starlit power systems ltd share price Directors report


To,

The Members,

Sterlite Power Transmission Limited

Your Directors are pleased to present the 8th Annual Report on the business and operations of the Company along with the audited financial statements of the Company for the financial year ended March 31, 2023 (FY2023).

1. FINANCIAL SUMMARY/HIGHLIGHTS

The financial performance of the Company for FY2023, is summarised below:

Summary of Key Financial Parameters

Standalone

(J Million)

Consolidated

Description

March 31,2023 March 31,2022 March 31,2023 March 31,2022

Revenue from operations

39,235.14 37,973.84 62,970.68 51,974.83

EBITDA

5,579.04 3,655.15 11,497.28 13,538.29

Less: Finance cost (net of finance income)

877.83 270.29 5,966.46 3,372.16

Less: Depreciation/Amortisation/Impairment Expense

438.40 390.65 1,058.04 803.56

Share of Profit/ (loss) of Associate

0 0 (2,168.87) (2,675.60)

Exceptional item

0 (117.00) 0 (117.00)

Profit Before Tax (PBT)

4,262.81 2,877.21 2,303.91 6,569.97

Less: Tax expense

1,042.70 411.43 2,631.23 2,168.55

Profit After Tax (PAT) (A)

3,220.11 2,465.78 (327.32) 4,401.42

Other Comprehensive Income/ (loss) (OCI) (B)

(4,629.36) 3,413.39 (1,742.65) 5,218.15

Total Comprehensive Income/ (loss) (A+B)

(1,409.25) 5,879.17 (2,069.97) 9,619.57

2. PERFORMANCE

Standalone Consolidated

FY2023 closed with Revenues of I 39,235.14 million, EBITDA of FY2023 closed with Revenues of I 62,970.68 million, EBITDA of

I 5,579.04 million, PAT of I 3,220.11 million. I 11,497.28 million, PAT of I (327.32) million.

3. BUSINESS OPERATIONS

Highlights of the business operations and state of affairs

Date of approval of the Board of April 21,2022

for the FY2023 of your Company, including the key

directors

performance indicators, key milestones, technology

Date of allotment May 18, 2022

leadership, business overview, economic overview,

No. of Securities 2,500 NCDs

and industry trends with respect to your Company and

Face Value

I 10,00,000 per NCDs

its subsidiaries, wherever applicable, forms part of this

Issue Price At par

Annual Report in the section of Corporate Overview and

Tenor 17 month & 25 days

Management Discussion and Analysis Report.

4. KEY EVENTS DURING FY2023 a. Issuance of Non-Convertible Debentures to Sterlite Grid 16 Limited, a wholly owned subsidiary, for an amount of

Coupon 14.50% p.a.

(determined on arms length basis)

Purpose To infuse funds in the Under Construction Projects and/or towards equity infusion or towards other corporate expenses

up to K 2,500 million

During FY2023, your Company issued unsecured, unlisted, redeemable, Non-Convertible Debentures (“NCDs”) to Sterlite Grid 16 Limited, a wholly owned subsidiary for an amount of I 2,500 million on private placement basis to augment fund requirements of your

Further, on March 3, 2023, your Company had redeemed 750 nos. of NCDs of I 10,00,000/- each aggregating to an amount of I 750 million. As on March 31, 2023, 1,750 nos. of NCDs of I 10,00,000/- each aggregating to an amount of I 1,750 million are outstanding.

Company. The details of NCDs issued are as under:

b. Acquisition of stake in the following wholly owned subsidiaries:

i. Sterlite Interlinks Limited

Sterlite Interlinks Limited is in the business of telecom infrastructure solutions company (Infrastructure Provider (IP) -1, registration bearing no. 839/2018 dated May 31, 2018, issued by the Department of Telecommunications, Government of India) that specialises in acquiring Right of Way (RoW) over passive fiber infrastructure assets from various State Transmission Utilities (STUs) for monetisation and leasing them to Internet Service Providers (ISPs) and Telecom Service Providers (TSPs).

In October2021, the Ministry of Commerce & Industry, Government of India issued a notification to allow 100% Foreign Direct Investment under ‘Automatic route in Telecom Infrastructure.

On June 01, 2022, to capitalise on the surge in requirement of utility grade OPGW based fibre infrastructure, your Company acquired additional 51% being 5,100 equity shares of Sterlite Interlinks Limited from PTC Cables Pvt Ltd for a total purchase consideration of I 13.36 million. Sterlite Interlinks Limited has become wholly owned subsidiary w.e.f. June 01, 2022.

ii. Kishtwar Transmission Limited

Kishtwar Transmission Limited, a Special Purpose Vehicle (‘SPV) houses a transmission project for setting up transmission system for evacuation of 1000MW of power from Pakaldul Hydro - Electric Plant in Chenab Valley, Jammu & Kashmir (hereinafter referred to as ‘Kishtwar Project). Kishtwar project will unlock the untapped hydro potential of Jammu & Kashmir to the tune of 20,000MW.

