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

• Aluminum production increased from 313,189 tons in fiscal 2007 to 358,671 tons in fiscal 2008, an increase of 14.5%, as our new
Korba smelter of 245,000 tpa capacity increased production from 207,643 tons in fiscal 2007 to 249,392 tons in fiscal 2008. The
existing smelter production increased from 105,546 tons in fiscal 2007 to 109,279 tons in fiscal 2008, an increase of 3.5%, primarily
due to improvements in operational efficiency. Due to higher production volume from the new smelter, wheeling income from the sale
of surplus power was reduced in fiscal 2008 as compared to fiscal 2007.
• Aluminum sales increased from 315,002 tons in fiscal 2007 to 358,328 tons in fiscal 2008, an increase of 13.8%. Sales of aluminum
ingots increased from 184,482 tons in fiscal 2007 to 195,785 tons in fiscal 2008, an increase of 6.1%, as production from the new
Korba smelter was primarily sold in ingot form. Wire rod sales increased from 72,948 tons in fiscal 2007 to 101,316 tons in fiscal
2008, an increase of 38.9% as a result of increased production due to the addition of two wire rod mills at the new Korba smelter.
Rolled product sales increased from 57,572 tons in fiscal 2007 to 61,227 tons in fiscal 2008, an increase of 6.3%. The increases in
sales of wire rods and rolled products reflect increased demand for these products, particularly in the electrical and construction
sectors, and our continued focus on the sale of value-added products.
• Aluminum sales in the domestic market increased from 224,163 tons in fiscal 2007 to 265,839 tons in fiscal 2008, an increase of
18.6%, as a result of increased production. Our aluminum exports increased from 90,839 tons in fiscal 2007 to 92,489 tons in fiscal
2008. We endeavor to sell as large a quantity of our products as possible domestically, where we receive an Indian market premium.
Our domestic sales as a percentage of total sales increased from 71.2% in fiscal 2007 to 74.2% in fiscal 2008 as the demand in the
domestic market increased more rapidly than our production volume growth.
• The daily average aluminum cash settlement price on the LME declined marginally from $2,663 per ton in fiscal 2007 to $2,620 per
ton in fiscal 2008, a decrease of 1.6%.
Operating income in the aluminum segment decreased from Rs. 13,371 million in fiscal 2007 to Rs. 11,581 million in fiscal 2008, a
decrease of Rs. 1,790 million, or 13.4%. Operating margin decreased from 33.4% in fiscal 2007 to 27.8% in fiscal 2008. The decrease in
operating income was primarily due to the increased cost of production as a result of the appreciation of the Indian Rupee against the US dollar
by 11.1% between fiscal 2007 and 2008 and higher cost of coal and a decrease in the daily average aluminum LME price.
Power
Our power business is still under development and we had no operating results for our commercial power generation business segment in
fiscal 2008.
Corporate and Others
Operating loss in our corporate and other business segment increased from Rs. 3 million in fiscal 2007 to Rs. 657 million in fiscal 2008.
Operating loss in fiscal 2008 was due to provisions made for corporate guarantees provided to banks and financial institutions.
Interest and Dividend Income
Interest and dividend income increased from Rs. 2,072 million in fiscal 2007 to Rs. 6,548 million in fiscal 2008, an increase of Rs.
4,476 million, or 216.0%, primarily due to interest income on the proceeds from our ADS offering that we have currently invested.
Interest Expense
Interest expense decreased from Rs. 4,329 million in fiscal 2007 to Rs. 3,386 million in fiscal 2008, a decrease of Rs. 943 million, or 21.8%.
The decrease in interest expense was primarily due to a reduction in outstanding debt due to early repayment of some borrowings and
reductions in interest rates in the second half of fiscal 2008.
Net Realized and Unrealized Investment Gains
Net realized and unrealized investment gains increased from Rs. 2,280 million in fiscal 2007 to Rs. 4,511 million in fiscal 2008, an increase
of Rs. 2,231 million, or 97.9%, primarily due to income earned from investment of the proceeds of our $2.0 billion offering of equity shares
represented by ADSs in June 2007. This increase was also due to higher income earned from surplus cash invested by HZL, income earned
from the investment of cash generated during the year, fair value gains on investments and improvement in yield on the investment of our cash.
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