Management Discussion Analysis

Business Strategy

According to the Strategic Review 2016 of the National Association of Software and Service (the
NASSCOM Report) in FY16, IT export revenues, from India grew by 12.3% in constant currency
to an estimated $108 billion.

Wipros ambition is to achieve $15 billion in revenue with 23% Operating Margins by 2020 in
their IT Services business segment.

Business Strategy:- Their strategy thus addresses their clients Run and Change agenda. The Run
Strategy is about Modernizing the Core of their clients process and technology landscape i.e.
help clients achieve significant efficiencies in their core operations through various levers in all
of their core markets. The Change Strategy (i.e., Driving the Future) is focused on helping clients
achieve digital transformation enabled by Digital Capabilities brought by Wipro and its partner
ecosystems.

Business Model:-

For the year ended March 31, 2016, the IT Services segment primarily consists of IT Service offerings to
their customers organized by industry verticals as follows:

1. Banking, Financial Services and Insurance (BFSI),

2. Healthcare and Life Sciences (HLS),
3. Retail, Consumer, Transport and Government (RCTG),
4. Energy, Natural Resource and Utilities (ENU),
5. Manufacturing (MFG) and
6. Global Media and Telecom (GMT).

Effective April 1, 2016, in order to provide strategic focus and draw synergistic advantages among their
sales, marketing and business development teams, we realigned their industry verticals.

1. Banking, Financial Services and Insurance (BFSI)

2. Healthcare and Life Sciences (HLS)
3. Consumer Business Unit (CBU)
 4. Energy, Natural Resource and Utilities (ENU)
5. Manufacturing and Technology (MFG & Tech)
6. Communications (Communications)

Good Governance and Management Practices ;-

At Wipro, Corporate Governance is more than just adherence to the Statutory & Regulatory
requirements. It is equally about focusing on voluntary practices that underlie the highest levels of
transparency & propriety.

Governance by Shareholders

Audit/Risk and Compliance Committee

Board Governance, Nomination and Compensation Committee with the additional responsibility
of CSR
Strategy Committee
Administrative, Shareholders and Investors Grievance Committee (Stakeholders Relationship
Committee)

Governance by Management Process

Risk Management
Code of Conduct
Compliance Framework
The Ombudsprocess

Key Dimensions of Wipros Corporate Governance

Independence

Majority of the Board comprised of Independent Directors (7 out of 11 Directors as of March 31,
2016)
Audit, Risk and Compliance Committee, Board Governance, Nomination & Compensation
Committee comprise of entirely Independent Directors

Accountability

Corporate Internal Audit Function Directly Reports to the Audit Committee

Ombudsperson reporting to Audit Committee
Among First Indian Companies to adopt Sarbanes Oxley Acts Certification Process in India

Transparency

Timely, adequate & equivalent access to information to all stakeholders

Disclosure when Exchanges are closed (both in India and the US)- during non-trading hours
Announcement of quarterly audited financial results within 15 minutes of approval by the Board
of Directors
 Early adoption of standards (e.g. AS30/ Hedge Accounting)
Early adoption of IFRS
Filing with SEC in line with US registrants
Quarterly audited accounts with no qualifications
Quarterly & annual results sent by email to shareholders

The Ombudsprocess

In 2015-16, total 1,397 complaints were received via the Ombuds process and the action taken
cases as of March 31, 2016 was 1,337.

Performance Highlights

Revenue - IT Services: In FY 2015-16 their revenue from their IT Services segment, in INR terms,
increased by 10.71%. In absolute terms in INR, we experienced growth across most IT Services
industry verticals, particularly in Healthcare and Life Sciences industry vertical, Retail, Consumer
Goods & Transportation industry vertical and Manufacturing & Hitech industry vertical. In their
IT Services segment, we added 261 new customers during the year ended March 31, 2016 across
all industry verticals including customers added on account of acquisitions. Revenue from
Product Engineering, Global Infrastructure Services, Business Process Services and Analytics
grew strongly during the year. Amongst geographic segments, India and Middle East business
and Americas regions showed strong growth. During the year, we saw significant softness in the
Oil & Gas business due to the impact of low oil prices, which affected their revenue growth in US
dollar. However, in absolute terms in INR, we experienced growth across all IT Services industry
verticals.
Profitability: Their gross profit as a percentage of their revenue from their IT Services segment
decreased by 163 bps. The decrease in gross margin as a percentage of revenue is primarily
attributable to an increase in employee compensation cost during the year ended March 31,
2016 as compared to year ended March 31, 2015 as part of their annual compensation review
and annual progression cycle, partially offset by the depreciation in the value of the Indian
rupee against foreign currency.
Selling and Marketing Expenses: Selling and marketing expenses as a percentage of revenue
from their IT Services segment increased from 6.37% for the year ended March 31, 2015 to
6.45 % for the year ended March 31, 2016. In absolute terms, selling and marketing expenses
increased Rs 3,366 million. This increase is primarily attributable to an increase in the employee
compensation cost due to increased compensation as part of their annual compensation review
and annual progression cycle and investments in manpower capacity and amortization of
intangibles acquired through business combinations.
General and Administrative Expenses: General and administrative expenses as a percentage of
revenue from their IT Services segment decreased from 5.68% for the year ended March 31,
2015 to 5.57% for the year ended March 31, 2016. In absolute terms, general and administrative
expenses increased Rs 2,146 million. This increase is primarily due to an increase in the
employee compensation cost due to increased compensation as part of their annual
compensation review and annual progression cycle.
Segment Results: As a result of the above, segment results as a percentage of their revenue
from their IT Services segment decreased by 172 bps. However, in absolute terms, the segment
results of their IT Services segment increased by 2.12%.
 Performance against Guidance: Historically, we have followed a practice of providing revenue
guidance for their largest business segment, namely, IT Services. The guidance is provided at the
release of every quarterly earnings when revenue outlook for the succeeding quarter is shared.
The following table presents the performance of IT Services Revenue against outlook previously
communicated for the four quarters of 2015-16.

