UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

Pursuant to Rule 13a-16 or 15d-16 of the Securities Exchange Act of 1934

For the Quarter ended September 30, 2006

Commission File Number 001-16139

WIPRO LIMITED

     Indicate by check mark if registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F		þ		Form 40-F		o

     Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g- 3-2(b) under the Securities Exchange Act of 1934.

Yes		o		No		þ

     If “Yes” is marked, indicate below the file number assigned to registrant in connection with Rule 12g 3-2(b)

     Not applicable.

 

 

Currency of Presentation and Certain Defined Terms

In this Quarterly Report references to “U.S.” or “United States” are to the United States of America, its territories and its possessions. References to “India” are to the Republic of India. References to U.K. are to the United Kingdom. Reference to “$” or “US$” or “dollars” or “U.S. dollars” are to the legal currency of the United States, references to “£” or “Pound Sterling” are to the legal currency of the United Kingdom, references to “€” or “Euro” are to the legal currency of the European Union, and references to “Rs.” or “Rupees” or “Indian rupees” are to the legal currency of India. All amounts are in Rs. or in U.S. dollars unless stated otherwise. Our financial statements are presented in Indian rupees and translated into U.S. dollars and are prepared in accordance with United States Generally Accepted Accounting Principles (“U.S. GAAP”). References to “Indian GAAP” are to Indian Generally Accepted Accounting Principles. References to a particular “fiscal” year are to our fiscal year ended March 31 of such year.

All references to “we”, “us”, “our”, “Wipro” or the “Company” shall mean Wipro Limited and, unless specifically indicated otherwise or the context indicates otherwise, our consolidated subsidiaries. “Wipro” is our registered trademark in the United States and India. All other trademarks or trade names used in this Quarterly Report on Form 6K are the property of the respective owners.

Except as otherwise stated in this Quarterly Report, all translations from Indian rupees to U.S. dollars are based on the noon buying rate in the City of New York on September 29, 2006, for cable transfers in Indian rupees as certified for customs purposes by the Federal Reserve Bank of New York which was Rs. 45.95 per $1.00. No representation is made that the Indian rupee amounts have been, could have been or could be converted into United States dollars at such a rate or any other rate. Any discrepancies in any table between totals and sums of the amounts listed are due to rounding. Information contained in our website, www.wipro.com, is not part of this Quarterly Report.

Forward-Looking Statements May Prove Inaccurate

     IN ADDITION TO HISTORICAL INFORMATION, THIS QUARTERLY REPORT CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933, AS AMENDED, AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. THE FORWARD-LOOKING STATEMENTS CONTAINED HEREIN ARE SUBJECT TO CERTAIN RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE REFLECTED IN THE FORWARD-LOOKING STATEMENTS. FACTORS THAT MIGHT CAUSE SUCH A DIFFERENCE INCLUDE, BUT ARE NOT LIMITED TO, THOSE DISCUSSED IN THE SECTIONS ENTITLED “RISK FACTORS” AND “MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS” AND ELSEWHERE IN THIS REPORT. READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH REFLECT MANAGEMENT’S ANALYSIS ONLY AS OF THE DATE HEREOF. IN ADDITION, READERS SHOULD CAREFULLY REVIEW THE OTHER INFORMATION IN THIS QUARTERLY REPORT AND IN THE COMPANY’S PERIODIC REPORTS AND OTHER DOCUMENTS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (“SEC”) FROM TIME TO TIME.

PART I — FINANCIAL INFORMATION

     Item 1. Financial Statements

WIPRO LIMITED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in millions, except share data)

		As of September 30,												As of March 31,
		2005				2006				2006				2006
										Convenience
										translation into
										US$
		(Unaudited)				(Unaudited)				(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents (Note 4)		Rs.	4,214.08			Rs.	4,143.97			$	90.18			Rs.	8,857.70
Investments in liquid and short-term mutual funds (Note 8)			27,715.50				33,046.40				719.18				30,328.42
Accounts receivable, net of allowances (Note 5)			16,889.74				24,698.81				537.51				20,593.11
Costs and earnings in excess of billings on contracts in progress			4,539.89				5,439.48				118.38				4,336.06
Inventories (Note 6)			1,736.74				2,425.59				52.79				2,064.61
Deferred income taxes			111.79				220.17				4.79				168.28
Other current assets (Note 7)			4,157.42				6,297.27				137.05				5,463.04
Total current assets			59,365.16				76,271.69				1,659.88				71,811.22
Property, plant and equipment, net (Note 9)			15,211.91				21,195.04				461.26				17,777.40
Investments in affiliates (Note 13)			908.44				1,200.45				26.13				1,043.09
Deferred income taxes			227.27				55.84				1.22				182.91
Intangible assets, net (Note 10)			352.87				2,376.42				51.72				854.33
Goodwill (Note 3,10)			5,924.87				11,454.87				249.29				7,480.85
Other assets (Note 7)			1,244.04				1,528.00				33.25				1,243.99
Total assets		Rs.	83,234.56				114,082.31			$	2,482.75			Rs.	100,393.78
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Borrowings from banks (Note 15)		Rs.	1,175.10				807.43			$	17.57			Rs.	704.55
Current portion of long-term debt			—				89.86				1.96
Accounts payable			3,588.38				4,589.65				99.88				4,145.96
Accrued expenses			5,525.82				7,711.19				167.82				6,600.63
Accrued employee costs			3,750.21				4,884.59				106.30				4,425.12
Advances from customers			1,718.03				2,212.21				48.14				1,616.26
Other current liabilities (Note 11)			3,018.89				5,632.14				122.57				3,614.41
Total current liabilities			18,776.43				25,927.07				564.25				21,106.94
Long-term debt, excluding current portion			—				105.65				2.30				—
Deferred income taxes			3.28				468.08				10.19				127.46
Other liabilities			324.16				460.86				10.03				395.04
Total liabilities			19,103.87				26.961.66				586.76				21,629.44
Stockholders’ equity:
Equity shares at Rs. 2 par value: 1,650,000,000 shares authorized; Issued and outstanding: 1,425,754,267, 1,414,957,082 and 1,434,563,895 shares as of March 31, 2006, September 30, 2005 and 2006 (Note 16, 17)			2,829.91				2,869.13				62.44				2,851.51
Additional paid-in capital (Note 22)			13,791.14				17,532.90				381.56				16,521.07
Deferred stcok compensation (Note 22)			(2,674.34	)			—				—				(2,202.42	)
Accumulated other comprehensive income			321.71				577.58				12.56				433.70
Retained earnings (Note 18)			49,862.35				66,141.12				1,439.45				61,160.56
Equity shares held by a controlled Trust: 7,869,060 shares as of March 31, 2006, September 30, 2005 and 2006 (Note 22)			(0.08	)			(0.08	)			(0.00	)			(0.08	)
Total stockholders’ equity			64,130.69				87,120.65				1,895.99				78,764.34
Total liabilities and stockholders’ equity		Rs.	83,234.56				114,082.31			$	2,482.75			Rs.	100,393.78

See accompanying notes to the consolidated financial statements.

