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Notes to Accounts of Sterlite Technologies Ltd.

Mar 31, 2016

NOTE 1: EMPLOYEE STOCK OPTION SCHEME

The Company has granted employees stock options plan, 2006 (ESOP Scheme 2006) and employees stock options plan, 2010 (ESOP Scheme 2010) to its employees pursuant to the resolution passed by the shareholders at the extraordinary general meeting held on March 13, 2006 and annual general meeting held on July 14, 2010 respectively. The Company has followed the fair value method (Black Scholes Options Pricing Model) for the valuation of these options. The compensation committee of the Company has approved ten grants vide their meetings held on June 14, 2006; March 19, 2007, September 28, 2007, June 14, 2008, June 26, 2009, December 29, 2011, July 27,2012, April 30, 2014, March 30,2015 and January 28, 2016. As per the plans, Options granted under ESOP would vest in not less than one year and not more than fve years from the date of grant of such options. Vesting of options is subject to continued employment with the Company. The plans are equity settled plans.

The Company will restructure/modify the ESOP schemes to give effect of the impact of demerger on the fair value of equity shares of the Company as required under the Scheme of demerger as well as the ESOP Schemes. The additional ESOPs that will be required to be issued is not presently ascertainable. However, the management believes that since the beneft to ESOP holders in terms of the total fair value of ESOPs before and after the demerger would be same, no additional charge on account of ESOP restructuring has been accrued in the financial statements for the year ended March 31, 2016.

NOTE 2: LEASES OPERATING LEASE

company as lessee :

The Company has taken offce buildings on operating lease. The lease term is for periods of three to nine years and renewable at the option of the Company. Disclosures in respect of operating leases of offce buildings as per the requirement of Accounting Standard- 19 on Leases, are as under:

(a) Lease payments recognised in the Statement of profit and Loss for the year is Rs. 9.77 crores (31 March 2015: Rs. 5.86 crores).

(b) The future minimum lease payments payable over the next one year is Rs. 14.40 crores (31 March 2015: Rs. 4.50 crores).

(c) The future minimum lease payments payable later than one year but not later than five year is Rs. 26.32 crores (31 March 2015: Rs. 12.46 crores).

company as lessor :

The Company has given office building on operating lease. The lease term is for non cancellable period of three years and renewable at the option of the Lessee. Disclosures in respect of operating leases of office building as per the requirement of Accounting Standard- 19 on Leases are as under:

(a) Lease income recognised in the Statement of profit and Loss for the year is Rs. 0.54 crore (31 March 2015: Rs. 0.39 crore).

(b) The future minimum lease payments receivable over the next one year is Rs. 0.76 crore (31 March 2015: Rs. 0.39 crore).

(c) The future minimum lease payments receivable later than one year but not later than five year is Rs. 1.14 crores (31 March 2015: Rs. 1.20 crores).

NOTE 3: CAPITALISATION OF EXCHANGE DIFFERENCE

The Ministory of Corporate Affairs (MCA) issued the amendment dated 29 December 2011 to AS - 11 The Effect of Changes in Foreign Exchange Rate, to allow companies deferral / capitalisation of exchange difference arising on long-term foreign currency monetory items. In accordance with the amendment to AS- 11, the Company has adjusted exchange loss / (gain) arising on long-term foreign currency loan amounting to Rs. 0.73 crore (31 March 2015: Rs. 0.67 crores) to the value of plant and machinery.

NOTE 4: CAPITAL AND OTHER COMMITMENTS

(a) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) are Rs. 59.78 crores (31 March 2015: Rs. 121.93 crores.)

(b) As on March 31, 2016, the Company has commitments of Rs. 17.33 crores (31 March 2015: Rs. 72.85 crores) relating to further investment in subsidiaries.

(c) For commitments relating to lease arrangments please refer note 30.

(d) The Company has entered into agreements with the lenders of following subsidiaries wherein it has committed to hold directly or indirectly at all times at least 51% of equity share capital of below mentioned subsidiaries and not to sell, transfer, assign, pledge or create any security interest except pledge of shares to the respective lenders as covered in respective agreements with lenders.

The Company has not provided for disputed sales tax, excise duty, customs duty and service tax arising from disallowances made in assessments which are pending with appellate authorities for its decision. The Company is contesting the demands and the management, including its tax advisors, believe that its position will likely be upheld in the appellate process. No tax expense has been accrued in the financial statements for the tax demand raised. The management believes that the ultimate outcome of this proceeding will not have a material adverse effect on the company''s financial position and results of operations.

In respect of the claims against the Company not acknowledged as debts as above, the management does not expect these claims to succeed. Accordingly, no provision for the contingent liability has been recognized in the financial statements.

It is not practicable to indicate the uncertainties which may affect the future outcome and estimate the financial effect of the above liabilities.

* In an earlier year, one of the Bankers of the Company had wrongly debited an amount of Rs. 18.87 crores, towards import consignment under letter of credit not accepted by the company, owing to discrepancies in the documents. Thereafter, the bank fled claim against the company in the Debt Recovery Tribunal (DRT). Against the DRT Order dated 28-Oct-2010, the parties had fled cross appeals before the Debt Recovery Appellate Tribunal. The Debt Recovery Appellate Tribunal vide its Order dated 28-Jan-2015 has allowed the appeal fled by the company and has dismissed the appeal fled by the bank. The bank has challenged the said order in WRIT before the Bombay High Court. The management doesn''t expect the claim to succeed.

NOTE 5: OTHER NOTES

A. The Company had in an earlier year received an order of CESTAT upholding the demand of Rs. 188 crores (including penalties and excluding interest) (31 March 2015: Rs. 188 crores) in the pending excise/custom matters on various grounds. The Company''s appeal with the Honorable High Court of Mumbai was rejected on the grounds of jurisdiction. The Company preferred an appeal with the Honorable Supreme Court of India against the order of CESTAT which has been admitted. The Company has re-evaluated the case on admission of appeal by the Honorable Supreme Court. Based on their appraisal of the matter, the legal advisors/consultants are of the view that under most likely event, the provision of Rs. 4.50 crores made by the Company against the above demand is adequate. The management is confident of a favorable order and hence no further provision is considered against the said demand.

B. There are no amounts due and outstanding to be credited to Investor Education and Protection Fund.

C. The Company has adopted component accounting as required under Schedule II to the Companies Act, 2013.

Due to application of Schedule II to the Companies Act, 2013, the Company has changed the manner of depreciation for its fixed assets. Now, the Company identifies and determines cost of each component/ part of the asset separately, if the component/ part has a cost which is significant to the total cost of the asset and has useful life that is materially different from that of the remaining asset. These components are depreciated separately over their useful lives; the remaining components are depreciated over the life of the principal asset. The company has used transitional provisions of Schedule II to adjust the impact of component accounting arising on its first application. If a component has zero remaining useful life on the date of component accounting becoming effective, i.e., 1 April 2015, its carrying amount, after retaining any residual value, is adjuted to opening general reserve (net of tax). As a result an amount of Rs.12.38 crores (net of tax of Rs. 6.55 crores) pertaining to components of fixed assets for which the remaining useful lives were nil as at April 1, 2015 has been adjusted to General Reserve. The carrying amount of other components, i.e., components whose remaining useful life is not nil on 1 April 2015, is depreciated over their remaining useful lives.