In addition, the project will evacuate 2,000MW of power from the Pakaldul HydroElectric Project to the Kishtwar substation. This project will involve the construction of a robust transmission system, which includes a 400/132kV GIS substation located in Kishtwar and a 400kV transmission line connecting Kishenpur to Dulhasti. In addition to augmenting the power flow capacity, this transmission system will also alleviate congestion in the downstream networks within the region, consequently, enhancing the quality and reliability of power flow in the Kashmir valley, benefiting the local communities, and improving the overall electricity infrastructure in the area.

Your Company participated in the tariff based competitive bidding for the Kishtwar Project through Sterlite Grid 24 Limited, a wholly owned subsidiary and emerged as a successful bidder.

Your Company has successfully acquired the SPV from PFC Consulting Limited, on December 06, 2022.

c. Restricted Stock Unit Scheme - 2022

Adopting a progressive approach from a long-term perspective for retention and value creation for your Company, its shareholders and the employees, the Board and the Members/Shareholders of the Company had approved Restricted Stock Unit Scheme Plan - 2022 (hereinafter referred to as RSU Plan - 2022) for key employees of the Company. The approval of the Shareholders on the RSU Scheme was obtained on July 06, 2022. Your Company believes that this scheme will

provide an opportunity to the employees to partner in the growth of the Organisation as a shareholder.

Under the RSU Plan - 2022, your Company will create, offer and grant from time to time, in one or more tranches, the number of Restricted Stock Unit (‘RSUs) not exceeding 1% (One percent) of the paid-up equity share capital of the Company at the time of grant of such RSUs. The RSUs will be granted to the permanent employees and Directors of the Company, whether whole time or otherwise, whether working in India or outside India (except Promoter, Promoter Group, Independent Directors and Directors holding more than 10% of the outstanding equity shares of the Company, if any, through themselves or through their relatives or through any body corporate, directly or indirectly), as may be decided by the RSU Committee under the RSU Plan - 2022. However, the aggregate number of equity shares to be issued upon exercise was originally limited to 6,11,819 equity shares.

Your Board of Directors had proposed issue of Bonus equity shares to the holder of existing equity shares of the Company at the 7th Annual General Meeting. Consequent to the Bonus issue approved by the Shareholders, such RSUs was increased from 6,11,819 to 12,23,638 equity shares, without affecting any other rights or obligations of the RSU grantees and without requiring any further action/ approval of the Members/ Shareholders.

Under RSU Plan - 2022, 30% of the RSUs granted have a vesting period of 1 (One) year from the date of grant of such RSUs. Accordingly, 30% of the Grant vested to the employees in July2023.

d. Amendment to the Joint Venture Agreement executed with Maharashtra State Electricity Transmission Company Limited (MSETCL) to extend the scope of operations and tenure of the Joint Venture Agreement

Your Company had entered into a joint venture (‘JV) agreement with Maharashtra State Electricity Transmission Company Limited (‘MSETCL), a government company for the purpose of build and monetisation of OPGW fibre for

3.301 Kms to be executed by Maharashtra Transmission Communication Infrastructure Limited (‘MTCIL), the JV Company. In furtherance to such JV, MTCIL has built a OPGW network of 3,537 Kms on EHV transmission line of MSETCL PAN Maharashtra and the transmission line is operational. During FY2023, your Company entered into an Amendment agreement with MSETCL for extension of scope of the joint venture agreement by additional 2,000 Kms and the period of joint venture agreement by 6 years, i.e. till 2040.

Subsequent to execution of the Amendment Agreement, your Company has total scope of OPGW network of

5.301 Kms and the Joint Venture Agreement is valid till 2040.

e. Issue of Bonus shares

Pursuant to the provisions of Section 63 of the Companies Act, 2013 and other applicable provisions, if any, including Rules made thereunder (including any statutory modifications or re-enactment thereof for the time being in force) read with the Articles of Association

of the Company and pursuant to the approval of the Members/ Shareholders of the Company and also subject to such consents and approvals as may be required from the appropriate authorities/Government, your Directors proposed to capitalise a sum of I 12,23,63,804 (Indian Rupees Twelve Crores Twenty-Three Lakhs Sixty-Three Thousand Eight Hundred Four only) out of free reserves, securities premium account and/ or capital redemption reserve account (except the reserves created by revaluation of assets), by issue and allotment of 6,11,81,902 (Six Crores Eleven Lakhs Eighty-One Thousand Nine Hundred Two) fully paid-up equity shares having face value of I 2/- each as bonus shares (“Bonus Shares”) to the holders of existing fully paid-up equity shares having face value of I 2/- each of the Company, whose names appeared in the Register of Members / Beneficial Owners Position of the Company as on the Record date (‘October 05, 2022), as fixed by the Board of Directors for this purpose, in the proportion of 1:1, that is 1 (One) new bonus equity share of I 2/- each for every 1 (One) existing fully paid-up equity share of I 2/- each held by the existing shareholders, and the Bonus Shares so allotted shall be treated as an increase in the paid up equity share capital of the Company held by each such member and not as income in lieu of dividend. The Bonus Shares issued and allotted rank pari-passu in all respects with existing equity shares and carry the same rights as the existing fully paid equity shares of the Company.