WIPRO LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in millions, except share data)

		Three months ended September 30,												Six months ended September 30,
		2005				2006				2006				2005				2006				2006
										Convenience												Convenience
										translation												translation
										into US$												into US$
		(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)
Revenues:
Global IT Services and Products
IT Services		Rs.	17,052.15				24,875.88			$	541.37			Rs.	32,653.98				47,289.38			$	1,029.15
BPO Services			1,824.02				2,303.02				50.12				3,652.06				4,402.22				95.80
India and AsiaPac IT Services and Products
Services			1,422.73				2,076.98				45.20				2,845.34				3,685.25				80.20
Products			2,479.08				2,921.89				63.59				4,468.82				5,669.80				123.39
Consumer Care and Lighting			1,358.75				1,870.81				40.71				2,681.02				3,520.80				76.62
Others			829.68				1,089.31				23.71				1,530.37				1,882.74				40.97
Total			24,966.41				35,137.89				764.70				47,831.59				66,450.19				1,446.14
Cost of revenues:
Global IT Services and Products
IT Services			11,065.97				16,467.49				358.38				20,908.81				31,084.87				676.49
BPO Services			1,390.26				1,498.67				32.62				2,862.53				2,991.92				65.11
India and AsiaPac IT Services and Product
Services			829.86				1,191.44				25.93				1,680.27				2,082.63				45.32
Products			2,219.88				2,642.92				57.52				3,986.08				5,131.03				111.67
Consumer Care and Lighting			878.44				1,242.64				27.04				1,704.27				2,299.03				50.03
Others			614.21				797.95				17.37				1,139.13				1,433.40				31.19
Total			16,998.62				23,841.12				518.85				32,281.09				45,022.88				979.82
Gross profit			7,967.79				11,296.77				245.85				15,550.50				21,427.31				466.32
Operating expenses:
Selling and marketing expenses			(1,599.45	)			(2,160.05	)			(47.01	)			(3,239.50	)			(4,196.50	)			(91.33	)
General and administrative expenses			(1,261.57	)			(1,793.86	)			(39.04	)			(2,432.53	)			(3,271.93	)			(71.21	)
Research and development expenses			(46.31	)			(70.69	)			(1.54	)			(88.86	)			(128.02	)			(2.79	)
Amortization of intangible assets (Note 10)			(10.54	)			(88.26	)			(1.92	)			(25.08	)			(141.76	)			(3.09	)
Foreign exchange gains/(losses), net			55.29				2.38				0.05				(92.94	)			(16.39	)			(0.36	)
Others, net			13.44				282.00				6.14				32.20				304.85				6.63
Operating income			5,118.65				7,468.29				162.53				9,703.79				13,977.56				304.19
Other income, net (Note 19)			293.53				471.19				10.25				507.15				978.70				21.30
Equity in earnings/(losses) of affiliates (Note 13)			82.95				92.01				2.00				139.20				157.37				3.42
Income before income taxes, minority interest and cumulative effect of change in accounting principle			5,495.13				8,031.49				174.79				10,350.14				15,113.63				328.91
Income taxes (Note 21)			(790.95	)			(1,068.22	)			(23.25	)			(1,376.98	)			(2,047.44	)			(44.56	)
Minority interest			—				—				—				(1.40	)			—				—
Income before cumulative effect of change in accounting principle			4,704.18				6,963.27				151.54				8,971.76				13,066.19				284.36
Cumulative effect of change in accounting principle (Note 2)			—				—				—				—				39.09				0.85
Net income		Rs.	4,704.18				6,963.27			$	151.54			Rs.	8,971.76				13,105.28			$	285.21
Earnings per equity share: (Note 23)
Basic
Income before cumulative effect of change in accounting principle			3.35				4.89				0.11				6.40				9.19				0.20
Cumulative effect of change in accounting principle			—				—				—				—				0.03				0.00
Net income			3.35				4.89				0.11				6.40				9.22				0.20
Diluted
Income before cumulative effect of change in accounting principle			3.32				4.83				0.11				6.33				9.08				0.20
Cumulative effect of change in accounting principle			—				—				—				—				0.03				0.00
Net income			3.32				4.83				0.11				6.33				9.11				0.20
Weighted average number of equity shares used in computing earnings per equity share:
Basic			1,403,065,125				1,424,691,434								1,401,305,426				1,422,047,916
Diluted			1,416,017,738				1,442,389,536								1,417,562,951				1,439,517,160

See accompanying notes to the consolidated financial statements.

