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On behalf of the Board of Directors (the" Board"), it gives me great pleasure to present the 70th Board's Report of your Company, along with the Balance Sheet, Profit and Loss account and Cash Flow statements, for the financial year ended March 31, 2016.
I. Financial Performance
On a consolidated basis, our sales increased to Rs.512,478 million for the current year as against Rs.469,510 million in the previous year, recording a growth of 9.15%. Our net profits increased to Rs.89,597 million for the current year as against Rs. 86,609 million in the previous year, recording a growth of 3.45%.
On a standalone basis, our sales increased to Rs.446,846 million for the current year as against Rs.412,098 million in the previous year, recording a growth of 8.43%. Our net profits remained largely stable for the current year as against the net profits of the previous year.
The standalone financial statements prepared in accordance with Indian GAAP and consolidated financial statements prepared in accordance with Indian GAAP as well as IFRS for the financial year ended March 31, 2016 forms part of this Annual Report. Key highlights of financial performance of your Company for the financial year 2015–16 are provided below:
loss of Rs. 523 Million (2015: Profit of Rs. 390 million) relating to changes in fair value of forward contracts designated as hedges of net investment in non–integral foreign operations, translation of foreign currency borrowings and changes in fair value of related cross currency swaps together designated as hedges of net investment in nonintegral foreign operations. In the Consolidated Accounts, these are considered as hedges of net investment in non–integral foreign operations and are recognized directly in shareholders’ fund.
Your Directors recommend a final dividend of per equity share of face value of Rs.2/– each to be appropriated from the profits of the Company for the financial year 2015–16, subject to the approval of the shareholders at the ensuing Annual General Meeting.
Pursuant to the approval of the Board on January 18, 2016, your Company distributed an interim dividend of Rs.5/– per equity share of face value of Rs.2/– each, to shareholders who were on the register of members as on closing hours of January 27, 2016, being the record date fixed for this purpose.
The total dividend for the year ended March 31, 2016 would accordingly be Rs.6/– per equity share of face value of Rs.2/– each.
During the year 2015–16, unclaimed Dividend for financial year 2007–08 of Rs.5,094,480/– was transferred to the Investor Education and Protection Fund, as required under the Investor Education and Protection Fund (Awareness and Protection of Investor) Rules, 2001.
Buyback of Equity Shares
On April 20, 2016, the Board approved a proposal to buyback up to 4,00,00,000 equity shares of the Company for an aggregate amount not exceeding Rs. 25,00,00,00,000, being 1.62% of the total paid up equity share capital, at Rs. 625 per equity share. The buyback is proposed to be made from all existing shareholders of the Company on May 6, 2016, being the record date for the buyback, on a proportionate basis under the tender offer route in accordance with the provisions contained in the Securities and Exchange Board of India (Buy Back of Securities) Regulations, 1998 and the Companies Act, 2013 and rules made there under
In accordance with Section 129(3) of the Companies Act, 2013, a statement containing salient features of the financial statements of the subsidiary companies in Form AOC–1 is provided at pages 214–215 of this Annual Report.
In accordance with third proviso to Section 136(1) of the Companies Act, 2013, the Annual Report of your Company, containing inter alia the audited standalone and consolidated financial statements, has been placed on the website of the Company at www.wipro.com Further, audited financial statements together with related information and other reports of each of the subsidiary companies have also been placed on the website of the Company at www.wipro.com
During the financial year 2015–16, your Company invested an aggregate of Rs. 3,207 million in its direct subsidiaries. Apart from this, your Company funded its subsidiaries, from time to time, as per the fund requirements, through loans, guarantees and other means to meet working capital requirements.