Such Bonus Shares were allotted to the eligible shareholders on October 20, 2022.

f. Withdrawal of Draft Red Herring Prospectus (DRHP) dated August 16, 2021, filed with Securities and Exchange Board of India (‘SEBI)

In the financial year 2021-22, to fund the growth strategy/

5. DIRECTORS

plans, your Company initiated the process of launching an Initial Public Offer through a fresh issuance of the equity shares of face value of I 2/- each and to list the equity shares on one or more of the recognised Stock Exchanges in India for an issue size of I 12,500 million (hereinafter referred to as an ‘Proposed Issue).

The Board of directors and the Members/Shareholders accorded their approval for the Proposed Issue on July 02, 2021, and August 01, 2021, respectively.

Post approval of the Board of directors, and Members/ Shareholders, the Draft Offer document was filed with Securities and Exchange Board of India (‘SEBI) on August 16, 2021, and the final observations of SEBI on the Draft Offer document were received vide its letter dated December 02, 2021. Pursuant to the letter of SEBI dated December 02, 2021, the Proposed Issue could be opened for subscription within a period of twelve months from the date of issuance of the final observations by SEBI i.e., December 01, 2022.

However, considering the prevailing market scenario during FY2023, the Management proposed to withdraw the Proposed Issue and reconsider undertaking an initial public offer of its securities in the near future, subject to suitable market conditions, receipt of requisite approvals and other considerations. The Board of directors accorded its approval to withdraw the DRHP on September 27, 2022, and the intimation of the same was sent to SEBI on September 28, 2022.

g. Disinvestment in Khargone Transmission Limited

Sterlite Power entered into a marquee deal with India Grid Trust for sale of its commissioned project thereby transfering Khargone Transmission Limited to India Grid Trust.

The Board of Directors of the Company is validly constituted and as on March 31, 2023, comprised of 6 Directors:

Sr.

_. Name of the director No.

Designation Category

1. Mr. Pravin Agarwal

Chairman Non-Executive

2. Mr. A.R. Narayanaswamy

Independent Director Non-Executive

3. Mr. Anoop Seth

Independent Director Non-Executive

4. Mr. Pratik Pravin Agarwal1

Managing Director Executive

5. Mr. Manish Agrawal2

Whole Time Director Executive

6. Ms. Kamaljeet Kaur3

Whole Time Director Executive

Notes:

1Mr. Pratik Pravin Agarwal was re-appointed as Managing Director w.e.f. June 01, 2021, for a term of 3 (Three) years.

2Mr. Manish Agrawal was re-appointed as Whole Time Director w.e.f. December 17, 2022, for a term of 2 (Two) years.

3Ms. Kamaljeet Kaur was appointed as Whole Time Director w.e.f. June 29, 2022, for a term of 1 (one) year. Accordingly from the closing hours of business of the Company on June 28, 2023, she has vacated the position of Director and Whole Time Director.

Changes during FY2023, are as under:

ii. Mr. Manish Agrawal was re-appointed as Whole

i. Mr. Pratik Pravin Agarwal, Managing Director being a

Time Director (Executive, Professional) effective December 17, 2022, upon the recommendation of

director liable to retire by rotation, and being eligible, was re-appointed as a director liable to retire by rotation in the Annual General Meeting held on

the Nomination and Remuneration Committee for a period of two years up to December 16, 2024.

September 26, 2022.

Pursuant to the provisions of the Companies Act, 2013, such re-appointment as the Whole Time

Director is being placed before the shareholders for approval in the ensuing Annual General Meeting.

iii. Ms. Kamaljeet Kaur was appointed as an Additional Director (Women Director, Executive, Professional) effective June 29, 2022, upon the recommendation of the Nomination and Remuneration Committee.

She was also appointed as a Whole Time Director, for a period of one year i.e. up to June 28, 2023, and her appointment as the Whole Time Director was approved by the Shareholders in the 7th Annual General Meeting held on September 26, 2022. Pursuant to the provisions of the Companies Act, 2013, read with the terms of appointment, from

the closing hours of business of the Company on June 28, 2023, she has vacated the position of the Director and Whole Time Director.

iv. Mr. Pravin Agarwal, Chairman will retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment, pursuant to Section 152 of the Companies Act, 2013. Details of the aforesaid proposal for re-appointment of

Mr. Pravin Agarwal are provided in the Annexure to the Notice of the ensuing Annual General Meeting.

v. The Company has received necessary declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under the Companies Act, 2013. The Independent Directors of the Company have also registered themselves in the data bank with the Indian Institute of Corporate Affairs and confirmed compliance

of relevant provisions of Rule 6 of the Companies (Appointments and Qualifications of Directors)

Rules, 2014. The Board is of the opinion that the Independent Directors of the Company possess requisite qualifications, experience and expertise and they hold highest standards of integrity. Further, the Independent Directors also confirmed that they are independent of the Management of the Company.

vi. Except as mentioned above, there was no other change in the Board of Directors of the Company during FY2023.

