UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

FORM 20-F

(Mark One)

     ¨ Registration statement pursuant to section 12(b) or 12(g) of the Securities Exchange Act of 1934

or

     þ Annual report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended March 31, 2013

or

     ¨ Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from            to

or

     ¨ Shell company report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934

Date of event requiring this shell company report

Commission file number 001-33175

Sterlite Industries (India) Limited

(Exact Name of Registrant as specified in its charter)

	SIPCOT Industrial Complex, Madurai Bypass Road, T. V.
	Puram P.O.,
	Tuticorin - 628002,
Republic of India	Tamil Nadu, India
(Jurisdiction of Incorporation or Organization)	(Address of Principal Executive Offices)

Rajiv Choubey

Company Secretary and Head Legal

SIPCOT Industrial Complex, Madurai Bypass Road, TV Puram P.O.

Tuticorin—628002

Tamil Nadu, India

(91) 461 424 2982

rajiv.choubey@vedanta.co.in

(Name, Telephone, E-mail and/or facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

American Depositary Shares each representing four equity shares
par value Re. 1 per equity share.	New York Stock Exchange
(Title of Class)	(Name of Exchange On Which Registered)

Securities registered or to be registered pursuant to Section 12(g) of the Act.

None

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

None

(Title of Class)

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

As of March 31, 2013, 3,361,207,534 equity shares, par value Re. 1 per equity share, were

issued and outstanding, of which 449,113,200 equity shares were held in the form of 112,278,300

American Depositary Shares or ADSs.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes þ  No ¨

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.  Yes ¨  No þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes þ  No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes ¨  No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer. See the definitions of “large accelerated filer” and “accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  þ Accelerated filer  ¨ Non-accelerated filer  ¨

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

US GAAP  ¨ International Financial Reporting Standards as issued by the International Accounting Standards Board  þ Other ¨

If “Other” has been checked in the previous question, indicate by check mark which financial statement item the registrant has elected to follow.  Item 17 ¨  Item 18 ¨

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934).  Yes ¨  No þ

TABLE OF CONTENTS

		PAGE
PART I
ITEM 1.	IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS		3
ITEM 2.	OFFER STATISTICS AND EXPECTED TIMETABLE		3
ITEM 3.	KEY INFORMATION		3
ITEM 4.	INFORMATION ON THE COMPANY		26
ITEM 4A.	UNRESOLVED STAFF COMMENTS		93
ITEM 5.	OPERATING AND FINANCIAL REVIEW AND PROSPECTS		93
ITEM 6.	DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES		125
ITEM 7.	MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS		133
ITEM 8.	FINANCIAL INFORMATION		140
ITEM 9.	THE OFFER AND LISTING		146
ITEM 10.	ADDITIONAL INFORMATION		147
ITEM 11.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		182
ITEM 12.	DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES		184
PART II
ITEM 13.	DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES		186
ITEM 14.	MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS		186
ITEM 15.	CONTROLS AND PROCEDURES		186
ITEM 16A.	AUDIT COMMITTEE FINANCIAL EXPERT		189
ITEM 16B.	CODE OF ETHICS		189
ITEM 16C.	PRINCIPAL ACCOUNTANT FEES AND SERVICES		189
ITEM 16D.	EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES		189
ITEM 16E.	PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS		189
ITEM 16F.	CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT		189
ITEM 16G.	CORPORATE GOVERNANCE		190
ITEM 16H.	MINE SAFETY DISCLOSURE		190
PART III
ITEM 17.	FINANCIAL STATEMENTS		190
ITEM 18.	FINANCIAL STATEMENTS		190
ITEM 19.	EXHIBITS		190
SIGNATURES			196
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS			F-1

CONVENTIONS USED IN THIS ANNUAL REPORT

In this annual report, we refer to information regarding the copper, zinc, aluminium and power industries and our competitors from market research reports, analyst reports and other publicly available sources. Although we believe that this information is reliable, we have not independently verified the accuracy and completeness of the information. We caution you not to place undue reliance on this data.

With effect from June 25, 2010, there was a stock split of each of the Rs. 2 shares into two equity shares of par value Re. 1 each and a bonus issue of one equity share in the ratio of 1:1 (“stock split and bonus issue”). Prior to the stock split and bonus issue, each ADS represented one equity share, having a par value of Rs. 2 each. Following the stock split and bonus issue, each ADS represents four equity shares, having a par value of Re. 1 each. The computations of basic and diluted EPS have been adjusted retroactively for all periods presented to reflect the change in capital structure. All references in our consolidated financial statements to number of shares and per share amounts have been retroactively restated to reflect the stock split and the bonus issue.

In this annual report, references to the “ADS offering” are to the initial public offering of our equity shares in the form of ADSs, each currently representing four equity shares, in the United States completed in June 2007.

Unless otherwise indicated, our accompanying financial information has been prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board, or IASB, for the fiscal years ended March 31, 2011, 2012 and 2013. Our consolidated financial statements as of and for the year ended March 31, 2009 were originally prepared in accordance with US GAAP and were restated in accordance with IFRS as issued by the IASB for comparative purposes only. For the years prior to fiscal 2010, we prepared our financial statements in accordance with accounting principles generally accepted in the United States, or US GAAP which differs in certain significant respects from and is not comparable with IFRS as issued by the IASB. References to a particular “fiscal” year are to our fiscal year ended March 31 of that year. Our fiscal quarters end on June 30, September 30 and December 31. References to a year other than a “fiscal” year are to the calendar year ended December 31.

Our consolidated financial statements are reported in Indian Rupees. Unless otherwise specified, translation of amounts for the convenience of the reader has been made in this annual report (i) from Indian Rupees to US dollars at the rate of Rs. 54.52 per $ 1.00 based on the exchange rate quoted by the Federal Reserve Bank of New York as of March 31, 2013; (ii) from Australian dollars to US dollars at the rate of AUD 1.04 per $1.00 based on the exchange rate quoted by the Federal Reserve Bank of New York as of March 31, 2013; (iii) from South African Rand to US dollars at the rate of ZAR 9.18 per $ 1.00 based on the exchange rate quoted by the Federal Reserve Bank of New York as of March 31, 2013 and (iv) from Namibian dollars to US dollars at the rate of NAD 9.00 per $1.00 based on the exchange rate quoted by Oanda (data available at www.oanda.com) as of March 31, 2013. As of July 19, 2013, the exchange rate between US dollars and Indian Rupees was $ 1.00 = Rs. 59.37 as quoted by the Federal Reserve Bank of New York.

In this annual report, references to “US” or the “United States” are to the United States of America, its territories and its possessions. References to “UK” are to the United Kingdom. References to “India” are to the Republic of India. References to “Namibia” are to the Republic of Namibia. References to “South Africa,” are to the Republic of South Africa. References to “Ireland” are to the Republic of Ireland. References to “$,” “US$,” “dollars” or “US dollars” are to the legal currency of the United States. References to “Rs.”, “Re.”, “Rs”, “Rupees” or “Indian Rupees” are to the legal currency of the Republic of India. References to “AUD”, “Australian dollars” are to the legal currency of the Commonwealth of Australia. References to “NAD” or “Namibian dollars” are to the legal currency of Namibia. References to “ZAR” or “RAND” are to the legal currency of the Republic of South Africa. References to “¢” are to US cents. References to “lb” are to the imperial pounds (mass) equivalent to 0.4536 kilograms, references to “mt” or “tons” are to metric tons, references to “tpa” are to tons per annum, a unit of mass equivalent to 1,000 kilograms or 2,204.6 lb, references to “oz” are to ounces, with one kilogram being equivalent to 32.1507 oz and one ton equivalent to 32,151 oz, references to “mm” are to millimeters and references to “ha” are to hectares, a unit of area equal to 10,000 square meters or 107,639 square feet.

We conduct our businesses both directly and through a consolidated group of companies that we have ownership interests in. See “Item 4. Information on the Company—A. History and Development of our Company” for more information on these companies and their relationships to us. Unless otherwise stated in this annual report or unless the context otherwise requires, references in this annual report to “we,” “us,” “our,” “Sterlite,” “SIIL,” “our company,” or “our consolidated group of companies” mean Sterlite Industries (India) Limited, its consolidated subsidiaries and its predecessors, collectively, including Monte Cello BV, or Monte Cello, Copper Mines of Tasmania Proprietary Limited, or CMT, Thalanga Copper Mines Proprietary Limited, or TCM, Bharat Aluminium Company Limited, or BALCO, Sterlite Energy Limited, or Sterlite Energy, Hindustan Zinc Limited, or HZL, Sterlite Infra Limited (formerly known as Sterlite Paper Limited), or SIL, Fujairah Gold FZE, Sterlite (USA), Inc., or Sterlite USA, Talwandi Sabo Power Limited, or TSPL, THL Zinc Ventures Limited or THLZVL, THL Zinc Limited, or THLZL, THL Zinc Holding B.V., or THLZBV, THL Zinc Namibia Holdings (Proprietary) Limited, or Skorpion, Skorpion Zinc (Proprietary) Limited (formerly known as Anglobase Namibia (Pty.) Ltd.), Skorpion Mining Company (Proprietary) Limited, Namzinc (Proprietary) Limited, Amica Guesthouse (Proprietary) Limited, Rosh Pinah Health Care (Proprietary) Limited, Black Mountain Mining (Proprietary) Limited, or BMM, Vedanta Lisheen Holdings Limited, or Lisheen (formerly Vedanta Lisheen Finance Limited), Vedanta Lisheen Mining Limited, Killoran Lisheen Mining Limited, Killoran Lisheen Finance Limited, Lisheen Milling Limited, Lisheen Mine Partnership, Sterlite Ports Limited (formerly known as Malco Power Company Limited), or MPCL, Sterlite Infraventures Limited (formerly known as Malco Industries Limited), or MIL, Vizag General Cargo Berth Private Limited, or VGCB, Paradip Multi Cargo Berth Private Limited, or PMCB, Pecvest 17 Proprietary Limited and Lakomasko B.V.

1

Our consolidated financial information does not include our controlling shareholder Vedanta Resources Plc, or Vedanta, its shareholders and various companies owned directly or indirectly by it (other than us and our consolidated group of companies described above), including without limitations, Vedanta Resources Holdings Limited, or VRHL, Konkola Copper Mines Plc, or KCM, Konkola Resources Plc, Twin Star Holdings Limited, or Twin Star, Welter Trading Limited, or Welter Trading, the Anil Agarwal Discretionary Trust, Ekaterina Limited, Onclave PTC Limited, or Onclave, Sterlite Technologies Limited, or STL, Monte Cello Corporation NV, or MCNV, Twin Star Infrastructure Limited, The Madras Aluminium Company Limited or MALCO, Sesa Goa Limited, or Sesa Goa and its subsidiaries, Valliant (Jersey) Limited, Vedanta Resources Jersey II Limited, Twinstar Energy Holding Limited, Twinstar Mauritius Holding Limited, Vedanta Resources Finance Limited, Vedanta Resources Cyprus Limited, Richter Holding Limited, Westglobe Limited, Finsider International UK, Vedanta Resources Investments Limited, Vedanta Resources Jersey Limited, Vedanta Finance Jersey Limited, Vedanta Jersey Investments Limited, Sesa Sterlite US Corporation, Sesa Sterlite US LLC, Cairn India Limited, or Cairn India and its subsidiaries and Vedanta Aluminium Limited, or Vedanta Aluminium, except that as to Vedanta Aluminium, our consolidated financial statements account for our 29.5% non-controlling interest therein under the equity method of accounting, but Vedanta Aluminium is not otherwise included in our consolidated group of companies or our consolidated financial statements. References to the “Vedanta group” are to Vedanta and its subsidiaries.

In this annual report, references to The London Metal Exchange Limited, or LME, price of copper, zinc or aluminium are to the cash seller and settlement price on the LME for copper, zinc or aluminium for the period indicated. References to primary market share in this annual report are to the market that includes sales by producers of metal from copper concentrate or alumina, as applicable, and do not include sales by producers of recycled metal or imports.

On February 25, 2012, we, Sesa Goa and Vedanta announced an all-share merger of our company and Sesa Goa to create Sesa Sterlite (“Sesa Sterlite”) and to effect the consolidation and simplification of Vedanta’s corporate structure through two series of transactions (together the “Reorganisation Transactions” consisting of the “Amalgamation and Reorganisation Scheme” and the “Cairn India Consolidation”). The Amalgamation and Reorganisation Scheme is subject to certain approvals. Please see “Item 5. Operating and Financial Review and Prospects – Consolidation and re-organization of Sesa Goa, Sterlite, Vedanta Aluminium, Sterlite Energy and MALCO to form Sesa Sterlite and transfer of Vedanta’s shareholding in Cairn India to Sesa Sterlite”.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This annual report contains “forward-looking statements” as defined in the safe harbor provisions of the US Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on our current expectations, assumptions, estimates and projections about our company and our industry. These forward-looking statements are subject to various risks and uncertainties. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “will,” “project,” “seek,” “should” and similar expressions. These forward-looking statements include, among other things, the discussions of our business strategy and expectations concerning our market position, future operations, margins, profitability, liquidity and capital resources. We caution you that reliance on any forward-looking statement involves risks and uncertainties, and that, although we believe that the assumptions on which our forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate and, as a result, the forward-looking statements based on those assumptions could be materially incorrect. Factors which could cause these assumptions to be incorrect include, but are not limited to:-

• consolidation and re-organization of Sesa Goa, Sterlite, Vedanta Aluminium, Sterlite Energy and MALCO to form Sesa Sterlite and transfer of Vedanta’s shareholding in Cairn India to Sesa Sterlite;

• a decline or volatility in the prices of or demand for copper, zinc, aluminium or power;

• events that could cause a decrease in our production and higher cost of production of copper, zinc, aluminium or power;

• unavailability or increased costs of raw materials for our products;

• fluctuations in metal prices on LME, ore prices or power prices;

• fluctuations in currency exchange rates;

• our actual economically recoverable copper ore, lead-zinc ore or bauxite reserves being lower than we have estimated;

• our ability to expand our business, effectively manage our growth or implement our strategy;

• our ability to retain our senior management team and hire and retain sufficiently skilled labor to support our operations;

• regulatory, legislative and judicial developments and future regulatory actions and conditions in our operating areas;

• increasing competition in the copper, zinc, aluminium or power industries;

2

• political or economic instability in India or around the region;

• worldwide economic and business conditions;

• our ability to successfully consummate strategic acquisitions;

• our ability to simplify our group structure and reduction in non-controlling stake in group companies;

• the outcome of outstanding litigation in which we are involved;

• our ability to maintain good relations with our trade unions and avoid strikes and lock-outs;

• any actions of our controlling shareholder, Vedanta;

• the future capital requirements of our business and the availability of financing on favorable terms;

• the continuation of tax holidays, exemptions and deferred tax schemes we currently enjoy;

• changes in tariffs, royalties, customs duties and government assistance; and

• terrorist attacks and other acts of violence, natural disasters and other environmental conditions and outbreaks of infectious diseases and other public health concerns in India, Asia and elsewhere.

These and other factors are more fully discussed in “Item 3. Key Information—D. Risk Factors,” “Item 5. Operating and Financial Review and Prospects” and elsewhere in this annual report. In light of these and other uncertainties, you should not conclude that we will necessarily achieve any plans, objectives or projected financial results referred to in any of the forward-looking statements. Except as required by law, we do not undertake to release revisions to any of these forward-looking statements to reflect future events or circumstances.

PART I

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable

ITEM 3. KEY INFORMATION

A. Selected Consolidated Financial Data

The selected consolidated financial data presented below as of March 31, 2012 and 2013 and for the years ended March 31, 2011, 2012 and 2013 has been derived from our consolidated financial statements included herein, which have been prepared in conformity with IFRS as issued by the IASB. These consolidated financial statements have been audited by Deloitte Haskins & Sells, Mumbai, India, or Deloitte, our independent registered public accounting firm, and included elsewhere in this annual report.

The selected consolidated financial data presented below as of March 31, 2009, 2010 and 2011, and for the years ended March 31, 2009 and 2010 has been derived from our consolidated financial statements, which also have been prepared in conformity with IFRS as issued by the IASB, and which have not been presented herein. Our consolidated financial statements as of and for the year ended March 31, 2009 were originally prepared in accordance with US GAAP and were restated in accordance with IFRS as issued by the IASB for comparative purposes only.

We have also disclosed below, for all periods presented herein, segment revenue and segment profit, based on the segment disclosures in our consolidated financial statements and cost of production by segment. Cost of production is not a recognized measure under IFRS as issued by the IASB. We have disclosed cost of production because we believe it is an indicative measure of our operating performance and is used by investors and analysts to evaluate companies in our industry. Our results of operations are, to a significant degree, dependent upon our ability to efficiently run our operations and maintain low costs of production. Efficiencies relating to recovery of metal from the ore, process improvements, by product management and increasing productivity help drive our costs down. Our computation of cost of production should be considered in addition to, and not as a substitute for, other measures of financial performance and liquidity reported in accordance with IFRS as issued by the IASB. Cost of production is a measure intended for monitoring the operating performance of our operations. This measure is presented by other non-ferrous metal companies, though our measure may not be comparable to similarly titled measures reported by other companies in our industry.

Our historical results do not necessarily indicate our expected results for any future period. The translations of Indian Rupee amounts to US dollars presented in the tables below, are solely for the convenience of the reader and are based on the noon buying rate of Rs. 54.52 per $ 1.00 in the City of New York for cable transfers of Indian Rupees, respectively, as certified for customs purposes by the Federal Reserve Bank of New York on March 31, 2013. No representation is made that the Indian Rupee amounts represent US dollar amounts or have been, could have been or could be converted into US dollars at such rates or at any other rates.

3

You should read the following information in conjunction with “Item 5. Operating and Financial Review and Prospects” and the consolidated financial statements included elsewhere in this annual report.

	For the year ended March 31,
	2009			2010			2011			2012			2013			2013
	(Rs. in millions except shares and per share data)			(Rs. in millions except shares and per share data)			(Rs. in millions except shares and per share data)			(Rs. in millions except shares and per share data)			(Rs. in millions except shares and per share data)			(US dollars in millions except shares and per share data)
Revenue		212,192			244,903			302,472			412,063			452,550			8,300.6
Cost of sales		(165,097	)		(181,928	)		(226,134	)		(319,719	)		(355,624	)		(6,522.8	)
Gross profit		47,095			62,975			76,338			92,344			96,926			1,777.8
Other operating income		3,750			1,907			2,366			1,398			1,883			34.5
Distribution expenses		(3,388	)		(3,022	)		(3,516	)		(7,446	)		(8,646	)		(158.6	)
Administration expenses		(4,367	)		(8,026	)		(7,614	)		(15,002	)		(13,637	)		(250.1	)
Operating profit		43,090			53,834			67,574			71,294			76,526			1,403.6
Investment and other income		18,772			13,811			21,933			28,829			36,693			673.0
Finance and other costs		(6,244	)		214			1,096			(12,042	)		(11,183	)		(205.1	)
Share in (loss)/profit of associate		(3,160	)		2,051			(3,082	)		(8,767	)		(7,736	)		(141.9	)
Profit before tax		52,458			69,910			87,521			79,314			94,300			1,729.6
Income tax expense		(7,782	)		(13,247	)		(18,810	)		(20,077	)		(15,555	)		(285.3	)
Profit for the year		44,676			56,663			68,711			59,237			78,745			1,444.3
Profit attributable to:
Equity holders of the parent		32,228			39,263			48,898			38,998			53,895			988.5
Non controlling interest		12,448			17,400			19,813			20,239			24,850			455.8
Earnings per share (refer to Note 29 to consolidated financial statements)
Basic		11.37			12.27			14.55			11.60			16.03			0.3
Diluted		11.37			12.03			13.87			11.60			16.03			0.3
Number of equity shares
Period End		2,833,977,644			3,361,601,688			3,361,207,534			3,361,207,534			3,361,207,534			3,361,207,534
Weighted Average		2,833,583,490			3,199,826,061			3,361,207,534			3,361,207,534			3,361,207,534			3,361,207,534
Diluted		2,833,583,490			3,236,000,281			3,446,945,134			3,361,207,534			3,361,207,534			3,361,207,534
Dividend declared per share (1) (2)		3.50			3.75			1.10			2.00			2.30			0.0

Notes:

(1) The final dividend of Re. 1 per equity share for fiscal 2012 was recommended by our board of directors on April 25, 2012 and approved by our shareholders at the general meeting held on July 14, 2012. An interim dividend of Rs. 1.10 per equity share for fiscal 2013 was declared by our board of directors on October 23, 2012 and was paid on November 1, 2012. Further, an interim dividend of Rs. 1.20 per equity share for fiscal 2013 was declared by our board of directors on April 29, 2013 and was paid on May 14, 2013.

(2) On June 11, 2010, our shareholders approved the sub-division of our equity shares from Rs. 2 each to Re. 1 each. Our shareholders also approved a bonus issue in the ratio of one equity share of Re. 1 each for one equity share of Re. 1. With effect from June 25, 2010, the equity shares have a par value of Re. 1 each. Prior periods have been restated for these changes.

					As of March 31,
Consolidated Financial Position Data	2009		2010		2011		2012		2013		2013
	(Rs. in millions)		(Rs. in millions)		(Rs. in millions)		(Rs. in millions)		(Rs. in millions)		(US dollars in millions)
Cash and cash equivalents		2,701		2,021		21,487		17,173		14,357		263.3
Restricted cash and cash equivalents		2,011		60		39		59		63		1.2
Total assets		444,578		606,854		746,723		842,889		955,884		17,532.7
Net assets		320,603		451,988		519,873		571,185		634,745		11,642.4
Long-term borrowings		14,384		43,578		53,559		74,490		106,232		1,948.5
Short-term borrowings		20,202		19,121		37,948		53,983		26,287		482.1
Equity attributable to equity holders of the parent		250,533		365,172		410,170		445,477		488,909		8,967.5

4

	For the Year Ended March 31,
	2009			2010			2011			2012			2013			2013
	(Rs. in millions)			(Rs. in millions)			(Rs. in millions)			(Rs. in millions)			(Rs. in millions)			(US dollars in millions)
Cash Flow Data:
Net cash provided by (used in):
Operating activities		72,585			14,249			127,529			66,998			73,954			1,356.5
Investing activities		(95,295	)		(117,582	)		(128,562	)		(94,705	)		(93,504	)		(1,715.1	)
Financing activities		13,442			102,322			20,650			22,634			16,401			300.8
Segment Data:
Revenue to external customers:
Copper		116,525			130,608			156,610			201,647			217,374			3,987.1
Zinc India		55,724			79,434			98,444			111,319			123,241			2,260.5
Zinc International		—			—			9,961			41,272			43,475			797.4
Aluminum		39,170			28,289			30,175			31,089			34,148			626.3
Power		773			6,572			7,282			24,333			30,800			564.9
Other		—			—			—			2,403			3,512			64.4
Total		212,192			244,903			302,472			412,063			452,550			8,300.6
Operating profit:
Copper		11,121			3,138			9,198			7,770			8,515			156.2
Zinc India		25,158			44,071			50,914			54,018			57,426			1,053.3
Zinc International		—			—			1,592			6,008			5,078			93.1
Aluminum		6,494			3,189			3,495			1,345			328			6.0
Power		323			3,445			2,437			2,200			5,251			96.3
Other		(6	)		(9	)		(62	)		(47	)		(72	)		(1.3	)
Total		43,090			53,834			67,574			71,294			76,526			1,403.6
Segment profit:(1)
Copper		13,312			5,120			11,247			9,943			10,866			199.3
Zinc India		27,773			47,124			55,343			59,254			63,270			1,160.5
Zinc International		—			—			4,247			17,367			15,712			288.2
Aluminum		9,103			5,499			5,866			3,998			2,649			48.6
Power		931			4,160			3,354			5,881			10,125			185.7
Other		(5	)		(8	)		(61	)		(46	)		(61	)		(1.2	)
Total		51,114			61,895			79,996			96,397			102,561			1,881.1

Notes:

(1) Segment profit is calculated by adjusting operating profit to exclude depreciation and amortization. Our segment profit may not be comparable to similarly titled measures reported by other companies due to potential inconsistencies in the method of calculation. We have included our segment profit because we believe it is an indicative measure of our operating performance and is used by investors and analysts to evaluate companies in our industry. Our segment profit should be considered in addition to, and not as a substitute for, other measures of financial performance and liquidity reported in accordance with IFRS as issued by the IASB. We believe that the inclusion of supplementary adjustments applied in our presentation of segment profit are appropriate because we believe it is an indicative measure of our baseline performance as it excludes certain charges that our management considers to be outside of our core operating results. In addition, our segment profit is among the primary indicators that our management uses as a basis for planning and forecasting future periods. The following table reconciles operating profit to segment profit for the periods indicated:

5

							For the Year Ended March 31,
	2009 (Rs. in millions)			2010 (Rs. in millions)			2011 (Rs. in millions)			2012 (Rs. in millions)			2013 (Rs. in millions)			2013 (US dollars in millions)
Copper:
Operating profit		11,121			3,138			9,198			7,770			8,515			156.2
Plus: Depreciation and amortization		2,191			1,982			2,049			2,173			2,351			43.1
Segment profit		13,312			5,120			11,247			9,943			10,866			199.3
Zinc India:
Operating profit		25,158			44,071			50,914			54,018			57,426			1,053.3
Plus: Depreciation and amortization		2,615			3,053			4,429			5,236			5,844			107.2
Segment profit		27,773			47,124			55,343			59,254			63,270			1,160.5
Zinc International:
Operating profit		—			—			1,592			6,008			5,078			93.1
Plus: Depreciation and amortization		—			—			2,655			11,359			10,634			195.1
Segment profit		—			—			4,247			17,367			15,712			288.2
Aluminum:
Operating profit		6,494			3,189			3,495			1,345			328			6.0
Plus: Depreciation and amortization		2,609			2,310			2,371			2,653			2,321			42.6
Segment profit		9,103			5,499			5,866			3,998			2,649			48.6
Power:
Operating profit		323			3,445			2,437			2,200			5,251			96.3
Plus: Depreciation and amortization		608			715			917			3,681			4,874			89.4
Segment profit		931			4,160			3,354			5,881			10,125			185.7
Other:
Operating profit		(6	)		(9	)		(62	)		(47	)		(72	)		(1.3	)
Plus: Depreciation and amortization		1			1			1			1			11			0.1
Segment profit		(5	)		(8	)		(61	)		(46	)		(61	)		(1.2	)

	For the Year Ended March 31,
	Unit of Measurement		2011		2012		2013
	(in US dollars per ton, except as indicated)
Cost of production:(2)
Copper smelting and refining(2)		¢/lb		4.0		0.0		8.7
Zinc India (2)		$		990		1,010		998
Zinc International(2)		$		1,077		1,069		1,029
Aluminium(2)		$		1,784		1,997		1,951
Power(2)		Rs./unit		—		2.62		2.08

6

(2) Cost of production is not a recognized measure under IFRS as issued by the IASB. We have included cost of production as a measure of effectiveness because we believe it is an indicative measure of our operating performance and is used by investors and analysts to evaluate companies in our industry. Our results of operations are, to a significant degree, dependent upon our ability to efficiently run our operations and maintain low costs of production. Efficiencies relating to recovery of metal from the ore, process improvements, by product management and increasing productivity help drive our costs down. Our computation of cost of production should be considered in addition to, and not as a substitute for other measures of financial performance and liquidity reported in accordance with IFRS as issued by the IASB. Cost of production is a measure intended for monitoring the operating performance of our operations. This measure is presented by other non-ferrous metal companies, though our measure may not be comparable to similarly titled measures reported by other companies.

Costs of production as reported for our metal products consists of:

• direct cash costs relating to production and conversion costs of metal (such as energy costs, ore extraction costs and processing costs at our captive mines, labor costs and other manufacturing expenses); and

• excludes depreciation and finance costs.

Further these costs are offset for any amounts we receive upon sale of immaterial by-products from such operations. We explain the cost of production for each metal as set forth below:

• In the case of copper, cost of production relates only to our custom smelting and refining operations (and not for our mining operations), and consists of converting copper concentrate into copper cathodes, including the cost of freight of copper anodes from Tuticorin to Silvassa. Revenue earned from the sale of by-product, sulphuric acid, and copper metal recovered in excess of paid copper metal are deducted from the cash costs. The total cash costs are divided by the total number of pounds of copper metal produced to calculate the cost of production per pound of copper metal produced.

• In the case of Zinc India operations, where we have integrated operations from production of zinc ore to zinc metal, cost of production is the cost of extracting ore and conversion of the ore into zinc metal ingots. Royalty is paid on mining and this cost is included in determining the cost of production. Revenue earned from the by-product sulphuric acid, is deducted from the cost of production. The total cash cost is divided by the total number of tons of zinc metal produced to calculate the cost of production per ton of zinc metal. Our Zinc India segment also includes lead and silver. However, the cost of production presented for Zinc India operations does not include lead and silver.

• Our Zinc International operations consist of the Skorpion mine and refinery in Namibia, Black Mountain Mine in South Africa and Lisheen mine in Ireland. Skorpion produces special high grade zinc ingots. As a result, the cost of production with respect to the Skorpion mine consists of the total direct cost of procuring zinc ore from the mining company and producing zinc in the refinery through a leaching, refining and electrowinning process. Skorpion mine does not produce any material by-products. Cost of production of zinc at Black Mountain mine consists of direct mining costs, concentrate costs, treatment and refining charges, direct services cost and allocated indirect costs. The by-product revenue of copper is credited to the cost of production. Lisheen mine produces zinc and lead concentrate. Therefore, the cost of production with respect to the Lisheen mine consists of direct mining costs, mill processing costs, other overhead costs, treatment charges and other direct cash costs. The by-product revenue of lead and silver are credited to the cost of production. Royalties paid are excluded from the cost of production of zinc as the same is levied on turnover. The total cash cost is divided by the total number of tons of zinc metal produced or zinc metal in concentrate produced to calculate the cost of production per ton of zinc metal produced or zinc metal in concentrate produced.

• In the case of aluminium, cost of production for BALCO’s smelters includes cost of purchased alumina, the cost of producing bauxite and conversion of bauxite/alumina into aluminium metal. Revenue earned from the sale of by-products, such as vanadium, reduces the total cash costs. The total cash cost is divided by the total quantity of hot metal produced to determine the cost of production per ton of aluminium hot metal produced. Hot metal production output is used instead of the cast metal production output disclosed elsewhere in this annual report in calculating cost of production. This is because, the hot metal production, which excludes the value added cost of casting, is the measure generally used in the aluminium metal industry for calculating cost of production.

Cost of production is divided by the daily average exchange rate for the year to calculate US dollar cost of production per lb or per ton of metal as reported.

• Cost of production of power for Sterlite Energy’s power plant (and not for the 274 MW HZL power plant and 270 MW BALCO power plant) includes the cost of coal and other liquid fuels used for generating power and other overhead costs such as operating, maintenance and manpower costs. The total cost is divided by the total net units generated to calculate the cost of production per unit of energy produced.

7

The following table reconciles segment cost, calculated as segment revenue less segment profit, to cost of production for the periods presented:

			For the Year Ended March 31,
	2009		2010		2011		2012		2013
	(Rs. in millions, except Production Output and Cost of Production)		(Rs. in millions, except Production Output and Cost of Production)		(Rs. in millions, except Production Output and Cost of Production)		(Rs. in millions, except Production Output and Cost of Production)		(Rs. in millions, except Production Output and Cost of Production)
Copper(2):
Segment revenue	Rs.	116,670	Rs.	130,608	Rs.	156,610	Rs.	201,647	Rs.	217,374
Less:
Segment profit		(13,312)		(5,120)		(11,247)		(9,943)		(10,866)
		103,358		125,488		145,363		191,704		206,508
Less:
Purchased concentrate/rock		(94,873)		(114,923)		(135,651)		(181,766)		(193,200)
By-product/free copper net sale		(4,337)		(1,981)		(4,686)		(6,685)		(4,812)
Cost for downstream products		(1,613)		(1,543)		(1,638)		(1,481)		(2,163)
Other, net		(1,556)		(3,386)		(2,153)		(1,773)		(2,630)
Total	Rs.	979	Rs.	3,655	Rs.	1,235	Rs.	(1)	Rs.	3,703
Production output (in tons)		312,833		334,202		303,991		325,877		353,154
Cost of production(a)		3.1 ¢/lb		10.46 ¢/lb		4.0 ¢/lb		0.0 ¢/lb		8.7 ¢/lb
Zinc—India(2):
Segment revenue	Rs.	55,724	Rs.	79,434	Rs.	98,444	Rs.	111,319	Rs.	123,241
Less:
Segment profit		(27,773)		(47,124)		(55,343)		(59,254)		(63,270)
		27,951		32,310		43,101		52,065		59,971
Less:
Cost of tolling including raw material cost		(409)		—		(1,651)		(3,121)		(6,805)
Cost of intermediary product sold		(1,301)		(3,060)		(1,699)		(149)		(1,806)
By-product revenue		(4,848)		(1,871)		(3,762)		(5,315)		(4,766)
Cost of lead metal sold		(2,079)		(2,652)		(3,028)		(5,260)		(6,962)
Other, net		(1,312)		(1,406)		(815)		(1,481)		(2,836)
Total	Rs.	18,002	Rs.	23,321	Rs.	32,146	Rs.	36,739	Rs.	36,796
Production output (in tons)		551,724		578,411		712,471		758,716		676,923
Cost of production (per ton)(a)	$	710	$	850	$	990	$	1,010	$	998
Zinc—International(2):
Segment revenue		—		—		9,961	Rs.	42,771	Rs.	43,475
Less:
Segment profit		—		—		(4,247)		(17,367)		(15,712)
		—		—		5,714		25,404		27,763
Less:		—		—		—		—		—
Cost of intermediary product sold		—		—		(82)		—		—
Treatment and Refining Charges (TcRc)								4,340		3,344
By-product revenue		—		—		(706)		(1,621)		(1,459)
Cost of lead metal sold		—		—		(453)		(6,240)		(5,336)
Royalty		—		—		(197)		(1,212)		(1,153)
Other, net		—		—		(345)		(2,228)		(3,351)
Total		—		—	Rs.	3,931	Rs.	18,443	Rs.	19,808
Production output (in tons)—Zinc International		—		—		80,066		359,728		353,404
Cost of production (per ton)(a)—		—		—	$	1,077	$	1,069	$	1,029
Aluminum(2):
Segment revenue	Rs.	39,336	Rs.	28,367	Rs.	30,245	Rs.	31,119	Rs.	34,257
Less:
Segment profit		(9,103)		(5,499)		(5,866)		(3,998)		(2,649)
		30,233		22,868		24,379		27,121		31,608
Less:
Cost of intermediary product sold		—		(304)		—		—
By-product revenue		(328)		(126)		(229)		(290)		(299)
Cost for downstream products		(1,966)		(1,767)		(2,597)		(2,674)		(3,267)
Other, net		(314)		(1,455)		(973)		(542)		(1,641)
Total	Rs.	27,625	Rs.	19,216	Rs.	20,580	Rs.	23,615	Rs.	26,401
Production output (hot metal) (in tons)		355,733		262,760		253,157		246,579		248,239

8

			For the Year Ended March 31,
	2009		2010		2011		2012		2013
	(Rs. in millions, except Production Output and Cost of Production)		(Rs. in millions, except Production Output and Cost of Production)		(Rs. in millions, except Production Output and Cost of Production)		(Rs. in millions, except Production Output and Cost of Production)		(Rs. in millions, except Production Output and Cost of Production)
Cost of production (per ton)(a)	$	1,700	$	1,542	$	1,784	$	1,997	$	1,951
Power
Segment revenue								25,461		31,379
Less:
Segment profit								(5,881)		(10,125)
								19,580		21,254
Less:
Cost of power at BALCO and HZL								(5,469)		(4,929)
Other, net								(1,572)		(2,335)
Total								12,539		13,990
Production output (in MU)(b)								4,790		6,735
Cost of production (per unit)							Rs.	2.62	Rs.	2.08

(a) Exchange rates used in calculating cost of production were based on the daily Reserve Bank of India, or the RBI, reference rates for the years ended March 31, 2009, 2010, 2011, 2012 and 2013 of Rs. 45.91 per $ 1.00, Rs. 47.42 per $ 1.00, Rs. 45.58 per $ 1.00, Rs. 47.95 per $ 1.00 and Rs. 54.45 per $ 1.00 respectively.

(b) Production does not include units generated from the 274 MW HZL wind power plant and 270 MW BALCO power plant.

B. Capitalization and Indebtedness

Not applicable

C. Reasons for the Offer and Use of Proceeds

Not applicable

D. Risk Factors

This annual report contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those described in the following risk factors and elsewhere in this annual report. If any of the following risks actually occur, our business, financial condition and results of operations could suffer and the trading price of our equity shares and ADSs could decline.

Risks Relating to Our Business

We depend upon third party suppliers for a substantial portion of our copper concentrate and alumina requirements, and our profitability and operating margins depend upon the market prices for those raw materials.

We source a majority of our copper concentrate and alumina requirements from third parties. For example, in fiscal 2013, we sourced 92.3% of our copper concentrate and 36.5% of our alumina requirements from third parties. As a result, profitability and operating margins of our copper and alumium businesses depend upon our ability to obtain the required copper concentrate and alumina at prices that are low relative to the market prices of the copper and alumium products that we sell.

We purchase copper concentrate at the LME price for copper metal for the relevant quotational period less a treatment charge (“Tc”) and refining charge (“Rc”), or TcRc, that we negotiate with our suppliers but which is influenced by the prevailing market rate for the TcRc. The TcRc has historically fluctuated independently and significantly from the copper LME price. We attempt to make the LME price a pass through for us as both our copper concentrate purchases and sales of finished copper products are based on LME prices. Nevertheless, we are also exposed to differences in the LME price between the quotational periods for the purchase of copper concentrate and sale of the finished copper products, and any decline in the copper LME price between these periods will adversely affect us. See “Item 5. Operating and Financial Review and Prospects—Factors Affecting Results of Operations—Metal Prices, Copper TcRc and Power Tariff.”

Similarly, for the portion of our alumina requirements sourced internally, our profitability is dependent upon the LME price of aluminium, less the cost of production, which includes the cost of mining bauxite, the refining of bauxite into alumina, transportation of bauxite and alumina and smelting of alumina into aluminium. For the portion of our alumina requirements sourced from third parties, our profitability is dependent upon the LME price of aluminium, less the cost of the sourced alumina and the cost of smelting.

The market price of the copper concentrate and alumina that we purchase from third parties and the market price of the copper and aluminium metals that we sell have experienced volatility in the past, and any increases in the market price of the raw materials relative to the market price of the metals that we sell would adversely affect the profitability and operating margins of our copper and aluminium businesses, which could have a material and adverse effect on our results of operations and financial condition.

Material changes in the regulations that govern us, or the interpretation of recent legislation, could have a material adverse effect on our business, financial condition and result of operations.

The Indian Mines (Amendment) Bill, 2011, or the Mining Bill, which is under consideration by the Indian Parliament, proposes several amendments to the Mines Act, 1952, including significant enhancement to the monetary penalties and terms of imprisonment for violations under the Mines Act, 1952.

9

The Mines and Minerals (Development and Regulation) Bill, 2011, under consideration by the Indian Parliament, provides for several key initiatives including identifying methods of granting a mineral concession and payment of an annual amount by the mining operations to affected persons, which could be in the form of a share in its profits.

The Land Acquisition, Rehabilitation and Resettlement Bill, 2011, under consideration by the Indian Parliament, addresses concerns of affected persons whose livelihoods are dependent on the land being acquired while facilitating land acquisition for industrialisation, infrastructure and urbanization. In addition, the implications of the Direct Tax Code and the Indian Companies Bill, 2012 (both of which are under consideration by the Parliament), on our operations is presently unclear.

If we are affected, directly or indirectly, or face any enforcement proceedings initiated under any such legislation, it may harm our mining activities and related expansion plans, new projects, our reputation and business, financial condition.

Our operations are subject to operating risks that could result in decreased production, increased cost of production and increased cost of or disruptions in transportation, which could adversely affect our revenue, results of operations and financial condition.

We are subject to operating conditions and events beyond our control that could, among other things, increase our mining, transportation or production costs, disrupt or halt operations at our mines and production facilities permanently or for varying lengths of time or interrupt the transport of our products to our customers. These conditions and events include:

• Disruptions in mining and production due to equipment failures, unexpected maintenance problems and other interruptions. All of our operations are vulnerable to disruptions. Our aluminium smelters are particularly vulnerable to disruptions in the supply of power which, even if lasting only a few hours, can cause the contents of the furnaces or cells to solidify, which would necessitate a plant closure and a shutdown in operations for a significant period, as well as involve expensive repairs. For example, during fiscal 2012, CMT’s Mt. Lyell processing plant was disrupted and experienced a 23 day interruption and the mining contractor’s inability to meet his contractual obligation. Our tuticorin smelter plant shut down for nine days in February 2012 due to the unavailability of copper concentrate. This was caused primarily due to the declaration of force majeure by some copper mines with which we had contracted for the supply of copper concentrate. We incurred loss of production to the extent of 8,000 metric tons and other costs due to this interruption. The losses from these interruptions include lost production, repair costs and other expenses.

• Availability of raw materials for energy requirements. Any shortage of or increase in the prices of any of the raw materials needed to satisfy our businesses’ energy requirements may interrupt our operations or increase our cost of production. We are particularly dependent on coal, which is used in many of our captive power plants. Our aluminium business, which has high energy consumption due to the energy-intensive nature of aluminium smelting, is significantly dependent on receiving allocations from Coal India Limited, or Coal India, the government-owned coal monopoly in India, and its subsidiaries. A shortage of coal from April 2005 led Coal India to reduce the amount of coal supplied to all of its non-utility customers, including BALCO. As a result, BALCO was forced to utilize higher-priced imported coal and coal from non-linkage sources, which resulted in higher power generation costs. In fiscal 2013, 93.5% of the allocated coal was supplied.

• Availability of water. The mining operations of our zinc and aluminium businesses, smelter operations of copper business and our captive power plants depend upon the supply of a significant amount of water. There is no assurance that the water required will continue to be available in sufficient quantities or that the cost of water will not increase. For example, BALCO is currently in a dispute with the National Thermal Power Corporation Limited, or NTPC, regarding the right of way for a water pipeline that provides one of BALCO’s captive power plants access to a body of water adjacent to NTPC premises. An unfavorable resolution to this dispute may significantly increase BALCO’s costs of obtaining water for that power plant.

• Disruptions to or increased costs of transport services. We depend upon seaborne freight, inland water transport, rail, trucking, overland conveyor and other systems to transport bauxite, alumina, zinc concentrate, copper concentrate, coal and other supplies to our operations and to deliver our products to customers. Any disruption to or increase in the cost of these transport services, including as a result of interruptions that decrease the availability of these transport, services or as a result of increases in demand for transport services from our competitors or from other businesses, or any failure of these transport services to be expanded in a timely manner to support an expansion of our operations, could have a material adverse effect on our operations and operating results.

• Accidents at mines, smelters, refineries, cargo terminals and related facilities. Any accidents or explosions causing personal injury, property damage or environmental damage at or to our mines, smelters, refineries, cargo terminals and related facilities may result in expensive litigation, imposition of penalties and sanctions or suspension or revocation of permits and licenses. Risks associated with our open-pit mining operations include flooding of the open-pit, collapses of the open-pit wall and operation of large open-pit mining and rock transportation equipment. Risks associated with our underground mining operations include underground fires and explosions (including those caused by flammable gas), cave-ins or ground falls, discharges of gases or toxic chemicals, flooding, sinkhole formation and ground subsidence and underground drilling, blasting and removal and processing of ore. Injuries to and deaths of workers at our mines and facilities have occurred in the past and may occur in the future. We are required by law to compensate employees for work-related injuries. Failure to make adequate provisions for our workers’ compensation liabilities could harm our future operating results.

10

• Strikes and industrial actions or disputes. The majority of the total workforce of our consolidated group of companies is unionized. Strikes and industrial actions or disputes have in the past and may in the future lead to business interruptions and halts in production. For example, the trade unions of BALCO initiated a 67-day-long strike in May 2001 in opposition to the divestment of equity shares of BALCO by the Government of India (“GoI”). We also experienced short strikes and work stoppages in 2005 and 2006. In addition, we may be subject to union demands and litigation for pay raises and increased benefits, and our existing arrangements with the trade unions may not be renewed on terms favorable to us, or at all. For example, currently HZL is negotiating a wage settlement agreement with its workmen.

The occurrence of any one or more of these conditions or events could have a material adverse effect on our results of operations and financial condition.

We are involved in certain litigation seeking cancellation of permits and environmental approval for the alleged violation of certain air, water and hazardous waste management regulations at our Tuticorin plant.

Various writ petitions were filed before the High Court of Madras between 1996 and 1998 by various non-governmental organisations such as The National Trust for Clean Environment political parties and some private citizens alleging, among other things, that sulphur dioxide emissions from our copper smelting operations at Tuticorin are causing air and water pollution and hazardous waste resulting in damage to the marine ecosystem and the lives of people living in and around Tuticorin.

In September 2010, the High Court of Madras ordered the closure of our copper smelting plant at Tuticorin. Following our appeal against this order to the Supreme Court of India, the order was stayed until further notice. The Supreme Court in subsequent hearings directed the Tamil Nadu Pollution Control Board (“TNPCB”), National Environmental Engineering Research Institute (“NEERI”) and the Central Pollution Control Board (“CPCB”) to issue certain directions and implement certain measures for the improvement of the copper smelter unit at Tuticorin, all of which have been implemented.

The Supreme Court in April 2013 allowed our appeal and set aside the order of the High Court of Madras. The Supreme Court has ruled that the plant has complied with all the directions and measures issued by the NEERI, TNPCB and CPCB. However, the Supreme Court directed us to deposit Rs. 1,000 million ($ 18.3 million) with the District Collector, Tuticorin, which will be used for the improvement of the environment, including soil and water, near the location of the plant.

Separately, in March 2013, the TNPCB ordered the closure of the copper smelter at Tuticorin due to complaints regarding a noxious gas leak by local residents. On April 1, 2013 we filed a petition in the National Green Tribunal (“NGT”) challenging the order of the TNPCB on the basis that the plant’s emissions were within permissible limits. The NGT passed an interim order in May 2013 allowing the copper smelter to recommence operations subject to certain conditions. We recommenced operations on June 16, 2013. The expert committee constituted by the NGT submitted a report on the operation of the plant on July 10, 2013 stating that the plant’s emissions were within the prescribed standards and based on this report, the NGT ruled on July 15, 2013 that the copper smelter could remain open and reserved its order. The NGT has also directed the company to comply with the recommendations made by the committee to further improve the working of the plant within a time bound schedule. However, the TNPCB filed a notice of appeal against the interim order of the NGT. The next date of hearing is on August 5, 2013. See “Item 8. Financial Information—A. Consolidated Statements and Other Financial Information—Legal Proceedings.” for further details.

In the event the expert committee report issues directions or recommends measures that are unfavourable to us or we are unsuccessful in challenging the above order, the NGT may issue an order to shut down the copper smelting plant at Tuticorin and, consequently, our business and results of operations would be adversely affected and may result in the recognition of an impairment of our Tuticorin copper smelter assets.

11

We are substantially dependent upon our Rampura Agucha zinc mine, and any interruption in our operationsat that mine could have a material adverse effect on our results of operations and financial condition.

Our Rampura Agucha zinc mine produced 85.4% of the total mined metal in concentrate that we produced in fiscal 2013 and constituted 57.2% of our total proven and probable zinc ore reserves as of March 31, 2013 in India. Our Zinc India business provided 75.0% of our operating income in fiscal 2013. Our results of operations have been and are expected to continue to be substantially dependent on the reserves and low cost of production of our Rampura Agucha mine and any interruption in our operations at the mine for any reason could have a material adverse effect on the results of operations and financial condition of our business as a whole.

If we are unable to secure additional reserves of copper, zinc and bauxite that can be mined at competitive costs or cannot mine existing reserves at competitive costs, our profitability and operating margins could decline.

If our existing copper, zinc and bauxite reserves cannot be mined at competitive costs or if we cannot secure additional reserves that can be mined at competitive costs, we may become more dependent upon third parties for copper concentrate, zinc concentrate and alumina. Because our mineral reserves decline as we mine the ore, our future profitability and operating margins depend upon our ability to access mineral reserves that have geological characteristics enabling mining at competitive costs. Replacement reserves may not be available when required or, if available, may not be of a quality capable of being mined at costs comparable to the existing or exhausted mines.

We may not be able to accurately assess the geological characteristics of any reserves that we acquire, which may adversely affect our profitability and financial condition. Because the value of reserves is calculated based on that part of our mineral deposits that are economically and legally exploitable at the time of the reserve calculation, a decrease in commodity prices of the metals may result in a reduction in the value of any mineral reserves that we do obtain as less of the mineral deposits contained therein would be economically exploitable at the lower prices. Exhaustion of reserves at particular mines may also have an adverse effect on our operating results that is disproportionate to the percentage of overall production represented by such mines. Further, with depletion of reserves, we will face higher unit extraction costs per mine.

Our ability to obtain additional reserves in the future could be limited by restrictions under our existing or future debt agreements, competition from other copper, zinc and aluminium companies, lack of suitable acquisition candidates, government regulatory and licensing restrictions, difficulties in obtaining mining leases and surface rights or the inability to acquire such properties on commercially reasonable terms, or at all. To increase production from our existing bauxite and lead-zinc mines, we must apply for governmental approvals, which we may not be able to obtain in a timely manner, or at all. These events could have a material adverse effect on the results of operations and financial condition of our business.

Our business requires substantial capital expenditures and the dedication of management and other resources to maintain ongoing operations and to grow our business through projects, expansions and acquisitions, which projects, expansions and acquisitions are subject to additional risks that could adversely affect our business, financial condition and results of operations.

Capital requirements. We require capital for, among other purposes, expanding our operations, making acquisitions, managing acquired assets, acquiring new equipment, maintaining the condition of our existing equipment and maintaining compliance with environmental laws and regulations. To the extent that cash generated internally and cash available under our existing credit facilities are not sufficient to fund our capital requirements, we will require additional debt or equity financing, which may not be available on favorable terms, or at all. Future debt financing, if available, may result in increased finance charges, increased financial leverage, and decreased income available to fund further acquisitions and expansions and the imposition of restrictive covenants on our business and operations. In addition, future debt financing may limit our ability to withstand competitive pressures and render us more vulnerable to economic downturns. If we fail to generate or obtain sufficient additional capital in the future, we could be forced to reduce or delay capital expenditures, sell assets or restructure or refinance our indebtedness.

In light of this, our planned and any proposed future expansions and projects may be materially and adversely affected if we are unable to obtain funding for such capital expenditures on satisfactory terms, or at all, including as a result of any of our existing facilities becoming repayable before its due date. In addition, there can be no assurance that our planned or any proposed future expansions and projects will be completed on time or within budget, which may adversely affect our cash flow.

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Cost overruns and delays. Our current and future projects including expansion plans for our existing operations and planned greenfield projects, may be significantly delayed by failure to receive regulatory approvals or renewal of approvals, failure to obtain sufficient funding, and technical difficulties due to human resource, technological or other resource constraints or for other unforeseen reasons, events or circumstances. We do not currently have all of the leases, licenses, permits, consents and approvals that are required for our projects, and there can be no assurance that we will be able to obtain or renew all necessary leases, licenses, permits, consents and approvals in a timely manner. As a result, these projects may incur significant cost overruns and may not be completed on time, or at all. Our decision to undertake or continue any of these projects will be based on assumptions of future demand for our products which may not materialize. As a consequence of project delays, cost overruns, changes in demand for our products and other reasons, we may not achieve the reductions in the cost of production or other economic benefits expected from these projects, which could adversely affect our business, financial condition and results of operations.

Demands on management. Our efforts to continue our growth will place significant demands on our management and other resources and we will be required to continue to improve operational, financial and other internal controls, both in India and elsewhere. Our ability to maintain and grow our existing business and integrate new businesses will depend on our ability to maintain the necessary management resources and on our ability to attract, train and retain personnel with skills that enable us to keep pace with growing demands and evolving industry standards.

We are, in particular, dependent to a large degree, on the continued service and performance of our senior management team and other key team members in our business units. These key personnel possess technical and business capabilities that are difficult to replace. The loss or diminution in the services of members of our senior management or other key team members, or our failure to maintain the necessary management and other resources could have a material adverse effect on our results of operations, financial condition and prospects.

Acquisition risks. As part of our growth strategy, we intend to continue to pursue acquisitions to expand our business. There can be no assurance that we will be able to identify suitable acquisition, strategic investment or joint venture opportunities, obtain the financing necessary to complete and support such acquisitions or investments, integrate such businesses or investments satisfy regulatory requirements for such acquisitions or that any business acquired will be profitable. If we attempt to acquire non-Indian companies, we may not be able to satisfy certain Indian regulatory requirements for such acquisitions and may need to obtain the prior approval of the RBI which we may not be able to obtain. The funding of such acquisitions by SIIL may require certain approvals from regulatory authorities in India. In addition, acquisitions and investments involve a number of risks, including possible adverse effects on our operating results, diversion of management’s attention, failure to retain key personnel, risks associated with unanticipated events or liabilities and difficulties in the assimilation of the operations, technologies, systems, services and products of the acquired businesses or investments. Any failure to achieve successful integration of such acquisitions or investments could have a material adverse effect on our business, results of operations or financial condition.

We are subject to restrictive covenants for the credit facilities including term loans and working capital facilities provided to us and our subsidiaries.

There are restrictive covenants in agreements which we have entered into with certain banks and financial institutions for borrowings by our subsidiaries. These restrictive covenants among others, require us to maintain certain financial ratios and seek the prior permission of these banks and financial institutions for various activities, including, among others, any change in our capital structure, issue of equity, preferential capital or debentures, raising any loans and deposits from the public, undertaking any new project, effecting any scheme of acquisition, merger, amalgamation or reconstitution, implementing a new scheme of expansion or creation of a subsidiary. Such restrictive covenants may restrict our operations or ability to expand and may adversely affect our business.

If we do not continue to invest in new technologies and equipment, our technologies and equipment may become obsolete and our cost of production may increase relative to our competitors, which would have a material adverse effect on our results of operations, financial condition and prospects.

Our profitability and competitiveness are in large part dependent upon our ability to maintain a low cost of production as we sell commodity products with prices we are unable to influence. Unless we continue to invest in newer technologies and equipment and are successful at integrating such newer technologies and equipment to make our operations more efficient, our cost of production relative to our competitors may increase and we may cease to be profitable or competitive. Newer technologies and equipment are expensive and the necessary investments may be substantial. Moreover, such investments entail additional risks including whether they will reduce our cost of production sufficiently to justify the capital expenditures to obtain them. Any failure to make sufficient or the right investments in or in integrating newer technologies and equipment into our operations could have a material adverse effect on our ability to compete and our financial condition, results of operations and prospects.

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Asarco has filed a complaint alleging that we and Sterlite USA have breached our prior agreement to acquire Asarco’s assets. Any adverse judgment may have a material adverse effect on our business, results or operations, financial condition and prospects.

On March 17, 2010, Asarco filed a complaint in the U.S. Bankruptcy Court for the Southern District of Texas, Corpus Christi Division, against us and Sterlite USA alleging that we and Sterlite USA had breached an agreement dated May 30, 2008 (“May 2008 Agreement”) by, among other things, refusing to pay the $ 2.6 billion purchase price and refusing to assume the liabilities and contractual obligations required under the May 2008 Agreement. Asarco claimed these damages to be in the range of $ 533 million to $ 1,509 million and also claimed applicable pre-judgment interest.

The May 2008 Agreement was only a stalking horse bid, the consummation of which was subject to various approvals from creditors of Asarco’s estate, the U.S. Bankruptcy Court and competition from any other bidders. The reorganization plan proposed by Asarco’s parent companies (“Parent Plan”) was finally approved by the U.S. District Court on November 13, 2009 and was consummated. It paid all the creditors in full along with interest and provided substantial benefits to the equity holders. The Parent Plan provided for a cash contribution of $ 2.205 billion to the estate of Asarco, a promissory note of $ 280 million to the trust set up for the benefit of asbestos claimants, assumption of certain liabilities and waiver of certain claims against Asarco. Asarco’s estate also provided substantial tax benefits to the equity holders. Asarco disclosed in the joint disclosure statement filed by it during the bankruptcy proceedings, in its view that the recovery, if any, against such potential claims may be approximately $ 100 million.

Further, Asarco terminated the agreement it entered with us on March 6, 2009 (the “March 2009 Agreement”). This agreement superseded the May 2008 Agreement in its entirety. The March 2009 Agreement provided for the settlement and release of any potential claims against us arising out of the May 2008 Agreement. Asarco drew the $ 50 million provided as deposit under the March 2009 agreement. We filed an application to the U.S. Bankruptcy Court for the return of the $ 50 million which was subsequently rejected.

The trial on Asarco’s complaint and our application was completed on August 17, 2011. The U.S. Bankruptcy Court, by its order dated February 27, 2012 ruled that Asarco is entitled to a gross amount of $ 132.8 million in incidental damages. This amount shall be reduced by $ 50 million drawn by Asarco under the March 2009 Agreement, making Asarco entitled for a net amount of $ 82.8 million. We and Asarco have filed a notice of appeal against this judgment. Additionally, Asarco filed a motion seeking pre-judgement interest on the incidental damages and for reimbursement of legal fees and expenses of $ 37 million. The U.S. Bankruptcy Court rejected Asarco’s motion for $ 37 million. We have provided for the amount of $82.8 million in our consolidated statement of income as part of our administration expenses for fiscal 2012.

We and Asarco have filed a notice of appeal against this judgment which is yet to be heard.

An adverse judgment relating to Asarco’s breach of contract claim against us may have a material adverse effect on our business, results of operations, financial condition and prospects.

We continue to develop our commercial power generation business, a line of business in which we have limited experience, from which we may never recover our investment or realize a profit and which may result in our management’s focus being diverted from our core copper, zinc and aluminium businesses.

Although we have some experience building and managing captive power plants such as our thermal coal based power facility operated by us, HZL and BALCO, to provide a significant percentage of the power requirements of our copper, zinc and aluminium businesses, and in March 2007 commissioned our first wind power plant, we have limited experience competing in the commercial power generation business. In addition to the significant capital investment, our management’s focus will also be directed towards this new business.

In particular, the building of coal-based power facilities is a long and capital-intensive process, with typically several years elapsing and significant capital investment required between the time that a decision to commence a project is made and the commencement of commercial operations. The completion targets for our projects and any other projects we may undertake are estimates and are subject to numerous risks and uncertainties, such as:

• regulatory requirements and restrictions which may change by the time our planned power facility is completed. These may include a change in the tariff policy, which may have an adverse impact on our revenues and reduce our margins. We may also face delays in the development of our power plants and any coal mines we may seek to develop, as a result of protests or other obstructive or delaying activities by displaced persons and others who may oppose such developments.

• consent of certain lenders to commence a new business, and there can be no assurance that we will obtain such consents.

• dependence upon third parties for the construction, delivery and commissioning of the power facilities, the supply and testing of equipment and transmission and distribution of any power we produce.

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• inability to procure an adequate supply of coal at sufficiently attractive prices, or at all, for our power plant to operate and generate a return on our investment.

• opposition to our projects by local communities where these projects are located or from special interest groups, including as a result of the perceived negative impact of coal mines and coal-based power plants to the environment or any required displacement and resettlement of individuals and families in the area of a project.

• competition with established commercial power generation companies, including NTPC, the Tata Power Company Limited, or Tata Power, and Reliance Energy Limited.

• constraints related to the availability of water.

• release of electricity through the power grid, such as those imposed on Sterlite Energy since August 2012 by the dispatch centre located in each region in India, which would restrict our output and profitability.

There can be no assurance that we will recover our investment in this new business, that we will realize a profit from this new business or that diverting our management’s attention to this new business will not have a material adverse effect on our existing copper, zinc and aluminium businesses, any of which results may have a material adverse effect on our results of operations, financial condition and prospects.

If any power facilities we build and operate as part of our commercial power generation business do not meet operating performance requirements and agreed norms as may be set out in our agreements, or otherwise do not operate as planned, we may incur increased costs and penalties and our revenue may be adversely affected.

Operating power plants involves many operational risks, including the breakdown or failure of generation equipment or other equipment or processes, labor disputes, fuel interruption and operating performance below expected levels. In addition, below are some of the risks involved:

• Dependence on third parties. We depend on third parties for the construction, delivery and commissioning of the power facilities, supply and testing of equipment and transmission and distribution of electricity that we generate, which is beyond our control. For instance, the external contractors may not be able to complete construction and installation on time, within budget, or to the specifications set forth in our contracts with them, or the contractors may otherwise cause delays in meeting project milestones or achieving commercial operation by the scheduled completion date, which could in turn cause forecast budgets to be exceeded or result in delayed payment by customers, invoke liquidated damages, penalty clauses or performance guarantees or result in termination of contracts.

In addition, the demand for contractors with specialist design, engineering and project management skills and services has increased, resulting in a shortage of contractors and increasing costs of services. There can be no assurance that such skilled and experienced contractors will continue to be available at reasonable rates and we may be exposed to risks relating to the cost and quality of their services, equipment and supplies.

• Dependence on coal. We may not receive the coal block allocations that we expect or may not be allowed to use such allocations for our commercial power generation business. Any coal block allocations that we receive may not be sufficient for our planned operations and we may not be successful in procuring a sufficient supply of coal at economically attractive prices, or at all. Additionally, we are subject to certain restrictive covenants contained in the coal block allocation agreements including specified end use and submission of mining plans within a specified period.

• Price volatility and changes in tariff policy. As we sell the power we generate in the open market (rather than to captive schemes), we are exposed to spot prices, which are subject to factors beyond our control.

• Power purchase agreements. The power purchase agreements and other agreements that we have entered into, or may enter into may require us to guarantee certain minimum performance standards, such as plant availability and generation capacity, to the power purchasers. If our facilities do not meet the required performance standards, the power purchasers with whom we have power purchase agreements may not reimburse us for any increased costs arising as a result of our plants’ failure to operate within the agreed norms, which in turn may affect our results of operations and financial condition.

• Power transmission. Lack of strong power transmission infrastructure could restrict our power generation volumes. For example, the effective plant load factor for all the four units of our commercial power plant at Jharsuguda was constrained at 44% in fiscal 2013 on account of the limited power transmission infrastructure available in India.

• Regulatory compliance. Power generation in India is a regulated industry. In particular, national and state regulatory bodies and other statutory and government mandated authorities may, from time to time, impose minimum performance standards upon us. Failure to meet these requirements could expose us to the risk of penalties, including, in certain instances, plant shut downs.

Any of the above mentioned results could have a material and adverse effect on our business, financial condition and results of operations.

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The GoI may allege a breach of a covenant by us and seek to exercise a put or call right with respect to shares of HZL, which may result in substantial litigation and serious financial harm to our business, results of operations, financial condition and prospects.

A shareholders’ agreement was entered into between the GoI and SOVL. By order of the High Court of Madras dated March 29, 2012, SOVL was merged into SIIL. If the GoI claims that we have breached the covenant related to the Kapasan Project as mentioned in the shareholders’ agreement, and it is determined that we have breached such covenant triggering an event of default, the GoI, under the terms of the shareholders’ agreement, may become entitled to the right, which is exercisable at any time within 90 days from the day it became aware of such event of default, to either sell any or all of the shares of HZL held by the GoI to us at a price equivalent to 150.0% of the market value of such shares, or purchase any or all of the shares of HZL held by us at a price equivalent to 50.0% of the market value of such shares.

Based solely on the closing market price of HZL’s shares on the National Stock Exchange of India Limited, or the NSE, on July 19, 2013, the price was Rs. 104.35 ($ 1.9) per share. If the GoI were determined to have, and were to exercise, a right to sell all of its 1,247,950,590 shares of HZL at a price equivalent to 150.0% of their market value, we would be required to pay Rs. 195,335 million ($ 3,582.8 million) for those shares, and if the GoI were determined to have, and were to exercise, a right to purchase all of the 2,743,154,310 shares of HZL held by us at a price equivalent to 50.0% of their market value, we would receive Rs. 143,124 million ($ 2,625.2 million) for those shares.

If the GoI were to assert that an event of default occurred and seek to exercise a put or call right with respect to shares of HZL, we may face expensive and time-consuming litigation over the matter, uncertainty as to the future of our zinc business, an inability to enforce our call option to acquire the GoI’s remaining 29.5% ownership interest in HZL and the possibility of serious financial harm if we were unsuccessful in litigation, any of which may have a material adverse effect on our business, results of operations, financial condition and prospects.

The GoI has disputed our exercise of the call option to purchase GoI’s remaining shares in HZL, and hence, the option may not be enforceable.

Under the terms of the shareholders’ agreement between the GoI and us (previously entered into between the GoI and SOVL. By order of the High Court of Madras dated March 29, 2012, SOVL was merged into SIIL.), we were granted two call options to acquire all the shares in HZL held by the GoI at the time of exercise. We exercised the first call option on August 29, 2003.

By a letter dated July 21, 2009, we exercised the second call option. The GoI has stated that the clauses of the shareholders’ agreement relating to our option violated the provisions of Section 111A of the Companies Act, 1956, or the Indian Companies Act, by restricting the right of the GoI to transfer its shares and that as a result the shareholders’ agreement was null and void. As such, the GoI has refused to act upon the second call option. Consequently, we commenced arbitral proceedings under the terms of the shareholders’ agreement. The arbitral tribunal has scheduled the next date for hearing on November 13, 2013. See “Item 4. Information on the Company—B. Business Overview—Our Business—Options to Increase Interests in HZL and BALCO—Call Options Over Shares in HZL.”

There can be no assurance we will be successful in its arbitral proceedings with the GoI. Any adverse ruling in the arbitration proceedings, if commenced, may preclude or delay us from exercising our option to increase our ownership interest in HZL, and such an outcome would be likely to have a material adverse effect upon our operational flexibility, results of operations and prospects. Alternatively, we may only be able to acquire the GoI’s remaining ownership interest in HZL at a price in excess of the market value or fair value of those shares, which could have a material adverse effect on our results of operations and financial condition.

The GoI has disputed our exercise of the call option to purchase its remaining 49.0% ownership interest in BALCO, and hence, the option may not be enforceable.

We and the GoI entered into arbitration proceedings in relation to the exercise of our second call option to acquire the remaining shares in BALCO held by the GoI pursuant to the shareholders’ agreement executed by the parties. On January 25, 2011, the arbitration tribunal rejected our claims and granted an award in favour of the GoI. On April 23, 2011, we filed an application in the High Court of Delhi to set aside the award. See “Item 4 – Information on the Company – B. Overview – Our Business – Call Option Over Shares in BALCO” for further details.

There is no assurance that the decision of the High Court of Delhi will be favourable to us. In such an event, we may be unable to purchase the GoI’s remaining 49.0% interest in BALCO or may be required to pay a higher purchase price, should it decide to consummate such purchase, which may adversely affect our operational flexibility, results of operations and prospects.

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Appeal proceedings in the High Court of Bombay have been brought by the Securities and Exchange Board of India, or SEBI, to overrule a decision by the Securities Appellate Tribunal, or SAT, that we have not violated regulations prohibiting fraudulent and unfair trading practices.

In April 2001, SEBI ordered prosecution proceedings to be brought against us, alleging that we have violated regulations prohibiting fraudulent and unfair trading practices and also passed an order prohibiting us from accessing the capital markets for a period of two years. This order of SEBI was overruled by the SAT on October 22, 2001 on the basis of lack of sufficient material evidence to establish that we had, directly or indirectly, engaged in market manipulation and that SEBI had exercised its jurisdiction incorrectly in prohibiting us from accessing the capital markets. On November 9, 2001, SEBI appealed to the High Court of Bombay. The next date of hearing has not been fixed.

In addition to the prosecution proceedings, SEBI also initiated criminal proceedings in 2001 before the Court of the Metropolitan Magistrate, Mumbai, against us, our non-Executive Chairman, Mr. Anil Agarwal, our Director of Finance, Mr. Tarun Jain who was also the Chief Financial Officer of MALCO at the time of the alleged price manipulation. When SEBI’s order was overruled in October 2001, we filed a petition before the High Court of Bombay to defend those criminal proceedings on the grounds that the SAT had overruled SEBI’s order on price manipulation. An order was passed by the High Court of Bombay in our favor, granting an interim stay of the criminal proceedings.

In the event any of the above matters are held against us, we may be prohibited from accessing the Indian capital market for a specified period of time and/or may become liable to pay penalties. If we and the individuals named in the criminal proceedings do not prevail, our business and operations may be materially and adversely affected. See Item 8. Financial Information - A. Consolidated Statements and Other Financial Information - Legal Proceedings.

We are involved in a number of litigation matters, both civil and criminal in nature, and any final judgments against us could have a material adverse effect on our business, results of operations, financial condition and prospects.

We are involved in a variety of litigation matters, including matters relating to alleged violations of environmental and tax laws and alleged price manipulation of our equity shares on the NSE and the Bombay Stock Exchange Limited, or the BSE. A final judgment against us or our directors in one or more of these disputes may result in damages being awarded that we must pay or injunctions against us, or criminal proceedings being instituted against us or our directors, which may require us to cease or limit certain of our operations and have a material adverse effect on our business, results of operations, financial condition and prospects.

For a detailed discussion of material litigation matters pending against us, see “Item 8. Financial Information—A. Consolidated Statements and Other Financial Information—Legal Proceedings.”

Defects in title or loss of any leasehold interests in our properties could limit our ability to conduct operations on our properties or result in significant unanticipated costs.

Our ability to mine the land on which we have been granted mining lease rights, is dependent on the surface rights that we acquire separately. Additional surface rights may be negotiated with landowners, though there is no guarantee that these rights will be granted. Any delay in obtaining title or leasehold rights to surface rights could negatively affect our financial condition and results of operations.

A significant part of our mining operations are carried out on leasehold properties. Our right to mine some of our reserves may be materially and adversely affected if defects in title or boundary disputes exist or if a lease expires and is not renewed or if a lease is terminated due to our failure to comply with its conditions. In addition, there may be certain irregularities in title in relation to some of our owned and leased properties. For example, some of the agreements for such arrangements may not have been duly executed and/or adequately stamped or registered in the land records of the local authorities or the lease deeds may have expired and not yet been renewed. Since registration of land title in India is not centralised and has not been fully computerised, the title to land may be defective as a result of a failure on our part, or on the part of a prior transferee, to obtain the consent of all such persons or duly complete stamping and registration requirements. The uncertainty of title to land may impede the process of acquisition, independent verification and transfer of title, and any disputes in respect of land title that we may become party to, may take several years and considerable expense to resolve if they become the subject of Court proceedings. Further, certain of these properties may not have been constructed or developed in accordance with local planning and building laws and other statutory requirements, or it may be alleged that such irregularities exist in the construction and development of our built up properties.

Any challenge to our title or leasehold interests could delay our mining operations and could ultimately result in the loss of some or all of our interests. Also, in any such case, the investigation and resolution of title issues would divert management’s time from our business and our results of operations could be adversely affected. Further, if we mine on property that we do not own or lease, we could incur liability for such mining.

We can also be subject to claims challenging our title to our non-mine properties. For example, BALCO is currently engaged in a dispute with the State Government of Chhattisgarh regarding alleged encroachment on state-owned land at its Korba smelter. See “Item 8. Financial Information—A. Consolidated Statements and Other Financial Information—Legal Proceedings.”

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Our operations are subject to extensive governmental, health and safety and environmental regulations which have in the past and could in the future cause us to incur significant costs or liabilities or interrupt or close our operations, any of which events may adversely affect our results of operations and financial condition.

Numerous governmental permits, approvals and leases are required for our operations as the industries in which we operate and seek to operate are subject to numerous laws and extensive regulation by national, state and local authorities. We are currently primarily subject to laws and regulations relating to operations in India, Australia, United Arab Emirates, Namibia, Ireland and South Africa. Our operations are also subject to laws and regulations relating to employment, the protection of health and safety and environment.

Failure to comply with any laws or regulations or to obtain or renew the necessary permits, approvals and leases may result in the loss of the right to mine or operate our facilities, the assessment of administrative, civil or criminal penalties, the imposition of cleanup or site restoration costs and liens, the imposition of costly compliance procedures, the issuance of injunctions to limit or cease operations, the suspension or revocation of permits and other enforcement measures could have the effect of closing or limiting production from our operations. In addition, a significant number of approvals are required from government authorities for metals and mining and commercial power generation projects, and any such approvals may be subject to challenge. For example, on March 29, 2013, the TNPCB ordered the closure of the copper smelter at Tuticorin due to complaints about a noxious gas leak by local residents. See “Item 8. Financial Information — A. Consolidated Statements and Other Financial Information — Legal Proceedings.” for further details.

Further, our ability to mine new areas of land for which we seek mining rights is dependent on our separate acquisition of surface rights. While we expect to obtain additional surface rights, any delay, or inability to obtain or substantial compensation costs incurred in obtaining additional surface rights could have a material adverse effect on our business, operating results and financial condition. In addition, we and HZL are required to comply with the various regulations of the Securities and Exchange Board of India and the relevant stock exchanges, as amended from time to time. Any inability on our or HZL’s part to comply with such regulations may attract regulatory action and imposition of penalties.

The costs, liabilities and requirements associated with complying with existing and future governmental, health and safety and environmental laws and regulations may be substantial and time-consuming and may delay the commencement or continuation of exploration, mining or production activities. Environmental regulations may also subject us to substantial costs and liabilities for the closure of our mines and other facilities.

New legislation or regulations may be adopted in the future that may materially and adversely affect our operations, our cost structure or our customers’ ability to use our products. New legislation or regulations, or different or more stringent interpretation or enforcement of existing laws and regulations, may also require us or our customers to change operations significantly or incur increased costs, which could have a material adverse effect on our business, operating results and financial condition.

Any increase in competition in our target markets could result in lower prices or sales volumes of the copper, zinc and aluminium products we produce, which may cause our profitability to suffer.

There is substantial competition in the copper, zinc and aluminium industries, both in India and internationally, and we expect this to continue. Our competitors in the copper, zinc and aluminium markets outside India include major international producers and these international producers have significantly larger scale of operations, greater financial resources and manufacturing and technological capabilities, more established and larger marketing and sales organizations and larger technical staffs than we do.

In the Indian copper market, we compete primarily against Hindalco Industries Limited, or Hindalco, the government-owned Hindustan Copper Limited, or Hindustan Copper, and imports. In the Indian zinc market, we compete primarily against imports. In the Indian aluminium market, we compete primarily against National Aluminium Company Limited, or NALCO, a GoI enterprise, Hindalco and imports. Many of our competitors are also expanding their production capacities. If domestic demand is not sufficient to absorb these increases in capacity, our competitors could reduce their prices, which may force us to do the same or cause us to lose market share or sell our products in overseas markets at lower prices.

The end-user markets for our metal products are highly competitive. Copper competes with a number of other materials, including aluminium and plastics. Zinc metal faces competition as a result of substitution of materials, including aluminium, stainless steel and other alloys, plastics and other materials being substituted for galvanized steel and epoxies, paints and other chemicals being used to treat steel in place of galvanization in the construction market. Aluminium competes with materials such as plastic, steel, iron, glass and paper, among others, for various applications. In the past, customers have demonstrated a willingness to substitute other materials for copper, zinc and aluminium. The willingness of customers to accept substitutes could have a material adverse effect on our business, results of operations and prospects.

Our insurance coverage may prove inadequate to satisfy future claims against us.

We maintain insurance which we believe is typical in our industry in India and other countries we operate and in amounts which we believe to be commercially appropriate. Nevertheless, we may become subject to liabilities, including liabilities for pollution or other hazards, against which we have not insured adequately, or at all, or cannot be insured. Our insurance policies

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contain exclusions and limitations on coverage. Our operating entities in India can only seek insurance from domestic insurance companies or foreign insurance companies operating in joint ventures with Indian companies and these insurance policies may not continue to be available at economically acceptable premiums, or at all. As a result, our insurance coverage may not cover the extent of any claims against us, including for environmental or industrial accidents or pollution. See “Item 4. Information on the Company—B. Business Overview—Our Business—Insurance.”

Third party interests in our subsidiary companies and restrictions due to stock exchange listings of our subsidiary companies will restrict our ability to deal freely with our subsidiaries, which may have a material adverse effect on our operations.

We do not wholly own all of our operating subsidiaries. Although we have management control of HZL, BALCO and Black Mountain, each of these companies has other shareholders who, in some cases, hold substantial interests in them. The non-controlling interests in our subsidiaries and the listing of HZL on the NSE and the BSE may limit our ability to increase our equity interests in these subsidiaries, combine similar operations and utilize synergies that may exist between the operations of different subsidiaries or reorganize the structure of our business in a tax effective manner. For example, the GoI, which is a minority shareholder in each of HZL and BALCO, has entered into shareholders’ agreements for HZL and BALCO and it is a term of the shareholders’ agreements that HZL and BALCO may not grant loans to companies which are under the same management as HZL or BALCO, as the case may be, without the prior consent of the GoI.

Any restrictions on our ability to deal freely with our subsidiaries caused by the non-controlling interests may have a material adverse effect on our results of operations or financial condition as our ability to move funds among the different parts of our business will be restricted and we will be unable to access cash held in HZL or BALCO except through dividend payments by HZL and BALCO which would be payable to all shareholders. This will limit our ability to make payments of interest and principal in respect of financial liabilities and obligations which we have undertaken on behalf of our consolidated group of companies. Further, pursuant to the requirements for the continued listing of the shares of HZL on the NSE and BSE, in the event we acquire the GoI’s remaining ownership interest in HZL under the shareholders' agreement, we would have to either divest a portion of our shareholding in HZL within a period of one year from the acquisition such that the minimum public shareholding requirement of 25.0% is complied with or delist HZL’s shares from the NSE and BSE by making an offer to purchase the equity shares held by the remaining HZL’s shareholders at a price determined by way of a reverse book-build process, which could adversely impact our financial condition and results of operations. See “Item 4. Information on the Company—B. Business Overview—Our Business—Options to Increase Interests in HZL and BALCO.”

We may be liable for additional taxes if the tax holidays, exemptions and tax deferral schemes which we currently benefit from expire without renewal, and the benefits of the tax holidays, exemptions and tax deferral schemes are limited by the minimum alternative tax, or MAT.

We currently benefit from significant tax holidays, exemptions and tax deferral schemes. These tax holidays, exemptions and tax deferral schemes are for limited periods. For example, HZL’s captive power plant at Debari, Chanderiya, and Zawar benefits from tax exemptions on the profits generated from transfers of power to HZL’s other units, which are expected to generate substantial savings. We also have wind mills located in states such as Gujarat, Karnataka, Tamil Nadu, Maharashtra and Rajasthan which are also eligible for tax exemption.

Our copper refinery and copper rod plant at Tuticorin and one of our hydrometallurgical zinc smelters at Chanderiya was awarded the status of export oriented units, under which we were eligible for tax exemptions on raw materials, capital goods procured and finished goods sold until March 31, 2011. New captive power plants will not be eligible for such tax exemptions if the capitalization is effected after March 31, 2014. Captive power plants will continue to have the benefit of any existing tax exemptions after March 31, 2014 until such tax exemptions expire. The expiry or loss of existing tax holidays, exemptions and tax deferral schemes or the failure to obtain new tax holidays, exemptions or tax deferral schemes will likely increase our tax obligations and any increase could have a material adverse effect on our financial condition or results of operations.

In addition, we are subject to a MAT which sets a minimum amount of tax that must be paid each year based on our book profits. The MAT rate is currently 18.5%. The Finance Act, 2013 has increased the surcharge on income of domestic companies having taxable income over Rs. 100 million ($ 1.8 million) from 5% to 10% which resulted in the increase in the effective MAT rate for such companies from 20.01% to 20.96%, including surcharge, education cess and secondary and higher secondary education cess. The MAT prevents us from taking full advantage of any tax holidays, exemptions or tax deferral schemes that may be available to us.

Shortage of skilled labor in the metals and mining industry could increase our costs and limit our ability to maintain or expand our operations, which could adversely affect our results of operations.

Mining and metal refining, smelting and fabrication operations require a skilled and experienced labor force. If we experience a shortage of skilled and experienced labor, our labor productivity could decrease and costs could increase, our operations may be interrupted or we may be unable to maintain our current production or increase our production as otherwise planned, which could have a material adverse effect on our results of operations, financial condition and business prospects.

The Reorganisation Transactions, for which approvals are still pending, may not be consummated or result in the expected benefits.

As of July 25, 2013, all third party approvals required for the consummation of the Reorganisation Transactions have been obtained. However, a final order in relation to the appeal filed by a shareholder against the order of the High Court of Bombay at Goa approving the Reorganisation Transactions is currently pending. The High Court of Bombay at Goa approved the Reorganisation Transactions by an order dated April 3, 2013. There is no assurance that the appeal before the High Court of Bombay at Goa will be determined in Vedanta’s favour, and accordingly, there is no assurance that the Reorganisation Transactions will be consummated.

If the Reorganisation Transactions are not consummated, we may not be able to achieve financial, operational, strategic and other potential benefits from the consolidation pursuant to the Reorganisation Transactions. The consolidation pursuant to the Reorganisation Transactions is expected to give rise to cost savings on account of operational, capital and corporate synergies, including tax efficiencies, economies of scale, leveraging of technical expertise, more efficient movement of our cash and improved allocation of capital. The consolidation is also expected to be earnings accretive to our shareholders immediately following the consummation of the Reorganisation Transactions.

If the Reorganisation Transactions are not consummated, there is also a risk that the annual cost saving, that we expect to achieve through the consolidation may not be realised or may be materially lower than estimated. Further, the extent to which any of the other benefits will actually be achieved, if at all, or the timing of any such benefits, cannot be predicted with certainty. If we are unable to realise the estimated annual cost savings or the other benefits, that we expect to achieve through the consolidation, if we are prevented from taking advantage of the aniticipated tax efficiencies, or if we are unable to offset the incremental costs we incur over time as a result of the consolidation with such savings and benefits, there could be an adverse effect on our operating results or financial condition.

Furthermore, negative publicity related to failure to consummate the Reorganisation Transactions could negatively affect the trading prices of our publicly traded securities.

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Risks Relating to Our Industry

Commodity prices and the copper TcRc may be volatile, which would affect our revenue, results of operations and financial condition.

Historically, the international commodity prices for copper, zinc and aluminium and the prevailing market TcRc rate for copper have been volatile and subject to wide fluctuations in response to relatively minor changes in the supply of, and demand for, such commodities, market uncertainties, the overall performance of world or regional economies and the related cyclicality in industries we directly serve and a variety of other factors. For example, between March 31, 2012 and March 31, 2013, the average LME prices of copper, aluminium, zinc and lead decreased by 7.3%, 14.7%, 7.2% and 6.9%, respectively. Commodity prices and the market TcRc rate for copper may continue to be volatile and subject to wide fluctuations in the future. A decline in the prices we receive for our copper, zinc or aluminium metals and in the market TcRc rate for copper would adversely affect our revenue and results of operations, and a sustained drop would have a material adverse effect on our revenue, results of operations and financial condition.

Our ore reserves are estimates based on a number of assumptions, any changes to which may require us to lower our estimated reserves.

The ore reserves stated in this annual report are estimates and represent the quantity of copper, zinc, lead and bauxite that we believed, as of March 31, 2013, could be mined, processed, recovered and sold at prices sufficient to cover the estimated future total costs of production, remaining investment and anticipated additional capital expenditures. These estimates are subject to numerous uncertainties inherent in estimating quantities of reserves and could vary in the future as a result of actual exploration and production results, depletion, new information on geology and fluctuations in production, operating and other costs and economic parameters such as metal prices, smelter treatment charges and exchange rates, many of which are beyond our control. As a result, you should not place undue reliance on the reserve data contained in this annual report. In the event that any of these assumptions turn out to be incorrect, we may need to revise our ore reserves downwards and this may adversely affect our life-of-mine plans and consequently the total value of our mining asset base, which could increase our costs and decrease our profitability.

Changes in tariffs, royalties, customs duties and government assistance may reduce our Indian market domestic premium, which would adversely affect our profitability and results of operations.

Copper, zinc and aluminium are sold in the Indian market at a premium to the international market prices of these metals due to tariffs payable on the import of such metals. Between March 2003 and February 2011, basic customs duties on imported copper, zinc, lead and alumina and aluminium decreased cumulatively from 25.0% to 5.0%, and have remained at 5.0% since February 2011. The GoI may reduce or abolish customs duties on any of these commodities in the future, although the timing and extent of such reductions cannot be predicted. As we sell the majority of the commodities we produce in India, any reduction in Indian tariffs on imports will decrease the premiums we receive in respect of those sales which would have an adverse effect on our results of operations and financial condition.

We pay royalties to the State Governments of Chhattisgarh and Rajasthan based on our extraction of bauxite and lead-zinc ore, respectively, and to the State Government of Tasmania in Australia based on our extraction of copper ore. Most significant of these is the royalty that HZL is required to pay to the State Government of Rajasthan, where all of HZL’s mines are located, at a rate of 8.4%, with effect from August 13, 2009 (with the rate being 6.6% prior to August 13, 2009), of the zinc LME price payable on the zinc metal contained in the concentrate produced and 12.7% (with the rate being 5.0% prior to August 13, 2009) of the lead LME price payable on the lead metal contained in the concentrate produced. Any upward revision to the royalty rates being charged currently may adversely affect our profitability. Additionally, the Department of Mines and Geology of the State of Rajasthan has raised additional demands for payment through several show cause notices to HZL for mining minerals associated with lead and zinc such as cadmium and silver. Any upward revision to the royalty rates being charged currently or payment of additional royalty for mining of associated minerals may adversely affect our profitability. See “Item 8. Financial Information—A. Consolidated Statements and Other Financial Information—Legal Proceedings—Demands against HZL by Department of Mines and Geology.”

We also pay royalties to the State Government of Tasmania in Australia based on our extraction of copper ore. We also pay royalties to the government from our Zinc International business. See “Item 5 — Operating and Financial Review and Prospects — Factors Affecting Results of Operations — Government Policy” for details.

Indian exports of copper, aluminium and zinc receive assistance premiums from the GoI, which have been reduced since 2002. These export assistance premiums have been reduced in recent years and may be further reduced in the future. Any reduction in these premiums will decrease the revenue we receive from export sales and may have a material adverse effect on our results of operations or financial condition. See “Item 5. Operating and Financial Review and Prospects—Factors Affecting Results of Operations—Government Policy.”

Regulation of greenhouse gas emissions effects and climate change issues may adversely affect our operations and markets.

Our mining, smelting and refining operations are energy intensive and depend heavily on electricity, thermal coal, diesel fuel and fuel oil. In addition, our commercial power generation business depends on coal-fired power plants. Many scientists believe that emissions from the combustion of carbon-based fuels contribute to greenhouse effects and therefore potentially to climate change.

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A number of governments or governmental bodies have introduced or are contemplating regulatory changes in response to the potential impacts of climate change. International treaties or agreements may also result in increasing regulation of greenhouse gas emissions, including the introduction of carbon emissions trading mechanisms, in jurisdictions in which we operate. Any such regulation will likely result in increased future energy and compliance costs. These regulatory initiatives will be either voluntary or mandatory and may impact our operations directly or through our suppliers or customers.

The potential physical impacts of climate change on our operations are highly uncertain, and would be particular to the geographic circumstances. These may include changes in rainfall patterns, water shortages, changing sea levels, changing storm patterns and intensities, and changing temperatures. These effects may adversely impact the cost, production and financial performance of our operations.

Risks Relating to Our Relationship with Vedanta

We are controlled by Vedanta and our other shareholders’ ability to influence matters requiring shareholder approval will be extremely limited.

We are a majority-owned and controlled subsidiary of Vedanta. Volcan Investments Limited, or Volcan holds 58.2% of the share capital and 64.9% of the voting rights of Vedanta. Volcan is a holding company, 100% owned and controlled by the Anil Agarwal Discretionary Trust. Onclave PTC Limited, or Onclave, is the trustee of the Anil Agarwal Discretionary Trust and controls all voting and investment decisions of the Anil Agarwal Discretionary Trust. As a result, shares beneficially owned by Volcan may be deemed to be beneficially owned by the Anil Agarwal Discretionary Trust and, in turn, by Onclave. The beneficiaries of the Anil Agarwal Discretionary Trust are members of the Agarwal family, who are related to Mr. Anil Agarwal. Mr. Anil Agarwal, the Executive Chairman of Vedanta and our Non-Executive Chairman, as protector of the Anil Agarwal Discretionary Trust, may be deemed to have deemed beneficial ownership of shares that are beneficially owned by the Anil Agarwal Discretionary Trust. Vedanta, Volcan, the Anil Agarwal Discretionary Trust, Onclave and Mr. Anil Agarwal are parties to a relationship agreement that seeks to enable Vedanta to carry on its business independently of Volcan, its direct and indirect shareholders, and their respective associates, or collectively, the Volcan Parties. See “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Related Parties—Vedanta.” However, we cannot assure you that the relationship agreement will be effective at insulating Vedanta, and in turn we, from being influenced or controlled by the Volcan Parties, which influence or control could have a material adverse effect on the holders of our equity shares and ADSs.

As long as Vedanta, through its subsidiaries, owns a majority of our outstanding equity shares, Vedanta will have the ability to control or influence significant matters requiring board approval and to take shareholder action without the vote of any other shareholder, and the holders of our equity shares and ADSs will not be able to affect the outcome of any shareholder vote. Vedanta will have the ability to control all matters affecting us.

In the event Vedanta ceases to be our majority shareholder, we will be required to immediately repay some of our outstanding long-term debt.

Vedanta’s voting control may discourage transactions involving a change of control of us, including transactions in which holders of our equity shares and ADSs might otherwise receive a premium therefore over the then current market prices. Vedanta is not prohibited from selling a controlling interest in us to a third party and may do so without the approval of holders of our equity shares and ADSs and without providing for a purchase of our equity shares or ADSs. Accordingly, our equity shares and ADSs may be worth less than they would be if Vedanta did not maintain voting control over us.

Vedanta may decide to allocate business opportunities to other members of the Vedanta group instead of us, which may have a material adverse effect on our business, results of operations, financial condition and prospects.

Vedanta’s control of us means it can determine the allocation of business opportunities among us, itself and its other subsidiaries. For example, as of March 31, 2013, Vedanta owned 79.4% of KCM, an integrated copper producer in Zambia, 55.1% of Sesa Goa, 78.8% of MALCO through Twin Star and 16.0% through Welter Trading, and 70.5% of Vedanta Aluminium, an alumina refining and aluminium smelting business through Twin Star and 58.8% of Cairn India, an oil exploration company based in India. As Vedanta controls KCM, MALCO, Vedanta Aluminium, Sesa Goa, Cairn India and us, it determines the allocation of business opportunities among, as well as strategies and actions of, KCM, MALCO, Vedanta Aluminium, Sesa Goa, Cairn India and us. Vedanta may determine to have KCM, MALCO, Vedanta Aluminium, Sesa Goa or Cairn India, instead of us, pursue business opportunities in the copper, zinc, aluminium or commercial power generation business, or any other business, or cause such companies or us to undertake corporate strategies, the effect of which is to benefit such companies instead of us and which could be detrimental to our interests. If Vedanta were to take any such actions, our business, results of operations, financial condition and prospects could be materially and adversely affected and the value of our equity shares and the ADSs may decline.

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We have issued several guarantees as security for the obligations of certain of our subsidiaries and other companies within the Vedanta group and we will have liability under these guarantees in the event of any failure by such entities to perform their obligations, which could have a material adverse effect on our results of operations and financial condition.

We have issued several guarantees in respect of the obligations of certain of our subsidiaries and other companies within the Vedanta group, including guarantees issued as security for loan obligations, credit facilities or issuance of customs duty bonds for import of capital equipment at concessional rates of duties. Our outstanding guarantees cover obligations aggregating Rs. 89,655 million ($ 1,644.4 million) as of March 31, 2013, the liabilities for which have not been recorded in our consolidated financial statements. We will have a liability in the event that any of these entities fails to perform its obligations under the loan agreements, credit facilities or bonds, which could have a material adverse effect on our results of operations and financial condition. See “Item 5. Operating and Financial Review and Prospects—Guarantees.”

Any disputes that arise between us and Vedanta or other companies in the Vedanta group could harm our business operations.

Disputes may arise between Vedanta or other companies in the Vedanta group and us in a number of areas, including:

• intercompany agreements setting forth services and prices for services between us and Vedanta or other companies in the Vedanta group;

• business combinations involving us;

• sales or distributions by Vedanta of all or any portion of its ownership interest in us; or

• business opportunities that may be attractive to us and Vedanta, or other companies in the Vedanta group.

We may not be able to resolve any potential conflicts, and even if we do, the resolution may be less favorable than if we were dealing with an unaffiliated party.

Our agreements with Vedanta and other companies in the Vedanta group may be amended upon agreement between the parties. As we are controlled by Vedanta, Vedanta may require us to agree to amendments to these agreements that may be less favorable to us than the original terms of the agreements.

Some of our directors and executive officers may have conflicts of interest because of their ownership of Vedanta shares, options to acquire Vedanta shares and positions with Vedanta.

Some of our directors and executive officers own Vedanta shares and options to purchase Vedanta shares, including through their continued participation in the Vedanta Long-Term Incentive Plan 2003, the Vedanta LTIP or ESOP schemes of Vedanta. In addition, some of our directors and executive officers are directors or executive officers of Vedanta. Ownership of Vedanta shares and options to purchase Vedanta shares and the presence of an executive officer of Vedanta on our board of directors could create, or appear to create, potential conflicts of interest and other issues with respect to their fiduciary duties to us when our directors and officers are faced with decisions that could have different implications for Vedanta than for us.

Our management, including our senior management, is not solely focused on our business and may be distracted by, or have conflicts as a result of, the demands of Vedanta or other businesses within the Vedanta group, which may materially and adversely affect our business, results of operations and financial condition.

Risks Relating to Investments in Indian Companies, Global Economic Conditions and International Operations

A substantial portion of our assets and operations are located in India and we are subject to regulatory, economic, social and political uncertainties in India.

We are incorporated in India. Our primary operating subsidiaries, HZL, BALCO and Sterlite Energy, as well as our associate company, Vedanta Aluminium, are also incorporated in India. A substantial portion of our assets and employees are located in India and we intend to continue to develop and expand our facilities in India. Consequently, our financial performance and the market price of our equity shares and ADSs will be affected by changes in exchange rates and controls, interest rates, changes in government policies, including taxation policies, social and civil unrest and other political, social and economic developments in or affecting India.

The GoI has exercised and continues to exercise significant influence over many aspects of the Indian economy. Since 1991, successive Indian governments have pursued policies of economic liberalization, including by significantly relaxing restrictions on the private sector. Nevertheless, the role of the Indian central and state governments in the Indian economy as producers, consumers and regulators has remained significant and we cannot assure you that such liberalization policies will continue. The present government has announced policies and taken initiatives that support the continued economic liberalization policies that have been pursued by previous governments. The present government continues to be a multiparty coalition and therefore there is no assurance that it will be able to generate sufficient cross-party support to implement its liberalization policies. The rate of economic liberalization could change, and specific laws and policies affecting metals and mining companies, foreign investments, currency exchange rates and other matters affecting investment in India could change as well. Further, protests against privatizations and government corruption scandals, which have occurred in the past, could slow the pace of liberalization and

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deregulation. Given the changes in government policy on divestments, there can be no assurance that any of the proposed privatizations which we may be interested in pursuing will be implemented or completed in the near future, or at all. A significant change in India’s policy of economic liberalization and deregulation could adversely affect business and economic conditions in India generally and our business in particular if new restrictions on the private sector is introduced or if existing restrictions are increased.

Global economic conditions have been unprecedented and challenging and have had, and continue to have, an adverse effect on the Indian financial markets and the Indian economy in general, which has had, and may continue to have, a material adverse effect on our business, our financial performance and the prices of our equity shares and ADSs.

Global market and economic conditions have been unprecedented and challenging and have resulted in tighter credit conditions and recession in most major economies in the last several years. Continued concerns about the systemic impact of potential long-term and wide-spread recession, energy costs, geopolitical issues, the availability and cost of credit, and the global housing and mortgage markets have contributed to increased market volatility and diminished expectations across various economies.

These conditions, combined with volatile oil prices, declining business and consumer confidence and increased unemployment, have contributed to volatility of unprecedented levels.

As a result of these market conditions, the cost and availability of credit has been and may continue to be adversely affected by illiquid credit markets and wider credit spreads. Concern about the stability of the markets generally and the strength of counterparties specifically has led many lenders and institutional investors to reduce, and in some cases, cease to provide credit to businesses and consumers. These factors have led to a decrease in spending by businesses and consumers alike and corresponding decreases in global infrastructure spending and commodity prices. Continued turbulence in the United States and international markets and economies and prolonged declines in business consumer spending may adversely affect our liquidity and financial condition, and the liquidity and financial condition of our customers, including our ability to refinance maturing liabilities and access the capital markets to meet liquidity needs. These global market and economic conditions have had an adverse effect on the Indian financial markets and the Indian economy in general, which has had, and may continue to have, a material adverse effect on our business, our financial performance and the prices of our equity shares and ADSs. For example, in response to global economic conditions and a decline in commodity prices, we had ceased operations at one of our aluminium smelters at the Korba complex in previous years which had an adverse effect on our business and financial performance.

As the domestic Indian market constitutes the major source of our revenue, the downturn in the rate of economic growth in India due to the unprecedented and challenging global market and economic conditions, or any other such downturn for any other reason, will be detrimental to our results of operations.

In fiscal 2013, approximately 58.5% of our revenue was derived from commodities that we sold to customers in India. The performance and growth of our business are necessarily dependent on the health of the overall Indian economy. Any downturn in the rate of economic growth in India, whether due to political instability or regional conflicts, economic slowdown elsewhere in the world or otherwise, may have a material adverse effect on demand for the commodities we produce. The Indian economy is also largely driven by the performance of the agriculture sector, which depends on the quality of the monsoon, which is difficult to predict. In the past, economic slowdowns have harmed manufacturing industries, including companies engaged in the copper, zinc, aluminium and power sectors, as well as the customers of manufacturing industries. Any future slowdown in the Indian economy could have, a material adverse effect on the demand for the commodities we produce and, as a result, on our financial condition and results of operations.

Terrorist attacks and other acts of violence involving India or other neighboring countries could adversely affect our operations directly, or may result in a more general loss of customer confidence and reduced investment in these countries that reduces the demand for our products, which would have a material adverse effect on our business, results of operations, financial condition and cash flows.

Terrorist attacks and other acts of violence or war involving India or other neighboring countries may adversely affect the Indian markets and the worldwide financial markets. The occurrence of any of these events may result in a loss of business confidence, which could potentially lead to economic recession and generally have a material adverse effect on our businesses, results of operations, financial condition and cash flows. In addition, any deterioration in international relations may result in investor concern regarding regional stability which could adversely affect the price of our equity shares and ADSs.

South Asia has also experienced instances of civil unrest, terrorist attacks and hostilities among neighboring countries from time to time, especially between India and Pakistan. Such activity or terrorist attacks in the future could adversely affect the Indian economy by disrupting communications and making travel more difficult and could create the perception that investments in Indian companies involve a high degree of risk. Furthermore, if India were to become engaged in armed hostilities, particularly hostilities that were protracted or involved the threat or use of nuclear weapons, we might not be able to continue our operations.

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If natural disasters or environmental conditions in India, including floods and earthquakes, affect our mining and production facilities, our revenue could decline.

Our mines and production facilities are spread across India, and our sales force is spread throughout the country. Natural calamities such as floods, rains, heavy downpours (such as heavy downpours in Tuticorin in 2008 which caused the closure of our Tuticorin facilities for two to three days, as well as the rains in Mumbai and other parts of the State of Maharashtra in 2005 and other states in 2006) and earthquakes could disrupt our mining and production activities and distribution chains and damage our storage facilities. Other regions in India have also experienced floods, earthquakes, tsunamis and droughts in recent years. Substantially all of our facilities and employees are located in India and there can be no assurance that we will not be affected by natural disasters in the future. In addition, if there were a drought or general water shortage in India or any part of India where our operations are located, the GoI or local, state or other authorities may restrict water supplies to us and other industrial operations in order to maintain water supplies for drinking and other public necessities which would cause us to reduce or close our operations.

Currency fluctuations among the Indian Rupee, the Australian dollar and the US dollar could have a material adverse effect on our results of operations.

Although substantially all of our revenue is tied to commodity prices that are typically priced by reference to the US dollar, most of our expenses are incurred and paid in Indian Rupees or Australian dollars, South African Rand or Namibian Dollar. In addition, in fiscal 2013, approximately 41.5% of our revenue was derived from commodities that we sold to customers outside India. The exchange rates between the Indian Rupee, Australian dollar, South African Rand or Namibian dollar and the US dollar have changed substantially in recent years and may fluctuate substantially in the future. Our results of operations could be adversely affected if the US dollar depreciates against the Indian Rupee or Australian dollar or South African Rand or Nambian dollar, or if the Indian Rupee or Australian dollar or South African Rand or Namibian dollar appreciates against the US dollar. We seek to mitigate the impact of short-term movements in currency on our business by hedging our exposures one year prior to maturity. Typically, most of our exposures with a maturity of less than one year are hedged completely. However, large or prolonged movements in exchange rates may have a material adverse effect on our results of operations and financial condition.

If India’s inflation worsens or the prices of oil or other raw materials rise, we may not be able to pass the resulting increased costs to our customers and this may adversely affect our profitability or cause us to suffer operating losses.

India has recently experienced wholesale price inflation in recent years compared to historical levels due to higher demand than supply. In addition, international prices of crude oil have recently experienced significant volatility, including a rise to historical highs that increased transportation costs followed more recently by a significant decline as global economic conditions have deteriorated. Inflation, increased transportation costs and an increase in energy prices generally, which may be caused by a rise in the price of oil, or an increase in the price of thermal coking coal in particular, could cause our costs for raw material inputs required for production of our products to increase, which would adversely affect our financial condition and results of operations if we cannot pass these added costs along to customers.

Stringent labor laws in India may adversely affect our profitability.

India has stringent labor legislation that protects the interests of workers, including legislation that sets forth detailed procedures for dispute resolution and employee compensation for injury or death sustained in the course of employment, and imposes financial obligations on employers upon employee layoffs. This makes it difficult for us to maintain flexible human resource policies, discharge employees or downsize, which may adversely affect our business and profitability.

As a foreign private issuer and a “controlled company” within the meaning of the New York Stock Exchange, or NYSE, rules, we are subject to different NYSE rules than non-controlled domestic US issuers. Consequently, the corporate governance standards which we are required to adhere to are different than those applicable to such companies, which may limit the information available to, and the shareholder rights of, holders of our ADSs.

We qualify as a “controlled company” within the meaning of the NYSE rules as Vedanta has effective control of a majority of our equity shares. This will allow Vedanta to, among other things, control the composition of our board of directors and direct our management and policies.

As a foreign private issuer and a “controlled company,” we are exempt from complying with certain corporate governance requirements of the NYSE, including the requirement that a majority of our board of directors consist of independent directors. As the corporate governance standards applicable to us are different than those applicable to domestic non-controlled US issuers, holders of our equity shares and ADSs may not have the same protections afforded under the NYSE rules as shareholders of companies that do not have such exemptions. It is also possible that the Agarwal family’s significant ownership interest of us as a result of its majority ownership of Vedanta’s majority shareholder, Volcan, could adversely affect investors’ perceptions of our corporate governance. For a summary of the differences between the corporate governance standards applicable to us as a listed company in India and as a foreign private issuer and “controlled company” in the United States and such standards applicable to a domestic non-controlled US issuer, see “Item 10. Additional Information—B. Memorandum and Articles of Association—Comparison of Corporate Governance Standards.”

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There are certain differences in shareholder rights and protections between the laws of India and the United States and between governance standards for a US public company and a foreign private issuer such as us.

We are incorporated in India and investors should be aware that there are certain differences in the shareholder rights and protections between the laws of India and the United States. There are also certain differences in the corporate governance standards for a domestic US issuer and those applicable to a foreign private issuer such as us. See “Item 10. Additional Information—B. Memorandum and Articles of Association—Comparison of Shareholders’ Rights.”

SEBI and the various Indian stock exchanges are responsible for improving and setting standards for disclosure and other regulatory standards for the Indian securities markets. SEBI has issued regulations and guidelines on disclosure requirements, insider trading and other matters. Nevertheless, there may be less information made publicly available in respect of Indian companies than is regularly made available by public companies in the United States as a result of differences between the level of regulation and monitoring of the Indian securities markets and of the transparency of the activities of investors and brokers in India compared to the United States. Similarly, our disclosure obligations under the rules of the NSE and BSE on which our equity shares are listed may be less than the disclosure obligations of public companies on the NYSE.

Risks Relating to our ADSs

Substantial future sales of our equity shares or ADSs in the public market, or the perception of such sales, could cause the market price of our ADSs to fall.

If our existing shareholders sell a substantial number of our equity shares in the open market, or if there is a perception that such sale or distribution could occur, the market price of our equity shares and ADSs could be adversely affected. These sales, or the perception that these sales could occur, also might make it more difficult for us to sell securities in the future at a time or at a price that we deem appropriate or pay for acquisitions using our equity securities.

As of March 31, 2013 we had 3,361,207,534 equity shares outstanding, including 449,113,200 equity shares represented by 112,278,300 ADSs. All our 3,361,207,534 outstanding equity shares are freely tradable on the NSE and BSE Furthermore, Vedanta, through Twin Star and MALCO, continued to have effective control over 1,956,383,435 of our total outstanding equity shares (including equity shares representing ADSs), which represented 58.2% of our outstanding share capital as of March 31, 2013.

Fluctuations in the exchange rate between the Indian Rupee and the US dollar could have a material adverse effect on the value of our ADSs, independent of our actual operating results.

The price of the ADSs is quoted in dollars. Our equity shares are quoted in Indian Rupees on the NSE and BSE. Any dividends in respect of our equity shares will be paid in Indian Rupees and subsequently converted into US dollars for distribution to ADS holders.

Currency exchange rate fluctuations will affect the dollar equivalent of the Indian Rupee price of our equity shares on the NSE and BSE and, as a result, the prices of our ADSs, as well as the US dollar value of the proceeds a holder would receive upon the sale in India of any of our equity shares withdrawn from the depositary under the deposit agreement and the US dollar value of any cash dividends we pay on our equity shares. Holders may not be able to convert Indian Rupee proceeds into US dollars or any other currency, and there is no guarantee of the rate at which any such conversion will occur, if at all. Currency exchange rate fluctuations will also affect the value received by ADS holders from any dividends paid by us in respect of our equity shares. Holders of our ADSs will bear all of the risks with respect to a decline in the value of the Indian Rupee as compared to the US dollar, which would adversely affect the price of our ADSs and the US dollar value of any dividends we pay that are received by ADS holders.

Transfers of the underlying shares by persons resident outside India to residents of India are subject to certain pricing norms.

Under current Indian regulations, subject to certain conditions, no prior regulatory approval is required for the sale of any equity shares, including any equity shares withdrawn from the ADS facilities, by a person resident outside India to a resident of India. However, certain reporting requirements would need to be complied with by the parties to the sale transaction. Also, the prior approval of the RBI would be required in the event of a sale of the equity shares underlying our ADSs by a non-resident investor to a resident investor if the sale price is greater than the maximum price set by the RBI under Indian foreign exchange laws. Any such approval required from the RBI or any other government agency may not be obtained on terms favorable to a non-resident investor, or at all.

Holders of ADSs may be restricted in their ability to exercise preemptive rights under Indian law and thereby may suffer future dilution of their ownership positions.

Under the Indian Companies Act, the holders of equity shares of a company incorporated in India have a preemptive right to subscribe and pay for a proportionate number of shares to maintain their existing ownership percentages prior to the issuance of any new equity shares by the company, unless the preemptive rights have been waived by adopting a special resolution passed by 75% of the shareholders present and voting at a general meeting.

Holders of ADSs may be unable to exercise preemptive rights for the underlying equity shares of the ADSs unless a registration statement under the Securities Act of 1933, as amended, or the Securities Act is effective with respect to such rights or an exemption from the registration requirements of the Securities Act is available. We are not obligated to prepare and file such a

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registration statement and our decision to do so will depend on the costs and potential liabilities associated with any such registration statement, as well as any other factors we consider appropriate at the time. No assurance can be given that we would file a registration statement under these circumstances. If we issue any such securities in the future, such securities may be issued to the depositary, which may sell the securities for the benefit of the holders of the ADSs. The value the depositary would receive from the sale of such securities cannot be predicted. To the extent that holders of ADSs are unable to exercise preemptive rights granted in respect of our equity shares represented by their ADSs, their proportional ownership interests in us would be diluted.

We may be classified as a passive foreign investment company, which could result in adverse United States federal income tax consequences to US Holders.

Based on the market prices of our equity shares and ADSs and the composition of our income and assets, including goodwill, although not clear, we do not believe we were a PFIC for United States federal income tax purposes for our taxable year ended March 31, 2013. However, the application of the PFIC rules is subject to uncertainty in several respects and, therefore, the US Internal Revenue Service may assert that, contrary to our belief, we were a PFIC for such taxable year. Moreover, although the asset test (defined below) is required to be calculated based on the fair market value of our assets, we did not do a valuation of our assets and our belief that we were not a PFIC for our taxable year ended March 31, 2013 is based on the book value of our assets. A non-United States corporation will be considered a passive foreign investment company, or PFIC, for any taxable year if either (1) at least 75% of its gross income for such year is passive income or (2) at least 50% of the total value of its assets (based on an average of the quarterly values of the assets during such year) is attributable to assets, including cash, that produce or are held for the production of passive income, or passive assets. In addition, a separate determination must be made after the close of each taxable year as to whether we were a PFIC for that year. Because the aggregate value of our assets for purposes of the PFIC test will generally be determined by reference to the market price of our ADSs and equity shares, fluctuations in the market price of the ADSs and equity shares may cause us to become a PFIC. In addition, changes in the composition of our income or assets may cause us to become a PFIC. Accordingly, we cannot assure you that we will not be a PFIC for the taxable year that will end on March 31, 2013 or any future taxable year. If we were a PFIC for any taxable year during which a US Holder (as defined under “Item 10. Additional Information—E. Taxation—United States Federal Income Taxation”) holds an ADS or an equity share, certain adverse United States federal income tax consequences could apply to the US Holder. See “Item 10. Additional Information—E. Taxation—United States Federal Income Taxation—Passive Foreign Investment Company.