During the year 2015–16, Wipro Technologies Spain S.L., a non–operational entity, was liquidated. Wipro Promax Holdings Pty Ltd and Wipro Promax IP Pty Ltd, non–operational entities, applied for de–registration as at March 31, 2016. Also, during the year, Wipro Europe SARL and SAS Wipro France were merged with New Logic Technologies SARL, France. Further, to enhance operational and financial efficiencies, Data Centre Services Operations Business of Infocrossing Inc., was transferred to Wipro Data Centre & Cloud Services, Inc., a wholly–owned subsidiary of Wipro LLC. Consequent to re–organization, Wipro Promax Analytics Solutions LLC, which was earlier a subsidiary of Wipro LLC, has now become a subsidiary of Wipro Gallagher Solutions Inc.
During the year 2015–16, the Company allotted 16,70,252 equity shares of Rs.2 each pursuant to exercise of stock options. Consequently, the paid up equity share capital of the Company stood at Rs. 4,94,14,26,580 consisting of 2,47,07,13,290 equity shares of Rs.2 each.
During the year under review, the Company has not issued shares with differential voting rights and sweat equity shares.
Particulars of Loans, Advances, Guarantees and Investments
Pursuant to section 186 of Companies Act, 2013 and Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), disclosure on particulars relating to Loans, advances, guarantees and investments are provided as part of the financial statements.
Your Company has not accepted any deposits from public and as such, no amount on account of principal or interest on public deposits was outstanding as on the date of the balance sheet.
Your Company is one of the leading providers of IT Services globally. Your Company combines the business knowledge and industry expertise of its domain specialists and the technical knowledge and implementation skills of its delivery team leveraging its products, platforms, partnerships and solutions in its development centers located around the world.
Your Company develops and integrates Innovative Solutions that enable its clients to leverage IT to achieve their business objectives at competitive costs. Your Company uses quality processes and global talent pool to deliver "time to development" advantages, cost savings and productivity improvements.
Your Company's IT Services business provides a range of IT and IT–enabled 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, Global Infrastructure Services, Analytics Services, Business Process Services, Research and Development and Hardware and Software Design to Leading Enterprises Worldwide. Your Company's vision is "To earn our Clients' trust and maximize value of their businesses by providing solutions that integrate deep industry insights, leading technologies and best in class execution". The markets that your Company serves are undergoing rapid changes due to the pace of developments in technology, innovation in business models and changes in the sourcing strategies of clients. Pressures on cost–competitiveness and an uncertain economic environment are causing clients to develop newer business models. On the technology front, Digital Business has changed the nature of demand for IT services. Development of advanced technologies such as Cloud Based Offerings, Big Data Analytics, Mobile Applications and the Emergence of Social Media are shifting the point of decision–making on IT sourcing within clients' organization from the traditional Chief Information Officer to newer stakeholders such as Chief Marketing Officer, Chief Digital Officer, Chief Risk Officer etc. These trends on newer business models, emerging technologies and sourcing patterns are expected to provide Your Company with significant growth opportunities.
Your Company's IT Products segment provides a range of third–party IT products, which allows it to offer comprehensive IT System Integration Services. These products include Computing, Platforms and Storage, Networking Solutions, Enterprise Information Security, and software products, including databases and operating systems. Your Company has a diverse range of clients, primarily in the India and Middle East markets from small and medium enterprises ("SMEs") to large enterprises in all major industries.
According to Strategic Review 2016 of the National Association of Software and Service ("NASSCOM"), in FY16, IT export revenues from India grew by 12.3% in constant currency, to an estimated $108 billion. NASSCOM expects FY17 export growth rates to be between 10% and 12%. According to NASSCOM Perspective 2025: Shaping the Digital Revolution, the Indian technology and services industry is on track to reach $200 billion to $225 billion in revenues by 2020, from a base of $143 billion in 2016, and furthermore, to reach revenues of $350 billion by 2025.