As a result of the above change, the depreciation charge for the current year is higher by Rs. 1.22 crores and profit for the current year is lower by Rs. 0.80 crore (net of tax impact of Rs. 0.42 crore).

D. The company has spent an amount of Rs. 2.23 crores (31 March 2015: 1.35 crores) during the year as required under section 135 of the Companies Act, 2013 in the areas of skill development, education and health in the cities of Pune, Aurangabad, Silvassa and Mumbai. Out of Rs. 2.23 crores (31 March 2015: Rs. 1.35 crores), an amount of Rs.0.57 crore (31 March 2015: Rs. 0.27 crore) was spent by way of contribution to Sterlite Tech Foundation, in which directors/senior executives of the Company and their relatives are trustees.

E. Demerger of Power Business

The Board of directors of the Company on May 18, 2015 approved the Scheme of Arrangement under Sections 391 – 394 of the Companies Act, 1956 (''the Scheme'') between Sterlite Technologies Limited (''STL'' or ''Demerged company''), Sterlite Power Transmission Limited (''SPTL'' or ''Resulting company'') and their respective shareholders and creditors for the demerger of power products and solutions business (including the investments of STL in power transmission infrastructure subsidiaries i.e. Sterlite Power Grid Ventures Limited and East North Interconnection Company Limited) into SPTL with the appointed date of April 1, 2015. The Scheme was approved by the Hon''ble Bombay High Court vide Order dated April 22, 2016 and it became effective from May 23, 2016 (being the date of fling with Registrar of Companies). The Scheme inter alia provides for issue by SPTL, at the option of the shareholder of STL, of either one equity share of face value of Rs. 2 or one redeemable preference share of face value of Rs. 2 issued at a premium of Rs. 110.30 per share for every 5 fully paid up equity shares of Rs. 2 each of the Demerged Company and redeemable on expiry of eighteen months from the date of allotment at a premium of Rs. 123.55 per share for eligible members other than non residents. In case of non residents one equity share of face value of Rs. 2 for every 5 fully paid up equity shares of Rs. 2 each of the Demerged Company and all such equity shares shall be purchased by the promoters of the Demerged Company and/or their affiliates or any other person and/or entity identified by them, in accordance with the scheme.

F. Acquisition and Amalgmation of Elitecore Technologies Private Limited

The Company acquired 100% of the paid up equity share capital of Elitecore Technologies Private Limited (''ETPL''), a global telecom software product company, on September 29, 2015, pursuant to share purchase agreement dated September 22, 2015 for a total purchase consideration of Rs. 187.37 crores which was discharged through bank payments. Post the acquisition, ETPL has been merged with the Company with appointed date of September 29, 2015 under the Scheme of Amalgamation approved by Hon''ble Gujarat High Court vide Order dated March 21, 2016 and effective date May 20, 2016 (being the date of fling with Registrar of Companies).

As required under the Scheme, the Company has accounted for the amalgamation as per Accounting Standard-14 "Accounting for Amalgamations" under the purchase method and has recognized the assets and liabilities acquired at their book value. The excess of amount of investments in ETPL cancelled pursuant to the merger over the net asset value of ETPL on the Appointed Date has been treated as Goodwill. Such Goodwill shall be amortized over a period of 5 years in accordance with AS-14.

As a result of the amalgamation, the financial statements of the Company for the year ended March 31, 2016 incorporate the operations of ETPL with effect from the appointed date i.e. September 29, 2015 and are therefore to that extent not comparable with the figures as at and for the year ended March 31, 2015.

NOTE 6: SEGMENT REPORTING

As a result of the demerger of Sterlite Power Transmission Limited as explained in note 45(E), the Company''s operations predominately relate to Telecom product and solutions and accordingly this is the only primary reportable segment as per AS?17 "Segment Reporting.

NOTE 7: PREVIOUS YEAR FIGURES

Previous year figures have been regrouped/reclassified where necessary, to confirm to this year''s classification. The financial statements for the year ended March 31,2016 incorporate the impact of the demerger and merger mentioned in Note 45 E and Note 45 F from the appointed dates April 1, 2015 and September 29, 2015 respectively. Hence, the amounts for the financial year ended March 31,2016 are not comparable with the previous financial year ended March 31, 2015.


Mar 31, 2014

1.The accompanying notes are an integral part of the financial statements.

The accompanying notes are an integral part of the financial statements.

2. Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 2 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees.

The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended 31 March 2014, the amount of per share dividend recognised as distributions to equity shareholders was Rs. 0.30 (31 March 2 013 : Rs. 0.30)

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

3. Aggregate number of bonus shares issued, share issued for consideration other than cash during the period of five years immediately preceding the reporting date:

In addition company has issued total 1,208,596 shares (31 March 2013 : 1,173,950 shares) during the period of five years immediately preceding the reporting date on exercise of option granted under the employee stock option plan (ESOP) wherein part consideration was received in form of employee services.

4. Shares reserved for issue under options:

For details of shares reserved for issue under the employee stock option (ESOP) plan of the Company, refer note 29.

NOTE 5: LONG-TERM BORROWINGS

i. 11.45 % Non convertible debentures are redeemable at par in financial year 2016-17, and secured by way of frst pari passu charge on entire movable fixed assets (both present and future) and mortgage of certain immovable fixed assets of the Company.

ii. Indian rupee term loan from banks amounting to Rs. 92.50 crores carries interest @ LTMLR 1.10% p.a. Loan amount is repayable in 19 quarterly equated installments of Rs. 4.87 crores (excluding interest) from the end of this financial year. The term loan is secured by frst charge on the movable fixed assets of the Company (both present and future).

iii. Indian rupee term loan from bank amounting to Rs. 109.83 crores carries interest @ Base rate 1% p.a. Loan amount is repayable in 13 quarterly equated installments of Rs. 8.45 crores (excluding interest) from the end of this financial year. The term loan is secured by frst charge on the movable fixed assets of the Company (both present and future).

iv. Indian rupee term loan from the bank amounting to Rs. 250.00 crores carries interest @ Base rate 1% p.a. Loan amount is repayable in 16 quarterly equated installments of Rs. 15.62 crores (excluding interest) starting from quarter ended March 2015 The term loan is secured by frst charge on the movable fixed assets of the Company (both present and future).

v. Indian rupee term loan from the bank amounting to Rs. 50.00 crores carries interest @ Base rate. Loan amount is repayable in April 2016. The term loan is secured by stand by letter of credit issued by a bank which inturn is secured by movable fixed assets of the Company.

# The Company had paid an amount of Rs. 5.10 crores towards Right of Way granted to Maharashtra Transmission Communication Infrastructure Limited (MTCIL) in which the Company owns 51% of equity share capital and the balance 49% of equity share capital is owned by Maharashtra State Electricity Transmission Company Limited . MTCIL is engaged in establishing communication network in the state of Maharashtra. This amount has been considered as cost of investment in the subsidiary.

NOTE 6: GRATUITY

The Company has a Defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with Life Insurance Corporation of India in the form of a qualifying insurance policy.

