WIPRO LIMITED CONSOLIDATED

Letter to
Stakeholders

Azim H Premji, Chairman

Dear Stakeholder,

Wipro is in good shape. Over the last few years, we have systematically nurtured growth. We have invested in new growth areas and simultaneously restructured existing growth engines. Both these strategic initiatives have helped in sustaining our value creation potential for customers and shareholders alike. In the 59 years of existence, we have learnt that to build sustainable value, we need to stay close to our customers and constantly reinvent ourselves. The only way to manage the future is by anticipating it well before it happens. This means remaining alert to changing customer needs, emerging market trends and quickly aligning ourselves to them. After all, if the saw is not regularly sharpened, it loses its edge.

The net result of all our initiatives is that we now have a strong portfolio of

businesses and services that can lead industry growth and create superior value over time. And the good news is that some of the benefits of the initiatives are beginning to reflect in our operations and operating results. If you look at the results of the past year for Wipro, you can be proud that your company:

• Posted strong results in all its businesses – Revenues grew 39%, fuelled by strong growth in all businesses. Revenue in Dollar terms in our Global IT business grew 43%, while all other businesses delivered Revenue growth that were at the top of industry growth rate.

• Delivered broad-based growth across geographies, verticals and services lines in its Global IT business – Every single vertical posted good growth. More importantly, our differentiated Services such as Technology Infrastructure Services and

Testing Services grew ahead of the overall growth rate, as did our Europe geography where we invested early.

• Grew profits ahead of its Revenues as Operating Margins expanded in a year of Offshore cost pressure and significant Rupee appreciation.

• Translated strategic initiatives into operating results – growth rate of our differentiated services in our Global IT business and the strong growth in newer services and geographies in our India, Middle East and Asia Pac IT business indicating the success.

continue to live amidst dire poverty and amongst other ills. But with relentless hard work and focused energy in the right direction, I am convinced that things can only change for the better. Change will not be easy, but will be achieved.

I am no economist or sociologist, but I do see clear trends around me. Some of these are :

• The recognition that human resources, complete with human endeavor, intelligence and spirit are the greatest drivers of societal growth and development. Large populations, poverty and scarcity do not represent only

• Benefited from the fundamental faith you had in your other businesses – Wipro Consumer Care and Lighting is among the fastest growing FMCG companies in India for the second consecutive year and Wipro’s infrastructure engineering business leveraged the opportunities in the increased spends on infrastructure in India.

As I look ahead, to any time horizon, I feel very enthused about the future. The forces shaping our society are fundamental and seek to not only improve our lot economically but also make the world a better place to live in.

It is not as if there are no dark clouds – we have all lived through September11, and

a problem, but an immense opportunity as well. For this opportunity to be utilized to its fullest potential, education, healthcare, infrastructure and other social investments are essential. This realization has given a fresh impetus to these initiatives. At the individual level, this will drive equality and at the aggregate level, it will drive economic and social progress.

• Technology has a great role to play in creating a momentum for progress. Technology can improve productivity at every level and thereby multiply gains in a systematic and pervasive manner. Sometimes, when I look back, I wonder what we ever did without the cell phones and the computers! Life may have been

simpler then. But such changes occur only in one direction. The truth is once we know there is a better way of doing things, few people would want to go back to the old ways.

• A deep and abiding faith that people and organizations can be successful only by sticking to Values. This is a heartening reversal of the view held by some people, that ethical behavior was an obstacle to business success. Over the last few years, there is an increasing conviction in the minds of people that doing the ‘right thing’ is good for the business, good for the individual and good for society. Ethical behavior cannot be mandated. It has to spring from within. By practicing Values, sincerely and consistently, one creates Value.

To us in Wipro, our primary satisfaction comes not only from the robust financial results but from the fact that this success has been built upon a strong foundation of Values. The future looks so exciting to us, because in a very real sense Wipro is fully aligned with the three important forces or vectors I mentioned before : People, Technology and Values.

• It is the endeavour, intelligence and commitment of each Wiproite that has driven the success of Wipro. Wipro truly respects its talent. This talent continues to grow, as Wipro spans the globe – across 26 countries, with employees from over 15 nations.

