Sterlte Annualreport
Sterlte Annualreport
Sterlte Annualreport
tech
August 7, 2020
National Stock Exchange of India Limited BSE Limited
Exchange Plaza, 5th Floor, Phirozee Jeejeebhoy Towers,
Plot No. C‐1, G Block, Dalal Street,
Bandra Kurla Complex, Bandra (East) Mumbai ‐ 400 001.
Mumbai ‐ 400 051.
Subject: Submission of Annual Report and Notice of Annual General Meeting (AGM)
Ref.: Scrip ID ‐ STRTECH/ Scrip Code – 532374
Dear Sirs,
Further to our letter dated August 5, 2020 regarding intimation of 21st AGM and Book closure dates and pursuant
to Regulation 30, 34 and other applicable provisions of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 (‘Listing Regulations’), we are enclosing herewith Annual Report for the year
2019‐20 and Notice of 21st AGM of the Company to be held on Monday, August 31, 2020 at 3.00 P.M. (IST)
through Video Conferencing (“VC”) / Other Audio Visual Means (“OAVM”).
The Notice of the 21st AGM and the Annual Report are also being uploaded on the website of the Company at
https://www.stl.tech/
Kindly take the same on record.
Thanking you,
Yours faithfully,
For Sterlite Technologies Limited
Amit Deshpande
Company Secretary (ACS 17551)
Enclosure: As above
www.stl.tech
Forward-looking and Cautionary Statement
Certain words and statements in this report concerning Sterlite Technologies Limited (STL) and its prospects, and other
statements relating to STL’s expected financial position, business strategy, the future development of STL’s operations and the
general economy in India, are forward-looking statements. Such statements involve known and unknown risks, uncertainties
and other factors, which may cause actual results, performance or achievements of STL, or industry results, to differ materially
from those expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous
assumptions regarding STL’s present and future business strategies and the environment in which STL will operate in the future.
The important factors that could cause actual results, performance or achievements to differ materially from such forward-looking
statements include, among others, changes in government policies or regulations of India and, in particular, changes relating to the
administration of STL’s industry, and changes in general economic, business and credit conditions in India. Additional factors that
could cause actual results, performance or achievements to differ materially from such forward-looking statements, many of which
are not in STL’s control, include, but are not limited to, those risk factors discussed in STL’s various filings with the BSE Limited and
The National Stock Exchange of India Limited. The Company does not undertake to update any forward-looking statements that
may be made from time to time by or on behalf of the Company unless it is required by law.
3
In this report
Strategic Overview
3 4 6 8 10
Chairman's Letter to the Innovating Driving Transforming
Message Shareholders for Next-Gen Business Lives at Scale
Technologies Value
Optically
12 14 16 18 20
Board of Executive Advisory Awards and Financial
Directors Leadership Board Accolades Highlights
22 24 36 38 44
Financial Management Leadership Risk Responsible
Discussion Discussion Team Management Corporate
and Analysis and Analysis Citizenship
72 74
DQS- GRI Index
Independent and UNGC
Assurance Principles
Statement
Governance Reports
76 112 129
Directors' Corporate Business
Report Governance Responsibility
Report Report
Financial Statements
139 222
Standalone Consolidated
Financials Financials
1. Strategic Overview 2. 3.
Chairman's Message
Dear Shareholders,
This next-gen network would link multiple Indian naval sites and
It is with great pleasure that I bring to you the Annual Report of India-administered islands, along with setting up of a highly secure
STL - Sterlite Technologies Limited. During FY20, STL launched data centre ecosystem. In another large scale project, STL also
end-to-end solutions and delivered value to customer segments connected 16 Indian Army sites in Kashmir, India for national
globally to firmly solidify its position as a leading integrator of security purposes.
digital networks.
STL also recently transformed Kakinada, a city in Andhra Pradesh,
The digital connectivity reached greater heights last year, India, into a smart city with technologies for mobility, situational
accelerated even further by the global lockdowns, and led to awareness, traffic control, smart lighting, public safety and security.
technological breakthroughs that have the potential to transform
humankind. These breakthroughs are a result of high-capacity Navigating a pandemic
networks backed by deep fibreisation and network value chain. Towards the end of FY20, we came across a global pandemic
STL is leading this front by integrating digital networks for that transformed the way we live, work, and interact. COVID-19
customers – global telcos, cloud companies, large enterprises, created a cloud of uncertainty surrounding several socio-
and citizen networks. economic aspects across the globe. While we continue to
navigate the pandemic, I am extremely pleased to see the way
Enabling digital inclusion for millions STL has been responding to the crisis.
STL’s continuous pursuit of transforming lives with digital networks
only grew further in the last financial year. Through strategic The Company undertook all necessary steps to ensure the
collaborations and initiatives, the Company has enabled the digital safety and wellbeing of its people. STL continued to interact
inclusion of millions of people worldwide. with its customers and partners and ensured its promises were
delivered on time.
In India, STL connected holy caves of Amarnath from Pahalgam
as well as Baltal to provide 4G services to everyone during the While employee wellbeing and customer engagement were STL’s
pilgrimage. STL delivered a comprehensive network design for priorities during the crisis, I am glad to share with you that the
Mahanet, an initiative to bring digital connectivity in the state of Company went above and beyond their call of duty to help the
Maharashtra. Garv, the rural-connectivity platform of STL, is using community. From creating disinfectants in-house to organising
the power of technology to provide a multitude of community- online awareness sessions for thousands of people through
centred services in many Indian villages. STL was also recently Project Savdhaan, STL made sure it became a valiant soldier in the
awarded the mandate to create a high-speed rural broadband fight against COVID-19.
network from Telangana Fibre Grid Corporation Ltd. (T-Fiber) to
provide affordable and high-speed broadband connectivity to Building networks of the future
6 million rural citizens in Telangana, India. With the spread of COVID-19, the Internet connectivity has
become the lifeline for billions of people around the world.
In South Africa, STL partnered with Frogfoot to provide Fibre To Also, emerging technologies such as artificial intelligence,
The Home (FTTH) infrastructure, enabling affordable, reliable machine learning, and 5G are now being adopted everywhere.
broadband connectivity to up to 20,000 homes and lower income This presents us with a perfect opportunity to truly transform
groups in the Protea Glen East and West areas of the South everyday living by delivering smarter networks.
African township of Soweto.
I am extremely excited for STL to play a role in building
Strengthening the power of Digital this future! I look forward to your continued support and
STL is working with large enterprises to build and modernise their encouragement in this journey – to become world’s leading
digital networks, enabling them to leverage the technologies of integrator of digital networks.
future. The Company is tirelessly working on Varun, a project to
develop the Indian Navy's communications network.
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Sterlite Technologies Limited
New global wins built a robust order book for STL across Innovation is in STL’s DNA
all customer segments—global telcos, cloud companies, citizen STL aims to create world-class solutions that can provide next-
networks and large enterprises—and key deals included T-Fiber generation connected experiences. Last year, STL launched 4
for rural broadband in Telangana, Telekom Albania digital End-to-end solutions, including Opticonn for integrated Optical
transformation and multi-million dollar contracts in India, Europe Connectivity and Netmode, for overall network upgrade and
and the Middle East modernisation. It also added 93 global patents to its credit,
taking the total tally to a very impressive 358* as of FY20.
Strategic transformation to solutions-driven
account-based organisation with end-to-end solutions STL Academy is also playing a key role in nurturing knowledge
that integrate optical interconnect products, virtualised access and innovation. The Academy is working tirelessly to create a
products, network software products and system integration certified talent pool of smarter network professionals. STL also
services. This has expanded the total addressable market, undertakes several initiatives where it collaborates with startups
including large-scale transformational projects and innovators to brainstorm and come up with breakthrough
technologies to handle digital network needs of the future.
Leading a Strong Ecosystem for Next-Gen
Solutions Zero Waste to Landfill
The technology landscape is changing fairly quickly and STL’s commitment to sustainable manufacturing recently won us
networks will have to be ready to adapt to the rapid evolution. a ‘Zero Waste to Landfill’ Certification by Intertek (US), a leading
STL has made key investments and collaborations to enhance Total Quality Assurance provider to industries worldwide.
its expertise to provide future-ready network solutions. The Company’s manufacturing plants in India—Rakholi
and Dadra, Silvassa and Shendra, Aurangabad—became
STL invested in Cloud and Data Centre technologies with the world’s first integrated Optical Fibre Cables, Speciality
acquisition of Impact Data Solutions (IDS), a UK-based company Cables, and Optical Fibre manufacturing facilities to win the
that provides infrastructure for hyperscale data centres. The international certification.
acquisition solidified STL’s position in the cloud and data centre
markets, as well as giving it access to two of the top global
cloud providers.
a) from predominantly entertainment to enterprises and cloud Cloud companies are looking to advance their data centre
use cases hyperscale connectivity to come up with comprehensive
solutions for communication, collaboration and business
b) from download only to symmetric uploads and downloads –
process, while ensuring security and privacy.
boosted by video conferencing
c) from asynchronous to real-time use cases, requiring Citizen networks are making heavy investments in expanding
instantaneous response time the broadband footprints to drive Internet penetration to nearly
50% global population that is still digitally disconnected.
d) from office networks to ever increasing home networks
usage
The next generation of networks are shifting towards network
e) an increase in traffic by 60-70% in the past few months densification, edge compute, open source and virtualisation.
We are at the center of this massive digital transformation,
The businesses are also identifying the right mix of virtual and we have a great opportunity to deliver the Next-Gen
collaboration tools to be able to work with employees and Digital Network - by being the world's leading integrator
partners. The digital strategies have been revamped and new of digital networks.
investments are being made to adapt to the changing needs to
employees, customers and partners. Thank you, shareholders, for your ongoing support and we
assure you we will continue to strive to transform everyday
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Sterlite Technologies Limited
Innovating
for Next-Gen
Technologies
STL, a leading global integrator of
digital networks, has innovation,
technology and transformation at DIGITAL NETWORKS AS A FOUNDATION
its core. The Company’s capabilities Designing and integrating digital networks is at
the very core of STL’s business. The Company
and solutions span all network layers is partnering with governments, defence and
from Optical Interconnect, Virtualised telecom companies to create transformational
impact in areas such as digital inclusion, homeland
Access Solutions to Network Software security and next-gen telecom networks.
and System Integration. STL is
Defence-grade smart networks
constantly innovating in the field of With STL’s success in delivering an intrusion-proof network
digital networks, thereby creating (Project NFS - Network for Spectrum) for the Indian Army, it is
now building a highly resilient, secure, converged and modern
unique value for its customers, MPLS network for the Indian Navy. This network will strengthen
shareholders, communities and the India’s naval defence capabilities, as well as homeland security
and lay the foundation for a digitally supreme Indian Navy.
nation at large.
Nation-wide rural connectivity
BharatNet, one of the most critical step towards Digital India,
aims to provide on-demand, affordable broadband connectivity
to 250,000 Gram Panchayats across the country. With STL’s
technology-led network rollouts using innovative applications
such as drone-based surveys, augur drilling, robotic ducting
and blowing, the Company is creating transformational impact
through projects such as MahaNet and T-Fiber. These digital
inclusion initiatives reach 50+ million rural Indians over
80,000 kms of optical fibre network and will pave the way to
rural growth and prosperity.
250,000 50MN+
Gram Panchayats provided Rural Indians impacted
on-demand, affordable under digital inclusion
broadband connectivity initiatives
under BharatNet
dSmartMobility With STL way of design and execution, the Company is focused
on creating next-gen data centres. Its differentiated capabilities
Seamlessly decongesting networks include design, end-to-end build-outs and networking, and
during the COVID-19 pandemic
interconnect services. With STL’s capability acquisition of Impact
Data Solutions, UK, it has made headway into key areas like
containment and inside data centre connectivity.
Build an online marketplace fit for 5G
As the industry undergoes massive transformation and with
STL is a trusted technology partner to two of the world’s leading
5G bringing in unique opportunities that render traditional
cloud companies for their hyper-scale data networks. One of
models obsolete, a digital marketplace model holds the
its clients wanted to set up a top tier data centre infrastructure
key to unlock potential. Telcos have to rapidly adopt new
within stringent budget and delivery timelines. The Company’s
business models that allow the flexibility to perform real-
experience in design consulting and installing hyperscale data
time content changes, and launch product offerings and
centres across 2,500+ data centre projects, enabled it to deliver
promotions quickly. Recently, STL’s digital marketplace
a purpose-engineered solution spanning data centre set-up
solution was implemented as a Proof of Concept in one
and hot & cold aisle containment services, including seamless
of Japan’s largest e-commerce players. The Company’s
onboarding on client’s colocation facilities.
continued focus on creating value for telecom companies
is spurring a wave of innovative software offerings
for our customers.
2,500+
Projects as part of the Company's
experience, in terms of design
consulting and installation of
hyperscale data centres
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Sterlite Technologies Limited
Driving
Business
Value
Optically
The Internet connectivity has OPTICAL INTERCONNECT
become the 4th basic need of Essential technology for high-bandwidth
data connections.
humankind. Optical Interconnect
solutions form the backbone that Global data usage is growing at unprecedented rates and the
global COVID-19 situation has accelerated this further. As cities
connects people, homes and go into lockdown and working from home becomes the norm
businesses around the world. data traffic is becoming more distributed and traffic patterns
more symmetric leading to new enterprise and consumer use
cases. This new connectivity dependent reality needs solutions
With 25+ years of experience driven by the convergence of wired and wireless networks - all
in optical fibre innovation, powered by high capacity optical digital networks.
25+ 4
Years of experience Innovation centres to
as a leading solutions design and develop
provider for optical cutting-edge technology
networks products
Customised
Cable design to fit different field
conditions, meeting the project-
specific application requirements
Best suited
For outdoor applications, including
plant automation, transportation, city
surveillance and WiFi hotspots
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Sterlite Technologies Limited
Transforming
Lives at Scale
Amidst COVID-19, STL's priority was to
ensure the wellbeing of its ecosystem:
employees, customers and partners.
It was one of the first companies in India
to announce Work from Home.
Enrolled students under PMG DISHA Enrolled people under state governments’
programme to improve the digital literacy employment exchange programme
11
Sterlite Technologies Limited
Board of Directors
Creating sustainable
value for business
13
Sterlite Technologies Limited
Executive Leadership
Nischal Gupta
Chief Transformation Officer
Given his global experience in business transformation, Nischal
drives STL by inseminating best of breed processes, technology
platforms, data science techniques including AI/ML concepts
and strategy execution. He joined STL in 2017.
15
Sterlite Technologies Limited
Advisory Board
Leveraging
trusted insights
STL’s Advisory Board includes eminent industry leaders
from the global telecom and data networking industry
who guide our decision-making.
Sandip BS
Das Shantharaju
Many skills
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Many cultures
Many views
One company 17
Sterlite Technologies Limited
Recognitions that
make us proud
Awards recognise the impact of our efforts. STL takes pride
in innovation, people initiatives, industry best practices, and
sustainability measures. We are honored to be recognised for
our success as we continue our journey.
Financial Highlights
Sustaining strong
momentum
Guided by our purpose, we are building on our strong fundamentals
to deliver into sustained and shared progress for all stakeholders.
We are sharpening our financial resilience, to ensure that the
business remains nimble, agile-footed and empowered to tap into
emerging opportunities.
REVENUE EBITDA
CAGR 23% CAGR 23%
C crores C crores
4,000 800
789
3,205
542
3,000 2,594 600 475
2,275
2,000 400
1,000 200
0 0
FY16 FY17 FY18 FY19 FY20 FY16 FY17 FY18 FY19 FY20
EBIT ROCE
CAGR 23%
C crores %
969 34
1,000 35
30
813 30
800
606 25 22
20 21
600 20
350 383 15
400
10
200
5
0 0
FY16 FY17 FY18 FY19 FY20 FY16 FY17 FY18 FY19 FY20
Consolidated Numbers
Growth % NA 14 24 59 1
PAT (After minority interest) C crores 154 201 334 563 472
PAT (After minority interest) $ million 21.7 28.4 47.1 79.3 66.5
Ratios
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Sterlite Technologies Limited
Positioned for
stable growth
The world is moving towards more technological advancement
day by day. We can see now that 5G mobile is now commercially
available across global markets and it is estimated that by 2025,
20% of all connections will be on 5G.
Along with 5G roll outs, operators are also focusing on INTEGRATED APPROACH TO SOLVE CUSTOMER PROBLEMS
strengthening the existing networks. Further, there is a surge
in the internet traffic by 30-40% and in the cloud demand as
more amount of work is done from remote places nowadays.
This is expected to grow further and change the way of working
Optical
across the globe. Connectivity
Solution
To grab these opportunities, STL is re-organising its business,
Network Fibre
expanding its portfolio of four offerings and developing end-to- Modernisation Deployment
end solutions for its customers. These four solutions are STL’s Solution Solution
The Company also sowed the seeds of future growth with Financials at a glance
the launch of the next generation of solutions. STL entered C in crores
partnerships with VMware as well as IIT Madras. It acquired
IDS Group, which is a data-solutions company based out of 2019-20 2018-19
Growth
Y-o-Y
the UK and made an investment in ASOCS, which is a virtual
radio access network company based out of Israel. The Particulars
Company has also launched new product named ‘Stellar’ the
Gross revenue 5,154 5,087 1%
industry's first universal fibre. This leading-edge innovation
from STL's optical connectivity solutions guarantees best-in- EBITDA (Before exception) 1,104 1,164 -5%
class data transfer, negligible data loss even with high-fibre
PAT (After minority interest before exception) 472 563 -16%
bends and compatibility with all fibres in use.
PAT (After minority interest) 434 563 -23%
The increase in focus on 5G rollouts by Telcos,and EBIDTA margin (%) 21% 23%
strengthening of the existing network and a shift towards
EPS (Diluted) (D) 10.64 13.83 -23%
digitisation by non-telco companies will create an enormous
amount of opportunity for STL in the global market. Net profit margin (%) 9% 11%
The Company will leverage its global presence and
ROCE (%) 22% 34 %
strong portfolio offerings to provide end-to-end
solutions to customers.
Gross revenues
STL recorded highest-ever revenues of C 5,154 crores during
the year under review, registering marginal growth year-on-
year. The revenue growth was secular, driven by all business
units. Export revenue for the year was C 1,779 crores. India,
Europe and China now account for more than 90% of the
Company’s revenues.
matter of C 188 crores demanded by CESTAT in 2005-06 which Cash & bank balances 245 234
the Company was contesting at Supreme Court, and also some Others including loans & advances 1,312 1,653
other litigations under Central Excise Act, 1944 and Chapter Total current assets (A) 3,805 3,934
V of Finance Act, 1994 which were pending as of June 30,
Total current liabilities (B) 2,714 3,185
2019. Based on the provisions of SVLDRS, Management has
determined the duty payable in respect of all matters offered Working capital (A-B) 1,091 749
23
Sterlite Technologies Limited
Page 31 Page 32
The global pandemic has made the shift to digital INCREASE IN TRAFFIC
permanent. For the majority of organisations across the • Increase in network traffic globally
by 60-70%
globe, digital disruption is no longer a concern but the new
• Significant amount of this traffic from
normal. The Internet and data are now so all-pervasive and enterprise applications like video
ubiquitous that it can be safely considered as the fourth conferencing, collaboration tools
utility, alongside water, gas and electricity. At no time in • Increase usage of web based
applications on the cloud
recent history, has this been more evident than in the recent
COVID-19 pandemic, where the interconnectedness and
resiliency of data networks have been the limelight and
has enabled the shift to remote working. In the medium LOW LATENCY REQUIREMENT USAGE PATTERNS SHIFTED
• The data consumption patterns
to long term, as the world emerges from this crisis, the • More enterprise applications
have shifted to residential localities
Company anticipates that some of these shifts in mindset are moving to cloud, requiring
amid an upsurge of home internet
instantaneous response time
and behavioural changes will carry on. The onus will be on and video streaming services,
telecom sector companies, ancillaries, OEMs and government resulting in network congestion
95% 11GB • Monthly data usage per user has increased ~14 times
Of total data traffic Current monthly over the last four years (800 MB to 11 GB)
consituted by 4G, data usage per user
across all categories • More than 30+ OTT platforms in India, Indians access
Source: India Mobile Broadband Index 2020 OTT platforms 12.5 times per week and consume
70 minutes per day
GLOBAL IP TRAFFIC GROWTH
Zettabytes
Exponential Growth
12
9.97
10
7.76
8 6.04
4.70
6
3.82
3.04
4
1.87 2.41
1.06 1.40
2 0.87
0.60 0.72
0.34 0.46
0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Source: International Data Corporation (IDC)
25
Sterlite Technologies Limited
EDGE
At the Edge
Close to the Edge
500+
Hyperscale data centres
in the world currently
27
Sterlite Technologies Limited
LARGE CLOUD
Another prominent trend in this space is the move towards
ENTERPRISES COMPANIES virtualisation. The adoption of Network Functions Virtualisation
(NFV) or Software-Defined Networking (SDN) will require
Communication Service Providers (CSPs) to increase their
spending on data centre systems to support virtualised
Global telecom companies network functions.
Telecom global capex had been plateauing in the wake of
completion of 4G rollouts. However, operators worldwide may
now have to contend with the next wave of capex infusion Citizen networks
driven by aggressive 5G rollout plans and FTTH rollouts. High-speed broadband networks that enable the rapid
Telecos across key economies are investing in 5G exchange of information and knowledge are crucial for
• China has been a trailblazer in embracing 5G. While 5G was economic growth. Nowadays, these networks are as important
launched only in November 2019, the three operators (the for our economic and social development as utilities like
state-owned China Mobile, China Unicom and China Telecom) electricity, road and rail networks, etc. Rural areas stand to
in the country have already signed more than 40 million 5G gain, especially from broadband and the opportunities it offers.
subscribers. All three operators have aggressive 5G rollout Access to a high-speed broadband infrastructure provides
plans for the year and they have recently (April 2020) awarded a basis for innovative broadband services offering high
contracts worth more than $10 billion for 5G economic returns, e.g. in the eWork, eGovernment, eHealth and
eLearning sectors.
• Verizon (USA) has gone live with 5G in parts of 31 cities using
ultra-high-speed, low-area mmWave technology As such, governments across the globe are focused on
investing in/subsidising network build outs (especially FTTH)
• T-mobile (Germany) has launched 5G selectively in rural areas.
and is following a ‘full layer cake’ strategy as their 5G
Governments undertake rural area digital network
customers can tap in to low-band 5G, mid-band 5G and
investments globally
mmWave 5G airwaves
• The UK government has promised to invest £5 billion to help
• Vodafone UK launched its 5G service in July 2019 in seven spread ‘gigabit-capable’ broadband Internet Service Provider
cities. As of today, Vodafone offers 5G in 41 cities (ISP) networks to the hardest-to-reach 20% of the country,
• South Korea, one of the earliest movers in 5G has reached a i.e., rural and non-metropolitan areas
5G penetration of 9.67%, representing the highest penetration • Federal Communications Commission (FCC), USA announced
rate around the globe and acquired ~6 million subscribers. The $20.4 billion Rural Digital Opportunity Fund. This funding
South Korean government announced that the country’s three would be used over a period of 10 years to provide gigabit
major telecom carriers (SK Telecom, KT and LG Uplus) had connectivity to rural areas
agreed to invest $3.4 billion in their 5G networks during the • Government of India launched ambitious National Broadband
first half of this year Mission (with investments of up to C 7 lakh crore) to provide
Telcos may in future also have to fend off competition from broadband access to all Indian villages, fibreisation of towers
web giants like Microsoft, Google and Facebook as they (from 30%–70%) and enhancing tower density
are launching their own connectivity propositions, via own
Cloud companies
Cloud companies are continuing to invest
Edge computing
heavily, building massive hyperscale data
While hyperscale build is not showing any
centres. As per estimates, there are more than
signs of slowdown, another appreciable trend
500 hyperscale data centres in the world today
that has emerged recently is edge computing.
with 150 more on the way.
The rapid growth of data-hungry applications
and IoT-related data, along with the continued
Notable investments in hyperscale
growth in Content Delivery Network (CDN) traffic,
data centres:
is certain to result in robust demand for edge data
• Equinix, Inc., a global interconnection and
centre services. Edge computing is expected to
data centre company, and GIC, Singapore’s
be an $18 billion business by 2022. Several telcos
sovereign wealth fund, have entered into
and cloud companies have already made forays
a partnership deal to form a joint venture
into edge computing. Telcos specifically see
to develop and operate hyperscale data
a synergy in bundling edge data centre build
centres in Japan
with 5G deployment.
• Google has opened new data centres in
Northern Virginia and Tennessee in 2019,
and broken ground for future campuses
$18 Bn
Expected size of edge
in Texas, Ohio and Nevada. It had plans computing business
to invest $13 billion in new data centre by 2022
campuses in 2019. The Company now has
19 data centre campuses around the globe, Telcos focus on edge computing
with 11 in the US, five in Europe, two in Asia- • Microsoft launches Azure Edge Zones.
Pacific region and one in South America. These are meant to bring that consistency to
applications that need to run at the edge for
• Amazon has plans to plough $1.6 billion extremely low latency
and stand up two data centres in
• AT&T is deploying Edge and 5G together
Hyderabad, India
(working with cloud service providers to add
• China’s biggest cloud computing provider, edge compute technology into network centres
Alibaba Cloud, will invest a whopping as they are upgrading them for 5G deployment
$28.2 billion in cloud infrastructure and • Verizon is rolling out 5G edge computing
the construction of data centres over architecture that will allow AWS developers
the next three years as it prepares to to build digital applications at the edge
help digital transformation efforts in a of Verizon’s 5G network. This is being
post-pandemic world trialled in Chicago
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Sterlite Technologies Limited
Large Enterprises
Defence forces
There is a great deal of focus on network build and • Increased readiness to cyber warfare through enhanced
modernisation in India’s defence forces. Of particular interest in network security
this context is the institution of Office of Chief of Defence Staff
(CDS) with the aim to integrate the operations of the three forces India’s defence forces has prioritised network modernisation of
i.e. Indian Army, Indian Air Force, and the Indian Navy. its Navy, Army, Air Force and Border Security Force, all building
With approval of the CDS, India will also have joint military secured digital networks. Total IT/ITES budget annual budget
commands to bring jointness in operations, logistics, transport, for network modernisation is in the range of C 12,000 crores
training, support services, communications, repairs and according to our estimates.
maintenance. STL believes that this could be a catalyst for:
STL works extensively with the defence forces today, but any
• Bringing defence forces existing communication network enterprise—big or small, public or private—that needs a private
to similar level of maturity network is the Company's prospective customer. For instance,
we are seeing significant network creation by Railways and by
• Driving interoperability in the upcoming network companies in Power & Utilities sector as well
upgradation projects
COVID-19 has accelerated While the synchronised ‘Great Lockdown’ impacts most
industries globally, the telecom sector will be among the least
investments in digital networks affected. Even as CY20 spending will take a hit, it is expected
Over the last couple of decades, the Internet connectivity has that there will be a strong revival of spending in CY21 (driven by
become the lifeblood of global economies, fuelling innovation FTTH and 5G capex).
and technological advancement. Amidst COVID-19, the need for Operators had committed significant capex outlay for 5G.
ubiquitous connectivity increased exponentially. As remote working While the spread of COVID-19 has raised concerns, large
became the new norm, data consumption increased globally operators are still going ahead with these commitments such as:
with education services, healthcare, entertainment and so on. • 5G spending in China has started again and the
top three telcos of the country have come out with
multi-billion-dollar 5G contracts
SUBSCRIBER ADDITIONS
(Mn) • Japan launched its 5G network in March 2020
6 There is a slew of Fibre-to-the-x (FTTx) rollout projects with
massive funding that are currently underway, including Open
Reach; City Fibre; UK Government’s gigabit connectivity
4
funding of $5 billion; FCC’s funding of rural digital opportunity
of $20.4 billion; Virgin Media’s gigabit connectivity
2 rollout and many more.
Data centre demand and usage is also clearly surging. Data
0 centres will benefit in the wake of new norms (WFH, OTT,
Jan-15 Feb-1 Mar-1 Apr-1 video conferencing) and ‘forced adoption’ by laggards (like the
government, retail and others).
Zoom Google Classroom
Microsoft Teams Hangouts Meet • Google Q1 cloud revenues up 52% compared to last year
Source: Apptopia
• Microsoft Q3 revenue in the Intelligent Cloud segment—
which includes Azure—rose 27%. Overall cloud
revenue grew by 59%
NETFLIX NET SUBSCRIBER ADDITIONS This in turn has led to hyperscale players increasing spend on
(Mn) new data centres, like
Q1 2020
+15.8 • Amazon Web Services, has applied for fast-track
16 planning permission to build three more data centres in
14
Northern Virginia
12
10 • Chinese company, Alibaba revealed that it will invest
8 7.4 ¥200 billion ($28.26 billion) in its cloud computing division
6.7
6 5.2 5.0 over the next three years
4 3.5
2.5 3.0 As a result of social distancing, home confinement and remote
2 working policies that many governments have adopted as
0 part of the Great Lockdown, there has been a massive surge
2013 2014 2015 2016 2017 2018 2019 2020
in usage of Information and Communications Technology
Source: Apptopia (ICT) services.
31
Sterlite Technologies Limited
STL has systematically built unique capabilities over the last Most analysts believe that there will be a reduced capex spend
25 years—optical connectivity, large-scale digital network from telecom companies immediately after the pandemic
integration and virtualised wireless capabilities. With this unique subsides. However, there is almost complete unanimity
value proposition, the Company is gaining global prominence as in the assertion that the capex will increase fast and at
a leading integrator of digital networks. steady pace after that. The rest of STL's customer segments
have all projected robust capex growth to address the
increased data demand.
LARGE-SCALE
NETWORKS SYSTEM INTEGRATION
10 YEARS NETWORK DESIGN & INTEGRATION
SOLUTIONS
OPTICAL VIRTUALISED
INTERCONNECT WIRELESS
=
25 YEARS (Software Cloud)
Extraordinary 3 YEARS DIGITAL
track record Strategic alliance and
Globally respected product development NETWORK
INTEGRATOR
EDGE
Close to the Edge
At the Edge
CONVERGED
STL CAN
Seamless, Wired & Wireless
Optical & Radio
INTEGRATE
COMPUTE
Enhanced Experience
Connectivity & Compute ALL THESE
DISAGGREGATED
TECHNOLOGIES
Agile, Scalable, Agnostic
Hardware & Software
33
Sterlite Technologies Limited
Technology-led integrated end-to-end solutions thereby creating a unique company in the world, which provides
With its enhanced capabilities and deep expertise, STL brings end-to-end integrated digital network solutions.
together best-in-class offerings. Our services portfolio includes right
from integrated silicon to fibre; modular customised kit; innovative STL's customers are evolving and so are its solutions to serve
cable design in the passive layer to end-to-end designing and them. The Company combines its four portfolio offerings – Optical
building network within the services layer; and the next-gen OSS/ Interconnect, System Integration, Access Network and Network
BSS and open sourced-virtualised access within the software layer, Software to create integrated end-to-end solutions that address the
requirements of its customers.
END-TO-END SOLUTIONS
• Product suite design • Large scale design • Design for scale, latency, agility • Comprehensive network
• Fibre and cables • Fibre rollout • Rollout, activation redesign
• Interconnect • Activation • Programmable open • Future readiness
• Logistics • Management orchestration • Transport, compute, security
for all network topologies for core network for fibre access network for enterprise network
PORTFOLIO OFFERINGS
Customer Problem
Statement Network BSS dTelco
Software Products
To connect fibre to
the premises P OSS (MANO)
Virtualised O ONT (CPE)
In least time Access Products D Virtualised OLT
Innovation-driven diverse technology talent could not have been possible without the contribution of each
STL's employees are at the core of its efforts to create a world and every STLer. Over 100 STLers have been working with the
with next-generation connected experiences that transform Company for more than two decades and have played a major
everyday living. Fondly known as STLers, its talented and diverse role in STL becoming a leading integrator of digital networks.
workforce thrives in a work culture built on diversity, equality and Their talent, dedication and commitment reaffirms STL's vision of
inclusion. More than 3,000 STLers from over 30 nationalities are transforming everyday lives through key account management
driven to build technologies that would define future networks. based approach, and deep focus on technology innovation and
The Company's journey of 25 years of optical fibre business customer engagement.
Celebrating 25 years
of optical fibre for high
quality digital networks
35
Sterlite Technologies Limited
Leadership Team
37
Sterlite Technologies Limited
Risk Management
BOD
Risk
Risk
Identification
Committee
Risk Risk
Monitoring Assessment Chief Risk Officer
and Reporting
Functional Unit
ERM Activities
Risk management includes activities relating to
identification, assessment,
response, and monitoring and reporting of risks.
Strategic Risks Operational Risks
Geo-political Talent
Risk Identification and Economic, Management,
This involves identifying those events, occurring internally Industry, Customer Service Delivery,
and Competition, Supply Chain,
or externally, that could affect strategy and achievement of Product Portfolio Cyber Security
objectives. Events identified are further categorised into: and Innovation
Risks
• Strategic Risks
• Operational Risks Compliance Financial and
• Financial and Reporting Risks Code of Business Reporting Risks
Conduct, Bribery Financial Reporting,
• Compliance Risks and Corruption, Liquidity, Commodity,
Environment, Tax Interest Rate,
The risk assessment also includes ‘business interruption risk’ (GST, Income Tax) Foreign Currency,
caused by COVID-19 pandemic. Counter Party
39
Sterlite Technologies Limited
Risk Management
COVID-19 has resulted into unprecedented level of uncertainty and business interruption (impacting supply chain,
restriction on movement of goods and people, prolonged lockdown and closure of manufacturing and economic
activities), which have negatively impacted the global GDP growth. The Company has proactively put in place a
Business Continuity Plan with clear focus on:
While the impact of COVID-19 pandemic on the industry and the Company’s outlook may not be assessed precisely,
STL continues to review, as the situations evolves and implement necessary risk mitigation strategies.
Strategic Risks
Strategic risks are inherent to an industry in which we operate. They are analysed and mitigated through strategic actions on
markets and customer offering, investment in R&D and product innovation, business model, etc. STL periodically assesses
strategic risks to the successful execution of its strategy and its impact on financial performance, effectiveness of organisational
structure and processes, retention and development of high-performing talent and leadership.
Geo-political and Economic Risk Customer and Competition Risks Product Portfolio and Innovation Risks
The Company operates in a global The market is competitive with few There is a risk that the Company may
environment, and can be affected by barriers to capacity expansion by be unable to develop new products
the general economic environment, existing players. Globally, most of the and solutions, which can proactively
political uncertainties, local business risks contracts are finalised through the meet customer’s unmet needs. In a
as well as laws, rules and regulations competitive bidding process, therefore, fast-changing world, a new technically
in individual countries that affect the product pricing become an important improved variant of the product or
demand for its offerings. STL is closely factor. While the Company dominates solution by STL’s competitor could put
monitoring the development on world in this segment, it does not have much its prospects at risk. To minimise the
events and taking pro-active actions to pricing power due to low global market impact of these risks and pursue new
minimise the potential negative impact. share. STL is expanding its capacity opportunities, STL continues to invest
and continuing to focus on increasing in new technologies and capabilities
Industry Risk its market share through access to new through ecosystem partnerships and
STL may not be able to implement markets, new product development investments. In addition, it is continuously
its strategy successfully and deliver and enhancing its client footprint. The investing in its existing product
growth due to changes in the industry Company closely monitors technological portfolio and large innovation projects.
in which it operates. The Company’s advances and competitive market Key innovation projects are closely
business depends on capex spend changes to adapt its organisational monitored, with a well-established gate
by telecommunication sector, which strategies to be able to benefit from and project management approach.
includes investment in backhaul, rollout these opportunities and safeguard Further, it also aims to execute value-
of new generation of mobile network against potential threats. STL has creating Mergers and Acquisitions (M&A),
and investment in fibre infrastructure implemented solution driven ‘Account to further develop its technology-led end-
and deployment. STL continues to invest Based Organisation’ with four end-to- to-end solutions.
in its product portfolio and capabilities end solutions—Optical Connectivity
to increase the total addressable (opticonn), Fibre Deployment (Lead 360),
market. Further, it is expanding its FTTx Access Network (FTTx Mantra) and
technology-led end-to-end solution and Network Modernisation (netmode)—
key account management to focus on to be the preferred partner of choice
principal customers across four crucial for its customers.
customer segments.
Operational Risks
Operations risks can negatively impact the operations of STL. These risks are related to people, policies, procedures, IT systems
affecting the product and service delivery to its customers. One of the focus areas is to transform STL’s business through processes,
platforms and analytics. The Company has strong mechanism in place to review the operations, including business processes and
procedures to minimise the risk relating to product and service delivery to customers.
Talent Management Risk Despite this, there is a risk that it may not Moreover, it is developing a network
STL’s ability to successfully implement be able to complete its projects within of logistic service providers, global
its strategy and deliver value and growth the contractually agreed timelines, which and local distribution centres, which
is highly dependent on the Company’s can result in penalties and in a remote augment STL’s manufacturing facilities
organisational structure, ability to scenario, contract termination. Such and delivery network to help it reach
attract, develop, engage and retain outcomes may result in lower revenues, faster to customers.
best professional talent with a focus on margins and adverse brand image.
diversity. STL has undertaken significant Cyber Security Risks
steps in building capabilities and talent Supply Chain Risk Cyber security risk is one of the key risks
pipeline for the future. It implemented an With the global reach and scale of as cyber threats continue to develop
agile and high performing team, which STL’s operations, it is important for the and become more sophisticated. Cyber
includes implementation of a customer- Company to have a smooth functioning security incidents include data theft,
centric ‘Account Based Organisation’. supply chain as disruptions in its ransomware (monetary/reputational
In addition, it has built a future talent manufacturing, delivery, logistics or losses), business interruption by malware,
pipeline through a structured succession supply chain can negatively impact its phishing and availability of IT systems.
planning process for the Top 40 critical revenue and reputation. Additionally, The Company has implemented a
roles in the Company. STL also rolled significant fluctuation in timing and depth in defence approach to manage
out a Hi-Potential programme for Top placement of orders by customers can and control these risks which include a
25 Young Talent to accelerate their also impact STL’s planning and fulfilment multi-year programme that focuses on
development and build young leaders. of the orders. There is also a risk of a cyber security resilience and capability.
To build the capability index of STL single or limited source for a few input The programme is addressing cyber
on critical future skills, it rolled out materials. STL has implemented digital security by looking at risk identification,
an organisation-wide development tools like SAP Integrated Business assessment, response and recovery
programme on critical thinking and Planning (IBP) for scenario-based taking account of people, tools and
structured problem-solving. STL has planning and forecasting and SAP-ARIBA technology, and processes. During the
invested in an e-learning platform to for end-to-end procure-to-pay process last two years, STL has implemented
imbibe a learning culture, enabling its and vendor management. Procurement many solutions around the emerging
talent to upskill and reskill themselves intelligence and benchmarking is threats with significant improvement in its
through self-paced programmes. followed to optimise prices and engage security posture in all domains, including
with right vendors. Further, to protect endpoint, network, cloud, data etc. It
Service Delivery Risk against disruptions and volatility in continues to assess the risk and invest in
The Company is undertaking various global supply chains, STL is driving evolving security architecture to further
large-scale end-to-end projects. STL has initiatives for development of the vendor strengthen its capabilities in managing
implemented strong project management ecosystem, diversification of sourcing cyber security risks.
frameworks, which are supported by geographies, along with emphasis
digital tools and applications. on local sourcing where possible.
41
Sterlite Technologies Limited
Risk Management
Financial risks include challenges like currency fluctuation, interest rate, credit and liquidity, tax and ability to manage
financial cost and optimise returns on investment. Further, there is also a risk of errors in the financial reporting of the
Company, that accounting principles are not correctly applied etc. resulting in misrepresentation of our financial position.
In addition, STL has also implemented Liquidity Risks systems in place to minimise the price
The Three Lines of Defence model, which STL requires funds both for short-term risk of its raw material to a large extent.
defines duties and responsibilities in operational needs, as well as for long- STL is vertically integrated globally, and
addressing risks. term investment projects, mainly in any movement in a single raw material
growth projects. The aim is to minimise does not impact its cost structure
First Line of Defence the risk by generating sufficient cash significantly. Commodity Risks
flows from its current operations, which
Management Controls
Internal Control Measures
in addition to the available cash and Interest Risks
cash equivalents, liquid investments and STL is exposed to interest rate fluctuations
sufficient committed fund facilities, will in both domestic and foreign-currency
Second Line of Defence provide liquidity both in the short and borrowings. It uses a judicious mix of
Financial Capital Quality long term. STL works with a healthy mix Rupee and foreign currency borrowing
Security Inspection of long-term and short-term debt. Further, within the stipulated parameters to mitigate
Risk Management Compliance
in response to COVID-19 pandemic, it has the interest-rate risk. This also helps to
performed scenario-based testing and have a lower blended interest rate. The
Third Line of Defence ensured that the Company has enough interest rate for Rupee borrowing is largely
liquidity to navigate in the current crisis. In linked to Mumbai Inter-Bank Offer Rate
Internal Audit
addition, STL has also implemented strict (MIBOR) and the rate is linked to prevailing
measures to manage working capital, US Dollar London Inter-bank Offered Rate
Regular internal audits by independent which includes re-negotiating payment (LIBOR) for foreign currency borrowings.
external audits ensure that controls are terms with its vendors, pacing of capex
designed and operating effectively. and arranging additional debt facilities. Foreign Currency Risks
The Audit Committee of the Board The Company’s policy is to hedge all
of Directors periodically reviews Commodity Risks long-term foreign-exchange risks as
the adequacy and effectiveness of STL is exposed to the risk of price well as short-term exposures within
internal control systems and suggests fluctuation on raw materials and energy the defined parameters. The long-term
improvement for further strengthening resources. As a market leader in the foreign-exchange liability is fully hedged,
of internal controls. industry, it has strong policies and and hedges are on held to maturity basis.
Within foreign currency, there are two Counterparty Risks significant concentration of the credit
major risk categories: risk associated with The Company is exposed to counterparty risk. Cash and liquid investments are held
the operations of the Company, such risks on its receivables and investments. primarily in debt mutual funds and banks
as purchase or sale in foreign currency; It has clearly defined policies to mitigate with high credit ratings, approved by
and risk related to the borrowing of the these risks. Limits are defined for CRISIL. Emphasis is given to the security
Company denominated in the foreign exposure to individual customers and of investments.
currency. STL has a defined and proven the exposure is strictly monitored on
policy to manage both kinds of risk, and an ongoing basis. Moreover, given
this is reviewed frequently in the light of the diverse nature of the Company’s
major developments in economic and businesses, trade receivables are
global scenarios. spread over several customers with no
Compliance Risks
Compliance risks result from violations Risks related to various compliances and-Policies). In addition, an external
or non-compliance with Laws and are identified, assigned to owners and independent internal auditor reviews the
Regulations, Code of Business Conduct monitored on a periodic basis. Further, compliance management framework,
and Contractual Compliance having a strong whistleblower mechanism including its operating effectiveness
material impact on the Company’s has been in place for reporting of and submit their findings to the
financial, organisational and reputational non-compliances. STL’s whistleblower Audit Committee.
standings. STL has a strong compliance policy is available on the Company’s
management framework. website (www.stl.tech/Code-of-Conduct-
43
Sterlite Technologies Limited
Delivering on our
promise of social impact
Working together for a better tomorrow
For STL, FY20 was pivotal, in terms of achievements on account of
innovation, eco-friendly operations, creating shared value, leveraging
tech and data among several other aspects; all for transforming everyday
living and creating a more inclusive world for everyone.
The Company has been collaborating with front-runners across its value
chain on several environmental, social and governance priorities. This has
allowed it to nurture a culture of innovation that enables it to drive circular
use of resources better, further its reach to help communities in need,
improve the impact it creates and delivers more than what it commits to.
45
Sterlite Technologies Limited
Employees Townhall, all hands meeting, leadership Professional growth, skill development,
shop floor visits, performance management increasing diversity, competency
systems, one-to-one interactions, trainings, enhancement, CSR and Sustainability
induction workshops, surveys
Customers Plant visits, customer satisfaction survey, New product development, research and
key account management, conferences and innovation, delivery compliance, customer
events, social audits satisfaction, social and environment actions
and achievements
Communities Community visits, social needs and impact Development projects according to the
assessment, philanthropic engagement, identified needs, support to social cause
employee volunteering
Shareholders Annual general meeting, performance calls, Economic value creation, disclosure
interaction with investors on Environment, Social and
Governance (ESG) performance
Materiality assessment
STL engages with its stakeholders based on the feedback This process gives the Company the materiality matrix,
received from various forums. It identifies and assesses these which helps it in identifying the areas that STL needs to
requirements and categorises them according to their material focus on. It also helps ensure clear accountability, specific
aspects. This helps STL prioritise social, governance and targets, governance and formulate a clear and time-bound
environmental issues based on the organisational vision and achievement strategy.
values, in addition to other business priorities.
During FY20, the Company further aligned each of its material
Each topic is evaluated in consultation with the process topics with the GRI standards and its indicators. The reporting
owner and management to assess its relevance, validity boundaries have been defined from the materiality assessment
and significance. and depicted in the GRI index that forms a part of this section.
MATERIALITY MATRIX
Extremely
HIgh
47
Sterlite Technologies Limited
While the Company is transforming itself to operate in a STL’s sustainability goals that it is working
more social and environment-friendly way, it recognises to deliver by 2030 are:
that the world’s major issues need a collective approach.
STL endeavours to work with each of its partners across the
value chain to evolve the way businesses are conducted.
The Company has been doing so by collaborating with
Water positivity Zero Waste to Landfill
its suppliers, customers and other partners to develop
across locations certifications for all
newer and more innovative ways of doing things that help globally manufacturing facilities
scale and drive progress across economic, social and globally
environmental parameters. Through each of these, it aims
to deliver life-changing technologies for communities,
reduce its environmental footprint through system-wide 100% products with 50% reduction
approaches, ensure its people are engaged and inspired environmental impacts in Carbon Footprint
to drive inclusive growth, stay safe and healthy as well evaluated from
Life Cycle perspective
as create sustainable business models that will drive
development and progress for communities, along with
the organisation.
100%
Sustainable
Sourcing
Drivers for Growth of CSR and Delivering business for Propelling local
business change sustainability reporting the benefit of all cluster development
STL believes it is its moral duty and essential for generations The Company has formulated a comprehensive Environment
beyond tomorrow to ensure that the Company uses minimal Policy that guides its processes and governs how they are
resources in terms of raw material, and design and produce monitored through an ISO 14001 certified Environment
best-in-class, green and durable products that withstand Management System. Through cross-functional teams, STL
time and tests of nature; as well as offer the end users world- plans, implements and evaluates ways to reduce the impact
class experiences. Therefore, it does not just look to reduce its operations have on the environment. Environmental Impact
energy, other resource usage and waste; but also takes every Assessments are also conducted during expansions or when
opportunity to replenish what it uses, recycling and repurposing setting up new manufacturing facilities. This helps the Company
any waste from manufacturing. ensure the high environmental and safety standards it maintains
across its facilities is adhered to and any gaps identified are
proactively mitigated through requisite action.
49
Sterlite Technologies Limited
In the reporting period, the Company conducted Life Cycle The Company has also gone on to further look at ways that can
Assessments (LCA) for its products to understand their improve the customers’ experience, as well as enhance the
environmental impact. The process included goal and scope lifespan of products and deployment of the same. Increased
definition, lifecycle inventory covering input and output analysis durability not only reduces replacements, but ensures scarce
of mass and energy flows from operations, along the optical resources are not wasted. Hence, STL couples its offerings with
fibre cable products value chain, to study the environmental trainings and certifications by experts to those deploying or
impact of the product from cradle to grave. In addition, a using them. This covers how are products and entire optic fibre
comprehensive Quality, Environment Health and Safety policy networks being laid should be installed, used and maintained to
guides STL’s operations to minimise accidents, spillage and prevent wear-and-tear, as well as any downtime.
reduce any negative environmental impact.
With water scarcity becoming a global issue, the Company has invested in
advanced technology and monitoring processes that do not just help reduce
its usage, but also recycle and reuse wastewater from manufacturing. This has Replenish Reuse
allowed STL to substantially reduce its freshwater intake year-on-year. To ensure
STL’s intake from nature is minimal, the Company has incorporated a holistic water
management approach which includes:
Recycle
Rainwater harvesting
Harvesting rainwater during the monsoons, provides a The rainwater passes through a filtration unit first, then the
sustainable option of saving rainwater for future use as well filtered water goes to the collection tank. The entire system has
as preventing its wastage due to run-off. With water scarcity been designed to use natural gradient so that rainwater flows to
as one of India’s and now even the world’s major challenges, collection tank under the influence of gravity. The filtered water
the Company takes up every opportunity to save this from collection tank is taken to raw water tank from where it is
precious resource. used in the process.
51
Sterlite Technologies Limited
Water Conservation
During FY20, STL evaluated its water consumption pattern WATER CONSUMPTION BY SOURCE*
through an audit across manufacturing locations. This helped m3
the Company identify additional areas of change. Improvements 5,00,000
implemented post the audit to monitor and optimise water 4,12,812 4,31,703
3,87,444
consumption included: 4,00,000
3,94,578
• Introduced water dashboards at plants to monitor water
3,00,000 (#98,308)
consumption on a daily basis
3,54,516 3,44,516
• Installed an automated dosing system in cooling towers 2,00,000
monitoring mechanisms
90,000 78,620 70,718
• During FY20, STL’s manufacturing facilities in
India have used 4,31,703 m3 of water. The total water 60,000
consumption includes value for the new plant –
Gaurav included in the reporting boundary in FY20. 30,000
The Company recycled and reused almost 29% of this
54,073
during the reporting period 0
FY19 FY20
• Investing in technologies like effluent and sewage
Old Plant New Plant
treatment plants (ETPs and STPs), multi-effective
evaporators and others helped the Company reduce
*A new manufacturing facility at Shendra was commissioned in FY20,
fresh water consumption which has resulted in an increase in consumption. To help with a
• While STL recycled and reused over 78,000 m3 of comparative analysis, the new plant metrics have been shown separately.
water in FY19, during FY20, it recycled and reused
1,24,791 m3 of water
• Rainwater harvested through three structures in
Rakholi, two in Dadra and one in Waluj
• Effluent and sewage treatment plants to treat
wastewater from manufacturing setup across all three
manufacturing units in Aurangabad
• Wastewater that has been recycled is reused within
STL’s manufacturing premises for horticulture
Over the next few years, STL aims to have all manufacturing STL’s Shendra manufacturing facility was Zero Waste to Landfill
facilities globally, Zero Waste to Landfill certified. certified by Intertek in FY20 for diverting more than 99.99%
waste away from landfills. Its Rakholi facility sustained its Zero
STL’s approach
Waste to Landfill certification diverting more than 99% of
waste, while the Dadra facility was upgraded to a Zero Waste to
Waste reduction at source Waste segregation Landfill unit for diverting over 99% waste in FY20 against 96%
in FY19 during which it secured a Near Zero Waste to Landfill
Reuse and recycle Legal compliance certification. Waluj, moved up in terms of waste diverted from
landfills from more than 95% in FY19 to over 97% in FY20.
Define Zero
Waste to Landfill
Prioritise Waste- Track
Approach
Reduction Activities Waste Data
Ensure
Regulatory
Compliance
Share Best
Strengthen Practices
Supplier
Partnerships
Achieve landfill Improve
diversion Efforts
53
Sterlite Technologies Limited
TOTAL WASTE BREAK-UP BY DISPOSAL METHOD FY20 TOTAL WASTE BREAK-UP BY TYPE FY20
30,306MT 30,306MT
MT MT
25,000 30,000
21,514 26,080
25,000
20,000
20,000
15,000
15,000
10,000
6,609 10,000
5,000 2,861
1,914 168 5,000
1,321
4 18 78 19 24
0 0
76 70.99
80 95 98.5 86.1
The Company is completely cognisant of the impacts of climate 2,50,000 1,93,394 1,15,397
1,25,000 (#72,460)
change and increasing carbon emissions, and has been 21,410
continuously trying to reduce its energy consumption through 0
different projects that include: FY18 FY19 FY20
From fuels From purchased electricity
• Recovery of residual hydrogen was completed, to be used # New Plant
glass working area. This has led to a saving of 45,000 Nm3/
month and C 5.5 lakhs/month STL continues to rigorously monitor its carbon emissions and is
• The optimisation of auxiliaries in the captive power plant has working towards its reduction. In FY20, scope 1 and 2 emissions
resulted in a saving of 24.6 tCO2e/month were 3,941 and 153,011 tonnes of CO2 equitant, respectively.
Contributions to UN SDGs
• Ensured Zero Waste is sent to Landfills at Shendra, Aurangabad and • Value engineering in packing spool covers have helped reduce
Rakholi and Dadra in Silvassa 23 MT of Polypropylene
• 97% waste generated at Waluj manufacturing facility diverted away • Adopted sustainable practices and integrated sustainability
from landfills and ensuring Zero Waste to landfill level 2 certification information into STL’s reporting cycle through disclosures in
• Implemented programmes for sustainable consumption and its Annual Report & the Communication of Progress on CSR &
production, through S.U.R.E. packaging, saving 830 MT of plastic, Sustainability through the UN Global Compact website
5,300 MT of carbon emissions and 4,300 MT of wood and paper • Awareness drives on water conservation and e-waste recycling
• 171 MT of by-products repurposed in FY20 conducted in FY20 for all employees
• All waste buyers are assessed as per the requirements of • 100% employees of Rakholi, Dadra and Shendra were
Zero Waste to Landfill certification covered under Zero Waste to Landfill awareness programme.
This awareness module covered topics like importance of
• QEHS policy guides STL’s safety processes
sustainability, water positive and zero waste to landfill
• Yearly Partner Audit includes Sustainability and Green Initiatives -
seven Supplier Audit conducted during FY20
• Redesigning of packaging material helped save 2,076 trees annually
55
Sterlite Technologies Limited
Anti-corruption
The trust of STL’s stakeholders has always been a priority for
the Company. Transparency, regulatory compliance and a
robust code of conduct and ethics policy guide its processes,
operations and culture.