NOTE 7: EMPLOYEE STOCK OPTION SCHEME

The Company has granted employees stock options plan, 2006 (ESOP Scheme 2006) and employees stock options plan, 2010 (ESOP Scheme 2010) to its employees pursuant to the resolution passed by the shareholders at the extraordinary general meeting held on March 13, 2006 and annual general meeting held on July 14, 2010 respectively. The Company has followed the fair value method (Black Scholes Options Pricing Model) for the valuation of these options. The compensation committee of the Company has approved six grants vide their meeting held on June 14, 2006; March 19, 2007, September 28, 2007, June 14, 2008, June 26, 2009 and December 29, 2011 As per the plan, Options granted under ESOP would vest in not less than one year and not more than five years from the date of grant of such options. Vesting of options is subject to continued employment with the Company. The plan is an equity settled plan.

The Company has charged Rs. 0.25 crore (31 March 2013: Rs. 0.44 crore) to the statement of Profit and loss in respect of options granted under ESOP scheme 2006 and options granted under ESOP scheme 2010.

NOTE 8: OPERATING LEASE

Company as lessee:

The Company has taken ofce buildings on operating lease. The lease term is for periods of three to nine years and renewable at the option of the Company. Disclosures in respect of operating leases of ofce buildings as per the requirement of AS- 19 on Leases, notified under the Rules are as under:

i. Lease payments recognised in the statement of Profit and loss for the year is Rs. 4.26 crores (31 March 2013: Rs. 5.46 crores). ii. The future minimum lease payments payable over the next one year is Rs. 1.77 crores (31 March 2013: Rs. 3.22 crores). iii. The future minimum lease payments payable later than one year but not later than five year is Rs. 0.66 crores (31 March 2013: Rs. 7.48 crores).

Company as lessor:

The Company has given ofce building on operating lease. The lease term is for non cancellable period of three years and renewable at the option of the Lessee. Disclosures in respect of operating leases of ofce building as per the requirement of AS- 19 on Leases, notified under the Rules are as under:

i. Lease income recognised in the statement of Profit and loss for the year is Rs. 0.10 crores (31 March 2013: Nil).

ii. The future minimum lease payments receivable over the next one year is Rs. 0.39 crores (31 March 2013:Nil).

iii. The future minimum lease payments receivable later than one year but not later than five year is Rs. 0.69 crores (31 March 2013:Nil).

NOTE 9: CAPITALISATION OF EXPENDITURE

During the year, the Company has capitalised the following expenses to the cost of fixed assets/ capital work-in-progress (CWIP). Consequently, expenses disclosed under the respective notes are net of amounts capitalised by the Company.

NOTE 10: CAPITAL AND OTHER COMMITMENTS

a. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) are Rs. 63.96 crores (31 March 2013: Rs. 91.14 Crores).

b. As on March 31, 2014, the Company has commitments of Rs. 419.72 crores (31 March 2013: Rs. 146.00 crores) relating to further investment in subsidiaries.

c. For commitments relating to lease arrangments please refer note 30.

d. The Company has entered into agreements with the lenders of following subsidiaries companies wherein it has committed to hold directly or indirectly at all times at least 51% of equity share capital of below mentioned subsidiaries and not to sale, transfer,assign,pledge or create any security interest except pledge of shares to the respective lenders as covered in respective agreements with lenders.

NOTE 11: CONTINGENT LIABILITIES

31 March 2014 31 March 2013 (Rs. in Crores) (Rs. in Crores)

1 Disputed liabilities in appeal

i. Sales tax 0.43 0.43

ii. Excise duty (Including excise duty case in Supreme Court, Refer note 8 and note 43(A)) 258.18 248.99

iii. Customs duty 69.60 67.24

iv. Income tax 18. 09 6.92

v. Claims lodged by a bank against the Company * (Refer note 8) 18.87 18.87

vi. Claims against the Company not acknowledged as debt 25.27 25.17

2 Outstanding amount of export obligation against advance licence – 45.86

3 Corporate guarantee to the income tax department on behalf of group companies. 114.00 114.00

4 Corporates guarantees given on behalf of its subsidiaries for loans and hedging facilities taken from bank / financial institution (to the extent of loans and hedging facilities outstanding as at balance sheet date) ((The total amount of corporate guarantees is Rs. 842.02 Crores (31 March 2013: Rs. 832.46 Crores)) 574.83 548.34

5 Bank guarantee given to Long-term Transmission Customers on behalf of its subsidiary company. 176.72 125.42

The Company has not provided for disputed sales tax, excise duty, customs duty and service tax arising from disallowances made in assessments which are pending with appellate authorities for its decision.

It is not practicable to indicate the uncertainties which may afect the future outcome and estimate the financial efect of the above liabilities.

*In an earlier year, one of the Bankers of the Company had wrongly debited an amount of Rs. 18.87 crores, towards import consignment under letter of credit not accepted by the Company, owing to discrepancies in the documents. The Company has fled the case against the bank in the High Court of Mumbai. The bank has also fled a claim against the Company in the Debt Recovery Tribunal. The Company does not believe that any liability will arise to the Company.

NOTE 12: DERIVATIVE INSTRUMENTS

The Company has entered into the following derivative instruments:

i. The following are the outstanding forward exchange contracts entered into by the Company, for hedge purpose, as on March 31, 2014

ii.The year end foreign currency exposures that have not been hedged by a derivative instrument or otherwise are given below:

a. Amount receivable in foreign currency on account of the following:

NOTE 13: OTHER NOTES

A. The Company had in an earlier year received an order of CESTAT upholding the demand of Rs. 188 crores (including penalties and excluding interest) (31 March 2013: Rs. 188 crores) in the pending excise/custom matters on various grounds. The Company''s appeal with the Honorable High Court of Mumbai was rejected on the grounds of jurisdiction. The Company preferred an appeal with the Honorable Supreme Court of India against the order of CESTAT which has been admitted. The Company has re-evaluated the case on admission of appeal by the Honorable Supreme Court. Based on their appraisal of the matter, the legal advisors/consultants are of the view that under most likely event, the provision of Rs. 4.50 crores made by the Company against the above demand is adequate. The management is confdent of a favorable orde and hence no further provision is considered against the said demand.

B. There are no amounts due and outstanding to be credited to Investor Education and Protection Fund.

NOTE 14: RELATED PARTY DISCLOSURES

1. Name of related party and nature of its relationship: i. Related parties where control exists

(a) Holding company

Twin Star Overseas Limited, Mauritius (Immediate holding company) Volcan Investments Limited, Bahamas (Ultimate holding company)

(b) Subsidiaries

Sterlite Display Technologies Private Limited

East North Interconnection Company Limited

Sterlite Grid Limited

Jabalpur Transmission Company Limited

Bhopal Dhule Transmission Company Limited

Sterlite Global Ventures (Mauritius) Limited

Jiangsu Sterlite and Tongguang Fiber Co. Limited

Sterlite Networks Limited

Sterlite Technologies Americas LLC

Sterlite Technologies Europe Ventures Limited

Sterlite Technologies UK Ventures Limited

Purulia & Kharagpur Transmission Company Limited

RAPP Transmission Company Limited

Maharashtra Transmission Communication Infrastructure Limited

(c) Joint Ventures

Sterlite Conduspar Industrial Ltda (50:50 joint venture between Sterlite Technologies UK Ventures Limited and Conduspar Condutores Eletricos Limitada)

ii. Other related parties with whom transactions have taken place during the year

(a) Key management personnel (KMP)

Mr. Pravin Agarwal Dr. Anand Agarwal

(b) Entities where key management personnel / relatives of key management personnel have significant infuence (EKMP)

Sesa Sterlite Limited* (erstwhile "Sesa Goa Limited")

Fujairah Gold FZE

Bharat Aluminium Company Limited

Hindustan Zinc Limited

Vedanta Resources PLC

Sterlite Industries (India) Limited*

Sterlite Energy Limited*

Vedanta Aluminium Limited*

2. Rs. 3.14 crores have been written of in respect of advances due from subsidiary.

NOTE 15: SEGMENT INFORMATION

In accordance the Accounting Standard 17 notified under the Act on "Segment Reporting", the Company has identified two reportable Business Segments i.e. Telecom Product and Solutions Business and Power Product and Solutions Business, which are regularly evaluated by the Management, in deciding the allocation of resources and assessment of performance. Common allocable costs are allocated to each segment according to the relative contribution of each segment to the total common cost. The segment performance is as follows:

NOTE 16: PREVIOUS YEAR FIGURES

Previous year figure have been regrouped / reclassified where necessary, to conform to this year''s classifcation.