6. COMPOSITION OF BOARD COMMITTEES

Details of the composition, terms of reference and meetings held during the year of all the Committees of the Board are available in the Corporate Governance Report annexed to this Directors Report as Annexure-A and forming part of the Directors Report. During FY2023, the Board of directors has accepted all the recommendations of the Committees.

7. FRAMEWORK FOR THE PERFORMANCE EVALUATION OF THE BOARD, ITS COMMITTEES, AND INDIVIDUAL DIRECTORS

In order to identify strengths and areas of improvement, the Board of Directors of the Company is committed to assess its own performance as a Board. The Nomination and Remuneration Committee has established processes

for performance evaluation of the Independent Directors, the Board as a whole and individual directors and the Committees of the Board. Pursuant to the provisions of the Companies Act, 2013, the Board has carried out an annual evaluation of its own performance, performance of its committees as well as the directors individually (including the Chairman and Independent Directors). Details of the evaluation mechanism are available in the Corporate Governance Report annexed to this Directors Report as Annexure-A and forming part of the Directors Report.

The Board has, on the recommendation of the Nomination and Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management, and their remuneration (‘NRC Policy). The NRC Policy including the Policy on Board Diversity can be accessed on the website of the Company at https:// www.sterlitepower.com/wp-content/uploads/2021/11/ nrc policy board diversity others.pdf.

8. CORPORATE SOCIAL RESPONSIBILITY

a. The details of composition and changes therein are available in the Corporate Governance Report annexed to this Directors Report as Annexure-A and forming part of the Directors Report.

b. The Board has approved a CSR policy governing the CSR initiatives of the Company. The same can be accessed on the website of the Company at https://www.sterlitepower.com/wp-content/ uploads/2021/11/csr policy.pdf.

c. During FY2023, pursuant to Section 135 of the Companies Act, 2013, and relevant Rules made thereunder, your Company was not mandatorily required to spend on CSR Activities. However, the Company had voluntarily spent I 2,09,40,000/- on the CSR activities during FY2023.

d. Pursuant to the amended provisions, your Company may carry forward and set off such amount against the liabilities that may arise in succeeding years.

e. Pursuant to Section 135 read with Rule 8 of Companies (Corporate Social Responsibility Policy) Rules, 2014, the Annual Report on CSR activities is enclosed as Annexure-G to this Directors Report.

9. MEETINGS OF THE BOARD OF DIRECTORS

During FY2023, 12 (Twelve) meetings of the Board of Directors have been duly convened. The intervening gap between the two consecutive meetings was within the period prescribed under the Companies Act, 2013, Rules made thereunder and Secretarial Standard 1 on Board Meetings issued by the Institute of Company Secretaries of India read with MCA circulars, as issued from time to time.

The composition of the Board and changes therein, and the details of meetings held during FY2023 are available in the Corporate Governance Report annexed to this Directors Report as Annexure-A and forming part of the Directors Report.

10. KEY MANAGERIAL PERSONNEL

Pursuant to Section 203 of the Companies Act, 2013, and the Rules made thereunder, as on March 31, 2023, the Key Managerial Personnels of the Company were as under:

Sr". Name No.

Designation Date of Appointment

1. Mr. Pratik Pravin Agarwal1

Managing Director June 01,2016

2. Mr. Manish Agrawal2

Whole Time Director December 17, 2021

3. Ms. Kamaljeet Kaur3

Whole Time Director June 29, 2022

4. Mr. Sanjeev Bhatia4

Chief Financial Officer October 01,2021

5. Mr. Ashok Ganesan

Company Secretary May 29, 2017

Notes

1Mr. Pratik Pravin Agarwal was re-appointed as Managing Director w.e.f. June 01, 2021, for a term of 3 (Three) years.

2Mr. Manish Agrawal was re-appointed as Whole Time Director w.e.f. December 17, 2022, for a term of 2 (Two) years.

3Ms. Kamaljeet Kaur was appointed as Whole Time Director w.e.f. June 29, 2022, for a term of 1 (one) year. Accordingly from the closing hours of business of the Company on June 28, 2023, she has vacated the position of Director and Whole Time Director.

4Mr. Sanjeev Bhatia, Chief Financial Officer (CFO) has submitted his resignation from the position of the Chief Financial Officer w.e.f. August 22, 2023.

11. AUDITORS AND AUDITORS REPORT

a. Statutory Auditors

M/s. S R B C & Co. LLP, Chartered Accountants were appointed as the Statutory Auditors of the Company from the conclusion of 6th Annual General Meeting held on September 29, 2021, for a period of 4 years up to the conclusion of 10th Annual General Meeting to be held for the financial year 2024-25.

Based on internal analysis of M/s. S R B C & Co. LLP, the total maximum period which can be served by an auditor for an entity where rotation is applicable, is 10 years. In light of the aforesaid and pursuant to Section 139(6) of the Companies Act, 2013 and Rules made thereunder, M/s.