Acquisitions and Investments
Acquisitions are a key enabler in driving growth and building capability in industry domains, emerging technology areas, Digital and increasing market footprint in newer markets. Your Company focuses on opportunities where it can further develop its domain expertise, specific skill sets and its Global Delivery Model to maximize service and product enhancements and higher margins. Your Company also uses its acquisition program to increase presence in select geographies, increase footprint in certain large customers and pursue select business opportunities. Key acquisitions consummated during the year ended March 31, 2016 were Designit, a global strategic design firm specializing in designing transformative product–services experiences; Cellent AG, a leading IT Consulting and
Software Services company offering holistic IT solutions and services; and HPH Holdings Corporation (HealthPlan Services), a leading technology and process as a service provider in the US Health Insurance market.
In December 2015, your Company entered into an agreement to acquire Viteos Group, a Business Process as a Service (BPaaS) provider for the alternative investment management industry for a purchase consideration of USD 130 million. The acquisition is subject to customary closing conditions and regulatory approvals.
As part of a start–up engagement model, your Company has invested in building a world class ecosystem through a US$ 100 million internal venture capital fund, Wipro Ventures, aimed at investing in cutting edge start–ups in areas such as Digital, Internet of Things (IoT), Big data, Open source, Cybersecurity and Artificial Intelligence (AI). In 2015–16, Wipro Ventures has seen strong traction and scale. Your Company has made 6 investments with a cumulative spend of US$ 15 million and a further committed spend of US$ 5 million in FY16 in start–ups working in Big Data and Analytics, Artificial Intelligence, the Internet ofThings, Mobility, Cloud Infra, Fintech and Security – technologies that are reshaping the future of enterprises.
Key Awards and Recognitions During the Year
Your Company is one of the most admired and recognized companies in the IT industry. During the year, your Company won several awards and accolades, out of which key recognitions are given below:
1. Wipro was recognized as a 2016 World's Most Ethical Company® for the fifth successive year by the Ethisphere Institute, the global leader in defining and advancing the standards of ethical business practices.
2. Wipro was awarded 'The ICSI National Award for Excellence in Corporate Governance' for 2015 by the Institute of Company Secretaries of India (ICSI).
3. Wipro was awarded the 'NASSCOM Corporate Award for Excellence in Diversity and Inclusion 2016', in the category of 'Best Program for Excellence in Gender Diversity' for having institutionalized robust and successful programs for driving and sustaining gender diversity initiatives, policies and processes.
4. Wipro has been recognized as a member of the global Dow Jones Sustainability Index for the sixth year in succession.
Management Discussion and Analysis Report
In terms of regulation 34 of the Listing Regulations, the Management Discussion and Analysis report on your Company's performance, industry trends and other material changes with respect to your Company and its subsidiaries, wherever applicable, are presented from pages 24 to 64 of this Annual Report. The MD&A report provides a consolidated perspective of economic, social and environmental aspects material to our strategy and our ability to create and sustain value to our key stakeholders and includes aspects of reporting as required by Regulation 34 of the Listing Regulations with Stock Exchange on Business Responsibility Report. Therefore, no separate section on Business Responsibility Report is published.
III. Governance and Ethics
Your Company believes in adopting best practices of corporate governance. Corporate governance principles are enshrined in the Spirit of Wipro, which form the core values of Wipro. These guiding principles are also articulated through the Company's code of business conduct, corporate governance guidelines, charter of various sub–committees and disclosure policy.
As per regulation 34 of the Listing Regulations, a separate section on corporate governance practices followed by your Company, together with a certificate from V. Sreedharan & Associates, Company Secretaries, on compliance with corporate governance norms under the Listing Regulations, is given from page no. 109 onwards.
Board of Directors
Board's Composition and Independence
Your Company's Board consists of global leaders and visionaries who provide strategic direction and guidance to the organization. As on March 31, 2016, the Board comprised four executive directors and seven nonexecutive Independent Directors.
Definition of 'Independence' of Directors is derived from regulation 16 of the Listing Regulations, NYSE Listed Company Manual and Section 149(6) of the Companies Act, 2013. The Company has received necessary declarations from the Independent Directors stating that they meet the prescribed criteria for independence.