Mar 31, 2013

NOTE 1. CORPORATE INFORMATION

Sterlite Technologies Limited (the company) is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on two stock exchanges in India. The company is primarily engaged in the manufacture and sale of Power and Telecom products and solutions. Telecom products and solutions mainly include integrated optical fiber, other Telecom products such as fiber optical cables, copper Telecom cables,structured data cables, access equipments, fiber connectivity and system integration solution offerings for Telecom networks and other service providers. Power products and solutions mainly includes power transmission conductors and cables.

NOTE 2. BASIS OF PREPARATION

The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention, except in case of assets which have been impaired and derivative financial instruments which have been measured at fair value.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

Note 3: Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days'' salary (last drawn salary) for each completed year of service. The scheme is funded with Life Insurance Corporation of India in the form of a qualifying insurance policy.

Note 4: Employee Stock Option Scheme

The Company has granted employees stock options plan, 2006 (ESOP Scheme 2006) and employees stock options plan, 2010 (ESOP Scheme 2010) to its employees pursuant to the resolution passed by the shareholders at the extraordinary general meeting held on March 13, 2006 and annual general meeting held on July 14, 2010 respectively. The Company has followed the fair value method (Black Scholes Options Pricing Model) for the valuation of these options. The compensation committee of the Company has approved six grants vide their meeting held on June 14, 2006; March 19, 2007; September 28, 2007; June 14, 2008; June 26, 2009 and December 29, 2011 As per the plan, Options granted under ESOP would vest in not less than one year and not more than five years from the date of grant of such options. Vesting of options is subject to continued employment with the company. The plan is an equity settled plan.

The Company has charged Rs. 0.44 Crores (31 March, 2012: Rs.1.00 Crores) to the statement of profit and loss in respect of options granted under ESOP scheme 2006 and options granted under ESOP scheme 2010.

Note 5: Operating Lease

The Company has taken office buildings on operating lease. The lease term is for periods of three to nine years and renewable at the option of the Company.

Disclosures in respect of operating leases of office buildings as per the requirement of AS- 19 on Leases, notified under the Rules are as under:

(a) Lease payments recognised in the statement of profit and loss for the year is Rs. 5.46 Crores (31 March 2012: Rs. 4.31 Crores).

(b) The future minimum lease payments payable over the next one year is Rs. 3.22 Crores (31 March 2012: Rs. 2.64 Crores).

(c) The future minimum lease payments payable later than one year but not later than five year is Rs. 7.48 Crores (31 March 2012: Rs. 1.65 Crores).

Note 6: Capitalisation of Expenditure

During the year, the Company has capitalised the following expenses to the cost of fixed assets/ capital work-in-progress (CWIP). Consequently, expenses disclosed under the respective notes are net of amounts capitalised by the Company.

Note 7: Capital Commitments

a] Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) are Rs. 91.14 Crores (31 March 2012: Rs. 38.07 Crores.)

b] As on March 31, 2013, the Company has commitments of Rs. 146.00 Crores (31 March 2012: Rs. 897.18 Crores) relating to further investment in subsidiaries.

Note 8: Contingent liabilities

31 March, 2013 31 March, 2012 Rs. in Crores Rs. in Crores

1 Disputed liabilities in appeal

a) Sales tax 0.43 0.43

b) Excise duty (Including excise duty case in Supreme Court, refer note 8 and note 43 (A)) 248.99 248.18

c) Customs duty 67.24 67.24

d) Income tax 6.92 6.92

e) Claims lodged by a bank against the Company (*) (refer note 8) 18.87 18.87

f) Claims against the Company not acknowledged as debt 25.17 22.32

2 Outstanding amount of export obligation against advance licence 45.86 36.58

3 The company has given corporate guarantee to the income tax department on behalf of 114.00 114.00 group companies.

4 Corporates guarantees given on behalf of its subsidiaries for loans and hedging facilities taken from bank / financial institution (to the extent of loans and hedging facilities outstanding as at balance sheet date)

((The total amount of corporate guarantees is Rs. 832.46 Crores (31 March 2012: Rs.119.59 Crores)) 548.34 30.00

5 Bank guarantee given to Long-term Transmission Customers on behalf of its subsidiary company. 30.00 30.00

The Company has not provided for disputed sales tax, excise duty, customs duty and service tax arising from disallowances made in assessments which are pending with appellate authorities for its decision.

It is not practicable to indicate the uncertainties which may affect the future outcome and estimate the financial effect of the above liabilities.

(*)In an earlier year, one of the Bankers of the Company had wrongly debited an amount of Rs. 18.87 Crores, towards import consignment under letter of credit not accepted by the company, owing to discrepancies in the documents. The company has filed the case against the bank in the High Court of Mumbai.

The bank has also filed a claim against the company in the Debt Recovery Tribunal. The company does not believe that any liability will arise to the company.

Note 9: Derivative instruments

The Company has entered into the following derivative instruments:

(a) The following are the outstanding forward exchange contracts entered into by the company, for hedge purpose, as on March 31, 2013:

Note 10: Share Application Money

Share application money pertains to the amount of exercise price of Rs. 2 per share for 3,650 equity shares (31 March 2012: 22,822 equity shares) under Employee Stock Option Plan.

Note 11: Accounting for Amalgamation

The Hon''ble High Court of judicature at Mumbai vide its Order dated October 21, 2011 approved the Scheme of Amalgamation of Sterlite Infra-Tech Limited (100% subsidiary of the Company) with the company. The subsidiary was engaged in the manufacture of optical fiber. The appointed date as per the scheme of amalgamation was April 1, 2011. Sterlite Infra-Tech Limited amalgamated with the Company effective from the appointed date. The Company has accounted for the amalgamation under the pooling of interests method.

Note 12: other notes

A. The Company had in an earlier year received an order of CESTAT upholding the demand of Rs. 188 Crores (including penalties and excluding interest) (31 March 2012: Rs. 188 Crores) in the pending excise/custom matters on various grounds. The Company''s appeal with the Honourable High Court of Mumbai was rejected on the grounds of jurisdiction. The Company preferred an appeal with the Honourable Supreme Court of India against the order of CESTAT which has been admitted. The Company has re-evaluated the case on admission of appeal by the Honourable Supreme Court. Based on their appraisal of the matter, the legal advisors/consultants are of the view that under most likely event, the provision of Rs. 4.50 Crores made by the company against the above demand is adequate. The management is confident of a favourable order and hence no further provision is considered against the said demand.

