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Wipro (WIT)

Filed: 19 Jul 21, 4:00pm

Exhibit 99.5

WIPRO LIMITED

CIN: L32102KA1945PLC020800 ; Registered Office : Wipro Limited, Doddakannelli, Sarjapur Road, Bengaluru - 560035, India

Website: www.wipro.com ; Email id – info@wipro.com ; Tel: +91-80-2844 0011 ; Fax: +91-80-2844 0054

STATUTORILY AUDITED CONSOLIDATED FINANCIAL RESULTS FOR THE THREE MONTHS ENDED JUNE 30, 2021

UNDER IFRS (IASB)

( in millions, except share and per share data, unless otherwise stated)

 

   

Particulars

  Three months ended   Year ended 
   June 30,
2021
   March 31,
2021
   June 30,
2020
   March 31,
2021
 
  

Income from operations

        
  

a) Revenue

   182,524   162,454   149,131   619,430
  

b) Other operating income/(loss), net

   2,150   —     97   (81
  

c) Foreign exchange gains

   1,160   886   1,205   2,995
    

 

 

   

 

 

   

 

 

   

 

 

 

I

  

Total income from operations

   185,834   163,340   150,433   622,344
    

 

 

   

 

 

   

 

 

   

 

 

 
  

Expenses

        
  

a) Purchase of stock-in-trade

   1,437   2,064   1,766   6,957
  

b) Changes in inventories of finished goods and stock-in-trade

   68   36   176   315
  

c) Employee benefit expense

   102,711   86,172   80,262   332,371
  

d) Depreciation, amortization and impairment

   8,390   6,995   6,154   27,656
  

e) Sub-contracting/ technical fees

   24,619   21,494   21,218   83,609
  

f) Facility expenses

   5,650   5,288   4,627   20,255
  

g) Travel

   1,435   1,310   1,290   5,258
  

h) Communication

   1,516   1,452   1,354   6,069
  

i) Legal and professional fees

   2,207   1,589   1,311   5,561
  

j) Marketing and brand building

   425   332   129   1,011
  

k) Lifetime expected credit loss

   (253   (109   1,589   1,506
  

l) Other expenses

   2,909   2,550   3,619   8,723
    

 

 

   

 

 

   

 

 

   

 

 

 

II

  

Total expenses

   151,114   129,173   123,495   499,291
    

 

 

   

 

 

   

 

 

   

 

 

 

III

  

Finance expenses

   746   1,122   1,299   5,088

IV

  

Finance and Other Income

   4,619   4,447   5,281   20,912

V

  

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

   7   4   31   130

VI

  

Profit before tax [I-II-III+IV+V]

   38,600   37,496   30,951   139,007

VII

  

Tax expense

   6,225   7,755   6,838   30,345

VIII

  

Profit for the period [VI-VII]

   32,375   29,741   24,113   108,662

IX

  

Total Other comprehensive income

   3,302   (616   4,989   6,679
    

 

 

   

 

 

   

 

 

   

 

 

 
  

Total comprehensive income for the period [VIII+IX]

   35,677   29,125   29,102   115,341
    

 

 

   

 

 

   

 

 

   

 

 

 

X

  

Profit for the period attributable to:

        
  

Equity holders of the Company

   32,321   29,721   23,902   107,946
  

Non-controlling Interests

   54   20   211   716
    

 

 

   

 

 

   

 

 

   

 

 

 
     32,375   29,741   24,113   108,662
    

 

 

   

 

 

   

 

 

   

 

 

 
  

Total comprehensive income for the period attributable to:

        
  

Equity holders of the Company

   35,600   29,105   28,955   114,678
  

Non-controlling Interests

   77   20   147   663
    

 

 

   

 

 

   

 

 

   

 

 

 
     35,677   29,125   29,102   115,341
    

 

 

   

 

 

   

 

 

   

 

 

 

XI

  

Paid up equity share capital (Par value 2 per share)

   10,958   10,958   11,429   10,958

XII

  

Reserves excluding revaluation reserves and Non-controlling Interests as per balance sheet

         542,137

XIII

  

Earnings per share (EPS)

        
  

(Equity shares of par value of 2/- each)

        
  

(EPS for the three months ended periods is not annualized)

        
  

Basic (in )

   5.92   5.39   4.20   19.11
  

Diluted (in )

   5.90   5.38   4.19   19.07

 

1


1.

The audited consolidated financial results of the Company for the three months ended June 30, 2021 have been approved by the Board of Directors of the Company at its meeting held on July 15, 2021. The Company confirms that its statutory auditors, Deloitte Haskins & Sells LLP have issued an audit report with unmodified opinion on the consolidated financial results.

 

2.

The above consolidated financial results have been prepared from the interim condensed consolidated financial statements, which are prepared in accordance with International Financial Reporting Standards and its interpretations (“IFRS”), as issued by the International Accounting Standards Board (“IASB”). All amounts included in the consolidated financial results (including notes) are reported in millions of Indian rupees ( in millions) except share and per share data, unless otherwise stated.

 

3.

Estimation uncertainty relating to the global health pandemic on COVID-19

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

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

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

 

4.

List of subsidiaries and investments accounted for using equity method as at June 30, 2021 are provided in the table below:

 

Subsidiaries

  

Subsidiaries

  

Subsidiaries

  

Country of
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
    Designit Tokyo Ltd.  Japan
    Designit Spain Digital, S.L. **  Spain
  Wipro Europe Limited    U.K.
    Wipro UK Limited  U.K.