57
Sterlite Technologies Limited
STL’s four focus areas were chosen for the fact that each of TOTAL LIVES IMPACTED
them has an intrinsic linkage to several other development Mn
areas, form part of India’s development priorities and are 1.5
1.32
also important global goals. The SDGs are the UN’s most
ambitious visualisation of sustainable development capable 1.2
of restructuring progress globally. To deliver on such an
ambitious vision, the Company believes it’s crucial to not just 0.9 0.83
look at addressing existing issues, but develop sustainable 0.63
programmes that delve deep into the problem, work with 0.6 0.45
communities and stakeholders to address the root cause and
0.3
prevent recurrence of the issue.
0
While working with communities for over a decade, STL has FY17 FY18 FY19 FY20
incorporated several learnings and observations from the
field to develop more inclusive, tech-driven and sustainable STL doubled its impact in FY20
programmes. Community involvement and ownership have
been significant contributors to ensuring sustainability of
4,95,000+
programmes, while technology has helped dramatically
enhance the Company's reach across urban, semi-urban
and rural India. Lives benefitted
4,000+
Lives benefitted through
Volunteering
59
Sterlite Technologies Limited
0
FY17 FY18 FY19 FY20
12,000+
Lives benefitted till date,
through Women Empowerment
Contributions to UN SDGs
• Till date, the programme has provided vocational education • 970 women have benefited through healthcare services
and livelihood opportunities to 2,265 women impacting over provided through the programme till date
11,000 villagers and over 5,000 in FY20 • 723 have been trained on manging self-help groups and
• Among one of the few programmes to provide beneficiaries supported in turning them into profit making enterprises
with transportation facilities from their villages to the • 16 women self-help groups have been linked to banks for
programme site financing them to setup their own businesses; C55 lakhs have
• A total of 1,014 women during FY20 have benefited been disbursed to these women
through the programme • The programme has helped spread the need to be digitally
• Empowered women from across over 100 villages across empowered through 536 computer course students till date
Haveli, Velhe and Bhor Talukas have been covered through • 134 students today hold well-paid jobs in administration,
the programme till date hospitals, teaching and private companies while over 400
• 54% of beneficiaries now earn a livelihood through jobs, small have their own businesses
enterprises, self-help groups and their own businesses • Partnered with MAVIM, a nodal agency of the
• Minimum salary earned by beneficiaries is C8,000 per month Government of Maharashtra, Maharashtra State Board of
• 50 self-help groups initiated to help women earn a livelihood Vocational Education, and Rangsutra to empower women in
rural Pune with vocational skills and livelihoods
• Crèche facilities provided to enable young mothers to avail of
the vocational course and livelihood opportunities
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Sterlite Technologies Limited
Education
Quality education is fundamental to create sustainable growth and
progressive communities. It is a powerful enabler that helps break
inter-generational cycles of poverty. Together with an improved
quality of life, access to quality education helps equip individuals with "I was scared to use a computer.
knowledge the capability required to develop pioneering solutions to The individual attention during
the world’s most pertinent issues. the course has helped me
overcome that fear"
During FY20, STL continued focusing on delivering quality education Anita, 42 years,
Khilarewadi, Pune
through ed-tech programmes like Pragyan and Smart Nandghars.
Additional investments were made to contribute towards the ‘Digital A member of a Bacchat Gat group at her slum, Anita
India Mission’ by deploying two mobile classrooms in Pune to digitally joined the data entry course along with her friends,
empower individuals across age groups mainly hailing from the despite the fact that using a computer overwhelmed
city’s slums. Another investment in this area involved leveraging the her. But the customised approach used through the
Company’s know-how in connectivity to create digital villages or digital empowerment programme that focuses on
STLGrams in Aurangabad. Several scholarships and upgradation of overpowering weaknesses, helped her learn how to
school facilities during the year also ensured that deserving children handle a computer. Today, Anita is adept at online
from low-income families get the opportunity to excel. By using transactions which she quickly replaced standing in
technology-driven solutions to make education more interactive and long queues by and also uses her knowledge to help
interesting for students, as well as teachers in government and play- her Bacchat Gat group.
schools, STL has helped create the love for learning among children
from rural, tribal and semi-urban communities who otherwise lacked
access to quality education.
Through STL’s digital empowerment programmes, it hopes to spread Through each of these interventions STL hopes to facilitate a truly
the need and importance of using digital infrastructure available to inclusive India where ease of access, learning opportunities and
youth, home-makers and individuals across age groups to learn, equality are warranted, thereby contributing to SDG 4 – Quality
facilitate online transactions, earn their livelihood, as well as ease Education, while simultaneously impacting SDGs 1, 8, 10 and
utility payments methods, among other aspects. 17. STL approached SDG 4 in a very comprehensive way to
make sure that it addresses not just the requirements of children
from underprivileged backgrounds, but also upskills and trains
8,16,000+ teachers to deliver quality lessons to students in an interesting
Lives benefitted till date, and engaging way.
through Education
Every one of these interventions have helped contribute to
LIVES IMPACTED achieving this global goal and national priority through the smarter
networks. STL is making quality education accessible even at
4,00,000 3,61,000 places otherwise distanced due to their location, unavailability of
3,50,000 transport facilities, good teachers and so on. It has also ensured that
3,00,000 capable students, irrespective of the financial backgrounds are not
2,50,000 deprived of opportunities to grow and reach their full potential. The
1,86,000 Company partnered with the Brihanmumbai Municipal Corporation
2,00,000
and Governments of Rajasthan and Dadra and Nagar Haveli, the
1,50,000 1,21,000
Pune Municipal Corporation and Pune City Connect to ensure
1,00,000 72,000
quality education and digital literacy is accessible to the masses.
50,000
0
FY17 FY18 FY19 FY20
Contributions to UN SDGs
• Till date quality education made accessible to over 796,000
students from low-income families through STL’s ed-tech
programmes and Smart Nandghars
• 1,483 government schools and 1384 teachers and headmasters in
Mumbai impacted through STL’s Data Support Programme in FY20
• Technology used to make learning and teaching fun during
FY20 for 5,700 students in Rajasthan
• Eight Nandghars re-developed in Silvassa for tribal toddlers and
further enhanced with solar-powered panels to ensure continuous
power supply in FY20
• Till date 640 toddlers provided with a tech-enabled and vibrant
environment playschools inculcating in them a love for learning
right from the start
• 281 individuals from across age groups digitally empowered
through STL’s Digital Empowerment Buses during FY20
• Through Pragyan, 500 teachers found a renewed purpose in
teaching with the latest tools and tech, trainings and regular tips for
making learning fun and interesting
• 1,000 students benefited with uninterrupted power supply through
diesel generators installed at municipal schools
• 27 scholarships worth C4,20,000 lakhs given to deserving and
needy children for higher studies
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Sterlite Technologies Limited
Healthcare
Ensuring good health and wellbeing across all age groups is LIVES IMPACTED
essential to build sustainable communities. It indirectly affects a 1,16,000
community’s ability to enhance their livelihoods and contribute 1,20,000
STL even stepped up to provide relief to those affected by the Hence, the Company has been working towards contributing to
COVID-19 pandemic. Over 10,000 tribals, underprivileged SDG 4 – Good Health & Well-being and has ensured it forms an
and contract labourers were provided with food and hygiene intrinsic part of every single programme STL implements. This
kits across locations like Silvassa, Lakshadweep, Andaman also involves providing nutrition to those in need during times of
and Nicobar Island, Gadchiroli, Nagpur, Wardha, Nanded, crisis, thereby indirectly impacting the targets set for SDG 2.
Hyderabad, Delhi and Mumbai. N95 masks, gloves and PPE
kits were provided to over 12,000 health workers to keep them By providing the communities with means to guarantee their
safe. The Jeewan Jyoti Women Empowerment beneficiaries health and wellbeing, STL has been ensuring that these remote
aided police officials and health workers in rural Pune by making and poorer sections of society are not left unattended since
20,000 cotton masks. 2006. Over the years, it has looked at ways to incorporate
technology into its programmes, thereby bringing in better
Access to quality healthcare should not be a privilege for a and more efficient ways to address hygiene and health issues
few who have the financial capability. It is a necessity and STL among patients across different age groups and ensure their
believes it should reach every person irrespective of their health and wellbeing.
financial or cultural background or where they live.
4,18,000+
Lives benefitted till date,
through Healthcare
Affected by complications at the time of his birth, Pritesh was unable to use his limbs. Regular
physiotherapy and medications at a hospital 20 kilometers away from his village were needed to
help him walk again. Being a daily wage earner, his father was unable to afford the high transport
and hospital charges. However, continuous medication and physiotherapy exercises prescribed
by our MMU doctor has helped Pritesh walk again. Now is he no longer dependent on anyone
to move around.
Contributions to UN SDGs
• 2,700 children below 5 years of age provided with medical
care in Silvassa during FY20 and over 35,000 since 2006
• Over 1,00,000 women treated through the Mobile Medical
Unit till date. Of these 7,158 received quality healthcare
in FY20
• 324 tribals treated for tropical diseases like malaria and
scabies during FY20
• 1,734 tribals covered through awareness drives on hygiene,
prevention of seasonal outbreaks and health camps
• Over 2,900 tribal patients between the age group of 60 and
above treated and provided free medicines to ensure their
wellbeing during FY20
• Food grains and meals provided to over 10,000 tribals,
contract labourers and underprivileged during the
COVID-19 lockdown
• Over 1,00,000 lives impacted through distribution of
essential supplies, PPE kits, N95 masks, ventilator donations
and so on during the COVID-19 pandemic
• Awareness sessions through the Mobile Medical
Unit and digital platforms conducted covering over 30,000
individuals across the country
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Sterlite Technologies Limited
Environment
Climate change is today one of the world’s most pertinent LIVES IMPACTED
problems. The vagaries caused by climate change not only
have a devastating effect on human life, but also on a country’s 20,000
10,000+ 77,800+
• 2,468 farmers benefited through irrigation and using
less water intensive crops
Trees maintained Lives benefitted till • Improved agricultural output for Tur pulses by 42% and
date, through STL's
wheat by 15%, thereby ensuring availability of food,
Environment initiatives
output for sale
67
Sterlite Technologies Limited
and wider than it could have on its own. These volunteers are 2,500
examples of STL’s value system. Despite their busy schedules 2,100+
they have taken time to volunteer and spend time with those 2,000
less fortunate showing them the world still cares. They have 1,500
also helped the Company build a conscientious culture in the 1,000+
1,100+
organisation by contributing to e-waste donations and actively 1,000
participating in awareness sessions on waste segregation, 500+ 400+
500 300+ 300+
disposal, sustainability and mentoring, among others. This not
only helps the Company reduce its environmental footprint 0
across facilities, but also helps STL extend its reach across the FY17 FY18 FY19 FY20
3,600+ 9,500+
Employee Lives impacted
volunteers till date
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Sterlite Technologies Limited
CII-ITC Sustainability Awards NGOBOX CSR Awards ET Now World CSR Congress &
(Excellence in CSR) (Company with Best CSR Impacts) Awards (Waste Management)
Starting in FY21, it intends to reach out further and wider along with the help of its
transformation enablers.
71
Sterlite Technologies Limited
Scope of Assurance
ii. Requesting evidence of the data sources and
The assurance encompassed the selected corporate assured
explanation of relevant collection and calculation
non-financial KPIs (GRI aligned) and the quality of information
methods to substantiate the figures and claims.
presented in the report over the reporting period of April
2019 to March 2020.
4. Challenging the KPI claims, where possible, confirming the
presented evidence, including calculation methods, criteria
Operational Boundary: Verification of Corporate office
and assumptions, with multiple data owners and other
at Pune of Sterlite Technologies Limited (STL) along with
documentation from internal and external sources.
specific production sites - Dadra Plant, Rakholi Plant, Waluj
Plant, Shendra Plant and Shendra Glass (New Facility)
5. Assess the collected information and provide
for the following:
recommendations for immediate correction wherever
required or for future improvement of the non-financial
1. CSR
indicator’s verification within the scope.
2. Water
3. Waste
Key observations and recommendations
4. Energy / Carbon Emissions
Strengths:
1. STL has strong focus on materiality issues like Zero
The assurance engagement was performed in accordance
Waste to Landfill. The Shendra, Waluj, Rakholi and
with a Type 2 Assurance of the AA1000 Assurance Standard
Dadra plants are certified for Zero Waste to Landfill.
(AA1000AS 2008) which consists of evaluating the reliability
This helps in meeting customer expectations for
of specified sustainability performance information of the
Responsible Manufacturing.
reported non-financial KPIs within the Company’s sustainability
framework and processes using the inclusivity, materiality and
2. Life Cycle Assessment (LCA) & Environment
responsiveness.
Product Declarations (EPD) studies for fiber optic
cables were carried out in FY20. This shows STL’s
Level of assurance and limitations
commitment in building credibility and transparency on
A moderate level of assurance under DQS Assurance
compliance to accepted international standards and
Framework was provided for this engagement. Information
environmental performance.
and performance data subject to assurance is limited to the
provided KPIs. The stakeholder engagement review was limited
3. STL has touched 1.32 million lives with CSR initiatives
to the employees as interested groups directly dependent on
aligned with the Sustainable Development Goals
the organisation’s activities and participation in the achievement
(SDG) and National Voluntary Guidelines (NVG). This
of the non-financial KPIs. The assurance did not cover financial
demonstrates STL’s intent of being a socially responsible
data, technical descriptions of buildings, equipment and
company and creating positive impact in the community.
production processes or other information not related to
selected performance indicators.
Opportunities for Improvement:
1. Benchmarking and target setting at micro level especially
Assurance methodology
in energy, water, carbon sources shall be established for
The assurance procedures and principles used for this
all locations. STL may develop short-term and long-term
engagement were drawn from the International Standards and
sustainability goals for all the top material issues
methodology for data verification developed by DQS as below:
3. STL may begin to focus on key supply chain partners GRI 300: Environmental
to identify and mitigate the sustainability challenges in • Energy: GRI 302: Energy 2016: 302-1, 302-5
the supply chain. • Water: GRI 303: Water 2016: 303-1, 303-3
• Emissions: GRI 305: Water 2016: 305-1, 305-2
4. STL may explore implementation of renewable energy • Effluents & waste: GRI 306: Effluents and Waste 2016: 306-2
(solar/wind energy) at each site
GRI 400: Social
5. STL may undertake assessment studies to determine • Employment: GRI 401: Employment 2016: 401-1
water footprint and social capital valuation of CSR projects • T
raining & GRI 404: Training and Education 2016:
Education: 404-1, 404-2
Evaluation of the adherence to AA1000 • Emissions: GRI 305: Water 2016: 305-1, 305-2
Accountability Principles • L
ocal GRI 413: Local Communities 2016: 413-1
DQS has evaluated the Report’s adherence to the GRI principles communities:
73
Sterlite Technologies Limited
75
Sterlite Technologies Limited
Directors’ Report
To the Members,
Your Directors are pleased to present the Annual Report for the Financial Year 2019-20, together with the audited financial
statements of the Company for the financial year ended March 31, 2020.
Financial Summary/Highlights
(` in crores)
Standalone Consolidated
Particulars
2019-20 2018-19 2019-20 2018-19
Net Revenue from Operations 4,760.50 4,862.63 5,154.40 5,087.26
Profit / (Loss) before Interest, Depreciation & Tax 1,018.13 1,053.84 1,094.72 1,147.08
Add: Finance Income 11.67 20.52 8.91 16.93
Less: Finance cost 204.46 95.25 221.04 105.49
Less: Depreciation and amortisation expense 232.42 167.79 290.28 194.98
Net Profit/(Loss) before exceptional item and taxation 592.92 811.32 592.31 863.54
Exceptional Item 50.71 - 50.71 -
Net profit/(loss) before taxation 542.21 811.32 541.60 863.54
Total Tax Expenses 108.69 276.09 108.88 278.16
Net Profit /(Loss) for the year after tax 433.52 535.23 432.72 585.38
Share of profit/(loss) of Joint venture NA NA - -
Net Profit for the year after tax & share in profit/(loss) of joint 433.52 535.23 432.72 585.38
venture
Loss from Discontinued Operations NA NA (8.28) (7.59)
Profit for the year 433.52 535.23 424.44 577.79
Share of profit of minority interest NA NA (9.46) 15.04
Net Profit attributable to owners of the Company 433.52 535.23 433.90 562.75
Balance carried forward from previous year 1,225.07 804.45 1,323.75 875.61
Amount available for appropriation 1,658.59 1,339.68 1,757.65 1,438.36
APPROPRIATIONS
Equity dividend and tax thereon (170.09) (96.80) (170.09) (96.80)
Transfer to debenture redemption reserve - - - -
Others (10.87) (17.83) (10.22) (17.83)
Balance carried forward to the next year 1,477.63 1,225.05 1,577.34 1,323.73
connectivity, making the world much more connected, much Buyback of Equity Shares
more border less and much more efficient and the Company During the year under review, the Board, at its meeting held
would have a large opportunity to contribute to make this on March 24, 2020, approved the buyback of fully paid-up
happen at a faster pace. equity shares of the Company, at a price not exceeding
` 150/- per equity share, from the open market through
Dividend stock exchange mechanism.
The Board of Directors (‘the Board’) is pleased to
recommend a final dividend of ` 3.50/- per Equity Share (i.e. The Buy-back shall not exceed an aggregate amount of
175%) of ` 2/- each for the FY20. The distribution of dividend ` 145 crores being 9.95% and 9.32% of the aggregate
will result in payout of around ` 140.71 crores. The dividend of the total paid-up equity capital and free reserves
payout is subject to approval of shareholders at the ensuing (including securities premium) of the Company based on the
Annual General Meeting (‘AGM’). The Company proposes audited standalone and consolidated financial statements
not to carry any amount to reserves for the FY20. respectively of the Company for last financial year ended on
March 31, 2019.
The Dividend Distribution Policy of the Company, in terms
of Regulation 43A of the SEBI (Listing Obligations and The Buy-back is expected to achieve the
Disclosure Requirements), Regulations, 2015 (‘Listing following objectives:
Regulations’), is attached as Annexure I to this Report and
a. For seeking a fairer valuation of the Company’s
is also available on the website of the Company at https://
stock price; and
www.stl.tech/Code-of-Conduct-and-Policies.html
b. Improve key return ratios like return on net worth,
Acquisition of IDS Group return on assets etc. over a period of time
The Company, through its wholly owned subsidiary, Sterlite
Global Ventures (Mauritius) Limited (SGVML), acquired the The Company believes that the Buy-back will create long
IDS Group, a data centre network infrastructure design and term value for shareholders.
deployment specialist based in the United Kingdom. The
transaction is structured to acquire 100%. Out of this 80% Shifting of Registered Office
has been acquired, and the remaining 20% will be acquired The Registered Office of your Company is presently
based on an earn-out model, over the next few years. situated at Aurangabad, in the State of Maharashtra
within the jurisdiction of Registrar of Companies, Mumbai.
The entities of the Group are Impact Data Solutions It is proposed to shift the Registered Office to Pune
Limited (“IDS”), its wholly owned subsidiary Impact Data within the jurisdiction of Registrar of Companies, Pune,
Solutions B.V.(“BV”) and its affiliate company namely, Maharashtra in order to bring operational synergies and
Vulcan Data Centre Solutions Limited (“Vulcan”). IDS is a aid the management in running the business operations
specialist provider of data centre and colocation design and more effectively.
installation services. It has a pan European presence with a
dedicated partner ecosystem for flawless execution. The Board, at its meeting held on May 12, 2020, has
approved the shifting of Registered Office, subject to
The acquisition will strengthen the Company’s position in the approval of shareholders. A resolution seeking
the cloud and data centre market and bring access to two of Members’ approval is included in the Notice convening
the top global cloud providers into its customer pool. the ensuing AGM.
The investment strengthens the Company’s offering in the Management Discussion and Analysis Report
promising and fast growing virtualised radio access space. Management Discussion and Analysis Report for the
year under review, giving detailed analysis of Company’s
77
Sterlite Technologies Limited
operations, as stipulated under Regulation 34 of the Listing Resolutions seeking Members’ approval is included
Regulations, is presented in a separate section forming part in the Notice convening the ensuing AGM. The Board
of this Annual Report. recommends the re-appointment of Mr. Pravin Agarwal and
Dr. Anand Agarwal.
Business Responsibility Report (BRR)
The Listing Regulations mandate the inclusion of the Pursuant to Section 149 read with Section 152 of the
BRR as part of the Annual Report for the top 1,000 listed Companies Act, 2013 (‘the Act’), Mr. Pratik Agarwal, Non-
entities based on market capitalization. In compliance Executive Director will retire by rotation at the ensuing AGM
with the Listing Regulations, the Company has included a and being eligible, offers himself for re-appointment. The
separate section on Business Responsibility as a part of Board recommends his appointment.
this Annual Report.
The Company has received necessary declarations from
Material Changes and Commitments, if any, all the Independent Directors confirming that they meet
affecting the Financial Position of the Company the criteria of independence as prescribed under the Act
There were no adverse material changes or commitments and the Listing Regulations. The Independent Directors
occurred between the end of financial year and date of of the Company have also registered themselves in the
this report, which may affect the financial position of the databank with the Indian Institute of Corporate Affairs
Company or may require disclosure. and confirmed compliance of relevant provisions of Rule
6 of the Companies (Appointments and Qualifications of
Board Meetings Directors) Rules, 2014. The Board is of the opinion that the
A calendar of Meetings is prepared and circulated in Independent Directors of the Company possess requisite
advance to the Directors. During FY20, six meetings of the qualifications, experience and expertise and they hold
Board of Directors were held on April 23, 2019; July 18, highest standards of integrity.
2019; October 24, 2019; December 05, 2019; January 15,
2020 and March 24, 2020. The maximum time-gap between Pursuant to provisions of Section 203 of the Act, and the
any two consecutive meetings did not exceed one hundred Rules made thereunder, following are the Key Managerial
and twenty days. Video/Tele-conferencing facilities are Personnel (KMP) of the Company:
made available to facilitate Directors travelling abroad, or
present at other locations, to participate in the meetings. 1. Dr. Anand Agarwal – Chief Executive Officer
2. Mr. Anupam Jindal – Chief Financial Officer
Composition of Audit Committee 3. Mr. Amit Deshpande – Company Secretary
The Board has constituted the Audit Committee which
comprises of Mr. A. R. Narayanaswamy as the Chairman; There has been no change in the KMP during FY20.
Mr. Arun Todarwal, Mr. Sandip Das and Mr. Pravin
Agarwal as the Members. All recommendations given Performance Evaluation of the Board, its
by Audit Committee during FY20 were accepted by Committees and Individual Directors
the Board. Further details on the Audit Committee The Board of Directors of the Company is committed to
and other Committees of the Board are given in the assessing its own performance as a Board in order to
Corporate Governance Report, which forms a part of identify its strengths and areas in which it may improve its
this Annual Report. functioning. To that end, the Nomination and Remuneration
Committee has established processes for performance
Directors and Key Manangerial Personnel evaluation of Independent Directors, the Board and
During the year, Mr. Arun Todarwal and Mr. A.R. Committees of the Board. Pursuant to the provisions of the
Narayanaswamy, were re-appointed as Independent Act and the Listing Regulations, the Board has carried out an
Directors of the Company for a second term of two years annual evaluation of its own performance, performance of
with effect from April 1, 2019 to March 31, 2021. The its Committees as well as the directors individually. Details
members approved the aforesaid re-appointments in the of the evaluation mechanism are provided in the Corporate
AGM held on July 23, 2019. Governance Report.
Mr. Pravin Agarwal’s appointment and Dr. Anand Agarwal’s The Board has, on the recommendation of the Nomination
appointment as a Whole-time Directors of the Company & Remuneration Committee framed a policy for selection
is valid upto October 29, 2020. and July 29, 2020, and appointment of Directors, Senior Management and their
respectively. The Board, at its Meeting held on May 12, 2020 remuneration (‘NRC Policy’). The NRC Policy of the Company
has approved the aforesaid re-appointments for a further includes criteria for determining qualifications, positive
period of five years, subject to the approval of members. attributes and independence of a director and policy relating
to the remuneration of Directors, Key Managerial Personnel During the year, the Company had not entered into any
and other employees and is framed with the object of contract or arrangement with related parties which could
attracting, retaining and motivating talent which is required be considered ‘material’ in terms of the Company’s Related
to run the Company successfully. The Policy can also be Party Transactions Policy. Accordingly, there are no
accessed on Company’s website at the link: https://www.stl. transactions that are required to be reported in Form AOC-2.
tech/Code-of-Conduct-and-Policies.html
Details regarding the policy, approval and review of
Directors’ Responsibility Statement Related Party Transactions are provided in the Corporate
Pursuant to provisions of Section 134(3)(c) and Section Governance Report.
134(5) of the Act, your Directors state that:
Subsidiaries and Joint Ventures
a) in the preparation of the annual accounts for the year In accordance with Section 129(3) of the Act, a statement
ended March 31, 2020, the applicable accounting containing salient features of the financial statements of the
standards read with requirements set out under subsidiary companies in Form AOC-1 is provided as part
Schedule III to the Act, have been followed and there of the consolidated financial statement. Hence, a separate
are no material departures from the same; report on the performance and financial position of each of
the subsidiaries and joint venture companies is not repeated
b) the Directors have selected such accounting policies here for the sake of brevity. This also includes highlights of
and applied them consistently and made judgements performance of Jiangsu Sterlite Tongguang Fibre Co. Ltd.
and estimates that are reasonable and prudent so as and Metallurgica Bresciana S.p.A., material subsidiaries
to give a true and fair view of the state of affairs of the of the Company.
Company as at March 31, 2020 and of the profit of the
Company for the year April 1, 2019 to March 31, 2020; During the year under review, Impact Data Solutions Limited,
UK, Impact Data Solutions B.V., Netherlands, Vulcan Data
c) the Directors have taken proper and sufficient care Centre Solutions Limited, UK, Sterlite Tech Holdings (UK)
for the maintenance of adequate accounting records Limited and Sterlite Tech Cables Solutions Limited, India,
in accordance with the provisions of the Act for have become subsidiaries of the Company. No company
safeguarding the assets of the Company and for has ceased to be subsidiary/joint venture or associate of the
preventing and detecting fraud and other irregularities; Company during FY20.
d) the Directors have prepared the annual accounts on a Policy on material subsidiaries, as approved by the Board of
‘going concern’ basis; Directors, may be accessed on the Company’s website at
https://www.stl.tech/Code-of-Conduct-and-Policies.html
e) the Directors have laid down internal financial controls
to be followed by the Company and that such internal The Audited Financial Statements of the Subsidiary
financial controls are adequate and are operating Companies have not been included in the Annual Report.
effectively; and The financial statements of the Subsidiary Companies
and the related information will be made available,
f) the Directors have devised proper systems to ensure upon request, to the members seeking such information
compliance with the provisions of all applicable at any point of time. These financial statements will
laws and that such systems are adequate and also be available on the Website of the Company
operating effectively. https://www.stl.tech/downloads.html#subsidiary
79
Sterlite Technologies Limited
an internal audit framework, an ethics framework, a risk both business and non-business risk. The Audit Committee
management framework and adequate segregation of duties and the Board of Directors periodically review the risk
to ensure an acceptable level of risk. and suggest steps to be taken to control and mitigate the
same through a properly defined framework. Details of Risk
The Company has documented Standard Operating Management are presented in a separate section forming
Procedures (SOP) for key functions such as for procurement, part of this Annual Report.
project / expansion management, capital expenditure, human
resources, sales and marketing, finance, treasury, compliance The Board has constituted Risk Management Committee
management, safety, health, and environment (SHE), and effective January 24, 2019. The Committee comprises of
manufacturing. The Company’s internal audit activity is Ms. Kumud Srinivasan- Chairperson, Mr. Arun Todarwal,
managed through the Management Assurance Services Mr. Sandip Das, Dr. Anand Agarwal, Directors and
(‘MAS’) function. It is an important element of the overall Mr. Anupam Jindal, Chief Financial Officer as the Members.
process by which the Audit Committee and the Board obtains
assurance on the effectiveness of relevant internal controls. Vigil Mechanism / Whistle Blower Policy
The Company has established a vigil mechanism and
The scope of work including annual internal audit plan, formulated the Whistle Blower Policy (WB) to deal with
authority, and resources of MAS are regularly reviewed and instances of fraud and mismanagement, if any. The details
approved by the Audit Committee. Annual internal audit of the WB Policy are explained in the Corporate Governance
plan is aligned with ERM to ensure that all critical risks are Report and also posted on the website of the Company.
covered in the audit plan. Besides, its work is supported by
the services of leading international audit firms. The annual Disclosure Regarding Prevention of Sexual
internal audit includes: monthly physical verification of Harassment
inventory and review of accounts/MIS and a quarterly review The Company is committed to maintaining a productive
of critical business processes. To enhance internal controls, environment for all its employees at various levels in the
the internal audit follows a stringent grading mechanism, organisation, free of sexual harassment and discrimination
monitoring and reporting of the implementation of internal on the basis of gender. The Company has framed a
auditors’ recommendations of internal auditors. The internal policy on Prevention of Sexual Harassment in line with
auditors make periodic presentations on audit observations, the requirements of the Sexual Harassment of Women at
including the status of follow-up to the Audit Committee. Workplace (Prevention, Prohibition & Redressal) Act, 2013
(“POSH Act”). The Company has also set up “Prevention of
During the year under review, neither the Statutory Sexual Harassment Committee, which is in compliance with
Auditors nor the Secretarial Auditor has reported to the the requirement of the POSH Act, to redress the Complaints
Audit Committee, under Section 143 (12) of the Companies received regarding sexual harassment which has formalised
Act, 2013, any instances of fraud committed against the a free and fair enquiry process with clear timeline. During
Company by its officers or employees, the details of which the financial year, Company had received 2 complaints,
would need to be mentioned in the Boards’ report. which have been resolved. No other complaint was pending
as on March 31, 2020.
Legal Compliances Management
The Company mitigates its legal and regulatory compliance Employees Stock Option Scheme
risks with the help of an online compliance management The Company’s Employee Stock Option Schemes are in
tool. It is a well-defined system for storing, monitoring and line with Company’s philosophy of sharing benefits of
ensuring compliances under various legislations. Non- growth with the growth drivers and are in compliance with
compliances, if any, are reported and corrective actions are the applicable SEBI Regulations. The Company allotted
taken within a reasonable time. Any regulatory amendment 14,21,264 shares during the year to various employees who
is updated periodically in the system. Based on reports from exercised their options. The Certificate from the Statutory
the system and certificates from functional heads, the CEO Auditors confirming that the Scheme has been implemented
presents the quarterly compliance certificate to the Board at in accordance with the SEBI Regulations and the resolution
the Board meetings. passed by the shareholders would be placed at the AGM for
inspection by members.
Business Risk Management
The Company has formally implemented Enterprise Risk Disclosures with respect to Stock Options, as required
Management framework and have policy to identify and under Regulation 14 of the Regulations, are available in
assess the risk events, monitor and report on action taken the Annexure III to this Report, Notes to the Financial
to mitigate identified risks. A detailed exercise is carried Statements and can also be accessed on the Company’s
out periodically to identify, evaluate, manage and monitor website at https://www.stl.tech/downloads.html
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Companies (Corporate Social Responsibility Policy) Rules, e) The Auditors have not reported any matter under
2014 is annexed as Annexure VII to this Report. Section 143 (12) of the Act, therefore no details
are required to be disclosed under Section 134 (3)
General (ca) of the Act.
Your Directors state that no disclosure or reporting is
required in respect of the following items as there were no Acknowledgement
transactions on these items during the year under review: Your Directors would like to express their appreciation for
the assistance and co-operation received from the financial
a) The Company has not accepted any deposits from the institutions, banks, Government authorities, customers,
public or otherwise in terms of Section 73 of the Act vendors and members during the year under review. Your
read with Companies (Acceptance of Deposit) Rules, Directors take on record their deep sense of appreciation to
2014 and as such, no amount on account of principal or the contributions made by the employees through their hard
interest on deposits from public was outstanding as on work, dedication, competence, support and co-operation
the date of the Balance Sheet. towards the progress of your Company.
c) The Whole-time Directors of the Company do not Pravin Agarwal Anand Agarwal
receive any remuneration or commission from any of Place: Pune Vice Chairman & CEO & Whole-time
its subsidiaries. Date: May 12, 2020 Whole-time Director Director
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4.1.2 “Applicable Laws” shall mean the Companies Act, D) Resources required to fund acquisitions and /
2o13 and Rules made thereunder, the Securities or new businesses;
and Exchange Board of India (Listing Obligations
E) Cash flow required to meet contingencies; D) Whenever it proposes to utilise surplus cash
for buy-back of securities; or
F) Outstanding borrowings;
I) Dividend pay-out ratios of companies in The Company may declare dividend out of the
the same industry; profits of the Company for the year or out of the
profits for any previous year or years or out of the
J) Economic Viability;
free reserves available for distribution of Dividend,
after having due regard to the parameters laid
5.2 Circumstances under which the shareholders may
down in this Policy.
or may not expect Dividend:
5.4 Parameters adopted with regard to various
The Board shall consider the parameters /
classes of shares:
factors provided above before declaring any
dividend payout after analysing the prospective
At present, the Share Capital of the Company
opportunities and threats, viability of the options
comprises only of equity shares. As and when the
of dividend payout or retention, etc. The decision
Company issues other kind of shares, the Board of
of dividend payout shall, majorly be based on the
Directors may suitably amend this Policy.
aforesaid factors considering the balanced interest
of the shareholders and the Company. However,
6 Disclosure
the shareholders of the Company may not expect
The Company shall make appropriate disclosures as
Dividend under the following circumstances-
required under the SEBI Regulations.
A) Whenever it undertakes or proposes to
7 General
undertake a significant expansion project
This Policy would be subject to revision/amendment
requiring higher allocation of capital;
in accordance with the guidelines as may be issued
by Ministry of Corporate Affairs, Securities Exchange
B) Significantly higher working capital
Board of India or such other regulatory authority as may
requirements adversely impacting
be authorized, from time to time, on the subject matter.
free cash flow;
The Company reserves its right to alter, modify, add,
delete or amend any of the provisions of this Policy.
C) Whenever it undertakes any acquisitions
or joint ventures requiring significant
allocation of capital;
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Sterlite Technologies Limited
Directors and Independent Directors. The changes in the I further report that during the audit period:
composition of the Board of Directors that took place during
In terms of the provisions of Sections 68, 69, 70 and
the period under review were carried out in compliance with
applicable rules under the Companies Act, 2013 and
the provisions of the Act.
Securities and Exchange Board of India (Buyback of
Securities) Regulation, 2018 and subject to such other
Adequate notice is given to all directors to schedule the
approvals, permissions and sanctions, the Board of Directors
Board Meetings, agenda and detailed notes on agenda were
of the company at its meeting held on 24 March, 2020
generally sent at least seven days in advance, and a system
approved buy back of Fully Paid up Equity Shares of ₹
exists for seeking and obtaining further information and
2/- each of the Company, from the open market through
clarifications on the agenda items before the meeting and
stock exchange mechanism, at a price not exceeding ₹
for meaningful participation at the meeting.
150/- (Rupees One Hundred and Fifty only) per equity
share (“Maximum Buyback Price”) aggregating to ₹ 145
All decisions at Board Meetings and Committee Meetings
crores (Rupees One Hundred and Forty Five crores only)
were carried out unanimously as recorded in the minutes of
(“Maximum Buyback Size”); being 9.95% (on Standalone)
the meetings of the Board of Directors or Committees of the
and 9.32% (on Consolidated) of the aggregate of the fully
Board, as the case may be.
paid-up Equity Share capital and free reserves as on
March 31, 2019.
I further report that there are adequate systems and
processes in the Company commensurate with the size
Dr. K. R. Chandratre
and operations of the Company to monitor and ensure
Place: Pune FCS No.: 1370, C. P. No.: 5144
compliance with applicable laws, rules, regulations
Date: 12 May, 2020 UDIN : F001370B000231160
and guidelines.
This report is to be read with my letter of even date which is annexed as Annexure and forms an integral part of this report.
To:
The Members,
Sterlite Technologies Limited,
E1, MIDC Industrial Area, Waluj,
Aurangabad – 431 136.
Maharashtra
1. Maintenance of secretarial records is the responsibility of the management of the Company. My responsibility is to
express an opinion on these secretarial records based on my audit.
2. I have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the
correctness of the contents of the secretarial records. The verification was done on test-check basis to ensure
that correct facts are reflected in secretarial records. I believe that the process and practices, I followed provide a
reasonable basis for my opinion.
3. I have not verified the correctness and appropriateness of financial records and books of accounts of the Company.
4. Wherever required, I have obtained Management Representation about the compliance of laws, rules and regulations
and happening of events, etc.
5. The compliance of the provisions of corporate and other applicable laws, rules, regulations, standards are the
responsibility of management. My examination was limited to the verification of procedures on test-check basis.
6. The Secretarial Audit report is neither an assurance as to future viability of the Company nor of the efficacy or
effectiveness with which the management has conducted the affairs of the Company.
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13. Description of method and significant assumptions used during the year to estimate the fair values of
options:
a) Assumptions under Black Scholes Option Pricing:
Grants
Details
I II III IV V VI VII VIII IX X XI XII XIII
1. Risk Free Interest 8.33 8.04 8.66 7.84 7.22 6.50 6.12 6.20 6.27 6.54 7.03 6.88 6.19
rate (%)
2. Expected Life (yrs) 1.5 1.7 1.7 1.7 1.8 1.5 1.54 1.5 1.5 1.5 1.54 1.5 3.5
3. Expected Volatility (%) 48.31 53.93 44.41 51.55 55.34 50.28 47.02 37.00 42.75 43.28 44.79 44.64 47.87
4. Expected Dividend 0.73 0.79 0.79 0.59 0.72 1.14 0.47 2.20 1.90 1.30 1.04 0.69 1.07
Yield (%)
5. Weighted Average 25.87 29.77 28.22 48.66 79.99 84.62 103.94 162.87 265.58 377.59 291.97 286.53 136.86
Fair value (`)
to be live. The minimum life of a stock option Price of underlying ` 172.30 ` 301.75 ` 145.35
stock
is the minimum period before which the
options cannot be exercised and the maximum Expected volatility 37.00% 44.79% 47.87%
life is the period after which the options Risk Free rate 6.40% 7.03% 6.19%
cannot be exercised. Exercise Price (per ` 2.00 ` 2.00 ` 2.00
Option)
• Expected dividend yield: Expected dividend Dividend Yield 2.20% 1.04% 1.07%
yield has been calculated on the dividend prior Fair Value of the ` 92.90 ` 134.31 ` 44.32
to the date of the grant. option
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A. Remuneration disclosures for Executive Directors and Key Managerial Personnel (KMP) for the financial
year ended March 31, 2020
` in crores
Remuneration of % increase in Ratio of remuneration
Director/ KMP for Remuneration in of each Director/ to
Sr. No. Name of Director/KMP and Designation
Financial Year 2019-20 the Financial Year median remuneration
2019-20 of employees
1 Mr. Pravin Agarwal Vice Chairman & Whole-time Director 14.86 3.6% 167
2 Dr. Anand Agarwal (KMP) CEO & Whole-time Director 10.76 -13.2% 121
3 Mr. Anupam Jindal (KMP) Chief Financial Officer 3.44 0% 39
4 Mr. Amit Deshpande (KMP) Company Secretary 0.64 -27.8% 7
Note: As the liability for leave encashment is provided on an actuarial basis for the Company as a whole, the said amounts are not included
above. The remuneration of KMPs also includes perquisites value of Employee Stock Options (ESOPs) exercised, if any.
Details of remuneration paid to Independent Directors and other Non-Executive Directors are provided in the
Corporate Governance Report, which forms a part of the Annual Report.
B. The percentage increase in the median remuneration of employees in the financial year is 9.3%.
C. The number of permanent employees on the rolls of company as on March 31, 2020 is 2519.
D. Average percentile increase made in the salaries of employees other than the managerial personnel in the last financial
year viz. FY20 was 7.8%.
E. It is hereby affirmed that the remuneration paid is as per the as per the Remuneration Policy for Directors, Key
Managerial Personnel and other Employees.
Annexure V
[Pursuant to section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration)
Rules, 2014]
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Holding/ Applicable
% of Shares
Sr. No. Name and Address of the Company Subsidiary/ Section CIN
held
Associate
IV. Share Holding Pattern (Equity Share Capital Breakup as percentage of Total Equity)
i) Category-wise Share Holding
No. of Shares held at the beginning of the No. of shares held at the end %
Sr. year April 1, 2019 of the year March 31, 2020 Change
Category of Shareholder
No. % Of Total % Of Total During
Demat Physical Total Demat Physical Total
Shares Shares the Year
(I) (II) (III) (IV) (V) (VI) (VII) (VIII) (IX) (X) (XI)
(A) Promoter and Promoter
Group
(1) Indian
(a) Individual /HUF 2,440,176 - 2,440,176 0.61 2,497,176 - 2,497,176 0.62 0.01
(b) Central Government/State - - - - - - - - -
Government(s)
(c) Bodies Corporate 4,764,295 - 4,764,295 1.18 4,764,295 - 4,764,295 1.18 0.00
(d) Financial Institutions / Banks - - - - - - - - -
(e) Others - - - - - - - - -
Sub-Total A(1) : 7,204,471 - 7,204,471 1.79 7,261,471 - 7,261,471 1.80 0.01
(2) Foreign
(a) Individuals (NRIs/Foreign - - - - - - - - -
Individuals)
(b) Bodies Corporate 209,402,750 - 209,402,750 52.02 209,402,750 - 209,402,750 51.84 (0.18)
(c) Institutions - - - - - - - - -
(d) Qualified Foreign Investor - - - - - - - - -
(e) Others - - - - - - - - -
Sub-Total A(2) : 209,402,750 - 209,402,750 52.02 209,402,750 - 209,402,750 51.84 (0.18)
Total A=A(1)+A(2) 216,607,221 - 216,607,221 53.81 216,664,221 - 216,664,221 53.63 (0.18)
(B) Public Shareholding
(1) Institutions
(a) Mutual Funds /UTI 37,330,005 - 37,330,005 9.27 19,730,104 - 19,730,104 4.88 (4.39)
(b) Financial Institutions /Banks 1,007,936 3,030 1,010,966 0.25 969,241 2,530 971,771 0.24 (0.01)
(c) Central Government / State 500 - 500 0.00 500 - 500 0.00 0.00
Government(s)
(d) Venture Capital Funds - - - 0.00 - - - 0.00 0.00
(e) Insurance Companies 5,221,535 - 5,221,535 1.30 5,221,535 - 5,221,535 1.29 0.00
(f) Foreign Institutional Investors 24,188,981 - 24,188,981 6.01 17,033,350 - 17,033,350 4.22 (1.79)
(g) Foreign Venture Capital - - - 0.00 - - - 0.00 0.00
Investors
(h) Qualified Foreign Investor - - - 0.00 - - - 0.00 0.00
(i) Foreign Portfolio Investors - - - 0.00 - - - 0.00 0.00
(j) Others 37,330,005 - 37,330,005 9.27 19,730,104 - 19,730,104 4.88 (4.39)
Sub-Total B(1) : 67,748,957 3,030 67,751,987 16.83 42,954,730 2,530 42,957,260 10.63 (6.20)
(2) Non-Institutions
(a) Bodies Corporate 14,809,627 10,505 14,820,132 3.68 14,002,903 8,760 14,011,663 3.47 (0.21)
(b) Individuals
(i) Individuals holding 74,078,879 3,070,074 77,148,953 19.17 93,249,962 2,703,879 95,953,841 23.75 4.59
nominal share capital
upto `1 lakh
(ii) Individuals holding 17,097,799 76,360 17,174,159 4.27 20,667,636 76,360 20,743,996 5.14 0.87
nominal share capital in
excess of `1 lakh
(d) Qualified Foreign Investor - - - - - - - - -
(c) Others
NBFC 157,691 - 157,691 0.04 27,100 - 27,100 0.01 (0.03)
Clearing Members 725,683 - 725,683 0.18 2,557,889 - 2,557,889 0.63 0.45
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Sterlite Technologies Limited
No. of Shares held at the beginning of the No. of shares held at the end %
Sr. year April 1, 2019 of the year March 31, 2020 Change
Category of Shareholder
No. % Of Total % Of Total During
Demat Physical Total Demat Physical Total
Shares Shares the Year
(I) (II) (III) (IV) (V) (VI) (VII) (VIII) (IX) (X) (XI)
Directors 979,190 - 979,190 0.24 1,118,580 - 1,118,580 0.28 0.03
Foreign Nationals 13,850 - 13,850 0.00 13,450 - 13,450 0.00 0.00
IEPF 3,343,380 - 3,343,380 0.83 4,153,249 - 4,153,249 1.03 0.20
Non-Resident Indians 2,470,874 203,630 2,674,504 0.66 3,269,384 189,990 3,459,374 0.86 0.19
Nri Non-Repatriation 1,062,663 - 1,062,663 0.26 1,311,787 - 1,311,787 0.32 0.06
Trusts 7,110 500 7,610 0.00 797,570 500 798,070 0.20 0.20
Qualified Institutional Buyer
Qualified Foreign Investor - - - 0.00 192,507 - 192,507 0.05 0.05
Sub-Total B(2) : 114,746,746 3,361,069 118,107,815 29.34 141,362,017 2,979,489 144,341,506 35.73 6.39
Total B=B(1)+B(2) : 182,495,703 3,364,099 185,859,802 46.17 184,316,747 2,982,019 187,298,766 46.37 0.19
(A+B) : 399,102,924 3,364,099 402,467,023 99.98 400,980,968 2,982,019 403,962,987 100.00 0.02
(C) Shares held by custodians,
against which Depository
Receipts have been issued
(1) Promoter and Promoter
Group
(2) Public 74,700 - 74,700 0.02 - - - 0.00 (0.02)
Grand Total (A+B+C) : 399,177,624 3,364,099 402,541,723 100.00 400,980,968 2,982,019 403,962,987 100.00
1 Twin Star Overseas Ltd 20,94,02,750 52.02 52.02 20,94,02,750 51.84 0.00 (0.18)
Note:- The Company has published details of only Promoter Category which is decided as per the declaration received under Regulation 30 of SEBI
(Substantial Acquisition of Shares and Takeovers) Regulation, 2011
(iii) Change in Promoters’ Shareholding (please specify, if there is no change):- There is no change in the
Promoters’ Shareholding during FY20.
(iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs):
Cumulative Shareholding during
Shareholding at the beginning of the Year
the Year
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Note: The above information is based on the weekly beneficiary positon received from depositaries.
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Sterlite Technologies Limited
1. Anil Agarwal - Chairman Nil Nil No change during the year Nil Nil
2. Pravin Agarwal – Vice-Chairman 11,29,750 0.28 27/05/2020 57,000 Purchase 11,86,750 0.28
3. Arun Todarwal - Independent Director 2,300 0.00 No change during the year 2,300 0.00
4. A R Narayanaswamy - Independent 1000 0.00 No change during the year 1,000 0.00
Director
5. Sandip Das- Independent Director 3,420 0.00 12/06/2019 4,870 Purchase 8,290 0.00
6. Kumud Srinivasan – Independent Nil Nil No change during the year Nil Nil
Director**
7. Pratik Agarwal – Non-Executive Director 1,18,340 0.03 No change during the year 1,18,340 0.03
8. Anand Agarwal (KMP) – CEO & Whole-time 9,72,470 0.22 10/07/2019 63,070 ESOP 10,35,540 0.26
Director 23/09/2019 71,450 ESOP 11,06,990 0.27
9. Anupam Jindal (KMP) – Chief Financial 2,43,997 0.06 10/07/2019 46,085 ESOP 2,90,082 0.06
Officer
10. Amit Deshpande (KMP) – Company 44,272 0.01 30/09/2019 3,565 ESOP 47,837 0.01
Secretary
V. Indebtedness
Indebtedness of the Company including interest outstanding/accrued but not due for payment
` in crores
Secured Loans
Unsecured Loans Deposits Total Indebtedness
excluding deposits
Indebtedness at the beginning of the financial year
i) Principal Amount 1,086.85 400.00 - 1,486.85
ii) Interest due but not paid - - - -
iii) Interest accrued but not due 3.12 - - 3.12
Total (i+ii+iii) 1,089.97 400.00 - 1,489.97
Change in Indebtedness during the financial year
• Addition 1,310.00 1,050.00 - 2,360.00
• Reduction 1,181.24 794.97 - 1,976.21
Net Change 128.76 255.03 - 383.79
Indebtedness at the end of the financial year
i) Principal Amount 1,216.97 655.03 1,872.00
ii) Interest due but not paid - - - -
iii) Interest accrued but not due 1.76 1.76
Total (i+ii+iii) 1,218.73 655.03 - 1,873.76
#Details of Stock Options are mentioned in details of Shareholding of Directors and Key Managerial Personnel in Point IV (v)
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Annexure VI
Particulars of Energy Conservation, Technology m. Kaizen implemented in shop floor to reduce cost &
Absorption and Foreign Exchange Earnings and Outgo improve productivity in shop floor.
required under the Companies (Accounts) Rules, 2014 for
the year ended March 31, 2020. 2. The steps taken by the Company for utilising
alternate sources of energy
A. Conservation of Energy a. Feasibility of sourcing power from Solar Energy
1. The steps taken or impact on conservation of Corporation of India (SECI- Govt Unit) is being
energy: explored at the group level.
In FY20, various initiatives were taken up across
plants which has contributed to decrease in energy b. Adoption of solar thermal technology is being
consumption and the carbon footprint: explored along with the United Nations Industrial
Development Organization.
a. Installation of Blower and vacuum based air
wipers to reduce compressed air consumption & c. Initiated 165 KVA Roof top solar systems with auto
power consumption. cleaning of panels.
g. Replacement of metallic fans in cooling towers b. New coiling set up is initiated to improve coiling in
with the fiber reinforced plastic fan. place of wooden drums.
h. Substitution of split air conditioner in UPS room c. Installed new 400 KVA UPS with higher efficiency
with centralised air handling unit. of 96 % as compared to existing UPS having
92 % efficiency.
i. Utilisation of condensate with feed water.
d. Installation of a new 600 CFM air compressor
j. Optimisation of the HVAC system based on the having high power efficiency as compared to
ambient condition and production. existing compressors.
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b) The newly commissioned plant uses LNG as n) Upgradation of UPS firmware for
fuel in cladding process with a provision of enhanced reliability.
methane upgrader technology, making available
higher calorific value, and higher purity fuel. This o) LNG methane system upgrader to achieve
improves the overall efficiency, cost and safety. 95% purity from 89% for enhanced quality of
glass preforms.
c) The aging HVAC chilled water lines of 4542
meter was replaced with new insulated water p) Installation of latest technology power equipment
lines leading to higher efficiency and reliability. - Ring Mount Unit (RMU) as a replacement of
The task was completed in a 3 day complete existing six pole structure which will result in
shutdown period. reduction of breakdown & scrap.
d) Auto load shedding system by the use of the MD q) Installation of latest technology & high efficient
controller is installed and is extensively used to UPS, dry transformer & load break switch for
keep the load within the permissible band and improving utilities reliability & efficiency.
shed the identified noncritical load temporarily
to ensure the plants avail maximum load factor r) The centralised utilities project started with the
discounts in power bill. energy bridge concept.
e) Earth leakage circuit breaker system implemented s) New high speed & high tech machines are
in 100 LDB’s to enhance the safety in lighting & purchased in some sections to increase
single-phase circuits. productivity with minimum scrap and capable of
producing multi products without increase in the
f) Upgradation of electrical panels and circuit energy consumptions.
breaker of UPS with newer generation for
better reliability. t) Machine parameters data streaming through
OPC UA has been completed on POC on 02
g) Firmware upgradation completed for UPS. This has production lines
resulted in improving the changeover time from 8
milliseconds to 4 milliseconds. 2. The benefits derived like product improvement,
cost reduction, product development or import
h) Replacement of aluminum bus bar with copper bus substitution
bar has been completed to decrease hotspots and a. Import Substitution – High Purity Chemicals
hence improve safety and reliability. used in Glass Manufacturing.
Successfully completed import substitute of high
i) Adoption of technology of automated chemical purity chemicals from Europe by manufacturing it
dosing pumps has led to minimisation of manual in-house that matches the quality of import. This in
handling of hazardous chemicals. house manufactured chemical which is now used
in the new glass plant process to the tune of 150
j) Replacement of ageing standalone UPS with tons / month presently.
parallel system has been completed for better
reliability and efficiency. b. Import Substitution – Components for
modification in refractive index profile.
k) Oil Natural Air Force (ONAF) fans provided for Successfully completed import substitute
two transformers of 2.25MVA to minimise oil & of components used for attaining special
winding heating. refractive index by changing the process of
manufacturing and installation, commissioning
l) Enhanced reliability by upgrading ageing of special equipment. This not only saves
transformer upgraded of 2MVA 33kV cost but also enables to make new design of
with 2.25MVA 33kV. profiles and products.
m) Redundant power provided for scrubber to ensure c. Bill of materials (BOM) optimisation.
continuity of our ability to provide environmental The project aims to optimise all the raw material
protection all times consumption & the process types based on the
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jacket. Applications include Remote application of the highest fibre density in the most compact
Low-Voltage power, High information transmission cable package possible. This cable offers an
speed with optical fiber, FTTA, Security Networks, outstanding solution for demanding high-growth,
IP Enable appliances, Wireless Access Points high-bandwidth communications applications
(backbone cable). like data centers, equipment connections within
cabinets, outside plant applications.
In Copper Cable Dadra Plant, replace the
Conversational Single Pass Water Trough by
AERIAL-LITE® Figure-8 Steel Wire Armored
Dual Water Trough for better cooling of FG Cable Unitube Cable – This product is intended for use
at high speed. in short span aerial installations.
Annexure VII
1) A brief outline of the Company’s CSR Policy, including overview of projects or programs proposed to be
undertaken and a reference to the web-link to the CSR policy and projects or programs.
STL, through a collaborative approach envisions ‘Transforming Everyday Living, by Delivering Smarter Networks for its
communities. Connectivity, Innovation and Sustainability are thus pivotal not only to how STL operates as a business,
but even for its community outreach programmes. This approach helps STL ‘Create Shared Value’ for each of its
stakeholders as well as enable connected future for the nation that is inclusive for all.