• Our technology expertise is another core pillar of our success in all our businesses and particularly in getting the global stature for our IT business. Our Quality process,

continually improved by Six Sigma and Lean techniques, are sharply focused on making our customers successful in their endeavors. We are at the very tip of the technology driven productivity vector.

• Our unyielding commitment to Wipro Values, has been, I believe the core reason of our success. This is reflected in the theme of this year’s annual write-up. We in Wipro believe that we are Creating Value by PracticingValues.

I thank you for your confidence in Wipro. As long term partners, many of you have stood by us through periods of transformation. Even though our journey of transformation is not complete and our dream of leadership far from fulfillment, the essential elements – Value,Vision, Strategy, Execution – are all there. Wipro is in good shape, more than ever before.

Very sincerely

Azim H Premji
Chairman
April 30, 2005

Practicing Values
to Create Value

Prologue

Traditional management thought and practice holds that a business is essentially a robust economic engine to drive shareholder wealth. For years companies have rested their survival mantra on growth in revenues and profitability.

At Wipro, philosophically and in practice, we regard this as a key tenet, but not the only one. Value creation for shareholders is necessary — absolutely necessary — but not the sole purpose of our existence.

Also, as conventional management suggests, is Wipro an instrument of wealth creation? Does Wipro exist to help its customers do better business? Is Wipro an attempt to realize the promise of technology? Is Wipro a force helping in changing the social and economic aspirations of the common man? Or, is Wipro a social organization that gives people an opportunity to find meaning in life?

We believe Wipro is an idea. An idea that economic progress and social development can go hand in hand. An idea that transparency and integrity can not only co-exist with business success, but actually drive it. An idea that a corporation is not a machine, but a thriving social system of people coming together to make life better, for themselves and for the world around.

The power of an idea rests in its realization. All things are conceived twice – first in the mind and then in reality. It is true of the Taj Mahal, the Pyramids, or the Great Wall – where the ideas conceived in mind were realized through action. So we looked at

Wipro’s history for illustrations of this idea. Not just in Wipro’s community initiatives, but also in the way our core business is conducted. And realized that the idea is not an idea with a tinge of finality, but a continuous journey.

All ideas are outcomes of our deepest beliefs. We were amongst the earliest corporations to explicitly state what we believed in and crystallized them as Wipro Beliefs. Since then it has evolved and is evolving with the environment, while remaining steadfast in intent and practice, which now manifests as Values.

At Wipro, Values are what we have held sacrosanct, all through our existence as an organization. Over the last six decades, it has been our constant attempt to build Wipro on a strong foundation of Values. Values that act as a guiding beacon in all our thoughts and actions.

We have learnt that practicing our Values makes immense business sense. For instance, good talent approaches us, because we respect individuals and offer opportunities for growth. Fine organizations partner with us because we are fair to them and believe in growing with them. And we find the best customers because we offer the best value, and deliver on commitments that we make to them.

In the next few pages we present a glimpse of how we have attempted to practice each of our four Values to create value for our stakeholders – community, employees, customers and shareholders.

Creating Value for
the Community

Over the years, Wipro has reached a position from which it can contribute significantly to community development. For us, this is reason enough to engage meaningfully with the world around us. For two fundamental beliefs have guided our engagement with society: One, that Wipro is a socio-economic citizen. Two, if you can do good, you must.

This led us to the next debate: what should Wipro do? We decided to rally our

need to drastically improve quality. Hence the mandate we have given ourselves is to contribute significantly to improving the quality of Indian school education. We think this focus will lead to a large multiplier effect on human development.

That is practicing Human Values for us – being sensitive to the individual needs, and then going ahead and creating a win for them. That is practicing Innovation for us. Consistently offering novel and superior

resources around one big idea, an idea with leverage for significant social impact. Also, we decided against creating external support structures – roads, hospitals, institutions – for no amount of brick can surrogate the ability of an individual to support himself. In contrast, education is a fundamental enabler of progress – for an individual and for a nation. Good education empowers us to shape our future, to understand our role in society and contribute to social progress.

Given the state of Indian education, we feel strongly that there is an urgent and critical

solutions to satisfy the needs of individual stake holder; in this case the community. What gives us satisfaction is that several Wiproites have taken up this initiative on their own, too.