S R B C & Co. LLP were appointed as the first statutory auditors by the Board of directors to hold office upto the conclusion of first Annual General Meeting, and such period of appointment is considered for computation of maximum period of 10 years. Therefore, an audit firm can be appointed or re-appointed by the Members/ Shareholders of a company in the first Annual General Meeting for a term of 5 consecutive years (first term) and thereafter can be re-appointed for another term of 4 consecutive years (second term) so that maximum period served by such Audit firm as the Statutory Auditors does not exceed 10 years.

The Statutory Auditors Report does not contain any qualification or adverse remark. Hence, the Directors Report do not require any clarification or explanation of the Board of directors.

b. Secretarial Auditors

During FY2023, M/s. DMK Associates, Practising Company Secretaries were appointed as the Secretarial Auditors of the Company, to conduct the Secretarial Audit of the Company for FY2023. The Report of the Secretarial Auditors is annexed as Annexure-E to this Directors Report.

The Secretarial Auditors Report does not contain any qualification or adverse remark. Hence, the Directors Report do not require any clarification or explanation of the Board of directors.

c. Cost Auditors

During FY2023, Mr. Kiran Chand Naik, Cost Accountant, was appointed as the Cost Auditor of the Company, to conduct the audit of cost records being made and maintained by the Company for FY2023.

The Cost Audit for FY2023 is under progress and will be duly completed within the defined timeline.

12. CHANGES IN SHARE CAPITAL a. Authorised share capital

During FY2023, there was no change in the authorised share capital of the Company. As on March 31, 2023, the authorised share capital was as under:

Type of capital

No. of shares Amount (In J)

Equity shares of I 2/- each

6,38,02,50,000 12,76,05,00,000

Optionally Convertible Redeemable Preference Shares of I 10/- each

47,00,00,000 4,70,00,00,000

Redeemable Preference Shares of I 2/- each

3,64,00,000 7,28,00,000

Total

17,53,33,00,000

b. Issued, subscribed, and paid-up share capital

During FY2023, the issued, subscribed, and paid-up share capital of the Company was increased on account of issue of bonus shares. The details of changes in the issued, subscribed, and paid-up share capital during FY2023 and as on March 31, 2023, are as under:

Particulars

As on (Date) No. of shares Amount (In J)

Issued, Subscribed, and Paid-up share capital (A)

April 01,2022 6,11,81,902 12,23,63,804

Increase during the year on account of issue and allotment of bonus shares (B)

October 20, 2022 6,11,81,902 12,23,63,804

Issued, Subscribed, and Paid-up share capital (A+B)

March 31,2023 12,23,63,804 24,47,27,608

13. INTERNAL FINANCIAL CONTROLS

Your Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. Your Company had documented a comprehensive Internal Control System for all the major processes to ensure reliability of financial reporting, timely feedback on achievement of operational and strategic goals, compliance with the policies, procedures, laws, and regulations, safeguarding of assets and economical and efficient use of resources. The formalised system of control facilitates effective compliance as per relevant provisions of the Companies Act, 2013 and other applicable Law(s).

To maintain its objectivity and independence, the Internal Audit function reports to the Audit Committee.

The Internal Audit function monitors and evaluates the efficacy and adequacy of Internal Control system in your Company, its compliance with operating systems, accounting procedures and policies at all locations of your Company. Based on the report of Internal Audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations, if any and corrective actions thereon are presented to the Audit Committee and the Board. The Audit Committee regularly reviews the suggestions/observations of the Statutory Auditors on the financial statements, including financial reporting system, compliance to accounting policies and procedures, the adequacy and effectiveness of internal controls and systems followed by your Company.

14. BUSINESS RISK MANAGEMENT

Risk can be viewed as a combination of the probability of an event occurring, the impact of its consequence and the current mitigation effectiveness. Events with a negative impact represent risks that can prevent value creation or erode existing value.

The Board has constituted a Risk Management Committee (details of which are available in the Corporate Governance Report annexed to this Directors Report as Annexure-A and forming part of the Directors Report) to review, identify, evaluate, and monitor both business and non-business-related risks and take requisite action to mitigate the same through a properly defined framework. Your Company has framed a Risk Management Policy to identify and assess the risk areas, monitor and report compliance and effectiveness of the policy. The Risk Management policy can be accessed on the website of the Company at https:// www.sterlitepower.com/wp-content/uploads/2021/11/ risk management policy 0.pdf.

A detailed exercise is being carried out regularly to identify, evaluate, manage and monitor both business and non-business risks. The Policy seeks to create transparency, minimise adverse impact on the business objectives and enhance the competitive advantage of your Company. The Policy defines the risk management approach across the enterprise at various levels including documentation and reporting.

15. LEGAL COMPLIANCES MANAGEMENT

The Compliance function independently tracks, reviews, and ensures compliance with Regulatory and Statutory Laws of the land and promotes compliance culture in your Company. The compliances are tracked and monitored on compliance portal, updated by the respective users. The compliance portal is a software which facilitates in operating an effective and efficient compliance management system that allows for monitoring of the compliance with respect to applicable laws and regulations and also updates the users in case of any amendments in existing laws and regulations. The portal also provides a robust governance structure and a streamlined reporting system that ensures comprehensive compliance reporting to the Board. The compliance certificate duly certified by the Managing Director and respective Function heads is submitted to the Board on a quarterly basis, allowing robust and effective oversight of the compliance management in your Company.

