Sterlite Industries (India)

The Directors are pleased to present the 33rd Annual Report together
 with the statement of audited accounts for the financial year ended 31
 March 2008.
 
 FINANCIAL HIGHLIGHTS
 
 The following table gives the financial highlights of your Company on a
 stand alone basis according to Indian Generally Accepted Accounting
 Principles (GAAP).
 
 Rs. in crore
 
 Year ended March 31                              2008          2007
 
 TURNOVER (GROSS)                             13,451.59    12,457.57
 
 Earning before interest, tax depreciation 
 and amortisation                              1,460.69     1,365.56
 
 Less: Interest                                  164.45       182.66
 
 Gross profit                                  1,296.24     1,182.90
 
 Less: depreciation and amortisation             138.98       133.20
 
 Extraordinary items                              52.79       137.40
 
 Profit before tax                             1,104.47       912.30
 
 Taxation                                        152.84       128.27
 
 NET PROFIT FOR THE YEAR                         951.63       784.03
 
 Add: balance brought forward from 
 previous year                                 1,426.93       970.47
 
 Amount available for appropriation            2,378.56     1,760.70
 
 APPROPRIATION:
 
 General reserve                                 100.00        79.00
 
 Debenture redemption reserve                      2.90          -
 
 Dividend on preference shares 
 (including tax thereupon)                          -           0.06
 
 Proposed dividend on equity shares 
 (including corporate tax thereon)
                                                 331.56          -
 
 Interim dividend on equity shares 
 (including corporate tax thereon)                  -         254.73
 
 Short provision of dividend of earlier year        -          (0.02)
 
 Balance carried forward to next year          1,944.10     1,426.93
 
 DIVIDEND
 
 Your Directors are pleased to recommend a dividend of 200% (Rs. 4/- per
 equity share of Rs. 2/- each) for the financial year 2007-08. The
 dividend, if approved at the ensuing Annual General Meeting, will be
 paid to those shareholders whose names appear on the register of
 members of the Company as on 21 August, 2008.
 
 FINANCIAL REVIEW
 
 During the year under review, the gross turnover of your Company
 increased by 8% from Rs. 12,458 crore to Rs. 13,452 crore. The EBITDA
 for the same period increased from Rs. 1,365 crore to Rs. 1,460 crore
 representing an increase of 7%.  The net profit increased by 21% from
 Rs. 784 crore to Rs. 952 crore. The increase in revenues can primarily
 be attributed to 8% increase in Copper sales to 337,073 MT from 311,148
 MT; 27% increase in Sulphuric Acid sales to 614,098 MT from 483,018 MT.
 LME prices also showed a substantial increase with average LME for the
 year being US,588 per MT compared to US,861 MT during the previous
 year.
 
 OPERATIONAL REVIEW
 
 We produced 339,294 MT of cathodes, an increase of 8% from the previous
 year of 312,720 MT. We also produced 224,758 MT of copper rods, an
 increase of 26% from the previous year production of 177,882 MT. The
 production of sulphuric acid increased by 9% from 946,539 MT to
 1,027,771 MT.
 
 During the year under review, your Company consolidated its leadership
 position in domestic copper with record sales of 125,588 MT of copper
 with a market share of 29% in the primary market. Your Company also
 exported 180,035 MT of copper (previous year 194,625 MT). Exports
 included 99,275 MT of copper rods (82,603 MT in the previous year).
 Malaysia, Saudi Arabia, Thailand, China and Singapore are the key
 markets and we continue to develop a larger customer base for the
 export of copper rods.
 
 SHARE CAPITAL
 
 The paid-up equity share capital of your Company increased by Rs. 30
 crore during the year due to the allotment of 15 crore equity shares of
 Rs. 2 each underlying American Depository Shares (ADSs), which were
 allotted in June 2007.
 
 CORPORATE GOVERNANCE AND ADDITIONAL INFORMATION TO SHAREHOLDERS
 
 A detailed report on the corporate governance system and practices of
 your Company along with auditor’s certificate on compliance are given
 as a separate chapter in the Annual Report.
 