ITEM 4. INFORMATION ON THE COMPANY

A. History and Development of our Company

SIIL was incorporated on September 8, 1975 under the laws of India and maintains a registered office at SIPCOT Industrial Complex, Madurai Bypass Road, T.V. Puram P.O., Tuticorin, State of Tamil Nadu 628 002, India, which is also its principal executive office. The telephone number for this office is (91) 461 424 2982. Our website address is www.sterlite-industries.com. Information contained on our website, or the website of any of our subsidiaries or affiliates, including Vedanta and other members of the Vedanta group, is not a part of this annual report. Our agent for service in the United States is CT Corporation System, 111 Eighth Avenue, New York, New York 10011.

We were acquired by Mr. Anil Agarwal and his family in 1979 and have grown from a small wire and cable manufacturing company to one of India’s leading non-ferrous metals and mining companies. In 1988, we completed an initial public offering of our shares in India to finance in part our first polythene insulated jelly filled copper telephone cables plant. As part of our strategy to concentrate on businesses with high growth potential, we discontinued production of polyvinyl chloride power and control cables and enameled copper wires in 1990 and in 1991 commissioned a continuous cast copper rod plant.

In 1997, in order to obtain captive sources of copper for our copper rod plant, we commissioned the first privately developed copper smelter in India at Tuticorin.

In 2000, we acquired CMT through Monte Cello, which owns the Mt. Lyell copper mine in Australia.

In July 2000, our telecommunications cables and optical fiber business was spun-off into a new company, STL. The Agarwal family has substantial interests in STL. STL is not a part of our group companies.

We acquired our aluminium business through our acquisition of a 51.0% interest in BALCO from the GoI on March 2, 2001. On March 19, 2004, we gave notice to exercise our call option to purchase the GoI’s remaining 49.0% shareholding in BALCO at a price determined in accordance with the shareholders’ agreement entered into by us and the GoI. The exercise of this option has been contested by the GoI. See “—B. Business Overview—Our Business—Options to Increase Interests in HZL and BALCO—Call Option Over Shares in BALCO” for more information.

On April 11, 2002, we acquired, through Sterlite Opportunities and Ventures Limited (“SOVL”), a 26.0% interest in HZL from the GoI and a further 20.0% interest through an open market offer. On November 12, 2003, we acquired, through SOVL, a further 18.9% interest in HZL following the exercise of a call option granted by the GoI, taking our interest in HZL to 64.9%. In addition, SOVL has a call option, which became exercisable beginning on April 11, 2007, to acquire the GoI’s remaining ownership interest in HZL. As per the order of the High Court of Madras dated March 29, 2012, SOVL has been merged into SIIL. The exercise of this option has been contested by the GoI. See “— B. Business Overview—Our Business—Options to Increase Interests in HZL and BALCO—Call Option Over Shares in HZL” for more information.

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On October 3, 2006, we acquired 100% of Sterlite Energy from Mr. Anil Agarwal and Mr. Dwarka Prasad Agarwal, one of our directors until March 31, 2009, for a total consideration of Rs. 4.9 million ($ 0.1 million). Sterlite Energy is our subsidiary through which we have set up a thermal coal-based 2,400 MW power facility in the State of Orissa.

In June 2007, we completed an initial public offering of our shares in the form of ADSs in the US and our ADSs were listed on the NYSE. Vedanta’s ownership interest, held through its subsidiaries, decreased to 59.9%.

In July 2008, Sterlite Energy was successful in an international bidding process and was awarded the construction of a 1,980 MW coal-based thermal commercial power plant at Talwandi Sabo in the State of Punjab, India. On September 1, 2008, Sterlite Energy completed the acquisition of TSPL for a purchase price of Rs. 3,868 million ($ 76.0 million).

In July 2009, in connection with our follow-on offering of ADS, each representing one equity share of par value Rs. 2, we issued 131,906,011 new equity shares in the form of ADSs, at a price of $ 12.15 per ADS, aggregating approximately $ 1,602.7 million. Out of 131,906,011 equity shares, 41,152,263 equity shares were allotted to our parent company, Twin Star, which is a wholly-owned subsidiary of Vedanta.

In October 2009, we issued $ 500 million aggregate principal amount of 4% Convertible Senior Note, or Convertible Notes. Subject to certain exceptions, the Convertible Notes are convertible, at the option of the holder, into ADSs at a conversion rate of 42.8688 ADSs per $ 1,000 principal amount of Convertible Notes, which is equal to a conversion price of approximately $ 23.33 per ADS. The Convertible Notes will mature on October 30, 2014, unless earlier repurchased or redeemed by us or converted.

On May 10, 2010, Sterlite agreed to acquire the zinc business of Anglo American Plc for a total consideration of Rs. 69,083 million ($ 1,513.1 million). The zinc business comprises of:

(1) a 100.0% stake in Skorpion which owns the Skorpion mine and refinery in Namibia;

(2) a 74.0% stake in BMM, which includes the Black Mountain mine and the Gamsberg Project, in South Africa; and

(3) a 100.0% stake in Lisheen, which owns the Lisheen mine in Ireland.

On December 3, 2010, we announced the completion of the acquisition of 100.0% stake in Skorpion by SIL, our wholly-owned subsidiary of Sterlite for a consideration of Rs. 32,098 million ($ 706.7 million). On February 4, 2011, we announced the completion of the acquisition of the 74.0% stake in BMM for a consideration of Rs. 11,529 million ($ 250.9 million), net of refund of $ 9.3 million. On February 15, 2011, we announced the completion of the acquisition of 100.0% stake in Lisheen for a consideration of Rs. 25,020 million ($ 546.2 million). The purchase price for the zinc business was paid in US dollars and has been converted into Indian Rupees based on the exchange rate as on the date of each such acquisition.

On February 3, 2011, our board of directors approved the acquisition of 100% ownership of MPCL for a consideration of Rs. 0.5 million and MIL for a consideration of Rs. 1.3 million. MPCL would be the proposed holding company for all port business and functions and MIL would be the proposed holding company for all the infrastructure business of the company. The acquisition of MPCL and MIL was completed on February 19, 2011 and March 4, 2011 respectively. MPCL has been renamed to Sterlite Ports Limited and it received its new certificate of incorporation on October 5, 2011. MIL has been renamed as Sterlite Infraventures Limited and it received its new certificate of incorporation on January 23, 2012. Subsequent to the change in name of MPCL and MIL, the registered offices of both the companies has been shifted from Mettur, Tamil Nadu to Tuticorin, Tamil Nadu.

On November 28, 2011, THLZBV acquired the entire outstanding share capital of Lakomasko BV for a consideration of $ 37.7 million from VRHL, a wholly owned subsidiary of Vedanta. Consequently, Lakomasko BV became a subsidiary of us. Further THL Zinc Holding Cooperatief U.A. ceased to be a subsidiary of us as it was liquidated with effect from November 29, 2011.

Further, Vedanta Base Metals (Ireland) Limited, Killoran Concentrates Limited, Killoran Lisheen Limited, Azela Limited and Killoran Lisheen Holdings Limited have also ceased to be our subsidiaries as they have been struck off from the Companies’ Registrar Office.

On February 25, 2012, we, Sesa Goa and Vedanta announced an all-share merger of our company and Sesa Goa to create Sesa Sterlite and to effect the consolidation and simplification of Vedanta's corporate structure through the Reorganisation Transactions consisting of the Amalgamation and Reorganisation Scheme and the Cairn India Consolidation. The Amalgamation and Reorganisation Scheme is also subject to certain approvals. Please see “Item 5. Operating and Financial Review and Prospects — Consolidation and re-organization of Sesa Goa, Sterlite, Vedanta Aluminium, Sterlite Energy and MALCO to form Sesa Sterlite and transfer of Vedanta’s shareholding in Cairn India to Sesa Sterlite”.

Our equity shares are listed and traded on the National Stock Exchange of India Limited (“NSE”) and the BSE Limited (“BSE”). Our equity shares have been included in BSE Sensex, a diversified index of 30 Indian stocks listed on the BSE since July 28, 2008. Our ADSs are quoted on the NYSE (NYSE: SLT).

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We are a majority-owned and controlled subsidiary of Vedanta, a London listed FTSE 100 diversified global natural resources major. Vedanta produces aluminium, copper, zinc, lead, silver, iron ore, oil and gas and commercial energy. Vedanta has operations in India, Zambia, Namibia, South Africa, Liberia, Ireland, Australia and Sri Lanka and it has a strong pipeline of projects. We and Vedanta share a common management team with a common strategic vision, and we form the core of Vedanta’s operations.

Volcan Investments Limited, or Volcan holds 58.2% of the share capital and 64.9% of the voting rights of Vedanta. Volcan is a holding company, 100% owned and controlled by the Anil Agarwal Discretionary Trust. Onclave is the trustee of the Anil Agarwal Discretionary Trust and controls all voting and investment decisions of the Anil Agarwal Discretionary Trust. As a result, shares beneficially owned by Volcan may be deemed to be beneficially owned by the Anil Agarwal Discretionary Trust and, in turn, by Onclave. The beneficiaries of the Anil Agarwal Discretionary Trust are members of the Agarwal family, who are related to Mr. Anil Agarwal. Mr. Anil Agarwal, the Executive Chairman of Vedanta and our Non-Executive Chairman, as protector of the Anil Agarwal Discretionary Trust, may be deemed to have deemed beneficial ownership of shares that are beneficially owned by the Anil Agarwal Discretionary Trust. Vedanta, Volcan, the Anil Agarwal Discretionary Trust, Onclave and Mr. Anil Agarwal are parties to a relationship agreement that seeks to enable Vedanta to carry on its business independently of the Volcan Parties. See “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Related Parties—Vedanta.”

Our capital expenditures in fiscal 2011, 2012 and 2013 were Rs. 50,016 million, Rs. 67,670 million and Rs. 57,636 million ($ 1,057.1 million) , respectively. See “Item 5. Operating and Financial Review and Prospects—Off Balance Sheet Arrangements—Capital Expenditures and Commitments” for more information.

B. Business Overview

OUR INDUSTRY

Unless otherwise indicated, all data relating to the copper, zinc and aluminium industries contained in this annual report is primarily derived from Wood Mackenzie company, Harbor Alumina/Bauxite Intelligence Report and other industry sources.

Unless otherwise indicated, all financial and statistical data relating to the power industry in India in the following discussion is derived from the Ministry of Power’s Annual Report (2005-06 to 2011-12), the Central Electricity Authority of India’s General Review (2004-05 to 2012-13), and the Ministry of Power website. The data may have been re-classified for the purpose of presentation. Unless otherwise indicated, the data presented excludes captive power generation capacity and captive power generation. The term “units” as used herein refers to kilowatt-hours or kWh.

Copper

Global Copper Market

Background

Copper consumption can be divided into three main product groups: copper wire rod, copper products and copper alloy products. According to Wood Mackenzie, the predominant use of copper has been the production of copper wire rod, which accounted for an estimated 55% of total global consumption (i.e. including scrap) and approximately 70% of primary consumption in 2012. Wire rod is consumed in five main wire and cable markets which include general and industrial cable, utility power cable, telecommunication cable, other insulated wire and winding wire.

In the global copper consumer market, the electrical and electronic products segment accounted for 34% of total copper consumption, followed by the construction segment (31%), the industrial machinery segment (13%), the transportation equipment segment (13%) and the consumer products segment (9%), as estimated by Wood Mackenzie.

The copper industry has three broad categories of producers:

• Miners, which mine the copper ore and produce copper concentrate;

• Custom smelters, which smelt and refine copper concentrate to produce copper metal; and

• Integrated producers, which mine copper ore from captive mines and produce copper metal either through smelting and refining or through leaching.

Global Copper Reserves

Global copper reserves were estimated to be, as of December 31, 2012, 680 million tons, according to preliminary estimates by U.S. Geological Survey, Mineral Commodity Summaries, January 2013. Chile, Australia, Peru, United States and Mexico have the majority of copper reserves and collectively account for 63.1% of world reserves.

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	Reserves
	(in thousand tons)
Chile		190,000
Australia		86,000
Peru		76,000
United States		39,000
Mexico		38,000
China		30,000
Russia		30,000
Indonesia		28,000
Poland		26,000
Congo		20,000
Zambia		20,000
Canada		10,000
Kazakhstan		7,000
Other countries		80,000
World Total (rounded)		680,000

Refined Copper Consumption & Production

Global refined copper consumption remained flat at 19.74 million tons in 2012 as compared to 19.75 million tons in 2011.

China was the largest end user of copper in 2012 with a global market share of 42%, taking Asia’s combined market share to 65%, followed by Europe (19%), North America (9.8%) and Latin America (4.6%).

The following table sets forth the regional consumption pattern of refined copper for 2012:

	Year Ended 31 December 2012
	Volume		%
	(thousands of tonnes, except percentages)
Africa		231		1	%
China		8,204		42	%
India		582		3	%
Japan		1,006		5	%
Asia		12,847		65	%
Europe		3,733		19	%
Latin America		906		5	%
United States		1,777		9	%
North America		1,926		10	%
Others		101		—
Global Total		19,744		100	%

Source: Wood Mackenzie Metals Market Service—Long Term Outlook, March 2013

Global refined copper production increased from 19.76 in 2011 to 20.2 million tons in 2012.

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The following table sets forth the regional production pattern of refined copper for 2012:

	Year Ended December 31, 2012
	Volume		%
	(thousands of tons, except percentages)
Africa		1,097		5	%
China		5,824		29	%
India		680		3	%
Japan		1,516		8	%
Asia		9,526		48	%
Europe		3,809		19	%
Chile		2,891		14	%
Latin America		3,776		19	%
Middle East		300		1	%
North America		1,262		6	%
Other		440		2	%
Total		20,210		100	%

Source: Wood Mackenzie Metals market Service—Long Term Outlook, March 2013

China was the largest producer of refined copper in 2012 with a global market share of 29%, followed by Chile and Japan.

Pricing

Copper is traded on the LME. Although prices are determined by LME price movements, producers normally charge a regional premium that is market driven. Copper price increased by 46.0% to $ 7,539 per ton in 2010 as a result of strong copper demand from China after global recession in 2008 and 2009, as well as low inventory levels. In 2011, copper price continued its increase to $ 8,810 per ton driven by sustained demand from emerging markets and investors’ interest in hedging against the weakening US dollar. However, 2012 average LME spot price decreased to $ 7,949 per ton.

The following table sets forth the movement in copper prices from 2003 to 2012:

	Annual Average
	2003		2004		2005		2006		2007		2008			2009			2010		2011		2012
	($ per ton, except percentages)
LME Cash Price		1,779		2,868		3,683		6,729		7,125		6,951			5,163			7,539		8,810		7,949
% Change		14.3		61.1		28.4		82.7		5.9		(2.4	)		(25.7	)		46.0		16.9		(9.8	)

Source: Wood Mackenzie Metals Market Service—Long Term Outlook, March 2013

The last closing LME copper cash price was $ 7,509.8 per ton as of 31 March 2013.

Since 2006, treatment and refining charges have fallen significantly, reflecting a continuing tightening in the physical concentrate demand/supply balance. In 2012, spot quotes averaged $ 0.099 per pound, representing a 37.3% decline on 2011 level according to Wood Mackenzie data. For 2013, the vast majority of miners and smelters adopted the benchmark level Tc and Rc of $ 70 per ton and $ 0.07 per pound respectively. In particular, Freeport’s deal with Jinchuan, as well as Antofagasta’s Esperanza deal with Jiangxi Copper which occurred around the same time established these benchmark levels which are in turn supported by the readiness of other buyers and sellers to adopt these terms. Over the longer term, concentrate availability is projected to rise significantly, outpacing additions to smelter capacity and therefore encourage higher long term TcRc.

The following table sets forth the movement in copper spot annual average TcRc from 2003 to 2012 in nominal dollars:

	Annual Average
	2003			2004		2005		2006			2007			2008		2009		2010			2011		2012
	(US cents per pound, except percentages)
TcRc (30% Concentrate)		3.9			14.6		37.7		16.3			7.2			7.3		7.4		7.1			15.8		9.9
% Change		(51.3	)		274.4		158.2		(56.8	)		(55.8	)		1.4		1.4		(4.1	)		122.5		(37.3	)

Source: Wood Mackenzie Global Copper Concentrate Market to 2024

Indian Copper Market

Background

The Indian copper industry consists primarily of custom smelters as there are limited copper deposits in the country. The available deposits are owned by the government-owned Hindustan Copper Limited, or HCL, which was the only producer in India until 1995 and has transformed significantly with our entry and the entry of Birla Copper, now owned by Hindalco. The Indian industry can be classified into two broad categories—manufacturers of refined copper (copper cathodes) and manufacturers of copper products. Of the three manufacturers of refined copper, HCL is the only primary producer, which mines and refines copper. We and Hindalco Industries Limited, or Hindalco process primarily imported copper concentrate to produce end products such as copper bars, rods and wires.

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We are one of the two custom copper smelters in India with a primary market share of 40% in fiscal 2013, according to the International Copper Promotion Council, India, or ICPCI.

Consumption Pattern

According to the World Copper Factbook 2012 by the International Copper Study Group, in 2011, India’s per capita consumption of copper (0.56kg per person) is significantly less than that of China (5.82kg per person) and other developed nations including Germany (16.32kg per person), Spain (7.89kg per person) and the United States (5.64kg per person). India’s consumption of copper is dominated by electrical, telecom, engineering, construction and transport. There is an imbalance between India’s smelting/refining capacity and its limited production capacity in copper mining. From 2009 to 2012, based on Wood Mackenzie data, Indian refined copper consumption increased at a CAGR of 1.8% while over the same period of time, copper refining output in India has decreased slightly. Wood Mackenzie expects refined copper demand in India to increase from 597,000 tons in 2013 to 968,000 tons in 2020 at a CAGR of 7%.

Pricing and Tariff

Indian copper prices track global prices as the metal is priced on the basis of landed costs of imported metal. The following table sets out the customs duties that were applicable on copper for the period indicated:

	February 28, 2011 to  present
Copper		5	%
Copper concentrate		2.5	%

In addition, the Finance Act (2 of 2004) of India, levies an additional surcharge at the rate of 3.0% of the total customs duty payable effective as of March 1, 2007.

Further, on March 1, 2011, the GoI announced an exemption from import duty on copper concentrate up to an amount equivalent to the customs duty leviable on the value of gold and silver contained in such copper concentrate.

Zinc

Global Zinc Market

Background

According to Wood Mackenzie, the principal use for zinc in the western world is galvanising, which involves coating steel with zinc to guard against corrosion. Galvanising, including sheet, tube, wire and general galvanising, accounted for approximately 58% of world consumption of zinc. The main end-use industries for galvanised steel products are the automobile manufacturing, domestic appliance manufacturing and construction industries, and it is these industries on which zinc consumption ultimately depends. Other major uses for zinc include die-casting alloys (14%), brass semis and castings (10%) and oxides and chemicals (9%). Alloys are principally used in toys, vehicles and hardware.

The end-user market is dominated by the construction industry with 51% of global end-use zinc consumption, followed by the sectors of transport (20%), infrastructure (16%), industrial machinery (7%) and consumer products (6%), according to Wood Mackenzie.

The zinc industry has three broad categories of producers:

• Miners, which mine the lead-zinc ore and produce zinc concentrate for sale to smelters, and usually receive payment for 85% of the zinc contained in the concentrate less a Tc;

• Smelters, which purchase concentrate and sell refined metal, with some smelters also having some integrated production downstream; and

• Integrated producers, which are involved in both the mining and smelting of zinc.

For custom smelters, Tc rates have a significant impact on profitability as prices for zinc concentrate are equal to the LME price net of Tc and prices of finished zinc products are equal to the LME price plus a premium. A significant proportion of concentrates are sold under frame contracts and Tc are negotiated annually. The main conditions of the contract which are subject to negotiation are the Tcs that are expressed in US dollars per dry metric ton of concentrate and price participation (under long-term contracts). The Tc rates are influenced by the demand-supply situation in the concentrate market, prevailing and forecasted LME prices and mining and freight costs.

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Global Zinc Reserves

Global zinc reserves were estimated to be, as of 31 December 2012, 250 million tons, according to preliminary estimates by the U.S. Geological Survey (“USGS”). Australia, China, Peru, Mexico and India collectively account for 63.6% of world reserves.

The following table sets for the world zinc reserves:

	Reserves
	(in million tons)
Australia		70.0
China		43.0
Peru		18.0
Mexico		16.0
India		12.0
United States		11.0
Kazakhstan		10.0
Canada		7.8
Bolivia		6.0
Ireland		1.2
Other countries		56.0
World Total (rounded)		250.0

Source: U.S. Geological Survey (USGS), Mineral Commodity Summaries, January 2013

Zinc Consumption

Global zinc consumption grew by 1.7% in 2012. Zinc consumption increased from 12.6 million tons in 2011 to 12.8 million tons in 2012 according to Wood Mackenzie.

Asia, Europe and North America together accounted for approximately 92.7% of global zinc consumption in 2012. Turkey, Indonesia and China, followed by India, are among the fastest growing substantial zinc markets in the world with a CAGR of 13.4%, 10.8%, 10.2% and 6.3% respectively between 2008 and 2012. China and India are expected to lead future growth as well.

The following table sets forth the regional consumption pattern of refined zinc for 2012:

	Year Ended December 31, 2012
	Volume		%
	(thousands of tons, except percentages)
Europe		2,243		17.5	%
China		5,606		43.8	%
Rest of Asia(1)		2,197		17.2	%
North America		1,216		9.4	%
Latin America		640		5.0	%
India		612		4.8	%
Oceania		149		1.2	%
Africa		146		1.1	%
Total		12,809		100.0	%

(1) Rest of Asia is Asia excluding China and India, but including the Middle East.

Source: Wood Mackenzie Metals Market Service Report—Long Term Outlook, March 2013

Zinc Supply

According to Wood Mackenzie, the five largest zinc mining countries are China (37.0%), Australia (11.1%), Peru (8.9%), India (5.6%) and the United States (5.5%) which together accounted for 68.0% of total zinc mined worldwide in 2012. The five largest zinc mining companies in 2012 were Xstrata AG (7.9%), Hindustan Zinc Limited (5.6%), Teck Cominco Limited (4.5%), Minmetals Resources Limited (3.1%) and Glencore International AG (2.8%).

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With a production of 4.8 million tons of zinc in 2012, China is the largest single zinc-producing country in the world. The other major zinc producing countries South Korea (7.1%), India (5.9%), Canada (5.1%) and Japan (4.4%) account for approximately 60.9% of total global refined zinc production. The five largest zinc producing companies in 2012 were Korea Zinc Company Limited (8.7%) Nyrstar NV (8.6%), HZL (5.4%), Xstrata (5%), and Votorantim Group (4.8%), which together accounted for about 32.5% of the total zinc produced worldwide in 2012.

The following table sets forth the regional production pattern of zinc mines in 2012:

	Year Ended December  31 2012
Region	Volume		%
	(thousands of tons, except percentages)
Europe		991		7.4	%
China		4,930		37.0	%
Rest of Asia(1)		999		7.5	%
North America		1,366		10.1	%
Latin America		2,515		18.9	%
India		741		5.6	%
Oceania		1,482		11.1	%
Africa		316		2.4	%
Total		13,340		100.0	%

(1) Rest of Asia is Asia excluding China and India, but including the Middle East.

Source: Wood Mackenzie Metals Market Service Report—Long Term Outlook, March 2013

The following table sets forth the regional production pattern of refined zinc in 2012:

	Year Ended December  31 2012
Region	Volume		%
	(thousands of tons, except percentages)
Europe		2,354		18.7	%
China		4,833		38.4	%
Rest of Asia(1)		2,109		16.7	%
North America		898		7.2	%
Latin America		974		7.7	%
India		745		5.9	%
Oceania		498		4.0	%
Africa		180		1.4	%
Total		12,591		100.0	%

(1) Rest of Asia is Asia excluding China and India, but including the Middle East.

Source: Wood Mackenzie Metals Market Service Report—Long Term Outlook, March 2013

Pricing

Zinc is traded on the LME. Although prices are determined by LME price movements, producers normally charge a regional premium that is market driven.

Significant price decrease in 2008 and 2009 have resulted in a large number and volume of mine production cuts and closures, which, along with the economic rebound in 2010, pushed the zinc price to $2,158 per ton, an increase of 30.1% over 2009. In 2011, zinc price increased to $2,190 per ton, an increase of 1.5%, due to a paradox situation of high refined stock coupled with a high price environment, which can be attributed to the acceptance of refined zinc as an asset class. Sustained high stock level in 2012, coupled with continuing European sovereign and economics issues, resulted in overall zinc price of $1,948 per ton for the year.

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The following table sets forth the movement in zinc prices from 2003 to 2012:

	Year Ended December 31
Zinc Prices	2003		2004		2005		2006		2007			2008			2009			2010		2011		2012
	($ per ton, except percentages)
LME Cash Price		828		1,048		1,381		3,272		3,248			1,870			1,658			2,158		2,190		1,948
% Change		6.4		26.5		31.8		136.9		(0.7	)		(42.4	)		(11.3	)		30.1		1.5		(11.1	)

Source: Wood Mackenzie Metals Market Service Report—Long Term Outlook, March 2013

The last closing LME zinc cash price was $ 1,870.5 per ton as of 31 March 2013.

Indian Zinc Market

Background

India holds substantial zinc resources – according to the Indian Minerals Yearbook 2011, India held around 36.7 million tons in zinc resources as on April 1, 2010. The USGS estimates India’s zinc reserves to be around 12 million tons, making it the fifth largest country in terms of zinc reserves globally. The Indian zinc industry has only two producers. The leading producer is our majority-owned subsidiary, HZL, which had an 82.0% market share in India in fiscal 2013, according to the Indian Lead and Zinc Development Association, or ILZDA. The other producer is Binani Zinc Limited (“Binani Zinc”), with a 5% Indian market share in terms of sales volume in fiscal 2013.

Consumption Pattern

According to Wood Mackenzie, consumption of refined zinc in India reached 612,000 tons during 2012. The principal use of zinc in the Indian market is in the galvanizing sector, which currently accounts for an estimated 75.0% of total consumption.

Wood Mackenzie forcasts Indian refined zinc demand to increase at a CAGR of 6% from 637,000 tons in 2013 to 960,000 tons in 2020.

Pricing and Tariff

Indian zinc prices track global prices as the metal is priced on the basis of the landed costs of imported metal.

The following table sets out the customs duties that were applicable on zinc for the periods indicated:

	January 3, 2009 to present
Zinc		5.0	%

In addition, the Finance Act (2 of 2004) of India levies an additional surcharge at the rate of 3.0% of the total customs duty payable.

Market Outlook

Global zinc outlook

According to Wood Mackenzie, zinc demand from the developing world is forecast to continue its growth at a CAGR of 6.7% between 2013 and 2016, to be led by Chinese economic growth. Coupling with contribution from mature economies’ growth (US in particular, albeit partially offset by European contraction), global zinc consumption is expected to expand at a CAGR of 4.5% between 2012 and 2015.

China’s zinc consumption will continue to drive the global zinc demand growth based on Wood Mackenzie’s forecast. The total consumption of slab zinc in China is expected to grow from 5.6 million tons in 2012 to 7.1 million tons in 2015. That would translate to China’s consumption growth at a CAGR of 7.8% between 2012 and 2015, which compares to global consumption growth at a CAGR of 4.5% for the same period and to the world (excluding China consumption growth) at an expected CAGR of 1.9% for the same period.

According to Wood Mackenzie, between 2012 and 2030, twenty-two new zinc mines will enter production adding almost 1.0 million tons per annum at peak output. The average size of these operations is quite modest at around 45,000 tons per annum although five are substantial, Bisha (Eritrea), Dugald River (Australia), Kyzyl Tashtygskoe (Russia), Perkoa (Burkina Faso) and Velardena (Mexico). Expansions or production creep at sixty mines globally will add 0.9 million tons per annum. One hundred and thirty-two existing producers are forecast to close on reserve depletion by 2030 for the loss of 6.0 million tons per annum. and twenty-two mines which produced 3.3 million tons per annum in 2012 will produce only 2.7 million tons per annum by 2030 for a loss of 0.6 million tons per annum output by attrition.

Indian zinc outlook

The Indian market is expected to remain positive, with strong growth in key user segments such as sheet galvanizing and zinc alloys for the construction segment. Indian zinc demand is expected to grow in the next few years based on a positive gross domestic product forecast, at a CAGR of 6.0% between 2013 and 2020 based on Wood Mackenzie’s forecast. The key components for growth are the ongoing and upcoming infrastructure projects, telecom and power projects and automobile sector.

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Aluminium

Global Aluminium Market

Background

Aluminium is lightweight in relation to its strength, durability and resistance to corrosion. It can be extruded, rolled, formed and painted for a wide variety of uses.

The raw material from which aluminium is produced is bauxite, which is a very common mineral found mainly in tropical regions. It normally occurs close to the surface and can be mined by open-pit methods. The bauxite is refined into alumina. Typically, the alumina content in bauxite ranges from 35% to 60%. There are several different types of bauxite, and alumina refineries are usually designed to treat a specific type. The majority of alumina refineries are therefore integrated with mines.

The importance of different sectors in aluminium demand varies significantly between developed and developing nations. In mature economies, transport plays a more important role in aluminium demand than construction. As estimated by Wood Mackenzie, in 2012, the four largest sectors of end-uses for aluminium in mature economies like Germany, Japan, North America and South Korea were transport (36%), packaging (21%), construction (14%) and electrical (6%). In comparison, in 2012, the four largest sectors of end-uses for aluminium in China were transportation (31%), followed by construction (23%), electrical (21%) and consumer goods (9%).

Aluminium consumption

Based on Wood Mackenzie data, world primary aluminium consumption increased from 35.1 million tons in 2009 to 46.4 million tons in 2012, at a CAGR of 9.7%. The growth was primarily due to increased demand in China, which accounted for 45.2% of total global consumption in 2012. Between 2009 and 2012, China’s demand for primary aluminium increased at a CAGR of 14.8%, compared to an increase of 6.1% for world demand excluding China. In comparison, the CAGR in demand in each of Europe and North America between 2009 and 2012 was 4.1% and 7.7%, respectively, reflecting the impact of a relatively slower economic growth in these regions.

The following table sets forth the regional consumption of primary aluminium in 2012:

	Fiscal Year Ended December 31 2012
Region	Volume		%
	(thousands of tons, except percentages)
China		20,972		45.2	%
Europe		7,697		16.6	%
Rest of Asia(1)		6,688		14.4	%
North America		5,893		12.78	%
Latin America		2,139		4.6	%
India		1,919		4.1	%
Africa		562		1.2	%
Oceania		492		1.1	%
Total		46,362		100.0	%

(1) Rest of Asia is Asia excluding China and India, but including the Middle East.

Source: Wood Mackenzie Metals Market Service—Long Term Outlook, March 2013

Aluminium supply

Aluminium production has become increasingly more concentrated in recent years, with the leading ten producers accounting for 49.7% of world primary aluminium production in 2012 as reported by Wood Mackenzie. The five largest primary aluminium producing companies are RUSAL Ltd. (“UC RUSAL”) (8.8%), Alcoa Inc. (“Alcoa”) (7.6%), Aluminium Corporation of China Limited (“CHALCO”) (7%), Rio Tinto Alcan (7.3%), and China Power Investment (“China Power”) (3.8%), which together accounted for approximately 34.5% of the total primary aluminium produced worldwide in 2012.

Global production of primary aluminium increased from 37.5 million tons in 2009 to 47.9 million tons in 2012, at a CAGR of 8.5%. In 2012, North America, Europe and China together accounted for approximately 73.7%, with China alone accounting for 46.3%, of global primary aluminium production.

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The following table sets forth the regional production of primary aluminium in 2012:

	Fiscal Year Ended December 31 2012
Region	Volume		%
	(thousands of tons, except percentages)
China		22,200		46.3	%
Europe		8,241		17.2	%
Rest of Asia(1)		5,018		10.5	%
North America		4,851		10.1	%
Oceania		2,187		4.6	%
Latin America		2,051		4.3	%
India		1,708		3.6	%
Africa		1,640		3.4	%
Total		47,896		100.0	%

(1) Rest of Asia is Asia excluding China and India, but including the Middle East.

Source: Wood Mackenzie Metals Market Service—Long Term Outlook, March 2013

Notwithstanding the rise in aluminium production and capacities in the region, aluminium supplies in Asia remains lagging behind demand, resulting in a supply deficit of 0.7 million tons during 2012. During this period, China had a surplus of 1.2 million tons while the rest of Asia had a deficit of 1.9 million tons. In particular, India has experienced a widening deficit increasing from 0.1 million tons in 2010 to 0.2 million tons in 2012. Despite increased production capacities in Asia, the demand-supply gap is likely to remain at similar levels given the strong demand growth expected in these markets.

Alumina

Alumina is a key raw material for aluminium production. Generally it takes two tons of alumina to produce one ton of primary aluminium. According to data compiled by Wood Mackenzie, in 2012, the five largest alumina producing companies are CHALCO (13.1%), Alcoa (10%), Rio Tinto Alcan (9.6%), UC RUSAL (7.3%), Alumina Limited (6.1%) and Xinfa Aluminium Electrical (6%), which together accounted for approximately 52.1% of the total alumina produced worldwide in 2012.

The following table sets forth the regional production of alumina in 2012:

	Fiscal Year Ended December 31 2012
Region	Volume		%
	(thousands of tons, except percentages)
China		42,500		41.6	%
Oceania		21,558		21.1	%
Latin America		14,066		13.8	%
Europe		10,899		10.8	%
North America		6,061		5.9	%
India		3,809		3.7	%
Rest of Asia(1)		3,061		3.0	%
Africa		150		0.1	%
Total		102,104		100.0	%

(1) Rest of Asia is Asia excluding China and India but including the Middle East.

Source: Wood Mackenzie Metals Market Service—Long Term Outlook, March 2013

The sharp increase in alumina demand from aluminium production in 2010 turned the global alumina market from a surplus in 2009 to a deficit in 2010. Following the expansion in alumina refinery capacity, the global alumina market returned to a surplus in 2011 and 2012. The following table sets forth the estimated global demand-supply balance for alumina from 2009 to 2012:

	Fiscal Year Ended December 31
	2009		2010			2011		2012
	(thousands of tons)
Global Alumina Surplus/(Deficit)		296		(794	)		1,323		2,010

Source: Wood Mackenzie Metals Market Service—Long Term Outlook, March 2013

Bauxite

Bauxite, the principal raw material used in the production of alumina, is typically open-pit mined in very large-scale operations. Between 2.0 to 3.6 dry tons of bauxite are usually required to make one ton of alumina (depending on ore type, alumina content and variables such as proportion of reactive silica and organic matter). Based on data from the USGS as reported in January 2013, Guinea has the largest bauxite reserves in the world (26.4%), followed by Australia (21.4%), Brazil (9.3%), Vietnam (7.5%), Jamaica (7.1%) and Indonesia (3.6%).

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The table below sets forth the world reserves:

	Reserves
	(million tons):
Guinea		7,400
Australia		6,000
Brazil		2,600
Vietnam		2,100
Jamaica		2,000
Indonesia		1,000
India		900
Guyana		850
China		830
Greece		600
Suriname		580
Venezuela		320
Russia		200
Sierra Leone		180
Kazakhstan		160
United States		20
Other countries		2,260
World total (rounded)		28,000

Source: U.S. Geological Survey (USGS), Mineral Commodity Summaries, January 2013

According to the USGS, global production of bauxite was expected to reach 263 million tons in 2012, representing a 1.5% increase year on year. Australia, China, Brazil, Indonesia and India are the largest bauxite producing countries, representing 77.9% of world’s total production in 2012.

Pricing

Aluminium is an LME traded metal. It is either sold directly to consumers or on a terminal market. The price is based on LME price but producers are also able to charge a regional price premium, which generally reflects the cost of obtaining the metal from an alternative source.

Alumina prices are negotiated on an individual basis between buyers and sellers but are usually determined by reference to the LME price for aluminium. The negotiated agreements generally take the form of long-term contracts, but fixed prices can be negotiated for shorter periods and a relatively small spot market also exists.

The following table sets forth the movement in aluminium and alumina prices from 2003 to 2012:

	Fiscal Year Ended December 31
	2003		2004		2005		2006			2007			2008			2009			2010		2011		2012
	($ per ton, except percentages)
Aluminium(1)
LME Cash Price	$	1,432	$	1,716	$	1,897	$	2,566		$	2,639		$	2,571		$	1,667		$	2,173	$	2,395	$	2,019
% Change		6.1		19.9		10.5		35.3			2.8			(2.6	)		(35.2	)		30.3		10.2		(15.7	)
Alumina
Spot Price(1)	$	283	$	420	$	468	$	420		$	353		$	362		$	245		$	333	$	374	$	319
% Change		92.0		48.3		11.3		(10.1	)		(16.0	)		2.5			(32.2	)		35.6		12.5		(14.9	)
Alumina/Aluminium(%)		19.8		24.5		24.6		16.4			13.4			14.1			14.7			15.3		15.6		15.8

(1) Source: Wood Mackenzie Metals Market Service—Long Term Outlook, March 2013

While aluminium prices have risen by 41.1% from 2003 to 2012, alumina prices have risen by 12.5% during the same period. Between 2011 and 2012, aluminium prices have decreased by around 15.7% while alumina prices fell by around 14.9% as a result of weakness in the global macroeconomy.

Indian Aluminium Market

Background

India has been producing primary aluminium since 1938, and over the years, the model that prevailed was of fully integrated operations with access to bauxite, alumina and power. As this model consolidated, the corporate structure of the aluminium industry also changed, with smaller regional producers being absorbed or merged to form larger integrated players with international presence and, in the case of the Company, an international listing.

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India possesses considerable bauxite resources, estimated at 3.5 billion tons in 2011, according to the Indian Minerals Yearbook. In Orissa, according to Indian industry sources, bauxite reserves are estimated to be 1.3 billion tons, with large reserves in Panchpatmali, Pottangi and Baphalimali. In Andhra Pradesh, there are 0.6 billion tons, with large bauxite concentrations in Saparla and Jarella. At current extraction rates, these two states alone have the equivalent of over 200 years’ of Indian requirements. Even using the more conservative the USGS reserve estimate, India has reserves equivalent to almost 70 years at current output. According to the USGS, India has the seventh largest reserves of bauxite ore in the world, with total recoverable reserves estimated at 900 million tons. These bauxite ore reserves are high grade and require less energy to refine, thus resulting in significant cost advantages for Indian aluminium producers.

Supply and demand

There are currently five refineries and five smelters operating in India, owned by four producing companies: 87% state-owned Nalco, privately held Hindalco, Vedanta Aluminium and BALCO, which is owned 49% by the Indian government and 51% by us.

The aluminium industry in India has traditionally been largely self-sufficient. Up until 2009, primary aluminium production has kept pace with demand, with the country being a small net exporter. Following a growth in aluminium demand, India has experienced supply deficit in primary aluminium since 2010 according to the estimates by Wood Mackenzie. The majority of aluminium produced in India is consumed in the building and construction, transport, electrical appliance and equipment and packaging industries, with limited exports to countries including Singapore, Taiwan and the United Arab Emirates. According to Wood Mackenzie, aluminium consumption in India grew at a CAGR of 9.1% between 2009 to 2012, backed by strong growth in the electricity, transportation, industrial and infrastructure sectors. Wood Mackenzie forecasts aluminium consumption in India to grow from 2.1 million tons in 2013 to 3.8 million tons in 2020, at a CAGR of 9%.

Pricing and tariff

Domestic aluminium prices track global price trends as producers usually price the metal at a marginal discount to the landed cost of imported metal. Though value-added product prices also track metal price movement, they usually have relatively less volatility and command a premium reflecting the degree of value addition and quality, as indicated by the brand.

The following table sets out the customs duties that were applicable for the periods indicated:

	January 3, 2009 to present
Aluminium		5	%

In addition, the Finance Act (2 of 2004) of India, which has been in effect since July 8, 2004, levies an additional surcharge at the rate of 2% of the total customs duty payable, which has been further increased to 3% of the total customs duty payable effective 1 March 2007.

Pursuant to a notification dated 1 March 2013, a customs duty of 10% was introduced by the GoI on bauxite (natural), in calcined and non-calcined form.

Market Outlook

Global aluminium outlook

According to Wood Mackenzie, global primary aluminium production is forecasted to increase by 8.6% in 2013, to 52.0 million tons, with China contributing 69.5% of the increase while primary aluminium consumption is projected to increase by an average of 6.9% per year in the period from 2012 to 2016 before slowing down to an average long term growth rate of 4.0% per year.

Collectively, Wood Mackenzie expects the aluminium market to remain in surplus until the end of the decade as supply outpaces consumption. The largest supply glut is projected to take place around 2013-2016 when production will exceed consumption by 12 million tons, putting pressure on the LME aluminium price which Wood Mackenzie forecasts to stay at around $2,000 per ton until 2017.

Indian aluminium outlook

India is the fastest growing aluminium market in Asia (excluding China) and according to Wood Mackenzie, primary aluminium consumption in India is expected to grow at a CAGR of 8.9% on average from 2013 to 2020 to reach 3.6 million tons, fuelled by India’s demand for housing, retail and office space. In terms of cash costs, India is reasonably well placed globally in primary smelting, lying at the lower end of the second quartile, compared to China, which occupies most of the fourth quartile. Indian smelters form part of integrated chains, stretching back to bauxite, alumina and forward into semi-fabricating operations. Indian smelters are also endowed with their own captive power plants and favourable labour costs.

Over the medium term, there will be fewer incentive policies such as those encouraging purchases of new vehicles, but a number of multiannual government expenditure plans will underpin demand in the coming years. The power sector, for instance, will continue to support aluminium demand as village electrification plans carry on. Infrastructure investment will fuel housing investment over the coming three years.

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Commercial Power Generation Business

Organisation of the Power Industry

Overview of the Indian Power Sector

A key risk to the continued growth of the Indian economy is inadequate infrastructure. Infrastructure investment in India is on the rise, but growth may be constrained without further improvements. The GoI has identified the power sector as a key sector of focus to promote sustained industrial growth.

The current revised power generation capacity target for the Twelfth Five-Year Plan (i.e. from April 2012 to March 2017) is 88,537 MW. As of 31 March 2013, capacity addition achieved over the 12th Plan has been 27% of the target addition or 23,467 MW. The total installed power generation capacity in India was 223,344 MW as of 31 March 2013. According to the CEA Monthly Review published in March 2013, the total provisional energy deficit and peak power deficit for March 2013 was approximately 8.6% and 7.4%, respectively.

Industry Demand-Supply Overview

The Indian power sector has historically been characterised by energy shortages which have been increasing over the years. The following table sets forth the peak and energy shortages of power in India from April 2007 to March 2013:

	Peak								Energy
Period	Demand		Supply		Shortage				Demand		Supply		Shortage
	(MW)		(MW)		(MW)		(%)		(MU)		(MU)		(MU)		(%)
2007-08		108,866		90,793		18,073		16.6		739,345		666,007		73,338		9.9
2008-09		109,809		96,785		13,024		11.9		777,039		691,038		86,001		11.1
2009-10		119,166		104,009		15,157		12.7		830,594		746,644		83,950		10.1
2010-11		122,287		110,256		12,031		9.8		861,591		788,355		73,236		8.5
2011-12		130,006		116,191		13,815		10.6		937,199		857,886		79,313		8.5
2012-13		135,453		123,294		12,159		9.0		995,500		908,574		86,926		8.7

Source: CEA Monthly Review, March 2013

Regional Demand-Supply Overview

The following table displays the provisional peak and normative power shortages in India for the period April 2012 to March 2013 across different regions in India:

Region	Energy Requirement		Deficit			Peak Demand		Deficit
	(MU)		(%)			(MW)		(%)
Northern		300,616		(9.2	)		45,860		(8.9	)
Western		293,929		(3.3	)		40,075		(1.5	)
Southern		281,792		(15.5	)		37,638		(16.1	)
Eastern		107,573		(4.6	)		16,655		(7.4	)
North Eastern		11,590		(7.3	)		1,998		(6.7	)
All India		995,500		(8.7	)		142,226		(9.0	)

Source: (1) CEA Power Scenario at a Glance, November 2012

(2) CEA Monthly Review, March 2013

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Energy deficit varies widely across India, with the Southern region having the highest peak energy shortages followed by the Northern region.

Large Energy Deficit Results in Low Per Capita Consumption of Electricity

Due to inadequate supply and distribution infrastructure, the per capita consumption of energy in India is extremely low in comparison to most other parts of the world. The following chart shows per capita consumption of energy in 2010 in various developed and developing countries.

Source: IEA Key World Energy Statistics, 2012

Installed Capacities

As of March 31, 2013, India’s power system had an installed generation capacity of approximately 223,344 MW, with the Central Power Sector Utilities of India, accounting for approximately 29.3% of total power generation capacity, while the various state entities and private sector companies accounted for approximately 39.9% and 30.8%, respectively.

MW	Central		State		Private		Total		Share of Total
Thermal		51,121		57,939		42,471		151,531		67.8	%
Hydro		9,459		27,437		2,595		39,491		17.7	%
Nuclear		4,780		—		—		4,780		2.1	%
Renewable Energy Source		—		3,748		23,794		27,542		12.4	%
Total		65,360		89,124		68,860		223,344		100.0	%

Source: CEA Monthly Review, March 2013

According to the CEA Monthly Review March 2013, approximately 68% of India’s total power generation capacity consists of thermal sources as at 31 March 2013. The predominance of thermal electricity sources in India can be attributed to the fact that India has large thermal coal resources. According to the Indian Minerals Yearbook 2011, India held approximately 286 billion tons and 41 billion tons in coal and lignite resources respectively, as on April 1, 2011, and it was the third largest country thermal coal producing country after China and the United States of America at the end of 2012.

Future Capacity Additions

According to the Integrated Energy Policy (“IEP”) report dated August 2006 issued by the GoI Planning Commission, India would require total installed capacity of 306 GW and 425 GW and might have a peak demand of 226 GW and 323 GW by fiscal 2017 and fiscal 2022 respectively at 8.0% annual GDP growth. Requirements may be much higher if India is able to achieve a GDP growth rate of higher than 8.0% (Source: IEP, Expert Committee on Power). The following table sets forth the additional capacity required by 2017 and 2022 under different GDP growth rate scenarios:

	Assumed GDP Growth		Electricity Generation Required		Peak Demand		Installed Capacity
	(%)		(BU)		(GW)		(GW)
By fiscal 2017		8.0		1,524		226		306
		9.0		1,687		250		337
By fiscal 2022		8.0		2,118		323		425
		9.0		2,438		372		488

Source: IEP Report, Expert Committee on Power

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Transmission and Distribution

In India, the transmission and distribution system is a three-tier structure comprising regional grids, state grids and distribution networks. The five regional grids, structured on a geographical contiguity basis, facilitate transfer of power from a power surplus state to a power deficit state. The regional grids also facilitate the optimal scheduling of maintenance outages and better co-ordination between the power plants. The regional grids shall be gradually integrated to form a national grid, whereby surplus power from a region could be transferred to another region facing power deficits, thereby facilitating a more optimal utilisation of the national generating capacity. Most inter-regional and interstate transmission links are owned and operated by the Power Grid Corporation of India Limited (“PGCIL”) though some are jointly owned by the SEBs. PGCIL is the central transmission utility of India and possesses one of the largest transmission networks in the world. Approximately 50% of the total generating capacity in India is transmitted through PGCIL’s system, according to the company’s disclosures.

PGCIL is working towards establishment of an integrated national power grid, in a phased manner, in order to strengthen the regional grids and to support the generation capacity addition programme. The existing inter-regional power transfer capacity of 27,950 MW (as of March 2012) is expected to be enhanced to 63,000 MW by 2017. Based on the expected generation capacity addition in the Twelfth Five-Year Plan, an investment of approximately Rs. 1,000 billion, Rs. 550 billion and Rs. 250 billion is envisaged in central, state and private sectors respectively (Source: Report of the Working Group on Power for Twelfth Five-Year Plan (2012-17), January 2012).

State grids and distribution networks are primarily owned and operated by the respective SEBs or state governments (through state electricity departments). State distribution networks are managed at the state level and continue to be affected by high aggregate technical and commercial losses, or “AT&C” losses estimated to be approximately 26.15% in 2010-11, which implies that 26.15% of power entering the system is lost during distribution (Source: CEA Monthly Review, March 2013). A direct consequence of the high AT&C losses is the poor financial condition of SEBs, thereby constraining the SEBs from making any meaningful investments in generation and in upgrading the transmission and distribution, or “T&D” network. All India T&D losses for the same period stood at 23.97% (Source: CEA Monthly Review, March 2013).

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 recognised as an independent activity. Power distribution in the States of Delhi and Orissa has been privatised 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.

In India, transmission sector has grown from a capacity of 52,034 CKms during the 6th fifth-year plan (as of 31 March 1985) to 258,697 CKms currently (as of 31 March 2013). (Source: CEA Monthly Review, March 2013)

Power Trading

Historically the main suppliers and consumers of bulk power in India have been the various government controlled generation and distribution companies who typically contracted power on a long term basis by way of PPAs with regulated tariffs. However, in order to encourage the entry of merchant power plants and private sector investment in the power sector, the Electricity Act recognised power trading as a distinct activity from generation and T&D activities, and has facilitated the development of a trading market for electricity in India by providing for open access to transmission networks at normative charges. Power trading involves the exchange of power from suppliers with surpluses to suppliers with deficits. Seasonal diversity in generation and demand, as well as the concentration of power generation facilities in the resources-rich Eastern region of India, has created ample opportunities for the trading of power. Recent regulatory developments include the announcement of rules and provisions for open access and licensing related to interstate trading in electricity. Several entities have started trading operations or have applied for trading licenses. With the aid of the reforms, the volume of power traded as well as its traded price has grown rapidly over the last few years. The following graph and table shows the increasing volume of power traded in India for the periods indicated:

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Source: Central Electricity Regulatory Commission, Monthly Reports on Short-term Power Market in India

Indian Energy Exchange

Indian Energy Exchange (“IEX”) is India’s first nation-wide automated and online electricity trading platform. IEX seeks to catalyse the modernisation of electricity trade in India by allowing trading through a technology enabled platform. On June 9, 2008, IEX received CERC approval to begin operations. IEX is a demutualised exchange set up to enable efficient price discovery and price risk management in the power trading market, offering a broader choice to generators and distribution licensees for sale and purchase of power facilitating trade in smaller quantities, and enabling participants to adjust their portfolio as a function of consumption or generation. The total volume of electricity traded on IEX amounted to 1,975.42 million units in February 2013 which is about 35% of the total short term transactions done through bilateral contracts and power exchanges (Source: Central Electricity Regulatory Commission: Monthly Report on Short-term Transactions of Electricity in India, February 2013).

Power Exchange India Limited

Power Exchange India Limited (“PXIL”) is a fully electronic nation-wide exchange for trading of electricity. It has been promoted by two of India’s leading exchanges, NSE and National Commodities & Derivatives Exchange Limited. PXIL received regulatory approval to begin operations from the CEA on September 30, 2008, and began its operations on October 22, 2008. The total volume of electricity traded on PXIL amounted to 36.97 million units in February 2013 which is about 1% of the total short term transactions done through bilateral contracts and power exchanges (Source: CERC Monthly Report, February 2013).

OUR BUSINESS

Overview

We are one of India’s largest diversified non-ferrous metals and mining company. Our business is principally located in India. We have operations in Australia, United Arab Emirates, South Africa, Namibia and Ireland and have over 13,000 employees worldwide. We are primarily engaged in copper, zinc, aluminium and commercial power generation businesses and are also developing and acquiring port operation businesses and infrastructure assets. We have experienced significant growth in recent years through our various expansion projects for our copper, zinc and aluminium businesses and the acquisition of the Zinc International business. We believe our experience in operating and expanding our businesses in India will allow us to capitalise on attractive growth opportunities arising from India’s large mineral reserves, relatively low cost of operations and large and inexpensive labour and talent pools. We believe we are also well-positioned to take advantage of the significant growth in industrial production and investments in infrastructure in India, China, Southeast Asia and the Middle East, which we expect will continue to generate strong demand for metals and power.

On February 25, 2012, we, Sesa Goa and Vedanta announced an all-share merger of our company and Sesa Goa to create Sesa Sterlite and to effect the consolidation and simplification of Vedanta's corporate structure through the Reorganisation Transactions consisting of the Amalgamation and Reorganisation Scheme and the Cairn India Consolidation. The Amalgamation and Reorganisation Scheme is also subject to certain approvals. Please see “Item 5. Operating and Financial Review and Prospects – Consolidation and re-organization of Sesa Goa, Sterlite, Vedanta Aluminium, Sterlite Energy and MALCO to form Sesa Sterlite and transfer of Vedanta’s shareholding in Cairn India to Sesa Sterlite”.

We are one of the two custom copper smelters in India with a 40% primary market share by sales volume in fiscal 2013, according to the ICPCI.

We are also the leading and only integrated zinc producer with a 82.0% market share by sales volume of the Indian zinc market in fiscal 2013, according to the ILZDA, and one of the four primary producers of aluminium with a 17.0% primary market share by production volume in India in fiscal 2013, according to the Alumium Association of India or AAI.

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Copper Business

Our copper business is principally one of custom smelting. Our assets include a smelter, a refinery, a phosphoric acid plant, a sulphuric acid plant, a copper rod plant and three captive power plants at Tuticorin in Southern India, a refinery and two copper rod plants in Western India, a precious metal refinery that produces gold and silver, a doré anode plant and a copper rod plant at Fujairah in the UAE. According to Wood Mackenzie, our Tuticorin smelter was one of the world's largest, in terms of production volumes in 2012. We own the Mt. Lyell copper mine in Tasmania, Australia, which provides a small percentage of our copper concentrate requirements.

Zinc Business

Our fully-integrated zinc business is owned and operated by HZL. In 2012, HZL was one of the top five lead mining companies based on production volumes and in the lowest cost quartile in terms of all zinc mining operations worldwide, according to Wood Mackenzie. In addition, HZL’s Rampura Agucha mine was the largest zinc mine in the world on a production basis and its Chanderiya hydrometallurgical zinc smelter was the fourth largest smelter in the world on a production basis worldwide in 2012, according to Wood Mackenzie. We have a 64.9% ownership interest in HZL, with the remainder owned by the GoI (29.5%) and institutional and public shareholders (5.6%). We have exercised the second call option to acquire the GoI’s remaining ownership interest in HZL although the exercise is currently subject to dispute. HZL’s operations include five lead-zinc mines, one rock phosphate mine, four hydrometallurgical zinc smelters, two lead smelters, one lead-zinc smelter, four sulphuric acid plants, one silver refinery and six captive power plants in northwest India, and processing and refining facilities for zinc at Haridwar and for zinc, lead and silver at Pantnagar, both in state of Uttarkhand in northern India. HZL mines supply almost all of its concentrate requirements and also exports surplus zinc and lead concentrates.

In addition our Zinc-International business comprises of:

(1) a 100.0% stake in Skorpion which owns the Skorpion mine and refinery in Namibia;

(2) a 74.0% stake in BMM, which includes the Black Mountain mine and the Gamsberg Project, in South Africa; and

(3) a 100.0% stake in Lisheen, which owns the Lisheen mine in Ireland.

Aluminium Business

Our aluminium business is primarily owned and operated by BALCO in which we have a 51.0% ownership interest BALCO, with the remainder owned by the GoI. BALCO, one of the four primary producers of aluminium in India, had a 17.0% primary market share by production volume in India in fiscal 2013 according to AAI. We have exercised our option to acquire the GoI’s remaining 49.0% ownership interest, although the exercise is currently subject to dispute. BALCO’s operations include two bauxite mines, two captive power plants and refining, smelting and fabrication facilities in Central India. BALCO’s operations benefit from relatively cost effective access to power, the most significant cost component in aluminium smelting due to the power-intensive nature of the process. This is to a considerable extent due to BALCO being an energy-integrated aluminium producer. BALCO received a coal block allocation of 211.0 million tons for use in its captive power plants in November 2007. In addition, BALCO is constructing a thermal coal-based 1,200 MW captive power facility in the State of Chhattisgarh, which is awaiting final stage approval. BALCO has commenced the setting up of 325,000 tpa aluminium smelter, which is expected to be completed for first metal tapping by the third quarter of fiscal 2014.

In addition, we are expanding our aluminium business through Vedanta Aluminium. We hold a 29.5% non-controlling interest in Vedanta Aluminium, a 70.5% owned subsidiary of Vedanta. Vedanta Aluminium has started with a 1.0 million tpa alumina refinery at Lanjigarh, which was commissioned in March 2010 and produced 527,052 tons of alumina in fiscal 2013.

In addition, Vedanta Aluminium has completed the construction of a greenfield 500,000 tpa aluminium smelter, together with an associated 1,215 MW coal-based captive power plant, in Jharsuguda in the State of Orissa. The project has been implemented in two phases of 250,000 tpa each. Phase 1 was completed on November 30, 2009 and Phase 2 was completed on March 1, 2010. All nine units of 135 MW have been commissioned. The metal production for fiscal 2013 was 527,037 tons and the net generation of the captive power plant was 7,916 million units.

Power Business

In respect of our power business, Sterlite Energy has completed building a 2,400 MW thermal coal-based power facility (comprising four units of 600 MW each) in Jharsuguda in the State of Orissa. All the four units are operational. In September 2006, Sterlite Energy entered into a PPA with Grid Corporation of Orissa Limited, a nominee of the state government of Orissa (“GRIDCO”). The PPA was amended in August 2009, pursuant to which GRIDCO was granted the right to purchase up to 25% of the installed capacity of the power plant (after adjustments for auxiliary consumption by Sterlite Energy), equal to approximately 561 MW. In July 2008, Sterlite Energy succeeded in an international bidding process and was awarded the project for the construction of a 1,980 MW (comprising three units of 660 MW each) coal-based commercial thermal power plant at Talwandi Sabo in the State of Punjab in India. Our commercial power generation business also includes the 274 MW of wind power plants commissioned by HZL and the 270 MW power plant at BALCO’s Korba facility which was previously for captive use before the shutdown of the 100,000 tpa aluminium smelter at Korba on June 5, 2009.

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Strategy

Our goal is to generate strong financial returns and become one of the top diversified natural resources company in the world. Our strategy is to continue to grow our business by completing our existing expansion projects as well as setting up new greenfield and brownfield projects. We intend to take advantage of our low-cost base, expand our position in India as a supplier of copper, zinc and aluminium products and further develop our exports of these products. We are also leveraging our experience in building and managing captive power plants in developing the commercial power generation business in India and will continue to closely monitor the Indian resource markets in our existing lines of business as well as new opportunities such as iron ore and coal. Key elements of our strategy include:

Continuing focus on asset optimization and reducing the cost of production

According to Wood Mackenzie, HZL is in the lowest cost quartile in terms of all zinc mining operations worldwide and we intend to continue to improve our production processes and methods and increase operational efficiencies to further reduce our costs of production in all our businesses. Our current initiatives include:

• seeking improvements in operations to maximize throughput, mining and plant availability to achieve production increases at our existing facilities with minimum capital expenditures to optimize our asset utilization;

• reducing logistics costs through various initiatives;

• reducing energy costs and consumption, including through continued investment in advanced technologies to reduce power consumption in the refining and smelting processes and in captive power plants to provide the required power;

• increasing exploration efforts to increase reserves, particularly in our zinc businesses;

• building and managing of our captive power plants to supply a majority of the power requirements of our operations;

• gaining access to relatively large and inexpensive labor in India;

• increasing automation to reduce the manpower required for a given level of production volume;

• a strong exploration effort seeking to increase the reserves, particularly in our zinc ore business;

• continuing to improve recovery ratios such that more finished product is obtained from a given amount of raw material;

• reducing purchase costs, including by entering into long-term contracts for raw materials, making investments in mining operations and optimizing the mix of raw material sourcing between long-term contracts, mining operations and the commodities spot markets to address fluctuations in demand and supply;

• securing additional sources of coal through coal block allocations and coal linkages, which are long-term supply contracts for delivery of coal for use in power plants, such as the coal block allocations of 211.0 million tons we received from the Ministry of Coal for use in BALCO’s captive power plants, 31.5 million tons received from the Madanpur Coal Block for use in HZL's captive power plants and 112.2 million tons from the Ministry of Coal to support Sterlite Energy’s plants. These allocated coal blocks are regarded as non-reserve coal deposits;

• seeking access to bauxite mines for Vedanta Aluminium;

• seeking better utilization of by-products, including through adding additional processing capabilities to produce end-products from the by-products that can be sold at higher prices and help lower the cost of production of our core metals. For example, silver is a by-product of lead while sulphuric acid is a by-product of zinc and lead;

• reducing greenhouse gas emissions from our operations through various projects, including for example our recent installation of a back pressure turbine for utilizing waste gases of the roaster plant at one of our zinc smelters at Chanderiya;

• Our two wind power projects at Gujarat and Karnataka have also been registered for carbon emission reduction credits.

Recent successes as a result of these initiatives include:

• increased zinc production volumes from fiscal 2011 to fiscal 2013;

• increase in BALCO’s production from 160,665 tpa of rods in fiscal 2011 to 179,986 tpa of rods in fiscal 2013;

• increase in reserves at HZL from 96.73 million tons as of March 31, 2011 to 109.7 million tons as of March 31, 2013; and

• stable cost of production in most of our businesses notwithstanding inflationary cost pressures across the metals and mining industry generally, particularly with respect to logistics and energy costs.

Increasing our capacities through greenfield and brownfield projects

We intend to continue to increase our capacities through the expansion of mines and construction of new facilities. We believe that increasing our reserves, access to ores and capacities is critical to enable us to continue to capitalize upon the growing demand for metals in India and abroad, particularly in China, Southeast Asia and the Middle East. We seek to implement our expansion projects quickly and with the minimum necessary capital costs in order to generate a high internal rate of return on the projects.

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As of March 31, 2013, we had total production capacities of 405,000 tpa of copper cathodes, 879,000 tpa of zinc, 185,000 tpa of lead and 245,000 tpa of aluminium. We believe we have made significant progress towards achieving this goal, though there can be no assurance that we will be able to achieve such production capacity for each of our businesses.

Leveraging our project execution and operating skills and experience in building and managing captive power plants to run/ develop a commercial power generation business

The demand for power in India to support its growing economy has in recent years exceeded supply. Per capita consumption of power in India, despite significant increases in recent years, continues to lag behind other leading developed and emerging economies by a large margin. India has large thermal coal resources and the coal industry is in the process of government deregulation that is expected to increase the availability of coal for power generation, among other uses. We believe these factors make the commercial power generation business an attractive growth opportunity in India and that, by leveraging our project execution and operating skills and experience in building and managing captive power plants, and by applying our mining experience to the mining of the coal blocks we are seeking to have allotted to us to reduce the costs of our proposed commercial power generation business, we can compete successfully in this business. In addition, we believe that our entry into the commercial power generation business will allow us to establish ourselves and gain specific experience in coal mining as the power industry is one of only three industries in India, the others being iron or steel and cement, where captive coal mining by non-governmental entities is permitted. We believe this would help position us to more broadly enter the coal mining business if it is eventually opened to entry by non-governmental entities as part of a GoI deregulation initiative. See “—Our Commercial Power Generation Business.”

Seeking further growth and acquisition opportunities that leverage our transactional, project execution and operational skills and experience

Our successful acquisitions of HZL, BALCO and our acquisition of the zinc business of Anglo American Plc have contributed substantially to our growth. We continually seek new growth and acquisition opportunities in the metals and mining and related businesses, including through government privatization programs in India, where we can leverage our skills and experience. We continue to closely monitor the resource markets in our existing lines of business as well as seek out opportunities in complementary businesses such as coal mining. By selecting the opportunities for growth and acquisition carefully and leveraging our skills and experience, we expect to continue to expand our business while maintaining a strong balance sheet and investment grade credit profile.

Continuing to add reserves and resources for long-term value

Our acquisitions of HZL, BALCO, Skorpion, Lisheen, Black Mountain Mining, have contributed substantially to our growth. We continually seek new growth and acquisition opportunities in the metals and mining and related businesses in India and elsewhere, including through government privatisation programmes, where we can leverage our skills and experience. We continue to closely monitor the resource markets in our existing lines of business as well as seek out opportunities in complementary businesses such as coal mining. We also intend to continue to seek out new exploration opportunities for future growth. By selecting opportunities for growth and acquisition carefully and leveraging our skills and experience, we seek to continue to expand our business while maintaining a strong balance sheet and investment grade credit profile.

Consolidating our corporate structure and increasing our direct ownership of our underlying businesses to derive additional synergies as an integrated group

We have consolidated and are continuing to seek to increase our direct ownership of our underlying businesses to simplify and derive additional synergies and better align cash flows and debt as an integrated group by consolidating our group structure and integrating our operations.

For example, we announced a series of transactions on February 25, 2012, to effect the consolidation of Vedanta, including an all-share merger of Sesa Goa and Sterlite to create Sesa Sterlite and a simplification of Vedanta's corporate structure.

See “Item 5. Operating and Financial Review and Prospects—Consolidation and re-organization of Sesa Goa, Sterlite, Vedanta Aluminium, Sterlite Energy and MALCO to form Sesa Sterlite and transfer of Vedanta’s shareholding in Cairn India to Sesa Sterlite”.

We own majority ownership interests in BALCO and HZL and have offered to acquire the remaining shares of both BALCO and HZL from the GoI. To date, these offers have not been accepted by the GoI and therefore, there is no certainty that these acquisitions will proceed. See “Item 3. Key Information—D. Risk Factors—Risks Relating to Our Business—The GoI has disupted our exercise of the call option to purchase GoI’s remaining shares in HZL, and hence, the option might not be enforceable” and “— Options to Increase Interests in HZL and BALCO.”

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Basis of Presentation of ore reserves

The reported reserves are defined as being either “ore reserves” if reported in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and ore reserves, 2004 Edition, prepared by the Joint ore reserves Committee of the Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia (the “JORC Code”) or “mineral reserves” if reported in accordance with the South African Code for Reporting of Exploration Results, Mineral Resources and Mineral Reserves which sets out minimum standards, recommendations and guidelines for public reporting of exploration results, Mineral Resources and Mineral Reserves in South Africa (the “SAMREC Code”). The meanings and definitions are the same. For convenience, we have standardised the term “ore reserves”. The results are reported in compliance with Industry Guide 7 of the US Securities and Exchange Commission, or the SEC.

The reported ore reserves of each mine, are derived following a systematic evaluation of geological data and a series of technical and economic studies by our geologists and engineers.

• The ore reserves of CMT’s copper mines are derived from management estimates as of March 31, 2013 and reviewed by SRK Consulting (Australia) Pty Ltd as of March 31, 2013.

• The ore reserves of HZL’s Rampura Agucha, Rajpura Dariba, Sindesar Khurd, Zawar and Kayar mines were reviewed by SRK Consulting (UK) Limited as of March 31, 2013.

• The ore reserves of Black Mountain Mining’s Black Mountain mine are derived from management estimates as of March 31, 2013.

• The ore reserves of Lisheen’s Lisheen mine are derived from management estimates as of March 31, 2013.

• The ore reserves of Skorpion's Skorpion mine are derived from management estimates as of March 31, 2013.

• The ore reserves of BALCO’s Mainpat and Bodai-Daldali bauxite mines were reviewed by Geo Solutions Private Limited as of March 31, 2013.

An “ore reserve” is the economically mineable part. It includes diluting materials and allowances for losses which may occur when the material is mined. Appropriate assessments and studies have been carried out, and include consideration of and modification by realistically assumed mining, metallurgical, economic, marketing, legal, environmental, social and governmental factors. These assessments demonstrate that at the time of reporting that extraction could reasonably be justified. Ore reserves are sub-divided in order of increasing confidence into probable ore reserves and proven ore reserves.

In addition to the ore reserves we have identified further mineral deposits as either extensions of or additions to its existing operations that are subject to ongoing exploration and evaluation.

Our Copper Business

Overview

Our copper business is principally one of custom smelting and includes a smelter, a refinery, a phosphoric acid plant, a sulphuric acid plant, a copper rod plant and three captive power plants at Tuticorin in southern India, a refinery and two copper rod plants at Silvassa in western India, a precious metal refinery, commissioned in March 2009, that produces gold and silver, a doré anode plant and a copper rod plant commissioned in May 2010, at Fujairah in the UAE. In addition, we own the Mt. Lyell copper mine in Tasmania, Australia, which provided approximately 7.75% of our copper concentrate requirements in fiscal 2013.

As a custom smelter, we buy copper concentrate at LME-linked prices for copper less a TcRc that is negotiated with suppliers. We sell refined copper at LME-linked prices in the domestic and export markets. We receive a discount from our suppliers, in the form of a TcRc, which is influenced by global copper concentrate demand, supply of copper smelting and refining capacity, LME trends, LME-linked price participation and other factors. We source our concentrate from various global suppliers and our Australian mine, Mt. Lyell.

In recent years, we have improved the operating performance of our copper business by improving operational efficiencies and reducing unit costs, including reducing power costs by constructing a captive power plant at Tuticorin. We intend to further improve the operating performance of our copper business by continuing to reduce unit operating costs through improvements in recovery rates, lowering power and transport costs, achieving economies of scale and the achievement of other operational efficiencies.

Principal Products

Copper Cathode

Our copper cathodes are square shaped with purity levels of 99.9% copper. These cathodes meet international quality standards and are registered as LME “A” Grade. The major uses of copper cathodes are in the manufacture of copper rods for the wire and cable industry and copper tubes for consumer durable goods. Copper cathodes are also used for making alloys like brass, bronze and alloy steel, with applications in transportation, electrical appliances and machines, defense and construction.

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Copper Rods

Our copper continuous cast rods meet all the requirements of international quality standards. Our copper rods are currently used primarily for power and communication cables, transformers and magnet wires.

Sulphuric Acid

We produce sulphuric acid at our sulphuric acid plant through conversion of sulphur dioxide gas that is generated from the copper smelter. A significant amount of the sulphuric acid produced at the Tuticorin smelter is consumed by our phosphoric acid plant in the production of phosphoric acid, and the remainder is sold to fertilizer manufacturers and other industries.

Phosphoric Acid

We produce phosphoric acid at our phosphoric acid plant by chemical reaction of sulphuric acid and rock phosphate, which we import. Phosphoric acid is sold to fertilizer manufacturers and other industries.

Anode Slime

We produce anode slimes from the copper refining process that contain gold and silver which we currently sell to Fujairah and third parties. We sell the anode slimes to Fujairah Gold FZE as the doré anode plant has been shifted to our precious metal refinery at Fujairah.

Other By-products

Gypsum is a by-product of our phosphoric acid operations which we sell to third parties.

Supply of Copper Concentrate

As a custom smelter, we source a significant majority of our copper concentrate from third party suppliers at the LME price less a TcRc. Approximately 7.75% of our copper concentrate was sourced from our own mine in Tasmania, Australia in fiscal 2013. All of the copper concentrate used in our operations, whether from our own mine in Australia or from third party suppliers, is imported through the port of Tuticorin in Southern India and transported by road to our Tuticorin smelter.

Delivery to Customers

The copper cathodes, copper rods, sulphuric acid, phosphoric acid and other by-products such as gypsum are shipped for export or transported by road to customers in India.

Principal Facilities

Our Copper Mine

The following map shows the location of the Mt. Lyell mine in Tasmania:

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Overview

The Mt. Lyell mine is located at Queenstown on the west coast of Tasmania, Australia. It comprises an underground copper mine and a copper processing facility and is owned and operated by CMT. The Mt. Lyell mine is owned and operated under the terms and conditions as stipulated in Mining Leases 1M95 and 5M95 granted by the state government of Tasmania. Mining Lease 1M95 was granted on January 1, 1995 for a period of 15 years and Mining Lease 5M95 was granted on February 1, 1995 for a period of 14 years and 11 months. Both are renewable and are subject to the terms and conditions specified in the Mineral Resources Development Act, 1995, as amended, of Australia. Renewal applications for a term of 15 years in respect of Mining Lease 1M95 and Mining Lease 5M95 have been submitted, and are expected to be approved in due course. The mine is also covered by the Copper Mines of Tasmania (Agreement) Act 1999, which, in conjunction with an agreement between the state government of Tasmania and CMT entered into pursuant to that Act, limits CMT’s environmental liabilities to the impact of current operations, thereby insulating CMT from any historical legacy claims.

Monte Cello acquired CMT in 1999 from Mt. Lyell Mining Company Limited, or MLMC, formerly Gold Mines of Australia, when MLMC entered into voluntary administration due to hedging difficulties. Since Monte Cello took over the mine, annual production has increased from 2.2 million tpa in fiscal 2000 to 2.6 million tpa in fiscal 2009 and decreased to 2.5 million tpa in 2013. We acquired Monte Cello, and with it CMT, from a subsidiary of Twin Star in 2000.

The principal deposits in the Mt. Lyell region are all of the volcanic disseminated pyrite-chalcopyrite type, which accounts for 86.0% of the known ore in the region. The geology of the Mt. Lyell mine consists of a series of intercalated felsic to mafic-intermediate volcanics. Lithologies are highly altered quartz-sericite-chlorite volcanics with individual units delineated largely by the relative abundance of phyllosilicates. Volcaniclastic and rhyolitic lithologies occur sporadically throughout the sequence, as does pervasive iron mineralization in the form of haematite, magnetite and siderite.

Chalcopyrite is the principal ore mineral and occurs chiefly in higher grade lenses enveloped by lower grade halos. The overall structure of Mt. Lyell is that of a steeply dipping overturned limb of a large anticline. The hanging wall (stratigraphic footwall) of the ore body consists of weakly mineralized chloritic schists with disseminated pyrite. The footwall is sharply defined by the Great Lyell Fault—Owen Conglomerate contact which truncates the ore body at its southern end.

All mining operations at CMT are undertaken by contractors while the processing and mill maintenance operations are undertaken by CMT employees. A sub-level caving underground mining method is used at the Prince Lyell ore body. Ore is loaded into trucks by front end loader at draw points and then transported to the underground crusher and skip loading area. Crushed ore is then hauled via the Prince Lyell shaft and unloaded onto a conveyor feeding the ore bin at the Mt. Lyell processing plant. At the processing plant, the ore is crushed and ground prior to processing by flotation to produce copper concentrate, which is then filtered to form a cake and trucked to the Melba Flats railway siding for transport to the port of Burnie. The concentrate is stored at Burnie until it is loaded into ships for transport to the port of Tuticorin in south India from where it is trucked to the Tuticorin smelter. CMT has an active exploration and evaluation programme at Mt. Lyell which involves upgrading resources below the Prince Lyell reserves and testing additional exploration targets on the mining lease. The Western Tharsis deposit lies to the west of the Prince Lyell ore body, but CMT has not yet committed to its development. Additional targets include Tasman & Crown, Glen Lyell, Copper Clays and NW Geophysics. The tailings dam is a valley-fill type and excess water is discharged via a spillway. The water quality is sampled before the water is released from the site. The tailings are deposited on beaches some 300 meters from the dam spillway. CMT’s accepted closure plan is to flood the tailings which will require CMT to raise the tailings dam wall.

The processing plant is approximately 30 years old and has been partially refurbished following CMT’s acquisition with the addition of crushers, a float cell and a regrind mill at the surface. While the condition of the plant is ageing, maintenance is carried out as required to ensure that the process plant remains in safe and efficient condition.

Power at the mine is supplied through an electricity supply agreements with Aurora Energy Proprietary Limited and Hydro Tasmania Proprietary Limited to supply approximately 112 Giga Watts per hour at a fixed rate until September 30, 2012. Since October 1, 2012, Aurora Energy Proprietary Limited supplies electricity on a spot price basis. There is ample supply of mine water and storm water captured on the tailings dam.

The gross and net value of fixed assets, including capital works-in-progress was approximately AUD 148.2 million ($ 154.5 million) and AUD 30.5 million ($ 31.5 million) respectively, as of March 31, 2013.

In fiscal 2013, Mt. Lyell mined and processed 2.5 million tons of ore at a grade of 1.19% copper to produce 98,682 tons of copper concentrate, which also contained 14,197 ounces of gold and 131,376 ounces of silver. Although the grade of copper at Mt. Lyell is low, it produces a clean concentrate that is valuable in the smelting process. The estimated mine life as of March 31, 2013, at Mt. Lyell is approximately 3.6 years based on (i) reserves; and (ii) planned production, which is determined based on a life-of-mine plan.

The cut-off grades are based on copper grades with the gold credit deducted from the operating costs. The reserves are derived from stopes which are designed such that the limits of the stope are defined by a cut-off grade of 0.8% copper and have an

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average grade that exceeds 0.8% copper. The revenue derivation of the cut-off grade includes the gold credit. The break-even cut-off grade of 0.65% copper is the grade that makes enough margin to cover the fixed and variable costs while the actual or operational cut-off grade used is 0.55% copper. CMT operates on a 0.8% copper operational cut-off grade in practice, preferring to take a higher revenue at the expense of a longer mine life.

The reserves at CMT in the proven reserve category are defined as the economically minable portion of the measured in-situ resource, which has gold drill coverage (<50 metre) and is on or within the 50m zone below the lowest active production level. The probable in-situ reserve is the material which has been defined as the economically minable portion and has good drill coverage but is outside the 50 metre zone from the lowest active production level. The ex-situ probable reserve is the portion of ex-situ indicated resource which can be economically recovered with the mining of the in-situ reserves; this is applied as a modifying factor.

CMT does not use a copper equivalent calculation for the determination of stope limits as the relationship between the copper and gold grades is essentially linear, allowing the gold credits to be deducted from operating costs.

The proportion of sub-economic dilution in the reserves varies with the amount of internal dilution and the amount of over-draw. Due to the caving process mixing ore from previous levels, remnant material and material from mineralized halo, it is difficult to determine the level of external dilution, leading CMT to derive the modifying factors from the reconciliation of historical production against the grade and tonnage of the primary ore mined.

For fiscal 2013, the metallurgical recovery was 92.69% for copper, 64.97% for gold and 59.19% for silver. For fiscal 2013, the contract mining and milling cost was AUD 4,225 (Rs. 237,251 or $ 4,363) per ton, administration and environment cost was AUD 382 (Rs. 21,450 or $ 394) per ton and transportation cost was AUD 274 (Rs. 15,386 or $282) per ton. Correspondingly the TcRc was AUD 357 (Rs. 19,990 or $ 368) per ton.

The following table sets out our proven and probable copper reserves as of March 31, 2013. The figures show the split between the ore derived from primary, or in-situ, ore and secondary ore, which consists of broken fresh ore from previous levels, remnants of ore from the open-pit side wall and pillars remaining from a former mining method together with sub-economic dilution from the mineralized material surrounding the ore body. The quantity and grade of the secondary ore was determined from the analysis of historical production. The estimate of the quantity and grade of the remnant material has been evaluated from previous studies and only uses a small proportion of this source of ore. Consequently, we believe that this allowance can be sustained for the forecast life of the reserves.

		Proven Reserve				Probable Reserve				Total Proven and Probable Reserves				Ownership of SIIL		Life
Mine	Source	Quantity		Copper Grade		Quantity		Copper Grade		Quantity		Copper Grade		%		(Years)
		(million tons)		(%)		(million tons)		(%)		(million tons)		(%)
Mt. Lyell	In-situ ore		2.09		1.33		1.67		1.19		3.76		1.27
	Secondary ore		—		—		5.02		1.14		5.02		1.14
	Surface stockpile		0.08		1.15		—		—		0.08		1.15
Total			2.17		1.32		6.69		1.16		8.86		1.20		100		3.6

Additional information:

(1) The reserve estimates presented incorporate losses for mine dilution and mining recovery according to the JORC code.

(2) The cut-off grade used with our reserve estimate is 0.8%.

(3) The metallurgical recovery factor for our Mt. Lyell mine is 92.4%. The metallurgical recovery for gold and silver considered is 67.0% and 68.0% respectively.

(4) The historic three year average commodity price is $ 8,155 per ton and the currency conversion factor that was used to estimate our reserves was US dollar per Australian dollar 1.04.

(5) The reserve quantities disclosed are for the entire mine.

Our Smelter and Refineries

Overview

The following table sets forth the total capacities as of March 31, 2013 at our Tuticorin and Silvassa facilities:

	Capacity
Facility	Copper Anode(1)		Copper Cathode(2)		Copper Rods(2)		Sulphuric Acid(3)		Phosphoric Acid(3)		Captive Power
	(tpa)		(tpa)		(tpa)		(tpa)		(tpa)		(MW)
Tuticorin(4)		405,000		205,000		96,000		1,300,000		230,000		111.5	(5)
Silvassa		—		200,000		172,000		—		—		—
Total		405,000		405,000		268,000		1,300,000		230,000		111.5

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Notes:

(1) Copper anode is an intermediate product produced by copper smelters and is not sold to customers. It is used for the production of copper cathode by copper refineries. Approximately one ton of copper anode is required for the production of one ton of copper cathode.

(2) Copper cathode is used as a starting material for copper rods. Approximately one ton of copper cathode is required for the production of one ton of copper rods.

(3) Sulphuric acid is used as a starting material for phosphoric acid. Approximately 2.8 tons of sulphuric acid are required for the production of one ton of phosphoric acid.

(4) The Tuticorin smelter was closed on March 29, 2013. On May 31, 2013, the NGT passed an interim order allowing the copper smelter to recommence operations. Operations at the copper smelter recommenced on June 16, 2013.

(5) On October 1, 2012, the first 80 MW unit of the new captive power plant was successfully commissioned and the second 80 MW unit is awaiting requisite approvals.

Tuticorin

Our Tuticorin facility, established in 1997, is located in Tamil Nadu in Southern India. Our Tuticorin facility currently consists of a 405,000 tpa copper smelter, a 205,000 tpa copper refinery, a 96,000 tpa copper rod plant, a 1,300,000 tpa sulphuric acid plant, a 230,000 tpa phosphoric acid plant and two captive power plants with capacities of 7.5 MW and 24.0 MW, respectively. The first 80 MW unit of the new 160 MW coal based captive power plant at Tuticorin was commissioned on October 1, 2012. This coal based power plant is primarily used for captive consumption and we have also entered into a power purchase agreement with Tamil Nadu Electricity Board (TNEB) for selling power in excess power over the captive consumption.

Presently, the captive power plants have a total capacity of 111.5 MW, excluding the 15 MW power generating power plant shifted to HZL for the Pantnagar operations. Further, we also have a 11.2 MW of power generated from a smelter waste heat boiler. The remaining power requirements of the facility in fiscal 2013 are obtained from the state power grid and our other captive power plants at Tuticorin operate on furnace oil. Coal for the new 160 MW power plant is imported.

The smelter at the Tuticorin facility utilizes IsaSmelt^TM furnace technology. The refinery uses IsaProcess^TM technology to produce copper cathode and the copper rod plant uses Properzi Continuously Cast and Rolled, or CCR, copper rod technology from Continuus-Properzi S.p.A., Italy, to produce copper rods.

In March 2013, the TNPCB ordered the closure of the copper smelter at Tuticorin due to complaints regarding a noxious gas leak by local residents. On April 1, 2013 we filed a petition in the National Green Tribunal (“NGT”) challenging the order of the TNPCB on the basis that the plant’s emissions were within permissible limits. The NGT passed an interim order in May 2013 allowing the copper smelter to recommence operations subject to certain conditions. We recommenced operations on June 16, 2013. The expert committee constituted by the NGT submitted a report on the operation of the plant on July 10, 2013 stating that the plant’s emissions were within the prescribed standards and based on this report, the NGT ruled on July 15, 2013 that the copper smelter could remain open and reserved its final order. The NGT has also directed the company to comply with the recommendations made by the committee to further improve the working of the plant within a time bound schedule. However, the TNPCB filed a notice of appeal against the interim order of the NGT. The next date of hearing is on August 5, 2013. See “Item 3. Key Information - Risk Factors - We are involved in certain litigation seeking cancellation of permits and environmental approval for the alleged violation of certain air, water and hazardous waste management regulations at our Tuticorin plant for additional information.

Silvassa

Our Silvassa facility, established in 1997, is located in the union territory of Dadra and Nagar Haveli in Western India. Our Silvassa facility currently consists of a 200,000 tpa copper refinery and two copper rod plants with a total installed capacity of 172,000 tpa of copper rods. Its refinery uses IsaProcess^TM technology in the production of copper cathode and its copper rod plants use Properzi CCR copper rod technology. Our Silvassa facility draws on the state power grid to satisfy its power requirements.

Fujairah

Fujairah Gold FZE is located in the Fujairah Free Zone 2. Our Fujairah facility is strategically located on the coast of the Arabian Sea. The precious metal refinery was commissioned in March 2009 and began production in April 2009, with a capacity of 20 tons of gold and 100 tons of silver. Outotec oyj, Finland, the pioneer in providing technology for extraction and refining of precious metals, supplied the technology for the precious metal refinery. Fujairah Gold FZE commissioned a copper rod plant at a cost of $ 12.5 million, with an annual capacity of 100,000 tpa with production having commenced in May 2010 and generated a production of 69,921 metric tons of rod, 3,523 kilograms of gold and 38,300 kilograms of silver in fiscal 2013. Continuus Properzi S.p.A., Italy, has supplied the rod mill equipment for this project, and the copper cathode required for the copper rod plant is being sourced from the smelters of the Vedanta group and third parties. The doré anode plant that has been shifted from Tuticorin to Fujairah was commissioned during fiscal 2013 for smelting of “anode slime” to “doré anode” which is the raw material for precious metal refinery.

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Production Volumes

The following table sets out our total production from Tuticorin and Silvassa for the three years ended March 31, 2013:

		For the Year Ended March 31,
Facility	Product	2011		2012		2013
			(tons)
Tuticorin(1)	Copper anode(2)		304,964		327,703		349,845
	Sulphuric acid(3)		968,760		1,026,471		1,060,519
	Phosphoric acid(3)		154,232		153,243		119,793
	Copper cathode(4)		141,281		169,448		191,858
	Copper rods(4)		54,006		44,961		52,404
Silvassa	Copper cathode(4)		162,710		156,429		161,296
	Copper rods(4)		133,886		116,460		119,451
Total	Copper anode		304,964		327,703		349,845
	Copper cathode		303,991		325,877		353,154
	Copper rods		187,892		161,421		171,855
	Sulphuric acid		968,760		1,026,471		1,060,519
	Phosphoric acid		154,232		153,243		119,793

Notes:

(1) The Tuticorin smelter was closed on March 29, 2013. On May 31, 2013, the NGT passed an interim order allowing the copper smelter to recommence operations. Operations at the copper smelter recommenced on June 16, 2013.

(2) Copper anode is an intermediate product produced by copper smelters and is not sold to customers. It is used for the production of copper cathode by copper refineries. Approximately one ton of copper anode is required for the production of one ton of copper cathode.

(3) Sulphuric acid is used as a starting material for phosphoric acid. Approximately 2.8 tons of sulphuric acid are required for the production of one ton of phosphoric acid.

(4) Copper cathode is used as a starting material for copper rods. Approximately one ton of copper cathode is required for the production of one ton of copper rods.

The following table sets out CMT’s copper extraction from the Mt. Lyell mine for the three years ended March 31, 2011, 2012 and 2013:

		For the Year Ended March 31,
Mine (Type of Mine)	Product	2011		2012		2013
		(tons, except for percentages)
Mt. Lyell (Underground)	Ore mined		1,976,177		2,067,407		2,519,464
	Ore grade		1.30%		1.18%		1.19%
	Copper recovery		93.2%		92.68%		92.69%
	Copper concentrate		83,940		85,339		98,682
	Copper in concentrate		22,929		22,607		26,047

Principal Raw Materials

Overview

The principal inputs of our copper business are copper concentrate, rock phosphate, power, fuel and sulphuric acid. Other inputs include coke, lime, reagents and oxide ore. We have in the past been able to secure an adequate supply of the principal inputs for our copper production.

Copper Concentrate

Copper concentrate is the principal raw material of our copper smelter. In fiscal 2013, we sourced 92.3% of our copper concentrate requirements from third party suppliers, either through long-term contracts or on spot markets, and sourced only from our own mines in Australia. We purchase copper concentrate at the LME price less a TcRc that we negotiate with our suppliers but which is influenced by the prevailing market rate for the TcRc. We expect the percentage we purchase from third party suppliers to increase in future periods as the reserves of our Mt. Lyell copper mine are expected to be exhausted by fiscal 2017. We expect the percentage we purchase from third party suppliers to also increase in future periods to the extent we seek to increase our copper smelting and refining capacity.

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In general, our long-term agreements run for a period of three to five years, and are renewable at the end of the period. The quantity of supply for each contract year is fixed at the beginning of the year and terms like TcRc and freight differential are negotiated each year depending upon market conditions. In fiscal 2013, we sourced approximately 61.3% of our copper concentrate requirements through long-term agreements.

We also purchase copper concentrate on a spot basis to fill any gaps in our requirements based on production needs for quantity and quality. These deals are struck on the best possible TcRc during the period and are specific for short-term supply. In fiscal 2013, we sourced approximately 38.7% of our copper concentrate requirements through spot purchases.

Rock Phosphate

Until fiscal 2012, rock phosphate is sourced primarily from Jordan pursuant to contracts renewed on an annual basis, with pricing fixed on a quarterly and half-yearly basis. In fiscal 2013 majority of the rock phosphate was sourced from Morocco and Egypt. We sourced rock phosphate on spot prices.

Power

The electricity requirements of our copper smelter and refinery at Tuticorin are primarily met by the on-site captive power plants. The first 80 MW of a new 160 MW coal-fired thermal power plant was commissioned on October 1, 2012. Our other captive power plants at Tuticorin operate on furnace oil that is procured through long-term contracts with various oil companies. We have outsourced the day-to-day operation and maintenance of our captive power plants at Tuticorin. Our Silvassa facility relies on the state power grid for its power requirements.

Distribution, Logistics and Transport

Copper concentrate from the Mt. Lyell processing facility is transported by road to a rail head and then transported by rail to the port of Burnie, Tasmania, from which it is shipped to the port of Tuticorin in India. Copper concentrate sourced from both our Mt. Lyell processing facility and from third parties is received at the port of Tuticorin and then transported by road to the Tuticorin facility.

Once processed at the Tuticorin facility, copper anodes are either refined at Tuticorin or transported by road to Silvassa. Copper cathodes, copper rods, sulphuric acid, phosphoric acid and other by-products are shipped for export or transported by road to customers in India.

Sales and Marketing

The 10 largest customers of our copper business accounted for approximately 34.4%, 39.5% and 39.8% of our copper business revenue in fiscals 2011, 2012 and 2013, respectively. One of our customers, Umicore Precious Metals Refining, accounted for 15.4% and less than 10.0% of our copper revenue in fiscal 2012 and 2013 respectively.

Our copper sales and marketing head office is located in Mumbai, and we have field sales and marketing offices in most major metropolitan centers in India. We sell our copper rods and cathodes in both the domestic and export markets. In fiscals 2011, 2012 and 2013, exports accounted for approximately 41.3%, 51.3% and 54.8% of the revenue of our copper business, respectively. Our export sales were primarily to China, Japan, Indonesia, Malaysia, Vietnam, Hong Kong, Europe, Turkey and Taiwan. We also sell phosphoric acid and other by-products in both the domestic and export markets.

Domestic sales are normally conducted on the basis of a fixed price for a given month that we determine from time to time on the basis of average LME price for the month, as well as domestic supply and demand conditions. The price for copper we sell in India is normally higher than the price we charge in the export markets due to the tariff structure on costs, smaller order sizes that domestic customers place and the packaging, storing and truck loading expenses that we incur when supplying domestic customers.

Our export sales of copper are made on the basis of both long-term sales agreements and spot sales. The sales prices of our copper exports include the LME price plus a producer’s premium. We do not enter into fixed price long-term copper sales agreements with our customers.

Market Share and Competition

We own one of the two custom copper smelters in India and had a 40% primary market share by sales volume in India in fiscal 2013, according to ICPCI. The other major custom copper smelter in India is owned by Hindalco Industries Limited, which had a primary market share by sales volume of approximately 35% in fiscal 2013, with the remainder of the primary copper market in India primarily served by imports and Hindustan Copper Limited.

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Copper is a commodity product and we compete primarily on the basis of price and service, with price being the most important consideration when supplies of copper are abundant. Our metal products also compete with other materials, including aluminium and plastics, that can be used in similar applications by end-users. Copper is sold directly to consumers or on terminal markets such as the LME. Prices are established based on the LME price, though as a regional producer we are able to charge a premium to the LME price which reflects the cost of obtaining the metal from an alternative source.

Projects and Developments

We have proposed expansion projects at Tuticorin costing Rs. 22,900 million ($ 420.0 million) to increase its total copper capacity to 800,000 tpa. A 160 MW coal-based thermal captive power plant is currently under construction at a cost of Rs. 6,080 million ($111.5 million), and on October 1, 2012, the first 80 MW unit of the new captive power plant was commissioned and, the second 80 MW unit, is awaiting requisite approvals. Surplus power generated by this plant is currently being sold to third parties, but the expansion of the smelter is on hold as required approvals have not yet been received. Specifically, the proposed capacity expansion at Tuticorin had been delayed since December 2009 due to a writ filed before by the Madras High Court, although this writ had not prevented the continued operation of the plant.

For additional information on these proceedings, please see Item.3 – Key Information – D. Risk Factors — We are involved in certain litigation seeking cancellation of permits and environmental approval for the alleged violation of certain air, water and hazardous waste management regulations at our Tuticorin plant”.

We have incurred Rs. 13,101 million ($ 240.3 million) on these projects as of 31 March 2013. We fund these projects primarily from the proceeds of the convertible senior notes issued in fiscal 2010.

Our Zinc India Business

Overview

Our Zinc India business is owned and operated by HZL. HZL’s fully-integrated zinc operations include five lead-zinc mines, one rock phosphate mine, four hydrometallurgical zinc smelters, two lead smelters, one lead-zinc smelter, four sulphuric acid plants, one silver refinery and six captive power plants at our Chanderiya, Dariba and Zawar facilities in the State of Rajasthan, processing and refining facilities for zinc at Haridwar and for zinc, lead and silver at Pantnagar, both in the State of Uttarkhand and in northern India. HZL’s mines supply almost all of its concentrate requirements and allow HZL to also export surplus zinc and lead concentrates.

We first acquired an interest in HZL in April 2002 and since then have significantly improved its operating performance through expansion and by improving operational efficiencies and reducing unit costs. HZL improved its operating performance further by:

• benefiting from low-cost production available from its two hydrometallurgical zinc smelters with capacity of 210,000 tpa each at Chanderiya commissioned in May 2005 and December 2007, and expanded in April 2008 together with associated captive power plants at Chanderiya;

• benefiting from low-cost production available from one of its hydrometallurgical zinc smelters with capacity of 210,000 tpa at Rajpura Dariba smelting complex, which was commissioned in March 2010, and also from its 100,000 tpa lead smelter at the Rajpura Dariba mine complex, which was commissioned in July 2011;

• increasing the total zinc smelting production capacity;

• commissioning a new silver refinery at Pantnagar of 350 tpa in Pantnagar;

• increasing the percentage of concentrates being sourced from its Rampura Agucha mine as compared to its other mines to lower its cost of obtaining zinc concentrate;

• commissioning a concentrator at Sindhesar Khurd mine of 1.5 mptpa in 2011 and increased capacity to 2.0 mtpa in fiscal 2012;

• continuing its initiatives to improve operational efficiencies at its existing operations;

• reducing power costs by building on-site captive power plants rather than relying on state power grids;

• reducing the size of its workforce including through a voluntary retirement plan; and

• increasing productivity and upgrading existing technology

HZL has signed a mining lease for the Kayar mine in the State of Rajasthan which expires in February 2018. In January 2009, HZL obtained environmental clearance for an annual production of 350,000 tons. HZL is in the process of obtaining surface land rights over the mine area. The Kayar mine achieved development ore production towards the end of the second quarter of fiscal 2013.

HZL pays royalties to the state government of Rajasthan based on its extraction of lead-zinc ore. With effect from August 13, 2009, the royalty rate increased from 6.6% to 8.4% of the LME zinc metal price payable on the zinc metal contained in the concentrate produced and from 5.0% to 12.7% of the LME lead metal price payable on the lead metal contained in the

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concentrate produced. For silver, HZL pays royalty at a rate of 7% of the silver LBMA price chargeable on silver-metal produced. The royalties we pay are subject to change. See “Item. 3—Key Information—D. Risk Factors—Risks Relating to Our Industry—Changes in tariffs, royalties, customs duties and government assistance may reduce our Indian market domestic premium, which would adversely affect our profitability and results of operation”. We have a 64.9% ownership interest in HZL, with the remainder owned by the GoI (29.5%) and institutional and public shareholders (5.6%).

We have exercised the second call option by a letter dated July 21, 2009 to acquire the GoI’s remaining ownership interest in HZL although the exercise is currently subject to dispute. See “—Options to Increase Interests in HZL and BALCO Call Options over shares in HZL”.

Principal Products

Zinc

We produce and sell zinc ingots in all three international standard grades: Special High Grade (SHG—99.994%), High Grade (HG—99.95%) and Prime Western (PW—98.0%). We sell most of our zinc ingots to Indian steel producers for galvanizing steel to improve its durability. Some of our zinc is also sold to alloy, dry cell battery, die casting and chemical manufacturers.

Lead

We produce and sell lead ingots of 99.99% purity primarily to battery manufacturers and to a small extent to chemical manufacturers.

By Products

Sulphuric Acid

Sulphuric acid is a by-product of our zinc and lead smelting operations. We sell sulphuric acid to fertilizer manufacturers and other industries.

Silver

Silver is a by-product of our lead smelting operations. We produce and sell silver ingots primarily to industrial users and traders of silver.

Lead-Zinc Mines

HZL normally sources all of the lead-zinc ore required for its business from its Rampura Agucha open-pit and underground mine, Zawar and Rajpura Dariba, Sindesar Khurd and Kayar underground mines in Northwest India. In Fiscal 2013, 2.5% and 14.5% of the zinc and lead production respectively were through sourced concentrates, as the mined metal production was relatively lower in the first half of the year in line with the mine plan. Lead-zinc ore extracted from the mines is conveyed to on-site concentrators and beneficiation plants that process the ore into zinc and lead concentrates. With its good ore mineralogy providing a high metal recovery ratio, the Rampura Agucha mine accounted for 85.4% of HZL’s total mined metal in zinc and lead concentrate produced in fiscal 2013, with the Zawar, Rajpura Dariba and Sindhesar Khurd mines accounting for the remaining 1.4%, 3.5% and 9.7%, respectively. The zinc and lead concentrates are then transported by road to the nearby Chanderiya, Dariba and Debari smelters. HZL has also sold surplus zinc concentrates from its mines to third party smelters.

Our current Indian Bureau of Mines, or IBM, approvals for the Rampura Agucha mine, the Zawar mine, Sindhesar Khurd mine and the Rajpura Dariba and Kayar mine limit our extraction of lead-zinc ore from the mines to approximately 6.15 million tpa, 1.2 million tpa, 2.0 million tpa, 0.9 million tpa and 0.35 million tpa, respectively, in fiscal 2013.

Zinc Smelters

HZL has two types of zinc smelters, hydrometallurgical and pyrometallurgical. Five of HZL’s smelters are hydrometallurgical and one of HZL’s smelters is pyrometallurgical. The Vizag hydrometallurgical smelter suspended its operations in February 2012.

The hydrometallurgical smelting process is a roast, leach and electrowin, or RLE, process. Zinc concentrate is first oxidized in the roaster and the gases generated are cleaned and sent to the sulphuric acid plant. The primary output from the roaster, called calcine, is sent to the leaching plant to produce a zinc sulphate solution that is then passed through a cold or hot purification process to produce purified zinc sulphate solution. The purified zinc solution then goes through an electrolysis process to produce zinc cathodes. Finally, the zinc cathodes are melted and cast into zinc ingots.

The pyrometallurgical smelter uses the imperial smelting process or ISP™, which process starts with sintering, where a mixture consisting of lead and zinc concentrates and fluxes is passed through the sinter machine to remove the sulphur. The gases generated from the sintering process are sent to the sulphuric acid plant. The de-sulphurized output of the sinter machine is broken for size reduction before being fed into an imperial smelting furnace, or ISF, where it is smelted with preheated metcoke and air. During the smelting process, molten lead trickles down to the bottom of the ISF and zinc rises up as vapor. The vapor is passed

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into a condenser where it is then absorbed back into the molten lead. The molten lead is cooled to separate out the zinc, which is then passed through a process of double distillation and condensation through which any remaining lead is removed to produce pure zinc metal which is cast into ingots. The lead removed through this process is sent to the pyrometallurgical lead smelter.

Lead Smelters

HZL has three lead smelters, one of which uses the pyrometallurgical ISF™ process, the second of which uses Ausmelt™ technology and the third smelter at Dariba lead uses SKS (Shuikoushan Smelting Technology) oxygen bottom blowing technology.

The pyrometallurgical process involves the smelting of lead and zinc together . Lead removed from the pyrometallurgical process is sent for further refining where it passes through a series of processes to remove impurities. In this process, silver is also produced as a by-product. The refined lead is cast into lead ingots.

HZL’s Ausmelt™ lead plant is based on Top Submerged Lance technology where lead concentrate is smelted directly in a vertical furnace along with flux. Lead bullion produced in this process is then treated in the lead refinery plant to produce high purity lead ingots. Off-gas containing sulphur dioxide gas is then cleaned and treated in the sulphuric acid plant.

HZL’s third lead smelter is based on SKS oxygen bottom blowing technology where lead concentrate is smelted directly in the SKS furnace along with fluxes, SKS furnace produces lead bullion and slag. Lead bullion produced in these processes is then treated in the lead refinery plant to produce high purity electrolytic grade lead ingots. Slag from blast furnace is fumed to produced zinc oxide dust. Off-gas containing sulphur dioxide gas is cleaned and treated in the sulphuric acid plant.

Delivery to Customers

The zinc, lead and silver ingots and the sulphuric acid by-product are transported by road to customers in India. Zinc ingots are also shipped for export.

Principal Facilities

Overview

The following map shows the locations of HZL’s facilities in the State of Rajasthan:

Mines

Rampura Agucha

The Rampura Agucha lead-zinc mine is located near Gulabpura in the State of Rajasthan.

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The good ore mineralogy of the mine provides a high metal recovery ratio and a low overall cost of production for zinc concentrate extracted from the mine. The mining and processing facilities are modern and in good condition.

The Rampura Agucha mine was the largest zinc mine in the world on a production basis in 2012, according to Wood Mackenzie. It is a sediment-hosted zinc deposit which lies within gneisses and schists of the Precambrian Mangalwar Complex. The main ore body is 1.5 kilometers long and has a width ranging from five meters to 120 meters with an average of approximately 58 meters. The southern boundary of the ore body is sharp and steeply dipping while the northern margin is characterized by thinner mineralized zone. Grades remain relatively consistent with depth. The ore body consists of sphalerite and galena, with localized concentrations of pyrite, arsenopyrite, pyrrhotite and tetrahedrite-tennantite.

The ore body is mined by open-pit methods. The capacity of the mine and concentrator was expanded between 2003 and 2010 from 2.4 million tpa to 6.15 million tpa for mine and 6.5 million tpa for mill through the purchase of additional mining equipment, upgrades to the truck fleet, improvements to the operational efficiency of the plant and the installation of a new semi-autogenous, or SAG, mill and ball mill circuit.

Mining at Rampura Agucha is a simple drill and blast, load and haul sequence using 221 metric tons trucks and 34 -cubic meter excavators. Ore is fed to the primary crusher and waste is dumped at the waste dump. The mining equipment is owner-operated. The processing facility is a conventional crushing, milling and differential lead-zinc floatation plant. Ore from the open-pit is crushed in a series of three crushing circuits and then milled in four streams, one rod mill-ball and three other sag mill-balls in closed circuit. The milled ore is then sent to the lead flotation circuit which includes roughing, scavenging and three stages of cleaning. The lead concentrates are thickened and filtered ahead of storage and transport to the Chanderiya and Dariba lead smelter. The lead flotation tails proceed to zinc flotation which comprises roughing, scavenging and four stages of cleaning. Zinc concentrates are thickened and filtered ahead of storage and transported to all three of the HZL zinc smelters. Zinc flotation tails are thickened ahead of disposal to the tailings dam.

Exploration at Rampura Agucha since 2004 has resulted in significant increases in the reserves at the mine. Following an extensive drilling program of 227 holes, approximately 105,966 meters to convert mineralized material to reserves, better definition of the ore body boundaries, addition of mineralized material and the conduct of open-pit re-optimization, as well as the commencement of potential underground mine project work, the reserves were increased to 62.7 million tons as of March 31, 2013 with an average grade of 13.6% zinc and 1.8% lead and 59 ppm silver after depletion. The drill spacing for the definition of proven reserves was approximately 50 meters by 50 meters while for probable reserves was 100 meters by 100 meters in the open-pit. HZL commenced production at the mine in 1991. Since inception, approximately 59.3 million tons of ore, with an ore grade of 12.7% zinc and 1.9% lead, respectively, have been extracted from the open-pit mine. Mineralized material now extend up to 1,190 meters below surface. HZL also believes that additional mineralization exists in an extension in the depth and breadth of the established mineralized material boundary and exploration drillings and is continuing to evaluate the potential of this deeper mineralization. As of March 31, 2013, HZL estimates the remaining mine life at Rampura Agucha to be 15 years based on (i) reserves; and (ii) planned production which is determined on the basis of a life-of-mine plan.

In fiscal 2013, 6.18 million tons of ore at 12.3% zinc and 1.8% lead were mined from Rampura Agucha, which produced 1.33 million tons of zinc concentrate at 50.8% zinc and 110,441 tons of lead concentrate at 59.4% lead. Approximately 80.87 million tons of waste was removed giving a strip ratio of 12.79 tons of waste per ton of ore mined. The expansion of the mine from 5 mtpa to 6.15 mtpa was completed in 2010 and has resulted in a significant increase in the strip ratio as there was dimensional change in the pit with the ultimate depth of the mine increasing to 372 metres. Rampura Agucha mine has initiated a number of steps to optimise the strip ratio. During fiscal 2013, approximately 89.4% of the zinc was recovered to the zinc concentrate, while 57.6% of the lead and 64.2% of the silver was recovered from the metal contained in the ore mined. The strip ratio is expected to increase to about 17.20 tons in fiscal 2014, considering the anticipated overburden removal of about 82.56 million tons and ore production of 4.8 million tons from the open-pit. Rampura Agucha mine has initiated a number of steps to optimize the strip ratio. We expect to produce 1.2 million tons of developmental ore from the underground mine in fiscal 2014.

In fiscal 2013, 114,435 dry metric tons of zinc concentrate at a grade of 51.1% was sold to third parties from the Rampura Agucha mine. In fiscal 2013, no lead concentrate was sold to third parties from the Rampura Agucha mine. The revenue realized from zinc concentrate sales was Rs. 4,375 million ($ 80.2 million).

The gross book value of the Rampura Agucha mine’s fixed assets and mining equipment (including assets related to the Rampura Agucha’s underground mining operations and the Kayar mine) was Rs. 27,213.0 million ($ 499.1 million) as of March 31, 2013.

Power is mainly supplied from a 234 MW captive power plants at Chanderiya, a 160 MW captive power plant at Dariba and a 80 MW captive power plant at Zawar with two backup 5 MW generators on-site. Water to the site is pumped 57 km from radial wells in the Banas River. A water extraction permit has been granted, which provides sufficient water for a production rate of approximately 6 mtpa.

Rajpura Dariba and Sindesar Khurd

Rajpura Dariba is a medium sized underground lead-zinc mine and processing facility located northeast of Udaipur in the Rajsamand district of Rajasthan, Northwestern India.

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The ore at Rajpura Dariba occurs in the north, south and east lenses which are typically 15 meters to 50 meters thick, are conformable with the stratigraphy and dip approximately 65 degrees to the east. The lenses have strike lengths of 500 to 900 meters. They lie within a synclinal structure with a north-south axis, which is overturned to the west with steep easterly dips. The lead and zinc mineralization is hosted within silicified dolomites and graphite mica schists. The main ore minerals are galena and sphalerite, with minor amounts of pyrite, pyrrhotite and silver bearing tetrahedrite-tennantite. The proven and probable reserves for the Rajpura Dariba mine as of March 31, 2013 are 10.7 million tons at 6.5% zinc, 1.6% lead and 56 particles per million silver after depletion.

Mining at Rajpura Dariba commenced in 1983 and is carried out using the vertical crater retreat method and blasting hole mining method with mined out stopes backfilled with cemented classified mill tailings. In certain areas the ground conditions adversely affect slope stability and dilution. These ground conditions are the result of the weak graphitic nature of the shear zone combined with the dissolution of fractured and sheared dolomites by percolating acidic groundwater derived for overlying adjacent oxidized zones. HZL’s Rajpura Dariba’s mine permit is valid until May 2030. The mine is serviced by two vertical shafts approximately 600 meters deep. The main shaft is six meters in diameter and the auxiliary shaft is 4.5 meters in diameter. The main shaft has the capacity to hoist 1.0 million tpa of ore and is equipped with a modern multi-rope Koepe winder. All personnel and materials are hoisted in a large counterbalanced cage which is operated by the koepe winder. The surface infrastructure includes ventilation fans, compressors and ore loading facilities.

