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Notes to Accounts of Sterlite Technologies Ltd.

Mar 31, 2023

There are no material overdues compared to original plans as on March 31, 2023 and March 31, 2022.

The Company evaluates completion of the projects based on its original plan which includes certain projects relating to research and development monitored on an ongoing basis.

Details of Lease:

The note provides information for leases where the company is a lessee. The company has taken land, various offices and plant and machinery on lease. Rental contracts for offices and plant and machinery are typically made for fixed periods of 2 to 15 years, but have extension options.

The total cash outflow for leases for the year ended March 31, 2023 is ?28 crores. (March 31, 2022 - ?20 crores) Extension and Termination option:

Extension and termination options are included in a number of property and equipment leases held by the company. These terms are used to maximise operational flexibility in terms of managing contracts. The majority of extension and termination options held are exercisable only by the company and not by the respective lessor.

Commitment for leases not yet commenced on March 31, 2023 was ?Nil (March 31, 2022 - ^ Nil).

During the year ended March 31, 2023, the Company considered indicators of impairment such as operational losses in previous years, changes in outlook of future profitability among other potential indicators for investments held in subsidiaries and business operations either directly or indirectly.

Speedon Network Limited (SNL) is a wholly owned subsidiary of the Company. In the current year, the fair value less cost to sell of SNL has been determined using replacement cost method using level III inputs by an independent valuer which is lower than its carrying value. The replacement cost is computed using the factors such as number of home passes, the cost to install each home pass, depreciation adjustment and first mover advantage premium. Accordingly, impairment of ?4 crores (31 March 2022: ?22 crores) in the value of investment held has been recognised in the current year.

The Company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds) to any other person or entity, including foreign entities (âIntermediariesâ) with the understanding (whether recorded in writing or otherwise) that the Intermediary shall, whether, directly or indirectly lend or invest in other persons/ entities identified in any manner whatsoever by or on behalf of the Company (âultimate beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries other than loans aggregating ?79 crores given during the year to STL UK Holdco Limited and Sterlite Technologies UK Ventures Limited, subsidiaries of the Company in the ordinary course of business and in keeping with the applicable regulatory requirements. for onward funding to one of the overseas subsidiary of the Company towards meeting its business requirements. Accordingly, no further disclosures, in this regard, are required.

Significant changes in Contract assets

Contract assets have increased from previous year as entity has entered into new contracts during the year and has provided more services ahead of the agreed billing and payment schedules for fixed price contracts.

During the year ended 31 March 2023, ?626 crores (31 March 2022: ?1,146 crores) of opening unbilled revenue has been reclassified to Trade receivables upon billing to customers on completion of milestones.

Refer note 18 for information on other assets pledged as security by the Company.

Amounts recognised in profit or loss:

Write-downs of inventories to net realisable value amounted to ?20 crores (March 31, 2022: ?55 crores). These were recognised as an expense and included in â(Increase) / decrease in inventories of finished goods, work-in-progress and traded goodsâ in statement of profit and loss of respective year.

Refer note 18 for information on inventories pledged as security by the Company.

Year ending March 31, 2022:

During the year ended March 31, 2022, company has sold the investment in MTCIL. The gain on sale of investment in Maharashtra Transmission Communication Infrastructure Limited of ?26 crores is disclosed in other income as Profit on sale of subsidiaries and investment in joint venture.

Further, the Company had decided to sell land and building at Hyderabad during the year ended 31 March 2021. Hence it was classified as held for sale during the year ended 31 March 2021 and measured at the lower of its carrying amount and fair value less costs to sell. The fair value of the building was determined using the sales comparison approach. No write down was recognised as fair value of the assets is higher than cost. During the year ended March 31, 2022, company has sold the Land and building at Hyderabad. The gain of ?67 crores is recognised as an exceptional item in the statement of profit and loss.

b. Terms and rights attached to equity shares

The Company has only one class of equity shares having a par value of ?2 per share. Each holder of equity shares is entitled to one vote per share.

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.

g. Details of shares bought back during the 5 years preceding 31 March 2023:

On March 24, 2020, the Board of Directors had approved the buyback of Equity Shares for a total amount not exceeding ?145 crores, being 9.95% and 9.32% of the aggregate of the total paid-up equity capital and free reserves (including securities premium) of the Company based on the audited standalone and consolidated financial statements, respectively, of the Company for the financial year ended March 31, 2019. The Company closed the buy back on August 27, 2020. The Company has bought back 88,67,000 shares for ?100 crores (excluding taxes).

Nature and Purpose of reserves other than retained earnings Securities Premium

Securities premium is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of the Companies Act, 2013.

Capital Reserve

Capital reserve was created on account of merger of passive infrastructure business of wholly owned subsidiary, Speedon Network Limited, in the year ended March 31, 2017.

General Reserve

General reserve is created out of the amounts transferred from debenture redemption reserve on account of redemption of debentures.

Cash Flow Hedge Reserve

The Company uses hedging instruments as part of its management of foreign currency risk associated with its highly probable forecasted sales and purchases and interest rate risk associated with variable interest rate borrowings as described in note 45. For hedging foreign currency risk, the Company uses foreign currency forward contracts which are designated as cash flow hedges. For hedging interest rate risk, the Company uses interest rate swaps which are also designated as cash flow hedges. To the extent these hedges are effective, the change in fair value of the hedging instrument is recognised in the cash flow hedging reserve. Amounts recognised in the cash flow hedging reserve are reclassified to profit or loss when the hedged item affects profit or loss. When the forecasted transaction results in the recognition of a non-financial asset (e.g. inventory), the amount recognised in the cash flow hedging reserve is adjusted against the carrying amount of the non financial asset.

Employee Stock Option Outstanding

The share options outstanding account is used to recognise the grant date fair value of options issued to employees under employee stock option plan (ESOP Scheme) approved by shareholders of the Company.

Debenture Redemption Reserve

The Company had created a debenture redemption reserve (DRR) of 25% of the total oustanding debentures out of the profits which are available for the purpose of redemption of debentures as per provisions of the Companies Act, 2013. The outstanding amounts were repaid in the previous year.

Capital Redemption Reserve

As per provisions of the Companies Act, 2013, the Company has created a capital redemption reserve (CRR) of 2 Crores against face value of equity shares bought back by the Company during the year ended 31 March 2021.

a) 8.25% Non convertible debentures carry 8.25% p.a rate of interest. Total amount of non-convertible debentures is due in 4 equal annual installments starting from FY 2027-28 till FY 2030-31. These non-convertible debentures are secured by way of first pari pasu charge on specified movable fixed assets at Shendra plant (project Gaurav) (both present and future).

b) 7.30% Non convertible debentures carry 7.30% p.a rate of interest. Total amount of non-convertible debentures is due in the FY2023-24. These non-convertible debentures are secured by way of mortgage of immovable fixed assets of the Company located at Aurangabad.

c) 9.10% Non convertible debentures carry 9.10% p.a rate of interest. Total amount of non-convertible debentures is due in the FY2025-26. These non-convertible debentures are secured by way of a first pari-passu charge over movable fixed assets of the Company, other than assets located at Shendra Aurangabad.

d) Foreign Currency term loan from bank amounting to ? Nil (March 31, 2022: ?38 crores) carries interest @ Libor 2.70 % p.a. Loan amount is repayable in 20 quarterly equated instalments of USD 0.13 crores starting from April 2018. The term loan is secured by way of first pari-passu charge on entire movable fixed assets (both present and future) and mortgage of immovable fixed assets of the Company located at Dadra & Nagar Haveli and Pune. The loan has been repaid during FY2022-23.

e) Foreign Currency term loan from bank amounting to ? Nil (March 31, 2022: ?62 crores) crores carries interest @ GBP Libor 2.60 % p.a. Loan amount is repayable in 6 half yearly equated instalments of GBP 0.13 crores starting from Feb 2022. The term loan is secured by way of first pari-passu charge on entire movable fixed assets (both present and future) of the Company. The loan has been repaid during FY2022-23.

f) Indian rupee term loan from bank amounting to ?166 crores (31 March 2022: ?249 crores) carries interest @ One Year MCLR 0.15% p.a. Loan amount is repayable in 12 quarterly instalments from June 2022 of ?20.75 crores per Quarter (excluding interest). The term loan is secured by way of first pari pasu charge on entire movable fixed assets at Shendra plant (project Gaurav) (both present and future).

g) Secured Indian rupee term loan from bank amounting to ?200 crores (31 March 2022 Unsecured indian rupee term loan: ?200 crores) carries interest @ overnight MCLR. Loan amount is repayable as a bullet repayment in the month of October 2023. The term loan is secured by way of first pari pasu charge on entire movable fixed assets at Shendra plant (project Gaurav) (both present and future).

h) Unsecured Indian rupee term loan from bank amounting to ? Nil (March 31, 2022: ?200 crores) carries interest 6.6% p.a. Loan amount has been repaid during FY2022-23.

i) Unsecured Indian rupee term loan from NBFC amounting to ?175 crores (March 31, 2022: Nil) carries interest @ 9.15% p.a. Loan amount is repayable in FY2024-25.

j) Unsecured Indian rupee term loan from NBFC amounting to ?74 crores (March 31, 2022: ?25 crores) carries interest @

5.5% p.a. Loan amount is repayable in FY2023-24 & 2024-25.

the Company. Working Capital Demand Loans have been taken for a period of 7 days to 180 days and carry interest @ 6.85 % to 8.60% p.a (March 31, 2022: 4.50 % to 7.00% p.a).

(ii) Commercial Papers are unsecured and are generally taken for a period from 60 Days to 180 days and carry interest @ 7.55% to 8.40% p.a (March 31, 2022: 4.50% to 6.00% p.a ).

(iii) Other loans include buyerâs credit arrangements (secured) and export packing credit (secured and unsecured). These secured loans are secured by hypothecation of raw materials, work in progress, finished goods and trade receivables. Export packing credit is taken for a period ranging from 30-180 days. Interest rate for both the products range from 6.85% - 8.05% p.a (March 31, 2022: 4.00% - 6.50% p.a).

Borrowing secured against current assets:

The company has borrowings from banks and financial institutions on the basis of security of current assets. The quarterly returns or statements of current assets filed by the company with banks and financial institutions are in agreement with the books of accounts except as disclosed in Note no.49.

Utilisation of borrowed funds

The company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the company shall:

a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or ;

b. provide any guarantee, security or the like on behalf of the ultimate beneficiaries.

The borrowings obtained by the company during the year from banks and financial institutions have been applied for the purposes for which such loans were taken.

The company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.

There are no charges or satisfaction which are yet to be registered with the Registrar of Companies beyond the statutory period. Net debt reconciliation

i) Compensated Absences

The compensated absences cover the Companyâs liability for sick and privilege leave. The Company does not have an unconditional right to defer settlement for any of these obligations. However, based on past experience, the company does not expect all employees to take the full amount of accrued leave or require payment within the next 12 months and accordingly amounts have been classified as current and non current based on actuarial valuation report.

ii) Post employment benefit obligation - Gratuity

The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972 (amended). Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. The gratuity plan is a funded plan and the Company makes contributions to fund managed by Life Insurance Corporation of India. The Company does not fully fund the liability and maintains a target level of funding to be maintained over a period of time based on estimate of expected gratuity payments.

The above sensitivity analysis is based on a change in an assumption while holding all other assumptions constant.

In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period. Risk exposure

Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:

Asset volatility:

The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets underperform this yield, this will create a deficit. Plan assets are maintained with fund manager, LIC of India.

The Companyâs assets are maintained in a trust fund managed by public sector insurance company (LIC of India). LIC has a sovereign guarantee and has been providing consistent and competitive returns over the years. The plan asset mix is in compliance with the requirements of the respective local regulations.

Changes in bond yields:

A decrease in bond yields will increase plan liabilities.

Future salary escalation and inflation risk:

Rising salaries will often result in higher future defined benefit payments resulting in a higher present value of liabilities especially unexpected salary increases provided at managementâs discretion may lead to uncertainties in estimating this risk.

Life expectancy

Increases in life expectancy of employee will result in an increase in the plan liabilities. This is particularly significant where inflationary increases result in higher sensitivity to changes in life expectancy.

The weighted average duration of the defined benefit obligation is 8 years (March 31, 2022 - 8 years). The expected maturity analysis of gratuity is as follows:

Maturity Analysis of defined benefit obligation:

The expected maturity analysis of undiscounted gratuity is as follows:

Revenue disaggregation in terms of nature of goods and services has been included above.

The total contract price of ?5,259 crores (31 March 2022: ?4,798 crores) is reduced by the consideration of ?13 crores (31 March 2022: ?26 crores) towards variable components.

Refer note 2 and 3 for accounting policy and significant judgements, respectively.

The Companyâs unsatisfied (or partially satisfied) performance obligations can vary due to several factors such as terminations, changes in scope of contracts, periodic revalidations of the estimates or other relevant economic factors. The aggregate value of unsatisfied (or partially satisfied) performance obligations is ?3,950 crores (31 March 2022: ?4,124 crores) which is expected to be recognised over a period of one to nine years. Amount of unsatisfied (or partially satisfied) performance obligations does not include contracts with original expected duration of one year or less since the Company has applied the practical expedient in Ind AS 115.

The Company has recorded provision of ?Nil (31 March 2022: ?64 crores) based on final settlement with the customer for supplies made in the previous years by an adjustment to revenue from a period.

"This relates to government grants pertaining to indirect tax benefits availed under Industrial Promotion Scheme, Remission of Duties or Taxes on Export Products Scheme and Duty Drawback Scheme.

a. Defined Contribution Plans:

The Company has a provident fund plan which is a defined contribution plan. Contributions are made to provident fund administered by the Government in India for employees at the rate of 12% of basic salary as per local regulations. The obligation of the Company is limited to the amount contributed and it has no further contractual nor any constructive obligation.

33. Employee Share Based Payments

The Company has established employees stock options plan, 2010 (âESOP Schemeâ) for its employees pursuant to the special resolution passed by shareholders at the annual general meeting held on July 14, 2010. The employee stock option plan is designed to provide incentives to the employees of the Company to deliver long-term returns and is an equity settled plan. The ESOP Scheme is administered by the Nomination and Remuneration Committee. Participation in the plan is at the Nomination and Remuneration Committeeâs discretion and no individual has a contractual right to participate in the ESOP Scheme or to receive any guaranteed benefits. Options granted under ESOP scheme would vest in not less than one year and not more than five years from the date of grant of the options. The Nomination and Remuneration Committee of the Company has approved multiple grants with related vesting conditions. Vesting of the options would be subject to continuous employment with the Company and hence, the options would vest with passage of time. In addition to this, the Nomination and Remuneration Committee may also specify certain performance parameters subject to which the options would vest. Such options would vest when the performance parameters are met.

Once vested, the options remain exercisable for a period of maximum five years. Options granted under the plan are for no consideration and carry no dividend or voting rights. On exercise, each option is convertible into one equity share. The exercise price is ?2 per option.

The Company has charged ?9 crores (March 31, 2022: ?12 crores) to the statement of profit and loss in respect of options granted under ESOP scheme.

b) Fair Value of the options granted during the year-

During the current year remuneration committee has approved three grants. Following are the details of assumptions under the grant, related vesting conditions and fair valuation model used based on the nature of vesting.

Date of Grant- July 19, 2022

The company has granted 72,280 options under ESOP scheme based on following criteria and related assumptions Vesting criteria - Continuous employment with the company.

Options granted to employees under the ESOP Scheme 2010 are considered to be potential equity shares. They have been included in the determination of diluted earnings per share to the extent to which they are dilutive. The options have not been included in the determination of basic earnings per share. Details relating to the options are given in note 33.

35. Code on Social Security, 2020

The Indian Parliament has approved the Code on Social Security, 2020 which would impact the contributions by the Company towards Provident Fund and Gratuity. The draft rules for the Code on Social Security, 2020 have been released by the Ministry of Labour and Employment on November 13, 2020. The Company is in the process of assessing the additional impact on Provident Fund contributions and on Gratuity liability contributions and will complete their evaluation and give appropriate impact in the financial statements in the period in which the rules that are notified become effective.

2. The Company had issued Corporate guarantees amounting to ?114 crores to the Income tax Authorities in FY2003-04 on behalf of the Group companies. The matter against which corporate guarantee was paid by STL was decided in favour of the Group companies by both ITAT and HC orders against which the Department has filed an appeal with the Supreme Court. The above corporate guarantee is backed by the corporate guarantee issued by Volcan Investments Limited (refer note 48) in the favour of the Company.

* In an earlier year, one of the Bankers of the Company had wrongly paid an amount of ?19 crores under the letter of credit facility. The letter of credit towards import consignment was not accepted by the Company, owing to discrepancies in the documents. Thereafter, the bank filed claim against the Company in the Debt Recovery Tribunal (DRT). Against the DRT Order dated 28 October 2010, the parties had filed cross appeals before the Debt Recovery Appellate Tribunal. The Debt Recovery Appellate Tribunal vide its Order dated 28 January 2015 has allowed the appeal filed by the Company and has dismissed the appeal filed by the bank. The bank has challenged the said order in Writ petition before the Bombay High Court. The management doesnât expect the claim to succeed and accordingly no provision for the contingent liability has been recognised in the financial statements.

In the FY21-22, the Company had received show cause notices with respect to 4 Service tax registrations of ?57 crores each demanding service tax on difference between value of services appearing in 26AS (at legal entity level) vis-a-vis respective service tax registrations for the period 2016-17. Management has assessed that the show-cause notice is not required to be disclosed as contingent liability as it is erroneous in nature and the probability of an unfavourable outcome is remote.

Further, Income tax orders for AY 2013-14, 2014-15 and 2017-18 were received with respect to Elitecore Technologies Private Limited (which is now a non-existent entity in these years since it had merged with the company with effect from 29 September 2016) with a demand of ?55.67 crores mainly relating to addition on certain aspects like treatment of purchase of software/hardware. Management has assessed that based on principles arising from judicial precedents, including those passed by the Honâble Supreme Court and Jurisdictional Bombay High Court, the notices issued in the name of nonexistent entity are not merely an irregularity but also suffer from jurisdictional defect which cannot be cured. On this primary ground and certain other strong grounds, including procedural defects, the company (on behalf of Elitecore Technologies private limited) has filed a writ before the Honâble High Court. The order of High Court for AY 2013-14 and AY 2014-15 came in favour of Company via order dated March 27, 2023. While the order for AY 2017-18 is awaited. Hence, management believes that the probability of an unfavourable outcome is remote and the demand of ?5 crores pertaining to the said case (AY 2017-18) is not disclosed as a contingent liability.

3. The Company has not provided for disputed liabilities disclosed above arising from disallowances made in assessments which are pending with different 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 liability has been accrued in the financial statements for the demands raised. The management believes that the ultimate outcome of these proceedings will not have a material adverse effect on the Companyâs financial position. In respect of the claims against the company not acknowledged as debts as above, the management does not expect these claims to succeed. It is not practicable to indicate the uncertainties which may affect the future outcome and estimate the financial effect of the above liabilities.

Amount due to Micro and Small enterprises are disclosed on the basis of information available with the Company regarding status of the suppliers as Micro and Small enterprises.

40. Research and Development Expenditure

STL through its extensive research capabilities, constant innovation and unique capabilities at following R&D centres is able to provide customers end to end solutions from manufacturing of cable to system integration to providing software products required by telecom players:

- Aurangabad - R&D activities to manufacture cable which can cater most bandwidth demand.

- Gurgaon - R&D activities to design, build, manage broadband network for global service providers, smart cities, rural broadband etc.

- Ahmedabad - R&D activities to develop innovative telecom software products which can cater demand for business support system and operating support system.

(e) There is no provision made with respect to a liability incurred by entering into a contractual obligation during the current year.

44. Exceptional Items

During the year ended March 31, 2022, the amount of ?53 crores reported under exceptional items in the financial statements includes profit of ?67 crores recognised on account of transfer of land situated at Hyderabad and a provision of ?14 crores with respect to an order against the Company for a claim filed by a vendor for non-fulfilment of certain contractually agreed off take obligations.

45. Financial Risk Management

The Companyâs principal financial liabilities, comprise borrowings, trade and other payables and other financial liabilities. The main purpose of these financial liabilities is to finance the Companyâs operations. The Companyâs principal financial assets include Investments, loans, trade and other receivables, cash and short-term deposits and other financial assets that arise directly from its operations. The Company also enters into derivative transactions.

The Companyâs activities expose it to market risk, credit risk and liquidity risk. The Companyâs senior management oversees the activities to manage these risks. All derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. It is the Companyâs policy that no trading in derivatives for speculative purposes should be undertaken.

The Risk Management policies of the Company are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are approved and reviewed regularly by the Board to reflect changes in market conditions and the Companyâs activities.

Management has overall responsibility for the establishment and oversight of the Companyâs risk management framework.

The risks to which Company is exposed and related risk management policies are summarised below -

(a) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk mainly includes loans given and borrowings, financial assets and liabilities in foreign currency, investments in quoted instruments and derivative financial instruments.

The sensitivity analysis in the following sections relate to the position as at March 31, 2023 and March 31, 2022.

The sensitivity analysis have been prepared on the basis that the amount of debt, the ratio of fixed to floating interest rates of the debt, derivatives and the proportion of financial instruments in foreign currencies are all constant and on the basis of hedge designations in place at March 31, 2023 and March 31, 2022.

Interest rate risk

Interest rate risk is the risk that the fair value or the future cash flows of a financial instrument will fluctuate because of changes in interest rates. The Companyâs exposure to the risk of changes in interest rate primarily relates to the Companyâs debt obligations with floating interest rates.

The Company is exposed to the interest rate fluctuation in domestic as well as foreign currency borrowing. The Company manages its interest rate risk by having a balanced portfolio of fixed and variable rate borrowings. The Company enters into interest rate swaps, in which it agrees to exchange, at specified intervals, the difference between fixed and variable rate interest amounts calculated by reference to an agreed-upon notional principal amount. There are no interest rate swaps outstanding as at March 31, 2023. At March 31, 2023, after taking into account the effect of interest rate swaps, approximately 88% of the Companyâs borrowings are at a fixed rate of interest (March 31, 2022: 83%).

Foreign currency risk

The company operates internationally and is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to the USD, EURO and GBP. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the companyâs functional currency (INR). The risk is measured through a forecast of highly probable foreign currency cash flows. The objective of the hedges is to minimise the volatility of the INR cash flows of highly probable forecast transactions.

The Company has a policy to keep minimum forex exposure on the books that are likely to occur within a 15-month period for hedges of forecasted sales and purchases. As per the risk management policy, foreign exchange forward contracts are taken to hedge its exposure in the foreign currency risk. During the year ended March 31, 2023 and 2022, the company did not have any hedging instruments with terms which were not aligned with those of the hedged items.

When a derivative is entered into for the purpose of hedge, the Company negotiates the terms of those derivatives to match the terms of the underlying exposure. For hedges of forecast transactions the derivatives cover the period of exposure from the point the cash flows of the transactions are forecasted up to the point of settlement of the resulting receivable or payable that is denominated in the foreign currency.

Out of total foreign currency exposure the Company has hedged the significant exposure as at March 31, 2023 and as at March 31, 2022.

Commodity price risk

The Company is affected by the price volatility of certain commodities. Its operating activities require the ongoing purchase and manufacture of copper cables and therefore require a continuous supply of copper. To meet requirements the company enters into contracts to purchase copper. The prices in these purchase contracts are linked to the price on London Metal Exchange.

The Company has a risk management strategy to mitigate commodity price risk.

Based on a 1 month forecast of the required copper supply, the Company hedges the purchase price using future commodity purchase contracts. The forecast is deemed to be highly probable.

Commodity price sensitivity

As per the Companyâs policy for commodity price hedging, all the commodity price exposures as on reporting dates are fully hedged. Thus, there are no open unhedged exposures on the reporting dates.

Price risk

The Companyâs investment in non-listed equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Company manages the equity price risk through diversification and by placing limits on individual and total equity instruments. Reports on the equity portfolio are submitted to the Companyâs senior management on a regular basis. The Companyâs Board of Directors review and approve all equity investment decisions.

The Company also invests into highly liquid mutual funds which are subject to price risk changes. These investments are generally for short duration and therefore impact of price changes is generally not significant. Investment in these funds are made as a part of treasury management activities.