Based on the confirmations/disclosures received from the Directors under section 149(7) of the Companies Act 2013 and on evaluation of the relationships disclosed, the following Non–Executive Directors are considered as Independent Directors:
Number of Meetings of the Board
The Board met six times during the financial year 2015–16 on April 20, 2015, June 3, 2015, July 22–23, 2015, October 20–21, 2015, January 4, 2016, and January 16–18, 2016. The maximum interval between any two meetings did not exceed 120 days.
Directors and Key Managerial Personnel
Pursuant to the recommendation of Board Governance, Nomination and Compensation Committee, the Board at its meeting held on April 20, 2015 approved, subject to members' approval, re–appointment of Mr. Azim H Premji as Executive Chairman and Managing Director from July 31, 2015 to July 30 2017 and appointment of Mr. Rishad Premji as Wholetime Director for a period of 5 years with effect from May 1, 2015. The aforesaid appointments were approved by the members at the 69th Annual General Meeting held on July 22, 2015.
Pursuant to the recommendation of Board Governance, Nomination and Compensation Committee, the Board at its meeting held on January 4, 2016 approved, subject to members' approval, re–appointment of Mr. T K Kurien as Executive Director designated as Executive Vice Chairman from February 1, 2016 to March 31, 2017 and appointment of Mr. Abidali Z Neemuchwala as Executive Director designated as Chief Executive Officer for a period of 5 years with effect from February 1, 2016.
On March 11, 2016, Dr. Patrick J Ennis was appointed as an Additional Director, to serve on the Board as an independent member effective April 1, 2016. Further, on March 29, 2016, Mr. Patrick Dupuis was appointed as an Additional Director, to serve on the Board as an independent member with effect from April 1, 2016.
At the 68th Annual General Meeting held on July 23, 2014, Mr. N Vaghul and Dr. Ashok S Ganguly were appointed as Independent Directors to hold office up to July 31, 2016 and Mr. M K Sharma was appointed as Independent Director to hold office up to June 30, 2016. Considering their immense contributions to the Company and pursuant to the recommendation of Board Governance, Nomination and Compensation Committee, the Board at its meeting held on April 20, 2016 appointed Mr. M K Sharma as Additional Director with effect from July 1, 2016 and decided to place the proposal for re–appointment of Mr. N Vaghul and Dr. Ashok S Ganguly as Independent Directors for a further term of 3 years up to July 31, 2019 and Mr. M K Sharma as Independent Director for a further term of 5 years up to June 30, 2021, for approval of the members at the 70th Annual General Meeting. The term of office of Dr. Jagdish N Sheth expires on July 18, 2016.
The Company has received separate notices under section 160 from members, along with the requisite deposit, signifying their intention to propose appointment/re–appointment of Mr. T K Kurien, Mr. Abidali Z Neemuchwala, Dr. Patrick J Ennis, Mr. Patrick Dupuis, Mr. N Vaghul, Dr. Ashok S Ganguly and Mr. M K Sharma as mentioned in the preceding paragraphs. Accordingly, necessary resolutions are being placed for approval of the members at the 70th Annual General Meeting of the Company.
Pursuant to provisions of section 152 and Articles of Association of the Company, Mr. Rishad Premji will retire by rotation at the 70th Annual General Meeting and being eligible, has offered himself for re–appointment.
Mr. Jatin P Dalal was appointed as the Chief Financial Officer of the Company with effect from April 1, 2015 and Mr. M Sanaulla Khan was appointed as the Company Secretary of the Company with effect from June 3, 2015.
Committees of the Board
The Company's Board has the following committees:
1. Audit, Risk and Compliance Committee
2. Board Governance, Nomination and Compensation Committee, also acts as CSR Committee
3. Strategy Committee
4. Administrative and Shareholders/Investors Grievance Committee (Stakeholders' Relationship Committee)
Details of terms of reference of the Committees, Committee membership and attendance at meetings of the Committees are provided in the Corporate Governance report from page no. 113 onwards.