The ore is crushed underground before being hoisted to the surface. It is then crushed again and milled before undergoing a lead flotation process incorporating roughing, scavenging and three stages of cleaning. A facility exists at the mine to direct lead rougher concentrate to multi-gravity separators in order to reduce the graphite levels in the final concentrate as required. The final lead concentrate is thickened and filtered and subsequently stored and sent to HZL’s Chanderiya and Dariba lead smelters.

Lead flotation tails are sent to the zinc flotation process which comprises roughing, scavenging and three stages of cleaning. The facility is able to direct zinc rougher concentrate to column flotation cells to reduce silica levels in the final concentrate if required. Zinc concentrates are thickened, filtered and stored prior to dispatch to HZL smelters. Zinc flotation tails proceed to a backfill plant where they are cycloned with the underflow proceeding to intermediate storage where cement is added in preparation for use as underground fill. The cyclone overflow is thickened to recover water ahead of disposal in the tailings dam.

Power for the mine is supplied largely from HZL’s 160 MW captive power plants at Dariba and through a contract with Ajmer Vidyut Vitran Nigam Limited, a state-owned entity. Water is sourced via a 22-kilometer long pipeline from the Matri Kundia Dam on the seasonal Banas River as well as from underground. Water supply has been erratic in the past requiring supplemental supplies to be delivered by truck.

The gross book value of the Rajpura Dariba mine’s fixed assets and mining equipment is approximately Rs. 2,890 million ($ 53.0 million) as of March 31, 2013 and at Sindesar Khurd mine the gross book value is approximately Rs. 8,470 million ($ 155.4 million) as of March 31, 2013.

As of March 31, 2013, HZL estimates the remaining mine life at Rajpura Dariba to be over 10 years based on (i) reserves; and (ii) planned production which is determined on the basis of a life-of-mine plan. An exploration programme is also underway to identify new resources with the potential to be upgraded to reserves, and has been and continues to be focused on maintaining the reserve position after annual mining depletion. The drill spacing for proved reserves was approximately 30 metres while for probable reserves was less than 60 metres.

The average grade for each individual stope was defined using standard parameters for internal waste and dilution and a geological cut-off grade of 3.0% combined lead and zinc, though the mineralization generally has a sharp natural contact. The in-situ quantities and qualities were adjusted by applying a mining loss factor of 10.0%, a dilution factor of between 12.0% and 20.0% depending on ground conditions. These parameters are based on a reconciliation of historical production. Stopes with average grades below this economic cut-off grade were excluded from the reserve estimate. The final reserve estimate is the sum of the stopes with an average grade above the economic cut-off limit. As the stopes are all accessed using the existing infrastructure and as there is sufficient capacity on the tailings dam, the capital expenditure was limited to the replacement of mining equipment and was therefore considered not to have a material impact on the cut-off grade.

In fiscal 2013, 5,135 dry metric tones of zinc concentrate at a grade of 50.2% was sold to third parties from the Rajpura Dariba mines. The revenue realized from zinc concentrate sales was Rs. 170 million ($ 3.1 million). In fiscal 2013, no lead concentrate was sold to third parties from the Rajpura Dariba mines.

The latest addition to the Rajpura Dariba mining operation is the Sindesar Khurd underground mine deposit that was explored during the years of 1992 to 1995. Mine production began at the Sindesar Khurd mine in April 2006 and HZL’s mining permit is valid until 2029.

The Sindesar Khurd mine is a large scale underground mine. The Sindesar Khurd mine lies on the same geological belt as the Rajpura Dariba mine. The mine is approachable from Rajpura Dariba mines by a metalled road.

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The Sindesar Khurd deposit consists of one, up to 50 meters thick, lens with a fairly complex shape and internal grade distribution due to intercalation of richer dolomite-hosted ore and low-grade mineralization in mica schists. In addition, there are discrete narrow ‘minor’ lenses distributed parallel to main lens all around at various locations and varied depth typically classified as auxiliary lenses. The principal ore forming minerals are sphalerite and galena and the rock forming minerals are calcite, dolomite, quartz, mica, garnet and tremolite. The mineralization is strata-bound (in metamorphous dolomite) and is structurally controlled (possibly concentrated limb shears of secondary faults).The mineralization has been described as of sedimentary exhalative deposit or SEDEX origin.

The mineralization has been traced over almost 2.5 kilometers along strike and 1.1 kilometer vertical extension. In the mine area, dip is steep westerly, while the dip turns into easterly direction in the lower-southern part of the deposit. The current “mine block” extends over 700 meters along strike and up to 225 meters depth extension.

The deposit has been drilled to a depth of approximately 1100 meters below surface and the ore body is traced over approximately two kilometers along the strike with an 1100 meters vertical extension. While the deposit is still open in depth in the southern extension of the present mine block, the area below the mine block and towards the north extension only has narrow and low to moderate grade mineralization intersected.

Exploration at the south part of Sindesar Khurd has been ongoing since March 2005 with a drilling program aimed at increasing the size of the ore body. A continuous exploration program from underground is also underway with the aim to upgrade the reserve status so that the stopes planned to be mined out shall be extracted with maximum recovery and thereby reducing mining losses. The drill spacing for proven reserves was 12.5-25 meters while for probable reserves was less than 25-50 meters. A total of 268 holes and 1,200 meters of drilling below surface has been accomplished till March 31, 2013.

According to JORC reserves and resources statement, the proven and probable reserves for the Sindesar Khurd mine as of March 31, 2013 is 21.4 million tons with 4.5% zinc and 2.5% lead and 146 particles per million silver after depletion. The in-situ quantities is adjusted by applying a mining loss factor of 10.0% and dilution factor of 20.0%.

Access to the mine is through an incline shaft and declines (North and South) from the surface while ore is hauled up through the declines by low profile dump truck or LPDTs. The ore body is accessed via horizontal drives on six levels. The mine currently utilises Sub Level Open Stoping (“SLOS”) mining method with stope panels varying from 30 to 50 metres in strike.

Lead and zinc concentrates are sent to their respective high rate thickeners installed each for lead concentrate and zinc concentrate generated from 2.0 million ton per annum concentrator plant at Sindesar Khurd mine. Tailing dewatering and disposal section comprises of hydro cyclone, tailing thickener, neutralization tank, pumping of tailing to tailing pond and reclaimed water pumping. Lead and zinc concentrates are thickened, filtered and stored prior to dispatch to HZL smelters.

As of March 31, 2013, HZL estimates the remaining mine life at Sindesar Khurd to be 8 years based on (i) reserves; and (ii) planned production which is determined on the basis of a life-of-mine plan.

Power for the mill and mine is supplied from HZL’s captive power plant recently commissioned at Dariba itself. Water is sourced via a 66 kilometer long pipeline from the Matri Kundia Dam in Chittorgarh and Manasi Wakal dam in Udaipur.

In fiscal 2013, 554,354 tons of ore at a grade of 5.4% zinc and 1.3% lead ore was mined at Rajpura Dariba mine which produced 39,860 tons of zinc concentrate at 50.3% zinc, 9,164 tons of lead concentrate at 42.7% lead and 2,201 grams per ton of silver, and 13,623 tons of bulk concentrate at 37.6% zinc and 8.7% lead with 83.5% of the zinc being recovered in the zinc concentrate and 70.1% of the lead and 75.9% of the silver.

In fiscal 2013, 1,585,150 tons of ore at a grade of 3.8% zinc and 2.4% lead ore was mined at the Sindesar Khurd mine which produced 101,480 tons of zinc concentrate at 51.8% zinc, 60,164 tons of lead concentrate at 53.4% lead and 2,465 grams per ton of silver with 86.3% of the zinc being recovered in the zinc concentrate and 85.4% of the lead and 82.5% of the silver.

Zawar

Zawar consists of four separate mines, Mochia, Balaria, Zawar Mala and Baroi. The deposit is located in Udaipur city, in Udaipur district of Rajasthan, in Northwest India. The deposits lie within a 36.2 square kilometers mining lease granted by the state government of Rajasthan, India, which expired on March 29, 2010. An application to the Government of Rajasthan was submitted on November 25, 2008 for the renewal of the mining lease. The mines are currently operating under deemed renewal. As of January 2013, mining activities at Mochia, Zawar Mala and Baroi mines have resumed, pursuant to in-principle approval from the Ministry of Environment and Forests (“ MoEF”) for forest diversion received on January 24, 2013. The mine plan for enhanced quantity was approved by the Indian Bureau of Mines (“IBM”) on August 21, 2009 and subsequently modified on 4 October 2012.

The four deposits at Zawar are hosted by low grade metamorphosed sediments consisting of greywackes, phyllites, dolomites and quartzites that unconformably overlay the Pre-Cambrian basement. The lead-zinc-pyrite mineralization is strata bound and occurs as vein-stringers reflecting the high level of fractures within the more competent dolomites. There are multiple ore bodies that are complex in some areas as the lenses split and enclose waste rock. The ore bodies are steeply dipping. Zawar uses the “sub-level open stoping mining method” and its variants for the majority of its production.

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Ore processing is carried out in a conventional comminution and flotation plant having facility for “differential” as well as “bulk flotation” of zinc & lead metals. The ore is crushed primarily underground and then hoisted to the surface. Thereafter, the ore is crushed to 15mm in size before being milled to 74 microns. In the differential flotation process, milled ore is conveyed separately to two lead flotation circuits and undergoes a process incorporating roughing, scavenging and cleaning. Final lead concentrate is thickened and filtered and then stored before dispatch to the Chanderiya lead smelter. Lead flotation tails proceed to two zinc flotation circuits comprising roughing, scavenging and cleaning. Zinc concentrate is thickened and filtered, then stored and dispatched to the Debari and Chanderiya smelters. Zinc flotation tails are disposed in slurry form in designated tailings disposal area.

In the bulk flotation process milled ore is conveyed to the flotation circuit and undergoes a process incorporating roughing, scavenging and cleaning. Final bulk concentrate is thickened and filtered, and then stored before dispatch to the Chanderiya lead zinc smelter. Bulk flotation tails are disposed in slurry form in designated tailings disposal areas.

In fiscal 2013, approximately 304,680 tons of ore at 3.8% zinc and 1.1% lead was mined which produced 21,745 tons of bulk concentrate at 44.1% zinc and 12.1% lead. The recovery of zinc and lead during fiscal 2013 was 91.8% and 89.0%, respectively.

The gross book value of the Zawar fixed assets and mining equipment was approximately Rs. 1,635.0 million ($30.0 million) as of 31 March 2013 and of the new 80 MW coal-based thermal captive power plant at Zawar was Rs. 3,154.0 million ($ 57.8 million).

Power is supplied through a combination of an 80 MW thermal coal-based captive power plant commissioned in December 2008 and a 6 MW captive power plant. The balance power from the 80 MW thermal coal-based captive power plant is supplied to our Debari hydrometallurgical zinc smelter and the excess power is sold to third parties.

Water consumption is controlled by an active water conservation program with supplemental water supplies sourced from a dedicated 300 million cubic foot dam.

As of March 31, 2013, HZL estimates the remaining mine life of the Zawar mine to be 5 years based on (i) reserves; and (ii) planned production which is determined on the basis of a life-of-mine plan. The focus of mine exploration at Zawar is to replenish the ore reserves that are being depleted through exploration activities and to look for new mineralised areas to enhance production capacity. A surface drilling programme is underway to locate deeper resources below -100 MRL up to -500 MRL. Underground exploratory drilling is carried out on a grid of between 25 metres and 30 metres which is then infilled to 12 metres and 15 metres after completing the development for final delineation of ore bodies. Past exploration has outlined additional in-mine mineral resources which require further delineation to add to reserves and further extend the mine life.

Kayar Mine

The Kayar lead-zinc mine is located in Kayar village which is in the North East part of Ajmer city, Rajasthan.

The Kayar lead-zinc deposit was initially prospected by Airborne Mineral Survey and Exploration wing of Geological Survey of India and drilling commenced from August 1988 and was completed in December 1991. Mineral Exploration Corporation Limited took up the project work on promotional basis, started the exploration and a total of 9,585 meters of drilling was achieved in 42 completed bore holes during 1994-1997. The detailed exploration of Kayar deposit was commenced by HZL in the month of June 1999 and continued till date. The major rock type in the area is quartz-mica schist. There are three lenses of the ore, the main lens, K1A lens and S1 lens. The main lens ranges in average width from 5 meters to about 40 meters and a maximum strike of 900 meters. K1A lens has strike of 250 meters and the average width of 4 meters. S1 lens has strike of 170 meters and width of 3 meters. According to the reserves and resources report, the proven and probable reserves for Kayar mine as of March 31, 2013 was 5.4 million tons at 10.0 % zinc and 1.5% lead. As of March 31, 2013, HZL estimates the remaining mine life of the Kayar mine to be over 6 years based on (i) reserves; and (ii) planned production which is determined on the basis of a life-of-mine plan.

The ground breaking of the mine started on June 11, 2011. A decline is being developed to access the ore body. The mine is designed to produce developmental ore 1 million ton capacity by fiscal 2016. Development ore production was achieved in the second quarter of fiscal 2013, and the mine is scheduled to commence operation by fiscal 2014. The mining method to be practised in Kayar will be Single Sublevel stoping (Bench Stoping) in the steeper portion of the deposit while transverse stoping method at flat portion along with rock filling / cemented rock filling. About 37 kilometers of development is planned by 2016. The mining is highly mechanized with 10 T and 17 T diesel load haul dump vehicles or LHDT coupled with 30 T / 50 T low profile dump trucks. An additional 50 T electric low profile dump trucks will be deployed as an environmental measure in the future. The run of mine will be stacked in the surface and transported via truck/rail to the Rampura Agucha mine for beneficiation.

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A 480.45 hectare mining lease was granted to Kayar mine by the State of Rajasthan and is valid until 2018, subject to further renewal. Mining leases are governed in accordance with the provisions of the lease agreement, the various mining laws and concession rules promulgated by the state and central government. We have also obtained consent from the Indian Bureau of Mines and the MoEF to produce 1000 metric tons per day at Kayar mine and have submitted a further application to increase the Kayar mine’s capacity by 1 million tons per annum. We have also obtained consents under various environmental laws to operate the mine, including from the State Pollution Control Board.

A 33 KV power line was commissioned on February 2, 2012 to meet the constructional power requirements of the mine. The power during full capacity is proposed to be supplied from our captive power plants.

Summary of Mine Reserves

The following table sets out HZL’s proven and probable zinc and lead reserves as of March 31, 2013:

	Proven Reserves								Probable Reserves								Total Proven and Probable Reserves								SIIL Owners hip		Reserve Life
Mine	Quantity		Zinc Grade		Lead Grade		Silver Grade		Quantity		Zinc Grade		Lead Grade		Silver Grade		Quantity		Zinc Grade		Lead Grade		Silver Grade
	(million tons)		(%)		(%)		(g/t)		(million tons)		(%)		(%)		(g/t)		(million tons)		(%)		(%)		(g/t Ag)		%		Years
Rampura Agucha		15.3		14.5		2.0		54		47.4		13.4		1.8		61		62.7		13.6		1.8		59				15
Rajpura Dariba		7.6		6.4		1.7		55		3.1		6.8		1.3		57		10.7		6.5		1.6		56				10
Sindesar Khurd		1.7		4.1		2.3		118		19.7		4.5		2.5		148		21.4		4.5		2.5		146				8
Zawar		3.7		4.2		2.0		34		5.9		3.4		2.0		35		9.6		3.7		2.0		35				5
Kayar										5.4		10.0		1.5		30		5.4		10.0		1.5		30				6
Total		28.3		10.4		1.9		56		81.5		10.0		1.9		78		109.8		10.1		1.9		72		64.9

References to “g/t” are grams per tonne

Additional information:

(1) The reserve estimates for each of the mines have been prepared by the mining engineer of the respective operation and the same have been certified by SRK Consulting UK. The reserves presented for the HZL mines have been adjusted to incorporate losses for mine dilution and mining recovery according to the JORC code.

(2) The cut off grade used for zinc and lead in (i) Rampura Agucha mine is 2.0%, (ii) Rajpura Dariba is 3.0%, (iii) Sindesar Khurd is 3.0% and (iv) Zawar is 3.0%.

(3) The metallurgical recovery factor for the following HZL mines is as follows:

Mine	Metallurgical Recovery Factor
Rampura Agucha
—    Zinc	89.4%
—    Lead	57.6%
Rajpura Dariba
—    Zinc	83.5%
—    Lead	70.1%
Sindesar Khurd
—    Zinc	86.3%
—    Lead	85.4%
Zawar
—    Zinc	91.8%
—    Lead	89.0%

(4) The historic three year average commodity price for zinc, lead and silver considered for evaluation of reserves is $ 2,077 per ton, $ 2,209 per ton and $29.9 per oz, respectively. The historic currency conversion factors that were used to estimate the reserves was US dollar per Indian Rupee 49.3.

(5) The reserve quantities disclosed are for the entire mine and our share in the reserve quantities is 64.9%.

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Smelters

Overview

The following table sets forth the total capacities as of March 31, 2013 at HZL’s Chanderiya, Debari, Vizag, Zawar and Dariba facilities:

	Capacity
Facility	Zinc		Lead		Silver		Sulphuric Acid		Captive Power
	(tpa)		(tpa)		(tpa)		(tpa)		(MW)
Chanderiya(1)		525,000		85,000		168		828,500		248.8
Debari		88,000		—		—		419,000		14.8
Vizag		56,000		—		—		91,000		—
Zawar		—		—		—		—		86.0
Dariba		210,000		100,000		350		404,500		160.0
Total		879,000		185,000		518		1,743,000		509.6

(1) The Haridwar plant melts and casts zinc ingots from zinc cathodes produced in the Chanderiya and Dariba smelter and the Pantnagar plant melts and casts zinc and lead ingots from zinc and lead cathodes produced in the Chanderiya and Dariba and therefore their production capacities do not increase the total production capacity of HZL’s facilities.

Chanderiya

The Chanderiya facility is located approximately 120 kilometers east of Udaipur in the State of Rajasthan in Northwest India. The facility contains four smelters, two associated captive power plants, two sulphuric acid plants, and a silver refinery:

• an ISP™ pyrometallurgical lead-zinc smelter with a capacity of 105,000 tpa of zinc and 35,000 tpa of lead that was commissioned in 1991;

• two RLE hydrometallurgical zinc smelters with a capacity of 170,000 tpa each that were commissioned in May 2005 and December 2007. Pursuant to the improvement in operational efficiencies which was completed in April 2008, the zinc smelting capacity increased by 40,000 tpa to 210,000 tpa each;

• an Ausmelt™ lead smelter with a capacity of 50,000 tpa that was commissioned in February 2006;

• associated 154 MW and 80 MW coal-based captive power plants commissioned in May 2005 and April 2008, respectively;

• a 14.8 MW fuel based captive power plant transferred from Debari in March 2009 and which was originally commissioned at Debari in March 2003;

• two sulphuric acid plants with a total capacity of 828,500 tpa of sulphuric acid; and

• a silver refinery with a capacity of 168 tpa silver ingots.

Concentrate requirements for the facility are supplied by HZL’s mines. The 154 MW, 80 MW and 14.8 MW captive power plants at Chanderiya provide all of the power for the facility. The captive power plants require approximately 100,000 metric tons of coal at 6,000 gross calorific value per month, which is currently met through imports, mostly from Indonesia.

In addition, HZL secured in January 2006, as part of a consortium with five other partners, the award of a coal block from the Madanpur Coal Block which is expected to help meet the coal requirements of its captive power plants in the future. HZL’s share of the coal block is 31.5 million tons which, according to the Ministry of Coal, are proved reserves with ash content ranging from 28.7% to 47.0% and with gross calorific value ranging from 3,865 kilo calories per kilogram to 5,597 kilo calories per kilogram. On June 16, 2008, the Ministry of Coal approved the consortium’s plan for mining the coal block. The coal block is located in the Hasdev Arand coal field of Chhattisgarh which falls under moderate to dense forest. The environmental clearance and approval for the forest diversion was rejected by the MoEF and accordingly, a letter of rejection was issued by the State government on January 23, 2010. In February 2012, the HZL consortium resubmitted its application, which requires state government and MoEF approval. After being denied access to the Hasdev Arand field, HZL continues to import coal from third-party suppliers as it had been during or it may pursue alternative sources. In either event, HZL does not anticipate any difficulty in obtaining an adequate supply of coal. HZL has also been awarded 2.4 million tons of coal linkage by the Ministry of Coal of the GoI, which will enable it to source coal from mines of Coal India Limited (“Coal India”) (catering to approximately a quarter of its total coal requirements), although access to this coal has been stopped since April 2013. Due to the scarcity of coal available with Coal India Limited, it has been supplying only 50.0% of the linkage quantity. HZL’s operations source their back-up power from liquid fuel-based captive power plants or from local power companies. The liquid fuel is sourced from third-party suppliers on yearly contracts.

Dariba

The Dariba hydrometallurgical zinc smelter is located in the Rajsamand district of Rajasthan in Northwest India. This hydrometallurgical zinc smelter was commissioned in March 2010 and has a capacity of 210,000 tpa. The Dariba facility also includes a 306,000 tpa sulphuric acid plant. In July 2011, we commissioned a new 100,000 tpa lead smelter in July, 2011 and it also includes a 98,500 tpa sulphuric acid plant. A majority of the power requirements of the facility is sourced from the160 MW coal-based captive power plant at Dariba.

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Debari

The Debari hydrometallurgical zinc smelter is located in the State of Rajasthan. The hydrometallurgical zinc smelter was commissioned in 1968, uses Roast-Leac-Electrowin (RLE) technology and has a capacity of 80,000 tpa which was increased to 88,000 tpa in April 2008 pursuant to improvements made to its operational efficiencies. The Debari facility also includes a 419,000 tpa sulphuric acid plant. A majority of the power requirements of the facility is sourced from the coal-based captive power plant at Chanderiya and the balance is sourced from an on-site liquid fuel-based 14.8 MW captive power plant commissioned in March 2003. The liquid fuel is procured from domestic oil-producing companies through a tender process for a yearly contract.

Vizag

The Vizag hydrometallurgical zinc smelter is located in the State of Andhra Pradesh in Southeast India. The hydrometallurgical zinc smelter was commissioned in 1977, uses older RLE technology and has a capacity of 56,000 tpa. The Vizag facility also includes a 91,000 tpa sulphuric acid plant. With effect from February 2012, the operations at Vizag have been suspended due to its high cost structure.

Haridwar

The zinc ingot melting and casting plant in Haridwar in the State of Uttarakhand was commissioned in July 2008. This plant melts and casts zinc ingots from zinc cathodes produced in the Chanderiya smelter and therefore its production capacity does not increase the total production capacity of HZL’s facilities. The capacity of Haridwar zinc plant is currently 292,000 tpa.

Pantnagar

The Pantnagar plant, which was located in Pantnagar in the state of Uttarakhand, India, includes a 350 tpa silver refinery that was commissioned in December, 2011 and 400,000 tpa zinc ingot (where we have received approvals to increase the capacity to 465,000 tpa) and 100,000 tpa lead ingot melting and casting plant that was commissioned in March 2012. The Pantnagar plant melts and casts zinc and lead ingots from zinc and lead cathodes that are produced by our Chanderiya and Dariba smelters. Therefore the Pantnagar plant does not increase the total production capacity of HZL’s facilities except in so far as it increases HZL’s silver producing capacity to 518 tpa.

Production Volumes

The following table sets out HZL’s total production from its Chanderiya, Debari and Vizag facilities for the three years ended March 31, 2013:

		For the Year Ended March 31,
Facility	Product	2011		2012		2013
	(tons, except for silver which is in kgs)
Chanderiya
—ISPTM pyrometallurgical lead-zinc smelter	Zinc		90,298		90,101		80,063
	Lead(2)		20,562		22,262		16,699
First hydrometallurgical zinc smelter	Zinc		179,276		185,491		179,232
Second hydrometallurgical zinc smelter	Zinc		154,844		188,429		183,780
AusTM lead smelter	Lead		36,733		39,422		36,953
Silver refinery	Silver		148,082		163,328		139,263
Sulphuric acid plants	Sulphuric acid		600,753		661,641		620,268
Dariba
Hydrometallurgical zinc smelter (2)	Zinc		164,551		198,204		165,403
Lead Smelter (3)	Lead				30,415		64,664
Silver Refinery (4)	Silver				43,616		234,637
Sulphuric acid plant	Sulphuric acid		218,483		266,671		257,205
Debari
Hydrometallurgical zinc smelter (2)	Zinc		84,839		68,046		68,445
Sulphuric acid plant	Sulphuric acid		306,949		332,489		316,006
Vizag
Hydrometallurgical zinc smelter	Zinc		38,663		28,445		—
Sulphuric acid plant	Sulphuric acid		65,514		49,787		—
Total	Zinc		712,471		758,716		676,923
	Lead(1)		57,295		92,099		118,316
	Silver		148,082		206,944		373,900
	Sulphuric acid		1,192,699		1,310,588		1,193,479

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Notes: + Vizag operations are currently suspended.

(1) Excludes lead containing a high content of silver (high silver lead) produced from the pyrometallurgical lead-zinc smelter for captive use, which was 5,898 tons, 6,625 tons and 6,500 tons in fiscals 2011, 2012 and 2013, respectively.

(2) The hydrometallurgical zinc smelter was commissioned in March 2010.

(3) The Dariba lead smelter was commissioned in July 2011

(4) The silver refinery at Pantnagar was commissioned in December 2011.

The following table sets out HZL’s total ore, zinc concentrate, lead concentrate and bulk concentrate production for the three years ended March 31, 2013:

		Year Ended March 31,
Mine (Type of Mine)	Product	2011		2012		2013
		(tons, except percentages)
Rampura Agucha (Open-pit)	Ore mined		6,149,165		5,947,081		6,177,679
	Ore grade –Zinc		13.1%		12.0%		12.3%
	Lead		2.2%		1.8%		1.8%
	Recovery –Zinc		88.4%		90.6%		89.4%
	Lead		54.6%		56.6%		57.6%
	Zinc concentrate		1,319,245		1,261,570		1,334,412
	Lead concentrate		117,272		101,629		110,441
Rajpura Dariba (Underground)	Ore mined		496,234		587,600		554,354
	Ore grade – Zinc		5.7%		5.4%		5.4%
	Lead		1.5%		1.3%		1.3%
	Recovery – Zinc		82.6%		83.3%		83.5%
	Lead		72.2%		70.8%		70.1%
	Zinc concentrate		40,246		41,512		39,860
	Lead concentrate		7,937		9,425		9,164
	Bulk concentrate(1)		10,322		20,003		13,623
Sindesar Khurd (Underground)	Ore mined		654,050		1,303,050		1,585,150
	Ore grade – Zinc		5.4%		4.4%		3.8%
	Lead		2.2%		2.2%		2.4%
	Recovery – Zinc		81.9%		84.0%		86.3%
	Lead		78.9%		83.0%		85.4%
	Zinc concentrate		53,118		100,683		101,480
	Lead concentrate		18,959		49,455		60,164
	Bulk concentrate(1)		3,943
Zawar (Underground)	Ore mined		240,550		204,150		304,680
	Ore grade – Zinc		3.7%		3.8%		3.8%
	Lead		0.9%		0.5%		1.1%
	Recovery – Zinc		88.0%		90.8%		91.8%
	Lead		70.7%		83.4%		89.0%
	Zinc concentrate		—		—		—
	Lead concentrate		—		—		—
	Bulk concentrate(1)		55,265		22,007		21,745
Total	Ore mined		7,539,999		8,041,881		8,621,863
	Zinc concentrate		1,412,609		1,403,765		1,475,752
	Lead concentrate		144,168		160,509		179,769
	Bulk concentrate(1)		69,530		42,010		35,368

Note:

(1) Bulk concentrate is concentrate that contains both zinc and lead.

(2) Includes mining operations at Kayar mine.

Principal Raw Materials

The principal inputs of HZL’s zinc smelting business are zinc and lead concentrates and power. HZL has in the past been able to secure an adequate supply of the principal inputs for its business.

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Zinc and Lead Concentrates

Zinc and lead concentrates are the principal raw material of HZL’s smelters. HZL’s lead-zinc mines have normally provided all of its requirements for zinc and lead concentrates in the past. However, in fiscal 2013 was an exception with 2.5% and 14.5% of the zinc and lead production respectively being through sourced concentrates, as the mined metal production was relatively lower in the first half of the year in line with the mine plan. We expect HZL’s mines to continue to provide all of its zinc and lead concentrate requirements for the foreseeable future.

Power

Most of HZL’s operations are powered by the coal-based captive power plants at Chanderiya, for which HZL imports the necessary thermal coal from a number of third party suppliers. HZL has outsourced the day-to-day operation and maintenance of its captive power plants at Chanderiya, Dariba, Debari and Zawar. HZL has also been awarded 2.43 million tons of coal linkage, by the Ministry of Coal, which will enable us to source coal from mines of SECL. Due to limited availability, Coal India has been supplying only 50.0% of the 2.4 million tones linkage quantity. As of April 2013, the coal supplies to Chanderiya have stopped due to pending decision at Ministry of Coal on the linkages for plants which have been allocated coal blocks, although supplies to HZL’s power plants at Dariba and Zawar are continuing.

HZL’s remaining operations source their required power from liquid fuel-based captive power plants or from local power companies. The liquid fuel is sourced from third party suppliers on yearly contracts.

Metallurgical Coke

In addition, HZL’s pyrometallurgical smelter at Chanderiya requires metallurgical coke that is used in the smelting process. HZL currently sources its metallurgical coke requirements from third parties under long-term contracts and the open market.

Distribution, Logistics and Transport

Zinc and lead concentrates from HZL’s lead-zinc mines are transported to the Chanderiya and Debari smelters by road. Zinc concentrate may also be shipped for export. Zinc and lead ingots, silver and sulphuric acid by-products are transported primarily by road to customers in India directly or via HZL’s depots. Zinc and lead cathode is mostly transported by rail to its processing and refining facilities in Uttarakhand state in north India. Zinc and lead ingots are transported for exports to ports in India primarily by rail, from where they are loaded on ships.

Sales and Marketing

HZL’s 10 largest customers accounted for approximately 36.2%, 39.3% and 40.3% of its revenue in fiscal 2011, 2012 and 2013 respectively. No customer accounted for greater than 10.0% of HZL’s Zinc business revenue in fiscal 2011, 2012 and 2013.

HZL’s marketing office is located in Mumbai, and it has field sales and marketing offices in most major metropolitan centers in India. In fiscal 2013, HZL sold approximately 77.4% of the zinc and lead metal it produces in the Indian market and exports approximately 22.6% of our Zinc India segment revenue.

Approximately 97.0% of the zinc metal that HZL produced in fiscal 2013 was sold under annual contracts specifying quantity, grade and price, with the remainder sold on the spot market. The contract sales price is linked to prevailing LME price with an additional physical market premium. Thus, the price that HZL receives for its zinc is dependent upon, and subject to fluctuations in, the LME price.

Projects and Developments

HZL has been actively conducting exploration, which increased net Ore Reserves across all mines to 109.7 million tons in fiscal 2013. Based on long-term evaluation of assets and in consultation with mining experts, we have finalised the next phase of growth, which will involve sinking of underground shafts and developing underground mines. The plan comprises developing a 3.75 mtpa underground mine at Rampura Agucha mine and expanding the Sindesar Khurd mine from 2.0 mtpa to 3.75 mtpa, Zawar mines from 1.2 mtpa to 5.0 mtpa, Rajpura Dariba mine from 0.6 mtpa to 1.2 mtpa and Kayar mine from 0.35 mtpa to 1.0 mtpa. The plan also involves the opening up of a small new mine at Bamnia Kalan in the Rajpura Dariba belt. The growth plan will increase mined metal (MIC) production capacity to 1.2 mtpa. The estimated cost for these projects amounts to Rs. 79,400 million ($ 1,456.3 million). As of March 31, 2013 we had spent Rs. 10,222 million ($ 187.5 million) on these projects. These projects are financed from internal sources.

Market Share and Competition

HZL is the only integrated zinc producer in India and had a market share by sales volume of the Indian zinc market of 82.0% in fiscal 2013, according to ILZDA. The only other zinc producer in India, but not integrated and depends on imports of zinc concentrate, is Binani Zinc Limited, which had a market share of 5.0% of the Indian market in terms of sales volume in fiscal 2013, according to ILZDA. Imports and secondary sources accounted for the remaining 13.0% market share, according to ILZDA.

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Zinc is a commodity product and HZL competes primarily on the basis of price, time of delivery and location. Zinc metal also faces competition as a result of substitution of materials, including aluminium, stainless steel and other alloys, plastics and other materials being substituted for galvanized steel and epoxies, paints and other chemicals being used to treat steel in place of galvanization in the construction market.

HZL is the only primary lead producer in India, with competition coming from imports which provide a substantial majority of the lead consumed in India. Lead is a commodity product and HZL competes primarily on the basis of price, time of delivery and location.

Our Zinc International Business

Overview

On May 10, 2010, Sterlite agreed to acquire the zinc business of Anglo American Plc for a total consideration of Rs. 69,083 million ($ 1,513.1 million). The zinc business comprises of:

(1) a 100.0% stake in Skorpion which owns the Skorpion mine and refinery in Namibia;

(2) a 74.0% stake in BMM, which includes the Black Mountain mine and the Gamsberg Project, in South Africa; and

(3) a 100.0% stake in Lisheen, which owns the Lisheen mine in Ireland.

On December 3, 2010, we announced the completion of the acquisition of 100.0% stake in Skorpion by SIL, a wholly-owned subsidiary of Sterlite for a consideration of Rs. 32,098 million ($ 706.7 million). On February 4, 2011, we announced the completion of the acquisition of the 74.0% stake in BMM for a consideration of Rs. 11,529 million ($ 250.9 million), net of refund of $ 9.3 million. On February 15, 2011, we announced the completion of the acquisition of 100.0% stake in Lisheen for a consideration of Rs. 25,020 million ($ 546.2 million). The purchase price for the zinc business was paid in US dollars and has been converted into Indian Rupees based on the exchange rate as on the date of each such acquisition. The zinc business of Anglo American Plc acquired by us has been categorised as a separate reportable segment “Zinc- International”.

Skorpion

Overview

THL Zinc Namibia Holdings Proprietary Limited was incorporated on June 16, 1998 and its headquarters is at the Skorpion Zinc mine site, which is situated 25 kilometers north of Rosh Pinah Namibia. Skorpion’s registered office is situated at 24 Orban Street, Klein Windhoek, Namibia. Skorpion’s wholly owned subsidiaries are: Skorpion Zinc (Proprietary) Limited, Namzinc (Proprietary) Limited and Skorpion Mining Company (Proprietary) Limited. Skorpion Zinc (Proprietary) Limited is an investment holding company, owning the entire share capital in Namzinc (Proprietary) Limited and Skorpion Mining Company (Proprietary) Limited. Namzinc (Proprietary) Limited operates a zinc refinery, which procures oxide zinc ore from Skorpion Mining Company (Proprietary) Limited, which in turn extracts the ore from an open pit zinc deposit. Skorpion Mining Company (Proprietary) Limited is a member of the Chamber of Mines in Namibia.

Principal Products

Skorpion produces SHG zinc ingots of LME grade. Skorpion offers the product to customers through one-year contracts, covering the sale of all zinc ingots produced at the integrated mine and refinery of Skorpion.

Principal Facilities

The following map shows the location of Skorpion mines in Namibia:

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Mines

Skorpion Mines

The Skorpion Zinc Deposit is located in the southern Namib desert of Namibia, approximately 20 kilometers north-west of the small mining town of Rosh Pinah, 75 kilometers from the Atlantic coastline, and about 40 kilometers from the perennial Orange river, which forms the border with South Africa. The deposit lies just inside the “Sperrgebiet” or forbidden area, now known as Diamond Area 1. The extracted ore is sent to the refinery for further processing.

As of March 31, 2013, the remaining mine life of the Skorpion mine is approximately 4 years based on (i) reserves; and (ii) planned production which is determined on the basis of a life-of-mine plan. The Skorpion mine has an attached electrolytic refinery producing approximately 150,000 tons of SHG zinc ingots annually. Further opportunities to extend the life of the mine are currently being evaluated. Further opportunities to extend the life of the mine are currently being evaluated based on the sulphide ore bodies in the nearby areas. Skorpion is also working for possible conversion of the refinery from stand-alone oxide ore treatment to Sulphide ore treatment also.

Summary of Mine Reserves

The following table sets out the proved and probable zinc and lead reserves as of March 31, 2013:

	Proved Reserve				Probable Reserve						Total Proved and Probable Reserves							SIIL Interest		Reserve life
	Quantity		Zinc Grade		Lead Grade		Quantity		Zinc Grade		Lead Grade		Quantity		Zinc Grade		Lead Grade
	(million tons)		(%)		(%)		(million tons)		(%)		(%)		(million tons)		(%)		(%)	%		(Years)
Skorpion		5.24		9.42		—		0.49		7.58		—		5.73		9.26
Total		5.24		9.42		—		0.49		7.58		—		5.73		9.26			100		4

Additional information:

(1) The reserve estimates presented incorporate losses for mine dilution and mining recovery according to the JORC code.

(2) The cut-off grade used with our reserve estimate is 4.0%.

(3) The metallurgical recovery factor for Skorpion mine is 88.7%.

(4) The historic three year average commodity price was $ 2,077 per ton and currency conversion factor that were used to estimate our reserves was Namibian dollar per US dollar 7.72.

(5) The reserve quantities disclosed are for the entire mine.

Skorpion Facility

The following table sets out the total capacity of the facility at Skorpion as of March 31, 2013:

	Capacity
Facility	Zinc (tpa)
Skorpion		150,000
Total		150,000

Production Volumes

The following table sets out the total production from Skorpion zinc refinery for each of the twelve months ended December 31, 2010 and for the years ended March 31, 2012 and 2013:

Facility	Product		Twelve months ended December 31, 2010		Twelve months ended March 31, 2012*		Twelve months ended March 31, 2013*
			(tons)
Zinc refinery		Zinc		152,000		145,000		145,342

* We changed the financial year end for Skorpion to March 31, to be consistent with our financial reporting year end and, accordingly, we have presented the production volumes for this mine since fiscal 2012. Prior to our acquisition of the Skorpion mine, we presented the production volumes for the twelve months ended December 31, 2010. For the period January 1, 2011 to March 31, 2011, the production of zinc from the Skorpion mine was 36,467 tons.

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The following table sets out the total ore, zinc and lead concentrate production at the Skorpion mine, for the twelve months ended December 31, 2010 and for the years ended March 31, 2012 and 2013:

	(tons except percentage)
Mine (Type of Mine)	Product	Twelve months ended December 31, 2010		Twelve months ended March 31, 2012*		Twelve months ended March 31, 2013
Skorpion (Open-pit)	Ore mined		1,553,000		1,676,000		1,664,282
	Ore grade -Zinc		11.1%		10.4%		10.3%
	Recovery -Zinc		90.3%		91.4%		90.4%

* We changed the financial year end for Skorpion to March 31, to be consistent with our financial reporting year end and, accordingly, we have presented the production volumes for this mine since fiscal 2012. Prior to our acquisition of the Skorpion mine, we presented the production volumes for the twelve months ended December 31, 2010. For the period January 1, 2011 to March 31, 2011, the production of zinc and lead concentrate at the Skorpion mine was:

Product	January 1, 2011 to March 31, 2011 (tons except  percentage)
Ore mined		345,900
Ore grade – zinc		11.4%
Recovery – zinc		90.5%

Principal Raw Materials

The Skorpion mine uses 85,000 tons of sulphur per year, of which 95.0% is imported in bulk and shipped to Namibia through the port of Luderitz while the remaining sulphur is brought from South Africa in molten form via road.

Power

The maximum power demand of the Skorpion mine is 85 MW and power is supplied from South Africa and is governed by a tri-partite US dollar-denominated contract between Namibia Power Corporation (Proprietary) Limited, Eskom Holdings Limited and Skorpion, that currently links the annual increases in power costs to a US inflationary index.

Distribution, Transport & Logistics

Zinc at the Skorpion mine is cast into ingots for export and transported from the refinery to the port of Luderitz, approximately 300 kilometers away by trucks each having a maximum capacity of 35 tons. On the return trip from Luderitz, sulphur transported to site which is imported by ship. All other re-agents and consumables are trucked in by one transport contractor.

Sales and Marketing

Skorpion produces SHG zinc ingots. Trafigura Beheer B.V, a customer for Skorpion’s products, entered into a committed agreement to purchase all the zinc ingots produced at the Skorpion refinery. This agreement expired on December 31, 2012, since which, we have entered into one year annual contracts with this customer. Trafigura Beheer B.V accounted for more than 10.0% of Skorpions’s revenue in fiscal 2013.

All the zinc metal that Skorpion produced in fiscal 2013 was sold under annual contracts. The contract sales price is linked to prevailing LME price with an additional market premium. Thus, the price that Skorpion receives for its zinc is dependent upon and is subject to fluctuations in the LME price.

Market Share and Competition

According to Wood Mackenzie, the Skorpion mine has consistently been one of the largest zinc producing mines in the world and in 2012, it was ranked fourteenth in the world in terms of production volume with a cost base in the lower cost half of the zinc industry cost curve. The Skorpion mine produces only high-grade, high purity SHG zinc ingots that are registered on the LME.

Black Mountain Mining

Overview

BMM consists of the Black Mountain mine and the Gamsberg project. Exxaro Resources (through its wholly owned subsidiary, Exxaro Base Metals) holds the remaining 26.0% interest in BMM.

The predominant mining method is ramp in stope cut and fill. The planned production rate is 1.63 mtpa plant feed and the share hoisting capacity is approximately 140,000 tpm. All production stopes are backfilled and waste filled, integrated into the mining sequence.

During fiscal 2013, 1,518,540 tons of ore at 3.35% zinc and 3.70% lead were mined from the Black Mountain mine, which produced approximately 78,457 tons of zinc concentrate and 68,986 tons of lead concentrate, containing 38,577 tons of zinc and 48,883 tons of lead respectively. In addition, the Black Mountain mine also produced 3,799 tons of copper in concentrate and 51 tons of silver in concentrate.

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Principal Products

BMM produces zinc, copper and lead in concentrate and all the zinc and copper concentrate is shipped overseas. A small portion of the lead concentrate is sold locally, with the bulk shipped overseas.

By-products

Silver

Silver is a by-product of our copper and lead concentrate.

Principal Facilities

The following maps shows the specific location of the Black Mountain mine in Northern Cape in South Africa:

Mines

The zinc mine at Black Mountain is an underground operation, mining a polymetallic ore body, with an attached concentrator producing approximately 38,577 tons of zinc, 48,883 tons of lead, 3,799 tons of copper and 51 tons of silver in concentrate, annually. Exxaro Resources (through its wholly owned subsidiary, Exxaro Base Metals) holds the remaining 26.0% interest in Black Mountain.

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The Black Mountain mine is operated pursuant to mining right 58/2008 MR granted pursuant to the Mineral and Petroleum Resources Development Act, 28 of 2002 of South Africa which entitles Black Mountain Mining to mine for lead, copper, zinc and associated minerals in, on and under an area in the district of Namaqualand measuring 24,195 hectares for a period of 30 years from 2008 to 2038.

Four major stratiform exhalative sediment hosted base metal deposits are located in a 10 by 30 km area, centred on Aggeneys. The deposits are situated in the supracrustal rocks of the mid-Proterozoic age Bushmanland group of the Namaqualand metamorphic complex. The deeps ore body, which is currently being mined, is considered to start at 166 metres above mean sea level, with a down plunge extent of 1.1 km with the deepest position of the ore body being 1,680 metres below the surface. Mineralisation in the deeps is hosted by iron formations, massive sulphide and sulphide quartzite. The massive sulphide rock is either banded, massive or occurs as fine grained mylonite. Banding is expressed as 1-5 m thick sulphide bands alternating with quartz rich bands of similar thickness.

Underground drilling of the deeps ore body was started in December 2000 and were completed in 2012. As of March 31, 2013, BMM estimates the remaining mine life of the Black Mountain mine to be 4 years based on (i) reserves; and (ii) planned production which is determined on the basis of a life-of-mine plan.

The predominant mining method is ramp in stope cut and fill. The production rate is 1.6 mtpa plant feed and the shaft hoisting capacity is approximately 140,000 tons per month. All production stopes are backfilled and waste filled, integrated into the mining sequence.

Power at the zinc mine at Black Mountain is supplied from two 40 MVA transformers at the Eskom Aggeneys substation. Water is supplied by the Pelladrift Water Board, which supplies potable water to the mine from the Orange river for both human consumption and industrial water requirements.

Zinc, lead and copper concentrate from the mine are road hauled to a dedicated railway siding along a 170 km gravel road, which is owned by the provincial authorities but maintained by Black Mountain. The concentrate is then transported by train to Saldanha on the Sishen-Saldanha railway with delivery terms to export customers on a cost, insurance and freight basis.

Summary of Mine Reserves

The following table sets out the proved and probable zinc and lead reserves as of March 31, 2013:

	Proved Reserve								Probable Reserve								Total Proved and Probable Reserves								SIIL ownership		Reserve life
	Quantity		Zinc Grade		Lead Grade		Silver		Quantity		Zinc Grade		Lead Grade		Silver		Quantity		Zinc Grade		Lead Grade		Silver
	(million tons)		(%)		(%)		(g/t)		(million tons)		(%)		(%)		(g/t)		(million tons)		(%)		(%)		(g/t)		%		(Years)
Black Mountain		3.20		3.31		4.09		44		6.85		2.7		2.63		31		10.05		2.85		3.05		35
Total		3.20		3.31		4.09		44		6.85		2.7		2.63		31		10.05		2.85		3.05		35		74		4

References to “g/t” are grams per tonne

Additional information:

(1) The reserve estimates presented incorporate losses for mine dilution and mining recovery according to the JORC code.

(2) The cut-off grade used with our reserve estimate is 548 ZAR per ton.

(3) The metallurgical recovery factor for zinc, lead and copper is 79.06%, 88.40% and 64.62%, respectively.

(4) The historic three year average commodity price for zinc, lead and copper considered for evaluation of reserves were $ 2,077 per ton, $ 2,209 per ton and $ 8,155 per ton, respectively. The average currency conversion factor that was used to estimate our reserves was South African Rand per US dollar 7.72.

(5) The reserve quantities disclosed are for the entire mine and our share in the reserve quantities is 74.0%.

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Production Volumes

The following table sets out the total ore, zinc and lead concentrate production at the Black Mountain mine for each of the twelve months ended December 31, 2010 and for the years ended March 31, 2012 and 2013:

Mine (Type of Mine)	Product		Twelve months ended December 31, 2010		Twelve months ended March 31, 2012*		Twelve months ended March 31, 2013
			(tons, except percentages)
Black Mountain (Underground)		Ore mined		1,379,000		1,434,088		1518,540
		Ore grade –Zinc		3.3%		2.9%		3.4%
		-Lead		4.2%		4.2%		3.7%
		Recovery - Zinc		79.9%		76.3%		77.8%
		-Lead		88.2%		91.0%		89.0%
		Zinc concentrate		72,000		64,683		78,457
		Lead concentrate		71,000		74,644		68,986

* We changed the financial year end for Black Mountain to March 31, to be consistent with our financial reporting year end and, accordingly, we have presented the production volumes for this mine since fiscal 2012. Prior to our acquisition of the Black Mountain mine, we presented the production volumes for the twelve months ended December 31, 2010. For the period January 1, 2011 to March 31, 2011, the production of zinc and lead concentrate at the Black Mountain mine was:

Product	January 1, 2011 to March 31, 2011 (tons except  percentage)
Ore mined		379,756
Ore grade – Zinc		3.76%
– Lead		4.15%
Recovery – Zinc		76.31%
– Lead		93.38%
Zinc concentrate		21,720
Lead concentrate		20,757

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Principal Raw Materials

There are no major raw materials used in Black Mountain Mine, except for chemical reagents which are used in the floatation process to produce zinc and lead concentrates.

Distribution, Logistics and Transport

Zinc concentrate, lead concentrate and copper concentrate from the mine is hauled by road to a dedicated railway siding along a 150 kilometers gravel road, which is owned by the provincial authorities but maintained by BMM. The concentrate is then transported by train to Saldanha on the Sishen-Saldanha railway with delivery terms to export customers on a cost, insurance and freight basis.

Sales and Marketing

BMM produces zinc, lead and copper concentrates that are sold in local and international markets on spot basis and through long term contracts. The commercial terms negotiated on an annual basis include taking into account the percentage of payable metals, treatment and refining charges and applicable prices. Some of the customers of Black Mountain mine are Rand Refinery, Trafigura Beheer B.V., MR Trading, Glencore International AG and Ocean Partners UK Limited.

Approximately 68.8% of the zinc and lead metal that BMM produced in fiscal 2013 was sold under annual contracts specifying quantity, grade and price, with the remainder sold on the spot market. The contract sales prices is linked to the prevailing LME price with an additional market premium. Thus, the price that BMM receives for its zinc and lead is dependent upon and is subject to fluctuations in the LME price.

Projects and Developments

Gamsberg Project

The major project undertaken by BMM is the Gamsberg project. This project comprises of two main areas of mineralization, Gamsberg North, which requires near surface mining, and Gamsberg East which requires underground mining.

According to Brook Hunt, the Gamsberg project is expected to be one of the world’s largest zinc producers with operating costs in the lower half of the cost curve.

The Gamsberg deposits are favorably distinguished from other large undeveloped zinc deposits for reasons including:

• the deposits have large open-pittable mineralized material, supported by higher grade underground mineralized material;

• the deposits belong to the class of mineralization characterised by metamorphosed, re-crystalised sulphide mineralization which can have important by-products such as lead and silver;

• there is potential to upgrade the mineralization using ore-sorting technology due to the magnetic nature of the non-ore mineral such as magnetite and pyrrhotite; and

• the deposits are located adjacent to a well established mining district with modern infrastructure and is locally in a politically stable country with a mild climate.

We believe that the Gamsberg project will be capable of producing in excess of 400,000 tpa of SHG zinc metal and is expected to comprise an open pit, an underground mine, a concentrator and a refinery. The estimated power requirement for the Gamsberg project is 350 MVA for the production of 400,000 tpa of SHG zinc metal.

Lisheen

Overview

The Lisheen mine is located in County Tipperary, Republic of Ireland and consists of an underground mine, concentrator and backfill plant, producing approximately 170,000 tons of zinc in concentrate annually with an expected mine life until 2015. The Lisheen mine also produces approximately 23,000 tons of lead concentrate annually. Current reserves are 2.26 million tons.

During the year ended March 31 2013, 1,644,537 tons of ore at 11.4% zinc and 2.2,% lead were processed at the Lisheen mine (this includes 168,987 tons of purchased ore from nearby Galmoy mine owned by a third party), which produced approximately 317,413 tons of zinc concentrate and 39,129 tons of lead concentrate, containing 169,485 tons and 23,407 tons of zinc and lead, respectively. Prior to its acquisition by us, Lisheen had a financial year end of December 31.

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The Lisheen zinc deposit is located in the Rathdowney Trend, which comprises sedimentary rocks, mainly limestone, which was formed approximately 320 million years ago. The Lisheen deposit owes its existence to the presence of several faults in the district, which played a major role in the formation, morphology and location of the ore bodies. It is believed that these fractures in the strata acted as conduits for the hydrothermal mineralising fluids which carried metals upwards from extreme depths.

The Lisheen zinc deposit is located in the Rathdowney Trend. The mine commenced production in 1999, following a successful development partnership between Minorco (merged with Anglo American in 1999) and Ivernia West. Anglo American subsequently acquired Ivernia’s stake in 2003 to gain 100% ownership. Lisheen mine was subsequently acquired by SIIL (through its subsidiary THL ZBV) on February 15, 2011.

Principal Products

Lisheen produces zinc and lead in concentrate and both concentrates are shipped overseas.

Principal Facilities

The following map shows the locations of Lisheen within Europe and within the island of Ireland:

Mines

The Lisheen zinc deposit is located in the Rathdowney Trend.

The Lisheen ore bodies occur as three principal zones, Main Zone, Derryville Zone and Bog Zone and a series of small satellite bodies surrounding these. The ore is largely hosted within fault-associated hydrothermal breccias, known as the Black Matrix Breccia, or BMB, which is developed at or proximal to the base of a massive, fine grained dolomitised limestone unit, termed the Waulsortian Formation. This unit is underlain by the Argillaceous Bioclastic Limestone, or ABL, a dark shaly limestone which forms the lithological footwall to the mineralization.

The ore bodies are at an average depth of 170 meters and are predominantly stratiform or flat lying, ranging in thickness from 1 to 14 meters. Close to faults, mineralization may be substantially thicker. The stratiform nature of the ore bodies is typical of zinc deposits in Ireland and also occurs elsewhere in the world.

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The Lisheen zinc deposit is located in the Rathdowney trend, which comprises sedimentary rocks (mainly limestone). The Lisheen ore bodies occur as three principal zones, main zone, Derryville zone and bog zone. The ore is largely hosted within fault associated hydrothermal breccias, known as the Black Matrix Breccia, which is developed at or proximal to the base of a massive, fine grained dolomitised limestone unit, termed the Waulsortian Formation. This unit is underlain by the argillaceous bioclastic limestone, a dark shaly limestone which forms the lithological footwall to the mineralisation. The ore bodies are at an average depth of 170 metres and are predominantly stratiform or flat lying, ranging in thickness from one to 14 metres. Close to faults, mineralisation may be substantially thicker. The deposit is high grade, with a zinc to lead ratio of 6:1.

The crushed ore from the Lisheen mine is stored in a surface stockpile from which it is conveyed to a two-stage wet grinding circuit as the first processing set in the concentrator. The slurried product from the grinding mills then passes directly to the two flotation circuits, where the lead concentrate and the zinc concentrates are floated off sequentially. The zinc concentrates are leached with sulphuric acid to remove dolomite to bring the product to smelter requirements. The concentrates are dewatered to shipment requirements by thickening and subsequent pressure filtration. The dewatered concentrates are then trucked to the port of Cork and are then shipped to international smelters.

Mineralogically, the ore bodies comprise massive sulphide lodes typically composed of dominant pyrite, marcasite and sphalerite with minor amounts of galena. The deposit is high grade, with a zinc to lead ratio of 6:1. Minor silver grades are encountered locally. Several deleterious elements occur, the principal ones being nickel, cobalt, copper, magnesium and arsenic. The aquifer is fracture-controlled and connected directly to the surface drainage system via a conjugate set of steeply dipping North-East and North-North-West trending joints and fissures, which have been extensively karst weathered. Water ingress to the workings occurs principally when one of these structures is intersected and significant flow rates can occur over short time spans. The peak daily water flow rate can reach up to 90 million litres per day and 75 million litres per day on an annual basis. Dedicated pumping and water treatment facilities are in place to ensure full compliance with the Integrated Pollution Control Licence.

The Lisheen zinc and lead deposit is located in the Rathdowney Trend, which stretches 40 kilometers, between the Towns of Abbeyleix to the North East and Thurles to the South West. The region is a broad plain drained by the Rossetown and Drish Rivers, tributaries of the Suir River, which flows into the Irish Sea at Waterford.

In common with much of Ireland, the area is characterised by cool, wet climatic conditions. Mean temperatures vary from 4.4 degree Celcius in January to around 15 degree celcius in July, with an average humidity of 83.0%. Annual rainfall ranges between 700 and 1000 millimeters.

The power requirements at the Lisheen mine are provided by a 110 KV line, rated for 120 MVA, to an on-site substation.

Land in the vicinity of the Lisheen mine has traditionally been used for dairy farming, cattle and sheep rearing, forestry and peat harvesting.

As of April 1, 2013, the reserve life of the mine is 2 years.

The Lisheen mine was wholly owned by Anglo American Plc between 2003 and 2011 following a series of mergers and acquisitions of stake holdings. The mine is now owned by SIIL through our subsidiary THLZBV.

Summary of Mine Reserves

The following table sets out the proved and probable zinc and lead reserves as of March 31, 2013:

	Proved Reserve						Probable Reserve						Total Proved and Probable Reserves						SIIL interest		Reserve
	Quantity		Zinc Grade		Lead Grade		Quantity		Zinc Grade		Lead Grade		Quantity		Zinc Grade		Lead Grade				life
	(million tons)				(%)		(million tons)				(%)		(million tons)				(%)
Lisheen		1.83		11.2		1.78		0.43		13.2		1.18		2.26		11.6		1.67
Total		1.83		11.2		1.78		0.43		13.2		1.18		2.26		11.6		1.67		100		2

Additional information:

(1) The reserve estimates presented incorporate losses for mine dilution and mining recovery according to the JORC code.

(2) The reserve was generated using a zinc equivalent ZnEq cut-off grade of 5.83%.

(3) The metallurgical recovery factor for zinc is 90.2% and lead is 66.8%

(4) The historic three year average commodity price for zinc and lead considered for evaluation of reserves were $ 2,077 per ton and $ 2,209 per ton, respectively.

(5) The average currency conversion factor that was used to estimate our reserves was US dollar per Euro 1.26.

(6) The reserve quantities disclosed are for the entire mine.

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Production Volumes

The following table sets out the total ore, zinc and lead concentrate production at the Lisheen mine for the the twelve months ended December 31, 2010 and for the years ended March 31, 2012 and 2013:

Mine (Type of Mine)	Product		Twelve months ended December 31, 2010		Twelve months ended March 31, 2012*		Twelve months ended March 31, 2013
			(tons, except percentages)
Lisheen (Underground)		Milled Ore Tonne (DMT)		1,588,000		1,564,237		1,644,537
		Ore grade Zinc		12.20%		12.90%		11.40%
		-Lead		1.90%		2.70%		2.15%
		Recovery Zinc		90.50%		90.60%		90.39%
		- Lead		67.20%		70.30%		66.13%
		Zinc concentrate		326,000		343,196		317,413
		Lead concentrate		34,000		49,053		39,129

*We changed the financial year end for Lisheen to March 31, to be consistent with our financial reporting year end and, accordingly, we have presented the production volumes for this mine since fiscal 2012. Prior to our acquisition of the Lisheen mine, we presented the production volumes for the twelve months ended December 31, 2010. For the period January 1, 2011 to March 31, 2011, the production of total ore, zinc and lead concentrate at the Lisheen mine was:

Product	January 1, 2011 to March 31, 2011 (tons except  percentage)
Milled Ore Tonne		311,266
Ore grade – Zinc		13.50%
– Lead		2.74%
Recovery – Zinc		91.71%
– Lead		74.03%
Zinc concentrate		78,615
Lead concentrate		11,376

Principal Raw Materials

There are no major raw materials used in Lisheen Mine, except for chemical reagents which is used in the flotation process to produce Zinc and Lead concentrates

Distribution, Logistics and Transport

With respect to Outbound Logistics Lisheen transports the zinc concentrates to the port at Cork (135 Kilometers from mine site) via on site haulage contracted with a single supplier. A dedicated marketing office in Cork handles shipping and contracts, with a stockyard and ship loading facilities. Haulage accounts for about 8.9% of total operating costs.

With respect to inbound logistics, contracts are in place with most of the high value suppliers, including drill consumables, pumps, shotcrete, binder for backfill, concrete and explosives.

Lisheen is within close proximity to international airports (Dublin 157 kilometers; Cork 135 kilometers), the national highway network and nearby towns. The nearest motorway is 10 kilometers from the mine site and provides direct motorway access to the port facility in Cork.

Sales and Marketing

The Lisheen mine extracts lead and zinc ore from underground and processes this into zinc and leads concentrates and sells these concentrates to smelters and customers in Europe, Asia, North Africa and the US. Lisheen currently has a very small base of customers. Marketing of the metals and concentrate produced by Lisheen is done centrally from the corporate office located in Aggeneys. There is also a site office to look after the logistics coordination, administrative support and contracting. Lisheen has a number of different concentrate sales contracts in place with international customers but increasingly deals on the spot market.

Some of the customers of Lisheen are Trafigura Beheer B.V, Boliden, Louis Dreyfus, MRI Transamine and Glencore International AG.

Approximately 60.0% of the zinc and lead metal that Lisheen produced in fiscal 2013 was sold under annual contracts specifying quantity, grade and price, with the remainder sold in the spot market. The contract sales price is linked to prevailing LME price. Thus, the price that Lisheen receives for its zinc and lead is dependent upon, and subject to fluctuations in the LME price.

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Market Share and Competition

According to Brook Hunt, the Lisheen mine was the eleventh largest zinc mines by production volume in the world in 2012.

Projects and Developments

There are no major projects currently undertaken at Lisheen mine.

Our Aluminium Business

(a) BALCO

Overview

Our aluminium business is owned and operated by BALCO. BALCO’s partially integrated aluminium operations are comprised of two bauxite mines, two captive power plants (one of which is used to produce power for captive consumption and the other is used for commercial purpose), an alumina refinery operations of which have been suspended since September 2009, a 245,000 tpa aluminium smelter and a fabrication facility, all of which are located in Korba in the State of Chhattisgarh in Central India. BALCO’s operations benefit from relatively cost effective access to power, the most significant cost component in aluminium smelting due to the power intensive nature of the process. This is, to a considerable extent, as a result of BALCO being an energy-integrated aluminium producer. BALCO received a coal block allocation of 211 million tons for use in its captive power plants in November 2007. BALCO is constructing a 1,200 MW coal-based thermal power facility in the State of Chhattisgarh, which is currently under construction and awaiting final stage regulatory approvals. BALCO has also commenced the setting up of 325,000 tpa aluminium smelter, which is expected to be completed for first metal tapping by the third quarter of fiscal 2014.

BALCO’s annual production as of March 31, 2013 was 246,990 tons.

BALCO’s bauxite mines provide a majority of the bauxite required for BALCO’s smelters. The bauxite is transferred to Vedanta Aluminium’s alumina refinery, which converts bauxite to alumina and supplies the alumina back to BALCO, for payment of a conversion price by BALCO to Vedanta Aluminium based on Vedanta Aluminium’s actual cost of production plus a reasonable margin. The remainder of BALCO’s alumina requirements is sourced from third parties. The mining lease of Mainpat bauxite mine expired on July 8, 2012 and BALCO has applied for renewal of the mining lease for a further period of ten years from July 2012. BALCO has temporarily stopped the mining activity on account of pending approval from the necessary mining authorities, and is currently sourcing whole of its alumina requirements from third parties.

We own a 51.0% ownership interest in BALCO and have management control of the company. The remainder of BALCO is owned by the GoI, which established BALCO in 1965. We acquired our interest in BALCO from the GoI on March 2, 2001. On March 19, 2004, we exercised an option to acquire the GoI’s remaining ownership interest. The exercise of this option has been contested by the GoI. Further, the GoI retains the right and has expressed an intention to sell 5.0% of BALCO to BALCO employees. See “- Options to Increase Interests in HZL and BALCO” for more information.

Principal Products

Primary Aluminium

Primary aluminium is produced from the smelting of metallurgical grade alumina. BALCO produces primary aluminium in the form of ingots and wire rods for sale. Ingots are used extensively for aluminium castings and fabrication in the construction and transportation industries. Wire rods are used in various electrical applications especially in the form of electrical conductors and cables.

Rolled Products

Rolled products, namely coils and sheets, are value-added products that BALCO produces from primary aluminium. Rolled products are used for a variety of purposes in different industries, including aluminium foil manufacturing, printing, transportation, consumer durables, building and architecture, electrical and communications, packaging and general engineering industries.

Delivery to Customers

Ingots, wire rods and rolled products are transported by trucks to customers in India and to ports for export.

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Principal Facilities

Overview

The following map shows details of the locations of BALCO’s facilities in the State of Chhattisgarh:

Bauxite Mines

Chhattisgarh Mines

BALCO has two captive bauxite mines, namely, the Mainpat bauxite mines and the BodaiDaldali Bauxite mines, in the State of Chhattisgarh in Central India. Mainpat is an open-pit bauxite mine located in the Surguja district of the State of Chhattisgarh. The Mainpat mine has been in production since 1993 and has a leased hold area of 6.39 square kilometers. The mining lease of Mainpat mine expired on July 8, 2012.We have applied for renewal of mining lease for a further period of 10 years from July 9, 2012. BALCO has temporarily stopped the mining activity on account of pending approval from the necessary mining authorities.The bauxite extraction limit for the mine as granted by MoEF is 750,000 tpa. BALCO had also applied to the MOEF for renewal of environmental clearance for the Mainpat mine in November 2011 and July 2012. The Bodai-Daldali deposits are located approximately 260 kilometers from Korba in the Kawardha district of the State of Chhattisgarh. Bodai-Daldali was commissioned in 2004 by BALCO with a lease hold area is 6.3 square kilometers renewable mining lease that is valid until March 26, 2017. The bauxite extraction limit for Bodai-Daldali approved by IBM is 1,250,000 tpa.

The Chhattisgarh bauxite deposits are situated over a plateau with steep scarps on both sides, at an elevation of approximately 1,000 metres above sea level, for Mainpat, and approximately 940 metres above the surrounding land, for Bodai-Daldali. The bauxite is generally one metre to three metres thick and lies within a laterite sequence overlying thick tertiary basalts of the Deccan Traps. The cover of laterite and thin topsoil is up to five metres thick but is generally less than two metres. The bauxite outcrops around much of the plateau rims.

A typical profile of the Chhattisgarh deposits comprises topsoil and soft overburden above the laterite. The upper laterite consists of hard, loose or indurated bauxite pebbles and boulders with a clear contact with the underlying hard bauxites. The bauxite occurs in discontinuous lenses up to four meters in thickness with laterite infilling joints and fractures with the bauxite. The contact with the softer lower laterite is usually gradational and irregular.

The bauxite is hard to very hard with a natural moisture content of 5.0% to 10.0%, an in-situ density of 2.3 tons to 2.4 tons per cubic meter. It comprises primarily gibbsite with boehmite and minor diaspore. The reactive silica content is low and iron is present in the form of hematite and aluminous goethite. The average grade of the bauxite is approximately 46.3% aluminium oxide and silica levels of 3.7% as of March 31, 2013.

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All mining and transportation at both mines are undertaken by contractors. One thin top soil layer is removed by excavator and is either transported to an adjacent storage point or an area that is being backfilled. The laterite layer is drilled and blasted. The overburden is then removed by backhoe excavators and 15-ton dumpers. Broken ore is hand-sorted, leaving waste material behind. Ore productivity is around two to three tons per person per day in the dry season which decreases to 1.25 to 1.75 tons per person per day in the wet season.

The current exploration drilling program is based on a 50-meter square pattern and is reduced to a 25-meter centers for detailed mine planning. Sampling is normally in 0.40 meter lengths and core is currently split and retained for future reference. Bauxite samples are tested for silica and aluminium oxide at laboratories situated on site and at the Korba plant. Selected sample are re-assayed as part of a quality control program.

Since commencing operations, the Mainpat mine has produced approximately 7.4 million tons of bauxite, with production in fiscal 2013 totaling approximately 230,137 tons at 43.9% aluminium oxide and was therefore less than the bauxite extraction limit for the mine fixed by the IBM. The potential consequences of this deviation include cancellation of the associated mining lease and a restriction from removing the mined ore from the mining site. Power and water requirements at Mainpat are minimal and can be supplied by small on-site diesel generators and from boreholes in the mine.

As of March 31, 2013, BALCO estimates the Proved and Probable Reserves at Mainpat to be 3.1 million tons and the remaining mine life of the Mainpat mine to be approximately 4 years based on (i) reserves; and (ii) planned production which is determined on the basis of a life-of-mine plan. Total production at the Bodai-Daldali mine since the commencement of production has been 3.6 million tons of bauxite, with production in fiscal 2013 totaling approximately 705,870 tons at 45.9% aluminium oxide. Power is supplied by on-site diesel generators and ground water provides the water requirements for the mine.

As of March 31, 2013, BALCO estimates the reserves at Bodai-Daldali to be 3.1 million tons and the remaining mine life to be approximately 3 years based on (i) reserves; and (ii) planned production which is determined on the basis of a life-of-mine plan. The cut-off grade used to define the reserves at BALCO’s mines was 44.0%. In fiscal 2013, all mining and transportation of the bauxite was done by contractors and the total cost for this was Rs. 2,157.0 ($ 39.6) per ton of bauxite.

Based on current costs and historical prices, BALCO’s operations are forecast to remain profitable and therefore the deposits at the Mainpat and Bodai-Daldali mines fulfill the requirements for being classified as reserves. The Proved and Probable Reserves as of March 31, 2013 at BALCO’s mines at Mainpat and Bodai-Daldali have been determined by verifying that the integrated operation is economic at an aluminium price of $ 2,183 per ton, which is the average metal price for the three fiscal years ending March 31, 2013.

The mining dilution and mining recovery factors applied to determine the reserves at the Mainpat mine are 6.4% and 62.0%, respectively, while the factors applied at the Bodai-Daldali mine are 5.0% and 65.0%, respectively. The parameters for Mainpat are derived from the reconciliation of actual production against the geological model, while the parameters for Bodai-Daldali are based on estimates.

In fiscal 2013, the stripping ratio at the Mainpat mine was 1.0:2.1, while the stripping ratio at the Bodai-Daldali mine was 1.0:3.0. The strip ratio for the remaining reserves at Mainpat is 2.41 tons of waste per ton of ore, while at the Bodai-Daldali mine, it is 2.36 tons of waste per ton of ore. Stripping ratio is the ratio of the volume of waste material required to be handled in order to extract some volume of ore.

Summary of Bauxite Mine Reserves

The following table sets out BALCO’s proven and probable bauxite reserves as of March 31, 2013:

Mines	Proven Reserves				Probable Reserves				Total Proven and Probable Reserves				SIIL Interest		Reserve Life
		Quantity	Alumina	Silica		Quantity	Alumina	Silica		Quantity	Alumina	Silica		%		(years)
		(in million tons)	(%)	(%)		(in million tons)	(%)	(%)		(in million tons)	(%)	(%)
Mainpat		3.1	46.28	4.12		—	—	—		3.1	46.28	4.12				4-5
Bodai-Daldali		3.1	46.40	3.33		—	—	—		3.1	46.40	3.33				3-4
Total		6.2	46.34	3.72		—	—	—		6.2	46.34	3.72		51		—

Additional information:

(1) The reserve estimates presented incorporate the losses for mine dilution and mining recovery according to the JORC code.

(2) The cut-off grade used with our reserve estimates for bauxite is 44.0%.

(3) The metallurgical recovery factor for bauxite at both Mainpat and Bodai-Daldali is 45.4%.

(4) The historic three year average commodity prices is $ 2,181 per ton for bauxite and the currency conversion factor that was used to estimate our reserves was Rs. 49.3 per US dollar.

(5) The reserve quantities disclosed are for the entire mine and our share in the reserve quantities is 51.0%.

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Korba Facility

Overview

BALCO’s Korba facility is located at Korba in the State of Chhattisgarh in Central India and consists of a 245,000 tpa aluminium smelter, two power plants (one of which is used to produce power for captive consumption and the other that is used for commercial purposes), an alumina and a fabrication facility. The following table sets forth the total capacities as of March 31, 2013 at BALCO’s Korba facility:

			Capacity
Facility	Alumina		Aluminium		Captive Power
	(tpa)		(tpa)		(MW)
Korba		200,000		245,000		810

Refinery

The Korba alumina refinery was commissioned in 1973, uses the conventional high pressure Bayer process and has a capacity of 200,000 tpa of alumina. The operations of the refinery have been stopped since September 2009.

Smelters

Earlier, there were two aluminium smelters. The first smelter was commissioned in 1975, and used the VSS technology to produce aluminium from alumina and had a capacity of 100,000 tpa. In response to recent global economic conditions and a decline in commodity prices, starting in February 2009, BALCO suspended part of its operations at the 100,000 tpa aluminium smelter at Korba. Operations at this aluminium smelter ceased on June 5, 2009. The second smelter uses pre-baked GAMI technology and has a capacity of 245,000 tpa, was commissioned in November 2006.

Fabrication Facility

The fabrication facility at Korba has two parts, a cast house and a sheet rolling shop.

Cast House

The cast house uses continuous rod casters from Continuus-Properzi S.P.A and has a foundry which has twin-roll continuous casters with a SNIF degasser and hydraulically driven semi-continuous ingot casting machine to produce ingots and wire rods.

Sheet Rolling Shop

The sheet rolling shop has three parts: a hot rolling mill with a capacity of 75,000 tpa, an older cold rolling mill with a capacity of 30,000 tpa and a newer cold rolling mill commissioned in 2004 with a capacity of 36,000 tpa. Molten metal is cast into slabs and then either hot-rolled and sold as hot-rolled sheets or converted into cold-rolled sheets in the cold rolling mills. Alternatively, molten metal is directly used in strip casting and then fed to the cold rolling mills to convert it into cold-rolled sheets or coils.

Captive Power Plants

Smelting requires a substantial continuous supply of power and interruptions can cause molten metal to solidify and damage or destroy the pots. Power for the Korba facility is for the most part provided by the coal-based 540 MW captive power plant commissioned in March 2006. The surplus generation from the power plant is supplied to the State Electricity Board and other customers. Following the shutdown of the 100,000 tpa aluminium smelter, power from its associated 270 MW power plant is sold in the merchant power market.

Thermal coal is a key raw material required for the operation of BALCO's captive power plants. In April 2008, BALCO entered into two five-year coal supply agreements with SECL for the supply of thermal coal by SECL to BALCO, which represents approximately 53.0 % of its thermal coal requirements, with the remainder obtained through open market purchases and imports of coal. Supply of coal from SECL is tapering as BALCO has been allotted a coal block for mining coal. In November 2007, BALCO received a coal block allocation of 211 million tons for use in its captive power plants. These allocated coal blocks are regarded as non-reserve coal deposits. These allocated coal blocks are currently in the post-exploration but pre-development stage. BALCO expects mine development activities to commence mining in the second quarter of fiscal 2014.

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Production Volumes

The following table sets out BALCO’s total production from its Korba facility for the three years ended March 31, 2013:

		For the Year Ended March 31,
Facility	Product	2011		2012		2013
		(tons)
Korba
	Ingots/Busbar		27,927		8,671		8,416
	Rods		160,665		167,826		179,987
	Rolled products		66,706		69,157		58,587
Total(1)			255,298		245,654		246,990

Notes:

(1) Reflects total of ingots, rods and rolled products.

The following table sets out the total bauxite ore production for each of BALCO’s mines for the three years ended March 31, 2013:

		For the Year Ended March 31,
Mine (Type of Mine)	Product	2011		2012		2013
		(tons, except for percentages)
Mainpat (Open-pit)	Bauxite ore mined		564,608		620,193		230,137
	Ore grade		45.8%		43.9%		43.9%
Bodai-Daldali (Open-pit)	Bauxite ore mined		506,108		885,261		705,870
	Ore grade		45.8%		46.3%		45.9%
Total			1,070,716		1,505,454		936,007

Principal Raw Materials

The principal inputs of BALCO’s operations are alumina, power, carbon and certain other raw materials. BALCO has in the past been able to secure an adequate supply of the principal inputs for its business.

Alumina

Alumina is the primary raw material used in the production of aluminium. Vedanta Aluminium supplies majority of the alumina requirements (after converting the bauxite supplied by BALCO to Vedanta Aluminium). BALCO currently sources all of its alumina from third-party suppliers in international markets. The alumina sourced externally is metallurgical grade calcined alumina with a minimum alumina content of 98.6% on a dry basis. In fiscal 2011, 2012 and 2013, BALCO purchased 126,210 tons, 26,250 tons and 166,302 tons of alumina at an average price of $ 360, $ 535 and $ 416 per ton, respectively, on a cost, insurance and freight or CIF basis at the port of Vizag, India.

Power

Smelting primary aluminium requires a substantial, continuous supply of electricity. As a result, power is a key input at BALCO’s Korba facility, where it is provided by one coal-based captive power plant of 540 MW. Our captive power plant has historically been dependent upon coal allocations from Coal India. In November 2007, BALCO received a coal block allocation of 211.0 million tons for use in its captive power plants. These allocated coal blocks are regarded as non-reserve coal deposits. BALCO received the environmental clearance on May 24, 2012 and the second stage forest clearance for the 211.0 million tons coal block on November 14, 2012. We are awaiting the approval for diversion of the forest land and execution of the mining lease, after which we shall commence the mining operations at the coal block (which is expected to commence in the second quarter of 2014). Power for BALCO’s mines is provided by on-site diesel generators.

Water

Water is also an important input for BALCO’s captive power plants. BALCO sources its water requirements at Korba from a nearby canal, with the water transported by pipelines. BALCO is currently in a dispute with NTPC regarding the right of way for its water pipeline that supplies water to its 270 MW captive power plant, which has been built through NTPC premises. Arbitration proceedings commenced on May 18, 2009 and are ongoing. The next date of hearing is fixed in August 2013. See “Item 3. Key Information -D. Risk Factors—Risks Relating to Our Business- Our operations are subject to operating risks that could result in decreased production, increased cost of production and increased cost of or disruptions in transportation, which could adversely affect our revenue, results of operations and financial condition.”

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Carbon

Carbon is an important raw material to the aluminium smelting process. Carbon is used in the process of electrolysis, in the form of cathodes and anodes, with the latter the biggest component of BALCO’s carbon costs. Anodes are made up of carbonaceous material of high purity. For pre-baked anodes, green carbon paste made of calcined petroleum coke and coal tar pitch is compacted or pressed into the required form. These anodes are baked before their use in electrolytic cells, or pots.

BALCO has in-house facilities to manufacture carbon anodes to meet its entire carbon anode requirements. Calcined petroleum coke, coal tar pitch and fuel oil, which are the key ingredients for the manufacture of carbon anodes, are sourced primarily from the Indian market. There is an adequate supply of these raw materials in India, though their prices are generally determined by movements in global prices. At times, based on commercial comparison, orders for import are also placed.

Other Raw Materials

BALCO also uses other raw materials such as fluorides and other chemicals. For these raw materials, there are several sources of supplies in the domestic markets and BALCO does not foresee any difficulty in securing supplies when needed.

Distribution, Logistics and Transport

The alumina purchased from third party suppliers is transported to the Korba facility by rail and ports. BALCO’s aluminium products are transported from the Korba facility to domestic customers through a combination of road and rail, and shipped for export.

Sales and Marketing

BALCO’s 10 largest customers accounted for approximately 41.1%, 49.5% and 38.9% of its revenue for aluminium business in fiscal 2011, 2012 and 2013, respectively. No customer accounted for greater than 10.0% of BALCO’s revenue in the last three fiscal years.

BALCO’s sales and marketing head office is located in Mumbai, and it has field sales and marketing offices in most major metropolitan centers in India. Currently, BALCO sells its products primarily in the Indian market, with limited focus on exports. However, with the commissioning of the new aluminium smelter, a significant part of the additional production is sold in the export market. BALCO’s key customers include conductor manufacturers, state road transport corporations, railways, defense contractors and electrical equipment and machinery manufacturers.

Domestic sales are normally conducted on the basis of a fixed price for a given month that BALCO determines from time to time on the basis of average LME price for the month, as well as domestic supply and demand conditions. The price for aluminium BALCO sells in India is normally higher than the price it charges in the export markets due to the tariff structure, smaller order sizes that domestic customers place and the packaging, storing and truck loading expenses incurred when supplying domestic customers.

BALCO’s export sales of aluminium are currently on a spot basis at a price based on the LME price plus a premium.

Projects and Developments

On October 7, 2006, BALCO entered into a MoU with the state government of Chhattisgarh, India, and the CSEB under which, among other things, feasibility studies will be undertaken to build a thermal coal-based 1,200 MW captive power facility, along with an integrated coal mine, in the State of Chhattisgarh at an estimated cost of Rs. 46,500 million ($ 852.9 million). The project was disrupted in September 2009 due to the collapse of a chimney under construction during heavy rains and lightning at Korba. There were 40 fatalities in the accident and SEPCO Electric Power Construction Corporation, our EPC contractor, and Gamon Dunkerley and Company Limited, the sub-contractor are the subject of an investigation by the Chhattisgarh government. The matter is fixed for hearing on September 27 and 28, 2013. We have instituted an enquiry being conducted by IIT Rourkee, an expert in the civil engineering field in India. Work had resumed in January 2010. BALCO is currently constructing the 1,200 MW captive power plant which is awaiting final stage regulatory approvals.

In addition, on August 8, 2007, BALCO entered into a MoU with the state government of Chhattisgarh for a potential investment to build an aluminium smelter with a capacity of 650,000 tpa at Chhattisgarh at an estimated cost of Rs. 81,000 million ($ 1,485.7 million). The first of two phases of this project has been commenced by BALCO with the setting up of a 325,000 tpa aluminium smelter at an estimated cost of Rs. 38,000 million ($ 697.0 million), which uses pre-baked GAMI technology. BALCO has received environmental clearance for both phases of the project. Construction has commenced and the first metal tapping from the 325,000 tpa aluminium smelter is expected in the third quarter of fiscal 2014.

The estimated cost of building the 325,000 tpa aluminium smelter and 1,200 MW captive power facility is Rs. 84,500 million ($ 1,549.9 million). As of March 31, 2013, Rs. 75,679 million ($ 1,388.1 million) has been spent.

BALCO received a coal block allocation of 211 million tons for use in its captive power plants in November 2007. These allocated coal blocks are regarded as non-reserve coal deposits. The environment and forest clearance have been received, and currently the approval for diversion of forest land and execution of mining lease is awaited. The mining is expected to commence from the first quarter of fiscal 2015. The estimated cost of developing the coal mine is Rs. 7,150 million ($ 131.1 million). As of March 31, 2013, Rs. 658 million ($ 12.1 million) has been spent.

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Market Share and Competition

BALCO is one of the four primary producers of aluminium in India and had a primary market share of 17.0% in fiscal 2013, according to AAI. BALCO’s competitors (and their respective primary market shares by volume in India in fiscal 2013) are Hindalco (33.0%), NALCO, a GoI enterprise (19.0%), and Vedanta Aluminium (31.0%) a subsidiary of Vedanta.

Aluminium ingots, wire rods and rolled products are commodity products and BALCO competes primarily on the basis of price and service, with price being the most important consideration when supplies are abundant. Aluminium competes with other materials, particularly plastic, steel, iron, glass, and paper, among others, for various applications. In the past, customers have demonstrated a willingness to substitute other materials for aluminium.

(b) Vedanta Aluminium

Overview

We hold 29.5% ownership interest in Vedanta Aluminium and the other 70.5% of Vedanta Aluminium is owned by Vedanta.

In October 2004, Vedanta Aluminium entered into an agreement with the Orissa Mining Corporation Limited, or OMC, regarding the establishment of the alumina refinery, an aluminium smelter and associated captive power plants in the Lanjigarh and Jharsuguda districts.

On March 11, 2010, Vedanta Aluminium has acquired 100.0% ownership of Allied Port Services Private Limited, or APSPL. APSPL was merged into Vedanta Aluminium with effect from April 1, 2011 pursuant to the merger approved by the High Court of Madras.

Principal Facilities

Overview

The following table sets forth the capacities as on March 31, 2013 at out Lanjigarh and Jharsuguda facilities:

Facility	Capacity tpa
Lanjigarh Alumina Refinery		1,000,000
Jharsuguda Aluminium Smelter		500,000

Lanjigarh alumina refinery. The Lanjigarh alumina refinery is located in the Lanjigarh district in the State of Orissa in India, which is located approximately 450 km from BALCO’s Korba facility in the State of Chhattisgarh. In March 2007, Vedanta Aluminium began the progressive commissioning of a 1,000,000 tpa greenfield alumina refinery, expandable to 1.4 mtpa of installed capacity and an associated 75 MW, expandable to 90 MW, captive power plant. The captive power plant is fully operational and can meet the power requirements of the refinery. The second production stream of the Lanjigarh alumina refinery was commissioned in March 2010. Production of alumina at the refinery at Lanjigarh was temporarily suspended since December 5, 2012, due to inadequate availability of bauxite and the plant recommenced operations on July 12, 2013. Vedanta is currently in discussions with government authorities for sourcing adequate supply of bauxite. A ministerial level committee looking into the issue of bauxite supply is expected to submit its report shortly. Production at the alumina refinery does not affect production at the smelters.

Vedanta Aluminium had planned to invest Rs. 106,000 million ($ 1,944.2 million) to expand its alumina refining capacity at Lanjigarh to 5 mtpa by (i) increasing the current alumina refinery’s capacity from 1,400,000 tpa to 2,000,000 tpa by de-bottlenecking; (ii) constructing a second alumina refinery with a capacity of 3 mtpa; and (iii) constructing an associated 210 MW captive power plant. However, the expansion of the alumina refinery at Lanjigarh and related mining operations in Niyamgiri Hills have been on hold since October 20, 2010. On April 18, 2013, the Supreme Court of India directed the state government of Odisha to place unresolved issues and claims of the local communities that had served as the basis for MoEF’s order before the Gram Sabha, a decision-making body of the affected local communities. The proceedings before the Gram Sabha are expected to conclude in the second quarter of fiscal 2014, after which the MoEF will give a final order on the expansion and mining projects that have been put on hold.

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On October 20, 2010, the MoEF has also directed Vedanta Aluminium to maintain status quo on the expansion of its refinery. Vedanta Aluminium made an application to the MoEF to reconsider the grant of the environmental clearance for its alumina refinery. The MoEF issued fresh terms of reference to Vedanta Aluminium for preparation of the EIA report which is required to be submitted to the Orissa Pollution Control Board for public hearing and after incorporation of the response, submit the final EIA report to the MoEF for environment clearance. Vedanta Aluminium submitted the EIA report to the Orissa Pollution Control Board and the public hearing has been kept on hold on the direction of the MoEF. Vedanta Aluminium is pursuing the matter with the state government.

Jharsuguda aluminium smelter. The Jharsuguda aluminium smelter is located in Jharsuguda in the State of Orissa in India. Operations in the Jharsuguda facility were implemented in 2 phases. The first phase has a production capacity of 250,000 tpa and was completed in November 2009. The second phase was commissioned in June 2010. A total of nine units of the associated 1,215 MW coal-based thermal captive power plant of 135 MW each, has been commissioned. It produced 429,723 and 527,037 tons of aluminium in fiscal 2012 and 2013, respectively. The captive power plant units are expected to meet the power requirements of the Jharsuguda smelter and all other power requirements of this facility. Vedanta Aluminium has also invested an estimated Rs. 145,000 million ($ 2,659.6 million) to set up a second 1,250,000 tpa aluminium smelter. Power to the new smelter will be provided by Sterlite Energy’s new 2,400 MW commercial power plant at Jharsuguda.

Projects and Developments

Lanjigarh alumina refinery. Vedanta Aluminium had planned to invest Rs. 106,000 million ($ 1,944.2 million) to expand its alumina refining capacity at Lanjigarh to 5 mtpa, subject to government approvals, by (i) increasing the capacity of the current alumina refinery from 1 mtpa to 2 mtpa through de-bottlenecking; (ii) constructing a 3 mtpa alumina refinery; and (iii) constructing an associated 210 MW captive power plant.

However, the expansion of the alumina refinery at Lanjigarh and related mining operations in Niyamgiri Hills have been on hold since October 20, 2010, due to the order of the MoEF. On April 18, 2013, the Supreme Court of India directed the state government of Odisha to place unresolved issues and claims of the local communities that had served as the basis for MoEF’s order before the Gram Sabha, a decision-making body of the affected local communities. The proceedings before the Gram Sabha are expected to conclude in the second quarter of fiscal 2014, after which the MOEF will give a final order on the expansion and mining projects that have been put on hold.

Unrelated to these proceedings, production of alumina at the refinery at Lanjigarh was temporarily suspended since December 5, 2012, due to inadequate availability of bauxite, and the plant recommenced operations on July 12, 2013. Vedanta is currently in discussions with government authorities to access bauxite and expects production at the refinery to resume once an adequate supply of bauxite has been secured. A ministerial level committee looking into the issue of bauxite supply is expected to submit its report shortly. Production at the alumina refinery does not affect production at the smelters.

As of 31 March 2013, Vedanta Aluminium had spent Rs. 38,931 million ($ 714.1 million) on the Lanjigarh expansion project.

Jharsuguda aluminium smelter. Vedanta Aluminium is also investing Rs. 145,000 million ($ 2,659.6 million) to set up additional 1,250,000 tpa aluminium smelter. As of March 31, 2013, Vedanta Aluminium had spent Rs. 119,611 million ($ 2,193.9 million) on this project.

Our Commercial Power Generation Business

Overview

We have been building and managing captive power plants since 1997. As of March 31, 2013, the total power generating capacity of our captive power plants and wind power plants, including the captive power plants of our 29.5%- owned subsidiary Vedanta Aluminium, was 5,410.3 MW, which includes our eleven thermal coal-based captive power plants with a total power generation capacity of 5,054 MW.

The following table sets forth information relating to our and Vedanta Aluminium’s existing power plants as of March 31, 2013:

Fiscal Year Commissioned	Capacity			Location	Fuel Used
	(MW)
1988(1)		270.0		Korba	Thermal Coal
1997		24.0		Tuticorin	Liquid fuel
2003		14.8		Debari	Liquid fuel
2003		6.0		Zawar	Liquid fuel
2003		14.8		Chanderiya (2)	Liquid fuel
2005		22.5		Tuticorin	Liquid fuel
2005		154.0		Chanderiya	Thermal coal
2006		540.0		Korba	Thermal coal
2007		75.0	(3)	Lanjigarh	Thermal coal
2007		107.2		Gujarat and Karnataka	Wind (4)
2008		80.0		Chanderiya	Thermal coal

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2009	80.0		Zawar	Thermal coal
2009	16.0		Gujarat and Karnataka	Wind (4)
2009	675.0	(3)	Jharsuguda	Thermal coal
2010	540.0	(3)	Jharsuguda	Thermal coal
2011	1200.0	(5)	Jharsuguda	Thermal coal
2011	48.0		Rajasthan and Karnataka	Wind
2011	160.0		Dariba	Thermal coal
2012	103.0		Karnataka, Maharashtra, Rajasthan and Tamil Nadu	Wind (4)
2012	600.0	(5)	Jharsuguda	Thermal coal
2013	600.0		Jharsuguda	Thermal coal
2013	80.0	(6)	Tuticorin	Thermal coal
	5,410.3

Notes:

(1) Commissioned by BALCO prior to our acquisition of BALCO in 2001 which is not being used for captive purposes at present due to the closure of operations at the 100,000 tpa aluminium smelter.

(2) Transferred from Debari to Chanderiya in March 2009.

(3) Captive power plant of Vedanta Aluminium, our 29.5%-owned subsidiary that is 70.5%-owned and controlled by Vedanta. The Lanjigarh captive power plant is expandable to 90 MW, subject to government approvals.

(4) Our wind power plants are not for captive use.

(5) All four units (600 MW each) were operational as of March 31, 2013.

(6) Of the two 80 MW units, one was operational as of March 31, 2013.

We have the following power plants under construction:

• The second 80 MW coal-based thermal captive power plant at Tuticorin, of the 160 MW capacity, is awaiting requisite approvals;

• BALCO’s 1,200 MW thermal coal-based captive power plant in the State of Chhattisgarh which is awaiting final stage regulatory approval;

• Talwandi Sabo’s 1980 MW thermal coal based captive power plant, comprising three units of 660 MW each, in the State of Punjab. The first unit is expected to be synchronized in the second quarter of fiscal 2014 and each subsequent unit at four monthly intervals.

Power sales

The following table sets out total power sales in MU for the last three fiscal years:

	For the Year Ended March 31,
Facility	2011		2012		2013
BALCO 270 MW		1,623		1,605		1,241
Sterlite Energy		856		5,638		7,530
HZL - Wind Power Plant		201		336		511
Total		2,680		7,579		9,282

Commercial power plants

Sterlite Energy—Orissa

Sterlite Energy has a 2,400 MW coal based thermal power plant facility (comprising of four units of 600 MW each) in Jharsuguda in the State of Orissa where approximately Rs. 82,000 million ($ 1,504.1 million) is the budgeted cost of the project. As of March 31, 2013, Rs. 79,574.0 million ($ 1,459.5 million) has been spent on the project. All four units have been commissioned as on March 31, 2013. This project is financed by internal sources and through debt financings.

This facility will require approximately 15 million tpa of coal. Sterlite Energy has applied to the Ministry of Coal for allotments of coal blocks and long-term coal linkages, which are long-term supply contracts for delivery of coal meeting specific contract specifications. In January 2008, the Ministry of Coal jointly allocated the coal blocks in the Rampia and Dip Side Rampia in the State of Orissa to six companies, including Sterlite Energy. Sterlite Energy’s proportionate share would be 112.2 million tons. The coal block is currently in the pre-exploration stage and are regarded as non-reserve coal deposits. The six companies have entered into an agreement regarding the joint allocation through a joint venture company, Rampia Coal Mine and Energy Private Limited, or RCMEPL, incorporated in February 2008.

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On April 16, 2008, RCMEPL submitted an application to the Government of Orissa for the grant of a prospecting licence, or a licence for exploration, which is currently pending approval from the regulatory authorities. Additionally, Sterlite Energy has been allotted a coal linkage of 2.57 mtpa for the Jharsuguda project to meet the coal requirements of one of the units of 600 MW of the 2,400 MW power facility. Following our application to the Ministry of Coal for a coal linkage to meet the substantial portion of the remaining coal requirements for the remaining three units, on the recommendation of Standing Linkage Committee in its meeting on January 29, 2010, Mahanadi Coal fields Limited issued the letter of assurance on July 14, 2010 for another 6.94 million tons.

Further, on September 26, 2006, Sterlite Energy entered into a memorandum of understanding with the state government of Orissa under which the government has agreed to assist us in our acquisition of approximately 3,000 acres of land for the power facility, including the rehabilitation and resettlement of persons to be displaced, the obtaining of environmental clearances, the allocation of coal blocks, long-term coal linkages, water allocations and the sourcing of power during the construction period. Pursuant to the memorandum of understanding, on September 28, 2006, Sterlite Energy entered into a power purchase agreement, or PPA, with the GRIDCO Limited, or GRIDCO, a nominee of the state government of Orissa, which provides for approximately 600 MW of power to be supplied to the state government of Orissa each year over a five-year period.

The PPA also provides that all power generated by the power plant prior to commercial operations and, thereafter, the power generated from the facility in excess of a plant load factor of 80% will be made available to GRIDCO at a variable price plus a variable incentive to be determined by the CERC.

Subsequently, Sterlite Energy entered into an amended PPA with GRIDCO on August 20, 2009 to amend the terms of the PPA pursuant to the Policy Guidelines for Thermal Power Generation notified by the Government of Orissa on August 8, 2008. Pursuant to the amended PPA, GRIDCO has the right to purchase up to 25.0% of the installed capacity of the power plant after adjustments for auxiliary consumption by us. Further, GRIDCO shall at all times have the right on behalf of the Government of Orissa to receive from the Jharsuguda power project, 7.0% of power generated (after adjustments for auxiliary consumption by us) at variable cost, determined by OERC. Further, we are required to make available to GRIDCO the entire power generated from the first unit of the Jharsuguda power project after meeting our own requirement. GRIDCO shall give six month notice to us if GRDICO does not want to avail part or whole right of purchase of power from us for any reason whatsoever. GRIDCO will have the right to purchase this power for 25 years from the date of commercial operation of the last unit. This right is an option to purchase rather than a binding commitment of GRIDCO. The PPA is subject to the approval of the OERC.

In the event GRIDCO decides not avail part or whole of the above mentioned right during any five year period, it shall give six months notice of the same to us prior to the commencement of such period.

The tariff for the sale of power by us to GRIDCO will be determined by the OERC as follows:

For the sale of power up to 25.0% of the installed capacity:

(i) a fixed capacity charge which shall be determined by the OERC as per the terms and conditions of tariff issued from time to time and will be related to target availability. Recovery of fixed capacity charges below the level of target availability shall be done on a pro rata basis and calculated proportionately to the capacity requisitioned to GRIDCO; and

(ii) a variable energy charge, which shall comprise fuel cost and shall be calculated on the basis of the ex-bus energy scheduled to be sent out from the generating station. The energy charges shall be calculated as per the methodology prescribed by the OERC from time to time.

For the sale of additional 7.0%, on account of allocation of coal blocks within the State of Orissa, a variable energy charge, which shall comprise fuel cost and shall be calculated on the basis of the ex-bus energy scheduled to be sent out from the generating station. The energy charges shall be calculated as per the methodology prescribed by the appropriate commission, from time to time.

Power from the power plant to be purchased by GRIDCO will be evacuated by GRIDCO from the bus bar of the project. For the evacuation of the remaining power, Sterlite Energy has constructed a 400 KV LILO1 & 400 KV LILOII transmission line to connect to the transmission line being developed by Power Grid Corporation India Limited, or PGCIL near Jharsuguda. Sterlite Energy entered into an agreement with PGCIL in July 2010 to build the dedicated transmission system required for evacuating power from the power plant to the pooling units of PGCIL and to dispatch power to beneficiaries.

The power generated from the 2,400 MW power plant is sold to entities including state electricity boards, state-owned utility companies, power trading companies and private entities.

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Sterlite Energy—Talwandi Sabo

In July 2008, Sterlite Energy succeeded in an international bidding process and was awarded the project for the construction of a 1,980 MW coal-based thermal commercial power plant at Talwandi Sabo in the State of Punjab in India. All necessary approvals for the project have been obtained and commissioning of this project will be carried out in stages and the first unit is expected to be synchronized in the third quarter of fiscal 2014 and each subsequent unit at four monthly intervals. The estimated cost of this project is Rs. 101,732 million ($ 1,866.0 million).

In November 2009, Sterlite Energy entered into an on-shore and offshore engineering, procurement and construction contract with SEPCO Electric Power Construction Corporation, or SEPCO, for Sterlite Energy’s Talwandi Sabo thermal power project for Rs. 66,560 million ($ 1,220.8 million). The contract was revised upwards by $ 74 million on November 15, 2012 to reflect the set-up and commissioning of three units of power at the Talwandi Sabo thermal Power Plant.

SEPCO’s obligations under the contract include testing and delivery of plant and equipment, system design and engineering of plant and equipment in accordance with technical specifications, supervision of civil, structure and manufacturing work, custom clearance, port clearance, inland transportation of offshore as well as onshore plant and equipment, unloading, storage and preservation for all equipment and material required, ash disposal among others within the period specified in the contracts. The fixed contract price is payable in multiple installments according to a fixed payment schedule. SEPCO has provided performance guarantees with respect to various parameters, for instance, net unit heat rate of 2,222.80 kwph/kcal and net unit electric output of 614 MW. If there is a delay in completion or failure to meet performance guarantees, liquidated damages may be imposed on SEPCO in accordance with the terms of the contract.

As of March 31, 2013, we had spent Rs. 79,965 million ($ 1,466.7 million) on this project. In September 2008, TSPL entered into a long-term PPA with the Punjab State Electricity Board for the sale of power from the completed power plant. This project is financed by internal sources and/or debt financing.

HZL—Wind Power Plants

As of March 31, 2013, wind power plants with a combined power generation capacity of 274 MW have been commissioned in the States of Gujarat, Karnataka, Tamil Nadu, Maharashtra and Rajasthan in India at a total cost of Rs. 14,520 million ($ 266.3 million). The electricity from these wind power plants is sold to SEBs.

Other Opportunities in Power

Vedanta Aluminium entered into an agreement on October 1, 2007 with GRIDCO for the sale of excess power from one unit of its 75 MW captive power plant at Lanjigarh with a capacity of 30 MW.

Sterlite Energy intends to participate in projects relating to the generation of coal-based thermal power and ancillary activities, including UMPPs or other projects announced by the GoI or any state government. A recent initiative of the Ministry of Power of the GoI offers private developers an opportunity to establish a number of UMPPs. Private developers will be selected on the basis of competitive bidding and under the initiative, will have the benefit of the assured purchase of power generated and payment security mechanisms.

Other Business

Vizag

We incorporated a special purpose vehicle, Vizag General Cargo Berth Private Limited, or VGCB, on April 20, 2010 for the coal berth mechanization project at Vishakhapatnam port. VGCB is owned by SIIL and Leighton Welspun Contractors Private Limited in the ratio of 74:26. The project is to be carried out on design, build, finance, operate, transfer basis and the concession agreement between Vizag Port Trust and VGCB was signed on June 10, 2010. Vizag Port Trust had specified certain conditions to be satisfied, before the concession is awarded to VGCB. VGCB had 120 days from June 10, 2010 to fulfill the conditions. On October 8, 2010, VGCB was awarded with concession after fulfilling conditions precedents of the concession agreement. The concession period is 30 years from the date of the award of the concession. The capacity of upgraded berth shall be 10.18 mmtpa and that the Vishakhapatnam Port Trust will receive 38.10% share of the revenue earned from the berth as royalty. The costs for the project is Rs. 6,640 million ($ 121.8 million) of which Rs. 5,917 million ($ 108.5 million) has been spent. VGCB commenced operations during March 2013.

Paradip Port

We incorporated a special purpose vehicle, Paradip Multi Cargo Berth Private Limited, or PMCB, on February 8, 2011 for setting up a multipurpose berth to handle clean cargo including containers at Paradip port, situated in the Jagatsinghpur district of Orissa, on the east coast of India. The project was to be carried out on design, build, finance, operate and transfer basis. PMCB is owned by SIIL and Leighton Welspun Contractors Private Limited in the ratio of 74:26. The concession agreement with PMCB has not been signed till date as the regulatory approvals have not been received. PMCB has decided not to pursue the project further. Disputes between PMCB and the Paradip Port Trust have emerged due to this reason and the matter is pending in the Civil Court of Orissa.

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Exploration and Development Activities

We are engaged in ongoing exploration activities to locate additional ore bodies in India, Australia, South Africa, Namibia and Ireland. We spent approximately Rs. 1,291 million ($ 23.7 million) in fiscal 2013 on exploration.

The focus of our exploration has been sediment hosted zinc deposits in India.

Options to Increase Interests in HZL and BALCO

Call Options Over Shares in HZL

On April 11, 2002, we acquired a 26.0% interest in HZL from the GoI through subsidiary, SOVL (which has been merged with us with effect from April 1, 2012). At the time of the acquisition, we owned 80.0% and STL owned the remaining 20.0%. In February 2003, STL transferred its 20.0% interest to us. We subsequently acquired a further 20.0% interest in HZL through an open market offer. The total cash consideration paid by us for the acquisition of the 46.0% interest in HZL was Rs. 7,776.0 million ($ 161.9 million at the time of acquisition).

Upon our acquisition of the 26.0% interest in HZL, we and the GoI entered into a shareholders’ agreement to regulate, among other things, the management of HZL and dealings in HZL’s shares.

Under the shareholders’ agreement, the GoI granted us two call options to acquire all the shares in HZL held by the GoI at the time of exercise. We exercised the first call option on August 29, 2003 and acquired an additional 18.9% of HZL’s issued share capital at a cost of Rs. 3,239.0 million ($ 72.5 million) on November 12, 2003, taking our interest in HZL to 64.9%.

The shareholders’ agreement provides that prior to selling shares in HZL to a third party, either party must first issue a sale notice offering those shares to the other party at the price it intends to sell them to the third party. However, a transfer of shares, representing not more than 5.0% of the equity share capital of HZL, by the GoI to the employees of HZL is not subject to such right of first refusal by us. The GoI has transferred shares representing 1.5% of HZL’s share capital to the employees of HZL. The shareholders’ agreement also provides that if the GoI proposes to make a sale of its shares in HZL by a public offer prior to the exercise of our second call option, then we shall have no right of first refusal.

The second call option provides us a right to acquire the GoI’s remaining 29.5% shareholding in HZL, subject to the right of the GoI to transfer up to 3.5% of the issued share capital of HZL to employees of HZL, in which case the number of shares that we may purchase under the second call option will be reduced accordingly. This call option became exercisable on April 11, 2007 and remains exercisable for as long as the GoI has not sold its remaining interest pursuant to a public offer of its shares. Under the shareholders’ agreement, upon the issuance of a notice of exercise of the second call option by us to the GoI, we shall be under an obligation to complete the purchase of the shares, if any, then held by the GoI, within a period of 60 days from the date of such notice. The exercise price for the second call option will be equal to the fair market value of the shares as determined by an independent appraiser. In determining the fair market value of the shares, the independent appraiser may take into consideration a number of factors including, but not limited to, discounted cash flows, valuation multiples of comparable transactions, trading multiples of comparable companies, SEBI guidelines and principles of valuation, the minority status of the shares, the contractual rights of the shares and the current market price of the shares. Based solely on the market price of HZL’s shares on the NSE on July 19, 2013 of Rs. 104.35 ($ 1.9) per share, and not including the other factors that the independent appraiser may consider, one possible estimation of the exercise price to acquire all of the GoI’s 1,247,950,590 shares in HZL would be Rs. 130,224 million ($ 2,388.5 million).

By a letter dated July 21, 2009, we exercised the second call option. The GoI disputes the validity of the call option and has refused to act upon it. Consequently, we invoked arbitration and filed a statement of claim. The arbitral proceedings are under progress and will be next heard on November 13, 2013.

On January 9, 2012, we offered to acquire the GoI’s interests in HZL for Rs. 154,920 million ($ 2,841.5 million). We have, by way of letters dated April 10, 2012 and July 6, 2012, sought to engage with the GoI on the same terms as the offer. This offer was separate from the contested exercise of the call options, and we proposed to withdraw the ongoing litigation in relation to the contested exercise of the options should the offer be accepted. To date, the offer has not been accepted by the GoI and therefore there is no certainty that the acquisition will proceed.

Call Option Over Shares in BALCO

On March 2, 2001, we acquired a 51.0% interest in BALCO from the GoI for a cash consideration of Rs. 5,533.0 million. On August 28, 2012, we entered into a shareholders’ agreement with the GoI and BALCO to regulate, among other things, the management of BALCO and dealings in BALCO’s shares. The shareholders’ agreement provides that as long as we hold at least 51.0% of the share capital of BALCO, it is entitled to appoint one more director to the board of BALCO than the GoI and is also entitled to appoint the managing director. There are various other matters reserved for approval by both the GoI and us under the shareholders’ agreement, including amendments to BALCO’s articles of association, the commencement of a new business, non-pre-emptive issues of shares or convertible debentures and the provision of loans or guarantees or security to other companies under the same management as BALCO.

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Under the shareholders’ agreement, if either we or the GoI wish to sell its shares in BALCO to a third party, the selling party must first offer the shares to the other party at the same price at which it is proposing to sell the shares to the third party. The other party shall then have the right to purchase all, but not less than all, of the shares so offered. If a shareholder does not exercise its right of first refusal, it shall have a tag along right to participate in the sale pro rata and on the same terms as the selling party, except that if the sale is by the GoI by way of a public offer, the tag along right will not apply. However, a transfer of shares representing not more than 5.0% of the equity share capital of BALCO by the GoI to the employees of BALCO is not subject to such right of first refusal by us.

The GoI also granted us an option to acquire the remaining shares in BALCO held by the GoI at the time of exercise. The exercise price is the higher of:

• the fair value of the shares on the exercise date, as determined by an independent valuer; and

• the original sale price (Rs. 49.0 per share) ($ 1.1 per share) together with interest at a rate of 14.0% per annum compounded half yearly from March 2, 2001 to the exercise date, less all dividends received by the GoI since March 2, 2001 to the exercise date.

On March 19, 2004, we exercised our option to acquire the remaining 49.0% of BALCO’s issued share capital held by the GoI at that time. Thereafter, the GoI sought several extensions to complete the sale of the shares. On June 7, 2006, the GoI contended that the clauses of the shareholders’ agreement relating to our option violated the provisions of section 111A of the Indian Companies Act, 1956 by restricting the right of the GoI to transfer its shares and that as a result the shareholders’ agreement was null and void. The GoI has also expressed an intention to exercise its right to sell 5.0% of BALCO to BALCO employees.

We have filed a petition before the High Court of Delhi seeking that the High Court direct the GoI to deposit with it at least 44.0% of the equity shares in BALCO and that the High Court further grant an injunction to restrain the GoI from selling, transferring, pledging or mortgaging or in any other way disposing of or encumbering its shareholding in BALCO in favour of any third party. The GoI retains the right to sell its shares representing 5.0% of BALCO to BALCO employees.

Subsequently, the GoI notified us that it would require us to amicably negotiate or, if that fails, commence informal mediation as provided for under the terms of the shareholders’ agreement. The High Court of Delhi on August 7, 2006 directed that negotiations between the parties take place expeditiously. As negotiations for an amicable resolution were unsuccessful, on May 17, 2007, we filed a petition requesting that the Court appoint an arbitrator as provided for under the terms of the shareholders’ agreement.

At a hearing on July 10, 2007, the High Court directed the parties to conduct mediation proceedings failing which arbitration would proceed. The mediation process failed to resolve the dispute and the High Court directed the arbitrators appointed by the parties to constitute the arbitration tribunal. Consequently all applications before the High Court were discontinued. Arbitration proceedings commenced on February 16, 2009 and concluded on August 29, 2010. On January 25, 2011, the arbitration tribunal rejected our claims on the ground that the clauses relating to the call option, the right of first refusal, the “tag-along” rights and the restriction on the transfer of shares violate section 111A(2) of the Indian Companies Act, 1956. On April 23, 2011, we filed an application under section 34 of the Arbitration and Conciliation Act, 1996 in the High Court of Delhi to set aside the award dated January 25, 2011 to the extent that it holds these clauses ineffective and inoperative. The GoI also filed an application before the High Court of Delhi to partially set aside the arbitral award dated January 25, 2011 in respect of certain matters involving valuation. The High Court of Delhi passed an order dated August 10, 2011 directing our application and the application by the GoI to be heard together as they arise from a common arbitral award. The matter is currently pending before the High Court of Delhi.