WIPRO LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY AND COMPREHENSIVE INCOME
(in millions, except share data)

																						Accumulated
										Additional												Other								Equity Shares held by a								Total
		Equity Shares								Paid in				Deferred Stock				Comprehensive				Comprehensive				Retained				Controlled Trust								Stockholders'
		No. of Shares				Amount				Capital				Compensation				Income				Income/(loss)				Earnings				No. of Shares				Amount				Equity
Balance as of March 31, 2005			1,407,141,044			Rs.	1,407.14			Rs.	13,272.57			Rs.	(3,185.14	)						Rs.	96.09			Rs.	45,138.37				(7,893,060	)		Rs.	(0.08	)		Rs.	56,728.95
Cash dividends (unaudited)			—				—				—				—								—				(3,997.74	)			—				—				(3,997.74	)
Issuance of equity shares on exercise of options (unaudited)			7,816,038				10.98				1,849.05				—								—				—				—				—				1,860.03
Stock split effected in the form of stock dividend (unaudited)			—				1,411.79				(1,161.75	)			—								—				(250.04	)			—				—				—
Equity shares granted by Trust (unaudited)			—				—				—				—				—				—				—				24,000				—				—
Reversals related to employee stock incentive plan, net of issuances (unaudited) (Note 22)			—				—				(168.73	)			142.77								—				—				—				—				(25.96	)
Amortization of compensation related to employee stock incentive plan (unaudited)			—				—				—				368.03				—				—				—				—				—				368.03
Comprehensive income
Net income (unaudited)			—				—				—				—			Rs.	8,971.76				—				8,971.76				—				—				8,971.76
Other comprehensive income / (loss)
Translation adjustments (unaudited)			—				—				—				—				8.24				—				—				—				—				—
Unrealized gain on investment securities, net (unaudited)			—				—				—				—				138.27				—				—				—				—				—
Unrealized gain on cash flow hedging derivatives, net (unaudited)			—				—				—				—				79.11				—				—				—				—				—
Total other comprehensive income / (loss) (unaudited)			—				—				—				—				225.62				225.62				—				—				—				225.62
Comprehensive income (unaudited)																		Rs.	9,197.38
Balance as of September 30, 2005 (unaudited)			1,414,957,082			Rs.	2,829.91			Rs.	13,791.14			Rs.	(2,674.34	)		Rs.	9,197.38			Rs.	321.71			Rs.	49,862.35				(7,869,060	)		Rs.	(0.08	)		Rs.	64,130.69
Balance as of March 31, 2006			1,425,754,267				2,851.51				16,521.07				(2,202.42	)			11,410.20				433.70				61,160.56				(7,869,060	)			(0.08	)			78,764.34
Elimination of deferred stock compensation balance on adoption of SFAS 123 No. ( R ) (Note 2)											(2,202.42	)			2,202.42																								—
Cumulative effect of change in accounting principle (Note 2)											(39.09	)																											(39.09	)
Issuance of equity shares on exercise of options (unaudited)			8,809,628				17.62				2,705.83																												2,723.45
Amortisation of compensation related to employee stock incentive plan (unaudited) (Note 2)											547.51																												547.51
Cash dividend (unaudited)																											(8,124.72	)											(8,124.72	)
Comprehensive income
Net income (unaudited)																			13,105.28								13,105.28												13,105.28
Other comprehensive income/(loss)																																							—
Translation adjustments (unaudited)																			88.64
Unrealised gain on investment securities, net (net of tax effect of Rs. 48.14) (unaudited)																			89.08
Unrealised gain on cash flow hedging derivatives, net (unaudited)																			(33.84	)
Total other comprehensive income/(loss) (unaudited)																			143.88				143.88																143.88
Comprehensive income (unaudited)																			13,245.80

																						Accumulated
										Additional												Other								Equity Shares held by a								Total
		Equity Shares								Paid in				Deferred Stock				Comprehensive				Comprehensive				Retained				Controlled Trust								Stockholders'
		No. of Shares				Amount				Capital				Compensation				Income				Income/(loss)				Earnings				No. of Shares				Amount				Equity
Balance as of September 30, 2006 (unaudited)			1,434,563,895				2,869.13				17,532.90				—								577.58				66,141.12				(7,869,060	)			(0.08	)			87,120.65
Balance as of September 30, 2006 (unaudited) ($)						$	62.44			$	381.56											$	12.56			$	1,439.45							$	(0.00	)		$	1,895.99

See accompanying notes to the consolidated financial statements.

WIPRO LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)

		Six months ended September 30,
		2005				2006				2006
										Convenience
										translation into
										US$
		(Unaudited)				(Unaudited)				(Unaudited)
Cash flows from operating activities:
Net income		Rs.	8,971.76				13,105.28			$	285.21
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on sale of property, plant and equipment			(7.29	)			(5.16	)			(0.11	)
Cumulative effect of change in accounting principle			—				(39.09	)			(0.85	)
Depreciation and amortization			1,506.07				2,043.52				44.47
Deferred tax charge/(benefit)			29.13				(52.27	)			(1.14	)
Unrealised exchange (gain)/loss			—				354.21				7.71
(Gain)/loss on sale of investment securities			(46.89	)			(174.91	)			(3.81	)
Amortization of stock compensation			342.07				547.51				11.92
Equity in earnings of affiliates			(139.20	)			(157.37	)			(3.42	)
Minority interest			1.40				—				—
Changes in operating assets and liabilities:
Accounts receivable			(2,083.38	)			(3,479.05	)			(75.71	)
Costs and earnings in excess of billings on contracts in progress			(1,800.24	)			(1,103.42	)			(24.01	)
Inventories			32.42				(300.87	)			(6.55	)
Other assets			(1,487.36	)			(690.37	)			(15.02	)
Accounts payable			(124.84	)			49.26				1.07
Accrued expenses and employee costs			2,281.09				1,570.04				34.17
Advances from customers			438.39				595.95				12.97
Other liabilities			937.78				1,109.08				24.14
Net cash provided by operating activities			8,850.91				13,372.34				291.02
Cash flows from investing activities:
Expenditure on property, plant and equipment			(3,490.57	)			(5,082.49	)			(110.61	)
Proceeds from sale of property, plant and equipment			47.56				183.33				3.99
Purchase of investments in liquid and short-term mutual funds			(23,662.41	)			(46,959.48	)			(1,021.97	)
Proceeds from sale of investments in liquid and short-term mutual funds			19,175.91				44,568.90				969.94
Payment for acquisitions, net of cash acquired			(852.00	)			(5,344.95	)			(116.32	)
Net cash used in investing activities			(8,781.51	)			(12,634.69	)			(274.97	)
Cash flows from financing activities:
Proceeds from issuance of equity shares			1,860.03				2,723.45				59.27
Proceeds from/(repayments of) short-term borrowing from banks, net			611.13				125.38				2.73
Repayment of long-term debt			—				(182.97	)			(3.98	)
Payment of cash dividends			(3,997.74	)			(8,124.72	)			(176.82	)
Net cash used in financing activities			(1,526.58	)			(5,458.86	)			(118.80	)
Net decrease in cash and cash equivalents during the period			(1,457.18	)			(4,721.21	)			(102.75	)
Effect of exchange rate changes on cash			0.50				7.48				0.16
Cash and cash equivalents at the beginning of the period			5,670.76				8,857.70				192.77
Cash and cash equivalents at the end of the period		Rs.	4,214.08				4,143.97			$	90.18
Supplementary information:
Cash paid for interest		Rs.	8.99				36.02			$	0.78
Cash paid for taxes			1,895.35				1,759.86				38.30

See accompanying notes to the consolidated financial statements.