(b) Credit risk

Credit risk is the risk that a counterparty will not meet its obligations under a contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its investing activities, including deposits with banks, loans given, foreign exchange transactions and other financial instruments.

Trade receivables and Contract assets

Customer credit risk is managed by each business unit subject to the Companyâs established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed taking into account its financial position, past experience and other factors, eg. credit rating and individual credit limits are defined in accordance with credit assessment. Outstanding customer receivables are regularly monitored and any shipments to major customers are generally covered by letters of credit or other forms of credit assurance.

The Company provides for expected credit loss of trade receivables and contract assets based on life-time expected credit losses (simplified approach). The Company assesses the expected credit loss for Global Services Business (GSB) considering the individual nature and risks of the contracts. The expected credit losses for other businesses is assessed using a provision matrix as per the practical expedient prescribed under IND AS 109.

The credit risk of customers of Global Services Business (GSB) is assessed individually considering the nature and risks involved in each contract. Such assessment is considered in determining the adequacy of expected credit loss for trade receivables and contract assets of the business which requires significant managment judgement. Refer Note 3 for details of the judgement involved.

A major portion of the GSB trade receivables and contract assets consists of government customers. The credit risk in receivable from government customers is considered to be low. In case of disputes, the Company considers interpretation of contractual terms, project status, probability of settlement, counter-claims, latest discussions / correspondence and legal opinions wherever applicable in assessing the recoverability. The average project execution cycle in GSB ranges from 12 to 36 months based on the nature of contract and scope of services to be provided. General payment terms include mobilisation advance, progress payments with a credit period ranging from 45 to 90 days and certain retention money to be released at the end of the project. In some cases retentions are substituted with bank/corporate guarantees.

For other businesses, a provision matrix is used to measure the lifetime expected credit losses as per the practical expedient prescribed under Ind AS 109. The trade receivables and contract assets for other businesses are mainly related to contracts for sale of goods.

An impairment analysis is performed at each reporting date on an individual basis for major customers. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively using a provision matrix to measure the lifetime expected credit losses as per the practical expedient prescribed under Ind AS 109. The assessment is based on historical information of defaults. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets.

The Company does not hold collateral as security. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and operate in largely independent markets. During the period, the company made write-offs of Nil (31 March 2022: Nil) trade receivables and it does not expect to receive future cash flows or recoveries from collection of cash flows previously written off.

Financial assets and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Companyâs treasury department in accordance with the Companyâs policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. Counterparty credit limits are reviewed by the Company on an annual basis, and may be updated throughout the year. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterpartyâs potential failure to make payments.

Based on the assessment performed, the company considers all the outstanding balances of such financial assets to be recoverable as on balance sheet date and appropriate provision for impairment is considered in financial statements.

The Companyâs maximum exposure to credit risk for the components of the balance sheet at March 31, 2023 and March 31, 2022 is the carrying amounts of each class of financial assets.

Liquidity risk is the risk that the Company may encounter difficulty in meeting its present and future obligations associated with financial liabilities that are required to be settled by delivering cash or another financial asset. The Companyâs objective is to, at all times, maintain optimum levels of liquidity to meet its cash and collateral obligations. The Company requires funds both for short term operational needs as well as for long term investment programs mainly in growth projects. The Company closely monitors its liquidity position and deploys a robust cash management system. It aims to minimise these risks by generating sufficient cash flows from its current operations, which in addition to the available cash and cash equivalents, liquid investments and sufficient committed fund facilities which will provide liquidity.

Cash flow hedges

The cash flow hedges for such derivative contracts as at March 31, 2023 were assessed to be highly effective and a net unrealised loss of ?33 crores, with a deferred tax liability of ?9 crores relating to the hedging instruments, is included in OCI. Comparatively, the cash flow hedges as at March 31, 2022 were assessed to be highly effective and an unrealised gain of ?1 crores, with a deferred tax liability of ?0.30 crores was included in OCI in respect of these contracts. The amounts retained in OCI at March 31, 2022 are expected to mature and affect the statement of profit and loss during the year ended March 31, 2024 and 31 March 2025.

At March 31, 2023, the company does not have any currency/interest rate swap agreemnts in place. As at March 31, 2022, the company had currency/interest rate swap agreements in place with a notional amount of USD 0.5 crores (?42.45 crores) and GBP 0.63 crores (?57.60 crores whereby the company received a variable rate of interest of Libor 2.70% and paid interest at a fixed rate equal to 10.0425% on the notional amount with USD-INR rate fixed at ?66.3850 per USD for the USD Interest Swap. For the GBP Interest Swap, the company received a variable rate of interest of Sterling Overnight Index Average and paid ineterst at a fixed rate equal to 1.74% p.a on the notional amount of GBP Loan. The swaps were being used to hedge the exposure to changes in the foreign exchange rates and interest rates. As at March 31, 2023, the company does not have any outstanding borrowings in foreign currency.

The cash flow hedges for such derivative contracts as at March 31, 2022 were assessed to be highly effective and a net unrealised loss of ?1.1 crores, with a deferred tax asset of ?0.28 crores relating to the hedging instruments, is included in OCI.

The Companyâs hedging policy requires for effective hedge relationships to be established. Hedge effectiveness is determined at the inception of the hedge relationship and through periodic prospective effectiveness assessments to ensure that an economic relationship exists between the hedged item and hedging instrument. The company enters into hedge relationships where the critical terms of the hedging instrument match exactly with the terms of the hedged item, and so a qualitative assessment of effectiveness is performed. If changes in circumstances affect the terms of the hedged item such that the critical terms no longer match exactly with the critical terms of the hedging instrument, the company uses the hypothetical derivative method to assess effectiveness.

Ineffectiveness is recognised on a cash flow hedge where the cumulative change in the designated component value of the hedging instrument exceeds on an absolute basis the change in value of the hedged item attributable to the hedged risk. In hedges of foreign currency forecast sale may arise if:

- the critical terms of the hedging instrument and the hedged item differ (i.e. nominal amounts, timing of the forecast transaction, interest resets changes from what was originally estimated), or

- differences arise between the credit risk inherent within the hedged item and the hedging instrument.

Refer note 17 for the details related to movement in cash flow hedging reserve.

46. Capital Management

For the purpose of the Companyâs capital management, capital includes issued equity capital and all other equity reserves attributable to the shareholders of the Company. The primary objective of the Companyâs capital management is to ensure that it maintains a strong credit rating, healthy capital ratios in order to support its business and maximise shareholder value and optimal capital structure to reduce cost of capital.

The Company manages its capital structure and makes adjustments to it in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Companyâs policy is to keep the gearing ratio optimum.

The Company includes within net debt interest bearing loans and borrowings less cash and cash equivalents excluding discontinued operations.

The recent investments by the Company in new businesses, increasing the capacity of existing businesses and increase in working capital due to certain projects has lead to increase in capital requirement. The Company expects to realise the benefits of these investments in near future.

c) Valuation technique used to determine fair value

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values:

The fair values of the quoted mutual funds are based on quoted price at the reporting date.

The Company enters into derivative financial instruments with financial institutions with investment grade credit ratings. Foreign exchange forward contracts, interest rate swaps are valued using valuation techniques, which employs the use of market observable inputs. The most frequently applied valuation techniques include forward pricing model, using present value calculations. The models incorporate various inputs including the credit quality counterparties, foreign exchange spot and forward rates, yield curves of the respective currencies, currency basis spread between the respective currencies, interest rate curves etc. The changes in counterparty credit risk had no material effect on the hedge effectiveness assessment for derivatives designated in hedge relationships and other financial instruments recognised at fair value.

d) Valuation processes

The finance department of the company includes a team that oversees the valuations of financial assets and liabilities required for financial reporting purposes, including level 3 fair values.

External valuers are involved for valuation of significant assets, such as unquoted financials assets. Involvement of external valuers is decided by the valuation team. Selection criteria includes market knowledge, reputation, independence and whether professional standards are maintained. The Valuation team decides, after discussions with the companyâs external valuers, which valuation techniques and inputs to use for each case.

The main level 3 inputs for used by the company are derived and evaluated as follows:

Discount rates are determined using a capital asset pricing model or based on weighted average cost of capital of counterparty, to calculate a post-tax rate that reflects current market assessments of the time value of money and the risk specific to the asset.

Risk adjustments specific to the counterparties (including assumptions about credit default rates) are derived from risk assessment (based on review of financial condition, economic factors) by management.

Earnings growth factor for unlisted equity securities are estimated based on market information for similar types of companies.

Changes in level 3 fair values are analysed at the end of each reporting period during the valuation discussion between the valuation team and external valuer. As part of this discussion the team presents a report that explains the reason for the fair value movements.

The significant unobservable inputs used in the fair value measurement categorised within Level 3 of the fair value hierarchy together with a quantitative sensitivity analysis as at March 31, 2023 and March 31, 2022 are as shown above.

The management assessed that cash and cash equivalents, trade receivables, trade payables, other current assets and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.The management has further assessed that borrowings availed and loans given approximate their carrying amounts largely due to the interest rates being variable or in case of fixed rate borrowings/loans, movements in interest rates from the recognition of such financial instrument till period end not being material.

Mar 31, 2022

There are no material overdues compared to original plans as on 31 March 2022 and 31 March 2021. The reporting for the year ended 31 March 2021 is based on current status of the projects due to revision in the original plan date of the project on account of Covid-19 pandemic.

The Company evaluates completion of the projects based on its original plan which includes certain projects relating to research and development monitored on an ongoing basis.

Details of lease:

The note provides information for leases where the company is a lessee. The company has taken land, various offices and equipments on lease. Rental contracts for offices and equipments are typically made for fixed periods of 2 to 15 years, but have extension options.

Extension and termination option:

Significant changes in contract assets

Contract assets have decreased from previous year as entity has provided fewer services ahead of the agreed payment schedules for fixed price contracts.

During the year, loss allowance of 11.18 crores (31 March 2021: '' Nil) has been recognised for the contract assets.

During the year ended 31 March 2022, '' 1,146.48 crores (31 March 2021: '' 538.57 crores) of opening unbilled revenue has been reclassified to Trade receivables upon billing to customers on completion of milestones.

Refer note 18 for information on other assets hypothecated as security by the Company.

Amounts recognised in profit or loss:

Write-downs of inventories to net realisable value amounted to '' 55.39 crores (31 March 2021 - '' 28.60 crores). These were recognised as an expense and included in ''(Increase) / decrease in inventories of finished goods, work-in-progress and traded goods'' in statement of profit and loss of respective year.

Refer note 18 for information on inventories hypothecated as security by the Company.

# Post demerger of the power business in the financial year ended 31 March 2017, the Company has been in the process of obtaining requisite approvals from government authorities to sell its equity interest in its subsidiary, Maharashtra Transmission Communication Infrastructure Limited (referred as disposal group or MTCIL) to Sterlite Power Transmission Limited. The investment in the subsidiary has been measured at lower of carrying amount and fair value, less cost to sell. No write down is required to be recognised as fair value of the investment is higher than cost. This is a level 3 measurement as per the fair value hierarchy set out in the fair value measurement disclosure.

During the year ended 31 March 2022, company has sold the investment in MTCIL. The gain on sale of investment in Maharashtra Transmission Communication Infrastructure Limited of '' 9.90 crores is disclosed in other income as Profit on sale of subsidiaries and investment in joint venture.

* The Company had decided to sell land and building at Hyderabad during the year ended 31 March 2021. Hence it was classified as held for sale during the year ended 31 March 2021 and measured at the lower of its carrying amount and fair value less costs to sell. The fair value of the building was determined using the sales comparison approach. No write down was recognised as fair value of the assets is higher than cost. During the year ended 31 March 2022, company has sold the Land and building at Hyderabad. The gain of '' 67.00 crores is recognised as an exceptional item in the statement of profit and loss.

Buy-back of shares:

On 24 March 2020, the Board of Directors had approved the buyback of Equity Shares for a total amount not exceeding '' 145 Crores, being 9.95% and 9.32% of the aggregate of the total paid-up equity capital and free reserves (including securities premium) of the Company based on the audited standalone and consolidated financial statements, respectively, of the Company for the financial year ended 31 March 2019. The Company closed the buy back on 27 August 2020. The Company has bought back 88,67,000 shares for '' 99.78 crores (excluding taxes).

b. Terms and rights attached to equity shares

The Company has only one class of equity shares having a par value of '' 2 per share. Each holder of equity shares is entitled to one vote per share.

e. Shares reserved for issue under options

For information relating to employees stock options plan, 2010 including details of options issued, exercised and lapsed during the financial year and options outstanding at the end of the reporting period, refer note 33.

Nature and purpose of reserves other than retained earnings Securities premium

Securities premium is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of the Companies Act, 2013.

Capital reserve

Capital reserve was created on account of merger of passive infrastructure business of wholly owned subsidiary, Speedon Network Limited, in the year ended 31 March 2017.

General reserve

General reserve is created out of the amounts transferred from debenture redemption reserve on account of redemption of debentures.

Cash flow hedge reserve

The Company uses hedging instruments as part of its management of foreign currency risk associated with its highly probable forecasted sales and purchases and interest rate risk associated with variable interest rate borrowings as described in note 47. For hedging foreign currency risk, the Company uses foreign currency forward contracts which are designated as cash flow hedges. For hedging interest rate risk, the Company uses interest rate swaps which are also designated as cash flow hedges. To the extent these hedges are effective, the change in fair value of the hedging instrument is recognised in the cash flow hedging reserve. Amounts recognised in the cash flow hedging reserve are reclassified to profit or loss when the hedged item affects profit or loss. When the forecasted transaction results in the recognition of a non-financial asset (e.g. inventory), the amount recognised in the cash flow hedging reserve is adjusted against the carrying amount of the non financial asset.

Employee stock option outstanding

Debenture redemption reserve

The Company had created a debenture redemption reserve (DRR) of 25% of the total oustanding debentures out of the profits which are available for the purpose of redemption of debentures as per provisions of the Companies Act, 2013. The DRR in previous year was carried forward to the extent of outstanding amounts which have been repaid during the year.

Capital redemption reserve

As per provisions of the Companies Act, 2013, the Company has created a capital redemption reserve (CRR) of '' 1.77 Crores against face value of equity shares bought back by the Company during the year ended 31 March 2021.

Notes:

a) 8.70% non convertible debentures carry 8.70% rate of interest. Total amount of non-convertible debentures has been repaid in the FY 2021-22. These non-convertible debentures were secured by way of mortgage of immovable fixed assets of the Company located at Aurangabad.

b) 8.25% non convertible debentures carry 8.25% rate of interest. Total amount of non-convertible debentures is due in 4 equal annual installments starting from FY 2027-28 till FY 2030-31. These non-convertible debentures are secured by way of hypothecation on specified movable fixed assets at Shendra plant (project Gaurav) (both present and future).

c) 7.30% non convertible debentures carry 7.30% rate of interest. Total amount of non-convertible debentures is due in the FY 2023-24. These non-convertible debentures are secured by way of mortgage of immovable fixed assets of the Company located at Aurangabad.

d) Foreign currency term loan from bank amounting to '' 37.89 crores (31 March 2021: '' 73.11 crores) carries interest @ Libor 2.70 % p.a. Loan amount is repayable in 20 quarterly equated instalments of USD 0.13 crores starting from April 2018. The term loan is secured by way of first pari passu charge on entire movable fixed assets (both present and future) and mortgage of immovable fixed assets of the Company located at Dadra & Nagar Haveli and Pune.

e) Foreign currency term loan from bank amounting to '' 62.16 crores (31 March 2021: '' 75.56 crores) crores carries interest @ GBP Libor 2.60 % p.a. Loan amount is repayable in 6 half yearly equated instalments of GBP 0.13 crores starting from Feb 2022. The term loan is secured by way of first pari passu charge on entire movable fixed assets (both present and future) of the Company.

f) Indian rupee term loan from bank amounting to '' 249.00 crores (31 March 2021: '' 249 crores) carries interest @ One Year MCLR 0.15% p.a. Loan amount is repayable in 12 quarterly instalments from June 2022 of '' 20.75 crores per Quarter (excluding interest). The term loan is secured by way of first pari passu charge on entire movable fixed assets (both present and future).

g) Unsecured indian rupee term loan from bank amounting to '' 200.00 crores carries interest @ one month MCLR. Loan amount is repayable as a bullet repayment, in the month of October 2023.

h) Unsecured indian rupee term loan from bank amounting to '' 200.00 crores carries interest 6.6% p.a. Loan amount is repayable as a ballooning installments in FY 2022-23 and FY 2023-24.

i) Unsecured indian rupee term loan from NBFC amounting to '' 25.49 crores carries interest @ 5.5% p.a. Loan amount is repayable in FY 2022-23 & FY 2023-24.

(i) Working capital demand loan from banks is secured by first pari-passu charge on entire current assets of the Company (both present and future) and second pari-passu charge on plant & machinery and other movable fixed assets of the Company. Working capital demand loans have been taken for a period of 7 days to 180 days and carry interest @ 4.50 % to 7.00% p.a (31 March 2021: 5.11% to 8.15% p.a).

(ii) Commercial papers are unsecured and are generally taken for a period from 60 Days to 180 days and carry interest @ 4.50% to 6.00% p.a (31 March 2021: 4.90% to 6.70% p.a).

(iii) Other loans include buyer''s credit arrangements (secured) and export packing credit (secured and unsecured). These secured loans are secured by hypothecation of raw materials, work in progress, finished goods and trade receivables. Export packing credit is taken for a period ranging from 30-180 days. Interest rate for both the products range from 4.00% - 6.50% p.a (31 March 2021: 5.00% to 8.11% p.a).

(iv) Loan from related party includes unsecured loan received from Sterlite Power Transmission Limited, which is repaid in the current year.

Borrowing secured against current assets:

Utilisation of borrowed funds:

The company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or;

b. provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.

a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or;

b. provide any guarantee, security or the like on behalf of the ultimate beneficiaries.

The borrowings obtained by the company during the year from banks and financial institutions have been applied for the purposes for which such loans were taken.

The company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.

There are no charges or satisfaction which are yet to be registered with the Registrar of Companies beyond the statutory period.

i) Compensated absences

The compensated absences cover the company''s liability for sick and privilege leave. The company does not have an unconditional right to defer settlement for any of these obligations. However, based on past experience, the company does not expect all employees to take the full amount of accrued leave or require payment within the next 12 months and accordingly amounts have been classified as current and non current based on actuarial valuation report.

ii) Post employment benefit obligation - gratuity

The company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972 (amended). Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/ termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. The gratuity plan is a funded plan and the Company makes contributions to fund managed by Life Insurance Corporation of India. The Company does not fully fund the liability and maintains a target level of funding to be maintained over a period of time based on estimate of expected gratuity payments.

The above sensitivity analysis is based on a change in an assumption while holding all other assumptions constant.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

Risk exposure

Through its defined benefit plans, the company is exposed to a number of risks, the most significant of which are detailed below:

Asset volatility:

The Company''s assets are maintained in a trust fund managed by public sector insurance company (LIC of India). LIC has a sovereign guarantee and has been providing consistent and competitive returns over the years. The plan asset mix is in compliance with the requirements of the respective local regulations.

Changes in bond yields:

A decrease in bond yields will increase plan liabilities.

Future salary escalation and inflation risk:

Rising salaries will often result in higher future defined benefit payments resulting in a higher present value of liabilities especially unexpected salary increases provided at management''s discretion may lead to uncertainties in estimating this risk.

Life expectancy

The weighted average duration of the defined benefit obligation is 8 years (31 March 2021 - 8 years). The expected maturity analysis of gratuity is as follows:

The total contract price of '' 4,962.13 crores (31 March 2021: '' 4,129.16 crores) is reduced by the consideration of '' 25.53 crores (31 March 2021: '' 33.78 crores) towards variable components.

Refer note 2 and 3 for accounting policy and significant judgements, respectively.

The Company''s unsatisfied (or partially satisfied) performance obligations can vary due to several factors such as terminations, changes in scope of contracts, periodic revalidations of the estimates or other relevant economic factors.

The aggregate value of unsatisfied (or partially satisfied) performance obligations is '' 4,124.40 crores (31 March 2021:

'' 2,986.59 crores) which is expected to be recognised over a period of one to seven years. Amount of unsatisfied (or partially satisfied) performance obligations does not include contracts with original expected duration of one year or less since the Company has applied the practical expedient in Ind AS 115.

During the year ended 31 March 2022, the Company has recorded provision of '' 64.38 crores based on final settlement with the customer for supplies made in the previous years by an adjustment to revenue from operations.

Defined contribution plans:

The Company has established employees stock options plan, 2010 (ESOP Scheme) for its employees pursuant to the special resolution passed by shareholders at the annual general meeting held on July 14, 2010. The employee stock option plan is designed to provide incentives to the employees of the company to deliver long-term returns and is an equity settled plan. The ESOP Scheme is administered by the Nomination and Remuneration committee. Participation in the plan is at the Nomination and Remuneration committee''s discretion and no individual has a contractual right to participate in the pIan or to receive any guaranteed benefits. Options granted under ESOP scheme would vest in not less than one year and not more than five years from the date of grant of the options. The Nomination and remuneration committee of the company has approved multiple grants with related vesting conditions. Vesting of the options would be subject to continuous employment with the company and hence the options would vest with passage of time. In addition to this, the Nomination and remuneration committee may also specify certain performance parameters subject to which the options would vest. Such options would vest when the performance parameters are met.

The Company has charged '' 11.88 crores (31 March 2021: '' 11.42 crores) to the statement of profit and loss in respect of options granted under ESOP scheme.

b) Fair Value of the options granted during the year-

The expected price volatility is based on historical volatality (based on remaining life of the options) adjusted for any expected change to future volatility due to publicly available information.

2. Vesting criteria - 30% vesting based on total shareholders return based on market performance Fair valuation method - Monte carlo simulation model

Vesting of these options is dependent on the shareholder return during the performance as compared to comparator group identified by Nomination and Remuneration Committee. The Monte carlo model requires the following information of the company and comparator group companies:

â¢ the historical share price and expected volatility during the performance period

â¢ Risk free interest rate of the country where stock of comparator group is listed

â¢ Dividend yield based on historical dividend payments

â¢ Estimate of correlation coefficients for each pair of company

3. Vesting criteria - 40% vesting based on achivement of target EBITDA Fair valuation method - Monte carlo simulation model

Vesting of these options is dependent on the achivement of target EBITDA during the performance of FY 2021-22 as per the criteria determined by Nomination and Remuneration Committee. The Monte carlo model requires the following information of the company:

â¢ the historical share price and expected volatility during the performance period

â¢ Risk free interest rate of the company

â¢ Dividend yield based on historical dividend payments

â¢ Estimate of EBITDA as per approved business plan

NOTE 35: CODE ON SOCIAL SECURITY, 2020

The indian parliament has approved the Code on Social Security, 2020 which would impact the contributions by the Company towards provident fund and gratuity. The draft rules for the Code on Social Security, 2020 have been released by the Ministry of Labour and Employment on 13 November 2020. The Company is in the process of assessing the additional impact on provident fund contributions and on gratuity liability contributions and will complete their evaluation and give appropriate impact in the financial statements in the period in which the rules that are notified become effective.

NOTE 36: CAPITAL AND OTHER COMMITMENTS

a) Estimated amount of contracts remaining to be executed on capital account and not recognised for (net of advances) are '' 67.40 crores (31 March 2021: '' 95.98 crores)

NOTE 37: CONTINGENT LIABILITIES
Particulars	31 March 2022 ('' in crores)	31 March 2021 ('' in crores)
1. Disputed liabilities
a) Excise and Customs duty	89.97	89.64
b) Goods and Service tax	0.69	0.69
c) Income tax	11.80	11.87
d) Claims lodged by a bank against the company*	18.87	18.87
e) Claims against the Company not acknowledged as debt $	-	15.91

2. The Company had issued corporate guarantees amounting to '' 114 crores to the income tax authorities in FY 2003-04 on behalf of the group companies. The matter against which corporate guarantee was paid by STL was decided in favour of the group companies by both ITAT and HC orders against which the department has filed an appeal with the Supreme Court. The above corporate guarantee is backed by the corporate guarantee issued by the Volcan Investments Limited (ultimate holding company) in the favour of the Company.