On January 9, 2012, we offered to acquire the GoI’s interests in BALCO for Rs. 17,820 million ($ 326.8 million). We have, by way of letters dated April 10, 2012 and July 6, 2012, sought to engage with the GoI on the same terms as the offer. This offer was separate from the contested exercise of the call options, and we proposed to withdraw the ongoing litigation in relation to the contested exercise of the options should the offer be accepted. To date, the offer has not been accepted by the GoI and therefore there is no certainty that the acquisition will proceed.

Employees

As of March 31, 2013, we had 13,471 employees as follows:

Company		Location	Primary Company Function	Total Employees
Copper
	— Sterlite Industries (India) Limited	India	Copper smelting and refining		1,202
	— Copper Mines of Tasmania Proprietary Limited.	Australia	Copper mining		115
	— Fujairah Gold FZE	UAE	Precious metal refinery		79
Zinc
	— Hindustan Zinc Limited	India	Zinc and lead production		6,024
Zinc International
	— Black Mountain	South Africa	Zinc and lead Mining		789
	— Skorpion	Namibia	Zinc and lead Mining & refining		754
	— Lisheen	Ireland	Zinc and lead Mining		380

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Company		Location	Primary Company Function	Total Employees
Aluminium
	— BALCO	India	Aluminium production		3,811
Power
	— Sterlite Energy Limited	India	Commercial power generation		165
	— Talwandi Sabo Power Limited	India	Commercial power generation		106
Others					46
Total					13,471

The majority of our workforce is unionized. Employees of HZL and BALCO are members of registered trade unions such as Bharat Aluminium Mazdoor Sangh for BALCO and Hindustan Zinc Workers Federation for HZL, and are affiliated with national trade unions such as the Indian National Trade Union Congress. We believe that relations with our employees and unions are good, though we have in the past and may in the future experience strikes and industrial actions or disputes. See “Item 3. Key Information—D. Risk Factors—Risks Relating to Our Business—Our operations are subject to operating risks that could result in decreased production, increased cost of production and increased cost of or disruptions in transportation, which could adversely affect our revenue, results of operations and financial condition.”

We have a strong ongoing institutional commitment to the health and safety of our employees for achieving sustainable development in harmony with the communities and environments in which we operate. Proactively complying with and exceeding the requirements of regulatory guidelines, utilizing environment friendly technologies in our expansions and modernizations and implementing programs to support communities around our facilities are integral part of to our business strategy. Most of our mines, refineries and smelters in India are both International Standards Organization (ISO) 14001 and Occupational Health and Safety Assessment Series (OHSAS) 18001 certified. We are committed to providing a healthy and safe working environment, to promoting empowerment, commitment and accountability of our employees and to being an equal opportunity employer. We actively initiate and participate in a variety of programs to contribute to the health, education and livelihood of the people in the local communities in which we operate, including through support of schools, educational programs and centers, women empowerment programs, hospitals and health centers. We constantly seek out and invest in new technologies and operational improvements to minimize the impact of our operations on the environment, including energy conservation measures, reductions in sulphur dioxide gas and other air emissions, water conservation and recycling measures and proper residue management. We also invest in programs to promote reforestation and better agricultural practices.

Insurance

We maintain property insurance which protects against losses relating to our assets arising from fire, business interruption, earthquakes or terrorism and freight insurance which protects against losses relating to the transport of our equipment, product inventory and concentrates. However, our insurance does not cover other potential risks associated with our operations. In particular, we do not have insurance for certain types of environmental hazards, such as pollution or other hazards arising from our disposal of waste products. The occurrence of a significant adverse event, the risks of which are not fully covered by insurance, could have a material adverse effect on our financial condition or results of operations. Moreover, no assurance can be given that we will be able to maintain existing levels of insurance in the future at the same rates. See “Item 3. Key Information -D. Risk Factors—Risks Relating to Our Business- Our insurance coverage may prove inadequate to satisfy future claims against us.”

We and our directors and officers are subject to US securities and other laws. In order to attract and retain qualified board members and executive officers, we have obtained directors’ and officers’ liability insurance. There can be no assurance that we will be able to maintain directors’ and officers’ liability insurance at a reasonable cost, or at all.

Regulatory Matters

Mining Laws

The Mines and Minerals (Development and Regulations) Act, 1957, as amended, or the MMDR Act, the Mineral Concession Rules, 1960, as amended, or the MC Rules, and the Mineral Conservation and Development Rules, 1988, as amended, or the MCD Rules, govern mining rights and the operations of mines in India. The MCD Rules outline the procedures for obtaining a prospecting license or the mining lease, the terms and conditions of such licenses and the model form in which they are to be issued. The GoI announced the National Mineral Policy in 1993. Additionally, a draft bill has been proposed by the Ministry of Mines to amend the existing Mines and Minerals (Development and Regulation) Act, 1957, which will result in a number of changes in the existing legal regime for the mining sector.

Grant of a Mining Lease

Only the government of the applicable state may grant a mining lease. The mining lease agreement governs the terms on which the lessee may use the land for the purpose of mining operations. If the land on which the mines are located belongs to private parties, the lessee must acquire the surface rights relating to the land from such private parties. If a private party refuses to grant the required surface rights to the lessee, the lessee is entitled to inform the state government and deposit with the state government compensation for the acquisition of the surface rights. If the state government deems that such amount is fair and

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reasonable, the state government has the power to order a private party to permit the lessee to enter the land and carry out such operations as may be necessary for the purpose of mining. For determining what constitutes a fair amount of compensation payable to the private party, state governments are guided by the principles of the Land Acquisition Act, 1894, as amended, or Land Acquisition Act, which generally governs the acquisition of land by governments from private individuals. In case of land owned by the government, the surface right to operate in the lease area is granted by the government upon application as per the norms of that state government. If the mining operations in respect of any mining lease results in the displacement of any persons, the consent of such affected persons, and their resettlement and rehabilitation as well as payment of benefits in accordance with the guidelines of the applicable state government, including payment for the acquired land owned by those displaced persons, needs to be settled or obtained before the commencement of the mining project. The maximum term of a mining lease is 30 years and the minimum term is 20 years. A mining lease may be renewed for further periods of 20 years or less at the option of the lessee. The MC Rules provide that if a lessee uses the minerals for its own industry, then such lessee is generally entitled to a renewal of its mining lease for a period of 20 years, unless it applies for a lesser period.

Protection of the Environment

The MMDR Act also deals with the measures required to be taken by the lessee for the protection and conservation of the environment from the adverse effects of mining. The National Mining Policy emphasises that no mining lease would be granted to any party without a proper mining plan, including an environmental plan approved and enforced by statutory authorities and which provides for controlling environmental damage, restoration of mined areas and for planting trees according to prescribed norms.

Labor Conditions

Working conditions of mine laborers are regulated by the Mines Act, 1952, as amended from time to time, which sets forth standards of work, including number of hours of work, leave requirements, medical examination, weekly days of rest, night shift requirements and other requirements to ensure the health and safety of workers employed in mines.

Royalties

Royalties on the minerals extracted or a dead rent component, whichever is higher, are payable to the relevant state government by the lessee in accordance with the MMDR Act. The mineral royalty is payable in respect of an operating mine from which minerals are removed or consumed and is computed in accordance with a prescribed formula. The GoI has been granted broad powers to modify the royalty scheme under the MMDR Act, but may not do so more than once every three years. In addition, the lessee must pay the occupier of the surface land over the mining lease an annual compensation determined by the state government. The amount depends on whether the land is agricultural or non-agricultural.

Mines Bill

The Mines (Amendment) Bill, 2011 proposes several amendments to the Mines Act, 1952, including significant enhancement to the monetary penalties and terms of imprisonment for violations under the Mines Act, 1952.

Environment Laws

Our business is subject to environmental laws and regulations. The applicability of these laws and regulations varies from operation to operation and is also dependent on the jurisdiction in which we operate.

Our operations require various environmental and other permits covering, among other things, water use and discharges, stream diversions, solid waste disposal and air and other emissions. Major environmental laws applicable to our operations include The Environment (Protection) Act, 1986, Forest (Conservation) Act, 1980, or Forest Act and the Forest Conservation Rules, 2003, Hazardous Wastes (Management and Handling) Rules, 1989, Water (Prevention and Control of Pollution) Act, 1974, Water (Prevention and Control of Pollution) Cess Act, 1977, Air (Prevention and Control of Pollution) Act, 1981, The Coal Mines (Nationalization) Act, 1973, or Coal Nationalization Act, Coking Coal Mines (Nationalization) Act, 1972, Coal Mines (Taking Over of Management) Act, 1973, Coking Coal Mines (Emergency Provision) Act, 1971, Coal Bearing Areas (Acquisition and Development) Act, 1957, Coal Mines (Conservation and Development) Act, 1974 and the New Coal Distribution Policy, 2007.

Power Sector

Licencing Requirements

Under the Electricity Act, 2003, or Electricity Act, transmission and distribution of, and trading in, electricity require licences from the appropriate Central or State Electricity Regulatory Commissions (respectively, “CERCs” and “SERCs”, and collectively, “ERCs”), unless exempted in accordance with the Electricity Act. The Tariff Policy, 2006 requires all procurement of power after January 6, 2006 to be through the bidding route. The CERC (Terms and Conditions of Tariff) Regulations, 2009, or Tariff Regulations, apply where tariff for a generating station or unit (other than those based on non-conventional energy sources) and transmission system is yet to be determined by CERC. In compliance with the Electricity Act, the GoI announced the National Electricity Policy in February 2005. The Electricity Act requires CEA to frame a National Electricity Plan once in five years and revise such plan from time to time in accordance with the National Electricity Policy.

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Mega Power Projects

Under the Mega Power Policy introduced by the MoP on November 10, 1995 and amended on December 14, 2009, power projects which meet certain specific criteria are eligible to be classified as mega power projects.

Ultra Mega Power Projects

With the aim of meeting India’s significant power requirements, the GoI proposed the construction of Ultra Mega Power Projects or UMPPs in 2006. The award of the projects is based on competitive bidding processes, with the amount of normalised tariff for 25 years being a significant factor in their selection.

Employment and Labor Laws

We are subject to various labor, health and safety laws which govern the terms of employment of the our laborers at our mining and manufacturing facilities, their working conditions, the benefits available to them and the general relationship between our management and such laborers. These include the Industrial Disputes Act, 1947, Factories Act, 1948, Contract Labor (Regulation and Abolition) Act, 1970, Employee State Insurance Act, 1948, Payment of Wages Act, 1936, Minimum Wages Act, 1948, Workmen’s Compensation Act, 1923, Payment of Gratuity Act, 1972, Payment of Bonus Act, 1965, and Employees’ Provident Funds and Miscellaneous Provisions Act, 1952.

Other Laws

Land Acquisition Act, 1894, or Land Acquisition Act

As per the provisions of the Land Acquisition Act, the central government or appropriate state government is empowered to acquire any land from private persons for ‘public purpose’ subject to payment of compensation to the persons from whom the land is so acquired. The Land Acquisition, Rehabilitation and Resettlement Bill, 2011 was introduced in the Indian Parliament on September 7, 2011. The Bill proposes a unified legislation for acquisition of land and adequate rehabilitation mechanisms for all affected persons and replaces the Land Acquisition Act, 1894.

Companies Act, 1956

The Companies Act, 1956 curently governs the formation, financing, functioning and winding up of companies. The Companies Bill, 2012 was passed by the Lower House of the Indian Parliament on December 18, 2012. The Bill seeks to consolidate and amend the law relating to the companies and intends to improve corporate governance and to further strengthen regulations for corporates. Once passed by the Upper House of the Indian Parliament and assented to by the President of India, the new legislation will replace the Companies Act, 1956. Among the major features of the Bill includes formulation of a corporate social responsibility (CSR) policy and spending towards CSR activities, increased responsibility of independent directors and setting up of a National Financial Reporting Authority (NFRA).

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C. Corporate Structure

The following diagram summarizes the corporate structure of our consolidated group of companies and our relationship with Vedanta and other key entities as of March 31, 2013:

(1) Volcan is owned and controlled by the Anil Agarwal Discretionary Trust. Onclave, is the trustee of the Anil Agarwal Discretionary Trust and controls all voting and investment decisions of the Anil Agarwal Discretionary Trust. As a result, shares beneficially owned by Volcan may be deemed to be beneficially owned by the Anil Agarwal Discretionary Trust and, in turn, by Onclave. The beneficiaries of the Anil Agarwal Discretionary Trust are members of the Agarwal family, who are related to Mr. Anil Agarwal. Mr. Anil Agarwal, the Executive Chairman of Vedanta and our Non-Executive Chairman, as protector of the Anil Agarwal Discretionary Trust, may be deemed to have deemed beneficial ownership of shares that are beneficially owned by the Anil Agarwal Discretionary Trust.

(2) We have exercised the second call option to acquire the GoI’s remaining ownership interest in HZL although the exercise is currently subject to dispute. See “- B. Business Overview—Our Business—Options to Increase Interests in HZL and BALCO” for more information.

(3) We have exercised our option to acquire the remaining 49.0% of BALCO owned by the GoI on March 19, 2004. The exercise of this option has been contested by the GoI. The GoI has the right and has expressed an intention to sell 5.0% of BALCO to BALCO employees. See “—B. Business Overview—Our Business—Options to Increase Interests in HZL and BALCO” for more information.

The principal members of our consolidated group of companies are as follows:

• SIIL. We are incorporated in Kolkata, State of West Bengal, India, our registered office is in Tuticorin, State of Tamil Nadu, India and we are headquartered in Mumbai. We have been a public listed company in India since 1988 and our equity shares are listed and traded on the NSE and BSE. Our ADSs are listed on the NYSE. Vedanta, through Twin Star and MALCO, owns 58.2 % of our issued share capital and has management control of us. Vedanta’s 58.2% ownership interest in us is equal to the sum of Twin Star’s 54.64% ownership interest in us plus 3.6% ownership interest in us of MALCO. We are a majority-owned and controlled subsidiary of Vedanta. The remainder of our share capital is held by Bhadram Janhit Shalika (previously known as the SIL Employees Welfare Trust), Life Insurance Corporation of India, or LIC, and other institutional and public shareholders (41.8%). We operate our copper business within Sterlite, except for our Australian copper mine, which is owned and operated by our wholly-owned subsidiary CMT.

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• BALCO. BALCO is incorporated in New Delhi, State of Delhi, India and is headquartered at Korba in the State of Chhattisgarh. We own 51.0% of BALCO’s share capital and have management control of the company. The GoI owns the remaining 49.0%. We exercised an option to acquire the GoI’s remaining ownership interest in BALCO on March 19, 2004, which has been contested by the GoI. Further, the GoI retains the right and has expressed an intention to sell 5.0% of BALCO to BALCO employees. See “—B. Business Overview—Our Business—Options to Increase Interests in HZL and BALCO” for more information. BALCO owns and operates our aluminium business.

• HZL. HZL is incorporated in Jaipur, State of Rajasthan, India and is headquartered in Udaipur in Rajasthan. HZL is listed on the NSE and BSE. We own 64.9% of HZL’s share capital through our wholly-owned subsidiary SOVL. SOVL was merged into SIIL with effect from April 1, 2011 pursuant to a merger approved by the Hon’ ble Madras High Court. The remainder of HZL’s share capital is owned by the GoI (29.5%) and institutional and public shareholders and employees of HZL (5.6%). We have management control of HZL, which owns and operates our zinc business, and a call option to acquire the GoI’s remaining ownership interest at a fair market value to be determined by an independent appraiser. We have exercised the second call option to acquire the GoI’s remaining ownership interest in HZL although the exercise is currently subject to dispute. See “- B. Business Overview—Our Business—Options to Increase Interests in HZL and BALCO” for more information.

• Sterlite Energy. Sterlite Energy is incorporated in Mumbai, State of Maharashtra, India, and its registered office is located in Tuticorin, State of Tamil Nadu. Sterlite Energy is our wholly-owned subsidiary. TSPL is a wholly owned subsidiary of Sterlite Energy.

• SIL. SIL (formerly Sterlite Paper Limited) was incorporated on June 25, 1999, State of Maharashtra, India, and its registered office is located in Tuticorin, State of Tamil Nadu. SIL is our wholly owned subsidiary. During fiscal 2011, SIL acquired the zinc business of Anglo American Plc which included the acquisition of 100.0% stake in Skorpion, which owns the Skorpion mine and refinery in Namibia, a 74.0% stake in BMM, which owns the Black Mountain mine and the Gamsberg Project, in South Africa and a 100.0% stake in Lisheen which owns the Lisheen mine in Ireland.

• Skorpion. Skorpion, previously Anglo Base Namibia Holdings (Proprietary) Limited, previously Ambase Exploration (Namibia) Proprietary Limited was incorporated on June 16, 1998. The company has its headquarters at the Skorpion Zinc mine site, which is situated 25 km north of Rosh Pinah Namibia. The company’s registered office is situated at 24 Orban Street, Klein Windhoek, Namibia. The company holds the entire share capital in the following companies: Skorpion Zinc Proprietary Limited, Namzinc Proprietary Limited and Skorpion Skorpion Zinc Proprietary Limited is an investment holding company, holding the entire share capital in Namzinc and Skorpion. Namzinc operates a zinc refinery, who procures oxide zinc ore from Skorpion, who in turn extracts the ore from an open pit zinc deposit.

• BMM. BMM is an underground mining operation located at Aggeneys in the Northern Cape. It produces zinc, lead and copper concentrates which are sold both locally and exported to international customers through the Saldanha harbour. The zinc mine at Black Mountain is an underground operation, mining a polymetallic ore body, with an attached concentrator producing approximately 28,000 tons of zinc, 50,000 tons of lead, 2,000 tons of copper and 55 tons of silver in concentrate, annually. Exxaro Resources (through its wholly owned subsidiary, Exxaro Base Metals) holds the remaining 26.0% interest in BMM. The predominant mining method is ramp in stope cut and fill. The planned production rate is 1.56 mtpa plant feed and the share hoisting capacity is approximately 150,000 tpa. All production stopes are backfilled and waste filled, integrated into the mining sequence.

• Vedanta Lisheen Holdings Limited: Lisheen is located in County Tipperary in Ireland, 160 km SW of Dublin, Republic of Ireland Lisheen is a world-class zinc operation, consisting of an underground mine, concentrator and backfill plant, producing approximately 175,000 tons of zinc in concentrate annually. In addition, Lisheen produces 20,000 tons of lead concentrate annually. The Lisheen zinc deposit is located in the Rathdowney Trend, which comprises sedimentary rocks, mainly limestone, which were formed approximately 320 million years ago. The mine commenced production in 1999, following a successful development partnership between Minorco (merged with Anglo American in 1999) and Ivernia West. Anglo American subsequently acquired Ivernia’s stake in 2003 to gain 100% ownership. Lisheen mine extracts lead and zinc ore from underground, processes this into zinc and lead concentrates and sells these concentrates to smelters and customers in Europe, Asia, North Africa and the US. The deposit was discovered in 1990 and construction commenced in 1997 and in late 1999 production commenced from the two main ore bodies. The production from third ore body was commenced in 2006. The average depth is approximately 190 meters below surface and as pre current planning and financial forecasts the end of production is scheduled to 2015.

The key entities that control us are as follows:

• Volcan. Volcan was incorporated in the Bahamas on November 25, 1992, and is owned and controlled by the Anil Agarwal Discretionary Trust. Onclave is the trustee of the Anil Agarwal Discretionary Trust and controls all voting and investment decisions of the Anil Agarwal Discretionary Trust. Mr. Anil Agarwal, the Executive Chairman of Vedanta and our Non-Executive Chairman, controls the Anil Agarwal Discretionary Trust. Vedanta, Volcan, the Anil Agarwal Discretionary Trust, Onclave and Mr. Anil Agarwal are parties to a relationship agreement that regulates the ongoing relationship among them. Volcan holds 58.2% of the share capital and 64.9% of the voting rights of Vedanta.

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• Vedanta. On April 22, 2003, Vedanta was created as a new company wholly-owned by Volcan. We and a number of other companies owned directly or indirectly by the Agarwal family at that time became subsidiaries of Vedanta. On December 10, 2003, Vedanta completed an initial public offering of its shares in the United Kingdom and its shares were listed on the LSE. As of March 31, 2012, Volcan holds 58.2% of the share capital and 64.9% of the voting rights of Vedanta. Vedanta is a leading metals and mining company that is listed on the LSE and included in the FTSE 100 Index. We are a majority-owned and controlled subsidiary of Vedanta. In 2004, Vedanta, through its wholly-owned subsidiary, VRHL, acquired 51.0% of KCM, which is incorporated in Zambia. In April 2008, Vedanta acquired a further 28.4% of KCM. KCM is the largest copper metals and mining company in Zambia and exports substantially all of its copper production to the Middle East and Southeast Asia. KCM competes with us on the world copper markets. In April 2007, Vedanta acquired a 51.0% controlling interest in Sesa Goa Limited, which was incorporated in India, is India’s largest private sector iron ore producer and exports substantially all of its iron ore production to leading global steel companies in China, Europe and Japan. In December 2011, Vedanta acquired 58.8% controlling stake in Cairn India, the largest private crude oil producer in India with assets in the State of Rajasthan.

• MALCO. MALCO was incorporated in 1960 in the State of Tamil Nadu, India where it is also headquartered. MALCO was delisted from the NSE and BSE on June 19, 2009. Vedanta has management control of MALCO. We also have an associate company, Vedanta Aluminium, which is incorporated in the State of Maharashtra, India, and is 70.5% owned by Vedanta through Twin Star and Welter Trading, following a Rs. 4,421 million investment in March 2005. In September 2008, Twin Star sold 25.0% of its interest in Vedanta Aluminium to Welter Trading, a wholly-owned subsidiary of Twin Star. We own the remaining 29.5% non-controlling interest in Vedanta Aluminium. Vedanta Aluminium is part of Vedanta’s consolidated group of companies but is not part of our consolidated group of companies. See “—B. Business Overview—Our Business—Overview.”

D. Property, Plant and Equipment

See “- B. Business Overview—Our Business—Our Copper Business—Principal Facilities,” “- B. Business Overview—Our Business—Our Zinc Business—Principal Facilities” “- B. Business Overview—Our Business—Our Aluminium Business—Principal Facilities.” and “- B. Business Overview—Our Business—Our Zinc International Business—Principal Facilities.”

ITEM 4A. UNRESOLVED STAFF COMMENTS

Not Applicable

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following discussion of our business, financial condition and results of operations should be read in conjunction with our consolidated financial statements and the related notes included elsewhere in this annual report. Some of the statements in the following discussion are forward-looking statements that reflect our current views with respect to future events and financial performance. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, such as those set forth under “Item 3. Key Information—D. Risk Factors” and elsewhere in this annual report. Our consolidated financial statements and the financial information discussed below have been prepared in accordance with IFRS as issued by the IASB.

Overview

We are a non-ferrous metals and mining company with operations in India, Australia, United Arab Emirates, Namibia, South Africa and Ireland. We also operate a commercial power generation business in India that leverages our experience in building and managing captive power plants used to support our copper, zinc and aluminium businesses. We also have a non-controlling interest in Vedanta Aluminium, an alumina refining and aluminium smelting company. We have experienced significant growth in recent years through various expansion projects, acquisition of our zinc and aluminium businesses in 2002 and 2001 respectively, through the GoI’s privatization programs, the acquisition of the zinc business of Anglo American Plc in Namibia, South Africa and Ireland in fiscal 2011, and by successfully growing our acquired businesses. We believe our experience in operating and expanding our business in India will allow us to capitalize on attractive growth opportunities arising from India’s large mineral reserves, relatively low cost of operations and large and inexpensive labor and talent pools.

Our revenue and operating profit increased from Rs. 302,472 million and Rs. 67,574 million in fiscal 2011 to Rs. 412,063 million and Rs. 71,294 million in fiscal 2012, respectively representing an increase of 36.2% and 5.5 %, respectively and further increased to Rs. 452,550 million ($ 8,300.6 million) and Rs. 76,526 million ($ 1,403.6 million) in fiscal 2013, respectively representing an increase of 9.8% and 7.3%, respectively.

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The following tables are derived from our selected consolidated financial data and set forth:

• the revenue from external customers for each of our business segments as a percentage of our revenue on a consolidated basis;

• the operating profit for each of our business segments as a percentage of our operating profit on a consolidated basis; and

• the segment profit for each of our business segments as a percentage of our segment profit on a consolidated basis.

	For the Year Ended March 31,
	2011			2012			2013
	(in percentages)
Revenue:
Copper		51.8			48.9			48.0
Zinc – India		32.5			27.0			27.2
Zinc – International		3.3			10.0			9.6
Aluminum		10.0			7.5			7.6
Power		2.4			5.9			6.8
Other		—			0.7			0.8
Total		100.0			100.0			100.0
Operating Profit:
Copper		13.6			10.9			11.1
Zinc – India		75.3			75.8			75.0
Zinc – International		2.4			8.4			6.7
Aluminum		5.2			1.9			0.4
Power		3.6			3.1			6.9
Other		(0.1	)		(0.1	)		(0.1	)
Total		100.0			100.0			100.0
Segment Profit(1):
Copper		14.1			10.3			10.6
Zinc – India		69.2			61.5			61.7
Zinc – International		5.3			18.0			15.3
Aluminum		7.3			4.1			2.6
Power		4.2			6.1			9.9
Other		(0.1	)		—			(0.1	)
Total		100.0			100.0			100.0

Note:

(1) Segment profit is calculated by excluding depreciation and amortization from operating profit. Our segment profit may not be comparable to similarly titled measures reported by other companies due to potential inconsistencies in the method of calculation. We have included our segment profit because we believe it is an indicative measure of our operating performance and is used by investors and analysts to evaluate companies in our industry. Our segment profit should be considered in addition to, and not as a substitute for, other measures of financial performance and liquidity reported in accordance with IFRS as issued by the IASB. We believe that the inclusion of supplementary adjustments applied in our presentation of segment profit are appropriate because we believe it is an indicative measure of our baseline performance as it excludes certain charges that our management considers to be outside of our core operating results. In addition, our segment profit is among the primary indicators that our management uses as a basis for planning and forecasting of future periods. The following table reconciles operating profit to segment profit for the periods presented:

	For the Year Ended March 31,
	2011		2012		2013		2013
	(Rs. in millions)		(Rs. in millions)		(Rs. in millions)		(US Dollar in millions)
Copper:
Operating profit		9,198		7,770		8,515		156.2
Plus: Depreciation and amortization		2,049		2,173		2,351		43.1
Segment profit		11,247		9,943		10,866		199.3
Zinc India:
Operating profit		50,914		54,018		57,426		1,053.3
Plus: Depreciation and amortization		4,429		5,236		5,844		107.2
Segment profit		55,343		59,254		63,270		1,160.5

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	For the Year Ended March 31,
	2011			2012			2013			2013
	(Rs. in millions)			(Rs. in millions)			(Rs. in millions)			(US Dollar in millions)
Zinc International:
Operating profit		1,592			6,008			5,078			93.1
Plus: Depreciation and amortization		2,655			11,359			10,634			195.1
Segment profit		4,247			17,367			15,712			288.2
Aluminum:
Operating profit		3,495			1,345			328			6.0
Plus: Depreciation and amortization		2,371			2,653			2,321			42.6
Segment profit		5,866			3,998			2,649			48.6
Power:
Operating profit		2,437			2,200			5,251			96.3
Plus: Depreciation and amortization		917			3,681			4,874			89.4
Segment profit		3,354			5,881			10,125			185.7
Other:
Operating profit		(62	)		(47	)		(72	)		(1.3	)
Plus: Depreciation and amortization		1			1			11			0.1
Segment profit		(61	)		(46	)		(61	)		(1.2	)

Consolidation and re-organization of Sesa Goa, Sterlite, Vedanta Aluminium, Sterlite Energy and MALCO to form Sesa Sterlite and transfer of Vedanta’s shareholding in Cairn India to Sesa Sterlite

On February 25, 2012, Vedanta announced an all-share merger of Sesa Goa and Sterlite, to create Sesa Sterlite and to effect the consolidation and simplification of Vedanta’s corporate structure through two series of transactions (together the “Reorganisation Transactions” consisting of the “Amalgamation and Reorganisation Scheme” and the “Cairn India Consolidation”).

The Amalgamation and Reorganisation Scheme

1. We will merge with and into Sesa Goa (which will be renamed Sesa Sterlite) through the issue of Sesa Goa shares to our shareholders (other than MALCO) on a three for five basis resulting in the issue of approximately 1,945 million Sesa Goa shares to our shareholders. The holders of our ADRs will receive three Sesa Goa ADRs for every five existing Sterlite ADRs. Our outstanding convertible bonds will become convertible bonds of Sesa Goa with equivalent rights and obligations;

2. MALCO’s power business will be sold to Vedanta Aluminium for cash consideration of Rs. 1,500 million;

3. MALCO will merge with and into Sesa Goa through the issue of Sesa Goa shares to the shareholders of MALCO on a seven for ten basis, resulting in the issue of approximately 78.7 million Sesa Goa shares to the shareholders of MALCO and consequently, MALCO’s holding in us will be cancelled;

4. Sterlite Energy will merge with and into Sesa Goa for no consideration;

5. Vedanta Aluminium’s aluminium business will merge with and into Sesa Goa for no consideration; and

6. Through a separate but concurrent amalgamation under Indian and Mauritian law, Ekaterina Limited, a Mauritian company and a wholly owned subsidiary of Vedanta which holds Vedanta's 70.5% ownership interest in Vedanta Aluminium will be merged with and into Sesa Goa. As we currently hold the remaining 29.5% of the shares of Vedanta Aluminium, upon this concurrent amalgmation scheme becoming effective, Vedanta Aluminium will be a wholly-owned subsidiary of Sesa Sterlite.

Cairn India Consolidation

The subsidiaries of Vedanta and Sesa Goa have entered into a sale and purchase agreement pursuant to which Vedanta's 38.7% ownership interest in Cairn India, together with debt of approximately $ 5.9 billion incurred by Vedanta to acquire that interest in Cairn India, will be transferred to a subsidiary of Sesa Sterlite for nominal consideration. The Cairn India Consolidation is not conditional on the Amalgamation and Reorganisation Scheme being completed. As of March 31, 2013, a subsidiary of Vedanta and Sesa Goa hold 38.7% and 20.1% of Cairn India’s shareholding respectively. After the completion of the Reorganisation Transactions, Vedanta, through Sesa Sterlite will hold 58.8% of the total shareholding of Cairn India.

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The Sesa Goa shares are, and the Sesa Sterlite shares will continue to be, listed on the BSE and the NSE. In connection with the merger of Sterlite into Sesa Goa to form Sesa Sterlite, Sesa Sterlite will establish an ADS facility and its ADSs are expected to be listed on The New York Stock Exchange.

Current Status of the Reorganization Transactions

The Reorganisation Transactions will become effective once the appeal before the High Court of Bombay at Goa is disposed and we file all the third party approvals received with the Registrar of Companies. The High Court of Madras approved the Amalgamation and Reorganisation Scheme by an order dated July 25, 2013. The High Court of Bombay at Goa approved the Amalgamation and Reorganisation Scheme by an order dated April 3, 2013. However, an appeal against this order has been filed by a shareholder of Sesa Goa and the order is yet to be delivered. Further, all the necessary approval and shareholder resolutions to implement the Cairn India Consolidation have been obtained.

Tuticorin Smelter

Various writ petitions were filed before the High Court of Madras between 1996 and 1998 by various non-governmental organisations such as The National Trust for Clean Environment, political parties and some private citizens alleging, among other things, that sulphur dioxide emissions from our copper smelting operations at Tuticorin are causing air and water pollution and hazardous waste resulting in damage to the marine ecosystem and the lives of people living in and around Tuticorin.

In September 2010, the High Court of Madras ordered the closure of our copper smelting plant at Tuticorin. Following our appeal of this order to the Supreme Court of India, the order was stayed until further notice. The Supreme Court in subsequent hearings directed the Tamil Nadu Pollution Control Board (“TNPCB”), National Environmental Engineering Research Institute (“NEERI”) and the Central Pollution Control Board (“CPCB”) to issue certain directions and implement certain measures for the improvement of the copper smelter unit at Tuticorin. The Supreme Court in April 2013 allowed our appeal and set aside the order of the High Court of Madras. The Supreme Court has ruled that the plant has complied with all the directions and measures issued by the NEERI, TNPCB and CPCB. However, the Supreme Court directed the company to deposit Rs. 1,000 million ($18.3 million) with the District Collector, Tuticorin, which will be used for the improvement of the environment, including soil and water, near the location of the plant.

Separately, in March 2013, the TNPCB ordered the closure of the copper smelter at Tuticorin due to complaints regarding a noxious gas leak by local residents. On April 1, 2013 we filed a petition in the National Green Tribunal (“NGT”) challenging the order of the TNPCB on the basis that the plant’s emissions were within permissible limits. The NGT passed an interim order in May 2013 allowing the copper smelter to recommence operations subject to certain conditions. We recommenced operations on June 16, 2013. The expert committee constituted by the NGT submitted a report on the operation of the plant on July 10, 2013 stating that the plant’s emissions were within the prescribed standards and based on this report, the NGT ruled on July 15, 2013 that the copper smelter could remain open and reserved its order. The NGT has also directed the company to comply with the recommendations made by the committee to further improve the working of the plant within a time bound schedule. However, the TNPCB filed a notice of appeal against the interim order of the NGT. The next date of hearing is on August 5, 2013. Please see “Item 3. Key Information — D. Risk Factors —We are involved in certain litigation seeking cancellation of permits and environmental approval for the alleged violation of certain air, water and hazardous waste management regulations at our Tuticorin plant” for additional information.

Factors Affecting Results of Operations

Our results of operations are primarily affected by commodity prices, our cost of production, our production output, government policy in India and exchange rates.

Metal Prices, Copper TcRc and Power Tariff

Overview

Our results of operations are significantly affected by the treatment charge and refining charge, or TcRc, of copper in our copper business and the commodity prices of the metals that we produce, which are based on LME prices, in our zinc and aluminium businesses, and the tariffs determined in our power business. Both the TcRc of copper and the commodity prices of the metals that we produce can vary significantly when supply of and demand for copper smelting and refining capacity and the metals we produce fluctuate. While copper smelters and metal producers are unable to influence the market rate of the TcRc or commodity prices directly, events such as changes in copper smelting or commodity production capacities, temporary price reductions or other attempts to capture market share by individual smelters and metal producers, including by our consolidated group of companies, may have an effect on market prices. Moreover, the prices realized by us can, to some extent, be affected by the particular terms we are able to negotiate for the contractual arrangements we enter into with buyers. Price variations and market cycles including volatility in both LME prices and the copper TcRc, have historically influenced, and are expected to continue to influence, our financial performance.

Global growth and commodity demand remains volatile and emerging markets continue to be the key drivers of growth. We are well positioned to capitalize on emerging market growth with a significant portion of our assets in India and Africa. With favorable demographics and urbanization driving consumption growth in India, we are well placed to meet the growing demand.

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For a further discussion of global market and economic conditions and the risks to our business, see “Item 3. Key Information—D. Risk Factors—Risks Relating to Investments in Indian Companies, Global Economic Conditions and International Operations—Global economic conditions have been unprecedented and challenging and have had, and continue to have, an adverse effect on the Indian financial markets and the Indian economy in general, which has had, and may continue to have, a material adverse effect on our business, our financial performance and the prices of our equity shares and ADSs.”

Copper

The revenue of our copper business fluctuates based on the volume of our sales and the LME price of copper. However, as our copper business is primarily one of custom smelting and refining, with only a small percentage of our copper concentrate requirements sourced from our own mine, the profitability of our copper business is significantly dependent upon the market rate of the TcRc. We purchase copper concentrate at the LME linked price for the relevant quotational period less a TcRc that we negotiate with our suppliers but which is influenced by the prevailing market rate for the TcRc. The market rate for the TcRc is significantly dependent upon the availability of copper concentrate, worldwide copper smelting capacity and transportation costs. The TcRc that we are able to negotiate is also substantially influenced by the TcRc terms established by certain large Japanese custom smelters. The profitability of our copper business as to the portion of our copper business where we source copper concentrate from third parties, which accounted for 92.3% of our copper concentrate requirements in fiscal 2013, is thus dependent upon the amount by which the TcRc we are able to negotiate exceeds our smelting and refining costs. The profitability of our copper operations is also affected by the prices we receive upon the sale of by-products, such as sulphuric acid and gypsum and precious metals, which are generated during the copper smelting and refining process. The prices we receive for by-products can vary significantly, including as a result of changes in supply and demand and local market factors in the location the by-product is produced. The following table sets forth the average TcRc that we have realized for each of the last three fiscal years:

	For the Year Ended March 31,
	2011		2012		2013
	(in US cents per pound)
Copper TcRc		11.9		14.5		12.8

The LME price of copper affects our profitability as to the portion of our copper business where we source copper concentrate from our own mine, which accounted for 7.7% of our copper concentrate requirements in fiscal 2013 and which is expected to decrease as a percentage in the future as the reserves of our sole remaining copper mine, Mt. Lyell in Tasmania, Australia, are expected to be exhausted by fiscal 2017 and to the extent we seek to increase our copper smelting and refining capacity. The following table sets forth the daily average copper LME price for each of the last three fiscal years:

	For the Year Ended March 31,
	2011		2012		2013
	(in US dollars per ton)
Copper LME		8,138		8,475		7,853

Zinc and Aluminium

The revenue of our zinc and aluminium businesses fluctuate based on the volume of our sales and the respective LME prices of zinc and aluminium. Our zinc business is fully integrated, so its profitability is dependent upon the difference between the LME/LBMA price of zinc and lead and silver prices and our cost of production, which includes the costs of mining and smelting. BALCO is a partially integrated producer and in fiscal 2013, sourced 36.5% of its alumina requirements from third party suppliers and the remaining alumina was supplied by Vedanta Aluminium. The bauxite is transferred to Vedanta Aluminium's alumina refinery, which converts bauxite to alumina and supplies the alumina back to BALCO, for payment of a conversion price by BALCO to Vedanta Aluminium based on Vedanta Aluminium’s actual cost of production plus a fixed margin. For the portion of our aluminium business where the alumina is sourced from BALCO’s own bauxite mines , profitability is dependent upon the LME price of aluminium less our cost of production, which includes the costs of bauxite mining, transportation costs, the refining of bauxite into alumina and the smelting of alumina into aluminium. For the portion of our aluminium business where alumina is sourced from third parties, profitability is dependent upon the LME price of aluminium less the cost of the sourced alumina and our cost of production. The following table sets forth the daily average zinc and aluminium LME prices for each of the last three fiscal years:

	For the Year Ended March 31,
	2011		2012		2013
	(in US dollars per ton/ ounce)
Zinc LME		2,185		2,098		1,948
Aluminium LME		2,257		2,313		1,974
Lead LME		2,244		2,269		2,113
Silver LBMA*		23.9		35.3		30.5

* silver is denominated in $/ ounce

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India Market Premium

Generally, our products in India are sold at a premium to the LME market price due to a number of factors including the customs duties levied on imports by the GoI, the costs to transport metals to India and regional market conditions. See “Government Policy.” As a result, we endeavor to sell large quantities of our products in India.

Hedging

We engage in hedging strategies to a limited extent to partially mitigate our exposure to fluctuations in commodity prices, as further described in “Item 11. Quantitative and Qualitative Disclosures About Market Risk—Qualitative Analysis—Commodity Price Risk.”

Power

Under the Indian Electricity Act, the Central Electricity Regulatory Commission (“CERC”) determines tariffs for the supply of electricity by a generating company. In case of shortage of electricity supply, the CERC may fix the minimum and maximum tariff for sale or purchase of electricity, pursuant to an agreement entered into between a generating company and licensees, for upto one year. Under the guidelines issued by the Ministry of Power, the determination of the tariff for a particular project depends on the mode of participation in the project (i) through signing a memorandum of understanding, based on tariff principles prescribed by CERC (cost plus basis, comprising capacity charge, energy charge, unscheduled interchange charge and incentive payments) or (ii) competitive bidding, where tariff is market based.

Our tariffs are based on the memorandum of understanding route for contracted quantity. Further, surplus power sold to multiple customers is based on the pricing determined by demand and supply of the power markets. The average power realization price for the years ended March 31, 2012 and 2013 was Rs. 3.39 and Rs. 3.34 per unit respectively.

Cost of Production

Our results of operations are, to a significant degree, dependent upon our ability to efficiently run our operations and maintain low costs of production. Efficiencies relating to recovery of metal from the ore, process improvements, by product management and increasing productivity help drive our costs down. Costs associated with mining and metal production include energy costs, ore extraction and processing costs at our captive mines, labor costs and other manufacturing expenses. Cost of production also includes cost of alumina for our aluminium business.

The cost of production of copper for our custom smelting and refining operations consists of cost of converting copper concentrate into copper cathodes, but does not include the cost of copper concentrate. We purchase copper concentrate at the LME price for copper metal for the relevant quotational period less a TcRc that we negotiate with our suppliers, including with CMT, but which is influenced by the prevailing market rate for the TcRc. We attempt to make the LME price a pass through for us as both the copper concentrate purchases and sales of finished copper products are based on LME prices. The profitability of the copper custom smelting and refining business is therefore dependent upon the amount by which the TcRc that we negotiate with both external suppliers and CMT exceeds our smelting and refining costs.

Energy cost is the most significant component of the cost of production in our metal production businesses. Most of our power requirements are met by captive power plants, which are primarily coal fueled. Thermal coal, diesel fuel and fuel oil, which are used to operate our power plants, and metcoke, which is used in the zinc smelting process, are currently sourced from a combination of long term and spot contracts. Our aluminium business, which has high energy consumption due to the power intensive nature of aluminium smelting, sources approximately 35.0% of its thermal coal requirement from South Eastern Coal Fields Limited, a subsidiary of Coal India, under a five year fuel supply agreement which was entered into in April 2008 and was valid until July 2013. The term of this contract is currently being negotiated. The remainder of the thermal coal requirements are obtained through open market purchases and imports of coal. Shortages of coal at Coal India may require that a greater amount of higher priced imported coal be utilized. For example, in April 2005, a shortage of coal led Coal India to reduce the amount of coal supplied to all its customers, except utilities, including BALCO, forcing BALCO to utilize higher priced imported coal.

HZL in January 2006, as part of a consortium with five other partners, secured the award of a coal block from the Ministry of Coal of the GoI. HZL’s share of the coal block is approximately 31.5 million tons which, according to the Ministry of Coal of the GoI, are proven reserves with ash content ranging from 28.7% to 47.0% and with gross calorific value ranging from 3,865 Kcal/kg to 5,597 Kcal/kg. On June 16, 2008, the Ministry of Coal of the GoI approved the consortium’s plan for mining the coal block. The coal block is located in the Hasdev Arand coal field in the State of Chhattisgarh which is falling under moderate to dense forest. The environmental clearance and approval for the forest diversion was initially rejected by the MoEF and accordingly, a letter of rejection was issued by the state government on January 23, 2010. In February 2012, the HZL consortium resubmitted its application, which requires approval from the state government and the MoEF. After being denied access to the Hasdev Arand field, HZL continues to import coal from third-party suppliers. HZL has also been awarded 1.2 million tons of coal linkage by the Ministry of Coal of the GoI, which will enable it to source coal from mines of Coal India (catering to approximately a quarter of its total coal requirements), although access to this coal has been stopped since April 2013. HZL’s operations source their back-up power from liquid fuel-based captive power plants or from local power companies. The liquid fuel is sourced from third-party suppliers on yearly contracts.

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In addition, in November 2007, we were allotted a 211.0 million ton share of a coal block by the Ministry of Coal for use in BALCO’s captive power plant. These allocated coal blocks are regarded as non-reserve coal deposits. In October 2008, the Ministry of Coal approved BALCO’s mining plan. BALCO received the environmental clearance on May 24, 2012 and the second stage forest clearance for the 211.0 million tons coal block on November 14, 2012. The process for forest land diversion has been initiated by the state government, and we are in the process of signing the mining lease agreement. We expect to commence mining by the end of the second quarter of fiscal 2014. Any change in coal prices or the mix of coal that is utilized, primarily whether the coal is sourced locally or imported, can affect the cost of generating power.

Further, we have obtained coal block allocations of 112.2 million tons from the Ministry of Coal, GoI to support the 2,400 MW thermal-based commercial power facility in the State of Odisha in Eastern India. These allocated coal blocks are regarded as non-reserve coal deposits.

For our zinc business and the portions of our copper and aluminium businesses where we source the ore from our own mines, ore extraction and processing costs affect our cost of production. In our zinc and copper businesses, the ore extraction and processing costs to produce concentrates are generally a small percentage of our overall cost of production of the finished metals. In our aluminium business, the bauxite ore extraction cost is not significant but the refining cost to produce alumina from bauxite ore including transportation costs represents approximately one-third of the cost of production of aluminium. In addition, a significant cost of production in our zinc business is the royalty that HZL pays on the lead-zinc ore that is mined, which royalty is a function of the LME prices of zinc and lead. See “Government Policy—Taxes and Royalties.”

In the commercial power generation business, production costs are mainly coal costs and the coal is largely sourced from the domestic market. Labor costs are principally a function of the number of employees and increases in compensation from time to time. Improvements in labor productivity in recent years have resulted in a decrease in the per unit labor costs. We outsource a majority of BALCO’s and CMT’s mining operations, a substantial portion of HZL’s mining operations and a limited number of functions at our copper, zinc and aluminium smelting operations to third party contractors. The operations and maintenance activities at the Sterlite Energy power facilities are fully outsourced to third party contractors.

Other manufacturing expenses include, among other things, additional materials and consumables that are used in the production processes and routine maintenance to sustain ongoing operations. None of these represents a significant portion of our costs of production.

Cost of production as reported for our metal products includes an offset for any amounts we receive upon the sale of the by-products from the refining or smelting processes. We divide our cost of production by the daily average exchange rate for the year to calculate the US dollar cost of production per lb or ton of metal as reported.

The following table sets forth our average realized TcRc and cost of production for each of our metals for each of the last three fiscal years:

	For the Year Ended March 31,
	Unit of Measurement	2011		2012		2013
	(in US dollars per ton, except as indicated)
Treatment and Refining Charges (TcRc) (1)	¢/lb		11.9		14.5		12.8
Cost of production:(2)
Copper smelting and refining(2)	¢/lb		4.0		0.0		8.7
Zinc India (2)	$		990		1,010		998
Zinc International(2)	$		1,077		1,069		1,029
Aluminium(2)	$		1,784		1,997		1,951
Power(2)	Rs./unit		—		2.62		2.08

Notes:

(1) Represents our average realized TcRc for the period.

(2) Cost of production is not a recognized measure under IFRS as issued by the IASB. We have included cost of production as a measure of effectiveness because we believe it is an indicative measure of our operating performance and is used by investors and analysts to evaluate companies in our industry. Our results of operations are, to a significant degree, dependent upon our ability to efficiently run our operations and maintain low costs of production. Efficiencies relating to recovery of metal from the ore, process improvements, by product management and increasing productivity help drive our costs down. Our computation of cost of production should be considered in addition to, and not as a substitute for, other measures of financial performance and liquidity reported in accordance with IFRS as issued by the IASB. Cost of production is a measure intended for monitoring the operating performance of our operations. This measure is presented by other non-ferrous metal companies, though our measure may not be comparable to similarly titled measures reported by other companies.

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Cost of production as reported for our metal products consists of:

• direct cash costs relating to production and conversion costs of metal (such as energy costs, ore extraction costs and processing costs at our captive mines, labor costs and other manufacturing expenses) and

• excludes depreciation and finance costs.

Further these costs are offset for any amounts we receive upon sale of immaterial by-products from such operations. We explain the cost of production for each metal as set forth below:

• In the case of copper, cost of production relates only to our custom smelting and refining operations (and not for our mining operations), and consists of converting copper concentrate into copper cathodes, including the cost of freight of copper anodes from Tuticorin to Silvassa. Revenue earned from the sale of by-product, sulphuric acid, and copper metal recovered in excess of paid copper metal are deducted from the cash costs. The total cash costs are divided by the total number of pounds of copper metal produced to calculate the cost of production per pound of copper metal produced.

• In the case of Zinc India operations, where we have integrated operations from production of zinc ore to zinc metal, cost of production is the cost of extracting ore and conversion of the ore into zinc metal ingots. Royalty is paid on mining and this cost is included in determining the cost of production. Revenue earned from by-product, sulphuric acid, is deducted from the cost of production. The total cash cost is divided by the total number of tons of zinc metal produced to calculate the cost of production per ton of zinc metal. Our Zinc India segment also includes lead and silver. However, the cost of production presented for Zinc India operations does not include lead and silver.

• Our Zinc International operations consists of the Skorpion mine and refinery in Namibia, Black Mountain mine in South Africa and Lisheen mine in Ireland. Skorpion produces special high grade zinc ingots. As a result, the cost of production with respect to the Skorpion mine consists of the total direct cost of procuring zinc ore from the mining company and producing zinc in the refinery through a leaching refining and electrowinning process. Skorpion does not produce any material by-products. Black Mountain mine produces zinc and lead concentrate. Therefore, the cost of production with respect to the Black Mountain mine consists of direct mining costs, concentrate costs, direct services cost and allocated indirect costs. Lisheen mine produces zinc and lead concentrate. Therefore, the cost of production with respect to the Lisheen mine consists of direct mining costs, mill processing costs, other overhead costs, treatment charges and other direct cash costs. The by-product revenue of lead and silver are credited to the cost of production. Royalties paid are excluded from the cost of production of zinc as the same is levied on turnover. The total cash cost is divided by the total number of tons of zinc metal produced or zinc metal in concentrate produced to calculate the cost of production per ton of zinc metal produced or zinc metal in zinc concentrate produced.

• In the case of aluminium, cost of production for BALCO’s smelters includes cost of purchased alumina, the cost of producing bauxite and conversion of bauxite/alumina into aluminium metal. Revenue earned from the sale of by-products, such as vanadium, reduces the total cash costs. The total cost is divided by the total quantity of hot metal produced to determine the cost of production per ton of aluminium hot metal produced. Hot metal production output is used instead of the cast metal production output disclosed elsewhere in this annual report in calculating cost of production as the hot metal production, which excludes the value added cost of casting, is the measure generally used in the aluminium metal industry for calculating cost of production.

Cost of production is divided by the daily average exchange rate for the year to calculate US dollar cost of production per lb or per ton of metal as reported.

• Cost of production of power for Sterlite Energy’s power plant (and not for the 274 MW HZL power plant and the 270 MW BALCO power plant) includes the cost of coal and other liquid fuels used for generating power and other overhead costs such as operating , maintenance and manpower costs. The total cost is divided by the total net units generated to calculate the cost of production per unit of energy produced. For more information see Note (2) to the table on page 7 of Item 3A: Key Information – Selected Consolidated Financial Data.

Production Volume and Mix

Production volume has a substantial effect on our results of operations. We are generally able to sell all of the products we can produce, so our revenue generally fluctuates as a result of changes in our production volumes. Production volumes depend on our production capacities, which have increased in recent years across all of our businesses. For our mining operations, production volumes also depend upon the quality and consistency of the ore. Per unit production costs are significantly affected by changes in production volumes in that higher volumes of production generally reduce the perunit production costs. Therefore, our production volumes are a key factor in determining our overall cost competitiveness. The following table summarizes our production volumes for our primary products for the last three fiscal years:

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		For the Year Ended March 31,
	Product	2011		2012		2013
		(tons except where otherwise stated)
Copper	Copper cathode(1)		303,991		325,877		353,154
	Copper rods		187,892		161,421		171,855
Zinc India	Zinc		712,471		758,716		676,923
	Lead		57,294		92,099		118,316
	Silver (Kilograms)		148,082		206,944		373,900
Zinc International
— Skorpion	Zinc		49,698		144,755		145,342
— BMM	Copper(3)		673		2,709		3,799
	Zinc(3)		7,593		31,769		38,577
	Lead(3)		9,324		53,578		48,883
— Lisheen	Zinc(3)		22,775		183,206		169,485
	Lead(3)		3,913		30,202		23,407
Aluminium	Ingots(2)		27,927		8,671		8,416
	Rods		160,665		167,826		179,987
	Rolled Products (2)		66,706		69,157		58,587
Power	Power (Million Units)  (4)		2,680		7,579		9,282

Notes:

(1) Copper cathode is used as a starting material for copper rods. Approximately one ton of copper cathode is required for the production of one ton of copper rods.

(2) Includes production capitalized in fiscal 2011, 2012 and 2013 of 8,856 tons, 6,478 tons and 724 tons respectively.

(3) Refers to mined metal content in concentrate.

(4) Includes production under trial run in fiscal 2011, 2012 and 2013 of 646 million units, 926 million units and 795 million units respectively.

In addition, the mix of products we produce can have a substantial impact on our results of operations as we have different operating margins in each of our businesses, and within each business our operating margins vary between the lower margins of primary metals and the higher margins of value-added products such as copper rods and aluminium rolled products. For example, copper cathodes are converted in our copper rod plant into copper rods, a value-added product which has a higher margin than copper cathodes. As copper rods have higher margins, we endeavor to sell as large a percentage of copper rods as possible. As the production volume of our various products fluctuate primarily based on market demand and our production capacity for such products, the percentage of our revenue from those products will also fluctuate between higher and lower margin products, which will in turn cause our operating profit and operating margins to fluctuate.

Periodically, our facilities are shut down for planned and unplanned repairs and maintenance which temporarily reduces our production volume.

Government Policy

India Customs Duties

We sell our products in India at a premium to the LME price, due in part to the customs duties payable on imported products. Our profitability is affected by the levels of customs duties as we price our products sold in India generally on an import-parity basis. We also pay a premium on certain raw materials that we import or which are sourced locally but which are priced on an import-parity basis as a result of customs duties, with copper concentrate, coal, petroleum products, alumina, carbon and caustic soda being the primary examples. The following table sets forth the customs duties that were applicable for the periods indicated:

	March 1, 2011 to Present
Copper		5.00	%
Copper concentrate		2.50	%
Zinc		5.00	%
Lead		5.00	%
Silver		6.00	%
Aluminium		5.00	%

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In addition, the Finance Act (2 of 2004) of India, which has been in effect since July 8, 2004, levies an additional surcharge at the rate of 2.0% of the total customs duty payable which has been further increased to 3.0% of the total customs duty payable effective March 1, 2007. We are also liable to pay an additional duty of customs, countervailing duty or CVD, of 12.0% (prior to February 27, 2010 the CVD was 8.0%, from February 27, 2010 to March 17, 2012 the CVD was 10%) of the assessable value and basic custom duty, which is levied on imports in India. Education cess and secondary and higher education cess on CVD is reduced to nil from March 17, 2012 (prior to March 17, 2012 it was 3% of CVD).

The GoI may reduce or abolish customs duties on copper and aluminium in the future, although the timing and extent of such reductions cannot be predicted. As we sell the majority of the commodities we produce in India, any further reduction in Indian tariffs on imports will decrease the premiums we receive in respect of those sales. Our profitability is dependent to a small extent on the continuation of import duties and any reduction would have an adverse effect on our results of operations and financial condition.

In February 2011, the import duty on copper concentrate and rock phosphate was increased from 2.0% to 2.5%, and a 1% excise duty was also imposed on fly ash. The excise duty on fly ash was further increased to 2% vide notification dated February 17, 2012.

Further, GoI imposed a 4% excise duty on silver produced from smelting of zinc and lead and an additional charge of 3.0% on the excise duty effective since March 1, 2013.

Export Incentives

The GoI provides a variety of export incentives to Indian companies. Exports of copper, aluminium and zinc from India receive assistance premiums from the GoI. Export incentives do not outweigh the Indian market price premiums. Accordingly, notwithstanding the export incentives, we endeavor to sell large quantities of our products domestically.

In fiscal 2012 and 2013, exports accounted for 51.3% and 54.9%, respectively, of our copper business revenue. The following table sets forth the export assistance premiums, either as Indian Rupees per ton of exports or as a percentage of the FOB value of exports, on copper cathode and copper rods for the period indicated:

	October 1, 2011 to Present (percentage of FOB value of exports)
Copper cathode		2.0	%
Copper rods		2.0	%

In fiscal 2012 and 2013, exports accounted for 33.7% and 22.6% respectively, of our zinc India business’ revenue. The following table sets forth the export assistance premiums, as a percentage of the FOB value of exports, on zinc concentrate, zinc ingots and lead concentrate for the periods indicated:

	October 9, 2012 to Present (percentage of FOB value of exports)
Zinc concentrate		1.5	%
Zinc ingots		2.0	%
Lead concentrate		1.5	%

In fiscal 2012 and 2013, exports accounted for 2.2% and 2.7% respectively, of our aluminium business’ revenue. The following table sets forth the export assistance premiums, as a percentage of the FOB value of exports, on aluminium ingots, aluminium rods and aluminium rolled products for the periods indicated:

	October 1, 2011 to Present
Aluminium ingots		2.0	%
Aluminium rods		2.0	%
Aluminium rolled products		3.0	%

In the case of sales to Focus Markets (as defined herein), export assistance premiums for these products would extend to 3 to 4% of the FOB value of exports made to the countries specified under the Focus Market Scheme. The Focus Markets Scheme was implemented under Chapter 3 of the Foreign Trade Policy of India in 2009. The purpose of this scheme is to provide Indian exporters certain incentives such as tax benefits, and thereby enhance India’s export competitiveness in certain focus markets, including, but not limited to Argentina, Austria, Chile, Cambodia, New Zealand and Bulgaria (“Focus Markets”). The GoI may further reduce export incentives in the future, which would adversely affect our results of operations.

Taxes and Royalties

Income tax on Indian companies during fiscal 2013 was charged at a statutory rate of 30.0% plus a surcharge of 5.0% on the tax and has an additional charge of 3.0% on the tax including surcharge, which results in an effective statutory tax rate of 32.5 %. We have in the past had an effective tax rate lower than the statutory rate, benefiting from tax incentives on infrastructure projects in specific locations.

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Profits of companies in India are subject to either regular income tax or Minimum Alternate Tax (MAT), whichever is greater. The effective MAT rate during fiscal 2013 was 20.01% of the book profit as prepared under generally accepted accounting principles in India, or Indian GAAP. The excess of amounts paid as MAT over the regular income tax amount may be applied towards regular income taxes payable in any of the succeeding ten years subject to certain conditions.

A tax on dividends declared and distributed by Indian companies during fiscal 2013 is charged at an effective tax rate of 16.995%. This tax is payable by the company declaring, distributing or paying the dividends. Dividends from our Indian subsidiaries to us are also subject to this tax, though we do not pay income tax upon the receipt of any such dividends. The Income Tax Act provides that if a company receives a dividend from any of its Indian subsidiaries during the year, and such subsidiary has paid a tax on its dividends, then the dividend distributed by the parent company to the extent of dividend received from the Indian subsidiary shall not be subject to dividend tax.

We currently pay an excise duty of 12.0% (prior to December 6, 2008 the excise duty was 14.0%, from December 6, 2008 to February 23, 2009, the excise duty was 10.0%, from February 24, 2009 to February 26, 2010, the excise duty was 8.0%, from February 27, 2010 to March 16, 2012 the excise duty was 10%) and an additional charge of 3.0% on the excise duty based on all of our domestic production intended for domestic sale. We charge the excise duty and additional charge to our domestic customers.

We pay royalties to the state governments of Chhattisgarh and Rajasthan based on our extraction of bauxite and lead-zinc ore, respectively. Most significant of these is the royalty that HZL is required to pay to the state government of Rajasthan, where all of HZL's mines are located, at a rate of 8.4% with effect from August 13, 2009 (with the rate being 6.6% prior to August 13, 2009), of the zinc LME price payable on the zinc metal contained in the concentrate produced, 12.7% (with the rate being 5.0% prior to August 13, 2009) of the lead LME price payable on the lead metal contained in the concentrate produced and at a rate of 7.0% of silver LME price chargeable on silver-metal produced. Any increase in the royalty rates may adversely affect our profitability.

We also pay royalties to the state government of Tasmania in Australia, based on our extraction of copper ore. The royalty is based on the operations at CMT at a rate equal to (a) the sum of (x) 1.9% (1.6% upto December 31, 2011) of the revenue plus (y) 0.4 times the profit multiplied by (b) the profit margin over revenue, subject to a cap of 5.35% (5.0 % up to December 31, 2011) of revenue, effective from January 1, 2012.

Our royalties in Zinc International business are as follows:

• 3.0% of sale value of the products for Skorpion;

• 7.0% of turnover for BMM. The royalty rate applied on the turnover is 0.5% if the adjusted earnings before interest and tax (“adjusted EBIT”) is negative, and in the event the adjusted EBIT is positive, the royalty rate applied on the turnover is 0.5% plus the rate computed at 100/9 times the adjusted EBIT upon turnover. In any event, the maximum royalty rate is capped at 7.0%; and

• 3.5% of turnover for Lisheen. The turnover is identified as gross revenue less smelter deductions, treatment charges, freight and marine insurance charges on a semi annual basis.

There are several tax incentives available to companies operating in India, including the following:

• profits from newly established units in special economic zones are entitled to a tax holiday for a specified period;

• profits from newly established units in certain geographical areas are entitled to a tax holiday for a specified period;

• profits from newly constructed power plants (including for captive use) benefit from a tax holiday for a specified period;

• renewable energy devices being windmills installed on or before March 31, 2012 are eligible for accelerated depreciation at 80%. However, units that have opted for generation based incentive are not eligible for the said accelerated depreciation; and

• income from investment in mutual funds is exempt from a tax subject to certain conditions.

We have benefited from these tax incentives. Such benefits have resulted in lower effective tax rates, both within SIIL and in some of our operating subsidiaries such as BALCO and HZL. HZL’s new export unit, effective from the quarter ended June 30, 2008, has benefited from its 100.0% export unit status, where profits on export sales are exempt from tax for a specified period. The export unit status expired on March 31, 2011. BALCO and HZL have considerable investments in captive power plants enjoying tax exemptions, and HZL has also benefited from establishing wind energy generating projects. HZL also benefits from a tax holiday exemption with respect to its newly commissioned zinc ingot melting and casting plant at Haridwar in the State of Uttarakhand in North India. In addition, a large part of SIIL’s and HZL’s investment of surplus cash is in tax exempt instruments.

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Exchange Rates

We sell commodities that are typically priced by reference to US dollar prices. However, a majority of our direct costs in our zinc and aluminium businesses and our smelting and refining costs in our copper business are incurred in Indian Rupees and to a much lesser extent in Australian dollars, South African Rand and Namibian dollar. Also, all costs with respect to imported material for all our businesses are generally incurred in US dollars. As a result, an increase in the value of the US dollar compared to the Indian Rupee, and to a lesser extent the Australian dollar, South African Rand and Namibian dollar, is generally beneficial to our results of operations, except to the extent that the increase results in increased costs of copper concentrate, alumina and other imported materials for our businesses. A decrease in the value of the US dollar relative to the Indian Rupee, Australian dollar South African Rand and Namibian dollar has the opposite effect on our results of operations. For more information on the fluctuations in the value of the Indian Rupee against the US dollar, the Australian dollar, South African Rand and Namibian dollar, see “Item 10. Additional Information—D. Exchange Controls—Exchange Rates.”

Critical Accounting Estimates

The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with IFRS as issued by the IASB. In the course of preparing these financial statements, our management has made judgments, estimates and assumptions, that affect the application of accounting policies and the reported amounts of assets, liabilities, income, expenses and disclosures of contingent assets and liabilities at the date of these consolidated financial statements and the reported amounts of revenues and expenses for the years presented. Actual results may differ from these estimates under different assumptions and conditions. For a discussion of our significant accounting policies, see note 3 to our consolidated financial statements included in this annual report. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and future periods affected.

We believe the critical accounting estimates described below are those that are both important to reflect our financial condition and results and require difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.

Mining properties

The costs of mining properties, which include the costs of acquiring and developing mining properties and mineral rights, are capitalised as property, plant and equipment under the heading “Mining properties” in the year in which they are incurred.

When a decision is taken that a mining property is viable for commercial production, all further pre-production primary development expenditure other than land, buildings, plant and equipment, etc. is capitalised as part of the cost of the mining property until the mining property is capable of commercial production. From that point, capitalised mining properties are amortized on a unit-of-production basis over the total estimated remaining commercial reserves of each property or group of properties and are subject to impairment review.

Stripping costs/secondary development expenditure incurred during the production stage of operations of an ore body is charged to the statement of income immediately.

In circumstances where a property is abandoned, the cumulative capitalized costs relating to the property are written off in the period.

Commercial reserves are proved and probable reserves. Changes in the commercial reserves affecting unit of production calculations are dealt with prospectively over the revised remaining reserves.

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Useful Economic Lives of Assets and Impairment

Property, plant and equipment, other than mine properties, are depreciated over their useful economic lives. Our management reviews the useful economic lives at least once a year and any changes could affect the depreciation rates prospectively and hence the asset carrying values.

We also review our property, plant and equipment, including mine properties, for possible impairment if there are events or changes in circumstances that indicate that the carrying value of an asset may not be recoverable and exceeds its fair value. In assessing property, plant and equipment for impairment, factors leading to significant reduction in profits such as changes in commodity prices, our business plans and significant downward revision in the estimated mining reserves are taken into consideration. The carrying value of the assets of a cash generating unit and associated mining reserves is compared with the recoverable amount of those assets, that is, the higher of fair value less costs to sell and value in use. Value in use is usually determined on the basis of discounted estimated future cash flows. This involves management estimates on commodity prices, market demand and supply, increase in cost, discount rate, economic and regulatory climates, long term mine plan and other factors. Any subsequent changes to cash flow due to changes in the abovementioned factors could have an impact on the carrying value of the assets.

Impairment assessment of the Tuticorin smelter

In September 2010, the High Court of Madras ordered the closure of our copper smelting plant at Tuticorin. Following our appeal of this order to the Supreme Court of India, the order was stayed until further notice. The Supreme Court in subsequent hearings directed the Tamil Nadu Pollution Control Board ("TNPCB"), National Environmental Engineering Research Institute ("NEERI"), and the Central Pollution Control Board ("CPCB") to issue certain directions and implement certain measures for the improvement of the copper smelter unit at Tuitcorin.

The Supreme Court in April 2013 has allowed our appeal and has set aside the order of the High Court of Madras. The Supreme Court has ruled that the plant has complied with all the directions and measures issued by the NEERI, TNPCB and CPCB. However, the Supreme Court directed us to deposit Rs. 1,000 million ($18.3 million) with the District Collector, Tuticorin, which will be used for the improvement of the environment, including soil and water, near the location of the plant.

Separately, in March 2013, the TNPCB ordered the closure of the copper smelter at Tuticorin due to complaints regarding a noxious gas leak by local residents. On April 1, 2013 we filed a petition in the National Green Tribunal (“NGT”) challenging the order of the TNPCB on the basis that the plant’s emissions were within permissible limits. The NGT passed an interim order in May 2013 allowing the copper smelter to recommence operations subject to certain conditions. We recommenced operations on June 16, 2013. The expert committee constituted by the NGT submitted a report on the operation of the plant on July 10, 2013 stating that the plant’s emissions were within the prescribed standards and based on this report, the NGT ruled on July 15, 2013 that the copper smelter could remain open and reserved its order. The NGT has also directed the company to comply with the recommendations made by the committee to further improve the working of the plant within a time bound schedule. However, the TNPCB filed a notice of appeal against the interim order of the NGT. The next date of hearing is on August 5, 2013.

In view of the above, management is confident that the unit will be permitted to continue operations and accordingly concluded that no impairment of the asset is required.

Investment in and loans to Vedanta Aluminium

Due to the ongoing delay in obtaining approval for the Niyamgiri mines and expansion of the alumina refinery, we have reviewed the carrying value of our investments in and loans to Vedanta Aluminium for any impairment, and have concluded that no impairment is currently considered necessary based on the possible alternate source of obtaining bauxite and expectation of obtaining the necessary approvals for the alumina refinery expansion in due course.

Contingencies and Commitments

We have significant capital commitments in relation to various capital projects which are not recognized on the consolidated statements of financial positions. In the normal course of business, contingent liabilities may arise from litigation and other claims against us. Guarantees are also provided in the normal course of business. There are certain obligations which the management has concluded, based on all available facts and circumstances, are not probable of payment or are very difficult to quantify reliably, and such obligations are treated as contingent liabilities and disclosed in the notes but are not reflected as liabilities in the consolidated financial statements. Although there can be no assurance regarding the final outcome of the legal proceedings in which we are involved, it is not expected that such contingencies will have a material effect on its financial position or profitability.

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Income Tax

In preparing the consolidated financial statements, we recognize the income taxes in each of the jurisdictions in which we operate. There are many transactions and calculations for which the ultimate tax determination is uncertain. We recognize liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current income tax assets and liabilities, and deferred income tax assets and liabilities in certain instances, during the period in which such determination is made.

Restoration, Rehabilitataion and Environmental Costs

Provision is made for costs associated with restoration and rehabilitation of mining sites as soon as the obligation to incur such costs arises. Such restoration and closure costs are typical of extractive industries and they are normally incurred at the end of the life of the mine. The costs are estimated on the basis of mine closure plans and the estimated discounted costs of dismantling and removing these facilities and the costs of restoration are capitalised when the obligation to incur such costs arises. A corresponding provision is created on the liability side. The capitalised asset is charged to the statement of income over the life of the asset through depreciation over the life of the operation and the provision is increased each period via unwinding the discount on the provision. Management estimates are based on local legislation and/or other agreements. The actual costs and cash outflows may differ from estimates because of changes in laws and regulations, changes in prices, analysis of site conditions and changes in restoration technology.

Retirement Benefits

We operate or participate in a number of defined benefit and defined contribution pension schemes, the assets of which are (where funded) held in separately administered funds. For defined benefit pension schemes, the cost of providing benefits under the plans is determined separately each year for each plan using the projected unit credit method by independent qualified actuaries.Actuarial gains and losses arising in the year are recognised in full in the statement of income for the year. For defined contribution schemes, the amount charged to the statement of income in respect of pension costs and other post-retirement benefits is the contributions payable in the year.

Results of Operations

Overview

Consolidated Statement of Income

The following table is derived from our selected consolidated financial data and sets forth our historical operating results as a percentage of revenue for the periods indicated:

	For the Year Ended March 31,
	2011			2012			2013
	(in percentages)
Consolidated Statement of Income:
Revenue		100.0			100.0			100.0
Cost of sales		(74.8	)		(77.6	)		(78.6	)
Gross Profit		25.2			22.4			21.4
Other operating income		0.8			0.3			0.4
Distribution expenses		(1.2	)		(1.8	)		(1.9	)
Administration expenses		(2.5	)		(3.6	)		(3.0	)
Operating profit		22.3			17.3			16.9
Investment and other income		7.3			7.0			8.1
Finance and other costs		0.4			(2.9	)		(2.5	)
Share in profit/(loss) of associates		(1.0	)		(2.1	)		(1.7	)
Profit before taxes		28.9			19.3			20.8
Income tax expense		(6.2	)		(4.9	)		(3.4	)
Profit for the year		22.7			14.4			17.4
Profit attributable to:
Equity holders of the parent		16.1			9.5			11.9
Non-controlling interest		6.6			4.9			5.5

Net revenue by Geographic Location

The primary markets for our products are India and the Far East. Other markets include a variety of countries mostly in the Middle East and Europe. We endeavor to sell as large a quantity of our products as possible in India due to the Indian market premium that we receive on sales in India. The following table sets forth our revenue from each of our primary markets and our revenue from each of our primary markets as a percentage of our total revenue for the periods indicated:

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	For the Year Ended March 31,
	2011					2012					2013
	(in millions, except percentages)
	Revenue (in Rs.)		% of Revenue			Revenue (in Rs.)		% of Revenue			Revenue (in Rs.)		Revenue (in $)		% of Revenue
India		187,454		62.0	%		229,163		55.6	%		264,688		4,854.9		58.5	%
Far East(1)		32,488		10.7	%		76,845		18.7	%		87,307		1,601.4		19.3	%
Other(2)		82,530		27.3	%		106,055		25.7	%		100,555		1,844.3		22.2	%
Total		302,472		100.0	%		412,063		100.0	%		452,550		8,300.6		100.0	%

Notes:

(1) Far East includes a number of countries, primarily China, South Korea, Malaysia, Singapore, Vietnam, Indonesia and Taiwan.

(2) Other markets primarily include Saudi Arbia, Belgium, Switzerland, Netherlands, UK, Italy, Spain, Denmark, South Africa, Tanzania, Nigeria, Oman, Turkey, UAE, Kenya and Nepal.

Customer Concentration

The following table sets forth for the periods indicated:

• the percentage of our revenue accounted for by our 10 largest customers on a consolidated basis; and

• for each of our segments, the percentage of the revenue of such business accounted for by the 10 largest customers of such business.

	Year Ended March 31,
	2011		2012		2013
	(% Percentage)
Consolidated		38.2		25.7		24.2
Copper		33.5		39.5		39.8
Zinc – India		36.5		39.3		40.2
Zinc – International		96.0		95.6		96.9
Aluminum		49.3		49.5		48.0
Power		—		82.7		83.4

No single customer accounted for 10.0% or more of our revenue on a consolidated basis in any of the periods indicated.

Comparison of years ended March 31, 2012 and March 31, 2013

Revenue and Operating Profit

Consolidated

Revenue increased from Rs. 412,063 million in fiscal 2012 to Rs. 452,550 million ($ 8,300.6 million) in fiscal 2013, an increase of Rs. 40,487 million, or 9.8%. Revenue increased in fiscal 2013 driven by increased sales volume across Copper, Zinc India and power businesses, on account of significant increase in silver and lead production in our Zinc India business and higher volume in Sterlite Energy on account of generation from the third 600 MW power unit commissioned during February 2012. Depreciation of Indian rupee against the US dollar by 13.6% in fiscal 2013 as compared to fiscal 2012 also contributed to higher revenues. However, the benefit of volume increase and rupee depreciation was partially offset by a decrease in all the metal prices as compared to fiscal 2012.

Operating profit increased from Rs. 71,294 million in fiscal 2012 to Rs. 76,526 million ($ 1,403.6 million) in fiscal 2013, an increase of Rs. 5,232 million, or 7.3%. The increase in operating profit was primarily driven by higher sales realization on account of rupee depreciation against the US dollar, higher lead and silver volumes from Zinc India operations and higher operating profits from the power and copper businesses on account of higher volumes offset by the impact of lower daily average LME prices across metals and higher cost of production. The increase in cost of production was due to inflation in the prices of all commodities. Operating margin decreased from 17.3% in fiscal 2012 to 16.9% in fiscal 2013 as a result of a decrease in the operating margins in Zinc India, Zinc International and Aluminium businesses.

Contributing factors to our consolidated operating profit were as follows:

• Cost of sales increased from Rs. 319,719 million in fiscal 2012 to Rs. 355,624 million ($6,522.8 million) in fiscal 2013, an increase of Rs. 35,905 million, or 11.2%. Cost of sales increased primarily due to increase in volumes in Copper and Power businesses and higher raw material costs across segments. The increase in raw material costs was due to inflation in the prices of all commodities. Cost of sales as a percentage of revenue increased from 77.6% in fiscal 2012 to 78.6% in fiscal 2013.

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• Other operating income increased from Rs. 1,398 million in fiscal 2012 to Rs. 1,883 million ($ 34.5 million) in fiscal 2013, an increase of Rs. 485 million, or 34.7%. The increase was primarily due to increase in scrap sales revenue by Rs. 340 million and decrease in foreign exchange losses by Rs. 170 million as against fiscal 2012.

• Distribution expenses increased from Rs. 7,446 million in fiscal 2012 to Rs.8,646 million ($ 158.6 million) in fiscal 2013, an increase of Rs. 1,200 million, or 16.1%, mainly due to higher volumes in Power and Aluminium businesses, and a larger proportion of power sale contracts where the distribution expenses were incurred by us. As a result, distribution expense as a percentage of revenue increased from 1.8 % in fiscal 2012 to 1.9 % in fiscal 2013.

• Administration expenses decreased from Rs. 15,002 million in fiscal 2012 to Rs. 13,637 million ($ 250.1 million) in fiscal 2013, a decrease of Rs. 1,365 million, or 9.1% mainly due to the charge of Rs. 4,233 million with respect to the claim made by Asarco in fiscal 2012 resulting in higher administration expenses recorded during that year, partly offset by a charge of Rs. 1,000 million ($ 18.3 million) recorded in fiscal 2013 towards the amount to be paid to the District Collector, Tuticorin, for improvement of the environment, including soil and water, in the vicinity of the Tuticorin smelter, as directed by the Supreme Court. As a percentage of revenue, administration expenses decreased from 3.6% in fiscal 2012 to 3.0% in fiscal 2013.

Copper

Revenue from the copper segment increased from Rs. 201,647 million in fiscal 2012 to Rs. 217,374 million ($ 3,987.1 million) in fiscal 2013, an increase of Rs. 15,727 million, or 7.8%. This increase was primarily due to the increase in production of cathodes and higher sales in Fujairah, offset by lower daily average LME prices of copper. Specifically:

• Copper cathode production increased from 325,877 tons in fiscal 2012 to 353,154 tons in fiscal 2013, an increase of 8.4%. The production in fiscal 2013 was higher, as we produced cathodes from blister copper as well during fiscal 2013, translating into higher volumes. Copper cathode sales increased from 159,004 tons in fiscal 2012 to 178,817 tons in fiscal 2013, an increase of 12.5%, due to increased production.

• Production of copper rods increased from 161,421 tons in fiscal 2012 to 171,855 tons in fiscal 2013, an increase of 6.5%, reflecting the market demand. Copper rod sales increased from 161,514 tons in fiscal 2012 to 171,653 tons in fiscal 2013, an increase of 6.3%, in line with the increase in production.

• Sales of copper in the Indian market decreased from 197,434 tons in fiscal 2012 to 196,626 tons in fiscal 2013, a decrease of 0.4%, and our exports increased from 123,084 tons in fiscal 2012 to 153,844 tons in fiscal 2013, an increase of 25.0%. Our domestic sales as a percentage of total sales decreased from 61.6% in fiscal 2012 to 56.1% in fiscal 2013. We endeavor to sell large quantities of our products domestically, where we receive an Indian market premium. The decrease, as shown above, is only on account of our effort to reduce our exports volume to Special Economic Zones or Export Oriented Units, and improve our exports volume to Focus Markets, where the margins are relatively higher. As a result, volume of our deemed exports, included in the domestic sales volume discussed above, decreased from 9,969 tons in fiscal 2012 to 4,796 tons in fiscal 2013.

• The daily average copper cash settlement price on the LME decreased from $ 8,475 per ton in fiscal 2012 to $ 7,853 per ton in fiscal 2013, a decrease of 7.3%.

Operating profit in the copper segment increased from Rs. 7,770 million in fiscal 2012 to Rs. 8,515 million ($ 156.2 million) in fiscal 2013, an increase of Rs. 745 million, or 9.6%. Operating margin remained constant at 3.9% in fiscal 2012 and fiscal 2013. The increase in operating profit was primarily due to the profit of fiscal 2012 having been impacted by provision of 4,233 million on account of the adverse Court ruling in Asarco’s claim, offset by the profit in fiscal 2013 impacted by lower daily average LME copper prices, lower TcRc rates in line with the market conditions, higher cost of production and a charge of Rs.1,000 million ($ 18.3 million) towards the amount to be paid to the District Collector, Tuticorin, for improvement of the environment, including soil and water, in the vicinity of the Tuticorin smelter, as directed by the Supreme Court. In particular:

• TcRc rates decreased from an average of 14.5¢/lb realized in fiscal 2012 to an average of 12.8 ¢/lb realized in fiscal 2013.

• Cost of production, which consists of cost of smelting and refining costs, increased significantly from 0.0 ¢/lb in fiscal 2012 to 8.7 ¢/lb in fiscal 2013, primarily due to lower average realization on the sale of sulphuric acid, a by-product, from Rs. 4,212 per ton in fiscal 2012 to Rs. 1,805 per ton in fiscal 2013, which was partially offset by higher sulphur recoveries and had an impact of 5.2 ¢/lb in the cost of production, and higher cost of consumables, marginally offset by higher metal recoveries.

Zinc India

Revenue in the Zinc India segment increased from Rs. 111,319 million in fiscal 2012 to Rs. 123,241 million ($ 2,260.5 million) in fiscal 2013, an increase of Rs. 11,922 million, or 10.7%. This increase was primarily due to the depreciation of Indian rupee against the US dollar by 13.6% and an increase in lead and silver sales volume, offset by lower daily average LME prices of zinc, lead and silver. Specifically:

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• Zinc ingot production decreased from 758,716 tons in fiscal 2012 to 676,923 tons in fiscal 2013, a decrease of 10.8%, in line with the mine plan for the year. Zinc ingot sales also decreased in line with the lower production, from 758,499 tons in fiscal 2012 to 674,959 tons in fiscal 2013, a decrease of 11.0%.

• Zinc ingot sales in the domestic market increased from 438,171 tons in fiscal 2012 to 471,032 tons in fiscal 2013, an increase of 7.5%. Our domestic sales as a percentage of total sales increased from 57.8% in fiscal 2012 to 69.8% in fiscal 2013. We endeavor to sell large quantities of our products domestically, where we receive an Indian market premium. As a result of lower production volume, as well as more of the production being sold in the domestic market, our export sales decreased from 320,328 tons of zinc in fiscal 2012 to 203,926 tons of zinc in fiscal 2013, a decrease of 36.3%.

• The daily average zinc cash settlement price on the LME decreased from $ 2,098 per ton in fiscal 2012 to $ 1,948 per ton in fiscal 2013, a decrease of 7.2%.

• Zinc concentrate sales increased from nil in fiscal 2012 to 119,570 dry metric tons in fiscal 2013. This increase was primarily due to the availability of surplus zinc concentrate in the second half of fiscal 2013. Lead concentrate sales to third parties decreased from 10,086 dry metric tons in fiscal 2012 to nil in fiscal 2013, due to increase in internal consumption on account of higher metal production at HZL’s lead smelters.

• Lead ingot production increased from 92,099 tons in fiscal 2012 to 118,316 tons in fiscal 2013, an increase of 28.5%, due to the ramp up of the lead smelter at Dariba commissioned in fiscal 2012. Lead ingot sales increased from 91,701 tons in fiscal 2012 to 117,445 tons in fiscal 2013, an increase of 28.1%, due to increase in production.

• Silver ingot production increased from 206,945 kilograms in fiscal 2012 to 373,900 kilograms in fiscal 2013, an increase of 80.7%, primarily due to higher output from Sindesar Khurd mine and Dariba lead smelter. Sale of silver ingots increased from 205,691 kilograms in fiscal 2012 to 373,954 kilograms in fiscal 2013, an increase of 81.8% enabled by the increase in production.

• The daily average lead cash settlement price on the LME decreased from $ 2,269 per ton in fiscal 2012 to $ 2,113 per ton in fiscal 2013, a decrease of 6.9%.

• The daily average silver LBMA prices decreased from $ 35.3 per ounce in fiscal 2012 to $ 30.5 per ounce in fiscal 2013, a decrease of 13.6%.

Operating profit in the zinc segment increased from Rs. 54,018 million in fiscal 2012 to Rs. 57,426 million ($ 1,053.3 million) in fiscal 2013, an increase of Rs. 3,408 million, or 6.3 %. Operating margin however, decreased from 48.5% in fiscal 2012 to 46.6% in fiscal 2013. The increase in operating profit in fiscal 2013 was primarily due to the higher lead and silver sales volume and Rupee depreciation, offset by lower daily average LME prices of zinc and lead and lower daily average silver LBMA prices which cumulatively had a positive impact of Rs. 6,590 million in fiscal 2013. Operating profit was also negatively affected by increase in the cost of production of zinc (not including royalty) from Rs. 40,003 per ton in fiscal 2012 to Rs. 45,461 per ton in fiscal 2013 and cost of production of lead (not including royalty) from Rs. 39,816 per ton in fiscal 2012 to Rs. 41,227 per ton in fiscal 2013 which had an impact of Rs. 2,480 million. The decrease in operating margin was also due to lower daily average LME prices of zinc and lead, lower daily average silver LBMA prices and higher cost of production in fiscal 2013.

Zinc International

Revenue from external customers in the Zinc International segment increased from Rs. 41,272 million in fiscal 2012 to Rs. 43,475 million ($ 797.4 million) in fiscal 2013, an increase of Rs. 2,203 million or 5.3%. The increase in revenue was primarily contributed by the rupee depreciation against the US dollar, offset by the fall in daily average zinc and lead LME prices combined with lower volumes in Lisheen in accordance with the mine plan. Specifically:

• Production of refined zinc metal at Skorpion registered a marginal increase from 144,755 tons in fiscal 2012 to 145,342 tons in fiscal 2013, an increase of 587 tons or 0.4%.

• Production of zinc metal in concentrate (MIC) from the Lisheen and BMM mines decreased from 214,975 tons in fiscal 2012 to 208,063 tons in fiscal 2013, a fall of 3.2%. Production of lead MIC also decreased from 83,780 tons to 72,289 tons, a decrease of 11,491 tons or 13.7%. The fall in production was in line with the current year’s mine plan.

• The daily average Zinc cash settlement price on the LME decreased from $ 2,098 per ton in fiscal 2012 to $ 1,948 per ton in fiscal 2013, a decrease of 7.2%.

• The daily average Lead cash settlement price on the LME decreased from $ 2,269 per ton in fiscal 2012 to $ 2,113 per ton in fiscal 2013, a decrease of 6.9%.

Operating profit in the Zinc International segment decreased from Rs. 6,008 million in fiscal 2012 to Rs 5,078 million ($ 93.1 million) in fiscal 2013, a decrease of Rs. 930 million or 15.5%, largely on account of the fall in volumes and lower daily average metal prices, partly offset by lower production costs. Operating margin decreased from 14.6% in fiscal 2012 to 11.7% in fiscal 2013.

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Aluminium

Revenue from external customers in the aluminium segment increased from Rs. 31,089 million in fiscal 2012 to Rs. 34,148 million ($ 626.3 million) in fiscal 2013, an increase of Rs. 3,059 million, or 9.8%. This increase was primarily due to depreciation of the Indian rupee against the US dollar by 13.6%, higher volumes and increased metal premiums, offset by the decline in the daily average LME prices of aluminium. Specifically:

• Aluminium production increased from 245,654 tons in fiscal 2012 to 246,990 tons in fiscal 2013, an increase of 0.5%. Production of value added products also registered a marginal increase, at 96.6% in fiscal 2013 as against 96.5% in fiscal 2012.

• Aluminium sales increased from 239,335 tons in fiscal 2012 to 245,857 tons in fiscal 2013, an increase of 2.7% as a result of higher production and stock liquidation. Sales of aluminium ingots increased from 7,490 tons in fiscal 2012 to 7,738 tons in fiscal 2013, an increase of 3.3%. Wire rod sales increased from 167,808 tons in fiscal 2012 to 179,879 tons in fiscal 2013, an increase of 7.2%, reflecting our continued focus on the sale of value-added products. Rolled product sales decreased from 63,996 tons in fiscal 2012 to 58,160 tons in fiscal 2013, a decrease of 9.1%, reflecting the market conditions. The remaining sales represent billet sales of 40 tons in fiscal 2012 as compared to bus bar sales of 80 tons in fiscal 2013.

• Aluminium sales in the domestic market increased from 233,385 tons in fiscal 2012 to 238,701 tons in fiscal 2013, an increase of 2.3%. Our aluminium exports increased marginally from 5,950 tons in fiscal 2012 to 7,156 tons in fiscal 2013. Our domestic sales as a percentage of total sales decreased from 97.5% in fiscal 2012 to 97.1 % in fiscal 2013.

• The daily average aluminium cash settlement price on the LME decreased from $ 2,313 per ton in fiscal 2012 to $ 1,974 per ton in fiscal 2013, a decrease of 14.7%.

Operating profit in the aluminium segment decreased from Rs. 1,345 million in fiscal 2012 to Rs. 328 million ($ 6.0 million) in fiscal 2013, a decrease of Rs. 1,017 million, or 75.6%. Higher sales realization due to depreciation of the Indian rupee against the US dollar and higher metal premiums partially offset by lower daily average LME prices of aluminium contributed to increase in operating profit by Rs. 1,960 million. However, increase in cost of production from Rs. 95,747 per ton in fiscal 2012 to Rs. 106,236 in fiscal 2013, largely on account of higher power and alumina costs resulted in the reduction in operating profit by Rs. 2,680 million. As a result, operating margin decreased from 4.3% in fiscal 2012 to 1.0% in fiscal 2013.

Power

Revenue from external customers in the power segment increased from Rs. 24,333 million in fiscal 2012 to Rs. 30,800 million ($ 564.9 million) in fiscal 2013, an increase of Rs. 6,467 million or 26.6%, the increase being primarily due to the generation from the third 600 MW unit of Sterlite Energy’s 2,400MW power plant and increased power generation from the 150 MW wind power generation capacity set up in fiscal 2012, offset by lower generation from BALCO’s 270 MW power plant. Specifically:

• Power sold increased from 7,578 million units (MU) in fiscal 2012 to 9,282 MU in fiscal 2013, an increase of 22.5%. This increase has been on account of the third unit of Sterlite Energy capitalized in February 2012 and 150 MW wind power generation capacity set up in the fourth quarter of fiscal 2012 generating power for the whole year in fiscal 2013. Power generated from these plants was higher by 1,892 MU and 175 MU respectively in fiscal 2013 as compared to fiscal 2012. However, this increase has been partially offset by the power evacuation constraints imposed on Sterlite Energy after a power grid failure in the end of August 2012, and lower power sales in BALCO’s 270 MW of 1,241 MU in fiscal 2013 as compared to 1,605 MU in fiscal 2012, on account of evacuation constraints.

• The average power realization decreased from Rs. 3.39 per unit in fiscal 2012 to Rs. 3.34 per unit in fiscal 2013, a decrease of 1.5%.

• Cost of generation at the power business decreased from Rs. 2.40 per unit in fiscal 2012 to Rs. 2.06 per unit in fiscal 2013, a decrease of 14.2%, mainly driven by decrease in Sterlite Energy’s power generation cost from Rs. 2.62 per unit to Rs. 2.08 per unit over the corresponding period, on account of lower coal costs and efficient plant operations.

Operating profit in the power segment increased from Rs. 2,200 million in fiscal 2012 to Rs. 5,251 million ($ 96.3 million) in fiscal 2013, an increase of Rs. 3,051 million or 138.7%, primarily due to higher power generation from the units commissioned during fiscal 2012 and improved efficiency from the increased scale of operations and lower generations costs, marginally offset by lower power realisations. Operating margin increased from 9.0% in fiscal 2012 to 17.0% in fiscal 2013.

Other

Operating loss in our other business segment increased from Rs. 47 million in fiscal 2012 to Rs. 72 million ($ 1.3 million) in fiscal 2013.

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Investment and Other income

Investment and other income increased from Rs. 28,829 million in fiscal 2012 to Rs. 36,693 million ($ 673.0 million) in fiscal 2013 an increase of Rs. 7,864 million or 27.3%, primarily due to an increase of Rs. 3,438 million in interest income on loans and receivables, and increase in interest income of Rs. 1,693 million on bank deposits consequent to increased deployment of funds in bank deposits and loans and receivables, gain of Rs.770 million towards sale of investment in Hudbay Minerals and an increase of Rs. 1,655 million in fair value gain on financial assets held for trading, partially offset by lower dividend income of Rs. 527 million from these financial assets.

Finance costs

Finance costs decreased from Rs. 12,042 million in fiscal 2012 to Rs. 11,183 million ($ 205.1 million) in fiscal 2013. Increase in interest expense was more than offset by reduction of Rs. 4,407 million in foreign exchange loss and increase in capitalization of interest costs by Rs. 1,982 million in fiscal 2013, as compared to the previous year.

Share in profit / loss of associate

Share in loss of associate decreased from Rs. 8,767 million in fiscal 2012 to Rs. 7,736 million ($ 141.9 million) in fiscal 2013 as smelter operations of Vedanta Aluminium operated above rated capacity with significant improvement in output of volume, power consumption, carbon consumption costs and other operational parameters.

Tax expense

Tax expense decreased from Rs. 20,077 million in fiscal 2012 to Rs. 15,555 million ($ 285.3 million) in fiscal 2013. Our effective income tax rate, calculated as tax expense divided by our profit before taxes, was 25.3% in fiscal 2012 and 16.5% in fiscal 2013. The effective tax rate decreased in fiscal 2013 primarily due to higher tax exemptions availed by our units located in designated areas in our Zinc India business in fiscal 2013 as compared to fiscal 2012 on account of which HZL's effective tax rate reduced from 20.0% to 11.0%, accelerated depreciation towards Sterlite’s newly set up 80 MW captive power plant and recognition of lower amount of losses as compared to the previous year in Vedanta Aluminium on which deferred tax assets are not recognized.

Non-controlling interest

Profit attributable to non-controlling interest increased from Rs. 20,239 million in fiscal 2012 to Rs. 24,850 million ($ 455.8 million) in fiscal 2013, an increase of Rs. 4,611 million or 22.8%. Non-controlling interest as a percentage of profit decreased from 34.2% in fiscal 2012 to 31.6% in fiscal 2013. The fall in percentage terms in spite of an increase in the value of profit attributable to non-controlling interest was primarily on account of higher profits from our power and Zinc India businesses.

Comparison of years ended March 31, 2011 and March 31, 2012

Revenue, Other Operating Income and Operating Profit

Consolidated

Revenue increased from Rs. 302,472 million in fiscal 2011 to Rs. 412,063 million in fiscal 2012, an increase of Rs. 109,591 million, or 36.2%. Revenue increased in fiscal 2012 as Zinc India, Zinc International and power businesses had higher volume growth with several of our growth projects commencing operations and ramping up production, the volume growth in power business at Sterlite Energy after the commencement of two units of 600 MW each, significant increase in revenues of silver production in our Zinc India business and the successful integration of the Zinc International business acquired in the second half of fiscal 2011.

Other operating income decreased from Rs. 2,366 million in fiscal 2011 to Rs. 1,398 million in fiscal 2012, a decrease of Rs. 968 million, or 40.9%. The decrease was primarily due to foreign exchange losses because of rupee depreciation against the US dollar.

Operating profit increased from Rs. 67,574 million in fiscal 2011 to Rs. 71,294 million in fiscal 2012, an increase of Rs. 3,720 million, or 5.5%. The increase in operating profit was primarily due to higher volumes from zinc and silver operations of our Zinc India business, higher operating profits from the Zinc International business as the acquisition was completed in the second half of fiscal 2011 and higher operating profits from the power business due to commissioning of two more 600 MW units at Sterlite Energy. The higher operating profit was offset by lower operating margins from the aluminium business due to lower LME, higher cost of production and charge of Rs. 4,233 million on account of the adverse Court ruling in Asarco’s case. Operating margin decreased from 22.3% in fiscal 2011 to 17.3% in fiscal 2012 as a result of a decrease in the operating margins in all businesses.

Contributing factors to our consolidated operating income were as follows:

• Cost of sales increased from Rs. 226,134 million in fiscal 2011 to Rs. 319,719 million in fiscal 2012, an increase of Rs. 93,585 million, or 41.4%. Cost of sales increased primarily due to higher input costs, higher royalty costs, higher costs due to increase in volume at our Zinc India business, power business and Zinc International business due to the acquisition of Zinc International business in the second half of fiscal 2011. Cost of sales as a percentage of revenue increased from 74.8% in fiscal 2011 to 77.6% in fiscal 2012.

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• Distribution expenses increased from Rs. 3,516 million in fiscal 2011 to Rs.7,446 million in fiscal 2012, an increase of Rs. 3,930 million, or 111.8%. As a percentage of revenue, selling and distribution expenses increased from 1.2 % in fiscal 2011 to 1.8 % in fiscal 2012 due to expenditure from the Zinc International business acquired in the second half of fiscal 2011 and higher distribution costs for the power business.

• Administration expenses increased from Rs.7,614 million in fiscal 2011 to Rs. 15,002 million in fiscal 2012, an increase of Rs. 7,388 million, or 97.0%, As a percentage of revenue, administration expenses increased from 2.5% in fiscal 2011 to 3.6% in fiscal 2012 due to the charge of Rs. 4,233 million with respect to the claim made by Asarco and higher administrative costs from the Zinc International business acquired in the second half of fiscal 2011.

Copper

Revenue in the copper segment increased from Rs. 156,610 million in fiscal 2011 to Rs. 201,647 million in fiscal 2012, an increase of Rs. 45,037 million, or 28.8%. This increase was primarily due to the increase in production of cathodes supplied to growing power sector, higher sales in Fujairah, higher LME prices of copper and reflecting the impact of the planned bi-annual plant maintenance shutdown for 26 days in June and July 2010 and a temporary shutdown pursuant to the order of the High Court in September 2010 and higher LME prices of copper. Specifically:

• Copper cathode production increased from 303,991 tons in fiscal 2011 to 325,877 tons in fiscal 2012, an increase of 7.2%. The production in fiscal 2011 was low primarily due to the planned bi-annual plant maintenance shut down for 26 days in June and July 2010 and stabilization issues faced during post shut down ramp-up. Copper cathode sales increased from 116,590 tons in fiscal 2011 to 159,004 tons in fiscal 2012, an increase of 36.0%, due to increased production.

• Production of copper rods decreased from 187,892 tons in fiscal 2011 to 161,421 tons in fiscal 2012, a decrease of 14.1%. Copper rod sales decreased from 186,737 tons in fiscal 2011 to 161,514 tons in fiscal 2012, a decrease of 13.5%. The rod sales decreased as we preferred to sell cathodes in view of better realization from the export market.

• Sales of copper in the Indian market decreased from 206,653 tons in fiscal 2011 to 197,434 tons in fiscal 2012, a decrease of 4.5%, and our exports increased from 96,674 tons in fiscal 2011 to 123,084 tons in fiscal 2012, an increase of 27.3%. We also carried out tolling of 4,581 tons of copper cathode. We endeavor to sell large quantities of our products domestically, where we receive an Indian market premium. Our domestic sales as a percentage of total sales decreased from 68.1% in fiscal 2011 to 61.6% in fiscal 2012.

• The daily average copper cash settlement price on the LME increased from $ 8,138 per ton in fiscal 2011 to $ 8,475 per ton in fiscal 2012, an increase of 4.1%.

Operating profit in the copper segment decreased from Rs. 9,198 million in fiscal 2011 to Rs. 7,770 million in fiscal 2012, a decrease of Rs. 1,428 million, or 15.5%. Operating margin decreased from 5.9% in fiscal 2011 to 3.9% in fiscal 2012. The decrease was primarily due to provision of 4,233 million during the fiscal 2012 on account of the adverse Court ruling in Asarco’s claim, higher costs at our CMT mines offset by improvement in margins due to increase in price and volumes, decrease in production costs and higher realization of suphuric acid. In particular:

• TcRc rates increased from an average of 11.9¢/lb realized in fiscal 2011 to an average of 14.5 ¢/lb realized in fiscal 2012.

• Cost of production, which consists of cost of smelting and refining costs, decreased significantly from 4.0 ¢/lb in fiscal 2011 to 0.0 ¢/lb in fiscal 2012, primarily due to higher realization on the sale of sulphuric acid by-product and higher metal recoveries.

Zinc India

Revenue in the zinc India segment increased from Rs. 98,444 million in fiscal 2011 to Rs. 111,319 million in fiscal 2012, an increase of Rs. 12,875 million, or 13.1%. This increase was primarily due to an increase in sales volume in both domestic and export volumes, increase in lead sales from the new lead smelter at Dariba and depreciation of the Indian rupee against the US dollar by 5.0% between 2011 and 2012. Specifically:

• Zinc ingot production increased from 712,471 tons in fiscal 2011 to 758,716 tons in fiscal 2012, an increase of 6.5%, due to ramp-up of production from our first zinc smelter at Dariba and improved operational efficiencies. Zinc ingot sales increased from 712,603 tons in fiscal 2011 to 758,499 tons in fiscal 2012, an increase of 6.4%, enabled by the higher production and strong market demand in India as well as in the rest of Asia.

• Zinc ingot sales in the domestic market increased from 411,617 tons in fiscal 2011 to 438,171 tons in fiscal 2012, an increase of 6.5%. Our domestic sales as a percentage of total sales remained constant in fiscal 2011 and in fiscal 2012. Export sales increased from 300,986 tons of zinc in fiscal 2011 to 320,328 tons of zinc in fiscal 2012, an increase of 6.4% due to increased production.

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• The daily average zinc cash settlement price on the LME decreased from $ 2,185 per ton in fiscal 2011 to $ 2,098 per ton in fiscal 2012, a decrease of 4.0%.

• Zinc concentrate sales decreased from 65,957 dry metric tons in fiscal 2011 to nil in fiscal 2012. This decrease was primarily due to higher captive consumption. We sold surplus lead concentrate of 38,457 dry metric tons in fiscal 2011 and 10,086 dry metric tons in fiscal 2012 to third parties. This decrease in concentrate sales was due to higher captive consumption on account of higher capacities available from the new ramped up smelters.

• Lead ingot production increased from 57,294 tons in fiscal 2011 to 92,099 tons in fiscal 2012, an increase of 60.8%, due to the ramp up of the new lead smelter at Dariba. Lead ingot sales increased from 57,229 tons in fiscal 2011 to 91,701 tons in fiscal 2012, an increase of 60.2%, due to increase in production.

• Silver ingot production increased from 148,082 kilograms in fiscal 2011 to 206,945 kilograms in fiscal 2012, an increase of 39.8%, primarily due to higher silver content in the mined ore. The daily average silver London Bullion Metal Association, or LBMA, price increased by 32.3% in fiscal 2012 as compared to fiscal 2011. Sale of silver ingots increased from 146,558 kilograms in fiscal 2011 to 205,691 kilograms in fiscal 2012, an increase of 40.3% enabled by the increase in production.

• The daily average lead cash settlement price on the LME increased from $ 2,244 per ton in fiscal 2011 to $ 2,269 per ton in fiscal 2012, an increase of 1.1%.

• The daily average silver LBMA prices increased from $ 23.9 per ounce in fiscal 2011 to $ 35.3 per ounce in fiscal 2012 an increase of 48.0%.

Operating profit in the zinc segment increased from Rs. 50,914 million in fiscal 2011 to Rs. 54,018 million in fiscal 2012, an increase of Rs. 3,104 million, or 6.1 %. Operating margin decreased from 51.7% in fiscal 2011 to 48.5% in fiscal 2012. The increase in operating income was primarily due to the higher sales volume, higher improved by-product, offset by higher cost of production. The operating margins decreased due to higher cost of production.

Zinc International

On May 10, 2010, we agreed to acquire various zinc business of Anglo American Plc for a total consideration of Rs. 69,083 million ($ 1,513.1 million). The zinc business comprises of:

(1) a 100.0% stake in Skorpion which owns the Skorpion mine and refinery in Namibia;

(2) a 74.0% stake in BMM, which includes the Black Mountain Mine and the Gamsberg Project, in South Africa and

(3) a 100.0% stake in Lisheen, which owns the Lisheen mine in Ireland.

On December 3, 2010, we announced the completion of the acquisition of Skorpion by SIL, a wholly-owned subsidiary of Sterlite at a consideration of Rs. 32,098 million ($ 706.7 million). On February 4, 2011, we announced the completion of the acquisition of the 74.0% stake in BMM for a consideration of Rs. 11,529 million ($ 250.9 million), net of refund of $ 9.3 million. On February 15, 2011, we announced the completion of the acquisition of 100.0% stake in Lisheen for a consideration of Rs.25,020 million ($ 546.2 million) . The purchase price for the zinc business was paid in US dollars and has been converted into Indian Rupees based on the exchange rate as on the date of each such acquisition.For further information, see “Item 4. B. Business Overview – Our Business – Our Zinc International Business”.

Revenue and operating profit in the Zinc International business segment was Rs. 41,272 million and Rs. 6,008 million in fiscal 2012 respectively. Revenue and operating profit in the Zinc International business segment was Rs. 9,961 million and Rs. 1,592 million in fiscal 2011 respectively for the period from the respective acquisition dates till March 31, 2011.Revenue and operating profits increased on account of higher volumes from the Zinc International business during fiscal 2012 as the Zinc International business was acquired during the second half of fiscal 2011.

Aluminium

Revenue to external customers in the aluminium segment increased from Rs. 30,175 million in fiscal 2011 to Rs. 31,089 million in fiscal 2012, an increase of Rs. 914 million, or 3.0%. This increase was primarily due to the 2.48% increase in average LME prices and depreciation of the Indian rupee against the US dollar by 5.0% offset by decrease in sales volume as compared to the previous year. Specifically:

• Aluminium production decreased from 255,298 tons in fiscal 2011 to 245,654 tons in fiscal 2012, a decrease of 3.8%, primarily due to lower production of hot metal. However, the production of value added products at 96.0% in fiscal 2012 as against 89.0% in fiscal 2011 primarily due to the process improvement and introduction of copper ring mould in wire rod mills to enhance the quality of our valued added products.

• Aluminium sales decreased from 247,412 tons in fiscal 2011 to 239,335 tons in fiscal 2012, a decrease of 3.3%, due to captive consumption of 5,321 MT of rolled products and 1,157 MT busbars in the smelter expansion project. Sales of aluminium ingots decreased from 26,510 tons in fiscal 2011 to 7,490 tons in fiscal 2012, a decrease of 71.7%, as a result of production of higher value added products. Wire rod sales increased from 160,723 tons in fiscal 2011 to

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167,808 tons in fiscal 2012, an increase of 4.4%, as a result of increased production and increased demand for this product, particularly in the electrical sector, and reflects our continued focus on the sale of value-added products. Rolled product sales increased from 60,149 tons in fiscal 2011 to 63,996 tons in fiscal 2012, an increase of 6.4%, primarily due to higher demand and process improvements.

• Aluminium sales in the domestic market decreased from 241,894 tons in fiscal 2011 to 233,385 tons in fiscal 2012, a decrease of 3.5%, due to captive consumption of 7,418 MT of rolled products and 1,438 MT busbars in the smelter expansion project. Our aluminium exports increased from 5,518 tons in fiscal 2011 to 5,950 tons in fiscal 2012, as a result of higher premium in the international market. Our domestic sales as a percentage of total sales decreased from 97.8% in fiscal 2011 to 97.5 % in fiscal 2012.

• The daily average aluminium cash settlement price on the LME increased from $ 2,257 per ton in fiscal 2011 to $ 2,313 per ton in fiscal 2012, an increase of 2.5%.

Operating profit in the aluminium segment decreased from Rs. 3,495 million in fiscal 2011 to Rs. 1,345 million in fiscal 2012, a decrease of Rs. 2,150 million, or 61.5%. Operating margin decreased from 11.6% in fiscal 2011 to 4.3% in fiscal 2012. This decrease in operating profits was due to higher costs of production on account of increase in coal, carbon and alumina costs.

Power

Revenue in the power segment increased from Rs.7,282 million in fiscal 2011 to Rs. 24,333 million in fiscal 2012, an increase of Rs. 17,051 million or 234.2 %, primarily due to sale of power from Sterlite Energy’s three units of 600 MW each and additional power sales from the wind power projects commissioned during fiscal 2012.

Similarly, operating profit in the power segment decreased from Rs. 2,437 million in fiscal 2011 to Rs. 2,200 million in fiscal 2012, a decrease of Rs. 237 million, or 9.7% due to increased foreign exchange loss of Rs. 1,329 million and offset by higher sales volume in the power business.

Other

Operating loss in our other business segment decreased from Rs. 62 million in fiscal 2011 to Rs. 47 million in fiscal 2012.

Investment and Other income

Investment and other income increased from Rs. 21,933 million in fiscal 2011 to Rs. 28,829 million in fiscal 2012, an increase of Rs. 6,896 million, or 31.4 % primarily due to an increase in fair value gain on financial assets held for trading (net of dividend income), an increase in interest income on bank deposits and loans and receivables consequent to increased deployment of funds in bank deposits and loans and receivables.

Finance costs

Finance costs increased from an income of Rs. 1,096 million in fiscal 2011 to an expense of Rs. 12,042 million in fiscal 2012. This increase in finance costs was primarily due to foreign exchange loss on account of rupee depreciation during fiscal 2012 and higher interest costs.

Share in profit / loss of associate

Share in loss of associate increased from Rs. 3,082 million in fiscal 2011 to Rs. 8,767 million in fiscal 2012. The increase in loss of Rs. 5,685 million is primarily related to interest cost relating to loans taken for expansion of projects, foreign exchange loss as well as increased depreciation.

Tax expense

Tax expense increased from Rs. 18,810 million in fiscal 2011 to Rs. 20,077 million in fiscal 2012. Our effective income tax rate, calculated as tax expense divided by our profit before taxes was 21.5% in fiscal 2011 and 25.3% in fiscal 2012. The effective tax rate was higher in fiscal 2012 primarily due to non-availability of tax exemption for the export oriented units in fiscal 2012 as compared to fiscal 2011 and recognition of higher share of losses in Vedanta Aluminium on which deferred tax are not recognized offset by higher tax free dividend and investment income.

Non-controlling interest

Profit attributable to non-controlling interest increased from Rs. 19,813 million in fiscal 2011 to Rs. 20,239 million in fiscal 2012, an increase of Rs. 426 million, or 2.2%. This increase was mainly due to higher profits in our zinc business and due to new acquisitions in fiscal 2011. Non-controlling interest as a percentage of profit increased from 28.8% in fiscal 2011 to 34.2% in fiscal 2012.