Wipro’s contribution to the community is carried through two initiatives – Wipro Applying Thought in Schools and Wipro Cares. The former is a structured initiative with active participation of all stake holders in the area of education with Wipro being the rallying point. The latter is an employee driven initiative which provides a channel for employees to contribute to the society.

Wipro Applying Thought in Schools

The Wipro Applying Thought in Schools initiative was triggered when Wipro realized that even the best people leaving our education system do not necessarily bring life-skills to the workplace. Education, with its focus on memorization and ‘doing well in exams’ is strongly disconnected from the needs of the student and society. Through this initiative, we strive to rekindle the spirit of curiosity in our children, and allow them

spearhead change through action research and advocacy.

For example, our Teachers’ Programme spread over two years, aims to transform the teacher into a ‘reflective practitioner’ through workshops and school based support. It helps teachers appreciate that knowledge is built through an evolving process of interpreting experience. The role of a teacher is to create right experiences and to guide the learner in

Human Values

We respect the unique
needs of Customers and
employees. We are
sensitive to their differing
needs in our interactions
with them.

to develop into critical, creative, and caring citizens.

Since its initiation in early 2001, Wipro Applying Thought in Schools has reached out to over 4,500 teachers and principals from 241 schools in 14 states across the country. Our projects range from training programs for teachers and principals to concerted efforts for transforming entire schools. Today, Wipro is among the largest providers of long-term developmental training to Indian schools.

All of our work is implemented through a partner network containing over a dozen of India’s leading social organizations. Together, we hope to reach a critical mass to

building knowledge. The Leadership Program works with school leaders to prepare them for their role in leading this transformation. The Parent Program helps parents appreciate the purpose of education and the process of learning. It also gets them to reflect on their part in their child’s education and development. Current research includes developing internationally benchmarked Learning Standards, curricular support material, and models for whole school transformation.

Wipro Cares

Another unique way in which we are creating value for the community is through our volunteering initiative Wipro Cares. It is a unique corporate experiment to channelise the contributions of Wiproites matched by Wipro, and the desires of Wiproites to make meaningful contribution to society, on a continuous basis.

Wipro Cares contributes through two pronged strategy: providing rehabilitation to the survivors of natural calamities and enhancing learning abilities of children from the under privileged sections of the society

Wipro Cares philosophy is to utilize the collective wisdom of volunteers to bring

Most survivors had broken a limb or back and needed medical help. We first provided a mobile X-ray and physiotherapy unit and later, set up a paraplegic centre at Nagarpal to accommodate 50 patients. Apart from this, we helped re-construct several school buildings that were damaged by the quake.

In the tsunami affected areas, Wipro Cares has adopted Pushpavanam village in Nagapattinam district in the state of Tamil Nadu where we are working to make it a better place to live than what it was before. We are providing livelihood means, working towards reclaiming agricultural land, creating self help groups to help women become economically independent and rebuilding schools in the village.

long term benefits and satisfaction to the community, as we believe that providing funding alone will not help the community.

Wipro Cares contributions in the Indian states that were hit by calamities are testimony to its philosophy where Wipro Cares worked on the ground to contribute where the need was felt.

In the cyclone hit Orissa, after detailed discussions with the survivors, we constructed a cyclone-proof school-cum-shelter at the Ramatara village in Erasama. The shelter is equipped with facilities such as bore wells, HAM radio set and life jackets. It functions as a well equipped school when there is no calamity.

When the Wipro Cares team visited Gujarat after the earthquake in 2001, the most glaring need was treatment for bone injuries.

Our efforts are always linked to the needs of the survivors and are executed along with the community.

Wipro Cares volunteers focus towards enhancing learning abilities of children in schools for children from the under privileged sections of urban areas. They work with children to teach them, to build confidence in them and to ignite curiosity and broaden their awareness levels.

Volunteers continue to engage with the community around us, with activities such as adult literacy, providing training for livelihood means, and helping them start their own initiatives to make them self sufficient.

Employee Initiatives

The community initiatives taken by Wipro have been furthered by employees who have taken their own steps towards adding value to the community.

When Robert Gabriel, Client Engagement Manager, (name changed due to the nature of his contribution) based out of Wipro – France, realized that several people are pushed to depression and possible suicide because they did not have any one to talk

are among several Wiproites who are making a difference to the society. Both believe in education as a great enabler for a bright future and have focused on providing financial help to the needy.