Pursuant to the provisions of the Companies Act, 2013 and the Listing Regulations, the Board is required to monitor and review the Board evaluation framework. In line with the Corporate Governance Guidelines, Annual Performance Evaluation is conducted for all Board Members as well as the working of the Board and its Committees. This evaluation is led by the Chairman of the Board Governance, Nomination and Compensation Committee with specific focus on the performance and effective functioning of the Board. The evaluation process also considers the time spent by each of the Board Member, core competencies, personal characteristics, accomplishment of specific responsibilities and expertise. The Board evaluation is conducted through questionnaire having qualitative parameters and feedback based on ratings. The outcome of the Board evaluation for financial year 2015–16 was discussed by the Board Governance, Nomination and Compensation Committee and the Board at their meeting held in April 2016.
Policy on Director's Appointment and Remuneration
The Board Governance, Nomination & Compensation Committee has framed a policy for selection and appointment
of Directors including determining qualifications and independence of a Director, Key Managerial Personnel, Senior Management Personnel and their remuneration as part of its charter and other matters provided under Section 178(3) of the Companies Act, 2013. The policy covering these requirements is provided in the Corporate Governance report at page no. 111. We affirm that the remuneration paid to Directors is as per the remuneration policy of the Company.
In line with the requirements under Section 177(9) and (10) of the Companies Act, 2013 and regulation 22 of the Listing Regulations, your Company has adopted an Ombuds process which is a channel for receiving and redressing complaints from employees and directors. Under this policy, your Company encourages its employees to report any reporting of fraudulent financial or other information to the stakeholders, and any conduct that results in violation of the Company's code of business conduct, to the management (on an anonymous basis, if employees so desire).
Likewise, under this policy, your Company has prohibited discrimination, retaliation or harassment of any kind against any employees who, based on the employee's reasonable belief that such conduct or practice have occurred or are occurring, reports that information or participates in the investigation.
Mechanism followed under Ombuds process is appropriately communicated within the Company across all levels and has been displayed on the Company's intranet and website at www.wipro.com
The Audit, Risk and Compliance Committee periodically reviews the functioning of this mechanism. No personnel of the Company was denied access to the Audit, Risk & Compliance Committee.
Related Party Transactions
As a part of its philosophy of adhering to highest ethical standards, transparency and accountability, your Company has historically adopted the practice of undertaking related party transactions only in the ordinary and normal course of business and at arm's length. In line with the provisions of the Companies Act, 2013 and the Listing Regulations, the Board has approved a policy on related party transactions. An abridged policy on related party transacations has been placed on the Company's website.
All Related Party Transactions are placed on a quarterly basis before the Audit, Risk and Compliance Committee and also before the Board for approval. Prior omnibus approval of the Audit, Risk and Compliance Committee is obtained for the transactions which are of a foreseeable and repetitive nature
The particulars of contracts or arrangements with related parties referred to in section 188(1) and applicable rules of the Companies Act, 2013 in Form AOC–2 is provided as Annexure I at page no. 74 of this Annual Report.
Compliance Management Framework
Your Company has a robust and effective framework for monitoring compliances with applicable laws. The Board has approved a Global Statutory Compliance Policy providing guidance on broad categories of applicable laws and process for monitoring compliance. In furtherance to this, your Company has instituted an online compliance management system within the organization to monitor compliances real–time and provide update to senior management and Board on a periodic basis. The Audit, Risk and Compliance Committee and the Board periodically monitor status of compliances with applicable laws based on quarterly certification provided by senior management.
Directors' Responsibility Statement
Your Directors hereby confirm that:
(a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;
(b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;
(c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) the Directors have prepared the annual accounts on a going concern basis; and
(e) the Directors, have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively;
(f) As required under Section 134(5)(f) of the Companies Act, 2013, and according to the information and explanations presented to us, based on the review done by the Audit, Risk and Compliance Committee and as recommended by it, we, the Board, hereby, state that adequate systems and processes, commensurate with the size of the Company and the nature of its business, have been put in place by the Company, to ensure compliance with the provisions of all applicable laws as per the Company's Global
Statutory Compliance Policy and that such systems and processes are operating effectively.