Each of STL’s CSR and Sustainability focus areas - Education, Women Empowerment, Health and Environment are
interconnected and power each other through their alignment with the UN Sustainable Development Goals and Ten
Principles of the UN Global Compact Network. This, in addition to strategic partnerships with the Government of India,
NGOs, technical institutions and other development players allows STL to create holistic solutions that positively impact
and contribute to the realization of integrated development for rural, semi-urban and urban areas in India.
In FY 19-20, STL did not only achieve its CSR goal for 2020 of impacting 1 million lives, but surpassed it by impacting
over 1.32 million lives.
The Company’s CSR Policy can be viewed on the link mentioned below:
https://www.stl.tech/pdf/20May07%20-%20CSR%20Policy_newBrand.pdf
2) The Composition of the Sustainability and Corporate Social Responsibility Committee (CSR Committee)
a. Mr. Arun Todarwal (Independent Director)
b. Mr. A. R. Narayanaswamy (Independent Director)
c. Mr. Pravin Agarwal
d. Dr. Anand Agarwal
3) Average net profit of the Company for last three financial years: ` 457.30 crores.
4) Prescribed CSR Expenditure (two per cent of the amount as in item 3 above):
The Company is required to spend 2% of last three years’ average net profit – ` 9.15 crores
6) In the column ‘Cumulative expenditure up to the reporting period’, while we have taken 2014-15 as the base year,
it is not the first year of our CSR programmes. Several of our programmes have been started well before 2014-15.
Considering the practical challenges of reporting the cumulative expenditure from inception, we chose to define 2014-
15 as the base year.
(` in lakhs)
1 2 3 4 5 6 7 8
Amount outlay Cumulative Amount
(budget), Amount spent expenditure spent: Direct
Sr.
CSR project or Activity Identified Sector Location project or on the projects upto the or through
No.
program wise (lakhs) reporting implementing
(lakhs) period (lakhs) agency*
1 Jeewan Jyoti Women Education, Women Pune 150 136 797 Indirect
Empowerment Institution - Empowerment
Vocational training and holistic
development program for women
from rural communities
Jeewan Jyoti Ved Vidyalaya – Education Pune 20 20 139 Indirect
Preservation of heritage language
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(` in lakhs)
1 2 3 4 5 6 7 8
Amount outlay Cumulative Amount
(budget), Amount spent expenditure spent: Direct
Sr.
CSR project or Activity Identified Sector Location project or on the projects upto the or through
No.
program wise (lakhs) reporting implementing
(lakhs) period (lakhs) agency*
Educational Scholarships and Education, Health Multiple locations 155 116 186 Indirect
donations
3 Pragyan - Technology based Education Jaipur 45 45 115 Direct
quality education program
for underprivileged children
combined with training for the
teachers.
(` in lakhs)
1 2 3 4 5 6 7 8
Amount outlay Cumulative Amount
(budget), Amount spent expenditure spent: Direct
Sr.
CSR project or Activity Identified Sector Location project or on the projects upto the or through
No.
program wise (lakhs) reporting implementing
(lakhs) period (lakhs) agency*
14 Contribution to IIT for Research Education, Multiple locations 100 100 100 Direct
Environment,
Health
15 Afforestation Programme - To Environment Pune 85 100 100 Indirect
support increased bio-diversity
and increase the forest cover in
Maharashtra
7) In case the Company has failed to spend the two per cent of the average net profit of the last three
financial years or any part thereof, the Company shall provide the reasons for not spending the amount in
its Board report. – Not Applicable
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Sterlite Technologies Limited
Philosophy of the Company on Code of Requirements) Regulations, 2015 (‘the Listing Regulations’),
Governance requiring not less than half the Board to be Independent.
Corporate Governance represents the value, ethical and
moral framework under which business commpanydecisions All Directors have made necessary disclosures regarding
are taken. The investors want to be sure that not only is Directorships and Committee positions held by them in
their capital handled effectively and adds to the creation other companies. None of the Directors is a Member of
of wealth, but the business decisions are also taken in a more than ten Committees and Chairman of more than
manner which is not illegal or involves moral hazard. five Committees (Audit Committee and Stakeholders’
Relationship Committee) across all companies in which he
Your Company perceives good corporate governance / she is a Director. None of the Company’s Independent
practices as key to sustainable corporate growth and long- Directors served as Independent Director in more than
term shareholder value creation. The primary objective is to seven listed companies. The appointment of the Whole-time
develop and adhere to a corporate culture of harmonious Directors, including their tenure and remuneration are also
and transparent functioning, increasing employee and approved by the Board.
client satisfaction and enhancing shareholders’ wealth by
developing capabilities and identifying opportunities that Mr. Pravin Agarwal and Dr. Anand Agarwal, Whole-time
best serve the goal of value creation. Directors of the Company, are not appointed as Independent
Directors of any Listed Company. Mr. Anil Agarwal and
The Company has a three-tier governance structure: Mr. Pravin Agarwal are brothers. Mr. Pratik Agarwal is the
son of Mr. Pravin Agarwal.
Strategic supervisionThe Board of Directors occupies the
topmost tier in the governance structure.
It plays a role of strategic supervision that All the Independent Directors have confirmed that they
is devoid of involvement in the task of meet the ‘independence’ criteria as mentioned under Listing
strategic management of the Company. Regulations. In the opinion of Board, the Independent
The Board lays down strategic goals directors fulfill the conditions specified in the Listing
and exercises control to ensure that Regulations and are independent of the management.
the Company is progressing to fulfill
stakeholders’ aspirations.
Matrix Setting out the List of Core Skills/
Strategic management The Executive Committee is composed of
the senior management of the Company
Expertise/Competencies
and operates upon the directions of the The skills and attributes of the Board can be broadly
Board. categorised as follows:
Financial Skills √ √ √ √ √ √ √ √
Experience in handling financial
management along with an understanding
of accounting and financial statements.
Stakeholder engagement √ √ √ √ √ √
Experience of dealing with government
officials, regulators, customers, boards,
partners and suppliers, employees; and
broader community for corporate
social responsibility agenda
The Board as a whole should also encompass desirable diversity in aspects such as gender, age and different perspectives.
Board Meetings
During FY20, six meetings of the Board of Directors were held on April 23, 2019; July 18, 2019; October 24, 2019;
December 05, 2019; January 15, 2020 and March 24, 2020. The maximum time-gap between any two consecutive meetings
did not exceed one hundred and twenty days. Video/Tele-conferencing facilities were made available to facilitate Directors
travelling abroad, or present at other locations, to participate in the meetings. As required by Part A of Schedule II to the
Listing Regulations, all the necessary information was placed before the Board from time to time. The Board also reviews the
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Sterlite Technologies Limited
declaration made by the Chief Executive Officer regarding compliance with all applicable laws on a quarterly basis as also
steps taken to remediate instances of non-compliances, if any.
The composition of the Board, their attendance in meetings, other Directorships and Committee memberships and their
shareholding in the Company as on March 31, 2020 are as follows:
Number of
Board Attendance Committee
Directorships shares held in
Meetings at the Last Memberships & Directorship in other listed entity
in other the Company
Director (Category) attended AGM held [Chairpersonships] (Category of Directorship)
Companies1 as on March
FY20 out of on July 23, in other
31, 2020
the 6 held 2019 Companies2
115
Sterlite Technologies Limited
b. Compliance with accounting standards and 12. Approving any transactions or subsequent
changes in accounting policies and practices modifications of transactions with related parties.
and reasons for the same.
13. Reviewing inter-corporate loans and investments.
c. Major accounting entries involving
estimates based on exercise of
14. Reviewing valuation of undertakings or assets of
judgment by Management.
the Company, if necessary.
d. Audit qualifications and significant
adjustments arising out of audit. 15. Reviewing financial statements and investments
made by subsidiary companies.
e. Significant adjustments made in the financial
statements arising out of Audit findings.
16. Evaluating reasons for any substantial defaults in
f. Compliance with listing and other legal payment to the depositors, debenture holders,
requirements relating to financial statements. shareholders (in case of non-payment of declared
dividend) and creditors, if any.
g. Disclosure of any related party transactions.
h. modified opinion(s) in the draft audit report; 17. Reviewing the effectiveness of the system for
monitoring compliance with laws and regulations.
i. Reviewing draft audit report in the format of
Key Audit Matters - “KAM Report”
18. Approving the appointment of CFO after assessing
the qualification, experience and background etc.
7. Reviewing, with the management, the statement
of the candidate.
of uses/application of funds raised through an
issue (public issue, rights issue, preferential issue,
19. Reviewing the utilisation of loans and/ or advances
etc.), the statement of funds utilised for purposes
from/investment by the holding company in the
other than those stated in the offer document/
subsidiary exceeding rupees 100 crore or 10% of
prospectus/notice and the report submitted by
the asset size of the subsidiary, whichever is lower
the monitoring agency monitoring the utilisation
including existing loans / advances / investments
of proceeds of a public or rights issue, and making
existing amounts.
appropriate recommendations to the Board to take
up steps in this matter.
20. Reviewing the following information:
applicable SEBI Regulations and to verify that the 2. Formulation of criteria for evaluation of Independent
systems for internal controls are adequate and Directors and the Board;
are operating effectively and to amend, modify,
interpret the Code.” 3. Reviewing whether to extend or continue the term
of appointment of the Independent Director, on the
Composition and Meetings basis of the report of performance evaluation of
The Audit Committee comprises of three independent Directors.
Independent Directors and one Executive Director.
Mr. A.R.Narayanaswamy, Chairman of the Committee 4. Devising a policy on Board diversity;
(Independent Director) is a Chartered Accountant and has
accounting and financial expertise. The other Committee 5. Identifying persons who are qualified to become
members also are financially literate. The quorum of the Directors and who may be appointed in senior
Committee is two members or one-third of its members, management in accordance with the criteria
whichever is higher with at least two Independent Directors. laid down, and recommend to the Board their
appointment and removal;
The Chairman of the Audit Committee attended the last
Annual General Meeting (‘AGM’) of the Company. The Audit 6. Administration of Employee Stock Option Scheme(s);
Committee met four times during FY20 on April 23, 2019;
July 18, 2019; October 24, 2019 and January 15, 2020 and 7. Recommend to the Board, all remuneration, in
the gap between two meetings did not exceed one hundred whatever form, payable to senior management, i.e. all
and twenty days. The Composition of the Audit Committee members of management one level below the Chief
and attendance at committee meetings is as follows: Executive Officer/Managing Director/Whole-time
Director/Manager (including Chief Executive Officer/
Number of Meetings
Name Category Manager, in case they are not part of the Board) and
attended
A. R. Narayanaswamy, Non-Executive & 04 shall specifically include Company Secretary and Chief
Chairman Independent Director Financial Officer.
Arun Todarwal Non-Executive & 04
Independent Director 8. Succession Planning of the CXO team
Sandip Das Non-Executive & 04
Independent Director Composition and Meetings
Pravin Agarwal Vice Chairman & 04 The Committee comprises of four Non-Executive
Whole-time Director Independent Directors. Mr. Sandip Das is the Chairman
of the Committee. The Committee met five times during
the FY20 on April 23, 2019; June 26, 2019, July 18,
Audit Committee meetings are usually attended by the
2019, October 24, 2019, and January 15, 2020. The
Executive Directors, the CFO and representatives of
Company Secretary acts as the Secretary to Nomination
Statutory Auditors and Internal Auditors. Business CEOs and
and Remuneration Committee. The Composition of and
Functional Heads are also invited to the meetings, as and
attendance at Committee meetings is as follows:
when needed. The Company Secretary acts as the Secretary
to Audit Committee. The Internal Audit function reports to Name Category
Number of
Meetings attended
the Audit Committee to ensure its independence.
Sandip Das,Chairman Non-Executive & 05
Independent Director
II. Nomination and Remuneration Committee
he powers, role and terms of reference of the Nomination
T Arun Todarwal Non-Executive & 05
Independent Director
and Remuneration Committee covers the areas as provided
under Regulation 19 of the Listing Regulations and Section A. R. Narayanaswamy Non-Executive & 05
Independent Director
178 of the Act, besides other terms as referred by the Board.
Kumud Srinivasan Non-Executive & 04
Independent Director
he terms of reference of the Nomination and Remuneration
T
Committee include:
III. Stakeholders’ Relationship Committee
1. Formulation of the criteria for determining The powers, role and terms of reference of the Stakeholders’
qualifications, positive attributes and independence Relationship Committee covers the areas as provided under
of a director and recommend to the Board a policy, Regulation 20 read with Part D of Schedule II of the Listing
relating to the remuneration of the Directors, key Regulations and Section 178 of the Act, besides other terms
managerial personnel and other employees; as referred by the Board.
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Sterlite Technologies Limited
The terms of reference of the Stakeholders’ Relationship The terms of reference of the Risk Management
Committee include: Committee include:
1. Resolving the grievances of the security holders of the 1. Framing, reviewing and monitoring the Risk
listed entity including complaints related to transfer/ Management Policy and Plan of the Company.
transmission of shares, non-receipt of annual report,
non-receipt of declared dividends, issue of new/ 2. Evaluating significant risk exposures of the Company
duplicate certificates, general meetings etc. and assessing management’s actions to mitigate the
exposures in a timely manner.
2. Review of measures taken for effective exercise of
voting rights by shareholders. 3. Monitoring risks and risk management capabilities
within the organisation, including communication
3. Review of adherence to the service standards adopted about escalating risk and crisis preparedness and
by the listed entity in respect of various services being recovery plans.
rendered by the Registrar & Share Transfer Agent.
4. Monitoring cyber security risks and assessing the
4. Review of the various measures and initiatives taken by adequacy of infrastructure controls in place to
the listed entity for reducing the quantum of unclaimed mitigate the same.
dividends and ensuring timely receipt of dividend
warrants/annual reports/statutory notices by the 5. Making regular reports to the Audit Committee/ Board
shareholders of the Company. on Risk management and minimisation procedures.
VI. Other Committees Whereas the term of the KMP (other than the
The Board has also constituted the following Committees, to Managing / Whole-time Director/ Manager) and Senior
assist in discharging its functions – Management shall be governed by the prevailing HR
policies of the Company.
1. Banking and Authorisation Committee
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Sterlite Technologies Limited
reasons and subject to such applicable Acts, Rules the Whole-time Director based on the standard market
and Regulations and the Company’s prevailing HR practice and prevailing HR policies of the Company.
policies, the Nomination and Remuneration Committee
may recommend, to the Board, with reasons recorded e. Remuneration to Non-executive / Independent
in writing, removal of a Director, KMP or Senior Director:
Management Personnel. The remuneration / commission / sitting fees, as the
case may be, to the Non-Executive / Independent
d. Remuneration of Managing / Whole-time Director, shall be in accordance with the provisions of
Director, KMP and Senior Management the Act and the Rules made thereunder for the time
The remuneration / compensation / commission, etc., being in force or as may be decided by the Committee /
as the case may be, to the Managing / Whole-time Board / shareholders.
Director will be determined by the NRC Committee
and recommended to the Board for approval. The An Independent Director shall not be entitled to
remuneration / compensation / commission, etc., as any stock option of the Company unless otherwise
the case may be, shall be subject to the prior / post permitted in terms of the Act and Listing Regulations,
approval of the shareholders of the Company and as amended from time to time.
Central Government, wherever required and shall be
in accordance with the provisions of the Act and Rules The complete text of the Nomination and Remuneration
made thereunder. Further, the Whole-time Director of Policy can be accessed on Company’s website at
the Company is authorised to decide the remuneration the link: https://www.stl.tech/Code-of-Conduct-
of KMP (other than Managing/ Whole-time Director) and and-Policies.html
Senior Management, and which shall be decided by
In FY20, sitting fee of ` 75,000/- for attendance at each meeting of the Board and ` 40,000/- for each meeting of the
Committees of the Board, was paid to its Members (excluding Executive Directors). Remuneration by way of commission
to Non-executive Directors is decided by the Board of Directors and distributed to them based on their participation and
contribution at the Board and certain Committee meetings as well as time spent on operational matters other than at
meetings. On August 4, 2015, Members had approved the payment of remuneration by way of commission to the Non-
Executive Directors of the Company, of a sum not exceeding 1% per annum of the net profits of the Company. The break-up
of remuneration actually paid to Directors (excluding provisions, if any) in FY20 is as follows:
(C In lakhs)
Salary / Incentive/
Director Sitting Fee Total
Perquisites1 Commission
Anil Agarwal - - - -
Arun Todarwal - 22.50 12.90 35.40
A. R. Narayanaswamy - 22.50 9.30 31.80
Kumud Srinivasan 22.50 7.75 30.25
Pravin Agarwal 1,192.84 293.00 - 1,485.84
Anand Agarwal2 801.50 275.00 - 1,076.50
Pratik Agarwal - 22.50 0.75 23.25
Sandip Das - 22.50 10.90 33.40
1. As the liabilities for gratuity and leave encashment are provided on an actuarial basis for the Company as a whole, the said amounts are not
included above.
2. Remuneration of Dr. Anand Agarwal also includes the perquisite value of Employee Stock Options (ESOPs) exercised by him during the year.
He has exercised 1,34,520 options in FY20 against which equal number of shares were allotted to him. 1,30,300 options were granted to him in
FY20, which are eligible for vesting over a period of five years.
3. The Company has paid ` 4.58 lakhs per month to Mr. Sandip Das as consultancy fees in FY20 for advisory services rendered by him in
professional capacity and the same is not a part of his remuneration as Director.
July 4, 2017 E1, MIDC Industrial Area, Waluj, 11.00 am • To offer or invite for subscription of Non-Convertible Debentures on
Aurangabad, Maharashtra – 431 private placement basis
136, India • Raising of the funds through Qualified Institutional Placement (QIP)/
External Commercial Borrowings (ECBs) with rights of conversion
into Shares/ Foreign Currency Convertible Bonds (FCCBs)/ American
Depository Receipts (ADRs)/ Global Depository Receipts (GDRs) /
Optionally or Compulsorily Convertible Redeemable Preference Shares
(OCPs/CCPs) etc. pursuant to Section 62 of the Act
June 26, 2018 E1, MIDC Industrial Area, Waluj, 11.00 am • To offer or invite for subscription of Non-Convertible Debentures on
Aurangabad, Maharashtra – 431 private placement basis
136, India • Raising of the funds through Qualified Institutional Placement (QIP)
/ External Commercial Borrowings (ECBs) with rights of conversion
into Shares / Foreign Currency Convertible Bonds (FCCBs) / American
Depository Receipts (ADRs) / Global Depository Receipts (GDRs) /
Optionally or Compulsorily Convertible Redeemable Preference Shares
(OCPs/CCPs) etc. pursuant to Section 62 of Companies Act, 2013
July 23, 2019 E1, MIDC Industrial Area, Waluj, 11.00 am • To re-appoint Mr. Arun Todarwal as an Independent Director
Aurangabad, Maharashtra – 431 • To re-appoint Mr. A. R. Narayanaswamy as an Independent Director
136, India • Raising of the funds through Qualified Institutional Placement (QIP)
/ External Commercial Borrowings (ECBs) with rights of conversion
into Shares / Foreign Currency Convertible Bonds (FCCBs) / American
Depository Receipts (ADRs) / Global Depository Receipts (GDRs) /
Optionally or Compulsorily Convertible Redeemable Preference Shares
(OCPs/CCPs) etc. pursuant to Section 62 of Companies Act, 2013
The Company had provided facility of e-voting pursuant Related Party Transactions
to provisions of the Act and the Listing Regulations, to its All Related Party Transactions are approved by the Audit
Members. A scrutinizer was appointed by the Company to Committee. Approval of the Board is taken, as needed, in
monitor and review the e-voting process. On completion accordance with the Act and the Listing Regulations. There
of e-voting process, the Scrutinizer presented a report were no materially significant transactions with related
to the Chairman. All the resolutions were passed with parties during the financial year which were in conflict
requisite majority. with the interest of the Company. No transaction with
the Promoters, Directors or their relatives has a potential
During FY20, no special resolutions were passed through conflict with the Company’s interest. The related party
postal ballot. There is no special resolution proposed to be transactions are entered into based on considerations of
conducted through postal ballot. various business exigencies, such as synergy in operations,
sectoral specialisation and the Company’s long-term
Subsidiary Companies strategy for sectoral investments, optimisation of market
The Company has formulated a policy for determining share, profitability, legal requirements, liquidity and capital
‘material’ subsidiaries pursuant to the provisions of the resources of subsidiaries and associates. All related party
Listing Regulations and the same is displayed on its transactions are negotiated on an arm’s length basis, and
website at link https://www.stl.tech/Code-of-Conduct- are intended to further the Company’s interests.
and-Policies.html
All transactions entered into with Related Parties as defined
The applicable requirements of Regulation 24 of Listing under the Act and Regulation 23 of the Listing Regulations
Regulations with respect to material subsidiary are complied during the FY20 were in the ordinary course of business and
with. Minutes of subsidiary companies are placed before on an arm’s length basis. Suitable disclosures as required
the Board and the attention of the Directors is drawn to under the applicable Accounting Standards have been made
significant transactions and arrangements entered into by in the notes to the Financial Statements. The Board has
the subsidiary companies. approved the policy on Related Party Transactions, which
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Sterlite Technologies Limited
has been uploaded on the Company’s website in “Investors” No person has been denied access to the Audit Committee.
section at link https://www.stl.tech/Code-of-Conduct- The Whistleblower policy has also been extended to
and-Policies.html external stakeholders like vendors, customers, etc. The
details of the Whistleblower Policy are available at the link
Code of Conduct https://www.stl.tech/Code-of-Conduct-and-Policies.html
The Company has adopted a ‘Code of Business Conduct
& Ethics’ to meet the changing internal and external Prevention of Insider Trading
environment for its employees at all levels including Senior The Company has adopted a Code of Conduct for
Management and Directors. The Code has also been posted Regulating, Monitoring and Reporting of trading in the
on the Company’s website at link https://www.stl.tech/ securities of the Company (‘the Code’) as per the SEBI
Code-of-Conduct-and-Policies.html. The Code serves as a (Prohibition of Insider Trading) Regulations, 2015 with a
guide to the employees of the Company to make informed view to regulate trading in securities by the Directors and
and prudent decisions. As required under the Listing designated employees of the Company. Under the Code,
Regulations, the affirmation of compliance with the Code the Company has constituted Insider Trading Monitoring
has been obtained from Directors and Senior Management Committee for overall administration of the Code. The Code
personnel for FY20. requires pre-clearance for dealing in the Company’s shares
and prohibits the purchase or sale of Company’s securities
Disclosures in Relation to the Sexual Harassment by the Directors and the designated employees while in
of Women at Workplace (Prevention, Prohibition possession of unpublished price sensitive information in
and Redressal) Act, 2013: relation to the Company and during the period when the
The status of complaints under is as follows: Trading Window is closed.
No. of Complaints Pending as on 1st April, 2019 0
No. of Complaints filed during financial year 2 CEO and CFO Certification
No. of Complaints disposed off during financial year 2 The Chief Executive Officer and Whole-time Director and
No. of Complaints Pending as on 31st March, 2020 0 the Chief Financial Officer of the Company give annual
certification on financial reporting and internal controls
to the Board in terms of Regulation 17 of the Listing
Vigil Mechanism/ Whistleblower Policy
Regulations. The Chief Executive Officer and Whole-time
The Company has a Vigil mechanism and has adopted
Director and the Chief Financial Officer also give quarterly
a ‘Whistleblower Policy’, which has been communicated
certification on financial results while placing the financial
to all employees along with Code of Business Conduct &
results before the Board in terms of Regulation 33 of the
Ethics. The Whistleblower policy is the mechanism to help
Listing Regulations. The annual certificate for FY20 given by
the Company’s directors, employees, its subsidiaries and
the Chief Executive Officer and Whole-time Director and the
all external stakeholders to raise their concerns about any
Chief Financial Officer is published in this Report.
malpractice, impropriety, abuse or wrongdoing at an early
stage and in the right way, without fear of victimisation,
Reconciliation of Share Capital Audit
subsequent discrimination or disadvantage. The policy
A qualified Practising Company Secretary carries out a
encourages raising concerns within the Company rather
Reconciliation of Share Capital Audit on a quarterly basis
than overlooking a problem. All Complaints under this policy
to reconcile the total admitted capital with NSDL and CDSL
are reported to the Director - Management Assurance, who
and the total issued and listed capital. The Audit report is
is independent of operating management and businesses.
submitted to the stock exchanges and is also placed before
‘Complaints’ can also be reported on a web-based portal,
the Board. The audit confirms that the total issued/paid-
designated email id or toll-free number as below:
up capital is in agreement with the aggregate of the total
Web based Portal www.vedanta.ethicspoint.com number of shares in physical form and the total number of
Toll Free number 000 800 100 1681 shares in dematerialised form (held with NSDL and CDSL).
Email stl.whistleblower@sterlite.com
Mailing address Group Head – Management Assurance, Disclosures
Vedanta, 75 Nehru Road, Vile Parle (E), Mumbai
a. The Company has complied with the requirements
400 099
Tel No. +91- 22 – 6646 1000, Fax No. +91- 22 – of the Stock Exchanges, SEBI and other statutory
6646 1450 authorities on all matters relating to capital markets. No
penalties or strictures were imposed on the Company
by the Stock Exchanges, SEBI or any statutory none of the Directors on the Board of the Company
authorities on any matter relating to the above. have been debarred or disqualified from being
appointed or continuing as Directors of companies by
b. The Company has not received any complaints the Board/Ministry of Corporate Affairs or any such
relating to child labour, forced labour, involuntary statutory authority. The said certificate is attached
labour during FY20. to this Report.
c. As a result of its businesses and the global nature of h. The Board had accepted all recommendation
its operations, the Company is exposed in particular of its committees during FY20, which were
to market risks from changes in foreign currency mandatorily required.
exchange rates and interest rates, while commodity
price risks arise from procurement. The Company i. The Company has complied with all the mandatory
has established internal guidelines for risk controlling requirements specified in Regulations 17 to 27 and
procedures and for the use of financial instruments, clauses (b) to (i) of sub – regulation (2) of Regulation 46
including a clear segregation of duties with regard of the Listing Regulations, as applicable. Comments on
to financial activities, settlement, accounting and the adoption of non-mandatory requirements are given at
related controlling. The guidelines upon which the the end of this report.
Company’s risk management processes for financial
risks are based, are designed to identify and analyze Means of Communication
these risks throughout the Company, to set appropriate a. Quarterly Financial Results are published in all-India
risk limits and controls and to monitor the risks by Editions of leading newspapers and, in the Aurangabad
means of reliable and up-to-date administrative and and Pune Edition of leading Marathi newspapers.
information systems. The guidelines and systems are
regularly reviewed and adjusted to changes in markets b. Results are also posted on the Company’s website:
and products. The Company enters into forward www.stl.tech and the websites of BSE Limited (BSE) and
contracts for hedging foreign exchange exposures The National Stock Exchange of India Limited (NSE).
against exports and imports.
c. The Company displays official news releases and the
d. This Corporate Governance Report of the Company presentations made to institutional investors or to
for the Financial Year ended March 31, 2020 is in analysts on the website.
compliance with the requirements of Corporate
Governance under Listing Regulations. d. NSE Electronic Application Processing System (NEAPS)
and BSE Corporate Compliance & Listing Centre
e. The Company has not raised any funds through (the ‘Listing Centre’): NEAPS and BSE Listing Centre
preferential allotment or qualified institutions are web-based applications designed by NSE/BSE
placement as specified under Regulation 32(7A) of the for corporates. All periodical compliance filings like
Listing Regulations. shareholding pattern, corporate governance report,
media releases, among others are filed electronically
f. Total fees for all services paid by the Company and on these applications.
its subsidiaries, on a consolidated basis, to PWC, the
statutory auditor and all entities in the network firm/ General Shareholder Information
network entity of which the statutory auditor is a part: CIN L31300MH2000PLC269261
(` in lakhs) Annual General Day, Date –, Monday, August 31, 2020
Entity Fees paid in FY20 Meeting Time – 3.00 p.m. IST
Sterlite Technologies Limited (STL) 291.78 Through Video Conferencing
(“VC”) / Other Audio Visual Means (“OAVM”)
Subsidiaries of STL 9.50
Book Closure Dates Saturday, August 29, 2020 to Monday,
Total 301.28
August 31, 2020
Dividend Payment Dividend, if declared in the AGM will be
g. The Company has obtained a certificate from M/s. J. Date paid within the statutory time limits.
B. Bhave & Co., Company Secretaries in practice that
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Sterlite Technologies Limited
Financial Calendar for FY21 (Financial Year April 1 to Exchange Code Address
Stock Performance
The performance of the Company’s stock prices is given in the chart below:
100
80
60
40
20
0
29-03-2019
29-04-2019
29-05-2019
29-06-2019
29-07-2019
29-08-2019
29-09-2019
29-10-2019
29-11-2019
29-12-2019
29-01-2020
29-02-2020
29-03-2020
Equity holding pattern as on March 31, 2020 The voting rights on the shares in the suspense account as
Category Number of Shares % of Equity on March 31, 2020 shall remain frozen till the rightful owners
Promoter Group 2,16,664,221 53.63 of such shares claim the shares.
Banks, Mutual Funds, Trusts, 26,721,980 6.62
Govt & Insurance Companies, Share Transfer System
Indian Financial Institutions, etc. Requests for Transfer/ Transmission of shares held in
FIIs, Foreign National, Foreign 22,010,468 5.45 physical form can be lodged with the Company’s Registrar
Portfolio Investors and NRIs
and Transfer Agent, KFin Technologies Private Limited
Bodies Corporates & NBFCs 14,038,763 3.48
Registered with RBI (‘KTPL), Hyderabad. The requests are generally processed
Individuals (Public) & HUFs 1,17,804,827 29.16 within 10-15 days of receipt of documents, if documents are
Clearing Members 2,557,889 0.63 complete and valid in all respects. Shares under objection
Others (including IEPF) 41,64,839 1.03 are returned within 7-10 days.
Total 403,962,987 100.00
Pursuant to Regulation 40(9) of the Listing Regulations,
Dematerialisation of Shares and Liquidity the Company submits to Stock Exchanges, a certificate,
The Company’s equity shares are compulsorily traded in on half yearly basis, issued by a Practising Company
the electronic form. As on March 31, 2020 40,09,80,968 Secretary for due compliance of share transfer formalities
shares representing 99.26% of total equity capital were held by the Company.
in electronic form. The Shareholders can hold the shares in
demat form either through NSDL or CDSL. The ISIN allotted Registrar & Transfer Agent
to the Company is INE089C01029. KTPL is the Registrar and Transfer Agent of the Company.
Shareholders, beneficial owners and Depository
Details of outstanding shares in the Unclaimed Participants, (DPs) can send/deliver the documents/
Suspense Account correspondence relating to the Company’s share transfer
In terms of Schedule V of Listing Regulations, the Company activity, etc. to Karvy at the following address:
reports the following details in respect of equity shares lying
in the suspense account – Kfin Technologies Private Limited
No. of Outstanding (Unit – Sterlite Technologies Limited)
Particulars
Total No. of Shares lying Selenium Tower-B, Plot No. 31 & 32,
Shareholders in Unclaimed
Suspense Account Financial District, Gachibowli, Nanakramguda,
As on April 1, 2019 861 7,45,585 Serilingampally,
Shareholders approached for 40 13,240 Hyderabad 500 008, India
transfer/delivery during FY20 Phone No.: 040 67161524
Shares transferred/delivered 40 13,240 E-mail: einward.ris@kfintech.com
during FY20
Shares transferred to IEPF 786 7,16,925
Balance as on March 31, 2020 35 15,240
125
Sterlite Technologies Limited
I have examined compliance by Sterlite Technologies Limited (the Company) with the requirements under the SEBI (Listing
Obligations and Disclosure Requirements), Regulations, 2015 (Listing Regulations) relating to corporate governance
requirements for the year ended on 31 March 2020.
In my opinion and to the best of my information and according to the explanations given to me and the representation by the
Directors and the management, I certify that the Company has complied with the conditions of Corporate Governance as
stipulated in the Listing Regulations.
The compliance of conditions of Corporate Governance is the responsibility of the management of the Company. My
examination was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance
of the conditions of Corporate Governance under the Listing Regulations. The examination is neither an audit nor an
expression of opinion on the financial statements of the Company or the Corporate Governance Report of the Company.
I state that no investor’s grievance is pending unresolved by the Company for a period exceeding one month against the
Company as per the records maintained by the Stakeholders Relationship Committee.
I further state that such compliance is neither an assurance to the future viability of the Company nor the efficiency or
effectiveness with which the management has conducted the affairs of the Company.
Dr. K R Chandratre
Practising Company Secretary
Place: Pune FCS No. 1370. Certificate of Practice No. 5144
Date: May 12, 2020 UDIN: F001370B000231259
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Sterlite Technologies Limited
To,
The Members of
STERLITE TECHNOLOGIES LIMITED
E1, MIDC Industrial Area Waluj
Aurangabad- 431136,
Maharashtra
I have examined the relevant registers, records, forms, returns and disclosures received from the Directors of STERLITE
TECHNOLOGIES LIMITED having CIN: L31300MH2000PLC269261 and having registered office at E1, MIDC Industrial Area
Waluj Aurangabad 431136, Maharashtra (hereinafter referred to as ‘the Company’), produced before me by the Company for
the purpose of issuing this Certificate, in accordance with Regulation 34(3) read with Schedule V Para-C Sub clause 10(i) of
the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.
In my opinion and to the best of my information and according to the verifications (including Directors Identification
Number (DIN) status at the portal www.mca.gov.in) as considered necessary and explanations furnished to me by the
Company & its officers, I hereby certify that none of the Directors on the Board of the Company as stated below for the
Financial Year ending on 31st March, 2020 have been debarred or disqualified from being appointed or continuing as
Directors of companies by the Securities and Exchange Board of India, Ministry of Corporate Affairs, or any such other
Statutory Authority.
Date of appointment
Sr. No.Name of Director Designation DIN
in Company
1 Anil Kumar Agarwal Non-Executive Director 00010883 30/10/2006
2 Arun Lalchand Todarwal Non-Executive and Independent Director 00020916 25/01/2003
3 Pravin Agarwal Whole-time Director 00022096 30/10/2006
4 Anand Gopaldas Agarwal Whole-time Director and CEO(KMP) 00057364 30/07/2009
5 Sandip Das Non-Executive and Independent Director 00116303 16/10/2017
6 Narayanaswamy Alampallam Ramakrishnan Non-Executive and Independent Director 00818169 30/04/2007
7 Pratik Pravin Agarwal Non-Executive Director 03040062 26/04/2013
8 Kumud Madhok Srinivasan Non-Executive and Independent Director 06487248 22/05/2018
Ensuring the eligibility for the appointment / continuity of every Director on the Board is the responsibility of the
management of the Company. Our responsibility is to express an opinion on the same based on our verification. This
certificate is specifically being issued in accordance with Regulation 34(3) read with Schedule V Para-C Sub clause 10(i) of
the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and is neither
an assurance as to the future viability of the Company nor of the efficiency or effectiveness with which the management has
conducted the affairs of the Company.
Jayavant Bhave
Proprietor
FCS: 4266 CP: 3068
UDIN: F004266B000229911
Place: Pune
Date: May 12, 2020
Introduction
At STL, we believe in creating shared value through responsible operations that encompass a number of environmental,
social and governance aspects. Alignment with global goals, national priorities and the triple bottom line of sustainability are
core to how we choose to operate and progress. For us, it is about ensuring communities and other stakeholders’ progress
along with us as we work collectively to create a more sustainable and better future.
Our Business Responsibility Report details our endeavours in the domain of sustainable development in FY 2019-20. The
report has been prepared in line with the guidelines prescribed by the Securities and Exchange Board of India (SEBI). It
presents STL’s commitment to the ‘National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of
Business’ principles issued by the Ministry of Corporate Affairs.
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Sterlite Technologies Limited
Section D: BR Information
6 Indicate the link for the policy to Code of Internal Internal Internal Internal Internal Internal CSR Internal
be viewed online? Conduct2 policy3
7 Has the policy been formally Y Y Y Y Y Y Y Y Y
communicated to all relevant
internal and external
stakeholders?
2https://www.stl.tech/pdf/coc/Sterlite_Code_of_Conduct_Final.pdf
3https://www.stl.tech/pdf/coc/Corporate%20Social%20Responsibility%20policy.pdf
b) If answer to the question at serial number 1 against any principle, is ‘No’, please explain why: (Tick up to 2 options)
No. Questions P1 P2 P3 P4 P5 P6 P7 P8 P9
1 The Company has not understood the Principles
2 The Company is not at a stage where it finds itself in a position to formulate and
implement the policies on specified principles
3 The Company does not have financial or manpower resources available for the task
4 It is planned to be done within next 6 months
5 It is planned to be done within the next 1 year
6 Any other reason (please specify)
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Sterlite Technologies Limited
Principle 2
We publish the Business Responsibility Report
annually as a part of our annual report. The first Businesses should provide goods and services that
BRR was published in 2016-17. Additionally, we are safe and contribute to sustainability
published our first sustainability report in 2017-18 STL’s unique proposition of offering integrated solutions
as per globally accepted GRI sustainability reporting enables us to effectively address sustainability challenges.
standards and have thereafter reported on CSR
and Sustainability in line with GRI standards in the We have undertaken several initiatives in this regard,
Annual Report. which have helped us reduce the environmental impact of
our products and services. STL became the world’s first
integrated optical fibre and cable manufacturer to receive
Section E: Principle-Wise Performance the Zero Waste to Landfill certification from Intertek for its
manufacturing facilities in India.
Principle 1
Business should conduct and govern themselves 1. List up to 3 of your products or services whose design
with ethics, transparency and accountability has incorporated social or environmental concerns,
Transparency and ethics are an integral part of how we risks and/or opportunities.
conduct our operations. We endeavour to meet the highest Smart City Solution
standards while upholding integrity in every business Smart cities are known for their administrative
transaction. We believe that ethical and economic values are efficiency and fast services to citizens and businesses.
interdependent and businesses must always strive to not The efficient administration and fast services are
just meet, but surpass national and global norms. powered by super-fast communication based on data
transfer. Our smart city solution enables this and helps
We have a comprehensive set of policies that govern ours as in better and improved governance, transportation,
well as our partners’ actions. Each of these are an extension safety of citizens, energy efficiency and fast emergency
of our values and principles and guide us on managing service management among other facets. These all
business activities while ensuring utmost integrity. ultimately help in creating safer, greener and cleaner
communities to live in, while minimising any negative
1. Does the policy relating to ethics, bribery and impact on the environment.
corruption cover only the Company? Does it extend
to the Group/Joint Ventures/ Suppliers/Contractors/ Optical fibre cables
NGOs /Others? Our products drive data transfer through cable
The Company’s Code of Conduct and Ethics policy networks facilitating last mile connectivity. Data transfer
covers every employee of the Company, its subsidiaries being paperless helps in protecting the environment
as well as partners across the value chain. The reducing deforestation. These optical fibre cable
Whistle-blower policy covers all employees of STL, networks have enabled the world to access unlimited
its subsidiaries and all external stakeholders. The information available on internet. It has digitised
rural and remote areas providing them with access However, to help enhance the durability and longevity
to quality education, healthcare, financial services, of the networks deployed and prevent replacements
better agricultural techniques and so on. Our products due to wear-and-tear, STL Academy conducts in-depth
drive progress, by empowering communities and certified trainings on the deployment of the networks
reducing inequalities. and their maintenance in addition to other optic fibre
and network related topics.
Garv
The GARV kiosk bridges the rural-urban digital divide 3. Does the Company have procedures in place for
in the country. This solution leverages BharatNet’s sustainable sourcing (including transportation)?
rural broadband connectivity and the power of future (a) If yes, what percentage of your inputs was sourced
technologies such as Artificial Intelligence and Internet sustainably? Also, provide details thereof, in about 50
of Things (IoT) to provide a multitude of community- words or so.
centred services helping reduce inequalities and build Our Supply Chain Management policy has been
progressive communities. enacted to facilitate development of suppliers as long-
term business partners. We work closely with them not
2. For each such product, provide the following details only on business focus areas, but also on sustainable
in respect of resource use (energy, water, raw material development, identifying and addressing existing
etc.) per unit of product (optional): issues to achieve a sustainable supply chain.
At STL, we ensure optimum utilisation of resources
across our value chain. What we take in the form of Additional details can be found under ‘Delivering
natural resources, our raw materials; how and what on Promises through Impact Creation’ of the Annual
we make in terms of the quality and durability of our Report under Supply chain section.
products; and what we waste, are for us, all a question
of ethics. Our Manufacturing Excellence Strategy 4. Has the Company taken any steps to procure goods
focuses on innovative ways to reduce resource and services from local & small producers, including
consumption as well as wastage. Every employee is communities surrounding their place of work?
encouraged to identify opportunities to do more with At STL, we believe in creating shared value for each
less. We firmly believe that this not only brings cost of our stakeholders, including our suppliers and local
savings, but also helps mitigating risks in a resource communities. We have made significant progress
constrained world. towards developing a local vendor base and have
assisted several suppliers in expanding their operations
By adopting a ‘first time right’approach, we have closer to our manufacturing facilities. In fact, as part
eliminated waste and rework and are gradually of our responsible corporate citizenship commitment,
transitioning to a circular economy. Along with our all non-critical materials such as packaging, machine
partners across the value chain, we believe we can spares, job work and others are procured from local
collectively work towards a cleaner, greener and better vendors. We have observed that such vendors benefit
world by reducing, recycling and reusing. immensely from these opportunities and several have
been able to scale rapidly.
(a) Reduction during sourcing/production/ distribution
achieved since the previous year throughout the value (a) If yes, what steps have been taken to improve their
chain? capacity and capability of local and small vendors?
As production lines at the factory are flexible Additional detail can be found under ‘Delivering on
and produce multiple types of products, there is Promises through Impact Creation’ of the Annual
practical difficulty in isolating product wise resource Report under Supply chain section.
utilisation data. For the overall production, a total of
7,87,151 GJ of energy was used and 4,31,703 kl of 5. Does the Company have a mechanism to recycle
water was consumed. products and waste? If yes what is the percentage of
recycling of products and waste (separately as <5%,
(b) Reduction during usage by consumers (energy, water) 5-10%, >10%). Also, provide details thereof, in about
has been achieved since the previous year? 50 words or so.
The products manufactured by the Company do The Company has a well-defined system and processes
not consume any energy or water during their use. in place to recycle products and waste which amounts
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Sterlite Technologies Limited
to >10% of total waste generated. Further details can Our commitments towards helping build a professionally
be found ‘Delivering on Promises through Impact rewarding career for our employees include:
Creation’ of the Annual Report under the Zero Waste to
Landfill section. • Providing and maintaining absolute transparency and
equality during all stages of recruitment and employment,
which discourages discrimination on any grounds
Principle 3
• Promoting wellbeing of employees by helping them
Businesses should promote the wellbeing of all
achieve work-life balance and providing necessary
employees
facilities to them, including those with special needs
STL is a certified Great Place to Work. This has been
achieved through a mix of progressive policies and • Assisting the employees to move up the professional
continuous interactions with employees for feedback ladder and ensure availability of continual training and
and improvement. Our Human Resource Strategy centres skill-upgradation opportunities and promote employee
on employee safety, well-being as well as facilitating a morale and career development
progressive and equal-opportunity work environment.
• Enabling a safe workplace free from all sorts of
harassment and providing all required means
and measures to ensure access to grievance
redressal mechanisms
7. Please indicate the Number of complaints relating to child labour, forced labour, involuntary labour, sexual harassment in the last
financial year and pending, as on the end of the financial year.
8. What percentage of your under mentioned employees were given safety & skill up-gradation training in the last year?
Principle 4
Businesses should respect the interests of, and be 2. Out of the above, has the Company identified
responsive towards all stakeholders, especially those the disadvantaged, vulnerable & marginalised
who are disadvantaged, vulnerable and marginalised. stakeholders.
1. Has the Company mapped its internal and external At STL, we actively engage with communities around
stakeholders? our operations and our objective has been to identify
Yes, we have identified five direct stakeholder groups and work towards uplifting those who are socially and
– Employees, Customers, Suppliers, Communities, financially disadvantaged.
Shareholders and Investors.
3. Are there any special initiatives taken by the Company necessary steps to ensure implementation of these
to engage with the disadvantaged, vulnerable and principles across our operations and value chain.
marginalised stakeholders? If so, provide details
thereof, in about 50 words or so. 2. How many stakeholder complaints have been
At STL, we believe that progress should be inclusive received in the past financial year and what percent
and have hence aligned our community outreach was satisfactorily resolved by the management?
programmes in a way that not only contributes to 2.1 takeholder complaints related to human rights
S Nil
national priorities, but also to the UN Sustainable received in the financial year
Development Goals. 2.2 takeholder complaints related to human rights
S Nil
pending from previous year
Till date, our Jeewan Jyoti Women Empowerment 2.3 takeholder complaints related to human rights
S Nil
Programme has been actively working with over 2,200 resolved in the financial year
rural women in Pune to help them emerge as confident,
independent agents of change. The Mobile Medical
Unit in Silvassa has since 2006 been ensuring quality Principle 6
healthcare is accessible to more than 2,29,000 tribals
Business should respect, protect, and make efforts to
in the region residing at remote villages. Whereas,
restore the environment
our Digital Empowerment Buses in Pune and Ed-tech
Environmental sustainability has been a core focus area
programmes across Mumbai, Rajasthan and Silvassa
for us. To achieve the same, we have a dedicated Quality,
have benefitted over 7,96,000 lives ensuring quality
Environment, Health and Safety (QEHS) policy across
education is not limited to a privileged few.
our facilities which guides all environmental initiatives.
Additionally, we reinforce each of our environmental
Principle 5 initiatives through our community outreach programmes as
well as through employee volunteering.
Businesses should respect and promote human
rights
We have elaborated on our initiatives in the ‘Delivering
STL has a standalone policy on Human Rights which
on Promises through Impact Creation’ section of the
is based on the principles of United Nations Universal
Annual Report.
Declaration on Human Rights and the International Labour
Organization’s Declaration on Fundamental Principles and
1. Does the policy related to Principle 6 cover only the
Rights at Work and also applies to our subsidiaries. We are a
Company or extends to the Group/Joint Ventures/
signatory to United Nations Global Compact (UNGC).
Suppliers/Contractors/NGOs/others?
The QEHS policy is applicable to STL, its subsidiaries
Our fundamental intent with respect to human rights
as well as every partner we do business with.
has been to focus on nurturing an environment where
employees feel happy, satisfied and respected at
2. Does the Company have strategies/ initiatives to
the workplace. Further, we have mechanisms where
address global environmental issues such as climate
employees can report their human rights related grievances
change, global warming, etc? If yes, please give
appropriately for resolution. To ensure awareness and
hyperlink for webpage etc.
access to the human rights policy and its helpline channel,
Yes. At STL, we not only ensure we operate responsibly,
it has been effectively communicated as well as displayed
but also contribute to addressing national and global
through electronic mediums and physically.
issues such as climate change, water scarcity, global
warming and the likes. Being a signatory to the UN
1. Does the policy of the Company on human rights
Global Compact has reinforced our commitment
cover only the Company or extend to the Group/Joint
to responsible operations, social accountability
Ventures/Suppliers/Contractors/NGOs/Others?
and transparency.
Our standalone human rights policy covers important
aspects like labour standards, child and forced
We aim to minimise the environmental impacts of our
labour, diversity and equal opportunities, health and
operations through resource optimisation, water and
safety, freedom of association and non-discrimination
energy conservation and waste reduction. To address
among other tenets.
one such environmental issue of water scarcity, in
addition to realigning our own operations, investing in
The policy applies to STL, its subsidiaries and all
technology and enhancing monitoring, we also worked
partners we do business with. We have also taken
with villages in the vicinity to redevelop 20 defunct
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Sterlite Technologies Limited
While our primary focus is on communities around our 4. What is your Company’s direct contribution to
operations to ensure they have access to quality healthcare, community development projects- Amount in INR and
education and a pristine environment, we also work the details of the projects undertaken?
with needy communities across the country to reduce We have spent INR 9.20 crores in FY 2019-20 on
inequalities through women empowerment programmes, our community outreach programmes. The details of
environment conservation and livelihood generation. each of our CSR programmes are elaborated on in the
‘Delivering on Promises through Impact Creation’ and
1. Does the Company have specified programmes/ ‘Annexure VI to the Director’s Report’ sections.
initiatives/projects in pursuit of the policy related to
Principle 8? If yes details thereof. 5. Have you taken steps to ensure that this community
The details of our CSR programmes are elaborated on development initiative is successfully adopted by the
in the ‘Delivering on Promises through Impact Creation’ community? Please explain in 50 words, or so.
and ‘Annexure VI to the Director’s Report’ sections. STL’s primary objective is to create shared value for
each of its stakeholders and the community is one of
2. Are the programmes/projects undertaken through these stakeholders. Hence, each of our community
in-house team/own foundation/external NGO/ programmes do not simply work towards benefitting
government structures/any other organisation? lives in these communities, but instead works with
STL’s CSR programmes are undertaken by Sterlite them as partners who help us drive sustainable
Tech Foundation (STF) either directly or through an transformation. We believe that a programme can
external NGO, NPO or in partnership with government only be sustainable after our intervention, when the
authorities. The operations of STF and partner NGOs, community understands its importance and are equally
NPOs among other social development partners are committed to wanting progress and development.
overseen by STL’s in-house CSR team. Our strategy revolves around addressing the main
issue by resolving the underlying reasons for its
3. Have you done any impact assessment of your emergence. Behavioural change, awareness, collective
initiative? effort and ownership have thus been key factors to
Impact assessments have been conducted by third ensuring each of our community outreach programmes
parties for our Jeewan Jyoti Women Empowerment are successfully adopted by the communities we
Programme, Jaldoot and Virtual Classrooms. implement them for.
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1. What percentage of customer complaints/consumer 4. Did your Company carry out any consumer survey/
cases are pending as on the end of financial year? consumer satisfaction trends?
Of the total customer complaints/consumer cases The Company regularly engages with customers to get
open at the beginning of the year and filed during their feedback on products and services and carries
the financial year 2019-20, 22% complaints/cases are out Customer Satisfaction (CSAT) Surveys to gauge
pending as on March 31, 2020. their satisfaction levels, expectations, product and
service feedback among other criteria. In the reporting
2. Does the Company display product information on period, one such important customer survey – Voice
the product label, over and above what is mandated of the Customer was conducted to get feedback from
as per local laws? Yes/No/N.A. /Remarks (additional our key customers.
information)
Yes. All our product labels are made in compliance with
the local law and consumer requirements.
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Sterlite Technologies Limited
Key audit matter How our audit addressed the key audit matter
1. Revenue Recognition
(Refer note 2.1(b), 3 and 26 to the Standalone Financial Statements) We performed the following procedures:
The Company recognises revenue in accordance with Ind AS 115 Understood and evaluated the design and tested the operating
“Revenue from Contracts with Customers”. This involves application effectiveness of controls relating to revenue recognition.
of significant judgements by Management with respect to:
In respect of certain large and complex contracts and certain other
• Combination of contracts entered into with the same customer; contracts our procedures included, among other things:
• Identification of distinct performance obligations;
• Reading of selected contracts to identify significant terms of the
• Total consideration when the contract involves variable
contracts;
consideration involved;
• Assessing appropriateness of management’s significant
• Allocation of consideration to identified performance obligations;
judgements in accounting for identified contracts such as
• Recognition of revenue over a period of time or at a point in time
identification of performance obligation and allocation of
based on timing when control is transferred to customer. For
consideration to identified performance obligation;
assessment of the date of transfer of control, Management has
• Evaluation of the contract terms and also consideration of the legal
obtained legal opinion in respect of certain arrangements.
opinion obtained by Management with respect to assessment of
Further, for contracts where revenue is recognised over a period the date of transfer of control;
of time, the Company makes estimates which impact the revenue • Testing of timing of recognition of revenue (including procedures
recognition. Such estimates include, but are not limited to: related to cut off) in line with the terms of contracts;
• Testing the appropriateness of key assumptions used by
• costs to complete,
Management including the appropriateness and reasonability
• contract risks,
of Management’s conclusion regarding the expected delays in
• price variation claims,
estimated completion of the performance obligations and possible
• liquidated damages
impact on key estimates. Reading of the related contract terms
Further in determining the above estimates for ongoing contracts, and communications with the customers to assess the likelihood of
Management has also evaluated the estimates, especially those availability of contractual remedies.
resulting from expected delays in the completion of the performance • Testing of journal entries for unusual/irregular revenue
obligations and available contractual remedies. transactions; and
• Evaluating adequacy of presentation and disclosures.
We focused on this area because a significant portion of the revenue
generated requires management to exercise judgement and Based on above procedures, we did not note any significant
therefore could be subject to material misstatement due to fraud or exceptions in the estimates and judgements applied by the
error. Management in revenue recognition including those relating
to presentation and disclosures as required by the applicable
accounting standard.
Effective April 1, 2019, Ind AS 116 Leases has replaced Ind AS 17 Obtain an understanding of the process followed by the management
“Leases”. and testing of the design and operating effectiveness of key controls
around accounting for leases.
The Company has applied the standard retrospectively and has
chosen to recognise the cumulative effect of initially applying this • Obtain understanding of the Company’s implementation process
Standard as an adjustment to the opening balance of retained including evaluating of the Company policy and election of
earnings. exemptions in accordance with Ind AS 116
• Evaluating the underlying lease contracts to verify the accuracy of
To assess the impact of initial application of Ind AS 116, Management
the underlying data for a representative sample of leases.
has applied judgements and estimates with respect to:
• Assessing the completeness of identified leases by reviewing key
• Identifying if a contract is or contains lease. service and supply contracts to assess whether they contain a
• Segregation of lease and non-lease components where applicable. lease under Ind AS 116.
• Assessment of the lease term considering the renewal and • Assessing the appropriateness of the assumptions used in
termination options in the contract and other factors eg leasehold determination of lease terms and interest rate used by the
improvements, intention to continue etc. Management for determining lease liability.