The Company has not provided for disputed liabilities disclosed above arising from disallowances made in assessments which are pending with different 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 liability has been accrued in the financial statements for the demands raised. The management believes that the ultimate outcome of these proceedings will not have a material adverse effect on the company''s financial position. In respect of the claims against the company not acknowledged as debts as above, the management does not expect these claims to succeed. 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 paid an amount of '' 18.87 crores under the letter of credit facility. The letter of credit towards import consignment was not accepted by the company, owing to discrepancies in the documents. Thereafter, the bank filed claim against the company in the Debt Recovery Tribunal (DRT). Against the DRT Order dated 28 October 2010, the parties had filed cross appeals before the Debt Recovery Appellate Tribunal. The Debt Recovery Appellate Tribunal vide its Order dated 28 January 2015 has allowed the appeal filed by the company and has dismissed the appeal filed by the bank. The bank has challenged the said order in WRIT petition before the Bombay High Court. The management doesn''t expect the claim to succeed and accordingly no provision for the contingent liability has been recognised in the financial statements.

$ Claims against the company not acknowledged as debt mainly pertains to an order against the Company with respect to claim made by a supplier of '' Nil (31 March 2021: '' 14.80 crores). In the current year, the company has provided for '' 14.25 crores in the books of account (refer note 46).

In the current year, the Company has received show cause notices with respect to 4 Service tax registrations of '' 56.53 crores each demanding service tax on difference between value of services appearing in 26AS (at legal entity level) vis-avis respective service tax registrations for the period 2016-17. Management has assessed that the show-cause notice is not required to be disclosed as contingent liability as it is erroneous in nature and the probability of an unfavourable outcome is remote.

Further, Income tax orders for AY 2013-14, 2014-15 and 2017-18 were received with respect to Elitecore Technologies private limited (which is now a non-existent entity in these years since it had merged with the company with effect from 29 September 2016) with a demand of '' 55.67 crores mainly relating to addition on certain aspects like treatment of purchase of software/hardware. Management has assessed that based on principles arising from judicial precedents, including those passed by the Hon''ble Supreme Court and Jurisdictional Bombay High Court, the notices issued in the name of non-existent entity are not merely an irregularity but also suffer from jurisdictional defect which cannot be cured. On this primary ground and certain other strong grounds, including procedural defects, the company (on behalf of Elitecore Technologies private limited) is in the process of filing a writ before the Hon''ble High Court. Hence, management believes that the probability of an unfavourable outcome is remote and the demand is not disclosed as a contingent liability.

NOTE 40: RESEARCH AND DEVELOPMENT EXPENDITURE

â¢ Aurangabad - R&D activities to manufacture cable which can cater most bandwidth demand.

â¢ Gurgaon - R&D activities to design, build, manage broadband network for global service providers, smart cities, rural broadband etc.

â¢ Ahmedabad - R&D activities to develop innovative telecom software products which can cater demand for business support system and operating support system.

NOTE 41: IMPACT OF COVID-19 PANDEMIC

Management has made an assessment of the impact of COVID 19 in preparation of these financial statements. Management has considered all relevant external and internal factors in the measurement of assets and liabilities including recoverability of carrying values of its assets, its liquidity position and ability to repay debts. No adjustment to key estimates and judgements that impact the financial statements have been identified.

NOTE 44: CORPORATE SOCIAL RESPONSIBILITY

The Company has spent an amount of '' 11.57 crores (31 March 2021: '' 11.60 crores) during the year as required under section 135 of the Companies Act, 2013 in the areas of education, healthcare, woman empowerment and environment. The amount was spent by way of contribution to Sterlite Tech Foundation of '' 11.42 crores (refer note 50) and other miscellaneous donations of '' 0.15 crores.

NOTE 45: AMORTISATION OF RECOGNISED GOODWILL ON ACQUISITION

During the year 2015-16, the Company had acquired 100% of the paid up equity share capital of Elitecore Technologies Private Limited (''ETPL''), a global telecom software product company. ETPL was merged with the Company with the appointed date of September 29, 2015 under a scheme of amalgamation approved by Honourable Bombay High Court and Gujarat High Court (the "Scheme"). Goodwill (excess of purchase consideration over the aggregate book value of the net assets acquired) was being amortised over a period of five years, as per the Scheme. Ind-AS does not allow amortisation of goodwill, which amounted to '' Nil (31 March 2021: '' 14.65 crores) for the year. The Goodwill attributable to ETPL has been completely amortized in the year ended 31 March 2021.

NOTE 46: EXCEPTIONAL GAIN/(LOSS) DURING THE YEAR

During the year ended 31 March 2022, the amount of '' 52.75 crores reported under exceptional items in the financial statements includes profit of '' 67 crores recognised on account of transfer of land situated at Hyderabad and a provision of '' 14.25 crores with respect to an order against the Company for a claim filed by a vendor for non-fulfilment of certain contractually agreed offtake obligations.

NOTE 47: FINANCIAL RISK MANAGEMENT

The Company''s principal financial liabilities, comprise borrowings, trade and other payables and other financial liabilities.

The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include Investments, loans, trade and other receivables, cash and short-term deposits and other financial assets that arise directly from its operations. The Company also enters into derivative transactions.

The Company''s activities expose it to market risk, credit risk and liquidity risk. The Company''s senior management oversees the activities to manage these risks. All derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. It is the Company''s policy that no trading in derivatives for speculative purposes should be undertaken.

The risk management policies of the Company are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are approved and reviewed regularly by the Board to reflect changes in market conditions and the Company''s activities.

Management has overall responsibility for the establishment and oversight of the Company''s risk management framework. The risks to which Company is exposed and related risk management policies are summarised below -

(a) Market risk

The sensitivity analysis in the following sections relate to the position as at 31 March 2022 and 31 March 2021.

Interest rate risk

Interest rate risk is the risk that the fair value or the future cash flows of a financial instrument will fluctuate because of changes in interest rates. The Company''s exposure to the risk of changes in interest rate primarily relates to the Company''s debt obligations with floating interest rates.

The Company is exposed to the interest rate fluctuation in domestic as well as foreign currency borrowing. The Company manages its interest rate risk by having a balanced portfolio of fixed and variable rate borrowings. The Company enters into interest rate swaps, in which it agrees to exchange, at specified intervals, the difference between fixed and variable rate interest amounts calculated by reference to an agreed-upon notional principal amount. At 31 March 2022, after taking into account the effect of interest rate swaps, approximately 83% of the Company''s borrowings are at a fixed rate of interest (31 March 2021: 85%).

Foreign currency risk

The company operates internationally and is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to the USD, EURO and GBP. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the company''s functional currency (INR). The risk is measured through a forecast of highly probable foreign currency cash flows. The objective of the hedges is to minimise the volatility of the INR cash flows of highly probable forecast transactions.

The Company has a policy to keep minimum forex exposure on the books that are likely to occur within a 15-month period for hedges of forecasted sales and purchases. As per the risk management policy, foreign exchange forward contracts are taken to hedge its exposure in the foreign currency risk. During the year ended 31 March 2022 and 2021, the company did not have any hedging instruments with terms which were not aligned with those of the hedged items.

Out of total foreign currency exposure the Company has hedged the significant exposure as at 31 March 2022 and as at 31 March 2021.

Foreign currency sensitivity

The following tables demonstrate the sensitivity to a reasonably possible change in USD, EUR and GBP exchange rates, with all other variables held constant. The impact on the Company''s profit before tax is due to changes in the fair value of monetary assets and liabilities. The impact on the Company''s pre-tax equity is due to changes in the fair value of forward exchange contracts designated as cash flow hedges. The Company''s exposure to foreign currency changes for all other currencies is not material. With all the other variable held constant, the Company''s profit before tax is affected through the impact on change of foreign currency rate as follows-

('' in crores)
	Change in USD rate	Effect on profit before tax / pre-tax equity	Change in Euro rate	Effect on profit before tax / pre-tax equity	Change in GBP rate	Effect on profit before tax / pre-tax equity
31 March 2022	5%	2.52/14.89	5%	5.23/16.86	5%	6.41/24.36
	-5%	(2.52)/(14.89)	-5%	(5.23)/(16.86)	-5%	(6.41)/(24.36)
31 March 2021	5%	1.21/2.28	5%	3.94/16.08	5%	(3.12)/16.28
	-5%	(1.21)/(2.28)	-5%	(3.94)/(16.08)	-5%	3.12/(16.28)

Commodity price risk

The Company has a risk management strategy to mitigate commodity price risk.

Based on a 1 month forecast of the required copper supply, the Company hedges the purchase price using future commodity purchase contracts. The forecast is deemed to be highly probable.

Commodity price sensitivity

As per the Company''s policy for commodity price hedging, all the commodity price exposures as on reporting dates are fully hedged. Thus, there are no open unhedged exposures on the reporting dates.

Price risk

The Company''s investment in non-listed equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Company manages the equity price risk through diversification and by placing limits on individual and total equity instruments. Reports on the equity portfolio are submitted to the Company''s senior management on a regular basis. The Company''s Board of Directors review and approve all equity investment decisions.

(b) Credit risk

Credit risk is the risk that a counterparty will not meet its obligations under a contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its investing activities, including deposits with banks, foreign exchange transactions and other financial instruments.

Trade receivables and contract assets

Customer credit risk is managed by each business unit subject to the Company''s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed taking into account its financial position, past experience and other factors, eg. credit rating and individual credit limits are defined in accordance with credit assessment. Outstanding customer receivables are regularly monitored and any shipments to major customers are generally covered by letters of credit or other forms of credit assurance.

An impairment analysis is performed at each reporting date on an individual basis for major customers. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The assessment is based on historical information of defaults. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets. The Company does not hold collateral as security. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and operate in largely independent markets. During the period, the company made write-offs of '' Nil (31 March 2021: '' 0.92 crores) trade receivables and it does not expect to receive future cash flows or recoveries from collection of cash flows previously written off. The contract assets have substantially the same risk characteristics as trade receivables for same type of contract etc. Therefore management has concluded that the expected loss for trade recievables are at reasonable approximation for loss rates for contract assets.

The Company''s customer profile for customer contracts and software services include public sector enterprises, state owned companies and private corporates. Accordingly, the Company''s customer credit risk is low. The Company''s average network integration project execution cycle ranges from 12 to 36 months based on the nature of contract and scope of services to be provided. General payment terms include mobilisation advance, progress payments with a credit period ranging from 45 to 90 days and certain retention money to be released at the end of the project. In some cases retentions are substituted with bank/corporate guarantees. The company provides for expected credit loss based on life-time expected credit losses (simplified approach).

Financial assets and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Company''s treasury department in accordance with the Company''s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. Counterparty credit limits are reviewed by the Company on an annual basis, and may be updated throughout the year. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterparty''s potential failure to make payments.

Other financial assets that are potentially subject to credit risk consists of inter corporate loans. The company assesses the recoverability from these financial assets on regular basis. Factors such as business and financial performance of counterparty, their ability to repay, regulatory changes and overall economic conditions are considered to assess future recoverability. The company charges interest on such loans at arms length rate considering counterparty''s credit rating. Based on the assessment performed, the company considers all the outstanding balances of such financial assets to be recoverable as on balance sheet date and appropriate provision for impairment is considered in financial statements.

The Company''s maximum exposure to credit risk for the components of the balance sheet at 31 March 2022 and 31 March 2021 is the carrying amounts of each class of financial assets.

(c) Liquidity risk

Liquidity risk is the risk that the Company may encounter difficulty in meeting its present and future obligations associated with financial liabilities that are required to be settled by delivering cash or another financial asset. The Company''s objective is to, at all times, maintain optimum levels of liquidity to meet its cash and collateral obligations. The Company requires funds both for short term operational needs as well as for long term investment programs mainly in growth projects. The Company closely monitors its liquidity position and deploys a robust cash management system. It aims to minimise these risks by generating sufficient cash flows from its current operations, which in addition to the available cash and cash equivalents, liquid investments and sufficient committed fund facilities which will provide liquidity.

The liquidity risk is managed on the basis of expected maturity dates of the financial liabilities. The average credit period taken to settle trade payables is about 60 - 180 days. The other payables are with short term durations. The carrying amounts are assumed to be reasonable approximation of fair value. The table below summarises the maturity profile of the Company''s financial liabilities based on contractual undiscounted payments:

NOTE 47: FINANCIAL RISK MANAGEMENT

Cash flow hedges

The cash flow hedges for such derivative contracts as at 31 March 2022 were assessed to be highly effective and a net unrealised gain of '' 1.21 crore, with a deferred tax liability of '' 0.30 crore relating to the hedging instruments, is included in OCI. Comparatively, the cash flow hedges as at 31 March 2021 were assessed to be highly effective and an unrealised gain of '' 2.03 crore, with a deferred tax liability of '' 0.51 crore was included in OCI in respect of these contracts. The amounts retained in OCI at 31 March 2022 are expected to mature and affect the statement of profit and loss during the year ended 31 March 2023 and 31 March 2024.

At 31 March 2022, the company has currency/interest rate swap agreements in place with a notional amount of USD 0.5 crores ('' 37.89 crores) and GBP 0.63 crores ('' 62.16 crores) (31 March 2021: USD 1 crores, GBP Nil). The Company receives a variable rate of interest of Libor 2.70% and pays interest at a fixed rate equal to 10.0425% on the notional amount with USD-INR rate fixed at '' 66.3850 per USD for the USD Interest Swap. For the GBP Interest Swap, the company receives a variable rate of interest of Sterling Overnight Index Average and pays ineterst at a fixed rate equal to 1.74% p.a on the notional amount of GBP Loan. The swaps are being used to hedge the exposure to changes in the foreign exchange rates and interest rates.

The cash flow hedges for such derivative contracts as at 31 March 2022 were assessed to be highly effective and a net unrealised loss of '' 1.1 crore, with a deferred tax asset of '' 0.28 crore relating to the hedging instruments, is included in OCI. Comparatively, the cash flow hedges as at 31 March 2021 were assessed to be highly effective and an unrealised loss of '' 3.51 crore, with a deferred tax asset of '' 0.88 crore was included in OCI in respect of these contracts. The amounts retained in OCI at 31 March 2022 are expected to mature and affect the statement of profit and loss during the year ended 31 March 2023.

The Company''s hedging policy requires for effective hedge relationships to be established. Hedge effectiveness is determined at the inception of the hedge relationship and through periodic prospective effectiveness assessments to ensure that an economic relationship exists between the hedged item and hedging instrument. The company enters into hedge relationships where the critical terms of the hedging instrument match exactly with the terms of the hedged item, and so a qualitative assessment of effectiveness is performed. If changes in circumstances affect the terms of the hedged item such that the critical terms no longer match exactly with the critical terms of the hedging instrument, the company uses the hypothetical derivative method to assess effectiveness.

â¢ the critical terms of the hedging instrument and the hedged item differ (i.e., nominal amounts, timing of the forecast transaction, interest resets changes from what was originally estimated), or

â¢ differences arise between the credit risk inherent within the hedged item and the hedging instrument.

Refer note 17 for the details related to movement in cash flow hedging reserve.

NOTE 48: CAPITAL MANAGEMENT

For the purpose of the Company''s capital management, capital includes issued equity capital and all other equity reserves attributable to the shareholders of the Company. The primary objective of the Company''s capital management is to ensure that it maintains a strong credit rating, healthy capital ratios in order to support its business and maximise shareholder value and optimal capital structure to reduce cost of capital.

The Company includes within net debt interest bearing loans and borrowings less cash and cash equivalents excluding discontinued operations.

âincludes other bank balance of '' 110.00 crores (31 March 2021: '' 50.00 crores) with respect to fixed deposit excluding deposits held as lien by banks against bank guarantees. These fixed deposits can be encashed by the Company at any time without any major penalties.

In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current year and previous year.

No changes were made in the objectives, policies or processes for managing capital during the years ended 31 March 2022 and 31 March 2021.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. There have been no transfers among Level 1, Level 2 and Level 3. c) Valuation technique used to determine fair value

The fair values of the quoted mutual funds are based on quoted price at the reporting date.

The fair values of the unquoted equity shares and debentures have been estimated using a DCF model. The valuation requires management to make certain assumptions about the model inputs, including forecast of cash flows, discount rate, credit risk and volatility. The probabilities of the various estimates within the range can be reasonably assessed and are used in management''s estimate of fair value for these unquoted equity investments and debentures.

Mar 31, 2021

Nature and Purpose of reserves other than retained earnings Securities premium reserve

Securities premium reserve is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of the Companies Act, 2013.

Capital reserve

Capital reserve was created on account of merger of passive infrastructure business of wholly owned subsidiary, Speedon Network Limited, in the year ended March 31, 2017.

General reserve

General reserve is created out of the amounts transferred from debenture redemption reserve on account of redemption of debentures.

Cash flow hedge reserve

The Company uses hedging instruments as part of its management of foreign currency risk associated with its highly probable forecasted sales and purchases and interest rate risk associated with variable interest rate borrowings as described in note 47. For hedging foreign currency risk, the Company uses foreign currency forward contracts which are designated as cash flow hedges. For hedging interest rate risk, the Company uses interest rate swaps which are also designated as cash flow hedges. To the extent these hedges are effective, the change in fair value of the hedging instrument is recognised in the cash flow hedging reserve. Amounts recognised in the cash flow hedging reserve is reclassified to profit or loss when the hedged item affects profit or loss. When the forecasted transaction results in the recognition of a non-financial asset (e.g. inventory), the amount recognised in the cash flow hedging reserve is adjusted against the carrying amount of the non financial asset.

Employee stock option outstanding

Debenture redemption reserve

The Company had created a debenture redemption reserve (DRR) of 25% of the total oustanding debentures out of the profits which are available for the purpose of redemption of debentures as per provisions of the Companies Act, 2013. The existing DRR is carried forward to the extent of outstanding amounts.

Capital redemption reserve

As per provisions of the Companies Act, 2013, the Company has created a capital redemption reserve (CRR) of 1.77 crores against face value of equity shares bought back by the Company during the year..

Notes:

a) 8.70% Non convertible debentures carry 8.70% rate of interest. Total amount of non-convertible debentures is due in the FY 2021-22. These non-convertible debentures are secured by way of mortgage of immovable fixed assets of the Company located at Aurangabad.

b) 8.25% Non convertible debentures carry 8.25% rate of interest. Total amount of non-convertible debentures is due in 4 equal annual installments starting from FY 2027-28 till FY 2030-31. These non-convertible debentures are secured by way of mortgage on specified movable fixed assets at Shendra plant (project Gaurav) (both present and future).

c) 7.30% Non convertible debentures carry 7.30% rate of interest. Total amount of non-convertible debentures is due in the FY 2023-24. These non-convertible debentures are secured by way of mortgage of immovable fixed assets of the Company located at Aurangabad.

d) Foreign Currency term loan from bank amounting to '' 73.11 crores carries interest @ Libor 2.70 % p.a. Loan amount is repayable in 20 quarterly equated instalments of USD 0.13 crores starting from April 2018. The term loan is secured by way of first pari passu charge on entire movable fixed assets (both present and future) and mortgage of immovable fixed assets of the Company located at Dadra & Nagar Haveli and Pune.

e) Foreign Currency term loan from bank amounting to '' 75.56 crores carries interest @ GBP Libor 2.60 % p.a. Loan amount is repayable in 6 half yearly equated instalments of GBP 0.13 crores starting from Feb 2022. The term loan is secured by way of first pari passu charge on entire movable fixed assets (both present and future) of the Company.

f) Indian rupee term loan from bank amounting to '' 249.00 crores carries interest @ One Year MCLR 15 Bps p.a. Loan amount is repayable in 12 quarterly instalments from October 21 of '' 20.75 crores per Quarter (excluding interest). The term loan is secured by way of first pari passu charge on entire movable fixed assets (both present and future).

g) Unsecured Indian rupee term loan from NBFC amounting to '' 19.45 crores carries interest @ 5.5% p.a. Loan amount of '' 12.89 crores is repayable in FY 2021-22 and remaining amount will be payable in FY 2022-23.

(i) Cash credit is secured by hypothecation of raw material inventory, work in progress, finished goods and trade receivables. The cash credit is repayable on demand and carries interest @ 7.10 % -11.50 % p.a.

(ii) Working capital demand loan from banks is secured by first pari-passu charge on entire current assets of the Company (both present and future) and second pari-passu charge on plant & machinery and other movable fixed assets of the Company. Working Capital Demand Loan has been taken for a period of 7 days to 180 days and carries interest @ 5.11 % to 8.15% p.a.

(iii) Commercial Papers are unsecured and are generally taken for a period from 60 Days to 180 days and carry interest @ 4.90% to 6.70% p.a.

(iv) Other loans include buyerâs credit arrangements (secured) and export packing credit (secured and unsecured). These secured loans are secured by hypothecation of raw materials, work in progress, finished goods and trade receivables. Export packing credit is taken for a period ranging from 30-180 days. Interest rate for both the products ranges from 5.00% - 8.11% p.a.

(v) Loan from related party includes unsecured loan received from Sterlite Power Transmission Limited which is repayable on demand.

The amount of net debt considering the amount of lease liability of '' 78.28 crores (31 March 2020 : '' 99.76 crores) is '' 1,938.09 crores (31 March 2020 : '' 1,578.69 crores)

"includes other bank balance of '' 50 crores (March 31,2020: '' 86 crores) with respect to fixed deposit. These fixed deposits can be encashed by the Company at any time without any major penalties.

i) Compensated Absences

The compensated absences cover the companyâs liability for sick and earned leave. The company does not have an unconditional right to defer settlement for any of these obligations. However, based on past experience, the company does not expect all employees to take the full amount of accrued leave or require payment within the next 12 months and accordingly amounts have been classified as current and non current based on actuarial valuation report.

ii) Post employment benefit - Gratuity

The company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972 (amended). Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. The gratuity plan is a funded plan and the Company makes contributions to fund managed by Life insurance corporation of India. The Company does not fully fund the liability and maintains a target level of funding to be maintained over a period of time based on estimate of expected gratuity payments.

The above sensitivity analysis is based on a change in an assumption while holding all other assumptions constant.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

Risk exposure

Through its defined benefit plans, the company is exposed to a number of risks, the most significant of which are detailed below:

Asset volatility:

The Companyâs assets are maintained in a trust fund managed by public sector insurance company via LIC of India. LIC has a sovereign guarantee and has been providing consistent and competitive returns over the years. The plan asset mix is in compliance with the requirements of the respective local regulations.

Changes in bond yields:

A decrease in bond yields will increase plan liabilities.

Future salary escalation and inflation risk:

Rising salaries will often result in higher future defined benefit payments resulting in a higher present value of liabilities especially unexpected salary increases provided at managements discretion may lead to uncertainties in estimating this risk.

Life expectancy

The weighted average duration of the defined benefit obligation is 8 years (March 31, 2020 - 8 years). The expected maturity analysis of gratuity is as follows:

Revenue disaggregation in terms of nature of goods and services has been included above.

The total contract price of '' 4,129.16 crores is reduced by the consideration of '' 33.78 crores towards variable components. Refer note 2 and 3 for accounting policy and significant judgements, respectively.

The aggregate value of unsatisfied (or partially satisfied) performance obligations is '' 2,986.59 crores which is expected to be recognised over a period of one to five years. Amount of unsatisfied (or partially satisfied) performance obligations does not include contracts with original expected duration of one year or less since the Company has applied the practical expedient in Ind AS 115.

Note 35: Employee Share Based Payments

Once vested, the options remain exercisable for a period of five years. Options granted under the plan are for no consideration and carry no dividend or voting rights. On exercise, each option is convertible into one equity share. The exercise price is '' 2 per option.

b) Fair Value of the options granted during the year-

During the current year remuneration committee has approved one grant. Following are the details of assumptions under the grant, related vesting conditions and fair valuation model used based on the nature of vesting.

