Sterlite Industries (India) Limited - Sterlite Industries India Ltd.

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A significant majority of India’s power requirements are dependent upon thermal coal-fired power plants. According to the Indian Bureau of Mines, or IBM, the total copper ore, lead-zinc ore, and bauxite resources of India are estimated at 1.4 billion tons, 0.5 billion tons, and 3.3 billion tons, respectively, as of April 2005. According to the Geological Survey of India, the total coal resources of India are 264.5 billion tons as of April 1, 2008 and according to the Energy Information Agency, a statistical agency of the United States government, India has the fourth largest coal reserves in the world as of 2007. The following table sets forth the coal reserves for the Indian states with the largest coal reserves: Indian states with more than 8 billion tons of coal reserves Total Coal Reserves (in billion tons) Charttisgarh 41.4 Jharkhand 73.9 Orissa 62.0 West Bengal 27.8 Andhra Pradesh 17.1 Madhya Pradesh 19.8 Maharashtra 9.1 Source: Ministry of Coal of the Government of India. Future Capacity Additions To sustain the strong recent economic growth in India, the Ministry of Power of the Government of India has set an ambitious target of providing “Power for All,” with a target of achieving an installed capacity of 212,000 MW by 2012 by adding over 100,000 MW of generation capacity from 2007 to 2012. An additional 64,035 MW is required from the current installed capacity to reach the target of 212,000 MW of installed capacity. The power sector in India is characterized by under-investment and resulting supply constraints, as a result of which, the power section in India suffers significant levels of energy deficits. The Indian Electricity Act, 2003 was enacted in order to consolidate multiple legislations covering various aspects of the power sector and to enhance the scope of power sector reforms. Reforms to national tariff policy in India in 2003 made it mandatory for power requirements to be procured via a transparent competitive bidding process as per the guidelines issued by the Ministry of Power of the Government of India. In order to accelerate the development of power plants in India, the Government of India has proposed the setting up of nine Ultra Mega Power Projects, or UMPPs. Each project will be 4,000 MW and will use coal as fuel. The Government of India will ensure land and environmental clearances, fuel linkage, offtake agreements and a payment security mechanism to ensure smooth implementation. Each of these projects is expected to be commissioned from 2008 to 2012, four of which have already been awarded. Tata Power has been awarded the Mundra UMPP in Gujarat and Reliance Power has won three UMPPs, Sasan in Madhya Pradesh, Krishnapatnam in Andhra Pradesh and Tilaiya in Jharkhand. According to the Central Electricity Authority of India, 78,577 MW of capacity additions were announced during the Eleventh Plan (2007- 2012) and it expects 86,500 MW of capacity additions in the Twelfth Plan (2012-2017). In order to maintain its current rate of growth, India requires faster capacity additions in the Eleventh Plan. Further, additions to generation capacity will require concomitant capacity additions in transmissions and distributions as well. Total investments of around Rs. 6.7 trillion ($166.6 billion) in the power sector in the Eleventh Plan (2007-2012) are expected. Transmission and Distribution In India, the transmissions and distributions system is comprised of state grids, regional grids (which are formed by interconnecting neighboring state grids) and distribution networks. The distribution networks and the state grids are mostly owned and operated by the SEBs or state governments through SEBs, while most of the inter-state transmission links are owned and operated by the Power Grid Corporation of India Limited. These regional grids facilitate transfers of power from power-surplus states to power-deficit states and are gradually being integrated to form a national grid. The existing inter-regional power transfer capacity of 17,000 MW is expected to be enhanced to 37,150 MW by the end of the Eleventh Plan (2012). With the enactment of the Indian Electricity Act, 2003 and the recently notified guidelines for competitive bidding in transmission projects, private investment was permitted in power transmission which became recognized as an independent activity. Power distribution in the States of Delhi and Orissa has been privatized and distribution networks are now operated by private utilities companies such as Tata Power, CESC Limited, Reliance Energy Limited, Torrent Power AEC & SEC and Noida Power Company Limited, and a number of other distribution companies. 14