• Determine the interest rate implicit in the lease. • Testing of the mathematical accuracy by recalculating the amount
of Lease Liabilities and Right of Use asset for a sample of lease
We considered the first time application of the standard as a key contracts.
audit matter due to the material impact of the same on the financial • Assessing whether the disclosures in the financial statements are
statements, and the significance of the judgements and estimates appropriate and are in line with the requirements of Ind AS 116.
used by the Management. Further implementation process requires
extraction and processing of extensive data which required Based on the above procedures, we did not note any significant
significant audit efforts to test the completeness and adequacy of exceptions in the estimates and judgements applied by the
such information. management in recording right of use asset and lease liability in
accordance with Ind AS 116 and related presentation and disclosure
requirements
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Sterlite Technologies Limited
a material uncertainty exists related to events or matters specified in paragraphs 3 and 4 of the Order, to
conditions that may cast significant doubt on the the extent applicable.
Company’s ability to continue as a going concern. If
we conclude that a material uncertainty exists, we 16. As required by Section 143(3) of the Act, we report that:
are required to draw attention in our auditor’s report
to the related disclosures in the standalone financial (a) We have sought and obtained all the information
statements or, if such disclosures are inadequate, to and explanations which to the best of our
modify our opinion. Our conclusions are based on knowledge and belief were necessary for the
the audit evidence obtained up to the date of our purposes of our audit.
auditor’s report. However, future events or conditions
may cause the Company to cease to continue as (b) In our opinion, proper books of account as
a going concern. required by law have been kept by the Company
so far as it appears from our examination
• Evaluate the overall presentation, structure and of those books.
content of the standalone financial statements,
including the disclosures, and whether the (c) The Balance Sheet, the Statement of Profit and
standalone financial statements represent the Loss (including other comprehensive income),
underlying transactions and events in a manner that the Statement of Changes in Equity and Cash
achieves fair presentation. Flow Statement dealt with by this Report are in
agreement with the books of account.
12. We communicate with those charged with governance
regarding, among other matters, the planned scope (d) In our opinion, the aforesaid standalone financial
and timing of the audit and significant audit findings, statements comply with the Accounting Standards
including any significant deficiencies in internal control specified under Section 133 of the Act.
that we identify during our audit.
(e) On the basis of the written representations
13. We also provide those charged with governance with received from the directors as on March 31, 2020
a statement that we have complied with relevant taken on record by the Board of Directors, none of
ethical requirements regarding independence, and the directors is disqualified as on March 31, 2020
to communicate with them all relationships and from being appointed as a director in terms of
other matters that may reasonably be thought to Section 164 (2) of the Act.
bear on our independence, and where applicable,
related safeguards. (f) With respect to the adequacy of the internal
financial controls with reference to standalone
14. From the matters communicated with those charged financial statements of the Company and the
with governance, we determine those matters that operating effectiveness of such controls, refer to
were of most significance in the audit of the standalone our separate Report in “Annexure A”.
financial statements of the current year and are
therefore the key audit matters. We describe these (g) With respect to the other matters to be included in
matters in our auditor’s report unless law or regulation the Auditor’s Report in accordance with Rule 11 of
precludes public disclosure about the matter or when, the Companies (Audit and Auditors) Rules, 2014, in
in extremely rare circumstances, we determine that our opinion and to the best of our information and
a matter should not be communicated in our report according to the explanations given to us:
because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest i. The Company has disclosed the impact of
benefits of such communication. pending litigations on its financial position
in its standalone financial statements
Report on other legal and regulatory requirements – Refer Note 22, 39 and 44 to the
15. As required by the Companies (Auditor’s Report) Order, financial statements;
2016 (“the Order”), issued by the Central Government
of India in terms of sub-section (11) of section 143 of ii. The Company has made provision,
the Act, we give in the Annexure B a statement on the as required under the applicable law
or accounting standards, for material 17. The Company has paid/ provided for managerial
foreseeable losses, if any, on long-term remuneration in accordance with the requisite
contracts including derivative contracts approvals mandated by the provisions of Section 197
– Refer Note 20 to the standalone read with Schedule V to the Act.
financial statements;
For Price Waterhouse Chartered Accountants LLP
iii. There has been no delay in transferring Firm Registration Number: 012754N/N500016
amounts, required to be transferred, to the
Investor Education and Protection Fund Neeraj Sharma
by the Company. Partner
Membership Number: 108391
iv. The reporting on disclosures relating to UDIN: 20108391AAAACZ7325
Specified Bank Notes is not applicable to the
Company for the year ended March 31, 2020. Place: Pune
Date: May 12, 2020
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Sterlite Technologies Limited
Report on the Internal Financial Controls with Our audit of internal financial controls with reference
reference to standalone financial statements to standalone financial statements included obtaining
under Clause (i) of Sub-section 3 of Section 143 an understanding of internal financial controls
of the Act with reference to standalone financial statements,
1. We have audited the internal financial controls with assessing the risk that a material weakness exists,
reference to standalone financial statements of Sterlite and testing and evaluating the design and operating
Technologies Limited (“the Company”) as of March 31, effectiveness of internal control based on the assessed
2020 in conjunction with our audit of the standalone risk. The procedures selected depend on the auditor’s
financial statements of the Company for the year judgement, including the assessment of the risks of
ended on that date. material misstatement of the standalone financial
statements, whether due to fraud or error.
Management’s Responsibility for Internal
Financial Controls 5. We believe that the audit evidence we have obtained
2. The Company’s management is responsible for is sufficient and appropriate to provide a basis for
establishing and maintaining internal financial controls our audit opinion on the Company’s internal financial
based on the internal control over financial reporting controls system with reference to standalone
criteria established by the Company considering financial statements.
the essential components of internal control stated
in the Guidance Note on Audit of Internal Financial Meaning of Internal Financial Controls with
Controls Over Financial Reporting issued by the reference to standalone financial statements
Institute of Chartered Accountants of India (ICAI). These 6. A company’s internal financial controls with reference to
responsibilities include the design, implementation and standalone financial statements is a process designed
maintenance of adequate internal financial controls that to provide reasonable assurance regarding the
were operating effectively for ensuring the orderly and reliability of financial reporting and the preparation of
efficient conduct of its business, including adherence standalone financial statements for external purposes
to company’s policies, the safeguarding of its assets, in accordance with generally accepted accounting
the prevention and detection of frauds and errors, principles. A company’s internal financial controls with
the accuracy and completeness of the accounting reference to standalone financial statements includes
records, and the timely preparation of reliable financial those policies and procedures that (1) pertain to the
information, as required under the Act. maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and
Auditor’s Responsibility dispositions of the assets of the company; (2) provide
3. Our responsibility is to express an opinion on the reasonable assurance that transactions are recorded
Company’s internal financial controls with reference as necessary to permit preparation of standalone
to standalone financial statements based on our financial statements in accordance with generally
audit. We conducted our audit in accordance with the accepted accounting principles, and that receipts and
Guidance Note on Audit of Internal Financial Controls expenditures of the company are being made only in
Over Financial Reporting (the “Guidance Note”) and the accordance with authorisations of management and
Standards on Auditing deemed to be prescribed under directors of the company; and (3) provide reasonable
section 143(10) of the Act to the extent applicable to assurance regarding prevention or timely detection
an audit of internal financial controls, both applicable of unauthorised acquisition, use, or disposition of the
to an audit of internal financial controls and both issued company’s assets that could have a material effect on
by the ICAI. Those Standards and the Guidance Note the standalone financial statements.
require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable Inherent Limitations of Internal Financial
assurance about whether adequate internal financial Controls with reference to standalone financial
controls with reference to standalone financial statements
statements was established and maintained and if such 7. Because of the inherent limitations of internal financial
controls operated effectively in all material respects. controls with reference to standalone financial
statements, including the possibility of collusion or
4. Our audit involves performing procedures to obtain improper management override of controls, material
audit evidence about the adequacy of the internal misstatements due to error or fraud may occur and
financial controls system with reference to standalone not be detected. Also, projections of any evaluation
financial statements and their operating effectiveness. of the internal financial controls with reference to
standalone financial statements to future periods are of internal control stated in the Guidance Note on
subject to the risk that the internal financial control Audit of Internal Financial Controls Over Financial
with reference to standalone financial statements may Reporting issued by the Institute of Chartered
become inadequate because of changes in conditions, Accountants of India. (Also refer paragraph 5 of the
or that the degree of compliance with the policies or main standalone audit report).
procedures may deteriorate.
For Price Waterhouse Chartered Accountants LLP
Opinion Firm Registration Number: 012754N/N500016
8. In our opinion, the Company has, in all material
respects, an adequate internal financial controls system Neeraj Sharma
with reference to standalone financial statements Partner
and such internal financial controls with reference Membership Number: 108391
to standalone financial statements were operating UDIN: 20108391AAAACZ7325
effectively as at March 31, 2020, based on the internal
control over financial reporting criteria established by Place: Pune
the Company considering the essential components Date: May 12, 2020
145
Sterlite Technologies Limited
i. (a) The Company is maintaining proper records Companies Act, 2013 in respect of the loans and
showing full particulars, including quantitative investments made and guarantees and security
details and situation, of fixed assets. provided by it.
(b) The fixed assets are physically verified by the v. The Company has not accepted any deposits from the
Management according to a phased programme public within the meaning of Sections 73, 74, 75 and
designed to cover all the items over a period of 76 of the Act and the Rules framed there under to the
three years which, in our opinion, is reasonable extent notified.
having regard to the size of the Company and the
nature of its assets. Pursuant to the programme, vi. Pursuant to the rules made by the Central Government
a portion of the fixed assets has been physically of India, the Company is required to maintain cost
verified by the Management during the previous records as specified under Section 148(1) of the Act
year and no material discrepancies have been in respect of manufacture of copper cables. We have
noticed on such verification. Further, the physical broadly reviewed the same, and are of the opinion that,
verification of cables is impractical due the manner prima facie, the prescribed accounts and records have
in which they have been installed/laid. been made and maintained. We have not, however,
made a detailed examination of the records with a view
(c) The title deeds of immovable properties, as to determine whether they are accurate or complete.
disclosed in Note 4 on fixed assets to the
standalone financial statements are held in the vii. (a) According to the information and explanations
name of the Company. given to us and the records of the Company
examined by us, in our opinion, the Company is
ii. The physical verification of inventory excluding generally regular in depositing the undisputed
stocks with third parties have been conducted at statutory dues in respect of income tax, goods and
reasonable intervals by the Management during the service tax, labour welfare fund and professional
year. In respect of inventory lying with third parties, tax, though there has been a slight delay in few
these have substantially been confirmed by them. cases, and is regular in depositing undisputed
The discrepancies noticed on physical verification statutory dues, including provident fund,
of inventory as compared to book records were not employees’ state insurance, duty of customs, cess
material and have been appropriately dealt with in the and other material statutory dues, as applicable,
books of accounts. with the appropriate authorities.
iii. The Company has not granted any loans, secured (b) According to the information and explanations
or unsecured, to companies, firms, Limited Liability given to us and the records of the Company
Partnerships or other parties covered in the register examined by us, there are no dues of Central
maintained under Section 189 of the Act. Therefore, Sales Tax, Service Tax, Goods and Service Tax
the provisions of Clause 3(iii), (iii)(a), (iii)(b) and (iii)(c) of which have not been deposited on account of any
the said Order are not applicable to the Company. dispute. The particulars of dues of income tax,
sales tax, duty of customs and duty of excise as at
iv. In our opinion, and according to the information and March 31, 2020 which have not been deposited on
explanations given to us, the Company has complied account of a dispute, are as follows:
with the provisions of Section 185 and 186 of the
Name of the statute Nature of Dues Amount ` Cr Period to which the amount relates Forum where the dispute is pending
Central Excise Act, 1944 Excise Duty 18.50 2014-17 Commissioner Central Excise, Goods &
Services Tax, Aurangabad
Customs Act, 1962 Customs Duty 67.82 2001-03 CESTAT, Mumbai
Customs Duty 1.61 2013-14 The commissioner of Customs (appeals)
Income tax act, 1961 Income Tax 3.88 AY 2013-14, AY 2015-16 Commissioner (Appeals) - Mumbai
Income Tax 1.27 AY 2001-02, AY 2002-03 Mumbai High Court
Income Tax 0.57 AY 2011-12, AY 2013-14, Commissioner (Appeals) - Ahmedabad
AY 2014-15, AY 2015-16
Income Tax 0.53 AY 2012-13 Gujarat High Court
Income Tax 0.12 AY 2009-10, AY 2010-11 Income Tax Appellate Tribunal - Ahmedabad
viii. According to the records of the Company examined xiii. The Company has entered into transactions with
by us and the information and explanation given to related parties in compliance with the provisions of
us, the Company has not defaulted in repayment Sections 177 and 188 of the Act. The details of such
of loans or borrowings to any financial institution or related party transactions have been disclosed in
bank or Government or dues to debenture holders the financial statements as required under Indian
as at the balance sheet date. As stated in Note 39 to Accounting Standard (Ind AS) 24, Related Party
the standalone financial statements, the Company Disclosures specified under Section 133 of the Act.
continues to dispute amounts aggregating ` 18.87
crores claimed by a bank in the earlier years, towards xiv. The Company has not made any preferential allotment
import consignments under letter of credit not accepted or private placement of shares or fully or partly
by the Company, owing to discrepancies in documents. convertible debentures during the year under review.
Since the matter is in dispute, we are unable to Accordingly, the provisions of Clause 3(xiv) of the Order
determine whether there is a default in repayment of are not applicable to the Company.
dues to the said bank.
xv. The Company has not entered into any non-cash
ix. In our opinion, and according to the information and transactions with its directors or persons connected
explanations given to us, the moneys raised by way with him. Accordingly, the provisions of Clause 3(xv) of
of term loans (including debt instruments) have been the Order are not applicable to the Company.
applied for the purposes for which they were obtained.
The Company has not raised any moneys by way of xvi. The Company is not required to be registered under
initial public offer or further public offer. Section 45-IA of the Reserve Bank of India Act, 1934.
Accordingly, the provisions of Clause 3(xvi) of the Order
x. During the course of our examination of the books and are not applicable to the Company.
records of the Company, carried out in accordance with
the generally accepted auditing practices in India, and For Price Waterhouse Chartered Accountants LLP
according to the information and explanations given Firm Registration Number: 012754N/N500016
to us, we have neither come across any instance of
material fraud by the Company or on the Company by Neeraj Sharma
its officers or employees, noticed or reported during Partner
the year, nor have we been informed of any such case Membership Number: 108391
by the Management. UDIN: 20108391AAAACZ7325
xi. The Company has paid/ provided for managerial Place: Pune
remuneration in accordance with the requisite Date: May 12, 2020
approvals mandated by the provisions of Section 197
read with Schedule V to the Act.
xii. As the Company is not a Nidhi Company and the Nidhi
Rules, 2014 are not applicable to it, the provisions
of Clause 3(xii) of the Order are not applicable
to the Company.
147
Sterlite Technologies Limited
Balance Sheet
as at March 31, 2020
For Price Waterhouse Chartered Accountants LLP Pravin Agarwal Anand Agarwal
Firm Registration No: 012754N/N500016 Vice Chairman & Whole-time Director CEO & Whole-time Director
DIN : 00022096 DIN : 00057364
Neeraj Sharma Anupam Jindal Amit Deshpande
Partner Chief Financial Officer Company Secretary
Membership Number: 108391
149
Sterlite Technologies Limited
B. Other Equity
Capital Securities Employee Debenture General Retained Cash Flow
Total
Reserve Premium stock option Redemption Reserve Earnings Hedge
Outstanding Reserve Reserve
As at 31 March 2018 (19.06) 27.93 21.24 75.00 112.50 804.45 (32.27) 989.79
Impact of change in accounting policy on - - - - - (12.71) - (12.71)
adoption of Ind AS 115 (refer note 51)
Restated balance as at 01 April 2018 (19.06) 27.93 21.24 75.00 112.50 791.74 (32.27) 977.08
Profit for the year - - - - - 535.23 - 535.23
Other comprehensive income for the year - - - - - (5.10) 86.38 81.28
Total comprehensive income for the year (19.06) 27.93 21.24 75.00 112.50 1,321.87 54.11 1,593.59
Addition on ESOPs exercised - 10.75 - - - - - 10.75
Transferred to Securities premium account - - (10.75) - - - - (10.75)
Employees stock option expenses for the year - - 19.16 - - - - 19.16
(refer note 35)
Equity dividend including taxes thereon - - - - - (96.80) - (96.80)
(refer note 48)
Reclassified to Statement of profit and loss - - - - - - (8.25) (8.25)
As at 31 March 2019 (19.06) 38.68 29.65 75.00 112.50 1,225.07 45.86 1,507.70
Impact of change in accounting policy on - - - - - (12.48) - (12.48)
adoption of Ind AS 116 (refer note 52)
Restated balance as at 01 April 2019 (19.06) 38.68 29.65 75.00 112.50 1,212.59 45.86 1,495.22
Profit for the year - - - - - 433.52 - 433.52
Other comprehensive income for the year - - - - - 1.61 (31.61) (30.00)
Total comprehensive income for the year (19.06) 38.68 29.65 75.00 112.50 1,647.72 14.25 1,898.74
Addition on ESOPs exercised - 12.68 - - - - - 12.68
Change in fair value of FVOCI equity - - - - - - -
instrument
Transferred to Securities premium account - - (12.68) - - - - (12.68)
Employees stock option expenses for the year - - 9.86 - - - - 9.86
(refer note 35)
Amount transferred to general reserve - - - (18.75) 18.75 - - -
Equity dividend including taxes thereon (refer - - - - - (170.09) - (170.09)
note 48)
Transferred to Statement of profit and loss - - - - - - (9.73) (9.73)
As at 31 March 2020 (19.06) 51.36 26.83 56.25 131.25 1,477.63 4.52 1,728.78
For Price Waterhouse Chartered Accountants LLP Pravin Agarwal Anand Agarwal
Firm Registration No: 012754N/N500016 Vice Chairman & Whole-time Director CEO & Whole-time Director
DIN : 00022096 DIN : 00057364
Neeraj Sharma Anupam Jindal Amit Deshpande
Partner Chief Financial Officer Company Secretary
Membership Number: 108391
151
Sterlite Technologies Limited
For Price Waterhouse Chartered Accountants LLP Pravin Agarwal Anand Agarwal
Firm Registration No: 012754N/N500016 Vice Chairman & Whole-time Director CEO & Whole-time Director
DIN : 00022096 DIN : 00057364
Neeraj Sharma Anupam Jindal Amit Deshpande
Partner Chief Financial Officer Company Secretary
Membership Number: 108391
Notes
to standalone financial statements for the year ended March 31, 2020
The standalone Ind AS financial statements have been The Company classifies all other liabilities as non-current.
prepared on a historical cost basis, except for the following
assets and liabilities which have been measured at fair value Deferred tax assets and liabilities are classified as non-
or revalued amount: current assets and liabilities.
• Derivative financial instruments; Operating cycle of the Company is the time between the
acquisition of assets for processing and their realisation
• Certain financial assets and liabilities measured
in cash or cash equivalents. Based on the nature of
at fair value (refer accounting policy regarding
products and the time between the acquisitions of assets
financial instruments).
for processing and their realisation in cash and cash
• Share based payments equivalents, the Company has ascertained operating cycle
of 12 months for the purpose of current and non-current
• Defined benefit plans - plan assets measured at fair value
classification of assets and liabilities.
• Asset held for sale – measured at fair value
less cost to sale. a) Foreign currency translation
Functional and presentation currency
The standalone Ind AS financial statements are presented in
Items included in the financial statements of the Company
Indian Rupees in crores, except when otherwise indicated.
are measured using the currency of the primary economic
environment in which the Company operates (` the
functional currency’). The financial statements are presented
153
Sterlite Technologies Limited
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
in Indian rupee (INR), which is company’s functional and A five-step process must be applied before revenue
presentation currency. can be recognised:
b) Revenue from contracts with customers However, the Company may promise to provide distinct
Ind AS 115 Revenue from contracts with customers has goods or services within a contract, for example when a
been issued with effect from April 1, 2018. The standard contract covers multiple promises (e.g., construction of
deals with revenue recognition and establishes principles network with its maintenance and support), in which case
for reporting useful information to users of financial the Company separates the contract into more than one
statements about the nature, amount, timing and uncertainty performance obligation. If a contract is separated into more
of revenue and cash flows arising from an entity’s contracts than one performance obligation, the Company allocates
with customers. Revenue is recognised when a customer the total transaction price to each performance obligation
obtains control of a promised good or service and thus has on the basis of the relative standalone selling price of each
the ability to direct the use and obtain the benefits from the distinct product or service promised in the contract. Where
good or service in an amount that reflects the consideration standalone selling price is not observable, the Company
to which the entity expects to be entitled in exchange for uses the expected cost plus margin approach to allocate the
those goods and services. transaction price to each distinct performance obligation.
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
The Company assesses for the timing of revenue recognition extent it is probable that a significant reversal of cumulative
in case of each distinct performance obligation. The revenue recognised will not occur when the uncertainty
Company first assesses whether the revenue can be associated with the variable consideration is resolved. The
recognised over time as it performs if any of the following estimates of variable consideration and determination of
criteria is met: whether to include estimated amounts in the transaction
price are based largely on an assessment of the anticipated
(a) The customer simultaneously consumes the benefits as performance and all information (historical, current and
the Company performs, or forecasted) that is reasonably available.
(b) The customer controls the work-in-progress, or Contracts are modified to account for changes in contract
specifications and requirements. The Company considers
(c) The Company’s performance does not create an contract modifications to exist when the modification either
asset with alternative use to the Company and the creates new or changes the existing enforceable rights
Company has right to payment for performance and obligations. Most of the contract modifications are for
completed till date. goods or services that are not distinct from the existing
contract due to the significant integration service provided
If none of the criteria above are met, the Company in the context of the contract and are accounted for as if
recognises revenue at a point-in-time. The point-in-time they were part of that existing contract. The effect of a
is determined when the control of the goods or services contract modification on the transaction price and measure
is transferred which is generally determined based on of progress for the performance obligation to which it
when the significant risks and rewards of ownership are relates, is recognised as an adjustment to revenue (either
transferred to the customer. Apart from this, the Company as an increase in or a reduction of revenue) on a cumulative
also considers its present right to payment, the legal title catch-up basis.
to the goods, the physical possession and the customer
acceptance in determining the point in time where control When estimates of total costs to be incurred exceed total
has been transferred. estimates of revenue to be earned on a performance
obligation related to a contract, a provision for the entire loss
The Company uses input method to measure the progress on the performance obligation is recognised in the period.
for contracts because it best depicts the transfer of control
to the customer which occurs as it incurs costs on contracts. For fixed price contracts, the customer pays the fixed
Under the input method measure of progress, the extent amount based on the payment schedule. If the services
of progress towards completion is measured based on rendered by the Company exceed the payment, a contract
the ratio of costs incurred to date to the total estimated asset is recognised. If the payment exceed the services
costs at completion of the performance obligation. rendered, a contract liability is recognised.
Revenues, including estimated fees or profits, are recorded
proportionally as costs are incurred. Revenue in respect of All the qualitative and quantitative information related to
operation and maintenance contracts is recognised on a significant changes in contract asset and contract liability
time proportion basis. balances such as impairment of contract asset, changes due
to business combination, changes in the timeframe for a
Due to the nature of the work required to be performed on performance obligation to be satisfied are disclosed by the
performance obligations, the estimation of total revenue and Company at every reporting period.
cost at completion is complex, subject to many variables
and requires significant judgment. It is common for network Revenue recognised at a point-in-time
integration project contracts to contain liquidated damages For sale of products, revenue is recognised at point in time
on delay in completion/performance, bonus on early when control of goods is transferred to the customer - based
completion, or other provisions that can either increase or on delivery terms, payment terms, customer acceptance and
decrease the transaction price. These variable amounts other indicators of control as mentioned above.
generally are awarded upon achievement of certain
performance metrics, program milestones or cost targets c) Other Income
and may be based upon customer discretion. 1. Interest income
Interest income is accrued on a time basis, by reference
The Company estimates variable consideration using to the principal outstanding and at the effective interest
expected value method of probability-weighted values at rate applicable. Interest income is included in finance
an amount to which it expects to be entitled. The Company income in the statement of profit and loss.
includes estimated amounts in the transaction price to the
155
Sterlite Technologies Limited
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
When loans or similar assistance are provided by Deferred tax assets are recognised for all deductible
governments or related institutions, with an interest rate temporary differences, the carry forward of unused tax
below the current applicable market rate, the effect of this credits and unused tax losses only if it is probable that
favourable interest is regarded as a government grant. The taxable profit will be available against which the deductible
loan or assistance is initially recognised and measured at temporary differences, and the carry forward of unused tax
fair value and the government grant is measured as the credits and unused tax losses can be utilised, except:
difference between the initial carrying value of the loan and
the proceeds received. The loan is subsequently measured • In respect of deductible temporary differences between
as per the accounting policy applicable to financial liabilities. the carrying amount and tax bases of investments in
subsidiaries, branch, associates and interests in joint
e) Income Taxes ventures, deferred tax assets are recognised only to the
Current income tax extent that it is probable that the temporary differences
The income tax expense or credit for the period is the tax will reverse in the foreseeable future and taxable profit
payable on the current period’s taxable income based on will be available against which the temporary differences
the applicable income tax rate for each jurisdiction adjusted can be utilised.
by changes in deferred tax assets and liabilities attributable
The carrying amount of deferred tax assets is reviewed at
to temporary differences and to unused tax losses.
each reporting date and reduced to the extent that it is no
longer probable that sufficient taxable profit will be available
The current income tax charge is calculated on the basis of
to allow all or part of the deferred tax asset to be utilised.
the tax laws enacted or substantively enacted at the end of
Unrecognised deferred tax assets are re-assessed at each
the reporting period. Management periodically evaluates
reporting date and are recognised to the extent that it has
positions taken in tax returns with respect to situations in
become probable that future taxable profits will allow the
which applicable tax regulation is subject to interpretation.
deferred tax asset to be recovered.
It establishes provisions where appropriate on the basis of
amounts expected to be paid to the tax authorities.
Deferred income tax is determined using tax rates (and tax
laws) that have been enacted or substantively enacted at the
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
reporting date and are expected to apply in the year when Expenditure directly relating to construction activity
the asset is realised or the liability is settled. is capitalised. Indirect expenditure incurred during
construction period is capitalised as part of the construction
Deferred tax assets include Minimum Alternative Tax (MAT) costs to the extent the expenditure can be attributable to
paid in accordance with the tax laws in India, which is likely construction activity or is incidental there to. Income earned
to give future economic benefits in the form of availability of during the construction period is deducted from the total of
set off against future income tax liability. Accordingly, MAT is the indirect expenditure.
recognized as deferred tax asset in the balance sheet when
the asset can be measured reliably, and it is probable that Subsequent costs are included in the asset’s carrying
the future economic benefit associated with the asset will amount or recognised as a separate asset, as appropriate,
be realized. In the year in which the MAT credit becomes only when it is probable that future economic benefits
eligible to be recognized as an asset, it is recorded by way associated with the item will flow to the Company and the
of a credit to the statement of comprehensive income and cost of the item can be measured reliably. The carrying
shown as deferred tax assets. The Management reviews amount of any component accounted for as a separate
the same at each balance sheet date and writes down asset is derecognised when replaced. All other repairs
the carrying amount of MAT Credit Entitlement to the and maintenance are charged to profit or loss during the
extent there is no longer convincing evidence to the effect reporting period in which they are incurred.
that Management will pay normal Income Tax during the
specified future period. Depreciation is calculated using the straight-line method
to allocate their cost, net of their residual values, over their
Current and Deferred tax is recognised in profit or loss, estimated useful lives. The Company, based on technical
except to the extent that it relates to items recognised in assessments made by technical experts and management
other comprehensive income or directly in equity. In this estimates, depreciates the certain items of tangible assets
case, the tax is also recognised in other comprehensive over estimated useful lives which are different from the
income or directly in equity, respectively. useful life prescribed in Schedule II to the Companies Act,
2013. The management believes that these estimated useful
Deferred tax assets and deferred tax liabilities are offset if a lives are realistic and reflect fair approximation of the period
legally enforceable right exists to set off current tax assets over which the assets are likely to be used. Table below
against current tax liabilities and the deferred taxes relate to provide the details of the useful life which are different from
income taxes levied by same taxation authorities on either useful life prescribed under Schedule II of the Companies
same taxable entity or different taxable entities which intend Act, 2013:
either to settle the current tax assets and tax liabilities on
Useful Life
a net basis or to realise the asset and settle the liability Asset Category Useful life (Schedule II#)
considered
simultaneously.
Plant and Machinery 3 - 25 Years * Continuous process
plant -25 Years
f) Property, plant and equipment Others - 15 Years
Freehold land and Capital work in progress are carried Furniture and fixtures 7.5 - 10 Years * 10 Years
at historical costs. All other items of property, plant and Data processing 3 - 5 Years * Service and networks -6
equipment are stated at historical cost, net of accumulated equipment years and Desktops and
depreciation and accumulated impairment losses, if any. laptop etc - 3 Years
Such historical cost includes the cost of replacing part of Office equipment 4 - 5 Years * 5 Years
the property, plant and equipment and borrowing costs Electric fittings 4 - 10 Years * 10 Years
if the recognition criteria are met. When significant parts Vehicles 4 - 5 Years *# 8 Years
of the property, plant and equipment are required to be * Considered on the basis of management’s estimation, supported by
replaced at intervals, the Company depreciates them technical advice, of the useful lives of the respective assets.
separately based on their specific useful lives. Likewise, #
Residual value considered as 15% on the basis of management’s
when a major inspection is performed, its cost is recognised estimation, supported by technical advice.
in the carrying amount of the plant and equipment as a
replacement if the recognition criteria are satisfied. All The property, plant and equipment acquired under finance
other repair and maintenance costs are recognised in leases is depreciated over the asset’s useful life or over the
statement of profit or loss as incurred. No decommissioning shorter of the asset’s useful life and the lease term if there
liabilities are expected or be incurred on the assets of is no reasonable certainty that the Company will obtain
plant and equipment. ownership at the end of the lease term.
157
Sterlite Technologies Limited
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
An asset’s carrying amount is written down immediately Intangible assets with finite lives are amortised over
to its recoverable amount if the asset’s carrying amount is their useful economic lives and assessed for impairment
greater than its estimated recoverable amount. whenever there is an indication that the intangible asset may
be impaired. The amortisation period and the amortisation
Gains and losses on disposals are determined by comparing method for an intangible asset with a finite useful life are
proceeds with carrying amount. These are included in profit reviewed at least at the end of each reporting period.
or loss within other gains/(losses). Changes in the expected useful life or the expected pattern
of consumption of future economic benefits embodied in
The assets residual values and useful lives are reviewed and the asset are considered to modify the amortisation period
adjusted if appropriate, at the end of each reporting period. or method, as appropriate, and are treated as changes
in accounting estimates. The amortisation expense on
g) Investment properties intangible assets with finite lives is recognised in the
Property that is held for long-term rental yields or for statement of profit or loss.
capital appreciation or both, and that is not occupied
by the Company, is classified as investment property. The Company does not have any intangible assets with
Investment property is measured initially at its cost, indefinite useful lives.
including related transaction costs and where applicable
borrowing costs. Subsequent expenditure is capitalised to Gains or losses arising from derecognition of an intangible
the asset’s carrying amount only when it is probable that asset are measured as the difference between the net
future economic benefits associated with the expenditure disposal proceeds and the carrying amount of the asset and
will flow to the Company and the cost of the item can be are recognised in the statement of profit or loss when the
measured reliably. All other repairs and maintenance costs asset is derecognised.
are expensed when incurred. When part of an investment
property is replaced, the carrying amount of the replaced Customer acquisition costs consist of payments made to
part is derecognised. obtain consents/permissions for laying of fiber cables and
other telecom infrastructure in residential and commercial
The Company, based on technical assessment made by complexes/townships. Such cost is amortised over the
technical expert and management estimate, depreciates the period of the consent/permission on a straight line basis.
building over estimated useful life which is also the useful
life prescribed in Schedule II to the Companies Act, 2013. Softwares are amortised on a straight line basis over a
The management believes that these estimated useful lives period of five to six years.
are realistic and reflect fair approximation of the period over
which the assets are likely to be used. All other intangible assets are amortised on a straight line
basis over a period of five to six years.
Investment properties are derecognised either when they
have been disposed of or when they are permanently Goodwill on amalgamation is amortised on a straight
withdrawn from use and no future economic benefit is line basis over a period of five years from the date of
expected from their disposal. The difference between the amalgamation as per the Court Order.
net disposal proceeds and the carrying amount of the asset
is recognised in profit or loss in the period of derecognition. Research costs are expensed as incurred.
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
Finance leases were capitalised at the lease’s inception Accounting policies with effect from April 01, 2019:
at the fair value of the leased property or, if lower, at the As a Lessee:
present value of the minimum lease payments. Lease The Company leases various assets which includes building
payments were apportioned between finance charges and & plant and machinery. Rental contracts are typically made
reduction of the lease liability so as to achieve a constant for fixed periods of 2 to 15 years but may have extension
rate of interest on the remaining balance of the liability. The options as described below. Lease terms are negotiated
corresponding rental obligations, net of finance charges, on an individual basis and contain a wide range of different
were included in borrowings or other financial liabilities as terms and conditions. The lease agreements do not impose
appropriate. Finance charges were recognised in finance any covenants, but leased assets may not be used as
costs in the statement of profit and loss, unless they were security for borrowing purposes
directly attributable to qualifying assets, in which case they
were capitalised in accordance with the Company’s general Until the 2018-19 financial year, leases of property, plant
policy on the borrowing costs. and equipment were classified as either finance or operating
leases. Payments made under operating leases (net of any
A leased asset was depreciated over the useful life of the incentives received from the lessor) were charged to profit
asset. However, if there was no reasonable certainty that the or loss on a straight-line basis over the period of the lease.
Company will obtain ownership by the end of the lease term,
the asset was depreciated over the shorter of the estimated From 1 April 2019, leases are recognised as a right-of-use
useful life of the asset and the lease term. asset and a corresponding liability at the date at which the
leased asset is available for use by the Company. Each lease
Leases in which a significant portion of the risk and rewards payment is allocated between the principal (liability) and
of ownership were not transferred to the Company were finance cost. The finance cost is charged to profit or loss
classified as operating lease. Operating lease payments over the lease period so as to produce a constant periodic
were recognised as an expense in the statement of profit rate of interest on the remaining balance of the liability for
and loss on a straight-line basis over the lease term unless each period. The right-of-use asset is depreciated over
the payment were structured to increase in line with the the shorter of the asset’s useful life and the lease term on
expected general inflation to compensate for the lessors a straight-line basis. If the Company is reasonably certain
expected inflationary cost increases. to exercise a purchase option, the right-of-use asset is
depreciated over the underlying asset’s useful life.
Company as a lessor
Leases in which the Company did not transfer substantially Assets and liabilities arising from a lease are initially
all the risks and rewards of ownership of an asset were measured on a present value basis. Lease liabilities
classified as operating leases. Rental income from operating include the net present value of the fixed payments
lease was recognised on a straight-line basis over the term (including in-substance fixed payments), less any lease
of the relevant lease unless the receipts were structured incentives receivable.
to increase in line with the expected general inflation to
compensate for the expected inflationary cost increases.
159
Sterlite Technologies Limited
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
Lease payments to be made under reasonably certain incurred in bringing the inventories to their present
extension options are also included in the measurement location and condition. Cost includes the reclassification
of the liability. The lease payments are discounted using from equity of any gains or losses on qualifying cash flow
the interest rate implicit in the lease. If that rate cannot be hedges relating to purchases of raw material but excludes
readily determined, the lessee’s incremental borrowing rate borrowing costs. Costs are assigned to individual items of
is used, being the rate that the lessee would have to pay inventory on the basis of weighted average basis. Costs of
to borrow the funds necessary to obtain an asset of similar purchased inventory are determined after deducting rebates
value in a similar economic environment with similar terms and discounts. Net realisable value is the estimated selling
and conditions. price in the ordinary course of business less the estimated
costs of completion and the estimated costs necessary
Right-of-use assets are measured at cost to make the sale.
comprising the following:
k) Impairment of non-financial assets
- the amount of the initial measurement of lease liability Goodwill and intangible assets that have an indefinite useful
life are not subject to amortisation and are tested annually
- any lease payments made at or before the
for impairment, or more frequently if events or changes
commencement date less any lease incentives received
in circumstances indicate that they might be impaired.
- any initial direct costs, and Other assets are tested for impairment whenever events or
changes in circumstances indicate that the carrying amount
- restoration costs.
may not be recoverable. An impairment loss is recognised
for the amount by which the asset’s carrying amount
Payments associated with short-term leases and leases of
exceeds its recoverable amount. The recoverable amount
low-value assets are recognised on a straight-line basis as
is the higher of an asset’s fair value less costs of disposal
an expense in profit or loss. Short-term leases are leases
and value in use. For the purposes of assessing impairment,
with a lease term of 12 months or less.
assets are grouped at the lowest levels for which there
are separately identifiable cash inflows which are largely
Extension and termination options are included in a number
independent of the cash inflows from other assets or groups
of property and equipment leases across the company.
of assets (cash-generating units). Non-financial assets other
These terms are used to maximise operational flexibility
than goodwill that suffered an impairment are reviewed
in terms of managing contracts. The majority of extension
for possible reversal of the impairment at the end of each
and termination options held are exercisable only by the
reporting period.
company and not by the respective lessor.
l) Provisions and contingent liabilities
As a Lessor:
General
Lease income from operating leases where the Company
Provisions are recognised when the Company has a
is a lessor is recognised in income on a straight line basis
present obligation (legal or constructive) as a result of
over the lease term. Initial direct costs incurred in obtaining
a past event, it is probable that an outflow of resources
an operating lease are added to the carrying amount of the
embodying economic benefits will be required to settle
underlying asset and recognised as expense over the lease
the obligation and a reliable estimate can be made of the
term on the same basis as lease income. The respective
amount of the obligation. When the Company expects some
leased assets are included in the balance sheet based
or all of a provision to be reimbursed, the reimbursement
on their nature. The Company did not need to make any
is recognised as a separate asset, but only when the
adjustments to the accounting for assets held as lessor as a
reimbursement is virtually certain. The expense relating to a
result of adopting the new leasing standard.
provision is presented in the statement of profit or loss net of
any reimbursement. Provisions are not recognised for future
j) Inventories
operating losses.
Inventories are valued at the lower of cost and net
realisable value.
If the effect of the time value of money is material, provisions
are discounted using a current pre-tax rate that reflects,
Cost of raw materials and traded goods comprises cost of
when appropriate, the risks specific to the liability. When
purchases. Cost of work-in progress and finished goods
discounting is used, the increase in the provision due to the
comprises direct materials, direct labour and an appropriate
passage of time is recognised as a finance cost.
proportion of variable and fixed overhead expenditure,
the latter being allocated on the basis of normal operating
capacity. Cost of inventories also include all other costs
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
161
Sterlite Technologies Limited
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
Changes in the fair value of financial assets at fair value then the entity reverts to recognising impairment loss
through profit or loss are recognised in other gain/ (losses) allowance based on 12-month ECL.
in the statement of profit and loss. Impairment losses
(and reversal of impairment losses) on equity investments Lifetime ECL are the expected credit losses resulting from all
measured at FVOCI are not reported separately from other possible default events over the expected life of a financial
changes in fair value. instrument. The 12-month ECL is a portion of the lifetime
ECL which results from default events that are possible
Equity investment in subsidiaries, associates and joint within 12 months after the reporting date.
venture are carried at historical cost as per the accounting
policy choice given by IND AS 27. ECL is the difference between all contractual cash flows that
are due to the Company in accordance with the contract
The Company makes investments in certain joint ventures and all the cash flows that the entity expects to receive (i.e.,
and associates with the objective to generate growth all cash shortfalls), discounted at the original EIR. When
in the medium term and with identified exit strategies. estimating the cash flows, an entity is required to consider:
Such investments are managed on a fair value basis. The
Company has elected to measure investments in such joint • All contractual terms of the financial instrument (including
ventures and associates in accordance with Ind AS 109. prepayment, extension, call and similar options) over
the expected life of the financial instrument. However,
iii) Impairment of financial assets in rare cases when the expected life of the financial
In accordance with Ind AS 109, the Company applies instrument cannot be estimated reliably, then the entity
expected credit loss (ECL) model for measurement and is required to use the remaining contractual term of the
recognition of impairment loss on the following financial financial instrument;
assets and credit risk exposure:
• Cash flows from the sale of collateral held or other credit
enhancements that are integral to the contractual terms.
a) Financial assets that are debt instruments, and are
measured at amortised cost e.g., loans, debt securities, ECL impairment loss allowance (or reversal) recognised
deposits, trade receivables and bank balance; during the period is recognised as income/ expense in the
statement of profit and loss. This amount is reflected under
b) Lease receivables under Ind AS 116. the head ‘other expenses’ in the statement of profit and
loss. The balance sheet presentation for various financial
c) Trade receivables or any contractual right to receive instruments is described below:
cash or another financial asset that result from
transactions that are within the scope of Ind AS 115. • Financial assets measured as at amortised cost,
contractual revenue receivables and lease receivables:
The Company follows ‘simplified approach’ for recognition of ECL is presented as an allowance, i.e., as an integral
impairment loss allowance on: part of the measurement of those assets in the balance
sheet. The allowance reduces the net carrying amount.
• Trade receivables or contract revenue receivables; and Until the asset meets write-off criteria, the Company
does not reduce impairment allowance from the gross
• All lease receivables resulting from transactions within the
carrying amount.
scope of Ind AS 116.
For assessing increase in credit risk and impairment loss,
The application of simplified approach does not require
the Company combines financial instruments on the basis
the Company to track changes in credit risk. Rather, it
of shared credit risk characteristics with the objective of
recognises impairment loss allowance based on lifetime
facilitating an analysis that is designed to enable significant
ECLs at each reporting date, right from its initial recognition.
increases in credit risk to be identified on a timely basis.
163
Sterlite Technologies Limited
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
165
Sterlite Technologies Limited
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
Embedded derivatives closely related to the host contracts Diluted earnings per share
are not separated. Diluted earnings per share adjusts the figures used in
the determination of basic earnings per share to take into
s) Financial Guarantee Contracts account the after income tax effect of interest and other
Financial guarantee contracts are recognised as a financial financing costs associated with dilutive potential equity
liability at the time the guarantee is issued. The liability shares, and the weighted average number of additional
is initially measured at fair value and subsequently at the equity shares that would have been outstanding assuming
higher of (i) the amount determined in accordance with the conversion of all dilutive potential equity shares.
the expected credit loss model as per Ind AS 109 and (ii)
the amount initially recognised less, where appropriate, w) Presentation of EBITDA
cumulative amount of income recognised in accordance with The Company presents Earnings before interest, tax,
the principles of Ind AS 115. depreciation and amortisation (‘EBITDA’) in the statement
of profit or loss; this is not specifically required by Ind AS 1.
The fair value of financial guarantees is determined based The term EBITDA is not defined in Ind AS. Ind AS compliant
on the present value of the difference between the cash Schedule III allows companies to present line items, sub-
flows between the contractual payments required under the line items and sub-totals to be presented as an addition or
debt instrument and the payments that would be without the substitution on the face of the financial statements when
guarantee, or the estimated amount that would be payable such presentation is relevant to an understanding of the
to the third party for assuming the obligations. Company’s financial position or performance.
Where the guarantees in relation to the loans or other Accordingly, the Company has elected to present EBITDA
payables of associates are provided for no compensation, as a separate line item on the face of the statement of
the fair values are accounted for as contributions and profit and loss. The Company measures EBITDA on the
recognised as part of the cost of the investment. basis of profit/ (loss) from continuing operations. In its
measurement, the Company does not include depreciation
t) Cash and cash equivalents and amortisation expense, finance income, finance costs
Cash and cash equivalent in the balance sheet comprise and tax expense
cash at banks and on hand and short-term deposits with an
original maturity of three months or less, which are subject x) Trade receivable
to an insignificant risk of changes in value. Trade receivables are amounts due from customers for
goods sold or services performed in the ordinary course of
For the purpose of presentation in the statement of cash business. Trade receivables are recognised initially at the
flows, cash and cash equivalents consist of cash and cash amount of consideration that is unconditional unless there is
equivalent, as defined above, net of outstanding bank significant financing components, when they are recognised
overdrafts if they are considered an integral part of the at fair value. The Company holds the trade receivables with
Company’s cash management. the objective to collect contractual cash flows and therefore
measures them subsequently at amortised cost using the
u) Dividends effective interest method, less provision for impairment.
The Company recognises a liability to make cash
distributions to equity holders of the Company when the y) Segment Reporting
distribution is authorised and the distribution is no longer Operating segments are reported in a manner consistent
at the discretion of the Company. As per the corporate laws with internal reporting provided to the Chief Operating
in India, a distribution is authorised when it is approved by Decision Maker (CODM). The Board of Directors has been
the shareholders. A corresponding amount is recognised identified as being the CODM. Refer note 53 for segment
directly in equity. information presented.
v) Earnings per share z) Non-current assets (or disposal group) held for sale
Basic earnings per share and discontinued operations
Basic earnings per share is calculated by dividing the profit Non-current assets (or disposal group) are classified as held
attributable to owners of the Company by the weighted for sale if their carrying amount will be recovered principally
average number of equity shares outstanding during the through a sale transaction rather than through continuing
financial year, adjusted for bonus elements in equity shares use and a sale is considered highly probable. They are
issued during the year and excluding treasury shares. measured at the lower of their carrying amount and fair
value less costs to sell, except for assets such as deferred
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
tax assets, assets arising from employee benefits, financial 3: Significant Accounting Judgements,
assets and contractual rights under insurance contracts, Estimates and Assumptions
which are specifically exempt from this requirement. The preparation of financial statements requires the use of
accounting estimates. Management also needs to exercise
An impairment loss is recognised for any initial or judgement in applying the company’s accounting policies.
subsequent write-down of the asset (or disposal company) Estimates and assumptions are continuously evaluated
to fair value less costs to sell. A gain is recognised for any and are based on historical experience and other factors
subsequent increases in fair value less costs to sell of including expectations of future events that are believed to
an asset (or disposal company), but not in excess of any be reliable and relevant under the circumstances. This note
cumulative impairment loss previously recognised. A gain or provides an overview of the areas that involved a higher
loss not previously recognised by the date of the sale of the degree of judgement or complexity, and of items which are
non-current asset (or disposal company) is recognised at the more likely to be materially adjusted due to estimates and
date of de-recognition. assumptions turning out to be different than those originally
assessed. Management believes that the estimates
Non-current assets (including those that are part of a are the most likely outcome of future events. Detailed
disposal company) are not depreciated or amortised while information about each of these estimates and judgements
they are classified as held for sale. Interest and other is described below.
expenses attributable to the liabilities of a disposal company
classified as held for sale continue to be recognised. Impairment of Goodwill
The company tests whether goodwill has suffered any
Non-current assets classified as held for sale and the impairment on an annual basis. Impairment exists when the
assets of a disposal company classified as held for sale are carrying value of an asset or cash generating unit exceeds
presented separately from the other assets in the balance its recoverable amount. The recoverable amount of a cash
sheet. The liabilities of a disposal company classified as held generating unit (CGU) is determined based on value in
for sale are presented separately from other liabilities in use calculations. The value in use calculation is based on
the balance sheet. a DCF model. The cash flows are derived from the budget
for the next five years and do not include restructuring
A discontinued operation is a component of the entity that activities that the Company is not yet committed to or
has been disposed of or is classified as held for sale and that significant future investments that will enhance the asset’s
represents a separate major line of business or geographical performance of the CGU being tested. The recoverable
area of operations, is part of a single co-ordinated plan to amount is sensitive to the discount rate used for the DCF
dispose of such a line of business or area of operations, or is model as well as the expected future cash-inflows and the
a subsidiary acquired exclusively with a view to resale. The growth rate. The key assumptions used to determine the
results of discontinued operations are presented separately recoverable amount for goodwill including a sensitivity
in the statement of profit and loss. analysis are disclosed and further explained in Note 6.
167
Sterlite Technologies Limited
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
that a significant reversal in the amount of cumulative service. In case of uninstalled materials, the Company
revenue recognised will not occur and is reassessed at the recognises revenue equal to the cost of the uninstalled
end of each reporting period. The Company allocates the materials if the goods are distinct, the customer is
elements of variable considerations to all the performance expected to obtain control of the goods significantly before
obligations of the contract unless there is observable services related to the goods are rendered, the cost of
evidence that they pertain to one or more distinct the transferred goods is significantly relative to the total
performance obligations. expected costs to completely satisfy the performance
obligation and the goods are procured from a third party
The Company uses judgement to determine an appropriate wherein there is no involvement of the Company in
standalone selling price for a performance obligation designing and manufacturing of the good.
(allocation of transaction price). The Company allocates
the transaction price to each performance obligation on Ind AS 116 - Leases
the basis of the relative standalone selling price of each In determining the lease term, management considers
distinct product or service promised in the contract. Where all facts and circumstances that create an economic
standalone selling price is not observable, the Company incentive to exercise an extension option or not to exercise
uses the expected cost plus reasonable margin approach to a termination option. Extension options (or periods after
allocate the transaction price to each distinct performance termination options) are only included in the lease term
obligation. if the lease is reasonably certain to be extended (or
not terminated).
The Company exercises judgement in determining whether
the performance obligation is satisfied at a point in time or For leases of offices and equipment’s, the following factors
over a period of time. The Company considers indicators are normally the most relevant:
such as how customer consumes benefits as services are
rendered or who controls the asset as it is being created or • If there are significant penalties to terminate (or not
existence of enforceable right to payment for performance extend), the Company is typically reasonably certain to
to date and alternate use of such product or service, transfer extend (or not terminate).
of significant risks and rewards to the customer, acceptance
• If any leasehold improvements are expected to have
of delivery by the customer, timing gap between transfer of
a significant remaining value, the Company is typically
control and actual revenue recognition, etc.
reasonably certain to extend (or not terminate).
Revenue for fixed-price contract is recognised using the • Otherwise, the Company considers other factors including
input method for measuring progress. The company uses historical lease durations and the costs and business
cost incurred related to total estimated costs to determine disruption required to replace the leased asset. Most
the extent of progress towards completion. Judgement extension options in offices and equipment leases have
is involved to estimate the future cost to complete the not been included in the lease liability, because the
contract and to estimate the actual cost incurred basis Company could replace the assets without significant cost
completion of relevant activities towards fulfilment of or business disruption.
performance obligations.
The lease term is reassessed periodically whether an option
is actually exercised (or not exercised) or the Company
Contract fulfilment costs are generally expensed as incurred
becomes obliged to exercise (or not exercise) it. The
except for costs that meet the criteria for capitalisation. Such
assessment of reasonable certainty is only revised if a
costs are amortised over the life of the contract.
significant event or a significant change in circumstances
occurs, which affects this assessment, and that is within the
Uninstalled materials are materials that will be used to
control of the lessee.
satisfy performance obligations in a contract for which the
cost incurred does not depict transfer to the customer.
The lease payments are discounted using the interest
The Company excludes cost of uninstalled materials for
rate implicit in the lease. If that rate cannot be readily
measuring progress towards satisfying a performance
determined, which is generally the case for leases in the
obligation if it involves only provision of a procurement
Company, the lessee’s incremental borrowing rate is used,
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
being the rate that the individual lessee would have to fair value for share-based payment transactions are
pay to borrow the funds necessary to obtain an asset of disclosed in Note 35.
similar value to the right-of-use asset in a similar economic
environment with similar terms, security and conditions. Defined benefit plans
The cost of the defined benefit plan and the present
Share-based payments value of such obligation are determined using actuarial
The Company measures the cost of equity-settled valuations. An actuarial valuation involves making various
transactions with employees using Black Scholes model and assumptions that may differ from actual developments in
Monte carlo’s simulation model to determine the fair value the future. These include the determination of the discount
of options. Estimating fair value for share-based payment rate, future salary increase, employee turnover and
transactions requires determination of the most appropriate expected return on planned assets. Due to the complexities
valuation model, which is dependent on the terms and involved in the valuation and its long term nature, a defined
conditions relating to vesting of the grant. This estimate also benefit obligation is highly sensitive to changes in these
requires determination of the most appropriate inputs to assumptions. All assumptions are reviewed at the year end.
the valuation model including the expected life of the share Details about employee benefit obligations and related
option, volatility and dividend yield and assumptions about assumptions are given in Note 25.
them. The assumptions and models used for estimating
169
Note 4: Property, Plant & Equipment
170
(Amounts ` crores)
Data
Freehold Leasehold Plant & Furniture Office Electrical Right of
Buildings# processing Vehicles Total
land land machinery & fixtures equipments fittings Use asset
Notes
equipments
Cost
At 01 April 2018 67.74 34.20 227.79 1,530.56 16.41 54.53 13.76 46.12 11.21 - 2,002.32
Additions - 2.52 160.86 698.91 0.76 5.55 1.84 11.81 5.45 - 887.70
Transfer from Investment property (refer note 7) - - 10.03 - - - - - - - 10.03
Sterlite Technologies Limited
Movement in Capital work in progress #Buildings include those constructed on leasehold land:
Opening balance as at 01 April 2019 413.87 31 March 2020 31 March 2019
Additions during the year 328.99 Gross Block 349.30 269.77
Borrowing cost capitalised during the year (Refer Note 33) 11.12 Depreciation for the year 3.47 10.30
to the Standalone Financial Statements for the year ended March 31, 2020
The Company has revised the useful life of certain assets effective from October 01, 2019 based on the
available evidence of their expected use and the impact of same on depreciation charge for current year is
` 15 crores. There will be similar impact in future years.
1. 2. 3. Financial Statements
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
Details of Leases :
The note provides information for leases where the company is a lessee. The company leases various offices and
equipments. Rental contracts are typically made for fixed periods of 2 to 15 years, but have extension options.
Additions to the right of use assets during the year is ` 3.39 crores.
31 March 2020
Particulars Note no.