 MANAGEMENT DISCUSSION AND ANALYSIS
 
 A detailed report on Management Discussion and Analysis is provided as
 a separate chapter in the Annual Report.
 
 SUBSIDIARY COMPANIES
 
 Fujairah Gold FZE, UAE became a subsidiary of your Company during the
 year. Including this, your Company had nine subsidiary companies as on
 31 March 2008.
 
 The shareholders may refer to the statement under Section 212 of the
 Companies Act, 1956 and information on the financial statements of
 subsidiaries appended to the above Statement under Section 212 of the
 Companies Act, 1956 in this Annual Report for further information on
 these subsidiaries.
 
 The Ministry of Corporate Affairs vide its letter No.  47/167/2008 – CL
 - III dated 18th June 2008 granted approval to your Company for not
 attaching the financial statements of subsidiary companies to the
 financials of your Company for 2007-08.
 
 Members may write to Company Secretary at Sterlite Industries (India)
 Limited, SIPCOT Industrial Complex, Madurai-Bypass Road, Tuticorin –
 628 002 to obtain a copy of the financial statements of the subsidiary
 companies.
 
 The consolidated financial statements, in terms of Clause 32 of the
 Listing Agreement and in terms of Accounting Standards 21 issued by the
 Institute of Chartered Accountants of India (ICAI) also form part of
 this Annual Report.
 
 POSTAL BALLOT
 
 Your Company amended the main object clause of its Memorandum of
 Association vide shareholder’s approval accorded through postal ballot
 on 19 December 2007.  Details have been provided in the section on
 Additional Shareholders’ Information / Corporate Governance.
 
 FIXED DEPOSITS
 
 Your Company has not accepted or renewed any fixed deposits under
 section 58A of the Companies Act, 1956.  No amount of principal or
 interest was outstanding as on 31 March 2008.
 
 DIRECTORS
 
 Mr Anil Agarwal and Mr Dwarka Prasad Agarwal retire by rotation at the
 ensuing Annual General Meeting scheduled on 22 August, 2008 and being
 eligible offer themselves for re-appointment.
 
 Mr Kuldip Kumar Kaura was re-appointed as Managing Director and Chief
 Executive Officer of the Company for a further period of six months
 from 1 April 2008 to 30 September 2008. The resolution for this has
 been included in the notice of the Annual General Meeting scheduled to
 be held on 22 August, 2008.
 
 Mr Navin Agarwal was re-appointed as a Whole-time Director, designated
 as Executive Vice-Chairman of the Company for a further period of five
 years from 1 August 2008 to 31 July 2013. The resolutions for his re-
 appointment has been included in the notice of the Annual General
 Meeting scheduled to be held on 22 August, 2008
 
 The brief profiles of Mr Anil Agarwal, Mr Dwarka Prasad Agarwal, Mr
 Kuldip Kumar Kaura and Mr Navin Agarwal are given in the chapter on
 Corporate Governance.
 
 INFORMATION PURSUANT TO SECTION 217 OF THE COMPANIES ACT, 1956
 
 A. CONSERVATION OF ENERGY, RESEARCH & DEVELOPMENTS, TECHNOLOGY
 ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
 
 The particulars as prescribed under section 217(1)(e) of the Companies
 Act, 1956, read with the Companies (Disclosure of Particulars in the
 Report of the Board of Directors) Rules, 1988 are set out as an
 annexure to the Directors’ Report.
 
 B. PARTICULARS OF EMPLOYEES
 
 Pursuant to the provisions of Section 217(2A) of the Companies Act,
 1956 read with the Companies (Particulars of Employees) Rules, 1975 as
 amended, the names and other particulars of employees are set out as an
 annexure to the Directors’ Report. However, as per provisions of
 Section 219(1)(b)(iv) of the Companies Act, 1956, the report and the
 accounts are being sent to all the shareholders excluding the aforesaid
 information. Any shareholder desirous of obtaining such particulars may
 write to the Company Secretary at the registered office of the Company.
 