Constant motivation, guidance, financial and emotional support from Ashok, helped little Kiran complete tenth grade from a government school in remote, rural India. She would now study for a Diploma in Electronics and Communication Engineering

to, he made up his mind to help such people. For the last year, he has been an active volunteer with SOS Amitié, which aims to prevent suicide by counseling on phone. SOS Amitié is available for people in distress 24x7, for 365 days a year. It also handles calls on drugs, alcohol and physical abuse and loneliness, depression, divorce, illness, etc.

SOS Amitié receives about 800,000 calls a year from people who need a ‘listening’ ear, in France alone. Robert, as one of the volunteers who has decided to use his spare time counseling those in need, helps the callers talk about their problem, to lower their anxiety levels, and helps them clarify their situation so that they find better ways of accepting their problems or start to find solutions.

“I am glad that I could make a difference to at least few people around me,” he says, about his passion.

Ashok Herur, Principal Consultant - Talent Transformation and Durga Prasad Kancherla, Technical Manager for EAS–Oracle Practice

at the Government Polytechnic College, which enables her to become a technically qualified professional.

While Ashok’s is a story of how an individual can make a difference, Durga Prasad’s efforts are in scaling the activities with the help of more like minded people.

When Durga met his four childhood friends after a gap of 16 years in the US, their discussions focused on what good education could do to millions of under privileged children back home in India. With this blossomed Big Help for Education, a non profit organization. Big Help is helping 100 students through Sponsor a Child program, touches 2800 students through Adopt a School program, is helping another 3500 students through Merit Awards program.

What is unique is that this band of friends decided to try out a pilot project to make a difference in a government school in a rural area by utilizing the seed money contributed by all five of them. They set out collecting funds for more activities only

after they succeeded in this pilot project. They work with project committee over seeing each project with 4 designated volunteers working closely with the children and Government schools.

Azim Premji Foundation is a not-for-profit organization launched by Wipro Chairman Azim Premji. Its Vision is to significantly contribute to achieving quality universal education to facilitate a just, equitable and humane society. The Foundation believes that Quality Education is fundamental for India becoming a developed country.

It is committed to contributing to large scale systemic reforms to achieve the quality of education through a three pronged strategy of Advocacy, Interventions and Networking.

To achieve its Vision, the Foundation develops proof of concept in partnership with the state governments. Among its key programs are Learning Guarantee Program, Accelerated Learning Program, Computer Aided Learning Center and Education Management. Through these, the Foundation

touches 1.8 million children in 11,000 schools with 30,000 teachers.

These are but a few illustrations of Wiproites’ contributions to the Community.

Creating Value for Wiproites

The manifestations of the Values can be in different ways for different stake holders. While we believe that working towards providing quality education in schools is necessary to build a talented pool of citizens, we are also making efforts to train and provide opportunities for development for the employees within.

We believe that the worth of an organization is measured by the people who work for it. The challenge is to make sure that our people use their energies, desires and potentials to make their lives and the lives of others whom they touch more complete; thus enriching the environment around us.

Wipro’s strong people processes are a bench mark for best-of-breed people- engagement. We recognized the need to create leaders who go beyond managing the tasks and people and these leaders help people find a new meaning in what they do; energizing them to think beyond what they have been doing and encouraging them to discover their true potential. This voyage continues down the line.

An enquiring mind is constantly in quest of knowledge and feels restless in a closed environment. Hence we engage Wiproites in enhancing their skills and knowledge levels, through higher education and technical training to acquire new skills. This, coupled with leadership building program that we have initiated through life cycle leadership development programs have built strong leadership for the company.

Competency building

People Development in Wipro is not about programs. It is a way of life. As new employees join, they go through a carefully crafted induction program that sets them up for success in their careers. The participants go through an elaborate technical program depending on the streams they select. The technical skills are rounded off with behavioral skills and understanding of various processes. Most important, they

learn how to breathe and live Wipro Values, how to choose instinctively what is right over what is wrong and act consistently according to it.