(` in crores)
Interest expenses (included in finance cost) 33 11.17
Expenses related to short term leases, low value assets (included as rent in other expenses) 31 5.34
The total cash outflow for leases for the year ended 31 March 2020 was ` 25.62 crores.
171
Sterlite Technologies Limited
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
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 been incorporated in the cash flow estimates. 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 budget period, consistent with the
industry forecasts.
EBITDA margins
EBITDA margins are based on the actual EBITDA of the CGU based on the past trend and future expectations.
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
During the previous 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)
173
Sterlite Technologies Limited
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
Note 8: Investments
31 March 2020 31 March 2019
Particulars
(` in crores) (` in crores)
Non-current investments in equity instruments (fully paid up) (unquoted)
Investment in Subsidiaries
Equity component of debt instrument
44,705,928 (31 March 2019: 44,705,928) 0.01% compulsory convertible debentures of 32.42 32.42
Speedon Network Limited
Equity investments at cost
29,096,847 (31 March 2019: 12,381,447) 186.86 67.14
Equity shares of Sterlite Global Ventures (Mauritius) Limited of USD 1 each fully paid up
5,050,000 (31 March 2019: 5,050,000) Equity shares of Sterlite Tech SPA of Euro 1 each fully paid-up 40.23 40.23
50,000 (31 March 2019: 50,000) Equity shares of Sterlite Innovative Solutions Limited of `10 0.05 0.05
each fully paid-up
50,000 (31 March 2019: 50,000) Equity shares of Sterlite Tech Connectivity Solutions Limited 0.05 0.05
of ` 10 each fully paid-up
50,000 (31 March 2019: Nil ) Equity shares of Sterlite Tech Cables Solutions Limited of `10 0.05 -
each fully paid-up
1,550,000 (31 March 2019: 1,550,000) Equity shares of Speedon Network Limited of ` 10 -* -*
each fully paid-up
5,000 (31 March 2019: 5,000) Equity shares of Sterlite Technologies UK Ventures Limited of Euro 1 each 0.04 0.04
fully paid-up
100% Equity shares of Sterlite (Shanghai) Trading Company Limited fully paid-up 1.53 1.53
19,875,404 (31 March 2019: 19,875,404) Equity shares of Maharashtra Transmission Communication - -
Infrastructure Limited of ` 10 each fully paid up (Refer Note 16)
Nil (31 March 2019: 17,506) Equity shares of Elitecore - 0.14
Technologies (Mauritius) Limited of MUR 100 each fully paid up$$
1,000 (31 March 2019: 1,000) Equity shares of Sterlite Tech Holding Inc. USA 0.00* 0.00*
100 (31 March 2019: 100) Equity shares of Elitecore Technologies SDN, BHD -* -*
Investment in Joint venture (at fair value through P&L)$
511 (31 March 2019: 333) Equity shares of Metis Eduventures Private Limited 1.53 0.26
Investments - Other (at fair value through OCI)
Nil (31 March 2019: 10) Equity shares of Singularity Healthcare IT$$ - -*
Systems Private Limited of ` 10 each fully paid up
Investment in debentures (unquoted)
Investment in debentures- Joint Venture (at fair value through P&L)
17,600,000 (31 March 2019: 17,600,000) 0.001% Compulsorily Convertible Debentures of Metis 17.60 17.60
Eduventures Private Limited
5,000,000 (31 March 2019: 5,000,000) 0.01% Cumulative Optionally Convertible Debentures of Metis 5.00 5.00
Eduventures Private Limited
Investment in debentures- Others (at fair value through OCI)
Nil (31 March 2019: 3,199,990) 0.001% Compulsorily Convertible Debentures of - -*
Singularity Healthcare IT Systems Private Limited of ` 10 each fully paid up$$
Investment in preference shares - Joint Venture (at fair value through P&L)
313 (31 March 2019: Nil) 0.01% Compulsorily Convertible 3.74 -
Preference Shares of Metis Eduventures Private Limited
Total Investments 289.10 164.46
Total non-current investments
Aggregate amount of quoted investments and market value thereof - -
Aggregate amount of unquoted investments 289.10 164.46
Amount of impairment in the value of investments** - 1.74
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
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.
175
Sterlite Technologies Limited
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
*This includes expenses incurred on behalf of customer, amounting to ` 4.51 crores (31 March 2019: `18.04 crores)
Refer note 19 for information on financial assets hypothecated as security by the Company.
Refer note 19 for information on other assets hypothecated as security by the Company.
31 March 2020 31 March 2019
Particulars
(` in crores) (` in crores)
Current
Prepaid expenses 27.87 39.60
Balances with Government authorities 281.03 250.19
Advance to suppliers 15.01 38.73
Other advances 8.06 3.68
Total other current assets 331.97 332.20
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
There are no repatriation restrictions with regards to cash and cash equivalents.
* Includes ` 0.01 crores (31 March 2019: ` 0.01 crores) held as lien by banks against bank guarantees.
** `1.84 crores (31 March 2019: `15.00 crores) held as lien by banks against bank guarantees.
177
Sterlite Technologies Limited
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
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. Management has filed an application with Department of Telecommunication for transfer of entity after its earlier
application had been rejected. The Department of Telecommunication has requested certain clarifications to which the
Management has responded. The Company is committed to the sale of MTCIL post requisite regulatory approvals.
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.
a. Reconciliation of the shares outstanding at the beginning and at the end of the reporting period
31 March 2020 31 March 2019
Nos in crores (` in crores) Nos in crores (` in crores)
At the beginning of the year 40.25 80.51 40.10 80.20
Issued during the year against employee stock options 0.14 0.28 0.15 0.31
Outstanding at the end of the year 40.39 80.79 40.25 80.51
Buy-back of shares:
The Board of Directors have approved on March 24, 2020 the proposed buyback of Equity Shares for a total amount not
exceeding ` 145 Crore, being 10% of the aggregate of the total paid-up equity capital and free reserves of the Company
based on the audited standalone and consolidated financial statements of the Company for the financial year ended March
31, 2019 . The Company has bought back Nil shares as at March 31, 2020. Post March 31, 2020, the Company has bought
back 2,418,719 shares for ` 20.30 crores (excluding taxes) upto the reporting date.
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.
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
d. Aggregate number of bonus shares issued, share issued for consideration other than cash during the
period of five years immediately preceding the reporting date :
31 March 2020 31 March 2019
Particulars
(` in crores) (` in crores)
Equity shares allotted as fully paid bonus shares by capitalisation of securities premium in five years - 0.04
immediately preceding the reporting date
179
Sterlite Technologies Limited
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
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.
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
181
Sterlite Technologies Limited
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
Note:
(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 @ 7.80 % -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 30 days to 90 days and carries interest @ 6.90
% to 8.25% p.a.
(iii) Commercial Papers are unsecured and are generally taken for a period from 60 to 90 days and carry interest @
6.65% to 7.00% p.a.
(iv) Other loans 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. Export packing
credit is taken for a period ranging from 30-180 days. Interest rate for both the products ranges from 6.9% - 8.11% 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.
The amount of net debt would have been ` 1,577.99 crores considering the amount of lease liability of ` 99.76 crores
*includes other bank balance of ` 86 crores (March 31, 2019 : ` 70 crores) with respect to fixed deposit. These fixed deposits can be encashed by the
Company at any time without any major penalties.
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
Non-current borrowings
31 March 2020 31 March 2019
Particulars
(` in crores) (` in crores)
Opening balance 734.42 707.33
Cashflows 45.27 23.67
Interest expense 61.28 46.75
Interest paid (62.64) (42.97)
Forex adjustment (9.74) (0.36)
Closing balance 768.59 734.42
Current borrowings
31 March 2020 31 March 2019
Particulars
(` in crores) (` in crores)
Opening balance 797.48 462.74
Cashflows 307.69 334.74
Interest expense 96.21 28.14
Interest paid (96.21) (28.14)
Closing balance 1,105.17 797.48
Current Investments
31 March 2020 31 March 2019
Particulars
(` in crores) (` in crores)
Opening balance 170.00 155.00
Cashflows 146.77 13.11
Realised gain on current investment 2.23 1.89
Closing balance 319.00 170.00
183
Sterlite Technologies Limited
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
* There are no amounts due and outstanding to be credited to Investor Education and Protection Fund.
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
During the year ended March 31, 2020, the company recognized revenue of ` 86.92 crores (March 31, 2019: ` 35.40 crores)
arising from opening unearned revenue.
185
Sterlite Technologies Limited
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
The major components of income tax expense for the years ended 31 March 2020 and 31 March 2019 are:
Pursuant to the announcement made by the Finance Ministry of the Government of India on September 20, 2019, the
company, basis their current assessment, is expected to opt for a lower corporate tax rate as per section 115BAA of the
Income Tax Act, 1961 as introduced by the Taxation Laws (Amendment) Ordinance, 2019 from financial year 2019-20
onwards. Accordingly, the company remeasured the Deferred Tax Liability basis the revised lower tax rate and impact of
the same was recognised in the current year. The company has also recognised provision for Income Tax and Deferred Tax
Liability for the year ended March 31, 2020 basis the revised lower tax rate.
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
i) Compensated Absences
The compensated absences cover the company’s liability for sick and earned leave. The amount of the provision is
` 20.02 Crore (31 March 2019: ` 17.01 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.
Changes in the present value of the defined benefit obligation are as follows:
31 March 2020 31 March 2019
Particulars
(` in crores) (` in crores)
Defined benefit obligation at the beginning of the year 34.18 22.98
Current service cost 5.29 2.85
Interest cost 2.61 1.99
Actuarial (gain)/loss (0.35) 7.33
Benefits paid (0.87) (0.97)
Defined benefit obligation, at the end of the year 40.86 34.18
187
Sterlite Technologies Limited
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
The company expects to contribute ` 2.50 crores (31 March 2019: ` 4.50 crores) to its gratuity plan in FY 2020-21.
The major categories of plan assets as a percentage of the fair value of total plan assets are as follows:
The fair value of planned assets represents the amount as confirmed by the fund.
The net liability disclosed above relates to funded plans are as follows:
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.
Net employee benefit expense recognised in the statement of profit and loss:
Net employee benefit expense recognised in the other comprehensive income (OCI):
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
The principal assumptions used in determining defined benefit obligation are shown below:
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.
Sensitivity Analysis
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.
189
Sterlite Technologies Limited
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
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 Company’s 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 (2019 - 7 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 ` 4,756.14 crores is reduced by the consideration of ` 71.07 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 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 ` 2,935.45 crores which is expected
to be recognised over a period of one to three years. Amount of unsatisfied (or partially satisfied) performance obligations
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
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 amount disclosed above is net of expenses related to provision of services (refer note 50).
191
Sterlite Technologies Limited
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
The Company has recognised the following expenses in the Statement of Profit and Loss for the year.
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
*This includes loss of ` Nil (March 31, 2019: `1.74 crores) pertaining to investments classified as FVTPL (refer note 8).
* During the year, the Company has capitalised borrowing costs of ` 11.12 crores (31 March 2019: ` 53.37 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. (March 31, 2019: 8.49% p.a.).
*For current year, the current tax expense is net of adjustment of ` 8.90 crores pertaining to current tax of previous year.
#For current year, the deferred tax includes ` 10.41 crores for adjustment for deferred tax expense of previous year.
193
Sterlite Technologies Limited
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
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.
The Company has charged ` 9.86 crore (31 March 2019: ` 19.16 crores) to the statement of profit and loss in respect of
options granted under ESOP scheme.
a) Set Out Below is the summary of options granted under the plan.
31 March 2020 31 March 2019
Average Average
Number of Number of
Exercise price Exercise price
Options Options
per share per share
Opening Balance 2 46,14,478 2 50,50,978
Granted During the year 2 17,41,630 2 16,36,950
Forfeited During the year 2 - 2 -
Exercised During the year 2 (14,21,264) 2 (15,51,202)
Expired/cancelled During the year 2 (10,00,954) 2 (5,22,248)
Closing Balance 39,33,890 46,14,478
Vested and Exercisable 4,23,130 3,41,195
Average share price for the year ended 31 March 2020 is 141.89 (31 March 2019: ` 307.95).
Share options outstanding at the end of the year have the following expiry date and exercise prices.
Weighted Average remaining contractual life of the options outstanding at the end of the period 3.11 2.68
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
1. Vesting criteria - Assured vesting of 30% Options in five years subject to continuous employment with the company.
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 - 70% Vesting based on total Shareholders return based on market performance
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
Variables
Price of underlying stock 145.35
Expected volatility 47.87%
Risk Free rate 6.19%
Exercise Price (` per Option) 2.00
Dividend Yield 1.07%
Fair Value of the option 44.32
195
Sterlite Technologies Limited
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
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 35.
Future minimum lease payments over non cancellable period of operating leases are as follows :
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 :
31 March 2020 31 March 2019
Particulars
(` in crores) (` in crores)
Lease income recognised in the statement of profit and loss for the year - 2.01
The future minimum lease payments receivable over the next one year - 1.32
The future minimum lease payments receivable later than one year but not later than five year - -
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 ` 881.49 crores (31 March 2019: ` 984.31 crores) to the Commissioner of
Customs. The company expects to fulfil the export obligation within prescribed time.
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
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 CIT(A) and ITAT orders against which the Department has filed an appeal with the High Court.
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.
(` in crores)
31 March 2020 31 March 2019
Name of Subsidiary Outstanding Maximum Outstanding Maximum
amount balance amount balance
Sterlite Global Ventures (Mauritius) Limited 0.35 0.35 0.34 0.34
Speedon Network Limited 8.64 30.72 29.60 29.60
Sterlite Tech Cables Solutions Limited 4.20 4.20 - -
Maharashtra Transmission Communication Infrastructure Limited 4.38 4.38 3.66 3.66
Sterlite Technologies UK Ventures Limited 24.40 24.40 22.33 33.18
STH Inc USA 17.25 33.47 17.02 16.80
Sterlite Tech SPA (Italy) 4.85 4.85 1.33 1.33
Elitecore Technologies SDN. BHD 0.26 0.56 0.56 0.56
Metallurgica Bresciana S.p.A 0.14 0.14 - -
Total 64.47 74.84
197
Sterlite Technologies Limited
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
Note 41: Details of Dues to Micro and Small Enterprises as Defined Under Msmed Act, 2006
The Company has certain dues to suppliers registered under Micro, Small and Medium Enterprises Development Act, 2006
(‘MSMED Act’). The disclosures pursuant to the said MSMED Act are as follows:
* includes amount of `11.53 Crore (31 March 2019: ` 91.70 crore) outstanding, but not overdue to micro, small and medium enterprises as on 31 March 2020.
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.
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.
- Pune - R&D activities for Product Engineering towards Programmable Networking & Intelligence.
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
The company has four Research and Development Centres. Centre wise breakup of expenditure is as follows :
The Company is in the business of designing , manufacturing and deployment of high-capacity converged fibre, cable
and wireless networks. Telecommunication is the largest end-use industry for the Company and the Company has special
expertise in large scale integrated telecommunications projects and offers system integration services across network
lifecycle. Management believes that the ongoing shift to remote work, reduced domestic and global travel and increasing
need for connected devices is expected to result in a sharp increase in network usage which will drive the need to for
networking infrastructure and connectivity.
Due to the lock down imposed by the government of India, the operations of the Company had to be temporarily suspended.
However, since telecom networks have been identified as an essential service, the Company has been able to partially
resume its operations as at the reporting date. The current situation is likely to continue for next few months and therefore
expected to result in some delays in delivering the customer orders and completion of ongoing projects. Given the
uncertainties around its impact on future global economic activity, Management will continue to monitor the impact on the
operations of the Company.
As inventory verification was impracticable at the year end, Management has performed the ‘wall to wall’ inventory
verification at a date subsequent to the year end in the presence of statutory auditor at one location and internal auditor (an
external firm of Chartered Accountants) at other location to obtain comfort over the existence and condition of inventories as
at March 31, 2020 including roll-back procedures etc.
Note 44: Excise /Customs Matter Pending With Honourable Supreme Court
During the current year, the Company has 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 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 has
determined the duty payable in respect of all matters offered for settlement under the scheme and accordingly recognised
199
Sterlite Technologies Limited
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
expense of ` 50.71 crores in the current year which has been disclosed as exceptional item in the statement of profit and
loss. The Company is awaiting acceptance of the application by the department as of the reporting date.
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 -
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
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 31 March 2020 and 31 March 2019.
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 2020 and 31 March 2019.
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 2020, after taking into
account the effect of interest rate swaps, approximately 84% of the Company’s borrowings are at a fixed rate of interest
(31 March 2019: 87%).
The exposure of the company’s borrowing to interest rate changes at the end of the reporting period are as follows:
As at the end of the year, the Company had the following variable rate borrowings and interest rate swap contracts outstanding:
31 March 2020 31 March 2019
Particulars
Balance % of total loans Balance % of total loans
Variable rate borrowings 412.22 22% 333.74 22%
Interest rate swaps (notional principal amount) 113.49 138.35
Net exposure to cash flow interest rate risk 298.73 195.39
201
Sterlite Technologies Limited
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
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 2020 and 2019, 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 31 March 2020 and as at 31
March 2019.
The Company exposure to foreign currency risk at the end of the year expressed in INR are as follows.
31 March 2020
(` in crores)
Financial Assets USD EUR GBP AED
Trade receivable 81.41 87.73 72.45 17.61
Bank Balances 9.73 14.77 4.21 -
Loans and advances 20.03 24.54 2.43 -
Derivative Assets
Foreign exchange forward contracts - Sell foreign currency 75.73 77.76 66.74 15.55
Net Exposure to foreign currency risk (Assets) 35.44 49.28 12.35 2.06
31 March 2020
(` in crores)
Financial Liabilities USD EUR GBP
Bank Loan (including deferred payment liabilities) 391.52 55.52 69.81
Payables for purchase of property, plant & equipments 97.19 108.54 7.55
Trade Payables 171.14 2.74 0.03
Derivative Liabilities
Foreign exchange forward contracts - Buy foreign currency 525.96 164.49 0.27
Principal Swap 113.08 - -
Net Exposure to foreign currency risk (Liabilities) 20.81 2.30 77.12
31 March 2019
(` in crores)
Financial Assets USD EUR GBP AED
Trade receivable 77.15 112.90 36.90 12.14
Bank Balances 10.56 0.56 4.79 -
Loans and advances 19.51 21.53 0.75 -
Derivative Assets
Foreign exchange forward contracts - Sell foreign currency 30.70 97.19 36.90 12.14
Net Exposure to foreign currency risk (Assets) 76.52 37.79 5.55 -
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
31 March 2019
(` in crores)
Financial Liabilities USD EUR GBP
Bank Loan (including deferred payment liabilities) 197.65 94.01 -
Payables for purchase of property, plant & equipments 262.04 8.46 -
Trade Payables 191.01 13.86 0.05
Derivative Liabilities
Foreign exchange forward contracts - Buy foreign currency 238.01 25.96 0.05
Principal Swap 138.34 - -
Net Exposure to foreign currency risk (Liabilities) 274.35 90.37 -
(` in crores)
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.
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 Company’s senior
management on a regular basis. The Company’s Board of Directors review and approve all equity investment decisions.
203
Sterlite Technologies Limited
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
At the reporting date, the exposure to unlisted equity collectively. The assessment is based on historical
securities (other than investments in subsidiaries) at fair information of defaults. The maximum exposure to credit
value was ` 27.87 crores (31 March 2019: ` 22.86 crores). risk at the reporting date is the carrying value of each class
of financial assets. The Company does not hold collateral as
The Company also invests into highly liquid mutual funds security. The Company evaluates the concentration of risk
which are subject to price risk changes. These investments with respect to trade receivables as low, as its customers
are generally for short duration and therefore impact of price are located in several jurisdictions and operate in largely
changes is generally not significant. Investment in these independent markets. During the period, the company
funds are made as a part of treasury management activities. made write-offs of ` 5.05 crores (31 March 2019 : ` 17.19
crores) trade receivables and it does not expect to receive
(b) Credit risk future cash flows or recoveries from collection of cash flows
Credit risk is the risk that a counterparty will not meet its previously written off.
obligations under a contract, leading to a financial loss.
The Company is exposed to credit risk from its operating The Company’s customer profile for customer contracts and
activities (primarily trade receivables) and from its investing software services include public sector enterprises, state
activities, including deposits with banks, foreign exchange owned companies and private corporates. Accordingly,
transactions and other financial instruments. the Company’s customer credit risk is low. The Company’s
average network integration project execution cycle ranges
Trade receivables and Contract assets from 12 to 36 months based on the nature of contract and
Customer credit risk is managed by each business unit scope of services to be provided. General payment terms
subject to the Company’s established policy, procedures include mobilisation advance, progress payments with
and control relating to customer credit risk management. a credit period ranging from 45 to 90 days and certain
Credit quality of a customer is assessed based on credit retention money to be released at the end of the project.
rating and individual credit limits are defined in accordance In some cases retentions are substituted with bank/
with credit assessment. Outstanding customer receivables corporate guarantees.
are regularly monitored and any shipments to major
customers are generally covered by letters of credit or other The Company has a detailed review mechanism of overdue
forms of credit assurance. customer receivables at various levels within organisation to
ensure proper attention and focus for realisation and based
An impairment analysis is performed at each reporting on assessment performed management has concluded that
date on an individual basis for major customers. In impact of expected credit loss is not material and current
addition, a large number of minor receivables are grouped provision made against trade receivable is adequate to
into homogenous groups and assessed for impairment cover the provision on account of expected credit loss.
Details of Expected credit loss for trade receivables and contract assets is as follows:
31 March 2020 31 March 2019
Particulars less than 3 more than 3 less than more than
Total Total
65 days 65 days 365 days 365 days
Gross carrying amount 1,929.39 264.23 2,193.62 2,283.27 20.26 2,303.54
Expected credit loss rate 0.29% 15.00% 0.60% 75.00%
Expected credit loss provision 5.68 39.63 45.31 13.78 16.21 29.99
Carrying amount of trade receivable 1,923.71 224.60 2,148.31 2,269.49 4.05 2,273.55
(net of provision)
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
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 Company’s maximum exposure to credit risk for the components of the balance sheet at 31 March 2020 and 31 March
2019 is the carrying amounts of each class of financial assets.
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:
(` in crores)
Particulars Payable on Less than 3 months to 1 year to
Total
demand 3 months 12 months 5 years
As at March 31, 2020
Borrowings 7.64 1,097.26 247.27 519.83 1,872.00
Other financial liabilities 4.89 10.97 102.56 3.49 121.91
Trade payables 279.54 452.33 634.60 - 1,366.47
Payables for purchase of Property, plant and equipments - 207.04 298.53 0.62 506.18
Derivative instruments - - 9.73 3.21 12.94
292.07 1,767.59 1,292.69 527.15 3,879.50
As at March 31, 2019
Borrowings 41.92 738.51 166.65 581.70 1,528.78
Other financial liabilities 4.24 39.63 29.77 2.71 76.35
Trade payables 264.14 783.46 762.39 - 1,809.99
Payables for purchase of Property, plant and equipments - 92.94 303.22 9.40 405.56
Derivative instruments - 6.29 3.98 2.77 13.04
310.30 1,660.83 1,266.01 596.58 3,833.72
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 2020 and
31 March 2019.
205
Sterlite Technologies Limited
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
The cash flow hedges for such derivative contracts as at 31 March 2020 were assessed to be highly effective and a net
unrealised gain of ` 18.83 crore, with a deferred tax liability of ` 4.75 crore relating to the hedging instruments, is included
in OCI. Comparatively, the cash flow hedges as at 31 March 2019 were assessed to be highly effective and an unrealised
gain of ` 122.95 crore, with a deferred tax liability of ` 42.96 crore was included in OCI in respect of these contracts. The
amounts retained in OCI at 31 March 2020 are expected to mature and affect the statement of profit and loss during the year
ended 31 March 2021.
At 31 March 2020, the Company has currency/interest rate swap agreements in place with a notional amount of USD 1.5
crore (` 113.49 crore) (31 March 2019 : USD 2 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 2020 were assessed to be highly effective and a net
unrealised gain of ` 9.49 crore, with a deferred tax liability of ` 2.39 crore relating to the hedging instruments, is included in
OCI. Comparatively, the cash flow hedges as at 31 March 2019 were assessed to be highly effective and an unrealised gain
of ` 9.87 crore, with a deferred tax liability of ` 3.45 crore was included in OCI in respect of these contracts. The amounts
retained in OCI at 31 March 2020 are expected to mature and affect the statement of profit and loss during the year ended
31 March 2021.
31 March 2020
(` in crores)
Change in the value
Carrying
Changes in fair of hedged item
Nominal Amount of Hedge Weighted average
Types of hedge and risks Maturity date value of hedging used as the basis for
Value Hedging ratio* Strike Price/Rate
instrument recognising hedge
Instruments
effectiveness
Assets /
(Liabilities)
Cash flow hedge
Foreign exchange risk
(i) Foreign exchange AED:INR- 20.29
forward contracts- AUD:INR- 46.65
Assets April 2020 - EUR:INR- 90.25
342.60 22.67 1:1 (58.30) 58.30
December 2023 GBP:INR- 97.19
USD:INR- 73.84
(ii) Foreign exchange EUR:INR- 88.19
forward contracts- April 2020 - 1:1 GBP:INR- 94.13
193.46 (3.83) (3.18) 3.18
Liabilities January 2022 USD:INR- 73.25
CNH:INR-10.73
(iii) Foreign Currency (182.89) 11.36 03-January 1:1 USD:INR 66.39 11.18 (11.18)
Loan 2023
Interest rate risk
Interest rate swap (297.77) (2.55) 03-January 1:1 N/A (1.51) 1.51
2023
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
31 March 2019
(` in crores)
Change in the value
Carrying
Changes in fair of hedged item
Nominal Amount of Hedge Weighted average
Types of hedge and risks Maturity date value of hedging used as the basis for
Value Hedging ratio* Strike Price/Rate
instrument recognising hedge
Instruments
effectiveness
Assets /
(Liabilities)
Cash flow hedge
Foreign exchange risk
(i) Foreign exchange EUR:INR- 90.38
April 2019 -
forward contracts- 1,233.38 80.97 1:1 GBP:INR- 101.09 80.92 (80.92)
December 2023
Assets USD:INR- 70.29
(ii) Foreign exchange EUR:INR- 79.04
April 2019 - 1:1
forward contracts- (39.36) (0.65) USD:INR- 71.033 41.98 (41.98)
January 2021
Liabilities
(iii) Foreign Currency (138.34) 0.18 03-January 1:1 USD:INR 66.39 12.22 (12.22)
Loan 2023
Interest rate risk
Interest rate swap (307.72) (1.04) 03-January 1:1 N/A (2.35) 2.35
2023
*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.
31 March 2020
(` in crores)
Change in the Value Hedge
Amount reclassified Line item affected in statement
of hedging instrument ineffectiveness
Type of hedge from cash flow hedging of profit and loss because of
recognised in other recognised in
reserve to profit or loss the reclassification
comprehensive income profit or loss
Cash flow hedge
Foreign exchange risk (50.30) - (52.70) Revenue and COGS
Interest Risk (1.51) - - N/A
31 March 2019
(` in crores)
Change in the Value Hedge
Amount reclassified Line item affected in statement
of hedging instrument ineffectiveness
Type of hedge from cash flow hedging of profit and loss because of
recognised in other recognised in
reserve to profit or loss the reclassification
comprehensive income profit or loss
Cash flow hedge
Foreign exchange risk 135.12 - (21.66) Revenue and COGS
Interest Risk (2.35) - - N/A
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
207
Sterlite Technologies Limited
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
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 18 for the details related to movement in cash flow hedging reserve.
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 Company’s 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.
As at As at
Particulars 31 March 2020 31 March 2019
(` in crores) (` in crores)
Interest Bearing Loans and borrowings 1,872.00 1,528.78
Less: Cash and Cash equivalents & current investment* (395.53) (228.43)
Net debt 1,476.47 1,300.35
Equity share capital 80.79 80.51
Other equity 1,728.78 1,507.70
Total capital 1,809.57 1,588.21
Capital and net debt 3,286.04 2,888.56
Gearing ratio 44.93% 45.02%
*includes other bank balance of ` 86 crores (31 March 2019 : ` 70 crores) with respect to fixed deposit. 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.
No changes were made in the objectives, policies or processes for managing capital during the years ended 31 March 2020
and 31 March 2019.
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
As at As at
Particulars 31 March 2020 31 March 2019
(` in crores) (` in crores)
Cash dividends on equity shares declared and paid:
Final dividend for the year ended on 31 March 2019: ` 3.5 per share (31 March 2018: ` 2 per share) 141.09 80.30
Dividend Distribution Tax on final dividend 29.00 16.51
170.09 96.80
Proposed dividends on Equity shares:
Final dividend for the year ended on 31 March 2020: ` 3.5 per share (31 March 2019: ` 3.5 per share) 141.35 140.86
Dividend Distribution Tax on proposed dividend - 28.68
141.35 169.54
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 and 31 March 2019, 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.
209
Sterlite Technologies Limited
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
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.
The fair values of the quoted mutual funds are based on quoted price at the reporting date.
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
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.
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.
(` in crores)
Investments in Investments in Investments in
Particulars
Equity Shares of JV Debentures Preference share
As at 31 March 2019 0.26 22.60 -
Acquisitions 1.27 - 3.74
Changes in Fair value - - -
As at 31 March 2020 1.53 22.60 3.74
*There were no significant inter-relationships between unobservable inputs that materially affect fair values.
211
Sterlite Technologies Limited
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
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:
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 31 March 2020 and 31 March 2019 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.
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
(ii)
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 Tech Holding Inc.
Sterlite Technologies Europe Ventures Limited (liquidated with effect from May 16, 2018)
Sterlite Tech Holdings (UK) Limited
Sterlite Technologies Inc.
Sterlite Technologies S.p.A
Metallurgica Bresciana S.p.A
Sterlite Innovative Solutions Limited
Sterlite Tech Connectivity Solutions Limited
Sterlite Tech Cables Solutions Limited
Impact Data Solutions Limited
Impact Data Soultions B.V.
Vulcan Data Centre Solutions Limited
PT Sterlite Technologies Indonesia
(b) Other related parties under IND AS-24 “Related party disclosures” with whom transactions have taken place
during the year
(i) Fellow Subsidiaries
Cairn India Holdings Ltd
Sterlite Power Transmission Limited
Twin Star Technologies Limited
Twin Star Display Technologies Limited
Vedanta Limited
Fujairah Gold FZE
(ii)
Joint ventures
Sterlite Conduspar Industrial Ltda (58:42 joint venture between Sterlite Technologies UK Ventures Limited
and Conduspar Condutores Eletricos Limiteda)
Metis Eduventures Private Limited
213
Sterlite Technologies Limited
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
(v) Entities where key management personnel or relatives of key management personnel have significant
influence (EKMP)
Universal Floritech LLP (EKMP)
Sterlite Tech Foundation (EKMP)
(c) 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)
receivables##
2 Loans/advance payables## - - - - - - - - - - 7.31 8.28
1.
215
Sterlite Technologies Limited
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
(C) Disclosure in respect of material related party transaction during the year:
S. No. Particulars Relationship 31 March 2020 31 March 2019
1 Remuneration
Mr. Pravin Agarwal KMP 14.86 14.34
Dr. Anand Agarwal KMP 10.76 12.40
Mr. Anupam Jindal KMP 3.44 3.44
Mr. Ankit Agarwal Relative of KMP 3.84 3.60
2 Sitting Fees
Mr. Arun Todarwal KMP 0.13 0.09
Mr. A. R. Narayanaswamy KMP 0.09 0.07
Mr. Sandip Das KMP 0.11 0.07
Ms. Kumud Srinivasan KMP 0.08 0.03
3 Commission
Mr. Arun Todarwal KMP 0.23 0.15
Mr. A. R. Narayanaswamy KMP 0.23 0.15
Ms. Avaantika Kakkar KMP - 0.15
Ms. Kumud Srinivasan KMP 0.23 -
Mr. Sandip Das KMP 0.23 0.08
Mr. Pratik Agarwal KMP 0.23 0.15
4 Consultancy
Mr. Sandip Das KMP 0.55 0.45
5 Dividend (received)/paid
Twin Star Overseas Limited Holding Company 73.29 41.88
6 Investment during the year
Sterlite Global Ventures (Mauritius) Limited Subsidiary 119.72 -
Sterlite Technologies S.p.A Subsidiary - 40.22
Maharashtra Transmission Communication Infrastructure Limited Subsidiary - 7.50
Metis Eduventures Private Limited Joint Venture 5.01 5.00
7 Sale of investment in subsidiaries
Elitecore Technologies (Mauritius) Limited Subsidiary 0.82 -
8 Loans & advances given
Speedon Network Limited Subsidiary 1.95 7.46
Sterlite Tech Holding Inc. Subsidiary 21.46 8.07
Sterlite Tech Cables Solutions Limited Subsidiary 4.20 -
Twinstar Display Technologies Limited. Fellow Subsidiary 0.21 3.44
Sterlite Power Transmission Limited. Fellow Subsidiary - 2.52
9 Repayment of loans
Speedon Network Limited Subsidiary 9.73 0.12
Maharashtra Transmission Communication Infrastructure Limited Subsidiary - 1.00
Sterlite Tech Holding Inc. Subsidiary 21.86 -
Sterlite Power Transmission Limited Fellow Subsidiary - 2.78
Twinstar Display Technologies Limited Fellow Subsidiary 29.07 0.24
10 Loan taken
Sterlite Power Transmission Limited Fellow Subsidiary 4.05 7.50
11 Loan repaid
Sterlite Power Transmission Limited Fellow Subsidiary 5.59 -
12 Interest charged on loans
Speedon Network Limited Subsidiary 1.99 1.75
Sterlite Technologies UK Ventures Limited Subsidiary 0.33 0.31
Sterlite Tech Holding Inc. USA Subsidiary 0.64 0.36
Twin Star Display Technologies Limited Fellow Subsidiary - 2.11
Twin Star Technologies Ltd Fellow Subsidiary - 0.70
13 Interest payable on loans
Sterlte Power Transmission Limited Fellow Subsidiary 0.57 0.70
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
**The amount is gross of the expenses incurred towards provision of these services.
01 April 2018
Particulars Notes
(` in crores)
Balances in retained earnings 804.45
Less: Adjustment on account of revenue recognition as per IND AS 115 (i) (19.54)
Add: Increase in Deferred Tax Assets (i) 6.83
Balances in retained earnings after adjustment 791.74
217
Sterlite Technologies Limited
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
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 project. 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 year ended
31 March 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.
Equity
Other Equity 1,510.87 (3.17) 1,507.70
Total Equity 1,591.38 (3.17) 1,588.21
Non-current liabilities
Provisions 24.02 (23.30) 0.72
Deferred tax liabilities (net) 73.83 (1.70) 72.13
Current liabilities
Trade payables 1,769.66 40.33 1,809.99
Contract liabilities - 269.31 269.31
Provisions 26.99 (17.03) 9.96
Other current liabilities 393.72 (344.13) 49.59
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
- 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 project contracts. It also includes advance received
from customers.
The company has adopted Ind AS 116 retrospectively from 01 April 2019, but has not restated comparatives for the year
March 31, 2019 reporting period, as permitted under the specific transitional provisions in the standard. The reclassifications
and the adjustments arising from the new leasing rules are therefore recognised in the opening balance sheet on
01 April 2019.
01 April 2019
Particulars
(` in crores)
Balances in retained earnings 1,225.07
Less: Adjustment on account of leases as per IND AS 116 (net of tax of ` 4.19 crore) (12.48)
Balances in retained earnings after adjustment 1,212.59
219
Sterlite Technologies Limited
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
Particulars Amount
Building 44.81
Plant and machinery 49.18
Right of use assets recognised as at 1 April 2019 93.99
- t he use of a single discount rate to a portfolio of leases with reasonably similar characteristics
- t he accounting for operating leases with a remaining lease term of less than 12 months as at 1 April 2019 as
short-term leases
- t he exclusion of initial direct costs for the measurement of the right-of-use asset at the date of initial application, and
- the use of hindsight in determining the lease term where the contract contains options to extend or terminate the lease.
- r elying on the assessment of whether leases are onerous as an alternative to performing an impairment review. There were
no onerous contracts as at April 01, 2019.
The company has also elected not to reassess whether a contract is, or contains a lease at the date of initial application.
Instead, for contracts entered into before the transition date the company relied on its assessment made applying Ind AS 17
and Appendix 4 Determining whether an Arrangement contains a Lease.
Notes
to the Standalone Financial Statements for the year ended March 31, 2020
Geographical Information
Non-current assets for this purpose consist of property, plant and equipment, capital work in progress, investment
properties and intangible assets including Goodwill.
Further, previous year figures have been reclassified to conform to this year’s classification.
As per our report of even date For and on behalf of the board of directors of Sterlite Technologies Limited
For Price Waterhouse Chartered Accountants LLP Pravin Agarwal Anand Agarwal
Firm Registration No: 012754N/N500016 Vice Chairman & Whole-time Director CEO & Whole-time Director
DIN : 00022096 DIN : 00057364
Neeraj Sharma Anupam Jindal Amit Deshpande
Partner Chief Financial Officer Company Secretary
Membership Number :108391
221
Sterlite Technologies Limited
Key audit matter How our audit addressed the key audit matter
a. Revenue Recognition
(Refer note 2.3 (e), 3 and 26 to the Consolidated Financial We performed the following procedures:
Statements)
Understood and evaluated the design and tested the operating
The Group recognises revenue in accordance with Ind AS 115 effectiveness of controls relating to revenue recognition.
“Revenue from Contracts with Customers”. This involves application
In respect of certain large and complex contracts and certain other
of significant judgements by Management with respect to:
contracts our procedures included, among other things:
• Combination of contracts entered into with the same customer;
• Reading of selected contracts to identify significant terms of the
• Identification of distinct performance obligations;
contracts;
• Total consideration when the contract involves variable
consideration involved; • Assessing appropriateness of management’s significant
• Allocation of consideration to identified performance obligations; judgements in accounting for identified contracts such as
• Recognition of revenue over a period of time or at a point in time identification of performance obligation and allocation of
based on timing when control is transferred to customer. For consideration to identified performance obligation;
assessment of the date of transfer of control, Management has • Evaluation of the contract terms and also consideration of the legal
obtained legal opinion in respect of certain arrangements. opinion obtained by Management with respect to assessment of
the date of transfer of control;
Further, for contracts where revenue is recognised over a period
of time, the group makes estimates which impact the revenue • Testing of timing of recognition of revenue (including procedures
recognition. Such estimates include, but are not limited to: related to cut off) in line with the terms of contracts;
• Testing the appropriateness of key assumptions used by
• costs to complete,
Management including the appropriateness and reasonability
• contract risks,
of Management’s conclusion regarding the expected delays in
• price variation claims,
estimated completion of the performance obligations and possible
• liquidated damages
impact on key estimates. Reading of the related contract terms
Further in determining the above estimates for ongoing contracts, and communications with the customers to assess the likelihood of
Management has also evaluated the estimates, especially those availability of contractual remedies.
resulting from expected delays in the completion of the performance • Testing of journal entries for unusual/irregular revenue
obligations and available contractual remedies.. transactions; and
We focused on this area because a significant portion of the revenue • Evaluating adequacy of presentation and disclosures.
generated requires management to exercise judgement and
Based on above procedures, we did not note any significant
therefore could be subject to material misstatement due to fraud or
exceptions in the estimates and judgements applied by the
error.
Management in revenue recognition including those relating
to presentation and disclosures as required by the applicable
accounting standard.
b. First time adoption of Ind AS – 116 ‘Leases’
(Refer note 2.3 (l), 3 and 56 to the consolidated financial statements) Our audit procedures included the following:
Effective April 1, 2019, Ind AS 116 Leases has replaced Ind AS 17 • Obtain an understanding of the process followed by the
“Leases”. management and testing of the design and operating effectiveness
of key controls around accounting for leases.
The Group has applied the standard retrospectively and has chosen
to recognise the cumulative effect of initially applying this Standard • Obtain understanding of the Group’s implementation process
as an adjustment to the opening balance of retained earnings. including review of the Group policy and election of exemptions in
accordance with Ind AS 116.
To assess the impact of initial application of Ind AS 116, Management
• Evaluating the underlying lease contracts to verify the accuracy of
has applied judgements and estimates with respect to:
the underlying data for a representative sample of leases.
• Identifying if a contract is or contains lease. • Assessing the completeness of identified leases by reviewing key
• Segregation of lease and non-lease components where applicable. service and supply contracts to assess whether they contain a
• Assessment of the lease term considering the renewal and lease under Ind AS 116.
termination options in the contract and other factors eg leasehold
• Assessing the appropriateness of of the assumptions used
improvements, intention to continue etc.
in determination of lease terms and interest rate used by the
• Determine the interest rate implicit in the lease.
Management for determining lease liability.
We considered the first time application of the standard as a key • Testing of the mathematical accuracy by recalculating the amount
audit matter due to the material impact of the same on the financial of Lease Liabilities and Right of Use asset for a sample of lease
statements, and the significance of the judgements and estimates contracts.
used by the Management. Further implementation process requires
• Assessing whether the disclosures in the financial statements are
extraction and processing of extensive data which required
appropriate and are in line with the requirements of Ind AS 116.
significant audit efforts to test the completeness and adequacy of
such information. Based on the above procedures, we did not note any significant
exceptions in the estimates and judgements applied by the
management in recording right of use asset and lease liability in
accordance with Ind AS 116 and related presentation and disclosure
requirements.
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records, relevant to the preparation and presentation internal financial controls with reference to financial
of the financial statements that give a true and fair view statements in place and the operating effectiveness
and are free from material misstatement, whether due of such controls.
to fraud or error, which have been used for the purpose
of preparation of the consolidated financial statements •
Evaluate the appropriateness of accounting policies
by the Directors of the Holding Company, as aforesaid. used and the reasonableness of accounting estimates
and related disclosures made by management.
12. In preparing the consolidated financial statements,
the respective Board of Directors of the companies •
Conclude on the appropriateness of management’s use
included in the Group and of its associates and jointly of the going concern basis of accounting and, based
controlled entity are responsible for assessing the on the audit evidence obtained, whether a material
ability of the Group and of its associates and jointly uncertainty exists related to events or conditions
controlled entity to continue as a going concern, that may cast significant doubt on the ability of the
disclosing, as applicable, matters related to going Group and its associates and jointly controlled entity
concern and using the going concern basis of to continue as a going concern. If we conclude that
accounting unless management either intends to a material uncertainty exists, we are required to
liquidate the Group or to cease operations, or has no draw attention in our auditor’s report to the related
realistic alternative but to do so. disclosures in the consolidated financial statements
or, if such disclosures are inadequate, to modify our
13. The respective Board of Directors of the companies opinion. Our conclusions are based on the audit
included in the Group and its associates and jointly evidence obtained up to the date of our auditor’s
controlled entity are responsible for overseeing the report. However, future events or conditions may cause
financial reporting process of the Group and of its the Group and its associate and jointly controlled entity
associates and jointly controlled entity. to cease to continue as a going concern.
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Sterlite Technologies Limited
other matters that may reasonably be thought to crores and total comprehensive loss (comprising of loss
bear on our independence, and where applicable, and other comprehensive loss) of ` (59.66) crores and
related safeguards. net cash flows amounting to ` 29.49 crores for the year
ended on that date, as considered in the consolidated
18. From the matters communicated with those charged financial statement. The consolidated financial
with governance, we determine those matters that were statement also includes the Group’s share of net profit
of most significance in the audit of the consolidated after tax of ` Nil and ` Nil and total comprehensive
financial statements of the current period and are income of ` Nil and ` Nil for the year ended March
therefore the key audit matters. We describe these 31, 2020 as considered in the consolidated financial
matters in our auditor’s report unless law or regulation statements, in respect of two associate companies
precludes public disclosure about the matter or when, and one jointly controlled entity respectively, whose
in extremely rare circumstances, we determine that financial information have not been audited by us.
a matter should not be communicated in our report These financial information are unaudited and have
because the adverse consequences of doing so would been furnished to us by the Management, and our
reasonably be expected to outweigh the public interest opinion on the consolidated financial statements insofar
benefits of such communication. as it relates to the amounts and disclosures included in
respect of these subsidiaries, jointly controlled entity
Other Matters and associate companies and our report in terms of
19. The financial statements of one subsidiary located sub-section (3) of Section 143 of the Act including
outside India, included in the consolidated financial report on Other Information insofar as it relates to the
statements, which constitute total assets of ` 564.09 aforesaid subsidiaries, associates and joint ventures, is
crores and net assets of ` 352.45 crores as at March based solely on such unaudited financial information.
31, 2020, total revenues of ` 277.33 crores, total In our opinion and according to the information and
comprehensive loss (comprising of loss and other explanations given to us by the Management, these
comprehensive income) of ` (19.35) crores and net cash financial information are not material to the Group.
flows amounting to ` (54.24) crores for the year ended
on that date and financial statement of one subsidiary Our opinion on the consolidated financial statements,
whose financial statements reflect total assets of and our report on Other Legal and Regulatory
` 490.09 crores and net assets of ` 294.10 crores as Requirements below, is not modified in respect of the
at December 31, 2019, total revenues of ` 398.56 above matters with respect to our reliance on the work
crores and total comprehensive income (comprising done and the reports of the other auditors and the
of profit and other comprehensive income) of ` 36.44 financial statements certified by the Management.
crores and net cash flows amounting to ` 12.93 crores
for the year ended on that date, have been prepared Report on Other Legal and Regulatory Requirements
in accordance with accounting principles generally 21. As required by Section 143(3) of the Act, we report, to
accepted in their respective countries and have been the extent applicable, that:
audited by other auditors under generally accepted
auditing standards applicable in their respective (a) We have sought and obtained all the information
countries. The Company’s management has converted and explanations which to the best of our
the financial statements of such subsidiaries located knowledge and belief were necessary for
outside India from the accounting principles generally the purposes of our audit of the aforesaid
accepted in their respective countries to the accounting consolidated financial statements.
principles generally accepted in India. We have audited
these conversion adjustments made by the Company’s (b) In our opinion, proper books of account as
management. Our opinion in so far as it relates to required by law relating to preparation of the
the balances and affairs of such subsidiaries located aforesaid consolidated financial statements
outside India, including other information, is based have been kept so far as it appears from our
on the report of other auditors and the conversion examination of those books and the reports of the
adjustments prepared by the management of the other auditors.
Company and audited by us.
(c) The Consolidated Balance Sheet, the
20. We did not audit the financial information of nineteen Consolidated Statement of Profit and Loss
subsidiary whose financial information reflect total (including other comprehensive income),
assets of ` 888.29 crores and net assets of ` 275.03 Consolidated Statement of Changes in Equity and
crores as at March 31, 2020, total revenue of ` 81.16 the Consolidated Cash Flow Statement dealt with
by this Report are in agreement with the relevant material foreseeable losses, if any, on long-
books of account and records maintained for term contracts including derivative contracts
the purpose of preparation of the consolidated as at March 31, 2020– Refer (a) Note 20
financial statements. to the consolidated financial statements
in respect of such items as it relates to the
(d) In our opinion, the aforesaid consolidated financial Group, its associates and jointly controlled
statements comply with the Accounting Standards entity and (b) note 52 to the consolidated
specified under Section 133 of the Act. financial statements in respect of the Group’s
share of net profit/loss in respect of its
(e) On the basis of the written representations associates and joint venture.
received from the directors of the Holding
Company as on March 31, 2020 taken on record iii. There has been no delay in transferring
by the Board of Directors of the Holding Company amounts, required to be transferred, to the
and its subsidiary companies incorporated in India, Investor Education and Protection Fund
none of the directors is disqualified as on March by the Holding Company. There were
31, 2020 from being appointed as a director in no amounts which were required to be
terms of Section 164(2) of the Act. transferred to the Investor Education and
Protection Fund by its subsidiary companies
(f) With respect to the adequacy of internal financial incorporated in India.
controls with reference to financial statements
of the Group and the operating effectiveness iv. The reporting on disclosures relating to
of such controls, refer to our separate Specified Bank Notes is not applicable to the
report in Annexure A. Group for the year ended March 31, 2020.
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Sterlite Technologies Limited
Report on the Internal Financial Controls with about whether adequate internal financial controls
reference to consolidated financial statements with reference to consolidated financial statements
under Clause (i) of Sub-section 3 of Section 143 was established and maintained and if such controls
of the Act operated effectively in all material respects.
1. In conjunction with our audit of the consolidated
financial statements of the Company as of and for 4. Our audit involves performing procedures to obtain
the year ended March 31, 2020, we have audited the audit evidence about the adequacy of the internal
internal financial controls with reference to consolidated financial controls system with reference to consolidated
financial statements of Sterlite Technologies Limited financial statements and their operating effectiveness.
(hereinafter referred to as “the Holding Company”) Our audit of internal financial controls with reference to
and its subsidiary companies, which are companies consolidated financial statements included obtaining
incorporated in India, as of that date. an understanding of internal financial controls with
reference to consolidated financial statements,
Management’s Responsibility for Internal assessing the risk that a material weakness exists,
Financial Controls and testing and evaluating the design and operating
2. The respective Board of Directors of the Holding effectiveness of internal control based on the assessed
company and its subsidiary companies, to whom risk. The procedures selected depend on the auditor’s
reporting under clause (i) of sub section 3 of Section judgement, including the assessment of the risks of
143 of the Act in respect of the adequacy of the internal material misstatement of the consolidated financial
financial controls with reference to consolidated statements, whether due to fraud or error.
financial statements is applicable, which are companies
incorporated in India, are responsible for establishing 5. We believe that the audit evidence we have obtained
and maintaining internal financial controls based is sufficient and appropriate to provide a basis for
on internal control over financial reporting criteria our audit opinion on the Company’s internal financial
established by the Company considering the essential controls system with reference to consolidated
components of internal control stated in the Guidance financial statements.
Note on Audit of Internal Financial Controls Over
Financial Reporting issued by the Institute of Chartered Meaning of Internal Financial Controls with
Accountants of India (ICAI)”. These responsibilities reference to consolidated financial statements
include the design, implementation and maintenance 6. A company’s internal financial control with reference to
of adequate internal financial controls that were consolidated financial statements is a process designed
operating effectively for ensuring the orderly and to provide reasonable assurance regarding the
efficient conduct of its business, including adherence reliability of financial reporting and the preparation of
to the respective company’s policies, the safeguarding consolidated financial statements for external purposes
of its assets, the prevention and detection of frauds in accordance with generally accepted accounting
and errors, the accuracy and completeness of the principles. A company’s internal financial control with
accounting records, and the timely preparation of reference to consolidated financial statements includes
reliable financial information, as required under the Act. those policies and procedures that (1) pertain to the
maintenance of records that, in reasonable detail,
Auditor’s Responsibility accurately and fairly reflect the transactions and
3. Our responsibility is to express an opinion on the dispositions of the assets of the company; (2) provide
Company’s internal financial controls with reference reasonable assurance that transactions are recorded
to consolidated financial statements based on our as necessary to permit preparation of consolidated
audit. We conducted our audit in accordance with the financial statements in accordance with generally
Guidance Note on Audit of Internal Financial Controls accepted accounting principles, and that receipts and
Over Financial Reporting (the “Guidance Note”) issued expenditures of the company are being made only in
by the ICAI and the Standards on Auditing deemed to accordance with authorisations of management and
be prescribed under section 143(10) of the Companies directors of the company; and (3) provide reasonable
Act, 2013, to the extent applicable to an audit of assurance regarding prevention or timely detection
internal financial controls, both applicable to an audit of unauthorised acquisition, use, or disposition of the
of internal financial controls and both issued by the company’s assets that could have a material effect on
ICAI. Those Standards and the Guidance Note require the consolidated financial statements.
that we comply with ethical requirements and plan
and perform the audit to obtain reasonable assurance
Inherent Limitations of Internal Financial financial statements and such internal financial controls
Controls with reference to consolidated financial with reference to consolidated financial statements
statements were operating effectively as at March 31, 2020, based
7. Because of the inherent limitations of internal financial on the internal control over financial reporting criteria
controls with reference to consolidated financial established by the Company considering the essential
statements, including the possibility of collusion or components of internal control stated in the Guidance
improper management override of controls, material Note on Audit of Internal Financial Controls Over
misstatements due to error or fraud may occur and Financial Reporting issued by the Institute of Chartered
not be detected. Also, projections of any evaluation Accountants of India. (Also refer paragraph 5 of the
of the internal financial controls with reference to main consolidated audit report).
consolidated financial statements to future periods are
subject to the risk that the internal financial control with For Price Waterhouse Chartered Accountants LLP
reference to consolidated financial statements may Firm Registration Number: 012754N/N500016
become inadequate because of changes in conditions,
or that the degree of compliance with the policies or Neeraj Sharma
procedures may deteriorate. Partner
Membership Number: 108391
Opinion UDIN: 20108391AAAADA7898
8. In our opinion, the Holding Company and its subsidiary
companies, which are companies incorporated in India, Place: Pune
have, in all material respects, an adequate internal Date: May 12, 2020
financial controls system with reference to consolidated
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Sterlite Technologies Limited
231
Sterlite Technologies Limited
B. Other Equity
Capital Redemption Securities Employee Debenture General Retained Cash Flow Foreign Total Non-
Reserve liability Premium stock option Redemption Reserve Earnings Hedge currency Controlling
reserve outstanding Reserve Reserve translation interest
reserve
As at 31 March 2018 0.04 - 27.93 21.24 75.00 112.50 875.61 (32.36) 15.16 1,095.12 81.95
Impact of change in accounting policy on - - - - - - (12.71) - - (12.71) -
adoption of Ind AS 115 (refer note 55)
Restated balance as at 01 April 2019 0.04 - 27.93 21.24 75.00 112.50 862.90 (32.36) 15.16 1,082.41 81.95
Profit for the year - - - - - - 562.75 - - 562.75 15.04
Other comprehensive income for the year - - - - - - (5.10) 86.38 (0.88) 80.40 (0.83)
Total comprehensive income for the 0.04 - 27.93 21.24 75.00 112.50 1,420.55 54.02 14.28 1,725.56 96.16
year
Addition on ESOPs Exercised - - 10.75 - - - - - - 10.75 -
Transferred to Securities premium - - - (10.75) - - - - - (10.75) -
account
Employees stock option expenses for the - - - 19.16 - - - - - 19.16 -
year (refer note 35)
Equity dividend including taxes thereon - - - - - - (96.80) - - (96.80) -
(refer note 49)
Amount transferred to statement of profit - - - - - - - (8.30) - (8.30) -
and loss
Transaction with non-controlling interests - - - - - - - - (0.83) (0.83) -
Issue of equity shares - - - - - - - - - - 16.26
Dividend paid to non-controlling interests - - - - - - - - - - (17.02)
As at 31 March 2019 0.04 - 38.68 29.65 75.00 112.50 1,323.75 45.72 13.45 1,638.80 95.40
Impact of change in accounting policy on - - - - - - (11.83) - - (11.83) -
adoption of Ind AS 116 (refer note 56)
Restated balance as at 01 April 2019 0.04 - 38.68 29.65 75.00 112.50 1,311.92 45.72 13.45 1,626.97 95.40
Profit for the year - - - - - - 433.90 - - 433.90 (9.46)
Other comprehensive income for the year, - - - - - - 1.61 (31.61) (9.70) (39.70) 3.04
net of tax
Total comprehensive income for the 0.04 - 38.68 29.65 75.00 112.50 1,747.43 14.11 3.75 2,021.16 88.98
year
Addition on ESOPs Exercised - - 12.68 - - - - - - 12.68 -
Transferred to Securities premium - - - (12.68) - - - - - (12.68) -
account
Employees stock option expenses for the - - - 9.86 - - - - - 9.86 -
year (refer note 35)
Amount transferred to general reserve - - - - (18.75) 18.75 - - - - -
Equity dividend including taxes thereon - - - - - - (170.09) - - (170.09) -
(refer note 49)
Creation of Redemption liability (refer - (15.22) - - - - - - - (15.22) -
note 47)
Amount transferred to statement of profit - - - - - - - (9.76) - (9.76) -
and loss
Transaction with non-controlling interests - - - - - - - - 3.04 3.04 -
Minority for IDS acquistion - - - - - - - - - - 11.70
(refer note 47)
Issue of equity shares - - - - - - - - - - 2.50
As at 31 March 2020 0.04 (15.22) 51.36 26.83 56.25 131.25 1,577.34 4.35 6.79 1,838.99 103.18
The accompanying notes are an integral part of the consolidated financial statements
As per our report of even date For and on behalf of the board of directors of Sterlite Technologies Limited
For Price Waterhouse Chartered Accountants LLP Pravin Agarwal Anand Agarwal
Firm Registration No: 012754N/N500016 Vice Chairman & Whole-time Director CEO & Whole-time Director
DIN : 00022096 DIN : 00057364
Neeraj Sharma Anupam Jindal Amit Deshpande
Partner Chief Financial Officer Company Secretary
Membership Number :108391
Place: Pune Place: Pune
Date: May 12, 2020 Date: May 12, 2020
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Sterlite Technologies Limited
The accompanying notes are an integral part of the consolidated financial statements.