B. There are no amounts due and outstanding to be credited to Investor Education and Protection Fund.

Note 44: Related Party Disclosures

(A) Name of related party and nature of its relationship:

(a) Related parties where control exists

(i) Holding company

Twin Star Overseas Limited, Mauritius (Immediate holding company)

Volcan Investments Limited, Bahamas (Ultimate holding company)

(ii) Subsidiaries

Sterlite Grid Limited

East North Interconnection Company Limited

Jabalpur Transmission Company Limited

Bhopal Dhule Transmission Company Limited

Sterlite Global Ventures (Mauritius) Limited

Jiangsu Sterlite Tongguang Fiber Co. Limited

Sterlite Networks Limited

Sterlite Display Technologies Private Limited

Sterlite Technologies Americas LLC

Sterlite Technologies Europe Ventures Limited

Maharashtra Transmission Communication Infrastructure Limited

(b) Other related parties with whom transactions have taken place during the year

(i) Key management personnel (KMP)

Mr. Pravin Agarwal

Dr. Anand Agarwal

(ii) Entities where key management personnel / relatives of key management personnel have significant influence (EKMP)

Sterlite Industries (India) Limited

Fujairah Gold FZE

Bharat Aluminium Company Limited

Hindustan Zinc Limited

Sterlite Energy Limited

Vedanta Aluminium Limited

Vedanta Resources PLC

(B) The transactions with related parties during the year and their outstanding balances are as follows:-

Note 13: Segment information

In accordance with the Notified AS 17 under the Companies (Accounting Standards) Rules, 2006 (as amended) on "Segment Reporting", the Company has identified two reportable Business Segments i.e. Telecom Product and Solutions Business and Power Product and Solutions Business, which are regularly evaluated by the Management, in deciding the allocation of resources and assessment of performance. Common allocable costs are allocated to each segment according to the relative contribution of each segment to the total common cost. The segment performance is as follows:

Note 14: Previous Year Figures

Previous year figure have been regrouped / reclassified where necessary, to confirm to this year''s classification.


Mar 31, 2012

NOTE 1. CORPORATE INFORMATION

Sterlite Technologies Limited (the company) is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on two stock exchanges in India. The company is primarily engaged in the manufacture and sale of Power and Telecom products and solutions. Telecom products and solutions mainly include integrated optical fiber, other telecom products such as fiber optical cables, copper telecom cables, structured data cables, access equipments, fiber connectivity and system integration solution offerings for telecom networks and other service providers. Power products and solutions mainly include power transmission conductors and cables.

NOTE 2. BASIS OF PREPARATION

The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention, except in case of assets which have been impaired.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year, except for the change in accounting policy explained below.

Note 3: Employee Stock Option Scheme

The company has granted employees stock options plan, 2006 (ESOP) and employees stock options plan, 2010 (ESOP) to its employees pursuant to the resolution passed by the shareholders at the extraordinary general meeting held on March 13, 2006 and annual general meeting held on July 14, 2010 respectively. The Company has followed the fair value method (Black Scholes Options Pricing Model) for the valuation of these options. The compensation committee of the company has approved six grants vide their meeting held on June 14, 2006; March 19, 2007; September 28, 2007; June 14, 2008; June 26, 2009 and December 29, 2011 As per the plan, Options granted under ESOP would vest in not less than one year and not more than five years from the date of grant of such options. Vesting of options is subject to continued employment with the company. The plan is an equity settled plan.

The company has charged Rs. 1.00 Crores (Rs. 2.02 Crores) to the statement of Profit and loss in respect of options granted under ESOP scheme 2006 and options granted under ESOP scheme 2010.

Note 4: Operating Lease

The company has taken office buildings on operating lease. The lease terms are for periods of three to nine years and renewable at the option of the company.

There is no escalation clause in the lease agreement. Disclosures in respect of operating leases of office buildings as per the requirement of AS-19 on Leases, notified under the Rules are as under:

a) Lease payments recognised in the statement of Profit and loss for the year is Rs. 4.31 Crores (31 March, 2011: Rs. 3.05 Crores).

b) The future minimum lease payments payable over the next one year is Rs. 2.64 Crores (31 March, 2011: Rs. 1.55 Crores).

c) The future minimum lease payments payable later than one year but not later than five year is Rs. 1.65 Crores (31 March, 2011: Rs. 2.66 Crores).

Note 5: Capital Commitments

a) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) are Rs. 38.07 Crores (31 March, 2011: Rs. 52.65 Crores).

b) As on March 31, 2012, the Company has commitments of Rs. 897.18 Crores (31 March, 2011: Rs. 1,126.59 Crores) relating to further investments in subsidiaries.

Note 6: Contingent Liabilities

31 March, 2012 31 March, 2011 Rs. in Crores Rs. in Crores

1) Disputed liabilities in appeal

a) Sales tax 0.43 0.59

b) Excise duty (Including excise duty case in supreme court, refer note 8 & note 44(A)) 248.18 247.07

c) Customs duty 67.24 74.31

d) Service tax - 2.48

e) Income tax 6.92 11.26

f) Claims lodged by a bank against the company (*) 18.87 18.87

g) Claims against the company not acknowledged as debt 22.32 19.80

2) Outstanding amount of export obligation against advance licence 36.58 87.19

3) The company has given corporate guarantee to the Income Tax department on behalf of group companies. The outstanding amount is Rs. 114.00 Crores (31 March, 2011: Rs. 114.00 Crores) on this account as at the year-end.

4) The company has given corporate guarantee to long term transmission customers and State Bank of India on behalf of its subsidiary company. The outstanding amount is Rs. 119.59 Crores (31 March, 2011: Rs. 30.00 Crores) on this account as at the year-end.

The Company has not provided for disputed sales tax, excise duty, customs duty and service tax arising from disallowances made in assessments which are pending with appellate authorities for its decision.

It is not practical to indicate the uncertainties which may affect the future outcome and estimate the financial effect of the above liabilities.

(*) In an earlier year, one of the bankers of the company had wrongly debited an amount of Rs. 18.87 Crores, towards import consignment under Letter of Credit not accepted by the company, owing to discrepancies in the documents. The company has f led the case against the bank in the High Court of Mumbai. The bank has also f led a claim against the company in the Debt Recovery Tribunal. The company does not believe that any liability will arise to the company.

Note 7: Share Application Money

Share application money pertains to the amount of exercise price of Rs. 2 per share for 22,822 ESOPs for which equity shares have been subsequently allotted on April 17, 2012.

Note 8: Accounting for Amalgamation

The Hon'ble High Court of judicature at Mumbai vide its Order dated October 21, 2011 approved the Scheme of Amalgamation of Sterlite Infra-Tech Limited (100% Subsidiary of the company) with the company. The subsidiary was engaged in the manufacture of optical fibre. The appointed date as per the Scheme of Amalgamation is April 1, 2011. Sterlite Infra-Tech Limited stands amalgamated with the company ef -fective from the appointed date. The company has accounted for the amalgamation under the pooling of interests method. The impact of amalgamation has been given in the financial statements w.e.f. April 01, 2011.