The induction program is only the end of the beginning. After that, there are many need based programs. There are programs to sharpen domain skills in Transportation, Manufacturing, etc, creating solution architects through solution readiness programs, project management programs including PMI to develop top class Project Managers, consulting capabilities through programs such as Power Consulting, Account Management Programs and customer leadership interface programs (CLIP). There are avenues for higher education including the mini-MBA programs and other longer post graduate programs in management education. Programs are offered at various classrooms both in India and overseas. Online courses like Campus Abroad and comprehensive courses such as Wipro Online Consulting Academy (WOCA) and Wipro Online Leadership Academy (WOLA) are available to onsite employees to learn at their own place at their own pace. These programs are backed by mentoring and contact sessions to create blended learning opportunities.

Leadership Lifecycle Training

Winning organizations go beyond this. They build leaders at every level. Thinking on these lines, we provide Leadership Lifecycle Training, which aims to provide the necessary skills at each stage of growth in Wipro, by mapping the competencies to specific roles so as to transform a local leader to a global leader. If it is the New Leaders Program for the first time managers, for the second rung leaders it is the Wipro Leaders Program. For business managers, it is the Business Leader Program and finally the Strategic Leaders Program takes care of the need of the top management. We have had the best programs going with best of

the best of business schools such as the London Business School and the Wharton Business School and with the best of minds globally.

All this adds up to over 200,000 plus person days of training imparted to our employees in a year. A mammoth effort going into building technical, behavioral and leadership competencies. Competencies in turn translate into people capabilities that are needed to utilize the opportunities ahead.

Future always favors the prepared mind. The task of people development in Wipro is to keep our employees fully prepared to grasp the opportunities that lie ahead.

Does career begin only after engineering ends? Wipro decided that the development initiative can be more pro-active. In 1995, Wipro pioneered a bold initiative of targeting brilliant, fresh Science graduates who had somehow missed the engineering bus. And a unique program called WASE or Wipro Academy of Software Excellence was born. The program prepares these graduates to work with applications programming in a growing Software company like Wipro. WASE students have another great advantage. They imbibe Wipro’s culture of ethics right from the infancy of their careers.

Bringing value to WASE students, is a formal post graduate degree in computer science from India’s leading deemed university, Birla Institute of Technology & Science. This is a reflection of the success that Wipro has ensured for these students. In turn, each WASE student is an ambassador for Wipro, spreading its message of excellence in education and a culture of ethics.

People policies

Wipro’s People Policies are dynamic. They are always tuned to the changing environment. We have launched several initiatives to address the changing aspirations of our employees.

Career Mosaic takes care of people’s desire to have all round experience, to help them move up in the organization and helps keep their excitement high. It is a job rotation process aimed at development of business leaders by grooming quality professionals and providing them multiplicity of roles across Wipro. All representative roles have been classified under 3 distinct Career Streams - Project, Specialist and Functional. Career Mosaic maps the roles in different streams at different levels and helps an individual trace a career path. This also helps to address concerns of employees regarding career planning by providing more visibility to opportunities that exist across the organization. The emphasis is laid on continuous learning and development of competencies with a wider variety of assignments that will be made available.

Talent Review Planning is a very intense career and succession review program. This exercise, done annually at every business unit of Wipro, enables us to have a snapshot of managerial talent in the organization, Talent Review Planning inputs are used to enhance the leadership pipeline, retain key talent and build capability for future - identify development needs of talent across levels, Identify talent pipeline for critical roles in Delivery, Technical and Sales stream.

It was exactly 25 years ago that we started investing in R&D to develop a technology base in IT. Our efforts saw the launch of home-grown products for the first time, including India’s first mini computer and packaged software.

Lab on Hire was an idea that was born out of this effort and which later paved way for Offshore Development Centers. This was the model that made possible off shoring of Software Services, creating enormous value for our customers.

As we started providing Software Services to diverse global customers, we understood that customers are on one hand looking for a single Service Provider who can supply the full range of IT Services from BPO to IT Consulting and on the other hand they also wanted the Service Provider to know his business as well as he does.

Our attempt thereafter has been to continuously expand our service offerings and develop domain expertise. Wherever it made sense, we have taken the route of inorganic growth. For instance, we acquired Spectramind (now Wipro BPO) to add BPO services, and Nervewire to bring in high-end expertise in Financial Securities domain.

Our India, AsiaPac & Middle East IT business, which markets IT products and services, realized early on that customer would welcome one stop shop; for all his IT related needs instead of interacting with several vendors. Wipro lnfotech now supplies full range of IT hardware, system integration, hardware maintenance, application development and other professional services.