As per our report of even date For and on behalf of the board of directors of Sterlite Technologies Limited
For Price Waterhouse Chartered Accountants LLP Pravin Agarwal Anand Agarwal
Firm Registration No: 012754N/N500016 Vice Chairman & Whole-time Director CEO & Whole-time Director
DIN : 00022096 DIN : 00057364
Neeraj Sharma Anupam Jindal Amit Deshpande
Partner Chief Financial Officer Company Secretary
Membership Number :108391
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
1. Corporate information • Defined benefit plans- plan assets measured at fair value
The consolidated Ind AS financial statements comprise
• Asset held for sale – measured at fair value
financial statements of Sterlite Technologies Limited
less cost to sale.
(the Parent Company), its subsidiaries, joint venture and
associates (collectively, the Group) for the year ended 31 The consolidated Ind AS financial statements are presented
March 2020. The Parent Company is a public company in Indian Rupees Crores, except when otherwise indicated
domiciled in India and incorporated under the provisions
of the Companies Act, 1956. Its shares are listed on two Amended standards adopted by the Group
stock exchanges in India. The registered office of the The Group has applied Ind AS 116 for the first time for their
Parent Company is located at E 1, MIDC Industrial Area, annual reporting period starting from April 01, 2019. Group
Waluj, Aurangabad, Maharashtra, India. The Group is has disclosed the impact of adoption of Ind AS 116 in note
primarily engaged in the business of Connectivity and 56 to the financial statements.
Network solutions.
2.2 Principles of consolidation and equity accounting
The Group is a global leader in end-to-end digital network The consolidated Ind AS financial statements comprise
solutions. The group designs and deploy high-capacity the financial statements of the Group, its subsidiaries,
converged fibre and wireless networks. With expertise joint venture and associates as at 31 March 2020. Control
ranging from optical fibre and cables, hyper-scale network is achieved when the Group is exposed, or has rights, to
design, and deployment and network software, the group variable returns from its involvement with the investee and
is the industry’s leading integrated solutions provider for has the ability to affect those returns through its power over
global digital networks. The group partners with global the investee. Specifically, the Group controls an investee if
telecom companies, cloud companies, citizen networks and and only if the Group has:
large enterprises to design, build and manage such cloud-
native software-defined networks. • Power over the investee (i.e. existing rights that give
it the current ability to direct the relevant activities
The consolidated Ind AS financial Statements were of the investee);
authorised for issue in accordance with resolution passed by
• Exposure, or rights, to variable returns from its
the Board of Directors of the Group on May 12, 2020.
involvement with the investee; and
2. Significant accounting policies • The ability to use its power over the investee to
This note provides a list of the significant accounting policies affect its returns.
adopted in the preparation of these financial statements.
Generally, there is a presumption that a majority of voting
These policies have been consistently applied to all the
rights result in control. To support this presumption, the
years presented, unless otherwise stated.
Group considers all relevant facts and circumstances in
assessing whether it has power over an investee, including:
2.1 Basis of preparation
The consolidated financial statements comply in all material
• The contractual arrangement with the other vote holders
aspects with Indian Accounting Standards (Ind AS) notified
of the investee;
under Section 133 of the Companies Act, 2013 (the Act)
[Companies (Indian Accounting Standards) Rules, 2015] and • Rights arising from other contractual arrangements;
other relevant provisions of the Act.
• The Group’s voting rights and potential voting rights;
The consolidated Ind AS financial statements have been • The size of the Group’s holding of voting rights relative to
prepared on a historical cost basis, except for the following the size and dispersion of the holdings of the other voting
assets and liabilities which have been measured at fair value rights holders.
or revalued amount:
The Group re-assesses whether or not it controls an
investee if facts and circumstances indicate that there are
• Derivative financial instruments;
changes to one or more of the three elements of control.
• Certain financial assets and liabilities measured Consolidation of a subsidiary begins when the Group
at fair value (refer accounting policy regarding obtains control over the subsidiary and ceases when the
financial instruments). Group loses control of the subsidiary. Assets, liabilities,
income and expenses of a subsidiary acquired or disposed
• Share Based Payments
of during the year are included in the consolidated financial
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Sterlite Technologies Limited
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
statements from the date the Group gains control until the statement of profit and loss, consolidated changes of
date the Group ceases to control the subsidiary. statement of equity and balance sheet respectively.
Consolidated financial statements are prepared using Profit or loss and each component of other comprehensive
uniform accounting policies for like transactions and other income (OCI) are attributed to the equity holders of the
events in similar circumstances. If a member of the Group parent of the Group and to the non-controlling interests,
uses accounting policies other than those adopted in the even if this results in the non-controlling interests having a
consolidated financial statements for like transactions and deficit balance. All intra-group assets and liabilities, equity,
events in similar circumstances, appropriate adjustments income, expenses and cash flows relating to transactions
are made to that group member’s financial statements in between members of the Group are eliminated in full
preparing the consolidated financial statements to ensure on consolidation.
conformity with the group’s accounting policies.
A change in the ownership interest of a subsidiary, without
The financial statements of all entities used for the purpose a loss of control, is accounted for as an equity transaction. If
of consolidation are drawn up to same reporting date as the Group loses control over a subsidiary, it:
that of the parent Group, i.e., year ended on 31 March 2020
except one subsidiary, Metallurgica Bresciana S.p.A for • Derecognises the assets (including goodwill) and
which the financials are consolidated upto December 31, liabilities of the subsidiary;
2019 which is the most recent audited financial information
• Derecognises the carrying amount of any non-
available with management. When the end of the reporting
controlling interests;
period of the parent is different from that of a subsidiary, the
subsidiary prepares, for consolidation purposes, additional • Derecognises the cumulative translation differences
financial information as of the same date as the financial recorded in equity;
statements of the parent to enable the parent to consolidate
• Recognises the fair value of the consideration received;
the financial information of the subsidiary, unless it is
impracticable to do so. • Recognises the fair value of any investment retained;
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
controlling interest’s proportionate share of the acquired c) Current versus non-current classification
entity’s net identifiable assets. The Group presents assets and liabilities in the balance
sheet based on current/non-current classification. An asset
Acquisition-related costs are expensed as incurred. is current when it is:
The excess of the consideration transferred; amount of
any non-controlling interest in the acquired entity, and • Expected to be realised or intended to be sold or
acquisition-date fair value of any previous equity interest in consumed in the normal operating cycle;
the acquired entity over the fair value of the net identifiable
• Held primarily for the purpose of trading;
assets acquired is recorded as goodwill. If those amounts
are less than the fair value of the net identifiable assets of • Expected to be realised within twelve months after the
the business acquired, the difference is recognised in other reporting period; or
comprehensive income and accumulated in equity as capital
• Cash or cash equivalent unless restricted from being
reserve provided there is clear evidence of the underlying
exchanged or used to settle a liability for at least twelve
reasons for classifying the business combination as a
months after the reporting period.
bargain purchase. In other cases, the bargain purchase gain
is recognised directly in equity as capital reserve. All other assets are classified as non-current.
If the business combination is achieved in stages, the Deferred tax assets and liabilities are classified as non-
acquisition date carrying value of the acquirer’s previously current assets and liabilities.
held equity interest in the acquiree is remeasured to fair
value at the acquisition date. Any gains or losses arising Operating cycle of the Group is the time between the
from such remeasurement are recognised in profit or loss or acquisition of assets for processing and their realisation
other comprehensive income, as appropriate. in cash or cash equivalents. Based on the nature of
products and the time between the acquisitions of assets
b) Investment in joint ventures and associates for processing and their realisation in cash and cash
The Group’s investment in its joint venture is accounted equivalents, the group has ascertained operating cycle
for using the equity method. Under the equity method of of 12 months for the purpose of current and non-current
accounting, the investments are initially recognised at cost classification of assets and liabilities.
and adjusted thereafter to recognise the group’s share of the
post-acquisition profits or losses of the investee in profit and d) Foreign currency translation
loss, and the group’s share of other comprehensive income Functional and presentation currency
of the investee in other comprehensive income. Dividends Items included in the financial statements of each of the
received or receivable from associates and joint ventures group entities are measured using the currency of the
are recognised as a reduction in the carrying amount of primary economic environment in which the entity operates
the investment. (`the functional currency’). The financial statements are
presented in Indian rupee (INR), which is Group’s functional
Associates are all entities over which group has significant and presentation currency.
influence but not control. Investment in associates are
accounted for using the equity method of accounting, after Transactions and balances
initially being recognised at cost. Foreign currency transactions are translated into the
functional currency using the exchange rates at the dates
of the transactions. Foreign exchange gains and losses
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Sterlite Technologies Limited
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
resulting from the settlement of such transactions and Goodwill and fair value adjustments arising on the
from the translation of monetary assets and liabilities acquisition of a foreign operations are treated as assets
denominated in foreign currencies at year end exchange and liabilities of the foreign operations and translated at
rates are generally recognised in profit or loss. They are the closing rate.
deferred in equity if they relate to qualifying cash flow
hedges and qualifying net investment hedges or are e) Revenue from contracts with customers
attributable to part of the net investment in a foreign Ind AS 115 Revenue from contracts with customers has
operation. A monetary item for which settlement is neither been issued with effect from April 1, 2018. The standard
planned nor likely to occur in the foreseeable future is deals with revenue recognition and establishes principles
considered as a part of the entity’s net investment in that for reporting useful information to users of financial
foreign operation. statements about the nature, amount, timing and uncertainty
of revenue and cash flows arising from an entity’s contracts
Foreign exchange differences regarded as an adjustment to with customers. Revenue is recognised when a customer
borrowing costs are presented in the statement of profit and obtains control of a promised good or service and thus has
loss, within finance costs. All other foreign exchange gains the ability to direct the use and obtain the benefits from the
and losses are presented in the Statement of profit and loss good or service in an amount that reflects the consideration
on the basis of underlying transactions. to which the entity expects to be entitled in exchange for
those goods and services.
Non-monetary items that are measured at fair value in a
foreign currency are translated using the exchange rates at The five-step process that must be applied before revenue
the date when the fair value was determined. Translation can be recognised:
differences on assets and liabilities carried at fair value are
reported as part of the fair value gain or loss. For example, (i) identify contracts with customers
translation differences on non-monetary assets and liabilities
such as equity instruments held at fair value through profit or (ii) identify the separate performance obligation
loss are recognised in profit or loss as part of the fair value
gain or loss and translation differences on non-monetary (iii) determine the transaction price of the contract
assets such as equity investments classified as FVOCI are
recognised in other comprehensive income. (iv) a
llocate the transaction price to each of the separate
performance obligations, and
Non-monetary items that are measured in terms of historical
cost in a foreign currency are translated using the exchange (v) recognise the revenue as each performance
rates at the dates of the initial transactions. obligation is satisfied.
The results and financial position of foreign operations Revenue recognition policy
that have a functional currency different from the The Group has following streams of revenue:
presentation currency are translated into the presentation
currency as follows: (i) Revenue from sale of goods
• Assets and liabilities are translated at the closing rate at (ii) Revenue from sale of services
the date of that balance sheet.
(iii) Revenue from network integration projects
• Income and expenses are translated at
average exchange rates
(iv) Revenue from software products/licenses and
• All resulting exchange differences are recognised in other implementation activities
comprehensive income or profit and loss account.
The Group accounts for a contract when it has approval
On consolidation, exchange difference arising from the
and commitment from parties involved, the rights of the
translation of any net investment in foreign entities, and
parties are identified, payment terms are identified, the
of borrowing and other financial instruments designated
contract has commercial substance and collectability of
as hedges of such investments are recognised in other
consideration is probable.
comprehensive income. When a foreign operation is sold,
the associated exchange difference are classified to profit or
The Group identifies distinct performance obligations
loss, as part of the gain or loss on sale.
in each contract. For most of the project contracts,
the customer contracts with the Group to provide a
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
significant service of integrating a complex set of tasks Due to the nature of the work required to be performed on
and components into a single project or capability. performance obligations, the estimation of total revenue and
Hence, the entire contract is accounted for as one cost at completion is complex, subject to many variables
performance obligation. and requires significant judgment. It is common for project
contracts to contain liquidated damages on delay in
However, the Group may promise to provide distinct completion/performance, bonus on early completion, or
goods or services within a contract, for example when other provisions that can either increase or decrease the
a contract covers multiple promises (e.g., construction transaction price. These variable amounts generally are
of network with its maintenance and support), in which awarded upon achievement of certain performance metrics,
case the Group separates the contract into more than one program milestones or cost targets and may be based upon
performance obligation. If a contract is separated into more customer discretion.
than one performance obligation, the Group allocates the
total transaction price to each performance obligation on The Group estimates variable consideration using expected
the basis of the relative standalone selling price of each value method of probability-weighted values at an amount
distinct product or service promised in the contract. Where to which it expects to be entitled. The Group includes
standalone selling price is not observable, the Group uses estimated amounts in the transaction price to the extent
the expected cost plus margin approach to allocate the it is probable that a significant reversal of cumulative
transaction price to each distinct performance obligation. revenue recognised will not occur when the uncertainty
associated with the variable consideration is resolved. The
The Group assesses for the timing of revenue recognition in estimates of variable consideration and determination of
case of each distinct performance obligation. The Group first whether to include estimated amounts in the transaction
assesses whether the revenue can be recognised over time price are based largely on an assessment of the anticipated
as it performs if any of the following criteria is met: performance and all information (historical, current and
forecasted) that is reasonably available.
(a) The customer simultaneously consumes the benefits as
the Group performs, or Contracts are modified to account for changes in contract
specifications and requirements. The Group considers
(b) The customer controls the work-in-progress, or contract modifications to exist when the modification either
creates new or changes the existing enforceable rights and
(c) The Group’s performance does not create an asset with obligations. Most of the contract modifications are for goods
alternative use to the Group and the Group has right to or services that are not distinct from the existing contract
payment for performance completed till date due to the significant integration service provided in the
context of the contract and are accounted for as if they
If none of the criteria above are met, the Group recognises were part of that existing contract. The effect of a contract
revenue at a point-in-time. The point-in-time is determined modification on the transaction price and our measure of
when the control of the goods or services is transferred progress for the performance obligation to which it relates,
which is generally determined based on when the is recognised as an adjustment to revenue (either as an
significant risks and rewards of ownership are transferred increase in or a reduction of revenue) on a cumulative
to the customer. Apart from this, the Group also considers catch-up basis.
its present right to payment, the legal title to the goods,
the physical possession and the customer acceptance When estimates of total costs to be incurred exceed total
in determining the point in time where control has estimates of revenue to be earned on a performance
been transferred. obligation related to a contract, a provision for the entire loss
on the performance obligation is recognised in the period.
The Group uses input method to measure the progress for
contracts because it best depicts the transfer of control to For fixed price contracts, the customer pays the fixed
the customer which occurs as it incurs costs on contracts. amount based on the payment schedule. If the services
Under the input method measure of progress, the extent rendered by the Group exceed the payment, a contract
of progress towards completion is measured based on asset is recognised. If the payment exceed the services
the ratio of costs incurred to date to the total estimated rendered, a contract liability is recognised.
costs at completion of the performance obligation.
Revenues, including estimated fees or profits, are recorded All the qualitative and quantitative information related to
proportionally as costs are incurred. Revenue in respect of significant changes in contract asset and contract liability
operation and maintenance contracts is recognised on a balances such as impairment of contract asset, changes due
time proportion basis. to business combination, changes in the timeframe for a
239
Sterlite Technologies Limited
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
• In respect of deductible temporary differences a net basis or to realise the asset and settle the liability
differences between the carrying amount and tax bases simultaneously.
of investments in subsidiaries, associates and interests
in joint ventures, deferred tax assets are recognised i) Property, plant and equipment
only to the extent that it is probable that the temporary Freehold land is carried at historical cost. All other items
differences will reverse in the foreseeable future of property, plant and equipment are stated at historical
and taxable profit will be available against which the cost, net of accumulated depreciation and accumulated
temporary differences can be utilised. impairment losses, if any. Such historical cost includes
the cost of replacing part of the property, plant and
The carrying amount of deferred tax assets is reviewed at
equipment and borrowing costs if the recognition criteria
each reporting date and reduced to the extent that it is no
are met. When significant parts of the property, plant and
longer probable that sufficient taxable profit will be available
equipment are required to be replaced at intervals, the
to allow all or part of the deferred tax asset to be utilised.
Group depreciates them separately based on their specific
Unrecognised deferred tax assets are re-assessed at each
useful lives. Likewise, when a major inspection is performed,
reporting date and are recognised to the extent that it has
its cost is recognised in the carrying amount of the plant
become probable that future taxable profits will allow the
and equipment as a replacement if the recognition criteria
deferred tax asset to be recovered.
are satisfied. All other repair and maintenance costs are
recognised in statement of profit or loss as incurred. No
Deferred income tax is determined using tax rates (and tax
decommissioning liabilities are expected or be incurred on
laws) that have been enacted or substantively enacted at the
the assets of plant and equipment.
reporting date and are expected to apply in the year when
the asset is realised or the liability is settled.
Expenditure directly relating to construction activity
is capitalised. Indirect expenditure incurred during
Deferred tax assets include Minimum Alternative Tax (MAT)
construction period is capitalised as part of the construction
paid in accordance with the tax laws in India, which is likely
costs to the extent the expenditure can be attributable to
to give future economic benefits in the form of availability of
construction activity or is incidental there to. Income earned
set off against future income tax liability. Accordingly, MAT is
during the construction period is deducted from the total of
recognised as deferred tax asset in the balance sheet when
the indirect expenditure.
the asset can be measured reliably, and it is probable that
the future economic benefit associated with the asset will
Subsequent costs are included in the asset’s carrying
be realised. In the year in which the MAT credit becomes
amount or recognised as a separate asset, as appropriate,
eligible to be recognised as an asset, it is recorded by way
only when it is probable that future economic benefits
of a credit to the statement of comprehensive income and
associated with the item will flow to the Group and the
shown as deferred tax assets. The Management reviews
cost of the item can be measured reliably. The carrying
the same at each balance sheet date and writes down
amount of any component accounted for as a separate
the carrying amount of MAT Credit Entitlement to the
asset is derecognised when replaced. All other repairs
extent there is no longer convincing evidence to the effect
and maintenance are charged to profit or loss during the
that Management will pay normal Income Tax during the
reporting period in which they are incurred.
specified future period.
Depreciation is calculated using the straight-line method
Current and Deferred tax is recognised in profit or loss,
to allocate their cost, net of their residual values, over their
except to the extent that it relates to items recognised in
estimated useful lives. The Group, based on technical
other comprehensive income or directly in equity. In this
assessments made by technical experts and management
case, the tax is also recognised in other comprehensive
estimates, depreciates the certain items of tangible assets
income or directly in equity, respectively.
over estimated useful lives which are different from the
useful life prescribed in Schedule II to the Companies Act,
Deferred tax assets and deferred tax liabilities are offset if a
2013. The management believes that these estimated
legally enforceable right exists to set off current tax assets
useful lives are realistic and reflect fair approximation of
against current tax liabilities and the deferred taxes relate to
the period over which the assets are likely to be used.
income taxes levied by same taxation authorities on either
Table below provide the details of the useful life which are
same taxable entity or different taxable entities which intend
different from useful life prescribed under Schedule II of the
either to settle the current tax assets and tax liabilities on
Companies Act, 2013
241
Sterlite Technologies Limited
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
Useful Life
Asset Category Useful life (Schedule II#) repairs and maintenance costs are expensed when incurred.
considered
Plant and Machinery 3 – 25 Years * Continuous process plant When part of an investment property is replaced, the
-25 Years carrying amount of the replaced part is derecognised.
Others - 15 Years
Furniture and fixtures 7.5 - 10 Years * 10 Years The Group depreciates building component of investment
Data processing 3 - 5 Years * Service and networks -6 property using straight line method over 60 years from the
equipments years and Desktops and date of original purchase.
laptop etc - 3 Years
Office equipment 4 - 5 Years * 5 Years
The Group, based on technical assessment made by
Electric fittings 4 - 10 Years * 10 Years
Vehicles 4 - 5 Years *# 8 Years technical expert and management estimate, depreciates the
* Considered on the basis of management’s estimation, supported by building over estimated useful life which is also the useful
technical advice, of the useful lives of the respective assets. life prescribed in Schedule II to the Companies Act, 2013.
# Residual value considered as 15% on the basis of management’s The management believes that these estimated useful lives
estimation, supported by technical advice. are realistic and reflect fair approximation of the period over
which the assets are likely to be used.
The property, plant and equipment acquired under finance
leases is depreciated over the asset’s useful life or over the
Investment properties are derecognised either when they
shorter of the asset’s useful life and the lease term if there is
have been disposed of or when they are permanently
no reasonable certainty that the group will obtain ownership
withdrawn from use and no future economic benefit is
at the end of the lease term.
expected from their disposal. The difference between the
net disposal proceeds and the carrying amount of the asset
The Group depreciates building using straight line method
is recognised in profit or loss in the period of derecognition.
over 30 to 60 years from the date of original purchase.
k) Intangible Assets
An item of property, plant and equipment and any significant
Goodwill on acquisitions of subsidiaries is included in
part initially recognised is derecognised upon disposal or
intangible assets. Goodwill is not amortised but it is tested
when no future economic benefits are expected from its
for impairment annually, or more frequently if events or
use or disposal. Any gain or loss arising on derecognition
changes in circumstances indicate that it might be impaired,
of the asset (calculated as the difference between the net
or is carried at cost less accumulated impairment losses.
disposal proceeds and the carrying amount of the asset) is
Gains and losses on the disposal of an entity include
included in the statement of profit or loss when the asset
carrying amount of goodwill relating to the entity sold.
is derecognised.
Goodwill is allocated to cash-generating units for the
An asset’s carrying amount is written down immediately
purpose of impairment testing. The allocation is made to
to its recoverable amount if the asset’s carrying amount is
those cash-generating units or group of cash-generating
greater than its estimated recoverable amount.
units that are expected to benefit from the business
combination in which the goodwill arose. The units or group
Gains and losses on disposals are determined by comparing
of units are identified at the lowest level at which goodwill is
proceeds with carrying amount. These are included in profit
monitored for internal management purposes.
or loss within other gains/(losses).
Intangible assets acquired separately are measured on initial
The asset residual values and useful lives are reviewed at
recognition at cost. Following initial recognition, intangible
each financial year end and adjusted, if appropriate, at the
assets are carried at cost less accumulated amortisation
end of each reporting period.
and accumulated impairment losses. Internally generated
intangible assets, excluding capitalised development costs,
j) Investment properties
are not capitalised and the expenditure is recognised in
Property that is held for long-term rental yields or for capital
the Statement of Profit and Loss in the period in which the
appreciation or both, and that is not occupied by the group,
expenditure is incurred.
is classified as investment property. Investment property is
measured initially at its cost, including related transaction
The useful lives of intangible assets are assessed as either
costs and where applicable borrowing costs. Subsequent
finite or indefinite.
expenditure is capitalised to the asset’s carrying amount
only when it is probable that future economic benefits
Intangible assets with finite lives are amortised over
associated with the expenditure will flow to the group and
their useful economic lives and assessed for impairment
the cost of the item can be measured reliably. All other
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
whenever there is an indication that the intangible asset may substantially all the risks and rewards incidental to
be impaired. The amortisation period and the amortisation ownership to the Group was classified as a finance lease.
method for an intangible asset with a finite useful life are
reviewed at least at the end of each reporting period. Finance leases were capitalised at the leases inception
Changes in the expected useful life or the expected pattern at the fair value of the leased property or, if lower, at the
of consumption of future economic benefits embodied in present value of the minimum lease payments. Lease
the asset are considered to modify the amortisation period payments were apportioned between finance charges and
or method, as appropriate, and are treated as changes reduction of the lease liability so as to achieve a constant
in accounting estimates. The amortisation expense on rate of interest on the remaining balance of the liability. The
intangible assets with finite lives is recognised in the corresponding rental obligations, net of finance charges,
statement of profit or loss. were included in borrowings or other financial liabilities as
appropriate. Finance charges were recognised in finance
The Group does not have any intangible assets with costs in the statement of profit and loss, unless they were
indefinite useful lives. directly attributable to qualifying assets, in which case they
were capitalised in accordance with the Group’s general
Gains or losses arising from derecognition of an intangible policy on the borrowing costs.
asset are measured as the difference between the net
disposal proceeds and the carrying amount of the asset and A leased asset was depreciated over the useful life of the
are recognised in the statement of profit or loss when the asset. However, if there was no reasonable certainty that the
asset is derecognised. Group will obtain ownership by the end of the lease term,
the asset was depreciated over the shorter of the estimated
Customer acquisition costs consist of payments made to useful life of the asset and the lease term.
obtain consents/permissions for laying of fiber cables and
other telecom infrastructure in residential and commercial Leases in which a significant portion of the risk and rewards
complexes/townships. Such cost is amortised over the of ownership were not transferred to the group were
period of the consent/permission on a straight line basis. classified as operating lease. Operating lease payments
were recognised as an expense in the statement of profit
Softwares are amortised on a straight line basis over a and loss on a straight-line basis over the lease term unless
period of five to six years. the payment were structured to increase in line with the
expected general inflation to compensate for the lessors
All other intangible assets are amortised on a straight line expected inflationary cost increases.
basis over a period of five to six years.
Group as a lessor
Goodwill on amalgamation is amortised on a straight Leases in which the Group did not transfer substantially
line basis over a period of five years from the date of all the risks and rewards of ownership of an asset were
amalgamation as per the Court Order. classified as operating leases. Rental income from operating
lease was recognised on a straight-line basis over the term
Customer relationships recognised as a part of business of the relevant lease. unless the receipts were structured
combination are amortised over period of five to ten years. to increase in line with the expected general inflation to
compensate for the expected inflationary cost increases.
Research costs are expensed as incurred. Initial direct costs incurred in negotiating and arranging an
operating lease were added to the carrying amount of the
l) Leases leased asset and recognised over the lease term on the
Accounting policies till March 31, 2019: same basis as rental income.
The determination of whether an arrangement is (or
contains) a lease is based on the substance of the Leases were classified as finance leases when substantially
arrangement at the inception of the lease. The arrangement all the risks and rewards of ownership transfer from the
is, or contains, a lease if fulfilment of the arrangement is Group to the lessee. Amounts due from lessees under
dependent on the use of a specific asset or assets and the finance leases were recorded as receivables at the Group’s
arrangement conveys a right to use the asset or assets, even net investment in the leases. Finance lease income was
if that right is not explicitly stated in the arrangement. allocated to accounting periods so as to reflect a constant
periodic rate of return on the net investment outstanding in
Group as a lessee respect of the lease.
A lease was classified at the inception date as a finance
lease or an operating lease. A lease that transfers
243
Sterlite Technologies Limited
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
The respective leased assets were included in the balance - any lease payments made at or before the
sheet based on their nature. commencement date less any lease incentives received
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
n) Impairment of non-financial assets months after the end of the period in which the employees
Goodwill and intangible assets that have an indefinite useful render the related service are recognised in respect of
life are not subject to amortisation and are tested annually employees’ services up to the end of the reporting period
for impairment, or more frequently if events or changes and are measured at the amounts expected to be paid when
in circumstances indicate that they might be impaired. the liabilities are settled. The liabilities are presented as
Other assets are tested for impairment whenever events or current employee benefit obligations in the balance sheet.
changes in circumstances indicate that the carrying amount
may not be recoverable. An impairment loss is recognised (ii) Other long-term employee benefit obligations
for the amount by which the asset’s carrying amount The liabilities for earned leave and sick leave are not
exceeds its recoverable amount. The recoverable amount expected to be settled wholly within 12 months after
is the higher of an asset’s fair value less costs of disposal the end of the period in which the employees render the
and value in use. For the purposes of assessing impairment, related service. They are therefore measured as the present
assets are grouped at the lowest levels for which there value of expected future payments to be made in respect
are separately identifiable cash inflows which are largely of services provided by employees up to the end of the
independent of the cash inflows from other assets or groups reporting period using the projected unit credit method.
of assets (cash-generating units). Non financial assets other The benefits are discounted using the market yields at the
than goodwill that suffered an impairment are reviewed end of the reporting period that have terms approximating
for possible reversal of the impairment at the end of each to the terms of the related obligation. Remeasurements as
reporting period. a result of experience adjustments and changes in actuarial
assumptions are recognised in profit or loss.
o) Provisions and contingent liabilities
General The obligations are presented as current liabilities in the
Provisions are recognised when the Group has a balance sheet if the entity does not have an unconditional
present obligation (legal or constructive) as a result of right to defer settlement for at least twelve months after the
a past event, it is probable that an outflow of resources reporting period, regardless of when the actual settlement is
embodying economic benefits will be required to settle expected to occur.
the obligation and a reliable estimate can be made of the
amount of the obligation. When the Group expects some (iii) Post-employment obligations
or all of a provision to be reimbursed, the reimbursement The Group operates the following post-
is recognised as a separate asset, but only when the employment schemes:
reimbursement is virtually certain. The expense relating to a
provision is presented in the statement of profit or loss net of (a) Defined benefit plans in the nature of gratuity and
any reimbursement. Provisions are not recognised for future
operating losses. (b) Defined contribution plans such as provident fund.
If the effect of the time value of money is material, provisions Gratuity obligations
are discounted using a current pre-tax rate that reflects, The liability or asset recognised in the balance sheet in
when appropriate, the risks specific to the liability. When respect of defined benefit gratuity plans is the present value
discounting is used, the increase in the provision due to the of the defined benefit obligation at the end of the reporting
passage of time is recognised as a finance cost. period less the fair value of plan assets. The defined benefit
obligation is calculated annually by actuaries using the
Contingent Liabilities projected unit credit method.
Contingent liabilities are disclosed when there is a possible
obligation arising from past events, the existence of which The present value of the defined benefit obligation
will be confirmed only by the occurrence or non-occurrence denominated in INR is determined by discounting the
of one or more uncertain future events not wholly within the estimated future cash outflows by reference to market yields
control of the group or a present obligation that arises from at the end of the reporting period on government bonds
past events where it is either not probable that an outflow of that have terms approximating to the terms of the related
resources will be required to settle or a reliable estimate of obligation. The benefits which are denominated in currency
the amount cannot be made. other than INR, the cash flows are discounted using market
yields determined by reference to high-quality corporate
p) Employee benefits bonds that are denominated in the currency in which the
(i) Short-term obligations benefits will be paid, and that have terms approximating to
Liabilities for wages and salaries, including non-monetary the terms of the related obligation.
benefits that are expected to be settled wholly within 12
245
Sterlite Technologies Limited
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
The net interest cost is calculated by applying the r) Investments and Other Financial assets
discount rate to the net balance of the defined benefit i) Classification & Recognition:
obligation and the fair value of plan assets. This cost is The Group classifies its financial assets in the following
included in employee benefit expense in the statement of measurement categories:
profit and loss.
• Those to be measured subsequently at fair value (either
Remeasurement gains and losses arising from experience through other comprehensive income, or through
adjustments and changes in actuarial assumptions are profit or loss)
recognised in the period in which they occur, directly in
• Those measured at amortised cost.
other comprehensive income. They are included in retained
earnings in the statement of changes in equity and in The classification depends on the entity’s business model
the balance sheet. for managing the financial assets and the contractual
terms of the cash flows. For assets measured at fair value,
Changes in the present value of the defined benefit gains and losses will either be recorded in profit or loss
obligation resulting from plan amendments or curtailments or other comprehensive income. For investments in debt
are recognised immediately in profit or loss as instruments, this will depend on the business model in
past service cost. which the investment is held. For investments in equity
instruments, this will depend on whether the Group has
Defined contribution plans made an irrevocable election at the time of initial recognition
The Group pays provident fund contributions to publicly to account for the equity investment at fair value through
administered provident funds as per local regulations. other comprehensive income.
The group has no further payment obligations once the
contributions have been paid. The contributions are The Group reclassifies debt investments when and
accounted for as defined contribution plans and the only when its business model for managing those
contributions are recognised as employee benefit expense assets changes.
when they are due. Prepaid contributions are recognised as
an asset to the extent that a cash refund or a reduction in Regular way purchases and sales of financial assets are
the future payments is available. recognised on trade-date, the date on which the group
commit to purchase or sale the financial asset.
q) Share-based payments
The fair value of options granted under the Employee Option ii) Measurement:
Plan is recognised as an employee benefits expense with At initial recognition, the group measures a financial asset
a corresponding increase in equity. The total amount to be at its fair value plus, in the case of a financial asset not at
expensed is determined by reference to the fair value of the fair value through profit or loss, transaction costs that are
options granted: directly attributable to the acquisition of the financial asset.
Transaction costs of financial assets carried at fair value
• Including any market performance conditions (e.g., the through profit or loss are expensed in profit or loss.
entity’s share price)
Financial assets with embedded derivatives are considered
• Excluding the impact of any service and non-market
in their entirety when determining whether their cash flows
performance vesting conditions (e.g. profitability, sales
are solely payment of principal and interest.
growth targets and remaining an employee of the entity
over a specified time period), and
Debt instruments
• Including the impact of any non-vesting conditions (e.g. Subsequent measurement of debt instruments depends
the requirement for employees to save or holdings shares on the group’s business model for managing the asset and
for a specific period of time). the cash flow characteristics of the asset. There are three
measurement categories into which the group classifies its
The total expense is recognised over the vesting period,
debt instruments:
which is the period over which all of the specified vesting
conditions are to be satisfied. At the end of each period,
Amortised cost: Assets that are held for collection of
the entity revises its estimates of the number of options
contractual cash flows where those cash flows represent
that are expected to vest based on the non-market vesting
solely payments of principal and interest are measured at
and service conditions. It recognises the impact of the
amortised cost. A gain or loss on a debt investment that is
revision to original estimates, if any, in profit or loss, with a
subsequently measured at amortised cost and is not part of
corresponding adjustment to equity.
a hedging relationship is recognised in profit or loss when
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
the asset is derecognised or impaired. Interest income from has elected to measure investments in such joint ventures
these financial assets is included in finance income using and associates in accordance with Ind AS 109.
the effective interest rate method. Impairment losses are
presented as a separate line item in the financial statement. iii) Impairment of financial assets
In accordance with Ind AS 109, the Group applies expected
Fair value through other comprehensive income (FVOCI): credit loss (ECL) model for measurement and recognition
Assets that are held for collection of contractual cash flows of impairment loss on the following financial assets and
and for selling the financial assets, where the assets’ cash credit risk exposure:
flows represent solely payments of principal and interest,
are measured at fair value through other comprehensive a) Financial assets that are debt instruments, and are
income (FVOCI). Movements in the carrying amount are measured at amortised cost e.g., loans, debt securities,
taken through OCI, except for the recognition of impairment deposits, trade receivables and bank balance;
gains or losses, interest revenue and foreign exchange gains
and losses which are recognised in profit and loss. When the b) Lease receivables under Ind AS 116
financial asset is derecognised, the cumulative gain or loss
previously recognised in OCI is reclassified from equity to c) Trade receivables or any contractual right to receive
profit or loss and recognised in other gains/ (losses). Interest cash or another financial asset that result from
income from these financial assets is included in other transactions that are within the scope of Ind AS 115.
income using the effective interest rate method.
The Group follows ‘simplified approach’ for recognition of
Fair value through profit or loss: Assets that do not meet impairment loss allowance on:
the criteria for amortised cost or FVOCI are measured
at fair value through profit or loss. A gain or loss on a • Trade receivables or contract revenue receivables; and
debt investment that is subsequently measured at fair
• All lease receivables resulting from transactions within
value through profit or loss and is not part of a hedging
the scope of Ind AS 116.
relationship is recognised in profit or loss and presented net
in the statement of profit and loss within other gains/(losses) The application of simplified approach does not require the
in the period in which it arises. Interest income from these Group to track changes in credit risk. Rather, it recognises
financial assets is included in other income. impairment loss allowance based on lifetime ECLs at each
reporting date, right from its initial recognition.
Equity instruments
The Group subsequently measures all equity investments For recognition of impairment loss on other financial assets
at fair value. Where the group’s management has elected to and risk exposure, the Group determines that whether there
present fair value gains and losses on equity investments has been a significant increase in the credit risk since initial
in other comprehensive income, there is no subsequent recognition. If credit risk has not increased significantly,
reclassification of fair value gains and losses to profit or loss. 12-month ECL is used to provide for impairment loss.
Dividends from such investments are recognised in profit However, if credit risk has increased significantly, lifetime
or loss as other income when the group’s right to receive ECL is used. If, in a subsequent period, credit quality of the
payments is established. instrument improves such that there is no longer a significant
increase in credit risk since initial recognition, then the entity
Changes in the fair value of financial assets at fair value reverts to recognising impairment loss allowance based
through profit or loss are recognised in other gain/ (losses) on 12-month ECL.
in the statement of profit and loss. Impairment losses
(and reversal of impairment losses) on equity investments Lifetime ECL are the expected credit losses resulting from all
measured at FVOCI are not reported separately from other possible default events over the expected life of a financial
changes in fair value. instrument. The 12-month ECL is a portion of the lifetime
ECL which results from default events that are possible
Equity investment in subsidiaries and joint venture are within 12 months after the reporting date.
carried at historical cost as per the accounting policy choice
given by IND AS 27. ECL is the difference between all contractual cash flows that
are due to the Group in accordance with the contract and all
The Group makes investments in certain joint ventures the cash flows that the entity expects to receive (i.e., all cash
and associates with the objective to generate growth in shortfalls), discounted at the original EIR. When estimating
the medium term and with identified exit strategies. Such the cash flows, an entity is required to consider:
investments are managed on a fair value basis. The Group
247
Sterlite Technologies Limited
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
• All contractual terms of the financial instrument (including is continued to be recognised to the extent of continuing
prepayment, extension, call and similar options) over involvement in the financial asset.
the expected life of the financial instrument. However,
in rare cases when the expected life of the financial v) Reclassification of financial assets
instrument cannot be estimated reliably, then the entity The Group determines classification of financial assets
is required to use the remaining contractual term of the and liabilities on initial recognition. After initial recognition,
financial instrument; no reclassification is made for financial assets which are
equity instruments and financial liabilities. For financial
• Cash flows from the sale of collateral held or other credit
assets which are debt instruments, a reclassification is
enhancements that are integral to the contractual terms.
made only if there is a change in the business model for
ECL impairment loss allowance (or reversal) recognised managing those assets. Changes to the business model are
during the period is recognised as income/ expense in the expected to be infrequent. The Group’s senior management
statement of profit and loss. This amount is reflected under determines change in the business model as a result of
the head ‘other expenses’ in the statement of profit and external or internal changes which are significant to the
loss. The balance sheet presentation for various financial Group’s operations. Such changes are evident to external
instruments is described below: parties. A change in the business model occurs when the
Group either begins or ceases to perform an activity that
• Financial assets measured as at amortised cost, is significant to its operations. If the Group reclassifies
contractual revenue receivables and lease receivables: financial assets, it applies the reclassification prospectively
ECL is presented as an allowance, i.e., as an integral part from the reclassification date which is the first day of the
of the measurement of those assets in the balance sheet. immediately next reporting period following the change in
The allowance reduces the net carrying amount. Until the business model. The Group does not restate any previously
asset meets write-off criteria, the Group does not reduce recognised gains, losses (including impairment gains or
impairment allowance from the gross carrying amount. losses) or interest.
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
Borrowings are removed from the balance sheet when the period. The accounting for subsequent changes in fair
obligation specified in the contract is discharged, cancelled value depends on whether the derivative is designated as a
or expired. The difference between the carrying amount of a hedging instrument, and if so, the nature of the item being
financial liability that has been extinguished or transferred to hedged and the type of hedge relationship designated.
another party and the consideration paid, including any non-
cash assets transferred or liabilities assumed, is recognised The Group designates their derivatives as hedges of foreign
in profit or loss as other gains/(losses). exchange risk associated with the cash flows of recognised
assets and liabilities and highly probable forecast
Where the terms of a financial liability are renegotiated transactions and variable interest rate risk associated with
and the entity issues equity instruments to a creditor to borrowings (cash flow hedges). The Group documents at
extinguish all or part of the liability (debt for equity swap), the inception of the hedging transaction the economic
a gain or loss is recognised in profit or loss, which is relationship between hedging instruments and hedged
measured as the difference between the carrying amount items including whether the hedging instrument is expected
of the financial liability and the fair value of the equity to offset changes in cash flows of hedged items. The Group
instruments issued. documents its risk management objective and strategy for
undertaking various hedge transactions at the inception
Borrowings are classified as current liabilities unless the of each hedge relationship. The full fair value of a hedging
Group has an unconditional right to defer settlement derivative is classified as a non-current asset or liability
of the liability for at least 12 months after the reporting when the remaining maturity of the hedged item is more
period. Where there is a breach of a material provision of than 12 months; it is classified as a current asset or liability
a long-term loan arrangement on or before the end of the when the remaining maturity of the hedged item is less than
reporting period with the effect that the liability becomes 12 months. Trading derivatives are classified as a current
payable on demand on the reporting date, the entity does asset or liability.
not classify the liability as current, if the lender agreed,
after the reporting period and before the approval of the Cash flow hedges that qualify for hedge accounting
financial statements for issue, not to demand payment as a
consequence of the breach. The effective portion of changes in the fair value of
derivatives that are designated and qualify as cash flow
Borrowing Costs hedges is recognised in the other comprehensive income
General and specific borrowing costs directly attributable in cash flow hedging reserve within equity, limited to the
to the acquisition, construction or production of an asset cumulative change in fair value of the hedged item on a
that necessarily takes a substantial period of time to get present value basis from the inception of the hedge. The
ready for its intended use or sale are capitalised as part gain or loss relating to the ineffective portion is recognised
of the cost of the asset. All other borrowing costs are immediately in profit or loss, within other gains/(losses).
expensed in the period in which they occur. Borrowing costs
consist of interest and other costs that the Group incurs in When forward contracts are used to hedge forecast
connection with the borrowing of funds. Borrowing cost also transactions, the Group designate the full change in fair
includes exchange differences to the extent regarded as an value of the forward contract as the hedging instrument.
adjustment to the borrowing costs. The gains and losses relating to the effective portion of
the change in fair value of the entire forward contract are
t) Offsetting of financial instruments recognised in the cash flow hedging reserve within equity.
Financial assets and financial liabilities are offset and the net
amount is reported in the balance sheet if there is a currently Amounts accumulated in equity are reclassified to profit
enforceable legal right to offset the recognised amounts and or loss in the periods when the hedged item affects
there is an intention to settle on a net basis, to realise the profit or loss (for example, when the forecast sale that is
assets and settle the liabilities simultaneously. The legally hedged takes place).
enforceable right must not be contingent on future events
and must be enforceable in the normal course of business When the hedged forecast transaction results in the
and in the event of default, insolvency or bankruptcy of the recognition of a non-financial asset (for example inventory),
Group or the counter party. the amounts accumulated in equity are transferred to profit
or loss as follows:
u) Derivatives and hedging activities
Derivatives are initially recognised at fair value on the date • With respect to gain or loss relating to the effective
a derivative contract is entered into and are subsequently portion of the of forward contracts, the deferred hedging
re-measured to their fair value at the end of each reporting gains and losses are included within the initial cost of the
249
Sterlite Technologies Limited
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
asset. The deferred amounts are ultimately recognised in The fair value of financial guarantees is determined based
profit or loss as the hedged item affects profit or loss (for on the present value of the difference between the cash
example, through cost of sales). flows between the contractual payments required under the
debt instrument and the payments that would be without the
When a hedging instrument expires, or is sold or terminated,
guarantee, or the estimated amount that would be payable
or when a hedge no longer meets the criteria for hedge
to the third party for assuming the obligations.
accounting, any cumulative deferred gain or loss and
deferred costs of hedging in equity at that time remains
Where the guarantees in relation to the loans or other
in equity until the forecast transaction occurs. When the
payables of associates are provided for no compensation,
forecast transaction is no longer expected to occur, the
the fair values are accounted for as contributions and
cumulative gain or loss and deferred costs of hedging that
recognised as part of the cost of the investment.
were reported in equity are immediately reclassified to
profit or loss within other gains/(losses). If the hedge ratio
w) Cash and cash equivalents
for risk management purposes is no longer optimal but
Cash and cash equivalent in the balance sheet comprise
the risk management objective remains unchanged and
cash at banks and on hand and short-term deposits with an
the hedge continues to qualify for hedge accounting, the
original maturity of three months or less, which are subject
hedge relationship will be rebalanced by adjusting either
to an insignificant risk of changes in value.
the volume of the hedging instrument or the volume of
the hedged item so that the hedge ratio aligns with the
For the purpose of the statement of cash flows, cash and
ratio used for risk management purposes. Any hedge
cash equivalents consist of cash and short-term deposits,
ineffectiveness is calculated and accounted for in profit or
as defined above, net of outstanding bank overdrafts
loss at the time of the hedge relationship rebalancing.
if they are considered an integral part of the Group’s
cash management.
Derivatives that are not designated as hedges
The Group enters into certain derivative contracts to hedge
x) Dividends
risks which are not designated as hedges. Such contracts
The Group recognises a liability to make cash distributions
are accounted for at fair value through profit or loss and are
to equity holders of the Group when the distribution
included in statement of profit and loss.
is authorised and the distribution is no longer at the
discretion of the Group. As per the corporate laws in
Embedded derivatives
India, a distribution is authorised when it is approved by
Derivatives embedded in a host contract that is an asset
the shareholders. A corresponding amount is recognised
within the scope of Ind AS 109 are not separated. Financial
directly in equity.
assets with embedded derivatives are considered in their
entirety when determining whether their cash flows are
y) Earnings per share
solely payment of principal and interest.
Basic earnings per share
Basic earnings per share is calculated by dividing the profit
Derivatives embedded in all other host contract are
attributable to owners of the group by the weighted average
separated only if the economic characteristics and risks
number of equity shares outstanding during the financial
of the embedded derivative are not closely related
year, adjusted for bonus elements in equity shares issued
to the economic characteristics and risks of the host
during the year and excluding treasury shares.
and are measured at fair value through profit or loss.
Embedded derivatives closely related to the host contracts
Diluted earnings per share
are not separated.
Diluted earnings per share adjusts the figures used in
the determination of basic earnings per share to take into
v) Financial Guarantee Contracts
account the after income tax effect of interest and other
Financial guarantee contracts are recognised as a financial
financing costs associated with dilutive potential equity
liability at the time the guarantee is issued. The liability
shares, and the weighted average number of additional
is initially measured at fair value and subsequently at the
equity shares that would have been outstanding assuming
higher of (i) the amount determined in accordance with
the conversion of all dilutive potential equity shares.
the expected credit loss model as per Ind AS 109 and (ii)
the amount initially recognised less, where appropriate,
z) Presentation of EBITDA
cumulative amount of income recognised in accordance with
The Group presents Earnings before interest, tax,
the principles of Ind AS 115.
depreciation and amortisation (‘EBITDA’) in the statement
of profit or loss; this is not specifically required by Ind AS 1.
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
The term EBITDA is not defined in Ind AS. Ind AS compliant current asset (or disposal group) is recognised at the date of
Schedule III allows companies to present line items, sub- de-recognition.
line items and sub-totals to be presented as an addition or
substitution on the face of the financial statements when Non-current assets (including those that are part of a
such presentation is relevant to an understanding of the disposal group) are not depreciated or amortised while they
group’s financial position or performance. are classified as held for sale. Interest and other expenses
attributable to the liabilities of a disposal group classified as
Accordingly, the Group has elected to present EBITDA as a held for sale continue to be recognised.
separate line item on the face of the statement of profit and
loss. The Group measures EBITDA on the basis of profit/ Non-current assets classified as held for sale and the
(loss) from continuing operations. In its measurement, the assets of a disposal group classified as held for sale are
Group does not include depreciation and amortisation presented separately from the other assets in the balance
expense, finance income, finance costs, share of profit/ loss sheet. The liabilities of a disposal group classified as held
from joint ventures and tax expense. for sale are presented separately from other liabilities in
the balance sheet.
aa) Trade receivable
Trade receivables are amounts due from customers for A discontinued operation is a component of the group that
goods sold or services performed in the ordinary course has been disposed of or is classified as held for sale and that
of business. Trade receivables are recognised initially at represents a separate major line of business or geographical
fair value. Trade receivables are recognised initially at area of operations, is part of a single co-ordinated plan to
the amount of consideration that is unconditional unless dispose of such a line of business or area of operations, or is
there are significant financing components, when they a subsidiary acquired exclusively with a view to resale. The
are recognised at fair value. The Group holds the trade results of discontinued operations are presented separately
receivables with the objective to collect contractual cash in the statement of profit and loss.
flows and therefore measures them subsequently at
amortised cost using the effective interest method, less dd) Rounding of amount
provision for impairment. All amounts disclosed in the financial statements and notes
have been rounded off to the nearest crores as per the
bb) Segment Reporting requirement of Schedule III, unless otherwise stated.
Operating segments are reported in a manner consistent
with internal reporting provided to the Chief Operating ee) Exceptional items
Decision Maker (CODM). The Board of Directors has been When the items of income and expense within profit or loss
identified as being the CODM. Refer note 57 for segment from ordinary activities are of such size, nature or incidence
information presented. that their disclosure is relevant to explain the performance
of the Group for the period, the nature and amount of
cc) Non-current assets (or disposal group) held for sale such items are disclosed separately as exceptional
and discontinued operations item by the Group.
Non-current assets (or disposal group) are classified as held
for sale if their carrying amount will be recovered principally 2.2 Recent Accounting Pronouncements
through a sale transaction rather than through continuing Ministry of Corporate Affairs (“MCA”) notifies new standard
use and a sale is considered highly probable. They are or amendments to the existing standards. There is no
measured at the lower of their carrying amount and fair such notification which would have been applicable
value less costs to sell, except for assets such as deferred from April 1, 2020.
tax assets, assets arising from employee benefits, financial
assets and contractual rights under insurance contracts, 3: Significant Accounting Judgements,
which are specifically exempt from this requirement. Estimates and Assumptions
The preparation of financial statements requires the use of
An impairment loss is recognised for any initial or accounting estimates. Management also needs to exercise
subsequent write-down of the asset (or disposal group) judgement in applying the Group’s accounting policies.
to fair value less costs to sell. A gain is recognised for any Estimates and assumptions are continuously evaluated
subsequent increases in fair value less costs to sell of an and are based on historical experience and other factors
asset (or disposal group), but not in excess of any cumulative including expectations of future events that are believed to
impairment loss previously recognised. A gain or loss not be reliable and relevant under the circumstances. This note
previously recognised by the date of the sale of the non- provides an overview of the areas that involved a higher
degree of judgement or complexity, and of items which are
251
Sterlite Technologies Limited
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
more likely to be materially adjusted due to estimates and The Group uses judgement to determine an appropriate
assumptions turning out to be different than those originally standalone selling price for a performance obligation
assessed. Management believes that the estimates are the (allocation of transaction price). The Group allocates
most likely outcome of future events. Detailed information the transaction price to each performance obligation on
about each of these estimates and judgements is described the basis of the relative standalone selling price of each
below. distinct product or service promised in the contract. Where
standalone selling price is not observable, the Group uses
Impairment of Goodwill the expected cost plus reasonable margin approach to
The Group tests whether goodwill has suffered any allocate the transaction price to each distinct performance
impairment on an annual basis. Impairment exists when the obligation.
carrying value of an asset or cash generating unit exceeds
its recoverable amount. The recoverable amount of a cash The Group exercises judgement in determining whether the
generating unit (CGU) is determined based on value in use performance obligation is satisfied at a point in time or over
calculations. The value in use calculation is based on a DCF a period of time. The Group considers indicators such as
model. The cash flows are derived from the budget for the how customer consumes benefits as services are rendered
next five years and do not include restructuring activities or who controls the asset as it is being created or existence
that the Group is not yet committed to or significant future of enforceable right to payment for performance to date
investments that will enhance the asset’s performance of and alternate use of such product or service, transfer of
the CGU being tested. The recoverable amount is sensitive significant risks and rewards to the customer, acceptance
to the discount rate used for the DCF model as well as the of delivery by the customer, timing gap between transfer of
expected future cash-inflows and the growth rate. The key control and actual revenue recognition, etc.
assumptions used to determine the recoverable amount for
goodwill including a sensitivity analysis are disclosed and Revenue for fixed-price contract is recognised using the
further explained in Note 6. input method for measuring progress. The Group uses
cost incurred related to total estimated costs to determine
Revenue Recognition on Contracts with Customers the extent of progress towards completion. Judgement
The Group’s contracts with customers could include is involved to estimate the future cost to complete the
promises to transfer multiple products and services to a contract and to estimate the actual cost incurred basis
customer. The Group assesses the products / services completion of relevant activities towards fulfilment of
promised in a contract and identifies distinct performance performance obligations.
obligations in the contract. Identification of distinct
performance obligation involves judgement to determine Contract fulfilment costs are generally expensed as
the distinct goods/services and the ability of the customer to incurred except for costs that meet the criteria for
benefit independently from such goods/services. capitalisation. Such costs are amortised over the life of the
contract.
