WIPRO ENTERPRISE CYPRUS LIMITED (FORMERLY WMNETSERV LIMITED) STANDALONE FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED MARCH 31, 2015

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1 WIPRO ENTERPRISE CYPRUS LIMITED (FORMERLY WMNETSERV LIMITED) STANDALONE FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED MARCH 31,

2 WIPRO ENTERPRISE CYPRUS LIMITED BALANCE SHEET AS AT MARCH 31, 2015 (Amount in Rupees, except share and per share data, unless otherwise stated) 2

3 WIPRO ENTERPRISE CYPRUS LIMITED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2015 (Amount in Rupees, except share and per share data, unless otherwise stated) 3

4 WIPRO ENTERPRISE CYPRUS LIMITED CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2015 (Amount in Rupees) 4

5 WIPRO ENTERPRISE CYPRUS LIMITED NOTES TO THE FINANCIAL STATEMENTS (Amounts in INR, except share and per share data, unless otherwise stated) 1. Background Wipro Enterprise Cyprus Limited (formerly WMNETSERV Limited) ( the Company ) was incorporated in Cyprus on August 21, 2006 for the purpose of providing its customers with certain services related to wire line, wireless and cable infrastructure, including system deployment, commissioning, systems integration, out tasking and outsourcing, customer call center help desks, networks operation center, security operation center, network management, network, etc During the financial year 2013,Wipro Cyprus Private Limited had initiated and completed a Reorganization Scheme in order to facilitate the Wipro Limited s demerger scheme, by transferring those investments/companies of the Company, which are not directly or indirectly connected with IT services, to the company. 2. Significant accounting policies i. Basis of preparation of financial statements ii. iii. These financial statements have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP) under the historical cost convention on the accrual basis. Indian GAAP comprises Accounting Standards ( AS ) specified under section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014; the Companies Act, 1956, the provisions of Companies Act 2013 (to the extent notified) and other generally accepted accounting principles in India. Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles in India requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities on the date of the financial statements and reported amounts of revenues and expenses during the period reported. Actual results could differ from those estimates. Any revision in accounting estimate is recognized prospectively in current and future periods. Revenue recognition Interest Income is recognized on accrual basis. Dividend income is recognized when the right to receive such dividend is established. Profit on sale of investments is recorded upon transfer of title by the company and is determined as the difference between the sales price and the then carrying value of the investment. Other income is recognized on accrual basis. iv. Tangible assets and intangible assets Fixed assets are stated at historical cost net of accumulated depreciation and accumulated impairment loss, if any. Costs include expenditure directly attributable to the acquisition of the asset. Borrowing costs directly attributable to the construction or production of qualifying assets are capitalized as part of the cost. Intangible assets are stated at the consideration paid for acquisition net of accumulated amortisation and accumulated impairment loss, if any. The goodwill arising on acquisition of a group of assets is not amortized and is tested for impairment if indicators of impairment exist. Depreciation is provided using the straight line method over the useful life of the assets as prescribed under Part C of Schedule II of the Companies Act, Freehold land is not depreciated. Leasehold land is amortized on a straight line basis over the period of lease. Intangible assets are amortized over their estimated useful life on a straight line basis. For various brands acquired by the Company, estimated useful life has been determined ranging between 20 to 25 years. 5

6 The estimated useful life has been determined based on number of factors including the competitive environment, market share, brand history, product life cycles, operating plan, no restrictions on title and the macroeconomic environment of the countries in which the brands operate. Accordingly, such intangible assets are being amortized over the determined useful life. v. Foreign currency transactions Foreign currency transactions are recorded at the average rate for the month. Period-end balances of monetary foreign currency assets and liabilities are restated at the closing rate. The exchange difference arising from restatement or settlement is recognized in the profit and loss account. vi. Translation of financial statements The Company is a foreign subsidiary and has been treated as integral operating unit for translation with effect from 1 st Jan For the purpose of accounting during the year, all income and expenses items are converted at the average rate of exchange applicable for the year. All monetary assets and liabilities are translated at the closing rate on the balance sheet date. The equity share capital and reserves are carried forward at the rate of exchange prevailing on the transaction date. All resulting exchange differences arising out of year-end translation have been shown under Profit & Loss account. vii. Net investment in non-integral foreign operation Exchange differences arising on a monetary item that, in substance, forms part of the Company s net investment in a non-integral foreign operation are accumulated in a foreign currency translation reserve until the disposal of the net investment, at which time they will be recognised as income or as expense. An item for which settlement is neither planned nor likely to occur in the foreseeable future is, in substance, an extension to, or deduction from, the Company s net investment in that non-integral foreign operation. Such monetary items may include long-term receivables or loans but do not include trade receivables or trade payables. viii. Income tax The current charge for income taxes is calculated in accordance with the relevant tax regulations. Deferred tax assets and liabilities are recognised for the future tax consequences attributable to timing differences that result between the profit offered for income taxes and the profit as per the financial statements of the Company. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. The effect on deferred tax assets and liabilities of a change in tax rates is recognised in the period that includes the enactment/ substantial enactment date. Deferred tax assets on timing differences are recognised only if there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. However, deferred tax assets on the timing differences when unabsorbed depreciation and losses carried forward exist, are recognised only to the extent that there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. ix. Deferred tax assets are reassessed for the appropriateness of their respective carrying amounts at each balance sheet date. Earnings per share The number of shares used in computing basic and diluted earnings per share is the weighted average number of shares outstanding during the period. The Company does not have potentially dilutive shares. 6