Our Consumer Care & Lighting division has taken the similar route for Baby products. Its portfolio now ranges from baby oil and baby soap to diapers.

oriented solutions to our customers.

Here is a sample of solutions that touch the customers business in several ways.

Wipro’s Test Management and Automation solution for mobile devices – WITMAS
With ever increasing functionalities in mobile devices and the convergence of many applications and standards, along with the product life cycle getting shorter, we felt a need to provide a good quality readily available Test Cases for the service providers. Wipro’s Test Management and Automation solution - WITMAS provides the apt solution for service providers to validate the ever increasing number of new phones that are getting launched.

Witmas provides over 21,000 test cases for all the mobile application areas like Messaging, Multimedia, Connectivity, MMI (Standard Applications) and WAP. The test cases can be managed by test management system, which is also developed by Wipro. The management platform provides the customers with an easy way to manage both manual and automated test cases. The test cases are further automated for faster turn around times for service providers, by partnering with a leading automation engine in the embedded domain.

Our customers are benefited by the set of readily available validated and automated test cases in the application areas that helps them to get started quickly in their Testing

journey. Wipro’s solution with all three components of test management, automation and test cases is of great value to our customers who haven’t invested on a Test Management system.

Radio Frequency Identification (RFID)

RFlD has been in use for the last two decades by several industries — especially the aeronautics and space industry. The technology has gained prominence in recent times due to several factors — one of the key ones being the compliance mandates from retail majors and the Department of Defence, FDA and other agencies. RFID is also gaining significant traction in the manufacturing industry worldwide.

RFlD is an emerging technology market. RFID solutions involve a mix of components including hardware, software and the domain expertise. For the same pain area the solutions that can be envisaged for two manufacturers may be very different. Thus the solution had to be modular which can be broken into pieces and yet based on the requirement can be assembled to demonstrate a solution that truly meets customer needs. We saw a clear opportunity to serve our customers in the RFID market in terms of technology and its applicability (to both closed and open loop applications).

We have built solutions in both the spaces that have enabled us to build business and technical capability. We have the ability and confidence to partner with prospects/customers to build and implement a sound RFlD strategy that would give tangible business benefits. Our solution is agnostic in terms of RFlD hardware and software. Our solution can plug and play easily with either proprietary systems or other enterprise software like SAP, Oracle etc. Our reusable components would reduce the time to deploy and also provide significant cost advantages to our customers.

Global Data Synchronization (GDS)

Sales lost each year due to supply chain inefficiencies are estimated to be $40 billion annually. GDS offering from Wipro has worked its way through retailers and manufacturers in greatly reducing their overheads in supply chain. Our customers were confident of posting savings to the tune of one million for every one billion by adapting to Wipro GDS strategy. The reduction in costs were spread across merchandising time, logistics cost reduction, shelf tag and scan errors reduction by 100s of hours, out of stock reduction by 24%. Both manufactures and retailers saw increase in speed to market, inventory reduction

Innovative Solutions

We consistently offer novel and superior solutions to satisfy the needs of the Customer.

Wipro Development Center at Reading, UK

improvement in warehouse deliverables, improvements in invoice reconciliation.

Wipro QuickStart

Wipro QuickStart is the ready-to-use templatized SAP solution for the Consumer Products Industry based on mySAP All-in-one Methodology. The Wipro QuickStart template addresses the specific needs of all the major functions of a Consumer Products company including those in financials, control, sales & distribution, materials management purchase & warehouse management, production planning, quality management and plant maintenance. Specifically focused on the small and medium Business segment, the Wipro QuickStart template leverages on Wipro’s domain knowledge and the Industry Best Practices from SAP. With more than 100 man months of effort gone into building the template, this feature-rich solution helps reduce the cycle time for implementation of SAP for the CPG industry by less than half.

Collaborative Manufacturing Framework (CME)

To be agile in a dynamic and disruptive business environment, it is increasingly becoming important for organizations to have access to information on realtime basis across the value chain of an enterprise. Thus IT is increasingly being mandated to deliver on the vision of Realtime Enterprise. To facilitate this vision we have developed a framework which we call as the CME. It is a framework for not just integrating IT applications but also integrating realtime systems at the shop floor with IT applications and thus helping our customers realize the vision of sensor to boardroom integration. We have used this framework to help one of our customers in Oil & Gas Industry to overcome the problem of data consistency and accuracy in his realtime systems at the refinery enabling informed decision making. We have also used this framework in Utilities and are now expanding this initiative to Metals and the CPG Industry.