Date of Grant - July 22, 2020

The company has granted options under ESOP scheme based on following two criteria and related assumptions

2. Vesting criteria - 30% Vesting based on total Shareholders return based on market performance Fair Valuation Method - Monte Carlo Simulation model

- the historical share price and expected volatility during the performance period

- Risk free interest rate of the country where stock of comparator group is listed

- Dividend yield based on historical dividend payments

- Estimate of correlation coefficients for each pair of company

3. Vesting criteria - 40% Vesting based on achivement of target EBITDA Fair Valuation Method - Monte Carlo Simulation model

Vesting of these options is dependent on the achivement of target EBITDA during the performance of FYâ 2020-21 as per the criteria determined by Nomination and Remuneration Committee. The Monte carlo model requires the following information of the company:

- the historical share price and expected volatility during the performance period

- Risk free interest rate of the company

- Dividend yield based on historical dividend payments

- Estimate of EBITDA as per approved business plan

Note 37: Code on Social Security, 2020

Note 38: Capital and other Commitments

a] Estimated amount of contracts remaining to be executed on capital account and not recognised for (net of advances) are '' 95.98 crores (31 March 2020: '' 100.09 crores)

2. The Company had issued Corporate guarantees amounting to '' 114 crores to the Income tax Authorities in FY 2003-04 on behalf of the Group companies. The matter against which corporate guarantee was paid by STL was decided in favour of the Group companies by both ITAT and HC orders against which the Department has filed an appeal with the Supreme Court. The above corporate guarantee is backed by the corporate guarantee issued by the Volcan Investments Limited (ultimate holding Company) in the favour of the Company.

The Company has not provided for disputed liabilities disclosed above arising from disallowances made in assessments which are pending with different 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 liability has been accrued in the financial statements for the demands raised. The management believes that the ultimate outcome of these proceedings will not have a material adverse effect on the companyâs financial position. In respect of the claims against the company not acknowledged as debts as above, the management does not expect these claims to succeed. 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 paid an amount of '' 18.87 crores under the letter of credit facility. The letter of credit towards import consignment was not accepted by the company, owing to discrepancies in the documents. Thereafter, the bank filed claim against the company in the Debt Recovery Tribunal (DRT). Against the DRT Order dated 28 October 2010, the parties had filed cross appeals before the Debt Recovery Appellate Tribunal. The Debt Recovery Appellate Tribunal vide its Order dated 28 January 2015 has allowed the appeal filed by the company and has dismissed the appeal filed by the bank. The bank has challenged the said order in WRIT petition before the Bombay High Court. The management doesnât expect the claim to succeed and accordingly no provision for the contingent liability has been recognised in the financial statements.

$ Claims against the company not acknowledged as debt mainly pertains to an order against the Company with respect to claim made by a supplier of '' 14.80 crores.

- Aurangabad - R&D activities to manufacture cable which can cater most bandwidth demand.

- Gurgaon - R&D activities to design, build, manage broadband network for global service providers, smart cities, rural broadband etc.

- Ahmedabad - R&D activities to develop innovative telecom software products which can cater demand for business support system and operating support system.

Management has made an assessment of the impact of COVID-19 in preparation for these financial statements.

Management has considered all relevant external and internal factors in the measurement of assets and liabilities including recoverability of carrying values of its assets, its liquidity position and ability to repay debts. No adjustment to key estimates and judgements that impact the financial statements have been identified. Since telecom networks have been identified as an essential service, the Group is operating at its normal operating capacity at all locations. However, the impact assessment of COVID-19 will be a continuing process given the uncertainties associated with its nature and duration and no significant impact is envisaged on the operations.

Further due to the ongoing lockdown restrictions, independent confirmations of balances of 5 bank accounts having a cumulative book balance of '' 0.07 crores and balance with LIC of '' 5.08 crores with respect to the Companyâs funded Gratuity plan assets could not be obtained as at March 31, 2021 from the respective parties. Management has prepared the financials based on the latest available statements available with Management, which fairly represent the respective balances. For balance with LIC, the statement available is for balance as at December 31, 2020 and for the 5 bank balances, the statements are available for balances as at March 31, 2021.

Note 44: Excise /Customs Matter Pending with Honourable Supreme Court

During the previous year ended March 31, 2020, the Company made an application under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS), for settlement of the disputed excise matter of '' 188 crores demanded by CESTAT in 2005-06 which the Company was contesting at Honourable Supreme Court, and also some other litigations under Central Excise Act, 1944 and Chapter V of Finance Act, 1994 which were pending as of June 30, 2019. Based on the provisions of SVLDRS, Management determined and paid duty in respect of all matters offered for settlement under the scheme and accordingly recognised expense of '' 50.71 crores in the previous year which has been disclosed as exceptional item in the Statement of profit and loss.

Note 45: Corporate Social Responsibility

The Company has spent an amount of '' 11.60 crores (31 March 2020: '' 9.15 crores) during the year as required under section 135 of the Companies Act, 2013 in the areas of education, healthcare, woman empowerment and environment. The amount was spent by way of contribution to Sterlite Tech Foundation of '' 11.60 crores.

During the year 2015-16, the Company had acquired 100% of the paid up equity share capital of Elitecore Technologies Private Limited (âETPLâ), a global telecom software product company. ETPL has been merged with the Company with the appointed date of September 29, 2015 under a scheme of amalgamation approved by Honourable Bombay High Court and Gujarat High Court (the âSchemeâ). Goodwill (excess of purchase consideration over the aggregate book value of the net assets acquired) was being amortised over a period of five years, as per the Scheme. Ind-AS does not allow amortisation of goodwill, which amounted to '' 14.65 crores (31 March 2020: '' 29.64 crores) for the year. The Goodwill attributable to ETPL has been completely amortised in the current year ended March 31, 2021.

Management has overall responsibility for the establishment and oversight of the Companyâs risk management framework. The risks to which Company is exposed and related risk management policies are summarised below -

(a) Market risk

The sensitivity analysis in the following sections relate to the position as at 31 March 2021 and 31 March 2020.

The sensitivity analysis have been prepared on the basis that the amount of debt, the ratio of fixed to floating interest rates of the debt and derivatives and the proportion of financial instruments in foreign currencies are all constant and on the basis of hedge designations in place at 31 March 2021 and 31 March 2020.

Interest rate risk

The Company is exposed to the interest rate fluctuation in domestic as well as foreign currency borrowing. The Company manages its interest rate risk by having a balanced portfolio of fixed and variable rate borrowings. The Company enters into interest rate swaps, in which it agrees to exchange, at specified intervals, the difference between fixed and variable rate interest amounts calculated by reference to an agreed-upon notional principal amount. At 31 March 2021, after taking into account the effect of interest rate swaps, approximately 85% of the Companyâs borrowings are at a fixed rate of interest (31 March 2020: 84%).

The Company has a policy to keep minimum forex exposure on the books that are likely to occur within a 12-month period for hedges of forecasted sales and purchases. As per the risk management policy, foreign exchange forward contracts are taken to hedge its exposure in the foreign currency risk. During the year ended 31 March 2021 and 2020, the company did not have any hedging instruments with terms which were not aligned with those of the hedged items.

Out of total foreign currency exposure the Company has hedged the significant exposure as at 31 March 2021 and as at 31 March 2020.

Foreign currency sensitivity

The following tables demonstrate the sensitivity to a reasonably possible change in USD, EUR and GBP exchange rates, with all other variables held constant. The impact on the Companyâs profit before tax is due to changes in the fair value of monetary assets and liabilities. The impact on the Companyâs pre-tax equity is due to changes in the fair value of forward exchange contracts designated as cash flow hedges. The Companyâs exposure to foreign currency changes for all other currencies is not material. With all the other variable held constant, the Companyâs profit before tax is affected through the impact on change of foreign currency rate as follows-

Commodity price risk

The Company has a risk management strategy to mitigate commodity price risk.

Based on a 1 month forecast of the required copper supply, the Company hedges the purchase price using future commodity purchase contracts. The forecast is deemed to be highly probable.

Commodity price sensitivity

As per the Companyâs policy for commodity price hedging, all the commodity price exposures as on reporting dates are fully hedged. Thus, there are no open unhedged exposures on the reporting dates.

Price risk

The Companyâs non-listed equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Company manages the equity price risk through diversification and by placing limits on individual and total equity instruments. Reports on the equity portfolio are submitted to the Companyâs senior management on a regular basis. The Companyâs Board of Directors review and approve all equity investment decisions.

At the reporting date, the exposure to unlisted equity securities (other than investments in subsidiaries) at fair value was '' 34.87 crores (31 March 2020: '' 27.87 crores).

(b) Credit risk

Credit risk is the risk that a counterparty will not meet its obligations under a contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its investing activities, including deposits with banks, foreign exchange transactions and other financial instruments.

Trade receivables and Contract assets

'' 5.05 crores) trade receivables and it does not expect to receive future cash flows or recoveries from collection of cash flows previously written off.

The contract assets have substantially the same risk characteristics as trade receivables for same type of contract etc. Therefore management has concluded that the expected loss for trade receivables are at reasonable approximation for loss rates for contract assets.

The Companyâs customer profile for customer contracts and software services include public sector enterprises, state owned companies and private corporates. Accordingly, the Companyâs customer credit risk is low. The Companyâs average network integration project execution cycle ranges from 12 to 36 months based on the nature of contract and scope of services to be provided. General payment terms include mobilisation advance, progress payments with a credit period ranging from 45 to 90 days and certain retention money to be released at the end of the project. In some cases retentions are substituted with bank/corporate guarantees.

Financial assets and cash deposits

Other financial assets that are potentially subject to credit risk consists of inter corporate loans. The company assesses the recoverability from these financial assets on regular basis. Factors such as business and financial performance of counterparty, their ability to repay, regulatory changes and overall economic conditions are considered to assess future recoverability. The company charges interest on such loans at arms length rate considering counterpartyâs credit rating. Based on the assessment performed, the company considers all the outstanding balances of such financial assets to be recoverable as on balance sheet date and appropriate provision for impairment is considered in financial statement.

The Companyâs maximum exposure to credit risk for the components of the balance sheet at 31 March 2021 and 31 March 2020 is the carrying amounts of each class of financial assets.

(c) Liquidity risk

Cash flow hedges

The terms of the foreign currency forward contracts match the terms of the expected highly probable forecast transactions. As a result, no hedge ineffectiveness arose requiring recognition through profit or loss as on 31 March 2021 and 31 March 2020.

The cash flow hedges for such derivative contracts as at 31 March 2021 were assessed to be highly effective and a net unrealised gain of '' 21.04 crores, with a deferred tax liability of '' 5.30 crores relating to the hedging instruments, is included in OCI. Comparatively, the cash flow hedges as at 31 March 2020 were assessed to be highly effective and an unrealised gain of '' 18.83 crores, with a deferred tax liability of '' 4.75 crores was included in OCI in respect of these contracts. The amounts retained in OCI at 31 March 2021 are expected to mature and affect the statement of profit and loss during the year ended 31 March 2022.

At 31 March 2021, the Company has currency/interest rate swap agreements in place with a notional amount of USD 1 crore ('' 73.11 crores) (31 March 2020: USD 1.5 crores) whereby the Company receives a variable rate of interest of Libor 2.70% and pays interest at a fixed rate equal to 10.0425% on the notional amount with USD-INR rate fixed at '' 66.3850 per USD. The swaps are being used to hedge the exposure to changes in the foreign exchange rates and interest rates.

The cash flow hedges for such derivative contracts as at 31 March 2021 were assessed to be highly effective and a net unrealised loss of '' 3.51 crores, with a deferred tax asset of '' 0.88 crore relating to the hedging instruments, is included in OCI. Comparatively, the cash flow hedges as at 31 March 2020 were assessed to be highly effective and an unrealised gain of '' 9.49 crores, with a deferred tax liability of '' 2.39 crores was included in OCI in respect of these contracts. The amounts retained in OCI at 31 March 2021 are expected to mature and affect the statement of profit and loss during the year ended 31 March 2022.

- the critical terms of the hedging instrument and the hedged item differ (i.e. nominal amounts, timing of the forecast transaction, interest resets changes from what was originally estimated), or

- differences arise between the credit risk inherent within the hedged item and the hedging instrument.

Refer note 18 for the details related to movement in cash flow hedging reserve.

Note 48: Capital Management

For the purpose of the Companyâs capital management, capital includes issued equity capital and all other equity reserves attributable to the shareholders of the Company. The primary objective of the Companyâs capital management is to ensure that it maintains a strong credit rating, healthy capital ratios in order to support its business and maximise shareholder valuea and optimal capital structure to reduce cost of capital.

In order to achieve this overall objective, the Companyâs capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current year.

No changes were made in the objectives, policies or processes for managing capital during the years ended 31 March 2021 and 31 March 2020.

The Finance Act 2020 has repealed the dividend distribution tax. Companies are now required to pay / distribute dividends after deducting applicable taxes. The remittance of dividends outside India is governed by Indian law on foreign exchange and is also subject to withholding tax at applicable rate.

During the year ended 31 March 2020, the Company has paid dividend to its shareholders. This has resulted in payment of Dividend Distribution Tax (DDT) to the taxation authorities. The Company believes that DDT represents additional payment to taxation authority on behalf of the shareholders. Hence DDT paid is charged to equity.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

There have been no transfers among Level 1, Level 2 and Level 3.

c) Valuation technique used to determine fair value

The fair values of the quoted mutual funds are based on quoted price at the reporting date.

The fair values of the unquoted equity shares and debentures have been estimated using a DCF model. The valuation requires management to make certain assumptions about the model inputs, including forecast of cash flows, discount rate, credit risk and volatility. The probabilities of the various estimates within the range can be reasonably assessed and are used in managementâs estimate of fair value for these unquoted equity investments.

f) Valuation processes

The finance department of the company includes a team that oversees the valuations of financial assets and liabilities required for financial reporting purposes, including level 3 fair values.

The main level 3 inputs for used by the company are derived and evaluated as follows:

Earnings growth factor for unlisted equity securities are estimated based on market information for similar types of companies.

The significant unobservable inputs used in the fair value measurement categorised within Level 3 of the fair value hierarchy together with a quantitative sensitivity analysis as at 31 March 2021 and 31 March 2020 are as shown above.

The financial statements for the year ended 31 March 2020 incorporate the impact of the change in accounting policies as mentioned in Note 51.

Further, previous year figures have been reclassified to conform to this yearâs classification.

Mar 31, 2019

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 registered office of the Company is located at E 1, MIDC Industrial Area, Waluj, Aurangabad, Maharashtra, India. The Company is primarily engaged in the business of Connectivity and Network solutions.

The Company is a global leader in end-to-end data network solutions. The company designs and deploy high-capacity converged fibre and wireless networks. With expertise ranging from optical fibre and cables, hyper-scale network design, and deployment and network software, the company is the industry''s leading integrated solutions provider for global data networks. The company partners with global telecom companies, cloud companies, citizen networks and large enterprises to design, build and manage such cloud-native software-defined networks.

Note 2: Impairment Testing of Goodwill

The Company has performed its annual impairment test by computing the recoverable amount based on a value in use calculations which require the use of assumptions as given in table below. The calculations use cash flow projections from financial budgets approved by senior management covering a period of five years. The management has not identified any instances that could cause the carrying amount of the CGU''s to exceed the recoverable amount. Goodwill generated on acquisition of Elitecore Technologies Private Limited (''ETPL'') which was merged with the Company with effect from 29 September 2015 is attributable to Network Software cash generating units (''CGU'').

Discount rate

The discount rate calculation is based on the specific circumstances of the CGU and is derived from the CGU''s weighted average cost of capital (WACC). The WACC takes into account both debt and equity. The cost of equity is derived from the expected return on investment by the investors. The cost of debt is based on the interest-bearing borrowings the Company is obliged to service. CGU specific risk is incorporated by applying individual beta factor. The beta factor is evaluated annually based on publicly available market data.

Growth rate

The Company has considered growth rate to extrapolate cash flows beyond the forecast period, consistent with the industry forecasts.

EBITDA margins

EBITDA margins are based on the actual EBITDA of respective CGU based on the past trend and future expectations.

Sensitivity to changes in assumptions of CGU

The management believes that no reasonably possible change in any of the key assumptions used in the value in use calculation would cause the carrying value of the CGU to materially exceed its value in use.

The Company''s investment property consisted of a commercial property in India.

As at 31 March 2018 the fair value of the investment property was Rs. 15.07 crores. This value was based on valuations performed by the management on the basis of available market quotes/ prevalent property prices in the same and nearby localities (Fair value judgements and estimates as per Level 2 hierarchy).

The Company had no restrictions on the realisability of its investment property and no contractual obligations to purchase, construct or develop investment property or for repairs, maintenance and enhancements.

During the current year, company has started using the property for its own use and therefore the same has been reclassified to Property, plant and equipment . (Refer note 4)

* Amount is below the rounding off norm followed by the Company.

## As per regulations of country in which subsidiary is domiciled equity investment is not required for the incorporation of the company.

$ As described in Significant accounting policies (refer note 2), the Company makes investments in certain joint ventures and associates with the objective to generate growth in the medium term and with identified exit strategies. Such investments are managed on a fair value basis. As permitted by Ind AS 28, the company has elected to measure such investments in joint ventures and associates in accordance with Ind AS 109.

$$ During the year, Sterlite Technologies Europe Ventures Limited has been liquidated with effect from May 16, 2018.

** These amounts pertain to fair value change in the investment recognised during the year.

No trade or other receivable are due from directors or other officers of the company either severally or jointly with any other person. Nor any trade or other receivable are due from firms or private companies in which any director is a partner, a director or a member.

Refer note 19 for information on trade receivables hypothecated as security by the Company.

Significant changes in Contract assets

Contract assets have increased from previous year as entity has incurred costs towards the fulfilment of performance obligations identified under the contracts with customers before the billing milestone for fixed price contracts.

There is no impairment allowance for the contract assets for current year.

During the year ended 31 March 2019, Rs. 148.98 crores of gross amount due from customers from construction contract and Rs. 20.15 crores of unbilled revenue as of 01 April 2018 has been reclassified to Trade receivables upon billing to customers on completion of milestones.

Amounts recognised in profit or loss

Write-downs of inventories to net realisable value amounted to Rs. 19.74 crores (31 March 2018- Rs. 9.22 crores). These were recognised as an expense and included in ''changes in value of inventories of work-in-progress, stock-in-trade and finished goods'' in statement of profit and loss.

Refer note 19 for information on inventories hypothecated as security by the Company.

Post demerger of the power business in the financial year ended March 31, 2017, the Company has been in the process of obtaining requisite approvals from government authorities to sell its equity interest in its subsidiary, Maharashtra Transmission Communication Infrastructure Limited (referred as disposal group or MTCIL) to Sterlite Power Transmission Limited. During the year, management received a letter from Department of Telecommunication rejecting Company''s application for transfer of entity. The Company has filed a letter seeking justification for such rejection. Pending response from the department, the Company is committed to the sale of MTCIL post requisite regulatory approvals. The Company anticipates completion of the sale by March 2020.

The investment in the subsidiary has been measured at lower of carrying amount and fair value, less cost to sell. No write down is required to be recognised as fair value of the investment is higher than cost. This is a level 3 measurement as per the fair value hierarchy set out in the fair value measurement disclosure.

b. Terms and 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 except for the underlying 74,700 (31 March 2018: 74,700) equity shares held by custodian bank against Global Depository Receipts (âGDRsâ) which do not have voting rights.

f. Shares reserved for issue under options

Nature and Purpose of reserves other than retained earnings Securities premium reserve

Securities premium reserve is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of the Companies Act, 2013.

Capital reserve

Capital reserve is created on account of merger of passive infrastructure business of wholly owned subsidiary, Speedon Network Limited, in the year ended March 31, 2017.

General reserve

General reserve is created out of the amounts transferred from debenture redemption reserves on account of redemption of debentures in earlier years.

Cash flow hedge reserve

The Company uses hedging instruments as part of its management of foreign currency risk associated with its highly probable forecasted sales and purchases and interest rate risk associated with variable interest rate borrowings as described in note 47. For hedging foreign currency risk, the Company uses foreign currency forward contracts which are designated as cash flow hedges. For hedging interest rate risk, the Company uses interest rate swaps which are also designated as cash flow hedges. To the extent these hedges are effective, the change in fair value of the hedging instrument is recognised in the cash flow hedging reserve. Amounts recognised in the cash flow hedging reserve is reclassified to profit or loss when the hedged item affects profit or loss. When the forecasted transaction results in the recognition of a non-financial asset (e.g. inventory), the amount recognised in the cash flow hedging reserve is adjusted against the carrying amount of the non financial asset.

Employee stock option outstanding

Debenture redemption reserve

The Company is required to create a debenture redemption reserve out of the profits which are available for payment of interest for the purpose of redemption of debentures as per provisions of the Companies Act, 2013.

Notes:

a) 8.45% Non convertible debentures carry 8.45% rate of interest. Out of the total outstanding amount, 50% are redeemable at par during the FY 2019-20 and balance in the FY 2020-21 . These non-convertible debentures are secured by way of first pari passu charge on entire movable fixed assets (both present and future) and immovable fixed assets of the Company located at Dadra & Nagar Haveli and Pune.

b) 8.70% Non convertible debentures carry 8.70% rate of interest. Total amount of non-convertible debentures is due in the FY 2022-23 . These non-convertible debentures are secured by way of first pari passu charge on entire movable fixed assets (both present and future) and mortgage of immovable fixed assets of the Company located at Aurangabad.

c) Indian rupee term loan from bank amounting to Rs. 50.00 crores carries interest @ LTMLR 0.75% p.a. Loan amount is repayable in twelve quarterly equated instalments of Rs. 10.00 crores (excluding interest) starting from July 2017. The term loan is secured by way of first pari passu charge on entire movable fixed assets (both present and future) and mortgage of immovable fixed assets of the Company located at Dadra & Nagar Haveli.

d) Foreign Currency term loan from bank amounting to Rs. 138.34 crores carries interest @ Libor 2.70 % p.a. Loan amount is repayable in 20 quarterly equated instalments of USD 0.13 crores starting from April 2018. The term loan is secured by way of first pari passu charge on entire movable fixed assets (both present and future) and mortgage of immovable fixed assets of the Company located at Dadra & Nagar Haveli and Pune.

e) Unsecured rupee term loan from bank amounting to Rs. 100 crores carries interest @ 8.70% p.a.

Loan amount is repayable in single bullet payment in Financial year 2020-21.

f) Deferred payment liabilities of Rs. 142.95 crores are as per the contractual terms with creditors for property, plant and equipment and amounts are payable after 1080 days from the due date. These amounts are presented as deferred payment liabilities under borrowings as per the disclosure requirements of Schedule III. The Interest payable on these deferred payment liabilities ranges from 6 months Libor (100-200) bps per annum.

Note:

(i) Cash credit was secured by hypothecation of raw material inventory, work in progress, finished goods and trade receivables. The cash credit is repayable on demand and carries interest @ 7.80 % -11.50 % p.a.

(ii) Working capital demand loan from banks was secured by first pari-passu charge on entire current assets of the Company (both present and future) and second pari-passu charge on plant & machinery and other movable fixed assets of the Company. Working Capital Demand Loan has been taken for a period of 30 days and carries interest @ 8.40%.

(iii) Commercial Papers are unsecured and are generally taken for a period from 60 to 90 days and carry interest @ 6.95% to 8.00% p.a.

(iv) Other loans include buyerâs credit arrangements (secured) and export packing credit (unsecured). Buyerâs credit are secured by hypothecation of raw materials, work in progress, finished goods and trade receivables Export packing credit is taken for a period ranging from 30-180 days. Interest rate for both the products ranges from 6.35% - 8.55% p.a.

(v) Loan from related party includes unsecured loan received from Sterlite Power Transmission Limited which is repayable on demand. The loan carries an interest rate of 10% p.a.

Provision for litigations / contingencies

The provision of Rs. 9.50 crores as at 31 March 2019 (31 March 2018: Rs. 9.50 crores) is towards contingencies in respect of disputed claims against the Company as described in note 39, quantum of outflow and timing of which is presently unascertainable. There is no movement in the provision for litigations / contingencies during the year.

Provision for warranty

The Company has given warranty on network software and licences sold to customers. The timing of the outflow is expected to be within a period of eighteen months from the date of sale of telecom software products. Movement in provision for warranty is given below.

Significant changes in Contract liabilities

Contract liabilities have increased as entity has received advance from customers against the new fixed price contracts entered during the year.

i) Compensated Absences

The compensated absences cover the company''s liability for sick and earned leave. The amount of the provision is Rs. 17.01 crores (31 March 2018: Rs. 11.59 crores). The company does not have an unconditional right to defer settlement for any of these obligations. However, based on past experience, the company does not expect all employees to take the full amount of accrued leave or require payment within the next 12 months and accordingly amounts have been classified as current and non current based on actuarial valuation report.

ii) Post employment benefit - Gratuity

The company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. The gratuity plan is a funded plan and the Company makes contributions to fund managed by Life Insurance Corporation of India. The Company does not fully fund the liability and maintains a target level of funding to be maintained over a period of time based on estimate of expected gratuity payments.