Note 9: Other Notes

A. The company had in an earlier year received an order officeSTAT upholding the demand of Rs. 188 Crores (including penalties and excluding interest)(31 March 2011: Rs. 188 Crores) in the pending excise/custom matters on various grounds. The company's appeal with the Honourable High Court of Mumbai was rejected on the grounds of jurisdiction. The company preferred an appeal with the Honourable Supreme Court of India against the order office STAT which has been admitted. The company has revaluated the case on admission of appeal by the Honourable Supreme Court. Based on their appraisal of the matter, the legal advisors/consultants are of the view that under most likely event, the provision of Rs. 4.50 Crores made by the company against the above demand is adequate. The management is conf dent of a favourable order and hence no further provision is considered against the said demand.

B. There are no amounts due and outstanding to be credited to Investor Education and Protection Fund.

Note 10: Related Party Disclosures

Related party disclosures as required by AS 18, Related Party Disclosures issued by the ICAI and notified under Rules are given below:-

(a) Name of related party and nature of its relationship: (i) Subsidiaries

Sterlite Display Technologies Private Limited

Sterlite Infra-Tech Limited (refer note 43)

East North Interconnection Company Limited

Sterlite Grid Limited (Formerly known as Sterlite Transmission Projects Private Limited)

Jabalpur Transmission Company Limited

Bhopal Dhule Transmission Company Limited

Sterlite Global Ventures (Mauritius) Limited

Jiangsu Sterlite and Tongguang Optical Fiber Co. Limited

Sterlite Networks Limited

Sterlite Technologies Americas, LLC

Sterlite Technologies Europe Ventures Limited

(ii) Key management personnel (KMP)

Mr. Pravin Agarwal Dr. Anand Agarwal

(iii) Entities where key management personnel/relative of key management personnel have significant influence (EKMP)

Sterlite Industries (India) Limited

Fujairah Gold FZE

Bharat Aluminium Company Limited

Hindustan Zinc Limited

Sterlite Energy Limited

Vedanta Aluminium Limited

Vedanta Resources PLC

(iv) Holding Company

Volcan Investments Limited (Ultimate holding company) Twin Star Overseas Limited (Immediate holding company)

(b) There are no provisions for doubtful debts or no amounts have been written of in respect of debts due to or from related parties.

Note 11: Segment Reporting

As permitted by paragraph 4 of Accounting Standard-17 (AS-17), 'Segment Reporting', if a single financial report contains both consolidated financial statements and the separate financial statements of the parent, segment information need be presented only on the basis of the consolidated financial statements. Thus, disclosures required by AS-17 are given in the consolidated financial statements.


Mar 31, 2011

1. NATURE OF OPERATIONS

The Company is primarily engaged in the manufacture of Power Transmission and Telecom products in India. Telecom Business includes integrated Optical Fiber, Telecom Cables (Fiber Optic Cables, Copper Telecom Cables and Structured Data Cables), access equipments and integrated management business. Power Transmission Business includes power transmission conductors.

2. The amount of foreign exchange (gain)/loss adjusted during the year to the carrying cost of the fixed assets and capital work in progress is Rs. 1.15 crores (Rs. 5.00 crores) and that (credited)/debited to respective heads of accounts in Profit and Loss Account is Rs. (6.73) crores (Rs. 12.39 crores); premium on forward exchange contract to be recognised in the Profit and Loss account of subsequent accounting periods is Rs. 10.03 crores (Rs. 5.75 crores).

3. In terms of accounting policy (Refer Note 2 (o) of Schedule 21) for the accrual of export incentives, estimated benefits of Rs. 50.63 crores (Rs. 32.07 crores) have been taken into account under the DEPB /High Value Add Income scheme/Duty Drawback scheme. These have been grouped as part of turnover in the profit and loss account.

4. The provision for tax has been made in accordance with provisions of Section 115 JB (Minimum Alternate Tax, 'MAT') of the Income Tax Act, 1961. The Company is entitled to avail Credit under Section 115JAA (1A) and accordingly it has considered MAT credit entitlement as an asset.

5. The Company had in an earlier year received an order of CESTAT upholding the demand of Rs. 188 crores (including penalties and excluding interest) (Rs. 188 crores as at March 31, 2010) in the pending excise/custom matters on various grounds. The Company's appeal with the Honourable High Court of Mumbai was rejected on the grounds of jurisdiction. The Company preferred an appeal with the Honourable Supreme Court of India against the order of CESTAT which has been admitted. The Company has revaluated the case on admission of appeal by the Honourable Supreme Court. Based on their appraisal of the matter, the legal advisors/consultants are of the view that under most likely event, the provision of Rs. 5 crores made by the Company against the above demand is adequate. The management is confident of a favourable order and hence no provision is considered against the said demand.

6. EMPLOYEE STOCK OPTION SCHEME

The Company has granted Employees Stock Options Plan, 2006 (ESOP) to its employees pursuant to the resolution passed by the shareholders at the Extraordinary General Meeting held on March 13, 2006. The Company has followed the fair value method (Black Scholes Options Pricing Model) for the valuation of these options. The Compensation Committee of the Company has approved five grants vide their meeting held on June 14, 2006; March 19, 2007, September 28, 2007, June 14, 2008 and June 26, 2009. As per the plan, Options granted under ESOP would vest in not less than one year and not more than five years from the date of grant of such options. Vesting of options is subject to continued employment with the Company. The plan is an equity settled plan.

7. Estimated amount of contracts remaining to be executed on Capital Account and not provided for (Net of Advances) are Rs. 52.65 crores (Rs. 75.58 crores.)

8. DETAILS OF LOANS AND ADVANCES GIVEN TO SUBSIDIARIES

The details are provided as required by schedule VI of the Companies Act, 1956 and SEBI Circular SMD/Policy/Cir-2/2003 dated 10 January, 2003 of the Listing Agreement.

Outstanding Loans/Advances given to subsidiary Sterlite Display Technologies Private Limited (formerly known as 'Sterlite Infrastructure Private Limited') is Rs. 6.16 crores (Rs. Nil). The maximum amount outstanding from Sterlite Display Technologies Private Limited (formerly known as 'Sterlite Infrastructure Private Limited') during the year is Rs. 6.16 crores (Rs. 0.56 crore).

Outstanding Loans/Advances (including interest) given to subsidiary Sterlite Infra-tech Limited is Rs. 46.17 crores (Rs. 6.56 crores). The maximum amount outstanding from Sterlite Infra-tech Limited during the year is Rs. 46.17 crores (Rs. 6.59 crores).

Outstanding Loans/Advances given to subsidiary Sterlite Global Ventures (Mauritius) Limited is Rs. 0.42 crore (Rs. Nil).The maximum amount outstanding from Sterlite Global Ventures (Mauritius) Limited during the year is Rs. 0.42 crore (Rs. Nil).