Creating Value for Investors

Integrity

We deliver what we commit. With honesty, fairness, reliability and uprightness in whatever we do.

Our approach to shareholder value creation is simple. Deliver value for all other stakeholders — customers, employees and community — and shareholder value creation will be a natural outcome. The result is evident. Over the last 59 years of our existence, our Revenues have grown by a Compounded Annual Growth Rate (CAGR) of 21%; our profits have grown by a CAGR of 31% and our market capitalization has grown by a CAGR of 24%.

Our investors have seen value in this approach and have encouraged us to pursue it.

Integrity at the core

The simple truth is that all business revolves around Integrity. Integrity in the core of all thoughts and actions. As a broader idea, Integrity includes following the law of the land both in spirit and in letter; doing the right things and not just strive to pass the legal muster, delivering on commitment and claims, sharing information and upholding propriety. No regulatory or legal body can ever ensure Integrity and no act by itself can guarantee ethical behavior. It can only be addressed through effective leadership code that permeates the organization.

We have adopted a six-dimensional Governance framework that includes ethical business practice, ownership of corporate action, independence of board and auditors, treating business partners fairly and putting the stake holders’ interest first and foremost always.

We have a well articulated Code of Business Conduct and a robust Ombuds Process to address the ethical dilemmas we may face.

Ombuds Process

Actions should demonstrate the intent. We have put in place systems and processes to ensure that the culture of integrity embeds deeper into the organization. We believe that this would happen with constant dialogue with Wiproites. Our Ombuds Process is one of the ways to encourage the dialogue. Wiproites can raise their concerns with full confidence that the concerns will be addressed. It provides an avenue to those who are in an ethical dilemma, to discuss that dilemma, or to bring a failure to comply to the notice of Wipro Ombuds Person.

In Wipro, ownership goes hand-in-hand with authority for all key management positions to ensure management ownership of corporate actions. The CEO/CFO certification has been a formal process right from the bottom of the pyramids. To reduce chances of individual errors of judgment in key business restructuring decisions and acquisitions, we have devised a democratic approach where a committee of Wipro leaders evaluates all proposals. There is an ongoing balancing of entrepreneurship thrust for which Wipro is known and is accompanied with vigilant management monitoring. In 2002, when we voluntarily started complying with Sarbanes Oxley 302 certification, we were amongst the first.

Even as we built a strong internal audit system, the first Indian Internal Audit Function to be ISO 9002 certified, we set up an independent Audit Committee of the board in 1986, probably among the first in India to do so. The Audit Committee is made up entirely of independent directors and the external auditors/internal auditors report directly to Audit Committee. Today, the majority of our board is constituted by independent directors, who are among the best business leaders in the world. In 2002 the Wipro Internal Audit Function became the first Indian Internal Audit Function

to win the International Award from Institute of Internal Auditors, USA. In 2004, we were recognized by the National Award for Excellence in Corporate Governance by the Institution of Company Secretaries of India.

The Investor Relations Function which acts as the primary interface for all investor interactions & information-exchange, won the Alexander Gold Award for Excellence in Investor Relations in 1998 and in 1999. When we published the Corporate Governance report, we were among the first to voluntarily publish such a report. In 2001, we were among the first Indian Companies to voluntarily publish MD&A under Indian GAAP. In 2003, we were awarded the Golden Peacock Award for Corporate Governance. In 2004 we were ranked No. 1 by Institutional Investors Survey in Investor Relations and Corporate Governance.

We were awarded the SVGA 1 (highest) rating by ICRA (an Associate of Moody’s in India) on Shareholder Value Creation & Governance. The rating uses Treatment of Business Partners as one of the key criteria and a vindication that we have put the stakeholders’ interests first. There is an organizational code of conduct on insider trading, the compensation committee of Board is made up entirely of independent directors, the disclosure of related party transaction is mandatorily published in the Annual Report and the Company Secretarial Function acts as single channel to receive and resolve shareholders queries. Its performance is tracked as part of quarterly financials.