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Liquidity and Capital Resources

The following table is derived from our selected consolidated financial data and sets forth our cash flow for the fiscal years 2009, 2010, 2011, 2012 and 2013:

	For the Year Ended March 31,
		2009		2010		2011		2012		2013		2013
		(Rs. in millions)		(Rs. in millions)		(Rs. in millions)		(Rs. in millions)		(Rs. in millions)		(US Dollars in millions)
Cash Flow Data:
Net cash provided by (used in):
Operating activities		72,585		14,249		127,529		66,998		73,954		1,356.5
Investing activities		(95,295	)	(117,582	)	(128,562	)	(94,705	)	(93,504	)	(1,715.1	)
Financing activities		13,442		102,322		20,650		22,634		16,401		300.8

Liquidity

As of March 31, 2013, we had cash and short term investments (excluding restricted cash and cash equivalents) totaling Rs. 251,338 million ($ 4,610.0 million), and near-term debt redemption obligations of Rs. 6,640 million ($ 121.8 million), and we had, on a standalone basis, cash and short term investments (excluding restricted cash and cash equivalents) totaling Rs. 24,458 million ($ 448.6 million). We expect that our current cash and short term investments, together with our cash flows from operations, will be our principal sources of cash to satisfy our capital requirements for the next few years. We also obtained cash from shareholder contributions to our share capital, offerings of our equity shares or ADSs and by issue of Foreign Currency Convertible Notes or FCCNs during fiscal 2010. While we believe that our current and anticipated sources of cash will be adequate to satisfy our capital requirements, current global market and economic conditions have increased the cost of and decreased the availability of credit and adversely affected the financial markets and economy in India, the United States and most other western and emerging economies, which in turn has had, and may continue to have, a material adverse effect on our business, our financial performance and the prices of our equity shares and ADSs. See “Item 3. Key Information—D. Risk Factors—Risks Relating to Investments in Indian Companies, Global Economic Conditions and International Operations”.

Capital Requirements

Our principal capital requirements include:

• capital expenditures, towards expansion of capacities in existing businesses including modernization of facilities;

• the establishment of our commercial power generation business;

• consolidation of our ownership in our various subsidiaries; and

• acquisitions of complementary businesses that we determine to be attractive opportunities.

We continue to consider increasing capacities of our existing businesses through greenfield and brownfield projects and through acquisitions as one of our major growth strategies, though we are actively monitoring global market and economic conditions and the outlook for commodity prices, as well as our current and anticipated liquidity positions, as we constantly evaluate our desired rate of growth in pursuing this strategy.

Our business is heavily dependent on plant and machinery for the production of our copper, zinc and aluminium products, as well as investments in our mining operations and our commercial power generation business. Investments to maintain and expand production facilities are, accordingly, an important priority and have a significant effect on our cash flows and future results of operations. Our capital expenditures in fiscal 2011, 2012 and 2013 were Rs 50,016 million Rs. 67,670 million and Rs 57,636 million ($ 1,057.1 million), respectively, largely due to our capacity expansion and new projects across our copper, zinc, aluminium and power businesses.

We have Rs. 22,900 million ($ 420.0 million) of ongoing expansion projects to increase our total copper capacity to 800,000 tpa with a 160 MW coal based thermal captive power plant at a cost of Rs. 6,080 million ($111.5 million). The 400,000 tpa copper smelter expansion project at Tuticorin is being rescheduled while we await the order of the Court and consent from the State Pollution Control Board. We have incurred Rs. 13,101 million ($ 240.3 million) on these projects as of March 31, 2013.

HZL has expansion projects in the amount of approximately Rs. 79,400 million ($ 1,456.3 million) to be spent on the expansion of its existing underground mines together with the development of the underground mine at Rampura Agucha, expansion of Sindesar Khurd, Zawar, Rajpura Dariba and Kayar mines. The plan also involves the opening up of a new mine at Bamnia Kalan in the Rajpura Dariba belt. Production from these mines will be gradually enhanced through the continuous development of the mines. As of March 31, 2013, Rs. 10,222 million ($ 187.5 million) has been spent.

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BALCO is building a 1,200 MW coal-based captive power plant in Chhattisgarh at an estimated cost of Rs. 46,500 million ($ 852.9 million) consisting four units of 300 MW each. Final stage regulatory approvals are awaited.

BALCO is in the process of setting up a 325,000 tpa aluminium smelter at an estimated cost of Rs. 38,000 million ($ 697.0 million) which uses pre-baked technology from the Guiyang Aluminium —Magnesium Design & Research Institute, or GAMI, of China. The first metal tapping from the 325,000 tpa aluminium smelter is scheduled for the third quarter of fiscal 2014. The capital expenditure spent on these projects as of March 31, 2013 is Rs. 75,679 million ($ 1,388.1 million).

BALCO received a coal block allocation of 211 million tons for use in its captive power plants in November 2007. These allocated coal blocks are regarded as non-reserve coal deposits. The environment and forest clearance have been received, and currently the approval for diversion of forest land and execution of mining lease is awaited. The mining is expected to commence from the first quarter of fiscal 2015. The estimated cost of developing the coal mine is Rs. 7,150 million ($ 131.1 million). As of March 31, 2013, Rs. 658 million ($ 12.1 million) has been spent.

The first 660 MW unit of the 1,980 MW coal-based thermal commercial power plant at Talwandi Sabo in the State of Punjab in India is expected to be synchronized in the third quarter of fiscal 2014 and each subsequent unit at four month intervals. The estimated cost of this project is Rs. 101,732 million ($ 1,866.0 million). As of March 31, 2013, we had spent Rs. 79,965 million ($ 1,466.7 million) on this project.

In fiscal 2014 and 2015, we have scheduled loan repayment obligations, denominated in a mix of Indian Rupees and US dollars of Rs. 6,640 million ($ 121.8 million) and Rs. 56,336 million ($ 1,033.3 million), respectively, for various outstanding long-term loans. We plan to finance our capital expenditures and our loan repayment obligations out of our cash flows from operations and financing activities. Our failure to make planned expenditures could adversely affect our ability to maintain or enhance our competitive position and develop higher margin products.

Consistent with our strategy to consolidate our ownership interests in our key subsidiaries, we had exercised the second call option to acquire the GoI’s remaining ownership interest in HZL although the exercise is currently subject to dispute. See “Item 4. Information on the Company—B. Business Overview—Our Business—Options to Increase Interests in HZL and BALCO” for more information. The option value will be the fair market value determined by an independent appraiser, and will entail significant capital requirements. Based solely on the market price of HZL’s shares on the NSE on July 19, 2013 of Rs. 104.35 ($ 1.9) per share, and not including the other factors that the independent appraiser may consider, one possible estimation of the exercise price to acquire all of the GoI’s 1,247,950,590 shares of HZL would be Rs. 130,224 million ($ 2,388.5 million). If the GoI sells its remaining ownership interest in HZL through a public offer, we may look into alternative means of increasing our ownership interest in HZL.

In addition, we have exercised our option to acquire the GoI’s remaining 49.0% ownership interest in BALCO, although the exercise of this option has been contested by the GoI and the GoI retains the right and has expressed an intention to sell 5.0% of BALCO to BALCO employees. See “Item 4. Information on the Company—B. Business Overview—Our Business—Options to Increase Interests in HZL and BALCO” for more information.

We may in the future make acquisitions of mines, plants or minerals and metals businesses that complement or enhance our existing businesses.

We have consistently paid dividends including tax on dividend amounting to Rs. 3,674 million for fiscal 2011, Rs. 7,658 million for fiscal 2012 and Rs. 7,198 million ($ 132.0 million) in fiscal 2013.

Capital Resources

We plan to finance our capital requirements through a mix of cash flows from operating and financing activities. We do not depend on off-balance sheet financing arrangements. We believe that our working capital requirements can be sufficiently funded through our internal accruals and undrawn line of credit.

Comparision of Years Ended March 31, 2012 and March 31, 2013

Net Cash from Operating Activities

Net cash from continuing operating activities was Rs. 73,954 million ($ 1,356.5 million) in fiscal 2013 compared to net cash from continuing operating activities of Rs. 66,998 million in fiscal 2012, an increase of Rs. 6,956 million. Net increase in cash generation from operations arose mainly due to following reasons:

• net proceeds of short term investments of Rs. 6,200 million ($ 113.7 million) in fiscal 2013 compared to net purchase of short term investments of Rs.7,992 million in fiscal 2012.

• income tax paid of Rs. 21,577 million ($ 395.7 million) in fiscal 2013 compared to outflow of Rs. 24,831 million in fiscal 2012.

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• the cash used in operating assets and liabilities (working capital) in fiscal 2013 was Rs. 16,063 million ($ 294.6 million) compared to cash used of Rs. 5,124 million in fiscal 2012.

• interest paid of Rs. 13,028 million ($ 239.0 million) in fiscal 2013 compared to outflow of Rs. 9,653 million in fiscal 2012.

• interest received of Rs. 10,420 million ($ 191.1 million) in fiscal 2013 compared to inflow of Rs. 14,949 million in fiscal 2012.

We believe our current working capital is sufficient for our present capital requirements.

Net Cash Used in Investing Activities

Net cash used in investing activities was Rs. 93,504 million ($ 1,715.1 million) in fiscal 2013 and Rs. 94,705 million in fiscal 2012. The net cash used in investing activities in fiscal 2013 was lower due to:

• cash inflow of Rs. 8,201 million ($ 150.4 million) in fiscal 2013 on account of proceeds from the sales of Hudbay shares compared to net cash used in fiscal 2012 towards purchase of investment of Rs. 7,158 million.

• lower cash used towards our expansion projects across our copper, zinc, power and aluminium businesses of Rs. 57,636 million ($ 1,057.1 million) in fiscal 2013 as compared to Rs. 67,670 million in fiscal 2012.

• net cash outflow of Rs. 11,902 million ($ 218.3 million) in fiscal 2013 as compared to net cash inflow from short term deposits of Rs. 5,488 million in fiscal 2012.

• net cash outflow on account of loans to related parties of Rs. 32,252 million ($ 591.6 million) in 2013 as compared to net cash outflow of Rs. 26,305 million in fiscal 2012.

Net Cash provided by Financing Activities

Net cash provided by financing activities was Rs. 16,401 million ($ 300.8 million) in fiscal 2013 and Rs. 22,634 million in fiscal 2012, primarily on account of:

• net cash outflow from long-term and short-term debts (other than working capital and related party debt) of Rs. 5,308 million ($ 97.4 million) as compared to cash inflow of Rs. 37,530 milion in 2012.

• net cash inflow from acceptances of Rs. 29,959 million ($ 549.5 million) in fiscal 2013 as compared to cash inflow of Rs. 1,232 million in fiscal 2012 which were partially offset by payment of dividend of Rs. 11,504 million ($ 211.0 million) in fiscal 2013 as compared to Rs. 12,612 million in fiscal 2012.

We tap both the domestic and offshore markets for our long-term funding needs. Since we have sizeable imports and exports, we access both import and export credits, based on cost effectiveness, both in the Indian Rupee and in foreign currencies, to finance our short-term working capital requirements. We have in place both secured and unsecured borrowings, with our secured borrowings being generally Indian Rupee denominated bonds.

We have tapped different segments of borrowing resources, including banks and capital markets, both in India and overseas. We have credit ratings of above investment grade from the local rating agencies such as CRISIL Limited and ICRA Limited. We therefore have not had, and do not believe that we will have, difficulty in gaining access to short-term and long-term financing sufficient to meet our current requirements.

Comparison of Years Ended March 31, 2011 and March 31, 2012

Net Cash provided by/ used in Operating Activities

Net cash provided by continuing operating activities was Rs. 66,998 million in fiscal 2012 compared to net cash provided by continuing operating activities of Rs. 127,529 million in fiscal 2011. The cash used in operating assets and liabilities (working capital) in fiscal 2012 was Rs. 5,124 million compared to cash used of Rs. 898 million in fiscal 2011. Cash generation from operations declined primarily due to higher proceeds from short term investments in fiscal 2011 of Rs. 57,390 million compared to outflow from short term investments of Rs.7,992 million in fiscal 2012.

Net Cash Used in Investing Activities

Net cash used in investing activities was Rs. 94,705 million in fiscal 2012 and Rs. 128,562 million in fiscal 2011. The net cash used in investing activities in fiscal 2012 was lower due to: (i) net cash used in fiscal 2012 to purchase investments of Rs. 7,158 million compared to the acquisition of the Zinc International business of Rs. 53,526 million in fiscal 2011; (ii) net cash inflow of Rs. 5,488 million in fiscal 2012 as compared to net cash outflow from short term deposits of Rs. 48,570 million in fiscal 2011; (iii) higher cash used towards our expansion projects across our copper, zinc, power and aluminium businesses of Rs. 67,670 million in fiscal 2012 as compared to Rs. 50,016 million in fiscal 2011; and (iv) net cash outflow on account of loan to related parties of Rs. 26,305 million in 2012 as compared to net cash inflow of Rs. 22,975 million in fiscal 2011.

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Net Cash Provided by Financing Activities

Net cash provided by financing activities was Rs. 22,634 million in fiscal 2012, primarily as a result of the net proceeds from long-term and short-term debts (other than working capital and related party debt) of Rs. 37,530 million and net cash inflow from acceptances of Rs. 1,232 million which were partially offset by repayment of related party loan of Rs. 5,202 million and payment of dividends of Rs. 12,612 million. Net cash provided by financing activities was Rs. 20,650 million in fiscal 2011, primarily as a result of the net proceeds from long-term and short-term debts of Rs. 23,477 million and loan from related parties of Rs. 4,900 million which were partially offset by repayment of acceptances (acceptances comprise of credit availed from financial institutions) of Rs. 4,676 million and payment of dividends of Rs. 4,743 million.

Outstanding Loans

The principal loans held by us and our subsidiaries and the amounts outstanding there under, as of March 31, 2013 were as follows:

Working capital loans

We have credit facilities from various banks for meeting working capital requirements, generally in the form of credit lines for establishing letters of credit, packing credit in foreign currency, or PCFC, cash credit, bank guarantees and bills discounting. Amounts due under working capital loans as of March 31, 2012 and March 31, 2013 were Rs. 4,969 million and Rs. 8,356 million ($ 153.2 million) respectively.

As on March 31, 2013 , the working capital loan of Rs. 8,356 million comprises of the following :-

• A working capital loan and cash credit facility availed by BALCO for Rs 1,748 million ($ 32.0 million). The weighted average interest on working capital loan and cash credit facility at BALCO is 10.10%. This working capital facility is secured by hypothecation of stock of raw materials, work-in-progress, semi-finished, finished products, consumable stores and spares, bills receivables, book debts and all other movables, both present and future. The charges ranks pari passu among banks under the multiple banking arrangements, both for fund based and non fund based facilities.

• At Fujairah, a US Dollar denominated loan facility of Rs. 2,444 million ($ 44.8 million) having interest rate based on the London Inter Bank Offer Rate or LIBOR, plus 160 basis points .This loan facility is secured by a letter of support by Sterlite.

• At Sterlite, US Dollar denominated bill discounting facility of Rs 4,164 million ($ 76.4 million). This is an unsecured facility at an average interest rate of LIBOR plus 101 basis points.

Foreign currency loans

In November 2008, BALCO obtained a US dollar denominated unsecured loan facility of $ 25 million from DBS Bank Limited, arranged by its Mumbai Branch, to meet the capital expenditure requirement on projects. The rate of interest payable on this facility is six-month LIBOR plus 345 basis points. The loan is repayable in three equal yearly installments beginning November 2013.This facility is secured by first paripassu charges on all movable fixed assets including plant and machinery related 1200 MW power project and 3.25 LTPA smelter projects both present and future along with secured lenders. The amount outstanding under this facility as of March 31, 2012 and March 31, 2013 was $ 25 million and $ 25 million (Rs. 1,350 million) respectively.

In July 2011, BALCO entered into an agreement with SBI London for External Commercial Borrowing of USD 200 million to part finance for setting up a 3.25 LTPA aluminium smelter along with a thermal power plant of 1200 MW at Korba. The facility is secured by first pari passu charges on all the fixed assets (excluding land) of the project and secured lenders. As at March 31, 2012 and March 31, 2013, the balance due under this facility was Rs. 10,008 million and Rs. 10,678 million ($ 195.8 million). The interest rate on this facility is six-month LIBOR plus 260 basis points. This loan is repayable in three annual equal installments starting from August 2016.

In February 2011, at the time of acquisition of BMM, short-term unsecured loan from Exxaro Base Metals (Proprietary) Limited (Exxaro) amounting to ZAR 218.7 million was also acquired. Exxaro owns 26% non-controlling equity interest in BMM. As of March 31, 2012, the balance due under this loan was Rs. 436 million. The outstanding balance as on March 31, 2013 is nil.

Term loans

On January 19, 2012, VGCB was sanctioned a financial assistance in the form of rupee term loan (RTL) of Rs.4,640 million from Axis Bank for financing the capital expenditure required towards the development, establishment, construction, operation and maintenance of coal handling facilities and upgradation of general cargo berth at outer harbor of Visakhapatnam port. Current effective interest rate of rupee term loan is at 11.25%, which is a floating rate based of interest revised on the basis of Axis Bank Base Rate plus 1.25% and is repayable with in 45 unequal quarterly installments commencing December 2014. As of March 31, 2012 and March 31, 2013, the outstanding amount under this facility is Rs. 1,079 million and Rs. 2,927 million ($ 53.7 million). This loan is secured by first pari passu floating charge on movable and immovable assets of VGCB and unconditional and irrevocable corporate guarantee from us. The charge on the assets is governed by the terms of a concessional agreement between VGCB and the Board of Trustees of Visakhapatnam Port.

On March 29, 2012 SEL received a sanction of Rs. 5,000 million from Bank of Baroda. As of March 31, 2012, the outstanding balance under this facility was Rs. 2,500 million (which was the amount drawn down). This outstanding balance has been repaid during fiscal 2013.

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Buyers’ credit

Sterlite Energy had utilised extended credit terms relating to purchases of property, plant and equipment for its projects. As of March 31, 2012, and March 31, 2013, the balance due under this facility was Rs. 3,213 million and Rs. 378 million ($ 6.94 million), respectively. The outstanding loans as on March 31, 2013 bear interest rate at LIBOR plus 167 basis points. These are unsecured debts. They are repayable on various dates within the next one year.

In April 2009, BALCO obtained a one time capex letter of credit limit of $ 100 million from State Bank of India. As on March 31, 2012, the outstanding balance under this facility was Rs. 737 million. The same has been repaid during fiscal 2013 year.

In June 2009, BALCO obtained a non-fund based limit of Rs. 6,250 million from AXIS Bank for the purchase of capital goods for projects, which is secured by a subservient charge on the current assets and movable fixed assets with a negative lien of BALCO. As at March 31, 2012 and March 31, 2013 the balance outstanding under this facility was Rs5,163 million and Rs.963 million ($17.7 million). The interest rate on this facility is six month LIBOR plus 200 basis points. The said outstanding amount is repayable from May 2014 until April 2016. Under this facility, BALCO is subject to certain financial covenants which provides that the ration of the total term debt to tangible networth should not exceed two times, a fixed asset cover of 1.25 times and a minimum debt service coverage ratio of 1.5 times should be maintained at all times and any other financial indicators stipulated by the bank should be followed.

In January 2010, BALCO obtained a non-fund based limit of Rs. 6,000 million from ICICI Bank for the purpose of import of capital goods, and subsequently another limit of Rs.2,500 million in December 2010 and Rs. 7,500 million in October 2011 which is secured by exclusive charge on assets to be imported under the facility.As on March 31, 2012 and March 31, 2013 the balance outstanding under this facility is Rs. 10,459 million and Rs. 10,299 ($ 188.9 million).The interest rate on this facility is six-month LIBOR plus 160 basis points. The said outstanding amount is repayable on various dates from October 2013 to November 2016.

In May 2010, BALCO obtained buyers credit facility of $ 50.0 million from DBS Bank Limited, Singapore for the import of capital goods for projects. The facility is secured by first pari passu charge on all movable fixed assets including plant and machinery related to 1200 MW power plant and 3.25 LTPA smelter project, both present and future alongwith secured lenders. The interest rate on this facility is six month LIBOR plus 175 basis points. The outstanding amount is repayable from May 2013 to June 2013. The balance outstanding under the facility as on March 31, 2012 and March 31, 2013 is Rs. 1,423 million and Rs 442 million ($ 8.1million) respectively.

In September 2010, VGCB obtained a non fund based limit of Rs. 1,000 million from ICICI Bank for the purpose of import of capital goods. As on March 31, 2012, the balance outstanding under this facility was Rs. 22 million. The same has been repaid during fiscal 2013.

In March 2012, VGCB obtained a non-fund based limit of Rs.1,500 million from AXIS Bank for the purpose of import of capital goods, which is secured by a first pari passu floating charge on movable and immovable assets and unconditional and irrevocable corporate guarantee from us. As of March 31, 2013, the balance outstanding under this facility Rs. 804 Million ($ 14.7 million).The interest rate on this facility is LIBOR plus 200 basis points. The outstanding amount is repayable on various dates from June 2013 to May 2015.

In August 2010, TSPL obtained a non-fund based limit of Rs.10,000 million from ICICI Bank for the purpose of import of capital goods, which is secured by unconditional and irrevocable corporate guarantee from us and a first charge on a pari passu basis on all the movable assets of TSPL. As of March 31, 2012 and March 31, 2013, the balance outstanding under this facility was Rs. 8,833 million and Rs. 9,400 million ($ 172.4 million) respectively .The interest rate on this facility is LIBOR plus 194 basis points. The said outstanding amount is repayable from July 2013 to September 2014.

In November 2011, TSPL obtained a non-fund based limit of Rs.5,000 million from State Bank of India for the purpose of import of capital goods, which is secured by unconditional and irrevocable corporate guarantee from us. As on March 31, 2012 and March 31, 2013 the balance outstanding under this facility is Rs. 4,971 million and Rs. 5,285 million ($ 97.0 million) respectively .The interest rate on this facility is LIBOR plus 173 basis points. The outstanding amount is repayable from May 2014 to September 2014.

In January 2012, TSPL obtained a non-fund based limit of Rs. 5,000 million from Axis Bank for the purpose of import of capital goods, which is secured by unconditional and irrevocable corporate guarantee from us and a subservient charge on all the movable assets of TSPL. As on March 31, 2012 and March 31, 2013, the balance outstanding under this facility is Rs. 4,838 million and Rs. 5,144 million ($ 94.4 million) respectively .The interest rate on this facility is LIBOR plus 190 basis points. The outstanding amount is repayable from April 2014 to September 2014.

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In July 2012, TSPL obtained a non-fund based limit of Rs. 3,900 million from Punjab National Bank for the purpose of import of capital goods, which is secured by unconditional and irrevocable corporate guarantee from us. As on March 31, 2013, the outstanding balance under this facility is Rs. 3,560 million ($ 65.3 million). The interest rate on this facility is LIBOR plus 150 basis points. The said outstanding amount is repayable from July 2013 to August 2013.

Non-convertible debentures

In April 2003, we issued Rs.1,000 million Indian Rupee denominated non-convertible debentures to Life Insurance Corporation of India, or (LIC). The debentures were issued in two tranches. Tranche A, in the amount of Rs. 400 million, due in April 2010 and Tranche B, in the amount of Rs. 600 million, due in April 2013. Interest payable on these debentures is linked to annualized GoI securities rates plus 190 basis points. These debentures are secured by some of our immovable properties and the current rate fixed is 8.24%. As of March 31, 2012, and March 31, 2013 the outstanding balance was Rs. 600 million and Rs. 600 million ($ 11.0 million) respectively.

During fiscal 2013, we issued secured non-convertible debentures for an aggregate amount of Rs. 20,000 million in four tranches ranging between 9.2% to 9.40% per annum. These non-convertible debentures are secured by way of mortgage on our immovable property situated at Sanaswadi in the state of Maharashtra and also by way of hypothecation on the movable fixed assets of Sterlite Energy with a security cover of 1.25 times on the face value of outstanding non-convertible debentures, by way of a charge on our assets and/or the assets of Sterlite Energy at all time during the tenure of non-convertible debentures.These non-convertible debentures are redeemable in tranches of Rs. 5,000 million each on October 25, 2022, November 27, 2022, December 6, 2022 and December 20, 2022. In respect of all the four tranches of non-convertible debentures, the debenture holders have a put and call option at the end of the 5 years from the respective date of the allotment of the non-convertible debentures. As on March 31, 2013 the outstanding balance under this facility was Rs. 19,939 million ($ 365.7 million).

In November 2008, BALCO issued Rs. 5,000 million in Indian Rupee denominated non-convertible debentures to LIC. The debentures are repayable in three equal yearly installments beginning in November 2013. The applicable interest rate is 12.25% per annum. The debentures are secured and have a pari passu charge on BALCO’s movable and immovable properties tangible or intangible assets, other than BALCO’s current assets to the extent of 1.33 times the issued amount of the debentures. As of March 31, 2012 and March 31, 2013 the outstanding balance was Rs. 5,000 million and Rs. 5,000 million ($ 91.7 million) respectively.

Talwandi Sabo has issued non-convertible debentures of Rs. 15,000 million to ICICI Bank at a rate of 9.8% per annum. The first tranche of Rs. 7,500 million was issued in December 2010 and second tranche for the balance amount was issued in January 2011. The NCDs are secured by first pari passu charge on the assets of TSPL both present and future, with a minimum asset cover of 1.25 times during the tenure of the NCDs (including the debt service reserve account) and unconditional and irrevocable corporate guarantee by us. Debentures have tenure of 13 years from the respective date of allotment, repayable in twelve equal quarterly installments after 10 years of allotment. As of March 31, 2012 and March 31, 2013, the amount outstanding is Rs. 14,982 million and Rs. 15,004 million ($ 275.2 million) respectively.

Commercial papers

During fiscal 2013, Sterlite Energy issued commercial paper to various asset management companies for funding project payables. As on March 31, 2013 outstanding balance is Rs. 500 million ($ 9.2 million) bearing coupon rateof 9.70%. These commercial papers were issued for a short duration and have been repaid in May 31, 2013.

During fiscal 2013, BALCO issued commercial papers to various asset management companies for funding project loan repayment and operational payables. As on March 31, 2013 outstanding balance was Rs. 6,900 million ($ 126.5 million) bearing coupon rate ranging between 9.30% to 9.70 %. These commercial papers were repaid in May 2013 and June 2013.

During fiscal 2012, SIIL issued commercial papers to various asset management companies for short term funding requirements. As of March 31, 2012 the outstanding balance was Rs. 4,977 million bearing a coupon rate of 11.20% and repayable on April 16, 2012. This has been repaid during fiscal 2013.

Convertible notes

Convertible Senior Notes or Convertible Notes, due 2014

On October 29, 2009, we raised $ 500 million by issue of 4.0% convertible notes of $ 1,000 each. Subject to certain exceptions, the note holders have an option to convert these Convertible Notes into ADSs (each ADS now represents four equity shares. Prior to the bonus issue and the share split of our equity shares on June 25, 2010, each ADS represented one equity share) at any time prior to business day immediately preceding the maturity date at a conversion rate of 42.8688 ADSs per $ 1,000 principal amount of notes which is equal to a conversion price of approximately $ 23.33 per ADS. The conversion price could be subject to adjustments should certain events occur. Further, at any time after November 4, 2012, we have a right to redeem in whole or parts of the convertible notes, subject to meeting certain conditions. The amount which we are required to pay contractually on October 30, 2014 is $ 500 million, unless previously converted, redeemed or purchased and cancelled.

At inception, the difference between the proceeds received on issuance of the convertible notes and the fair value of the conversion option (which is an embedded derivative) has been allocated to the convertible notes to establish its initial carrying cost. Subsequently, the conversion option has been measured at fair value through profit and loss with changes in fair value recognised in the statement of income, and the convertible notes have been carried at amortised cost using an effective interest rate method.

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The conversion option amounting to Rs. 302 million and Rs.3 million ($ 0.1 million) and un-amortised borrowing costs amounting to Rs. 93 million and Rs.59 million ($ 1.0 million) as of March 31, 2012 and March 31, 2013, respectively, are included along with the notes in statements of financial position. Change in the fair value of conversion option has been presented in the notes to our financial statements.

Export Obligations

We had export obligations of Rs. 146,267 million and Rs. 146,070million ($ 2,679.2 million) as at March 31, 2012 and March 31, 2013 respectively on account of concessional rates of import duties paid on capital goods under the Export Promotion Capital Goods Scheme enacted by the GoI which is to be fulfilled over the next eight years. If we are unable to meet these obligations, our liability would be Rs. 23,149 million ($ 424.6 million) reduced in proportion to actual exports. Due to the remote likelihood of us being unable to meet our export obligations, we do not anticipate a loss with respect to these obligations and hence have not made any provision in our consolidated financial statements.

Guarantees

As of March 31, 2013, we have provided the following guarantees:

• Guarantees including corporate guarantees on the issuance of customs and excise duty bonds amounting to Rs. 12,442 million and Rs. 24,196 million ($ 443.8 million) for the import of goods, including capital equipment at concessional rates of duty as at March 31, 2012 and 2013 respectively. We do not anticipate any liability on these guarantees.

• Corporate guarantee of Rs. 31,000 million and Rs. 42,221 million ($ 774.4 million) on behalf of Vedanta Aluminium for obtaining credit facilities as at March 31, 2012 and 2013 respectively. We also issued corporate guarantees of Rs. 14,383 million and Rs. 14,383 million ($ 263.8 million) as at March 31, 2012 and March 31, 2013 respectively on behalf of Vedanta Aluminium, for importing capital equipment at concessional rates of duty under the Export Promotion Capital Goods Scheme enacted by the GoI for the referred periods. Vedanta Aluminium is obligated to export goods worth eight times the value of concessions enjoyed in a period of eight years following the date of import, failing which we will be liable to pay the dues to the GoI. As of March 31, 2012 and 2013, we determined that we have no liability on these corporate guarantees.

• Bank guarantee amounting of AUD 5 million (Rs. 284 million or $ 5.2 million) as of March 31, 2013 (previous year AUD 5 million or Rs. 266 million), in favour of the Ministry for Economic Development, Energy and Resources, Tasmania, Australia as a security against rehabilitation liabilities on behalf of CMT. The same guarantee is backed up by the issuance of a corporate guarantee of Rs. 320 million ($ 5.9 million). These liabilities have been fully recognized in our consolidated financial statements. We do not anticipate any additional liability on these guarantees.

• Bank indemnity guarantees amounting to AUD 2.9 million (Rs. 164 million or $ 3.0 million) as of March 31, 2013 (previous year AUD 2.9 million or Rs. 154 million), in favor of the State Government of Queensland, Tasmania, Australia, as a security against rehabilitation liabilities that are expected to occur at the closure of the mine on behalf of Thalanga Copper Mines Proprietary Limited ("TCM"). The same guarantee is backed up by the issuance of a corporate guarantee of Rs. 164 million ($ 3.0 million). The environmental liability has been fully recognized in our consolidated financial statements. We do not anticipate any additional liability on these guarantees.

• Bank indemnity guarantees amounting to ZAR 20.2 million (Rs. 119 million or $ 2.2 million) as at March 31, 2013 (previous year ZAR 20.2 million or Rs. 133 million), in favor of the Department of Mineral Resources, South Africa as a security against rehabilitation liabilities on behalf of BMM. The environmental liability has been fully recognized in our consolidated financial statements. We do not anticipate any additional liability on these guarantees.

• Performance bank guarantees amounting to Rs. 3,368 million and Rs. 2,962 million ($ 54.3 million) as of March 31, 2012 and 2013 respectively. These guarantees are issued in the normal course of business while bidding for supply contracts or in lieu of advances received from customers. The guarantees have varying maturity dates normally ranging up to three years. These are contractual guarantees and are enforceable if the terms and conditions of the contracts are not met and the maximum liability on these contracts is the amount mentioned above. We do not anticipate any liability on these guarantees.

• Bank guarantees for securing supplies of materials and services in the normal course of business. The value of these guarantees as of March 31, 2012 and 2013 was Rs. 4,763 million and Rs. 5,189 million ($ 95.2 million) respectively. We have also issued bank guarantees in the normal course of business for an aggregate value of Rs. 242 million and Rs. 704 million ($ 12.9 million) for litigation, against provisional valuation and for other liabilities as at March 31, 2012 and 2013 respectively. We do not anticipate any liability on these guarantees of custom duty.

Our outstanding guarantees cover obligations aggregating Rs. 66,198 million and Rs. 89,655 million ($ 1,644.4 million) as of March 31, 2012 and 2013 respectively, the liabilities for which have not been recorded in our consolidated financial statements.

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Contractual Obligations

The following table sets out our total future commitments to settle contractual obligations as of March 31, 2013:

	Payment Due by Period                                                                            (in millions)
	Total				Less than 1 Year				1-3 Years				3-5 Years				More than 5 Years
	(Rs.)		(US Dollar)		(Rs.)		(US Dollar)		(Rs.)		(US Dollar)		(Rs.)		(US Dollar)		(Rs.)		(US Dollar)
Bank loans and borrowings		109,320		2,005.1		26,294		482.3		33,093		607.0		7,677		140.8		42,256		775.0
Interest commitment		42,472		779.0		8,845		162.2		11,204		205.5		7,683		140.9		14,740		270.4
Convertible notes		27,195		498.8		—		—		27,195		498.8		—		—		—		—
Other non-current liabilities1		10,357		190.0		120		2.2		10,083		184.9		107		2.0		47		0.9
Capital commitments		68,905		1,263.8		42,757		784.2		18,750		343.9		7,398		135.7		—		—
Total		258,249		4,736.7		78,016		1,430.9		100,325		1,840.2		22,865		419.4		57,043		1,046.3

1. Other non-current liabilities consist of security deposits and retentions.

Our total future commitments to settle contractual obligations as of March 31, 2013 were Rs. 258,249 million ($ 4,736.7 million), representing a Rs. 10,779 million increase as compared to our total future commitments to settle contractual obligations as of March 31, 2012.

We also have commitments to purchase copper concentrate for our copper custom smelting operations. These commitments are based on future copper LME prices which are not ascertainable as of the date of this annual report.

Off-Balance Sheet Arrangements

In the normal course of business, we enter into certain capital commitments and also give certain financial guarantees. The aggregate amount of indemnities and other guarantees, on which we do not expect any material losses, was Rs. 112,804 million ($ 2,069.0 million) as of March 31, 2013. Details of our guarantees are set out in “- Guarantees.” Details of our capital expenditures and commitments and contingencies are as follows:

Capital Expenditure and Commitments

Our principal financing requirements primarily include:

• capital expenditures, towards expansion of capacities in existing businesses including modernization of facilities;

• the establishment of our planned commercial power generation business;

• consolidation of our ownership in our various subsidiaries; and

• acquisitions of complementary businesses that we determine to be attractive opportunities.

The following table shows our capital expenditures spent in fiscal 2011, 2012 and 2013:

	For Year Ended March 31,
	2011		2012		2013		2013
	(in millions)						(US dollars in millions)
Capital Expenditure		50,016		67,670		57,636	1,057.1

We had significant capital commitments as of March 31, 2012 and March 31, 2013 amounting to Rs. 100,951 million and Rs. 68,905 million ($ 1,263.8 million) respectively, related primarily to capacity expansion projects, including the following commitments:

(i) Rs. 19,027 million ($ 349.0 million) for its commercial power generation business;

(ii) Rs. 6,220 million ($ 114.1 million) for capacity expansion at BALCO;

(iii) Rs. 27,777 million ($ 509.5 million) for capacity expansion at HZL; and

(iv) Rs. 15076 million ($ 276.5 million) for setting up captive power plants and for capacity expansion at SIIL.

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Contingencies

Certain of our operating subsidiaries have been named as parties to legal actions by third party claimants, and by the Indian sales tax, electricity cess, excise and related tax authorities for additional sales tax, electricity cess, excise and indirect duties. These claims primarily relate either to the assessable values of sales and purchases or to incomplete documentation supporting our tax returns. As of March 31, 2012 and March 31, 2013, the total claim related to these liabilities is Rs. 8,144 million and Rs. 10,211 million ($ 187.3 million) respectively. We have evaluated these contingencies and estimated that some of these claims are probable of resulting in loss contingencies and hence have recorded Rs. 212 million and Rs. 294 million ($ 5.4 million) as current liabilities as at March 31, 2012 and 2013 respectively.

The claims by third party claimants amounted to Rs. 5,792 million and Rs. 7,133 million ($ 130.8 million) as of March 31, 2012 and March 31, 2013 respectively. We evaluated these contingencies and estimated that some of these claims are probable of resulting in loss contingencies. Accordingly, we have recorded Rs. 536 million and Rs. 1,046 million ($ 19.2 million) as current liabilities as at March 31, 2012 and 2013 respectively.

Vedanta Aluminium has certain disputes which are in appeal. Disputed liabilities in appeal primarily relates to entry tax on the import of goods and other amounting to Rs. 1,572 million and Rs. 5,878 million ($ 107.8 million), being our proportionate share in the referred contingencies as of March 31, 2012 and March 31, 2013 respectively. Therefore, we evaluated these contingencies and estimated that the likelihood of these disputes becoming an obligation is remote and as a result, will not have any material adverse effect on our financial conditions or results of operations.

Foreign exchange effects

The following table discloses exchange (loss)/ gain recognized in the statement of income:

For the year ended March 31,	2011		2012			2013			2013
	(Rs. in millions)		(Rs. in millions)			(Rs. in millions)			(US dollars in millions)
Other operating income		32		(752	)		(582	)		(10.7	)
Cost of sales		420		(4,980	)		(3,268	)		(59.9	)
Administration expenses		—		—			(268	)		(4.9	)
Investment and other income		788		18			667			12.2
Finance and other costs		746		(7,704	)		(5,648	)		(103.6	)
Total		1,986		(13,418	)		(9,099	)		(166.9	)

Recently issued accounting pronouncements

At the date of authorisation of these financial statements, the following standards and interpretations which have not been applied in these financial statements were in issue but not yet effective:

IAS 1 “Presentation of Financial Statements” the amendment requires entities to separate the items presented in Other Comprehensive Income (“OCI”) into two groups, based on whether or not they may be recycled to profit or loss in the future. The amendment is effective for annual periods beginning on or after July 1, 2012. Sterlite has evaluated the requirements of IAS 1 (amended) and does not believe that the adoption of IAS 1 (amended) will have a material effect on its consolidated financial statements.

IAS 19 “Employee benefits” the amendments make important improvements by eliminating the option to defer the recognition of gains and losses, known as the ‘corridor method, streamlining the presentation of changes in assets and liabilities arising from defined benefit plans, including requiring remeasurements to be presented in OCI, enhancing the disclosure requirements for defined benefit plans. IAS 19 is applicable retrospective basis from the financial year beginning on or after January 1, 2013. Earlier application is permitted. Sterlite has evaluated the requirements of IAS 19 (amended) and these requirements are not expected to have a material impact on the consolidated financial statements.

IAS 32 “Financial Instruments: Presentation” requires an entity to offset a financial asset and financial liability only when the entity currently has a legally enforceable right of set-off and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously. The amendments clarify that the right of set-off must be available today and legally enforceable for all counterparties in the normal course of business, as well as in the event of default, insolvency or bankruptcy. The amendment is effective for annual periods beginning on or after January 1, 2014. Sterlite is currently evaluating the impact, if any; the adoption of the amendment will have on the Company’s consolidated financial statements.

IAS 39 was amended to provide relief from discontinuing hedge accounting when novation of a derivative designated as a hedging instrument meets certain criteria. Similar relief will be included in IFRS 9 Financial Instruments. The amendment is effective for annual periods beginning on or after January 1, 2014. An entity shall apply those amendments retrospectively in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors. Earlier application is permitted. Sterlite is currently evaluating the impact, if any; the adoption of the amendment will have on the Company’s consolidated financial statements.

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IFRS 7 was amended in December 2011 disclosure relating to offsetting financial assets and financial liabilities. The effect of the amendments were to provide (a) evaluating the effect or potential effect of netting arrangements on an entity’s financial position and (b) analysing and comparing financial statements prepared in accordance with IFRS and US GAAP. The amendments issued in December 2011 are effective for annual periods beginning on or after January 1, 2013. Early application is permitted. Sterlite has evaluated the requirements of IFRS 7 (amended), as it relates to disclosures, these requirements are not expected to have a material impact on the consolidated financial statements.

IFRS 9 “Financial Instruments” was issued by IASB in October 2010 as part of its project for revision of the accounting guidance for financial instruments. The new standard provides guidance with respect to classification and measurement of financial assets and financial liabilities. The standard will be effective for annual periods beginning on or after January 1, 2015, with early application permitted. Sterlite is currently evaluating the impact, if any, the adoption of the standard will have on the Company’s consolidated financial statements.

IFRS 10 “Consolidated Financial Statements” establishes principles for the presentation and preparation of consolidated financial statements when an entity controls one or more other entities. IFRS 10 supersedes the requirements relating to consolidated financial statement in IAS 27—“Consolidated and Separate Financial Statement” (amended 2008) and also supersedes SIC 12, “Consolidation – Special Purpose Entities”. The standard will be effective for annual periods beginning on or after January 1, 2013, with early application permitted. Sterlite has evaluated the requirements of IFRS 10 and these requirements are not expected to have a material impact on the consolidated financial statements.

IFRS 11 “Joint Arrangements” classifies joint arrangements as either joint operations (combining the existing concepts of jointly controlled assets and jointly controlled operations) or joint ventures (equivalent to the existing concept of a jointly controlled entity). Joint operation is a joint arrangement whereby the parties that have joint control have rights to the assets and obligations for the liabilities. Joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement. IFRS 11 requires the use of the equity method of accounting for interests in joint ventures thereby eliminating the proportionate consolidation method. IFRS 11 supersedes IAS 31 – “Interest in Joint Ventures” (amended 2008) and SIC 13 – “Jointly Controlled Entities – Non Monetary Contribution by Ventures”. The standard will be effective for annual periods beginning on or after January 1, 2013, with early application permitted. Sterlite has evaluated the requirements of IFRS 11 and these requirements are not expected to have a material impact on the consolidated financial statements.

IFRS 12 “Disclosure of Interests in Other Entities” applies to entities that have an interest in a subsidiary, a joint arrangement, an associate or an unconsolidated structured entity. The IFRS requires an entity to disclose information that enables users of financial statements to evaluate the nature of, and risks associated with, its interests in other entities; and the effects of those interests on its financial position, financial performance and cash flows. IFRS 12 replaces disclosure requirements in IAS 27 – “Consolidated and Separate Financial Statements” (amended 2008), IAS 28 – “Investment in Associates” and IAS 31 – “Interest in Joint Ventures” (amended 2008). The standard will be effective for annual periods beginning on or after January 1, 2013, with early application permitted. Sterlite has evaluated the requirements of IFRS 12 and these requirements are not expected to have a material impact on the consolidated financial statements.

IFRS 13 “Fair value measurement” defines ‘fair value’ and sets out in a single IFRS a framework for measuring fair value and requires disclosures about fair value measurements. It seeks to increase consistency and comparability in fair value measurements and related disclosures through a fair value hierarchy. IFRS 13 is to be applied for annual periods beginning on or after January 1, 2013. Earlier application is permitted. Sterlite has evaluated the requirements of IFRS 13 and these requirements are not expected to have a material impact on the consolidated financial statements.

IFRIC 20 which specifies the accounting for stripping costs. Stripping costs that relate to inventory produced should be accounted for as current production cost in accordance with IAS 2, ‘Inventories’. Stripping costs that generate a benefit of improved access and meet the definition of an asset should be accounted for as an addition to or enhancement of an existing asset. IFRIC 20 is effective for annual periods beginning on or after January 1, 2013 and earlier application is permitted. Sterlite is currently evaluating the impact that would arise on adopting the IFRIC 20 to the consolidated financial statements.

IFRIC 21 provides guidance on when to recognise a liability for a levy imposed by a government, both for levies that are accounted for in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets and those where the timing and amount of the levy is certain. The Interpretation covers the accounting for outflows imposed on entities by governments (including government agencies and similar bodies) in accordance with laws and/or regulations. However, it does not include income taxes (see IAS 12 Income Taxes), fines and other penalties, liabilities arising from emissions trading schemes and outflows within the scope of other Standards. IFRIC 21 is effective for annual periods beginning on or after January 1, 2014. Initial application is in accordance with the requirements of IAS 8 Accounting Policies, Changes in Estimates and Errors, i.e. the requirements are applied on a retrospective basis. Sterlite is currently evaluating the impact, if any; the adoption of the standard will have on the Company’s consolidated financial statements.

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ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A. Directors and Senior Management

Our board of directors consists of seven directors.

The following table sets forth the name, age (as of March 31, 2013) and position of each of our directors, executive officers and significant employees as of the date hereof:

Name	Age		Position
Directors
Anil Agarwal(1)		61	Non-Executive Chairman
Navin Agarwal(2)(3)		52	Whole Time Director and Executive Vice Chairman
Din Dayal Jalan(2)(4)(5)		56	Whole Time Director and Chief Financial Officer
Berjis Minoo Desai(1)(5)(7)(8)(9)		56	Non-Executive Director
Gautam Bhailal Doshi(1)(7)(8)(10)		60	Non-Executive Director
Sandeep H. Junnarkar(5)(7)(8)(11)		61	Non-Executive Director
A.R. Narayanaswamy(1)(7)(8)		61	Non-Executive Director
Executive Officers
Mahendra Singh Mehta(12)		57	Group Chief Executive Officer and Chief Executive Officer, SIIL
Tarun Jain(13)		53	Director of Finance
A.Thirunavukkarasu		52	President, Group Human Resources
Dilip Golani		47	President, Group Management Assurance and Information Technology
Other Significant Employees
Copper Business
Jeyakumar Janakaraj		42	Chief Executive Officer, Tasmania Proprietary Limited
P. Ramnath(6)(19)		54	Chief Executive Officer, our copper operations at Tuticorin and Silvassa
Zinc India Business
Akhilesh Joshi(2)(18)		59	Chief Executive Officer and Whole Time Director, Hindustan Zinc Limited
Amitabh Gupta(16)		51	Chief Financial Officer, Hindustan Zinc Limited
Zinc International Business
Rajagopal Kishore Kumar (14) (15)		50	Chief Executive Officer, Zinc International Division
Aluminium and Power Businesses
Sushil Kumar Roongta(17)		62	Managing Director, Vedanta Aluminium, Vice Chairman, BALCO, Chairman, TSPL, Director, Sterlite Energy
Mansoor Siddiqi(20)		59	Director, Vedanta Aluminium, Vizag General Cargo Berth Private Limited , Paradip Multi Cargo Berth Private Limited and TSPL
V. Ramanathan(21)		53	President – Finance, Aluminium and Power Business
Dinesh Mantri(22)		47	Chief Financial Officer, BALCO
G.R. Arun Kumar(23)		42	Chief Financial Officer, Vedanta Aluminium
Ramesh Nair(24)		44	Chief Executive Officer, BALCO

Notes:

(1) Member of the Nomination, Governance and Remuneration Committee.

(2) A “Whole Time Director” is a director who is employed full-time in rendering services to our management with respect to which he is a director. An individual can be a whole time director with respect to only one company, although he or she may accept the position of non-whole time director in other companies. Mr. Mansoor Siddiqi ceased as a Whole Time Director and was appointed as director of Vedanta Aluminium Limited with effect from February 18, 2011.

(3) Appointed as a Whole Time Director with effect from August 2003 for a period of five years, was re-appointed for a further period of five years from August 1, 2008 and was re-appointed for a period of five years with effect from August 1, 2013.

(4) Further Mr. Jalan has been re-appointed as Whole Time Director with effect from December 24, 2012 till September 30, 2014, subject to shareholder approval. In addition, Mr. Jalan was our Chief Financial Officer prior to June 15, 2009 and was re-appointed as Chief Financial Officer with effect from March 31, 2011.

(5) Member of the Shareholders’ and Investors’ Grievance Committee.

(6) Appointed as Chief Executive Officer of our copper operations at Tuticorin and Silvassa with effect from September 8, 2011.

(7) Member of the Audit Committee.

(8) Independent director. Mr. Sandeep H. Junnarkar and Mr. Gautam Bhailal Doshi, were appointed to the board of directors with effect from June 29, 2001. Mr. Berjis Minoo and Mr. A.R. Narayanaswamy were appointed to the board of directors on January 29, 2003 and July 14, 2012, respectively.

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(9) Chairman of the Nomination, Governance and Remuneration Committee.

(10) Chairman of the Audit Committee. On January 23, 2012, Gautam Bhailal Doshi was appointed as Chairman of the Audit Committee and A. R. Narayanaswamy was appointed as Vice Chairman of the Audit Committee.

(11) Chairman of the Shareholders’ and Investors’ Grievance Committee.

(12) Appointed as Chief Executive Officer of SIIL with effect from March 31, 2011.

(13) Resigned as Whole Time Director with effect from March 31, 2009, following which he is no longer a director of our company. However, he remains our executive officer as our Director of Finance.

(14) Ceased to be Chief Executive Officer of SIIL with effect from March 31, 2011.

(15) Appointed as Chief Executive Officer of Zinc International Division with effect from February 24, 2011.

(16) Appointed as Chief Financial Officer, HZL with effect from December 1, 2011.

(17) Appointed as Managing Director of Vedanta Aluminium with effect from June 2, 2011.

(18) Appointed as Chief Executive Officer and whole time director, HZL with effect from February 1, 2012.

(19) Member of the Share and Debenture Transfer Committee.

(20) Appointed as Director of Vedanta Aluminium on June 4, 2007.

(21) Appointed as President of our finance, aluminium and power business on June 3, 2013.

(22) Appointed as Chief Financial Officer of BALCO on July 3, 2009.

(23) Appointed as Chief Financial Officer of Vedanta Aluminium on June 3, 2013.

(24) Appointed as Chief Executive Officer on June 3, 2013.

Directors

Anil Agarwal, who founded the Vedanta group in 1976, is our Non-Executive Chairman and was appointed to our board of directors in 1978. Mr. Agarwal is based in the United Kingdom. In addition to his role as Non-Executive Chairman, Mr. Agarwal is also the Executive Chairman of Vedanta and a Director of STL. Mr. Agarwal was previously our Chairman and Managing Director and Chief Executive Officer from 1980 until the expiration of his term in October 2004. Mr. Agarwal was also the Chief Executive Officer of Vedanta from December 2003 to March 2005. Mr. Agarwal has over 37 years of experience as an industrialist and has been instrumental in our growth and development since our inception. Mr. Agarwal is the son of Mr. Dwarka Prasad Agarwal, one of our directors until March 31, 2009, and the brother of Mr. Navin Agarwal. The business address of Mr. Agarwal is 75 Nehru Road, Vile Parle (East), Mumbai, Maharashtra 400099, India.

Navin Agarwal is our Executive Vice Chairman and was appointed to our board of directors in August 2003. Mr. Agarwal is based in Mumbai, India. His responsibilities as Executive Vice Chairman include executing our business strategy and managing the overall performance and growth of our organization. Mr. Agarwal joined our company at its inception. In addition to his role as Executive Vice Chairman, Mr. Agarwal is also the non-executive Chairman of BALCO, Cairn India, KCM and MALCO, the Executive Vice Chairman of Vedanta and a non-executive Director of HZL, Vedanta Aluminium, Sterlite Iron & Steel Company Limited, Hare Krishna Packaging Private Limited,Vedanta Resources Holdings Limited and Vedanta Resources Investments Limited. He has over 27 years of experience in general management and commercial matters. Mr. Agarwal has completed the Owner/President Management Program at Harvard University and is a Bachelor of Commerce from Sydenham College, Mumbai, India. Mr. Agarwal is the son of Mr. Dwarka Prasad Agarwal and the brother of Mr. Anil Agarwal. The business address of Mr. Agarwal is 75 Nehru Road, Vile Parle (East), Mumbai, Maharashtra 400099, India.

Din Dayal Jalan is our Chief Financial Officer. Mr. Jalan joined our company as the president of our Australian operations and was responsible for the business and operations of CMT and TCM from January 2001 to February 2002 before becoming our Chief Financial Officer (metals) of our company. He was appointed as our Chief Financial Officer in March 2003 and held that position until June 2009. Further Mr. Jalan was re-appointed as Chief Financial Officer of our company with effect from March 31, 2011. Mr. Jalan has been the Chief Financial Officer of Vedanta since October 2005. Mr. Jalan is also a non-executive Director of Vedanta Resources Finance Limited, Vedanta Resources Cyprus Limited, Vedanta Resources Jersey Limited, Vedanta Resources Jersey II Limited, Vedanta Investment Jersey Limited, Sesa Resources Limited (earlier V S Dempo & Company Private Limited), Sesa Mining Corporation Limited (earlier Dempo Mining Corporation Private Limited), TCM, CMT, Sterlite Ports Limited, Sterlite Infraventures Limited, Paradip Multi Cargo Berth Private Limited, Vizag General Cargo Berth Private Limited, Twinstar Energy Holdings Limited, Twinstar Mauritius Holdings Limited, THL Zinc Ventures Limited, THL Zinc Limited and Pecvest 17 (Proprietary) Limited, South Africa. Mr. Jalan has over 34 years of experience in finance, accounts, audit, taxation, secretarial and legal areas. Mr. Jalan also has experience working in mining, engineering and non-ferrous metals industries. Mr. Jalan is a Bachelor of Commerce and is a member of the Institute of Chartered Accountants of India. The business address of Mr. Jalan is Core 6, Third floor, SCOPE Complex, 7 Lodhi Road, New Delhi 110003, India.

Berjis Minoo Desai is our Non-Executive Director and was appointed to our board of directors in January 2003. Mr. Desai is based in Mumbai, India. Mr. Desai is a solicitor and has been the Managing Partner of Messrs J. Sagar Associates since April 2003 specializing in mergers and acquisitions, securities, financial and international business laws and international commercial arbitration. Prior to that, Mr. Desai was a Partner at Messrs Udwadia, Udeshi & Desai from 1997 to 2003. Mr. Desai is a Bachelor of Arts and a Bachelor of Law from the University of Mumbai and is a Master of Law from the University of Cambridge, UK. Mr. Desai is also a Director of several companies including The Great Eastern Shipping Company Limited, Praj Industries Limited, Emcure Pharmaceuticals Limited, Greatship (India) Limited, Edelweiss Financial Services Limited, DCW Limited, Man Infraconstruction Limited, Adani Enterprises Limited, Centrum Fiscal Private Limited, Capricorn Studfarm Private Limited, Capricorn Agrifarms & Developers Private Limited, Equine Bloodstock Private Limited, Himatsingka Seide Limited, JSA Lex Holdings Limited and Divatex Home Fashions Inc. The business address of Mr. Desai is Vakil’s House, 18 Sprott Road, Ballard Estate, Mumbai, Maharashtra 400001, India.

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Gautam Bhailal Doshi is our Non-Executive Director and was appointed to our board of directors in December 2001 and is the Chairman of our Audit Committee. Mr. Doshi is based in Mumbai, India. Mr. Doshi is a chartered accountant. Since August 2005, he has been the group managing director of the Reliance ADA Group Limited. Prior to that, he was a partner of RSM & Co. in India from September 1997 to July 2005. Mr. Doshi has more than 29 years of experience in the areas of audit, finance and accounting. Mr. Doshi has a Bachelor of Commerce from the University of Mumbai and a Master of Commerce from the University of Mumbai and is a Fellow Member of the Institute of Chartered Accountants of India. Mr. Doshi is also a director of Reliance Communications Infrastructure Limited, Reliance Media Works Limited, Reliance Anil Dhirubhai Ambani Group Limited, Reliance Big TV Limited, Reliance Telecom Limited, REL Utility Engineers Limited (formerly known as Sonata Investments Limited, Piramal Life Sciences Limited, Digital Bridge Foundation (formed under Section 25 of Companies Act, 1956, Reliance Broadcast Network Limited, Reliance Home Finance Private Limited, Telecom Infrastructure Finance Private Limited and Connect Infotain Private Limited. The business address of Mr. Doshi is Reliance Centre, 3rd Floor, 19 Walchand Hirachand Marg, Ballard Estate, Mumbai, Maharashtra 400038, India.

Sandeep H. Junnarkar is our Non-Executive Director and was appointed to our board of directors in June 2001. Mr. Junnarkar is based in Mumbai, India. Mr. Junnarkar is a solicitor and a partner of Messrs Junnarkar & Associates. Prior to that, he was a partner at Messrs Kanga & Co. from 1981 until 2002. Mr. Junnarkar specializes in banking and corporate law and regularly advises on all aspects of exchange control under the Foreign Exchange Management Act, 1999, as amended, or FEMA, and the Securities Contracts (Regulation) Act, 1956, or the SCRA. Mr. Junnarkar has a Bachelor of Law from the University of Mumbai and is a member of the Bombay Incorporated Law Society. Mr. Junnarkar is also a director of Everest Industries Limited, Excel Crop Care Limited, IL&FS Infrastructure Development Corporation Limited, Jai Corp. Limited, Jai Realty Ventures Limited, Reliance Industrial Infrastructure Limited, Reliance Industrial Investments & Holdings Limited and Reliance Ports and Terminals Limited. The business address of Mr. Junnarkar is 311/312 Embassy Centre, Nariman Point, Mumbai, Maharashtra 400021 India.

A.R. Narayanaswamy is our non-executive director and was appointed to our board of directors in July 2011. He is based in Mumbai. He has over 37 years of experience as Chartered Accountant. Mr. Narayanaswamy has a Bachelor of Commerce from the University of Mumbai. He is a member of the Institute of Chartered Accountants of India. He consults for companies in accounting, financial management and information technology areas across several industry verticals. Mr. Narayanaswamy is also an independent director of Hindustan Zinc Limited, and a director of STL, IBIS Softec Solutions Private Limited, IBIS Logistics Private Limited, IBIS Systems and Solutions Private Limited and Primex Healthcare and Research Private Limited. The business address of Mr. Narayanaswamy is 404, Mastermind 1, Royal Plams, Goregaon (East), Mumbai 400065, India.

Executive Officers

Mahendra Singh Mehta is our Group Chief Executive Officer and our Chief Executive Officer. Mr. Mehta joined our group in April 2000 and held various leadership positions within our group, including as the chief executive officer and Whole Time Director of HZL and as our commercial director for base metals and head of our copper business. Prior to joining our group, Mr. Mehta worked in the steel industry for more than 21 years including Lloyds Steel Industries Limited where he handled a wide portfolio of responsibilities, including marketing, procurement, working capital finance and projects. Mr. Mehta is also the chief executive officer of Vedanta and was appointed as a director of Vedanta in October 2008. Mr. Mehta is the Chief Executive Officer of our company with effect from March 31, 2011. Mr. Mehta has a Bachelor of Mechanical Engineering from MBM Engineering College, Jodhpur, and a Master of Business Administration from the Indian Institute of Management, Ahmedabad.

Tarun Jain is our Director of Finance. Mr. Jain joined us in 1984 and has over 28 years of experience in the corporate finance, audit and accounting, tax and secretarial practice. He is responsible for our strategic financial matters, including corporate finance, corporate strategy, business development and mergers and acquisitions. Mr. Jain is a graduate of the Institute of Cost and Works Accountants of India and a Fellow Member of the Institute of Chartered Accountants of India and the Institute of Company Secretaries of India. Mr. Jain is also a director of Sterlite USA, BALCO, Vedanta Aluminium, SIL (formerly known as Sterlite Paper limited), Cairn India, Twin Star and Vedanta Medical Research Foundation and Rajtaru Charity Foundation (formed under Section 25 of Companies Act, 1956).

A. Thirunavukkarasu is our President of Corporate Human Resources of the group. He joined the Group in April 2004 as general manager of human resources and subsequently became the senior vice president of human resources for our Copper Division. In 2004 he headed our human resources, quality management, corporate social responsibility and public relation functions. In July 2007 he became the head of our Group human resources division. Mr. Thirunavukkarasu has 29 years of work experience and has held various positions in the human resources departments of several companies including Hindustan Unilevers Limited (HUL), English Electric Co. of India Limited and TVS Electronics Limited. Mr. Thirunavukkarasu holds a Bachelor degree in Literature and Masters in Social Work with personnel management and organisational behaviour as his specialisation from Loyola College, Chennai.

Dilip Golani is the President of Management Assurance and Information Technology function of the group. He headed the Management Assurance function from April 2000 to July 2004. Mr. Golani headed sales and marketing division for Hindustan Zinc Limited and a Group performance management function from August 2004 to November 2005. Prior to joining the Group in April 2000, he was member of the Unilever corporate audit team responsible for auditing Unilever group companies in Central

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Asia, Middle East and Africa regions. At Unilever, Mr. Golani was responsible for managing operations & marketing functions for one of the exports businesses of HUL. Mr. Golani has over 21 years’ experience and has worked with organisations like Ranbaxy Laboratories Limited and Union Carbide India Limited. Mr. Golani is a Bachelor in Mechanical Engineering from Motilal National Institute of Technology, Allahabad and a Post Graduate Diploma in Industrial Engineering and Management.

Other Significant Employees

Copper Business

Jeyakumar Janakaraj is the Chief Executive Officer of Tasmania Proprietary Limited. Mr. Janakaraj has over 21 years of experience in operations, maintenance and project execution and joined our group in September 1995 as a mechanical engineer in our copper division at Tuticorin. He subsequently joined HZL as a senior manager in July 2002 and worked in various capacities, including as head of projects for HZL’s mines and smelters. Prior to joining our group, Mr. Janakaraj was with Essar Steel from 1992 to 1995 as a junior engineer. In September 2006, Mr. Janakaraj was awarded a Gold Medal by the Indian Institute of Metals, Kolkata, for his significant contributions to the non-ferrous metallurgical industry. Mr. Janakaraj is also Chief Executive Officer of KCM. Mr. Janakaraj has a Bachelor of Mechanical Engineering from the PSG College of Technology, Bharathiar University, Coimbatore.

P. Ramnath is the Chief Executive Officer of our copper operations in Tuticorin and Silvassa and has over 30 years of experience in oil and gas, manufacturing and paper industries. Mr. Ramnath joined our group in September 2011. Prior to joining our group, Mr. Ramnath worked at Jubilant Organosys, Praxair India, SNF Ion Exchange, Bakelite Hylam Limited and Reliance Industries Limited. Prior to joining us, Mr. Ramnath was also the Chief Operating Officer of JK Paper Limited. He is also a Director of MALCO, Sterlite Infra Limited (formerly known as Sterlite Paper Limited), Sterlite Ports Limited (formerly known as MALCO Power Company Limited) and Sterlite Infraventures Limited (formerly known as MALCO Industries Limited). Mr. Ramnath has a Bachelor of Technology from Osmania University, Hyderabad and a Post Graduate Diploma from the Indian Institute of Management, Bengaluru.

Zinc India Business

Akhilesh Joshi is the Chief Executive Officer of HZL. He has 37 years of experience in mining industry and joined HZL in 1976 as an assistant engineer for mining and worked in various capacities at both underground and opencast mines of HZL. Mr. Joshi became the General Manager of HZL when HZL became a part of the Vedanta group. He has also served as the unit head of Rampura Agucha and became Senior Vice President (Mines) in April 2008. Mr. Joshi played a significant role in the expansion projects for the Rampura Agucha mine and is in charge of the mining activities at HZL. Mr. Joshi is a Bachelor of Engineering (Mining) from M.B.M. Engineering College, Jodhpur.

Amitabh Gupta is the Chief Financial Officer of HZL and is responsible for its finance and accounting functions, its information technology, legal, insurance, compliance and treasury departments. Mr. Gupta joined us on December 1, 2011. Prior to his present appointment he was the chief financial officer of Moser Baer Solar Limited. He has over 24 years of experience in the Finance arena having worked in corporations like Cargill India, TeleTech India (Bharti Group) and Ranbaxy. He is a Bachelor of Commerce from Sriram College of Commerce, New Delhi. Mr. Gupta is a member of the Institute of Chartered Accountants of India and Institute of Cost and Works Accountants of India.

Zinc International Business

Rajagopal Kishore Kumar is the Chief Executive Officer of our Zinc International Division and also a non-executive director of KCM. He has more than 25 years of experience in accounting, marketing, supply chain management, merger and acquisitions. Prior to this, Mr. Kumar headed our copper and zinc divisions and he has been responsible for the overall management of our copper and zinc businesses since December 2006 and October 2008, respectively. He was appointed as the Chief Executive Officer of our consolidated group of companies in October 2008 and remained in this position until March 2011. Mr. Kumar joined our company in April 2003 as vice president of marketing for HZL and became senior vice president of marketing for our copper division from June 2004 to December 2006, where he was responsible for copper marketing and concentrate procurement. Prior to joining our company, Mr. Kumar was employed by Hindustan Unilever Limited for 12 years. Mr. Kumar has a Bachelor of Commerce from Kolkata University and is a member of the Institute of Chartered Accountants of India.

Aluminium and Power Business

Sushil Kumar Roongta is the Managing Director of Vedanta Aluminium, Vice Chairman of BALCO, Chairman of TSPL and Director of Sterlite Energy and is responsible for the aluminium and power Business. Prior to his present appointment, he was Chairman of Steel Authority of India Limited or SAIL. Mr. Roongta has 42 years of experience with SAIL, and has held a key position in the marketing division before being appointed as Director (Commercial) in 2004 and later as Chairman in 2006 of the SAIL board. Mr. Roontga has a Bachelor of Engineering from the Birla Institute of Technology and Science, Pilani, and is a gold medalist in Post Graduate Diploma in Business Management in International Trade from Indian Institute of Foreign Trade, Delhi. He is a fellow member of the All India Management Association. He is also on the board of Neyveli Lignite Corporation Limited, Shipping Corporation of India Limited, Jubilant Industries Limited, Hindustan Petroleum Corporation Limited, ACC Limited and member of the board of governors of the Indian Institute of Technology, Bhubaneshwar.

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Mansoor Siddiqi is the Director of Vedanta Aluminium Limited with effect from June 2007. He was also a Whole Time Director of Vedanta Aluminium Limited till February 18, 2011. Further, he is the Director of Vizag General Cargo Berth Private Limited, Paradip Multi Cargo Berth Private Limited and TSPL. Mr. Siddiqi joined our group in 1991. Prior to his present appointment, he was the director of projects for our group and was in charge of managing our expansion projects in our aluminium business. Prior to joining our group, Mr. Siddiqi worked at Hindustan Copper Limited and has 31 years of experience in various areas of operations and project management. Mr. Siddiqi has a Bachelor of Technology from the Indian Institute of Technology, Delhi, and a Diploma in Management from the All India Management Association, Delhi.

V. Ramanathan is the President of the Finance division for our aluminium and power businesses and is responsible for driving various systems since June 2013, procedures and processes improvement initiatives across the aluminium and power businesses. He is also responsible for timely mitigation of risks and ensuring controls through advance planning and forecasting. Mr. Ramanathan has 29 years of experience in accounting and finance and joined our group in 1992. Prior to that, he was with Coimbatore Agro Industries Limited and Malabar Building Limited. Mr. Ramanathan has a Bachelor of Science from the University of Madras and is a member of the Institute of Chartered Accountants of India.

Dinesh Mantri is the Chief Financial Officer of BALCO since July 2009. Prior to this, he was with AV Birla group for a period of seven years at Grasim and Birla Copper and Singapore based Tolaram group. He also served in South Africa for three years from 1997 to 2000 and is associated with Vedanta for last ten years in various capacities with MALCO, HZL and Vedanta Aluminium. He has over 23 years experience in finance and accounting functions. Mr. Mantri is a Bachelor of Commerce from University of Rajasthan. He is also a member of the Institute of Chartered Accountants of India.

G.R. Arun Kumar is the Chief Financial Officer of Vedanta Aluminium with effect from May 2013. He has about 18 years of experience in finance having worked in companies like General Electric and HUL. Prior to joining Vedanta Aluminium, he was the Chief Financial Officer - Asia Pacific (Appliances and Lighting) for General Electric, based out of Shanghai. Mr Arun Kumar is a Bachelor of Commerce from Loyola University, Chennai and is a fellow member of the Institute of Chartered Accountants of India.

Ramesh Nair is the Chief Executive Officer of our aluminium operations at BALCO. Mr Ramesh joined BALCO in June 2013. Prior to joining Balco, he was with Jindal Stainless Limited as its President and Executive Director. Mr Ramesh Nair has over 20 years of experience in the metals industry and has worked with us for 11 years in multiple functions before assuming overall leadership role at Sterlite Copper as its Chief Operating Officer. He had earlier joined the Vedanta group’s copper business in the year 2000 and has varied experience in smelter operations. He was appointed as the Chief Operating Officer of our copper units at Tuticorin and Silvassa in the year 2008. Prior to joining us, Mr. Ramesh Nair was employed in Essar Steel Ltd. Mr. Ramesh Nair holds a degree of Bachelor of Technology (Electrical) from the National Institute of Technology, Kurukshetra.

B. Compensation

Compensation of Directors and Executive Officers

The aggregate compensation we paid our executive directors and executive officers for fiscal 2013 was Rs. 414.9 million ($ 7.6 million), which includes Rs. 300.2 million ($ 5.5 million) paid towards salary, bonuses, allowances and other cash payments, Rs. 92.4 million ($ 1.7 million) paid and payable by us to Vedanta for the fair value of share options granted to our executive directors and executive officers under the Vedanta LTIP, and Rs. 22.3 million ($ 0.4 million) paid towards benefits such as contributions to the provident fund and superannuation fund. The total compensation paid to our most highly compensated executive during fiscal 2013 was Rs. 148.8 million ($ 2.7 million) (of which Rs. 103.3 million ($ 1.9 million) comprised salary, bonuses and allowances, Rs. 35.3 million ($ 0.6 million) comprised payment by us and payable to Vedanta for the fair value of share options granted under the Vedanta LTIP, and Rs. 10.2 million ($ 0.2 million) comprised benefits such as contribution to the provident fund and superannuation fund.

The following table sets forth the compensation paid to our directors and executive officers in fiscal 2013, where the disclosure of compensation is required on an individual basis in India or is otherwise publicly disclosed by us:

Name	Salary, Bonuses, Allowances and Perquisites		Fair Value of Share Options granted under the Vedanta LTIP		Contribution to Provident and Superannuation Funds
	(Rs. in millions)
Navin Agarwal		103.32		35.26		10.24
Din Dayal Jalan		29.59		9.62		2.28
Mahendra Singh Mehta		36.20		14.16		2.19
Tarun Jain		95.30		19.93		5.61
A.Thirunavukkarasu		16.82		6.33		0.88
Dilip Golani		18.96		7.10		1.07

The aggregate compensation paid or payable to our non-executive directors for fiscal 2013 was Rs. 6.5 million ($ 0.12 million), which comprised Rs. 0.87 million ($ 0.02 million) in sitting fees and Rs.5.63 million ($ 0.10 million) in commissions.

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We adopted the Vedanta LTIP in February 2004. Under the Vedanta LTIP, our directors and executive officers will be granted share awards which will entitle them to acquire the ordinary shares of Vedanta based on the performance of Vedanta’s total shareholder return against a peer group of companies comprising the FTSE Worldwide Mining Index (excluding precious metals) measured over a three-year performance period and Vedanta’s financial performance. Vedanta adopted two new ESOP schemes in August 2012 and May 2013. The ESOPS granted under these two schemes will vest based on the achievement of certain performance targets. The vesting schedule is staggered over a period of three years.

Outstanding Awards or Options

As of March 31, 2013, our directors and executive officers as a group held options under the Vedanta LTIP to acquire an aggregate of 494,263 ordinary shares of Vedanta representing approximately 0.17% of Vedanta’s share capital. The awards are exercisable at the end of the three-year performance period commencing from the date of each grant at an exercise price of $ 0.10 per ordinary share. The awards expire six months after their date of grant. For more information, see “- Vedanta Long-Term Incentive Plan.”

Employee Benefit Plans

We maintain employee benefit plans in the form of certain statutory and welfare schemes covering substantially all of our employees. As of March 31, 2012 and March 31, 2013, the total amount set aside by us to provide pension, retirement or similar benefits was Rs. 1,696 and Rs. 1,903 million ($ 34.9 million) respectively.

Provident Fund

In accordance with Indian law, all of our employees in India are entitled to receive benefits under the Provident Fund, a defined contribution plan to which both we and the employee contribute monthly at a pre-determined rate (currently 12.0% of the employee’s base salary). These contributions are made to the Government Provident Fund and we have no further obligation under this fund apart from our monthly contributions. We contributed an aggregate of Rs. 776 million and Rs. 677 million ($ 12.4 million) in fiscal 2012 and 2013 respectively.

Gratuity

In accordance with Indian law, we provide for gratuity pursuant to a defined benefit retirement plan covering all of our employees in India. The gratuity plan provides a lump sum payment to vested employees at retirement, disability or termination of employment, in an amount based on the employee’s last drawn salary and the number of years of employment with us. The assets of the plan, to the extent the plan is funded, are held in separate funds managed by LIC and a full actuarial valuation of the plan is performed on an annual basis. Our liability for the gratuity plan was Rs. 1,379 million and Rs. 1,564 million ($ 28.7 million) in fiscal 2012 and 2013, respectively.

Superannuation Fund

It is our current policy for all of our non-unionized employees in a managerial position and above to pay into a superannuation fund a sum equal to 15.0% of their annual base salary which is payable to the employee in a lump sum upon his retirement or termination of employment. We contributed an aggregate of Rs. 43 million and Rs. 59 million ($ 1.1 million) in fiscal 2012 and 2013, respectively.

Compensated Absence

Our liability for compensated absences is determined on an undiscounted basis for short term liabilities and on an actuarial basis for long term liabilities, for the entire unused vacation balance standing to the credit of each employee at each calendar year-end. Contributions to such liability are charged to income in the year in which they accrue. Liability for the compensated absences was Rs. 1,524 million and Rs. 1,677 million ($ 30.8 million) in fiscal 2012 and 2013, respectively.

Vedanta Long-Term Incentive Plan

We are a participating company in the Vedanta LTIP which was adopted by Vedanta to grant share options to its employees or employees of its subsidiaries. Awards under the plan may be granted to any employee of Vedanta or any of its subsidiaries who is not within six months of such employee’s normal retirement date.

The awards are indexed to and settled by Vedanta shares. The awards provide for a fixed exercise price denominated in Vedanta’s functional currency at 10 US cents per share. Vedanta is obligated to issue the shares. In accordance with the terms of agreement between Vedanta and us, the grant date fair value of the awards is recovered by Vedanta from us. The amount recovered by Vedanta has been recognized as compensation expense over the requisite service period of three years.

The Vedanta LTIP is consistent with our reward philosophy, which aims to provide superior rewards for outstanding performance, and to provide a high proportion of “at risk” remuneration for executive directors and senior employees. The maximum value of Vedanta ordinary shares which may be conditionally awarded in any financial year to a participant in the Vedanta LTIP who is an executive director is restricted to 100% of that executive director’s annual base salary.

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The performance target which applies to vesting of awards is our performance as measured against comparative total shareholder return against a peer group of companies comprising the FTSE Worldwide Mining Index (excluding precious metals). Vedanta adopted two new ESOP schemes on (i) September 24, 2012 pursuant to which a total of 4,652,550 options can be granted and (ii) May 14, 2013 pursuant to which a total of 4,547,650 options can be granted. According to the ESOP schemes, 50% of the shares vest on September 24, 2013 based on performance conditions from April 1, 2012 to March 31, 2013. The next 30% of the shares will vest on the second anniversary from the date of grant and the remaining 20% of the shares will vest on the third anniversary from the date of grant. The exercise price is 10 cents.

As of March 31, 2013, our directors and executive officers as a group held options under the Vedanta LTIP to acquire an aggregate of 494,263 ordinary shares of Vedanta representing approximately 0.17 % of Vedanta’s share capital.

Limitations on Liability and Indemnification Matters

Section 201 of the Indian Companies Act provides that a company may indemnify any director, officer or auditor against any liability incurred by such director, officer or auditor in defending any civil or criminal proceedings, in which a judgment is given in favor of such director, officer or auditor or in which he or she is acquitted or discharged or in connection with application made by a director or an officer to the High Court of the relevant state for relief, because he or she has reason to apprehend that any proceeding will or might be brought against him in respect of any negligence, default, breach of duty, misfeasance or breach of trust, in which relief has been granted by the High Court of the relevant state.

Section 201 also provides that, except for such indemnity described above, any provision, whether contained in the articles of association of a company or in an agreement with the company or in any other instrument, for exempting any director, officer or auditor of the company from, or indemnifying him or her against, any liability which, by any rule of law, would otherwise attach to such director, officer or auditor in respect of any negligence, default, misfeasance, breach of duty or breach of trust of which he or she may be guilty in relation to the company, shall be void.

C. Board Practices

Composition of the Board

Our board of directors currently consists of seven directors. Four of our seven directors, namely, Mr. Gautam Bhailal Doshi, Mr. A.R. Narayanaswamy, Mr. Sandeep H. Junnarkar and Mr. Berjis Minoo Desai, satisfy the “independence” requirements of the NYSE rules.

Under the Indian Companies Act, our shareholders must approve the salary, bonus and benefits of all directors at an annual general meeting of the shareholders. Mr. Navin Agarwal and Mr. Din Dayal Jalan have entered into service contracts with us which will expire on July 31, 2013 and September 30, 2014, respectively. Mr. Navin Agarwal’s contract is in the process of being renewed. However, either we or the director may terminate the respective service contract upon 90 days’ notice to the other party or payment in lieu of. None of their service contracts provide for benefits upon termination of their employment.

Under the service contracts, each of Mr. Agarwal and Mr. Jalan is entitled to be paid a basic salary, performance incentives to be determined by our board of directors and perquisites including a housing allowance, medical and insurance reimbursement, club membership fees reimbursement and leave travel concessions for himself and his family. The basic salaries of Mr. Agarwal and Mr. Jalan in fiscal 2013 were Rs. 3.2 million ($ 0.06 million) and Rs.0.7 million ($ 0.01 million) per month, respectively. In addition, Mr. Agarwal is entitled to be paid a commission based on our net profits for a particular fiscal year as determined by our board of directors, subject to a maximum allowable under Indian law. Mr. Jalan is entitled to receive a bonus equal to 20.0% of his respective basic salary.

The rest of our directors have no fixed term of office and they serve as directors on our board of directors until their resignation or removal from office by a resolution of our shareholders, until they cease to be directors by virtue of the provision of law or they are disqualified by law or our articles of association from being directors.

Committees of the Board

Our equity shares are currently listed and traded on the NSE and the BSE, and our ADSs are currently listed and traded on the NYSE. In addition to compliance with the NYSE corporate governance rules applicable to us as a foreign private issuer, we maintain our corporate governance arrangements in accordance with Indian regulations for companies listed on the NSE and the BSE. In particular, we have established an audit committee and a remuneration committee in accordance with Indian corporate governance requirements.

Our board of directors currently has an audit committee, a remuneration committee and a shareholders’ and investors’ grievance committee, which have the composition and general responsibilities described below.

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Audit Committee

The audit committee consists of four directors: Mr. Gautam Bhailal Doshi (Chairman), Mr. A.R. Narayanaswamy (Vice Chairman), Mr. Berjis Minoo Desai and Mr. Sandeep H. Junnarkar. Each of Messrs. Desai, Doshi, Junnarkar and Narayanaswamy satisfies the “independence” requirements of Rule 10A-3 of the Securities Exchange Act of 1934 as amended, or the Exchange Act and the NYSE rules. The principal duties and responsibilities of our audit committee are as follows:

• to serve as an independent and objective party to monitor our financial reporting process and internal control systems;

• to review and appraise the audit efforts of our independent accountants and exercise ultimate authority over the relationship between us and our independent accountants; and

• to provide an open avenue of communication among the independent accountants, financial and senior management and the board of directors.

On January 23, 2012, Gautam Bhailal Doshi was appointed as Chairman of the Audit Committee and A.R. Narayanaswamy was appointed as Vice Chairman of the Audit Committee.

The audit committee has the power to investigate any matter brought to its attention within the scope of its duties. It also has the authority to retain counsel and advisors to fulfill its responsibilities and duties. Mr. Gautam Bhailal Doshi and Mr. A.R. Narayanaswamy are designated as our “audit committee financial experts”, within the requirements of the rules promulgated by the SEC relating to listed-company audit committees.

The audit committee held six meetings in fiscal 2013.

Nomination, Governance and Remuneration Committee

Schedule XIII of the Indian Companies Act requires that the the remuneration committee comprise of at least three non-executive independent directors. Our remuneration committee complies with this requirement. The nomination, governance and remuneration committee consists of four directors: Mr. Berjis Minoo Desai (Chairman), Mr. Gautam Bhailal Doshi, Mr. A.R. Narayanaswamy and Mr. Anil Agarwal. Three of the four directors on this committee are independent directors, namely, Messrs. Desai, Doshi and Narayanaswamy.

Under the NYSE listing standards, listed companies must have a remuneration comittee composed entirely of independent board members as defined by the NYSE listing standards. However, foreign private issuers such as us, are permitted to follow their respective home country rules in this regard. Since we comply with the Indian regulations in relation to the independence requirements of the remuneration committee, we are not required to follow the NYSE listing standards. The committee is responsible for recommending the fixation and periodic revision of remunerations (including commissions and/or incentives, etc) of whole-time directors/executive directors. This is done after taking into account our profits and performance, external competitive environment and our growth plans and the company policy on rewarding achievements and performance. Payment of remuneration to the Executive Vice Chairman, Managing Director and Whole Time Director is governed by the respective agreements executed between them and Sterlite and are governed by the board and shareholder resolutions. The remuneration structure comprises of salary, commission linked to profits, perquisites and allowances and retirement benefits (pension, superannuation and gratuity).

The remuneration committee held three meetings in fiscal 2013.

Share/ Debenture Transfer Committee

The share and debenture transfer committee consists of three members Mr. P. Ramnath, Mr. Sridhar Narasimhan and Mr. Rajiv Choubey. The principal duties and responsibilities of this committee are to approve transfers of shares or debentures and to consider stock splits and consolidation requests received from our shareholders.

The share and debenture transfer committee held 23 meetings in fiscal 2013.

Shareholders’ and Investors’ Grievance Committee

The shareholders’ and investors’ grievance committee consists of three directors: Mr. Sandeep H. Junnarkar (Chairman), Mr. Berjis Minoo Desai and Mr. Din Dayal Jalan. Mr. Din Dayal Jalan was appointed as a member of the shareholders’ and investors’ grievance committee effective April 27, 2009. Two of three directors on our shareholders’ and investors’ grievance committee are independent directors, namely, Messrs. Junnarkar and Desai. The principal duties and responsibilities of this committee are to oversee the reports received from the registrar and transfer agent and to facilitate the prompt and effective resolution of complaints from our shareholders and investors.

The shareholders’ and investors’ grievance committee held 4 meetings in fiscal 2013.

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D. Employees

See “Item 4. Information on the Company—B. Business Overview—Our Business—Employees.”

E. Share Ownership for Directors and Executive Officers :

The following table sets forth information with respect to the beneficial ownership of our equity shares as of March 31, 2013 by each of our directors and all our directors and executive officers as a group. As used in this table, beneficial ownership means the sole or shared power to vote or direct the voting or to dispose of or direct the sale of any security. A person is deemed to be the beneficial owner of securities that can be acquired within 60 days upon the exercise of any option, warrant or right. Equity shares subject to options, warrants or rights that are currently exercisable or exercisable within 60 days are deemed outstanding for computing the ownership percentage of the person holding the options, warrants or rights, but are not deemed outstanding for computing the ownership percentage of any other person. The amounts and percentages as of March 31, 2013 are based on an aggregate of 3,361,207,534 equity shares outstanding as of that date.

	Equity Shares Beneficially Owned
Name	Number		Percent
Anil Agarwal(1)		1,956,383,435		58.20	%
Navin Agarwal		—		—
Tarun Jain		—		—
Din Dayal Jalan		—		—
Berjis Minoo Desai		—		—
Gautam Bhailal Doshi		—		—
Sandeep H. Junnarkar		72,000		*
Mahendra Singh Mehta		1,000		*
A.Thirunavukkarasu		—		—
Dilip Golani		1,000		*
All our directors and executive officers as a group (10 persons)		1,956,457,435		58.20	%

Notes:

* Represents beneficial ownership of less than 1.0%.

(1) Consists of 1,956,383,535 equity shares beneficially owned by Vedanta. Volcan holds 58.2% of the share capital and 64.9% of the voting rights of Vedanta. Volcan is 100% owned and controlled by the Anil Agarwal Discretionary Trust. Onclave is the trustee of the Anil Agarwal Discretionary Trust and controls all voting and investment decisions of the Anil Agarwal Discretionary Trust. As a result, shares beneficially owned by Volcan may be deemed to be beneficially owned by the Anil Agarwal Discretionary Trust and, in turn, by Onclave. The beneficiaries of the Anil Agarwal Discretionary Trust are members of the Agarwal family, who are related to Mr. Anil Agarwal. Mr. Anil Agarwal, the Executive Chairman of Vedanta and our Non-Executive Chairman, as protector of the Anil Agarwal Discretionary Trust, may be deemed to have deemed beneficial ownership of shares that are beneficially owned by the Anil Agarwal Discretionary Trust. Vedanta, Volcan, the Anil Agarwal Discretionary Trust, Onclave and Mr. Anil Agarwal are parties to a relationship agreement that regulates the ongoing relationship among them. See “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Related Parties—Vedanta.” As a result of this agreement, Volcan, the Anil Agarwal Discretionary Trust, Onclave and Mr. Anil Agarwal disclaim beneficial ownership of the shares beneficially owned by Vedanta.

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

A. Major Shareholders

The following table sets forth information regarding beneficial ownership of our equity shares as of March 31, 2013 held by each person who is known to us to have 5.0% or more beneficial share ownership based on an aggregate of 3,361,207,534 equity shares outstanding as of that date.

Beneficial ownership is determined in accordance with the SEC rules and includes shares over which the indicated beneficial owner exercises voting and/or investment power or receives the economic benefit of ownership of such securities. Equity shares subject to options currently exercisable or exercisable within 60 days are deemed outstanding for the purposes of computing the percentage ownership of the person holding the options but are not deemed outstanding for the purposes of computing the percentage ownership of any other person.

Name of Beneficial Owner	Number of Shares Beneficially Owned		Percentage Beneficially Owned
Vedanta Resources Plc(1)		1,956,383,435		58.20	%

Note:

(1) Vedanta has beneficial ownership of 1,956,383,435 equity shares, consisting of 1,671,144,924 equity shares held by Twin Star and 41,371,963 ADSs held by Twin Star representing 165,487,852 underlying equity shares and 119,750,659 equity

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shares held by MALCO. Twin Star and Welter Trading hold 78.8% and 16.0% of the outstanding shares of MALCO respectively and Twin Star is a controlling shareholder of MALCO. Twin Star is a wholly-owned subsidiary of VRHL, and VRHL is in turn a wholly-owned subsidiary of Vedanta; accordingly, our shares beneficially owned by Twin Star and MALCO may be regarded as being beneficially owned by VRHL and Vedanta. Volcan holds 58.2% of the share capital and 64.9% of the voting rights of Vedanta.Volcan is 100.0% owned and controlled by the Anil Agarwal Discretionary Trust. Onclave is the trustee of the Anil Agarwal Discretionary Trust and controls all voting and investment decisions of the Anil Agarwal Discretionary Trust. As a result, securities beneficially owned by Volcan may be deemed to be beneficially owned by the Anil Agarwal Discretionary Trust and, in turn, by Onclave. The beneficiaries of the Anil Agarwal Discretionary Trust are members of the Agarwal family, who are related to Mr. Anil Agarwal. Mr. Anil Agarwal, the Executive Chairman of Vedanta and our Non-Executive Chairman, as protector of the Anil Agarwal Discretionary Trust, may be deemed to have deemed beneficial ownership of shares that may be beneficially owned by the Anil Agarwal Discretionary Trust. Vedanta, Volcan, the Anil Agarwal Discretionary Trust, Onclave and Mr. Anil Agarwal are parties to a relationship agreement that regulates the ongoing relationship among them. See “- B. Related Party Transactions—Related Parties—Vedanta.” As a result of this agreement, Volcan, the Anil Agarwal Discretionary Trust, Onclave and Mr. Anil Agarwal disclaim beneficial ownership of the shares beneficially owned by Vedanta.

As of March 31, 2013, there were approximately 257,171 holders of our equity shares of which 118 have registered addresses in the United States. As of the same date, 112,278,300 of our ADSs representing 449,113,200 equity shares, representing 13.36% of our outstanding equity shares, were held by a total of 13 registered holders of record with addresses in and outside of the US. Since certain of these equity shares and ADSs were held by brokers or other nominees, the number of record holders in the US may not be representative of the number of beneficial holders or where the beneficial holders are resident. Each of our equity shares is entitled to one vote on all matters that require a vote of shareholders, and none of our shareholders has any contractual or other special voting rights.

B. Related Party Transactions

The following is a summary of material transactions we have engaged in with our controlling shareholder, Vedanta, and its subsidiaries and other related parties, including those in which we or our management have a significant equity interest. In addition, the following contains a discussion of how we intend to handle conflicts of interest and allocations of business opportunities between us and our affiliates, directors and executive officers. For further discussion of related party transactions, see Note 33 to our consolidated financial statements included elsewhere in this annual report.

Related Parties

Volcan and the Agarwal Family

Volcan holds 58.2% of the share capital and 64.9% of the voting rights of Vedanta. Volcan is 100% owned and controlled by the Anil Agarwal Discretionary Trust. Onclave is the trustee of the Anil Agarwal Discretionary Trust and controls all voting and investment decisions of the Anil Agarwal Discretionary Trust. Mr. Anil Agarwal, the Executive Chairman of Vedanta and our Non-Executive Chairman, is the protector of the Anil Agarwal Discretionary Trust. Vedanta, Volcan, the Anil Agarwal Discretionary Trust, Onclave and Mr. Anil Agarwal are parties to a relationship agreement that regulates the ongoing relationship among them. See “- Vedanta.” Mr. Anil Agarwal, his father, Mr. Dwarka Prasad Agarwal, one of our directors until March 31, 2009, and his son, Mr. Agnivesh Agarwal, the Non-Executive Chairman of HZL, also have a controlling interest in STL, a publicly listed company in India which was spun-off from the Vedanta group in July 2000, except for nominal interests in STL held by MALCO and us.

Vedanta

As of March 31, 2013, Vedanta had beneficial ownership of 1,956,383,435 of our equity shares, including 1,836,632,776 equity shares (54.64%) held by Twin Star and 119,750,659 (3.56%) equity shares held by MALCO. Twin Star and Welter Trading holds 78.8% and 16.0% of the outstanding shares of MALCO and Twin Star is a controlling shareholder of MALCO. Twin Star is a wholly-owned subsidiary of VRHL, and VRHL is in turn a wholly-owned subsidiary of Vedanta. As a result, Vedanta is the beneficial owner of 58.20 % of our equity shares.

Vedanta, Volcan, the Anil Agarwal Discretionary Trust, Onclave and Mr. Anil Agarwal are parties to a relationship agreement. The principal purpose of the relationship agreement is to enable Vedanta to carry on its business independently of Volcan and its direct and indirect shareholders, and their respective associates, or the “Volcan Parties” as required by the listing rules of the Financial Services Authority of the United Kingdom or the FSA and to ensure that transactions and relationships are at arm’s length and on a normal commercial basis. The relationship agreement will terminate in respect of Volcan at such time as each of the Volcan Parties, acting individually or jointly by agreement, cease to be a controlling shareholder of Vedanta for the purposes of the listing rules of the FSA or if Vedanta is de-listed from the LSE. In addition, the relationship agreement will terminate in respect of Onclave and Mr. Anil Agarwal if any of them individually or acting jointly ceases to be a controlling shareholder of Vedanta or Volcan. Currently, a controlling shareholder of a company for the purposes of the listing rules of the FSA is any person (or persons acting jointly by agreement whether formal or otherwise) who is entitled to exercise, or to control the exercise of 30.0% or more of the rights to vote at general meetings of such company or is able to control the appointment of directors who are able to exercise a majority of the votes at board meetings of such company.

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Under the relationship agreement:

• the parties agree to ensure that Vedanta is capable, at all times, of carrying on its business independently of the Volcan Parties as required by the listing rules of the FSA;

• Vedanta’s board of directors and nominations committee and any other committee of Vedanta’s board of directors (other than the audit committee or the remuneration committee or any committee which may be established by the board of directors in connection with a specific transaction, the constitution of which is approved by the board of directors) to which significant powers, authorities or discretions are delegated shall at all times comprise a majority of directors who are independent of the Volcan Parties and who are free from any business or other relationship with the Volcan Parties which could materially interfere with the exercise of the director’s judgment concerning Vedanta;

• Vedanta’s remuneration committee and audit committee shall at all times consist only of non-executive directors;

• Volcan is entitled to nominate for appointment to the board of directors of Vedanta such number of persons as is one less than the number of directors who are independent of the Volcan Parties and who are free from any business or other relationship with the Volcan Parties which could materially interfere with the exercise of the director’s judgment concerning Vedanta;

• neither Mr. Anil Agarwal nor any non-independent directors shall be permitted, unless the independent directors agree otherwise, to vote on any resolutions of Vedanta’s board of directors or of a committee of the board to approve the entry into, variation, amendment, novation or abrogation or enforcement of any contract, arrangement or transaction with any of the Volcan Parties;

• Volcan shall not exercise voting rights attaching to its shares in Vedanta or any resolution to approve the entry into, variation, amendment, novation or abrogation of any transactions or arrangements between Vedanta and the Volcan Parties;

• the Volcan Parties represented and warranted to Vedanta that at the time of the execution of the relationship agreement they did not own, directly or indirectly, any interests in the smelting, refining, mining or sale of any base metals or mineral otherwise than through Vedanta or any member of the Vedanta group;

• the Volcan Parties agreed to, directly or indirectly, acquire or otherwise invest in any company, business, business operation or other enterprise which engages in the smelting, refining or mining of base metals or minerals only through Vedanta or other member of the Vedanta group. However, this agreement does not prevent, restrict or limit:

• the acquisition or ownership by the Volcan Parties of not more than 5.0% in aggregate of any class of shares, debentures or other securities in issue from time to time of any company which engages in the smelting, refining or mining of base metals or minerals which is for the time being listed on any stock exchange; or

• the acquisition or ownership, directly or indirectly, by the Volcan Parties of any interest in, a base metal or mineral property or asset (together with any associated property, plant and equipment), which is not adjacent or geographically proximate to an existing property or operation of Vedanta group so as to give them operational synergies, where the acquisition cost (including assumed indebtedness), including any related capital expenditures committed at the date of acquisition for the following 12 months, is equal to $ 50 million or less, for which purpose any acquisitions of two or more related or adjacent base metal or mineral properties or assets shall be aggregated when calculating the acquisition cost, provided that the relevant interested party (i) is not an officer or director of a Vedanta group company; and (ii) before acquiring such property or asset, first made the opportunity to acquire such property or asset available to the Vedanta group, with a reasonable period for the independent directors of Vedanta to consider the opportunity, on terms no less favorable than those on which they are proposed to be acquired by the interested party and a majority of the independent directors has determined that the Vedanta group should not make the acquisition; and

• transactions and relationships between Vedanta and the Volcan Parties must be conducted at arm’s length and on a normal commercial basis.

Key Management Personnel

See “Note 33 of Notes to the Consolidated Financial Statements — Related Party Transactions”.

Related Party Transactions

Representative Office Agreement—Vedanta and Sterlite

We entered into a representative office agreement with Vedanta on March 29, 2005 under which Vedanta agreed to provide technical and commercial materials to us to enable us to promote our business or raise funds overseas, and to be our non-exclusive overseas representative, for which we have agreed to pay an amount of $ 2.0 million (Rs. 109.0 million) per year to Vedanta. This agreement expired on March 31, 2013 and is in the process of being renewed.

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Consultancy Agreement—Vedanta and Sterlite

We entered into a consultancy agreement with Vedanta on March 29, 2005 under which Vedanta agreed to provide strategic planning and consultancy services to us and our subsidiaries in various areas of business such that we are able to finalize and implement our plans for growth and are able to raise the necessary finances. The terms of this agreement were negotiated by us and Vedanta and we believe them to be fair and reasonable. Under this agreement, Vedanta has agreed to make certain of its employees available to us and we have agreed to pay a service fee to Vedanta on the basis of, among other things, the amount of time spent in providing the services and associated costs, with a mark-up of 40.0%. The anticipated fee used for reference in the agreement, which is based on a relevant proportion of the expected annual budgeted costs for fiscal 2005 plus the mark-up of 40.0%, is $ 3.0 million (Rs. 163.6 million) per year. This agreement expired on March 31, 2013 and is in the process of being renewed.

Outsourcing Services Agreement—Vedanta and Sterlite

We entered into a service agreement with Vedanta on April 1, 2010, under which we shall provide accounting, treasury and related services at the request of Vedanta from time to time. In consideration of above, Vedanta has agreed to pay us service charges aggregating to an amount of $ 0.2 million (Rs. 10.9 million) per year.

Issuance of Equity Shares by Vedanta Aluminium—Sterlite, Twin Star and Vedanta Aluminium

Prior to March 2005, Vedanta Aluminium was a wholly-owned subsidiary of ours that was part of our consolidated group of companies. In March 2005, Vedanta Aluminium issued equity shares to Twin Star in exchange for consideration of Rs. 4,421 million from Twin Star. As a result of this sale of equity shares by Vedanta Aluminium, Twin Star acquired a 70.5% ownership interest in Vedanta Aluminium and we ceased to consolidate Vedanta Aluminium in our consolidated financial statements. The terms of this sale were negotiated between Vedanta Aluminium and Twin Star on an arm’s length basis, with an independent appraiser hired to establish the sale price. During fiscal 2007, Vedanta Aluminium issued to us 1,133,737 equity shares of par value Rs. 10 per equity share for cash at a price of Rs. 1,160 per equity share on a rights basis. Accordingly, we paid a sum of Rs. 1,315 million ($ 24.1 million). We subscribed for our full proportionate share so as to maintain our shareholding in Vedanta Aluminium at 29.5%. During fiscal 2010, we have received 69,437,960 equity shares on account of the split of the value of the shares from Rs. 10 to Rs. 2 per share and 165,322,677 equity shares on account of the bonus issue in the ratio of 1.90:1 from Vedanta Aluminium. As of March 31, 2013, we have 252,120,127 equity shares in Vedanta Aluminium.

Issuance of Debentures by Vedanta Aluminium—Sterlite and Vedanta Aluminium

In fiscal 2008, pursuant to two memoranda of understanding entered into between Vedanta Aluminium and us on August 29, 2007 and December 23, 2007, Vedanta Aluminium issued to us 1.6 billion zero % optionally fully convertible debentures at par value of Rs. 10 per debenture. Accordingly, we paid a sum of Rs. 16,000 million ($ 293.5 million). The debentures are convertible in full or in part into equity shares at such premium as may be determined by a merchant banker or any other expert agency in the field based on fair value at any time within five years from the date of allotment unless we request for an extension of the redemption date by up to five years. Debentures that have not been converted to equity shares prior to the redemption date shall be redeemed on the fifth anniversary of the date of allotment of such debentures, or at the expiry of the extension period. In September 2008, 265,840,200 debentures of Rs. 2,658 million ($ 48.8 million) had been converted into 1,772,268 equity shares of Rs. 10 each at a premium of Rs. 1,490 per share. During the fiscal 2010, Vedanta Aluminium has paid Rs. 13,342 million ($ 244.7 million) to us towards redemption of its 1,334,159,800 debenture.

In fiscal 2009, pursuant to a term sheet for the issue of 15,000 non-convertible debentures at par value of Rs. 1.0 million per debenture, Vedanta Aluminium issued to us 6,850 such debentures. Interest at the rate of 9.75% is payable semi-annually. Accordingly, we paid a sum of Rs. 6,850 million. In April and May 2009, Vedanta Aluminium issued the remaining 8,150 debentures to us and we paid a sum of Rs. 8,150 million. The debentures are redeemable at par one year from the date of allotment. In fiscal 2011, 8,150 debentures were redeemed by Vedanta Aluminium and we received a sum of Rs. 8,150 million ($ 149.5 million).

In fiscal 2010, pursuant to a letter of allotment for the issue of 10,000 non-convertible debentures at par value of Rs.1 million per debenture, Vedanta Aluminium issued to us 10,000 such debentures. Interest at the rate of 8.0% is payable semi-annually. Accordingly, we paid a sum of Rs.10,000 million ($ 183.4 million). The debentures are redeemable at par one year from the date of allotment. In fiscal 2011, 10,000 debentures were redeemed by Vedanta Aluminium and we received a sum of Rs. 10,000 million ($ 183.4 million).

Loan Agreement—Sterlite and Vedanta Aluminium

We entered into a loan agreement with Vedanta Aluminium on February 4, 2008, under which we agreed to lend to Vedanta Aluminium Rs. 10,000 million ($ 183.4 million) for a term of ten years. Interest is payable in arrears on the outstanding amount of the loan at the prevailing RBI bank rate plus 2.0% per annum every quarter on January 1, April 1, July 1 and October 1, until the loan is fully repaid. The entire loan together with all interest accrued thereon shall be repaid on or before the expiry of 10 years from the date of the last disbursement of the loan which shall be no later than March 31, 2010. As of March 31, 2013, the amount outstanding under the loan was approximately Rs. 6,890 million ($ 126.4 million).

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Further, we entered into a loan agreement with Vedanta Aluminium on February 11, 2010, which was effective from January 26, 2010, under which we agreed to lend to Vedanta Aluminium Rs. 45,000 million ($ 825.4 million) for a term of one year. Interest is payable monthly in arrears on the outstanding amount of the loan at 8.0% per annum every month on the first day of the next month for the corresponding preceding month, until the loan is fully repaid. The entire loan together with all interest accrued thereon shall be repaid on or before the expiry of one year from the date of disbursement of the loan. In fiscal 2011, Vedanta Aluminium has repaid Rs. 19,500 million ($ 357.7 million) and renewed the loan for the balance amount of Rs 25,500 million ($ 467.7 million) for a period of one year with interest rate of 10.0%. In fiscal 2012, this was further renewed upon maturity at the interest rate of 10.50% . In fiscal 2013, this was further renewed at the interest rate of 9.75%. As of March 31, 2013, the amount outstanding under the loan was Rs. 25,500 million ($ 467.7 million).

Further, we entered into a loan agreement with Vedanta Aluminium on April 6, 2010, under which we agreed to lend to Vedanta Aluminium Rs. 25,000 million ($ 458.5 million) for a term of one year. Interest is payable at the rate of 8.0% per annum at the time of the repayment of the actual principal amount. The entire loan together with all interest accrued thereon shall be repaid on or before the expiry of one year from the date of disbursement of the loan. During fiscal 2012 the loan balance were renewed on maturity for one year at 10.25%. During fiscal 2013, the loan balances were further renewed for one year at a rate of 10.50%. Further, Rs.17,000 million ($ 311.8 million) of the loan balances were converted into 17 million preference shares on March 29, 2012. As of March 31, 2013, the amount outstanding under the loan was Rs. 8,000 million ($ 146.7 million).

Further, we entered into a loan agreement with Vedanta Aluminium on September 29, 2010, under which we agreed to lend to Vedanta Aluminium Rs. 20,000 million ($ 366.8 million) for a term of one year. Interest is payable at the rate of 8.0% per annum at the time of repayment of the actual principal amount. The entire loan together with all interest accrued thereon shall be repaid on or before the expiry of one year from the date of disbursement of the loan. During fiscal 2012, the loan balances were renewed upon maturity for one year at coupon rate of 10.25%. Further, Rs. 3,000 million ($ 55.0 million) \of the loan balances were converted into 3 million preference shares. As of March 31, 2012, the amount outstanding under the loan was Rs. 17,000 million ($ 311.8 million). During fiscal 2013, the loan of Rs. 4,500 million ($ 82.5 million) was renewed for one year and loan of Rs. 12,500 million ($ 229.3 million) was renewed for six months at a coupon rate of 9.75%. As of March 31, 2013, the amount outstanding under the loan was Rs. 17,000 million ($ 311.8 million).

Further, we entered into a loan agreement with Vedanta Aluminium on April 12, 2011, under which we agreed to lend to Vedanta Aluminium Rs. 10,000 million ($ 183.4 million) for a term of one year. Interest is payable at the rate of 10.0% per annum at the time of the repayment of the actual principal amount. The entire loan together with all interest accrued thereon shall be repaid on or before the expiry of one year from the date of disbursement of the loan. During fiscal 2012, the loan balances were converted into 10 million preference shares.

Further, we entered into a loan agreement with Vedanta Aluminium on October 27, 2011, under which we agreed to lend to Vedanta Aluminium Rs. 5,250 million ($ 96.3 million) for a term of one year. Interest is payable at the rate of 10.25% per annum at the time of the repayment of the actual principal amount. The entire loan together with all interest accrued thereon shall be repaid on or before the expiry of one year from the date of disbursement of the loan. As of March 31, 2012, the amount outstanding under the loan was Rs. 4,710 million ($ 86.4 million). In fiscal 2013, Rs. 2,000 million ($ 36.7 million) was repaid by Vedanta Aluminium and the balance amount of Rs 2,710 million (49.7 million) was renewed upon maturity for a period of six months at a coupon rate of 9.75%. As of March 31, 2013, the amount outstanding under the loan was Rs. 2,710 million ($ 49.7 million).

Further, we entered into a loan agreement with Vedanta Aluminium on December 20, 2012, under which we agreed to lend Vedanta Aluminium Rs. 10,000 million ($ 183.4 million) for a term of one year. Interest is payable at the rate of 9.75% per annum. The entire loan together with all interest accrued thereon shall be repaid on or before the expiry of one year from the date of disbursement of the loan. As of March 31, 2013, the amount outstanding under the loan was Rs. 9,710 million ($ 178.1 million).

Issuance of Preference Shares by Vedanta Aluminium—Sterlite and Vedanta Aluminium

On March 29, 2012, we invested Rs. 30,000 million ($ 550.3 million) in preference shares of Vedanta Aluminium with maturity period of ten years and dividend rate of 9.0% and redeemable at a premium at the end of a ten year period. The investment in preference shares were made by converting part of the loan provided to Vedanta Aluminium. These preference shares are outstanding as of March 31, 2013.

Loan Agreement – SOVL and Vedanta Aluminium

SOVL entered into a loan agreement with Vedanta Aluminium on October 29, 2011, under which they agreed to lend to Vedanta Aluminium Rs. 2,414 million ($ 44.3 million) for a term of one year. After merger of SOVL with Sterlite with effect from April 1, 2011, pursuant to the order of the High Court of Madras dated March 29, 2012, these loan balances are outstanding for us. This loan has been renewed upon maturity for a further period of one year, at an interest rate of 9.75% per annum. As of March 31, 2013, the amount outstanding under the loan is Rs. 2,414 million ($ 44.3 million).

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Loan Agreement—Vedanta Jersey Investment Limited and Monte Cello BV

Monte Cello BV entered into agreement with Vedanta Jersey Investment Limited on April 1, 2010 to make available a loan facility for one year which shall not exceed $ 150 million. The loan facility has been, upon maturity, renewed each year, on fresh terms and conditions, for a further period of one year. Accordingly, upon maturity in April 2013, the loan has been renewed for a period of one year, with an interest rate of 2.56% per annum. The loan balance as of March 31, 2013 is $ 67.9 million.

Loan Agreement—Welter Trading and Monte Cello BV

Monte Cello BV entered into agreement with Welter Trading on November 3, 2010 to make available a loan facility which shall not exceed $ 100 million. The limit was further increased upto $ 105 million during 2012. In fiscal 2013, the loan balance together with accrued interest amounting to $ 103.3 million was renewed into a fresh loan at an interest rate of LIBOR plus 120 basis points for a further period of one year. As of March 31, 2013, the amount outstanding under this facility was $103.2 million.

During fiscal 2013, Monte Cello BV also entered into an agreement with Welter Trading Limited for a loan facility of $ 50 million at an interest rate of 1.35% for a period of one year. As of March 31, 2013, the amount outstanding under this facility was $ 14.2 million.

Loan Agreement—Welter Trading Limited and THL Zinc Holding BV

THL Zinc Holding B.V entered into an agreement with Welter Trading Limited on August 6, 2012 for a loan facility of $ 100 million at an interest rate of 1.35% per annum for a period of one year. As of March 31, 2013, the loan amount outstanding under this facility was $ 65.5 million.

Loan Agreement—Twin Star Holdings Limited and THL Zinc Limited

During fiscal 2013, THL Zinc Limited further entered into an agreement for a loan facility of $ 100 million at an interest rate of LIBOR plus 100 basis points. As of March 31, 2013, the loan amount outstanding under this facility was $ 53.6 million.

Loan Agreement—Richter Holdings Limited and THL Zinc Holding B.V

THL Zinc Holding B.V entered into an agreement with Richter Holdings Limited on December 24, 2012, further amended on January 11, 2013 for a loan facility of $ 240 million at an interest rate of LIBOR plus 115 basis points for a period of one year. As of March 31, 2013, the amount outstanding under this facility was $ 181.9 million.

Guarantees—Sterlite, CMT, TCM and Vedanta Aluminium

We have provided guarantees on behalf of CMT, TCM and Vedanta Aluminium. See “Item 5. Operating and Financial Review and Prospects—Guarantees.”

Acquisition of Lakomasko B.V. – THL Zinc Holding B.V. and Vedanta Resources Holding Limited

THL Zinc Holding B.V. acquired 100% of the outstanding shares of Lakomasko B.V. on November 28, 2011 from Vedanta Resources Holding Limited, a wholly owned subsidiary of Vedanta) for a total consideration of $ 37.7 million. THL Zinc Holding BV also provided a short term unsecured loan of $ 112.0 million to Lakomasko BV which in turn has repaid the loan along with accrued interest to Vedanta Resources Holdings Limited.