WIPRO LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share data and where otherwise stated)

1. Overview

     Wipro Limited (Wipro), together with its subsidiaries Wipro Inc., Wipro Holdings (Mauritius) Limited, Wipro Chandrika Limited, Wipro Travel Services Limited, Wipro Trademarks Holdings Limited, Wipro Japan KK, Wipro Infrastructure Engineering Limited (formerly known as Wipro Fluid Power Limited), Spectramind Inc., Wipro Cyprus Private Limited, Quantech Global Services Ltd., Wipro Healthcare IT Limited, Wipro Consumer Care Limited, Wipro Shanghai Limited and affiliates WeP Peripherals Limited and Wipro GE Medical Systems Limited (collectively, referred to as the Company) is a leading India based provider of IT Services and Products, including Business Process Outsourcing (BPO) services, globally. Further, Wipro has other businesses such as India and AsiaPac IT Services and Products and Consumer Care and Lighting. Wipro is headquartered in Bangalore, India.

2. Significant Accounting Policies

     The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles (U.S. GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and disclosure of contingent assets and liabilities. Actual results could differ from these estimates.

     Basis of preparation of financial statements. The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States.

     Interim information presented in the consolidated financial statements has been prepared by the management without audit and, in the opinion of management, includes all adjustments of a normal recurring nature that are necessary for the fair presentation of the financial position, results of operations and cash flows for the periods shown, and is in accordance with U.S. GAAP. These financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s annual report on Form 20-F for the fiscal year ended March 31, 2006.

     Functional currency and exchange rate translation. The functional currency of Wipro and certain of its foreign subsidiaries is the Indian rupee. For certain other foreign subsidiaries, the functional currency is their local currency. The translation of the functional currency of these foreign subsidiaries into Indian rupee is performed for balance sheet accounts using the exchange rate in effect at the balance sheet date and for revenue and expense accounts using an appropriate monthly weighted-average exchange rate for the respective periods. The gains or losses resulting from such translation are reported as a separate component of stockholders’ equity.

     Foreign currency transactions are translated into the functional currency at the rates of exchange prevailing on the date of respective transactions. Monetary assets and liabilities in foreign currency are translated into functional currency at the exchange rates prevailing on the balance sheet date. The resulting exchange gains/losses are included in the statement of income.

     Convenience translation. The accompanying consolidated financial statements have been reported in Indian rupees, the national currency of India. Solely for the convenience of the readers, the financial statements as of and for the six months ended September 30, 2006, have been translated into US dollars at the noon buying rate in New York City on September 29, 2006, for cable transfers in Indian rupees, as certified for customs purposes by the Federal Reserve Bank of New York of $1 = Rs. 45.95. No representation is made that the Indian rupee amounts have been, could have been or could be converted into United States dollars at such a rate or any other rate.

     Principles of consolidation. The consolidated financial statements include the financial statements of Wipro and all of its subsidiaries, which are more than 50% owned and controlled. All material inter-company accounts and transactions are eliminated on consolidation. The Company accounts for investments by the equity method where its investment in the voting stock gives it the ability to exercise significant influence over the investee.

     Cash equivalents. The Company considers investments in highly liquid investments with remaining maturities, at the date of purchase/investment, of three months or less to be cash equivalents.

     Revenue recognition. Revenue from services, as rendered, are recognized when persuasive evidence of an arrangement exists, the sales price is fixed or determinable and collectibility is reasonably assured. Revenues from software development services comprise revenues from time-and-material and fixed-price contracts. Revenue on time-and-material contracts is recognized as the related services are performed. Revenue from fixed-price, fixed-time frame contracts is recognized in accordance with the percentage of completion method. Guidance has been drawn from the Accounting Standards Executive Committee’s conclusion in paragraph 95 of Statement of Position (SOP) 97-2, Software Revenue Recognition, to account for revenue from fixed price arrangements for software development and related services in conformity with SOP 81-1, Accounting for Performance of Construction-Type and Certain Production-Type Contracts. The input (cost expended) method has been used to measure progress towards completion as there is a direct relationship between input and productivity. Provisions for estimated losses on contracts-in-progress are recorded in the period in which such losses become probable based on the current contract estimates. Maintenance revenue is deferred and recognized ratably over the term of the agreement. Revenue from customer training, support and other services is recognized as the related service is performed. Costs that are incurred for a specific anticipated contract and that will result in no future benefits unless the contract is obtained are not included in contract costs before the receipt of the contract. However, such costs are deferred only if the cost can be directly associated with specific anticipated contract and the recoverability from that contract is deemed to be probable.

     Revenue from sale of products is recognized when persuasive evidence of an arrangement exists, the product has been delivered in accordance with sales contract, the sales price is fixed or determinable and collectibility is reasonably assured.

     The Company has elected to adopt the guidance in EITF Issue No. 00-21 for all revenue arrangements with multiple deliverables.

     Based on this guidance, the Company recognizes revenues on the delivered products or services only if:

	•		The revenue recognition criteria applicable to the unit of accounting is met;
	•		The delivered element has value to the customer on a standalone basis. The delivered unit will have value on a standalone basis if it is being sold separately by other vendors or the customer could resell the deliverable on a standalone basis;
	•		There is objective and reliable evidence of the fair value of the undelivered item(s); and
	•		If the arrangement includes a general right of return relative to the delivered item, delivery or performance of the undelivered item(s) is considered probable and substantially in control of the Company.

     The arrangement consideration is allocated to the units of accounting based on their fair values. The revenue recognized for the delivered items is limited to the amount that is not contingent upon the delivery or performance of the undelivered items.