7 x. Cash flow statement xi. xii. xiii. Cash flows are reported using indirect method, whereby net profits before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated. Provisions and contingent liabilities The Company creates a provision when there is a present obligation as a result of an obligating event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made. Provisions for onerous contracts, i.e. contracts where the expected unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it, are recognised when it is probable that an outflow of resources embodying economic benefits will be required to settle a present obligation as a result of an obligating event, based on a reliable estimate of such obligation. Foreign currency transactions and translation of financial statement: Being integral operation of Wipro Enterprise Limited, the functional currency of the Company is Indian rupees. Foreign currency transactions are recorded at the average rate of the month. All monetary assets and liabilities are translated at the closing rate on the balance sheet date and non monetary assets and liabilities are translated at transaction rate. All resulting exchange difference arising out of year-end conversion has been transferred to profit and loss account. Impairment of assets The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs to is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognised in the profit and loss account. If at the balance sheet date there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciated historical cost. 7

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12 16. Related Party Transactions i) List of related parties and relationships: Wipro Enterprise Limited Wmnetserv (UK) Limited Wipro Yardley FZE Wipro Infrastructure Engineering AB Wipro Singapore PTE Limited Yardley of London Limited Wipro Enterprise Inc Wipro Enterprises Netherlands BV Wipro Infrastructure Engineering S.A. (Formerely Hervil S.A) Wipro Do Brasil Industrial S.A (Formerly R.K.M Equipamentos Hidráulicos S.A) Wipro Limited Wipro Technologies SRL Holding company Step Subsidiary Company Entity under common control Entity under common control ii) The following are the details of investment in subsidiaries: Name of the Entities Country of Incorporation Cost of Investment Effective Equity INR INR % % WMnetserv UK Limited United Kingdom 8,160,000 8,160, Wipro Infrastructure engineering AB Sweden 3,256,934,510 3,256,934, Wipro Singapore Pte Limited Singapore 10,926,095,072 10,926,095, Yardley of London Limited United Kingdom 194,184, Hervil S.A. Romania 435,511, ,511, Hervil Asset Management SRL Romania 179,344, ,344, Wipro Yardley FZE Dubai 1,857,622,949 1,857,622, Wipro Enterprise Inc USA 58,141,250 58,141, Wipro Enterprises Netherlands BV Netherland 187,256,250 42,032, iii) The following is the list of receivables from and payables to the related parties: As at March 31, 2015 March 31, 2014 Payables WMNETSERV (UK) Ltd 844, ,302 Wipro Singapore Pte Ltd 1,099,784, ,271,079 Yardley of London Limited 761,188 - Wipro Technologies SRL 1,933,054 - Receivables Wipro Limited 78,462,206 76,460,988 Wipro Yardley FZE 43,674,502 52,599,011 1

13 Wipro Infrastructure Engineering AB 353,455, ,841,627 Yardley of London Limited - 190,048,298 Wipro Cyprus Private Limited - 123,311,840 Wipro Enterprises Limited 169,746, ,463,511 Wipro Enterprise Netherland BV 433,219, ,477,382 Wipro Enterprise Inc 64,287,191 30,206,200 Wipro Singapore Pte Ltd 636,002,904 - Wipro Do Brasil Industrial S.A (Formerly R.K.M 50,198,984 - Equipamentos Hidráulicos S.A) Wipro Infrastructure Engineering S.A. (Formerely Hervil S.A) 16,532,851 - iv) The following is the list of transactions with the related parties: As at March 31, 2015 March 31, 2014 Royalty Income Wipro Enterprises Limited 69,762,178 65,687,988 Wipro Yardley FZE 218,206, ,958,704 Management Service Fees Wipro Infrastructure Engineering AB 7,533,150 - Wipro Infrastructure Engineering S.A. 14,915,486 - (Formerely Hervil S.A) Interest Income Wipro Singapore Pte Ltd 17,854,660 17,789,146 Wipro Enterprise Netherland BV 12,164,300 2,650,213 Wipro Infrastructure Engineering AB 9,287,108 5,086,583 Wipro Enterprises Inc 1,497, ,843 Wipro Do Brasil Industrial S.A (Formerly R.K.M 202,886 - Equipamentos Hidráulicos S.A) Yardley of London Limited - 6,094,710 Interest Expense Wipro Singapore Pte Ltd 7,616,738 3,012,111 Yardley of London Limited - 2,285, Segment reporting The Company neither has not more than one business segment nor more than one geographic segment; hence segment reporting is not required to be disclosed. 18. The Company is a foreign company and is not governed by the provisions of Micro, Small and Medium Enterprises Development Act, 2006 (the Act). Hence, the disclosures under the Act are not applicable to the Company. As per our report of even date attached for Geetha Chandrakant & Co. Chartered Accountants Firm Registration number : S For and on behalf of the Board of Directors Sd/- Sd/- Sd/- Sd/- CA. Geetha A B Director Director Director Partner Membership No Bangalore/ June 23,