9. There are no amounts due and outstanding to be credited to Investor Education and Protection Fund.

10. RELATED PARTY DISCLOSURES

Related party disclosures as required by AS-18, Related Party Disclosures issued by the ICAI and notified under Rules are given below: (a) Name of related party and nature of its relationship: (i) Subsidiary

Sterlite Display Technologies Private Limited (formerly known as Sterlite Infrastructure Private Limited)

Sterlite Infratech Limited

East North Interconnection Company Limited

Sterlite Transmission Projects Private Limited

Jabalpur Transmission Company Limited (*)

Bhopal Dhule Transmission Company Limited (*)

Sterlite Global Ventures (Mauritius) Limited

Jiangsu Sterlite and Tongguang Optical Fiber Co. Limited (*)

(ii) Key Management Personnel

Mr. Pravin Agarwal Dr. Anand Agarwal

(iii) Entities where Key Management Personnel / relative of key management personnel has significant influence

Sterlite Industries (India) Limited Fujairah Gold FZE

Bharat Aluminium Company Limited Hindustan Zinc Limited Sterlite Energy Limited Vedanta Aluminium Limited

(iv) Investing Company

Twin Star Overseas Limited

3. Share application money paid include Sterlite Transmission Project Private Limited Rs. 39.84 crores (Rs. Nil), East North Interconnection Company Limited Rs. 51.57 crores (Rs. Nil).

4. Advances given during the year include Sterlite Display Technologies Private Limited Rs. 6.16 crores (Rs. 0.25 crore).

5. Repayment of advances include Sterlite Display Technologies Private Limited Rs. Nil (Rs. 0.56 crore).

6. Loans given/(repayment) during the year include Sterlite Infratech Limited Rs. 37.35 crores (Rs. 6.37 crores), East North Interconnection Company Limited Rs. (21.87 crores)(Rs. 21.87 crores).

7. Interest charged on loans include Sterlite Infratech Limited Rs. 2.24 crores (Rs. 0.19 crore)

8. Sale of fixed assets include Sterlite Infratech Limited Rs. 3.75 crores (Rs. Nil).

9. Purchase of goods include Vedanta Aluminium Limited Rs. 483.88 crores (Rs. 560.06 crores), Bharat Aluminium Company Limited Rs. 90.53 crores (Rs. 115.45 crores).

10. Sale of goods include Sterlite Energy Limited Rs. 24.31 crores (Rs. 13.27 crores).

11. Expenses incurred include Sterlite Industries (India) Limited Rs. 0.64 crore (Rs. 0.33 crore), Vedanta Aluminium Limited Rs. 0.21 crore (Rs. Nil).

12. Interest include Vedanta Aluminium Limited Rs. 0.65 crore [Rs. (0.26) crore], Bharat Aluminium Company Limited Rs. 0.11 crore (Rs. 0.02 crore).

13. Advances received against supplies include East North Interconnection Company Limited Rs. 19.01 crores (Rs. Nil).

Note: As the liabilities for gratuity and leave encashment are provided on an actuarial basis for the Company as a whole, the amounts pertaining to the directors are not included above.

14. OPERATING LEASES

The Company has taken office buildings on operating lease. The lease term is for a period of three years and renewable at the option of the Company. There is no escalation clause in the lease agreement. Disclosures in respect of operating leases of office buildings as per the requirement of AS-19 on Leases, notified under the Rules are as under:

(a) Lease payments recognised in the statement of Profit and Loss for the year is Rs. 3.05 crores (Rs. 2.62 crores).

(b) The future minimum lease payments payable over the next one year is Rs. 1.55 crores (Rs. 0.53 crore).

(c) The future minimum lease payments payable later than one year but not later than five year is Rs. 2.66 crores (Rs. 0.54 crore).

15. The disclosures as per AS-15, Employee benefits notified under the Rules are as follows:-

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with Life Insurance Corporation of India in the form of a qualifying insurance policy.

16. CONTINGENT LIABILITIES (Rs. in crores)

Sr. No. Particulars 2010-11 2009-10

1. Disputed Liabilities in Appeal

a) Sales Tax 0.59 0.59

b) Excise Duty (Including Excise duty case in 247.07 266.69 Supreme Court, Refer Note 8, Schedule 21)

c) Customs Duty 74.31 74.31

d) Service Tax 2.48 2.45

e) Claims lodged by a Bank Against the company (*) 18.87 18.87

f) Claims against the company not acknowledged as Debt -- 2.07

2. Outstanding amount of Export obligation against 87.19 58.99 Advance Licence

3. The company has given Corporate Guarantee to the Income Tax Department on behalf of group companies. The outstanding amount is Rs. 114.00 crores (Rs. 114.00 crores) on this account as at the year-end.

The company has given Corporate Guarantee to Long Term Transmission Customers on behalf of its subsidiary company. The outstanding amount is Rs. 30.00 crores (Rs. Nil) on this account as at the year-end.

The Company has not provided for disputed Sales Tax, Excise Duty, Customs Duty and Service Tax arising from disallowances made in assessments which are pending with Appellate Authorities for its decision.

It is not practicable to indicate the uncertainties which may affect the future outcome and estimate the financial effect of the above liabilities.

(*) In an earlier year, one of the Bankers of the Company had wrongly debited an amount of Rs. 18.87 crores, towards import consignment under Letter of Credit not accepted by the Company, owing to discrepancies in the documents. The Company has filed the case against the bank in the High Court of Mumbai. The bank has also filed a claim against the Company in the Debt Recovery Tribunal. The Company does not believe that any liability will arise to the Company.

17. Expenditure of Rs. 1.88 crores (Rs. 4.39 crores) and 1.12 crores (Rs. 0.35 crore) on account of financing cost relating to borrowed funds for construction or acquisition of fixed assets is debited to "Fixed Assets" and "Capital work-in-Progress" respectively.

18. Excise duty on sales amounting to Rs. 54.14 crores (Rs. 63.87 crores) has been reduced from sales in profit & loss account and excise duty on increase/decrease in stock amounting to Rs. 3.50 crores (Rs. 0.83 crore) has been disclosed in Schedule 15 of financial statements.

19. PREVIOUS YEAR COMPARATIVES

Previous Year's figures have been regrouped where necessary to confirm to current year's classification.


Mar 31, 2010

1. NATURE OF OPERATIONS

The Company is primarily engaged in the manufacturer of Power Transmission and Telecom products in India. Telecom Business includes integrated Optical Fiber, Telecom Cables (Fiber Optic Cables, Copper Telecom Cables and Structured Data Cables), access equipments and integrated management business.

2. The amount of foreign exchange (gain)/loss adjusted during the year to the carrying cost of the fixed assets and capital work in progress is Rs. 5.00 Crores (Rs. 0.87 Crore) and that (credited)/debited to respective heads of accounts in Profit and Loss Account is Rs. (12.39) Crores (Rs. 12.53 Crores); premium on forward exchange contract to be recognised in the Profit and Loss account of subsequent accounting period is Rs. 5.75 Crores (Rs. 6.37 Crores).

3. The provision for tax has been made as per Minimum Alternative Tax under Section 115 JB of the Income Tax Act, 1961. The Company is entitled to avail Credit under Section 115JAA (1A) and accordingly it has considered MAT credit entitlement as an asset.

4. The Company had in an earlier year received an order of CESTAT upholding the demand of Rs. 188 Crores (including penalties and excluding interest) (Rs. 188 Crores as at March 31, 2009) in the pending excise/custom matters on various grounds. The Companys appeal with the Honourable High Court of Mumbai was rejected on the grounds of jurisdiction. The Company preferred an appeal with the Honourable Supreme Court of India against the order of CESTAT which has been admitted. The Company has reevaluated the case on admission of appeal by the Honourable Supreme Court. Based on their appraisal of the matter, the legal advisors/consultants are of the view that under most likely event, the provision of Rs. 5 Crores made by the Company against the above demand is adequate. The management is confident of a favourable order and hence no further provision is considered against the said demand.