     In certain cases, the application of the contingent revenue provisions of EITF Issue No. 00-21 could result in recognizing a loss on the delivered element. In such cases, the cost recognized is limited to the amount of non-contingent revenues recognized and the balance costs are recorded as an asset and are reviewed for impairment based on the estimated net cash flows to be received for future deliverables under the contract. These costs are subsequently recognized on recognition of the revenue allocable to the balance deliverables.

     Revenues from BPO Services are derived from both time-based and unit-priced contracts. Revenue is recognized as the related services are performed, in accordance with the specific terms of the contract with the customers.

     Revenues are shown net of excise duty, sales tax, value added tax, service tax and applicable discounts and allowances

     When the Company receives advance payments from customers for sale of products or provision of services, such payments are reported as advances from customers until all conditions for revenue recognition are met.

     Volume discount. The Company accounts for volume discounts and pricing incentives to customers using the guidance in EITF Issue 01-09, Accounting for Consideration Given by a Vendor to a Customer (Including a Reseller of the Vendor’s Products). The discount terms in the Company’s arrangements with customers generally entitle the customer to discounts, if the customer completes a specified level of revenue transactions. In some arrangements, the level of discount varies with increases in the levels of revenue transactions. The Company recognizes discount obligations as a reduction of revenue based on the ratable allocation of the discount to each of the underlying revenue transactions that result in progress by the customer toward earning the discount. The Company recognizes the liability based on its estimate of the customer’s future purchases. If the Company cannot reasonably estimate the customer’s future purchases, then the liability is recorded based on the maximum potential level of discount. The Company recognizes changes in the estimated amount of obligations for discounts using a cumulative catch-up adjustment.

     Warranty costs. The Company accrues the estimated cost of warranties at the time when the revenue is recognized. The accruals are based on the Company’s historical experience of material usage and service delivery costs.

     Shipping and handling costs. Shipping and handling costs are included in selling and marketing expenses.

     Inventories. Inventories are stated at the lower of cost and market value. Cost is determined using the weighted-average method for all categories of inventories.

     Investment securities. The Company classifies its debt and equity securities in one of the three categories: trading, held-to-maturity or available-for-sale, at the time of purchase and re-evaluates such classifications as of each balance sheet date. Trading and available-for-sale securities are recorded at fair value. Held-to-maturity securities are recorded at amortized cost, adjusted for the amortization or accretion of premiums or discounts. Unrealized holding gains and losses on trading securities are included in income. Temporary unrealized holding gains and losses, net of the related tax effect, on available-for-sale securities are excluded from income and are reported as a part of other comprehensive income in stockholders’ equity until realized. Realized gains and losses from the sale of trading and available-for-sale securities are determined on a first-in-first out basis and are included in income. A decline in the fair value of any available-for-sale or held-to-maturity security below cost that is deemed to be other than temporary results in a reduction in carrying amount to fair value with a charge to the income statement. Fair value for mutual fund units is based on published per unit value, which is the basis for current transactions. Non-readily marketable equity securities for which there is no readily determinable fair value are recorded at cost, subject to an impairment charge to the income statement for any other than temporary decline in value.

     Investments in affiliates. The Company’s equity in the earnings/(losses) of affiliates is included in the statement of income and the Company’s share of net assets of affiliates is included in the balance sheet.

     Shares issued by subsidiary/affiliate. The issuance of stock by a subsidiary/affiliate to third parties reduces the proportionate ownership interest in the investee. Unless the issuance of such stock is part of a broader corporate reorganization or unless realization is not assured, the Company recognizes a gain or loss, equal to the difference between the issuance price per share and the Company’s carrying amount per share. Such gain or loss is recognized in the statement of income when the transaction occurs.

     Property, plant and equipment. Property, plant and equipment are stated at cost. The Company depreciates property, plant and equipment over the estimated useful life using the straight-line method. Assets under capital lease are amortized over their estimated useful life or the lease term, as appropriate. The estimated useful lives of assets are as follows:

Buildings		30 to 60 years
Plant and machinery		2 to 20 years
Furniture, fixtures and equipment		5 years
Vehicles		4 years
Computer software		2 years

     Software for internal use is primarily acquired from third-party vendors and is in ready to use condition. Costs for acquiring this software are capitalized and subsequent costs are charged to the statement of income. The capitalized costs are amortized on a straight-line basis over the estimated useful life of the software.

     Deposits paid towards the acquisition of property, plant and equipment outstanding as of each balance sheet date and the cost of property, plant and equipment not ready for use before such date are disclosed under capital work-in-progress. The interest cost incurred for funding an asset during its construction period is capitalized based on the actual investment in the asset and the average cost of funds. The capitalized interest is included in the cost of the relevant asset and is depreciated over the estimated useful life of the asset.

     Business combinations, goodwill and intangible assets. In accordance with Statement of Financial Accounting Standards (SFAS) No. 141, Business Combinations, the Company uses the purchase method of accounting for all business combinations consummated after June 30, 2001. Intangible assets acquired in a business combination are recognized and reported apart from goodwill if they meet the criteria specified in SFAS No. 141. Any purchase price allocated to an assembled workforce is not accounted separately.

     In accordance with SFAS No. 142, Goodwill and Other Intangible Assets, all assets and liabilities of the acquired business including goodwill are assigned to the reporting units. The Company does not amortize goodwill but instead tests goodwill for impairment at least annually, using a two step impairment process.

     The fair value of the reporting unit is first compared to its carrying value. The fair value of reporting units is determined using the income approach. If the fair value of the reporting unit exceeds the carrying value of the net assets assigned to that unit, goodwill is not impaired. If the carrying value of the net assets assigned to the reporting unit exceeds the fair value of the reporting unit, then the implied fair value of the reporting unit’s goodwill is compared with the carrying value of the reporting unit’s goodwill. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination. If the carrying value of a reporting unit’s goodwill exceeds its implied fair value, then an impairment loss equal to the difference is recorded.