Sponsor Support Agreement—Sterlite and Sterlite Energy

We entered into a sponsor support agreement on June 29, 2009 with Sterlite Energy and the State Bank of India, as facility agent, in connection with the Rs. 55,690 million ($ 1,021.5 million) term loan facility granted to Sterlite Energy by a syndicate of banks to finance its construction of a 2,400 MW thermal coal-based power facility in Jharsuguda in the State of Orissa. Under the sponsor support agreement, we undertook to, among other things, contribute Rs. 20,500 million ($ 376.0 million) to the capital of Sterlite Energy by subscribing for additional shares in order to ensure that Sterlite Energy’s debt to equity ratio does not exceed 75:25 during the term of the facility, meet any project cost overruns by contributing additional capital or by providing or arranging for unsecured and subordinated loans to be made available to Sterlite Energy, retain control of Sterlite Energy until the loan is fully repaid, meet all export obligations as required under the Export Promotion of Capital Good Scheme, fund the development of the coal blocks in Rampia and Dip Side Rampia in the State of Orissa that were jointly allocated by the Ministry of Coal to Sterlite Energy and other companies, and in the event that Sterlite Energy is unable to timely discharge its obligations under the loan agreement due to the occurrence of certain events, to provide additional funds to Sterlite Energy in order to enable Sterlite Energy to meet those obligations. In addition, we agreed to indemnify the lenders, the security trustee and the facility agent against all losses and claims incurred by them as a result of any breach of the loan agreement by Sterlite Energy. Sterlite Energy has applied for cancellation of this facility and has received consent from a majority of the members of the consortium banks.

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Conflicts of Interest and Allocations of Business Opportunities

From time to time, conflicts of interest have in the past and will in the future arise between us and our affiliates, including our controlling shareholder, Vedanta, and other companies controlled by Vedanta, our directors and our executive officers. See “Item 3. Key Information—D. Risk Factors—Risks Relating to Our Relationship with Vedanta.” With respect to transactions between us and our affiliates, directors and executive officers that involve conflicts of interests, we have in the past undertaken and will continue in the future to undertake such transactions in compliance with the rules for interested or related party transactions of the LSE on which Vedanta is listed, the NYSE on which our ADSs are listed and the NSE and BSE.

The rules applicable to LSE-listed companies, which would apply to transactions between us and the controlling shareholders of Vedanta, namely Volcan and the Agarwal family, require that the details of a related party transaction be notified to a regulatory information service and disclosed to the FSA as soon as possible after the terms of the transaction are agreed upon. There is also a requirement that a circular containing information about the related party transaction be sent to all shareholders and that their approval of the related party transaction be obtained either before the transaction is entered into or, if the transaction is conditional on shareholder approval, before the transaction is completed. The related party and its associates must be excluded from voting on the related party transactions. The requirement of shareholder approval does not apply to transactions where the gross assets of the transaction as a percentage of the gross assets of the listed company, the profits attributable to the assets of the transaction as a percentage of the profits of the listed company, the consideration for the transaction as a percentage of the aggregate market value of all the ordinary shares (excluding treasury shares) of the listed company and the gross capital of the company or business being acquired as a percentage of the gross capital of the listed company, does not exceed 5%. However, the listed company must, before entering into the related party transaction, inform the FSA of the details of the proposed related party transaction, provide the FSA with a written confirmation from an independent adviser acceptable to the FSA that the terms of the proposed related party transaction with the related party are fair and reasonable as far as the shareholders of the listed company are concerned and undertake in writing to the FSA to include details of the related party transaction in the listed company’s next published annual accounts, including, if relevant, the identity of the related party, the value of the consideration for the transaction or arrangement and all other relevant circumstances. Related party transactions where all the above percentage ratios are 0.25% or less have no requirements under the rules applicable to LSE-listed companies. Where several separate transactions occur between a company and the same related party during a 12-month period, the transactions must be aggregated for the purpose of applying the percentage ratio tests.

As part of our listing with the NYSE, we were required to confirm to the NYSE that we will appropriately review and oversee related party transactions on an ongoing basis. These related party transactions include transactions between us and our controlling shareholder, Vedanta, and its affiliates. The NYSE reviews the public filings of its listed companies as to related party transactions. Under the rules of the NYSE, we are required to have an independent audit committee comprised entirely of independent directors. We have had an independent audit committee comprised entirely of independent directors since our ADS offering in June 2007. One of the functions of the independent audit committee is to review any related party transactions by us or any of our subsidiaries or affiliates. In addition, under the rules of the NYSE, we are required to obtain shareholder approval for any issuance of our equity shares, or securities convertible into or exercisable for our equity shares, to any related party, except that such approval would not be required for sales of our equity shares to our controlling shareholder or its affiliates in an amount not to exceed 5% of the number of our equity shares outstanding prior to such issuance and at a price equal to or greater than the higher of the book or market value of our equity shares.

Under the listing agreements we have entered into with the NSE and BSE, we are required to ensure that our disclosures in relation to material and significant related party transactions in our annual reports are in compliance with Indian GAAP. Specifically, we are required to place before the audit committee and publish in our annual reports a statement in summary form of the related party transactions entered into by us during the previous fiscal year, providing details of whether such transactions were undertaken in the ordinary course of business and details of material individual transactions with related parties or others which were not on an arm’s length basis, together with our management’s justification for such transactions. Under the listing agreements, our audit committee is required to review and discuss with the management the disclosures of any related party transactions, as defined under Indian GAAP, in our annual financial statements.

We also have used and will continue to use independent appraisers in appropriate circumstances to help determine the terms of related party transactions. We have had and will continue to have an audit committee comprised entirely of independent directors which is responsible for reviewing any related-party transaction by us or any of our subsidiaries or affiliates.

We are continually seeking to identify and pursue business opportunities. However, Vedanta, as our controlling shareholder, has the power to determine in its sole discretion what corporate opportunities we may pursue and whether to pursue a corporate opportunity itself or through one of its other subsidiaries, which may benefit such companies instead of us and which could be detrimental to our interests. See “Item 3. Key Information—D. Risk Factors—Risks Relating to Our Relationship with Vedanta—Vedanta may decide to allocate business opportunities to other members of the Vedanta group instead of to us, which may have a material adverse effect on our business, results of operations, financial condition and prospects.” Vedanta has in the past allocated and expects in the future to allocate corporate opportunities among itself and its various subsidiaries based on a number of factors, including the nature of the opportunity, the availability of funds at the relevant subsidiary to pursue the opportunity and which subsidiary it believes can most successfully take advantage of the opportunity.

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C. Interest of Experts and Counsel

Not applicable

ITEM 8. FINANCIAL INFORMATION

A. Consolidated Statements and Other Financial Information

Please see Item 18 for a list of the financial statements filed as part of this annual report.

Legal Proceedings

Except as described below, there are no governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened, of which we are aware) which we believe could reasonably be expected to have a material adverse effect on our results of operations or financial position. See note 31 to our consolidated financial statements included elsewhere in this annual report for more information.

We have commenced proceedings against the GoI which has disputed our exercise of the call option to purchase its remaining 49.0% ownership interest in BALCO.

Certain proceedings are ongoing before an arbitral tribunal constituted in accordance with the terms of the shareholders’ agreement between us and the GoI with respect to our exercise of our call option to acquire the remaining shares of BALCO held by the GoI. The claim amount is not presently quantifiable. A final award was pronounced on January 22, 2011. As per the award, clauses 5.3, 5.4 and 5.1(a) and 5.8 of the shareholders’ agreement were held to be void, ineffective and inoperative by virtue of being violative of sub section (2) of Section 111A of the Companies Act, 1956. We filed an application before the High Court of Delhi to set aside the award under Section 34 of the Arbitration and Conciliation Act, 1996. This application is scheduled for hearing on October 7, 2013. See “Item 4. Information on the Company—B. Business Overview—Our Business—Options to Increase Interests in HZL and BALCO.”

Appeal proceedings in the High Court of Bombay brought by SEBI to overrule a decision by the SAT that we have not violated regulations prohibiting fraudulent and unfair trading practices.

In April 2001, SEBI ordered prosecution proceedings to be brought against us, alleging that we have violated regulations prohibiting fraudulent and unfair trading practices and also passed an order prohibiting us from accessing the capital markets for a period of two years. This order of SEBI was overruled by the SAT on October 22, 2001 on the basis of lack of sufficient material evidence to establish that we had, directly or indirectly, engaged in market manipulation and that SEBI had exercised its jurisdiction incorrectly in prohibiting us from accessing the capital markets. On November 9, 2001, SEBI appealed to the High Court of Bombay. The next date of hearing has not been fixed.

In addition to the prosecution proceedings, SEBI also initiated criminal proceedings in 2001 before the Court of the Metropolitan Magistrate, Mumbai, against us, our non-Executive Chairman, Mr. Anil Agarwal, our Director of Finance, Mr. Tarun Jain who was also the chief financial officer of MALCO at the time of the alleged price manipulation. When SEBI’s order was overruled in October 2001, we filed a petition before the High Court of Bombay to defend those criminal proceedings on the grounds that the SAT had overruled SEBI’s order on price manipulation. An order was passed by the High Court of Bombay in our favor, granting an interim stay of the criminal proceedings.

Proceedings against directors and employees of BALCO

Criminal Proceedings have been initiated by Mr. Ajay Padia before the Court of the Judicial Magistrate First Class, Pune (“Judicial Magistrate”) against Mr Anil Agarwal, Mr Navin Agarwal, Mr Tarun Jain and certain of our other ex-directors and employees in 2002 stating that an assurance that was given by the said directors that all sums of money owed to him for the damaged material supplied by BALCO was not honored. The Judicial Magistrate issued summons to the directors and employees. On receipt of the summons, an application under Section 482 of the Criminal Procedure Code was filed in the High Court of Bombay for quashing the proceedings in the Judicial Magistrate and to dispose the matter directing that alternative remedies were available before the Session Court, Pune, which was the appropriate Court. The High Court of Bombay stayed the proceedings of the Judicial Magistrate and the application was listed for disposal. The next date of hearing has not been fixed.

Penalties levied on us and certain of our directors by the Enforcement Directorate

The Enforcement Directorate levied penalties on us and certain of our directors aggregating to Rs. 347 million ($ 6.4 million). This is based on an allegation that we and our other group companies invested an amount of $ 49 million into Sterlite and MALCO through Twinstar without the permission of the Reserve Bank of India.

We appealed against this order of the Enforcement Directorate to the Appellate Tribunal for Foreign Exchange seeking waiver of the pre-deposit amount, which is equal to 100% of the penalty levied , which was allowed by the tribunal. The Enforcement Directorate appealed against this decision of the tribunal to the High Court of Delhi, which remanded the matter back to the tribunal to consider the issue afresh. The next date of hearing is scheduled for August 6, 2013.

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We are involved in certain litigation seeking cancellation of permits and environmental approval for the alleged violation of certain air, water and hazardous waste management regulations at our Tuticorin plant.

Various writ petitions were filed before the High Court of Madras between 1996 and 1998 by various non-governmental organisations such as The National Trust for Clean Environment political parties and some private citizens alleging, among other things, that sulphur dioxide emissions from our copper smelting operations at Tuticorin are causing air and water pollution and hazardous waste resulting in damage to the marine ecosystem and the lives of people living in and around Tuticorin.

In September 2010, the High Court of Madras ordered the closure of our copper smelting plant at Tuticorin. Following our appeal of this order to the Supreme Court of India, the order was stayed until further notice. The Supreme Court in subsequent hearings directed the TNPCB, the NEERI, and the CPCB to issue certain directions and implement certain measures for the improvement of the copper smelter unit at Tuitcorin.

The Supreme Court in April 2013 has allowed our appeal and has set aside the order of the High Court of Madras. The Supreme Court has ruled that the plant has complied with all the directions and measures issued by the NEERI, TNPCB and CPCB. However, the Supreme Court directed us to deposit Rs. 1,000 million ($18.3 million) with the District Collector, Tuticorin, which will be used for the improvement of the environment, including soil and water, near the location of the plant.

Separately, in March 2013, the TNPCB ordered the closure of the copper smelter at Tuticorin due to complaints regarding a noxious gas leak by local residents. On April 1, 2013 we filed a petition in the National Green Tribunal (“NGT”) challenging the order of the TNPCB on the basis that the plant’s emissions were within permissible limits. The NGT passed an interim order in May 2013 allowing the copper smelter to recommence operations subject to certain conditions. We recommenced operations on June 16, 2013. The expert committee constituted by the NGT submitted a report on the operation of the plant on July 10, 2013 stating that the plant’s emissions were within the prescribed standards and based on this report, the NGT ruled on July 15, 2013 that the copper smelter could remain open and reserved its order. The NGT has also directed the company to comply with the recommendations made by the committee to further improve the working of the plant within a time bound schedule. However, the TNPCB filed a notice of appeal against the interim order of the NGT. The next date of hearing is on August 5, 2013.

Further, another writ petition in public interest was filed in December 2009 in the High Court of Madras challenging the grant of environmental clearance for the expansion of our copper smelting unit at Tuticorin. But no order/direction for injunction was granted. The next date of hearing for the writ petition is not yet fixed.

Petitions have been filed in the Supreme Court of India and the High Court of Orissa to seek the cessation of construction of Vedanta Aluminium’s refinery in Lanjigarh and related mining operations in Niyamgiri Hills, which are currently suspended.

Certain non-governmental organizations and an individual filed applications in the Supreme Court of India, in 2004 challenging construction and mining operations on the ground that the construction of mines surrounding the Niyamgiri hills endangers the life and habitat of wild life and the tribal community in that area.

The Supreme Court, passed an order which provided that if the State of Orissa, Orissa Mining Corporation and we jointly agree to the rehabilitation package proposed by the Court, and we notify the Court that we are agreeable to the package, the Court may consider granting clearance to the project. The MoEF granted us the environmental clearance for the mining of bauxite. After the grant of environmental clearance, certain groups of persons and individuals have filed an appeal challenging the grant of the environmental clearance before the National Environment Appellate Authority (“NEAA”) on the same issues which were raised during hearing in Supreme Court. The NEAA dismissed the appeals and pursuant to the NEAA order, additional conditions, may be imposed by the MoEF for the environmental clearance, which remains inoperable for the time being, until the MoEF reconsiders the matter.

The MoEF on August 24, 2010 rejected the forest clearance for the Niyamgiri Mines to Orissa Mining Corporation , which is one of the sources of supply of bauxite to Vedanta Aluminium. Against this order of the MoEF, Orissa Mining Corporation filed a writ petition in the Supreme Court on October 24, 2010. In the meantime, the MoEF by its order dated July 11, 2011, cancelled the environmental clearance granted to the Orissa Mining Corporation for mining in Niyamgiri mines. The Orissa Mining Corporation has filed an application in the Supreme Court against this order of the MoEF on August 1, 2011. The Supreme Court through its order dated April 18, 2013 has directed the state government of Orissa to place any unresolved issues and claims of the local communities under the Forest Rights Act before the Gram Sabha, the council representing the local community. The Gram Sabha has been directed to consider these claims and communicate its decision to the MOEF through the state government of Orissa within three months of the order, which is in process. On conclusion of the proceedings of the Gram Sabha, the MOEF will then take a final decision on the granting of stage II forest clearance for the mining project within two months.

The MoEF has also directed Vedanta Aluminium to maintain status quo on the expansion of its refinery on October 20, 2010. Against this order, Vedanta Aluminium filed a writ petition in the High Court of Orissa and the Court dismissed the writ. Vedanta Aluminium made an application to the MoEF to reconsider the grant of the environmental clearance for its alumina refinery. The MoEF by its letter dated February 2, 2012, issued fresh terms of reference to Vedanta Aluminium for preparation of the Environment Impact Assessment (“EIA”) report which is required to be submitted to the Orissa Pollution Control Board for public hearing and after incorporation of the response, submit the final EIA report to the MoEF for environment clearance. Vedanta Aluminium submitted the EIA report to the Orissa Pollution Control Board and the public hearing has been kept on hold on the direction of the MoEF. Vedanta Aluminium is pursuing the matter with the state government.

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Shenzhen Shandong Nuclear Power Construction Co. Limited has commenced arbitration proceedings against Vedanta Aluminium claiming breach of the EPC contract for the expansion project

On February 19, 2012, Shenzhen Shandong Nuclear Power Construction Co. Limited (SSNP) filed a petition under section 9 of the Arbitration and Conciliation Act, 1996 before Bombay High Court alleging non-payment of their dues towards construction of a 210 MW co-generation power plant for 6 MTPA expansion project. This was subsequent to SSNP’s notice for termination of the contract dated February 25, 2011 and legal notice dated February 23, 2012 for recovery of its alleged dues. Under the said petition, SSNP sought for a restraining order on encashment of the advance bank guarantee, injunction from disposing or creating third party right over plant and machinery at the project site and security for the amount due under the contract. The Bombay High Court on April 25, 2012 dismissed SSNP’s petition. SSNP appealed against this order and the High Court by its order of December 12, 2012 directed Vedanta Alumnium to furnish security to SSNP for approximately Rs. 1,870 million ($ 34.3 million) and Vedanta Alumnium was restrained from alienating its assets of equivalent value.

SSNP has also subsequently invoked arbitration proceedings for alleged dues and Vedanta Alumnium has also filed a counter claim for delays caused for which SSNP is responsible. The proceedings are ongoing and the next date of hearing is on August 6, 2013.

BALCO is involved in various litigations in relation to the alleged encroachment of land on which the Korba smelter is situated and the state government of Chhattisgarh has issued notices to BALCO alleging that BALCO had encroached on state-owned land.

BALCO has occupied certain land on which the Korba smelter is situated since its establishment, which is the subject matter of a dispute for alleged encroachment by BALCO on government owned land, among others. BALCO petitioned the High Court of Chhattisgarh in 1996 to direct the state government of Chhattisgarh to execute a lease deed in respect of this land in BALCO’s favor. The High Court of Chhattisgarh passed an interim order in 2004 directing that the state government of Chhattisgarh take no action against BALCO. In 2005, in response to several show cause notices issued against BALCO alleging encroachment of government land, BALCO filed an amendment petition with the High Court of Chhattisgarh seeking to quash these show cause notices. The High Court of Chhattisgarh directed that the status quo be maintained and that BALCO should not engage in any deforestation activities on the land until the next hearing date, which has not yet been determined. By clarificatory order dated July 2, 2007, the High Court of Chhattisgarh directed that BALCO may continue construction and engage in deforestation activities after receipt of the requisite environmental approvals.

BALCO has no formal lease deed in relation to this land. BALCO was engaged in a dispute with the state government of Chhattisgarh regarding alleged encroachment on state-owned land at its Korba smelter. On February 6, 2009, the High Court of Chhattisgarh held that BALCO is in legal possession of the land and is required to pay premium and rent on the land according to the rates offered by the Government of Chhattisgarh in 1968. The state government of Chhattisgarh challenged this order in an appeal before the High Court of Chhattisgarh. By an order dated February 25, 2010, the High Court of Chhattisgarh dismissed the appeal. The dispute of encroachment, premium and rent has been decided and the state government of Chhattisgarh has decided to issue a lease deed in favour of BALCO once the dispute on forest land presently pending before the Supreme Court is decided.

A public interest writ petition has been filed by Sarthak, a non-governmental organisation before the Supreme Court of India alleging encroachment by BALCO over the land on which the Korba smelter is situated. It alleges that the land is classified as forest land and belongs to the state government of Chhattisgarh and that BALCO has engaged in illegal felling of trees on that land. The Supreme Court of India directed the petition to be listed before the Forest Bench of the Supreme Court of India. The Forest Bench directed the Central Empowered Committee (CEC) to submit a report on the petition. The CEC submitted a report on the petition to the Supreme Court of India on October 17, 2007, recommending that BALCO be directed to seek ex-post facto approval under the Forest Act for the allotment and non forestry use of the land in possession.

The matter was heard on April 23, 2010 for an interim application by BALCO for clearing the expansion on the land area limited to its proposed expansion. On April 23, 2010, pursuant to a contempt application filed by the petitioners alleging felling of trees, the Supreme Court directed CEC to examine the same and submit its report. The CEC submitted its report on June 30, 2012 to the Supreme Court recommending that a detailed survey should be conducted through Forest Survey of India (MoEF) using high quality remote sensing technique to find out whether any tree felling and/or non-forest use has taken place after February 29, 2008 in the revenue forest land and/or deemed forest in possession of BALCO. In order to expedite the proceedings BALCO filed an application in the Supreme Court seeking direction to pay without prejudice the net present value on forest land as per the recommendation of the CEC made in 2007. The date for hearing this matter has not yet been fixed.

In the event that the judgment of the Supreme Court is held against BALCO, BALCO may be required to pay the net present value of the land in question to convert the forest land to non-forest use. The maximum amount payable, based on the highest prescribed rate, is approximately Rs. 63.9 million ($ 1.2 million).

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Demands against HZL by Department of Mines and Geology.

The Department of Mines and Geology of the State of Rajasthan issued several show cause notices in August, September and October 2006, aggregating Rs. 3,339 million ($ 61.2 million), to HZL claiming unlawful occupation and unauthorized mining of associated minerals other than zinc and lead at HZL's Rampura Agucha, Rajpura Dariba and Zawar mines in Rajasthan, during the period from July 1968 to March 2006. HZL filed a writ petition against all the show cause notices issued by the Department of Mines and Geology in the High Court of Rajasthan. The High Court issued an order in October 2006 granting a stay and restrained the Department of Mines and Geology from undertaking any coercive measures to recover the penalty. In January 2007, the High Court issued another order granting the Department of Mines and Geology more time to file their reply and the High Court also directed the Department of Mines and Geology not to issue any orders canceling the lease. The next date of hearing date has not yet been fixed.

Demand against BALCO for electricity duty

We received a notice in February 2010 from the Chief Electrical Inspector, Government of Chhattisgarh demanding that BALCO is required to pay Rs. 2,404 million ($ 44.1 million) from 2004 to 2009, towards duty on electricity for the generation of power by BALCO’s 540 MW power plant. It alleged that BALCO did not submit the eligibility certificate required for exemption from payment of electricity duty. The said exemption is claimed pursuant to a memorandum of understanding entered with the state government and according to the industrial policy 2001-2006. The state level committee recommended that an eligibility certificate be issued to us that will exempt us from paying duty on electricity. The application is filed before Directorate of Industries for granting us exemption from electricity duty and is currently under review. The amount of duty on electricity payable for the period subsequent to March 31, 2009 until March 31, 2013 is Rs. 2,499 million ($ 45.8 million).

Demand against BALCO for electricity dues for power allocated from Central quota

BALCO in the year 1983-84 being a public sector undertaking was allocated 45 MW power by the GoI from the Central Quota. Upon disinvestment of BALCO in 2001, the Central Quota of 45 MW power allocated to BALCO was withdrawn on January 12, 2001 as it was no longer a public sector undertaking. Based on representation by BALCO to the GoI, the Ministry of Power on January 13, 2003 passed a specific order restoring Central Quota Power to BALCO on the terms and conditions as existed before withdrawal of power for a period of two years that is April 1, 2001 to March 31, 2003. Despite such order, MPEB/CSEB/ Power Distribution Company (“CSPDCL”) raised an electricity bill for period of September 2002 to November 2002 and unilaterally adjusted an amount of Rs.70.4 million ($ 1.3 million) on December 23, 2010 from the security deposit lying with it. BALCO has challenged this action by filing a writ petition to declare the order dated December 23, 2010 as illegal and void, since the adjustment has been done without prior notice to the company, even though the allotted quota had been restored to BALCO. CSPDCL by way of letter dated June 19, 2012 has demanded Rs.629 million ($ 11.5 million) as outstanding and BALCO was given interim relief of producing solvent security for 50% of the demand. The aforesaid interim order dated July 23, 2012 stands complied. The matter is expected to be listed in due course.

Claim against HZL for environment and health cess

HZL has filed an application before the Supreme Court in January 2012 against the judgment of the High Court of Rajasthan which held the Finance Act, 2008 imposing levy of cess on mineral as being constitutionally valid. An amount of Rs.80 per metric ton of ore produced would be attracted from the Finance Act 2008 if it is held to be valid. The Supreme Court has issued notice in the application and a notice on application for stay. Further direction has been issued on March 23, 2012 not to take any coercive action against HZL for recovery of cess. The matter is still pending and is not yet listed for hearing.

Claim against BALCO for energy development cess

The High Court of Chhattisgarh in December 2006 on a writ filed by BALCO quashed the provisions relating to imposition of energy development cess on captive power plants and directed refund of the cess already collected by the state government. The State of Chhattisgarh filed a special leave petition in the Supreme Court against the order of the High Court. The Supreme Court has issued notice and stayed the refund of the cess already collected pending the disposal of the special leave petition. The matter will be listed for further hearing.

Asarco commenced proceedings against Sterlite and Sterlite USA in the US Bankruptcy Court claiming breach of our May 2008 Agreement.

On March 17, 2010, Asarco filed a complaint in the U.S. Bankruptcy Court for the Southern District of Texas, Corpus Christi Division, against us and Sterlite USA alleging that we and Sterlite USA had breached an agreement dated May 30, 2008 (“May 2008 Agreement”) by, among other things, refusing to pay the $ 2.6 billion purchase price and refusing to assume the liabilities and contractual obligations required under the May 2008 Agreement. Asarco claimed these damages to be in the range of $ 533 million to $ 1,509 million and also claimed applicable pre-judgment interest.

Further, Asarco terminated the agreement it entered with us on March 6, 2009 (the “March 2009 Agreement”). This agreement superseded the May 2008 Agreement in its entirety. The March 2009 Agreement provided for the settlement and release of any potential claims against us arising out of the May 2008 Agreement. Asarco drew the $ 50 million provided as deposit under the March 2009 agreement. We filed an application to the U.S. Bankruptcy Court for the return of the $ 50 million which was subsequently rejected.

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The U.S. Bankruptcy Court, by its order dated February 13, 2012 and February 27, 2012 ruled that Asarco is entitled to a gross amount of $ 132.8 million in incidental damages. This amount was to be reduced by $ 50 million drawn by Asarco under the March 2009 Agreement, making Asarco entitled for a net amount of $ 82.8 million. We and Asarco have filed a notice of appeal against this judgment which is yet to be heard.

Central Excise

The Central Excise department of the GoI had issued in July 2010 an ex-parte notice for reversal of Cenvat credit of Rs. 3,150 million ($ 57.8 million) along with interest of Rs. 88 million for the non compliance of Rules 4(5a) and 4(6) of the Cenvat Credit Rules, in respect of non-return of job work challans for the period March 1, 2009 to September 30, 2009 within a stipulated time. In addition, it also alleged that we violated the Advance license conditions from 2005 to 2009. We filed four writ petitions WP No. 8123, 8135, 9744 and 9755 in 2010 in the High Court of Madras against the Central Excise department. An associated contempt petition was also filed by us. All the above petitions were heard on July 29, 2010 and the High Court of Madras in relation to WP No. 8123 remanded the matter to be heard and determined afresh by a new set of officers of the Central Excise department. The High Court of Madras granted a stay in relation to WP No. 8135 till a fresh enquiry was made. Further, the High Court of Madras disposed WP No. 9744, 9755 and the contempt petition.

The Central Excise department deputed the Assistant Commissioner of Central Excise to conduct an enquiry for the alleged non-compliance of Rules 4(5a) and 4(6) of the Cenvat Credit Rules in respect of non-return of job work challans. The Assistant Commissioner of Central Excise served a show cause notice on September 9, 2011. We filed a reply before the Assistant commissioner of Central Excise. After conducting personal hearing Assistant Commissioner of Central Excise has passed a favorable order on January 1, 2012 and dropped the demand for duty and interest. The department went into appeal before the Commissioner (Appeals) against this order, but the appeal was restricted only to the demand of interest. The Commissioner (Appeals) allowed the appeal on February 25, 2013 on the condition that interest would become applicable only in those cases where goods have not been sent back or cleared from the premises within 180 days from the date of dispatch from the Tuticorin facility. The verification is under process and not yet completed.

We have filed two writ appeals WP No. 704 and 705 of 2011 in the High Court of Madras challenging the orders passed with respect to the writ petitions 8135 and 9744 of 2010. The writ petitions were admitted on August 1, 2011 and the Court directed other party to maintain status quo. These matters came up for hearing on August 29, 2011. The matter has been adjourned for hearing for four weeks after September 12, 2011. The appeals have been adjourned from time to time and have not been listed till date. The interim order has been extended till then. However, till date, the Commissioner of Customs, Tuticorin has not served any notice on the subject matter but has referred the matter to Ministry of Law for their advice on whether department can proceed to issue a show cause notice in this situation or needs to wait for directions of the High Court of Madras. The Commissioner of Customs, Tuticorin has filed an application for impleading the customs department and the High Court of Madras has allowed the same.

Entry Tax

BALCO challenged the constitutional validity of the Chhattisgarh Sthaniya Kshetra Me Mal Ke Pravesh Par Kar Adhiniyam 1976 (Act No.52 of 1976) levying entry tax on the entry of goods brought into the State of Chhattisgarh, India from outside and other notifications, as being violative of the certain provisions of the Indian Constitution. BALCO has been paying the entry tax of Rs. 1,230 million ($ 22.6 million) to the state government of Chhattisgarh. The matter is referred to the Supreme Court. The next date of hearing is not fixed.

Vedanta Aluminium, has challenged the constitutionality of the Orissa Entry Tax Act. The Orissa High Court on February 18, 2008 held that (i) the Orissa Entry tax is not compensatory, (ii) there should not be any entry tax on goods coming into Orissa which is not manufactured in Orissa and (iii) that the Orissa Entry Tax Act is valid. Vedanta Aluminium challenged the High Court order before the Supreme Court. The Supreme Court on February 3, 2010, directed Vedanta Aluminium to deposit a sum of Rs. 35 million ($ 0.6 million) and to deposit Rs. 0.1 million per month from October 2009 till the matter is actually disposed. These amounts have been paid under protest. The Supreme Court on April 9, 2013 directed 50 % of the entry tax amount accrued until September 30, 2012 amounting to Rs.768 million ($ 14.1 million) to be deposited as entry tax.

In respect of the demand for entry tax imposed on imported goods, Sterlite Energy filed a writ in which stay was granted by the High Court of Orissa on September 12, 2007. The High Court of Orissa has on March 26, 2012 disposed the writ with a direction to Sterlite Energy to file the returns before the authority and the authority to raise demand in accordance with law and further held that Sterlite Energy is at liberty to submit before the authority why it is not liable to pay entry tax on imported goods. However, the department has raised a demand on March 26, 2012 for Rs. 727 million ($ 13.3 million) and an interest of Rs. 492 million ($ 9.0 million) for the period from August 2007 to January 2012. Sterlite Energy has filed a Special Leave Petition in the Supreme Court against the order of the High Court disposing the writ. The Supreme Court on April 4, 2012 issued notice to the state government of Orissa and stayed operation of the demand raised by the department on Sterlite Energy. Sterlite Energy has however made a deposit of Rs. 150 million ($ 2.8 million) subject to the outcome of the order of the Supreme Court. On April 29, 2013, Sterlite Energy withdrew its petition to avail other remedies, and has accordingly filed a writ petition on June 21, 2013 before the Orissa High Court along with an application for stay of the order dated March 26, 2012 demanding entry tax. The petition is currently pending.

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Certain of our subsidiaries have been named in legal actions by third party claimants and by Indian sales tax, excise and related tax authorities for additional sales tax, excise and indirect duties.

Certain of our subsidiaries have been named as parties to legal actions where the claims primarily relate to either the assessable values of sales and purchases or to incomplete documentation supporting our tax returns. The total claims on account of the disputes with sales tax, excise and related tax authorities is Rs. 10,211 million ($ 187.3 million), of which Rs. 294 million ($ 5.4 million) has been recorded as current liabilities as of March 31, 2013. The claims by third party claimants amounted to Rs. 7,133 million ($ 130.8 million) as of March 31, 2013. We have not recorded any of these claims as current liabilities.

Dividend Policy

Under Indian law, a company declares dividends (including interim dividends) upon a recommendation by its board of directors and approval by a majority of the shareholders at the annual general meeting of shareholders held within six months of the end of each fiscal year. However, while final dividends can be paid out by a company only after such dividends have been recommended by the board of directors and approved by shareholders, interim dividends can be paid out with only a recommendation by the board of directors, though such action is subject to subsequent sanction by the shareholders at the annual general meeting held within six months from the end of the fiscal year. The shareholders have the right to decrease but not to increase the dividend amount recommended by the board of directors.

Under Indian law, a company is allowed to pay dividends (including interim dividends), in excess of 10.0% of its paid-up capital in any year from profits for that year only if it transfers a specified percentage of the profits of that year to reserves. We make such transfers for any dividends we pay to general reserves.

If profits for that year are insufficient to declare dividends (including interim dividends), the dividends for that year may be declared and paid out from accumulated profits on the following conditions:

• the rate of dividend to be declared shall not exceed the average of the rates at which dividends were declared in the five years immediately preceding that year or 10.0% of our paid-up share capital, whichever is less;

• the total amount to be drawn from the accumulated profits earned in previous years and transferred to the reserves shall not exceed an amount equal to one-tenth of the sum of our paid-up share capital and net reserves, and the amount so drawn shall first be utilized to set off the losses incurred in the financial year before any dividend in respect of preference or equity share is declared; and

• the balance of the reserves after such withdrawal shall not fall below 15.0% of our paid-up share capital.

Dividends (including interim dividends) must be paid within 30 days from the date of the declaration and any dividend which remains unpaid or unclaimed after that period must be transferred within seven days to a special unpaid dividend account held at a scheduled bank. We must transfer any money which remains unpaid or unclaimed for seven years from the date of such transfer to the Investor Education and Protection Fund established by the GoI.

The tax rates imposed on us in respect of dividends paid in prior periods have varied. Currently, the effective tax rate on dividends is 16.995%, which is a direct tax paid by us. Taxes on dividends are not payable by our shareholders and are not withheld or deducted from the dividend payments set forth above. Under Section 115 O (1A) of the Finance Act, 2009, effective April 1, 2009, an Indian company, subject to certain conditions, can set off the dividend income received from its subsidiaries against the amount of dividend income declared by it to its shareholders, thereby reducing the dividend distribution tax to the extent of such set-off.

Future dividends will depend on our revenue, cash flows, financial condition (including capital position) and other factors. ADS holders will be entitled to receive dividends payable in respect of the equity shares represented by ADSs. Cash dividends in respect of the equity shares represented by your ADSs will be paid to the depositary in Indian Rupees and, except as otherwise described under the deposit agreement governing the issuance of our ADSs, will be converted by the depositary into dollars. The depositary will distribute these proceeds to you. The equity shares represented by ADSs will rank equally with all other equity shares in respect of dividends. ADS holders will bear all of the currency exchange rate risk of the conversion of any dividends from Indian Rupees to dollars, and a decline in the value of the Indian Rupee as compared to the dollar would reduce the dollar value of any dividends we pay that are received by ADS holders.

B. Significant Changes

There has been no significant subsequent event following the close of the last financial year up to the date of this annual report that are known to us and require disclosure in this annual report for which disclosure was not made in this annual report.

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ITEM 9. THE OFFER AND LISTING

A. Offer and Listing Details

Our ADSs evidenced by American Depositary Receipts, or ADRs, commenced trading on the NYSE, on June 20, 2007 at an initial offering price of $ 13.44 per ADS. The ADRs evidencing ADSs were issued by our depositary, Citibank, N.A., pursuant to a deposit agreement.

In July 2009, in connection with offering of ADS, each representing one equity share of par value Rs. 2, we issued 131,906,011 new equity shares in the form of ADSs, at a price of $ 12.15 per ADS, aggregating approximately $ 1,602.7 million. Out of 131,906,011 equity shares, 41,152,263 equity shares were issued to our parent company, Twin Star Holdings Limited, which is a wholly-owned subsidiary of Vedanta.

As of March 31, 2013, 3,361,207,534 of our equity shares were outstanding (including the 449,113,200 equity shares underlying our 112,278,300 ADSs outstanding as of such date) after giving effect to the bonus issue and share split. All our equity shares are registered shares.

We have entered into listing agreements with BSE and NSE, pursuant to which we are required to comply with certain regulations in addition to the requirements under the Companies Act 1956.

Our outstanding equity shares are currently listed and traded on the NSE and BSE. For information regarding conditions in the Indian securities markets, see “Item 3. Key Information – D. Risk Factors – Risks Relating to Investments in Indian Companies, Global Economic Conditions and International Operations.” Our equity shares were previously listed on the Calcutta Stock Exchange Association Limited and were voluntarily delisted on May 9, 2008.

The following table shows:

• the reported high and low trading prices for our ADSs on the NYSE;

• the imputed high and low trading prices for our equity shares, translated into US dollars, based on the Indian Rupee prices for such equity shares as quoted in the official list of each of the NSE and BSE and the noon buying rate of the Federal Reserve Bank of New York on the last business day of each period presented; and

• the average of the aggregate trading volume of our ADSs on the NYSE and our equity shares on the NSE and BSE, all as adjusted to reflect the five-for-two stock split on May 5, 2006.

	NYSE Price Per ADS				Average NYSE Daily ADS Trading		NSE Price Per Equity Share				Average NSE Daily Equity Share Trading		BSE Price Per Equity Share				Average BSE Daily Equity Share Trading
	High		Low		Volume		High		Low		Volume		High		Low		Volume
Fiscal Year
2009		23.00		3.12		1,227,508		23.06		3.40		2,420,215		22.24		3.39		746,960
2010		20.10		6.70		1,930,177		18.40		7.71		2,979,722		18.38		7.69		663,956
2011		19.92		12.58		1,317,081		18.72		3.38		5,627,526		18.78		3.38		1,149,373
2012(1)		16.60		6.64		1,161,246		4.28		1.64		6,479,436		4.27		1.63		994,973
2013(1)		9.06		6.42		642,788		2.26		1.59		6,169,332		2.26		1.63		664,307
2011
1st Quarter		19.92		12.58		1,664,289		18.72		3.72		3,423,256		18.78		3.70		828,882
2nd Quarter		15.79		15.49		5,638,200		3.85		3.34		3,170,237		3.83		3.34		1,830,019
3rd Quarter		17.39		16.87		3,448,100		4.18		3.58		936,820		4.18		3.59		1,024,561
4th Quarter		17.29		17.10		2,114,900		4.27		3.41		1,597,000		4.27		3.43		890,293
2012
1st Quarter		16.60		16.34		1,264,300		4.19		3.41		1,828,526		4.18		3.41		555,187
2nd Quarter		15.60		9.21		1,306,044		4.00		2.30		5,305,204		4.00		2.30		823,060
3rd Quarter		10.91		6.64		1,234,576		2.81		1.64		5,849,947		2.80		1.63		1,053,930
4th Quarter		10.84		10.65		1,370,830		2.81		1.64		10,599,907		2.81		1.67		1,563,893
2013
1st Quarter(2)		8.92		6.42		866,258		2.04		1.59		6,729,421		2.04		1.59		775,115
2nd Quarter		8.29		6.76		570,641		2.17		1.66		7,055,821		2.17		1.75		720,407
3rd Quarter		8.96		6.92		587,504		2.23		1.73		5,638,983		2.23		1.73		677,771
4th Quarter		9.06		6.64		541,025		2.26		1.65		5,221,218		2.26		1.65		481,461
Last six months(1)
January 2013		9.06		8.19		554,878		2.31		2.04		5,087,902		2.31		2.04		460,947
February 2013		8.58		7.02		515,688		2.13		1.71		5,658,468		2.13		1.71		462,952
March 2013		7.59		6.64		550,549		1.87		1.65		4,922,339		1.87		1.65		525,777
April 2013		7.23		6.07		742,336		1.81		1.55		6,847,325		1. 80		1.55		827,278
May 2013		7.44		6.54		618,575		1.77		1.60		3,075,471		1.77		1.61		360,617
June 2013		6.78		5.16		579,124		1.59		1.27		4,152,485		1.59		1.28		549,451
July 2013 (through July 19, 2013)		6.16		5.47		459,113		1.55		1.37		3,982,637		1.55		1.37		236,938

Notes:

(1) Post split and bonus, with effect from June 25, 2010.

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B. Plan of Distribution

Not applicable

C. Markets

Our ADSs are listed on the NYSE under the symbol “SLT”. Equity shares are listed on the BSE with stock code 500900 and on the NSE with stock code STER/EQ.

D. Selling Shareholders

Not applicable

E. Dilution

Not applicable

F. Expenses of the Issue

Not applicable

ITEM 10. ADDITIONAL INFORMATION

A. Share Capital

Not applicable

B. Memorandum and Articles of Association

General

We were incorporated in Kolkata, the State of West Bengal, India, as a public company on September 8, 1975 as “Rainbow Investment Limited.” Our name was subsequently changed to “Sterlite Cables Limited” on October 19, 1976 and finally to “Sterlite Industries (India) Limited” on February 28, 1986. Our company identification number is L65990TN1975PLC062634. Our registered office is presently situated in the State of Tamil Nadu at SIPCOT Industrial Complex, Madurai Bypass Road, T.V. Puram P.O., Tuticorin, State of Tamil Nadu 628 002, India.

Our register of members is maintained at our registered office.

Our activities are regulated by our Memorandum and Articles of Association. Our current Memorandum and Articles of Association were amended by a special resolution of our shareholders passed in December 2007. In addition to our Memorandum and Articles of Association, our activities are regulated by certain legislation, including the Indian Companies Act, the SCRA and the Securities Contracts (Regulation) Rules, 1957, as amended, or the SCR Rules.

Our Memorandum of Association permits us to engage in a wide variety of activities, including all of the activities that we are currently engaged in or intend to be engaged in, as well as other activities that we currently have no intention of engaging in. Our objects are set out at clause 3 of our Memorandum of Association.

Share Capital

Our authorized share capital has been increased from Rs 1,850 million (925 million equity shares of par value Rs 2 each) to Rs. 5,000 million, divided into 5,000 million equity shares of par value Rs. 1 per equity share. As of March 31, 2013 our issued share capital was Rs. 3,361.21 million, divided into 3,361,207,534 equity shares of par value Re. 1 per equity share.

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As of March 31, 2013, 3,361,207,534 equity shares, par value Re. 1 per equity share, were issued and outstanding, of which 449,113,200 equity shares were held in the form of 112,278,300 ADSs. Each ADS represents four equity share.

On October 29, 2009, we completed an offering of $ 500 million aggregate principal amount of convertible senior notes (“Convertible Notes”). The Convertible Notes are convertible into ADSs at an initial conversion price of approximately $ 23.33 per ADS, subject to adjustment in certain events. The Convertible Notes have a maturity date of October 30, 2014 and bear interest at the rate of 4.0% per annum. As of March 31, 2013, 500,000 Convertible Notes were outstanding.

Changes in Capital or our Memorandum of Association and Articles of Association

Subject to the Indian Companies Act and our Articles of Association, we may, by passing an ordinary resolution or a special resolution, as applicable, at a general meeting or through postal ballot:

• increase our authorized or paid up share capital;

• consolidate all or any part of our shares into a smaller number of shares each with a larger par value;

• split all or any part of our shares into a larger number of shares each with a smaller par value;

• convert any of our paid-up shares into stock, and reconvert any stock into any number of paid-up shares of any denomination;

• cancel shares which, at the date of passing of the resolution, have not been taken or agreed to be taken by any person, and diminish the amount of the authorized share capital by the amount of the shares so cancelled;

• reduce our issued share capital; or

• alter our Memorandum of Association or Articles of Association.

Directors

Under our Articles of Association, a director is not required to hold any qualification shares. There is no age limit requirement for the retirement of the directors.

Any director who is directly or indirectly interested in a contract or arrangement or proposed contract or arrangement entered into or to be entered into by us or on our behalf is required to disclose the nature of his interest at a meeting of the board of directors and such interested director shall not participate in any discussion of, or vote on, any contract, arrangement or proposal in which he is interested. In addition, we are prohibited from making loans, directly or indirectly, or providing any guarantee or security, directly or indirectly, in connection with any loans made by a third party, to our directors without the prior approval of the Central Government.

General Meetings of Shareholders

There are two types of general meetings of shareholders, an annual general meeting and an extraordinary general meeting. We must convene our annual general meeting within six months of the end of each financial year and must ensure that the intervening period between two annual general meetings does not exceed 15 months. The Registrar of Companies may extend this period in special circumstances at our request. Extraordinary general meetings may be convened at any time by our directors at their discretion or at the request of our shareholders holding in the aggregate not less than 10.0% of our paid-up capital. A notice in writing to convene a general meeting must set out the date, time, place and agenda of the meeting and must be provided to shareholders at least 21 days prior to the date of the proposed meeting. The requirement of the 21 days’ notice in writing may be waived if consent to shorter notice is received from all shareholders entitled to vote at the annual general meeting or, in the case of an extraordinary general meeting, from shareholders holding not less than 95.0% of our paid-up capital. General meetings are generally held at our registered office. Business may be transacted at a general meeting only when a quorum of shareholders is present. Five persons entitled to attend and to vote on the business to be transacted, each being a member or a proxy for a member or a duly authorized representative of a corporation which is a member, will constitute a quorum.

The annual general meetings deal with and dispose of all matters prescribed by our Articles of Association and by the Indian Companies Act, including the following:

• the consideration of our annual financial statements and report of our directors and auditors;

• the election of directors;

• the appointment of auditors and the fixing of their remuneration;

• the authorization of dividends; and

• the transaction of any other business of which notice has been given.

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Division of Shares

The Indian Companies Act provides that a company may sub-divide its share capital if its Articles of Association authorize the company to do so by adopting an ordinary resolution in its general meeting.

Our Articles of Association allow us in a general meeting to alter our Memorandum of Association and subdivide all or any of our equity shares into a larger number of shares with a smaller par value than originally fixed by the Memorandum of Association.

Voting Rights

Subject to any special terms as to voting on which any shares may have been issued, every shareholder entitled to vote who is present in person (including any corporation present by its duly authorized representative) shall on a show of hands have one vote and every shareholder present in person or by proxy shall on a poll have one vote for each share of which he is the holder. In the case of joint holders, only one of them may vote and in the absence of election as to who is to vote, the vote of the senior of the joint holders who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders. Seniority is determined by the order in which the names appear in the register of members.

Voting is by show of hands unless a poll is ordered by the chairman of the meeting, who is generally the chairman of our board of directors but may be another director or other person selected by our board or the shareholders present at the meeting in the absence of the chairman, or demanded by a shareholder or shareholders holding at least 10% of the voting rights or holding paid-up capital of at least Rs. 50,000 (i.e. 50,000 shares of Rs. 1 each). Upon a poll, the voting rights of each shareholder entitled to vote and present in person or by proxy shall be proportionate to the capital paid-up on each share against our total paid-up capital. In the case of a tie vote, the chairman of the meeting, who is generally the chairman of our board of directors, has the right to cast a tie-breaking vote.

A shareholder may appoint any person (whether or not a shareholder) to act as his proxy to vote on a poll at any meeting of shareholders (or of any class of shareholders) in respect of all or a particular number of the shares held by him. A shareholder may appoint more than one person to act as his proxy and each such person shall act as proxy for the shareholder for the number of shares specified in the instrument appointing the person a proxy. The instrument appointing a proxy must be delivered to our registered office at least 48 hours prior to the meeting or in case of a poll, not less than 24 hours before the time appointed for taking of the poll. If a shareholder appoints more than one person to act as his proxy, each instrument appointing a proxy shall specify the number of shares held by the shareholder for which the relevant person is appointed as his proxy. A proxy does not have a right to speak at meetings. A corporate shareholder is also entitled to nominate a representative to attend and vote on its behalf at general meetings. Such a representative is not considered a proxy and he has the same rights as the shareholder by which he was appointed to speak at a meeting and vote at a meeting in respect of the number of shares held by the shareholder, including on a show of hands and a poll.

Subject to the Articles of Association and the Companies (Issue of Share Capital with Differential Voting Rights) Rules, 2001, as amended, the Indian Companies Act allows a public company to issue shares with different rights as to dividend, voting or otherwise, provided that it has distributable profits as specified under the Indian Companies Act for a period of three financial years immediately preceding the issue of such shares and has filed its annual accounts and annual returns for the immediately preceding three years.

Quorum

Our Articles of Association provide that a quorum for a general meeting is at least five shareholders entitled to vote and present in person.

Shareholder Resolutions

An ordinary resolution requires the affirmative vote of a majority of our shareholders entitled to vote in person or by proxy at a general meeting.

A special resolution requires the affirmative vote of not less than three-fourths of our shareholders entitled to vote in person or by proxy at a general meeting and casting a vote. The Indian Companies Act provides that to amend the Articles of Association, a special resolution approving such an amendment must be passed in a general meeting. Certain amendments, including a change in the name of the company, reduction of share capital, approval of variation of rights of special classes of shares and dissolution of the company require a special resolution.

Further, the Companies (Passing of the Resolution by Postal Ballot) Rules, 2011 requires certain resolutions such as those listed below to be voted on only by a postal ballot:

• amendments of the memorandum of association to alter the objects of the company and to change the registered office of the company under Section 146 of the Indian Companies Act;

• alteration of the articles of association in relation to insertion of provisions defining private company;

• the issue of shares with differential rights with respect to voting, dividend or otherwise;

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• the sale of the whole or substantially the whole of an undertaking of the company;

• providing loans, extending guarantees or providing a security in excess of the limits prescribed under Section 372A of the Indian Companies Act;

• varying the rights of the holders of any class of shares or debentures or other securities;

• change in place of registered office outside local limits of any city, town or village as specified in sub-section (2) of section 146;

• the election of a director by minority shareholders; and

• the buy-back of shares.

Dividends

Under the Indian Companies Act, unless the board of directors recommends the payment of a dividend, the shareholders at a general meeting have no power to declare any dividend. The board of directors may also declare interim dividends that do not need to be approved by the shareholders. A company pays dividends recommended by the board of directors and approved by a majority of the shareholders at the annual general meeting of shareholders held within six months of the end of each fiscal year. The shareholders have the right to decrease but not increase the dividend amount recommended by the board of directors. Listed companies are required to declare and disclose the dividends paid on a per share basis only. The dividend recommended by the board of directors and approved by the shareholders at a general meeting is distributed and paid to shareholders in proportion to the paid up value of their equity shares. The Indian Companies Act provides that shares of a company of the same class must receive equal dividend treatment. Dividends can only be paid in cash to the registered shareholder at a record date fixed on or prior to the annual general meeting or to his order or his banker’s order. No shareholder is entitled to a dividend while any lien in respect of unpaid calls on any of such shareholder’s shares is outstanding.

These distributions and payments are required to be paid to shareholders within 30 days of the annual general meeting where the resolution for declaration of dividends is approved. The dividend so declared is required to be deposited in a separate bank account within a period of five days from the date of declaration of such dividend. All dividends unpaid or unclaimed within a period of 30 days from the date of declaration of such dividend must be transferred within seven days of the end of such period to a special unpaid dividend account held at a scheduled bank. Any dividend which remains unpaid or unclaimed for a period of seven years from the date of the transfer to a scheduled bank must be transferred to the Investor Education and Protection Fund established by the GoI and following such transfer, no claim shall lie against the company or the Investor Education and Protection Fund. Under the Indian Companies Act, dividends in respect of a fiscal year may be paid out of the profits of a company in that fiscal year or out of the undistributed profits of previous fiscal years or both, after providing for depreciation in a manner provided for in the Indian Companies Act.

Under the Indian Companies Act, we are only allowed to pay dividends in excess of 10.0% of our paid-up capital in respect of any fiscal year from our profits for that year after we have transferred to our reserves a percentage of our profits for that year ranging between 2.5% to 10.0% depending on the rate of dividend proposed to be declared in that year in accordance with the Companies (Transfer of Profits to Reserves) Rules, 1975. “Reserves” are defined in the Guidance Note on Terms Used in Financial Statements issued by the Institute of Chartered Accountants of India as the portion of earnings, receipts or other surpluses of an enterprise (whether capital or revenue) appropriated by the management for a general or specific purpose other than a provision for depreciation or diminution in the value of assets or for a known liability. The Indian Companies Act and the Companies (Declaration of Dividend out of Reserves) Rules, 1975 provide that if profits for that year are insufficient to declare dividends, the dividends for that year may be declared and paid out from our accumulated profits transferred by us to our reserves, subject to the following conditions:

• the rate of dividend to be declared shall not exceed the lesser of 10.0% of our paid-up capital or the average of the rates at which dividends were declared in the five years immediately preceding that year;

• the total amount to be drawn from the accumulated profits may not exceed 10.0% of the sum of our paid-up capital and free reserves and any amount so drawn shall first be used to set off any losses incurred in that financial year; and

• the balance of our reserves following such withdrawal shall not fall below 15.0% of our paid-up capital.

Distribution of Assets on a Winding-up

In accordance with the Indian Companies Act, all surplus assets remaining after payments are made to employees, statutory creditors, tax and revenue authorities, secured and unsecured creditors and the holders of any preference shares (though not in that order), shall be distributed among our equity shareholders in proportion to the amount paid up or credited as paid-up on such shares at the commencement of the winding-up.

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Transfer of Shares

Under the Indian Companies Act, the shares of a public company are freely transferable, unless such a transfer contravenes applicable law or the regulations issued by the SEBI or the Sick Industrial Companies (Special Provisions) Act, 1985, as amended, or the SICA. The transferor is deemed to remain the holder until the transferee’s name is entered in the register of members.

In the case of shares held in physical form, we will register any transfer of equity shares in the register of members upon lodgment of the duly completed share transfer form, the relevant share certificate, or if there is no certificate, the letter of allotment, in respect of shares to be transferred together with duly stamped share transfer forms. In respect of electronic transfers, the depositary transfers shares by entering the name of the purchaser in its register as the beneficial owner of the shares. In turn, we then enter the name of the depositary in our records as the registered owner of the shares. The beneficial owner is entitled to all the rights and benefits and is subject to the liabilities attached to the shares held by the depositary on his or her or its behalf.

Equity shares held through depositaries are transferred in the form of book entries or in electronic form in accordance with the regulations laid down by SEBI. These regulations provide the regime for the functioning of the depositaries and the participants and set out the manner in which the records are to be kept and maintained and the safeguards to be followed in this system.

SEBI requires that our equity shares for trading and settlement purposes be in book-entry form for all investors, except for transactions that are not made on a stock exchange and transactions that are not required to be reported to the stock exchange. Transfers of equity shares in book-entry form require both the seller and the purchaser of the equity shares to establish accounts with depositary participants appointed by depositaries established under the Depositories Act, 1996. Charges for opening an account with a depositary participant, transaction charges for each trade and custodian charges for securities held in each account vary depending upon the practice of each depositary participant.

The depositary transfers equity shares by entering the name of the purchaser in its books as the beneficial owner of the equity shares. In turn, we will enter the name of the depositary in our records as the registered owner of the equity shares. The beneficial owner is entitled to all the rights and benefits as well as the liabilities with respect to the equity shares that are held by the depositary. The register and index of beneficial owners maintained by our depositary is deemed to be a register and index of our members and debenture holders under the Depositories Act, 1996. Transfers of beneficial ownership held through a depositary are exempt from stamp duty. For this purpose, we have entered into an agreement for depositary services with the National Securities Depositary Limited and the Central Depositary Services India Limited.

The requirement to hold the equity shares in book-entry form will apply to the ADS holders when the equity shares are withdrawn from the depositary facility upon surrender of the ADSs. In order to trade the equity shares in the Indian market, the withdrawing ADS holder will be required to comply with the procedures described above.

Our Articles of Association provide for certain restrictions on the transfer of equity shares, including granting power to the board of directors in certain circumstances, to refuse to register or acknowledge a transfer of equity shares or other securities issued by us. Under the listing agreements with the NSE and BSE on which our equity shares are listed, in the event we have not effected the transfer of shares within one month or where we have failed to communicate to the transferee any valid objection to the transfer within the stipulated time period of one month, we are required to compensate the aggrieved party for the opportunity loss caused during the period of delay.

If a company without sufficient cause refuses to register a transfer of equity shares within two months from the date on which the instrument of transfer is delivered to the company, the transferee may appeal to the Company Law Board, or the CLB, seeking to register the transfer of equity shares. The CLB may, in its discretion, issue an interim order suspending the voting rights attached to the relevant equity shares before completing its investigation of the alleged contravention.

In addition, the Indian Companies Act provides that the CLB may direct a rectification of the register of members for a transfer of equity shares which is in contravention of SEBI regulations or the SICA or any similar law, upon an application by the company, a participant, a depositary incorporated in India, an investor or SEBI.

Under the Companies (Second Amendment) Act, 2002, it is proposed that the CLB be replaced with the National Law Tribunal with effect from a date that is yet to be notified.

Disclosure of Ownership Interest

Section 187C of the Indian Companies Act requires that beneficial owners of shares of companies who are not registered as holders of those shares must make a declaration to the company specifying the nature of his or her or its interest, particulars of the registered holder of such shares and such other particulars as may be prescribed. Any lien, charge, promissory note or other collateral agreement created, executed or entered into with respect to any equity share by its registered owner, or any hypothecation by the registered owner of any equity share, shall not be enforceable by the beneficial owner or any person claiming through the beneficial owner if such declaration is not made. Failure by a person to comply with Section 187C will not affect the company’s obligation to register a transfer of shares or to pay any dividends to the registered holder of any shares in respect of which the declaration has not been made.

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Any investor who fails to comply with these requirements may be liable for a fine of up to Rs. 1,000 for each day such failure continues. Additionally, if the company fails to comply with the provisions of Section 187C, then the company and every defaulting officer may be liable for a fine of up to Rs. 100 for each day the default continues.

Alteration of Shareholder Rights

Under Section 106 of the Indian Companies Act, and subject to the provisions of the articles of association of a company and the relevant rules as issued by the Ministry of Corporate Affairs, where the share capital of a company is divided into different classes of shares, the rights of any class of shareholders can only be altered or varied with the consent in writing of the holders of not less than three-fourths of the issued shares of that class, by a special resolution passed at a separate meeting of the holders of the issued shares of that class, or pursuant to a judicial order sanctioning a compromise or arrangement between the company and such class of shareholders.

Share Register and Record Dates

We maintain our register of members at our registered office and all transfers of shares should be notified to us at such address. Our register of members is open to inspection during business hours by shareholders without charge and by other persons upon payment of a fee as prescribed under the applicable law.

The register and index of beneficial owners maintained by a depositary under the Depositories Act, 1996 is deemed to be an index of members and register and index of debenture holders. We recognize as shareholders only those persons who appear on our register of members and we do not recognize any person holding any equity share or part thereof on trust, whether express, implied or constructive.

To determine which shareholders are entitled to specified shareholder rights, we may close the register of members. For the purpose of determining who our shareholders are, our register of members may be closed for periods not exceeding 45 days in any one year or 30 days at any one time. In order to determine our shareholders’ entitlement to dividends, it is our general practice to close the register of members for approximately 10 to 20 days before the annual general meeting. The date on which this period begins is the record date. Under the listing agreements with each of the stock exchanges on which our equity shares are listed, we may, upon giving at least seven working days’ advance notice to the stock exchange, set a record date and/or close the register of members. The trading of our equity shares and the delivery of shares certificates may continue while the register of members is closed.

Annual report

At least 21 days before an annual general meeting, we must circulate our annual report, which comprises of either a detailed or abridged version of our audited financial accounts, our directors’ report, our corporate governance report, and our auditor’s report, to the shareholders along with a notice convening the annual general meeting. In addition, we must furnish to the exchanges quarterly unaudited or audited results within 45 days after the end of each accounting quarter. We are required to furnish to the exchanges audited financial results for the entire financial year within 60 days of the end of the financial year. We are also required to send copies of our annual report to the NSE and BSE and to publish our financial results in at least one English language daily newspaper circulating in the whole or substantially the whole of India and also in a daily newspaper published in the language of the region where our registered office is situated. We are also required under the Indian Companies Act to make available upon the request of any shareholder our complete balance sheet and statement of profit and loss along with all the subsidiaries.

Under the Indian Companies Act, we must file with the Registrar of Companies our balance sheet and statement of profit and loss within 30 days of the date on which the balance sheet and statement of profit and loss were laid before the annual general meeting and our annual return within 60 days of the conclusion of that meeting.

Borrowing Powers

Our directors may raise, borrow or secure the payment of any sums of money for our purposes as they deem appropriate without the consent of a majority of the shareholders in a general meeting, provided that, the aggregate of the monies to be borrowed and the principal amount outstanding in respect of monies raised, borrowed or secured by us does not exceed the aggregate of our paid up share capital plus free reserves.

Issue of Equity Shares and Pre-emptive Rights

Subject to the provisions of the Indian Companies Act and our Articles of Association and to any special rights attaching to any of our equity shares, we may increase our share capital by the allotment or issue of new equity shares with preferred, deferred or other special rights or restrictions regarding dividends, voting, return of capital or other matters as we may from time to time determine by special resolution. We may issue preference shares that are redeemable or are liable to be redeemed at our option or the option of the holder in accordance with our Articles of Association.

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Under the Indian Companies Act, new equity shares shall first be offered to existing shareholders in proportion to the amount they have paid up on their equity shares on the record date. The offer shall be made by written notice specifying:

• the right, exercisable by the shareholders of record, to renounce the equity shares offered in favor of any other person;

• the number of equity shares offered; and

• the period of the offer, which may not be less than 15 days from the date of the offer. If the offer is not accepted, it is deemed to have been declined.

The offer is deemed to include a right exercisable by the person concerned to renounce the shares offered to him in favor of any other person. Our board of directors is permitted to distribute equity shares not accepted by existing shareholders in the manner it deems beneficial for us in accordance with our Articles of Association. Holders of ADSs may not be able to participate in any such offer.

However, under the provisions of the Indian Companies Act, new equity shares may be offered to non-shareholders, if this has been approved by a special resolution or by an ordinary resolution with the GoI’s permission.

Capitalization of Profits and Reserves

Our Articles of Association allow our directors, with the approval of our shareholders by an ordinary resolution, to capitalize any part of the amount standing to the credit of our reserve accounts or to the credit of our statement of profit and loss or otherwise available for distribution. Any sum which is capitalized shall be appropriated among our shareholders in the same proportion as if such sum had been distributed by way of dividend. This sum shall not be paid out in cash and shall be applied in the following manner:

• paying up any amount remaining unpaid on the shares held by our shareholders; or

• issuing to our shareholders, fully paid bonus equity shares (issued either at par or a premium).

Any issue of bonus equity shares would be subject to the SEBI (Disclosure and Investor Protection) Guidelines, 2000, as amended, or SEBI Guidelines, which provide that:

• no company shall, pending the conversion of convertible securities, issue any bonus equity shares unless a similar benefit is extended to the holders of such convertible securities through a reservation of equity shares in proportion to such conversion;

• the bonus issue shall be made out of free reserves built out of genuine profits or share premium collected in cash only;

• bonus equity shares cannot be issued unless all the partly paid up equity shares have been fully paid-up;

• the company has not defaulted in the payment of interest or principal in respect of fixed deposits and interest on existing debentures or principal on redemption of such debentures;

• a declaration of bonus equity shares in lieu of dividend cannot be made;

• the company shall have sufficient reason to believe that it has not defaulted in the payment of statutory dues of the employees such as contribution to provident fund, gratuity, bonus etc;

• any reserves created by a revaluation of fixed assets shall not be capitalized;

• the articles of association of the company must contain provisions for the capitalization of reserves; and

• the bonus issue must be implemented within two months from the date of approval by the board of directors.

Purchase of Own Equity Shares

A company may reduce its capital in accordance with the Indian Companies Act and the regulations issued by SEBI by way of a share buy-back out of its free reserves or securities premium account or the proceeds of any shares or other specified securities (other than the kind of shares or other specified securities proposed to be bought back) subject to certain conditions, including:

• the buy-back must be authorized by the company’s Articles of Association;

• a special resolution authorizing the buy-back must be passed in a general meeting;

• the buy-back is limited to 25.0% of the company’s total paid up capital and free reserves in a fiscal year;

• the ratio of debt owed is not more than twice the capital and free reserves after such buy-back;

• the shares or other specified securities for share buy-back are fully paid-up; and

• the buy-back is in accordance with the SEBI (Buy-Back of Securities) Regulations, 1998, as amended.

The first two conditions mentioned above would not be applicable if the number of equity shares bought back is less than 10.0% of our total paid up equity capital and free reserves and if such buy-back is authorized by the board of directors, provided that no buy-back shall be made within 365 days from the date of any previous buy-back. If such buy-back constitutes more than 10.0% of the total paid-up equity capital and free reserves of the company, it must be authorized by a special resolution of the company in general meeting. Our Articles of Association permit us to buy-back our equity shares.

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Any equity shares which have been bought back by us must be extinguished within seven days. Further, we will not be permitted to buy-back any securities for a period of one year or to issue new securities of the same kind for six months except by way of a bonus issue or in discharge of our existing obligations such as conversion of warrants, stock option schemes, sweat equity or conversion of preference shares or debentures into equity. A company is also prohibited from purchasing its own shares or specified securities through any subsidiary company including its own subsidiary companies or in the event of non-compliance with certain other provisions of the Indian Companies Act.

SEBI in its board meeting dated June 25, 2013, has introduced following amendments to SEBI (Buy Back of Securities) Regulations, 1998 governing buy-back through open market purchase:

• The company shall be required to deposit 25% of maximum amount proposed to be utilised for share buy-back in an Escrow account, before the offer is launched;

• The company shall be mandatorily required to purchase at least 50% of the offer size as against existing requirement of 25%. In case of the failure to purchase the minimum prescribed 50% of the offer size, the entire amount in the Escrow account will be forfeited, subject to maximum of 2.5% of the amount earmarked for the share buy-back;

• The company shall mandatorily complete the buy back process within 6 months from the date of the offer as against the existing time period of 12 months;

• The company shall not be allowed to raise further capital for a period of one year from the closure of buy back;

• The companies are not allowed to undertake another share buy-back within a period of one year from the closure of buy back;

• Buy-back of 15% or more of the net worth (paid-up capital and free reserves) can only be done through the tender offer method;

• During the buy-back offer, promoters of the company are prohibited from dealing in shares of the company either off-market or on-market; and

• Procedure of buy-back of physical shares (odd-lot) are simplified including creation of separate trading window for tendering such shares.

The reporting and disclosures requirement are proposed to be rationalised

ADS holders will be eligible to participate in a share buy-back in certain cases. An ADS holder may acquire equity shares by withdrawing them from the depositary facility and then selling those equity shares back to us in accordance with the provisions of applicable law as discussed above. ADS holders should note that equity shares withdrawn from the depositary facility may only be redeposited into the depositary facility under certain limited circumstances as specified under the guidelines issued by the GoI and the RBI relating to a sponsored ADS facility and fungibililty of ADSs. See “- D. Exchange Controls.”

There can be no assurance that the equity shares offered by an ADS investor in any buy-back of equity shares by us will be accepted by us. The position regarding regulatory approvals required for ADS holders to participate in a buy-back is not clear. ADS investors are advised to consult their Indian legal advisers prior to participating in any buy-back by us, including in relation to any regulatory approvals and tax issues relating to the share buy-back.

Rights of Minority Shareholders

The Indian Companies Act provides mechanisms for the protection of the rights of the minority shareholder. Where the share capital of a company is divided into different classes of shares and there has been variation in the rights attached to the shares of any class, the holders of not less than 10.0% of the issued shares of that class, who did not vote in favor of a resolution for the variation, have the right to apply to the CLB to have the variation cancelled and such variation shall not have any effect unless confirmed by the CLB.

Further, under the Indian Companies Act, shareholders holding not less than 10.0% of the issued share capital or shareholders representing not less than 10.0% of the total number of members or 100 members, whichever is lesser, provided that they have paid all calls and other sums due on their shares, have the right to apply to the CLB for an order to bring an end to the matter complained of, on the following grounds of oppression or mismanagement:

• that the company’s affairs are being conducted in a manner prejudicial to public interest or in a manner oppressive to any member or members or in a manner prejudicial to the interests of the company; or

• that a material change has taken place in the management or control of the company, whether by a change in its board of directors or management or in the ownership of the company’s shares and by reason of such change, it is likely that the affairs of the company will be conducted in a manner prejudicial to public interest or in a manner prejudicial to the interests of the company.

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Provisions on Squeeze Out of Minority Shareholders

Under the Indian Companies Act, where an arrangement or contract involving a transfer of shares or any class of shares of a company to another company has been approved by holders holding not less than 90.0% in value of such class of shares, the transferee company has the right to give notice to any dissenting shareholder, within a specified time and in a prescribed manner, that it desires to acquire its shares.

Unless the CLB, upon an application made by a dissenting shareholder within a month of the aforementioned notice, orders otherwise, the transferee company has the right to acquire the shares of the dissenting shareholder on the same terms as those offered to the other shares to be transferred under the arrangement or contract.

Where, in pursuance of any such arrangement or contract, shares in a company are transferred to another company, and those shares, together with any other shares held by the transferee company (or its nominee or subsidiary company) in the transferor company, constitute not less than 90.0% in value of the shares, the transferee company is required to give notice of such fact to any remaining shareholders within a month of such transfer. Any such remaining shareholder may within three months of the notice from the transferee company, require the transferee company to acquire its shares. Where such notice is given by such remaining shareholder, the transferee company is bound to acquire those shares on the same terms as provided for under the arrangement or contract for the transfer of the other shares of the transferor company or on such terms as may be agreed or on terms that the CLB (upon an application of either the transferee company or the shareholder) thinks fit to order.

Book-Entry Shares and Liquidity

Our equity shares are compulsorily traded in book-entry form and are available for trading under both depositary systems in India, namely, the National Securities Depository Limited and Central Depository Services (India) Limited. The International Securities Identification Number (ISIN) for our equity shares is INE 268A01031.

Liquidation Rights

According to the Indian Companies Act, certain payments have preference over payments to be made to equity shareholders. These payments having preference include payments to be made by the company to its employees, taxes, payments to secured and unsecured lenders and payments to holders of any shares entitled by their terms to preferential repayment over the equity shares. In the event of our winding-up, the holders of the equity shares are entitled to be repaid the amounts of paid up capital or credited as paid upon those equity shares after payments have been made by the company as set out above. Subject to such payments having been made by the company, any surplus assets are paid to holders of equity shares in proportion to their shareholdings.

Takeover Code and Listing Agreements

In September 2011, SEBI notified the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (the Takeover Code) which replaces the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997. Under the Takeover Code, upon acquisition of shares or voting rights in a publicly listed Indian company such that the aggregate share-holding of the acquirer is 5% or more of the shares of the company, the acquirer is required to, within two working days of such acquisition, disclose the aggregate shareholding and voting rights in the company to the company and to the stock exchanges in which the shares of the company are listed. Further, an acquirer, who, together with persons acting in concert with him, holds shares or voting rights entitling them to 5% or more of the shares or voting rights in a target company must disclose every sale or acquisition of shares representing 2% or more of the shares or voting rights of the company to the company and to the stock exchanges in which the shares of the company are listed within two working days of such acquisition or sale or receipt of disclosure of allotment of such shares. This disclosure is required, in case of a sale, even if such sale results in the shareholding of the acquirer falling below 5%. Every person, who together with persons acting in concert with him, holds shares or voting rights entitling him to exercise 25% or more of the voting rights in a target company, has to disclose to the company and to stock exchanges, their aggregate shareholding and voting rights as of March 31, in such target company within seven working days from the end of the financial year of that company.

The acquisition of shares or voting rights which entitles the acquirer to exercise 25% or more of the voting rights in or control over the target company triggers a requirement for the acquirer to make an open offer to acquire at least 26% of the total shares of the target company at an offer price determined as per the provisions of the Takeover Code. The acquirer is required to make a public announcement for an open offer on the date on which it is agreed to acquire such shares or voting rights. Such open offer shall only be for such number of shares as is required to adhere to the maximum permitted non-public shareholding.

Where the public shareholding in the target company is reduced to a level below the limit specified in the listing agreement on account of shares being acquired pursuant to an open offer, the acquirer is required to take necessary steps to facilitate compliance with the public shareholding threshold within the time prescribed in the Securities Contract (Regulation) Rules, 1957. Such an acquirer will not be eligible to make voluntary delisting offer under the SEBI (Delisting of Existing Shares) Regulations 2009, unless 12 months have elapsed from the date of the completion of offer.

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Since we are a listed company in India, the provisions of the Takeover Code will apply to us and to any person acquiring our equity shares or voting rights in our Company. The ADSs entitle ADS holders to exercise voting rights in respect of the Deposited Equity Shares (as described in the section titled “Voting Rights of Deposited Equity Shares Represented by ADSs”). Accordingly, the requirement to make an open offer of at least 26% of the shares of a company to the existing shareholders of the company would be triggered by an ADS holder where the shares that underlie the holder’s ADSs represent 25% or more of the shares or voting rights of the company. We have entered into listing agreements with BSE and NSE, on which our equity shares are listed, pursuant to which we must report to the stock exchanges any disclosures made to the company pursuant to the Takeover Code.

Voting Rights of Deposited Equity Shares Represented by ADSs

Under Indian law, voting in relation to the equity shares is by show of hands unless a poll is demanded by a member or members present in person or by proxy holding at least 10% of the total shares entitled to vote on the resolution or by those holding shares with an aggregate paid up capital of at least Rs. 50,000. A proxy (other than a body corporate represented by an authorized representative) may not vote except on a poll. As soon as practicable after receipt of notice of any general meetings or solicitation of consents or proxies of holders of shares or other deposited securities, our Depositary shall fix a record date for determining the holders entitled to give instructions for the exercise of voting rights. The Depositary shall then mail to the holders of ADSs a notice stating (i) such information as is contained in such notice of meeting and any solicitation materials, (ii) that each holder on the record date set by the Depositary will be entitled to instruct the Depositary as to the exercise of the voting rights, if any pertaining to the deposited securities represented by the ADSs evidenced by such holder’s ADRs, and (iii) the manner in which such instruction may be given, including instructions to give discretionary proxy to a person designated by us.

On receipt of the aforesaid notice from the Depositary, our ADS holders may instruct the Depositary on how to exercise the voting rights for the shares that underlie their ADSs. For such instructions to be valid, the Depositary must receive them on or before a specified date. The Depositary will try, as far as is practical, and subject to the provisions of Indian law and our Memorandum of Association and our Articles of Association, to vote or to have its agents vote in relation to the shares or other deposited securities as per our ADS holders’ instructions. The Depositary will only vote or attempt to vote as per an ADS holder’s instructions. The Depositary will not itself exercise any voting discretion. Neither the Depositary nor its agents are responsible for any failure to carry out any voting instructions, for the manner in which any vote is cast, or for the effect of any vote. There is no guarantee that our shareholders will receive voting materials in time to instruct the Depositary to vote and it is possible that ADS holders, or persons who hold their ADSs through brokers, dealers or other third parties, will not have the opportunity to exercise a right to vote.

Insider Trading Regulations

Under the SEBI (Prohibition of Insider Trading) Regulations, 1992 (Insider Trading Regulations), any person who holds more than 5% of the shares or of the voting rights in any listed company is required to disclose to the company the number of shares or voting rights held by such person and any change in shareholding or voting rights (even if such change results in the shareholding falling below 5%), exceeding 2% of the total shareholding or voting rights in the company, from the date of last disclosure made by the person. Such disclosure is required to be made within two working days of: (i) the receipt of intimation of allotment of the shares; or (ii) the acquisition or the sale of the shares or voting rights. As a result of a clarification issued by SEBI on June 22, 2009 under the SEBI (Informal Guidance) Scheme, 2003, disclosures would be required to be made by a holder of ADSs under the Insider Trading Regulations as set out above where the shares that underlie that holder’s ADSs represent 5% or more of the shares or voting rights of the company.

As per the SEBI (Prohibition of Insider Trading) (Amendment) Regulations, 2011, any person who is a promoter or part of promoter group of a listed company shall disclose to the company in the number of shares or voting rights held by such person. Further, any person who is a promoter or part of promoter group of a listed company, shall disclose to the company and the stock exchange where the securities are listed, the total number of shares or voting rights held and any change in shareholding or voting rights, if there has been a change in such holdings of such person from the last disclosure made under Listing Agreement or under the Insider Trading Regulations and the change exceeds Rs. 500,000 in value or 25,000 shares or 1% of total shareholding or voting rights, whichever is lower. Such disclosure is required to be made within two working days of becoming such promoter or person belonging to promoter group.

Comparison of Shareholders’ Rights

We are incorporated under the laws of India. The following discussion summarizes certain material differences between the rights of holders of our equity shares and the rights of holders of the common stock of a typical corporation incorporated under the laws of the State of Delaware which result from differences in governing documents and the laws of India and Delaware. The rights of holders of our ADSs differ in certain respects from those of holders of our equity shares.

This discussion does not purport to be a complete statement of the rights of holders of our equity shares under applicable law in India and our amended and restated Memorandum and Articles of Association or the rights of holders of the common stock of a typical corporation under applicable Delaware law and a typical certificate of incorporation and bylaws.

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Delaware Law	Indian Law
Annual and Special Meetings of Shareholders
Shareholders of a Delaware corporation generally do not have the right to call meetings of shareholders unless that right is granted in the certificate of incorporation or by-laws. However, if a corporation fails to hold its annual meeting within a period of 30 days after the date designated for the annual meeting, or if no date has been designated for a period of 13 months after its last annual meeting, the Delaware Court of Chancery may order a meeting to be held upon the application of a shareholder.	While shareholders of a company do not have any right to call for an annual general meeting, shareholders holding one-tenth of the voting share capital of the company have a right to request an extraordinary general meeting. However, in the event the company defaults in holding an annual general meeting within 15 months from the date of its last annual general meeting, the GoI may order a meeting to be held upon the application of any shareholder.
Quorum Requirements for Meetings of Shareholders
A Delaware corporation’s certificate of incorporation or bylaws can specify the number of shares which constitute the quorum required to conduct business at a meeting, provided that in no event shall a quorum consist of less than one-third of the shares entitled to vote at a meeting.	Our Articles of Association specify that five members personally present constitute the quorum required to conduct business at a general meeting, which is consistent with Indian law requirements.
Board of Directors
A typical certificate of incorporation and bylaws would provide that the number of directors on the board of directors will be fixed from time to time by a vote of the majority of the authorized directors. Under Delaware law, a board of directors can be divided into classes and cumulative voting in the election of directors is only permitted if expressly authorized in a corporation’s certificate of incorporation.	Our Articles of Association provide that unless otherwise determined by the shareholders at a general meeting, the number of directors shall not be less than three or more than 12. Under Indian law, the appointment and removal of directors (other than additional directors) is required to be approved by the shareholders. There is no concept under Indian law as to division of the board of directors into different classes or cumulative voting.
Removal of Directors
A typical certificate of incorporation and bylaws provide that, subject to the rights of holders of any preferred stock, directors may be removed at any time by the affirmative vote of the holders of at least a majority, or in some instances a supermajority, of the voting power of all of the then outstanding shares entitled to vote generally in the election of directors, voting together as a single class. A certificate of incorporation could also provide that such a right is only exercisable when a director is being removed for cause (removal of a director only for cause is the default rule in the case of a classified board).	Under Indian law, a director of a company, other than a director appointed by the GoI, may be removed by the affirmative vote of shareholders holding a majority of the voting share capital, provided that a special notice of the resolution to remove the director is given in accordance with the provisions of the Indian Companies Act. Under our Articles of Association, any director who has been appointed by any persons pursuant to the provisions of an agreement with us may be removed at any time by such person.

Filling Vacancies on the Board of Directors
A typical certificate of incorporation and bylaws provide that, subject to the rights of the holders of any preferred stock, any vacancy, whether arising through death, resignation, retirement, disqualification, removal, an increase in the number of directors or any other reason, may be filled by a majority vote of the remaining directors, even if such directors remaining in office constitute less than a quorum, or by the sole remaining director. Any newly elected director usually holds office for the remainder of the full term expiring at the annual meeting of stockholders at which the term of the class of directors to which the newly elected director has been elected expires.	The board of directors has the power to fill a vacancy on the board and any director so appointed shall hold office only so long as the vacating director would have held such office if no vacancy had occurred.
Interested Director Transactions
Interested director transactions are not voidable if (i) the material facts as to the interested director’s relationship or interests are disclosed or are known to the board of directors and the board in good faith authorizes the transaction by the affirmative vote of a majority of the disinterested directors, (ii) the material facts are disclosed or are known to the shareholders entitled to vote on such	Under Indian law, contracts or arrangements in which one or more directors of an Indian company has an interest are not void or voidable because of such interest, provided that certain conditions, such as obtaining the required approval of the board of directors and disclosing the nature of the interest to the board of directors, are satisfied. Subject to a

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transaction and the transaction is specifically approved in good faith by vote of the majority of shares entitled to vote on the matter or (iii) the transaction is fair as to the corporation as of the time it is authorized, approved or ratified by the board of directors, a committee or the shareholders.	few exceptions, for an interested director transaction not to be voided, (a) the interested director is required to disclose the nature of his concern or interest at a meeting of the board of directors; (b) the board of directors is required to grant its consent to the contract or arrangement; (c) the interested director is not permitted to take part in the discussion of, or vote on, the contract or arrangement; and (d) the approval of the GoI is required to be obtained in the event the paid up share capital of the company is more than Rs. 10 million. An interested director is not to be counted for the purposes of quorum at the time of any such discussion or vote and if the interested director does vote, the vote shall be void. The contravention of relevant provisions is punishable with fine.
Cumulative Voting
Delaware law does not require that a Delaware corporation provide for cumulative voting. However, the certificate of incorporation of a Delaware corporation may provide that shareholders of any class or classes or of any series may vote cumulatively either at all elections or at elections under specified circumstances.	There is no concept of cumulative voting under Indian law.
Shareholder Action Without a Meeting
Unless otherwise specified in a Delaware corporation’s certificate of incorporation, any action required or permitted to be taken by shareholders at an annual or special meeting may be taken by shareholders without a meeting, without notice and without a vote, if consents, in writing, setting forth the action, are signed by shareholders with not less than the minimum number of votes that would be necessary to authorize the action at a meeting. All consents must be dated. No consent is effective unless, within 60 days of the earliest dated consent delivered to the corporation, written consents signed by a sufficient number of holders to take the action are delivered to the corporation.	There is no concept of shareholder action without a meeting under Indian law.

Business Combinations
With certain exceptions, a merger, consolidation or sale of all or substantially all the assets of a Delaware corporation must be approved by the board of directors and a majority of the outstanding shares entitled to vote thereon.	The sale, lease or disposal of all or substantially all of the assets of an Indian company must be approved by the board of directors and shareholders holding a majority of the voting share capital of the company.
Delaware law also requires a special vote of stockholders in connection with a business combination with an “interested stockholder” as defined in Section 203 of the Delaware General Corporation Law. See “- Interested Stockholders” below.	Under the Indian Companies Act, the merger of two companies is required to be approved by a Court of competent jurisdiction and by a three-fourths majority of each class of shareholders and creditors of the company present and voting at the meetings held to approve the merger.
Interested Stockholders
Section 203 of the Delaware General Corporation Law generally prohibits a Delaware corporation from engaging in specified corporate transactions (such as mergers, stock and asset sales, and loans) with an “interested stockholder” for three years following the time that the stockholder becomes an interested stockholder. Subject to specified exceptions, an “interested stockholder” is a person or group that owns 15.0% or more of the corporation’s outstanding voting stock (including any rights to acquire stock pursuant to an option, warrant, agreement, arrangement or understanding, or upon the exercise of conversion or exchange rights, and stock with respect to which the person has voting rights only), or is an affiliate or associate of the corporation and was the owner of 15.0% or more of the voting stock at any time within the previous three years.	Indian law does not prohibit corporate transactions but does require disclosure of related party transactions in the financial statements of the company. Under applicable accounting standards in India, during the time that a related party transaction exists, a company is required to disclose the name of the related parties, describe the relationship between the parties, describe the nature of the transactions and disclose the volume of the transactions either as an amount or as an appropriate proportion, the amounts or appropriate proportions of outstanding items pertaining to related parties at the balance sheet date and provisions for doubtful debts due from such parties at that date and the amounts written off or written back in the period in respect of debts due from or to related parties.

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A Delaware corporation may elect to “opt out” of, and not be governed by, Section 203 through a provision in either its original certificate of incorporation or its bylaws, or an amendment to its original certificate or bylaws that was approved by majority stockholder vote. With a limited exception, this amendment would not become effective until 12 months following its adoption.	Transactions undertaken between a company and a person having a substantial interest in the company would qualify as a related party transaction and would be required to be disclosed under applicable accounting standards in India. Under such accounting standards, a party is considered to have a substantial interest in a company if that party owns, directly or indirectly, 20.0% or more of the voting power in the company.
Limitations on Personal Liability of Directors
A Delaware corporation may include in its certificate of incorporation provisions limiting the personal liability of its directors to the corporation or its shareholders for monetary damages for many types of breach of fiduciary duty. However, these provisions may not limit liability for any breach of the duty of loyalty, acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, the authorization of unlawful dividends, or unlawful share purchase or redemption, or any transaction from which a director derived an improper personal benefit. Moreover, these provisions would not be likely to bar claims arising under US federal securities laws.	Generally, Indian law provides that directors are not personally liable in respect of contracts of the company. However, where a director acts without the approval or ratification of the company, such director may be personally liable. Directors are also personally liable for breach of trust or misfeasance, both civilly and in some cases criminally. The Indian Companies Act contains certain provisions making directors personally liable to discharge certain monetary obligations in their capacity as directors, such as the non-refund of share application monies or excess application monies within the time limit stipulated by the Indian Companies Act. Similarly, the Indian Companies Act provides for civil liability of directors for misstatements in a prospectus issued by the company that has been signed by the directors, including the obligation to pay compensation to any persons subscribing to the shares of the company on the faith of statements made in the prospectus. Directors’ and officers’ liability insurance policies are available in India. However, the permissible coverage under such policies is subject to the same limitations as on the ability of the company to indemnify its directors as described under “- Indemnification of Directors and Officers.”
Indemnification of Directors and Officers
A Delaware corporation may indemnify a director or officer of the corporation against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred in defense of an action, suit or proceeding by reason of his or her position if (i) the director or officer acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation and (ii) with respect to any criminal action or proceeding, the director or officer had no reasonable cause to believe his or her conduct was unlawful.	Under Indian law, subject to specified exceptions, any provision, whether contained in the Articles of Association of a company or in any agreement, exempting or indemnifying any director, officer or auditor of the company against any liability in respect of any negligence, default, breach of duty or breach of trust which would by law otherwise attach to such director, officer or auditor, shall be void. However, pursuant to the exceptions permitted under Indian law, our Articles of Association provide for indemnification of any officer or agent against any liability incurred by such person in successfully defending any proceeding, whether civil or criminal, in which such person is acquitted in whole or in part on the grounds that such person had acted honestly and reasonably, or in connection with an application made by an officer or agent to the High Court of the relevant state for relief for reason that he or she has a reason to apprehend that any proceeding may be brought against him in respect of any negligence, default, breach of duty, misfeasance or breach of trust in which relief has been granted by such High Court.
Appraisal Right
A shareholder of a Delaware corporation participating in certain major corporate transactions may, under certain circumstances, be entitled to appraisal rights pursuant to which the shareholder may receive cash in the amount of the fair value of the shares held by that shareholder (as determined by a Court) in lieu of the consideration the shareholder would otherwise receive in the transaction.	There is no concept of appraisal rights under Indian law.

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Shareholder Suits
Class actions and derivative actions generally are available to the shareholders of a Delaware corporation for, among other things, breach of fiduciary duty, corporate waste and actions not taken in accordance with applicable law. In such actions, the Court has discretion to permit the winning party to recover attorneys’ fees incurred in connection with such action.	Under the Indian Companies Act, shareholders holding not less than one tenth of the issued share capital, shareholders representing not less than one tenth of the total number of members or one hundred members, provided that they have paid all calls and other sums due on their shares, have the right to request the CLB, a statutory body, for an order or injunction as to the taking or not taking of an action by the company on the following grounds of oppression or mismanagement: (a) that the company’s affairs are being conducted in a manner prejudicial to public interest, in a manner oppressive to any member or members or in a manner prejudicial to the interests of the company; and (b) that a material change has taken place in the management or control of the company, whether by a change in the board of directors or management or in the ownership of the company’s shares, and by reason of such change it is likely that the affairs of the company will be conducted in a manner prejudicial to public interest or in a manner prejudicial to the interests of the company.
Inspection of Books and Records
All shareholders of a Delaware corporation have the right, upon written demand under oath stating the purpose thereof, to inspect or obtain copies of the corporation’s shares ledger and its other books and records for any proper purpose.	Pursuant to our Articles of Association, our board of directors has the authority to determine whether and to what extent and at what times and places and under what conditions or regulations our books are open to the inspection of the shareholders. Further, no shareholder of the company has the right to inspect any record of the company except as conferred under law or authorized by the board of directors or by the shareholders in a general meeting. The books containing the minutes of the proceedings of any general meetings of the shareholders are required to be kept at the registered office of the company and such materials are to be opened for inspection by any shareholder, without charge, subject to reasonable restrictions which may be imposed by a company’s articles or the general meeting of the shareholders. If an inspection is refused, the company and every officer of the company in default will be punishable with a fine. Under Indian law, the audited financial statements for the relevant financial year, the directors’ report and the auditors’ report are required to be provided to the shareholders before the annual general meeting.
Amendment of Governing Documents
Amendments to the certificate of incorporation of a Delaware corporation require the affirmative vote of the holders of a majority of the outstanding shares entitled to vote thereon or such greater vote as is provided for in the certificate of incorporation; a provision in the certificate of incorporation requiring the vote of a greater number or proportion of the directors or of the holders of any class of shares than is required by Delaware corporate law may not be amended, altered or repealed except by such greater vote.	Under Indian Law, subject to certain specified amendments that require the additional approval of the central government, a company may make amendments to its articles with the approval of shareholders holding not less than 75.0% of the shares of the company.

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Distributions and Dividends; Repurchases and Redemptions
Delaware law permits a corporation to declare and pay dividends out of statutory surplus or, if there is no surplus, out of net profits for the fiscal year in which the dividend is declared and/or for the preceding fiscal year as long as the amount of capital of the corporation following the declaration and payment of the dividend is not less than the aggregate amount of the capital represented by the issued and outstanding stock of all classes having a preference upon the distribution of assets. Under Delaware law, any corporation may purchase or redeem its own shares, except that generally it may not purchase or redeem those shares if the capital of the corporation is impaired at the time or would become impaired as a result of the redemption. A corporation may, however, purchase or redeem capital shares that are entitled upon any distribution of its assets to a preference over another class or series of its shares if the shares are to be retired and the capital reduced.	Under Indian law, a company may only pay a dividend in an amount in excess of 10% of its paid up capital out of the profits of that year after it has transferred to the reserves of the company a percentage of its profits for that year ranging between 2.5% to 10.0% depending on the rate of dividend proposed to be declared in that year. If the profits for a year are insufficient, the dividend for that year may be declared out of the accumulated profits earned in previous years and transferred to reserves, subject to the following conditions: (i) the rate of dividend to be declared may not exceed the lesser of the average of the rates at which dividends were declared in the five years immediately preceding the year, or 10.0% of paid-up capital; (ii) the total amount to be drawn from the accumulated profits from previous years and transferred to the reserves may not exceed an amount equivalent to one tenth of the paid-up capital and free reserves and the amount so drawn is first to be used to set off the losses incurred in the financial year before any dividends in respect of preference or equity shares; and (iii) the balance of reserves after withdrawals must not be below 15.0% of paid-up capital. Shareholders have a right to claim a dividend, after such dividend has been declared by the company at a general meeting. Shareholders also have a right to claim the interim dividends, which may be declared only pursuant to a resolution of the company’s board of directors. Dividends may be paid only in cash. Where a dividend has been declared by a company but has not been paid within 30 days from the date of declaration to any shareholder entitled to the payment of such dividend, a penalty can be imposed on a director who is knowingly a party to such default.
	A company is prohibited from acquiring its own shares unless the consequent reduction of capital is effected and sanctioned by a High Court. However, pursuant to certain amendments to the Indian Companies Act, a company has been empowered to purchase its own shares or other specified securities out of its free reserves, or the securities premium account or the proceeds of any shares or other specified securities (other than the kind of shares or other specified securities proposed to be bought back), subject to certain conditions including: (a) the buy-back must be authorized by the articles of association of the company; (b) a resolution must be passed by shareholders holding not less than 75.0% of the outstanding shares in the general meeting of the company authorizing the buy-back; (c) the buy-back is limited to 25.0% of the total paid up capital and free reserves; (d) the ratio of debt owed by the company must not be more than twice the capital and free reserves after such buy-back; and (e) the buy-back must be in accordance with the SEBI (Buy-Back of Securities) Regulations, 1998.
	Conditions (a) and (b) mentioned above would not be applicable if the buy-back is for less than 10.0% of the total paid-up equity capital and free reserves of the company and such buy-back has been authorized by the board of directors of the company. Further, a company buying back its securities is not permitted to buy-back any additional securities for a period of one year after the buy-back or to issue any securities of the same kind for a period of six months.
	A company is also prohibited from purchasing its own shares or specified securities directly or indirectly.

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Comparison of Corporate Governance Standards

The listing of our ADSs on the NYSE and our equity shares on the NSE and BSE cause us to be subject to NYSE listing standards and Indian corporate governance requirements set out in the listing agreements that we have entered into with the NSE and BSE.

The NYSE listing standards applicable to us, as a foreign private issuer, are considerably different from those applicable to companies incorporated in the United States. Under the NYSE rules, we need only (i) establish an independent audit committee that has specified responsibilities as described in the following table; (ii) provide prompt certification by our chief executive officer of any material non-compliance with any corporate governance rules of the NYSE; (iii) provide periodic (annual and interim) written affirmations to the NYSE with respect to our corporate governance practices; and (iv) provide a brief description of significant differences between our corporate governance practices and those followed by US companies.

The corporate governance requirements which apply to us as a listed company on the NSE and BSE are contained in Clause 49 of the listing agreements that we have entered into with the NSE and BSE. Clause 49 has been amended from time to time.

The following table summarizes certain material differences in the corporate governance standards applicable to us under our listing agreements with the NSE and BSE and the corporate governance standards for a NYSE-listed company, both to a typical US domestic issuer and the requirements that would be different for us as a foreign private issuer.

Standard for NYSE-Listed Companies	Requirements under our Listing Agreements with the NSE and BSE
Director Independence
A majority of the board must consist of independent directors. Independence is defined by various criteria including the absence of a material relationship between the director and the listed company. For example, directors who are employees, are immediate family of an executive officer of the company or receive over $ 120,000 per year in direct compensation from the listed company are not independent. Directors who are employees of or otherwise affiliated through immediate family with the listed company’s independent auditor are also not independent. Determinations of independence were made by the board. The non-management directors must meet at regularly scheduled executive sessions without management. (The NYSE requirements for a board consisting of independent directors and non-management directors meeting at regularly scheduled executive sessions do not apply to us as a foreign private issuer.)	If the Chairman of the board of directors is an executive director, at least 50.0% of the board of directors should comprise of independent directors. If the Chairman of the board of directors is a non-executive director, then at least one third of the board should comprise of independent directors, provided that where the non-executive Chairman is a promoter of the company or is related to any promoter or person occupying a management position at the board of directors level or at one level below that, at least 50.0% of the board of directors should comprise of independent directors. Clause 49 of the listing agreements define an “independent director” to mean a non-executive director who (i) is receiving director’s remuneration and does not have any other material pecuniary relationship or transaction with the company, its promoters, its directors, its senior management or its holding company or its subsidiaries or its associates, which may affect the independence of the director; (ii) is not related to promoters or management at the board level or at one level below the board; (iii) has not been an executive of the company in the immediately preceding three financial
	years; (iv) is not a partner or an executive and has not been a partner or executive during the preceding three financial years, of the statutory audit firm or the internal audit firm or the legal firm and consulting firm of the company; (v) is not a material supplier, service provider, customer, lessee, or lessor of the company; (vi) is not a shareholder, owning 2.0% or more of the voting shares of the company; and (vii) is not less than 21 years of age.
	There is no comparable requirement under Indian law.
Audit Committee
The audit committee must (i) be comprised entirely of independent directors; (ii) be directly responsible for the appointment, compensation, retention and oversight of any registered public accounting firm engaged (including resolution of disagreements between management and the auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the listed issuer, and each such registered public accounting	The listing agreements require that the role of the audit committee should include the following: •     To oversee the company’s financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible.

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firm must report directly to the audit committee; (iii) establish procedures for the receipt, retention and treatment of complaints with respect to accounting and auditing issues; (iv) establish procedures for the confidential, anonymous submission by employees of the listed issuer of concerns regarding questionable accounting or auditing matters; (v) be authorized to engage independent counsel and other advisers it deems necessary to perform its duties; and (vi) be given sufficient funding by the board of directors to compensate the independent auditors and other advisors as well as for the payment of ordinary administrative expenses incurred by the committee that are necessary or appropriate in carrying out its duties.	•     To recommend to the board of directors the appointment and removal of the external auditor, fix the audit fee and also approve of payment to such auditor for any other services rendered by him. •     To review with management the annual financial statements before submission to the board of directors, focusing primarily on matters required to be included in the Director’s Responsibility Statement, any changes in accounting policies and practices, any major accounting entries based on exercise of judgment by management, any qualifications in the draft audit report, any significant adjustments arising out of the audit, the going concern assumption, compliance with accounting standards, compliance with stock exchange and legal requirements concerning financial statements and any related party transactions.
	•     To review with management the statement of uses or application of funds raised through an issue of securities, the statement of funds utilized for purposes other than as stated in the offer document and the report submitted by the monitoring committee agency, and to make appropriate recommendations.
	•     To review with management the performance of external and internal auditors, and the adequacy of internal control systems.
	•     To review the adequacy of the internal audit function, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit.
	•     To discuss with internal auditors any significant findings and follow-up thereon.
	•     To review the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and report the matter to the board.
	•     To discuss with external auditors before the audit commences, the nature and scope of the audit as well as to conduct post-audit discussions to ascertain any area of concern.
	•     To review the company’s quarterly financial statements and management policies.
	•     To examine the reasons for substantial defaults in payment to depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors.
	•     To review the functioning of whistle blower mechanism.
	•     To review the management’s discussion and analysis of financial condition and results of operation.
	•     To review the statement of significant related party transactions submitted by the management.
	•     To review the management letters/letters of internal control weaknesses issued by the statutory auditors.

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	•   To review the internal audit reports relating to internal control weaknesses.
	•   To review the appointment, removal and terms of remuneration of the chief internal auditor.
The audit committee must consist of at least three members, and each member must be independent within the meaning established by the NYSE and Rule 10A-3 under the Exchange Act. The audit committee members must be financially literate or become financially literate within a reasonable period of their appointment to the audit committee.	Clause 49 of the listing agreements require that a qualified and independent audit committee should be set up, which has a minimum of three members. Two-thirds of its members should be independent directors and the chairman of the audit committee should be an independent director.
Each listed company must have disclosed whether its board of directors has identified an audit committee financial expert (as defined under applicable rules of the SEC) and if not, the reasons why the board has not done so.	The listing agreements also require that all members of the audit committee should be financially literate and at least one member should have financial management and accounting expertise.
The audit committee must have a written charter that addresses the committee’s purpose and responsibilities. At a minimum, the committee’s purpose must be to assist the board in the oversight of the integrity of the company’s financial statements, the company’s compliance with legal and regulatory requirements, the independent auditor’s qualifications and independence and the performance of the company’s internal audit function and independent auditors. The duties and responsibilities of the audit committee include conducting a review of the independent auditing firm’s annual report describing the firm’s internal quality control procedures, any material issues raised by the most recent internal quality control review or peer review of the firm and any steps taken to address such issues.	In addition to the role of the audit committee described above, the audit committee is required to have powers that include the ability to investigate any activity within their terms of reference, seek information from any employee, obtain outside legal or other professional advice and secure attendance of outsiders with relevant expertise if this is considered necessary. The listing agreements require an Indian listed company to have an internal audit function. Clause 49 of the listing agreements also require that the audit committee should meet at least four times in a year and not more than four months should lapse between two meetings.
The audit committee is also to assess the auditor’s independence by reviewing all relationships between the company and its auditor. It must establish the company’s hiring guidelines for employees and former employees of the independent auditor.
The committee must also discuss the company’s annual audited financial statements and quarterly financial statements with management and the independent auditors, the company’s earnings press releases, as well as financial information and earnings guidance provided to analysts and rating agencies, and policies with respect to risk assessment and risk management.
Each listed company must have an internal audit function.
The committee must also meet separately, periodically, with management, with internal auditors (or other personnel responsible for the internal audit function) and with independent auditors and review with the independent auditor any audit problems or difficulties and management’s response.
The committee must report regularly to the board.
(The NYSE audit committee requirements apply to us as foreign private issuers are not exempt from this requirement.)
Compensation Committee
Listed companies must have a compensation committee composed entirely of independent board members as defined by the NYSE listing standards. The committee must have a written charter that addresses its purpose and responsibilities.	The listing agreements state that a company may set up a remuneration committee, which should be comprised of at least three non-executive independent directors.

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These responsibilities include (i) reviewing and approving corporate goals and objectives relevant to CEO compensation; (ii) evaluating CEO performance and compensation in light of such goals and objectives for the CEO; (iii) based on such evaluation, reviewing and approving CEO compensation levels; (iv) recommending to the board non-CEO compensation, incentive compensation plans and equity-based plans; and (v) producing a report on executive compensation as required by the SEC to be included in the company’s annual proxy statement or annual report. The committee must also conduct an annual performance self-evaluation. (The NYSE compensation committee requirements allow us, as a foreign private issuer, to follow our home country rules in this regard. We comply with our home country rules applicable to the Compensation Committee.)
Nominating/Corporate Governance Committee
Listed companies must have a nominating/corporate governance committee composed entirely of independent board members.	There is no comparable provision under Indian law.
The committee must have a written charter that addresses its purpose and responsibilities, which include (i) identifying individuals qualified to become board members; (ii) selecting, or recommending that the board select, the director nominees for the next annual meeting of shareholders; (iii) developing and recommending to the board a set of corporate governance principles applicable to the company; (iv) overseeing the evaluation of the board and management; and (v) conducting an annual performance evaluation of the committee. (The NYSE nominating/corporate governance committee requirements do not apply to us as a foreign private issuer.)
Equity-Compensation Plans
Shareholders must be given the opportunity to vote on all equity-compensation plans and material revisions thereto, with limited exceptions. (The NYSE requirement for shareholder approval of equity-compensation plans does not apply to us as a foreign private issuer.)	Under Section 79A of the Indian Companies Act, a company may issue equity shares of an existing class of shares to employees or directors at a discount or for consideration other than cash if such issue is authorized by a special resolution passed by the company in a general meeting. The SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, as amended, also require that a special resolution be passed by the shareholders of a company in a general meeting to approve an employee stock option or stock purchase scheme.
Corporate Governance Guidelines
Listed companies must adopt and disclose corporate governance guidelines. (The NYSE requirement that corporate governance guidelines be adopted does not apply to us as a foreign private issuer. However, we must disclose differences between the corporate governance standards to which we are subject and those of the NYSE.)	Corporate governance requirements for listed companies in India are included in Clause 49 of the listing agreements required to be entered into with the NSE and BSE.
Code of Business Conduct and Ethics
All listed companies, United States and foreign, must adopt and disclose a code of business conduct and ethics for directors, officers and employees, and promptly disclose any waivers of the code for directors or executive officers. (The NYSE requirement for a code of business conduct and ethics does not apply to us as a foreign private issuer.)	Clause 49 of the listing agreements require that the board of directors shall lay down a code of conduct for all board members and senior management of a listed company. This code of conduct is required to be posted on the website of the company. Further, all board members and senior management personnel are required to affirm compliance with the code on an annual basis and the company’s annual report must contain a declaration to this effect signed by its CEO.

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C. Material Contracts

The following is a summary of each of our material contracts, other than contracts entered into in the ordinary course of business, to which we are a party, for the two years immediately preceding the date of this annual report.

Representative Office Agreement—Vedanta and Sterlite

We entered into a representative office agreement with Vedanta on March 29, 2005 under which Vedanta agreed to provide technical and commercial materials to us to enable us to promote our business or raise funds overseas, and to be our non-exclusive overseas representative, for which we have agreed to pay an amount of $ 2.0 million (Rs. 109.0 million) per year to Vedanta. This agreement expired on March 31, 2013 and is in the process of being renewed.

Consultancy Agreement—Vedanta and Sterlite

We entered into a consultancy agreement with Vedanta on March 29, 2005 under which Vedanta agreed to provide strategic planning and consultancy services to us and our subsidiaries in various areas of business such that we are able to finalize and implement our plans for growth and are able to raise the necessary finances. The terms of this agreement were negotiated by us and Vedanta and we believe them to be fair and reasonable, though this agreement was not negotiated on an arm’s length basis. Under this agreement, Vedanta has agreed to make certain of its employees available to us and we have agreed to pay a service fee to Vedanta on the basis of, among other things, the amount of time spent in providing the services and associated costs, with a mark-up of 40.0%. The anticipated fee used for reference in the agreement, which is based on a relevant proportion of the expected annual budgeted costs for fiscal 2005 plus the mark-up of 40.0%, is $ 3.0 million (Rs. 163.6 million) per year. This agreement expired on March 31, 2013 and is in the process of being renewed.

Outsourcing Services Agreement—Vedanta and Sterlite

We entered into a service agreement with Vedanta on April 1, 2010, under which we shall provide accounting, treasury and related services at the request of Vedanta from time to time. In consideration of above, Vedanta has agreed to pay us service charges aggregating to an amount of $ 0.2 million (Rs. 10.9 million) per year.

Outstanding loans

See “Item 5. Operating and Financial Review and Prospects—Outstanding Loans.”

Loan Agreement dated February 15, 2011 between THL Zinc Limited and BMM

See “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Related Transactions.”

D. Exchange Controls

General

The GoI regulates ownership of Indian companies by foreigners. Foreign investment in securities issued by Indian companies is generally regulated by the FEMA, read with the rules, regulations and notifications issued under FEMA. A person resident outside India can transfer any security of an Indian company or any other security to an Indian resident only in accordance with the terms and conditions specified in FEMA and the rules, regulations and notifications made thereunder or as permitted by the RBI.

Foreign Direct Investment

The GoI, pursuant to its liberalization policy, set up the Foreign Investment Promotion Board, or FIPB, to regulate all foreign direct investment. Foreign direct investment, or FDI, means investment by way of subscription and/or purchase of shares or securities convertible or exchangeable into shares of an Indian company by a non resident investor. FDI in India can be either through the automatic route where no prior approval of any regulatory authority is required or through the government approval route. Over a period of time, the GoI has relaxed the restrictions on foreign investment. Subject to certain conditions, under current regulations, FDI in most industry sectors does not require prior approval of the FIPB or the RBI if the percentage of equity holding by all foreign investors does not exceed specified industry-specific thresholds. These conditions include certain minimum pricing requirements, compliance with the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, as amended, or the Takeover Code, and ownership restrictions based on the nature of the foreign investor. FDI is prohibited in certain sectors such as atomic energy and railways (other than Mass Rapid Transport Systems). Also, certain investments require the prior approval of the FIPB, including:

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• investments in excess of specified sectoral caps or investments in sectors in which FDI is not permitted or in sectors which specifically require approval of the FIPB;

• investments by any foreign investor who had on January 12, 2005, an existing joint venture or a technology transfer/trade mark agreement in the same field as the Indian company in which the FDI is proposed. However, no prior approval is required if: (a) the investor is a venture capital funds registered with SEBI or a multinational financial institution, or (b) the existing joint venture, investment by either of the parties is less than 3%, or (c) the existing joint venture or collaboration is now defunct or sick, or (d) for transfer of shares of an Indian company engaged in the information technology sector or in the mining sector for the same area or mineral;

• foreign investment of more than 24% in the equity capital of units manufacturing items reserved for small scale industries; and

• all proposals relating to the acquisition of shares of an Indian company by a foreign investor (including an individual of Indian nationality or origin residing outside India and corporations established and incorporated outside India) which are not under the automatic route.

The GoI amended the method of calculating foreign investment in an Indian company pursuant to Press Note No. 2 (2009 Series) dated February 13, 2009 and Press Note No. 4 (2009 Series) dated February 25, 2009.

A person residing outside India (other than a citizen of Pakistan or Bangladesh) or any entity incorporated outside India (other than an entity incorporated in Pakistan or Bangladesh and an Overseas Corporate Body as defined in FEMA) has general permission to purchase shares, convertible debentures or preference shares of an Indian company, subject to certain terms and conditions.

Currently, subject to certain exceptions, FDI and investment by Non-Resident Indians, or NRIs (as such term is defined in FEMA), in Indian companies do not require the prior approval of the FIPB or the RBI. The GoI has indicated that in all cases where FDI is allowed on an automatic basis without FIPB approval, the RBI would continue to be the primary agency for the purposes of monitoring and regulating foreign investment. The foregoing description applies only to an issuance of shares and not to a transfer of shares by Indian companies.

As per the FDI Policy that came into effect on April 10, 2012, downstream investment by an Indian company, which is owned and/or controlled by non-resident entities, into another Indian company, must be in accordance with the relevant sectoral conditions on approval route, conditionalities and caps with regard to the sectors in which the latter Indian company is operating. Such a company is under the obligation to notify the Secretariat for Industrial Assistance, Department of Industrial Policy and Promotion and the Foreign Investment promotion Board of its downstream investment within thirty days of such investment. Further, the company needs to comply with the issue, transfer, pricing and valuation of shares with the applicable SEBI and RBI guidelines. The new FDI policy also stipulates that the investing Indian company should bring in requisite funds from abroad and not leverage funds from the domestic market.

We are majorly controlled by a non-resident entity and hence all downstream investments made by us are subject to the above conditions.

Under the current regulations, in the case of mining and processing of aluminium, copper and zinc, FDI up to 100% is permitted under the automatic route, subject to the Mines and Minerals (Development and Regulation) Act, 1957.

Investment by QFIs

Qualified Foreign Investors (QFI) are permitted to invest through SEBI registered depositary participants in equity shares of listed Indian companies through SEBI registered stock brokers on recognized stock exchanges in India as well as in equity shares of Indian companies which are offered to the public in India in terms of the relevant and applicable SEBI guidelines/regulations. The individual and aggregate investment limits for the QFls is 5% and 10% respectively of the paid up capital of an Indian company.