Wipro Employee Stock Option Plans (WESOP)/ Restricted Stock Unit Plans
In order to motivate, incentivize and reward employees, your Company has instituted various employee stock options plans/restricted stock unit plans from time to time. The Board Governance, Nomination and Compensation Committee administers these plans. The stock option plans are in compliance with Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 ("Employee Benefits Regulations") and there have been no material changes to these plans during the financial year. Disclosures on various plans, details of options granted, shares allotted upon exercise, etc. as required under Employee Benefits Regulations read with Securities and Exchange Board of India circular no. CIR/CFD/POLICY CELL/2/2015 dated June 16, 2015 are available on the Company's website at <http://www.wipro.com/investors/> financial–information/annual–reports/. No employee was issued stock option during the year equal to or exceeding 1% of the issued capital of the Company at the time of grant.
Wipro Equity Reward Trust (WERT) is an ESOP Trust set up by your Company. Pursuant to approval by the shareholders at their meeting held in July 2014, the Company is authorized to transfer shares from the WERT to employees on exercise of vested Indian RSUs.
Particulars of Employees
Information required pursuant to Section 197 (12) of the Companies Act, 2013 read with Rule 5(1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided as Annexure II to this report.
A statement containing, inter alia, names of employees employed throughout the financial year and in receipt of remuneration of Rs.60 lakhs or more, employees employed for part of the year and in receipt of Rs.5 lakhs or more per month, pursuant to Rule 5(2) the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided as Annexure III to this report.
IV. Internal Financial Controls and Audit
Internal Financial Controls and their Adequacy
The Board of your Company has laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively. Your Company has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures.
Given the diversified scale of operations, your Company has put in place an Enterprise Risk Management (ERM) framework and adopted an enterprise risk management policy based on globally recognized standards. The ERM framework is administered by the Audit, Risk and Compliance Committee. The objective of the ERM framework is to enable and support achievement of business objectives through risk–intelligent assessment while also placing significant focus on constantly identifying and mitigating risks within the business.
Further details on the Company's risk management framework is provided in the Management Discussion and Analysis report.
Pursuant to the provisions of section 139 of the Companies Act, 2013, an audit firm can act as auditors for a maximum tenure of two terms of 5 consecutive years. For the purpose of reckoning this limit, existing tenure of the auditors needs to be counted. However, companies have been given a transition time of 3 years from April 1, 2014 to comply with this provision.
Accordingly, the Company's auditors M/s BSR & Co. LLP, (Registration No.101248W/W–100022) Chartered Accountants, Bangalore, who retire at the ensuing Annual General Meeting, may continue as statutory auditors for auditing financial statements for the financial year ending March 31, 2017. M/s BSR & Co. LLP have confirmed their eligibility and willingness to accept office, if re–appointed. Based on the recommendation of Audit, Risk and Compliance Committee, the Board has approved the proposal for placing the matter of re–appointment of M/s BSR & Co. LLP as statutory auditors to conduct audit of financial statements for the financial year ending March 31, 2017 at the 70th Annual General Meeting. A resolution to that effect forms part of notice of the 70th Annual General Meeting sent along with this Annual Report.
There are no qualifications, reservations or adverse remarks made by M/s BSR & Co. LLP, Statutory Auditors, in their report for the financial year ended March 31, 2016.
Pursuant to provisions of section 143(12) of the Companies Act, 2013, the Statutory Auditors have not reported any incident of fraud to the Audit, Risk and Compliance Committee during the year under review.