     Intangible assets acquired individually, with a group of other assets or in a business combination are carried at cost less accumulated amortization. The intangible assets are amortized over their estimated useful lives in proportion to the economic benefits consumed in each period. The estimated useful lives of the intangible assets are as follows:

Customer-related intangibles		2 to 5 years
Marketing-related intangibles		2 to 20 years
Technology-based intangibles		5 years

     Start-up costs. Cost of start-up activities including organization costs are expensed as incurred.

     Research and development. Revenue expenditure on research and development is expensed as incurred. Capital expenditure incurred on equipment and facilities that are acquired or constructed for research and development activities and having alternative future uses, is capitalized as tangible assets when acquired or constructed. Software product development costs are expensed as incurred until technological feasibility is achieved.

     Impairment or disposal of long-lived assets. Long-lived assets, including certain identifiable intangible assets, to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Such assets are considered to be impaired if the carrying amount of the assets is higher than the future undiscounted net cash flows expected to be generated from the assets. The impairment amount to be recognized is measured by the amount by which the carrying value of the assets exceeds its fair value.

     The Company measures long-lived assets held-for-sale, at the lower of carrying amount or fair value, less costs to sell.

     Earnings per share. In accordance with SFAS No. 128, Earnings per Share, basic earnings per share is computed using the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed using the weighted-average number of common and dilutive common equivalent shares outstanding during the period, using the treasury stock method for options and warrants, except where the results would be antidilutive.

     Income taxes. Income taxes are accounted for using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The deferred tax asset is reduced by a valuation allowance if it is more likely than not that some portion or all of the asset will not be realized.

     The income tax provision for the interim periods is based on the best estimate of the effective tax rate expected to be applicable for the full fiscal year. Changes in interim periods to tax provisions, for changes in judgments or settlements relating to tax exposure items of earlier years, are recorded as discrete items in the interim period of change.

     Stock-based compensation. Effective April 1, 2006, the Company adopted SFAS No. 123 (revised 2004), Share-Based Payment, (SFAS No. 123 (R)), which requires the measurement and recognition of compensation expense for all stock-based payment awards based on the grant-date fair value of those awards. Previously, the Company used the intrinsic value based method, permitted by Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock issued to Employees, to account for its employee stock-based compensation plans and had adopted the pro-forma disclosure provisions of SFAS No. 123, Accounting for Stock-Based Compensation.

     The Company adopted SFAS No.123(R) using the modified prospective application method. Under this approach the Company has recognized compensation expense for share-based payment awards granted prior to, but not yet vested as of April 1, 2006, based on the grant date fair value estimated in accordance with the provisions of SFAS No. 123. Pursuant to adoption of SFAS No. 123(R) the Company recognized additional compensation expense of Rs. 82.50 for the six months ended September 30, 2006.

     SFAS No. 123(R) requires that deferred stock-based compensation previously recorded under APB Opinion No. 25 and outstanding on the date of adoption be eliminated against additional paid-in capital. Accordingly, the deferred compensation balance of Rs. 2,202.42 was eliminated against additional paid-in capital on April 1, 2006.

     Under APB Opinion No. 25, the Company had a policy of recognizing the effect of forfeitures only as they occurred. Accordingly, as required by SFAS No. 123 (R), on April 1, 2006, the Company estimated the number of outstanding instruments, which are not expected to vest and recognized a gain of Rs. 39.09 representing the reversal of compensation cost for such instruments previously recognized in income.

     Had compensation cost, for six months ended September 30, 2005, been determined in a manner consistent with the fair value approach described in SFAS No. 123, the Company’s net income and earnings per share as reported would have been reduced to the pro-forma amounts indicated below:

		Six months ended
		September 30,
		2005
Net income, as reported		Rs.	8,971.76
Add: Stock-based employee compensation expense included in reported net income, net of tax effects			314.70
Less: Stock-based employee compensation expense determined under fair value based method, net of tax effects			(660.21	)
Pro-forma net income			8,626.25
Earnings per share: Basic
As reported			6.40
Pro-forma			6.16
Earnings per share: Diluted
As reported			6.33
Pro-forma			6.11

     Derivatives and hedge accounting. The Company purchases forward foreign exchange contracts/option contracts (derivatives) to mitigate the risk of changes in foreign exchange rates on accounts receivable and forecasted cash flows denominated in certain foreign currencies. The strategy also includes purchase of series of short term forward foreign exchange contracts which are replaced with successive new contracts up to the period in which the forecasted transactions are expected to occur (roll-over hedging). The Company also designates zero-cost collars, which qualify as net purchased options, to hedge the exposure to variability in expected future foreign currency cash inflows due to exchange rate movements beyond a defined range.

     In accordance with SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended, the Company recognizes all derivatives as assets or liabilities measured at their fair value, regardless of the purpose or intent of holding them. In respect of derivatives designated and effective as cash flow hedges, gains or losses resulting from changes in the fair value are deferred and recorded as a component of accumulated other comprehensive income within stockholder’s equity until the hedged transaction occurs and are then recognized in the consolidated statements of income along with the hedged item. The Company assesses hedge effectiveness based on the overall change in fair value of the derivative instrument. However, for derivatives acquired pursuant to roll-over hedging strategies, the forward premium/discount points are excluded from assessing hedge effectiveness.

     Changes in fair value for derivatives not designated as hedging derivatives and ineffective portion of the hedging instruments are recognized in consolidated statements of income of each period and are reported within foreign exchange gains/ (losses), net under operating expenses.

     In respect of derivatives designated as hedges, the Company formally documents all relationships between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. The Company also formally assesses both at the inception of the hedge and on an ongoing basis, whether each derivative is highly effective in offsetting changes in fair values or cash flows of the hedged item. If it is determined that a derivative is not highly effective as a hedge, or if a derivative ceases to be a highly effective hedge, the Company, prospectively, discontinues hedge accounting with respect to that derivative.

     Recent accounting pronouncement

     FASB Interpretation No. 48. In July 2006, the FASB issued Interpretation (FIN) No. 48, Uncertainty in Income Taxes. FIN 48 applies to all tax positions within the scope of SFAS No. 109, Accounting for Income Taxes, and clarifies when and how to recognize tax benefits in the financial statements with a two-step approach of recognition and measurement. FIN 48 is effective for fiscal years beginning after December 15, 2006. FIN 48 also requires the enterprise to make explicit disclosures about uncertainties in their income tax positions, including a detailed roll-forward of tax benefits taken that do not qualify for financial statement recognition. The Company is currently evaluating the impact of FIN 48 on the financial statements and will adopt FIN 48 for the fiscal year beginning April 1, 2007.