 C. DIRECTORS’ RESPONSIBILITY STATEMENT
 
 As required under Section 217(2AA) of the Companies Act, 1956, your
 Directors hereby confirm that:
 
 In the preparation of the annual accounts, applicable accounting
 standards have been followed along with proper explanations relating to
 material departures;
 
 Such accounting policies have been selected and they have consistently
 applied them 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 at the end of the financial year and of the profit of the
 Company for that period.
 
 Proper and sufficient care for maintenance of adequate accounting
 records have been taken in accordance with the provisions of this Act,
 for safeguarding the assets of the Company, and for preventing and
 detecting fraud and other irregularities;
 
 The accounts are prepared on ‘going concern’ basis.
 
 AUDITORS
 
 The statutory auditors of the Company, M/s. Chaturvedi & Shah,
 Chartered Accountants and M/s. Das and Prasad, Chartered Accountants,
 retire at the ensuing Annual General Meeting.
 
 M/s. Chaturvedi & Shah have confirmed their eligibility and willingness
 to accept office of Auditors, however, M/s. Das & Prasad, Chartered
 Accountants have expressed their inability for the same. The Company
 has received the consent of M/s. Deloitte, Haskin & Sells, Chartered
 Accountants to act as statutory auditors of the Company.  The Audit
 Committee and the Board of Directors therefore, recommend M/s.
 Chaturvedi & Shah and M/s. Deloitte, Haskin & Sells, Chartered
 Accountants as statutory auditors of the Company for 2008-09 for the
 approval of shareholders.
 
 AUDITORS’ QUALIFICATION ON ACCOUNTS
 
 Notes to the accounts, as referred in the auditors report, are
 self-explanatory and a practice consistently followed, and therefore do
 not call for any further comments and explanations.
 
 RECENT DEVELOPMENT
 
 On 30 May, 2008, your Company and ASARCO LLC, or Asarco, a mining,
 smelting and refining Company based in Tucson, Arizona, United States
 of America, signed a definitive agreement for your Company to acquire
 substantially all the operating assets of Asarco for .6 billion in
 cash following an auction process. The agreement is subject to the
 approval of the US Bankruptcy Court for the Southern District of Texas,
 Corpus Christi Division.
 
 GROUP STRUCTURE
 
 The Agarwal Group, being a “group” defined under the Monopolies and
 Restrictive Trade Practices Act, 1969, (MRTP Act) controls the Company.
 The names of companies and persons comprising the Agarwal Group, have
 been disclosed in the Annual Report of the Company for the purpose of
 Regulation 3(1)(e) of the SEBI (Substantial Acquisition of Shares and
 Takeover) Regulations, 1997.
 
 REGISTRAR AND SHARE TRANSFER AGENT
 
 Details of the depository system and listing of shares are given in the
 section “Additional Shareholder Information, which forms a part of the
 Corporate Governance Report and is attached with the Annual Accounts.
 
 During the year, M/s. Karvy Computershare Private Limited, Hyderabad,
 was appointed as the Registrar and Share Transfer Agent of the Company
 with effect from June 2007.
 
 AWARDS AND ACCOLADES
 
 A detailed report on the awards won by your Company during the year
 ended 31 March 2008 is given in a separate section in this Annual
 Report.
 
 CORPORATE SOCIAL RESPONSIBILITY
 
 A detailed report on the Corporate Social Responsibility of your
 Company is given in a separate section in this Annual Report.
 
 ACKNOWLEDGEMENTS
 
 Your Company maintained healthy, cordial and harmonious industrial
 relations at all levels. The enthusiasm and unstinting efforts of the
 employee have enabled your Company to remain at the forefront of the
 industry. The Directors place on record their sincere appreciation for
 significant contributions made by the employees through their
 dedication, hard work and commitment towards the success and growth of
 the Company.
 
 The Directors also acknowledge the support and assistance extended to
 us by the Government of India, various state governments, and
 government departments, financial institutions, bankers, shareholders
 and investors at large, and look forward to having the same support in
 our endeavours.
 
 
                          For and on behalf of the Board of Directors:
 
                          ANIL AGARWAL
                          CHAIRMAN
 
 Place: Mumbai
 Date : 28 June 2008