization and impairment

                 6,154

Information on reportable segments for the three months ended June 30, 2021, is as follows:

 

   IT Services   IT Products  ISRE   Reconciling
Items
  Total 
  Americas 1   Americas 2   Europe   APMEA   Total 

Revenue

   49,683   55,105   54,461   21,232   180,481   1,311  1,937  (45  183,684

Other operating income/(loss), net

   —     —     —     —     2,150   —    —     —    2,150

Segment Result

   9,379   11,350   8,325   3,066   32,120   (53  475   (28  32,514

Unallocated

           56   —    —     —    56
          

 

 

   

 

 

  

 

 

   

 

 

  

 

 

 

Segment Result Total

           34,326   (53  475   (28  34,720

Finance expenses

                 (746

Finance and other income

                 4,619

Share of net profit of associates accounted for using the equity method

                 7
                

 

 

 

Profit before tax

                 38,600

Income tax expense

                 (6,225
                

 

 

 

Profit for the period

                 32,375
                

 

 

 

Depreciation, amortization and impairment

                 8,390

 

25


Revenues from India, being Company’s country of domicile, is  7,014, and  6,141 for three months ended June 30, 2020 and 2021, 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, 
           2020                   2021         

United States of America

   82,434   96,439

United Kingdom

   15,942   22,867
  

 

 

   

 

 

 
   98,376   119,306
  

 

 

   

 

 

 

No customer individually accounted for more than 10% of the revenues during the three months ended June 30, 2020 and 2021.

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)

Effective beginning of fiscal year ended March 31, 2021, revenue from sale of traded cloud-based licenses is no longer reported in IT Services revenue and finance income on deferred consideration earned under total outsourcing contracts is not included in segment revenue. Further, for evaluating performance of the individual operating segments, stock compensation expense is allocated based on the accelerated amortization as per IFRS 2. Segment information for the three months ended June 30, 2020 has been re-stated to give effect to these changes.

 

 b)

“Reconciling items” includes elimination of inter-segment transactions and other corporate activities.

 

 c)

Revenue from sale of company owned intellectual properties is reported as part of IT Services revenues.

 

 d)

For the purpose of segment reporting, the Company has included the impact of “foreign exchange gains / (losses), net” in revenues (which is reported as a part of operating profit in the interim condensed consolidated statement of income).

 

 e)

During the three months ended June 30, 2020, the Company has contributed  991, respectively towards COVID-19 and is reported in Reconciling items.

 

 f)

Other operating income/(loss) of  97 and  2,150 is included as part of IT Services segment results for three months ended June 30, 2020 and 2021 respectively. Refer to Note 26.

 

 g)

IT Services segment results for the three months ended June 30, 2020, are after considering the impact of impairment charge of  194 and included under unallocated. Refer to Note 4 and 21.

 

 h)

Segment results of IT Services segment are after recognition of share-based compensation expense  360, and  977 for the three months ended June 30, 2020 and 2021, respectively.

 

29.

List of subsidiaries and investments accounted for using equity method as at June 30, 2021 is provided below:

 

Subsidiaries

  

Subsidiaries

  

Subsidiaries

  

Country of

Incorporation

Wipro, LLC      USA
  Wipro Gallagher Solutions, LLC    USA
    Wipro Opus Risk Solutions LLC (formerly known as Wipro Opus Mortgage Solutions LLC)  USA
  Wipro Insurance Solutions, LLC    USA
  Wipro IT Services, LLC    USA
    HealthPlan Services, Inc. **  USA
    Wipro Appirio, Inc. **  USA
    Designit North America, Inc.  USA
    Infocrossing, LLC  USA
    Wipro US Foundation  USA
    International TechneGroup Incorporated **  USA
    Wipro Designit Services, Inc. **  USA
    Wipro VLSI Design Services, LLC  USA
    Cardinal US Holdings, Inc**  USA
Wipro Overseas IT Services Private Limited      India
Wipro Japan KK      Japan
Wipro Shanghai Limited      China
Wipro Trademarks Holding Limited      India
Wipro Travel Services Limited      India
Wipro Holdings (UK) Limited      U.K.
  Designit A/S    Denmark
    Designit Denmark A/S  Denmark
    Designit Germany GmbH  Germany
    Designit Oslo A/S  Norway
    Designit Sweden AB  Sweden
    Designit T.L.V Ltd.  Israel

 