Judgement is also required to determine the transaction
price for the contract. The transaction price could be either Uninstalled materials are materials that will be used to
a fixed amount of customer consideration or variable satisfy performance obligations in a contract for which the
consideration with elements such as volume discounts, cost incurred does not depict transfer to the customer. The
liquidated damages, penalties, price concessions and Group excludes cost of uninstalled materials for measuring
incentives. Any consideration payable to the customer is progress towards satisfying a performance obligation if it
adjusted to the transaction price, unless it is a payment for a involves only provision of a procurement service. In case of
distinct product or service from the customer. uninstalled materials, the Group recognises revenue equal
to the cost of the uninstalled materials if the goods are
The estimated amount of variable consideration is distinct, the customer is expected to obtain control of the
adjusted in the transaction price only to the extent goods significantly before services related to the goods are
that it is highly probable that a significant reversal in rendered, the cost of the transferred goods is significantly
the amount of cumulative revenue recognised will not relative to the total expected costs to completely satisfy the
occur and is reassessed at the end of each reporting performance obligation and the goods are procured from a
period. The Group allocates the elements of variable third party wherein there is no involvement of the Group in
considerations to all the performance obligations designing and manufacturing of the good.
of the contract unless there is observable evidence
that they pertain to one or more distinct performance
obligations.
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
253
Note 4: Property, Plant & Equipment
254
(Amounts ` crores)
Freehold Leasehold Buildings# Plant & Furniture Data Office Electrical Vehicles Right of Total
land land machinery & fixtures processing equipments fittings Use asset
Notes
equipments
Cost
At 01 April 2018 67.04 36.30 263.00 1,687.97 16.67 54.82 14.34 46.56 11.20 - 2,197.90
Additions - 7.65 201.98 968.43 0.76 6.17 2.12 11.81 5.45 - 1,204.37
Transfer from Investment property (refer note 7) - - 10.03 - - - - - - - 10.03
Sterlite Technologies Limited
Assets Acquired under business combination (refer note 47) 53.30 - 51.04 33.31 - - - - - - 137.65
Translation Adjustments (0.89) (0.09) (2.66) (6.51) - (0.02) (0.01) - (0.12) - (10.30)
Movement in Capital work in progress # Buildings include those constructed on leasehold land:
Opening balance as at 01 April 2019 419.44 31 March 2020 31 March 2019
Additions during the year 418.28 Gross Block 425.21 343.33
Borrowing cost capitalised during the year (Refer Note 33) 11.12 Depreciation for the year 7.15 12.74
Transfers during the year (716.06) Accumulated depreciation 61.11 53.96
Closing balance as at 31 March 2020 132.78 Net Block 364.10 289.37
Capital work in progress mainly comprises amounts pertaining to plant & machinery. Refer note 19 for information on property, plant and equipment pledged as security by the Group.
Refer note 39 for disclosure of capital commitments for the acquisition of property, plant & equipments.
The Group has revised the useful life of certain assets effective from October 01, 2019 based on the
available evidence of their expected use and the impact of same on depreciation charge for current year is
` 15 crores. There will be similar impact in future years.
1. 2. 3. Financial Statements
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
Details of Leases :
The note provides information for leases where the group is a lessee. The group leases various offices and equipments.
Rental contracts are typically made for fixed periods of 2 to 15 years, but have extension options.
Additions to the right of use assets during the year is ` 21.27 crores.
31 March 2020
Particulars Note no.
(` in crores)
Interest expenses (included in finance cost) 33 11.38
Expenses related to short term leases, low value assets (disclosed as rent in other expenses) 31 10.00
The total cash outflow for leases for the year ended 31 March 2020 was ` 28.16 crores.
255
Sterlite Technologies Limited
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
Goodwill is monitored by management at CGU level. The Group 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.
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
Management has determined the values assigned to each of the above key assumptions as follows:
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 Group and 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 Group’s investors. The cost of debt is based on the interest-bearing
borrowings the Group 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.
EBITDA margins
EBITDA margins are based on the actual EBITDA of the CGU based on the past trend and future expectations.
Sensitivity to changes in assumptions - Network software CGU and Network service Solutions business in
Europe Region 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.
EBITDA margins - A decreased demand can lead to a decline in EBITDA. A decrease in EBITDA margins below 11% would
result in impairment.
257
Sterlite Technologies Limited
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
Notes
During the previous year, Group has started using the property for its own use and therefore the same has been reclassified
to buildings block under property plant and equipment. (Refer note 4)
Note 8: Investments
31 March 2020 31 March 2019
Particulars
(` in crores) (` in crores)
Non-current investments
Investment in Joint Venture
58.05% Equity investment in Sterlite Conduspar Industrial Ltda -* -*
Investment in Joint venture at fair value through P&L$
511 (31 March 2019: 333) Equity shares of Metis Eduventures Private Limited 1.53 0.26
Investments - Other at fair value through OCI
Nil (31 March 2019: 10) Equity shares of Singularity Healthcare IT - -*
Systems Private Limited of ` 10 each fully paid up$$
Investment in debentures (unquoted)
Investment in debentures- Joint Venture at fair value through P&L
17,600,000 (31 March 2019: 17,600,000) 0.001% Compulsorily 17.60 17.60
Convertible Debentures of Metis Eduventures Private Limited
5,000,000 (31 March 2019: 5,000,000) 0.01% Cumulative Optionally 5.00 5.00
Convertible Debentures of Metis Eduventures Private Limited
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
259
Sterlite Technologies Limited
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
No trade or other receivable are due from directors or other officers of the Group 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 Group.
*This includes expenses incurred on behalf of customer, amounting to ` 4.51 crores (31 March 2019: `18.04 crores)
Refer note 19 for information on financial assets hypothecated as security by the Company.
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
There is no impairment allowance of the contract assets for current year and previous year.
During the year ended March 31, 2020, ` Nil (March 31, 2019: ` 148.98 crores) of opening gross amount due from customers from
construction contract and ` 1,087.53 crores (March 31, 2019: ` 20.15 crores) of opening unbilled revenue has been reclassified to Trade
receivables upon billing to customers on completion of milestones.
Refer note 19 for information on other assets hypothecated as security by the Company.
261
Sterlite Technologies Limited
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
There are no repatriation restrictions with regards to cash and cash equivalents.
* Includes ` 0.01 crores (31 March 2019: ` 0.01 crores) held as lien by banks against bank guarantees.
** `2.86 crores (31 March 2019: `15.00 crores) held as lien by banks against bank guarantees.
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
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. Management has filed an application with Department of Telecommunication for transfer of entity after its earlier
application had been rejected. The Department of Telecommunication has requested certain clarifications to which the
Management has responded. The Company is committed to the sale of MTCIL post requisite regulatory approvals.
a. Reconciliation of the shares outstanding at the beginning and at the end of the reporting period
31 March 2020 31 March 2019
Nos in crores (` in crores) Nos in crores (` in crores)
At the beginning of the year 40.25 80.51 40.10 80.20
Issued during the year against employee stock option 0.14 0.28 0.15 0.31
Outstanding at the end of the year 40.39 80.79 40.25 80.51
263
Sterlite Technologies Limited
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
Buy-back of shares:
The Board of Directors have approved on March 24, 2020 the proposed buyback of Equity Shares for a total amount not
exceeding ` 145 Crore, being 10% of the aggregate of the total paid-up equity capital and free reserves of the Company
based on the audited standalone and consolidated financial statements of the Company for the financial year ended March
31, 2019 . The Company has bought back Nil shares as at March 31, 2020. Post March 31, 2020, the Company has bought
back 2,418,719 shares for ` 20.30 crores (excluding taxes) upto the reporting date.
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.
d. Aggregate number of bonus shares issued, share issued for consideration other than cash during the
period of five years immediately preceding the reporting date :
31 March 2020 31 March 2019
Particulars
(` in crores) (` in crores)
Equity shares allotted as fully paid bonus shares by capitalisation of securities premium during the period of - 0.04
five years immediately preceding the reporting date
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
265
Sterlite Technologies Limited
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
General reserve
General reserve is created out of the amounts transferred from debenture redemption reserve on account of
redemption of debentures.
Capital reserve
Capital reserve is not available for distribution as dividend.
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
Notes:
b) 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.
c) Indian rupee term loan from bank amounting to ` 10.00 crores carries interest @ LTMLR + 0.75% p.a. Loan amount is
repayable in twelve quarterly equated instalments of ` 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 ` 113.49 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 ` 70.15 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 ` 80.00 crores carries interest @ One Year MCLR +15 Bps p.a. Loan
amount is repayable in 12 quarterly instalments from Oct’21 of ` 6.67 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 ` 129.61 crores carries interest @ 8% p.a. Loan amount is
repayable in FY 2020-21.
h) Deferred payment liabilities of ` 138.58 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.
b) Foreign currency loan from bank of ` 55.40 crores ( 31 March 2019: ` Nil ) carries interest @ 4.72% p.a. This loan is
secured by way of hypothecation of Plant and Machinery. This loan is repayable by FY 2022-23.
267
Sterlite Technologies Limited
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
b) Foreign currency term loan from bank of ` 166.76 crores (31 March 2019: ` 155.20 crores ) carries interest of EURIBOR
+ 1.70% p.a. This loan is backed by SBLC issued by Citi Bank, India. This loan is repayable by FY 2023-24.
Note:
(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 30 days to 90 days and carries interest @ 6.90
% to 8.25% p.a.
(iii) Commercial Papers are unsecured and are generally taken for a period from 60 to 90 days and carry interest @
6.65% to 7.00% p.a.
(iv) Other loans 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. Export packing
credit is taken for a period ranging from 30-180 days. Interest rate for both the products ranges from 6.9% - 8.11% 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.
b) Foreign currency term loan from bank of ` Nil (31 March 2019 : ` 9.85 crores) carries interest @ LIBOR +
0.70% - 0.90% p.a.
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
b) Foreign currency term loan from bank of ` Nil (31 March 2019 : ` 25.59 crores) carries interest @ EURIBOR +
0.75% - 1.30% p.a.
The amount of net debt would have been ` 2,133.69 crores considering the amount of lease liabilities of ` 129.30 crores.
*Includes cash and cash equivalents of ` 3.88 crores (March 31, 2019: ` 5.72 crores) relating to disposal group (MTCIL) classified as discontinued operations
(Refer note 16).
** Includes other bank balance of ` 86 crores (March 31, 2019 : ` 70 crores) with respect to fixed deposit. These fixed deposits can be encashed by the Group
at any time without any major penalties.
*** Includes non current borrowing ` 29.28 crores (March 31, 2019: ` 26.74 crores ) relating to disposal group (MTCIL) classified as discontinued operations
(Refer note 16).
Non-current borrowings
31 March 2020 31 March 2019
Particulars
(` in crores) (` in crores)
Opening balance 1,111.17 618.50
Cashflows 146.27 496.83
Interest expense 70.99 51.34
Interest paid (72.35) (55.14)
Forex adjustment (9.74) (0.36)
Closing balance 1,246.34 1,111.17
Current borrowings
31 March 2020 31 March 2019
Particulars
(` in crores) (` in crores)
Opening balance 982.69 462.74
Cashflows 247.88 519.95
Interest expense 100.39 32.10
Interest paid (100.39) (32.10)
Closing balance 1,230.57 982.69
269
Sterlite Technologies Limited
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
Current Investments
31 March 2020 31 March 2019
Particulars
(` in crores) (` in crores)
Opening balance 170.17 155.00
Cashflows 146.64 13.28
Realised gain on current investment 2.23 1.89
Closing balance 319.04 170.17
* There are no amounts due and outstanding to be credited to Investor Education and Protection Fund.
# This includes amount of ` 31.26 crores payable towards acquisition of an associate company.
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
During the year ended March 31, 2020, the group recognised revenue of ` 87.78 crores (March 31, 2019: ` 35.40 crores)
arising from opening unearned revenue.
271
Sterlite Technologies Limited
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
The major components of income tax expense for the years ended 31 March 2020 and 31 March 2019 are:
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
Reconciliation of tax expense and the accounting profit multiplied by India’s domestic tax rate for 31 March 2020
and 31 March 2019:
31 March 2020 31 March 2019
Particulars
(` in crores) (` in crores)
Profit before tax & share in loss of joint venture 541.60 863.54
Tax at India’s statutory income tax rate of 25.17% (31 March 2019: 34.94%) 136.32 301.72
Tax at lower tax rate of Subsidiaries (2.08) (18.61)
Adjustments in respect of current income tax of previous years 1.51 -
Tax benefits available under various sections of income tax act (4.09) (8.37)
Income taxed at lower tax rate (5.47) -
Income tax rate difference (21.21) -
Other adjustments 3.90 3.42
Income tax expense 108.88 278.16
Income tax expense reported in the statement of profit and loss 108.88 278.16
Pursuant to the announcement made by the Finance Ministry of the Government of India on September 20, 2019, the
parent company, basis their current assessment, is expected to opt for a lower corporate tax rate as per section 115BAA of
the Income Tax Act, 1961 as introduced by the Taxation Laws (Amendment) Ordinance, 2019 from financial year 2019-20
onwards. Accordingly, the parent company remeasured the Deferred Tax Liability basis the revised lower tax rate and impact
of the same was recognised in the current year. The parent company has also recognised provision for Income Tax and
Deferred Tax Liability for the year ended March 31, 2020 basis the revised lower tax rate.
i) Compensated Absences
The compensated absences cover the Group’s liability for sick and earned leave. The amount of the provision is ` 20.02
crores (31 March 2019: ` 17.01 crores). The Group does not have an unconditional right to defer settlement for any
of these obligations. However, based on past experience, the Group 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.
273
Sterlite Technologies Limited
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
Changes in the present value of the defined benefit obligation are as follows:
31 March 2020 31 March 2019
Particulars
(` in crores) (` in crores)
Defined benefit obligation at the beginning of the year 34.18 22.98
Current service cost 5.29 2.85
Interest cost 2.61 1.99
Actuarial (gain)/loss (0.35) 7.33
Benefits paid (0.87) (0.97)
Defined benefit obligation, at the end of the year 40.86 34.18
The Group expects to contribute ` 2.50 crores (31 March 2019: ` 4.50 crores ) to its gratuity plan in FY 2020-21.
The major categories of plan assets as a percentage of the fair value of total plan assets are as follows:
31 March 2020 31 March 2019
Particulars
(%) (%)
Insurance Fund with Life Insurance Corporation of India 100 100
The fair value of planned assets represents the amount as confirmed by the fund.
The net liability disclosed above relates to funded plans are as follows:
31 March 2020 31 March 2019
Particulars
(` in crores) (` in crores)
Present value of funded obligations 40.86 34.18
Fair value of plan assets (5.32) (4.32)
Deficit of funded plan (A) 35.54 29.86
Unfunded plans (B) - -
Total net obligation (A+B) 35.54 29.86
The Group has no legal obligation to settle the deficit in the funded plans with an immediate contribution or additional one
off contributions. The Group intends to continue to contribute the defined benefit plans as per the demand from LIC of India.
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
Net employee benefit expense recognised in the statement of profit and loss:
Net employee benefit expense recognised in the other comprehensive income (OCI):
The principal assumptions used in determining defined benefit obligation are shown below:
31 March 2020 31 March 2019
Particulars
(` in crores) (` in crores)
Discount rate 6.56% 7.64%
Expected rate of return on plan asset 6.56% 7.64%
Employee turnover 10.00% 10.00%
Expected rate of salary increase 10.00% 10.00%
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.
Sensitivity Analysis
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.
275
Sterlite Technologies Limited
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
Risk exposure
Through its defined benefit plans, the Group 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.
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 Group’s 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 (2019 - 7 years). The expected maturity analysis
of gratuity is as follows:
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
Revenue disaggregation in terms of nature of good and service has been included above.
The total contract price of ` 5,148.02 crores is reduced by the consideration of ` 71.07 crores towards variable components.
Refer note 2, 3 and 55 for accounting policy, significant judgements and details about impact of changes in accounting
policies on adoption of Ind AS 115 respectively.
The Group’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 ` 2,935.45 crores which is expected to be recognised
over a period of one to three years. Amount of unsatisfied (or partially satisfied) performance obligations does not
include contracts with original expected duration of one year or less since the Group has applied the practical expedient
in Ind AS 115.
*The amount disclosed above is net of expenses for provision of services (refer note 51).
277
Sterlite Technologies Limited
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
The Group has recognised the following expenses in the Statement of Profit and Loss for the year.
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
*This includes loss of ` Nil (March 31, 2019: ` 1.74 crores) pertaining to investments classified as FVTPL. (refer note 8)
279
Sterlite Technologies Limited
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
* During the year, the Group has capitalised borrowing costs of ` 11.12 crores (31 March 2019: ` 53.37 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
Group’s general borrowings, in this case 8.49% p.a. (March 31, 2019: 8.49% p.a.).
Certain subsidiaries of the group have undistributed earnings where an assessable temporary difference exists, but no
deferred tax has been recognised considering applicable tax regulations in countries where subsidiaries are domiciled and
the parent entity is able to control the timing of distributions from these subsidiaries and is not expected to distribute these
profits in the foreseeable future.
*For current year, the current tax expense is net of adjustment of ` 8.90 crores pertaining to current tax of previous year.
#
For current year, the deferred tax includes ` 10.41 crores for adjustment for deferred tax expense of previous year.
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 ` 2 per option.
The Group has charged ` 9.86 crores(31 March 2019: ` 19.16 crores) to the statement of profit and loss in respect of options
granted under ESOP schemes.
a) Set Out Below is the summary of options granted under the plan.
31 March 2020 31 March 2019
Average Average
Number of Number of
Exercise price Exercise price
Options Options
per share per share
Opening Balance 2 4,614,478 2 5,050,978
Granted During the year 2 1,741,630 2 1,636,950
Forfeited During the year 2 - 2 -
Exercised During the year 2 (1,421,264) 2 (1,551,202)
Expired During the year 2 (1,000,954) 2 (522,248)
Closing Balance 3,933,890 4,614,478
Vested and Exercisable 423,130 341,195
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
Average share price for the year ended 31 March 2020 is 141.89 (31 March 2019: ` 307.95).
Share options outstanding at the end of the year have the following expiry date and exercise prices.
Weighted Average remaining contractual life of the options outstanding at the end of the period 3.11 2.68
1. Vesting criteria - Assured vesting of 30% Options in five years subject to continuous employment with the company
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 - 70% Vesting based on total Shareholders return based on market performance
281
Sterlite Technologies Limited
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
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
Variables
Price of underlying stock 145.35
Expected volatility 47.87%
Risk Free rate 6.19%
Exercise Price (` per Option) 2.00
Dividend Yield 1.07%
Fair Value of the option 44.32
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 set out in note 35.
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
Note 37: The List of Subsidiaries, Joint Venture and Associates which are included in the
Consolidation and the Group’s Effective Holding Therein
Effective Effective
Country of
Name of the Group ownership as on ownership as on
incorporation
31 March 2020 31 March 2019
List of subsidiaries
Speedon Network Limited 100.00% 100.00% India
Maharashtra Transmission Communication Infrastructure Limited 65.99% 70.49% India
Sterlite Telesystems Limited 100.00% 100.00% India
Sterlite Innovative Solutions Limited 100.00% 100.00% India
Sterlite Tech Connectivity Solutions Limited 100.00% 100.00% India
Sterlite Tech Cables Solutions Limited 100.00% - India
Sterlite Global Ventures (Mauritius) Limited 100.00% 100.00% Mauritius
Jiangsu Sterlite and Tongguang Fiber Co. Limited 75.00% 75.00% China
Sterlite (Shanghai) Trading Co. Limited 100.00% 100.00% China
Sterlite Technologies S.p.A 100.00% 100.00% Italy
Metallurgica Bresciana S.p.A. 100.00% 100.00% Italy
Elitecore Technologies (Mauritius) Limited 100.00% 100.00% Mauritius
Elitecore Technologies SDN. BHD 100.00% 100.00% Malaysia
Sterlite Technologies UK Ventures Limited 100.00% 100.00% United Kingdom
Sterlite Tech Holdings (UK) Limited 100.00% - United Kingdom
Sterlite Tech Holding Inc. 100.00% 100.00% USA
Sterlite Technologies Inc. 100.00% 100.00% USA
Impact Data Solutions Limited 80.00% - United Kingdom
Impact Data Solutions B.V. 80.00% - Netherlands
Vulcan Data Centre Solutions Limited 80.00% - United Kingdom
PT Sterlite Technologies Indonesia 100.00% - Indonesia
List of Associate
MB Maanshan Special Cable Limited** 40.00% 40.00% China
ASOCS 12.50% - Israel
List of joint venture
Sterlite Conduspar Industries Ltda 58.05% 58.05% Brazil
** Associate company is not considered for consolidation as the operations of the associate company is insignificant for the Group.
Joint Venture with Metis Eduventures Private Limited is not considered for consolidation as the same is accounted as per Ind AS 109 (Refer
note 2s(ii))
Future minimum lease payments over non cancellable period of operating leases are as follows :
Group as lessor :
The Group 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.
283
Sterlite Technologies Limited
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
Future minimum lease receipts over non cancellable period of operating leases are as follows :
31 March 2020 31 March 2019
Particulars
(` in crores) (` in crores)
Lease income recognised in the statement of profit and loss for the year - 2.01
The future minimum lease payments receivable over the next one year - 1.32
The future minimum lease payments receivable later than one year but not later than five year - -
b] The Group 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 Group has given bonds of ` 881.49 crores (31 March 2019: ` 984.31 crores) to the Commissioner of
Customs. The Group expects to fulfil the export obligation within prescribed time.
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 CIT(A) and ITAT orders against which the Department has filed an appeal with the
High Court.
The Group 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 Group 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 Group’s financial position. In respect of the claims
against the Group 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 Group 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 Group, owing to discrepancies in
the documents. Thereafter, the bank filed claim against the Group in the Debt Recovery Tribunal (DRT). Against the DRT
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
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 Group 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 41: Details of Dues to Micro and Small Enterprises as Defined Under Msmed Act, 2006
31 March 2020 31 March 2019
Particulars
(` in crores) (` in crores)
(i) The principal amount and the interest due thereon remaining unpaid to any supplier at the end of each
accounting year
Principal amount due to supplier* 30.66 92.44
Interest due on above 0.96 0.19
(ii) The amount of interest paid by the buyer in terms of Section 16 of the Micro, Small and Medium - -
Enterprises Development Act, 2006 along with the amount of the payment made to the supplier beyond
the appointed day during each accounting year.
(iii) The amount of interest due and payable for the period of delay in making payment but without adding - -
the interest specified under the Micro, Small and Medium Enterprises Development Act, 2006
(iv) The amount of interest accrued and remaining unpaid at the end of each accounting year. 0.96 0.19
(v) The amount of further interest remaining due and payable even in the succeeding years, until such - -
date when the interest dues as above are actually paid to the small enterprise for the purpose of
disallowance as a deductible expenditure under section 23 of the Micro, Small and Medium Enterprise
Development Act, 2006
* includes amount of `11.53 Crore (31 March 2019: ` 91.70 crore) outstanding, but not overdue to micro, small and medium enterprises as on 31 March 2020.
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.
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.
- Pune - R&D activities for Product Engineering towards Programmable Networking & Intelligence.
285
Sterlite Technologies Limited
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
The company has four Research and Development Centres. Centre wise breakup of expenditure is as follows :
The Company is in the business of designing , manufacturing and deployment of high-capacity converged fibre, cable
and wireless networks. Telecommunication is the largest end-use industry for the Company and the Company has special
expertise in large scale integrated telecommunications projects and offers system integration services across network
lifecycle. Mangement believes that the ongoing shift to remote work, reduced domestic and global travel and increasing
need for connected devices is expected to result in a sharp increase in network usage which will drive the need to for
networking infrastructure and connectivity.
Due to the lock down imposed by the government of India, the operations of the Company had to be temporarily suspended.
However, since telecom networks have been identified as an essential service, the Company has been able to partially
resume its operations as at the reporting date. The current situation is likely to continue for next few months and therefore
expected to result in some delays in delivering the customer orders and completion of ongoing projects. Given the
uncertainties around its impact on future global economic activity, Management will continue to monitor the impact on the
operations of the Company.
As inventory verification was impracticable at the year end, Management has performed the ‘wall to wall’ inventory
verification at a date subsequent to the year end in the presence of statutory auditor at one location and internal auditor (an
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
external firm of Chartered Accountants) at other location to obtain comfort over the existence and condition of inventories as
at March 31, 2020 including roll-back procedures etc.
The unfolding COVID-19 epidemic is worsening the outlook for the global economy as embedded in the March 2020 ECB
staff macroeconomic projections. Developments since the cut-off date for the projections suggest that the downside risk to
global activity related to the COVID-19 outbreak has partly materialised, implying that global activity this year will be weaker
than envisaged in the projections. The outbreak hit the global economy as signs of a stabilisation in activity and trade
had started to emerge and the signing of the so-called Phase 1 trade agreement between the United States and China,
accompanied by cuts in tariffs, had reduced uncertainty. Looking further ahead, the projected global recovery is expected to
gain only modest traction.
The first months of 2020 were characterised by an acceleration of the activities by national operators to fill up the delays
accumulated previously in the development of the national optical network and by the will of the two giants TIM and
Openfiber to arrive strengthened in view of an imminent merger between the two.
Thanks to the remarkable degree of reliability and the consolidated relationship built in previous years with customers and
thanks to the synergy with the STL Group that has allowed us to optimize the process, to double the production capacity and
significantly reduce the production costs, we are now the successful tenderers of important contracts with TIM, Openfiber
and the main Italian installers in a market with constant decreasing prices due to the aggressive commercial policy of mainly
foreign competitors (Chinese and Korean). These contracts, whose validity is extended until 2021, guarantee a solid basis
for the continuation of production activities in the whole year 2020. Our position is also consolidated by the acquisitions of
important foreign orders.
Note 44: Excise /Customs Matter Pending With Honourable Supreme Court
During the current year, the Company has 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 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 has
determined the duty payable in respect of all matters offered for settlement under the scheme and accordingly recognised
expense of ` 50.71 crores in the current year which has been disclosed as exceptional item in the statement of profit and
loss. The Company is awaiting acceptance of the application by the department as of the reporting date.
287
Sterlite Technologies Limited
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
Group has an obligation to acquire the balance 20% over the next 2 to 5 years for a consideration based on an earn out
model. Accordingly, the Group has recognised ` 15.22 crore with respect to the redemption liability.
The assets and liabilities recognised as a result of the acquisition are as follows:
The goodwill is attributable to the synergies from combining operations with group and workforce. It will not be deductible
for tax purposes.
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
Acquired receivables
The fair value of acquired trade receivables is ` 11.37 crores.
i) adjusting for the accounting policies between the group and subsidiaries and
ii) the additional depreciation and amortisation that would have been charged assuming the fair value adjustments to
Property, plant and equipment and intangible assets had applied from 1 April 2019, together with the consequential tax
effects. The working of it as per the following:
Revenue Profit
Particulars
(` in crores) (` in crores)
Total revenue and profit of group excluding IDS Group 5,107.20 428.35
Revenue and profit of IDS Group 88.54 6.83
Total 5,195.74 435.19
Measurement period
The group does not expect any further significant changes till the end of measurement period to the goodwill amount
recognised subject to changes in purchase consideration.
In the current year, the group has received a refund of Euro 0.55 million (` 4.57 Crs) against purchase consideration paid
for acquisition of Metallurgica Bresciana S.p.A. in the previous year. This refund was made for the subsequent identification
of slow moving/obsolete inventory. This refund of purchase consideration has been deducted from the goodwill amount
recognised in previous year (refer note 5).
The Group’s activities expose it to market risk, credit risk and liquidity risk. The Group’s senior management oversees
the activities to manage 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 Group’s policy that no trading in derivatives for
speculative purposes should be undertaken.
289
Sterlite Technologies Limited
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
The Risk Management policies of the Group are established to identify and analyse the risks faced by the Group, 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 Group’s activities.
Management has overall responsibility for the establishment and oversight of the Group’s risk management framework. The
risks to which Group is exposed and related risk management policies are summarised below -
The sensitivity analysis in the following sections relate to the position as at 31 March 2020 and 31 March 2019.
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 2020 and 31 March 2019.
The Group is exposed to the interest rate fluctuation in domestic as well as foreign currency borrowing. The Group manages
its interest rate risk by having a balanced portfolio of fixed and variable rate borrowings. The Group 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 2020, after taking into account the effect
of interest rate swaps, approximately 70% of the Group’s borrowings are at a fixed rate of interest (31 March 2019: 75%).
The exposure of the group’s borrowing to interest rate changes at the end of the reporting period are as follows:
As at the end of the year, the group had the following variable rate borrowings and interest rate swap contracts outstanding:
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
The following table demonstrates the sensitivity to a reasonably possible change in the interest rates borrowings at variable
interest rate. With all the other variables held constant, the Group’s profit before tax is affected through the impact on
floating rate borrowings, as follows:
(` in crores)
The Group 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. As per the risk management policy, foreign exchange forward
contracts are taken to hedge its exposure in foreign currency risk. During the years ended 31 March 2020 and 2019, the
Group 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 Group 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 Group has hedged significant exposure as at March 31, 2020 and as at March 31,
2019. The Group’s foreign currency exposure at the year end is as follows:
31 March 2020
(` in crores)
Financial Assets USD EUR GBP AED
Trade receivable 91.21 98.03 72.45 17.61
Bank Balances 10.33 19.98 4.21 -
Loans and advances - - 3.23 -
Derivative Assets
Foreign exchange forward contracts - Sell foreign currency 75.73 77.76 66.74 15.55
Net Exposure to foreign currency risk (Assets) 25.81 40.24 13.14 2.06
31 March 2020
(` in crores)
Financial Liabilities USD EUR GBP AED
Bank Loan (including deferred payment liabilities) 480.78 74.08 69.81 -
Payables for purchase of property, plant & equipments 97.19 108.54 7.55 -
Trade Payables 215.46 6.49 0.40 -
Derivative Liabilities
Foreign exchange forward contracts - Buy foreign currency 525.96 164.49 0.27 -
Principal Swap 113.08 - - -
Net Exposure to foreign currency risk (Liabilities) 154.40 24.62 77.50 -
291
Sterlite Technologies Limited
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
31 March 2019
(` in crores)
Financial Assets USD EUR GBP AED
Trade receivable 103.91 117.81 36.90 12.14
Bank Balances 10.56 0.56 4.79 -
Loans and advances - - 1.92 -
Derivative Assets
Foreign exchange forward contracts - Sell foreign currency 30.70 97.19 36.90 12.14
Net Exposure to foreign currency risk (Assets) 83.77 21.18 6.71 -
31 March 2019
(` in crores)
Financial Liabilities USD EUR GBP AED
Bank Loan (including deferred payment liabilities) 197.65 94.01 - -
Payables for purchase of property, plant & equipment's 262.04 8.46 - -
Trade Payables 191.01 13.86 0.05 -
Derivative Liabilities
Foreign exchange forward contracts - Buy foreign currency 238.01 25.96 0.05 -
Principal Swap 138.34 - - -
Net Exposure to foreign currency risk (Liabilities) 274.35 90.37 - -
(` in crores)
Change in Effect on profit Change in Effect on profit Change in Effect on profit
USD rate before tax / Euro rate before tax / GBP rate before tax /
pre-tax equity pre-tax equity pre-tax equity
31 March 2020 +5% (6.43)/(5.32) +5% 0.78/22.00 +5% (3.22)/(1.63)
-5% 6.43/5.32 -5% (0.78)/(22.00) -5% 3.22/1.63
31 March 2019 +5% (9.53)/(3.82) +5% (3.46)/53.85 +5% 0.34/0.34
-5% 9.53/3.82 -5% 3.46/(53.85) -5% (0.34)/(0.34)
The Group has risk management strategy to mitigate commodity price risk.
Based on a 1 month forecast of the required copper supply, the Group hedges the purchase price using future commodity
purchase contracts. The forecast is deemed to be highly probable.
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
Price risk
The Group’s non-listed equity securities are susceptible to market price risk arising from uncertainties about future values of
the investment securities. The Group 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 Group’s senior management on a regular
basis. The Group’s 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
` 100.28 crores (31 March 2019: ` 35.30 crores).
The group invests into highly liquid funds which are subject to price risk changes. These investments are generally for short
durations and therefore impact of price change is generally not significant.
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 default risk. The maximum exposure to credit risk at the reporting date is
the carrying value of each class of financial assets. The Group does not hold collateral as security. The Group evaluates
the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and
industries and operate in largely independent markets. During the period, the group made write-offs of ` 5.05 crores (31
March 2019 : ` 17.33 crores) trade receivables, it does not expect to receive future cash flows or recoveries from collection
of cash flows previously written off.
The Group’s profile for customer contracts and software services include public sector enterprises, state owned companies
and private corporates. Accordingly, the Group’s customer credit risk is low. The Group’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 Group 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.
Details of Expected credit loss for trade receivables and contract assets is as follows:
31 March 2020 31 March 2019
Particulars less than 365 more than 365 less than 365 more than 365
Total Total
days days days days
Gross carrying amount 2,053.19 308.45 2,361.64 2,467.99 20.27 2,488.26
Expected credit loss rate 2.06% 15.00% 0.89% 80.00%
Expected credit loss provision 7.99 46.27 54.26 21.91 16.22 38.13
Carrying amount of trade receivable 2,045.20 262.18 2,307.38 2,446.08 4.05 2,450.13
(net of provision)
293
Sterlite Technologies Limited
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
Other financial assets that are potentially subject to credit risk consists of inter corporate loans. The Group 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 Group charges interest on such loans at arms length rate considering countparty’s credit rating. Based on
the assessment performed, the Group 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 Group’s maximum exposure to credit risk for the components of the balance sheet at 31 March 2020 and 31 March
2019 is the carrying amounts of each class of financial assets.
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 Group’s
financial liabilities based on contractual undiscounted payments:
(` in crores)
Particulars Payable on Less than 3 months to 1 year to > 5 years
Total
demand 3 months 12 months 5 years
As at March 31, 2020
Borrowings 7.64 1,149.77 320.19 969.96 - 2,447.56
Other financial liabilities 4.91 42.23 94.96 18.72 - 160.82
Trade payables 279.54 510.11 640.65 - - 1,430.30
Payables for purchase of Property, plant - 207.04 345.02 0.62 - 552.68
and equipments
Derivative instruments - - 9.73 3.21 - 12.94
292.09 1,909.15 1,410.56 992.51 - 4,604.31
As at March 31, 2019
Borrowings 41.92 777.40 312.98 934.82 - 2,067.12
Other financial liabilities 4.24 39.63 29.77 2.71 - 76.35
Trade payables 264.13 778.28 816.52 53.62 0.20 1,912.75
Payables for purchase of Property, plant - 162.94 312.10 9.40 - 484.44
and equipments
Derivative instruments - 6.29 3.98 2.77 - 13.04
310.29 1,764.54 1,475.35 1,003.32 0.20 4,553.70
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
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 2020 and
31 March 2019.
The cash flow hedges for such derivative contracts as at 31 March 2020 were assessed to be highly effective and a net
unrealised gain of ` 18.83 crore, with a deferred tax liability of ` 4.75 crores relating to the hedging instruments, is included
in OCI. Comparatively, the cash flow hedges as at 31 March 2019 were assessed to be highly effective and an unrealised
gain of ` 122.95 crores, with a deferred tax liability of ` 42.96 crores was included in OCI in respect of these contracts. The
amounts retained in OCI at 31 March 2020 are expected to mature and affect the statement of profit and loss during the year
ended 31 March 2021.
At 31 March 2020, the Group has currency/interest rate swap agreements in place with a notional amount of USD 1.5 crores
(` 113.49 crore) (31 March 2019 : USD 2 crores) whereby the Group 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-` 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 Group also
has multiple interest rate swap agreements in place with a total notional amount of USD 2.45 crores whereby the Group 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 2020 were assessed to be highly effective and a net
unrealised gain of ` 9.49 crores, with a deferred tax liability of ` 2.39 crores relating to the hedging instruments, is included
in OCI. Comparatively, the cash flow hedges as at 31 March 2019 were assessed to be highly effective and an unrealised
gain of ` 9.87 crores, with a deferred tax liability of ` 3.45 crores was included in OCI in respect of these contracts. The
amounts retained in OCI at 31 March 2020 are expected to mature and affect the statement of profit and loss during the year
ended 31 March 2021.
31 March 2020
(` in crores)
Types of hedge and risks Nominal Carrying Maturity date Hedge Weighted average Changes in fair Change in the value
Value Amount of ratio* Strike Price/Rate value of hedging of hedged item
Hedging instrument used as the basis for
Instruments recognising hedge
effectiveness
Assets /
(Liabilities)
Cash flow hedge
Foreign exchange risk
(i) Foreign exchange AED:INR- 20.29
forward contracts- AUD:INR- 46.65
Assets April 2020 - EUR:INR- 90.25
342.60 22.67 1:1 (58.30) 58.30
December 2023 GBP:INR- 97.19
USD:INR- 73.84
(ii) Foreign exchange EUR:INR- 88.19
forward contracts- April 2020- GBP:INR- 94.13
193.46 (3.83) 1:1 (3.18) 3.18
Liabilities January 2022 USD:INR- 73.25
CNH:INR-10.73
(iii) Foreign Currency (182.89) 11.36 3 January 2023 1:1 USD:INR 66.39 11.18 (11.18)
Loan
Interest rate risk
Interest rate swap (297.77) (2.55) 3 January 2023 1:1 N/A (1.51) 1.51
295
Sterlite Technologies Limited
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
31 March 2019
(` in crores)
Types of hedge and risks Nominal Carrying Maturity date Hedge Weighted average Changes in fair Change in the value
Value Amount of ratio* Strike Price/Rate value of hedging of hedged item
Hedging instrument used as the basis for
Instruments recognising hedge
effectiveness
Assets /
(Liabilities)
Cash flow hedge
Foreign exchange risk
(i) Foreign exchange EUR:INR- 90.38
April 2019 -
forward contracts- 1,233.38 80.97 1:1 GBP:INR- 101.09 80.92 (80.92)
December 2023
Assets USD:INR- 70.29
(ii) Foreign exchange
April 2019- 1:1 EUR:INR- 79.04
forward contracts- (39.36) (0.65) 41.98 (41.98)
January 2021 USD:INR- 71.033
Liabilities
(iii) Foreign Currency (138.34) 0.18 3 January 2023 1:1 USD:INR 66.39 12.22 (12.22)
Loan
Interest rate risk
Interest rate swap (307.72) (1.04) 3 January 2023 1:1 N/A (2.35) 2.35
*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.
31 March 2020
(` in crores)
Type of hedge Change in the Value Hedge Amount reclassified Line item affected in statement
of hedging instrument ineffectiveness from cash flow hedging of profit and loss because of
recognised in other recognised in reserve to profit or loss the reclassification
comprehensive income profit or loss
Cash flow hedge
Foreign exchange risk (50.30) - (52.70) Revenue and COGS
Interest Risk (1.51) - - N/A
31 March 2019
(` in crores)
Change in the Value Hedge
Amount reclassified Line item affected in statement
of hedging instrument ineffectiveness
Type of hedge from cash flow hedging of profit and loss because of
recognised in other recognised in
reserve to profit or loss the reclassification
comprehensive income profit or loss
Cash flow hedge
Foreign exchange risk 135.12 - (21.66) Revenue and COGS
Interest Risk (2.35) - - N/A
The Group’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 Group 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 Group uses the hypothetical
derivative method to assess effectiveness.
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
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 18 for the details related to movement in cash flow hedging reserve.
The Group manages its capital structure and makes adjustments to it in light of changes in economic conditions and/or
the requirements of the financial covenants. To maintain or adjust the capital structure, the Group may adjust the dividend
payment to shareholders, return capital to shareholders or issue new shares. The Group monitors capital using a gearing
ratio, which is net debt divided by total capital plus net debt. The Group’s policy is to keep the gearing ratio optimum.
The Group includes within net debt, interest bearing loans and borrowings less cash and cash equivalents excluding
discontinued operations.
As at As at
Particulars 31 March 2020 31 March 2019
(` in crores) (` in crores)
Interest Bearing Loans and borrowings 2,447.56 2,067.12
Less: Cash and Cash equivalents & current investment* (468.64) (313.46)
Net debt 1,978.92 1,753.66
Equity share capital 80.79 80.51
Other equity 1,838.99 1,638.79
Total capital 1,919.78 1,719.30
Capital and net debt 3,898.70 3,472.96
Gearing ratio 50.76% 50.49%
*includes other bank balance of ` 86 crores (31 March 2019 : 70 crores) with respect to fixed deposit. These fixed deposits can be encashed by the Company
at any time without any major penalties.
In order to achieve this overall objective, the Group’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. No changes
were made in the objectives, policies or processes for managing capital during the years ended March 31, 2020 and
March 31, 2019.
297
Sterlite Technologies Limited
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
As at As at
Particulars 31 March 2020 31 March 2019
(` in crores) (` in crores)
Sterlite Technologies Limited
Cash dividends on equity shares declared and paid:
Final dividend for the year ended on 31 March 2020: ` 3.5 per share (31 March 2019: ` 2 per share) 141.09 80.30
Dividend Distribution Tax on final dividend 29.00 16.50
Jiangsu Sterlite and Tongguang Optical Fiber Co. Limited
Dividend declared and paid to non controlling interests - 17.02
170.09 113.82
Proposed dividends on Equity shares:
Final cash dividend for the year ended on 31 March 2020: ` 3.5 per share (31 March 2019: ` 3.5 per 141.35 140.86
share)
Dividend Distribution Tax on proposed dividend - 28.68
141.35 169.54
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 and 31 March 2019, the Group has paid dividend to its shareholders. This has
resulted in payment of Dividend Distribution Tax (DDT) to the taxation authorities. The Group believes that DDT represents
additional payment to taxation authority on behalf of the shareholders. Hence DDT paid is charged to equity.
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
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.
299
Sterlite Technologies Limited
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
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..
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.
The Group 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.
(` in crores)
Investments in Investments in Investments in
Particulars
Equity Shares of JV Debentures Preference share
As at 31 March 2019 0.26 22.60 -
Acquisitions 1.26 - 3.74
Changes in Fair value - - -
As at 31 March 2020 1.53 22.60 3.74
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
*There were no significant inter-relationships between unobservable inputs that materially affect fair values.
f) Valuation processes
The finance department of the Group 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 Group 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.
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 31 March 2020 and 31 March 2019 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.
301
Sterlite Technologies Limited
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
(b) Other related parties under IND AS-24 “Related party disclosures” with whom transactions have taken place
during the year
(i) Fellow Subsidiaries
Cairn India Holdings Ltd
Sterlite Power Transmission Limilted
Twin Star Technologies Limited
Sterlite Grid 1 Limited
Twin Star Display Technologies Limited
Vedanta Limited
Fujairah Gold FZE
(ii) Joint ventures
Sterlite Conduspar Industrial Ltda (58:42 joint venture between Sterlite Technologies UK Ventures Limited
and Conduspar Condutores Eletricos Limiteda)
Metis Eduventures Private Limited
(iii) 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)
Ms. Avaantika Kakkar (Non executive & Independent Director) (up to 22 May 2018)
Mr. Sandip Das (Non executive & Independent Director)
Mr. Pratik Agarwal (Non executive Director)
Ms. Kumud Srinivasan (Non executive & Independent Director) (from 22 May 2018)
(iv) Relative of key management personnel (KMP)
Mr. Ankit Agarwal
Mrs. Jyoti Agarwal
Mrs. Ruchira Agarwal
Mrs. Sonakshi Agarwal
Mr. Navin Agarwal
(v) Entities where key management personnel or relatives of key management personnel have significant
influence (EKMP)
Universal Floritech LLP (EKMP)
Sterlite Tech Foundation (EKMP)
(vi) Associates
M.B Maanshan Special Cables Co. Ltd
ASOCS
(c) 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)
& debentures
6 Corporate and bank guarantees given and - - - - - - - - 114.00 114.00
2.
outstanding
3. Financial Statements
303
Sterlite Technologies Limited
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
(C) Disclosure in respect of material related party transaction during the year:
(` in crores)
S. No. Particulars Relationship 31 March 2020 31 March 2019
1 Remuneration
Mr. Pravin Agarwal KMP 14.86 14.34
Dr. Anand Agarwal KMP 10.76 12.40
Mr. Anupam Jindal KMP 3.44 3.44
Mr. Ankit Agarwal Relative of KMP 3.84 3.60
2 Sitting Fees
Mr. Arun Todarwal KMP 0.13 0.09
Mr. A. R. Narayanaswamy KMP 0.09 0.07
Mr. Sandip Das KMP 0.11 0.07
Mr. Kumud Srinivasan KMP 0.08 0.03
3 Commission
Mr. Arun Todarwal KMP 0.23 0.15
Mr. A. R. Narayanaswamy KMP 0.23 0.15
Ms. Avaantika Kakkar KMP - 0.15
Ms. Kumud Srinivasan KMP 0.23 -
Mr. Sandip Das KMP 0.23 0.08
Mr. Pratik Agarwal KMP 0.23 0.15
4 Consultancy
Mr. Sandip Das KMP 0.55 0.45
5 Dividend (received) / paid
Twin Star Overseas Limited Holding Company 73.29 41.88
6 Investment during the year
Metis Eduventures Private Limited Joint Venture 5.01 5.00
ASOCS Associate 59.97 -
7 Loans and advances given
Twinstar Display Technologies Limited. Fellow Subsidiary 0.21 3.44
Twin Star Technologies Ltd Fellow Subsidiary 0.09 0.15
Sterlite Power Transmission Limited. Fellow Subsidiary - 2.52
Sterlite Conduspar Industrial Ltda Joint Venture 0.39 0.11
8 Repayment of loans
Sterlite Power Transmission Limited Fellow Subsidiary - 2.78
Sterlite Grid 1 Limited Fellow Subsidiary - 0.25
Twinstar Display Technologies Limited Fellow Subsidiary 29.07 0.24
9 Loan taken
Sterlite Power Transmission Limited Fellow Subsidiary 4.05 7.50
10 Loan repaid
Sterlite Power Transmission Limited Fellow Subsidiary 5.59 -
11 Interest charged on loans
Twin Star Display Technologies Limited Fellow Subsidiary - 2.11
Twin Star Technologies Ltd Fellow Subsidiary - 0.70
12 Interest payable on loans
Sterlite Power Transmission Limited Fellow Subsidiary 0.57 0.70
13 Management fees received
Cairn India Holdings Ltd Fellow Subsidiary 10.74 13.24**
14 Reimbursement of expenses
Cairn India Holdings Ltd Fellow Subsidiary 3.10 -
15 Management fees paid
Vedanta Limited Fellow Subsidiary - 0.52
16 Purchase of goods & services
Vedanta Limited Fellow Subsidiary 0.01 0.79
Fujairah Gold FZE Fellow Subsidiary 2.18 4.52
Sterlite Power Transmission Limited Fellow Subsidiary 0.23 1.91
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
(` in crores)
S. No. Particulars Relationship 31 March 2020 31 March 2019
17 Purchase of fixed asset
Sterlite Power Transmission Limited Fellow Subsidiary 0.42 -
18 Sale of goods & services
Sterlite Conduspar Industrial Ltda Joint Venture 19.27 14.18
M.B Maanshan Special Cables Co. Ltd Associates 13.86 8.17
Sterlite Power Transmission Limited Fellow Subsidiary 9.65 18.86
19 Contributions made for CSR
Sterlite Tech Foundation EKMP 8.10 5.22
20 Rental income
Universal Floritech LLP EKMP 0.06 0.06
**The amount is gross of the expenses incurred towards provision of these services.
# #Includes interest & expenses incurred and recoverable.
* Share-based payments includes the perquisite value of stock incentives exercised during the year, determined in accordance with the provisions of the
Income-tax Act, 1961.
305
Sterlite Technologies Limited
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
As per paragraph 39 of Ind AS 28, the group has not recongnised the share of loss of joint venture, as the equity investment
in joint venture is reduced to zero. The group will resume recognising its share of profits in the joint venture only after its
share of the profits equals the share of losses not recognised.
The group had no contingent liabilities or capital commitments relating to its interest in joint venture as at 31 March 2020
and 31 March 2019. \
Financial information of subsidiaries that have material non-controlling interests is provided below:
Summarised statement of profit and loss for the year ended 31 March 2020:
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
307
Note 54: Statutory Group Information
308
Net Assets, i.e total assets minus Share in total comprehensive Share in total comprehensive
Share in profit and loss
total liabilities income income
As % of
Notes
Name of the Entity in the group As % of As % of consolidated As % of total
consolidated net INR Crores consolidated INR Crores other INR Crores comprehensive INR Crores
assets profit and loss comprehensive income
income
Parent
Sterlite Technologies Limited
309
Net Assets, i.e total assets minus Share in total comprehensive Share in total comprehensive
310
Share in profit and loss
total liabilities income income
As % of
Name of the Entity in the group As % of As % of consolidated As % of total
consolidated net INR Crores consolidated INR Crores other INR Crores comprehensive INR Crores
Notes
assets profit and loss comprehensive income
income
14. Share of Profit/(Loss) of Joint Venture
Balance as at 31 March 2020 - - - - - - - -
Sterlite Technologies Limited
All eliminations and adjustments are netted off against balances of parent company for disclosure purpose
Associate company is not considered for consolidation as the operations of the associate company is insignificant for the Group.
Joint Venture with Metis Eduventures Private Limited is not considered for consolidation as the same is accounted as per Ind AS 109 (Refer note 2s(ii))
to the Consolidated Financial Statements for the year ended March 31, 2020
1. 2. 3. Financial Statements
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
01 April 2018
Particulars Notes
(` in crores)
Balances in retained earnings 875.61
Less: Adjustment on account of revenue recognition as per Ind AS 115 (i) (19.54)
Add: Increase in Deferred Tax Assets (i) 6.83
Balances in retained earnings after restatement 862.90
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 separate 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. I mpact 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 project. 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 satisfies 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 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.
311
Sterlite Technologies Limited
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
Equity
Other Equity 1,641.96 (3.17) 1,638.79
Total Equity 1,722.47 (3.17) 1,719.30
Non-current liabilities
Provisions 24.31 (23.30) 1.01
Deferred tax liabilities (net) 76.09 (1.70) 74.39
Current liabilities
Trade payables 1,872.42 40.33 1,912.75
Contract liabilities - 270.36 270.36
Provisions 28.49 (17.03) 11.46
Other current liabilities 426.95 (345.18) 81.77
- 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 project contracts. It also includes advance received
from customers.
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
The group has adopted Ind AS 116 retrospectively from 01 April 2019, but has not restated comparatives for the year ended
March 31, 2019 reporting period, as permitted under the specific transitional provisions in the standard. The reclassifications
and the adjustments arising from the new leasing rules are therefore recognised in the opening balance sheet on
01 April 2019.
The new accounting policies are disclosed in note 2.
01 April 2019
Particulars
(` in crores)
Balances in retained earnings 1,323.75
Less: Adjustment on account of leases as per IND AS 116 (net of tax of ` 4.19 crores) (11.83)
Balances in retained earnings after adjustment 1,311.92
Particulars Amount
Building 59.09
Plant and machinery 49.18
Right of use assets recognised as at 1 April 2019 108.27
313
Sterlite Technologies Limited
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
- the use of a single discount rate to a portfolio of leases with reasonably similar characteristics
- the accounting for operating leases with a remaining lease term of less than 12 months as at 1 April 2019 as
short-term leases
- the exclusion of initial direct costs for the measurement of the right-of-use asset at the date of initial application, and
- the use of hindsight in determining the lease term where the contract contains options to extend or terminate the lease.
- relying on the assessment of whether leases are onerous as an alternative to performing an impairment review. There
were no onerous contracts as at April 01, 2019.
The group has also elected not to reassess whether a contract is, or contains a lease at the date of initial application.
Instead, for contracts entered into before the transition date the group relied on its assessment made applying Ind AS 17
and Appendix 4 Determining whether an Arrangement contains a Lease.
Geographical Information
Non-current assets for this purpose consist of property, plant and equipment, capital work in progress, investment
properties and intangible assets including Goodwill.
Further, previous year figures have been reclassified to conform to this year’s classification.
