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
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
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
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
It is not practical to indicate the uncertainties which may affect the
future outcome and estimate the financial effect of the above
(*) 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
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
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
(a) Name of related party and nature of its relationship: (i)
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
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.