The company has no legal obligation to settle the deficit in the funded plans with an immediate contribution or additional one off contributions. The company intends to continue to contribute the defined benefit plans as per the demand from LIC of India.

The above sensitivity analysis is based on a change in an assumption while holding all other assumptions constant.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

Risk exposure

Through its defined benefit plans, the company is exposed to a number of risks, the most significant of which are detailed below :

Asset volatility:

Changes in bond yields:

A decrease in bond yields will increase plan liabilities.

Future salary escalation and inflation risk:

Rising salaries will often result in higher future defined benefit payments resulting in a higher present value of liabilities especially unexpected salary increases provided at managements discretion may lead to uncertainties in estimating this risk.

Life expectancy

The Company''s all assets are maintained in a trust fund managed by public sector insurance company via LIC of India. LIC has a sovereign guarantee and has been providing consistent and competitive returns over the years. The plan asset mix is in compliance with the requirements of the respective local regulations.

The weighted average duration of the defined benefit obligation is 7 years (2018 - 8 years). The expected maturity analysis of gratuity is as follows:

Revenue disaggregation in terms of nature of goods and services has been included above.

The total contract price of Rs. 4,859.38 crores is reduced by the consideration of Rs. 87.76 crores towards variable components.

Refer note 2, 3 and 51 for accounting policy, significant judgements and details about impact of changes in accounting policies on adoption of Ind AS 115 respectively.

The aggregate value of unsatisfied (or partially satisfied) performance obligations is Rs. 2,904 crores which is expected to be recognised evenly over a period of one to three years. Remaining value of performance obligations is expected to be substantially recognised in the next year. Amount of unsatisfied (or partially satisfied) performance obligations does not include contracts with original expected duration of one year or less since the Company has applied the practical expedient in Ind AS 115.

In accordance with the requirements of Ind AS, revenue for the period April 1, 2017 to June 30, 2017 is inclusive of excise duty of Rs. 28.46 crore.

The Company has certain defined contribution plans. Contributions are made to provident fund in India for employees at the rate of 12% of basic salary as per local regulations. The contributions are made to provident fund administered by the government. The obligation of the Company is limited to the amount contributed and it has no further contractual nor any constructive obligation.

Defined Contribution Plans: The Company has recognised the following expenses in the Statement of Profit and Loss for the year.

* During the year, the Company has capitalised borrowing costs of Rs. 42.12 crores (31 March 2018: Rs. 2.67 crores) incurred on the borrowings specifically availed for expansion of production facilities and general borrowing costs. The capitalisation rate used to determine the amount of borrowing costs to be capitalised is the weighted average interest rate applicable to the company''s general borrowings, in this case 8.49% p.a.

Note 3: Employee Share Based Payments

Such options would vest when the performance parameters are met.

Once vested, the options remain exercisable for a period of one year. Options granted under the plan are for no consideration and carry no dividend or voting rights. On exercise, each option is convertible into one equity share.

The exercise price is Rs. 2 per option.

The Company has charged Rs. 19.16 crores (31 March 2018: Rs. 13.39 crores) to the statement of profit and loss in respect of options granted under ESOP scheme.

b) Fair Value of the options granted during the year-

During the current year remuneration committee has approved two grants. Following are the details of assumptions under individual grant, related vesting conditions and fair valuation model used based on the nature of vesting.

Date of Grant- July 19, 2018

The company has granted options under ESOP scheme based on following two criteria and related assumptions

1. Vesting criteria - Assured vesting of 30% Options in five years subject to continuous employment with the company Fair Valuation Method- Black Scholes options Pricing Model

2. Vesting criteria - 70% Vesting based on total Shareholders return based on market performance Fair Valuation Method - Monte Carlo Simulation model Vesting of these options is dependent on the shareholder return during the performance as compared to comparator group identified by Nomination and Remuneration Committee. The Monte carlo model requires the following information of the company and comparator group companies:

- the historical share price and expected volatility during the performance period

- Risk free interest rate of the country where stock of comparator group is listed

- Dividend yield based on historical dividend payments

- Estimate of correlation coefficients for each pair of company Assumptions used are as follows:

Note 4: Leases Operating lease Company as lessee :

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.

Company as lessor :

The Company has given land and office building on operating lease. The lease term is for non cancellable period of three years and renewable at the option of the Lessee. Future minimum lease receipts over non cancellable period of operating leases are as follows :

Note 5: Capital and Other Commitments

a] Estimated amount of contracts remaining to be executed on capital account and not recognised for (net of advances) are Rs. 174.53 crores (31 March 2018: Rs. 685.85 crores)

b] The company has imported certain machinery under the Export Promotion Capital Goods (EPCG) scheme and accordingly has export obligation as per details below :

In this respect, the Company has given bonds of Rs. 984.31 crores (31 March 2018: Rs. 684.66 crores) to the Commissioner of Customs. The company expects to fulfil the export obligation within prescribed time.

c] For commitments relating to lease arrangements please refer note 37.

d] The Company has entered into agreements with the lenders of subsidiary Maharashtra Transmission Communication Infrastructure Limited wherein it has committed to hold directly or indirectly at all times at least 51% of equity share capital 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.

* In an earlier year, one of the Bankers of the Company had wrongly paid an amount of Rs. 18.87 crores under the letter of credit facility. The letter of credit towards import consignment was not accepted by the company, owing to discrepancies in the documents. Thereafter, the bank filed claim against the company in the Debt Recovery Tribunal (DRT). Against the DRT Order dated 28 October 2010, the parties had filed cross appeals before the Debt Recovery Appellate Tribunal. The Debt Recovery Appellate Tribunal vide its Order dated 28 January 2015 has allowed the appeal filed by the company and has dismissed the appeal filed by the bank. The bank has challenged the said order in WRIT petition before the Bombay High Court. The management doesn''t expect the claim to succeed and accordingly no provision for the contingent liability has been recognised in the financial statements.

Note 6: Details of Loans and Advances Given to Subsidiaries

The details are provided as required by regulation 53 (f) read with Para A of Schedule V to SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015.

Interest payable as per section 16 of the Micro, Small and Medium Enterprises Development Act, 2006 is Rs. 0.19 crores (31 March 2018: Rs. 0.10 crore) and same is not accrued in the books of accounts. Dues to micro and small enterprises have been determined to the extent such parties have been identified on the basis of intimation received from the "suppliers" / informations available with the Company regarding their status under the Micro, Small and Medium Enterprises development Act 2006.

Note 7: Excise /Customs Matter Pending With Honourable Supreme Court

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 2018 : Rs. 188 crores) in the pending excise/custom matters on various grounds. The Companyâs 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.

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.

Note 8: Corporate Social Responsibility

The Company has spent an amount of ''5.37 crores (31 March 2018: Rs. 3.64 crores) during the year as required under section 135 of the Companies Act, 2013 in the areas of education, healthcare, woman empowerment and environment. The amount was spent by way of contribution to Sterlite Tech Foundation of Rs. 5.22 crores, in which directors/senior executives of the Company and their relatives are trustees and to Kerala Chief Minister''s Relief Fund Rs. 0.15 crores.

Note 9: Amortisation of Recognised Goodwill on Acquisition

During the year 2015-16, the Company had acquired 100% of the paid up equity share capital of Elitecore Technologies Private Limited (''ETPL''), a global telecom software product company. ETPL has been merged with the Company with the appointed date of September 29, 2015 under a scheme of amalgamation approved by Honourable Bombay High Court and Gujarat High Court (the "Scheme"). Goodwill (excess of purchase consideration over the aggregate book value of the net assets acquired) is being amortised over a period of five years, as per the Scheme. Ind-AS does not allow amortisation of goodwill, which amounted to Rs. 29.65 crores (31 March 2018: Rs. 29.64 crores) for the year.

Note 10: Financial Risk Management

The Company''s principal financial liabilities, comprise borrowings, trade and other payables and other financial liabilities. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include Investments, loans, trade and other receivables, cash and short-term deposits and other financial assets that arise directly from its operations. The Company also enters into derivative transactions.

(a) Market risk

The sensitivity analysis in the following sections relate to the position as at 31 March 2019 and 31 March 2018.

Interest rate risk

The Company is exposed to the interest rate fluctuation in domestic as well as foreign currency borrowing. The Company manages its interest rate risk by having a balanced portfolio of fixed and variable rate borrowings. The Company enters into interest rate swaps, in which it agrees to exchange, at specified intervals, the difference between fixed and variable rate interest amounts calculated by reference to an agreed-upon notional principal amount. At 31 March 2019, after taking into account the effect of interest rate swaps, approximately 87% of the Company''s borrowings are at a fixed rate of interest (31 March 2018: 83%).

Interest rate sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in the interest rates on borrowings at variable interest rate. With all the other variables held constant, the Company''s profit before tax is affected through the impact on floating rate borrowings, as follows:

Foreign currency risk

The company operates internationally and is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to the USD, EURO and GBP. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the company''s functional currency (INR). The risk is measured through a forecast of highly probable foreign currency cash flows. The objective of the hedges is to minimise the volatility of the INR cash flows of highly probable forecast transactions.

The Company has a policy to keep minimum forex exposure on the books that are likely to occur within a 12-month period for hedges of forecasted sales and purchases. As per the risk management policy, foreign exchange forward contracts are taken to hedge its exposure in the foreign currency risk. During the year ended 31 March 2019 and 2018, the company did not have any hedging instruments with terms which were not aligned with those of the hedged items.

Out of total foreign currency exposure the Company has hedged the significant exposure as at 31 March 2019 and as at 31 March 2018.

Foreign currency sensitivity

The following tables demonstrate the sensitivity to a reasonably possible change in USD, EUR and GBP exchange rates, with all other variables held constant. The impact on the Company''s profit before tax is due to changes in the fair value of monetary assets and liabilities. The impact on the Companyâs pre-tax equity is due to changes in the fair value of forward exchange contracts designated as cash flow hedges. The Companyâs exposure to foreign currency changes for all other currencies is not material. With all the other variable held constant, the Company''s profit before tax is affected through the impact on change of foreign currency rate as follows:

Commodity price risk

The prices in these purchase contracts are linked to the price on London Metal Exchange.

The Company has a risk management strategy to mitigate commodity price risk.

Based on a 1 month forecast of the required copper supply, the Company hedges the purchase price using future commodity purchase contracts. The forecast is deemed to be highly probable.

Commodity price sensitivity

As per the Company''s policy for commodity price hedging, all the commodity price exposures as on reporting dates are fully hedged. Thus, there are no open unhedged exposures on the reporting dates.

Further, total exposure related to commodity derivative is not material.

Price risk

The Company''s non-listed equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Company manages the equity price risk through diversification and by placing limits on individual and total equity instruments. Reports on the equity portfolio are submitted to the Companyâs senior management on a regular basis.

The Companyâs Board of Directors review and approve all equity investment decisions.

At the reporting date, the exposure to unlisted equity securities (other than investments in subsidiaries) at fair value was Rs. 22.86 crores (31 March 2018: Rs. 19.60 crores).

(b) Credit risk

Credit risk is the risk that a counterparty will not meet its obligations under a contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its investing activities, including deposits with banks, foreign exchange transactions and other financial instruments.

Trade receivables and Contract assets

Customer credit risk is managed by each business unit subject to the Companyâs established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on credit rating and individual credit limits are defined in accordance with credit assessment. Outstanding customer receivables are regularly monitored and any shipments to major customers are generally covered by letters of credit or other forms of credit assurance.

An impairment analysis is performed at each reporting date on an individual basis for major customers.

In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The assessment is based on historical information of defaults. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets. The Company does not hold collateral as security. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and operate in largely independent markets. During the period, the company made write-offs of Rs. 17.19 crores (31 March 2018 : Rs. 10.54 crores) trade receivables and it does not expect to receive future cash flows or recoveries from collection of cash flows previously written off.

The Companyâs customer profile for customer contracts and software services include public sector enterprises, state owned companies and private corporates. Accordingly, the Companyâs customer credit risk is low. The Companyâs average network integration projects execution cycle ranges from 12 to 36 months based on the nature of contract and scope of services to be provided. General payment terms include mobilisation advance, progress payments with a credit period ranging from 45 to 90 days and certain retention money to be released at the end of the project. In some cases retentions are substituted with bank/corporate guarantees.

The Company has a detailed review mechanism of overdue customer receivables at various levels within organisation to ensure proper attention and focus for realisation and based on assessment performed management has concluded that impact of expected credit loss is not material and current provision made against trade receivable is adequate to cover the provision on account of expected credit loss.

Financial instruments and cash deposits

Other financial assets that are potentially subject to credit risk consists of inter corporate loans. The company assesses the recoverability from these financial assets on regular basis. Factors such as business and financial performance of counterparty, their ability to repay, regulatory changes and overall economic conditions are considered to assess future recoverability. The company charges interest on such loans at arms length rate considering counterparty''s credit rating. Based on the assessment performed, the company considers all the outstanding balances of such financial assets to be recoverable as on balance sheet date and no provision for impairment is considered necessary.

The Companyâs maximum exposure to credit risk for the components of the balance sheet at 31 March 2019 and 31 March 2018 is the carrying amounts of each class of financial assets.

Liquidity risk is the risk that the Company may encounter difficulty in meeting its present and future obligations associated with financial liabilities that are required to be settled by delivering cash or another financial asset. The Company''s objective is to, at all times, maintain optimum levels of liquidity to meet its cash and collateral obligations. The Company requires funds both for short term operational needs as well as for long term investment programs mainly in growth projects. The Company closely monitors its liquidity position and deploys a robust cash management system. It aims to minimise these risks by generating sufficient cash flows from its current operations, which in addition to the available cash and cash equivalents, liquid investments and sufficient committed fund facilities which will provide liquidity.

The liquidity risk is managed on the basis of expected maturity dates of the financial liabilities. The average credit period taken to settle trade payables is about 60 - 90 days. The other payables are with short term durations. The carrying amounts are assumed to be reasonable approximation of fair value. The table below summarises the maturity profile of the Company''s financial liabilities based on contractual undiscounted payments:

Cash flow hedges

The cash flow hedges for such derivative contracts as at 31 March 2019 were assessed to be highly effective and a net unrealised gain of Rs. 122.95 crore, with a deferred tax liability of Rs. 42.96 crores relating to the hedging instruments, is included in OCI. Comparatively, the cash flow hedges as at 31 March 2018 were assessed to be highly effective and an unrealised loss of Rs. 47.92 crore, with a deferred tax asset of Rs. 16.74 crores was included in OCI in respect of these contracts. The amounts retained in OCI at 31 March 2019 are expected to mature and affect the statement of profit and loss during the year ended 31 March 2020.

At 31 March 2019, the Company has currency/interest rate swap agreements in place with a notional amount of USD 2 crores (Rs. 138.34 crore) (31 March 2018 : USD 2.5 crores ) whereby the Company receives a variable rate of interest of Libor 2.70% and pays interest at a fixed rate equal to 10.0425% on the notional amount with USD-INR rate fixed at INR 66.3850 per USD. The swaps are being used to hedge the exposure to changes in the foreign exchange rates and interest rates.

The Company also has multiple interest rate swap agreements in place with a total notional amount of USD 2.45 crores whereby the Company pays interest at fixed rate of 2.69%-3% and receives interest at a variable rate of 6M LIBOR.

The cash flow hedges for such derivative contracts as at 31 March 2019 were assessed to be highly effective and a net unrealised gain of Rs. 9.87 crore, with a deferred tax liability of Rs. 3.45 crores relating to the hedging instruments, is included in OCI. Comparatively, the cash flow hedges as at 31 March 2018 were assessed to be highly effective and an unrealised loss of Rs. 2.15 crore, with a deferred tax asset of Rs. 0.75 crores was included in OCI in respect of these contracts. The amounts retained in OCI at 31 March 2019 are expected to mature and affect the statement of profit and loss during the year ended 31 March 2020.

Impact of hedging activities

(a) Disclosure of effects of hedge accounting on financial position:

*The foreign exchange forward contracts are denominated in the same currency as the highly probable future sales therefore the hedge ratio is 1:1.

The notional amount of interest rate swap is equal to the portion of variable rate loans that is being hedged and therefore the hedge ratio for interest rate swaps is also 1:1.

The entire amount of foreign currency loan (USD) is designated as cash flow hedge and hence the hedge ratio is 1:1.

In hedges of foreign currency forecast sale may arise if:

- the critical terms of the hedging instrument and the hedged item differ (i.e. nominal amounts, timing of the forecast transaction, interest resets changes from what was originally estimated), or

- differences arise between the credit risk inherent within the hedged item and the hedging instrument.

Refer note 18 for the details related to movement in cash flow hedging reserve.

Note 11: Capital Management

For the purpose of the Company''s capital management, capital includes issued equity capital and all other equity reserves attributable to the shareholders of the Company. The primary objective of the Company''s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximise shareholder value.

The Company manages its capital structure and makes adjustments to it in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return on capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company''s policy is to keep the gearing ratio optimum. The Company includes within net debt, interest bearing loans and borrowings, trade and other payables less cash and cash equivalents excluding discontinued operations.

â-âincludes other bank balance of Rs. 70 crores with respect to fixed deposit. These fixed deposits can be encashed by the Company at any time without any major penalties.

No changes were made in the objectives, policies or processes for managing capital during the years ended 31 March 2019 and 31 March 2018.

Dividend Distribution Made And Proposed

As a part of Company''s capital management policy, dividend distribution is also considered as key element and management ensures that dividend distribution is in accordance with defined policy. Below mentioned are details of dividend distributed and proposed during the year.

Proposed dividend on equity shares is subject to approval at the ensuing annual general meeting and is not recognised as a liability (including DDT thereon) as at year end.

During the year ended 31 March 2019 and 31 March 2018, the Company has paid dividend to its shareholders. This has resulted in payment of Dividend Distribution Tax (DDT) to the taxation authorities. The Company believes that DDT represents additional payment to taxation authority on behalf of the shareholders. Hence DDT paid is charged to equity.

Note 12: Fair Values

a) Financial Instruments by Category

Set out below, is a comparison by class of the carrying amounts and fair value of the Company''s financial instruments, other than those with carrying amounts that are reasonable approximations of fair values as of March 31, 2019:

b) Fair value hierarchy

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

There have been no transfers among Level 1, Level 2 and Level 3.

c) Valuation technique used to determine fair value

The fair values of the quoted mutual funds are based on quoted price at the reporting date.

The fair values of the unquoted equity shares and debentures have been estimated using a DCF model. The valuation requires management to make certain assumptions about the model inputs, including forecast of cash flows, discount rate, credit risk and volatility. The probabilities of the various estimates within the range can be reasonably assessed and are used in managementâs estimate of fair value for these unquoted equity investments.

f) Valuation processes

The finance department of the company includes a team that oversees the valuations of financial assets and liabilities required for financial reporting purposes, including level 3 fair values.

External valuers are involved for valuation of significant assets, such as unquoted financials assets. Involvement of external valuers is decided by the valuation team. Selection criteria includes market knowledge, reputation, independence and whether professional standards are maintained. The Valuation team decides, after discussions with the company''s external valuers, which valuation techniques and inputs to use for each case.

The main level 3 inputs for used by the company are derived and evaluated as follows:

Earnings growth factor for unlisted equity securities are estimated based on market information for similar types of companies.

The significant unobservable inputs used in the fair value measurement categorised within Level 3 of the fair value hierarchy together with a quantitative sensitivity analysis as at 31 March 2019 and 31 March 2018 are as shown above.

The fair values of non-current borrowings are based on discounted cash flows using a current borrowing rate. They are classified as level 3 fair values in the fair value hierarchy due to the use of unobservable inputs, including own credit risk.

The management assessed that cash and cash equivalents, trade receivables, trade payables, other current assets and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments. The management has further assessed that borrowings availed and loans given approximate their carrying amounts largely due to the interest rates being variable or in case of fixed rate borrowings/loans, movements in interest rates from the recognition of such financial instrument till period end not being material.

During the year Sterlite Technologies Europe Ventures Ltd. has been liquidated with effect from May 16, 2018.

# includes interest & expenses incurred and recoverable.

*Share-baseC payments include the perquisite value of stock incentives excercised during the year,CetermineC in accordance with the provisions of the Income-tax Act,1961.

**The amount is gross of the expenses incurred towards provision of these services.

Note 13: Changes in Accounting Policies

The Company applied Ind AS 115 for the first time by using the cumulative catch-up transition method of adoption with the date of initial application of April 01, 2018. Under this method, company recognised the cumulative effect of initially applying the Ind AS 115 as an adjustment to the opening balance of retained earnings as on April 01, 2018. For all open contracts as on that date, comparative prior period has not been adjusted.

Note (i) :

Impact is mainly on account of :

1. Service warranty - As per Ind AS 115, service warranty has been considered as a separate performance obligation and accordingly contract price has been allocated to such seperate performance obligation resulting in an impact on estimated revenue & warranty cost recognised. There was no such requirement under Ind AS 11 and accordingly provision for warranty was recognised basis percentage of completion of contract.

2. Impact of variable considerations - As per Ind AS 115, variable consideration eg. liquidated damages and other penalties which are based on future events should be netted off against revenue and reassessed at every reporting period. Accordingly, such variable considerations have been adjusted against the contract price. Under the previous standard, these were considered as a part of estimated contract costs.

3. Impact of bought out components - Under previous standard cost incurred on bought out components was considered in the calculation of the percentage of completion of network integration projects. As per Ind AS 115, revenue with respect to bought out components should be recognised equivalent to cost incurred to faithfully depict performance if all the prescribed conditions are met. Accordingly on transition, margin on cost related to bought out component was derecognised.

4. Revenue recognition on transfer of control - Under the previous revenue recognition standards, revenue was recognised when the entity has transferred the significant risks and rewards of ownership of goods. Under Ind AS 115, revenue is recognised when entity satisifies a performance obligation by transferring control of a promised goods and service to a customer. As a consequence revenue with respect to cost incurred on construction work in progress is recognised on transition.

5. Milestone based accounting - As per Ind AS 115, there is change in the revenue recognition as compared to previous standard wherein revenue was recognised once milestones were achieved.

The following table presents the amount by which each financial statement line item is affected in the current year ended March 31, 2019 by the application of Ind AS 115 as compared with the previous revenue recognition requirements.

Line items that were not affected by the changes have not been included. As a result, the sub-totals and totals disclosed cannot be recalculated from the numbers provided.

Presentation of assets and liabilities related to contracts with customers:

The company also has changed the presentation of certain amounts in the balance sheet to reflect the terminology of Ind AS 115:

- Contract assets recognised was previously presented as a part of other current assets. Contract assets are in the nature of right to receive consideration which arises when entity satisfies a performance obligation but does not have an unconditional right to consideration as it has not reached the contractual billing milestone.

- Contract liabilities recognised was previously presented as a part of other current liabilities. Contract liabilities represent deferred revenue arising from revenue from network integration projects contracts. It also includes advance received from customers.

Note 14: Segment Reporting

The Company has only one operating segment which is Connectivity and Network Solutions. Accordingly, separate segment information is not required to be disclosed.

Non-current assets for this purpose consist of property, plant and equipment, capital work in progress, investment properties and intangible assets including Goodwill.

(3) Revenue from external customers

Revenue from two customers in India amounted to Rs. 1,293.15 crores (31 March 2018 is Rs. 360.02 crores).

Note 15: Previous Year Figures

The financial statements for the year ended 31 March 2019 incorporate the impact of the change in accounting policies as mentioned in Note 51. Thus, current year numbers are not comparable to previous year numbers.

Mar 31, 2018

1. Corporate information

Telecom products and solutions mainly include integrated optical fiber, other telecom products such as fiber optical cables, copper telecom cables, structured data cables and access equipments, fiber connectivity and system integration solution offerings for telecom networks, Operations Support Systems /Business Support Service solutions, billing & bandwidth management solutions to organizations and other services of design, engineering, implementation and maintenance of Optical Fiber Cable (OFC) Network.