     SFAS No. 157. In September 2006, FASB issued SFAS No. 157, Fair Value Measurements (SFAS No. 157). SFAS No. 157 defines ‘fair value’ as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. SFAS No. 157 provides guidance on determination of fair value and lays down the fair value hierarchy to classify the source of information used in fair value measurement. The Company is currently evaluating the impact of SFAS No. 157 on its financial statements and will adopt SFAS No. 157 for the fiscal year beginning April 1, 2007.

     SFAS No. 158. In September 2006, FASB issued SFAS No.158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans—an amendment of FASB Statements No. 87, 88, 106, and 132(R) (SFAS No. 158). SFAS No. 158 requires the employer to recognize the funded status of a defined benefit postretirement plan (other than a multiemployer plan), measured as the difference between plan assets at fair value (with limited exceptions) and the benefit obligation in its statement of financial position. The statement requires recognition of the gains or losses and prior service costs or credits that arise during the period but are not recognized as components of net periodic benefit cost as a component of other comprehensive income, net of tax. The statement also requires measurement of defined benefit plan assets and obligations as of the date of the employer’s fiscal year-end statement of financial position. The Company will adopt the provisions of SFAS No. 158 for the fiscal year ending March 31, 2007.

3. Acquisitions

mPower Software Services Inc. and subsidiaries

     In December 2005, the Company acquired 100% of the equity of mPower Software Services Inc. and subsidiaries (mPower) including the minority shareholding held by MasterCard International in MPact India, a joint venture between MasterCard International and mPower Inc, for an aggregate cash consideration of Rs.1,274.57. mPower Software Services Inc. is a US based company engaged in providing IT services in the payments service sector.

     As a part of this acquisition, Wipro plans to provide MasterCard with a wide range of services including application development and maintenance, infrastructure services, package implementation, BPO and testing. Wipro believes that through this acquisition, it will be able to expand its domain expertise in the payments service sector and increase the addressable market for IT services.

     The purchase price has been preliminarily allocated to the acquired assets and liabilities as follows:

Description		Fair value
Net tangible assets		Rs.	185.39
Customer-related intangibles			356.96
Deferred tax liabilities			(124.94	)
Goodwill			857.16
Total		Rs.	1,274.57

BVPENTE Beteiligungsverwaltung GmbH and subsidiaries

     In December 2005, the Company acquired 100% equity of BVPENTE Beteiligungsverwaltung GmbH and subsidiaries (New Logic). New Logic is a European system-on-chip design company. The consideration included a upfront consideration of Rs. 1,156.54 million, subject to working capital adjustments, and an earn-out of Euro 26.70 million to be determined and paid in the future based on financial targets being achieved over a 3 year period. During the six months ended September 30, 2006, the Company

paid an additional consideration of Rs. 68.76 million towards the working capital adjustment. The Company has determined that a portion of the earn-out, up to a maximum of Euro 2.50 million is linked to the continuing employment of one of the selling shareholders. The balance earn-out will be recorded as additional purchase price when the contingency is resolved.

     The Company believes that through this acquisition, it has acquired strong domain expertise in semiconductor Intellectual Property (IP) cores and complete system-on-chip solutions with digital, analog mixed signal and Radio Frequency (RF) design services. The acquisition also enables the Company to access over 20 customers in the product engineering space.

     The purchase price has been preliminarily allocated to the acquired assets and liabilities as follows:

Description		Fair value
Net tangible assets		Rs.	307.15
Customer-related intangibles			117.40
Technology-based intangibles			95.72
Deferred tax liabilities			(53.00	)
Goodwill			758.03
Total		Rs.	1,225.30

cMango Inc. and subsidiaries

     In April 2006, the Company acquired 100% of the equity of cMango Inc. and subsidiaries (cMango). cMango is a provider of Business Service Management (BSM) solutions. The consideration included a cash payment of Rs. 884.25 and an earn-out of USD 12.00 to be determined and paid in the future based on specific financial metrics being achieved over a two year period. The earn-out will be recorded as additional purchase price when the contingency is resolved.

     Wipro believes that through this acquisition it will expand its operations in the Business Management Services sector. This acquisition also enables the Company to access over 20 customers in the Business Management Services sector.

     The purchase price has been preliminarily allocated to the acquired assets and liabilities as follows:

Description		Fair value
Net tangible assets/(liabilities)		Rs.	(23.08	)
Customer-related intangibles			132.64
Deferred tax liabilities			(46.42	)
Goodwill			821.11
Total		Rs.	884.25

RetailBox BV and subsidiaries

     In June 2006, the Company acquired 100% of the equity of RetailBox BV and subsidiaries (Enabler). Enabler is in the business of providing comprehensive IT solutions and services. The consideration included a cash payment of Rs. 2,442.12 and an earn-out of Euro 11.00 to be determined and paid in the future based on specific financial metrics being achieved over a two year period. The earn-out will be recorded as additional purchase price when the contingency is resolved.

     Through this acquisition Wipro aims to provide a wide range of services including Oracle retail implementation, digital supply chain, business optimization and integration. Further, through this acquisition, the Company aims to expand its domain expertise both in the retail and technology sectors and obtain a presence in five different geographical locations.

     The purchase price has been preliminarily allocated to the acquired assets and liabilities as follows:

Description		Fair value
Net tangible assets		Rs.	388.88
Customer-related intangibles			242.55
Deferred tax liabilities			(84.89	)
Goodwill			1,895.58
Total		Rs.	2,442.12

Saraware Oy

     In June 2006, the Company acquired 100% equity of Saraware Oy (Saraware) a Company involved in providing design and engineering services to telecom companies. The Company acquired Saraware for an aggregate consideration of Rs. 947.25 and an earn-out of Euro 7 to be determined and paid in future based on financial targets being achieved over a period of 18 months. In addition, amounts collected against certain specific reward/ incentive assets at the acquisition date are payable to the sellers. The earn-out and the additional payments will be recorded as additional purchase price when the related contingencies are resolved.