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. V Sreedharan, Partner, M/s V Sreedharan & Associates, a firm of Company Secretaries in Practice, to conduct Secretarial Audit of the Company. The Report of the Secretarial Audit in Form MR–3 for the financial year ended March 31, 2016 is enclosed at Annexure IV to the Report. There are no qualifications, reservations or adverse remarks made by the Secretarial Auditor in his report.
V. Social Responsibility and Sustainability
Corporate Social Responsibility
Your Company is at the forefront of Corporate Social Responsibility (CSR) and sustainability initiatives and practices. Your Company believes in making lasting impact towards creating a just, equitable, humane and sustainable society. Your Company has been involved with social initiatives for more than decade and a half and engages in various activities in the field of education, primary healthcare and communities, ecology and environment, etc. Your Company has won several awards and accolades for its CSR and sustainability efforts.
As per the provisions of the Companies Act, 2013, companies having net worth of Rs.500 crore or more, or turnover of Rs.1000 crore or more or net profit of Rs.5 crore or more during any financial year are required to constitute a Corporate Social Responsibility (CSR) committee of the board comprising three or more directors, at least one of whom should be an independent director and such company shall spend at least 2% of the average net profits of the company's three immediately preceding financial years. Accordingly, your Company spent Rs.1,598 million towards CSR activities during the financial year 2015–16. The contents of the CSR policy and CSR Report for the year 2015–16 is attached as Annexure V to this report. Contents of the CSR policy is also available on the Company's website at <http://www.wipro.com/investors/corporate–governance/> policies–and–guidelines/.
The terms of reference of CSR committee, framed in accordance with Section 135 of the Companies Act, 2013, forms part of Board Governance, Nomination and Compensation Committee. The Committee consists of three independent directors, Dr. Ashok S Ganguly, Mr. N Vaghul and Mr. William Arthur Owens, as its members. Dr. Ashok S Ganguly is the Chairman of the Committee.
Particulars Regarding Conservation of Energy and Research and Development and Technology Absorption
Details of steps taken by your Company to conserve energy through its "Sustainability" initiatives have been disclosed as part of this Annual Report in Management Discussion and Analysis Report.
Your Company's Research and Development ("R&D") initiatives continue to focus on strengthening and extending its portfolio of IT services across multiple new and emerging technology areas as well as in the intersection of these technologies. Your Company is investing in developing solutions and services around multiple
advanced technology areas (commercial wearables, smart robotics, autonomous vehicles, augmented reality, virtual reality, etc.), co–innovating with customers on emerging themes (Digital), enabling new customer experiences, building its patent portfolio, shaping innovation culture by running a number of initiatives to support and fund ideas and also by working closely with partner/startups ecosystem, academia and expert networks to bring cutting edge innovations to its customers.
Your Company has invested in these advanced technologies to strengthen existing capabilities and enhance its platforms for rich customer experience. For example, Wipro Sight solution uses advanced computer vision based algorithms to analyze customer behavior in stores for delivering enhanced in–store retail experience. These investments have resulted in many solution enhancements and new capabilities, which are unique and differentiated in the market. They have also led to multiple patents being applied and granted. Your Company has filed for 514 patents across technology areas in the last financial year.
Your Company has extended the applicability of HOLMES™ (Wipro's Artificial Intelligence platform) to multiple domains and processes to offer verticalised solutions to its customers.
Your Company has built a data discovery platform, which provides pertinent business insights across the value chain of an industry through pre–defined applications. Leveraging techniques like visual sciences and storytelling with data, the data discovery platform provides a unique value proposition around accelerating time to market for insights resulting in better adoption of insight driven decision making. Built using best of breed open source technologies, the data discovery platform leverages techniques like machine learning, natural language processing, visualization, stream computing, etc. to bring to the life the hidden insights in large and diverse data sets.
Your Company has also built a Big Data Ready Enterprise, which is an open sourced big data product aimed at addressing the complete lifecycle of managing data across the enterprise data lake that makes it possible to ingest, organize, enrich, process, analyze, govern and extract data at a fast pace, thereby significantly accelerating the big data implementation in a cost effective manner. The product is released under the Apache Public License v2.0 and hosted on Github.