2.1 Recent accounting pronouncements

a) Ind AS 115- Revenue from Contract with Customers:

Ind AS 115, Revenue from contracts with customers deals with revenue recognition and establishes principles for reporting useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from an entityâs contracts with customers. Revenue is recognised when a customer obtains control of a promised good or service and thus has the ability to direct the use and obtain the benefits from the good or service in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services.

The standard replaces Ind AS 18 Revenue and Ind AS 11 Construction contracts and related appendices.

A new five-step process must be applied before revenue can be recognised:

1. identify contracts with customers

2. identify the separate performance obligation

3. determine the transaction price of the contract

4. allocate the transaction price to each of the separate performance obligations, and

5. recognise the revenue as each performance obligation is satisfied.

The new standard is mandatory for financial years commencing on or after 1 April 2018 and early application is not permitted.

The company is in the process of assessing the detailed impact of Ind AS 115. Presently, the company is not able to reasonably estimate the impact that application of Ind AS 115 is expected to have on its financial statements, except that adoption of Ind AS 115 is not expected to significantly change the timing of the companyâs revenue recognition for product sales. Consistent with the current practice, recognition of revenue will continue to occur at a point in time when products are dispatched to customers, which is also when the control of the asset is transferred to the customer under Ind AS 115.

The company intends to adopt the standard using the modified retrospective approach which means that the cumulative impact of the adoption will be recognised in retained earnings as of 1 April 2018 and that comparatives will not be restated.

b) Appendix B to Ind AS 21 Foreign currency transactions and advance consideration

The MCA has notified Appendix B to Ind AS 21, Foreign currency transactions and advance consideration. The appendix clarifies how to determine the date of transaction for the exchange rate to be used on initial recognition of a related asset, expense or income where an entity pays or receives consideration in advance for foreign currency-denominated contracts.

For a single payment or receipt, the date of the transaction should be the date on which the entity initially recognises the non-monetary asset or liability arising from the advance consideration (the prepayment or deferred income/contract liability). If there are multiple payments or receipts for one item, date of transaction should be determined as above for each payment or receipt.

The appendix can be applied:

c retrospectively for each period presented applying Ind AS 8;

- prospectively to items in scope of the appendix that are initially recognised

- on or after the beginning of the reporting period in which the appendix is first applied (i.e. 1 April 2018 for entities with March year-end); or

- from the beginning of a prior reporting period presented as comparative information (i.e. 1 April 2017 for entities with March year-end).

Management has assessed the effects of applying the appendix to its foreign currency transactions for which consideration is received in advance. The Company expects this change to impact its accounting for long-term revenue contracts involving multiple advance payments in foreign currency.

c) Other pronouncements

Following accounting pronouncements are not expected to have significant impact on the companyâs financial statement,

- Amendments to Ind AS 12 Income taxes regarding recognition of deferred tax assets on unrealised losses which clarify the accounting for deferred taxes where an asset is measured at fair value and that fair value is below the assetâs tax base

* Amendments to Ind AS 40 Investment property

- Transfers of investment property which clarify that transfers to, or from, investment property can only be made if there has been a change in use that is supported by evidence.

3. Significant Accounting Judgements, Estimates and Assumptions

The preparation of financial statements requires the use of accounting estimates. Management also needs to exercise judgement in applying the companyâs accounting policies. This note provides an overview of the areas that involved a higher degree of judgement or complexity, and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed. Detailed information about each of these estimates and judgements is described below

Impairment of Goodwill

The company tests whether goodwill has suffered any impairment on an annual basis. Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount. The recoverable amount of a cash generating unit (CGU) is determined based on value in use calculations. The value in use calculation is based on a DCF model. The cash flows are derived from the budget for the next five years and do not include restructuring activities that the Company is not yet committed to or significant future investments that will enhance the assetâs performance of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used. The key assumptions used to determine the recoverable amount for goodwill including a sensitivity analysis are disclosed and further explained in Note 6.

Estimation of provision for Excise/Customs matter

The Company had in an earlier year received an order of CESTAT upholding a demand of Rs.188 crores (including penalties and excluding interest) (Rs.188 crores as at March 31, 2017) in a pending excise/customs matter against which the Companyâs appeal with the Honourable Supreme

Court has been admitted. The details of the matter and the amount of provision made based on managementâs estimate are disclosed and further explained in Note 44.

Revenue Recognition on Construction Contracts

The Company is also engaged in business of construction of assets which are accounted using percentage of completion method, recognising revenue as the performance on the contract progresses. The percentage of completion method requires management to make significant estimates of the extent of progress towards completion. The significant estimates include costs to complete, contract risks, price variation claims, liquidated damages and other judgements including identifying multiple contracts which need to be combined and considered as a single contract. The company continuously reviews the estimates involved and adjust them as necessary. For the purpose of revenue recognition on fixed price projects based on percentage of completion method, the Company determines the stage of completion of the project as proportion of actual cost incurred to total estimated cost of the project. The Company estimates the total cost of the project at each period end (including the estimates of liquidated damages and other related judgements). These estimates are based on the rates agreed with vendors/sub contractors and managementâs best estimates of the costs that would be incurred for the completion of project based on past experience. These estimates are re-assessed at each reporting date. Refer Note 43 for details related to construction contracts.

Share-based payments

The Company measures the cost of equity-settled transactions with employees using Black Scholes model and Monte carloâs simulation model to determine the fair value of options. Estimating fair value for share-based payment transactions requires determination of the most appropriate valuation model, which is dependent on the terms and conditions relating to vesting of the grant.

This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield and making assumptions about them. The assumptions and models used for estimating fair value for share-based payment transactions are disclosed in Note 35.

Defined benefit plans

The cost of the defined benefit plan and other postemployment benefits and other post-employment benefits and the present value of such obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increase, employee turnover and expected return on planned assets. Due to the complexities involved in the valuation and its long term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at the year end. Details about employee benefit obligations and related assumptions are given in Note 25.

Note 4: Impairment Testing of Goodwill

Goodwill generated on acquisition of Elitecore Technologies Private Limited (âETPLâ) which was merged with the Company with effect from 29 September 2015 is attributable to Telecom software product cash generating units (âCGUâ) (acquired as a result of merger of ETPL with the Company) for impairment testing.

The Company performed its annual impairment test for the year ended 31 March 2018 as of 28 February 2018. The recoverable amount of Telecom software product CGU as at 28 February 2018 is determined based on a value in use calculation using cash flow projections from financial budgets approved by senior management covering a five-year period. The post-tax discount rate applied to the cash flow projections for impairment testing during the current year is 15.50%. The growth rate used to extrapolate the cash flows of the unit beyond the five-year period is 5% which is consistent with the industry forecasts for entites operating in similar line of business. As a result of the analysis, management did not identify impairment for this CGU.

Key assumptions used in the value in use calculations

The calculation of value in use for the CGU is most sensitive to the following assumptions:

EBITDA margins

EBITDA margins are based on the actual EBITDA of telecom software product division based on the past trend and future expectations. The EBITDA margins considered are from 7%-13% over the budget period on the anticipated order flows.

Discount Rate

Discount rate represents the current market assessment of the risks specific to the CGU, taking into consideration the time value of money and individual risks of the underlying assets that have not been incorporated in the cash flow estimates. The discount rate calculation is based on the specific circumstances of the Company and the CGU and is derived from the CGUâs weighted average cost of capital (WACC). The WACC takes into account both debt and equity. The cost of equity is derived from the expected return on investment by the Companyâs investors. The cost of debt is based on the interest-bearing borrowings the Company is obliged to service. CGU specific risk is incorporated by applying individual beta factor. The beta factor is evaluated annually based on publicly available market data.

Growth rates used to estimate cash flows beyond the forecast period

The Company has considered growth rate of 5% to extrapolate cash flows beyond the forecast period which is consistent with the industry forecasts.

Sensitivity to changes in assumptions

The implications of the key assumptions for the recoverable amount are discussed below:

Growth rate assumptions

The management recognizes that the speed of technological change and the possibility of new entrants can have a significant impact on growth rate assumptions. A reduction to 2% in the long-term growth rate would result in impairment.

Discount rates

A rise in post-tax discount rate to 18.50% would result in impairment.

EBITDA margins

A decreased demand can lead to a decline in EBITDA. A decrease in EBITDA margins below 10% would result in impairment.

The Companyâs investment property consists of a commercial property in India.

As at 31 March 2018 and 31 March 2017 the fair values of the investment property are Rs.15.07 crores and Rs.14.64 crores respectively. These values are based on valuations performed by the management on the basis of available market quotes/ prevalent property prices in the same and nearby localities. Resulting fair value estimates for Investment properties are included in level 3.

The Company has no restrictions on the realisability of its investment property and no contractual obligations to purchase, construct or develop investment property or for repairs, maintenance and enhancements.

Post demerger of the power business in the financial year ended March 2017, the Company was in the process of obtaining requisite approvals from government authorities to sell its equity interest in its subsidiary, Maharashtra Transmission Communication Infrastructure Limited (referred as disposal group or MTCIL) to Sterlite Power Transmission Limited. Based on developments during the current year, the company anticipates completion of the sale by March 2019.

On reclassification, the investment in the subsidiary has been measured at lower of carrying amount and fair value less cost to sell. No right down is required to be recognised as fair value of the investment is higher than cost. This is a level 3 measurement as per the fair value hierarchy set out in the fair value measurement disclosure (Refer note 49).

b. Terms and 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 except for the underlying 74,700 (31 March 2017: 85,550) equity shares held by custodian bank against Global Depository Receipts (âGDRsâ) which do not have voting rights.

Nature and Purpose of reserves other than retained earnings

Securities premium reserve

Securities premium reserve is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of the Companies Act, 2013.

Cash flow hedge reserve

The Company uses hedging instruments as part of its management of foreign currency risk associated with its highly probable forecast sales and purchases and interest rate risk associated with variable interest rate borrowings as described within note 47. For hedging foreign currency risk, the Company uses foreign currency forward contracts which are designated as cash flow hedges. For hedging interest rate risk, the Company uses interest rate swaps which are also designated as cash flow hedges. To the extent these hedges are effective;the change in fair value of the hedging instrument is recognised in the cash flow hedging reserve. Amounts recognised in the cash flow hedging reserve is reclassified to profit or loss when the hedged item affects profit or loss. When the forecast transaction results in the recognition of a non-financial asset (e.g. inventory), the amount recognised in the cash flow hedging reserve is adjusted against the carrying amount of the non financial asset.

Share options outstanding account

Debenture redemption reserve

The Company is required to create a debenture redemption reserve out of the profits which is available for payment of interest for the purpose of redemption of debentures as per provisions of the Companies Act, 2013

Capital Reserve

Capital reserve is created on account of merger of passive infrastructure business of wholly owned subsidiary. Refer note 51 for details related to the merger.

Notes:

a) 8.45% Non convertible debentures carry 8.45% rate of interest. Out of the total outstanding amount, 50% are redeemable at par during the FY 2019-20 and balance in the FY 2020-21. These non-convertible debentures are secured by way of first pari passu charge on entire movable fixed assets (both present and future) and immovable fixed assets of the Company located at Dadra And Nagar Haveli and Pune.

b) 8.70% Non convertible debentures carry 8.70% rate of interest. Total amount of non-convertible debentures due in the FY 2022-23. These non-convertible debentures are secured by way of first pari passu charge on entire movable fixed assets (both present and future) and mortgage of immovable fixed assets of the Company located at Aurangabad.

c) Indian rupee term loan from bank amounting to Rs.11.14 crores carries interest @ Base rate 1.00 % p.a. Loan amount is repayable in quarterly equated first instalments of Rs.6.25 crores (excluding interest) and 2nd installment of Rs.4.89 crores.The term loan is secured by way of first pari passu charge on entire movable fixed assets (both present and future) and mortgage of certain immovable fixed assets of the Company.

d) Indian rupee term loan from bank amounting to Rs.90.00 crores carries interest @ LTMLR 0.75% p.a.

Loan amount is repayable in nine quarterly equated instalments of Rs.10.00 crores (excluding interest). The term loan is secured by way of first pari passu charge on entire movable fixed assets (both present and future) and mortgage immovable fixed assets of the Company located at Dadra And Nagar Haveli

e) Foreign Currency term loan from banks amounting to Rs.163.89 crores carries interest @ Libor 2.70 % p.a.

Loan amount is repayable in 20 quarterly equated installments of USD 0.13 crores starting from April 2018.The term loan is secured by way of first pari passu charge on entire movable fixed assets (both present and future) and mortgage of immovable fixed assets of the Company located at Dadra and Nagar Haveli and Pune.

f) Foreign currency term loan from bank of Rs.0.42 crores carries interest ranging from 6.20% to 6.65% p.a. Loan amount is repayable in one quarterly equated instalments of Rs.0.42 crores (excluding interest) from the end of this financial period. The term loan is secured by first pari passu charge by way of hypothecation on certain present and future current assets and certain movable fixed assets of the Company and by way of mortgage on present and future immovable fixed assets of the Company.

g) Finance lease obligation is secured by hypothecation of laptops taken on lease. The interest rate implicit in the lease is 10% p.a. The gross investment in lease i.e. lease obligation and interest is payable in quarterly instalments of approximately Rs.0.30 crore.

h) As per the contractual terms with creditors for property, plant and equipment amounts are payable after 1080 days from the due date. These amounts are presented as deferred payment liabilities under borrowings as per the disclosure requirements of Schedule III. The Interest payable on these deferred payment liabilities ranges from 6 months Libor 100 bps to 2% per annum.

Note:

(i) Cash credit was secured by hypothecation of raw material inventory, work in progress, finished goods and trade receivables.The cash credit is repayable on demand and carries interest @ 7.80 % -11.50 % p.a.

(iii) Commercial Papers are unsecured and are generally taken for a period from 80 to 90 days and carry interest @ 6.50% -7.00% p.a.

(iv) Other loans from banks include buyerâs credit arrangements (secured) and export packing credit (unsecured). Buyerâs credit are secured by hypothecation of raw materials, work in progress, finished goods and trade receivables. Buyerâs credit is repaid / rolled over after a period of six months and carry interest @ 0.55% - 3.10% p.a. Export packing credit is taken for a period ranging from 90-180 days and carries interest @ 6.30% to 7.95% p.a.

Details of assets pledged as security

The company has pledged its all current assets,movable fixed assets and certain immovable assets located at aurangabaad and Dadra and Nagar Haveli as a security for the outstanding borrowings.

Provision for litigations / contingencies

The provision of Rs.9.50 crores as at March 31, 2018 (31 March 2017: Rs.9.50 Crores) is towards contingencies in respect of disputed claims against the Company as described in note 39, the timing of outflow and quantum of which is presently unascertainable. There is no movement in the provision for litigations / contingencies during the year.

Provision for warranty

The Company has given warranty on products and services forming part of construction contracts being undertaken by the Company to repair or replace the items that fail to perform satisfactorily during the warranty period and on telecom software and licences/services sold to customers. The timing of the outflow is expected to be within a period of three years from the date of completion of the projects and within six months from the date of sale of telecom software. Movement in provision for warranty is given below.

i) Compensated Absences

The compensated absences cover the companyâs liability for sick and earned leave. The amount of the provision of Rs.11.59 Crore (31 March 2017 Rs.9.72 Crore). The company does not have an unconditional right to defer settlement for any of these obligations. However, based on past experience, the company does not expect all employees to take the full amount of accrued leave or require payment within the next 12 months and accordingly amounts have been classified as current and non current based on actuarial valuation report.

ii) Post employment benefit - Gratuity

The company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/ termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. The gratuity plan is a funded plan and the Company makes contributions to fund managed by Life Corportation of India. The Company does not fully fund the liability and maintains a target level of funding to be maintained over a period of time based on estimate of expected gratuity payments. The gratuity plan for the employees of software division is unfunded.

The estimated future salary increase, considered in actuarial valuation, takes into account the effect of inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market. The overall expected rate of return on plan assets is determined based on the market expected return on the fund balance.

The above sensitivity analysis is based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.

Risk exposure

Through its defined benefit plans, the company is exposed to a number of risks, the most significant of which are detailed below :

Asset volatility

Changes in bond yields

A decrease in bond yields will increase plan liabilities Future salary escalation and inflation risk

Rising salaries will often result in higher future defined benefit payments resulting in a higher present value of liabilities especially unexpected salary increases provided at managements discretion may lead to uncertainties in estimating this risk.

Life expectancy

Risk which arises if there is a mismatch in the duration of the assets relative to the liabilities. By matching duration with the defined benefit liabilities, the company is successfully able to neutralize valuation swings caused by interest rate movements. Hence company is encouraged to adopt asset-liability management.

The Companyâs all assets are maintained in a trust fund managed by public sector insurance company via LIC of India. LIC has a sovereign guarantee and has been providing consistent and competitive returns over the years. The plan asset mix is in compliance with the requirements of the respective local regulations.

The weighted average duration of the defined benefit obligation is 8 years (2017 - 8 years). The expected maturity analysis of gratuity is as follows:

Maturity Analysis of defined benefit obligation:

The expected maturity analyses of undiscounted gratuity is as follows

In accordance with the requirements of Ind AS, revenue for the period April 1, 2017 to June 30, 2017 is inclusive of excise duty of Rs.28.46 crore and revenue for the period July 1, 2017 to March 31, 2018 is net of Goods and Services Tax (âGSTâ). However, revenue for the year ended March 31, 2017 is inclusive of excise duty of Rs.144.80 crore.

Defined Contribution Plans: The Company has recognised the following expenses in the Statement of Profit and Loss for the year

Note 5: Employee Share Based Payments

The Company has established employees stock options plan, 2010 (ESOP Scheme) for its employees pursuant to the special resolution passed by shareholders at the annual general meeting held on July 14, 2010.The employee stock option plan is designed to provide incentives to the employees of the company to deliver long-term returns and is an equity settled plan.The ESOP Scheme is administered by the Nomination and Remuneration committee. Participation in the plan is at the Nomination and Remuneration committeeâs discretion and no individual has a contractual right to participate in the pIan or to receive any guaranteed benefits. Options granted under ESOP scheme would vest in not less than one year and not more than five years from the date of grant of the options.The Nomination and remuneration committee of the company has approved multiple grants with related vesting conditions. Vesting of the options would be subject to continuous employment with the company and hence the options would vest with passage of time. In addition to this, the Nomination and remuneration committee may also specify certain performance parameters subject to which the options would vest. Such options would vest when the performance parameters are met.

The Company has charged Rs.13.39 crore (31 March 2017: Rs.11.30 crores) to the statement of profit and loss in respect of options granted under ESOP schemes * Note: 1800 shares with a grant date of 29 December 2011 have been exercised during the year. These options have not been alloted as at 31st March 2018 and therefore cosidered in outstanding balance of options as at year end.

b) Fair Value of the options granted during the year

During the current year remuneration committee has approved three grants. Following are the details of assumptions under individual grant, related vesting conditions and fair valuation model used based on the nature of vesting.

Date of Grant- July 19, 2017

The company has granted options under ESOP scheme based on following two criteria and related assumption

1. Vesting criteria - Assured vesting of 30% Options in five years subject to continuous employment with the company

Fair Valuation Method- Black Scholes options Pricing Model

2. Vesting criteria - 70% Vesting based on total Shareholders return based on market performance Fair Valuation Method - Monte Carlo Simulation model

- the historical share price and expected volatility during the performance period

- Risk free interest rate of the country where stock of comparator group is listed

- Dividend yield based on historical dividend payments

- Estimate of correlation coefficients for each pair of company

Note 6: Leases Operating lease

Company as lessee

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.

Future minimum lease payments over non cancellable period of operating leases are as follows :

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. Future minimum lease receipts over non cancellable period of operating leases are as follows:

Finance lease

The company does not have any significant finance lease as at March 31, 2018.

Note 7: Capital and Other Commitments

a] Estimated amount of contracts remaining to be executed on capital account and not recognised for (net of advances) are Rs.685.85 crores (31 March 2017: Rs.79.09 crores)

b] The company has imported certain machinery under the Export Promotion Capital Goods (EPCG) scheme and accordingly has export obligation as per details below :

In this respect, the Company has given bonds of Rs.684.66 crores (31 March 2017: Rs.209.37 crores) to the Commissioner of Customs. The company expects to fulfil the export obligation within prescribed time.

c] For commitments relating to lease arrangements please refer note 37.

The Company has not provided for disputed liabilities disclosed above arising from disallowances made in assessments which are pending with different 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 liability has been accrued in the financial statements for the demands raised. The management believes that the ultimate outcome of these proceedings will not have a material adverse effect on the companyâs financial position. 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 recognised 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 paid an amount of Rs.18.87 crores under the letter of credit facility. The letter of credit towards import consignment was not accepted by the company, owing to discrepancies in the documents. Thereafter, the bank filed claim against the company in the Debt Recovery Tribunal (DRT). Against the DRT Order dated 28 October 2010, the parties had filed cross appeals before the Debt Recovery Appellate Tribunal. The Debt Recovery Appellate Tribunal vide its Order dated 28 January 2015 has allowed the appeal filed by the company and has dismissed the appeal filed by the bank. The bank has challenged the said order in WRIT petition before the Bombay High Court. The management doesnât expect the claim to succeed and accordingly no provision for the contingent liability has been recognised in the financial statements.

Note 8: Details of Loans and Advances given to Subsidiaries

The details are provided as required by regulation 53 (f) read with Para A of Schedule V to SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015.

Interest payable as per section 16 of the Micro, Small and Medium Enterprises Development Act, 2006 is Rs.0.10 crore (31 March 2017: Rs.0.08 crore) and same is not accrued in the books of accounts. Dues to micro and small enterprises have been determined to the extent such parties have been identified on the basis of intimation received from the âsuppliersâ / informations available with the Company regarding their status under the Micro, Small and Medium Enterprises development Act 2006.

Note 9: Excise/Customs Matter Pending With Hon. Supreme Court

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 2017: Rs.188 crores) in the pending excise/custom matters on various grounds. The Companyâs 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 are of the view that under most likely event, the provision of Rs.4.50 crores (31 March 2017: 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.

Note 10: Corporate Social Responsibility

The Company has spent an amount of Rs.3.64 crores (31 March 2017: Rs.3.05 crores) during the year as required under section 135 of the Companies Act, 2013 in the areas of skill development, education and health. The amount of Rs.3.64 crores (31 March 2017: Rs.2.71 crore) was spent by way of contribution to Sterlite Tech Foundation, in which directors/senior executives of the Company and their relatives are trustees.

Note 11: Amortisation of Recognised Goodwill on Acquisition

During the year 2015-16, the Company had acquired 100% of the paid up equity share capital of Elitecore Technologies Private Limited (âETPLâ), a global telecom software product company. ETPL has been merged with the Company with the appointed date of September 29, 2015 under a scheme of amalgamation approved by Honourable Bombay High Court and Gujarat High Court (the âSchemeâ). Goodwill (excess of purchase consideration over the aggregate book value of the net assets acquired) is being amortised over a period of five years, as per the Scheme. Ind-AS does not allow amortisation of goodwill, which amounted to Rs.29.64 crore for the year.

Note 12: Financial Risk Management

The Companyâs principal financial liabilities, comprise borrowings, trade and other payables and other financial liabilities. The main purpose of these financial liabilities is to finance the Companyâs operations. The Companyâs principal financial assets include Investments, loans, trade and other receivables, cash and short-term deposits and other financial assets that derive directly from its operations. The Company also enters into derivative transactions.

(a) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk include loans given and borrowings, financial assets and liabilities in foreign currency, investments in quoted instruments and derivative financial instruments.

The sensitivity analysis in the following sections relate to the position as at 31 March 2018 and 31 March 2017.

Interest rate risk

The Company is exposed to the interest rate fluctuation in domestic as well as foreign currency borrowing. The Company manages its interest rate risk by having a balanced portfolio of fixed and variable rate borrowings. The Company enters into interest rate swaps, in which it agrees to exchange, at specified intervals, the difference between fixed and variable rate interest amounts calculated by reference to an agreed-upon notional principal amount. At 31 March 2018, after taking into account the effect of interest rate swaps, approximately 90% of the Companyâs borrowings are at a fixed rate of interest (31 March 2017: 80%).

Interest rate sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in the interest rates on borrowings at variable interest rate. With all the other variables held constant, the Companyâs profit before tax is affected through the impact on floating rate borrowings, as follows:

Foreign currency risk

The company operates internationally and is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to the USD, EURO and Chinese renminbi (RMB). Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the companyâs functional currency (INR). The risk is measured through a forecast of highly probable foreign currency cash flows. The objective of the hedges is to minimise the volatility of the INR cash flows of highly probable forecast transactions.