     Through this acquisition the Company aims to expand its presence in the engineering services sector in Finland and the Nordic region.

     The purchase price has been preliminarily allocated to the acquired assets and liabilities as follows:

Description		Fair value
Net tangible assets/(liabilities)		Rs.	186.98
Customer-related intangibles			189.45
Deferred tax liabilities			(66.31	)
Goodwill			637.13
Total		Rs.	947.25

Northwest Switchgear Limited

     In May 2006, the Company acquired a substantial portion of the business of Northwest Switchgear Limited a manufacturer and distributor of switches, sockets and miniature circuit breakers (collectively ‘the products’) under the trademark/ brand name NorthWest. The consideration included a cash payment of Rs 1,131.66 and an earn-out of Rs. 200.00 to be determined and paid in the future based on achievement of a specified revenue levels over a period of four years. Further, the Company has entered into a non-compete and manufacturing agreement with the sellers. Under the manufacturing agreement, the seller will manufacture the products for the Company by certain assets and employee retained by the seller. The manufacturing agreement is for a period of five years.

     Based on the guidance in EITF Issue No. 98-3, Determining Whether a Non-monetary Transaction Involves Receipt of Productive Assets of a Business, the Company has accounted for this transaction as an acquisition of a business. A significant portion of the consideration has been allocated to the trademark/brand name North-West.

     The purchase price has been preliminarily allocated to the acquired assets and liabilities as follows:

Description		Fair value
Net tangible assets		Rs.	33.75
Marketing-related intangibles			1,097.91
Total		Rs.	1,131.66

Quantech Global Service

     In July 2006, the Company acquired 100% equity of Quantech Global Services LLC and Quantech Global Services Ltd (Quantech). Quantech provides computer aided design and engineering services. The consideration includes an upfront cash payment of Rs. 142.00, a deferred cash payment of USD 3.00 and an earn-out to be determined and paid in the future based on financial targets being achieved over a period of 36 months.

     Through this acquisition, the Company aims to strengthen its presence in the mechanical engineering design and analysis service sector.

     The purchase price has been preliminarily allocated to the acquired assets and liabilities as follows:

Description		Fair value
Net tangible assets/(liabilities)		Rs.	(230.33	)
Customer-related intangibles			45.92
Deferred tax liabilities			(16.07	)
Goodwill			481.77
Total		Rs.	281.29

     For the above acquisitions, the purchase price has been allocated on a preliminary basis based on the Company’s estimates. The Company is in the process of making a final determination of the carrying value of assets and liabilities, which may result in changes in the carrying value of net assets recorded. Finalization of the purchase price allocation based on an independent third party appraisal may result in certain adjustments to the above allocation.

Hydrauto Group

     In September 2006, the Company entered into an agreement to acquire Hydrauto Group AB (Hydrauto) for a cash consideration of Euro 24.50. Hydrauto is engaged in production, marketing and development of customized hydraulic cylinders solution for mobile applications such as mobile cranes, excavator, dumpers and trucks. The Company expects to complete the acquisition by November 2006. The Company believes that this acquisition will give the Company an entry into Europe, access to a customer base built over the past few decades and complementary engineering skills.

4. Cash and Cash Equivalents

     Cash and cash equivalents as of September 30, 2005 and 2006 comprise of cash, cash on deposit with banks and highly liquid investments.

5. Accounts Receivable

     Accounts receivable are stated net of allowance for doubtful accounts. The Company maintains an allowance for doubtful accounts based on present and prospective financial condition of its customers and aging of the accounts receivable. Accounts receivable are generally not collateralized. The activity in the allowance for doubtful accounts receivable is given below:

										Year ended
		Six months ended September 30,								March 31,
		2005				2006				2006
		(Unaudited)				(Unaudited)
Balance at the beginning of the period		Rs.	846.54			Rs.	1,115.78			Rs.	846.54
Additional provision during the period, net of collections			203.40				139.97				275.24
Bad debts charged to provision			(3.53	)			—				(6.00	)
Balance at the end of the period		Rs.	1,046.61			Rs.	1,255.75			Rs.	1,115.78

6. Inventories

     Inventories consist of the following:

		As of September 30,								As of March 31,
		2005				2006				2006
		(Unaudited)				(Unaudited)
Stores and spare parts		Rs.	181.85			Rs.	229.80			Rs.	198.02
Raw materials and components			625.01				666.87				692.01
Work-in-process			263.03				372.95				288.73
Finished goods			666.85				1,155.97				885.85
		Rs.	1,736.74			Rs.	2,425.59			Rs.	2,064.61

7. Other Assets

     Other assets consist of the following:

		As of September 30,								As of March 31,
		2005				2006				2006
		(Unaudited)				(Unaudited)
Prepaid expenses		Rs.	1,126.47			Rs.	1,110.80			Rs.	1,182.07
Due from officers and employees			1,078.62				997.72				753.68
Advances to suppliers			327.41				494.03				467.19
Balances with statutory authorities			75.74				108.87				130.76
Deposits			1,330.25				1,539.03				1,388.89
Interest bearing deposits with corporates			—				500.00				500.00
Advance income taxes			709.45				942.19				1,237.33
Derivative asset			115.58				385.12				338.11
Others			637.94				1,747.51				708.99
			5,401.46				7,825.27				6,707.02
Less: Current assets			(4,157.42	)			(6,297.27	)			(5,463.04	)
		Rs.	1,244.04			Rs.	1,528.00			Rs.	1,243.98

8. Investment Securities

     Investment securities consist of the following:

As of September 30, 2005

As of September 30, 2006

(Unaudited)

(Unaudited)

Gross

Gross

Unrealized

Unrealized

Carrying Value

Holding Gains

Fair Value

Carrying Value

Holding Gains

Fair Value

Available-for-sale:

Investments in liquid and short-term mutual funds

Rs.

27,333.56

Rs.

381.94

27,715.50

Rs.

32,410.56

Rs.

635.84

Rs.

33,046.40

As of March 31, 2006

Gross Unrealized

Carrying Value

Holding Gains

Fair Value

Available-for-sale:

Investments in liquid and short-term mutual funds

Rs.

29,821.50

Rs.

506.92

Rs.

30,328.42