16. VIGIL MECHANISM / WHISTLE BLOWER POLICY

The details of Vigil Mechanism/ Whistle Blower Policy are available in the Corporate Governance Report annexed to this Directors Report as Annexure-A and forming part of the Directors Report.

1 7. MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF THE FINANCIAL YEAR AND DATE OF THE REPORT

a. Acquisition of Fatehgarh III Beawar Transmission Limited

Fatehgarh III Beawar Transmission Limited, a Special Purpose Vehicle (‘SPV) houses a transmission project to establish Inter-State Transmission System for evacuation of power from REZ in Rajasthan (20GW) under Phase- III Part G. Your company will build, own, operate, and transfer, a critical transmission project in Rajasthan for a period of 35 years. The project will involve construction of a 350km, 765kV transmission corridor from Fatehgarh III to Beawar in Rajasthan. It will enable evacuation of a part of 20 GW of renewable power from Renewable Energy Zones in Fatehgarh (9.1 GW), Bhadla (8 GW) and Ramgarh (2.9 GW) areas of the state.

Your Company participated in the tariff based competitive bidding for the Fatehgarh Project through Sterlite Grid 19 Limited, a wholly owned subsidiary and emerged as a successful bidder. Your Company has successfully acquired the SPV from PFC Consulting Limited, on August 01, 2023.

18. FINANCIAL STATEMENTS

The standalone and consolidated financial statements of the Company for the financial year 2022-23, prepared in accordance with Indian Accounting Standards (Ind AS) and duly audited by the Statutory Auditors of the Company, forms part of the Annual Report of FY2023.

Pursuant to General Circular Nos. 14/2020 dated April 08, 2020; 17/2020 dated April 13, 2020; 22/2020 dated June 15, 2020; 33/2020 dated September 28,

2020, 39/2020 dated December 31, 2020, 10/2021 dated June 23, 2021, 20/2021 dated December 08,

2021 and 03/2022 dated May 05, 2022; 10/2022 dated December 28, 2022 issued by the Ministry of Corporate Affairs, the Company shall not be dispatching physical copies of the financial statements forming part of the Annual Report. The Annual Report for FY2023 shall be sent to the Members/Shareholders through email only. The physical copy of the Annual Report would be sent to the Member/Shareholders on a request made in this regard.

19. AMOUNT TRANSFERRED TO GENERAL RESERVE

No amount is being proposed to be transferred to the reserves, out of profits for FY2023.

20. DIVIDEND

The Board of Directors of your Company in its meeting held on March 24, 2023, declared an interim dividend of 50% per equity share, being I 1/- per share for FY2023, aggregating up to approximately I 122.36 million to be paid out of the profits of the Company for FY2023.

The interim dividend was paid to those shareholders of the Company whose names appeared on the Register of Members as on the record date i.e. April 07, 2023, except those equity shares in respect of which the Shareholders have waived or forgone their right to receive the interim dividend for FY2023, in accordance with the Articles of Association of the Company.

Further, your Board of Directors do not recommend final dividend for FY2023. Therefore, the Interim Dividend paid during FY2023 would become the final dividend for such year and accordingly, the same will also be placed for confirmation/approval of the Members/ Shareholders at the ensuing 8th Annual General Meeting.

The Dividend policy can be accessed on the website of the Company at https://www.sterlitepower.com/wp- content/uploads/2021/11/dividend policy 0.pdf.

21. CHANGE IN NATURE OF BUSINESS, IF ANY.

There is no change in the nature of business of the Company during FY2023.

22. CORPORATE GOVERNANCE

A Report on Corporate Governance forming part of this Directors Report is annexed as Annexure-A.

23. CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All contracts and arrangements with related parties, entered into by your Company during FY2023, were in the ordinary course of business and on arms length basis. Pursuant to Section 134 of the Companies Act, 2013 and the Rules made thereunder, particulars of contracts or arrangements in Form: AOC-2 with related parties are annexed to this Directors Report as Annexure-B.

The details regarding the policy, approval and review process of Related Party Transactions are available in the Corporate Governance Report annexed to this Directors Report as Annexure-A and forming part of the Directors Report.

24. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The details of Loans, Guarantees and Investments of your Company are provided in Note no. 6, 7, 8, 19 & 20 of the standalone financial statements forming part of the Annual Report for FY2023.

25. SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES

As on March 31, 2023, your Company had 51 subsidiaries and 8 Joint-ventures. The list of subsidiaries and joint ventures is annexed to this Directors Report as Annexure-C.

Pursuant to Section 129 of the Companies Act, 2013 and the Rules made thereunder, statement containing salient features of the financial statements of the subsidiary and joint venture companies in Form: AOC-1 is annexed to this Directors Report as Annexure-D.