Resource Allocation Strategy

Cash generated from operations is their primary source of liquidity. We believe that their cash and cash
equivalents along with cash generated from operations will be sufficient to meet their working capital
requirements as well as repayment obligations with respect to debt and borrowings. Their choices of
sources of funding will be driven with the objective of maintaining an optimal capital structure.

We maintain a debt/borrowing level that we have established through consideration of a number of

factors including cash flow expectations, cash required for operations and investment plans. We
continually monitor their funding requirements, and strategies are executed to maintain sufficient
flexibility to access global funding sources, as needed. Please refer to Note 12 of their Notes to the
Consolidated Financial Statements for additional details on their borrowings.

The Companys cash flow from its operating, investing and financing activities, as reflected in the
Consolidated Statement of Cash Flows, is summarized in the table below:

Year ended March YOY

(INR Million)
31, changes

Net cash provided by/ (used in) : 2016 2015

Operating activities 78,873 78,262 611

Investing activities (138,156) (25,816) (112,340)

Financing activities* (1,587) (8,523) 6,936

Net change in cash and cash equivalents (60,870) 43,923 (104,793)

Effect of exchange rate changes on cash and cash equivalent 549 589 (40)

As of March 31, 2016, we had cash and cash equivalent and short-term investments of Rs 301,432
million. Cash and cash equivalent and short-term investments, net of debt, was Rs 176,211 million. As of
March 31, 2014, 2015 and 2016, their cash and cash equivalents were primarily held in Indian Rupees,
U.S. Dollars, United Kingdom Pound Sterling, Euros, Australian Dollars and Canadian Dollars. Please refer
to Financial risk management under Note 15 of their Notes to the Consolidated Financial Statements
for more details on their treasury activities.
In addition, we have unused credit lines of Rs 34,498 million. To utilize these lines of credit, we require
the consent of the lender and compliance with certain financial covenants. We have historically financed
their working capital and capital expenditures through their operating cash flows and through bank
debt, as required. In the normal course of business, we transfer accounts receivables and net
investment in finance lease (financial assets) to banks. The incremental impact of such transactions on
their cash flow and liquidity for the years ended March 31, 2014, 2015 and 2016 is not material. Please
refer Note 15 of their Notes to Consolidated Financial Statements.

The Company enters into operating leases for office space, hardware, and certain other equipment.
These arrangements are sometimes referred to as a form of off-balance sheet financing and details are
available in the notes to the Consolidated Financial statements.

Cash from Operating Activities: Cash generated by operating activities for the year ended March 31,
2016 increased by Rs 611 million over the year ended March 31, 2015, while profit for the year
increased by Rs 2,355 million during the same period. This is primarily due to longer collection cycles in
India and Middle East business.

Cash used in Investing Activities: Cash used in investing activities for the year ended March 31, 2016
was Rs 138,156 million. The cash invested (net of sales) in available for sale investments and inter-
corporate deposits amounted to Rs 104,311 million. Cash utilized for the payment for business
acquisitions amounted to Rs 39,373 million. We purchased property, plant and equipment amounted to
Rs 13,951 million, which was primarily driven by the growth plan of the Company.

As of March 31, 2016, we had contractual commitments of Rs 10,734 million related to capital
expenditures on construction or expansion of software development facilities, Rs 16,859 million related
to non-cancelable operating lease obligations and Rs 21,760 million related to other purchase
obligations. Plans to construct or expand their software development facilities are determined by their
business requirements.

In relation to their acquisitions, a portion of the purchase consideration is payable upon achievement of
specified revenue and earnings targets in the future. We expect that their cash and cash equivalents,
investments in liquid and short-term mutual funds and the cash flows expected to be generated from
their operations in the future will generally be sufficient to fund the earn-out payments.

Cash used in Financing Activities: Cash used in financing activities for the year ended March 31, 2016
was Rs 1,587 million as against Rs 8,523 million for the year ended March 31, 2015. This is primarily due
to an increase in net proceeds of loans and borrowings amounting to Rs 14,370 million. Their
borrowings have increased primarily on account of bridge loans to finance their acquisitions of Cellent
and HPS. This increase is partly offset by increase in payment of dividend amounting to Rs 6,004 million.
Dividends paid in the year ended March 31, 2016 represents final dividend declared for the year ended
March 31, 2015 amounting to Rs 7 per share and interim dividend for the year March 31, 2016
amounting to Rs 5 per share.