Dear Shareholder''s
 
 OVERVIEW
 
 The year FY 2011-12 has been a transformational year for Sterlite. Your
 company has made considerable progress in the execution of its strategy
 this year, delivering production growth and increasing reserves and
 resources, completing Zinc International acquisition. Over the years,
 Sterlite has become a world-class, diversifed resources company,
 contributing around Rs. 5,500 Crore to the Indian exchequer in terms of
 taxes, duties and royalties.
 
 ROBUST FINANCIAL RESULTS
 
 Despite volatile economy conditions, Sterlite increased volumes across
 most of its commodities and successfully integrated recent Zinc
 International acquisition, which contributed to our strong revenue
 growth, which were up 35% at Rs.  40,967 Crore. In line with the
 revenue growth, FY 2011-12 EBITDA grew 26% to Rs. 10,169 Crore. We
 continue to maintain a strong and liquid balance sheet with Cash and
 liquid investments of Rs. 23,403 Crore.
 
 STRONG OPERATIONAL PERFORMANCE
 
 Record production of Refined Zinc, Lead including Silver and Power and
 increased contributions from the Zinc International assets were the key
 drivers of our strong operational performance as our growth projects
 started to yield results.
 
 The ramp up of the silver-rich Sindesar Khurd mine and the new Silver
 refnery delivered an impressive 35% increase in Silver production for
 the year, with production reaching a new high of 242 tonnes and
 contributing Rs. 1,014 Crore to EBITDA in FY 2011-12.
 
 The commissioning of two 600 MW power plant at the 2,400 MW SEL power
 plant and the Lead smelter at Dariba signifcantly boosted our power
 generation and lead production.
 
 This performance is the result of the hard work and commitment of our
 13,525 employees across the organization and on behalf of the Board; I
 would like to thank them for their contribution to this excellent
 performance.
 
 GLOBAL MARKETS
 
 Despite volatile global market conditions, demand for commodities
 remained strong throughout the year, driven by economic growth and
 urbanization in emerging economies, which account for approximately 94%
 of our revenues. Commodity prices were strong in the frst half of FY
 2011-12, but corrected in the second half of the year, with the end
 result that prices for silver moved up substantially, zinc prices fell
 and copper TC/RCs, aluminium and lead were ahead of the previous year.
 
 Growth rates in India, our home market, moderated to 6.9% due to higher
 infation. Demand for natural resources however continued its upward
 trend particularly for aluminium with India projected to become the
 second largest consumer of aluminium in Asia during CY 2012.
 
 Over the long-term, we believe that the increasing size of the domestic
 market in India and favourable demographics will continue to drive
 robust economic growth. We meet 82% of India''s Zinc consumption and
 approximately 46.5% of its Copper and Lead requirements.
 
 KEY STRATEGIC DEVELOPMENTS
 
 Growth
 
 We continued to focus on extending our existing resources and growing
 our assets organically, investing in projects that expand our high
 quality asset base, zinc assets life and increase our production
 volumes. During the year, we invested Rs. 7,439 Crore in our organic
 growth programme, increasing production of Zinc-Lead, Silver, Copper,
 Aluminium, and Power. We have successfully completed the integration of
 the assets acquired from Anglo American last year, now our Zinc
 International business. The assets we acquired also included the
 Gamsberg deposit in South Africa, which is one of the largest
 undeveloped zinc deposits in the world. With a resource base of 186 mt
 , Gamsberg has the potential to deliver over 400 ktpa over a mine life
 of more than 20 years and a feasibility study is underway to scope the
 project.
 
 Long term Value
 
 We have maintained our position as a low cost producer through our
 culture of continuous improvement.  As well as major investment
 projects, a myriad of small projects have been implemented across all
 our businesses to reduce energy consumption, improve productivity,
 debottleneck processes and increase effciency.
 
 To ensure the long-term future of the Group, we aim to grow our
 Reserves and Resources (R&R) at a faster rate than we deplete them,
 through exploration and acquisitions. Exploration focus yielded good
 results during the year for Zinc Business.
 
 In line with our strategy to simplify our corporate structure, towards
 the end of the year, we announced a merger of Sterlite Industries
 (India) Ltd with Sesa Goa Ltd to create Sesa Sterlite Ltd. As part of
 the group structure simplifcation, Vedanta''s stake in Cairn India and
 Vedanta Aluminium will move under Sesa Sterlite. Sesa Sterlite Ltd is
 expected to be the world''s Seventh largest global diversifed natural
 resources major, ranked by EBITDA.
 
 The simplifcation and consolidation of the Group structure is expected
 to yield signifcant benefits through a more effcient capital structure,
 increased fexibility to allocate capital, broader access to capital
 markets and enhanced visibility of earnings and cash fow. The merger
 will also generate signifcant synergies for the shareholders of
 Sterlite.
 
 Sustainability
 
 We have continued to focus on aligning our policies and management
 systems to the sustainability standards recognized internationally by
 the IFC performance standards, ICMM and UNGC principles. This year we
 have completed the development of a comprehensive Sustainability
 Framework that is now being rolled out across our operations.
 
 We want to go even further and embed sustainable development into every
 aspect of what we do which is one of the priorities that I have set.
 The others are to:
 
 Improve our health and safety performance for a safer, more secure and
 healthier environment for every employee and contractor.
 
 - We work in an inherently risky industry. We will continue to strive
 to achieve our goal of ''zero harm''.  We have structured programme in
 place and our efforts to eliminate unsafe conditions and unsafe
 behavior are starting to yield results. Our quarterly fgures show good
 progress and our lost time injury rate continues to fall, reducing by
 13% as compared to last year.
 
 Contribute further and in a more targeted way to local communities
 
 We are passionately committed to making a difference to our local
 communities, contributing Rs. 57.58 Crore this year to community
 development projects, benefiting over 1.6 million people.
 
 Continue to manage and minimize our impact on air, water and land
 
 Our environmental focus on reducing specifc consumption of energy and
 water is making sound progress with most of our operations yielding
 signifcant positive results.
 
 Maintain a dialogue with Stakeholders to help us understand and respond
 to their material issues
 
 - We understand that stakeholder engagement is a two way process and
 have structured programmes through which we identify and engage with
 our different stakeholder group like our communities, our employee''s,
 our industry, our lenders, our government and our civil society in
 order to understand their material issues.
 
 Achieving our goals will take a great deal of hard work, but we are
 committed to our journey of continuous improvement.
 
 DIVIDEND
 
 The Board has recommended a fnal dividend of Rs. 1/- per share, taking
 the total dividend for FY 2011-12 to Rs. 2 per share, which is the
 highest ever dividend proposed by the company. The total dividend outgo
 will nearly double to Rs. 686 Crore in FY 2011-12 as against Rs. 430
 Crore during the previous year.
 
 FUTURE OUTLOOK
 
 We start the new financial year with a world-class asset portfolio, a
 low cost structure and a strong near term growth profle. The outlook
 for natural resources remains robust: industrialization and
 urbanization in China, India and other emerging economies continues to
 drive demand and Sterlite is well-positioned to serve these markets.
 Our signifcant capital investment programme, which has largely been
 invested, will deliver near-term production growth across our
 portfolio, in turn driving strong cash fow growth.
 
 Anil Agarwal
 
 Chairman