The Policy on material subsidiaries can be accessed on the website of the Company at https://www.sterlitepower. com/wp-content/uploads/2021/11/policy on material subsidiaries 0.pdf.

During FY2023, the changes in subsidiaries and/or joint ventures of your Company is as under:

i. Companies that have become subsidiaries/associates/ joint ventures during FY2023:

• Through incorporation of a new company-
- Sterlite Grid 31 Limited (w.e.f. May 26, 2022)
- Sterlite Grid 32 Limited (w.e.f. May 23, 2022)
- Sterlite Grid 33 Limited (w.e.f. May 25, 2022)
- Sterlite Grid 34 Limited (w.e.f. June 02, 2022)
- Sterlite Grid 35 Limited (w.e.f. May 26, 2022)
- Sterlite Grid 36 Limited (w.e.f. July 20, 2022)
- Sterlite Grid 37 Limited (w.e.f. July 22, 2022)
- Sterlite Grid 38 Limited (w.e.f. July 22, 2022)
- Sterlite Grid 39 Limited (w.e.f. July 22, 2022)
- Sterlite Grid 40 Limited (w.e.f. July 22, 2022)
- SF 542 (w.e.f. July 28, 2022)

• Through acquisition of shares- Kishtwar Transmission Limited

(w.e.f. December 06, 2022)

- Sterlite Interlinks Limited (w.e.f. June 01, 2022)

- Serra Negra Transmissao de Energia S.A (w.e.f. June 15, 2022)

- Tangara Transmissao de Energia S.A.

(w.e.f. June 15, 2022)

Note: Post March 31, 2023, Fatehgarh III Beawar Transmission Limited has become the subsidiary of the Company through acquisition of shares w.e.f. August 01, 2023.

ii. Companies which have ceased to be subsidiaries during FY2023:

• SE Vineyards Transmissao de Energia S.A (w.e.f. November 30, 2022)

• Vineyards Participagoes S.A.

(w.e.f. November 30, 2022)

• Khargone Transmission Limited (w.e.f. March 02, 2023)

iii. Companies which have ceased to be associates during FY2023:

• Sterlite Interlinks Limited (w.e.f. June 01, 2022)

26. DISCLOSURE REGARDING PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

Your Company has zero tolerance for sexual harassment at workplace and has adopted a Policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules framed thereunder for prevention and redressal of complaints of sexual harassment at workplace and the same can be accessed on the website of the Company at https://www. sterlitepower.com/wp-content/uploads/2021/12/sterlite power posh policv-1.pdf. Your Company has constituted Internal Complaints Committee (ICC) for various business divisions and offices, as per the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Your Company is an equal opportunity employer and believes in providing opportunity and key positions to women professionals. The Group has endeavoured to encourage women professionals by creating proper policies to address issues relating to safe and proper working conditions and create and maintain a healthy and conducive work environment that is free from discrimination. This includes discrimination on any basis, including gender, as well as any form of sexual harassment.

During FY2023, your Company has received no complaints of harassment. As on March 31, 2023, no complaints were pending to be resolved.

27. INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Pursuant to the provisions of Section 124 of the Companies Act, 2023 and the Rules made thereunder the amounts of Dividend which remained unpaid or unclaimed for a period of seven years are to be transferred by the Company to the Investor Education and Protection Fund established by Central Government.

As on March 31, 2023, the details of unpaid and unclaimed dividend lying with your Company can be accessed on the website of the Company at https://www. sterlitepower.com/investors.

Further, no amount was required to be transferred to IEPF during FY2023.

28. SHARES LYING IN UNCLAIMED SUSPENSE ACCOUNT

The details of shares lying in Unclaimed Suspense Account are available in the Corporate Governance Report annexed to this Directors Report as Annexure-A and forming part of the Directors Report. Further, the details of the Shareholders to whom the shares belong and lying in the unclaimed suspense account can be accessed on the website of the Company at https://www. sterlitepower.com/investors.

29. PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Pursuant to Section 134 of the Companies Act, 2013 and the Rules made thereunder, the particulars of conservation of energy, technology absorption and foreign exchange earnings and outgo is annexed to this Directors Report as Annexure-F.

30. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

Pursuant to the Section 197 of the Companies Act, 2013 and the Rules made thereunder, the particulars relating to statement containing the remuneration of the employees including such other details as are required to be disclosed under the relevant Section, is being excluded from this Annual Report for FY2023.

However, such particulars shall be made available to any Member/Shareholder on a specific request made in writing before the date of ensuing Annual General Meeting. Any Member/Shareholder interested in obtaining a copy of such statement, may write to the Company Secretary at secretarial.grid@sterlite.com and the same shall be furnished upon such request.

31. PERFORMANCE AND RETENTION CASH PLAN 2021

In order to provide strategic direction to the Organisation and ensuring achievement of high growth, the Nomination and Remuneration Committee had adopted ‘Performance and Retention Cash Plan 2021 (“Plan”) on September 24, 2021, for the key employees including Managing Director

of the Company to ensure a continuous focus on creating value and participating actively in growth journey.