26


    Designit Tokyo Ltd.  Japan
    Designit Spain Digital, S.L. **  Spain
  Wipro Europe Limited    U.K.
    Wipro UK Limited  U.K.
  Wipro Financial Services UK Limited    U.K.
  Wipro IT Services S.R.L.    Romania
  Wipro Gulf LLC    Sultanate of Oman
  Wipro 4C NV    Belgium
    Wipro 4C Danmark ApS  Denmark
    4C Nederland B.V  Netherlands
    Wipro Weare4C UK Limited **  U.K.
    Wipro 4C Consulting France SAS  France
Wipro IT Services UK Societas      U.K.
  Wipro Doha LLC #    Qatar
  Wipro Technologies SA DE CV    Mexico
  Wipro Holdings Hungary Korlátolt Felelősségű Társaság    Hungary
    Wipro Holdings Investment
Korlátolt Felelősségű Társaság
  Hungary
  Wipro Information Technology Egypt SAE    Egypt
  Wipro Arabia Co. Limited *    Saudi Arabia
    Women’s Business Park Technologies Limited *  Saudi Arabia
  Wipro Poland SP Z.O.O    Poland
  Wipro IT Services Poland SP Z.O.O    Poland
  Wipro Technologies Australia Pty Ltd    Australia
  Wipro Corporate Technologies Ghana Limited    Ghana
  Wipro Technologies South Africa (Proprietary) Limited    South Africa
    Wipro Technologies Nigeria Limited  Nigeria
  Wipro IT Service Ukraine, LLC    Ukraine
  Wipro Information Technology Netherlands BV.    Netherlands
    Wipro Portugal S.A. **  Portugal
    Wipro Technologies Limited  Russia
    Wipro Technology Chile SPA  Chile
    Wipro Solutions Canada Limited  Canada
    Wipro Information Technology Kazakhstan LLP  Kazakhstan
    Wipro Technologies W.T. Sociedad Anonima  Costa Rica
    Wipro Outsourcing Services (Ireland) Limited  Ireland
    Wipro Technologies VZ, C.A.  Venezuela
    Wipro Technologies Peru SAC  Peru
    Wipro do Brasil Technologia Ltda **  Brazil
  Wipro Technologies SA    Argentina
  Wipro Technologies SRL    Romania
  PT. WT Indonesia    Indonesia
  Wipro (Thailand) Co. Limited    Thailand
  Wipro Bahrain Limited Co. W.L.L    Bahrain
  Rainbow Software LLC    Iraq
  Cardinal Foreign Holdings S.á.r.l    Luxembourg
    Cardinal Foreign Holdings 2 S.á.r.l **  Luxembourg
Wipro Networks Pte Limited      Singapore
  Wipro (Dalian) Limited    China
  Wipro Technologies SDN BHD    Malaysia
Wipro Chengdu Limited      China
Wipro Philippines, Inc.      Philippines
Wipro IT Services Bangladesh Limited      Bangladesh
Wipro HR Services India Private Limited      India
Encore Theme Technologies Private Limited *      India
Wipro VLSI Design Services India Private Limited (Formerly known as Eximius Design India Private Limited)      India
Capco Technologies Private Limited      India

 

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*

All the above direct subsidiaries are 100% held by the Company except that the Company holds 83.4% of the equity securities of Encore Theme Technologies Private Limited, 66.67% of the equity securities of Wipro Arabia Co. Limited and 55% of the equity securities of Women’s Business Park Technologies Limited are held by Wipro Arabia Co. Limited.

The remaining 16.6% equity securities of Encore Theme Technologies Private Limited will be acquired subject to and after receipt of certain regulatory approvals/confirmations.

# 51% of equity securities of Wipro Doha LLC are held by a local shareholder. However, the beneficial interest in these holdings is with the Company.

The Company controls ‘The Wipro SA Broad Based Ownership Scheme Trust’, ‘Wipro SA Broad Based Ownership Scheme SPV (RF) (PTY) LTD incorporated in South Africa and Wipro Foundation in India.

 

**

Step Subsidiary details of Wipro Portugal S.A, Wipro do Brasil Technologia Ltda, Designit Spain Digital, S.L, HealthPlan Services, Inc, International TechneGroup Incorporated, Wipro Appirio, Inc., Wipro Designit Services, Inc and Wipro Weare4C UK Limited, Cardinal US Holdings, Inc, Cardinal Foreign Holdings 2 S.á.r.l are as follows:

 

Subsidiaries

  

Subsidiaries

  

Subsidiaries

  