As per our report of even date For and on behalf of the board of directors of Sterlite Technologies Limited
For Price Waterhouse Chartered Accountants LLP Pravin Agarwal Anand Agarwal
Firm Registration No: 012754N/N500016 Vice Chairman & Whole-time Director CEO & Whole-time Director
DIN: 00022096 DIN: 00057364
Neeraj Sharma Anupam Jindal Amit Deshpande
Partner Chief Financial Officer Company Secretary
Membership Number: 108391
1 Speedon Network Limited India INR NA 1.55 1.96 31.46 34.97 0.02 14.19 (7.22) - (7.22) - 100.00
2 Sterlite Telesystems Limited India INR NA 0.02 (0.17) 0.18 0.03 - - (0.03) - (0.03) - 100.00
3 Elitecore Technologies (Mauritius) Mauritius MUR 1.91 0.14 0.52 0.15 0.81 - 1.36 0.14 0.02 0.12 - 100.00
Limited
4 Elitecore Technologies Sdn Bhd. Malaysia MYR 17.45 - 3.29 3.67 6.96 - 9.95 1.69 0.38 1.31 - 100.00
5 Sterlite Global Ventures Mauritius US$ 75.33 186.74 55.18 0.42 242.34 238.97 - (0.30) - (0.30) - 100.00
(Mauritius) Limited
6 Maharashtra Transmission India INR NA 30.70 (21.14) 100.41 109.97 - 6.24 (8.28) - (8.28) - 51.73%
Communication Infrastructure
Limited*
7 Jiangsu Sterlite Tongguang Fiber China RMB 10.62 154.52 197.93 211.64 564.09 - 277.33 (39.91) (9.85) (30.06) - 75.00
Co. Limited
8 Sterlite Technologies UK Ventures UK GBP 93.55 0.04 (1.99) 24.43 22.48 19.14 - (0.68) - (0.68) - 100.00
Limited
9 Sterlite Tech Holding Inc. America US$ 75.33 - (1.40) 17.33 15.93 - - (0.86) - (0.86) - 100.00
10 Sterlite Technologies Inc America US$ 75.33 - (13.97) 19.24 5.27 - 3.61 (11.47) 0.03 (11.50) - 100.00
11 Sterlite Conduspar Industrial Ltda Brazil Real 14.47 19.14 (28.33) 46.87 37.68 - 67.89 (6.99) - (6.99) - 58.05
12 Sterlite (Shanghai) Trading Co. China RMB 10.62 1.53 (3.53) 1.40 (0.60) - 3.55 (3.01) 0.01 (3.02) - 100.00
Limited
13 Sterlite Tech S.P.A. Italy EUR 83.09 40.22 (31.27) 367.20 376.15 368.71 - (11.84) (2.99) (8.85) - 100.00
14 Sterlite Innovative Solutions India INR NA 0.05 (0.05) 0.03 0.03 - - (0.02) - (0.02) - 100.00
Limited
15 Sterlite Tech Connectivity India INR NA 0.05 (0.02) 0.01 0.04 - - (0.01) - (0.01) - 100.00
Solutions Limited
to the Consolidated Financial Statements for the year ended March 31, 2020
16 Sterlite Tech Cables Solutions India INR NA 0.05 (0.01) 4.21 4.25 - - (0.01) - (0.01) - 100.00
1.
Limited
17 Impact Data Solutions Limited & UK GBP 93.55 0.02 23.80 43.08 66.90 - 47.20 4.69 0.59 4.10 - 80.00
2.
Subsidiary
18 Vulcan Data Centre Solutions UK GBP 93.55 - 2.72 0.04 2.76 0.01 1.30 0.88 0.61 0.27 - 80.00
Limited
19 Metallurgica Bresciana S.P.A. Italy EUR 79.98 56.18 237.91 196.00 490.09 12.47 398.56 37.61 9.12 28.49 - 100.00
* The figures for this company have not been consolidated as it has been classified as ‘Asset held-for-sale’ under IndAS
3. Financial Statements
315
Sterlite Technologies Limited
Notes
to the Consolidated Financial Statements for the year ended March 31, 2020
1. Names of associate or joint ventures which are yet to commence operations :- Nil
2. Names of associate or joint ventures which have been liquidated or sold during the year :- Nil
Place: Pune
Date: May 12, 2020
Imprints
Editorial Risk Management Financials
Manish Sinha, Vinay Rawat, Namrata Dokewar, Manish Bhansali Navin Sharma, Yogesh Deshpande
Amrit Mohanty, Rahul Arora
Corporate Social Responsibility Project Sponsors
Brand & Sustainability Dr. Anand Agarwal, Anupam Jindal
Amit Jaurwal, Alok Chandar, Manish Sinha Akanksha Sharma, E K Kishanchand,
Louette Pai, Umesh Dharmendra With Inputs From
Project Management Gaurav Basra, Vishal Aggarwal
Shweta Mali, Vinay Rawat Business Responsibility Report
Akanksha Sharma, Louette Pai,
Management Discussion and Analysis Umesh Dharmendra
Vishal Aggarwal, Maitreya Yadav,
Sreedher G, Vijay Agashe Directors’ Report and Corporate
Governance Report
Financial Discussion and Anaysis Amit Deshpande, Mrunal Dixit, Palash Mutha,
Yogesh Deshpande Rohit Kulkarni, Sangeet Hunjan
Sterlite Technologies Limited
Godrej Millenium 9, Koregaon Road, Pune - 411 001 Maharashtra, India
Phone +91 20 30514000 Email: stl.communications@sterlite.com
www.sterlitetech.com
Notice
NOTICE
NOTICE is hereby given that the Twenty First Annual with effect from October 30, 2020 on the terms and
General Meeting (“AGM”) of the members of Sterlite conditions including remuneration, as contained in the
Technologies Limited will be held on Monday, August draft of the Agreement to be entered into between
31, 2020 at 3.00 P.M. (IST) through Video Conferencing the Company and Mr. Pravin Agarwal, material terms
(“VC”) / Other Audio Visual Means (“OAVM”) to transact the of which are set out in the explanatory statement
following businesses: attached hereto, with liberty to the Board of Directors
(hereinafter referred to as “the Board”, which term shall
ORDINARY BUSINESS: include the Nomination and Remuneration Committee
1. a) To receive, consider and adopt the Audited of the Board constituted for the purpose) to alter and
Standalone Financial Statements of the Company vary from time to time, the terms and conditions of
for the financial year ended March 31, 2020 and the said re-appointment and/or remuneration as it
the reports of the Board of Directors and the may deem fit and as may be acceptable to Mr. Pravin
Auditors thereon. Agarwal, subject to the same not exceeding the
applicable limits as specified in Section 197 read with
b) To receive, consider and adopt the Audited Schedule V of the Act or any statutory modification(s) or
Consolidated Financial Statements of the re-enactment thereto.
Company for the financial year ended March 31,
2020 and the Report of the Auditors thereon. RESOLVED FURTHER THAT, the Board be and is
hereby authorised to do all acts and take all such steps
2. To declare Dividend of ` 3.50/- per Equity Share for the as may be necessary, proper or expedient to give effect
financial year ended March 31, 2020. to this resolution.”
3. To appoint a Director in place of Mr. Pratik Agarwal 5. Re-Appointment of Dr. Anand Agarwal as a Whole-
(DIN 03040062), who retires by rotation and being time Director of the Company
eligible, offers himself for re-appointment.
To consider and if thought fit, to pass with or
SPECIAL BUSINESS : without modification(s), the following resolution as a
4. Re-Appointment of Mr. Pravin Agarwal as a Whole-time Special Resolution:
Director of the Company
“RESOLVED THAT pursuant to the provisions of
To consider and if thought fit, to pass with or Sections 196, 197 and other applicable provisions of
without modification(s), the following resolution as a the Companies Act, 2013, rules, circulars, orders and
Special Resolution: notifications issued thereunder (including any statutory
modification(s) or re-enactment thereof for the time
“RESOLVED THAT pursuant to the provisions of being in force), read with Schedule V of the Companies
Sections 196, 197 and other applicable provisions of Act, 2013, approval of the members of the Company
the Companies Act, 2013, rules, circulars, orders and be and is hereby accorded to the re-appointment
notifications issued thereunder (including any statutory of Dr. Anand Agarwal (DIN 00057364) as a Whole-
modification(s) or re-enactment thereof for the time time Director of the Company for a period of 5 (five)
being in force), read with Schedule V of the Companies years with effect from July 30, 2020 on the terms and
Act, 2013, approval of the members of the Company conditions including remuneration, as contained in the
be and is hereby accorded to the re-appointment of draft of the Agreement to be entered into between
Mr. Pravin Agarwal (DIN 00022096) as a Whole-time the Company and Dr. Anand Agarwal, material terms
Director of the Company for a period of 5 (five) years of which are set out in the explanatory statement
1
attached hereto, with liberty to the Board of Directors Companies Act, 2013 read with Rule 14 of Companies
(hereinafter referred to as “the Board”, which term shall (Audit and Auditors) Rules, 2014 [including any
include the Nomination and Remuneration Committee statutory modification(s) or re-enactment thereof, for
of the Board constituted for the purpose) to alter and the time being in force], approval of the Company be
vary from time to time, the terms and conditions of and is hereby accorded to payment of remuneration of
the said re-appointment and/or remuneration as it ` 1,00,000/- plus applicable taxes, and reimbursement
may deem fit and as may be acceptable to Dr. Anand of actual travel and out-of-pocket expenses, if any, to
Agarwal, subject to the same not exceeding the Mr. Kiran Naik, Cost Accountant (Registration Number
applicable limits as specified in Section 197 read with 10927) for conducting the audit of the cost records of
Schedule V of the Act or any statutory modification(s) or the Company for the Financial Year 2020-21.
re-enactment thereto.
RESOLVED FURTHER THAT the Board of Directors of
ESOLVED FURTHER THAT the Board be and is
R the Company and/or the Audit Committee be and is
hereby authorised to do all acts and take all such steps hereby authorized to do all acts and take all such steps
as may be necessary, proper or expedient to give effect as may be necessary, proper or expedient to give effect
to this resolution.” to this resolution.”
5. In compliance with the aforesaid circulars, the Notice In order to receive dividend/s in a timely manner,
of the AGM and Annual Report are being sent only Members are requested to register / update their
through electronic mode to the Members whose complete bank details:
e-mail addresses are registered with the Company or
the Depository Participant(s). The Notice and Annual a) with their Depository Participant(s) with whom they
Report 2019-20 will also be available on the Company’s maintain their demat accounts if shares are held in
website www.stl.tech, websites of the Stock Exchanges dematerialised mode by submitting the requisite
i.e. BSE Limited and National Stock Exchange of India documents, and
Limited at www.bseindia.com and www.nseindia.com
respectively, and on the website of KFIN at b)
with KFIN, if shares are held in physical mode, by
https://evoting.karvy.com submitting (i) scanned copy of the signed request
letter which shall contain shareholder’s name,
6. Shareholders who have not registered their e-mail folio number, bank details (Bank account number,
address or registered an incorrect email address and as Bank and Branch Name and address, IFSC, MICR
a consequence Notice of the AGM and Annual Report details), (ii) self-attested copy of the PAN card and
could not be serviced, may also temporarily get their (iii) cancelled cheque leaf.
email address and mobile number registered at the link
provided by KFIN, by clicking the link: 10. Pursuant
to Finance Act, 2020, dividend income will
https://ris.kfintech.com/email_registration/ and then be taxable in the hands of the shareholders w.e.f. April
send the same. Alternatively, member may send signed 1, 2020 and the Company is required to deduct tax
copy of the request letter providing the e-mail address, at source (“TDS”) from dividend paid to the Members
mobile number, self-attested PAN copy along with client at prescribed rates in the Income Tax Act, 1961 (“the
master copy (in case of electronic folio)/copy of share IT Act”). In general, to enable compliance with TDS
certificate (in case of physical folio) via e-mail at the requirements, Members are requested to complete
and / or update their Residential Status, PAN, Category
e-mail id einward.ris@kfintech.com for obtaining the as per the IT Act with their Depository Participants
Notice of the AGM and Annual Report by email. or on the portal of KFIN, which can be accessed at
https://ris.kfintech.com/form15/emailregister.aspx?q=0.
7. The Register of Members and Share Transfer Books will For details, Members may refer to the “Communication
remain closed from Saturday, August 29, 2020 on TDS on Dividend Distribution” being sent with this
to Monday, August 31, 2020 (both days inclusive) Notice of AGM.
for determining the names of members eligible for
dividend on Equity Shares, if declared at the Meeting. 11. Members
holding shares in dematerialized form are
requested to intimate all changes pertaining to their
8. If Dividend on Equity Shares as recommended by the bank details, NECS, ECS mandates, power of attorney,
Board of Directors for the financial year ended March 31, change of address/name/email address(es), etc. to their
2020 is approved at the AGM, payment of such dividend Depository Participant only and not to the Company’s
will be made within a period of 30 days from the date of Registrar and Share Transfer Agent. Changes intimated
declaration as under – to the Depository Participant will automatically get
reflected in the beneficiary details with the respective
a) To all Beneficial Owners in respect of shares held depositories which will help the Company and its
in dematerialized form as per the data as may Registrar and Share Transfer Agent to provide efficient
be made available by the National Securities and better service to the Members. Members holding
Depository Limited and the Central Depository shares in physical form are requested to advice such
Services (India) Limited as of the close of business changes, if any, to KFIN.
hours on Friday, August 28, 2020.
12. MCA
and SEBI has mandated that securities of listed
b) To all Members in respect of shares held in physical companies can be transferred only in dematerialised
form after giving effect to requests received for form w.e.f. April 1, 2019. Accordingly, the Company /
transmission, deletion of the name of the deceased KFIN has stopped accepting any fresh lodgement of
etc, if lodged with the Company on or before the transfer of shares in physical form. Members holding
close of business hours on Friday, August 28, 2020. shares in physical form are advised to avail of the
facility of dematerialization by contacting a Depository
9. Payment of dividend shall be made through electronic Participant of their choice.
mode to the Members who have updated their bank
account details. However, dividend warrants / demand 13. The
members who are interested availing nomination
drafts will be despatched to the registered address of the facility may obtain the necessary application from KFIN.
members who have not updated their bank account
details, at the earliest once the normalcy is restored.
3
14. SEBI
has mandated the submission of Permanent Members whose shares have been transferred to
Account Number (PAN) by every participant in IEPF may claim the shares by making an application
securities market. SEBI has also emphasized the need in Form IEPF-5. Detailed procedure and the required
to make payment of dividend through e-payment documentation for claiming the shares/dividend refund
and made it mandatory to print Bank Account details can be accessed at www.iepf.gov.in.
on Dividend Warrant. In view of the same, Members
holding shares in electronic form are requested to 17. An
Explanatory Statement pursuant to Section 102
submit their PAN and Bank Account details to their (1) of the Act relating to the Special Businesses to be
Depository Participants with whom they are maintaining transacted at the meeting is annexed hereto.
their demat accounts. Members holding shares in
physical form can submit their PAN to KFIN. 18. As required under Securities and Exchange Board of
India (Listing Obligations and Disclosure Requirements)
15. Non-Resident
Indian Members are requested to inform Regulations, 2015 (“the SEBI Listing Regulations”), and
KFIN, immediately of: Secretarial Standard 2 on General Meetings, details
in respect of Directors seeking re-appointment at the
a) Change in their residential status on return to India AGM, are separately annexed hereto.
for permanent settlement.
19. All
documents referred to in the above Notice and
b) Particulars
of their bank account maintained in Explanatory Statement will be available electronically
India with complete name, branch, account type, for inspection for Members on all working days (except
account number and address of the bank with pin Saturdays, Sundays and Holidays) up to the date of
code number, if not furnished earlier. announcement of the voting results. Members seeking
to inspect such documents can send an e-mail to
16. Members are requested to note that dividends not secretarial@sterlite.com.
encashed or remaining unclaimed for a period of
7 years from the date of transfer to the Company’s 20. Since the AGM being held through VC/OAVM, the
Unpaid Dividend Account shall be transferred to Route Map, Attendance Slip and proxy form are not
Investor Education and Protection Fund (“IEPF”) of the attached to this Notice.
Central Government, established under Section 125 of
the Companies Act, 2013 (the “Act”). Further, pursuant By order of the Board of Directors of
to the provisions of Section 124 of the Act and IEPF Sterlite Technologies Limited
Rules, all the shares on which dividend has not been
paid or claimed for seven consecutive years or more Date: May 12, 2020 Amit Deshpande
shall be transferred to IEPF Authority. Place: Pune Company Secretary &
Corporate General Counsel
The Company has transferred the unpaid or unclaimed
dividends declared up to financial years 2011-12,
from time to time to IEPF. The Company has been
sending reminders to Members before transfer of such
dividend(s) to IEPF.
Name of the Director Dr. Anand Agarwal Mr. Pravin Agarwal Mr. Pratik Agarwal
DIN 00057364 00022096 03040062
Date of Birth 07-Aug-1967 16-Oct-1954 02-Dec-1982
Date of first appointment 30-July-2003 29-Jan-2004 26-Apr-2013
on the Board
Experience (including Dr. Anand Agarwal has been Mr. Pravin Agarwal is the Vice Mr. Pratik Agarwal is a Non-executive
expertise in specific the CEO of the Company since Chairman and Whole-time Director, Director of the Company and is the
functional area)/Brief 2003. Under his leadership, and the Non-Executive Chairman of Managing Director of Sterlite Power
Resume the Company has grown from a Sterlite Power Transmission Limited. Transmission Limited. A Wharton
leading provider of optical fibre He has been closely involved with graduate and an MBA from London
to a builder of digital networks Sterlite Group’s operations in India Business School, he has over 10 years of
globally through integrated end- since its inception in 1979. H has experience in building core infrastructure
to-end data network solutions. A been the driving force behind the assets in India. He is the chairman of CII
PhD in Materials Engineering from expansion of Sterlite Group’s telecom core committee on Transmission, and
Rensselaer Polytechnic Institute and power businesses into multiple also in the Advisory Board of India Brazil
and BTech from IIT Kanpur, he is a markets and the company’s continued Chamber of Commerce (IBCC).
hands-on technologist on advanced growth momentum. He is an astute
photonics and programmable businessman and a leader with almost
networks. He was honoured with four decades of experience.
the prestigious ‘“Pathbreaker of
the Year” in 2019 at the Telecom
Leadership Forum for transforming
India’s digital infrastructure.
Remuneration last ` 801.5 Lacs plus INR 275 Lacs ` 1,192.84 Lacs plus INR 293 Lacs Commission of ` 22.50 Lacs and sitting
drawn incentive incentive fees at ` 75,000 for each Board meeting
attended
Remuneration As per Item No. 5 of the Notice of As per Item No. 4 of the Notice of Commission of ` 22.50 lacs for
proposed to be paid ** this meeting read with explanatory this meeting read with explanatory FY 2019-20
statement thereto. statement thereto.
Terms and Conditions As per Item No.5 of the Notice of As per Item No.4 of the Notice of As per Item No 3 of the Notice of this
of Appointment/Re- this meeting read with explanatory this meeting read with explanatory meeting, he is proposed to be re-
appointment statement, he is proposed to be statement, he is proposed to be re- appointed as director liable to retire by
re-appointed as Whole-time Director appointed as Whole-time Director of the rotation
of the Company for a period of 5 Company for a period of 5 (five) years
(five) years commencing from July commencing from October 30, 2020
30, 2020
Directorships in other 1. Twin Star Technologies Limited 1. Twin Star Technologies Limited 1. Sterlite Investment Managers Limited
Companies (excluding 2. Twin
Star Display Technologies 2. Sterlite Power Grid Ventures Limited 2. Sterlite Power Grid Ventures Limited
Foreign Companies) Limited 3. Sterlite Power Transmission Limited 3. Sterlite Power Transmission Limited
4. Twin Star Display Technologies
Limited
Memberships / Nil 1. Sterlite Power Transmission 1. Sterlite Power Grid Ventures Limited-
Chairmanships of other Limited- Member of Audit, Member of Audit, Nomination and
companies Allotment, CSR Committee Remuneration, CSR, Allotment,
Stakeholder Relationship Banking and Authorization Committee
Committee & Chairperson of 2. Sterlite Power Transmission Limited-
Banking and Authorization Member of CSR, Allotment, Banking
Committee. and Authorization, Risk Management
2. Sterlite Power Grid Ventures Committee
Limited – Chairperson of Banking 3. Sterlite Investment Managers Limited
& Authorization Committee and Member of Stakeholder Relationship,
Allotment Committee Audit, Nomination and Remuneration,
Allotment, Risk Management and
Investment Committee.
No. of shares held in 11,06,990 11,86,750 1,18,340
the Company
Relationship with Nil Brother of Mr. Anil Agarwal, Non- Son of Mr. Pravin Agarwal, Vice Chairman
other Directors/KMPs executive Chairman and Father of Mr. & Whole-time Director
Pratik Agarwal, Non-executive Director
No. of Board Meetings 06 06 01
attended during the year
**Excluding sitting fees for attending meetings
The total remuneration shall be restricted to the limits
as prescribed in Section 197 read with Schedule V of
the Companies Act, 2013.
3.
Reimbursement of expenses incurred for d. order to comply with the provision of Section
In
travelling, boarding and lodging including for 152 regarding number of Directors liable to retire
spouse and attendant(s) during business trip(s), by rotation, Mr. Pravin Agarwal will be considered
provision of car for use on the Company’s to be liable to retire by rotation.
e. The Whole-time Director will perform his duties above and Key Managerial Personnel of the Company
as such with regard to all work of the Company and their relatives are concerned or interested,
and he will manage and attend to such business financially or otherwise, in the proposed Special
and carry out the orders and directions given by Resolution as set out in Item No. 4 of this Notice.
the Board from time to time in all respects and
conform to and comply with all such directions and ITEM 5
regulations as may from time to time be given and It is proposed to re-appoint Dr. Anand Agarwal as Whole-
made by the Board. time Director, designated as Chief Executive Officer of
the Company, for a period of 5 (five) years. His current
f. The Whole-time Director shall act in accordance appointment as a Whole-time Director of the Company
with the Articles of Association of the Company was upto July 29, 2020. The Board of Directors at its
and shall abide by the provisions contained Meeting held on May 12, 2020 has, subject to the approval
in Section 166 of the Act with regard to of members, re-appointed Dr. Anand Agarwal as Whole-
duties of Directors. time Director of the Company for a period of 5 (five) years
commencing from July 30, 2020 in accordance with the
g. The Whole-time Director shall adhere to the provisions of Sections 196, 197 and 203 and Schedule V of
Company’s Code of Business Conduct & Ethics for the Act. The Act also requires approval of the members of
Directors and Management Personnel. the Company for the said appointment and remuneration.
7
4. is clarified that employees stock options granted
It by rotation, Dr. Anand Agarwal will be considered
/ to be granted to Dr. Anand Agarwal, from time to be liable to retire by rotation.
to time, shall not be considered as a part of
perquisites given above, and that the perquisite e.
The Whole-time Director will perform his duties
value of stock options exercised shall be in as such with regard to all work of the Company
addition to the remuneration above. and he will manage and attend to such business
and carry out the orders and directions given by
5. Anand Agarwal will be entitled to a
Dr. the Board from time to time in all respects and
performance based incentive as may be conform to and comply with all such directions and
recommended by the NRC and approved by the regulations as may from time to time be given and
Board of Directors every financial year. made by the Board.
6.
Company’s contribution to Provident Fund, f.
The Whole-time Director shall act in accordance
Superannuation or annuity Fund, Gratuity and with the Articles of Association of the Company
Encashment of Leave as per the rules of the and shall abide by the provisions contained
Company shall be in addition to the remuneration in Section 166 of the Act with regard to
mentioned above. duties of Directors.
In the event of loss or inadequacy of profits, the view of the provisions of Sections 196, 197, 203 read
In
aforesaid remuneration will be paid as minimum with Schedule V and any other applicable provisions
remuneration in accordance with provisions of of the Companies Act, 2013, the Board recommends
Schedule V of the Companies Act, 2013 and subject to the Special Resolution set out at item no. 5 of the
applicable laws and such sanctions and approvals as accompanying Notice for the approval of the Members.
may be required.
Except for Dr. Anand Agarwal, being an appointee,
Other Terms none of the Directors and Key Managerial Personnel
a.
The Whole-time Director shall be entitled to of the Company and their relatives are concerned
compensation for loss of office as provided in or interested, financially or otherwise, in the
Section 202 of the Companies Act, 2013. proposed Special Resolution as set out in Item No. 5
of this Notice.
b. sitting fees shall be paid to the Whole-time
No
Director for attending meetings of the Board of ITEM 6
Directors or any Committee of the Board. The Registered Office of your Company is presently
situated in the State of Maharashtra within the jurisdiction of
c.
The contract of appointment of Dr. Anand Agarwal Registrar of Companies, Mumbai. For ease of administration
is terminable by either the Board of Directors or and cost effectiveness, it is proposed by the Board of
by Dr. Anand Agarwal giving to the other 90 days Directors at their meeting held on May 12, 2020 to shift
notice in writing. registered office of the Company from E1, MIDC Industrial
Area Waluj Aurangabad, Aurangabad 431136 Maharashtra,
d. In order to comply with the provision of Section India, located within the State of Maharashtra, under the
152 regarding number of Directors liable to retire jurisdiction of Registrar of Companies, Mumbai (ROC
Mumbai) to 4th Floor, Godrej Millennium, Koregaon Road 9, In terms of the provisions of 13 of the Companies Act 2013
STS 12/1, Pune- 411001, (belonging to and owned by Sterlite read with Rule 28 of the Companies (Incorporation) Rules,
Technologies Limited) located in the State of Maharashtra 2014, shifting of the Registered Office from the jurisdiction
under the jurisdiction of Registrar of Companies, Pune (ROC of ROC Mumbai to the jurisdiction of ROC Pune, requires
Pune) subject to approval of members of the Company and the approval of Members by way of Special Resolution and
Regional Director, Ministry of Corporate Affairs, Government Regional Director, Ministry of Corporate Affairs, Government
of India, Western Region, Mumbai. The proposed shifting of India, Western Region, Mumbai.
would enable to bring operational synergies and aid
the management in running the business operations The Board of Directors recommends the approval of the
more effectively. Special Resolution.
Following are the additional disclosures under section 102 of the Companies Act, 2013.
Particulars Remarks
i) To specify the nature of concern or interest, financial or otherwise None of the Directors, Key Managerial Personnel of the Company and
of every director and the manager and of every other key their relatives are concerned, interested, financially or otherwise, in the
managerial personnel and relatives of the said persons. aforesaid resolution.
ii) specify any other information and facts that may enable the
To As detailed above.
members to understand the meaning scope and implications of the
items of business and to take a decision thereon.
iii) Where
any item of Special Business to be transacted at the Not Applicable
meeting relates to or affects any other Company, the extent of
shareholding interest in that other Company of every promoter
director, manager and of every other key managerial personnel Necessary documents are available electronically for inspection
of the first mentioned Company also to be set out in explanatory for Members on all working days (except Saturdays, Sundays and
statement if such shareholding is not less than two percent of the Holidays) up to the date of announcement of the voting results.
paid-up share capital of that Company. Members seeking to inspect such documents can send an e-mail to
iv) Where
any document is referred to any Business, specification of secretarial@sterlite.com.
time and place for inspection of such document.
9
module shall be forthwith disabled by KFIN upon expiry (Insta Poll) and votes cast through remote e-voting,
of the aforesaid period. make a consolidated Scrutiniser’s Report and submit
the same to the Chairman or a person authorized by
iv. The voting rights of the Members shall be in proportion him. The result of e-voting will be declared within forty-
to the paid-up value of their shares in the equity capital eight hours of the conclusion of the AGM and the same,
of the Company as on the cut-off date being Monday, along with the consolidated Scrutiniser’s Report, will be
August 24, 2020. A person, whose name is recorded in placed on the website of the Company: www.stl.tech
the register of members or in the register of beneficial and on the website of KFIN at:
owners maintained by the depositories as on the cut-off https://evoting.karvy. com. The result will simultaneously
date, i.e. August 24, 2020 only shall be entitled to avail be communicated to the stock exchanges.
the facility of remote e-voting / e-voting during the
meeting. viii. The
resolutions will be deemed to be passed on the
AGM date subject to receipt of the requisite numbers of
v. Any person who becomes a member of the Company votes in favour of the Resolutions.
after despatch of the Notice of the Meeting and holding
shares as on the cut-off date may obtain the User ID and INFORMATION AND INSTRUCTIONS FOR
password from KFIN in the manner as mentioned below: REMOTE E-VOTING:
I. (A) In case a member receives an e-mail from
a) If the mobile number of the member is registered the Company / KFin [for members whose
against Folio No. / DP ID Client ID, the member may e-mail addresses are registered with the
Company / Depository Participant(s)]:
send SMS: MYEPWD <space> E-Voting Event
Number+Folio No. or DP ID Client a) Launch internet browser by typing the URL:
https://evoting.karvy.com
ID to 9212993399
Example for NSDL: b) Enter the login credentials (User ID and
MYEPWD<SPACE>IN12345612345678 password given in the e-mail). The E-Voting
Event Number+Folio No. or DP ID Client ID will
Example for CDSL:
be your User ID. However, if you are already
MYEPWD<SPACE>1402345612345678 Example registered with KFin for e-voting, you can use
for Physical: the existing password for logging in. If
required, please visit
MYEPWD<SPACE>XXXX1234567890
https://evoting.karvy. com or contact toll-free
numbers / 1800-345-4001 (from 9:00 a.m. to
b) If e-mail address or mobile number of the member
6:00 p.m.) for your existing password.
is registered against Folio No. / DP ID Client ID,
then on the home page of
c) After entering these details appropriately, click
https://evoting.karvy. com, the member may click
on “LOGIN”.
‘Forgot Password’ and enter Folio No. or DP ID
Client ID and PAN to generate a password.
d) You will now reach Password Change Menu
wherein you are required to mandatorily
c) Member may call on KFIN’s toll-free numbers /
change your password upon logging-in
1800-345-4001 (from 9:00 a.m. to 6:00 p.m.)
for the first time. The new password shall
comprise minimum 8 characters with at least
d) Member may send an e-mail request to
one upper case (A-Z), one lower case (a-z), one
evoting@karvy.com/einward.ris@kfintech.com
numeric (0-9) and a special character (@,#,
$,etc.). The system will prompt you to change
your password and update your contact details
the member is already registered with KFin’s e-voting
If
like mobile number, e-mail address, etc. on
platform, then he can use his existing password
first login. You may also enter a secret
for logging in.
question and answer of your choice to retrieve
your password in case you forget it. It is
vi.
The Board of Directors has appointed Mr. B
strongly recommended that you do not share
Narasimhan, Proprietor BN & Associates, Practicing
your password with any other person and that
Company Secretary (Membership No. FCS 1303 and
you take utmost care to keep your password
Certificate of Practice No. 10440), as a Scrutinizer to
confidential.
scrutinize the remote e-voting and Insta Poll process in
a fair and transparent manner.
e) You need to login again with the
new credentials.
vii. The Scrutiniser will, after the conclusion of e-voting at
the Meeting, scrutinise the votes cast at the Meeting
f) On successful login, the system will prompt be served, may temporarily get their E-mail
you to select the E-Voting Event Number address and mobile number provided with
(EVEN) for Sterlite Technologies Limited. the Company’s Registrar, by clicking the link
https://ris.kfintech.com/email_registration/for
g) On the voting page, enter the number of sending the same. Members are requested
shares as on the cut-off date under either to follow the process as guided to capture
“FOR” or “AGAINST” or alternatively, you the E-mail address and mobile number for
may partially enter any number under “FOR” sending the soft copy of the notice and
/ “AGAINST”, but the total number under e-voting instructions along with the User ID
“FOR” / “AGAINST” taken together should and Password. In case of any query, member
not exceed your total shareholding as on may write to einward.ris@kfintech.com.
the cut-off date. You may also choose to
“ABSTAIN” and vote will not be counted b)
Members holding shares in dematerialised
under either head. mode who have not registered their e-mail
addresses with their Depository Participant(s)
h) Members holding shares under multiple folios are requested to register / update their
/ demat accounts shall choose the voting email addresses with the Depository
process separately for each of the folios / Participant(s) with whom they maintain their
demat accounts. demat accounts.
i) Voting has to be done for each item of the c) After due verification, the Company / KFIN
Notice separately. In case you do not desire will forward your login credentials to your
to cast your vote on any specific item, it will registered email address.
be treated as “ABSTAINED”.
d) Follow the instructions at I.(A). (a) to (m) to
j) You may then cast your vote by selecting an cast your vote.
appropriate option and click on “SUBMIT”.
III. Once the vote on a resolution is cast by a member,
k) A confirmation box will be displayed. Click whether partially or otherwise, the member shall
“OK” to confirm, else “CANCEL” to modify. not be allowed to change it subsequently or cast
the vote again.
l) Once you confirm, you will not be allowed to
modify your vote. IV. In case of any query, you may refer the Frequently
Asked Questions (FAQs) for members and e-vooting
m) Corporate / Institutional Members (i.e., User Manual available at the ‘download’ section of
other than Individuals, HUFs, NRIs, etc.) https://evoting.karvy.com or call KFin on 1800 345
are also required to send legible scanned 4001 (toll free).
certified true copy (in PDF Format) of the
Board Resolution / Power of Attorney / Instructions for members for e-voting during the
Authority Letter, etc., together with attested e-AGM session :
specimen signature(s) of the duly authorized
a)
During the e-AGM proceedings, upon instructions of
representative(s), to the Scrutiniser at e-mail
the chairman, the e-Voting ‘Thumb sign’ on the left
id: AGM.sterlite.tech@kfintech.com. It is also
hand corner of the video screen shall be activated.
requested to upload the same in the e-voting
Shareholders shall click on the same to take them to
module in their login. The naming format of
the ‘Insta Poll’ page.
the aforesaid legible scanned document shall
be “Corporate Name EVENT NO.”
b)
Members to click on the ‘Insta Poll’ icon to reach the
resolution page and follow the instructions to vote on
(B) In case of a member whose e-mail address is
the resolutions.
not registered / updated with the Company
/ KFIN / Depository Participant(s), please
c) Only
those shareholders, who are present in the e-AGM
follow the following steps to generate your
and have not casted their vote on the Resolutions
login credentials:
through remote e-Voting and are otherwise not barred
a) Members who have not registered their from doing so, shall be eligible to vote through e-Voting
E-mail address and in consequence, the system available during the e-AGM.
Annual Report and Notice of AGM could not
11
PROCEDURE FOR JOINING THE AGM iv) Shareholders who would like to express their views
THROUGH VC / OAVM: / ask questions during the meeting may log on to
https://emeetings.kfintech.com/ and click on ‘Post your
Members will be able to attend the AGM through VC / OAVM
Questions’ may post their queries/views/questions in
to view the live webcast at https://emeetings.kfintech.com
the window provided by mentioning the name, demat
by using their remote e-voting login credentials.
account number/folio number, email id, mobile number.
Please note that queries / questions only of those
i) Members are requested to follow the
members will be answered who are holding the shares
procedure given below:
of the Company as on the cut-off date.
a) Launch internet browser (chrome / firefox / safari)
by typing the URL: https:// emeetings.kfintech.com v)
Facility of joining the AGM through VC / OAVM shall
be available for 1000 members on first-come-first-
b) Enter
the login credentials (i.e., User ID and served basis. However, the participation of members
password for remote e-voting). holding 2% or more shares, promoters, and Institutional
Investors, directors, key managerial personnel,
c)
After logging in, click on “Video Conference” chairpersons of Audit Committee, Stakeholders
option Relationship Committee, Nomination and Remuneration
Committee and Auditors are not restricted on first-
d)
Then click on camera icon appearing against come-first served basis.
AGM event of Sterlite Technologies Limited, to
attend the Meeting. vi) Facility to join the meeting shall be opened
fifteen minutes before the scheduled time of
ii) Members who do not have User ID and Password for the AGM and shall be kept open throughout the
e-voting or have forgotten the User ID and Password proceedings of the AGM.
may retrieve the same by following the procedure given
in the remote E-voting instructions. vii) Members who need assistance before or during the
AGM, can contact KFIN on einward.ris@kfintech.com or
iii) Members who would like to express their views or ask call on toll free numbers / 1800-345-4001. Kindly quote
questions during the AGM may register themselves your name, DP ID-Client ID / Folio no. and E-voting Event
by logging on to https://emeetings.kfintech.com and Number in all your communications.
clicking on the ‘Speaker Registration’ option available
on the screen after log in. The Speaker Registration will viii) In case of joint holders attending the Meeting, only
be open during Thursday, August 27, 2020 to Saturday, such joint holder who is higher in the order of names
August 29, 2020. Only those members who are will be entitled to vote at the AGM.
registered will be allowed to express their views or ask
questions. The Company reserves the right to restrict ix)
Members of the Company under the category of
the number of questions and number of speakers, Institutional Investors are encouraged to attend and
depending upon availability of time as appropriate for vote at the AGM.
smooth conduct of the AGM.
As you are aware, the Board of Directors of the Company, at their Meeting held on May 12, 2020,
have recommended a Final Dividend of ₹3.5 per Equity Share of ₹2 each for the Financial Year
ended March 31, 2020. This dividend will be paid / dispatched within a period of 30 days from the
conclusion of the Annual General Meeting, subject to approval of the shareholders of the Company.
Pursuant to the changes introduced by the Finance Act 2020, w.e.f. April 1, 2020, the Company
would be required to apply withholding tax / deduct taxes at source (TDS) at the prescribed rates on
the dividend paid to its shareholders. The withholding tax rate would vary depending on the
residential status of the shareholder and the documents submitted by them and as acceptable to the
Company.
Accordingly, the above referred Final Dividend will be paid after deducting the tax at source as
per the attached file titled ‘Sterlite Technologies Limited – Dividend 2020 – WHT rates’ (refer
Annexure 1). Please note the following important points in relation to the dividend payable to you:
1. Update the Permanent Account Number (PAN) and Residential Status, if not already done,
with the depositories (in case of shares held in demat mode) and with the Company's Registrar
and Transfer Agents - KFin Technologies Private Limited (KFIN), (in case of shares held in
physical mode).
2. In absence of PAN / Invalid PAN, TDS will be made at 20%, plus applicable surcharge and
cess, if any. For non-residents, the higher rate of 20% may not be applicable if such non-
resident provides the documents requested in the declaration and company basis its review is
satisfied on completeness of such documents as well as eligibility for tax treaty benefits.
3. The Company is not obligated to apply the beneficial Tax Treaty rates at the time of tax
deduction / withholding on dividend amounts. Application of beneficial Tax Treaty Rate shall
depend upon the completeness of the documents submitted by the Non- Resident shareholder
and satisfaction of the Company on review of such documents.
4. Shareholders who are exempted from TDS provisions through any circular or notification
may provide documentary evidence in relation to the same (including copy of relevant
circular or notification), to enable the Company in applying the appropriate TDS on Dividend
payment to such shareholder.
5. The documents mentioned against each category, in the attachment to this communication titled
‘Sterlite Technologies Limited – Dividend 2020 – WHT rates’ (refer Annexure 1), need to be
provided compulsorily, else the Company shall determine the rate of withholding tax/TDS
applicable on the dividend payments.
6. Form 10F (refer Annexure 2), Form 15G (refer Annexure 3) and Form 15H (refer Annexure 4)
need to be in the format provided by the Indian income-tax authorities. Copy of blank forms, as
on extant date is attached.
7. Declaration in specified format (refer Annexure 5) along with requisite documents need to be
filled in and should be duly signed. Any mismatch in details/information/documents vis-à-vis that
available with the depositories and Registrar and Transfer Agents would be considered for
withholding tax, as deemed appropriate by the Company.
The aforesaid documents, as applicable, should be uploaded on the portal of KFIN, which can be
accessed at https://ris.kfintech.com/form15/emailregister.aspx?q=0 on or before 11.59 PM (IST) on
August 28, 2020 to enable the Company to determine the appropriate TDS / withholding tax rate
applicable.
No communication on the tax determination / deduction received post August 28, 2020 shall be
considered for payment of Final Dividend.
If the tax on said Final Dividend is deducted at a higher rate in absence of receipt of or satisfactory
completeness of the afore-mentioned details / documents by August 28, 2020 the shareholder may
claim an appropriate refund in the return of income filed with their respective Tax authorities.
No claim shall lie against the Company for such taxes deducted.
The Company will arrange to email a soft copy of the TDS certificate at the shareholders
registered email ID in due course, post payment of the said Final Dividend. Shareholders will also
be able to see the credit of TDS in Form 26AS, which can be downloaded from their e-filing account
at https://incometaxindiaefiling.gov.in
Amit Deshpande
Company Secretary & Corporate General Counsel
Sterlite Technologies Limited - Dividend 2020 – WHT rates Annexure 1
Withholding tax (TDS) rate on Dividend for Financial Year 2020-21 as per Income-tax Act, 1961
Category of Shareholder Withholding tax Applicable Applicable Cess Final withholding tax rate Remarks / Minimum documents required (red ones
Sr. rate Surcharge (subject to tax treaty are mandatory) *to be read with email and below
No. benefits for non-resident notes
shareholders)
Nil NA Nil If dividend amount does not exceed INR 5,000 per
shareholder
If dividend amount does not exceed INR 5,000 per
shareholder:
a. Self certified PAN Card copy
b. Lower/Nil withholding tax deduction certificate, if
1 Resident Individuals
obtained, with respect to dividend income
7.5% No 7.5%
c. Signed Form 15G/15H, if tax payable will be Nil on
the estimated total income including dividend income
d. Signed self declaration in specified format
Mutual Funds
a. Signed Documentary evidence to prove that the
Mutual Funds covered under Section
Nil NA Nil Fund is registered under Section 10(23D)
10(23D) of the Income-tax Act, 1961
b. Signed Self declaration in specified format
2 a. Self certified PAN Card copy
b. Lower/Nil withholding tax deduction certificate, if
Other Mutual Funds 7.5% No 7.5% obtained, with respect to dividend income
c. Signed self declaration in specified format
Resident corporates
a. Self certified Permanent Account Number Card copy
b. Lower/Nil withholding tax deduction certificate, if
obtained, with respect to dividend income
c. Signed Self declaration in specified format
d. Self certified Certificate of Incorporation
3 Bodies Corporates 7.5% No 7.5% Non-resident corporates
In addition to the above documents, following
additional documents would be required:
a. Self certified Tax Residency Certificate
b. Signed Form 10F
37% 28.496%
Insurance Companies
a. Signed Documentation to prove that the
Life Insurance Corporation of India, shareholder is established under Life Insurance
General Insurance Corporation of Corporation Act, 1956 or under General Insurance
India, National Insurance Company Ltd, Business (Nationalisation) Act, 1972 (57 of 1972)
Nil NA Nil
Oriental Insurance Company Ltd, The b. Signed Self declaration in specified format
New India Assurance Company Ltd and
5 United India Insurance Company Ltd
Category of Shareholder Withholding tax Applicable Applicable Cess Final withholding tax rate Remarks / Minimum documents required (red ones
Sr. rate Surcharge (subject to tax treaty are mandatory) *to be read with email and below
No. benefits for non-resident notes
shareholders)
7 Investor Education Protection Fund As per rate applicable to respective shareholders Not applicable
10
Notes:
The above withholding tax rates for non-resident shareholders (except for Sr no. 4) are subject to applicable tax treaty between India and country of residence of shareholder.
1.
2. Surcharge and cess, if applicable would be applied
3. Company would determine the rate of withholding tax to be applied based on the details/documents provided. No liabilities, whatsoever, shall lie against Sterlite Technologies
Limited in relation to such withholding tax.
4. Any other category of shareholder should provide declaration in specified format, PAN, Form 15G/15H, lower withholding tax certificate, Form 10F, Tax residency certificate
and/or any other document as applicable to them to enable the Company to determine appropriate rate of withholding tax.
Annexure 2
(v) Period for which the residential status as mentioned in the certificate :
referred to in sub-section (4) of section 90 or sub-section (4) of section
90A is applicable
(vi) Address of the assessee in the country or territory outside India during :
the period for which the certificate, mentioned in (v) above, is
applicable
Verification
Place: ……………………………
Notes :
2. #Write N.A. if the relevant information forms part of the certificate referred to in sub-section
(4) of section 90 or sub-section (4) of section 90A.
Annexure 3
INCOME-TAX RULES, 1962
...............................................................
1. Substituted by IT (Fourteenth Amdt.) Rules 2015, w.e.f. 1-10-2015. Earlier Form No. 15G was
inserted by the IT (Fifth Amdt.) Rules, 1982, w.e.f. 21-6-1982 and later on amended by the
IT (Fifth Amdt.) Rules, 1989, w.r.e.f. 1-4-1988, IT (Fourteenth Amdt.) Rules, 1990, w.e.f.
20-11-1990 and IT (Twelfth Amdt.) Rules, 2002, w.e.f. 21-6-2002 and substituted by the IT
(Eighth Amdt.) Rules, 2003, w.e.f. 9-6-2003 and IT (Second Amdt.) Rules, 2013, w.e.f. 19-2-2013.
PART II
[To be filled by the person responsible for paying the income
referred to in column 16 of Part I]
1. Name of the person responsible for paying 2. Unique Identification No.11
3. PAN of the person 4. Complete Address 5. TAN of the person responsible for paying
responsible for paying
6. Email 7. Telephone No. (with STD Code) and Mobile No. 8. Amount of income paid12
9. Date on which Declaration is received 10. Date on which the income has been paid/credited
(DD/MM/YYYY) (DD/MM/YYYY)
i
( ) in a case where tax sought to be evaded exceeds twenty-five lakh rupees, with rigorous
imprisonment which shall not be less than six months but which may extend to seven
years and with fine;
ii
( ) in any other case, with rigorous imprisonment which shall not be less than three months
but which may extend to two years and with fine.
11
The person responsible for paying the income referred to in column 16 of Part I shall allot
a unique identification number to all the Form No. 15G received by him during a quarter of
the financial year and report this reference number along with the particulars prescribed in
rule 31A(4)( vii) of the Income-tax Rules, 1962 in the TDS statement furnished for the same
quarter. In case the person has also received Form No.15H during the same quarter, please
allot separate series of serial number for Form No.15G and Form No.15H.
12
The person responsible for paying the income referred to in column 16 of Part I shall not
accept the declaration where the amount of income of the nature referred to in sub-section
(1) or sub-section (1A) of section 197A or the aggregate of the amounts of such income
credited or paid or likely to be credited or paid during the previous year in which such income
is to be included exceeds the maximum amount which is not chargeable to tax. For deciding
the eligibility, he is required to verify income or the aggregate amount of incomes, as the case
may be, reported by the declarant in columns 16 and 18.
Annexure 4
11. PIN 12. Email 13. Telephone No. (with STD Code) and Mobile No.
17. Details of Form No.15H other than this form filed for the previous year, if any6
Total No. of Form No.15H filed Aggregate amount of income for which Form No.15H filed
............................................................
Signature of the Declarant
________________________
1. Substituted by the IT (Fourteenth Amdt.) Rules, 2015, w.e.f. 1-10-2015. Earlier Form No. 15H was amended
by the IT (Fifth Amdt.) Rules, 1982, w.e.f. 21-6-1982, IT (Fifth Amdt.) Rules, 1989, w.r.e.f. 1-4-1988, IT
(Fourteenth Amdt.) Rules, 1990, w.e.f. 20-11-1990, IT (Twelfth Amdt.) Rules, 1992, w.e.f. 1-6-1992, IT
(Seventh Amdt.) Rules, 1995, w.e.f. 1-7-1995, IT (Thirty-second Amdt.) Rules, 1999, w.e.f. 19-11-1999, IT
(Twelfth Amdt.) Rules, 2002, w.e.f. 21-6-2002, IT (Eighth Amdt.) Rules, 2003, w.e.f. 9-6-2003, IT
(Fourteenth Amdt.) Rules, 2003, w.e.f. 1-8-2003 and IT (Second Amdt.) Rules, 2013, w.e.f. 19-2-2013.
Declaration/Verification8
I ....................................................... do hereby declare that I am resident in India within the
meaning of section 6 of the Income-tax Act, 1961. I also hereby declare that to the best of my
knowledge and belief what is stated above is correct, complete and is truly stated and that the
incomes referred to in this form are not includible in the total income of any other person under
sections 60 to 64 of the Income-tax Act, 1961. I further declare that the tax on my estimated total
income including *income/incomes referred to in column 15 *and aggregate amount of
*income/incomes referred to in column 17 computed in accordance with the provisions of the
Income-tax Act, 1961, for the previous year ending on ..................................... relevant to the
assessment year ..................................... will be nil.
9. Date on which Declaration is received 10. Date on which the income has been
(DD/MM/YYYY) paid/credited (DD/MM/YYYY)
1[Provided that such person shall accept the declaration in a case where income of the assessee,
who is eligible for rebate of income-tax under section 87A, is higher than the income for which
declaration can be accepted as per this note, but his tax liability shall be nil after taking into
account the rebate available to him under the said section 87A.]
____________________
1. Inserted by Income-tax (4th Amendment) Rules, 2019, w.e.f. 22-5-2019.
Annexure 5
DECLARATION BY SHAREHOLDERS
(TO BE FILLED IN BLOCK LETTERS ONLY)
Name of shareholder:
___________________________________________________________________________
(As registered with the registrar)
To,
Principal Officer,
Sterlite Technologies Limited (STL),
E1/E2 - MIDC Industrial Area,
Waluj, Aurangabad,
Maharashtra – 431 136.
In relation to our dividend income of INR 3.5 per share from STL (record date 28/08/2020), I / We
hereby declare and certify as under (strike off the paragraphs which are inapplicable):
1. Resident Shareholders
c. Our dividend income is not liable for tax deduction at source or tax is applicable at lower rate since
(choose the applicable option):
i. Tax on my estimated income (including dividend income) for the period 1 April 2020 to 31 March
2021 shall be NIL.
Copy of Form 15G / 15H is enclosed herewith.
ii. Lower / Nil rate of tax applies to me / us as I / we have obtained a lower / nil deduction certificate
from my / our jurisdictional tax officer in relation to the dividend income from STL.
Copy of certificate is enclosed herewith.
2. Non-Resident Shareholders
My / Our tax identification number issued by_____________ <<insert name of authority of country of
tax residence which has issued the tax identification number>> is _______ <<mention the tax
identification number>> and PAN obtained in India is _________ <<insert PAN of shareholder, please
mention not available in case PAN is not obtained>>.
A copy of Tax Residency Certificate (For FY 2020-21 and valid as on record date), Form 10F
(duly executed) and PAN card (duly self-attested) [if available] are enclosed herewith.
i. I/ We hold full beneficial interest in the shares, dividend income and are entitled to the benefits of
India –____________________________<<insert name of country of tax residence>>, Double
Taxation Avoidance Agreement (DTAA) read with the provisions of Multilateral Instrument (MLI),
wherever applicable.
ii. We further affirm that (applicable in case of non-residents other than individuals):
The construct and affairs of __________________________________ <<insert name of
shareholder>> are not arranged with the principal or one of the principal purposes of obtaining
any tax benefits, directly or indirectly, under the Income Tax Act, 1961 or DTAA; or
Objective parameters laid out in the DTAA such as listing, ownership, activity etc. are fulfilled
by me/ us to be regarded as qualified person for entitlement of DTAA; or
We are not fiscally transparent entities and shall qualify as ‘resident’ of
__________________________ <<insert name of country of tax residence>> as per India-
____________________________ <<insert name of country of tax residence>> DTAA; or
The claim of benefits by us under the DTAA is not impaired in any way.
iii. I / We have the right to use and enjoy the dividend received / receivable from the shares held by us
in STL and such right is not constrained by any contractual and / or legal obligation to pass on
such dividend to another person
c. We do not or shall not have a taxable presence, fixed base or Permanent Establishment (PE) in India
as defined under the Indian Income-tax Act, 1961 and DTAA between India and _______________
<<insert name of country of tax residence>> read with the provisions laid down in MLI, wherever
applicable, during the period 1 April 2020 to 31 March 2021.
We further confirm that we do not have any business connection in India as per provisions of the
Indian Income-tax Act 1961.
d. Lower / Nil rate of tax applies to me / us as I / we have obtained a lower / nil deduction certificate from
my / our jurisdictional tax officer in relation to the dividend income from STL.
Copy of certificate is enclosed.
e. I/ We confirm that we shall file the income tax return in India disclosing the dividend income received
from STL in compliance with the provisions of Indian Income Tax Act, 1961.
Copy of registration certificate and PAN card (duly self-attested) are enclosed herewith.
We declare that our dividend income is not eligible for tax deduction at source since (choose the
applicable option):
i. We are a mutual fund as defined under Section 10(23D) of the Income-tax Act, 1961
ii. We are an Insurance company as defined under second proviso to Section 194 of the Income-tax
Act, 1961
iii. We are registered as a Category I / Category II Alternative Investment Fund, as defined under
Section 10(23FBA) and clause (a) of Explanation 1 to Section 115UB of the Indian Income-tax Act,
1961.
iv. We are an entity covered by Circular 18 of 2017 issued by the Central Board of Direct Tax and our
income is unconditionally exempt under Section 10 of the Income-Tax Act, 1961 and we are
statutorily not required to file return of income under Section 139 of the Act.
v. We are a Corporation named ____________________ <<insert the name of set-up>> set up under
______________________________________ <<insert the name of relevant Act>> whose
income is exempt from any income-tax or can be considered as a ‘Government’ and qualify for
exemption under section 196 of the Income tax Act, 1961.
vi. We qualify as NPS Trust for the purpose of section 197A(1E) of the Income-tax Act, 1961 and our
income is eligible for exemption under section 10(44) of the Income-tax Act, 1961.
In case there is any change in the above details, I / we shall inform STL immediately of such
change to enable STL to take appropriate corrective action.
I / We hereby confirm that the details / information provided in the above declaration are complete,
true and correct. This declaration is issued to STL to enable them to decide upon the withholding
tax applicable on the dividend income receivable by me / us and conclusion of applicability of
such withholding tax rate shall be at the discretion of STL.
In the event, the Indian Revenue Authorities levies any charge on STL (in the nature of tax,
interest, penalty, compounding fees) on account of lower or non withholding of taxes basis the
documents furnished by the shareholder, then the shareholder will fully indemnify STL for any
such demand including any other expenses (such as litigation cost etc.) incurred by STL with
respect to the same. Also, the shareholders shall undertake to provide STL, on demand, the
relevant details in respect of taxability/ non-taxability of the dividends considered by the
shareholder, copies of tax returns filed in India, evidence of the tax paid, etc.