Consumption Although electricity generation capacity has increased substantially in recent years, the demand for electricity in India still substantially exceeds available generation supply. The following charts show the gap between the total electricity required versus total electricity made available from fiscal 1998 to 2009. Power: Demand and Supply Power: Peak Demand and Supply Source: Ministry of Power of the Government of India. The industrial, domestic and agriculture sectors are the main consumers of electrical energy, with the industrial sector consuming 44%, domestic consumption of 25% and agriculture consuming over 24% of total electrical energy in fiscal 2007. Overall power demand increased at a compound annual growth rate of around 5% in the last decade from 1996-97 to 2007-08. There has been a shift in the demand for electricity from various sectors — the share of the industrial sector has declined steadily, and agricultural consumption, after peaking at 31% in 1995-96, declined to 22% in 2005-06. On the other hand, domestic household demand witnessed a steady increase from 19% in 1995-96 to 24% in 2005-06. The following chart shows power consumption by sector in percentage terms, for the period 2005 to 2006. Power: Category-wise Consumption (2005-06) Source: Central Electricity Authority of India. 15
Page 1 and 2: Yes Yes No No (Mark One) UNITED
Page 3 and 4: TABLE OF CONTENTS PAGE ITEM 4. INFO
Page 5 and 6: • Part I — Item 6. Directors, S
Page 7 and 8: Refined Copper Consumption Global c
Page 9 and 10: Indian Copper Market Background The
Page 11 and 12: The following table sets forth the
Page 13 and 14: Market Outlook Global Zinc Outlook
Page 15 and 16: Notwithstanding the rise in aluminu
Page 17: Market Outlook Global Aluminum Outl
Page 21 and 22: Power Trading Power trading takes p
Page 23 and 24: In addition, we are expanding our a
Page 25 and 26: • India’s economic growth and p
Page 27 and 28: We utilize project monitoring and a
Page 29 and 30: Seeking further growth and acquisit
Page 31 and 32: Our Production Process Our copper b
Page 33 and 34: The following map shows the locatio
Page 35 and 36: The principal deposits in the Mt. L
Page 37 and 38: consists of a 400,000 tpa copper sm
Page 39 and 40: Once processed at the Tuticorin fac
Page 41 and 42: Lead-Zinc Mines HZL sources all of
Page 43 and 44: Principal Facilities Overview The f
Page 45 and 46: Mines Rampura Agucha The Rampura Ag
Page 47 and 48: The gross book value of the Rajpura
Page 49 and 50: Summary of Mine Reserves The follow
Page 51 and 52: The following table sets out HZL’
Page 53 and 54: Market Share and Competition HZL is
Page 55 and 56: Additional Supply of Alumina The ad
Page 57 and 58: Bauxite Mines Chhattisgarh Mines Th
Page 59 and 60: Fabrication Facility The fabricatio
Page 61 and 62: Other Raw Materials BALCO also uses
Page 63 and 64: 1,250,000 tpa Aluminum Smelter Veda
Page 65 and 66: Sterlite Energy — Talwandi Sabo I
Page 67 and 68: Call Option Over Shares in BALCO On
Page 69 and 70:
mineral development on the forest,
Page 71 and 72:
Water (Prevention and Control of Po
Page 73 and 74:
The employer is responsible for ded
Page 75 and 76:
Our net sales and operating income
Page 77 and 78:
• Power. Our commercial power gen
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Copper The net sales of our copper
Page 81 and 82:
Year Ended March 31, 2007 2008 2009
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In addition, the Finance Act (2 of
Page 85 and 86:
Power Business We expect our future
Page 87 and 88:
Results of Operations Overview Cons
Page 89 and 90:
• Pursuant to the approval of the
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Aluminum Net sales to external cust
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the selling and distribution expens
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• Aluminum production increased f
Page 97 and 98:
We currently expect capital expendi
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Besides existing facilities, we had
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Energy is in the process of obtaini
Page 103 and 104:
Contractual Obligations The followi
Page 105 and 106:
SFAS No. 161, “Disclosures about
Page 107 and 108:
ITEM 6. DIRECTORS, SENIOR MANAGEMEN
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ITEM 19. EXHIBITS The following exh
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4.15 Rs. 7,000 million Rupee Term F
Page 113 and 114:
4.41 Rs. 10,000 million Loan Agreem
Page 115 and 116:
Exhibit 12.3 Certification of Chief
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Sterlite Industries (India) Limited - Sterlite Industries India Ltd.

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