From Published Accounts

Accounting
for Demerger in the books of demerged company and resulting company (both
companies following Ind AS)

Sterlite Technologies Ltd. (31-3-2017) (demerged company)

From
Notes to Accounts

54G  Demerger
of Power Business

        The
Board of directors of the Company on 18^th May 2015 approved the
Scheme of Arrangement under sections 391 – 394 of the Companies Act, 1956 (“the
Scheme’) between Sterlite Technologies Limited (‘STL’ of Demerged company),
Sterlite Power Transmission Limited (‘SPTL’ or Resulting company’) and their respective
shareholders and creditors for the demerger of power products and solutions
business (including the investments of STL in power transmission infrastructure
subsidiaries i.e. Sterlite Power Grid Ventures Limited and East North
interconnection Company Limited into SPTL with the appointed date of 1^st
April 2015. The Scheme was approved by the Hon’ble Bombay High Court vide
Order dated 22^nd April 2016 and it became effective from 23^rd
May 2016 (being the date of filing with Registrar of Companies).

        As
a result of the demerger, the opening balance sheet as at 1^st  April 2015 and the financial  statements of the Company as at and for the
year ended 31^st March 2016, do not include the operations of the
demerged undertaking.

        As per the Scheme, STL shall reduce the book
values of assets and liabilities pertaining to the demerged undertaking (i.e.
Power Business) as on the appointed date from its books of account.
Accordingly, the following assets and liabilities pertaining to Power Business
have been reduced from the books of account of STL as on April 1^st
2015.

Further, as per the Scheme,
the excess of book value of assets over the book value of liabilities of the
demerged undertaking shall be adjusted against the securities premium account
and balance, if any, shall be first adjusted against the general reserve account
and thereafter against profit and loss account of the demerged company. Also,
the investment of STL in SPTL of Rs. 0.05 crore has been cancelled and adjusted
against surplus in the statement of profit and loss as per the Scheme,
Accordingly, the following adjustments have been made in the opening reserves
as at 1^st April 2015:

The resulting company shall
reimburse the demerged company for all liabilities incurred by the demerged
company in so far as such liabilities relate to period prior to the appointed
date i.e. 1^st April 2015 in respect of the demerged undertaking as
per the Scheme.

Sterlite Power Transmission Ltd. (31-3-2017) (resulting company)

From
Notes to Accounts

NOTE 45:
DEMERGER OF POWER BUSINESS FROM STERLITE TECHNOLOGIES LIMITED

A.    The
Board of directors of the Sterlite Technologies Limited on 18^th May,
2015 approved the Scheme of Arrangement under sections 391 – 394 of the
Companies Act, 1956 (‘the Scheme’) between Sterlite Technologies Limited (‘STL’
or ‘Demerged company’), Sterlite Power Transmission Limited (‘SPTL’ or
‘Resulting company’ or ‘Company’) and their respective shareholders &
creditors for the demerger of power products and solutions business (including
the investments of STL in power transmission infrastructure subsidiaries i.e.
Sterlite Power Grid Ventures Limited and East North Interconnection Company
Limited) into the Company with the appointed date of 1^st April,
2015. The Scheme was approved by the Hon’ble Bombay High Court vide
Order dated 22^nd April, 2016 and it became effective from 23^rd
May, 2016 (being the date of filing with Registrar of Companies).

        The
Company was incorporated on 5^th May, 2015 with the object of
carrying out business of power products and solutions under the name Sterlite
Power Transmission Limited. As per the Scheme, power products and solutions
business (including the investments of STL in power transmission infrastructure
subsidiaries i.e. Sterlite Power Grid Ventures Limited and East North
Interconnection Company Limited) has been transferred into the Company with the
appointed date of 1^st April, 2015.

B.    The
Scheme inter alia provides for issue by SPTL, at the option of the
shareholder of STL, of either one equity share of face value of INR 2 or one
redeemable preference share of face value of INR 2 issued at a premium of INR
110.30 per share for every 5 fully paid up equity shares of INR 2 each of the
Demerged company and redeemable on expiry of eighteen months from the date of
allotment at a premium of INR 123.55 per share for eligible members other than
non-residents. In case of non-residents, one equity share of face value of INR
2 for every 5 fully paid up equity shares of INR 2 each of the Demerged company
and all such equity shares shall be purchased by the promoters of the Demerged
Company and/or their affiliates or any other person and/or entity identified by
them, in accordance with the scheme.

C.    As
per the option exercised by the shareholders of STL 61.18 million equity shares
and 17.09 million redeemable preference shares were issued on 22^nd
August, 2016.

D.    Further,
as per the Scheme, the investment of STL in SPTL of INR 0.05 crore has been
cancelled w.e.f. 1^st April, 2015.

E.    As
per the Scheme, the following assets and liabilities pertaining to Power Business
were transferred from STL to SPTL w.e.f. 1^st April, 2015:

*These figures are as per Indian GAAP.

        As
per the Scheme, difference between total consideration payable by the Company
to equity share holders of Sterlite Technologies Limited and excess of book
value of assets over the book value of liabilities transferred from Sterlite
Technologies Limited is recognised as Goodwill and amortised over a period of
five years as required under the Scheme.

F.     As
per the Scheme, the resulting company shall reimburse the demerged company for
all liabilities incurred by the demerged company in so far as such liabilities
relate to period prior to the appointed date i.e. 1^st April, 2015 in
respect of the demerged undertaking. The management does not expect any cash
outflow in respect of the above.

From
Auditors’ Report

Emphasis
of Matter

        We
draw attention to Note 45 to the standalone Ind AS financial statements which
describes the accounting for merger which has been done as per the Scheme of
arrangement approved by the High Court. Our opinion is not qualified in respect
of this matter. _