The Plan is in line with Companys philosophy of sharing benefits of growth with its key growth drivers.

32. LITIGATION BY THE COMPANY UNDER

INSOLVENCY AND BANKRUPTCY CODE, 2016

The details of application made by your Company and proceeding pending under the Insolvency and Bankruptcy Code, 2016 during FY2023 along with the status as at March 31, 2023 is as under:

Pursuant to certain purchase orders placed by Pan

India Infraprojects Private Limited (‘Pan India) for the purchase of ACSS aluminium conductors and OPGW Cables from the Company and a liquidation application filed before the National Company Law Tribunal against Pan India under the Insolvency and Bankruptcy Code, 2016 and the corresponding public announcement dated July 25, 2020, your Company has raised a claim of approximately I 124.17 million against Pan India for certain cancellation costs and dues towards the non-issuance of C form owed by Pan India to the Company. The matter is currently pending.

33. DISCLOSURES WITH RESPECT TO EVENTS POST MARCH 31,2023

a. Alteration in the share capital clause of Memorandum of Association

Post closure of FY2023, the authorised Share Capital has been increased from I 1753,33,00,000 to I 2000,00,00,000, by creation of 123,33,50,000 additional Redeemable Preference Shares of I 2/- each aggregating to I 246,67,00,000. The details of the same are as under:

Type of share

Capital structure as on March 31,2023 No. of shares Amount (In J)

Capital Structure

as on August 11, 2023

No. of shares Amount (In J)

Equity shares of I 2/- each

638,02,50,000 1276,05,00,000 638,02,50,000 1276,05,00,000

Optionally Convertible Redeemable Preference Shares of I 10/- each

47,00,00,000 470,00,00,000 47,00,00,000 470,00,00,000

Redeemable Preference Shares of I 2/- each

3,64,00,000 7,28,00,000 126,97,50,000 253,95,00,000

Total

1753,33,00,000 2000,00,00,000

b. Completion of tenure of Ms. Kamaljeet Kaur,

Whole Time Director

Ms. Kamaljeet Kaur (Chief Human Resource Officer) was appointed as a Woman and Whole Time Director of the Company on June 29, 2022, for a period of 1 (One) year. Pursuant to the provisions of the Companies Act, 2013 and read with the terms of appointment, from the closing hours of business of the Company on June 28, 2023, she has vacated the position of the Director and Whole Time Director.

c. Resignation of Mr. Sanjeev Bhatia, from the position of the Chief Financial Officer

Mr. Sanjeev Bhatia was appointed as Chief Financial Officer (CFO) of your Company w.e.f. October 01, 2021.

He has submitted his resignation from the position of the CFO w.e.f. August 22, 2023, as he wants to pursue opportunities outside your Company. The Board of directors in its meeting held on August 11, 2023, has accepted the same and he would be relieved of his responsibilities as CFO with effect from closing hours of business of the Company on August 22, 2023.

34. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to provisions of Section 134 of the Companies Act, 2013 and the Rules made thereunder, your Directors state that:

a. in the preparation of the annual accounts for the financial year ended March 31, 2023, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same.

b. they have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2023 and of the profit/ loss of the Company for the year April 01, 2022 to March 31, 2023.

c. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d. they have prepared the annual accounts on a going concern basis.

e. they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively.

f. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

35. GENERAL

For FY2023, the Directors state that:

a. Your Company has not received any complaints relating to child labour, forced labour, involuntary labour during the FY2023.

b. Your Company has not accepted any deposits from the public or otherwise in terms of Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposit) Rules, 2014 and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of Balance Sheet.

c. Your Company has not issued any equity shares with differential rights as to dividend, voting or otherwise.

d. The Managing Director of your Company do not receive any remuneration or commission from any of its subsidiaries.

e. No significant or material orders were passed by the Regulators or Courts or Tribunals which has an impact on the going concern status and Companys operations in future.

f. The Auditors have not reported any matter under Section 143 (12) of the Act.

g. Your Company has not made any one-time settlement in respect of any loan from Banks or Financial Institutions, hence, no details of difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof, are required to

be given.

36. COMPLIANCE WITH SECRETARIAL STANDARDS

Your Directors confirm that the Secretarial Standard - 1, on Meetings of Board of Directors and Secretarial Standard - 2 on General Meetings, issued by the Institute of Company Secretaries of India, have been duly complied with.

37. ANNUAL RETURN

Pursuant to Section 92 of the Companies Act, 2013 the Annual Return of the Company for FY2023 can be accessed on the website of the Company at https://www. sterlitepower.com/investors.

38. ACKNOWLEDGEMENTS

Your Directors would like to express their appreciation for the assistance and co-operation received from the financial institutions, banks, Government authorities, customers, vendors and Members during FY2023.

Your Directors place on record their deep sense of appreciation to the contributions made by the employees through their hard work, dedication, competence, support and co-operation towards the progress of your Company.

For and on behalf of the Board of Directors

Sterlite Power Transmission Limited
sd/-
Pravin Agarwal
Chairman
DIN-00022096

Date: August 11, 2023

Place: Mumbai