 

2


  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

 

3


*

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

 

4


***

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

 

Subsidiaries

  

Subsidiaries

  

Subsidiaries

  

Country of Incorporation

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

 

****

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

 

Subsidiaries

  

Subsidiaries

  

Subsidiaries

  

Country of Incorporation

Capco (US) GP LLC      USA
  Capco (Canada) GP ULC    Canada

As at June 30, 2021, the Company held 43.7% interest in Drivestream Inc, accounted for using the equity method.

As at June 30, 2021, The Capital Markets Company Limited (Canada) and Capco (Canada) GP ULC act as Limited and General Partners, respectively in Capco (Canada) LP.

The list of controlled trusts are:

 

Name of the entity

  

Country of incorporation

Wipro Equity Reward Trust  India
Wipro Foundation  India

 

5.

Segment Information

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

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

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

 

5


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

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

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

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

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

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

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

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

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

Information on reportable segments for the three months ended June 30, 2021, March 31, 2021 and June 30, 2020, and year ended March 31, 2021 are as follows:

 

Particulars

  Three months ended   Year ended 
  June 30,
2021
   March 31,
2021
   June 30,
2020
   March 31,
2021
 
  Audited   Audited   Audited   Audited 

Revenue

        

IT Services

        

Americas 1

   49,683   46,510   42,612   178,091

Americas 2

   55,105   46,475   44,194   179,821

Europe

   54,461   45,107   38,944   165,441

APMEA

   21,232   20,825   20,158   82,462
  

 

 

   

 

 

   

 

 

   

 

 

 

Total of IT Services

   180,481   158,917   145,908   605,815

IT Products

   1,311   2,117   2,306   7,685

ISRE

   1,937   2,302   2,111   8,912

Reconciling Items

   (45   4   11   13
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Revenue

   183,684   163,340   150,336   622,425
  

 

 

   

 

 

   

 

 

   

 

 

 

Other operating income/(loss), net

        

IT Services

   2,150   —     97   (81
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Other operating income/(loss), net

   2,150   —     97   (81
  

 

 

   

 

 

   

 

 

   

 

 

 

 

6


Segment Result

        

IT Services

        

Americas 1

   9,379   9,863   6,504   33,040

Americas 2

   11,350   10,500   10,422   41,589

Europe

   8,325   8,704   7,547   31,673

APMEA

   3,066   3,074   2,546   11,476

Unallocated

   56   1,257   748   5,153

Other operating income/(loss), net

   2,150   —     97   (81
  

 

 

   

 

 

   

 

 

   

 

 

 

Total of IT Services

   34,326   33,398   27,864   122,850
  

 

 

   

 

 

   

 

 

   

 

 

 

IT Products

   (53   145   123   45

ISRE

   475   587   (106   1,061

Reconciling Items

   (28   37   (943   (903
  

 

 

   

 

 

   

 

 

   

 

 

 

Total

   34,720   34,167   26,938   123,053

Finance expenses

   (746   (1,122   (1,299   (5,088

Finance and Other Income

   4,619   4,447   5,281   20,912

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

   7   4   31   130
  

 

 

   

 

 

   

 

 

   

 

 

 

Profit before tax

   38,600   37,496   30,951   139,007
  

 

 

   

 

 

   

 

 

   

 

 

 

Notes

 

 a)

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

 b)

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

 c)

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

 d)

For the purpose of segment reporting, the Company has included the impact of “foreign exchange gains / (losses), net” in revenues amounting to  1,160,  886 and  1,205 for the three months ended June 30, 2021, March 31, 2021, and June 30, 2020 respectively, and  2,995 for the year ended March 31, 2021, which is reported as a part of operating profit in the interim condensed consolidated statement of income.

 e)

During the three months ended June 30, 2020, and year ended March 31, 2021 the Company has contributed  991 towards COVID-19 and is reported in Reconciling items.

 f)

Segment results for the three months ended March 31, 2021, and year ended March 31, 2021, are after considering the impact of impairment charge of  Nil, and  1,250 in Americas 1 and  Nil, and  192 in Europe, respectively. Further, an impairment charge of  Nil, and  674 for the three months ended March 31, 2021, and year ended March 31, 2021, respectively towards certain marketing-related intangible assets and software platform recognized on acquisitions, is allocated to all IT Services SMUs. The remaining impairment charge of  Nil,  194 and  302 for the three months ended March 31, 2021, June 30, 2020 and year ended March 31, 2021, respectively is included under unallocated.

 g)

Segment results for the three months and year ended March 31, 2021, are after considering additional amortization of  795 in Americas 2 due to change in our estimate of useful life of the customer-related intangibles in an earlier business combination.

 h)

Other operating income/(loss) of  2,150,  Nil and  97 is included as part of IT Services segment results for the three months ended June 30, 2021, March 31, 2021 and June 30, 2020 respectively, and  (81) for the year ended March 31, 2021. Refer to Note 6.

 i)

Segment results of IT Services segment are after recognition of share-based compensation expense  977,  1,091, and  360 for the three months ended June 30, 2021, March 31, 2021, and June 30, 2020 respectively and  2,897 for the year ended March 31, 2021.

 

6.

Other operating income/(loss), net

The Company has partially met the first and second-year business targets pertaining to sale of hosted data center business concluded during the year ended March 31, 2019. Change in fair value of the callable units pertaining to achievement of cumulative business targets amounting to  Nil and  97 for the three months ended March 31, 2021 and June 30, 2020, respectively and  (81) for the year ended March 31, 2021, has been recognized under other operating income/(loss), net.

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

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

 

7


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.

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

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

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

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

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

 

8.

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

 

9.

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

 

10.

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

 

11.

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

 

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By order of the Board,  For, Wipro Limited

Place: Bengaluru

Date: July 15, 2021

  

Rishad A. Premji

Chairman

 

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