Country of

Incorporation

Wipro Portugal S.A.      Portugal
  Wipro Technologies GmbH    Germany
    Wipro IT Services Austria GmbH  Austria
    Wipro Business Solutions GmbH (formerly known as Metro-nom GmbH)***  Germany
Wipro do Brasil Technologia Ltda      Brazil
  Wipro Do Brasil Sistemetas De Informatica Ltd    Brazil
  Wipro do Brasil Servicos Ltda    Brazil
Designit Spain Digital, S.L.      Spain
  Designit Colombia S A S    Colombia
  Designit Peru SAC    Peru
HealthPlan Services, Inc.      USA
  HealthPlan Services Insurance Agency, LLC    USA
International TechneGroup Incorporated      USA
  International TechneGroup Ltd.    U.K.
  ITI Proficiency Ltd    Israel
  International TechneGroup S.R.L.    Italy
    MechWorks S.R.L.  Italy
Wipro Appirio, Inc.      USA
  Wipro Appirio, K.K.    Japan
  Topcoder, LLC.    USA
  Wipro Appirio (Ireland) Limited    Ireland
    Wipro Appirio UK Limited  U.K.
Wipro Designit Services, Inc      USA
  Wipro Designit Services Limited    Ireland
Wipro Weare4C UK Limited      U.K.
  CloudSocius DMCC    UAE
Cardinal Foreign Holdings 2 S.á.r.l      Luxembourg
  Grove Holdings 2 S.á.r.l    Luxembourg
    The Capital Markets Company BV***  Belgium
    Capco Brasil Serviços E Consultoria Em Informática Ltda  Brazil
Cardinal US Holdings, Inc      USA
  The Capital Markets Company LLC    USA
    CAPCO (US) LLC  USA
  Capco Consulting Services LLC    USA
  Capco RISC Consulting LLC    USA
  ATOM Solutions LLC    USA
  NEOS Holdings LLC    USA
    NEOS LLC  USA
    NEOS Software LLC  USA

 

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***

Step Subsidiary details of The Capital Markets Company BV and Wipro Business Solutions GmbH (formerly known as Metro-nom GmbH) are as follows:

 

Subsidiaries

  

Subsidiaries

  

Subsidiaries

  

Country of

Incorporation

The Capital Markets Company BV      Belgium
  Capco Belgium BV    Belgium
  The Capital Markets Company (UK) Ltd    UK
    Capco (UK) 1, Limited  UK
  The Capital Markets Company Limited    Canada
    Capco (US) GP LLC****  USA
  The Capital Markets Company Limited    Hong Kong
    Capco Consulting Services (Guangzhou) Company Limited  China
  The Capital Markets Company s.r.o    Slovakia
  The Capital Markets Company S.A.S    France
  Capco Poland sp. z.o.o    Poland
  The Capital Markets Company S.á.r.l    Switzerland
    Andrion AG  Switzerland
  The Capital Markets Company BV    Netherlands
  CapAfric Consulting (Pty) Ltd    South Africa
  Capco Consulting Singapore Pte. Ltd    Singapore
  Capco Sweden AB    Sweden
  The Capital Markets Company GmbH    Germany
    Capco Austria GmbH  Austria
  Capco Consultancy (Malaysia) Sdn. Bhd    Malaysia
  Capco Greece Single Member P.C    Greece
  Capco Consultancy (Thailand) Ltd    Thailand
Wipro Business Solutions GmbH (formerly known as Metro-nom GmbH)      Germany
  Metro Systems Romania S.R.L    Romania

****  Step Subsidiary details of Capco (US) GP LLC is as follows:

Subsidiaries

  

Subsidiaries

  

Subsidiaries

  

Country of
Incorporation

Capco (US) GP LLC      USA
  Capco (Canada) GP ULC    Canada
As at June 30, 2021, the Company held 43.7% interest in Drivestream Inc, accounted for using the equity method.
As at June 30, 2021, The Capital Markets Company Limited (Canada) and Capco (Canada) GP ULC act as Limited and General Partners, respectively in Capco (Canada) LP.
The list of controlled trusts are:    

Name of the entity

  

Country of incorporation

Wipro Equity Reward Trust  India
Wipro Foundation  India

 

30.

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

 

29


31.

As part of customer contract with Metro AG, the Company has acquired Metro-nom GmbH (currently known as Wipro Business Solutions GmbH) and Metro Systems Romania S.R.L, the IT units of Metro AG in Germany and Romania, respectively, for a consideration of  5,110. Considering the terms and conditions of the agreement, the Company has concluded that this transaction does not meet the definition of Business under IFRS 3“Business Combinations”. The transaction was consummated on April 1, 2021. The fair value of net assets acquired aggregating to  4,705 is allocated to respective assets and liabilities. The excess of consideration paid, and net assets taken over is accounted as ‘costs to obtain contract’, which will be amortized over the tenure of the contract as reduction in revenues.

 

32.

On April 1, 2021, the Company entered into a definitive agreement to acquire Ampion, an Australia-based provider of cyber security, DevOps and quality engineering services for a total consideration of AUD 150 million. The acquisition is subject to customary closing conditions and regulatory approvals and is expected to be concluded in the quarter ending September 30, 2021.

 

 

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 Registration No: 117366W/W - 100018      Managing Director
Vikas Bagaria  Jatin Pravinchandra Dalal    M. Sanaulla Khan
Partner  Chief Financial Officer    Company Secretary
Membership No. 60408      
Bengaluru      
July 15, 2021      

 

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