In addition to equity shares of listed Indian companies and equity shares of Indian companies offered to the public, QFIs are also permitted to invest in the following securities through a SEBI registered depositary participant, either directly issued by the issuer or through a registered broker on recognized stock exchange in India:

a. dated government securities or treasury bills;

b. commercial papers issued by an Indian company;

c. security receipts issued by asset reconstruction companies, subject to specified limits;

d. perpetual debt instruments eligible for inclusion as Tier I capital and debt capital instruments as upper Tier II capital issued by banks in India, subject to specified limits;

e. listed and unlisted non-convertible debentures/bonds issued by an Indian company in the infrastructure sector;

f. non-convertible debentures / bonds issued by infrastructure finance companies; and

g. rupee denominated bonds/units issued by infrastructure debt funds.

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A QFI has been defined by the SEBI as a non-resident investor (other than SEBI registered Foreign Institutional Investors and SEBI registered Foreign Venture Capital Investor) who meets the requirements of SEBI for the purpose of making investments in accordance with the regulations/orders/circulars of RBI/SEBI.

QFls are also permitted to acquire equity shares by way of right shares, bonus shares or equity shares on account of stock split / consolidation or equity shares on account of amalgamation, demerger or such corporate actions subject to the prescribed investment limits. QFIs are allowed to sell the equity shares so acquired through SEBI registered stock brokers or pursuant to the relevant SEBI guidelines such as in an open offer under the Takeover Code or in a buy back.

Dividend payments on equity shares held by QFls can either be directly remitted to the designated overseas bank accounts of the QFIs or credited to the single non-interest bearing rupee bank account. In case dividend payments are credited to the single non-interest bearing rupee bank account they shall be remitted to the designated overseas bank accounts of the QFIs within five working days (including the day of credit of such funds to the single non-interest bearing rupee bank account). Within these five working days, the dividend payments can be also utilized for fresh purchases of equity shares under this scheme, if so instructed by the QFI.

SEBI in its board meeting dated June 25, 2013, decided to introduce uniform entry norms for existing foreign institutional investors, sub accounts and QFIs and to classiy them into a new investor class to be termed as “Foreign Portfolio Investors” (FPIs).

Issue of ADSs

The Ministry of Finance, pursuant to the Issue of Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Receipt Mechanism) Scheme, 1993, as amended, or the ADR Scheme, has permitted Indian companies to issue ADSs. Certain relaxations in the ADR Scheme have also been notified by the RBI. The ADR Scheme provides that an Indian company may issue ADSs to a person resident outside India through a depositary without obtaining any prior approval of the Ministry of Finance of India or the RBI, except in certain cases. An Indian company issuing ADSs must comply with certain reporting requirements specified by the RBI. An Indian company may issue ADSs if it is eligible to issue shares to persons resident outside India under the FDI scheme. Similarly, an Indian company which is not eligible to raise funds from the Indian capital markets, including a company which has been restricted from accessing the securities market by the SEBI, will not be eligible to issue ADSs.

Investors do not need to seek specific approval from the Government of India to purchase, hold or dispose of ADSs. However, overseas corporate bodies, or OCBs, as defined under applicable RBI regulations, which are not eligible to invest in India and entities, prohibited to buy, sell or deal in securities by the SEBI are not eligible to subscribe to ADSs issued by Indian companies. We have obtained approval from the relevant Indian stock exchanges for listing of the equity shares underlying the ADSs.

The proceeds of an ADS issue may not be used for investment in stock markets and real estate. There are no other end-use restrictions on the use of the proceeds of an ADS issue. Further, issue-related expenses for an issue of ADSs shall be subject to a ceiling of 7.0% of the total issue size. Issue-related expenses beyond this ceiling would require the RBI approval.

Restrictions on Redemption of ADSs, Sale of the Equity Shares Underlying the ADSs and the Repatriation of Sale Proceeds

Other than mutual funds that may purchase ADSs subject to terms and conditions specified by the RBI and employees in connection with stock options, a person resident in India is not permitted to hold ADSs of an Indian company. Under Indian law, ADSs issued by Indian companies to non-residents have free transferability outside of India. Under the ADR Scheme, a non-resident holder of the ADSs may transfer such ADSs, or request that the overseas depositary bank redeem such ADSs. A non-resident holder of ADS can transfer or redeem the ADS into underlying equity shares of the company subject to the procedure specified under the ADR Scheme. In the case of a redemption, the overseas depositary bank will request the domestic custodian bank to release the corresponding underlying shares in favor of the non-resident investor for being sold directly on behalf of the non- resident investor, or being transferred in the books of account of the company in the name of the non-resident.

The re-issuance of ADS is subject to availability of head room which is equivalent to the difference between the number of ADS originally issued and the number of ADS outstanding, as further adjusted for ADS redeemed into underlying shares and registered in the name of the non-resident investor. Accordingly, shares which are registered in the name of the non-resident investor post-redemption will not be eligible for participation under the limited two way fungibility scheme.

Foreign investors holding ADS or equity shares equal to or more than 15.0% of the company’s total equity capital/ voting rights may be required to make a public announcement of offer to the remaining shareholders of the company under the Takeover Code, when further acquisition of shares or ADS above 15.0% by the foreign investor exceeds the limits specified under the Takeover Code.

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Investors who seek to sell any equity shares in India withdrawn from the depositary facility and to convert the Rupee proceeds from the sale into foreign currency and repatriate the foreign currency from India will also be subject to certain exchange control restrictions on the conversion of Rupees into dollars. The GoI has relaxed restrictions on capital account transactions by resident Indians who are now permitted to remit up to $ 200,000 per financial year (April-March) for any permissible capital account transaction or a combination of capital account and current account transaction other than remittances made directly or indirectly to Bhutan, Nepal, Mauritius or Pakistan or to countries identified by the Financial Action Task Force as “non co-operative countries and territories.”

Fungibility of ADSs

As per the directions issued by the Ministry of Finance in coordination with RBI on the two-way fungibility of ADSs, an ADS holder who has redeemed the ADS into underlying equity shares and has sold it in the Indian Market is permitted to purchase to that extent, through a registered stock broker in India, shares of an Indian company for the purposes of converting the same into ADSs, subject, inter alia, to the following conditions:

• the shares of the Indian company are purchased on a recognized stock exchange in India;

• the shares of the Indian company are purchased on a recognized stock exchange with the permission of the domestic custodian for the ADSs issued by the Indian company and such shares are deposited with the custodian after purchase;

• the custodian agreement is amended to enable the custodian to accept shares from entities other than the company;

• the number of shares of the Indian company so purchased does not exceed the head room which is equivalent to the difference between numbers of ADS originally issued and number of ADS outstanding, as further adjusted for ADS redeemed into underlying shares and registered in the name of the non-resident investor (and is further subject to specified sectoral caps); and

• compliance with the provisions of the ADR Scheme and the guidelines issued thereunder.

Further, the amendment to the regulations permit an issuer in India to sponsor the issue of ADSs through an overseas depositary against underlying equity shares accepted from holders of its equity shares in India for offering outside of India. The sponsored issue of ADSs is possible only if the following conditions are satisfied:

• the price of the offering is determined by the lead manager of the offering. The price shall not be less than the average of the weekly high and low prices of the shares of the company during the 2 weeks preceding the relevant date (i.e. the date on which the board of directors of the company decides to open the issue);

• the ADS offering is approved by the Foreign Investment Promotion Board;

• the ADS offering is approved by a special resolution of the shareholders of the issuer in a general meeting;

• the facility is made available to all the equity shareholders of the issuer;

• the proceeds of the offering are repatriated into India within one month of the closing of the offering;

• the sales of the existing equity shares are made in compliance with the foreign direct investment policy in India;

• the number of shares offered by selling shareholders are subject to limits in proportion to the existing holdings of the selling shareholders when the offer is oversubscribed; and

• the offering expenses do not exceed 7% of the offering proceeds and are paid by shareholders on a pro-rata basis.

The issuer is also required to furnish a report to the RBI specifying the details of the offering, including the amount raised through the offering, the number of ADSs issued, the underlying shares offered and the percentage of equity in the issuer represented by the ADSs.

Corporate Actions

The ADS holders are entitled to receive the benefits of corporate actions such as bonus, split and dividend in proportion to the number of equity shares represented by the ADS. The benefits are subject to the terms and conditions of the FEMA regulations and the offer documents of ADS issue.

Buyback of ADS

Shares issued under the ADR Scheme represented by the ADS, are eligible for participation in a buy back scheme, if any, announced by us. In the event that we decide to implement the buy back scheme for ADS holders, the option form for the buy back scheme will be distributed to the ADS custodian who will submit the same to the overseas depository. ADS holders who wish to participate in the buy back scheme may exercise the buy back option by converting the ADS into ordinary equity shares and surrendering those shares to the company under the buyback scheme.

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FCCBs

Eligibility

Foreign Currency Convertible Bonds, or FCCBs, are convertible bonds issued by an Indian company expressed in foreign currency (such as US dollar), the principal and interest in respect of which is payable in foreign currency. FCCBs are required to be issued in accordance with the ADR and FCCB Scheme and subscribed by a non-resident in foreign currency and are convertible into equity shares of the issuing Indian company. The External Commercial Borrowing Guidelines, or ECB Guidelines, apply to FCCBs. The provisions of the Foreign Exchange Management (Transfer or Issue of any Foreign Security) Regulations 2000, as amended, are also applicable to FCCBs and the issue of FCCBs must adhere to such provisions.

Automatic Route

Under the terms of the ADR and FCCB Schemes and the Foreign Exchange Management (Transfer or Issue of any Foreign Security) Regulations 2000, as amended, read together with the ECB Guidelines, Indian companies are permitted to issue FCCBs under the automatic route in the manner set forth therein, subject to certain conditions specified therein, including:

• the issue of FCCBs are subject to the FDI sectoral caps prescribed by the Ministry of Finance;

• a public issue of FCCBs is to be made through reputable lead managers;

• FCCBs cannot be issued with attached warrants;

• issue-related expenses shall not exceed 4.0% of the issue size; and

• FCCBs issued under the automatic approval route to meet Indian Rupee expenditure are required to be hedged unless there is a natural hedge in the form of uncovered foreign exchange receivables.

The FCCBs issued by us would be convertible into ADS subject to the terms and conditions of FEMA guidelines and the offering circular or issue prospectus of the FCCB. Upon receipt of the conversion notice from FCCB holders, the equity shares in the applicable ADS would be issued to the custodian based on which the holders of FCCB will obtain their allotted proportion of ADS. We have obtained in-principle approval from the NSE and BSE, where our equity shares are currently listed, and prior to allotment of the FCCBs, for listing the shares which will be issued upon conversion of the FCCBs into ADS. We are required to apply for and obtain the approval for listing and trading of the equity shares underlying the FCCBs after the completion of the allotment of the equity shares. Upon receipt of listing and trading approvals, the equity shares issued on conversion are expected to be listed on the NSE and the BSE and will be tradable on such stock exchanges once listed thereon, which is expected to occur within 45 days after the relevant conversion date unless we state otherwise.

Pricing of FCCB Issue

Pursuant to a circular dated November 27, 2008 issued by the Ministry of Finance, the pricing guidelines set forth in the ADS and FCCB Schemes have been amended. Pursuant to the circular, the issue price of FCCB and ADS should be not less than the average of the weekly high and low of the closing prices of the related shares quoted on the stock exchange during the two weeks preceding the “relevant date”, where the “relevant date” means the date of the meeting on which our Board of Directors or the Committee of Directors duly authorized by the Board of Directors decides to issue the FCCB or ADS.

Regulatory Filings

We are required to make the following filings in connection with the issuance of FCCBs and upon conversion of the FCCBs into equity shares:

• filing Form No. 83 with RBI through an authorised dealer;

• filing of information with RBI subsequent to the issuance of FCCBs which would include: the total amount of FCCBs issued, the names of the investors resident outside India and the number of FCCBs issued to each of them, and the amount repatriated to India through normal banking channels duly supported by Foreign Inward Remittance Certificates;

• filing of the return of allotment with the Registrar of Companies, Goa, Daman and Diu, at the time of conversion of the FCCBs into equity shares;

• on conversion of the FCCBs into equity shares, the filing of information with the Regional Office of the RBI in the prescribed Form FC-GPR, and to the Department of Statistics and Information Management, RBI within 7 days of the month to which it relates, in Form No. ECB-2; and

• monthly filing of Form No. ECB-2 with RBI through an authorised dealer.

Buy Back of FCCBs

In July 2012, RBI permitted buy back of FCCBs by Indian companies prior to the maturity date of such FCCB, after satisfying certain conditions under the approval route. The entire process of such buy back is required to be completed by December 31, 2013, after which the scheme lapses.

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Restrictions on equity shares underlying the ADSs issued arising on conversion of FCCB’s and the repatriation of Sale Proceeds

FCCB holders who have converted the FCCBs into ADS in accordance with the provisions of the offering circular are entitled to the same rights and subject to the same conditions as normal ADS holders and may withdraw the equity shares underlying ADS from the depositary at any time. A non- resident holder of ADS can transfer or redeem the ADS into underlying equity shares of the company subject to the procedure specified under the ADR Scheme. In the case of redemption, the overseas depositary bank will request for the domestic custodian bank to release the corresponding underlying shares in favor of the non-resident investor, for being sold directly on behalf of the non- resident investor, or for being transferred in the books of account of the company in the name of the non-resident.

Foreign investors who elect to convert FCCB into ADS would be required to make a public announcement of offer to remaining shareholders of the company under the Takeover Code if the conversion results in their direct or indirect holding in the company equivalent to or in excess of 15.0% of the company’s total equity capital or voting rights.

Investment by Foreign Institutional Investors

Pension funds, mutual funds, investment trusts, insurance or reinsurance companies, international or multinational organizations or agencies thereof, foreign governmental agencies, sovereign wealth funds or foreign central banks, endowment funds, university funds, foundation or charitable trusts or charitable societies investing on their own behalf and asset management companies, investment managers or advisors, banks or institutional portfolio managers, trustees, investing their proprietary funds or on behalf of “broad based” funds must register with SEBI as a foreign institutional investor, or FII, and obtain the approval of the RBI unless they are investing in securities of Indian companies through FDI.

FIIs who are registered with SEBI are required to comply with the provisions of the SEBI (Foreign Institutional Investors) Regulations, 1995, as amended, or the Foreign Institutional Investors Regulations. A registered FII may, subject to the pricing and ownership restrictions discussed below, buy and freely sell securities issued by any Indian company, realize capital gains on investments made through the initial amount invested in India, subscribe to or renounce rights offerings for shares, appoint a domestic custodian for custody of investments made and repatriate the capital, capital gains, dividends, income received by way of interest and any compensation received towards sale or renunciation of rights offerings of shares.

Subject to the terms and conditions set out in the Foreign Institutional Investor Regulations, a registered FII or its sub-account may buy or sell equity shares, debentures and warrants of unlisted, listed or to be listed Indian companies through stock exchanges in India at ruling market price and also buy or sell shares or debentures of listed or unlisted companies other than on a stock exchange in compliance with the applicable SEBI/RBI pricing norms. Under the portfolio investment scheme under Schedule 2 to the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000 and the Foreign Institutional Investors Regulations, an FII is not permitted to hold more than 10.0% of the total issued capital of an Indian company in its own name; a foreign corporate or individual sub-account of the FII is not permitted to hold more than 5.0% of the total issued capital of an Indian company, and a broad based sub-account is not permitted to hold more than 10.0% of the total issued capital of an Indian company. The total holding of all FIIs together with their sub-accounts in an Indian company is subject to a cap of 24.0% of the total issued capital of the company, which may be increased up to the percentage of sectoral cap on FDI in respect of the said company pursuant to a resolution of the board of directors of the company and the approval of the shareholders of the company by a special resolution in a general meeting. Our board of directors and shareholders have approved an increase in the existing FII limit in our company to 49.0% of our total issued capital.

Regulation 15A of the Foreign Institutional Investors Regulations provides that an FII may issue or otherwise deal in offshore derivative instruments such as participatory notes, equity linked notes or any other similar instruments against underlying securities, listed or proposed to be listed on any stock exchange in India, only in favor of those entities which are regulated by any regulatory authority in the countries of their incorporation or establishment, subject to compliance with “know your client” requirements.

SEBI has clarified that certain categories of entities would be deemed to be regulated entities for purposes of Regulation 15A of the Foreign Institutional Investors Regulations. An FII is also required to ensure that no further issue or transfer of any offshore derivative instrument is made to any person other than a person regulated by an appropriate foreign regulatory authority.

There is uncertainty under Indian law about the tax regime applicable to FIIs that hold and trade ADSs. FIIs are urged to consult with their Indian legal and tax advisors about the relationship between the FII guidelines and ADSs and any equity shares withdrawn upon surrender of ADSs.

Portfolio Investment by Non-Resident Indians

A variety of methods for investing in shares of Indian companies are available to NRIs. Under the portfolio investment scheme, each NRI can purchase up to 5.0% of the paid-up share capital of an Indian company, subject to the condition that the aggregate paid-up share capital of an Indian company purchased by all NRIs through portfolio investments cannot exceed 10.0%. The 10.0% limit may be raised to 24.0% if a special resolution is adopted by the shareholders of the company. In addition to portfolio investments in Indian companies, NRIs may also make foreign direct investments in Indian companies under the FDI route discussed above. These methods allow NRIs to make portfolio investments in shares and other securities of Indian companies on a basis not generally available to other foreign investors.

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Overseas corporate bodies controlled by NRIs, or OCBs, were previously permitted to invest on more favorable terms under the portfolio investment scheme. The RBI no longer recognizes OCBs as an eligible class of investment vehicle under various routes and schemes under the foreign exchange regulations.

Transfer of Shares

Previously the sale of shares of an Indian company from a non-resident to a resident required RBI approval, unless the sale was made on a stock exchange through a registered stockbroker at the market price. The RBI has now granted general permission to persons resident outside India to transfer shares and convertible debentures held by them to an Indian resident, subject to compliance with certain terms and conditions and reporting requirements. A resident who wishes to purchase shares from a non-resident must, pursuant to the relevant notice requirements, file a declaration with an authorized dealer in the prescribed Form FC-TRS, together with the relevant documents and file an acknowledgment thereof with the Indian company to effect transfer of the shares. However, a non-resident to whom the shares are being transferred is required to obtain the prior permission of the GoI to acquire the shares if he had on January 12, 2005, an existing joint venture or technology transfer agreement or trademark agreement in the same field other than in the information technology field to that in which the Indian company whose shares are being transferred is engaged, except:

• investments to be made by venture capital funds registered with SEBI or a multinational financial institution;

• where the existing joint venture investment by either of the parties is less than 3.0%;

• where the existing venture/collaboration is defunct or sick; or

• for transfer of shares of an Indian company engaged in the information technology sector or in the mining sector for the same area or mineral.

A non-resident may also transfer any security to a person resident in India by way of gift. The transfer of shares from an Indian resident to a non-resident does not require the prior approval of the GoI or the RBI if the activities of the investee company are under the automatic route pursuant to the FDI Policy and are not under the financial services sector, the investor does not have an existing joint venture or technology transfer agreement or trademark agreement in the same field as described above, the non-resident shareholding is within sector limits under the FDI policy, the transaction is not under the Takeover Code and the pricing is in accordance with the guidelines prescribed by SEBI and the RBI.

A non-resident of India is generally permitted to sell equity shares underlying the ADSs held by him to any other non-resident of India without the prior approval of the RBI. However, approval by the FIPB is required if the person acquiring the shares has a previous venture or tie up in India in the same field in which the company whose shares are being transferred is engaged. Further, the RBI has granted general permission for the transfer of shares by a person resident outside India to a person resident in India, subject to compliance with certain pricing norms and reporting requirements.

Other than mutual funds that may purchase ADSs subject to terms and conditions specified by the RBI and employees in connection with stock options, a person resident in India is not permitted to hold ADSs of an Indian company. An ADS holder is permitted to surrender the ADSs held by him in an Indian company and to receive the underlying equity shares under the terms of the deposit agreement.

Exchange Rates

Substantially all of our revenue is denominated or paid with reference to US dollars and most of our expenses are incurred and paid in Indian Rupees or Australian dollars. We report our financial results in Indian Rupees. The exchange rates among the Indian Rupee, the Australian dollar and the US dollar have changed substantially in recent years and may fluctuate substantially in the future. The results of our operations are affected as the Indian Rupee and the Australian dollar appreciate or depreciate against the dollar and, as a result, any such appreciation or depreciation will likely affect the market price of our ADSs in the United States.

Since our acquisition of the Zinc International companies, our transactions are also in Namibia Dollars and South African Rand currencies, and accordingly data relating to those currencies have been presented from 2011.

The following table sets forth, for the periods indicated, information concerning the exchange rates between Indian Rupees and US dollars based on the rates quoted on Federal Reserve Bank of New York:

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	Period End(1)		Average(1)(2)		High		Low
Fiscal Year:
2008		40.02		40.13		43.05		38.48
2009		50.87		45.84		51.96		39.73
2010		44.95		47.39		50.48		44.94
2011		44.54		45.50		47.49		44.05
2012		50.89		48.01		53.71		44.00
2013		54.52		54.47		57.13		50.64
Month:
November 2012		54.26		54.78		55.70		53.75
December 2012		54.86		54.65		55.06		54.23
January 2013		53.32		54.23		55.20		53.21
February 2013		54.37		53.81		54.47		52.99
March 2013		54.52		54.42		54.92		54.06
April 2013		53.68		54.32		54.91		53.68
May 2013		56.50		54.98		56.50		53.65
June 2013		59.52		58.38		60.70		56.43
July 2013 (through July 19, 2013)		59.37		59.80		60.75		59.29

Notes:

(1) The exchange rates quoted by Federal Reserve Bank of New York at each period end and the average rate for each period may have differed from the exchange rates used in the preparation of financial statements included elsewhere in this annual report.

(2) Represents the average of the exchange rates quoted on Federal Reserve Bank of New York on the last day of each month during the period for all fiscal years presented and the average of the exchange rates quoted on Federal Reserve Bank of New York for all days during the period for all months presented.

The following table sets forth, for the periods indicated, information concerning the exchange rates between the Australian dollar and US dollars based on the Federal Reserve Bank of New York:

	Period  End(1)		Average(1)(2)		High		Low
Fiscal Year:
2008		1.10		1.15		1.27		1.06
2009		1.44		1.31		1.65		1.02
2010		1.09		1.18		1.44		1.07
2011		0.97		1.06		1.22		0.97
2012		0.96		0.95		1.06		0.91
2013		0.96		0.97		1.03		0.94
Month:
November 2012		0.96		0.96		0.97		0.96
December 2012		0.96		0.96		0.97		0.95
January 2013		0.96		0.95		0.96		0.95
February 2013		0.98		0.97		0.98		0.96
March 2013		0.96		0.97		0.98		0.95
April 2013		0.96		0.96		0.98		0.95
May 2013		1.04		1.01		1.04		0.97
June 2013		1.09		1.06		1.09		1.02
July 2013 (through July 19, 2013)		1.11		1.10		1.11		1.08

Notes:

(1) The exchange rates quoted on Federal Reserve Bank of New York at each period end and the average rate for each period may have differed from the exchange rates used in the preparation of financial statements included elsewhere in this annual report.

(2) Represents the average of the exchange rates quoted on Federal Reserve Bank of New York on the last day of each month during the period for all fiscal years presented and the average of the exchange rates quoted on Federal Reserve Bank of New York for all days during the period for all months presented.

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The following table sets forth, for the periods indicated, information concerning the exchange rates between the South African Rand and US dollars based on the Federal Reserve Bank of New York:

	Period  End(1)		Average(1)(2)		High		Low
Fiscal Year:
2011		6.77		7.15		7.98		6.61
2012		7.66		7.41		8.55		6.57
2013		9.18		8.55		9.32		7.63
Month:
November 2012		8.85		8.81		8.97		8.64
December 2012		8.48		8.60		8.80		8.48
January 2013		8.84		8.80		9.13		8.49
February 2013		9.07		8.89		9.07		8.80
March 2013		9.18		9.20		9.32		9.06
April 2013		9.02		9.09		9.25		8.90
May 2013		10.07		9.37		10.07		8.93
June 2013		9.88		10.00		10.24		9.76
July 2013 (through July 19, 2013)		9.86		9.98		10.20		9.85

Notes:

(1) The exchange rates quoted on Federal Reserve Bank of New York at each period end and the average rate for each period may have differed from the exchange rates used in the preparation of financial statements included elsewhere in this annual report.

(2) Represents the average of the exchange rates quoted on Federal Reserve Bank of New York on the last day of each month during the period for all fiscal years presented and the average of the exchange rates quoted on Federal Reserve Bank of New York for all days during the period for all months presented.

The following table sets forth, for the periods indicated, information concerning the exchange rates between the Namibian dollar and US dollars based on Oanda.com:

	Period  End(1)		Average(1)(2)		High		Low
Fiscal Year:
2011		6.84		7.17		7.95		6.62
2012		7.73		7.46		8.58		6.59
2013		9.24		8.55		9.32		7.66
Month:
November 2012		8.81		8.79		8.94		8.66
December 2012		8.47		8.65		8.87		8.47
January 2013		9.04		8.76		9.07		8.47
February 2013		8.84		8.88		8.99		8.81
March 2013		9.24		9.17		9.32		8.89
April 2013		9.08		9.11		9.24		8.90
May 2013		9.90		9.29		9.80		8.91
June 2013		9.88		10.02		10.23		9.79
July 2013 (through July 19, 2013)		9.87		10.01		10.21		9.86

Notes:

(1) The exchange rates quoted on oanda.com at each period end and the average rate for each period may have differed from the exchange rates used in the preparation of financial statements included elsewhere in this annual report.

(2) Represents the average of the exchange rates quoted on oanda.com on the last day of each month during the period for all fiscal years presented and the average of the exchange rates quoted on oanda.com for all days during the period for all months presented.

Although we have translated selected Indian Rupee, Australian dollar amounts and South African Rand and Namibian dollars in this annual report into US dollars for convenience, this does not mean, and no representation is made, that the Indian Rupee or Australian dollar amounts referred to represent US dollar amounts or have been, could have been or could be converted to US dollars at any particular rate, the rates stated above, or at all. Unless otherwise stated herein, all translations in this annual report from Indian Rupees to US dollars are based on the exchange rate quoted by the Federal Reserve Bank of New York on March 31, 2013, which was Rs. 54.52 per $ 1.00, all translations from Australian dollars to US dollars are based on the exchange

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rate quoted by the Federal Reserve Bank of New York on March 31, 2013, which was AUD 1.04 per $ 1.00, all translations from South African Rand to US dollars are based on the exchange rate quoted by the Federal Reserve Bank of New York on March 31, 2013, which was ZAR 9.18 per $ 1.00 and all translations from Namibian dollars to US dollars are based on the exchange rate quoted by Oanda (data available at www.oanda.com) on March 31, 2013, which was NAD 9.00 per $ 1.00. As of July 19, 2013, the exchange rate between US dollars and Indian Rupees was $ 1.00 = Rs. 59.37 as quoted by the Federal Reserve Bank of New York.

E. Taxation

India Taxation

The following is a summary of the material Indian income tax, wealth tax, stamp duty and estate duty consequences of the purchase, ownership and disposal of the ADSs and the equity shares underlying the ADSs for non-resident investors of the ADSs. The summary only addresses the tax consequences for non-resident investors who hold the ADSs or the equity shares underlying the ADSs as capital assets and does not address the tax consequences which may be relevant to other classes of non-resident investors, including dealers. The summary proceeds on the basis that the investor continues to remain a non-resident when the income by way of dividends and capital gains are earned. The summary is based on Indian tax laws and relevant interpretations thereof as are in force as of the date of this annual report, including the Income Tax Act and the special tax regimes under Sections 115AC and 115ACA of the Income Tax Act read with the Issue of Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Receipt Mechanism) Scheme, 1993, as amended, which provides for the taxation of persons resident in India on their global income and persons not resident in India on income received, accruing or arising in India or deemed to have been received, accrued or arisen in India, and is subject to change.

The Finance Act 2012 includes General Anti Avoidance Rule (GAAR), wherein the tax authority may declare an arrangement as an impermissible avoidance arrangement if an arrangement is not entered at arm’s length, results in misuse/ abuse of provisions of Income Tax Act, 1961 lacks commercial substance or the purpose of arrangement is obtaining a tax benefit. The procedural and administrative mechanism for the implementation of GAAR is still being finalized. If any of our transactions are found to be ‘impermissible avoidance arrangements’ under GAAR, our business may be affected.

The GAAR was originally proposed to become effective on April 1, 2013. Based on the recommendation of a panel which was formed to study proposed GAAR, the GAAR provisions are now proposed to be effective from April 1, 2016.

The Finance Act 2012 has changes in the field of international taxation covering income deemed to accrue or arise in India, sanctity of double taxation avoidance agreements, tax residency certificates for claiming relief under the double taxation avoidance agreements. Certain provisions in international taxation like income deemed to accrue or arise in India are applicable from retrospective effect.

This summary does not take into account the impact of proposals contained in the draft new Direct Tax Code which has been circulated to the India Government for public debate and the subsequent revised discussion paper. Parliamentary Standing Committee has submitted its report to the Government on amendments proposed to the Direct Taxes Code. The Direct Taxes Code is yet to come into effect.

This summary is not intended to constitute a complete analysis of all the tax consequences for a non-resident investor under Indian law in relation to the acquisition, ownership and disposal of the ADSs or the equity shares underlying the ADSs and does not deal with all possible tax consequences relating to an investment in the equity shares and ADSs, such as the tax consequences under state, local and other (for example, non-Indian) tax laws.

Residence

For the purpose of the Income Tax Act, an individual is considered to be a resident of India during the fiscal year if he is in India for at least 182 days in a particular year or at least 60 days in a particular year and for a period or periods aggregating at least 365 days in the preceding four years. However, the 60 day period shall be read as 182 days in the case of (i) a citizen of India who leaves India in the previous year for employment overseas, or (ii) a citizen of India or a person of Indian origin living abroad who visits India and within the four preceding years has been in India for a period or periods aggregating to 365 days or more. A company is considered to be resident in India if it is incorporated in India or the control and management of its affairs is situated wholly in India during the fiscal year. Individuals and companies who are not residents of India are treated as non-residents.

Taxation of Sale of the ADSs

It is unclear whether capital gains derived from the sale by a non-resident investor of rights in respect of ADSs will be subject to tax liability in India. This will depend on the view taken by Indian tax authorities on the position with respect to the situs of the rights being offered in respect of the ADSs. The Finance Act, 2012 retrospectively amended the term property so as to include any rights in or in relation to an Indian company. Under the ADR Scheme, the transfer of ADSs outside India by a non-resident holder to another non-resident does not give rise to any capital gains tax in India. Shares (including shares issuable on the conversion of the ADSs) held by the non-resident investor for a period of more than 12 months is treated as long term capital assets. If the shares are held for a period of less than 12 months from the date of conversion, the same is treated as short term capital asset.

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However, Section 115AC of the Income Tax Act provides that income by way of long-term capital gains arising from the transfer of ADSs outside India by the non-resident holder to another non-resident is subject to tax at the rate of 10.0% plus applicable surcharge and education cess; short term capital gains on such a transfer will be taxed at the graduated rates with a maximum 30% plus applicable surcharge and education cess. In the circumstances, if at all, that capital gains arising from a transfer of ADSs are taxable under the Income Tax Act, the same would be subject to tax as long-term capital gains at the rate of 10% plus applicable surcharge and education cess if such ADSs have been held by the non-resident holder for more than twelve months. Otherwise, the capital gains shall be subject to tax as short-term capital gains at the normal income tax rates applicable to non-residents under the provisions of the Income Tax Act. Because there are significant intricacies relating to application of rules on indirect transfers, it is not clear, whether or to what extent, a buyer of ADS of the company should be held liable for not withholding tax on the acquisition of shares or be subject to Indian tax on gains realized on dispostion of ADS.

Subject to the following, long-term capital gains realized by a non-resident upon the sale of equity shares obtained from the conversion of ADSs are subject to tax at a rate of 10% excluding the applicable surcharge and education cess; and short-term capital gains on such a transfer will be taxed at the rate of tax applicable to the seller;

• Long-term capital gain realized by a non-resident upon the sale of equity shares obtained from the conversion of ADSs is exempt from tax if the sale of such shares is made on a recognized stock exchange and Securities Transaction Tax, or STT (described below) is paid; and

• Any short term capital gain is taxed at 15% excluding the applicable surcharge and education cess, if the sale of such equity shares is settled on a recognized stock exchange and STT is paid on such sale

Withdrawal of Equity Shares in Exchange for the ADSs

The withdrawal of equity shares in exchange for the ADSs would not give rise to any capital gains liable to income tax in India.

Taxation of Dividends

Dividends paid to non-resident holders of ADSs are not presently subject to tax in the hands of the recipient. However, the company that is distributing the dividend is liable to pay a “dividend distribution tax”. The Finance Act, 2013 has increased the surcharge on dividend distribution tax from 5% to 10% which resulted in increase in the effective rate of dividend distribution tax to 16.995% against 16.22% effective April 1, 2013. Under Section 115 O (1A) of the Income Tax Act 1961, an Indian company, subject to certain conditions, can set off the dividend income received from its subsidiaries against the amount of dividend income declared by it to its shareholders, therefore reducing the dividend distribution tax to the extent of such set-off.

Any distribution of additional ADS or equity shares to resident or non-resident shareholders would not be subject to any Indian tax.

Taxation of Sale of the Equity Shares

Sale of equity shares by any holder may occasion certain incidence of tax in India, as is discussed below. This discussion does not take into consideration the effect of the provisions contained in the new Direct Taxes Code 2010 which seeks to make sweeping changes in the regime of capital gains tax. Under applicable law, an equity sale of shares may be subject to a transaction tax and/or tax on income by way of capital gains. Capital gains accruing to a non-resident investor on the sale of the equity shares, whether to an Indian resident or to a person resident outside India and whether in India or outside India, may be subject to Indian capital gains tax in certain instances as described below.

Sale of the Equity Shares on a Recognized Stock Exchange

In accordance with applicable Indian tax laws, any income arising from a sale of the equity shares of an Indian company through a recognized stock exchange in India is subject to a securities transaction tax. Such tax is payable by a person irrespective of residential status and is collected by the recognized stock exchange in India on which the sale of the equity shares is effected. Capital gains realized in respect of equity shares held by the non-resident investor for more than 12 months will be treated as long-term capital gains and will not be subject to tax in the event such transaction is chargeable to the securities transaction tax.

Capital gains realized in respect of shares held by the non-resident investor for 12 months or less will be treated as short-term capital gains and will be subject to tax at the rate of 15% plus applicable surcharge and education cess in the event such transaction is subject to the securities transaction tax. Withholding tax on capital gains on sale of shares is required to be deducted under Section 195 of the Income Tax Act at the prescribed rates.

For the purpose of computing the capital gain tax on the sale of equity shares, the cost of acquisition of the equity shares would be deemed to be the historical cost of acquiring the ADSs. For the purpose of computing capital gains on the sale of equity shares, the sale consideration received or accruing on such sale shall be reduced by the cost of acquisition of such equity shares and any expenditure incurred wholly and exclusively in connection with such sale. Under the Issue of Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Receipt Mechanism) Scheme, 1993, or Scheme, the purchase price of equity shares in an India listed company received in exchange for ADSs will be the market price of the underlying shares on the

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date that the depositary gives notice to the custodian of the delivery of equity shares in exchange for such corresponding ADSs. The market price is the price of the equity shares prevailing in the BSE or the NSE as applicable. There is no corresponding provision under the Income Tax Act providing for the use of market price as the basis for determination of the purchase price of the equity shares. In the event that the tax department denies the use of market price as the basis for determination of the purchase price of the equity shares, the original purchase price of the ADSs shall be considered as the purchase price of the equity shares for computing the capital gains tax.

According to the Scheme, a non-resident’s holding period for the purpose of determining the applicable capital gains tax rate relating to equity shares received in exchange for ADSs commences on the date of notice of redemption by the depositary to the custodian.

It is unclear as to whether section 115AC and the Scheme are applicable to a non-resident who acquires the shares outside India from a non-resident holder of equity shares after receipt of equity shares upon conversion of the ADSs.

Securities Transaction Tax

Since October 1, 2004, with respect to a sale and purchase of equity shares entered into on a recognized stock exchange, (i) both the buyer and seller are required to pay a Securities Transaction Tax (STT) at the rate of 0.1% of the transaction value of the securities, if the transaction is a delivery based transaction, i.e. the transaction involves actual delivery or transfer of shares; the rate of 0.1% has been substituted for 0.125% by the Finance Act, 2012 with effect from July 1, 2012. (ii) the seller of the shares is required to pay a STT at the rate of 0.025% of the transaction value of the securities if the transaction is a non-delivery based transaction, i.e. a transaction settled without taking delivery of the shares. STT is levied with respect to a sale and purchase of a derivative and the rates of STT as substituted by Finance Act, 2008 with effect from June 1, 2008 is as follows: (i) in case of sale of an option in securities, the seller is required to pay an STT at the rate of 0.017% of the option premium; (ii) in case of a sale of an option in securities, where the option is exercised, the buyer is required to pay a STT at the rate of 0.125% of the settlement price; and (iii) in case of sale of futures in securities, the seller is required to pay STT at 0.017% on transaction value. This rate of 0.017% changed to 0.01% under the Finance Act, 2013.

Sale of the Equity Shares otherwise than on a Recognized Stock Exchange

Capital gains realized in respect of equity shares listed in India and held by a non-resident investor for more than 12 months will be treated as long-term capital gain. It is unclear whether it is subjected to tax at the rate of 10.0% or 20.0% plus applicable surcharge and education cess. Capital gains realized in respect of equity shares held by the non-resident investor for 12 months or less will be treated as short-term capital gains and will be subject to tax at the normal income tax rates applicable to non-residents under the provisions of the Income Tax Act. Withholding tax on capital gains on sale of equity shares is required to be deducted under Section 195 of the Income Tax Act at the prescribed rates (surcharge on non-residents is applicable at the rate of 2.0% if the income exceeds Rs. 10 million ($ 0.2 million) but does not exceed Rs. 100 million ($ 1.8 million). The surcharge at the rate of 5% shall be levied if the total income of the company other than the domestic company exceeds Rs. 100 million ($ 1.8 million).

Capital Losses

The losses arising from a transfer of a capital asset in India can only be set off against capital gains and not against any other income in accordance with the Income Tax Act. A long-term capital loss may be set off only against a long-term capital gain. To the extent the losses are not absorbed in the year of transfer, they may be carried forward for a period of eight years immediately succeeding the year for which the loss was first computed and may be set off against the capital gains assessable for such subsequent years. In order to get the benefit of set-off of the capital losses in this manner, the non-resident investor must file appropriate and timely tax returns in India.

Tax Treaties

The above mentioned tax rates and the consequent taxation are subject to any benefits available to a non-resident investor under the provisions of any agreement for the avoidance of double taxation entered into by the GoI with the country of tax residence of such non-resident investor. The investors are advised to consult their tax advisors the residential status for the purpose of treaty benefits in the event the investments are made through special purpose vehicle in an overseas jurisdiction.

Withholding Tax on Capital Gains

Any taxable gain realized by a non-resident from the sale of ADSs and equity shares shall be subject to withholding tax of 10% at source and withheld by the buyer. However, no withholding tax is required to be withheld under Section 196D (2) of the Income Tax Act from any income accruing to a FII as defined in Section 115AD of the Income Tax Act on the transfer of securities. The FII is required to pay the tax on its own behalf.

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Buy-Back of Securities

Indian companies are not subject to tax on the buy-back of their equity shares. However, shareholders will be taxed on the resulting gains from the share buy-back. We would be required to deduct tax at source in proportion to the capital gains tax liability of our shareholders.

Stamp Duty

Upon the issuance of the equity shares underlying the ADSs, we are required to pay a stamp duty for each equity share equal to 0.1% of the issue price. Under Indian stamp law, no stamp duty is payable on the acquisition or transfer of equity shares in book-entry form. However, a sale of equity shares by a non-resident holder will be subject to Indian stamp duty at the rate of 0.25% on the market value of equity shares on the trade date, although such duty is customarily borne by the transferee. A transfer of ADSs is not subject to Indian stamp duty.

Wealth Tax, Gift Tax and Inheritance Tax

The holding of ADSs by non-resident investors, the holding of the equity underlying shares by the depositary in a fiduciary capacity and the transfer of the ADSs between non-resident investors and the depositary is exempt from payment of wealth tax. Further, there is no tax on gifts and inheritances which applies to the ADSs, or the equity shares underlying the ADSs.

Service Tax

Brokerage or commission fees paid to stockbrokers in connection with the sale or purchase of equity shares are subject to an Indian service tax at the effective tax rate of 12.36% (including cess of 3%) collected by the stockbroker (from February 24, 2009 to March 31, 2012 service tax was 10.3%). Further, pursuant to Section 65(101) of the Finance Act (2 of the 2004) a sub-broker is also subject to this service tax.

Minimum Alternate Tax (MAT)

The Income Tax Act imposes a Minimum Alternate Tax on companies wherein the income tax payable on the total income is less than 20.0% plus applicable surcharge and cess of its book profit on its book profits. The Finance Act 2013 increased the surcharge on income of domestic companies having taxable income above Rs. 100 million ($ 1.8 million) from 5% to 10% which resulted in the increase in the effective MAT rate for such companies to 20.96% from 20.01%. Amounts paid as MAT may be applied towards regular income taxes payable in any of the succeeding ten years subject to certain conditions. The manner of computing the MAT which can be claimed as a credit is specified in the Income Tax Act. The Finance Act, 2007, included income eligible for deductions under section 10A and 10B of the Act in the computation of book profits for the levy of MAT, and determined that MAT is payable on income which falls within the ambit of section 10A and 10B of the Act.

The Direct Taxes Code 2010, when effective shall levy a 20.0% tax on book profit (excluding surcharge or education cess). Although the Code when introduced contained a levy of MAT on gross assets, the revised Direct Taxes Code 2010 has restored the tax on book profit. The tax credit for taxes paid on book profit shall be allowable for a period of 15 years (as against the existing limit of 10 years) and MAT provisions shall apply to special economic zone developers and special economic zone units.

Tax Credit

A non-resident investor may be entitled to a tax credit with respect to any withholding tax paid by us or any other person for such non-resident investor’s account in accordance with the laws of the applicable jurisdiction.

United States Federal Income Taxation

The following discussion describes certain material United States federal income tax consequences to US Holders (defined below) under present law of an investment in the ADSs or equity shares. This summary applies only to investors that hold the ADSs or equity shares as capital assets (generally, property held for investment) and that have the US dollar as their functional currency. This discussion is based on the United States Internal Revenue Code of 1986, as amended, as in effect on the date of this annual report and on United States Treasury regulations in effect or, in some cases, proposed, as of the date of this annual report, as well as judicial and administrative interpretations thereof available on or before such date. All of the foregoing authorities are subject to change, which change could apply retroactively and could affect the tax consequences described below.

The following discussion neither deals with the tax consequences to any particular investor nor describes all of the tax consequences applicable to persons in special tax situations such as:

• banks;

• certain financial institutions;

• insurance companies;

• regulated investment companies;

• real estate investment trusts ;

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• broker dealers;

• United States expatriates;

• traders that elect to use the mark-to-market method of accounting;

• tax-exempt entities;

• persons liable for the alternative minimum tax;

• persons holding an ADS or equity share as part of a straddle, hedging, conversion or integrated transaction;

• persons that actually or constructively own 10.0% or more of the total combined voting power of all classes of our voting stock;

• persons who acquired ADSs or equity shares pursuant to the exercise of any employee share option or otherwise as compensation; or

• persons holding ADSs or equity shares through partnerships or other pass-through entities.

INVESTORS SHOULD CONSULT THEIR TAX ADVISORS ABOUT THE APPLICATION OF THE UNITED STATES FEDERAL TAX RULES TO THEIR PARTICULAR CIRCUMSTANCES AS WELL AS THE STATE AND LOCAL, FOREIGN AND OTHER TAX CONSEQUENCES TO THEM OF THE OWNERSHIP AND DISPOSITION OF ADSs OR EQUITY SHARES.

The discussion below of the United States federal income tax consequences to “US Holders” will apply to you if you are a beneficial owner of ADSs or equity shares and you are, for United States federal income tax purposes,

• an individual who is a citizen or resident of the United States;

• a corporation (or other entity taxable as a corporation for United states federal income tax purposes) created or organized in the United States or under the laws of the United States, any State thereof or the District of Columbia;

• an estate, the income of which is subject to United States federal income taxation regardless of its source; or

• a trust that (1) is subject to the primary supervision of a Court within the United States and the control of one or more United States persons for all substantial decisions of the trust or (2) was in existence on August 20, 1996, was treated as a domestic trust on the previous day and has a valid election in effect under the applicable United States Treasury regulations to be treated as a United States person.

If a partnership or other entity or arrangement treated as a partnership for United States federal income tax purposes holds ADSs or equity shares, the tax treatment of a partner will generally depend upon the status and the activities of the partnership. A US Holder that is a partner in a partnership holding ADSs or equity shares is urged to consult its tax advisor.

The discussion below assumes that the representations contained in the deposit agreement are true and that the obligations in the deposit agreement and any related agreement will be complied with in accordance with their terms. If you hold ADSs, you should be treated as the holder of the underlying equity shares represented by those ADSs for United States federal income tax purposes.

The United States Treasury has expressed concerns that parties to whom ADSs are pre-released may be taking actions that are inconsistent with the claiming, by US Holders of ADSs, of foreign tax credits for United States federal income tax purposes. Such actions would also be inconsistent with the claiming of the reduced rate of tax applicable to dividends received by certain non-corporate US Holders, as described below. Accordingly, the availability of foreign tax credits or the reduced tax rate for dividends received by certain non-corporate US Holders could be affected by future actions that may be taken by the United States Treasury or parties to whom ADSs are pre-released.

Taxation of Dividends and Other Distributions on the ADSs or Equity Shares

Subject to the PFIC rules discussed below, the gross amount of any distributions we make to you with respect to the ADSs or equity shares generally will be includible in your gross income as foreign source dividend income on the date of receipt by the depository, in the case of ADSs, or by you, in the case of equity shares, but only to the extent that the distribution is paid out of our current or accumulated earnings and profits (as determined under United States federal income tax principles). Any such dividends will not be eligible for the dividends received deduction allowed to corporations in respect of dividends received from other United States corporations. To the extent that the amount of the distribution exceeds our current and accumulated earnings and profits (as determined under United States federal income tax principles), such excess amount will be treated first as a tax-free return of your tax basis in your ADSs or equity shares, and then, to the extent such excess amount exceeds your tax basis in your ADSs or equity shares, as capital gain. However, we currently do not, and we do not intend to calculate our earnings and profits under United States federal income tax principles. Therefore, a US Holder should expect that any distribution will generally be reported as a dividend even if that distribution would otherwise be treated as a non-taxable return of capital or as capital gain under the rules described above.

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With respect to certain non-corporate US Holders, including individual US Holders, dividends may be taxed at the lower applicable capital gains rate applicable to “qualified dividend income”, provided that (1) the ADSs or equity shares, as applicable, are readily tradable on an established securities market in the United States or we are eligible for the benefits of the United States-India income tax treaty, (2) we are neither a PFIC nor treated as such with respect to you (as discussed below) for the taxable year in which the dividend is paid or the preceding taxable year, and (3) the equity shares are held for a holding period of more than 60 days during the 121 – day period beginning 60 days before the ex-dividend date. Under US Internal Revenue Service authority, equity shares or ADSs representing such shares, are considered for the purpose of clause (1) above to be readily tradable on an established securities market in the United States if they are listed on the NYSE, as our ADSs currently are. You should consult your tax advisors regarding the availability of the lower capital gains rate applicable to qualified dividend income for any dividends paid with respect to our ADSs or equity shares.

Any dividends will constitute foreign source income for foreign tax credit limitation purposes. If the dividends are taxed as qualified dividend income (as discussed above), the amount of the dividend taken into account for purposes of calculating the foreign tax credit limitation will in general be limited to the gross amount of the dividend, multiplied by the reduced tax rate applicable to qualified dividend income and divided by the highest tax rate normally applicable to dividends. The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. For this purpose, any dividends distributed by us with respect to ADSs or equity shares will generally constitute “passive category income” but could, in the case of certain US Holders, constitute “general category income.” A US Holder will not be able to claim a foreign tax credit for any Indian taxes imposed with respect to dividend distribution taxes on ADSs or equity shares (as discussed under “- India Taxation—Taxation of Dividends”). The rules relating to the determination of the foreign tax credit are complex and US Holders should consult their tax advisors to determine whether and to what extent a credit would be available in their particular circumstances, including the effects of any applicable income tax treaties.

Taxation of a Disposition of ADSs or Equity Shares

Subject to the PFIC rules discussed below, upon a sale or other disposition of ADSs or equity shares, a US Holder will generally recognize a capital gain or loss for United States federal income tax purposes in an amount equal to the difference between the amount realized for the ADS or equity share and such US Holder’s tax basis in such ADSs and equity shares. Any such gain or loss will be treated as long-term capital gain or loss if the US Holder’s holding period in the ADSs and equity shares at the time of the disposition exceeds one year. Long-term capital gain of individual US Holders generally will be subject to United States federal income tax at reduced tax rates. The deductibility of capital losses is subject to limitations. Any such gain or loss that you recognize generally will be treated as United States source income or loss for foreign tax credit limitation purposes.

Because gains generally will be treated as United States source gain, as a result of the United States foreign tax credit limitation, any Indian income tax imposed upon capital gains in respect of ADSs or equity shares (as discussed under “— India Taxation — Taxation of Sale of the ADSs,” “—India Taxation—Taxation of Sale of the Equity Shares,” “—India Taxation—Sale of the Equity Shares on a Recognized Stock Exchange,” “—India Taxation—Sale of the Equity Shares otherwise than on a Recognized Stock Exchange” and “—India Taxation—Buy-Back of Securities”) may not be currently creditable unless a US Holder has other foreign source income for the year in the appropriate United States foreign tax credit limitation basket. US Holders should consult their tax advisors regarding the application of Indian taxes to a disposition of an ADS or equity share and their ability to credit an Indian tax against their United States federal income tax liability.

Passive Foreign Investment Company

Based on the market prices of our equity shares and ADSs and the composition of our income and assets, including goodwill, although not clear, we do not believe we were a PFIC for United States federal income tax purposes for our taxable year ended March 31, 2013. However, the application of the PFIC rules is subject to uncertainty in several respects and, therefore, the US Internal Revenue Service may assert that, contrary to our belief, we were a PFIC for such taxable year. Moreover, although the asset test (defined below) is required to be calculated based on the fair market value of our assets, we did not do a valuation of our assets and our belief that we were not a PFIC for our taxable year ended March 31, 2013 is based on the book value of our assets. In addition, we must make a separate determination each taxable year as to whether we are a PFIC (after the close of each taxable year). A decrease in the market value of our equity shares and ADSs and/or an increase in cash or other passive assets would increase the relative percentage of our passive assets. Accordingly, we cannot assure you we will not be a PFIC for the taxable year ending on March 31, 2014 or any future taxable year.

A non-United States corporation will be a PFIC for United States federal income tax purposes for any taxable year if, applying certain look-through rules either:

• at least 75% of its gross income for such taxable year is passive income, or

• at least 50% of the total value of its assets (based on an average of the quarterly values of the assets during such year) is attributable to assets, including cash, that produce passive income or are held for the production of passive income (the asset test).

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For this purpose, we will be treated as owning our proportionate share of the assets and earning our proportionate share of the income of any other corporation in which we own, directly or indirectly, 25% (by value) of the stock. A separate determination must be made after the close of each taxable year as to whether we were a PFIC for that year. Because the value of our assets for purposes of the PFIC test will generally be determined by reference to the market price of our equity shares and ADSs, fluctuations in the market price of our equity shares and ADSs may cause us to become a PFIC. In addition, changes in the composition of our income or assets may cause us to become a PFIC.

If we are a PFIC for any taxable year during which you hold ADSs or equity shares, we generally will continue to be treated as a PFIC with respect to you for all succeeding years during which you hold our equity shares or ADSs, unless we cease to be a PFIC and you make a “deemed sale” election with respect to the equity shares or ADSs. If such election is timely made, you will be deemed to have sold the ADSs and equity shares you hold at their fair market value on the last day of the last taxable year in which we qualified as a PFIC and any gain from such deemed sale would be subject to the consequences described in the following two paragraphs. In addition, a new holding period would be deemed to begin for the equity shares and ADSs for purposes of the PFIC rules. After the deemed sale election, your equity shares or ADSs with respect to which the deemed sale election was made will not be treated as shares in a PFIC unless we subsequently become a PFIC.

For each taxable year that we are treated as a PFIC with respect to you, you will be subject to special tax rules with respect to any “excess distribution” that you receive and any gain you recognize from a sale or other disposition (including a deemed sale discussed in the precedent paragraph and a pledge) of the ADSs or equity shares, unless you make a “mark-to-market” election as discussed below. Distributions you receive in a taxable year that are greater than 125% of the average annual distributions you received during the shorter of the three preceding taxable years or your holding period for the ADSs or equity shares will be treated as an excess distribution. Under these special tax rules:

• the excess distribution or gain will be allocated ratably over your holding period for the ADSs or equity shares;

• the amount allocated to the current taxable year, and any taxable year in your holding period prior to the first taxable year in which we were a PFIC, will be treated as ordinary income; and

• the amount allocated to each other year will be subject to the highest tax rate in effect for individuals or corporations, as applicable, for each such year and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year.

In addition, non-corporate US Holders will not be eligible for reduced rates of taxation on any dividends received from us (as described above under “—Taxation of Dividends and Other Distributions on the ADSs or Equity Shares”) if we are a PFIC in the taxable year in which such dividends are paid or in the preceding taxable year.

The tax liability for amounts allocated to taxable years prior to the year of disposition or “excess distribution” cannot be offset by any net operating losses for such years, and gains (but not losses) realized on the sale or other disposition of the ADSs or equity shares cannot be treated as capital, even if you hold the ADSs or equity shares as capital assets.

If we are treated as PFIC with respect to you for any taxable year, to the extent any of our subsidiaries are also PFICs or we make direct or indirect equity investments in other entities that are PFICs, you may be deemed to own shares in such lower-tier PFICs that are directly or indirectly owned by us in that proportion which the value of the ADSs and equity shares you own bears to the value of all of the ADSs and equity shares, and you may be subject to the adverse tax consequences described in the preceding two paragraphs with respect to the shares of such lower-tier PFICs that you would be deemed to own. You should consult your tax advisor regarding the applicability of the PFIC rules to any of our PFIC subsidiaries

A US Holder of “marketable stock” (as defined below) in a PFIC may make a mark-to-market election for such stock to elect out of the PFIC rules described above regarding excess distributions and recognized gains. If you make a valid mark-to-market election for the ADSs or equity shares, you will include in income for each year that we are a PFIC an amount equal to the excess, if any, of the fair market value of the ADSs or equity shares as of the close of your taxable year over your adjusted basis in such ADSs or equity shares. You will be allowed a deduction for the excess, if any, of the adjusted basis of the ADSs or equity shares over their fair market value as of the close of the taxable year. However, deductions are allowable only to the extent of any net mark-to-market gains on the ADSs or equity shares included in your income for prior taxable years. Amounts included in your income under a mark-to-market election, as well as gain on the actual sale or other disposition of the ADSs or equity shares will be treated as ordinary income. Ordinary loss treatment will also apply to the deductible portion of any mark-to-market loss on the ADSs or equity shares, as well as to any loss realized on the actual sale or other disposition of the ADSs or equity shares, to the extent that the amount of such loss does not exceed the net mark-to-market gains previously included for such ADSs or equity shares. Your basis in the ADSs or equity shares will be adjusted to reflect any such income or loss amounts. If you make a mark-to-market election, any distributions that we make would generally be subject to the tax rules discussed above under “ – Taxation of Dividends and Other Distributions on the ADSs or Equity Shares,” except that the lower rate applicable to qualified dividend income (discussed above) would not apply.

The mark-to-market election is available only for “marketable stock,” which is stock that is traded in other than de minimis quantities on at least 15 days during each calendar quarter (“regularly traded”) on a qualified exchange or other market, as defined in the applicable United States Treasury regulations. The NYSE is a qualified exchange. Our ADSs are listed on the NYSE and, consequently, if you are a holder of ADSs and the ADSs are regularly traded, the mark-to-market election would be available to you if we become a PFIC. Because a mark-to-market election cannot be made for equity interests in any lower-tier PFICs we own,

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a US Holder may continue to be subject to the PFIC rules with respect to its indirect interest in any investments held by us that are treated as an equity interest in a PFIC for United States federal income tax purposes. You should consult your tax advisors as to the availability and desirability of a mark-to-market election, as well as the impact of such election on interests in any lower-tier PFICs.

Alternatively, if a non-United States corporation is a PFIC, a holder of shares in that corporation may avoid taxation under the PFIC rules described above regarding excess distributions and recognized gains by making a “qualified electing fund” election to include in income its share of the corporation’s income on a current basis. However, you may make a qualified electing fund election with respect to our ADSs or equity shares only if we agree to furnish you annually with certain tax information, and we currently do not intend to prepare or provide such information.

Unless otherwise provided by the United States Treasury, each US Holder of a PFIC is required to file an annual report containing such information as the United States Treasury may require. If we are or become a PFIC, you should consult your tax advisor regarding any reporting requirements that may apply to you.

You should consult your tax advisor regarding the application of the PFIC rules to your investment in ADSs or equity shares.

Information Reporting and Backup Withholding

Any dividend payments with respect to ADSs or equity shares and proceeds from the sale, exchange, redemption or other disposition of ADSs or equity shares may be subject to information reporting to the US Internal Revenue Service and possible United States backup withholding. Backup withholding will not apply, however, to a US Holder who furnishes a correct taxpayer identification number and makes any other required certification or who is otherwise exempt from backup withholding. US Holders who are required to establish their exempt status generally must provide such certification on Internal Revenue Service Form W-9. US Holders should consult their tax advisors regarding the application of the United States information reporting and backup withholding rules.

Backup withholding is not an additional tax. Amounts withheld as backup withholding may be credited against your United States federal income tax liability, and you may obtain a refund of any excess amounts withheld under the backup withholding rules by timely filing the appropriate claim for refund with the US Internal Revenue Service and furnishing any required information.

Additional Reporting Requirements

Certain US Holders who are individuals are required to report information relating to an interest in our ADSs or equity shares, subject to certain exceptions (including an exception for ADSs and equity shares held in accounts maintained by certain financial institutions). US Holders should consult their tax advisors regarding the effect, if any, of these rules on the ownership and disposition of our ADSs or equity shares.

F. Dividends and Paying Agents

Not applicable

G. Statements by Experts

Not applicable

H. Documents on Display

Publicly filed documents concerning our company which are referred to in this annual report may be inspected and copied at the public reference facilities maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. Copies of these materials can also be obtained from the Public Reference Room at the SEC’s principal office, 100 F Street, N.E., Washington D.C. 20549, after payment of fees at prescribed rates.

The SEC maintains a website at www.sec.gov that contains reports, proxy and information statements and other information regarding registrants that make electronic filings through its Electronic Data Gathering, Analysis, and Retrieval, or EDGAR, system. We have made all our filings with the SEC using the EDGAR system.

I. Subsidiary Information

Not applicable

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Quantitative and Qualitative Analysis

See Note 25 “Financial Instruments” in Item 8. Financial Information for more details.

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Currency Risk

The results of our operations may be affected by fluctuations in the exchange rates between the Indian Rupee, Namibia Dollar, South African Rand and Australian Dollar against the US Dollar. This table illustrates the effect of a 10% movement in exchange rates between these currencies on our operating profit for fiscal 2013.

10% movement in currency	For Rs./ $					For AUD/ $			For NAD / $			For ZAR/ $
	(in millions)
Copper		801		14.7			715	13.1		—	—		—	—
Zinc – India		9,631		176.7			—	—		—	—		—	—
Zinc – International		1,760		32.3			—	—		1,481	27.2		1,210	22.2
Aluminum		2,403		44.1			—	—		—	—		—	—
Power		(177	)	(3.2	)		—	—		—	—		—	—
Total		14,418		264.6			715	13.1		1,481	27.2		1,210	22.2

We seek to mitigate the impact of short-term movements in currency on our businesses by hedging our short-term exposures based on their maturity. However, large or prolonged movements in exchange rates may have a material effect on our business, operating results, financial condition and/or prospects. We use hedging instruments to manage the currency risk associated with the fluctuations in the Indian Rupee and Australian dollar against the US dollar in line with our risk management policy. Typically, all short term exposures are managed using simple instruments such as forward contracts. As long-term exposures draw nearer, we hedge them progressively to insulate these from the fluctuations in the currency markets. In our Australian and Zinc International operations, apart from funds to meet local expenses which are denominated in the respective local currencies, we strive to retain our surplus funds in US dollar terms. These exposures are reviewed by appropriate levels of management on a monthly basis.

Hedging activities in India are governed by the RBI with whose policies we must comply. The policies under which the RBI regulates these hedging activities can change from time to time and these policies affect the effectiveness with which we manage currency risk.

We hold or issue instruments such as options, swaps and other derivative instruments for purposes of mitigating our exposure to currency risk. We have also partly hedged our foreign exchange risk in net investment in foreign operations. We do not enter into hedging instruments for speculative purposes.

The conversion rate from Indian Rupees to US dollars has substantially depreciated recently from the rate of Rs. 54.52 per $ 1.00 used in this annual report and had crossed the level of Rs. 60 per $ 1.00 on June 27, 2013. The volatile currency movement between the US dollar and Indian Rupee provided in the table above reflects the impact of this movement. For more information on this currency movement, see Note 25 on pages F-46, F-47 and F-49 of this annual report.

Interest Rate Risk

We are exposed to interest rate risk on short-term and long-term floating rate instruments and on the refinancing of fixed rate debt. Our short-term borrowing is principally denominated in Indian Rupees with fixed rates of interest. Typically, our foreign currency debt has floating rates of interest linked to US Dollar LIBOR. The costs of floating rate borrowings may be affected by the fluctuations in the interest rates. We have selectively used interest rate swaps, options and other derivative instruments to manage our exposure to interest rate movements. These exposures are reviewed by appropriate levels of management on a monthly basis.

Borrowing and interest rate hedging activities in India are governed by the RBI and we have to comply with its regulations. The policies under which the RBI regulates these borrowing and interest rate hedging activities can change from time to time and can impact the effectiveness with which we manage our interest rate risk.

We have in the past held or issued instruments such as swaps, options and other derivative instruments for purposes of mitigating our exposure to interest rate risk. We do not enter into hedging instruments for speculative purposes. This table illustrates the impact of a 0.5% to 2.0% movement in interest rates on interest payable on loans and borrowings for fiscal 2013.

Movement in interest rates	Interest Rates
	(in millions)
0.5%		Rs.    275	$	5.0
1.0%		Rs.    549	$	10.1
2.0%		Rs. 1,098	$	20.1

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Commodity Price Risk

We are exposed to the movement of base metal commodity prices on the London Metal Exchange. Any decline in the prices of the base metals that we produce and sell will have an immediate and direct impact on the profitability of our businesses. We use commodity hedging instruments such as forwards, swaps, options and other derivative instruments to manage our commodity price risk in our copper and zinc businesses. Currently, we use commodity forward contracts to partially hedge against changes in the LME prices of copper and zinc. We enter into these hedging instruments for the purpose of reducing the variability of our cash flows on account of volatility in commodity prices. These hedging instruments are typically of a maturity of less than one year.

Hedging activities in India are governed by the RBI and we have to comply with its regulations. The policies under which the RBI regulates these hedging activities can change from time to time and can impact on the effectiveness with which we manage commodity price risk.

We have in the past held or issued derivative instruments such forwards, options and other derivative instruments for purposes of mitigating our exposure to commodity price risk. We do not enter into hedging instruments for speculative purposes.

This table illustrates the impact of a $ 100 movement in LME/LBMA prices based on fiscal 2013 volumes, costs and exchange rates and provides the estimated impact on operating profit assuming all other variables remain constant.

$ 100 movement in LME price	Change in Operating Income
	Rs. Million		$ Million
Copper		182		3.3
Zinc India		5,797		106.3
Zinc International		2,294		42.1
Aluminium		1,259		23.1
Total		9,532		174.8

The fair value of our open derivative positions (excluding normal purchase and sale contracts), recorded within other current assets and current financial liabilities is as follows:

	March 31,
	2012				2013				2013
	Asset		Liability		Asset		Liability		Asset		Liability
	(Rs in millions)				(Rs in millions)				(US dollar in millions)
Cash flow hedges:
Commodity contracts		1		2		318		—		5.8		—
Forward foreign currency contracts		18		—		—		3		—		0.1
Fair value hedges:
Commodity contracts		118		—		11		—		0.2		—
Forward foreign currency contracts		242		15		13		755		0.2		13.8
Non-qualifying hedges:
Commodity contracts		33		129		9		—		0.2		0.0
Forward foreign currency contracts		105		—		—		5		—		0.1
Net Investment in foreign operations		—		460		—		182		—		3.3
Fair value		517		606		351		945		6.4		17.3

ITEM 12.   DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

A. Debt Securities

Not Applicable.

B. Warrants and Rights

Not Applicable.

C. Other Securities

Not Applicable.

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D. American Depositary Shares

Our ADR facility is maintained with Citibank, N.A., or the Depositary, pursuant to a Deposit Agreement, dated as of July 18, 2007, among us, our Depositary and the holders and beneficial owners of ADSs. We use the term “holder” in this discussion to refer to the person in whose name an ADR is registered on the books of the Depositary.

In accordance with the Deposit Agreement, the Depositary may charge fees up to the amounts described below:

	Type of Service	Fees	By whom paid
1.	Issuance of ADSs upon the deposit of ordinary shares (excluding issuances as a result of distributions described in paragraph 4 below)	Up to $ 5.00 per 100 ADSs (or any portion thereof) issued	Person depositing shares or person receiving ADSs
2.	Surrender of ADSs for cancellation and withdrawal of ordinary shares underlying such ADSs	Up to $ 5.00 per 100 ADSs (or any portion thereof) surrendered	Person surrendering ADSs for purpose of withdrawal of deposited securities or person to whom deposited securities are delivered
3.	Distribution of cash dividends or other cash distributions (i.e. sale of rights and other entitlements)	Up to $ 2.00 per 100 ADSs (or any portion thereof) held	Person to whom distribution is made
4.	Distribution of ADSs pursuant to (i) stock dividends or other free stock distributions, or (ii) exercise of rights to purchase additional ADSs	Up to $ 5.00 per 100 ADSs (or any portion thereof) issued	Person to whom distribution is made
5.	Distribution of securities other than ADSs or rights to purchase additional ADSs (i.e. spin-off shares)	Up to $ 5.00 per 100 ADSs (or any portion thereof) issued	Person to whom distribution is made
6.	Depositary services	Up to $ 2.00 per 100 ADSs (or any portion thereof) held	Person holding ADSs on applicable record date(s) established by the Depositary
7.	Transfer of ADRs	$ 1.50 per certificate presented for transfer	Person presenting certificate for transfer

In addition, holders or beneficial owners of our ADS, persons depositing ordinary shares for deposit and persons surrendering ADSs for cancellation and withdrawal of deposited securities will be required to pay the following charges:

• taxes (including applicable interest and penalties) and other governmental charges;

• registration fees for the registration of ordinary shares or other deposited securities on the share register and applicable to transfers of ordinary shares or other deposited securities to or from the name of the custodian, the Depositary or any nominees upon the making of deposits and withdrawals;

• certain cable, telex, facsimile and electronic transmission and delivery expenses;

• expenses and charges incurred by the Depositary in the conversion of foreign currency;

• fees and expenses incurred by the Depositary in connection with compliance with exchange control regulations and other regulatory requirements applicable to ordinary shares, deposited securities, ADSs and ADRs;

• fees and expenses incurred by the Depositary in connection with the delivery of deposited securities; and

• the fees and expenses incurred by the Depositary, the custodian, or any nominee in connection with the servicing or delivery of deposited securities.

In the case of cash distributions, the applicable fees, charges, expenses and taxes will be deducted from the cash being distributed. In the case of distributions other than cash, such as share dividends, the distribution generally will be subject to appropriate adjustments for the deduction of the applicable fees, charges, expenses and taxes.

In certain circumstances, the Depositary may dispose of all or a portion of such distribution and distribute the net proceeds of such sale to the holders of ADS, after deduction of applicable fees, charges, expenses and taxes.

If the Depositary determines that any distribution in property is subject to any tax or other governmental charge which the Depositary is obligated to withhold, the Depositary may withhold the amount required to be withheld and may dispose of all or a portion of such property in such amounts and in such manner as the Depositary deems necessary and appropriate to pay such taxes or charges and the Depositary will distribute the net proceeds of any such sale after deduction of such taxes or charges to the holders of ADSs entitled to the distribution.

185

During fiscal 2013, the Depositary has reimbursed to us an amount of $ 1,364,492.5 (after deduction of applicable withholding taxes amounting to $ 584,782.5) in respect of investor relation expenses. In addition, as part of its service to us, the Depositary has waived an amount of $ 47,099.6 (inclusive of the withholding tax amount) that it has paid on our behalf to third-party service providers in respect of proxy related expenses and other administrative costs.

PART II

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

None

ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

ADS offering in 2009

On July 16, 2009, we completed the ADS offering on the NYSE. We sold an aggregate of 131,906,011 ADSs representing 131,906,011 equity shares. The price per ADS was $ 12.15. The joint bookrunners of the ADS offering were J.P. Morgan Securities Inc. and Morgan Stanley & Co. International plc. The joint bookrunners exercised their over-allotment option to acquire an additional 8,449,221 ADSs at $ 12.15 per ADS. The aggregate price of the offering amount, including the over-allotment option, registered and sold was $ 1,602.7 million.

The registration statement on Form F-3 (File No. 333-160580) filed by us in connection with the ADS offering was automatically effective on July 15, 2009.

The net proceeds from the offering to us, after deducting underwriting discounts and commissions and offering expenses ($ 13.8 million), amounted to $ 1,588.9 million. As of March 31, 2013, we have used the entire proceeds for the purpose mentioned in the offer document.

Convertible Notes offering in 2009

On October 29, 2009, we completed an offering of $ 500 million aggregate principal amount of convertible senior notes (“Convertible Notes”). The Convertible Notes are convertible into ADSs at a conversion price of approximately $ 23.33 per ADS, subject to adjustment in certain events. The Convertible Notes have a maturity date of October 30, 2014 and bear interest at the rate of 4.0% per annum. The joint bookrunners of the Convertible Notes offering were Deutsche Bank Securities Inc. and Morgan Stanley & Co. Incorporated.

The post-effective amendment to the registration statement on Form F-3 (File No. 333-160580) filed by us in connection with the Convertible Note offering was automatically effective on October 15, 2009.

The net proceeds from the offering to us, after deducting underwriting discounts and commissions and offering expenses ($ 5 million), amounted to $ 495.0 million. As at March 31, 2013, we have used approximately $ 180.3 million towards capital expenditures and the unutilized proceeds have been invested temporarily in fixed deposits. We may use the remaining net proceeds towards the expansion of our copper business with another power plant, acquisition of a complementary business outside of India and any other permissible purpose under, and in compliance with, applicable laws and regulations of India, including the external commercial borrowing regulations specified by the Reserve Bank of India.

Consolidation and re-organization of Sesa Goa, Sterlite, Vedanta Aluminium, Sterlite Energy and MALCO to form Sesa Sterlite and transfer of Vedanta’s shareholding in Cairn India to Sesa Sterlite

On February 25, 2012, we, Sesa Goa and Vedanta announced an all-share merger of our company and Sesa Goa to create Sesa Sterlite (“Sesa Sterlite”) and to effect the consolidation and simplification of Vedanta's corporate structure through two series of transactions (together the “Reorganisation Transactions” consisting of the “Amalgamation and Reorganisation Scheme” and the “Cairn India Consolidation”). The Amalgamation and Reorganisation Scheme is also subject to certain approvals. Please see “Item 5. Operating and Financial Review and Prospects – Consolidation and re-organization of Sesa Goa, Sterlite, Vedanta Aluminium, Sterlite Energy and MALCO to form Sesa Sterlite and transfer of Vedanta’s shareholding in Cairn India to Sesa Sterlite”.

ITEM 15. CONTROLS AND PROCEDURES

(a) Disclosure Controls and Procedures

As required by Rules 13a-15 and 15d-15 under the Exchange Act, management, including our Chief Executive Officer and our Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Disclosure controls and procedures refer to controls and other procedures designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized

186

and reported, within the time periods specified in the rules and forms of the SEC. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in our reports that we file or submit under the Exchange Act is accumulated and communicated to management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding our required disclosure.

Based on the foregoing, our Chief Executive Officer and our Chief Financial Officer have concluded that, as of March 31, 2013, our disclosure controls and procedures were effective.

(b) Management’s Annual report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal controls over financial reporting, as such term is defined in Rule 13a-15(f) of the Exchange Act.

Internal controls over financial reporting refers to a process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with IFRS as issued by the IASB.

Our internal control over financial reporting includes those policies and procedures that, (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of our financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our consolidated financial statements.

Our management assessed the effectiveness of internal control over financial reporting as of March 31, 2013 based on the criteria established in Internal Control—Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission. As a result of this assessment, management concluded that, as of March 31, 2013, our internal control over financial reporting was effective in providing reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The scope of our management’s assessment of the effectiveness of internal control over financial reporting includes all of our company’s consolidated operations.

Our management recognizes that there are inherent limitations in the effectiveness of any system of internal control over financial reporting, including the possibility of human error and the circumvention or override of internal control. Accordingly, even effective internal control over financial reporting can provide only reasonable assurance with respect to financial statement preparation, and may not prevent or detect all misstatements and can only provide reasonable assurance with respect to the preparation and presentation of our financial statements.

The effectiveness of our internal control over financial reporting as at March 31, 2013 has been audited by Deloitte Haskins & Sells, or Deloitte, our independent registered public accounting firm, as stated in their report which is reproduced in its entirety in Item 15(c) below:

(c) Attestation Report of the Registered Public Accounting Firm

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of

Sterlite Industries (India) Limited

Mumbai, Maharashtra, India

We have audited the internal control over financial reporting of Sterlite Industries (India) Limited and subsidiaries (the “Company”) as of March 31, 2013, based on criteria established in Internal Control—Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in Item 15(b) Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed by, or under the supervision of, the company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the company’s board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

187

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of effectiveness of the internal control over financial reporting to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of March 31, 2013, based on the criteria established in Internal Control—Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements as of and for the year ended March 31, 2013 of the Company and our report dated July 30, 2013 expressed an unqualified opinion on those financial statements.

/s/ Deloitte Haskins & Sells

Deloitte Haskins & Sells

Mumbai, Maharashtra, India

July 30, 2013

188

(d) Changes in Internal Control over Financial Reporting

Management has evaluated, with the participation of our Chief Executive Officer and our Chief Financial Officer, whether any changes in our internal control over financial reporting that occurred during our last fiscal year have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Based on the evaluation we conducted, management has concluded that no such changes have occurred in fiscal 2013.

ITEM 16A.  AUDIT COMMITTEE FINANCIAL EXPERT

Our audit committee members are Mr. Gautam Bhailal Doshi (Chairman), Mr. A. R Narayanaswamy, Mr. Berjis Minoo Desai and Mr. Sandeep H. Junnarkar. Each of Messrs. Doshi, Narayanaswamy, Desai and Junnarkar, satisfies the “independence” requirements pursuant to the rules of the SEC and Rule 10A-3 of the Exchange Act. See “Item 6. Directors, Senior Management and Employees—A. Directors and Senior Management” for the experience and qualifications of the members of the audit committee.

Our board of directors has determined that each of Mr. Gautam Bhailal Doshi and Mr. A.R. Narayanaswamy qualify as an “—audit committee financial expert” within the requirements of the rules promulgated by the SEC relating to audit committees.

ITEM 16B.  CODE OF ETHICS

We have adopted a written Code of Business Conduct and Ethics that is applicable to all of our directors, executive officers and employees. We amended our Code of Business Conduct and Ethics on October 24, 2011 to add various provisions including applicable provisions of the U.K. Bribery Act, 2010. We have posted the code on our website at http://www.sterlite-industries.com/PDFs/code-of-coduct.pdf. Information contained in our website does not constitute a part of this annual report. We will also make available a copy of the Code of Business Conduct and Ethics to any person, without charge, if a written request is made to us at our registered office at SIPCOT Industrial Complex, Madurai Bypass Road, T.V. Puram P.O., Tuticorin, State of Tamil Nadu 628 002, India.

ITEM 16C.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

Our financial statements prepared in accordance with IFRS as issued by the IASB are audited by Deloitte Haskins & Sells, a firm registered with the Public Company Accounting Oversight Board in the United States and an Indian firm of Chartered Accountants registered with the Institute of Chartered Accountants of India.

Deloitte Haskins & Sells has served as our independent registered public accountant for each of the years ended March 31, 2012 and March 31, 2013 for which audited statements appear in this annual report.

The following table shows the aggregate fees for professional services and other services rendered by Deloitte Haskins & Sells and the various member firms of Deloitte to us, including our subsidiaries, in fiscal 2012 and 2013.

	Fiscal
	2012		2013
	($ in thousands)
Audit fees (audit and review of financial statements)		2,322.2		2,467.9
Audit-related fees (including other miscellaneous audit related certifications)		37.7		89.9
Tax fees (tax audit, other certifications and tax advisory services)		224.6		267.0
All other fees (certification on corporate governance and advisory services)		135.9		12.2
Total		2,720.4		2,837.0

Audit Committee Pre-approval Process

Our audit committee reviews and pre-approves the scope and the cost of audit services related to us and permissible non-audit services performed by the independent auditors, other than those for de minimus services which are approved by the audit committee prior to the completion of the audit. All of the services related to our company provided by Deloitte Haskins & Sells during the last fiscal year have been approved by the audit committee.

ITEM 16D.  EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

Not applicable

ITEM 16E.  PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

There were no repurchases of the equity shares of SIIL made by SIIL and any “affiliated purchaser” (as defined in Rule 10b-18(a)(3) of the Exchange Act) in fiscal 2013.

ITEM 16F.  CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT

Not applicable

189

ITEM 16G.  CORPORATE GOVERNANCE

As our ADSs are listed on the NYSE, we are subject to the NYSE listing standards. The NYSE listing standards applicable to us, as a foreign private issuer, are considerably different from those applicable to US companies. Under the NYSE rules, we need only (i) establish an independent audit committee; (ii) provide prompt certification by our chief executive officer of any material non-compliance with any corporate governance rules of the NYSE; (iii) provide periodic (annual and interim) written affirmations to the NYSE with respect to our corporate governance practices; and (iv) provide a brief description of significant differences between our corporate governance practices and those followed by US companies. Our audit committee consists of four directors: Mr. Gautam Bhailal Doshi (Chairman), Mr A.R.Narayanaswamy, Mr. Berjis Minoo Desai and Mr. Sandeep H. Junnarkar. Each of Messrs. Desai, Doshi, Junnarkar and Narayanaswamy satisfies the “independence” requirements of Rule 10A-3 of the Exchange Act. A brief description of significant differences between our corporate governance practices and those followed by US companies can be found in “Item 10. Additional Information—B. Memorandum and Articles of Association—Comparison of Corporate Governance Standards.”

As a foreign private issuer, we are exempt from the NYSE rules applicable to a US company requiring (i) a board of directors consisting of a majority of independent directors, (ii) a compensation committee and a nominating/corporate governance committee, (iii) shareholder approval of equity-compensation plans, (iv) the adoption and disclosure of corporate governance guidelines, and (v) the adoption and disclosure of a code of business conduct and ethics for directors, officer and employees, and the prompt disclosure of any waivers thereof for directors or executive officers.

In addition, we are deemed to be a “controlled company” under the NYSE rules. As a result, we are exempt from the NYSE rules applicable to a US company that is not a “controlled company” requiring (i) a board of directors consisting of a majority of independent directors and (ii) a compensation committee and a nominating/corporate governance committee.

ITEM 16H.  MINE SAFETY DISCLOSURE

Not applicable

PART III

ITEM 17.  FINANCIAL STATEMENTS

See Item 18 for a list of the financial statements filed as part of this annual report.

ITEM 18.  FINANCIAL STATEMENTS

The following financial statements are filed as part of this annual report, together with the report of the independent registered public accounting firms:

• Report of Independent Registered Public Accounting Firm.

• Consolidated Statements of Income for the years ended March 31, 2011, 2012 and 2013.

• Consolidated Statements of Comprehensive Income for the years ended March 31, 2011, 2012 and 2013.

• Consolidated Statements of Cash Flow for the years ended March 31, 2011, 2012 and 2013.

• Consolidated Statements of Financial Position as at March 31, 2012 and 2013.

• Consolidated Statement of Changes in Equity for the years ended March 31, 2011, 2012 and 2013.

• Notes to the Consolidated Financial Statements.

ITEM 19.  EXHIBITS

The following exhibits are filed as part of this annual report:

1.1	Certificate of Incorporation of Sterlite Industries (India) Limited, as amended - incorporated by reference to Exhibit 3.1 of Amendment No. 5 to the Registration Statement on Form F-1 (File No. 333-138739), as filed with the SEC on June 4, 2007.
1.2	Memorandum of Association of Sterlite Industries (India) Limited, as amended - incorporated by reference to Exhibit 1.2 of the annual report on Form-20F for fiscal 2008 (File No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on June 30, 2008.
1.3	Article of Association of Sterlite Industries (India) Limited, as amended - incorporated by reference to Exhibit 3.3 of Amendment No. 2 to the Registration Statement on Form F-1 (File No. 333-138739), as filed with the SEC on February 8, 2007.
2.1	Form of Deposit Agreement among Sterlite Industries (India) Limited, Citibank, N.A., as Depositary, and owners and holders from time to time of American Depositary Shares evidenced by American Depositary Receipts issued thereunder amended (including the Form of ADR) - incorporated by reference to Exhibit (a) of Amendment No. 2 to the Registration Statement on Form F-6 (File No. 333-139102), as filed with the SEC on June 15, 2007 as amended by Form of ADR incorporated by reference to Form 424B3 (File No. 333-139102), as filed with the SEC on June 28, 2010.
2.2	Specimen share certificate (effective as of November 30, 2006) - incorporated by reference to Exhibit 4.3 to the Registration Statement on Form 8-A (File No. 001-33175) as filed with the SEC on November 30, 2006.
4.1	Vedanta Resources plc Long-Term Incentive Plan - incorporated by reference to Exhibit 10.1 to the Registration Statement on Form F-1 (File No. 333-138739), as filed with the SEC on November 15, 2006.
4.2	Relationship Agreement dated December 5, 2003 among Vedanta Resources Plc, Volcan Investments Limited, Dwarka Prasad Agarwal, Agnivesh Agarwal and Anil Agarwal - incorporated by reference to Exhibit 10.2 to the Registration Statement on Form F-1 (File No. 333-138739), as filed with the SEC on November 15, 2006.

190

4.3	Deed of Adherence dated December 11, 2007 among Vedanta Resources plc, Volcan Investments Limited, Onclave PTC Limited and Anil Agarwal - incorporated by reference to Exhibit 4.3 of the annual report on Form-20F for fiscal 2008 (File No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on June 30, 2008.
4.4	Shared Services Agreement dated December 5, 2003 among Vedanta Resources Plc, Sterlite Optical Technologies Limited, Sterlite Gold Limited and Sterlite Industries (India) Limited, including the letter agreement dated April 13, 2006 amending the Shared Services Agreement - incorporated by reference to Exhibit 10.3 to the Registration Statement on Form F-1 (File No. 333-138739), as filed with the SEC on November 15, 2006.
4.5	Consultancy Agreement dated March 29, 2005 between Vedanta Resources Plc and Sterlite Industries (India) Limited - incorporated by reference to Exhibit 10.4 to the Registration Statement on Form F-1 (File No. 333-138739), as filed with the SEC on November 15, 2006.
4.6	Representative Office Agreement dated March 29, 2005 between Vedanta Resources Plc and Sterlite Industries (India) Limited - incorporated by reference to Exhibit 10.5 to the Registration Statement on Form F-1 (File No. 333-138739), as filed with the SEC on November 15, 2006.
4.7	Shareholders’ Agreement between the President of India and Sterlite Opportunities and Ventures Limited dated April 4, 2002 - incorporated by reference to Exhibit 10.6 to the Registration Statement on Form F-1 (File No. 333-138739), as filed with the SEC on November 15, 2006.
4.8	Shareholders’ Agreement between Sterlite Industries (India) Limited, GoI and Bharat Aluminium Company Limited dated March 2, 2001 - incorporated by reference to Exhibit 10.7 to the Registration Statement on Form F-1 (File No. 333-138739), as filed with the SEC on November 15, 2006.
4.9	Guarantee Agreement between the President of India, Sterlite Industries (India) Limited, Sterlite Optical Technologies Limited and Sterlite Opportunities and Ventures Limited dated April 4, 2002 - incorporated by reference to Exhibit 10.8 to the Registration Statement on Form F-1 (File No. 333-138739), as filed with the SEC on November 15, 2006.
4.10	Agreement between Vedanta Aluminium Limited and Orissa Mining Corporation Limited dated October 5, 2004 - incorporated by reference to Exhibit 10.9 to the Registration Statement on Form F-1 (File No. 333-138739), as filed with the SEC on November 15, 2006.
4.11	Mining lease between the Government of Rajasthan and Hindustan Zinc Limited dated March 13, 1980 renewed on September 15, 2000 pursuant to an order of the Government of Rajasthan dated May 1, 2000 and an indenture dated September 15, 2000 - incorporated by reference to Exhibit 10.10 to the Registration Statement on Form F-1 (File No. 333-138739), as filed with the SEC on November 15, 2006.
4.12	$ 92.6 million Term Facility Agreement between Sterlite Industries (India) Limited as borrower and CALYON, Standard Chartered Bank and ICICI Bank Limited as lenders dated March 22, 2006 - incorporated by reference to Exhibit 10.11 to the Registration Statement on Form F-1 (File No. 333-138739), as filed with the SEC on November 15, 2006.
4.13	Japanese Yen 3,570 million and $ 19.65 million Term Loan Facilities Agreement between Sterlite Industries (India) Limited as borrower and ICICI Bank Limited, Sumitomo Mitsui Banking Corporation and DBS Bank Limited as lenders dated September 19, 2005 - incorporated by reference to Exhibit 10.12 to the Registration Statement on Form F-1 (File No. 333-138739), as filed with the SEC on November 15, 2006.
4.14	$ 125 million Term Facility Agreement between Hindustan Zinc Limited as borrower and ABN AMRO Bank N.V., CALYON, Standard Chartered Bank, DBS Bank Limited, Mizuho Corporate Bank, Limited., Sumitomo Mitsui Banking Corporation, The Sumitomo Trust and Banking Co., Limited., Cathay United Bank, Hua Nan Commercial Bank, National Bank of Kuwait S.A.K., Bank of Taiwan, The Export-Import Bank of the Republic of China, Chang Hwa Commercial Bank Limited., Chiao Tung Bank Co., Limited., The International Commercial Bank of China, Co. Limited., Mascareignes International Bank Ltd., Syndicate Bank, Canara Bank and The Shanghai Commercial and Savings Bank, Limited. as lenders dated July 29, 2005 - incorporated by reference to Exhibit 10.13 to the Registration Statement on Form F-1 (File No. 333-138739), as filed with the SEC on November 15, 2006.
4.15	Rs. 7,000 million Rupee Term Facility Agreement between Bharat Aluminium Company Limited as the borrower and Union Bank of India, Export Import Bank of India, Uco Bank, State Bank of Travancore, State Bank of Saurashtra, State Bank of Hyderabad, State Bank of Patiala and State Bank of Indore as lenders dated August 18, 2004 - incorporated by reference to Exhibit 10.14 to the Registration Statement on Form F-1 (File No. 333-138739), as filed with the SEC on November 15, 2006.
4.16	$ 50 million Facility Agreement between Bharat Aluminium Company Limited as borrower and ICICI Bank Limited, Singapore Branch, ICICI Bank Limited, Bahrain Branch and ICICI Bank Limited, Offshore Banking Unit as lenders dated November 8, 2004 - incorporated by reference to Exhibit 10.15 to the Registration Statement on Form F-1 (File No. 333-138739), as filed with the SEC on November 15, 2006.

191

4.17	$ 50 million Facility Agreement between Bharat Aluminium Company Limited as borrower and ICICI Bank Limited, ICICI Bank Limited, Bahrain Branch and ICICI Bank Limited, Offshore Banking Unit as lenders dated November 10, 2004 - incorporated by reference to Exhibit 10.16 to the Registration Statement on Form F-1 (File No. 333-138739), as filed with the SEC on November 15, 2006.
4.18	Rs. 10,000 million Facility Agreement between Bharat Aluminium Company Limited as borrower and Oriental Bank of Commerce, Syndicate Bank, The Jammu & Kashmir Bank Limited, Corporation Bank, Housing Development Finance Corporation Limited, State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Indore, State Bank of Mysore, State Bank of Patiala, State Bank of Saurashtra, The Federal Bank Limited, The Karnataka Bank Limited, The Karur Vysya Bank Limited, UCO Bank, Vijaya Bank, ABN AMRO Bank N.V., The Laxmi Vilas Bank Limited as lenders dated September 16, 2003 - incorporated by reference to Exhibit 10.17 to the Registration Statement on Form F-1 (File No. 333-138739), as filed with the SEC on November 15, 2006.
4.19	Subscription Agreement between Sterlite Industries (India) Limited and the Life Insurance Corporation of India dated April 9, 2003 - incorporated by reference to Exhibit 10.18 to the Registration Statement on Form F-1 (File No. 333-138739), as filed with the SEC on November 15, 2006.
4.20	Option Agreement between Sterlite Industries (India) Limited, India Foils Limited and ICICI Bank Limited dated February 18, 2005 - incorporated by reference to Exhibit 10.19 to the Registration Statement on Form F-1 (File No. 333-138739), as filed with the SEC on November 15, 2006.
4.21	Corporate Guarantee by Sterlite Industries (India) Limited to ICICI Bank Limited on behalf of India Foils Limited dated February 8, 2005 - incorporated by reference to Exhibit 10.20 to the Registration Statement on Form F-1 (File No. 333-138739), as filed with the SEC on November 15, 2006.
4.22	Corporate Guarantee by Sterlite Industries (India) Limited to ICICI Bank Limited on behalf of Vedanta Aluminium Limited dated December 4, 2004 - incorporated by reference to Exhibit 10.21 to the Registration Statement on Form F-1 (File No. 333-138739), as filed with the SEC on November 15, 2006.
4.23	Frame Contract between Sterlite Industries (India) Limited and the Copper Mines of Tasmania Proprietary Limited dated July 1, 2004, as amended on July 1, 2004 - incorporated by reference to Exhibit 10.22 to the Registration Statement on Form F-1 (File No. 333-138739), as filed with the SEC on November 15, 2006.
4.24	Copper Concentrate Purchase Contract between Sterlite Industries (India) Limited and the Copper Mines of Tasmania Proprietary Limited dated July 1, 2005 - incorporated by reference to Exhibit 10.23 to the Registration Statement on Form F-1 (File No. 333-138739), as filed with the SEC on November 15, 2006.
4.25	Agreement for Sale and Purchase of the Power Transmission Line Division between Sterlite Industries (India) Limited and Sterlite Optical Technologies Limited dated August 30, 2006 - incorporated by reference to Exhibit 10.24 to the Registration Statement on Form F-1 (File No. 333-138739), as filed with the SEC on November 15, 2006.
4.26	Agreement between Sterlite Industries (India) Limited and Navin Agarwal dated October 8, 2003 - incorporated by reference to Exhibit 10.25 to the Registration Statement on Form F-1 (File No. 333-138739), as filed with the SEC on November 15, 2006.
4.27	Agreement between Sterlite Industries (India) Limited and Kuldip Kumar Kaura dated September 12, 2006 - incorporated by reference to Exhibit 10.26 to the Registration Statement on Form F-1 (File No. 333-138739), as filed with the SEC on November 15, 2006.
4.28	Letter issued by Sterlite Industries (India) Limited to Kuldip Kumar Kaura dated March 27, 2008 - incorporated by reference to Exhibit 4.28 of the annual report on Form-20F for fiscal 2008 (File No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on June 30, 2008.
4.29	Share Purchase Agreement between Sterlite Industries (India) Limited and Anil Agarwal dated October 3, 2006 relating to the sale of Sterlite Energy Limited - incorporated by reference to Exhibit 10.29 of Amendment No. 1 to the Registration Statement on Form F-1 (File No. 333-138739), as filed with the SEC on November 22, 2006.
4.30	Share Purchase Agreement between Sterlite Industries (India) Limited and Dwarka Prasad Agarwal dated October 3, 2006 relating to the sale of Sterlite Energy Limited - incorporated by reference to Exhibit 10.30 of Amendment No. 1 to the Registration Statement on Form F-1 (File No. 333-138739), as filed with the SEC on November 22, 2006.
4.31	Share Purchase Agreement between Sterlite Industries (India) Limited and Twin Star Infrastructure Limited dated October 3, 2006 relating to the sale of Sterlite Energy Limited - incorporated by reference to Exhibit 10.31 of Amendment No. 1 to the Registration Statement on Form F-1 (File No. 333-138739), as filed with the SEC on November 22, 2006.
4.32	Specialty Deed between Copper Mines of Tasmania Proprietary Limited, Mt Lyell Mining Company Limited, Citibank Limited and Citibank, N.A. dated April 1, 1999 - incorporated by reference to Exhibit 10.36 of Amendment No. 2 to the Registration Statement on Form F-1 (File No. 333-138739), as filed with the SEC on February 8, 2007.

192

4.33	Subordination Deed Poll between Monte Cello Corporation N.V., Citibank Limited and Citibank, N.A. dated April 1, 1999 - incorporated by reference to Exhibit 10.37 of Amendment No. 2 to the Registration Statement on Form F-1 (File No. 333-138739), as filed with the SEC on February 8, 2007.
4.34	Deed of Assignment of Debt between Monte Cello Corporation N.V. and Mt Lyell Mining Company Limited dated April 1, 1999 - incorporated by reference to Exhibit 10.38 of Amendment No. 2 to the Registration Statement on Form F-1 (File No. 333-138739), as filed with the SEC on February 8, 2007.
4.35	Deed of Assignment of Debt between Monte Cello Corporation N.V., Citibank Limited and Citibank, N.A. dated April 1, 1999 - incorporated by reference to Exhibit 10.39 of Amendment No. 2 to the Registration Statement on Form F-1 (File No. 333-138739), as filed with the SEC on February 8, 2007.
4.36	Memorandum of Understanding between Sterlite Industries (India) Limited and Vedanta Aluminium Limited dated August 29, 2007 relating to the subscription of the Zero Percent Optionally Fully Convertible Debentures - incorporated by reference to Exhibit 4.38 of the annual report on Form-20F for fiscal 2008 (File No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on June 30, 2008.
4.37	Addendum dated March 17, 2008 to the Memorandum of Understanding between Sterlite Industries (India) Limited and Vedanta Aluminium Limited dated August 29, 2007 relating to the subscription of the Zero Percent Optionally Fully Convertible Debentures - incorporated by reference to Exhibit 4.39 of the annual report on Form-20F for fiscal 2008 (File No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on June 30, 2008.
4.38	Memorandum of Understanding between Sterlite Industries (India) Limited and Vedanta Aluminium Limited dated December 23, 2007 relating to the subscription of the Zero Percent Optionally Fully Convertible Debentures - incorporated by reference to Exhibit 4.40 of the annual report on Form-20F for fiscal 2008 (File No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on June 30, 2008.
4.39	Addendum dated March 17, 2008 to the Memorandum of Understanding between Sterlite Industries (India) Limited and Vedanta Aluminium Limited dated December 23, 2007 relating to the subscription of the Zero Percent Optionally Fully Convertible Debentures - incorporated by reference to Exhibit 4.41 of the annual report on Form-20F for fiscal 2008 (File No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on June 30, 2008.
4.40	Purchase and Sale Agreement dated May 30, 2008 among Asarco LLC, AR Silver Bell, Inc., Copper Basin Railway, Inc., Asarco Santa Cruz, Inc., Sterlite (USA), Inc. and Sterlite Industries (India) Limited - incorporated by reference to Exhibit 4.42 of the annual report on Form-20F for fiscal 2008 (File No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on June 30, 2008.
4.41	10,000 million Loan Agreement between Sterlite Industries (India) Limited and Vedanta Aluminium Limited dated February 4, 2008 - incorporated by reference to Exhibit 4.43 of the annual report on Form-20F for fiscal 2008 (File No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on June 30, 2008.
4.42	Amendment No. 1 dated April 15, 2009 to the Settlement and Sale and Purchase Agreement dated March 6, 2009 among Asarco LLC, AR Silver Bell, Inc., Copper Basin Railway, Inc., Asarco Santa Cruz, Inc., Sterlite (USA), Inc., and Sterlite Industries (India) Limited - incorporated by reference to Exhibit 4.43 of the annual report on Form-20F for fiscal 2009 (File No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on July 10, 2009.
4.43	Amendment No. 2 effective as of April 22, 2009 to the Settlement and Sale and Purchase Agreement dated March 6, 2009, as amended on April 15, 2009, among Asarco LLC, AR Silver Bell, Inc., Copper Basin Railway, Inc., Asarco Santa Cruz, Inc., Sterlite (USA), Inc., and Sterlite Industries (India) Limited - incorporated by reference to Exhibit 4.44 of the annual report on Form-20F for fiscal 2009 (File No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on July 10, 2009.
4.44	Amendment No. 3 effective as of June 12, 2009 to the Settlement and Sale and Purchase Agreement dated March 6, 2009, as amended on April 15, 2009 and April 22, 2009, among Asarco LLC, AR Silver Bell, Inc., Copper Basin Railway, Inc., Asarco Santa Cruz, Inc., Sterlite (USA), Inc., and Sterlite Industries (India) Limited - incorporated by reference to Exhibit 4.45 of the annual report on Form-20F for fiscal 2009 (File No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on July 10, 2009.
4.45	Sterlite Plan Agreement in Principle Term Sheet dated June 12, 2009 among Asarco LLC, the subsidiary debtors, Sterlite (USA), Inc., Robert C. Pate, in his capacity as the Future Claims Representative, and the Official Committee of Asbestos Claimants - incorporated by reference to Exhibit 4.46 of the annual report on Form-20F for fiscal 2009 (File No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on July 10, 2009.
4.46	Credit Agreement Letter dated February 7, 2005 between India Foils Limited and ICICI Bank Limited - incorporated by reference to Exhibit 4.47 of the annual report on Form-20F for fiscal 2009 (File No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on July 10, 2009.

193

4.47	Novation Agreement dated November 15, 2008 among Sterlite Industries (India) Limited, India Foils Limited and ICICI Bank Limited in respect of Rs. 772.5 million term loan facility - incorporated by reference to Exhibit 4.48 of the annual report on Form-20F for fiscal 2009 (File No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on July 10, 2009.
4.48	Credit Agreement Letter dated August 4, 2005 between India Foils Limited and ICICI Bank Limited - incorporated by reference to Exhibit 4.49 of the annual report on Form-20F for fiscal 2009 (File No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on July 10, 2009.
4.49	Novation Agreement dated November 15, 2008 among Sterlite Industries (India) Limited, India Foils Limited and ICICI Bank Limited in respect of the Rs. 250 million term loan facility - incorporated by reference to Exhibit 4.50 of the annual report on Form-20F for fiscal 2009 (File No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on July 10, 2009.
4.50	Rs. 55,690 million Common Rupee Loan Agreement dated June 29, 2009 among Sterlite Energy Limited, the State Bank of India as facility agent and issuing bank, IDBI Trusteeship Services Limited as security trustee and the lenders named therein - incorporated by reference to Exhibit 4.51 of the annual report on Form-20F for fiscal 2009 (File No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on July 10, 2009 .
4.51	$ 140 million Term Loan Facility Agreement dated June 29, 2009 among Sterlite Energy Limited, India Infrastructure Finance (UK) Company Limited as lender, and the State Bank of India as facility agent - incorporated by reference to Exhibit 4.52 of the annual report on Form-20F for fiscal 2009 (File No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on July 10, 2009.
4.52	Sponsor Support Agreement dated June 29, 2009 among Sterlite Industries (India) Limited, Sterlite Energy Limited, and the State Bank of India as facility agent - incorporated by reference to Exhibit 4.53 of the annual report on Form-20F for fiscal 2009 (File No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on July 10, 2009.
4.53	Term Sheet dated May 22, 2009 between Sterlite Industries (India) Limited and Vedanta Aluminium Limited relating to the subscription of 9.75% Non-Convertible Debentures - incorporated by reference to Exhibit 4.54 of the annual report on Form-20F for fiscal 2009 (File No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on July 10, 2009.
4.54	Agreement dated February 18, 2009 between the Orissa Mining Corporation Limited and Sterlite Industries (India) Limited - incorporated by reference to Exhibit 4.55 of the annual report on Form-20F for fiscal 2009 (File No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on July 10, 2009.
4.55	Indenture and Supplemental Indenture, both dated October 29, 2009, between Sterlite Industries (India) Limited and Wilmington Trust Company as trustee and Citibank, N.A., as securities administrator - incorporated by reference to Exhibits 4.1 and 4.2 to the Form-6K (File No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on November 3, 2009.
4.56	Amendment dated March 29, 2009 to the Consultancy and Representative Office Agreement between Vedanta Resources Plc and Sterlite Industries (India) Limited both dated March 29, 2005 – incorporated by reference to Exhibit 4.56 of the annual report on Form 20-F for fiscal 2011 (File No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on September 30, 2011.
4.57	Outsourcing Services Agreement dated April 1, 2010 between Vedanta Resources Plc and Sterlite Industries (India) Limited - incorporated by reference to Exhibit 4.57 of the annual report on Form 20-F for fiscal 2011 (File No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on September 30, 2011.
4.58	Share Purchase Agreement dated May 9, 2010 between Anglo Operations Limited, Taurus International S.A., Anglo South Africa Capital (Pty) Limited, Anglo American Services (UK) Limited, Welter Trading Limited and Vedanta Resources Plc. incorporated by reference to Exhibit 4.58 of the annual report on Form 20-F for fiscal 2011 (File No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on September 30, 2011.
4.59	Buyer’s Credit Import Advance facility dated December 8, 2009 and Demand Promissory Note accepted on May 18, 2010 obtained by Bharat Aluminium Company Limited from DBS Bank Limited for $ 50 million - incorporated by reference to Exhibit 4.59 of the annual report on Form 20-F for fiscal 2011 (File No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on September 30, 2011.
4.60	Letter of Credit Facility Agreement dated August 30, 2010 obtained by Talwandi Sabo Power Limited from ICICI Bank for Rs. 10,000 million - incorporated by reference to Exhibit 4.60 of the annual report on Form 20-F for fiscal 2011 (File No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on September 30, 2011.
4.61	Share Purchase and Shareholders’ Agreement dated September 17, 2010 between Sterlite Industries (India) Limited, Leighton Contractors (India) Private Limited and Vizag General Cargo Berth Private Limited - incorporated by reference to Exhibit 4.61 of the annual report on Form 20-F for fiscal 2011 (File No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on September 30, 2011.

194

4.62	Corporate Guarantee dated December 8, 2010 given by Sterlite Industries (India) Limited to IL&FS Trust Company Limited on behalf of Talwandi Sabo Power Limited - incorporated by reference to Exhibit 4.62 of the annual report on Form 20-F for fiscal 2011 (File No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on September 30, 2011.
4.63	Second Deed of Amendment dated December 16, 2010 between Anglo Operations Limited, Taurus International S.A., Anglo South Africa Capital (Pty) Limited, Anglo American Services (UK) Limited, Welter Trading Limited, THL Zinc Limited, Labaume B.V., Pecvest 17 (Proprietary) Limited and Vedanta Resources Plc as an amendment to the Share Purchase Agreement dated May 9, 2010 - incorporated by reference to Exhibit 4.63 of the annual report on Form 20-F for fiscal 2011 (File No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on September 30, 2011.
4.64	Letter of Credit Facility Agreement dated December 18, 2010 obtained by Bharat Aluminium Company Limited from ICICI Bank for Rs. 2.50 billion - incorporated by reference to Exhibit 4.64 of the annual report on Form 20-F for fiscal 2011 (File No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on September 30, 2011.
4.65	Service Contract dated January 25, 2011 between Sterlite Industries (India) Limited and Mr. Din Dayal Jalan - incorporated by reference to Exhibit 4.65 of the annual report on Form 20-F for fiscal 2011 (File No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on September 30, 2011.
4.66**	Service Contract dated January 29, 2013 between Sterlite Industries (India) Limited and Mr. Din Dayal Jalan.
8.1**	List of subsidiaries of Sterlite Industries (India) Limited.
11.1	Sterlite Industries (India) Limited - Code of Business Conduct and Ethics as amended till November 2011 incorporated by reference to Exhibit 11.1 of the annual report on Form 20-F for fiscal 2012 (File No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on May 25, 2012.
12.1**	Certification by the Chief Executive Officer pursuant to 17 CFR 240. 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
12.2**	Certification by the Chief Financial Officer pursuant to 17 CFR 240. 15D-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
13.1**	Certification by the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
13.2**	Certification by the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
15.1**	Consent of Independent Registered Public Accounting Firm.

** Filed herewith

195

SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

Date: July 30, 2013

STERLITE INDUSTRIES (INDIA) LIMITED
By:	/s/ Din Dayal Jalan
Name:	Din Dayal Jalan
Title:	Chief Financial Officer

196

Index to Consolidated Financial Statements

	Page(s)
Report of Independent Registered Public Accounting Firm		F-2
Consolidated Statements of Income for the years ended March 31, 2011, 2012 and 2013.		F-3
Consolidated Statements of Comprehensive Income for the years ended March 31, 2011, 2012 and 2013.		F-4
Consolidated Statements of Financial Position as at March 31, 2012 and 2013.		F-5
Consolidated Statements of Cash Flows for the years ended March 31, 2011, 2012 and 2013.		F-6
Consolidated Statements of Changes in Equity for the years ended March 31, 2011, 2012 and 2013.		F-8
Notes to the Consolidated Financial Statements		F-10

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of

Sterlite Industries (India) Limited

Mumbai, Maharashtra, India

We have audited the accompanying consolidated statements of financial position of Sterlite Industries (India) Limited and subsidiaries (the “Company”) as of March 31, 2013, and 2012, and the related consolidated statements of income, comprehensive income, changes in equity, and cash flows for each of the three years in the period ended March 31, 2013, all expressed in Indian Rupees. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Sterlite Industries (India) Limited and subsidiaries as of March 31, 2013 and 2012, and the results of their operations and their cash flows for each of the three years in the period ended March 31, 2013, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company’s internal control over financial reporting as of March 31, 2013, based on the criteria established in Internal Control — Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated July 30, 2013 expressed an unqualified opinion on the Company’s internal control over financial reporting.

Our audit for the year ended and as of March 31, 2013, also comprehended the translation of Indian Rupees amounts into United States dollar amounts and, in our opinion, such translation has been made in conformity with the basis stated in Note 2. The translation of the consolidated financial statements amounts into United States dollars have been made solely for the convenience of the readers.

/s/ Deloitte Haskins & Sells

Deloitte Haskins & Sells

Mumbai, Maharashtra, India

July 30, 2013

F-2

STERLITE INDUSTRIES (INDIA) LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Indian Rupees in millions except share or per share amounts unless otherwise stated)

For the year ended March 31,	Notes	2011			2012			2013			2013
		(Rs. in millions)			(Rs. in millions)			(Rs. in millions)			(US dollars in millions) (Note 2)
Revenue	4		302,472			412,063			452,550			8,300.6
Cost of sales			(226,134	)		(319,719	)		(355,624	)		(6,522.8	)
Gross profit			76,338			92,344			96,926			1,777.8
Other operating income			2,366			1,398			1,883			34.5
Distribution expenses			(3,516	)		(7,446	)		(8,646	)		(158.6	)
Administration expenses			(7,614	)		(15,002	)		(13,637	)		(250.1	)
Operating profit			67,574			71,294			76,526			1,403.6
Investment and other income	5		21,933			28,829			36,693			673.0
Finance and other costs	6		1,096			(12,042	)		(11,183	)		(205.1	)
Share in loss of associate	10		(3,082	)		(8,767	)		(7,736	)		(141.9	)
Profit before tax			87,521			79,314			94,300			1,729.6
Income tax expense	7		(18,810	)		(20,077	)		(15,555	)		(285.3	)
Profit for the year			68,711			59,237			78,745			1,444.3
Profit attributable to:
Equity holders of the parent			48,898			38,998			53,895			988.5
Non-controlling interests			19,813			20,239			24,850			455.8
Earnings per share	29
Basic			14.55			11.60			16.03			0.3
Diluted			13.87			11.60			16.03			0.3
Weighted average number of equity shares used in computing earnings per share
Basic			3,361,207,534			3,361,207,534			3,361,207,534			3,361,207,534
Diluted			3,446,945,134			3,361,207,534			3,361,207,534			3,361,207,534

The accompanying notes are an integral part of these consolidated financial statements.

The Company’s consolidated statements of income are presented disclosing expenses by function. The consolidated statements of income disclosing expenses presented by nature are in Note 34 (c).

F-3

STERLITE INDUSTRIES (INDIA) LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Indian Rupees in millions except share or per share amounts unless otherwise stated)

For the year ended March 31,	2011			2012			2013			2013
	(Rs. in millions)			(Rs. in millions)			(Rs. in millions)			(US dollars in millions) (Note 2)
Profit for the year		68,711			59,237			78,745			1,444.3
Other comprehensive income/(loss), net of tax:
Exchange differences on translation of foreign operations		807			5,053			(3,631	)		(66.6	)
(Loss)/gain on available-for-sale financial investments		(129	)		1,337			(1,369	)		(25.1	)
Cash flow hedges*#		(97	)		(454	)		499			9.2
Share in other comprehensive income/(loss) of associate		340			(1,249	)		866			15.9
Total other comprehensive income/(loss) for the year, net of tax		921			4,687			(3,635	)		(66.6	)
Total comprehensive income		69,632			63,924			75,110			1,377.7
Total comprehensive income attributable to:
Equity holders of the parent		49,727			43,581			50,664			929.3
Non-controlling interests		19,905			20,343			24,446			448.4
		69,632			63,924			75,110			1,377.7

* Refer to Note 7 for tax related to each component of other comprehensive income/(loss)

# Refer to Note 34(a) for amounts reclassified into profit for the year out of other comprehensive income/(loss)

The accompanying notes are an integral part of these consolidated financial statements.