This Governance framework has ensured that every aspect of our work can measure up to the yardstick of propriety. For instance, we have consciously tried to make our business operations more environmentally sustainable by using as little of natural resources as possible.

Wipro’s Experience of Sustainable Living

Wipro Technologies was the First Software Services business to be awarded ISO 1400 1 certification way back in 2000. Our efforts at sustainable living have so far focused on water conservation, energy conservation and waste management.

We have set aggressive targets to manage the above three parameters. We have initiated and implemented a number of measures towards achieving our set targets. A sample of results:

Water conservation achieved a 53% reduction in consumption in 2004-05 compared to the previous year. Energy achieved a 5% reduction year on year. Waste management evolved a robust waste handling and disposal process.

We believe that the challenge of sustainable living is never ending and there is scope for continuous improvement using emerging technologies. Plans for improving our rain water harvesting system, setting up of a captive power plant and a biogas plant using waste are in various stages of implementation.

Transparency with stakeholders

The guiding principle for us has been – share not only what is required bylaw, but also whatever is important for stakeholders to know. To ensure that we serve the interests of our stakeholders by disclosing relevant information within a specific time frame, we have in place a Disclosure Committee that monitors the information flow within and outside the organization and a Corporate Controllership Organization that constantly benchmarks with Global Reporting Standards. This ensures that all our stakeholders have complete information on how we are conducting the business.

In 1985, Wipro became the first Indian corporate to present Segment-wise & Consolidated Results, years before it became a regulatory requirement.

Value for Money

Delivering higher Value to the Customer through continuous improvement in quality, cost and speed.

Delivering on commitment

Perhaps what builds trust with the stakeholders the most is delivering on commitment. We believe that we must constantly deliver Value for what the Customer pays. The Customer must always feel that he or she gets continuous improvement in quality, cost and delivery of our products and services rendered.

For instance, Wipro’s claim that the lamp life of our GLS incandescent lamp is 30% higher than the BIS specified limit, must be met unambiguously, for the customers to trust the company. Similarly, a commitment to the employees, that the company would be fair in assessing their performance, has to live up to their actual experience for them to trust the organisation.

Extending our values to business associates

When we speak of practicing values, it is not only by Wipro alone but also by all its business associates who contribute in its operations. Our stakeholders do not distinguish between Wipro and our business associates as far as reposing trust on Wipro is concerned, and therefore it is incumbent on us that this trust is not short-changed.

At Wipro we spend as much effort and time on ensuring that our business associates have a similar sense of what is right as we do. With a clear perception that if any one of them fails, it is the failure of the company. The Wipro Code of Business Conduct is equally applicable to our business associates.

In India, we have a strong partner network for IT service delivery. We ensure that we build a relationship based on shared values with our business partners to create a win for our customers.

Epilogue

We believe that our 40,000 plus-strong team will be the torch bearers of this culture in the society they live. We believe that our culture of ethics and integrity will go beyond the boundaries of our offices, to the friends and families of our employees, their acquaintances, our vendors, partners, any one who is touched by us. This is, perhaps our most significant contribution. A small step towards creating a wider group which will standup to its values and make this world a better place to live in.

As we grow quickly, there will be a challenge of scale at three levels. One, to ensure that Wiproites and our associates practice the Values to maintain the trust reposed on us by our stakeholders. Two, to continuously help develop our people as the organization doubles in size every few years. Three, to continuously adapt our values to the environment and make it relevant while remaining strong at the core.

At another level, there is the challenge of sustaining the rapid growth rate year after year. For this, we will need to constantly develop newer services, upgrade skill-sets and reinvent our business model to ensure that it creates value for our customers. Our Quality and Innovation engines must continue to work effectively to create incremental as well as breakthrough value for our customers.

Lastly, the transformation of the education system would continue to challenge us as we constantly improve our understanding of how such large systems change.

We are acutely aware that as we grapple with these challenges, our understanding

of the essence of business itself will continue to change. But our quest for creating a business with a soul will remain steadfast in the years ahead.

Our efforts at practicing values and creating value for our stakeholders are a never ending journey. In this journey to build a great organization, we have but taken the first few steps. And we know the next steps will be as challenging as the journey so far. And just as fulfilling. This is Wipro’s journey into the soul of its business........