The company uses foreign exchange forward contracts to hedge its exposure in foreign currency risk. During the year ended 31 March 2018 and 2017, the company did not have any hedging instruments with terms which were not aligned with those of the hedged items.

Out of total foreign currency exposure the Company has hedged the significant exposure as at March 31, 2018 and as at March 31, 2017.

The Company exposure to foreign currency risk at the end of the year expressed in INR are as follows

Foreign currency sensitivity

The following tables demonstrate the sensitivity to a reasonably possible change in USD, EUR and GBP exchange rates, with all other variables held constant. The impact on the Companyâs profit before tax is due to changes in the fair value of monetary assets and liabilities. The impact on the Companyâs pre-tax equity is due to changes in the fair value of forward exchange contracts designated as cash flow hedges. The Companyâs exposure to foreign currency changes for all other currencies is not material. With all the other variable held constant, the Companyâs profit before tax is affected through the impact on change of foreign currency rate as follows-

Commodity price risk

The Companyâs Board of Directors has developed and enacted a risk management strategy regarding commodity price risk and its mitigation.

Based on a 1 month forecast of the required copper supply, the Company hedges the purchase price using future commodity purchase contracts. The forecast is deemed to be highly probable.

Commodity price sensitivity

As per the Companyâs policy for commodity price hedging, all the commodity price exposures as on reporting dates are fully hedged. Thus, there are no open unhedged exposures on the reporting dates. Further, total exposure related to commodity derivative is not material.

Price risk

At the reporting date, the exposure to unlisted equity securities (other than investments in subsidiaries) at fair value was Rs.19.60 crores (31 March 2017: Rs.13.20 crores). The Company also invests into highly liquid mutual funds which are subject to price risk changes. These investments are generally for short duration and therefore impact of price changes is generally not significant. Investment in these funds are made as a part of treasury management activities.

(b) Credit risk

Credit risk is the risk that a counterparty will not meet its obligations under a contract, leading to a financial loss.

The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its investing activities, including deposits with banks, foreign exchange transactions and other financial instruments.

Trade receivables

Customer credit risk is managed by each business unit subject to the Companyâs established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on credit rating and individual credit limits are defined in accordance with credit assessment. Outstanding customer receivables are regularly monitored and any shipments to major customers are generally covered by letters of credit or other forms of credit assurance.

An impairment analysis is performed at each reporting date on an individual basis for major customers. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The assessment is based on historical information of defaults. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets. The Company does not hold collateral as security. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and operate in largely independent markets. During the period, the company made write-offs of Rs.10.54 crores trade receivables and it does not expect to receive future cash flows or recoveries from collection of cash flows previously written off.

The Companyâs customer profile for construction contracts and software services include public sector enterprises, state owned companies and private corporates. Accordingly, the Companyâs customer credit risk is low. The Companyâs average project execution cycle ranges from 12 to 36 months based on the nature of contract and scope of services to be provided. General payment terms include mobilisation advance, progress payments with a credit period ranging from 45 to 90 days and certain retention money to be released at the end of the project. In some cases retentions are substituted with bank/corporate guarantees.

Financial instruments and cash deposits

Other financial assets that are potentially subject to credit risk consists of inter corporate loans. The company assesses the recoverability from these financial assets on regular basis. Factors such as business and financial performance of counterparty, their ability to repay, regulatory changes and overall economic conditions are considered to assess future recoverability. The company charges interest on such loans at arms length rate considering countpartyâs credit rating. Based on the assessment performed, the company considers all the outstanding balances of such financial assets to be recoverable as on balance sheet date and no provision for impairment is considered necessary.

The Companyâs maximum exposure to credit risk for the components of the balance sheet at 31 March 2018 and 31 March 2017 is the carrying amounts of each class of financial assets.

The Companyâs objective is to, at all times, maintain optimum levels of liquidity to meet its cash and collateral obligations. The Company requires funds both for short term operational needs as well as for long term investment programs mainly in growth projects. The Company closely monitors its liquidity position and deploys a robust cash management system. It aims to minimise these risks by generating sufficient cash flows from its current operations, which in addition to the available cash and cash equivalents, liquid investments and sufficient committed fund facilities which will provide liquidity.

The carrying amounts are assumed to be reasonable approximation of fair value. The table below summarises the maturity profile of the Companyâs financial liabilities based on contractual undiscounted payments:

Cash flow hedges

Foreign exchange forward contracts are designated as hedging instruments in cash flow hedges of highly probable forecast transactions/firm commitments for sales and purchases in USD, EUR and GBP. The foreign exchange forward contract balances vary with the level of expected foreign currency sales and purchases and changes in foreign exchange forward rates. As per the risk management policy, management hedges the highly probable forecast sales and purchase transactions and hedge accounting is followed till such transaction are recognised in books of accounts.

The cash flow hedges for such derivative contracts as at 31 March 2018 were assessed to be highly effective and a net unrealised loss of Rs.47.92 crore, with a deferred tax liability of Rs.16.74 crore relating to the hedging instruments, is included in OCI. Comparatively, the cash flow hedges as at 31 March 2017 were assessed to be highly effective and an unrealised gain of Rs.0.83 crore, with a deferred tax liability of Rs.0.29 crore was included in OCI in respect of these contracts. The amounts retained in OCI at 31 March 2018 are expected to mature and affect the statement of profit and loss during the year ended 31 March 2019.

At 31 March 2018, the Company had currency/interest rate swap agreements in place with a notional amount of USD 2.50 crore (Rs.163.89 crore) whereby the Company receives a variable rate of interest of Libor 2.70% and pays interest at a fixed rate equal to 10.0425% on the notional amount with USD-INR rate fixed at INR 66.3850 per USD. The swaps are being used to hedge the exposure to changes in the foreign exchange rates and interest rates.

- the critical terms of the hedging instrument and the hedged item differ (i.e. nominal amounts, timing of the forecast transaction, interest resets changes from what was originally estimated), or

- differences arise between the credit risk inherent within the hedged item and the hedging instrument.

Refer note 18 for the details related to movement in cash flow hedging reserve.

Note 13: Capital Management

For the purpose of the Companyâs capital management, capital includes issued equity capital and all other equity reserves attributable to the shareholders of the Company. The primary objective of the Companyâs capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximise shareholder value.

The Company manages its capital structure and makes adjustments to it in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return on capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Companyâs policy is to keep the gearing ratio optimum. The Company includes within net debt, interest bearing loans and borrowings, trade and other payables less cash and cash equivalents excluding discontinued operations.

No changes were made in the objectives, policies or processes for managing capital during the years ended March 31, 2018 and March 31, 2017.

Dividend Distribution Made and Proposed

As a part of Companyâs capital management policy, dividend distribution is also considered as key element and management ensures that dividend distribution is in accordance with defined policy. Below mentioned are details of dividend distributed and proposed during the year.

Proposed dividend on equity shares is subject to approval at the ensuing annual general meeting and is not recognised as a liability (including DDT thereon) as at year end.

During the year ended 31 March 2017 and 31 March 2016, the Company has paid dividend to its shareholders. This has resulted in payment of Dividend Distribution Tax (DDT) to the taxation authorities. The Company believes that DDT represents additional payment to taxation authority on behalf of the shareholders. Hence DDT paid is charged to equity.

Note 14: Fair Values

a) Financial Instruments by Category

Set out below, is a comparison by class of the carrying amounts and fair value of the Companyâs financial instruments, other than those with carrying amounts that are reasonable approximations of fair values as of March 31, 2018:

b) Fair value hierarchy

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

There have been no transfers among Level 1, Level 2 and Level 3.

c) Valuation technique used to determine fair value

The fair values of the quoted mutual funds are based on quoted price at the reporting date.

The fair values of the unquoted equity shares and debentures have been estimated using a DCF model.

The valuation requires management to make certain assumptions about the model inputs, including forecast of cash flows, discount rate, credit risk and volatility. The probabilities of the various estimates within the range can be reasonably assessed and are used in managementâs estimate of fair value for these unquoted equity investments.

d) Fair value measurements using significant unobservable inputs (level 3)

The following table presents the changes in level 3 items for the periods ended March 31, 2018 and March 31, 2017:

e) Valuation inputs and relationships to fair value

The following table summarises the quantitative information about the significant unobservable inputs used in level 3 fair value measurements.

f) Valuation processes

The finance department of the company includes a team that oversees the valuations of financial assets and liabilities required for financial reporting purposes, including level 3 fair values.

External valuers are involved for valuation of significant assets, such as unquoted financials assets. Involvement of external valuers is decided by the valuation team. Selection criteria includes market knowledge, reputation, independence and whether professional standards are maintained. The Valuation team decides, after discussions with the comapnyâs external valuers, which valuation techniques and inputs to use for each case.

The main level 3 inputs for used by the company are derived and evaluated as follows:

Discount rates are determined using a capital asset pricing model or based on weighted average cost of capital of counterparty, to calculate a pre-tax rate that reflects current market assessments of the time value of money and the risk specific to the asset.

Earnings growth factor for unlisted equity securities are estimated based on market information for similar types of companies.

Changes in level 3 fair values are analysed at the end of each reporting period dur

Mar 31, 2017

1. Standards issued but not yet effective

The amendments to standards that are issued, but not yet effective, up to the date of issuance of the Company''s financial statements are disclosed below. The Company intends to adopt these standards, if applicable, when they become effective.

The Ministry of Corporate Affairs (MCA) has issued the Companies (Indian Accounting Standards) Amendment Rules, 2017 and has amended the following standards:

Amendments to Ind AS 7, Statement of Cash Flows

The amendments to Ind AS 7 require an entity to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes. On initial application of the amendment, entities are not required to provide comparative information for preceding periods. These amendments are effective for annual periods beginning on or after 1 April 2017. Application of these amendments will not have any recognition and measurement impact. However, it will require additional disclosures in the financial statements.

Amendments to Ind AS 102, Share-based Payment

The MCA has issued amendments to Ind AS 102 that address three main areas: the effects of vesting conditions on the measurement of a cash-settled share-based payment transaction, the classification of a share-based payment transaction with net settlement features for withholding tax obligations, and accounting where a modification to the terms and conditions of a share-based payment transaction changes its classification from cash settled to equity settled. The amendments are effective for annual periods beginning on or after 1 April 2017. The Company is assessing the potential effect of the amendments on its financial statements.

The Company performed its annual impairment test for the year ended 31 March 2017 as of 31 December 2016. The recoverable amount of Telecom software product CGU as at 31 December 2016 is determined based on a value in use calculation using cash flow projections from financial budgets approved by senior management covering a five-year period. The pre-tax discount rate applied to the cash flow projections for impairment testing during the current year is 20.98%. The growth rate used to extrapolate the cash flows of the unit beyond the five-year period is 5% which is consistent with the industry forecasts. As a result of the analysis, management did not identify impairment for this CGU.

Key assumptions used in the value in use calculations

The calculation of value in use for the CGU is most sensitive to the following assumptions:

EBITDA margins

EBITDA margins are based on the actual EBITDA of telecom software product division for past 3 years preceding the beginning of the budget period. The EBITDA margins considered are from 10%-13.5% over the budget period for anticipated order flows.

Discount Rate

Discount rates represent the current market assessment of the risks specific to the CGU, taking into consideration the time value of money and individual risks of the underlying assets that have not been incorporated in the cash flow estimates. The discount rate calculation is based on the specific circumstances of the Company and the CGU and is derived from its weighted average cost of capital (WACC). The WACC takes into account both debt and equity. The cost of equity is derived from the expected return on investment by the Company''s investors. The cost of debt is based on the interest-bearing borrowings the Company is obliged to service. CGU specific risk is incorporated by applying individual beta factor. The beta factor is evaluated annually based on publicly available market data. Adjustments to the discount rate are made to factor in the specific amount and timing of the future tax flows in order to reflect a pre-tax discount rate.

Growth rates used to extrapolate cash flows beyond the forecast period

The Company has considered growth rate of 5% to extrapolate cash flows beyond the forecast period which is consistent with the industry forecasts.

Sensitivity to changes in assumptions

The implications of the key assumptions for the recoverable amount are discussed below:

Growth rate assumptions - The management recognizes that the speed of technological change and the possibility of new entrants can have a significant impact on growth rate assumptions. A reduction to 2% in the long-term growth rate would result in impairment.

Discount rates A rise in post-tax discount rate to 17.80% (Pre-tax discount rate 24.41%) would result in impairment.

EBITDA margins A decreased demand can lead to a decline in EBITDA. A decrease in EBITDA below 11% would result in impairment

The Company''s investment property consists of a commercial property in India.

As at 31 March 2017 and 31 March 2016 the fair values of the investment property are Rs. 14.64 crores and Rs. 13.21 crores respectively. These values are based on valuations performed by the management on the basis of available market quotes/ prevalent property prices in the same and nearby localities.

The Company has no restrictions on the reliability of its investment property and no contractual obligations to purchase, construct or develop investment property or for repairs, maintenance and enhancements.

Fair value hierarchy disclosures for investment property have been provided in Note 50.

Security deposits are non-derivative financial assets and are refundable in cash. These are measured based on effective interest method.

Advances recoverable in cash are non-derivative financial assets. These pertain to costs incurred as part of project execution which is recoverable from customer on actual basis.

Derivative instruments reflect the change in fair value of foreign exchange forward contracts and Currency and Interest rate swaps, designated as cash flow hedges to hedge highly probable forecasts/firm commitments for sales and purchases in US Dollars (USD), Euros (EUR) and GB pound sterling (GBP) and hedge of interest rate and foreign exchange fluctuation risks on foreign currency loan in USD.

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 except for the underlying 85,550 (31 March 2016: 85,550, 1 April 2015: 85,550) equity shares held by custodian bank against Global Depository Receipts (âGD'') which do not have voting rights.

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 2017, the amount of per share dividend recognized as distributions to equity shareholders was Rs. 1.50 (31 March 2016 : Rs. 0.60).

3. Non convertible debentures carry 8.45% rate of interest. Out of the total non-convertible debenture, 50% are redeemable at par during the FY 2019-20 and balance in the FY 2020-21. These non-convertible debenture are secured by way of first pari passu charge on entire movable fixed assets (both present & future) and mortgage of certain immovable fixed assets of the Company.

4. Indian rupee term loan from banks amounting to Rs. 36.46 crores carries interest @ Base rate 1.00 % p.a. Loan amount is repayable in 5 quarterly equated installments of Rs. 6.25 crores (excluding interest) and 6th installment of Rs. 5.21 crores.The term loan is secured by first pari passu charge on entire movable fixed assets (both present and future) and mortgage of certain immovable fixed assets of the Company.

5. Indian rupee term loan from the bank amounting to Rs. 1.00 crores carries interest @ LTMLR 1.10% p.a. Loan amount is repayable in June 2017. The term loan is secured by way of first pari passu charge on entire movable fixed assets (both present and future) and mortgage of certain immovable fixed assets of the Company.

6. Indian rupee term loan from banks amounting to Rs. 120.00 crores carries interest @ LTMLR 0.75% p.a. Loan amount is repayable in 12 quarterly equated installments of Rs. 10.00 crores (excluding interest) starting from July 2017. The term loan is secured by first pari passu charge on entire movable fixed assets (both present and future) and mortgage of certain immovable fixed assets of the Company.

7. Foreign Currency term loan from banks amounting to Rs. 161.97 crores (USD 2.5 crores) carries interest @ Libor 2.70 % p.a. Loan amount is repayable in 20 quarterly equated installments of USD 0.125 crores starting from April 2018.The term loan is secured by first pari passu charge on entire movable fixed assets (both present and future) and mortgage of specified immovable fixed assets of the Company.

8. Foreign currency term loan from bank of Rs. 2.09 crores (USD 0.03 crore) carries interest ranging from 6.20% to 6.65% p.a. Loan amount is repayable in 5 quarterly equated installments of Rs. 0.42 crores (excluding interest) from the end of this financial period. The term loan is secured by first pari passu charge by way of hypothecation on certain present and future current assets and certain movable fixed assets of the Company and by way of mortgage on certain present and future immovable fixed assets of the Company.

9. Finance lease obligation is secured by hypothecation of laptops taken on lease. The interest rate implicit in the lease is 10% p.a. The gross investment in lease i.e. lease obligation and interest is payable in quarterly installments of approximately Rs. 0.30 crore.

Loan Covenants

Bank loans contain certain debt covenants relating to limitation on indebtedness, debt-equity ratio, net Borrowings to EBITDA ratio and debt service coverage ratio. The limitation on indebtedness covenant gets suspended if the Company meets certain prescribed criteria. The debt covenant related to limitation on indebtedness remained suspended as of the date of the authorization of the financial statements. The Company has also satisfied all other debt covenants prescribed in the terms of bank loan/non convertible debentures. The other loans do not carry any debt covenant.

Provision for litigations / contingencies

The provision of Rs. 9.50 crores as at March 31, 2017 (31 March 2016: Rs. 9.50 crores, 1 April, 2015: Rs. 9.50) is towards contingencies in respect of disputed claims against the Company as described in note 40 and note 53, the timing of outflow and quantum of which is presently unascertainable. There is no movement in the provision for litigations/contingencies during the year.

Provision for warranty

The Company has given warranty on products and services forming part of projects being undertaken by the Company to repair or replace the items that fail to perform satisfactorily during the warranty period and on telecom software and licences/services sold to customers. The timing of the outflow is expected to be within a period of three years from the date of completion of the projects and within six months from the date of sale of telecom software.

10. Cash credit is secured by hypothecation of raw materials, work-in-progress, finished goods and trade receivables. The cash credit is repayable on demand and carries interest @ 8.95% -12.50 % p.a.

11. Working capital demand loan from banks is secured by first pari passu charge on entire current assets of the Company (both present and future) and second pari passu charge on plant & machinery and other movable fixed assets of the Company. Working Capital Demand Loan has been taken for a period of 30 days and carries interest @ 7.80%.

12. Commercial Papers are unsecured and are generally taken for a period from 80 to 90 days and carry interest @ 6.47% - 6.60% p.a.

13. Other loans from banks include buyer''s credit arrangements (secured) and export packing credit (unsecured). Buyer''s credit are secured by hypothecation of raw materials, work-in-progress, finished goods and trade receivables. Buyer''s credit is repaid/rolled over after a period of six months and carry interest @ 0.55% - 2.10% p.a. (excluding hedging premium). Export packing credit is generally taken for a period of 90-180 days and carries interest @ 4.00% to 4.90% p.a.

14.Other Financial Liabilities

*Payables for purchase of property, plant and equipment are non-interest bearing and are normally settled on 90-120 days terms. It also includes the current maturities of long-term payables for purchase of property, plant and equipment which have been valued at Amortized cost. It also includes deferred payables for purchase of property, plant and equipment. Deferred payables where credit terms allowed by the vendors are beyond normal credit terms have been measured at cash price equivalent and the differential amount is recognized as interest expense over the period of credit.

Derivative instruments reflect the change in fair value of foreign exchange forward contracts and Currency/Interest rate swaps, designated as cash flow hedges to hedge highly probable forecasts/firm commitments for sales and purchases in US Dollars (USD), Euros (EUR) and GB pound sterling (GBP) and hedge of interest rate and foreign exchange fluctuation risks on foreign currency loan in USD.

Other payables are non-interest bearing and have an average term of six months.

Interest payable is normally settled monthly throughout the financial year.

For explanations on the Company''s credit risk management processes, refer to Note 47.

15.Earnings per Share (EPS)

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders by the weighted average number of Equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit attributable to equity holders by the weighted average number of Equity shares outstanding during the year plus the weighted average number of Equity shares that would be issued on conversion of all the dilutive potential Equity shares into Equity shares.

16.Significant Accounting Judgments, Estimates and Assumptions

The preparation of the Company''s standalone financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

Impairment of non-financial assets

Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm''s length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a DCF model. The cash flows are derived from the budget for the next five years and do not include restructuring activities that the Company is not yet committed to or significant future investments that will enhance the asset''s performance of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes. The key assumptions used to determine the recoverable amount for goodwill including a sensitivity analysis, are disclosed and further explained in Note 5.

Excise/Customs matter pending with Hon. Supreme Court

The Company had in an earlier year received an order of CESTAT upholding a demand of Rs. 188 crores (including penalties and excluding interest) (Rs. 188 crores as at March 31, 2016) in a pending excise/customs matter against which the Company''s appeal with the Honourable Supreme Court has been admitted. The details of the matter and the amount of provision made based on management''s estimate are disclosed and further explained in Note 53.

Estimated costs (including estimates of liquidated damages) for revenue recognition on projects

For the purpose of revenue recognition on fixed price projects based on percentage of completion method, the Company determines the stage of completion of the project as proportion of actual cost incurred to total estimated cost of the project. The Company estimates the total cost of the project at each period end (including the estimates of liquidated damages). These estimates are based on the rates agreed with vendors/sub contractors and management''s best estimates of the costs that would be incurred for the completion of project based on past experience and/or industry data. These estimates are re-assessed at each period end.

Share-based payments

The Company measures the cost of equity-settled transactions with employees using Black and Scholes model and Binomial model to determine the fair value of options. Estimating fair value for share-based payment transactions requires determination of the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield and making assumptions about them. The assumptions and models used for estimating fair value for share-based payment transactions are disclosed in Note 37.

Estimation of provision for warranty claims

Provision for warranty claims is recognized based on management''s best estimates of the costs that would be incurred on warranty claims on the basis of historical experience and/or nature of business. Refer Note 20 for further details on provision for warranty claims.

19. Employee Share Based Payments

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 14 July 2010 respectively. The Company has followed the fair value methods like Black Scholes Options Pricing Model and Binomial Model for the valuation of these options. The compensation committee of the Company has approved twelve grants vide their meetings held on 14 June 2006; 19 March 2007; 28 September 2007; 14 June 2008; 26 June 2009; 29 December 2011; 27 July 2012; 30 April 2014; 30 March 2015; 28 January 2016; 25 July 2016 and 18 January 2017. As per the plans, 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. All the plans are equity settled plans.

The Company has charged Rs. 11.30 crore (31 March 2016: Rs. 13.46 crores) to the statement of profit and loss in respect of options granted under ESOP scheme 2006 and options granted under ESOP scheme 2010

(*)The measure of volatility used in the above model is the annualized standard deviation of the continuously compounded rates of return on the stock over a period of time. The volatility periods considered above, corresponding to the respective expected lives of the different vests are prior to the grant date. The daily volatility of stock prices is considered as per the National Stock Exchange (NSE) prices over these years.

ESOP Scheme 2016 and ESAR Scheme 2016 have been approved by the shareholders through postal ballot on 30 March, 2016. However no grant has been made under ESOP Scheme 2016 or ESAR Scheme 2016 and accordingly no charge in respect of the same has been accrued in the financial statements for the year ended 31 March, 2017.

As part of the Scheme of Arrangement for demerger, employees of power business have been transferred to Sterlite Power Transmission Limited (âSPTL''). ESOPs granted to such employees will continue to be held and exercised by them. The charge in respect of ESOPs held by employees transferred from the Company to SPTL shall be borne by SPTL with effect from 1 April, 2015. Accordingly, an amount of Rs. 0.76 crore and 3.37 crores pertaining to charge for the year ended 31 March, 2017 and 31 March, 2016 respectively, on ESOPs held by such employees has been transferred to SPTL.

20.LEASES Operating lease Company as lessee :

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.

Future minimum lease payments over non cancellable period of operating leases are as follows :

21. Lease payments recognized in the statement of profit and loss for the year is Rs. 23.62 crore (31 March 2016: Rs. 13.25 crore, 1 April 2015: Rs. 9.05 crore).

22. The future minimum lease payments payable over the next one year is Rs. 21.03 crore (31 March 2016: Rs. 18.15 crore, 1 April 2015: Rs. 7.69 crore).

23. The future minimum lease payments payable later than one year but not later than five years is Rs. 33.57 crore (31 March 2016: Rs. 30.63 crore, 1 April 2015: Rs. 19.95 crore).

24. The future minimum lease payments payable later than five years is Rs. 15.36 crore (31 March 2016: Rs. 0.35 crore, 1 April 2015: Rs. 0.45 crore).