To drive open innovation efforts for its customers, Your Company is driving many new age innovation initiatives through startups connects, hackathons, ideathons, etc. Your Company is part of various industry and startup forums including the NASSCOM Industry Partner Program (NIPP) that connects promising startups with corporates, to enable partnerships and growth. Your Company is working with various open innovation intermediaries to tap into expert networks across the world to complement our specialists on niche projects to solve complex customer problems involving Artificial Intelligence, Next Gen Architecture, Cognitive Systems etc. Your Company's academic and research partnerships exist across geographies.
Your Company is driving co–innovation with customers on emerging themes, conducting joint research, proof of concepts (POC), pilots etc. Some of the emerging areas include block chain, biometrics, new architectures and smart devices.
The innovation incubation center, Technovation Center continues to play a key role in helping customers design, conceptualize, and experience by leveraging future of technologies, industry processes and consumer behavior. The Technovation Center has now evolved into an experience platform to demonstrate the Company's solutions to its customers. Your Company has started work on its new Technovation Center in Mountain View, California, USA, which would cater predominantly to US & Canada geography customers, when fully operational.
Your Company is also building solutions around next generation robotics, drones and autonomous vehicles which combined with the computer vision and cognitive capabilities can address various market needs across industry verticals. Your Company is also working on industrial and enterprise wearable solutions which help improve work force productivity and safety requirements. Your Company has developed a video and sensor based smart parking solution which is useful in a smart city context to dynamically assess parking availability across locations, reservation and demand based pricing. Your Company has developed a smart healthcare solution called Wipro AssureCareTM which helps track medication, vital parameters and is used in elderly Care, home monitoring and clinical trials.
The research and development expenses for the years ended March 31, 2016, 2015 and 2014 were Rs.2,561 million, Rs.2,513 million and Rs.2,660 million respectively.
VI. Other Disclosures
Foreign Exchange Earnings and Outgoings
During the year 2015–16, your Company's foreign exchange earnings were Rs. 404,862 million and foreign exchange outgoings were Rs. 208,181 million as against Rs. 367,665 million of Foreign Exchange earnings and Rs. 194,308 million of Foreign Exchange outgoings for the financial year 2014–15.
Extract of Annual Return
Pursuant to section 92(3) and section 134(3)(a), extract of the Annual Return as on March 31, 2016 in form MGT–9 is enclosed as Annexure VI to this report.
Material Changes and Commitments Affecting the Financial Position of the Company
There have been no material changes and commitments, affecting the financial position of the Company which occurred during between the end of the financial year to which the financial statements relate and the date of this report.
Details of Significant and Material Orders Passed by the regulators/Courts/Tribunals Impacting the Going Concern Status and the Company's Operations in Future
There are no significant material orders passed by the Regulators/ Courts which would impact the going concern status of the Company and its future operations.
Information Required Under Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2014
Your Company has a policy and framework for employees to report sexual harassment cases at workplace and the process ensures complete anonymity and confidentiality of information. Adequate workshops and awareness programmes against sexual harassment are conducted across the organization. A total of 111 complaints of sexual harassment were raised in the year 2015, of which 107 cases were disposed and appropriate actions were taken in all cases within the statutory timelines. Further details are provided on page no. 37 of the Annual Report.
Acknowledgements and Appreciation
Your Directors take this opportunity to thank the customers, shareholders, suppliers, bankers, business partners/associates, financial institutions and Central and State Governments for their consistent support and encouragement to the Company. I am sure you will join our Directors in conveying our sincere appreciation to all employees of the Company and its subsidiaries and associates for their hard work and commitment. Their dedication and competence has ensured that the Company continues to be a significant and leading player in the IT Services industry.
For and on behalf of the Board of Directors
Azim H Premji
Date : June 3, 2016
Place : Bangalore