5. EMPLOYEE STOCK OPTION SCHEME

The Company has granted Employees Stock Options Plan, 2006 (ESOP) to its employees pursuant to the resolution passed by the shareholders at the Extraordinary General Meeting held on March 13, 2006. The Company has followed the fair value method (Black Scholes Options Pricing Model) for the valuation of these options. The Compensation Committee of the Company has approved five grants vide their meeting held on June 14, 2006; March 19, 2007, September 28, 2007, June 14, 2008 and June 26, 2009. As per the plan, Options granted under ESOP would vest in not less than one year and not more than five years from the date of grant of such options. Vesting of options is subject to continued employment with the company. The plan is an equity settled plan.

6. Estimated amount of contracts remaining to be executed on Capital Account and not provided for (Net of Advances) are Rs. 75.58 Crores (Rs. 25.80 Crores.)

7. LOANS AND ADVANCES GIVEN TO SUBSIDIARIES

The details are provided as required by Schedule VI of Companys Act, 1956 and SEBI circular SMD/policy cir-2/2003 dated 10 January, 2003 of the listing agreement.

Outstanding Loans/Advance given to subsidiary Sterlite Infrastructure Private Limited is Rs. Nil Crore (Rs. 0.31 Crore). The maximum amount outstanding from Sterlite Infrastructure Private Limited during the year is Rs. 0.56 Crore (Rs. 0.31 Crore).

Outstanding Loans/Advance (including interest) given to subsidiary Sterlite Infra-tech Limited is Rs. 6.56 Crores (Rs. Nil). The maximum amount outstanding from Sterlite Infra-tech Limited during the year is Rs. 6.59 Crores (Rs Nil).

Outstanding Loans/Advance given to subsidiary East North Interconnection Company Limited is Rs. 21.87 Crores (Rs. Nil). The maximum amount outstanding from East North Interconnection Company Limited during the year is Rs. 21.87 Crores (Rs. Nil).

8. There are no amounts due and outstanding to be credited to Investor Education and Protection Fund.

9. RELATED PARTY DISCLOSURES

Related party disclosures as required by AS-18, Related Party Disclosures issued by the Institute of Chartered Accountants of India and notified under the Companies (Accounting Standards) Rules, 2006 are given below:

(a) Name of related party and nature of its relationship:

(i) Subsidiary

Sterlite Infrastructure Private Limited

Sterlite Infratech Limited (*) (100% subsidiary incorporated in December 2009)

East North Interconnection Company Limited (**) (The Company was acquired on March 31, 2010)

(ii) Key Management Personnel

Mr. Pravin Agarwal

Dr. Anand Agarwal

(iii) Investing Company

Twin Star Overseas Limited.

(b) There are no provisions for doubtful debts or no amounts have been written off in respect of debts due to or from related parties.

10. OPERATING LEASES

The Company has taken Office Buildings on Operating lease. The lease term is for a period of three years and renewable at the option of the Company. Disclosures in respect of Operating Leases of office buildings as per the requirement of Notified AS-19 under the Companies (Accounting Standard) Rules, 2006 on Leases issued by The Institute of Chartered Accountants of India, is as under:

(a) Lease payments recognised in the statement of Profit and Loss for the period is Rs. 0.85 Crore (Rs. 1.23 Crores).

(b) The future minimum lease payments payable over the next one-year is Rs. 0.53 Crore (Rs. 1.37 Crores).

(c) The future minimum lease payments payable later than one year but not later than five year is Rs 0.54 Crore (Rs. 1.92 Crores).

11. The disclosures as per AS-15, Employee benefits, issued by the Institute of Chartered Accountants of India and notified under the Companies (Accounting Standards) Rules, 2006 are as follows:-

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with Life Insurance Corporation of India in the form of a qualifying insurance policy.

12. CONTINGENT LIABILITIES INCLUDING INTEREST AND PENALTY

(Rs. inCrores)

Sr. No. particulars 2009-2010 2008-2009

1. Disputed Liabilities in Appeal

a) Sales Tax 0.59 0.59

b) Excise Duty 78.69 78.80

c) Customs Duty 74.31 74.52

d) Service Tax 2.45 2.45

e) Claims lodged by a Bank Against the company (*) 18.87 18.87

f) Claims against the company not acknowledged as Debt 2.07 2.78

g) Excise Duty Case in Supreme Court (Refer Note 8, Schedule 21)

2. Outstanding amount of Export obligation against Advance Licence 58.99 0.37

3. The company has given Corporate Guarantee to the Income Tax Department on behalf of group companies. The outstanding amount is Rs. 114.00 Crores (Rs. 114.00 Crores) on this account as at the year-end.

The Company has deposited Rs. Nil (Rs. 8.14 Crores) under protest against above contingent liabilities.

The Company has not provided for disputed Sales Tax, Excise Duty, Customs Duty and Service Tax arising from disallowances made in assessments which are pending with Appellate Authorities for its decision.

It is not practicable to indicate the uncertainties which may affect the future outcome and estimate the financial effect of the above liabilities.

(*) In earlier year, one of the bank of the Company had wrongly debited an amount of Rs. 18.87 Crores, towards import consignment under Letter of Credit not accepted by the Company, owing to discrepancies in the documents. The Company has filed the case against the bank in the High Court of Mumbai. The bank has also filed a claim against the Company in the Debt Recovery Tribunal. The Company does not believe that any liability will arise to the Company.

13. Expenditure of Rs. 4.39 Crores (Rs. Nil) and 0.35 Crore (Rs. 2.30 Crores) on account of financing cost relating to borrowed funds for construction or acquisition of fixed assets is debited to "Fixed Assets" and "Capital work-in-Progress" respectively.

14. Excise duty on sales amounting to Rs. 63.87 Crores (Rs. 100.47 Crores) has been reduced from sales in profit & loss account and excise duty on increase/decrease in stock amounting to Rs. 0.83 Crore (Rs. (0.11) Crore) has been disclosed in Schedule 15 of financial statements.

15. OTHER NOTES

(a) Effective February 25, 2010, the Company has subdivided the face value of equity shares from Rs. 5 each to Rs. 2 each (share split), after obtaining shareholders approval vide Extra-Ordinary General Meeting held on February 25, 2010. Accordingly, the number of equity shares and face value of shares disclosed in the financial statements have been adjusted for the impact of share split. Further, the basic and diluted earnings per share disclosed have been computed for the current year and recomputed for the previous year based on the revised face value of Rs. 2 each. In the same meeting the Company has declared bonus shares in the ratio of 1:1 to all existing shares holders along with outstanding equity share warrants and outstanding ESOP scheme as disclosed in the Note 9 of Schedule 21.

During the current year, the company has issued 16,125,000 share warrants at a price of Rs. 26 per warrant and 18,250,000 warrants at a price of Rs. 59.40 per warrant to Twinstar Overseas Limited a promoter of the Company, 16,125,000 shares have been converted into equity shares in the ratio of 1:1 and bonus shares in the ratio of 1:1 have also been given on these shares. The balance warrants outstanding as at year end aggregating 18,250,000 are convertible within a period of 18 months from the date of issue.

16. PREVIOUS YEAR COMPARATIVES

Previous Years figures have been regrouped where necessary to confirm to current years classification.

 
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