Company as lessor :

25. Lease income recognized in the statement of profit and loss for the year is Rs. 1.03 crore (31 March 2016: Rs. 0.54 crore, 1 April 2015: Rs. 0.39 crore).

26. The future minimum lease payments receivable over the next one year is Rs. 1.94 crore (31 March 2016: Rs. 0.76 crore, 1 April 2015: Rs. 0.39 crore).

27. The future minimum lease payments receivable later than one year but not later than five year is Rs. 2.57 crore (31 March 2016: Rs. 1.14 crores, 1 April 2015: Rs. 1.20 crores).

Finance lease Company as lessee :

The Company has taken laptops on finance lease. The lease term is for periods of three years.

The terms of the foreign currency forward contracts match the terms of the expected highly probable forecast transactions. As a result, no hedge ineffectiveness arise requiring recognition through profit or loss.

The cash flow hedges as at 31 March 2017 were assessed to be highly effective and a net unrealized gain of Rs. 3.24 crore, with a deferred tax liability of Rs. 1.12 crore relating to the hedging instruments, is included in OCI. Comparatively, the cash flow hedges as at 31 March 2016 were assessed to be highly effective and an unrealized gain of Rs. 1.98 crore with a deferred tax liability of Rs. 0.69 crore was included in OCI in respect of these contracts. The amounts retained in OCI at 31 March 2017 are expected to mature and affect the statement of profit and loss during the year ended 31 March 2018.

At 31 March 2017, the Company had currency/interest rate swap agreements in place with a notional amount of USD 2.50 crore (Rs. 162.13 crore) whereby the Company receives a variable rate of interest of Libor 2.70% and pays interest at a fixed rate equal to 10.0425% on the notional amount with USD-INR rate fixed at INR 66.3850 per USD. The swaps are being used to hedge the exposure to changes in the foreign exchange rates and interest rates. The cash flow hedges during the year ended 31 March 2017 were assessed to be highly effective and a net unrealized loss of Rs. 4.07 crore, with a deferred tax asset of Rs. 1.41 crore relating to the hedging instruments, is included in OCI. The amounts retained in OCI at 31 March 2017 are expected to mature and affect the statement of profit and loss during the year ended 31 March 2018.

28.Financial risk management objectives and policies

The Company'' s principal financial liabilities, comprise borrowings, trade and other payables and other financial liabilities. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include Investments, loans, trade and other receivables, cash and short-term deposits and other financial assets that derive directly from its operations. The Company also holds FVTOCI investments and enters into derivative transactions.

The Company is exposed to market risk, credit risk and liquidity risk. The Company''s senior management oversees the management of these risks. All derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. It is the Company''s policy that no trading in derivatives for speculative purposes may be undertaken. The Company reviews and agrees policies for managing each of these risks, which are summarized below.

The Risk Management policies of the Company are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company''s activities.

Management has overall responsibility for the establishment and oversight of the Company''s risk management framework. In performing its operating, investing and financing activities, the Company is exposed to the Credit Risk, Liquidity Risk and Market risk.

29. Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk include loans and borrowings, deposits, investments and derivative financial instruments.

The sensitivity analysis in the following sections relate to the position as at 31 March 2017 and 31 March 2016.

The sensitivity analysis have been prepared on the basis that the amount of net debt, the ratio of fixed to floating interest rates of the debt and derivatives and the proportion of financial instruments in foreign currencies are all constant and on the basis of hedge designations in place at 31 March 2017.

The analyses exclude the impact of movements in market variables on: the carrying values of gratuity and provisions.

The following assumption has been made in calculating the sensitivity analyses:

- The sensitivity of the relevant statement of profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at 31 March 2017 and 31 March 2016.

Interest rate risk

Interest rate risk is the risk that the fair value or the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company''s exposure to the risk of changes in market interest rate primarily relates to the Company''s long-term debt obligations with floating interest rates.

The Company is exposed to the interest rate fluctuation in both domestic and foreign currency borrowing. The Company manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and borrowings. The Company enters into interest rate swaps, in which it agrees to exchange, at specified intervals, the difference between fixed and variable rate interest amounts calculated by reference to an agreed-upon notional principal amount. At 31 March 2017, after taking into account the effect of interest rate swaps, approximately 80% of the Company''s borrowings are at a fixed rate of interest (31 March 2016: 52%, 1 April 2015: 50%).

Interest rate sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in the interest rates on that portion of loans and borrowings affected. With all the other variables held constant, the Company''s profit before tax is affected through the impact on floating rate borrowings, as follows:

Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s operating activities (when revenue or expense is denominated in a foreign currency).

The Company has a policy to keep minimum forex exposure on the books that are likely to occur within a maximum 12-month period for hedges of forecasted sales and purchases.

When a derivative is entered into for the purpose of being a hedge, the Company negotiates the terms of those derivatives to match the terms of the hedged exposure. For hedges of forecast transactions the derivatives cover the period of exposure from the point the cash flows of the transactions are forecasted up to the point of settlement of the resulting receivable or payable that is denominated in the foreign currency.

Out of total foreign currency exposure the Company has hedged the exposure of 99.50% as at 31 March 2017 and 99% as at 31 March 2016.

Foreign currency sensitivity

Commodity price risk

The Company is affected by the price volatility of certain commodities. Its operating activities require the ongoing purchase and manufacture of copper cables and therefore require a continuous supply of copper. Due to the volatility of the price of the copper, the Company also entered into various purchase contracts for copper on London Metal Exchange. The prices in these purchase contracts are linked to the price on London Metal Exchange.

The Company''s Board of Directors has developed and enacted a risk management strategy regarding commodity price risk and its mitigation.

Based on a 1 month forecast of the required copper supply, the Company hedges the purchase price using future commodity purchase contracts. The forecast is deemed to be highly probable.

Commodity price sensitivity

As per the Company''s policy for commodity price hedging, all the commodity price exposures as on reporting dates are fully hedged. Thus, there are no open unhedged exposures on the reporting dates.

Equity price risk

At the reporting date, the exposure to unlisted equity securities (other than investments in subsidiaries) at fair value was ''Rs.13.20 crores (31 March 2016: Rs. 1.60 crores). Sensitivity analysis of these investments have been provided in Note 49.

29. Credit risk

Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks, foreign exchange transactions and other financial instruments.

Trade receivables

Customer credit risk is managed by each business unit subject to the Company''s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on an extensive credit rating scorecard and individual credit limits are defined in accordance with this assessment. Outstanding customer receivables are regularly monitored and any shipments to major customers are generally covered by letters of credit or other forms of credit insurance.

Financial instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Company''s treasury department in accordance with the Company''s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. Counterparty credit limits are reviewed by the Company''s Board of Directors on an annual basis, and may be updated throughout the year. The limits are set to minimize the concentration of risks and therefore mitigate financial loss through counterparty''s potential failure to make payments.

The Company''s maximum exposure to credit risk for the components of the balance sheet at 31 March 2017 and 31 March 2016 is the carrying amounts of each class of financial assets except for financial guarantees and derivative financial instruments. The Company''s maximum exposure relating to financial guarantees and financial derivative instruments is noted in note 41 and the liquidity table below:

30. Liquidity risk

Liquidity risk is the risk that the Company may encounter difficulty in meeting its present and future obligations associated with financial liabilities that are required to be settled by delivering cash or another financial asset. The Company''s objective is to, at all times, maintain optimum levels of liquidity to meet its cash and collateral obligations. The Company requires funds both for short-term operational needs as well as for long-term investment programs mainly in growth projects. The Company closely monitors its liquidity position and deploys a robust cash management system. It aims to minimize these risks by generating sufficient cash flows from its current operations, which in addition to the available cash and cash equivalents, liquid investments and sufficient committed fund facilities, will provide liquidity.

The liquidity risk is managed on the basis of expected maturity dates of the financial liabilities. The average credit period taken to settle trade payables is about 60 - 90 days. The other payables are with short-term durations. The carrying amounts are assumed to be reasonable approximation of fair value. The table below summarizes the maturity profile of the Company''s financial liabilities based on contractual undiscounted payments:

31. Capital Management

For the purpose of the Company''s capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company''s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximize shareholder value.

No changes were made in the objectives, policies or processes for managing capital during the years ended 31 March, 2017 and 31 March, 2016.

32. Fair Values

The management assessed that cash and cash equivalents, trade receivables, trade payables, other current assets and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments. The management has further assessed that borrowings availed and loans given approximate their carrying amounts largely due to the interest rates being variable or in case of fixed rate borrowings/loans, movements in interest rates from the recognition of such financial instrument till period end not being material.

- The fair values of the quoted mutual funds are based on price quotations at the reporting date.

- The fair values of the unquoted equity shares have been estimated using a DCF model. The valuation requires management to make certain assumptions about the model inputs, including forecast cash flows, discount rate, credit risk and volatility. The probabilities of the various estimates within the range can be reasonably assessed and are used in management''s estimate of fair value for these unquoted equity investments.

- The Company enters into derivative financial instruments with financial institutions with investment grade credit ratings. Foreign exchange forward contracts, interest rate swaps are valued using valuation techniques, which employs the use of market observable inputs. The most frequently applied valuation techniques include forward pricing model, using present value calculations. The models incorporate various inputs including the credit quality counterparties, foreign exchange spot and forward rates, yield curves of the respective currencies, currency basis spread between the respective currencies, interest rate curves etc. The changes in counterparty credit risk had no material effect on the hedge effectiveness assessment for derivatives designated in hedge relationships and other financial instruments recognized at fair value.

The significant unobservable inputs used in the fair value measurement categorized within Level 3 of the fair value hierarchy together with a quantitative sensitivity analysis as at 31 March 2017, 31 March 2016 and 1 April 2015 are as shown below:

33. Related Party Disclosures (A) Name of related party and nature of its relationship:

34. Related parties where control exists

35. Holding company

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

36. Subsidiaries

Jiangsu Sterlite Tongguang Fiber Co. Ltd. Sterlite Global Ventures (Mauritius) Limited Maharashtra Transmission Communication Infrastructure Limited

Sterlite Technologies UK Ventures Limited Speedon Network Limited Sterlite Telesystems Limited Elitecore Technologies (Mauritius) Limited Elitecore Technologies SDN BHD. (Malaysia) Sterlite (Shanghai) Trading Company Limited Sterlite Technologies Americas LLC*

Sterlite Technologies Europe Ventures Limited Sterlite Power Technologies Private Limited#

*Liquidated during the year with effect from June 22, 2016. #Transferred to Twin Star Overseas Limited, Mauritius.

37. Joint ventures

Sterlite Conduspar Industrial Ltda (58:42 joint venture between Sterlite Technologies UK Ventures Limited and Conduspar Condutores Eletricos Limitada)

38. Other related parties under IND AS-24 "Related party disclosures" with whom transactions have taken place during the year

39. Key management personnel (KMP)

Mr. Pravin Agarwal

(Vice Chairman & Whole-time Director)

Dr. Anand Agarwal

(CEO & Whole-time Director)

Mr. A. R. Narayanaswamy (Non-Executive & Independent Director)

Mr. Arun Todarwal

(Non-Executive & Independent Director)

Mr. C. V. Krishnan

(Non-Executive & Independent Director) Avaantika Kakkar (Non-Executive & Independent Director)

Mr Pratik Agarwal (Non-Executive Director)

40. Relative of key management personnel (KMP)

Mr. Ankit Agarwal

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

Bharat Aluminum Company Limited Sterlite Power Transmission Ltd.

Hindustan Zinc Limited Twin Star Technologies Limited Sterlite Power Grid Ventures Limited Sterlite Grid 1 Limited

East North Interconnection Company Limited Jabalpur Transmission Company Limited Bhopal Dhule Transmission Company Limited Twin Star Display Technologies Limited Vedanta Limited Fujairah Gold FZE

Sterlite Power Technologies Private Limited Khaitan & Co. LLP Universal Floritech LLP Sterlite Tech Foundation

42. Additional related parties as per Companies Act, 2013 with whom transactions have taken place during the year (i) Key management personnel (KMP)

Mr. Anupam Jindal (Chief Financial Officer)

Mr. Amit Deshpande (Company Secretary)

43. FIRST TIME ADOPTION OF IND AS

These financial statements, for the year ended 31 March 2017, are the first the Company has prepared in accordance with Ind AS. For periods up to and including the year ended 31 March 2016, the Company prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP).

Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for period ending on 31 March 2017, together with the comparative period data as at and for the year ended 31 March 2016, as described in the summary of significant accounting policies. In preparing these financial statements, the Company''s opening balance sheet was prepared as at 1 April 2015, the Company''s date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its Indian GAAP financial statements, including the balance sheet as at 1 April 2015 and the financial statements as at and for the year ended 31 March 2016.

Exemptions Applied

Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has applied the following exemptions:

- Ind AS 103 Business Combinations has not been applied to acquisitions of subsidiaries, which are considered businesses under Ind AS that occurred before 1 April 2015. Use of this exemption means that the Indian GAAP carrying amounts of assets and liabilities, that are required to be recognized under Ind AS, is their deemed cost at the date of the acquisition. After the date of the acquisition, measurement is in accordance with respective Ind AS.

The Company recognizes all assets acquired and liabilities assumed in a past business combination, except (i) certain financial assets and liabilities that were derecognized and that fall under the de recognition exception, and (ii) assets (including goodwill) and liabilities that were not recognized in the acquirer''s balance sheet under its previous GAAP and that would not qualify for recognition under Ind AS in the individual balance sheet of the acquire. Assets and liabilities that do not qualify for recognition under Ind AS are excluded from the opening Ind AS balance sheet. The Company did not recognize or exclude any previously recognized amounts as a result of Ind AS recognition requirements.

- An item of freehold land has been measured at fair value at the date of transition to Ind AS being 1 April 2015. The Company has elected to regard the fair value of land as deemed cost at the date of transition to Ind AS.

- Since there is no change in the functional currency, the Company has elected to continue with the carrying value of its investment property as recognized in its Indian GAAP financials as deemed cost at the transition date.

- Ind AS 102 Share-based Payments has not been applied to equity instruments in share-based payment transactions that vested before 1 April 2015.

Estimates

The estimates at 1 April 2015 and at 31 March 2016 are consistent with those made for the same dates in accordance with Indian GAAP (after adjustments to reflect any differences in accounting policies). The estimates used by the Company to present these amounts in accordance with Ind AS reflect conditions at 1 April 2015, the date of transition to Ind AS and as of 31 March 2016.

Hedge accounting

The Company uses derivative financial instruments, such as forward currency contracts, currency/interest rate swaps and forward commodity contracts, to hedge its foreign currency risks, interest rate risks and commodity price risks, respectively. Under Indian GAAP, there is no mandatory standard that deals comprehensively with hedge accounting, which has resulted in the adoption of varying practices. The Company has designated various economic hedges and applied economic hedge accounting principles to avoid profit or loss mismatch. All the hedges designated under Indian GAAP are of types which qualify for hedge accounting in accordance with Ind AS 109 also. Moreover, the Company, before the date of transition to Ind AS, has designated a transaction as hedge and also meets all the conditions for hedge accounting in Ind AS 109. Consequently, the Company continues to apply hedge accounting after the date of transition to Ind AS.

Footnotes to the reconciliation of equity as at 1 April 2015 and 31 March 2016 and profit or loss for the year ended 31 March 2016: 1 Property, plant and equipment

The Company has elected to measure an item of freehold land at fair value of Rs. 50.96 crore at the date of transition to Ind AS. Hence at the date of transition to Ind AS, an increase of Rs. 45.46 crore (31 March 2016: Rs. 45.46 crores) was recognized in property, plant and equipment. This amount has been recognized against retained earnings net of tax.

The impact of componentization of items of property, plant and equipment of Rs. 18.93 crore has been disclosed under Ind AS adjustments. The same was considered in the Indian GAAP financial statements for the year ended 31 March 2016 based on the requirements of Schedule II to the Companies Act, 2013. The corresponding charge has been considered in Other equity of Rs. 12.38 crore (net of deferred tax of Rs. 6.55 crore)

Commercial property of Rs. 9.35 crore (31 March 2016: Rs. 9.19 crore) shown as fixed assets under Indian GAAP has been reclassified to Investment property under Ind AS.

44. Financial Assets - Loans

The Company has given loans to subsidiaries at lower than market rates of interest. Accordingly an amount of Rs. 3.73 crore being the difference between the nominal value of the loan and its fair value calculated based on market interest rate has been classified as equity investment of the Company in subsidiary. The differential interest is accrued as income over the period of the loan. Accordingly, as at the date of transition to Ind AS, Rs. 0.65 crore (31 March 2016: Rs. 1.03 crore) accrued interest income was included in the loan amount.

45. Other non-current financial assets

Interest free security deposits have been accounted for at Amortized cost using market rates of interest. The difference between the nominal amount of deposits and the Amortized cost as at the date of transition to Ind AS of Rs. 1.66 crore (31 March 2016: Rs. 2.76 crore) has been classified as prepaid expenses under other non-current assets. Interest income on deposits is recognized on EIR basis disclosed under Finance income and the prepaid expense is Amortized on a straight line basis over the period of deposit disclosed under Other expenses.

46. Other non-current assets

MAT credit of Rs. 25.95 crore (31 March 2016: Rs. 27.20 crore) shown under noncurrent assets in Indian GAAP as at the date of transition to Ind AS has been reclassified to deferred tax under Ind AS.

47. Financial assets - Investments

Under Indian GAAP, investment in mutual funds were measured at lower of cost and fair value. Under Ind AS, these are measured at fair value.

48. Other current financial assets / liabilities

The adjustments of Rs. 3.67 crore (31 March 2016: Rs. 2.77 crore) in Other current financial assets and Rs. 2.61 crore (31 March 2016: Rs. 4.77 crore) in Other current financial liabilities pertain to accounting for derivatives. The fair value of forward foreign exchange contracts is recognized under Ind AS, and was not recognized under Indian GAAP. The contracts, which were designated as hedging instruments under Indian GAAP, have been designated as at the date of transition to Ind AS as hedging instrument in cash flow hedges of either expected future sales or purchases for which the Company has firm commitments or expected sales or purchases that are highly probable.

The corresponding adjustment has been recognized as a separate component of equity, in the cash flow hedge reserve. On the date of transition, cash flow hedge reserve was credited by Rs. 1.85 crore on 1 April 2015 (31 March 2016: Rs. 2.28 crore) and net movement of Rs. 1.29 crore (net of tax) during the year ended on 31 March 2016 was recognized in OCI and subsequently taken to cash flow hedge reserve.

49. Securities premium

Under Indian GAAP, the balance in securities premium was utilised towards expenses on issue of non-convertible debentures. Under Ind AS, the NCDs are measured at Amortized cost using effective interest method. The difference between the carrying amount of NCDs under Indian GAAP and the Amortized cost under Ind AS as at the date of transition to Ind AS has been credited to securities premium.

50. Borrowings

Under Indian GAAP, transaction costs incurred in connection with borrowings are Amortized and charged to profit or loss over the period of the borrowings. UnAmortized costs were disclosed under Other assets. Under Ind AS, transaction costs are included in the initial recognition amount of financial liability and charged to profit or loss using the effective interest method.

51. Other financial liabilities

Under Ind AS, deferred payables for purchase of property, plant and equipment beyond normal credit terms have been measured at cash price equivalent and the differential amount is recognized as interest expense over the period of credit. Under Indian GAAP, such payables were recognized and measured at nominal amounts.

52. Non-current provisions

Under Indian GAAP, provisions were not discounted. Under Ind AS, provisions are discounted to present value, where the effect of time value of money is material.

53. Current provisions

Under Indian GAAP, proposed dividends including dividend distribution taxes are recognized as a liability in the period to which they relate, irrespective of when they are declared. Under Ind AS, a proposed dividend is recognized as a liability in the period in which it is declared by the company (usually when approved by shareholders in a general meeting) or paid. In case of the Company, the declaration of dividend occurs after period end. Therefore, the liability of Rs. 28.45 crore for the year ended on 31 March 2015 recorded for dividend has been derecognized against retained earnings on 1 April 2015. The proposed dividend for the year ended on 31 March 2016 of Rs. 47.57 crore recognized under Indian GAAP was reduced from provisions and with a corresponding impact in the retained earnings.

54. Trade payables and other current liabilities

For the purpose of Ind AS financial statements, certain amounts have been reclassified among trade payables, other current financial liabilities and other current liabilities based on the requirements of Ind AS. There is no change in the measurement of such amounts under Ind AS as compared to Indian GAAP.

55. Revenue from operations

Under Indian GAAP, Revenue from operations was disclosed net of Excise duty on sales of Rs. 131.07 crore for the year ended 31 March 2016. Under Ind AS, Revenue is shown gross of Excise duty and the amount of Excise duty is shown as expense in the Statement of Profit and Loss.

The Company changed the accounting policy for revenue recognition on telecom software solutions (software license sale and related services) to percentage of completion method (POCM) from the earlier method of recognizing products sale based on delivery and sale of services based on milestones achieved as per terms and conditions of the specific customer contracts. The effect of the above change (i.e. reduction in revenue by Rs. 8.07 crore) has been given retrospectively in the year ended 31 March 2016 as required by Ind AS - 8 "Accounting policies, changes in accounting estimates and errors". Further, provision for onerous contracts of Rs. 5.44 crore recognized under Indian GAAP in Other expenses has been reversed under Ind AS due to change in accounting policy to POCM.

56. Other expenses - Leases

The Company has evaluated an arrangement under the requirements of Appendix C to Ind AS 17 "Leases" for procurement of raw materials from a plant located in Company''s premises but owned by vendor. Based on such evaluation, the arrangement contains an operating lease. Accordingly, Rs. 3 crore being part of the amounts paid towards procurement of raw materials from the vendor plant has been reclassified to lease rent under Other expenses.

57. Employee benefits expense

Both under Indian GAAP and Ind AS, the Company recognized costs related to its post-employment defined benefit plan on an actuarial basis. Under Indian GAAP, the entire cost, including actuarial gains and losses, are charged to profit or loss. Under Ind AS, re measurements (comprising of actuarial gains and losses and the return on plan assets excluding amounts included in net interest on the net defined benefit liability) are recognized immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI. Thus the employee benefit cost is reduced by Rs. 3.34 crore and re measurement loss on defined benefit plans has been recognized in the OCI net of tax.

58. Finance income

Interest subvention received on certain short-term borrowings relating to exports has been re-classified to finance income under Ind AS.

Under Ind AS, Finance income has been shown separately. Under Indian GAAP, such income was disclosed under Other Income.

59. Other comprehensive income

Under Indian GAAP, the Group has not presented other comprehensive income (OCI) separately. Hence, it has reconciled Indian GAAP profit or loss to profit or profit or loss as per Ind AS. Further, Indian GAAP profit or loss is reconciled to total comprehensive income as per Ind AS.

60. Statement of cash flows

The transition from Indian GAAP to Ind AS has not had a material impact on the statement of cash flows.

61.Excise /Customs Matter Pending with Hon. Supreme Court

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 2016: Rs. 188 crores; 1 April 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.

62. Other Notes

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

64. The Company has spent an amount of Rs. 3.05 crores (31 March 2016: 2.23 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. 3.05 crores (31 March 2016: Rs. 2.23 crores), an amount of Rs. 2.71 crore (31 March 2016: Rs. 0.57 crore) was spent by way of contribution to Sterlite Tech Foundation, in which directors/senior executives of the Company and their relatives are trustees.

65. Acquisition and Amalgamation 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 29 September 2015, pursuant to share purchase agreement dated 22 September 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 29 September 2015 under the Scheme of Amalgamation (''the Scheme'') approved by Hon''ble Gujarat High Court vide Order dated 21 March 2016 and effective date 20 May 2016 (being the date of filing with Registrar of Companies).

The Company has accounted for the merger in accordance with the provisions of the Scheme as approved by the High Court whereby the assets and liabilities of ETPL have been recognized at their book values. 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 from the Appointed date as per the Court order.

As a result of the amalgamation, the financial statements of the Company for the year ended 31 March 2016 incorporate the operations of ETPL with effect from the Appointed date i.e. 29 September 2015.

66. Disclosure related to

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 Â 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 Â 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.

Disclaimer: This is 3rd Party content/feed, viewers are requested to use their discretion and conduct proper diligence before investing, GoodReturns does not take any liability on the genuineness and correctness of the information in this article

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