F-4

STERLITE INDUSTRIES (INDIA) LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(Indian Rupees in millions except share or per share amounts unless otherwise stated)

		As at March 31,
		2012		2013		2013
		(Rs. in millions)		(Rs. in millions)		(US dollars in millions) (Note 2)
ASSETS
Non-current assets
Property, plant and equipment	8		379,517		421,626		7,733.4
Intangible assets	9		12,657		17,317		317.6
Leasehold land prepayments			1,716		1,807		33.2
Deferred tax assets	7		—		162		3.0
Financial asset investments	11(a)		9,620		100		1.8
Other non-current assets	12		41,562		30,936		567.4
Total non-current assets			445,072		471,948		8,656.4
Current assets
Inventories	13		45,711		71,294		1,307.7
Current tax assets			618		1,120		20.5
Trade and other receivables	14		117,445		158,670		2,910.3
Financial asset investments	11(a)		—		1,100		20.2
Short-term investments	15		216,283		236,981		4,346.7
Derivative financial assets	25		517		351		6.4
Restricted cash and cash equivalents	16		59		63		1.2
Cash and cash equivalents	17		17,173		14,357		263.3
Total current assets			397,806		483,936		8,876.3
Assets held for sale	18		11		—		—
Total assets			842,889		955,884		17,532.7
LIABILITIES
Current liabilities
Short-term borrowings	19		53,983		26,287		482.1
Acceptances	20		28,471		60,254		1,105.2
Trade and other payables	21		73,724		86,802		1,592.1
Derivative financial liabilities	25		606		945		17.3
Provisions	22		802		664		12.2
Current tax liabilities			539		3,153		57.8
Total current liabilities			158,125		178,105		3,266.7
Net current assets			239,681		305,831		5,609.6
Non-current liabilities
Long-term borrowings	19		74,490		106,232		1,948.5
Deferred tax liabilities	7		24,920		16,797		308.1
Retirement benefits	24		1,696		1,903		34.9
Provisions	22		7,208		7,745		142.1
Other non-current liabilities	23		5,265		10,357		190.0
Total non-current liabilities			113,579		143,034		2,623.6
Total liabilities			271,704		321,139		5,890.3
Net assets			571,185		634,745		11,642.4
EQUITY
Share capital	27		3,361		3,361		61.6
Securities premium			181,117		181,117		3,322.0
Other components of equity			7,080		3,815		70.0
Retained earnings			253,919		300,616		5,513.9
Equity attributable to equity holders of the parent			445,477		488,909		8,967.5
Non-controlling interests			125,708		145,836		2,674.9
Total equity			571,185		634,745		11,642.4

The accompanying notes are an integral part of these consolidated financial statements.

F-5

STERLITE INDUSTRIES (INDIA) LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Indian Rupees in millions except share or per share amounts unless otherwise stated)

For the year ended March 31,	2011			2012			2013			2013
	(Rs. in millions)			(Rs. in millions)			(Rs. in millions)			(US dollars in millions) (Note 2)
Cash flows from operating activities
Profit before tax		87,521			79,314			94,300			1,729.6
Adjustments to reconcile profit before tax to net cash provided by operating activities:
Depreciation and amortization		12,422			25,103			26,035			477.5
Provision for doubtful debts/advances		26			115			(9	)		(0.2	)
Fair value gain on financial assets held for trading		(4,185	)		(9,760	)		(11,415	)		(209.4	)
Gain on sale of financial asset investments		—			—			(770	)		(14.1	)
Profit on sale of fixed asset, net		(257	)		(50	)		339			6.2
Share in loss of associate		3,082			8,767			7,736			141.9
Exchange loss/(gains), net		(2,232	)		9,474			6,388			117.2
Gain on fair valuation of conversion option		(3,206	)		(2,455	)		(299	)		(5.4	)
Interest and dividend income		(16,917	)		(19,050	)		(24,508	)		(449.6	)
Interest expense		2,693			7,178			9,622			176.5
Changes in assets and liabilities:
(Increase)/ decrease in trade and other receivables		(8,528	)		1,457			3,505			64.3
(Increase)/ decrease in inventories		(17,584	)		6,953			(25,863	)		(474.3	)
Decrease /(increase) in other current and non-current assets		(1,244	)		4,543			8,536			156.6
Increase/(Decrease) in trade and other payable		31,977			(8,008	)		5,832			107.0
(Decrease)/increase in other current and non-current liabilities		(5,519	)		(10,069	)		(8,073	)		(148.1	)
Proceeds from short-term investments		1,263,809			739,051			647,132			11,869.6
Purchases of short-term investments		(1,206,419	)		(747,043	)		(640,932	)		(11,755.9	)
Cash generated from operations		135,439			85,520			97,556			1,789.4
Interest paid		(4,375	)		(9,653	)		(13,028	)		(239.0	)
Interest received		9,769			14,949			10,420			191.1
Dividends received		4,320			1,013			583			10.7
Income tax paid		(17,624	)		(24,831	)		(21,577	)		(395.7	)
Net cash from operating activities		127,529			66,998			73,954			1,356.5
Cash flows from investing activities
Purchases of property, plant and equipment		(50,016	)		(67,670	)		(57,636	)		(1,057.1	)
Proceeds from sale of property, plant and equipment		554			524			89			1.6
Loans repaid by related parties		79,556			1,064			9,609			176.2
Loans to related parties		(56,581	)		(27,369	)		(41,861	)		(767.8	)

F-6

Proceeds from short-term deposits	58,307		87,607		64,824		1,189.0
Purchases of short-term deposits	(106,877	)	(82,119	)	(76,726	)	(1,407.3	)
Proceed from sale of Hudbay shares	—		—		8,201		150.4
Acquisition of zinc international business (net of cash acquired)1	(53,526	)	—		—		—
Refund of purchase consideration in BMM acquisition	—		436		—		—
Purchase of investment 2	—		(7,158	)	—		—
Net changes in restricted cash and cash equivalents	21		(20	)	(4	)	(0.1	)
Net cash used in investing activities	(128,562	)	(94,705	)	(93,504	)	(1,715.1	)
Cash flows from financing activities
Proceeds from/(repayment of) working capital loan, net	1,692		1,686		3,254		59.7
Proceeds from acceptances	35,043		158,993		183,319		3,362.4
Repayment of acceptances	(39,719	)	(157,761	)	(153,360	)	(2,812.9	)
Proceeds from other short-term borrowings	30,171		113,717		114,558		2,101.2
Repayment of other short-term borrowings	(15,000	)	(99,756	)	(134,155	)	(2,460.7	)
Proceeds from long-term borrowings	17,129		32,147		23,449		430.1
Repayment of long-term borrowings	(8,823	)	(8,578	)	(9,160	)	(168.0	)
Loan from related party	15,738		—		—		—
Loan repaid to related party	(10,838	)	(5,202	)	—		—
Deemed dividend 2	—		(616	)	—		—
Payment of dividends to equity holders of the parent, including dividend tax	(3,674	)	(7,658	)	(7,198	)	(132.0	)
Payment of dividends to non-controlling interests, including dividend tax	(1,069	)	(4,338	)	(4,306	)	(79.0	)
Net cash provided by financing activities	20,650		22,634		16,401		300.8
Effect of exchange rate changes on cash and cash equivalents	(151	)	759		333		6.1
Net (decrease)/increase in cash and cash equivalents	19,466		(4,314	)	(2,816	)	(51.7	)
Cash and cash equivalents at the beginning of the year	2,021		21,487		17,173		315.0
Cash and cash equivalents at the end of the year3	21,487		17,173		14,357		263.3
Supplementary disclosure of non-cash investing activities:
Payables for purchase of property, plant and equipment	21,660		27,500		38,910		713.7
Conversion of short term loans into 9% cumulative redeemable preference shares to associate	—		30,000		—		—

The accompanying notes are an integral part of these consolidated financial statements.

1 In financial year 2010-11 payments for acquisition of zinc international business includes an amount of Rs 3,972 million paid towards settlement of shareholder’s loan acquired as a part of BMM acquisition.

2 Refer note 11(b).

3 for composition refer Note 17.

F-7

STERLITE INDUSTRIES (INDIA) LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Indian Rupees in millions except share or per share amounts unless otherwise stated)

	Attributable to equity holders of the parent
	Share capital		Securities premium			Translation of foreign operations		Available- for-sale financial investments			Cash flow hedges			Retained earnings			Total			Non- controlling interests			Total
Balance as at April 1, 2010		1,681		182,797			896		326			1,501			177,971			365,172			86,816			451,988
Profit for the year		—		—			—		—			—			48,898			48,898			19,813			68,711
Exchange differences on translation of foreign operations		—		—			714		—			—			—			714			93			807
Movement in available-for-sale financial investments		—		—			—		(129	)		—			—			(129	)		—			(129	)
Net movement in fair value of cash flow hedges, net of tax*#		—		—			—		—			(96	)		—			(96	)		(1	)		(97	)
Share in other comprehensive income of associate		—		—			—		—			340			—			340			—			340
Total comprehensive income for the year		—		—			714		(129	)		244			48,898			49,727			19,905			69,632
Bonus shares issued		1,680		(1,680	)		—		—			—			—			—			—			—
Non-controlling interest on acquisition		—		—			—		—			—			—			—			4,051			4,051
Adjustment for amount transferred to initial carrying amount of property, plant and equipment, net of tax		—		—			—		—			(1,055	)		—			(1,055	)		—			(1,055	)
Dividend paid including tax on dividend		—		—			—		—			—			(3,674	)		(3,674	)		(1,069	)		(4,743	)
Balance as at March 31, 2011		3,361		181,117			1,610		197			690			223,195			410,170			109,703			519,873
Balance as at April 1, 2011		3,361		181,117			1,610		197			690			223,195			410,170			109,703			519,873
Profit for the year		—		—											38,998			38,998			20,239			59,237
Exchange differences on translation of foreign operations		—		—			4,959		—			—			—			4,959			94			5,053
Movement in available-for-sale financial investments		—		—			—		1,337			—			—			1,337			—			1,337
Net movement in fair value of cash flow hedges, net of tax*#		—		—			—		—			(464	)		—			(464	)		10			(454	)
Share in other comprehensive income of associate		—		—			—		—			(1,249	)		—			(1,249	)		—			(1,249	)
Total comprehensive income for the year		—		—			4,959		1,337			(1,713	)		38,998			43,581			20,343			63,924
Deemed dividend**		—		—			—		—			—			(616	)		(616	)		—			(616	)
Dividend paid including tax on dividend		—		—			—		—			—			(7,658	)		(7,658	)		(4,338	)		(11,996	)
Balance as at March 31, 2012		3,361		181,117			6,569		1,534			(1,023	)		253,919			445,477			125,708			571,185

F-8

	Attributable to equity holders of the parent
	Share capital		Securities premium		Translation of foreign operations			Available for sale financial investments			Cash flow hedges			Retained earning			Total			Non- controlling interests			Total
Balance as at April 1, 2012		3,361		181,117		6,569			1,534			(1,023	)		253,919			445,477			125,708			571,185
Profit for the year		—		—		—			—			—			53,895			53,895			24,850			78,745
Exchange differences on translation of foreign operations		—		—		(3,095	)		—			—			—			(3,095	)		(536	)		(3,631	)
Movement in available-for-sale financial investments		—		—		—			(640	)		—			—			(640	)		41			(599	)
Reclassified to income statement**		—		—		—			(770	)		—			—			(770	)		—			(770	)
Net movement in fair value of cash flow hedges, net of tax*#		—		—		—			—			408			—			408			91			499
Share in other comprehensive income of associate		—		—		—			—			866			—			866			—			866
Total comprehensive income for the year		—		—		(3,095	)		(1,410	)		1,274			53,895			50,664			24,446			75,110
Adjustment for amount transferred to initial carrying amount of property, plant and equipment, net of tax		—		—		—			—			(34	)		—			(34	)		(12	)		(46	)
Dividend paid including tax on dividend		—		—		—			—			—			(7,198	)		(7,198	)		(4,306	)		(11,504	)
Balance as at March 31, 2013		3,361		181,117		3,474			124			217			300,616			488,909			145,836			634,745
Balance as at March 31, 2013 (in US dollars in millions)		61.6		3,322.0		63.7			2.3			4.0			5,513.9			8,967.5			2,674.9			11,642.4

* Refer to Note 7 for taxes related to each component of the consolidated statements of comprehensive income

# Refer to Note 34(a) for amount reclassified to the consolidated statements of income from consolidated statements of comprehensive income

** Refer to Note 11(b) for financial assets investments

The accompanying notes are an integral part of these consolidated financial statements.

F-9

STERLITE INDUSTRIES (INDIA) LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. Company overview

Sterlite Industries (India) Limited (“SIIL”) and its consolidated subsidiaries (collectively, the “Company” or “Sterlite”) are principally engaged in non-ferrous metals and mining in India, Australia, Namibia, South Africa and Ireland. The Company is also in the business of commercial power generation and port operations in India. SIIL was incorporated on September 8, 1975 under the laws of the Republic of India and has its registered office at Tuticorin, Tamilnadu. SIIL’s shares are listed on National Stock Exchange and Bombay Stock Exchange in India. In June 2007, SIIL completed its initial public offering of American Depositary Shares, or ADS, each representing four equity shares, and listed its ADSs on the New York Stock Exchange. In July 2009, SIIL completed its follow-on offering of an additional 131,906,011 ADSs, each currently representing four equity shares, which are listed on the New York Stock Exchange.

These consolidated annual financial statements were authorized for issue by SIIL’s board of directors on July 30, 2013.

SIIL is a majority-owned subsidiary of Twin Star Holdings Limited (“Twin Star”) which is in turn a wholly-owned subsidiary of Vedanta Resources plc (“Vedanta”), a public limited company incorporated in the United Kingdom and listed on the London Stock Exchange plc. Twin Star held 54.64% of SIIL’s equity as at March 31, 2013.

The Company’s copper business is principally one of custom smelting and includes a copper smelter, a refinery, a phosphoric acid plant, a sulphuric acid plant, a copper rod plant and two captive power plants at Tuticorin in Southern India, and a refinery and two copper rod plants at Silvassa in Western India. In addition, the Company owns and operates the Mt. Lyell copper mine in Tasmania, Australia through its subsidiary, Copper Mines of Tasmania Pty Ltd (“CMT”), which provides a small percentage of the copper concentrate requirements, and a precious metal refinery and copper rod plant in Fujairah through its subsidiary Fujairah Gold FZE in the UAE.

The Company’s zinc India business is owned and operated by Hindustan Zinc Limited (“HZL”) in which it has a 64.9% interest as at March 31, 2013. HZL’s operations include five lead-zinc mines, four zinc smelters, two lead smelters, one lead-zinc smelter, four sulphuric acid plants, a silver refinery and six captive power plants in the State of Rajasthan in Northwest India, one zinc smelter and a sulphuric acid plant in the State of Andhra Pradesh in Southeast India and one zinc ingot melting and casting plant at Haridwar and one silver refinery, one zinc ingot melting and casting plant and one lead ingot melting and casting plant at Pantnagar in the State of Uttarakhand in North India. Operations at the Visakhapatnam facility in the State of Andhra Pradesh were suspended during the last quarter of fiscal 2012.

The Company’s zinc international business comprises Skorpion mine and refinery in Namibia operated through THL Zinc Namibia Holdings (Proprietary) Limited (“Skorpion”), Lisheen mine in Ireland operated through Vedanta Lisheen Holdings Limited (“Lisheen”) and Black Mountain Mining (Proprietary) Limited (“BMM”), whose assets include the Black Mountain mine and the Gamsberg mine project which is in exploration stage, located in South Africa. The Company has 100% interest in Skorpion, 74% interest in BMM and 100% interest in Lisheen as at March 31, 2013.

The Company’s aluminum business is owned and operated by Bharat Aluminium Company Limited (“BALCO”) in which it has a 51.0% interest as at March 31, 2013. BALCO’s operations include two bauxite mines, two power plants (of which one is used to produce power for captive consumption), and refining, smelting and fabrication facilities in Central India.

The Company’s power business comprises Sterlite Energy Limited (“SEL”) and Talwandi Sabo Power Limited (“TSPL”) which are engaged in the power generation business in India. SEL completed construction of its 2,400 MW (four units of 600 MW each) thermal coal-based commercial power facility in the State of Orissa in Eastern India and all four units of 600 MW are currently operational. TSPL had signed a power purchase agreement with the Punjab State Power Corporation Limited (“PSPCL”) for the establishment of 1,980 MW (three units of 660 MW each) thermal coal-based commercial power facilities and is a development stage enterprise in the process of constructing the power plant. Power business also include the 274 MW of wind power plants commissioned by HZL and 270 MW power plant at BALCO’s Korba facility which was previously for captive use before the shutdown of the 100,000 tpa aluminum smelter at Korba on June 5, 2009.

The Company’s other activities include Vizag General Cargo Berth Private Limited (“VGCB”) and Paradip Multi Cargo Berth Private Limited (“PMCBPL”), in which the Company owns a 74% interest in each. Vizag port project includes mechanisation of coal handling facilities and up gradation of general cargo berth for handling coal at the outer harbour of Vishakhapatnam port on the east coast of India. VGCB commenced operations in the fourth quarter of fiscal 2013. Pursuant to the delay in statutory clearances, Paradip Multi Cargo Berth project is not being pursued.

The Company owns a 29.5% non-controlling interest in Vedanta Aluminium Limited (“Vedanta Aluminium”), a 70.5% owned subsidiary of Vedanta. Vedanta Aluminium is primarily engaged in production of aluminium at Jharsuguda, in the State of Orissa. Vedanta Aluminium’s operations include a smelter, refinery and captive power plant in the State of Orissa. Vedanta Aluminum is also setting up another aluminium smelter and alumina refinery which is currently on hold.

F-10

2. Basis of preparation of financial statements

Basis of preparation

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by International Accounting Standards Board (“IASB”).

These consolidated financial statements have been prepared in accordance with the accounting policies, set out below and were consistently applied to all periods presented unless otherwise stated.

Basis of measurement

The consolidated financial statements have been prepared on the historical cost convention and on an accrual cost basis, except for derivative financial instruments, short-term investments and available-for-sale financial investments.

Going concern

The consolidated financial statements have been prepared in accordance with the going concern basis of accounting.

Convenience translation

The consolidated financial statements are presented in Indian Rupee, the functional and presentational currency of the Company. Solely for the convenience of readers, the consolidated financial statements as at and for the year ended March 31, 2013 have been translated into US dollars (“$”) at the noon buying rate of $ 1.00 = Rs. 54.52 in the City of New York for cable transfers of Indian Rupee as certified for customs purposes by the Federal Reserve Bank of New York on March 29, 2013. No representation is made that the Indian Rupee amounts represent US dollar amounts or have been, could have been or could be converted into US dollars at such a rate or any other rate.

3. Significant accounting policies

A. Basis of consolidation

The consolidated financial statements incorporate the results of SIIL and all its subsidiaries, being the entities that it controls. This control is normally evidenced when SIIL is able to govern an entity’s financial and operating policies so as to benefit from its activities or where SIIL owns, either directly or indirectly, the majority of an entity’s equity voting rights, unless it can be demonstrated that ownership does not constitute control.

The results of subsidiaries acquired or sold during the year are consolidated for the periods from, or to, the date on which control is transferred. The financial statements of subsidiaries are prepared for the same reporting year as the parent company, using consistent accounting policies.

Intra-group balances and transactions, and any unrealized income and expenses arising from intra-group transactions, have been eliminated in preparing the consolidated financial statements. Unrealized losses are eliminated unless costs cannot be recovered.

B. Investments in associates

Investments in associates are accounted for using the equity method. An associate is an entity over which the Company is in a position to exercise significant influence over operating and financial policies and generally owns between 20% and 50% of the voting equity but is neither a subsidiary nor a joint venture. Goodwill arising on the acquisition of associates is included in the carrying value of investments in associate.

Investment in associates is initially recorded at the cost to the Company and then, in subsequent periods, the carrying value is adjusted to reflect the Company’s share of the associate’s consolidated profits or losses, other changes to the associate’s net assets and is further adjusted for impairment losses, if any. The consolidated statements of income and consolidated statements of comprehensive income include the Company’s share of associate’s results, except where the associate is generating losses, share of such losses in excess of the Company’s interest in that associate are not recognized. Losses recognised under the equity method in excess of the Company’s investment in ordinary shares are applied to the other components of the Company’s interest that forms part of Company’s net investment in the associate in the reverse order of their seniority (i.e. priority in liquidation).

Additional losses are provided for, only to the extent that the Company has incurred legal or constructive obligations or made payments on behalf of the associate.

Unrealized gains arising from transactions with associates are eliminated against the investment to the extent of the Company’s interest in the associate. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment of the asset transferred.

C. Revenue recognition

Revenues are measured at the fair value of the consideration received or receivable, net of discounts, volume rebates, outgoing sales taxes, excise duty and other indirect taxes. Revenues are recognised when all significant risks and rewards of ownership of the commodity sold are transferred to the customer and the commodity has been delivered to the shipping agent. Revenues from sale of by-products are included in revenue.

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Certain of the Company’s sales contracts provide for provisional pricing based on the price on The London Metal Exchange (“LME”), as specified in the contract, when shipped. Final settlement of the price is based on the applicable price for a specified future period. The Company’s provisionally priced sales are marked to market using the relevant forward prices for the future period specified in the contract and is adjusted in revenue.

Revenue from sale of power is recognised when delivered and measured based on rates as per bilateral contractual agreements with buyers/at rate arrived at based on the principles laid down under the relevant Tariff Regulations as notified by the regulatory bodies, as applicable.

When the Company acts as a port operator, revenues and costs relating to each construction contract of service concession arrangements are recognised over the period of each arrangement only to the extent of costs incurred that are probable of recovery. Revenues and costs relating to operating phase of the port contract are measured at the fair value of the consideration received or receivable for the services provided.

Revenue from rendering of services is recognised on the basis of work performed.

Dividend income is recognised when the right to receive payment is established. Interest income is recognised using the effective interest rate method.

D. Business combinations

Acquisitions are accounted for under the purchase method. The acquirer’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3, are recognised at their fair value at the acquisition date.

Excess of purchase consideration and the acquisition date non-controlling interest over the acquisition date fair value of identifiable assets acquired and liabilities assumed is recognised as goodwill. Goodwill arising on acquisitions is reviewed for impairment annually. Where the fair values of the identifiable assets and liabilities exceed the cost of acquisition, the surplus is credited to the consolidated statements of income in the period of acquisition. Where it is not possible to complete the determination of fair values by the date on which the first post-acquisition financial statements are approved, a provisional assessment of fair value is made and any adjustments required to those provisional fair values are finalised within 12 months of the acquisition date.

The Company makes adjustments to the provisional fair value amounts recognised at the date of acquisition to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognised as of that date. The Company applies the measurement period adjustments retrospectively to the consolidated financial statements to reflect the measurement period adjustments as retrospectively recorded on the date of the acquisition as if measurement period adjustments had been recorded initially at the date of acquisition.

Any non-controlling interest in an acquiree is measured at fair value or as the non-controlling interest’s proportionate share of the acquiree’s net identifiable assets. This accounting choice is made on a transaction by transaction basis.

Acquisition expenses are charged to consolidated statements of income in line with IFRS 3.

E (a) Property, plant and equipment

(i). Mining properties

The costs of mining properties, which include the costs of acquiring and developing mining properties and mineral rights, are capitalised as property, plant and equipment under the heading “Mining properties” in the year in which they are incurred.

When a decision is taken that a mining property is viable for commercial production, all further pre-production primary development expenditure other than land, buildings, plant and equipment, etc. is capitalised as part of the cost of the mining property until the mining property is capable of commercial production. From that point, capitalised mining properties are amortised on a unit of production basis over the total estimated remaining commercial reserves of each property or group of properties and are subject to impairment review.

Stripping costs/secondary development expenditure incurred during the production stage of operations of an ore body is charged to the consolidated statements of income immediately.

In circumstances where a property is abandoned, the cumulative capitalised costs relating to the property are written off in the same period.

Commercial reserves are proved and probable reserves. Changes in the commercial reserves affecting unit of production calculations are dealt with prospectively over the revised remaining reserves.

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(ii). Other property, plant and equipment

The initial cost of property, plant and equipment comprises its purchase price, including import duties and non-refundable purchase taxes, and any directly attributable costs of bringing an asset to working condition and location for its intended use. It also includes the initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located. Expenditure incurred after the property, plant and equipment have been put into operation, such as repairs and maintenance, are normally charged to the consolidated statements of income in the period in which the costs are incurred. Major inspection and overhaul expenditure is capitalised.

(iii). Assets in the course of construction

Assets in the course of construction are capitalised in the assets under construction account. At the point when an asset is capable of operating in the manner intended by management, the cost of construction is transferred to the appropriate category of property, plant and equipment. Costs associated with the commissioning of an asset are capitalised until the period of commissioning has been completed and the asset is ready for its intended use.

(iv). Depreciation

Mining properties and other assets in the course of development or construction and freehold land are not depreciated. Capitalised mining properties costs are amortised once commercial production commences, as described in “Property, plant and equipment — mining properties”.

Other buildings, plant and equipment, office equipment and fixtures, and motor vehicles are stated at cost less accumulated depreciation and any provision for impairment. Depreciation commences when the assets are ready for their intended use.

Depreciation is provided at rates calculated to write off the cost, less estimated residual value, of each asset on a straight-line basis over its expected useful life, as follows:

Buildings:
— Operations	30 years
— Administration	50 years
Plant and equipment	10-20 years
Office equipment and fixtures	3-20 years
Motor vehicles	9-11 years

Major inspection and overhaul costs are depreciated over the estimated life of the economic benefit derived from such costs. The carrying amount of the remaining previous overhaul cost is charged to the consolidated statements of income if the next overhaul is undertaken earlier than the previously estimated life of the economic benefit.

The Company reviews the residual value and useful life of an asset at least at each financial year-end and, if expectations differ from previous estimates, the change(s) is accounted for as a change in accounting estimate.

(b) Intangible assets

Exploration and evaluation expenditure incurred after obtaining the mining right or the legal right to explore are capitalised as intangible asset and stated at cost less impairment. Exploration and evaluation assets are transferred to property, plant and equipment when the technical feasibility and commercial viability has been determined. Exploration and evaluation expenditure incurred prior to obtaining the mining right or the legal right to are expensed as incurred.

Intangible assets arising out of service concession arrangements are accounted for as intangible assets where the Company has a contractual right to charge users of services when the projects are completed and is measured at the cost of such construction services completed. Such assets are amortised on straight line basis over the balance of licence period.

F. Non-current assets held for sale

Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset (or disposal group) is available for immediate sale in its present condition. Management must be committed to the sale which should be expected to qualify for recognition as a completed sale within one year from the date of classification.

Non-current assets and disposal groups classified as held for sale are not depreciated and are measured at the lower of carrying amount and fair value less costs to sell. Such assets and disposal groups are presented separately on the face of the consolidated statements of financial position.

G. Financial instruments

(i). Non-derivative financial assets

The Company initially recognises loans and receivables and deposits on the date that they are originated. All other financial assets are recognised initially on the trade date at which the Company becomes a party to the contractual provisions of the instrument.

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The Company derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred.

Financial assets and liabilities are offset and the net amount presented in the consolidated statements of financial position when, and only when, the Company has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

The Company has the following non-derivative financial assets: financial asset investments, short-term investments, cash and cash equivalents, loans and receivables.

(a). Financial asset investments

Financial asset investments are classified as available-for-sale and are initially recorded at cost and then remeasured at subsequent reporting dates to fair value. Unrealized gains and losses on financial asset investments are recognised directly in the consolidated statements of comprehensive income. Upon disposal or impairment of the investments, the gains and losses in other comprehensive income are reclassified into the consolidated statements of income.

Investments in unquoted equity instruments that do not have a market price and whose fair value cannot be reliably measured are measured at cost. Equity investments are recorded in non-current assets unless they are expected to be sold within one year.

(b). Short-term investments

Short-term investments represent short-term marketable securities and other bank deposits with an original maturity more than three months.

Short-term marketable securities are categorized as held for trading and are initially recognised at fair value with any gains or losses arising on remeasurement recognised in the consolidated statements of income.

(c). Cash and cash equivalents

Cash and cash equivalents in the consolidated statements of financial position comprise cash at bank and in hand, and short-term deposits which have a maturity of three months or less from the date of acquisition, and are unrestricted as to withdrawal and usage.

(d). Loans and receivables

Trade receivables, loans, and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as ‘loans and receivables’. Trade receivables are stated at their transaction value as reduced by appropriate allowances for estimated irrecoverable amounts. The allowance accounts in respect of loans and receivables are used to record impairment losses unless the Company is satisfied that no recovery of the amount owing is possible; at that point the amounts are considered irrecoverable and are written off against the loans and receivables directly.

Loans and other receivables are measured at amortised cost using the effective interest method, less any impairment. Interest income is recognised by applying the effective interest rate.

(ii). Non-derivative financial liabilities

The Company initially recognises debt securities issued on the date that they are originated. All other financial liabilities are recognised initially on the trade date at which the Company becomes a party to the contractual provisions of the instrument.

The Company derecognises a financial liability when its contractual obligations are discharged or cancelled or expire.

Financial assets and liabilities are offset and the net amount presented in the consolidated statements of financial position when, and only when, the Company has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

The Company has the following non-derivative financial liabilities: Borrowings, Foreign currency convertible notes, trade and other payables.

(a). Borrowings

Interest bearing loans and borrowings are initially recorded at the proceeds received. After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using the effective interest rate (EIR) method.

Amortised cost is calculated by taking into account the finance charges, including premiums payable on settlement or redemption and direct issue costs that are an integral part of the EIR. The EIR amortisation is included in finance costs in the consolidated statements of income. The unamortised portion is classified with the carrying amount of debt.

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(b). Foreign currency convertible notes

Convertible notes issued in foreign currency are convertible at the option of the holder into ordinary shares of the Company according to the terms of the issue. The conversion option which is not settled by exchanging a fixed amount of cash for a fixed number of shares is accounted for separately from the liability component as derivative and initially accounted for at fair value. The liability component is recognized initially at the difference between the fair value of the note and the fair value of the conversion option. Directly attributable notes issue costs are allocated to the liability component and the conversion option (expensed off immediately) in proportion to their initial carrying amounts.

Subsequent to initial recognition, the liability component is measured at amortised cost using the effective interest method. The conversion option is subsequently measured at fair value at each reporting date, with changes in fair value recognized in consolidated statements of income. The conversion option is presented together with the related liability.

(c). Trade and other payables

Trade and other payables are recognised at their transaction cost, which is its fair value, and subsequently measured at amortised cost.

(iii). Derivative financial instruments

In order to hedge its exposure to foreign exchange, interest rate, and commodity price risks, the Company enters into forward, option, swap contracts and other derivative financial instruments. The Company does not hold derivative financial instruments for speculative purposes.

Derivative financial instruments are initially recorded at their fair value on the date of the derivative transaction and are re-measured at their fair value at subsequent financial position dates.

Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk. Hedge accounting is discontinued when the Company revokes the hedge relationship, the hedging instrument expires or is sold, terminated, or exercised or no longer meets the criteria for hedge accounting.

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges are recorded in the consolidated statements of comprehensive income. The gain or loss relating to the ineffective portion is recognized immediately in the consolidated statements of income. The cumulative gain or loss previously recognized in the consolidated statements of comprehensive income remains there until the forecast transaction occurs. When the hedged item is a non-financial asset, the amount recognized in the consolidated statements of comprehensive income is transferred to the carrying amount of the asset when it is recognized. In other cases the amount recognized in the consolidated statements of comprehensive income is transferred to consolidated statements of income in the same period that the hedged item affects profit or loss. Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated or exercised, or no longer qualifies for hedge accounting. If a hedged transaction is no longer expected to occur, the net cumulative gain or loss recognized in the consolidated statements of comprehensive income is transferred to consolidated statements of income.

For derivative instruments that are designated and qualify as a hedge of a net investment in a foreign currency, the gain or loss is reported in the consolidated statements of comprehensive income as part of the exchange difference on translation of foreign operations to the extent it is effective. Any ineffective portions of net investment hedges are recognized in other income/expense in current earnings during the period of change. Under a hedge of a net investment, the cumulative gain or loss remains in the consolidated statements of comprehensive income when the hedging instrument expires or is sold, terminated or exercised, or when the hedge no longer qualifies for hedge accounting or the Company revokes designation of the hedge relationship. The cumulative gain or loss is recognised in the consolidated statements of income as part of the profit on disposal when the net investment in the foreign operation is disposed.

Derivative financial instruments that do not qualify for hedge accounting are marked to market at the financial position date and gains or losses are recognized in the consolidated statements of income immediately.

Derivatives embedded in other financial instruments or other host contracts are treated as separate derivatives when their risks and characteristics are not closely related to those of host contracts and the host contracts are not carried at fair value with unrealised gains or losses reported in the consolidated statements of income.

H. Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognised at the proceeds received, net of direct issue costs.

I. Borrowing costs

Borrowing costs directly relating to the acquisition, construction or production of a qualifying capital project under construction are capitalised and added to the project cost during construction until such time that the assets are substantially ready for their intended use i.e. when they are capable of commercial production. Borrowing costs relating to the construction phase of a service concession

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arrangement is capitalised as part of the cost of the intangible asset. Where funds are borrowed specifically to finance a project, the amount capitalised represents the actual borrowing costs incurred. Where surplus funds are available out of money borrowed specifically to finance a project, the income generated from such short-term investments is also capitalised and deducted from the total capitalised borrowing cost. Where the funds used to finance a project form part of general borrowings, the amount capitalised is calculated using a weighted average of rates applicable to relevant general borrowings of the Company during the year.

All other borrowing costs are recognized in the consolidated statements of income in the year in which they are incurred.

J. Impairment

Financial assets

A financial asset is assessed at each reporting date to determine whether there is any objective evidence that it is impaired. A financial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash flows of that asset.

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount, and the present value of the estimated future cash flows discounted at the original effective interest rate. An impairment loss in respect of an available-for-sale financial asset is calculated by reference to its fair value.

Significant financial assets are tested for impairment on an individual basis. The remaining financial assets are assessed collectively in groups that share similar credit risk characteristics. All impairment losses are recognized in the consolidated statements of income. Any cumulative loss in respect of an available-for-sale financial asset recognized previously in the consolidated statements of comprehensive income is transferred to the consolidated statements of income on recognition of impairment. An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognized. For financial assets measured at amortised cost and available-for-sale financial assets that are debt securities, the reversal is recognized in the consolidated statements of income. For available-for-sale financial assets that are equity securities, the change in fair value is recognized directly in the consolidated statements of comprehensive income.

The allowance accounts in respect of trade and other receivables are used to record impairment losses unless the Company is satisfied that no recovery of the amount owing is possible; at that point the amounts are considered irrecoverable and are written off against the financial asset directly.

Non-financial assets

The carrying amounts of the Company’s non-financial assets, other than inventories and deferred tax assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the “cash-generating unit”).

An impairment loss is recognized if the carrying amount of an asset or its cash-generating unit exceeds its estimated recoverable amount.

Impairment losses are recognized in the consolidated statements of income. Impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognized.

K. Government grants

Government grants are not recognised until there is a reasonable assurance that the Company will comply with the conditions attaching to them and that the grants will be received. Government grants relating to tangible fixed assets are treated as deferred income and released to the consolidated statements of income over the expected useful lives of the assets concerned. Other grants are credited to the consolidated statements of income as and when the related expenditure is incurred.

L. Inventories

Inventories including work-in-progress are stated at the lower of cost and net realisable value, less any provision for obsolescence. Cost is determined on the following bases:

• purchased copper concentrate is recorded at cost on a first-in, first-out (“FIFO”) basis; all other materials including stores and spares are valued on a weighted average basis;

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• finished products are valued at raw material cost plus costs of conversion, comprising labor costs and an attributable proportion of manufacturing overheads based on normal levels of activity and are moved out of inventory on a FIFO basis; and

• immaterial by-products and scrap are valued at net realisable value.

Net realisable value is determined based on estimated selling price, less further costs expected to be incurred to completion and disposal.

M. Taxation

Tax expense represents the sum of current tax and deferred tax.

Current tax is provided at amounts expected to be paid (or recovered) using the tax rates and laws that have been enacted or substantively enacted by the reporting date and includes any adjustment to tax payable in respect of previous years.

Subject to exceptions below, deferred tax is provided, using the balance sheet method, on all temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes:

• tax payable on the future remittance of the past earnings of subsidiaries where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future;

• deferred income tax is not recognised on goodwill which is not deductible for tax purposes or on the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

• deferred tax assets are recognised only to the extent that it is more likely than not that they will be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date. Tax relating to items recognized directly in other comprehensive income is recognised in the consolidated statements of comprehensive income and not in the consolidated statements of income.

The carrying amount of deferred tax assets is reviewed at each reporting date and is adjusted to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the asset to be recovered.

Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the relevant entity intends to settle its current tax assets and liabilities on a net basis.

N. Retirement benefit schemes

The Company operates or participates in a number of defined benefits and defined contribution pension schemes, the assets of which are (where funded) held in separately administered funds. For defined benefit pension schemes, the cost of providing benefits under the plans is determined by actuarial valuation separately each year for each plan using the projected unit credit method by independent qualified actuaries as at the year end.

Actuarial gains and losses arising in the year are recognised in full in the consolidated statements of income for the year. For defined contribution schemes, the amount charged to the consolidated statements of income in respect of pension costs and other post-retirement benefits is the contributions payable in the year.

O. Share based payments

SIIL does not have any outstanding share based payments. Vedanta offers certain share based incentives under the Long-Term Incentive Plan (“LTIP”) to employees and directors of SIIL and its subsidiaries. Vedanta recovers the proportionate cost (calculated based on the grant date fair value of the options granted) from the respective group companies, which is charged to the consolidated statements of income.

P. Provisions for liabilities and charges

Provisions represent liabilities to the Company for which the amount or timing is uncertain. Provisions are recognized when the Company has a present obligation (legal or constructive), as a result of past events, and it is probable that an outflow of resources, that can be reliably estimated, will be required to settle such an obligation. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows to net present value using an appropriate pre-tax discount rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Unwinding of the discount is recognized in the consolidated statements of income as a finance cost. Provisions are reviewed at each reporting date and are adjusted to reflect the current best estimate.

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Q. Restoration, rehabilitation and environmental costs

An obligation to incur restoration, rehabilitation and environmental costs arises when environmental disturbance is caused by the development or ongoing production of a mine. Such costs, discounted to net present value, are provided for and a corresponding amount is capitalised at the start of each project, as soon as the obligation to incur such costs arises. These costs are charged to the statement of income over the life of the operation through the depreciation of the asset and the unwinding of the discount on the provision. The cost estimates are reviewed periodically and are adjusted to reflect known developments which may have an impact on the cost estimates or life of operations. The cost of the related asset is adjusted for changes in the provision due to factors such as updated cost estimates, changes to lives of operations, new disturbance and revisions to discount rates. The adjusted cost of the asset is depreciated prospectively over the lives of the assets to which they relate. The unwinding of the discount is shown as finance and other cost in the consolidated statements of income.

Costs for the restoration of subsequent site damage, which is caused on an ongoing basis during production, are charged to the consolidated statements of income as extraction progresses. Where the costs of site restoration are not anticipated to be material, they are expensed as incurred.

R. Foreign currency translation

The functional currency for each entity in the Company is determined as the currency of the primary economic environment in which it operates. For all principal operating subsidiaries, the functional currency is the local currency of the country in which it operates.

In the financial statements of individual group companies, transactions in currencies other than the functional currency are translated into the functional currency at the exchange rates ruling at the date of the transaction. Monetary assets and liabilities denominated in other currencies are translated into the functional currency at exchange rates prevailing on the reporting date. Non-monetary assets and liabilities denominated in other currencies and measured at historical cost or fair value are translated at the exchange rates prevailing on the dates on which such values were determined. All exchange differences are included in the consolidated statements of income except any exchange differences on monetary items designated as an effective hedging instrument of the currency risk of designated forecasted sales, which are recognized in the consolidated statements of comprehensive income.

For the purposes of the consolidated financial statements, items in the consolidated statements of income of those entities for which the Indian Rupees (functional currency of SIIL) is not the functional currency are translated into Indian Rupees at the average rates of exchange during the year. The related consolidated statements of financial position are translated at the rates as at the reporting date. Exchange differences arising on translation are recognised in the consolidated statements of comprehensive income. On disposal of such entities the deferred cumulative exchange differences recognised in equity relating to that particular foreign operation are recognised in the consolidated statements of income.

S. Earnings per share

The Company presents basic and diluted earnings per share (“EPS”) data for its equity shares. Basic EPS is calculated by dividing the profit or loss attributable to equity shareholders of SIIL by the weighted average number of equity shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to equity shareholders and the weighted average number of equity shares outstanding for the effects of all dilutive potential equity shares.

T. Critical accounting judgments and estimation uncertainty

The preparation of financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions, that affect the application of accounting policies and the reported amounts of assets, liabilities, income, expenses and disclosures of contingent assets and liabilities at the date of these consolidated financial statements and the reported amounts of revenues and expenses for the years presented. Actual results may differ from these estimates under different assumptions and conditions.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and future periods affected.

In particular, information about significant areas of estimation uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the financial statements are included in the following accounting policies and/or notes:

i. Note 8 and 9, the accounting policy on property, plant and equipment- Mining reserve estimates and useful life of property, plant and equipment and intangible assets.

ii. Accounting policy on impairment of assets:

In assessing property, plant and equipment for impairment, factors leading to significant reduction in profits such as changes in commodity prices, the Company’s business plans and significant downward revision in the estimated mining reserves are taken into consideration. The carrying value of the assets of a cash generating unit (CGU) and associated mining reserves is compared with the recoverable amount of those assets, that is, the higher of fair value less costs to sell and value in use. Value in use is usually determined on the basis of discounted estimated future cash flows. This involves management estimates on commodity prices, market demand and supply, increase in cost, discount rate, economic and regulatory climates, long term mine plan and other factors. Any subsequent changes to cash flow due to changes in the abovementioned factors could have an impact on the carrying value of the assets.

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iii. Note 22 and the accounting policy on restoration, rehabilitation and environmental costs:

Provision is made for costs associated with restoration and rehabilitation of mining sites as soon as the obligation to incur such costs arises. Such restoration and closure costs are typical of extractive industries and they are normally incurred at the end of the life of the mine. The costs are estimated on the basis of mine closure plans and the estimated discounted costs of dismantling and removing these facilities and the costs of restoration are capitalised when incurred reflecting the Company’s obligations at that time. A corresponding provision is created on the liability side. The capitalised asset is charged to the consolidated statements of income over the life of the asset through depreciation over the life of the operation and the provision is increased each period via unwinding the discount on the provision. Management estimates are based on local legislation and/or other agreements. The actual costs and cash outflows may differ from estimates because of changes in laws and regulations, changes in prices, analysis of site conditions and changes in restoration technology.

iv. Note 24 and the accounting policy on retirement benefit schemes

v. Note 31 on contingencies:

The Company has significant capital commitments in relation to various capital projects which are not recognized on the consolidated statements of financial positions. In the normal course of business, contingent liabilities may arise from litigation and other claims against the Company. Guarantees are also provided in the normal course of business. There are certain obligations which management has concluded, based on all available facts and circumstances, are not probable of payment or are very difficult to quantify reliably, and such obligations are treated as contingent liabilities and disclosed in the notes but are not reflected as liabilities in the consolidated financial statements. Although there can be no assurance regarding the final outcome of the legal proceedings in which Company involved, it is not expected that such contingencies will have a material effect on its financial position or profitability.

vi. Note 7 and accounting policy on taxation:

In preparing consolidated financial statements, the Company recognises income taxes in each of the jurisdictions in which it operate. There are many transactions and calculations for which the ultimate tax determination is uncertain. The Company recognises liabilities for anticipated tax issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current and deferred income tax assets and liabilities in the period in which such determination is made.

vii. Note 10 on investments in associate (also refer accounting policy on investment in associate):

The Ministry of Environment and Forests (“MOEF”) rejected the issue of the final stage forest clearance for Niyamgiri mining lease of Orissa Mining Corporation (“OMC”) which is one of the sources of supply of bauxite to the alumina refinery of VAL. The Honourable Supreme Court vide its order dated April 18, 2013 has directed the State Government of Orissa to place unresolved issues and claims of the local communities under the Forest Right Act and rules before the Gram Sabha (Village council of Rayagada and Kalahandi districts of Orissa). The Gram Sabha will consider these claims within three months of the order, which is in process and communicate the same to MOEF through the State Government of Orissa. On conclusion of the proceedings before the Gram Sabha, the MOEF shall take a final decision for grant of final stage forest clearance for the Niyamgiri mining lease of OMC within two months thereafter.

In view of the temporary suspension of operations from December 5, 2012 and delay in approval for expansion of alumina refinery at Lanjigarh, the Company has reviewed the carrying value of its investments in Vedanta Aluminium for impairment, and has concluded that no impairment is currently considered necessary based on the assumptions set out below:

• The State of Orissa has abundant bauxite resources and under the terms of the MOU with the Government of Orissa, management is confident that bauxite will be made available to Vedanta Aluminium in terms of the said MOU.

• The State of Orissa has taken certain measures including reservation of areas for mining operations and undertaking prospecting, it has also constituted a Ministerial Committee for formulation of policy for supply of ores to Orissa based industries on long term basis.

• On the continued operations and planned refinery expansion, management is confident that the conditions for construction of the alumina refinery will be fulfilled and expects the approval in due course.

• VAL is also considering sourcing bauxite from alternate sources to support the existing and expanded refinery operations.

viii. Impairment assessment of Tuticorin plant:

In response to various writ petitions filed in the year 1996-98 challenging the environment clearances for setting up of the copper smelter at Tuticorin, the Madras High Court by its order dated 28th September 2010 ordered the closure of the smelter at Tuticorin, The Company has filed Special Leave Petition (SLP) in the Supreme Court of India against the impugned order of Madras High Court and the Honourable Supreme Court stayed the order of the High Court. The

F-19

Honourable Supreme Court in subsequent hearings directed Tamilnadu Pollution Control Board (‘TNPCB”) to issue directions to implement the improvement measures suggested by National Environmental Engineering Research Institute (“NEERI”), Central Pollution Control Board (“CPCB”) and TNPCB.

On April 2, 2013, the Honorable Supreme Court upheld the Company’s appeal filed in 2010 against the Madras High Court order for the Tuticorin smelter closure. The Company has complied with all the recommendations for improvements ordered by the Tamil Nadu Pollution Control Board. The Company has deposited Rs 1000 million ($18.3 million ) with the District Collector of Tuticorin as ordered by the Honorable Supreme Court, which will be used to improve the environment, including soil and water, in the vicinity of the plant. The compensation ordered by the Supreme Court has been recognized in the financial statements during the year as part of the administration expenses.

Following a few public complaints against emissions, the TNPCB ordered closure of the Tuticorin Copper Smelter on March 29, 2013. On April 1, 2013 the Company filed a petition in the National Green Tribunal (“NGT”) challenging the order of the TNPCB on the basis that the plant’s emissions were within permissible limits. The NGT passed an interim order on May 31, 2013 allowing the copper smelter to recommence operations subject to certain conditions. The Company recommenced operations on June 16, 2013. The expert committee constituted by the NGT submitted a report on the operation of the plant on July 10, 2013 stating that the plant’s emissions were within the prescribed standards and based on this report, the NGT ruled on July 15, 2013 that the copper smelter could remain open and reserved its order. The NGT has also directed the company to comply with the recommendations made by the committee to further improve the working of the plant within a time bound schedule. However, the TNPCB filed a notice of appeal against the interim order of the NGT. The next date of hearing is fixed on August 5, 2013.

In view of the above, management is confident that the unit will be permitted to continue operations and accordingly concluded that no impairment of the asset is required.

U. Recently issued accounting pronouncements

At the date of authorisation of these financial statements, the following Standards and Interpretations which have not been applied in these financial statements were in issue but not yet effective:

IAS 1 “Presentation of Financial Statements” the amendment requires entities to separate the items presented in OCI into two groups, based on whether or not they may be recycled to profit or loss in the future. The amendment is effective for annual periods beginning on or after July 1, 2012. The Company has evaluated the requirements of IAS 1 (amended) and does not believe that the adoption of IAS 1 (amended) will have a material effect on its consolidated financial statements.

IAS 19 “Employee benefits” the amendments make important improvements by eliminating the option to defer the recognition of gains and losses, known as the ‘corridor method, streamlining the presentation of changes in assets and liabilities arising from defined benefit plans, including requiring remeasurements to be presented in other comprehensive income (OCI), enhancing the disclosure requirements for defined benefit plans. IAS 19 is applicable retrospective basis from the financial year beginning on or after January 1, 2013. Earlier application is permitted. The Company has evaluated the requirements of IAS 19 (amended) and these requirements are not expected to have a material impact on the consolidated financial statements

F-20

IAS 32 “Financial Instruments: Presentation” requires an entity to offset a financial asset and financial liability only when the entity currently has a legally enforceable right of set-off and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously. The amendments clarify that the right of set-off must be available today and legally enforceable for all counterparties in the normal course of business, as well as in the event of default, insolvency or bankruptcy. The amendment is effective for annual periods beginning on or after January 1, 2014. The Company is currently evaluating the impact, if any; the adoption of the amendment will have on the Company’s consolidated financial statements.

IAS 39 was amended to provide relief from discontinuing hedge accounting when novation of a derivative designated as a hedging instrument meets certain criteria. Similar relief will be included in IFRS 9 Financial Instruments. The amendment is effective for annual periods beginning on or after January 1, 2014. An entity shall apply those amendments retrospectively in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors. Earlier application is permitted. The Company is currently evaluating the impact, if any; the adoption of the amendment will have on the Company’s consolidated financial statements.

IFRS 7 was amended in December 2011 disclosure relating to offsetting financial assets and financial liabilities. The effect of the amendments were to provide (a) evaluating the effect or potential effect of netting arrangements on an entity’s financial position and (b) analysing and comparing financial statements prepared in accordance with IFRSs and US GAAP. The amendments issued in December 2011 are effective for annual periods beginning on or after January 1, 2013. Early application is permitted. The Company has evaluated the requirements of IFRS 7 (amended), and as it relates to disclosures, these requirements are not expected to have a material impact on the consolidated financial statements.

IFRS 9 “Financial Instruments” was issued by IASB in October 2010 as part of its project for revision of the accounting guidance for financial instruments. The new standard provides guidance with respect to classification and measurement of financial assets and financial liabilities. The standard will be effective for annual periods beginning on or after January 1, 2015, with early application permitted. The Company is currently evaluating the impact, if any, the adoption of the standard will have on the Company’s consolidated financial statements.

IFRS 10 “Consolidated Financial Statements” establishes principles for the presentation and preparation of consolidated financial statements when an entity controls one or more other entities. IFRS 10 supersedes the requirements relating to consolidated financial statement in IAS 27—“Consolidated and Separate Financial Statement” (amended 2008) and also supersedes SIC 12, “Consolidation – Special Purpose Entities”. The standard will be effective for annual periods beginning on or after January 1, 2013, with early application permitted. The Company has evaluated the requirements of IFRS 10 and these requirements are not expected to have a material impact on the consolidated financial statements.

IFRS 11 “Joint Arrangements” classifies joint arrangements as either joint operations (combining the existing concepts of jointly controlled assets and jointly controlled operations) or joint ventures (equivalent to the existing concept of a jointly controlled entity). Joint operation is a joint arrangement whereby the parties that have joint control have rights to the assets and obligations for the liabilities. Joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement. IFRS 11 requires the use of the equity method of accounting for interests in joint ventures thereby eliminating the proportionate consolidation method. IFRS 11 supersedes IAS 31 – “Interest in Joint Ventures” (amended 2008) and SIC 13 – “Jointly Controlled Entities – Non Monetary Contribution by Ventures”. The standard will be effective for annual periods beginning on or after January 1, 2013, with early application permitted. The Company has evaluated the requirements of IFRS 11 and these requirements are not expected to have a material impact on the consolidated financial statements.

IFRS 12 “Disclosure of Interests in Other Entities” applies to entities that have an interest in a subsidiary, a joint arrangement, an associate or an unconsolidated structured entity. The IFRS requires an entity to disclose information that enables users of financial statements to evaluate the nature of, and risks associated with, its interests in other entities; and the effects of those interests on its financial position, financial performance and cash flows. IFRS 12 replaces disclosure requirements in IAS 27 – “Consolidated and Separate Financial Statements” (amended 2008), IAS 28 – “Investment in Associates” and IAS 31 – “Interest in Joint Ventures” (amended 2008). The standard will be effective for annual periods beginning on or after January 1, 2013, with early application permitted. The Company has evaluated the requirements of IFRS 12 and these requirements are not expected to have a material impact on the consolidated financial statements.

IFRS 13 “Fair value measurement” defines ‘fair value’ and sets out in a single IFRS a framework for measuring fair value and requires disclosures about fair value measurements. It seeks to increase consistency and comparability in fair value measurements and related disclosures through a fair value hierarchy. IFRS 13 is to be applied for annual periods beginning on or after January 1, 2013. Earlier application is permitted. The Company has evaluated the requirements of IFRS 13 and these requirements are not expected to have a material impact on the consolidated financial statements.

IFRIC 20 which specifies the accounting for stripping costs. Stripping costs that relate to inventory produced should be accounted for as current production cost in accordance with IAS 2, ‘Inventories’. Stripping costs that generate a benefit of improved access and meet the definition of an asset should be accounted for as an addition to or enhancement of an existing asset. IFRIC 20 is effective for annual periods beginning on or after January 1, 2013 and earlier application is permitted. The Company is currently evaluating the impact that would arise on adoption of IFRIC 20 on the consolidated financial statements.

F-21

IFRIC 21 provides guidance on when to recognise a liability for a levy imposed by a government, both for levies that are accounted for in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets and those where the timing and amount of the levy is certain. The Interpretation covers the accounting for outflows imposed on entities by governments (including government agencies and similar bodies) in accordance with laws and/or regulations. However, it does not include income taxes (see IAS 12 Income Taxes), fines and other penalties, liabilities arising from emissions trading schemes and outflows within the scope of other Standards. IFRIC 21 is effective for annual periods beginning on or after January 1, 2014. Initial application is in accordance with the requirements of IAS 8 Accounting Policies, Changes in Estimates and Errors, i.e. the requirements are applied on a retrospective basis. The Company is currently evaluating the impact, if any; the adoption of the standard will have on the Company’s consolidated financial statements.

4. Revenue

For the year ended March 31,	2011			2012			2013			2013
	(Rs. in millions)			(Rs. in millions)			(Rs. in millions)			(USD dollars in millions)
Revenue, gross of excise duty		320,946			431,432			477,751			8,762.8
Less: excise duty		(18,474	)		(19,369	)		(25,201	)		(462.2	)
Revenue, net of excise duty		302,472			412,063			452,550			8,300.6

Below table summaries revenue of the Company from its primary products for the year ended March 31, 2011, 2012 and 2013:

For the year ended March 31,	2011			2012			2013			2013
	(Rs. in millions)			(Rs. in millions)			(Rs. in millions)			(US dollars in millions)
Copper cathode		54,452			83,954			109,796			2,013.9
Copper rods		83,383			83,225			89,053			1,633.4
Zinc metal		85,788			103,054			101,498			1,861.7
Lead metal		7,284			11,782			16,904			310.0
Silver metal		5,436			11,320			21,016			385.5
Zinc and lead mined metal		11,286			26,524			31,569			579.0
Aluminium - ingot		3,142			921			1,044			19.1
Aluminium - rods		20,221			22,831			26,479			485.7
Aluminium - rolled products		8,727			9,675			9,634			176.7
Power		7,282			24,333			30,800			564.9
Others		33,945			53,813			39,958			732.9
Revenue - gross of excise duty		320,946			431,432			477,751			8,762.8
Less: Excise Duty		(18,474	)		(19,369	)		(25,201	)		(462.2	)
Revenue - net of excise duty		302,472			412,063			452,550			8,300.6

5. Investment and other income

For the year ended March 31,	2011			2012			2013			2013
	(Rs. in millions)			(Rs. in millions)			(Rs. in millions)			(US dollars in millions)
Dividend income on financial assets held for trading		4,320			1,013			486			8.9
Dividend income on financial asset investments		—			—			85			1.6
Fair value gain on financial assets held for trading		4,185			9,760			11,415			209.4
Interest income on bank deposits		4,962			7,749			9,442			173.2
Interest income on loans and receivables		7,760			10,448			13,886			254.7
Gain on sale of financial asset investments(1)		—			—			770			14.1
Foreign exchange gain		788			18			667			12.2
Capitalisation of interest income(2)		(82	)		(159	)		(58	)		(1.1	)
		21,933			28,829			36,693			673.0

Notes:

(1) Refer note 11(b).

(2) Capitalisation of interest income relates to the income from temporary surplus funds, specifically borrowed to acquire/ construct qualifying assets.

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6. Finance and other costs

For the year ended March 31,	2011			2012			2013			2013
	(Rs. in millions)			(Rs. in millions)			(Rs. in millions)			(US dollars in millions)
Interest on borrowings other than convertible notes(1)		2,783			7,788			10,515			192.8
Interest on convertible notes(1)		2,124			2,377			2,902			53.2
Bank charges		628			981			535			9.8
Unwinding of discount on provisions		52			168			184			3.4
Gain on fair valuation of conversion option		(3,206	)		(2,455	)		(299	)		(5.4	)
Foreign exchange (gain)/loss on foreign currency borrowings		(746	)		10,055			5,648			103.6
Other		374			(225	)		327			6.0
Capitalisation of borrowing costs(2)		(3,105	)		(6,647	)		(8,629	)		(158.3	)
		(1,096	)		12,042			11,183			205.1

Notes:

(1) Finance costs include Rs. 4,907 million, Rs. 10,165 million and Rs. 13,417 million ($246.0 million) in respect of financial liabilities which are carried at amortised cost using the effective interest rate method for the year ended March 31, 2011, 2012 and 2013 respectively.

(2) Capitalisation of borrowing costs relates to funds borrowed both specifically and generally to acquire/ construct qualifying assets. The capitalisation rate relating to general borrowings was approximately 12.71% for the year ended March 31, 2011, 2012 and 2013.

7. Income tax expense

Overview of the Indian direct tax regime

Indian companies are subject to Indian income tax on a standalone basis. Each entity is assessed for tax on taxable profits determined for each fiscal year beginning on April 1 and ending on March 31. For each fiscal year, a company’s profit or loss is subject to the higher of the regular income tax payable or the minimum alternative tax (“MAT”).

Statutory income taxes are assessed based on book profits prepared under generally accepted accounting principles in India (“Indian GAAP”) adjusted in accordance with the provisions of the (Indian) Income tax Act, 1961. Such adjustments generally relate to depreciation of fixed assets, disallowances of certain provisions and accruals, deduction for tax holidays and similar exemptions, the use of tax losses carried forward and retirement benefit costs. Statutory income tax is charged at 30% plus a surcharge and education cess. The combined Indian statutory tax rate for the fiscal year 2012-13 was 32.45% and for the fiscal year 2013-14 will be 33.99%.

MAT is assessed on book profits adjusted for certain limited items as compared to the adjustments allowed for assessing regular income tax under normal provisions. MAT for the fiscal year 2012-13 was chargeable at 18.50% plus a surcharge and education cess. The combined Indian statutory tax rate of MAT for the fiscal year 2012-13 was 20.01% and for the fiscal year 2013-14 will be 20.96%. MAT paid in excess of regular income tax during a year can be set off against regular income taxes within a period of ten years succeeding the assessment year in which MAT credit arises subject to the limits prescribed.

Income tax returns submitted by companies are regularly subjected to a comprehensive review and challenge by the tax authorities. There are appellate procedures available to both the tax authorities and taxpayers and it is not uncommon for significant or complex matters in dispute to remain outstanding for several years before they are finally resolved by the High Court or the Supreme Court.

There are various tax exemptions or tax holidays available to companies in India. The most important to the Company are:

• The industrial undertakings’ exemption — Profits of newly constructed industrial undertakings located in designated area at India can benefit from a tax holiday. A typical tax holiday would exempt 100% of the profits from the undertaking for five years, and 30% for five years thereafter.

• The power plants’ exemption — Profits on newly constructed power plants are eligible for a tax holiday. A typical holiday would exempt 100% of profits for ten consecutive years within the first 15 years of the power plants’ operation. The start of the exemption period is at the discretion of a company. This exemption is available only for units established prior to March 31, 2014

• Wind power plant’s exemption — Profits are exempt from income tax for any continuous block of 10 years in the first 15 years of operations. This exemption is available only for units established prior to March 31, 2014. Renewable energy devices being windmills installed on or before March 31, 2012 are eligible for accelerated depreciation at 80%. However, units that have opted for generation based incentive are not eligible for the said accelerated depreciation.

F-23

The total effect of such tax holidays were Rs. 10,942 million (impact on basic EPS Rs. 3.3), Rs. 7,375 million (impact on basic EPS Rs. 2.19), and Rs. 14,481 million ($265.6 million) (impact on basic EPS Rs. 4.3) ($ 0.1) for the years ended March 31, 2011, 2012 and 2013 respectively.

Business losses in India can be carried forward for a maximum period of eight assessment years immediately succeeding the assessment year to which the loss pertains. Unabsorbed depreciation can be carried forward for an indefinite period.

Losses arising out of transfer of capital assets in India can be carried forward for a maximum period of eight assessment years immediately succeeding the assessment year to which the loss pertains. The carried forward long term capital losses can be set-off only against long term capital gains. Short term capital losses can be set off only against capital gains (which can be either long term or short term capital gain)

The major components of income tax expense for the year ended March 31, 2011, 2012 and 2013 are indicated below:

(a) Consolidated statements of income

For the year ended March 31,	2011			2012			2013			2013
	(Rs. in millions)			(Rs. in millions)			(Rs. in millions)			(US dollars in millions)
Current tax:
Current tax on profit for the year		18,325			23,673			23,204			425.6
Charge/ (credit) in respect of current tax for earlier years		60			(447	)		227			4.2
Total current tax		18,385			23,226			23,431			429.8
Deferred tax:
Origination and reversal of temporary differences		890			(3,149	)		(7,876	)		(144.5	)
Reduction in tax rate		(465	)		—			—			—
Total deferred tax		425			(3,149	)		(7,876	)		(144.5	)
Tax expense for the year		18,810			20,077			15,555			285.3
Effective income tax rate (%)		21.5	%		25.3	%		16.5	%		16.5	%

(b) Consolidated statements of comprehensive income

For the year ended March 31,	2011			2012			2013		2013
	(Rs. in millions)			(Rs. in millions)			(Rs. in millions)		(US dollars in millions)
Deferred tax (credit)/charge on:
-cash flow hedges		110			(130	)		111		2.0
- reclassification adjustments on cash flow hedges		(174	)		(110	)		130		2.4
		(64	)		(240	)		241		4.4

F-24

A reconciliation of income tax expense applicable to accounting profit before tax at the statutory income tax rate to recognised income tax expense for the year indicated are as follows:

For the year ended March 31,	2011			2012			2013			2013
	(Rs. in millions)			(Rs. in millions)			(Rs. in millions)			(US dollars in millions)
Accounting profit before tax		87,521			79,314			94,300			1,729.6
Statutory income tax rate		33.22	%		32.45	%		32.45	%		32.45	%
Tax at Indian statutory income tax rate		29,074			25,737			30,600			561.3
Disallowable expenses		477			115			187			3.4
Non-taxable income		(2,012	)		(1,575	)		(3,829	)		(70.2	)
Tax holidays and similar exemptions		(10,942	)		(7,375	)		(14,481	)		(265.6	)
Change in deferred tax balances due to the change in Indian income tax rates from 33.22% to 32.45% for 2011		(465	)		—			—			—
Effect of tax rates differences of subsidiaries operating in other jurisdictions		(104	)		(1,235	)		(649	)		(11.9	)
Dividend distribution tax		728			1,068			1,686			30.9
Unrecognised MAT credit		1,145			668			600			11.0
Charge/(credit) in respect of previous years		60			(447	)		227			4.2
Utilisation of tax losses		(131	)		—			(944	)		(17.3	)
Tax effect on share of loss of associate		1,024			2,845			2,510			46.0
Other		(44	)		276			(352	)		(6.5	)
		18,810			20,077			15,555			285.3

There are certain income-tax related legal proceedings which are pending against the Company. Potential liabilities, if any have been adequately provided for, and the Company does not currently estimate any material incremental tax liability in respect of these matters.

Deferred tax assets/liabilities

The Company has recognised significant amounts of deferred tax. The majority of the deferred tax liabilities represent accelerated tax relief for the depreciation of property plant and equipment and the depreciation on mining reserves.

Significant components of deferred tax assets/liabilities recognized in the consolidated statements of financial position are as follows:

For the year ended March 31, 2011 :
Significant components of deferred tax liabilities/(assets)	Opening balance as at  April 1, 2010			Acquisition through business combination			Charged/ (credited) to Statement of income			Charged/ (credited) to equity			Exchange difference transferred to translation of foreign operation			Total as at March 31, 2011
	(Rs. in millions)			(Rs. in millions)			(Rs. in millions)			(Rs. in millions)			(Rs. in millions)			(Rs. in millions)
Intangible assets		—			3,400			—			—			77			3,477
Property, plant and equipment		17,948			6,260			911			—			65			25,184
Voluntary retirement scheme		(7	)		—			(62	)		—			—			(69	)
Employee benefits		(308	)		—			(68	)		—			(2	)		(378	)
Fair value of derivative assets/ liabilities		173			—			1,442			(64	)		—			1,551
Fair valuation of other assets/liabilities		294			—			770			—			(12	)		1,052
MAT credits entitlement		(93	)		—			(3,134	)		—			—			(3,227	)
Other temporary differences		(52	)		(107	)		566			—			1			408
Total		17,955			9,553			425			(64	)		129			27,998

F-25

For the year ended March 31, 2012:

	Opening balance as at April 1, 2011			Charged/ (credited) to Statement of income			Charged/ (credited) to equity			Exchange difference transferred to translation of foreign operation			Total as at March 31, 2012
Significant components of deferred tax liabilities/(assets)	(Rs. in millions)			(Rs. in millions)			(Rs. in millions)			(Rs. in millions)			(Rs. in millions)
Intangible assets		3,477			—			—			66			3,543
Property, plant and equipment		25,184			(101	)		—			273			25,356
Voluntary retirement scheme		(69	)		(271	)		—			(2	)		(342	)
Employee benefits		(378	)		(62	)		—			—			(440	)
Fair value of Derivative assets/ liabilities		1,551			(782	)		(240	)		—			529
Fair valuation of other assets/liabilities		1,052			(66	)		—			(1	)		985
MAT credits entitlement		(3,227	)		(1,343	)		—			—			(4,570	)
Other temporary differences		408			(524	)		—			(25	)		(141	)
Total		27,998			(3,149	)		(240	)		311			24,920

For the year ended March 31, 2013:

	Opening balance as at  April 1, 2012			Charged/ (credited) to Statement of income			Charged/ (credited) to  equity		Exchange difference transferred to translation of foreign operation			Total as at March 31, 2013			Total as at March 31, 2013
Significant components of deferred tax liabilities/(assets)	(Rs. in millions)			(Rs. in millions)			(Rs. in millions)		(Rs. in millions)			(Rs. in millions)			(US dollars in  millions)
Intangible assets		3,543			149			—		(408	)		3284			60.2
Property, plant and equipment		25,356			5,136			—		(276	)		30,216			554.2
Carry forward tax losses		—			(4,592	)		—		12			(4,580	)		(84.0	)
Voluntary Retirement Scheme		(342	)		6			—		11			(325	)		(6.0	)
Employee benefits		(440	)		(134	)		—		(1	)		(575	)		(10.5	)
Fair value of derivative assets/ liabilities		529			(776	)		241		—			(6	)		(0.1	)
Fair valuation of other assets/liabilities		985			576			—		(1	)		1,560			28.6
MAT credits entitlement		(4,570	)		(7,879	)		—		—			(12,449	)		(228.3	)
Other temporary differences		(141	)		(362	)		—		13			(490	)		(9.0	)
Total		24,920			(7,876	)		241		(650	)		16,635			305.1

Deferred tax assets and liabilities have been offset where they arise in the same legal entity and taxing jurisdiction but not otherwise.

Deferred tax assets on carry forward unused tax losses have been recognised to the extent of deferred tax liabilities on taxable temporary differences available. It is expected that any reversals of the deferred tax liability would be offset against the reversal of the deferred tax asset at respective entities.

Unused tax losses for which no deferred tax asset is recognized amount to Rs. 17,242 million and Rs 17,724 million ($ 325.1 million) as at March 31, 2012 and March 31, 2013 respectively. The unused tax losses as at March 31, 2013 expire, if unutilized, based on the year of origination as follows:

Nature of unutilised tax losses	Financial year of expiry	2013		2013
		(Rs. in millions)		(US dollar in millions)
Business losses
- Skorpion	No expiry limit		558		10.2
- TSPL	FY 2018-19 to 2020-21		396		7.3
Depreciation losses
- SEL	No expiry limit		11,072		203.1
- VGCB	No expiry limit		115		2.1
Long term capital losses
- SIIL	FY 2018-19 to 2019-20		1,755		32.2
- HZL	FY 2018-19 to 2019-20		3,828		70.2
			17,724		325.1

F-26

The Company had unused MAT credit amounting to Rs. 4,109 million and Rs. 4,674 million ($ 85.7 million) as at March 31, 2012 and 2013 respectively. Such tax credits have not been recognised on the basis that recovery is not sufficiently certain in the foreseeable future. Unrecognised MAT credit expires, if unutilized, based on the year of origination as follows:

Financial year ending March 31,	(Rs. in millions)		(US dollar in millions)
2016		198		3.6
2017		1,036		19.0
2018		137		2.5
2019		520		9.6
2020		517		9.5
2021		1,033		18.9
2022		633		11.6
2023		600		11.0

The Company has not recognised a deferred tax asset on its share of losses in the associate company amounting to Rs. 13,768 million and Rs. 20,638 million ($ 378.5 million) as at March 31, 2012 and March 31, 2013 respectively. The deferred tax asset is not recognised on the basis that its recovery is not sufficiently certain in the foreseeable future.

As at March 31, 2012 and 2013, the Company has not recognised any deferred tax liabilities for taxes that would be payable on the Company’s share in unremitted earnings of certain of its subsidiaries because the Company controls when the liability will be incurred and it is probable that the liability will not be incurred in the foreseeable future. The amount of unremitted earnings was Rs. 239,198 million and Rs. 280,064 million ($ 5136.9 million) respectively as at March 31, 2012 and 2013.

F-27

8. Property, plant and equipment

	Mining property			Land and building			Plant and equipment			Motor vehicles			Office equipment and fixtures			Total			Total
	(Rs. in millions)			(Rs. in millions)			(Rs. in millions)			(Rs. in millions)			(Rs. in millions)			(Rs. in millions)			(US dollar in  millions)
Cost
April 01, 2011		42,441			29,074			201,644			979			3,046			277,184
Additions		1,026			6,492			47,687			328			415			55,948
Disposals		—			(36	)		(1,054	)		(71	)		(31	)		(1,192	)
Foreign exchange		2,516			226			1,238			97			8			4,085
March 31, 2012		45,983			35,756			249,515			1,333			3,438			336,025			6,163.3
Additions		1,066			2,875			28,724			205			257			33,127			607.6
Disposals		—			—			(612	)		(52	)		(17	)		(681	)		(12.5	)
Foreign exchange		(597	)		(594	)		(2,402	)		50			(6	)		(3,549	)		(65.1	)
March 31, 2013		46,452			38,037			275,225			1,536			3,672			364,922			6,693.3
Accumulated depreciation and impairment
April 01, 2011		13,101			4,090			56,623			172			1,503			75,489
Charge for the year		4,966			1,907			17,868			172			190			25,103
Disposals		—			(7	)		(634	)		(51	)		(26	)		(718	)
Foreign exchange		1,092			46			642			11			2			1,793
March 31, 2012		19,159			6,036			74,499			304			1,669			101,667			1,864.8
Charge for the year		8,592			1,791			15,132			274			224			26,013			477.1
Disposals		—			(2	)		(217	)		(26	)		(8	)		(252	)		(4.6	)
Foreign exchange		63			(227	)		(724	)		5			(2	)		(886	)		(16.3	)
March 31, 2013		27,814			7,598			88,690			557			1,883			126,542			2,321.0
March 31, 2012		26,824			29,720			175,016			1,029			1,769			234,358
Assets under construction																	145,159
Total																	379,517
March 31, 2013		18,638			30,439			186,535			979			1,789			238,380			4,372.3
Assets under construction																	183,246			3,361.1
Total																	421,626			7,733.4
March 31, 2013 (US dollar in millions)		341.8			558.3			3,421.4			18.0			32.8

Plant and equipment includes refineries, smelters, power plants and related facilities, data processing equipment and electrical fittings.

Certain property, plant and equipment are pledged as collateral against borrowings, the details related to which have been described in Note 19 on “Borrowings”. Interest (net) capitalised as part of property, plant and equipment was Rs. 6,488 million and Rs. 8,571 million ($157.2 million) for the years ended March 31, 2012 and 2013, respectively.

Depreciation and amortisation charge for the year includes Rs 7 million ($0.1 million) capitalised as property, plant and equipment during the year.

9. Intangible assets

The intangible assets include the Gamsberg mine project which is in the exploration stage, port concession rights to operate a general cargo berth for handling coal at the outer harbor of the Visakhapatnam port on the east coast of India and software licences.

The movement in intangible assets during the year is as below:

F-28

	Gamsberg mine project			Port  concession rights(1)		Software licence		Total			Total
	(Rs. in millions)			(Rs. in millions)		(Rs. in millions)		(Rs. in millions)			(US dollar in millions)
Cost
April 01, 2011		12,419			—		—		12,419
Foreign exchange		238			—		—		238
March 31, 2012		12,657			—		—		12,657			232.2
Additions		—			5,875		275		6,150			112.8
Foreign exchange		(1,461	)		—		—		(1,461	)		(26.8	)
March 31, 2013		11,196			5,875		275		17,346			318.2
Accumulated depreciation and impairment
March 31, 2012		—			—		—		—			—
Charge for the year		—			10		19		29			0.5
March 31, 2013		—			10		19		29			0.5
Intangibles as at :
March 31, 2012		12,657			—		—		12,657
March 31, 2013		11,196			5,865		256		17,317			317.6
March 31, 2013 (US dollar in millions)		205.4			107.6		4.7

(1) Vizag General Cargo Berth Private Limited (VGCB), a special purpose vehicle, was incorporated for the coal berth mechanization and up gradation at Visakhapatnam port. VGCB is owned by SIIL and Leighton Welspun Contractors Private Limited in the ratio of 74:26. The project is to be carried out on a design, build, finance, operate, transfer basis and the concession agreement between Visakhapatnam Port and VGCB was signed on June 10, 2010. On October 8, 2010, VGCB was awarded with the concession after fulfilling conditions stipulated as a precedent to the concession agreement. Visakhapatnam Port has provided, in lieu of license fee an exclusive license to VGCB for designing, engineering, financing, constructing, equipping, operating, maintaining, and replacing the project/project facilities and services. The concession period is 30 years from the date of the award of the concession. The capacity of upgraded berth would be 10.18 mmtpa and that the Vishakhapatnam Port would be entitled to receive 38.10% share of the gross revenue as royalty. VGCB commenced operations in the fourth quarter of fiscal 2013. VGCB is entitled to recover a tariff from the user(s) of the project facilities and services as per its tariff notification. The tariff rates are linked to the Wholesale Price Index (WPI) and would accordingly be adjusted as specified in the concession agreement every year. The ownership of all infrastructure assets, buildings, structures, berths, wharfs, equipment and other immovable and movable assets constructed, installed, located, created or provided by VGCB at the project site and/or in the port’s assets pursuant to concession agreement would be with VGCB until expiry of this concession agreement. The cost of any repair, replacement or restoration of the project facilities and services shall be borne by VGCB during the concession period. VGCB has to transfer all its rights, titles and interest in the project facilities and services free of cost to Visakhapatnam Port at the end of the concession period. Intangible asset—port concession rights represents consideration for construction services. Revenue from construction contract of service concession arrangements on exchanging construction services for the port concession rights amounting to Rs. 2,402 million and Rs. 3,473 million ($63.7 million) have been recognised in the consolidated statements of income for the year ended March 31, 2012 and 2013, respectively.

10. Investment in associate

Vedanta Aluminium is a non public entity engaged in the production of metallurgical grade alumina and other aluminium products. Vedanta Aluminium caters to a wide spectrum of industries and has its presence in Jharsuguda and Lanjigarh, in the state of Orissa. The Company owns a 29.5% interest in Vedanta Aluminium. Vedanta owns the remaining 70.5% interest.

The Company has been recognising its share of losses in Vedanta Aluminum to the extent of its interest in the associate. Losses recognized under the equity method in excess of the Company’s equity investment have been applied to the Company’s investment in preference shares of associate to the extent of Rs. 15,008 million ($275.3 million). Refer note 12.

The Company’s investment in Vedanta Aluminium consists of the following:

	As at March 31,
	2012			2013			2013
	(Rs. in millions)			(Rs. in millions)			(US dollars in millions)
Equity investment		5,630			5,630			103.3
Less: share of losses of associate		(5,630	)		(5,630	)		(103.3	)
Total		—			—			—

F-29

Summarized consolidated financial information in respect of Vedanta Aluminium is as follows:

	As at March 31,
	2012		2013		2013
	(Rs. in millions)		(Rs. in millions)		(US dollars in millions)
Current assets		33,320		20,191		370.3
Non-current assets		282,382		288,685		5,295.1
Total assets		315,702		308,876		5,665.4
Current liabilities		137,394		150,771		2,765.4
Non-current liabilities		205,894		208,980		3,833.1
Total liabilities		343,288		359,751		6,598.5

For the year ended March 31,	2011			2012			2013			2013
	(Rs. in millions)			(Rs. in millions)			(Rs. in millions)			(US dollars in millions)
Total revenue		46,212			57,077			69,408			1,273.1
Operating profit/(loss)		133			(2,794	)		865			15.9
Loss for the year		(10,446	)		(29,718	)		(26,223	)		(481.0	)
Share in consolidated loss of associate		(3,082	)		(8,767	)		(7,736	)		(141.9	)
Share in consolidated other comprehensive income/(loss) of associate, net of tax		340			(1,249	)		866			15.9

11. Financial asset investments

(a) Financial asset investments represent investments classified and accounted for as available-for-sale investments

Movements for the year ended March 31,	2012			2013			2013
	(Rs. in millions)			(Rs. in millions)			(US dollars in millions)
As at April 01,,		1,233			9,620			176.4
Purchased during the year [refer Note (b) below]		7,158			—			—
Changes in fair value		1,337			(697	)		(12.8	)
Disposed during the year		—			(8,287	)		(152.0	)
Foreign exchange		(108	)		564			10.4
As at March 31,		9,620			1,200			22.0

F-30

Available-for-sale financial assets consist of the following:

	As at March 31,
	2012		2013		2013
	(Rs. in millions)		(Rs. in millions)		(US dollars in millions)
Quoted		8,636		100		1.8
Unquoted		984		1,100		20.2
		9,620		1,200		22.0
	As at March 31,
	2012		2013		2013
	(Rs. in millions)		(Rs. in millions)		(US dollars in millions)
Current		—		1,100		20.2
Non-current		9,620		100		1.8
		9,620		1,200		22.0

Quoted investment represents investment in equity securities that present the Company with opportunities for return through dividend income and gains in value. The fair values of such securities are determined by reference to published price quotations in active markets.

Unquoted investment represents an investment held by HZL in the equity share capital of the Andhra Pradesh Gas Power Corporation Limited (APGPCL) that was held at cost in the previous year since the fair value of unquoted investment could not be reliably measured. On March 30, 2013 HZL had entered into a share purchase agreement with a buyer for sale of its entire equity investment in APGPCL for an aggregate consideration of Rs. 1,100 million ($20.2 million) subject to approval by the board of directors of APGPCL which occurred post year end. Consequently, these investment are held at fair value with the consequential gain on fair valuation aggregating to Rs. 116 million ($ 2.1 million) recognised to the consolidated statements of comprehensive income. The sale was concluded on April 10, 2013.

(b) THL Zinc Holding BV, a wholly owned subsidiary of SIIL, during the previous year had acquired the entire ordinary share capital of Lakomasko BV for a consideration of $ 149.7 million from Vedanta Resources Holding Limited (VRHL). Consequently, Lakomasko BV became a subsidiary of SIIL. Lakomasko BV is a private investment company incorporated under the laws of the Netherlands. At the acquisition date, Lakomasko BV had no independent operations and held a single material asset namely 8.78% of the equity shares of Hudbay Minerals Inc., a company incorporated in Canada and listed on the New York and Canadian stock exchanges. Lakomasko BV accounted for this investment as an available-for-sale investment, with a fair value measurement basis. The carrying value at the acquisition date was $ 137.7 million (Rs. 7,158 million). The excess amount paid over the fair valuation of shares acquired amounting to $ 12.0 million (Rs. 616 million) was treated as deemed dividend and hence recognized in retained earnings during the year ended March 31, 2012. The Company’s investment in Hudbay Minerals Inc. was sold during the year for a consideration of $ 151.8 million (Rs 8,287 million) and the resultant gain amounting to $14.1 million (Rs. 770 million) has been reclassified from equity to consolidated statements of income and recognized within “Investment and other income” (refer note 5).

12. Other non-current assets

	As at March 31,
	2012			2013			2013
	(Rs. in millions)			(Rs. in millions)			(US dollars in millions)
Loans to associate (including investment in preference shares of associate)		36,890			38,522			706.6
Less: additional share of losses in associate		(8,138	)		(15,008	)		(275.3	)
Loans to other related parties		2,558			—			—
Other non-current assets		10,252			7,422			136.1
		41,562			30,936			567.4

Other non-current assets include Rs. 4,434 million and Rs. 4,573 million ($ 83.9 million) held as collateral in respect of closure cost and future redundancy payments payable to employees of Lisheen on termination of their employment on or before the mine closure as at March 31, 2012 and 2013, respectively. Other non-current assets also include Rs. 570 million and Rs. 534 million ($9.8 million) as at March 31, 2012 and 2013 respectively which relates to an investment in a rehabilitation trust established to meet the cost of some of BMM’s decommissioning, restoration and environmental liabilities.

F-31

13. Inventories

Inventories consist of the following:

	As at March 31,
	2012		2013		2013
	(Rs. in millions)		(Rs. in millions)		(US dollars in millions)
Raw materials and consumables		24,829		51,859		951.2
Work-in-progress		18,948		17,375		318.7
Finished goods		1,934		2,060		37.8
		45,711		71,294		1,307.7

Inventories with a carrying amount of Rs 33,794 million and Rs. 56,915 million ($1,043.9 million) have been pledged as security against certain bank borrowings of the Company as at March 31, 2012 and 2013, respectively.

14. Trade and other receivables

Trade and other receivables (net of allowances) consist of the following for the year indicated:

	As at March 31,
	2012		2013		2013
	(Rs. in millions)		(Rs. in millions)		(US dollars in millions)
Trade receivables		17,813		15,388		282.2
Other receivables from associate		4,937		13,053		239.4
Trade receivables from other related parties		503		840		15.4
Loans to associate		58,624		66,333		1,216.7
Loans to other related parties		16,900		46,239		848.1
Balance with Government authorities		10,299		6,350		116.5
Prepayments		878		1,538		28.2
Claims/refunds receivable		1,232		1,498		27.5
Advances for supplies		4,745		5,282		96.9
Other receivables		1,514		2,149		39.4
		117,445		158,670		2,910.3

The credit period given to customers ranges from zero to 90 days. Other receivables primarily include deposits and interest receivable. For terms and conditions for receivables from associate and other related parties, refer Note 33 on related party disclosure.

Trade receivables with a carrying value of Rs. 12,865 million and Rs.14,209 million ($260.6 million) have been given as collateral towards borrowings as at March 31, 2012 and 2013 respectively.

Allowances for trade and other receivables

The change in the allowance for trade and other receivables is as follows:

	2012			2013			2013
	(Rs. in millions)			(Rs. in millions)			(US dollars in millions)
As at April 01,		256			371			6.8
Allowance made during the year		158			6			0.1
Written off		(43	)		(15	)		(0.3	)
As at March 31,		371			362			6.6

F-32

15. Short-term investments

Short-term investments consist of the following:

	As at March 31,
	2012		2013		2013
	(Rs. in millions)		(Rs. in millions)		(US dollars in millions)
Bank deposits		72,083		87,106		1,597.7
Other investments		144,200		149,875		2,749.0
		216,283		236,981		4,346.7

Other investments include mutual fund investments and bonds and are fair valued through the consolidated statements of income. Bank deposits are made for the periods of more than three months depending on the cash requirements of the Company and earn interest at the respective deposit rates.

The Company has pledged short-term investments of Rs. 67 million and Rs. 218 million ($4.0 million) as at March 31, 2012 and 2013 respectively, to secure certain banking facilities.

F-33

16. Restricted cash and cash equivalents

Restricted cash and cash equivalents consist of the following:

	As at March 31,
	2012		2013		2013
	(Rs. in millions)		(Rs. in millions)		(US dollars in millions)
Cash at banks		59		63		1.2
		59		63		1.2

Cash at banks is restricted in use as it relates to unclaimed deposits & debentures, dividends and interest on debentures.

17. Cash and cash equivalents

Cash and cash equivalents consist of the following:

	As at March 31,
	2012		2013		2013
	(Rs. in millions)		(Rs. in millions)		(US dollars in millions)
Cash at banks and in hand		6,799		8,896		163.2
Short-term deposits		10,374		5,461		100.1
		17,173		14,357		263.3

Short-term deposits are made for periods of between one day and three months, depending on the immediate cash requirements of the Company, and earn interest at the respective short-term deposit rates.

18. Assets held for sale

The Company had recognized assets amounting to Rs. 11 million as assets held for sale during the year ended March 31, 2012. Such assets related to the Company’s aluminum segment.

A description of the assets held for sale was as follows:

	As at March 31, 2012
	Gross Value		Accumulated depreciation and impairment		Carrying Value
	(Rs. in millions)
Building		31		29		2
Plant and machinery		174		165		9
Total		205		194		11

The relatively high cost of operation of BALCO’s Plant I 100,000 tpa smelter which used the Vertical Stud Soderberg (“VSS”) technology at Korba and the steep decline in LME prices made the existing operations at the smelter unviable. As such, operations at the smelter were phased out of production commencing in February 2009 and operations at the smelter ceased on June 5, 2009.

Consequently, the Company transferred Plant 1 smelter assets at Korba, the main receiving station and distribution system used in the above mentioned smelter, Fume treatment plant (“FTP”), Profile tube shop (“PTS”) and Bidhan Bagh Unit (“BBU”) to “Assets held for sale”. The Company obtained approval for dismantling and disposing of these assets from the appropriate level of management. The Company has sold these remaining assets having the carrying value of Rs. 11 million ($ 0.2 million) during the year. Gain on sale of these assets amounting to Rs. 1 million has been credited in the consolidated statements of income during the year.

19. Borrowings

Short-term borrowings represent borrowings with an original maturity of less than one year and current portion of long-term borrowings. Long-term borrowings represent borrowings with an original maturity of greater than one year. Maturity distribution is based on contractual maturities. Interest rates on floating-rate debt are linked to benchmark rates.

F-34

Short-term borrowings consist of:

As at March 31,	2012			2013			2013
	(Rs. in millions)			(Rs. in millions)			(US dollars in millions)
Banks and financial institutions		41,327			19,647			360.3
Other		436			—			—
Current portion of long-term borrowings		12,220			6,640			121.8
Short-term and current portion of long term borrowings		53,983			26,287			482.1
Weighted average interest rate on short-term borrowings		7.2	%		5.4	%		5.4	%

Long-term borrowings consist of:

As at March 31,	2012			2013			2013
	(Rs. in millions)			(Rs. in millions)			(US dollars in millions)
Banks and financial institutions		43,917			47,341			868.3
Non-convertible debentures		20,582			40,543			743.6
Convertible notes		21,367			24,081			441.7
Other		844			907			16.7
Long-term borrowings		86,710			112,872			2,070.3
Less: Current portion of long-term borrowings		(12,220	)		(6,640	)		(121.8	)
Long-term borrowings, net of current portion		74,490			106,232			1,948.5

Major borrowings are as follows:

Working capital loans

The Company has credit facilities from various banks for meeting working capital requirements, generally in the form of credit lines for establishing letters of credit, packing credit in foreign currency, or PCFC, cash credit, bank guarantees and bills discounting. Amounts due under working capital loans as of March 31, 2012 and March 31, 2013 were Rs. 4,969 million and Rs. 8,356 million ($153.2 million) respectively.

As of March 31, 2013, the working capital loan of Rs 8,356 million ($153.2 million) comprises the following:-

(a) At BALCO, Rs 1,748 million ($ 32.0 million) of a working capital loan and cash credit limit having weighted average interest at 10.10%. This working capital facility is secured by hypothecation of stock of raw materials, work-in-progress, semi-finished, finished products, consumable stores and spares, bills receivables, book debts and all other movables, both present and future. The charges ranks pari passu among banks under the multiple banking arrangements, both for fund based and non fund based facilities.

(b) At Fujairah Gold FZE , a US Dollar denominated loan facility of Rs. 2,444 million ($ 44.8 million) having interest rate based on the London Inter Bank Offer Rate or LIBOR, plus 160 basis points .This loan facility is secured against comfort letter issued by SIIL.

(c) At Sterlite, a US Dollar denominated bill discounting facility of Rs 4,164 million ($ 76.4 million). This is an unsecured facility at an average interest rate of LIBOR plus 101 basis points.

Foreign currency loans

In November 2008, BALCO obtained a US dollar denominated loan facility of $ 25 million from DBS Bank Limited, arranged by its Mumbai Branch, to meet the capital expenditure requirement on projects. The rate of interest payable on this facility is six-month LIBOR plus 345 basis points. The loan is repayable in three equal yearly installments beginning November 2013.This facility is secured by first pari passu charges on all movable fixed assets including plant & machinery related 1200 MW power project and 3.25 LTPA Smelter projects both present and future along with secured lenders. The amount outstanding under this facility as of March 31, 2012 and March 31, 2013 was $ 25 million and $ 25 million (Rs 1,350 million), respectively.

In July 2011, BALCO entered into an agreement with SBI London for External Commercial Borrowing of $ 200 Million to part finance for setting up a 3.25 LTPA Aluminium Smelter along with a Thermal Power Plant of 1200 MW at Korba. This facility is secured by first pari passu charges on all the fixed assets (excluding land) of the project, both present and future along with secured lenders. As at March 31, 2012 and March 31, 2013, the balance due under this facility was Rs. 10,008 million and Rs.10,678 million ($ 195.8 million), respectively. The interest rate on this facility is six-month LIBOR plus 260 basis points. This loan is repayable in three annual equal installments starting from August 2016.

In February 2011, at the time of acquisition of BMM, short-term unsecured loan from Exxaro Base Metals (Proprietary) Limited (Exxaro) amounting to ZAR 218.7 million was also acquired. Exxaro owns 26% non-controlling equity interest in BMM. As of March 31, 2012, the balance due under this loan was Rs.436 million. This loan has been repaid during the year.

F-35

Term loans

In January 2012, VGCB was sanctioned financial assistance in the form of a Rupee term loan (RTL) of Rs.4,640 million from Axis Bank for financing the capital expenditure required towards the development, establishment, construction, operation and maintenance of coal handling facilities and up gradation of general cargo berth at outer harbor of Visakhapatnam port. The current effective interest rate of RTL is at 11.25%, which is a floating rate of interest revised on the basis of Axis Bank Base Rate plus 1.25% and is repayable with in forty five unequal quarterly installments commencing on December 2014. As at March 31, 2012 and March 31, 2013, the outstanding amount under this facility was Rs 1,079 million and Rs 2,927 million ($ 53.7 million), respectively. This loan is secured by first pari passu floating charge on movable and immovable assets of VGCB (other than project site as defined in concessional agreement) and unconditional and irrevocable corporate guarantee from SIIL. The charge on assets would be governed by terms of concessional agreement between VGCB and Board of Trustees for Visakhapatnam Port.

SEL received a sanction of Rs 5,000 million loan from Bank of Baroda. As at March 31, 2012, the outstanding balance under this facility was Rs 2,500 million which has been repaid during the year.

Buyers’ credit

SEL had utilised extended credit terms relating to purchases of property, plant and equipment for its projects. As of March 31, 2012, and March 31, 2013, the balance due under this facility was Rs. 3,213 million and Rs.378 million ($ 6.9 million), respectively. The outstanding loan as of March 31, 2013 was bearing interest rate at LIBOR plus 167 basis points. These are unsecured debts. They are repayable on various dates within the next one year.

In April 2009, BALCO obtained a one time capex letter of credit limit of $ 100 million from SBI. As of March 31, 2012, the outstanding balance under this facility was Rs 737 million, which has been repaid during the year.

In June 2009, BALCO obtained a non-fund based limit of Rs. 6,250 million from AXIS Bank for the purchase of capital goods for projects, which is secured by a subservient charge on the current assets and movable fixed assets with a negative lien on fixed assets of BALCO (except borrowings in Indian Currency i.e. BALCO can create charge on fixed assets for the domestic borrowings). As at March 31, 2012 and March 31, 2013 the balance outstanding under this facility was Rs. 5,163 million and Rs. 963 million ($17.7 million) respectively. The interest rate on this facility is six month LIBOR plus 200 basis points. The said outstanding amount is repayable from May 2014 to April 2016.

In January 2010, BALCO obtained a non-fund based limit of Rs. 6,000 million from ICICI Bank for the purpose of import of capital goods, and subsequently another limit of Rs.2,500 million in December 2010 and Rs. 7,500 million in October 2011 which is secured by exclusive charge on assets imported under the facility. As of March 31, 2012 and March31, 2013 the balance outstanding under this facility was Rs. 10,459 million and Rs 10,299 ($188.9 million) respectively. The interest rate on this facility is six-month LIBOR plus 160 basis points. The said outstanding amount is repayable on various dates from October 2013 to November 2016.

In May 2010, BALCO obtained buyers credit facility of $ 50 million from DBS Bank Limited, Singapore for the import of capital goods for projects. The facility is secured by first pari passu charge on all movable fixed assets including plant and machinery related to 1200 MW power plant and 3.25 LTPA Smelter project, both present and future along with secured lenders. The interest rate on this facility is six-month LIBOR plus 175 basis points. The outstanding amount is repayable from May 2013 to June 2013. The balance outstanding under the facility as of March 31, 2012 and March 31, 2013 was Rs.1,423 million and Rs. 442 million ($ 8.1million) respectively.

In September 2010, VGCB has obtained a non fund based limit of Rs.1,000 million from ICICI Bank for the purpose of import of capital goods. As of March 31, 2012, balance outstanding under this facility was Rs 22 million. The same has been repaid during the year.

In March 2012, VGCB has obtained a non-fund based limit of Rs.1,500 million from AXIS Bank for the purpose of import of capital goods, which is secured by a first pari passu floating charge on movable & immovable assets and unconditional & irrevocable corporate guarantee from SIIL. As of March 31, 2013, the balance outstanding under this facility was Rs. 804 million ($ 14.7 million).The interest rate on this facility is LIBOR plus 200 basis points. The said outstanding amount is repayable on various dates from June 2013 to May 2015.

In August 2010, TSPL obtained a non-fund based limit of Rs.10,000 million from ICICI Bank for the purpose of import of capital goods, which is secured by unconditional and irrevocable corporate guarantee from SIIL and a first charge on a pari passu basis on all the movable assets of TSPL. As of March 31, 2012 and March 31, 2013, the balance outstanding under this facility was Rs. 8,833 million and Rs. 9,400 million ($172.4 million) respectively. The interest rate on this facility is LIBOR plus 194 basis points. The said outstanding amount is repayable from July 2013 to September 2014.

In November 2011, TSPL obtained a non-fund based limit of Rs.5,000 million from State Bank of India for the purpose of import of capital goods, which is secured by unconditional and irrevocable corporate guarantee from SIIL. As of March 31, 2012 and March 31, 2013 the balance outstanding under this facility was Rs. 4,971 million and Rs.5,285 million ($ 97.0 million) respectively. The interest rate on this facility is LIBOR plus 173 basis points. The said outstanding amount is repayable from May 2014 to September 2014.

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In January 2012, TSPL obtained a non-fund based limit of Rs.5,000 million from Axis Bank for the purpose of import of capital goods, which is secured by unconditional and irrevocable corporate guarantee from SIIL and a sub servient charge on all the movable assets of TSPL. As of March 31, 2012 and March 31, 2013, the balance outstanding under this facility was Rs. 4,838 million and Rs 5,144 million ($94.4 million) respectively .The interest rate on this facility is LIBOR plus 190 basis points. The outstanding amount is repayable from April 2014 to September 2014.

In July 2012, TSPL obtained a non-fund based limit of Rs.3,900 million from Punjab National Bank for the purpose of import of capital goods, which is secured by unconditional and irrevocable corporate guarantee from SIIL. As of March 31, 2013, the outstanding balance under this facility was Rs 3,560 million ($ 65.3 million). The interest rate on this facility is LIBOR plus 150 basis points. The said outstanding amount is repayable from July 2013 to August 2013

Non-convertible debentures

In April 2003, SIIL issued Rs.1,000 million Indian Rupee denominated Non-convertible Debentures (NCDs) to Life Insurance Corporation of India (LIC). These NCDs were issued in two tranches. Tranche A, in the amount of Rs. 400 million, due in April 2010 and Tranche B, in the amount of Rs. 600 million, due in April 2013. Interest payable on these NCDs is linked to annualized Government of India securities rates plus 190 basis points and the current interest rate fixed at 8.24 %. These debentures are secured by certain of SIIL’s immovable properties. As of March 31, 2012, and March 31, 2013 the outstanding balance was Rs. 600 million and Rs. 600 million ($ 11.0 million), respectively. The outstanding amount has been paid in April 2013.

During the year SIIL, issued secured NCDs for an aggregate amount of Rs 20,000 million in four tranches. The first two of which were issued at 9.40% p.a. and the other two at 9.24%.p.a. These NCDs were secured by way of mortgage on the immovable property of SIIL situated at Sanaswadi in the state of Maharashtra and also by way of hypothecation on the movable fixed assets of SEL with a security cover of 1.25 times on the face value of outstanding NCDs at all time during the tenure of NCDs. These are redeemable in tranches of Rs 5,000 million each on October 25, 2022, November 27, 2022, December 6, 2022 and December 20, 2022. In respect of all the four tranches of NCDs, the debenture holders and SIIL have put and call option respectively at the end of the 5 years from the respective date of the allotment of the NCDs. As of March 31, 2013 the outstanding balance under this facility was Rs. 19,939 million ($ 365.7 million).

In November 2008, BALCO issued Rs. 5,000 million in Indian Rupee denominated NCDs to LIC. The debentures are repayable in three equal yearly installments beginning in November 2013. The applicable interest rate is 12.25% per annum. The debentures are secured and have a pari passu charge on BALCO’s movable and immovable properties tangible or intangible assets, other than BALCO’s current assets to the extent of 1.33 times the issued amount of the debentures. As of March 31, 2012 and March 31, 2013 the outstanding balance was Rs. 5,000 million and Rs. 5,000 million ($ 91.7 million) respectively.

TSPL has issued NCDs of Rs. 15,000 million to ICICI Bank at a rate of 9.8% per annum. The first tranche of Rs. 7,500 million was issued in December 2010 and second tranche for the balance amount was issued in January 2011. The NCDs are secured by first pari passu charge on the assets of TSPL both present and future, with a minimum asset cover of 1.25 times during the tenure of the NCDs (including the debt service reserve account) and unconditional and irrevocable corporate guarantee by SIIL. NCDs have tenure of 13 years from the respective date of allotment, repayable in twelve equal quarterly installments after 10 years of allotment. As of March 31, 2012 and March 31, 2013, the amount outstanding was Rs. 14,982 million and Rs. 15,004 million ($ 275.2 million) respectively.

Commercial papers

During the fiscal 2012, SIIL had issued commercial papers to various asset management companies for short term funding requirements. As of March 31, 2012 the outstanding balance was Rs 4,977 million bearing a coupon rate of 11.20 % and repayable on April 16, 2012. The same has been repaid during the year.

During the year, SEL has issued commercial papers to various asset management companies for funding project payables. As of March 31, 2013 the outstanding balance was Rs. 500 million ($ 9.2 million) bearing coupon rate of 9.70%.These were issued for short duration and are due for repayment on May 31, 2013.

During the year, BALCO has issued commercial papers to various asset management companies for funding project loan repayment and operational payables. As of March 31, 2013 outstanding balance was Rs. 6,900 million ($ 126.6 million) bearing coupon rate ranging between 9.30% to 9.70 %.These were issued for a shorter duration and are due for repayment in May 2013 and June 2013.

Convertible notes

Convertible Senior Notes or Convertible Notes, due 2014

On October 29, 2009, the Company raised $ 500 million by issue of 4.0% Convertible Notes of $ 1,000 each (the “Convertible Notes”). Subject to certain exceptions, the note holders have an option to convert these Convertible Notes into ADSs (each ADS now represents four equity shares. Prior to the bonus issue and the share split of the equity shares of the Company on June 25, 2010, each ADS represented one equity share) at any time prior to business day immediately preceding the maturity date at a conversion rate of 42.8688 ADSs per $ 1,000 principal amount of notes which is equal to a conversion price of approximately $ 23.33 per ADS.

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The conversion price could be subject to adjustments should certain events occur. Further, at any time after November 4, 2012, SIIL has a right to redeem in whole or parts of the Convertible Notes, subject to meeting certain conditions. The amount which SIIL is required to pay contractually on October 30, 2014 is $ 500 million, unless previously converted, redeemed or purchased and cancelled.

At inception, the difference between the proceeds received on issuance of the Convertible Notes and the fair value of the conversion option (which is an embedded derivative) was allocated to the Convertible Notes to establish its initial carrying cost. Subsequently, the conversion option has been measured at fair value through profit and loss with changes in fair value recognised in the consolidated statements of income. The Convertible Notes have been carried at amortised cost using an effective interest rate method.

The conversion option amounting to Rs. 302 million and Rs.3 million ($0.1 million) and un-amortised borrowing costs amounting to Rs. 93 million and Rs.59 million ($ 1.0 million) as of March 31, 2012 and March 31, 2013 respectively, are included along with the notes in consolidated statements of financial position. Changes in the fair value of conversion option are presented in Note 6 on Finance and other costs.

20. Acceptances

Acceptances consist of:

	As at March 31,
	2012		2013		2013
	(Rs. in millions)		(Rs. in millions)		(US dollars in millions)
Payable under trade financing arrangements		28,471		60,254		1,105.2
		28,471		60,254		1,105.2

Acceptances comprise of credit availed from financial institutions for payment to suppliers for raw materials purchased by the Company. The arrangements are interest-bearing and are payable within one year. The fair value of acceptances is not materially different from the carrying values presented.

21. Trade and other payables

Trade and other payables consist of:

	As at March 31,
	2012		2013		2013
	(Rs. in millions)		(Rs. in millions)		(US dollars in millions)
Trade payables		33,749		36,526		670.0
Advances from customers		1,816		1,960		35.9
Amount due to associate		1,251		606		11.1
Amount due to other related parties		1,607		1,219		22.4
Security deposit and retentions		23,533		32,665		599.1
Payable on Asarco claim [refer note 31(c)(i)]		4,233		4,501		82.6
Other payables		7,535		9,325		171.0
		73,724		86,802		1,592.1

Trade payables are non-interest bearing and are normally settled within 90 days to 180 days terms. The fair value of trade and other payables is not materially different from the carrying values presented. Other payables include statutory dues and other dues.

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22. Provisions

	Restoration, rehabilitation and environmental (a)			Other (b)			Total
	(Rs. in millions)			(Rs. in millions)			(Rs. in millions)
As at April 01, 2011		4,616			2,918			7,534
Additions		228			260			488
Adjustments on account of change in discount rate		(12	)		—			(12	)
Credited to consolidated statements of income		—			(570	)		(570	)
Unwinding of discount		168			—			168
Exchange differences		236			166			402
As at March 31, 2012		5,236			2,774			8,010
Classification as at March 31, 2012
Current		—			802			802
Non-current		5,236			1,972			7,208
		5,236			2,774			8,010

	Restoration, rehabilitation and environmental (a)			Other (b)			Total			Total
	(Rs. in millions)			(Rs. in millions)			(Rs. in millions)			(US dollars in millions)
As at April 01, 2012		5,236			2,774			8,010			146.9
Additions		466			238			704			12.9
Disposal		—			(128	)		(128	)		(2.3	)
Unwinding of discount		184			—			184			3.4
Exchange differences		(330	)		(31	)		(361	)		(6.6	)
As at March 31, 2013		5,556			2,853			8,409			154.3
Classification as at March 31, 2013
Current		—			664			664			12.2
Non-current		5,556			2,189			7,745			142.1
		5,556			2,853			8,409			154.3

(a) Restoration, rehabilitation and environmental

The provision for restoration, rehabilitation, decommissioning and environmental represents the Company’s best estimate of the costs which will be incurred in the future to meet the obligations under the laws of the land, the terms referred to in the Company’s mining and other licences and contractual arrangements. These amounts become payable upon closure of the mines and are expected to be incurred over a period of 2 to 15 years.

(b) Other

Other provisions comprise the Company’s best estimate of the costs based on the possibility of occurrence in the future to settle certain legal, tax and other claims outstanding against the Company. The timing of cash flows in respect of such provisions cannot be reasonably determined.

This also includes one onerous contract related to redundancy cost at Lisheen. The provision for redundancy cost becomes payable to employees on their termination of employment on or before the mine closure.

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23. Other non-current liabilities

Non-current liabilities consist of:

	As at March 31,
	2012		2013		2013
	(Rs. in millions)		(Rs. in millions)		(US dollars in millions)
Security deposits and retentions		5,265		10,357		190.0
		5,265		10,357		190.0

24. Employee benefits

The Company participates in defined contribution and benefit schemes, the assets of which are held (where funded) in separately administered funds.

For defined contribution schemes the amount charged to the consolidated statements of income is the total of contributions payable in the year.

For defined benefit pension schemes, the cost of providing benefits under the plans is determined by actuarial valuation separately each year for each plan using the projected unit credit method by independent qualified actuaries as at the year end. Actuarial gains and losses arising in the year are recognized in full in the consolidated statements of income of that year.

Defined contribution plans

The Company contributed a total of Rs. 510 million, Rs. 819 million and Rs 736 million ($13.5 million) for the years ended March 31, 2011, 2012 and 2013, respectively, to the following defined contribution plans.

Central provident fund

In accordance with the Indian Provident Fund Act, employees are entitled to receive benefits under the Provident Fund. Both the employee and the employer make monthly contributions to the plan at a predetermined rate (12.0% for 2013) of an employee’s basic salary. All employees have an option to make additional voluntary contribution. These contributions are made to the fund administered and managed by the Government of India (GOI) or to independently managed and approved funds. The Company has no further obligations under the fund managed by the GOI beyond its monthly contributions which are charged to the consolidated statements of income in the period they are incurred. Where the contribution are made to independently managed and approved funds shortfall in actual return, if any, from the return guaranteed by the State are made by the employer. There is no such shortfall in the actual return for independently managed funds for the year March 31, 2012 and 2013. The benefits are paid to employees on their retirement or resignation from the Company.

Superannuation

Superannuation, another pension scheme applicable in India, is applicable only to senior executives. SIIL and each relevant Indian subsidiary holds a policy with Life Insurance Corporation of India (“LIC”), to which each of these entities contributes a fixed amount relating to superannuation and the pension annuity is met by LIC as required, taking into consideration the contributions made. The Company has no further obligations under the scheme beyond its monthly contributions which are charged to the consolidated statements of income in the period they are incurred.

Australian pension scheme

The Company also participates in defined contribution superannuation schemes in Australia. The contribution of a proportion of an employee’s salary in a superannuation fund is a legal requirement in Australia. The employer contributes, into the employee’s fund of choice, 9.0% of an employee’s gross remuneration where the employee is covered by an industrial agreement and 12.0% of the basic remuneration for all other employees. All employees have the option to make additional voluntary contributions. The Company has no further obligations under the scheme beyond its monthly contributions which are charged to the consolidated statements of income in the period they are incurred.

Skorpion Provident Fund

The Skorpion Zinc Provident Fund is a defined contribution fund and is compulsory to all full time employees under the age of 60. Company contribution to the fund is a fixed percentage of 8% per month of pensionable salary, whilst the employee contributes 7% with the option of making additional contributions, up to a maximum of 12%.

The Fund provides disability cover which is equal to the member’s fund credit and a death cover of 2 times annual salary in the event of death before retirement.

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Black Mountain (Pty) Limited, South Africa Pension & Provident Funds

BMM has two retirement funds, both administered by Alexander Forbes, a registered financial service provider. Both funds form part of the Alexander Forbes umbrella fund and are defined contribution funds. The purpose of the funds is to provide retirement and death benefits to all eligible employees. Both the fund plans are defined contribution schemes for its employees and amount of contribution paid or payable during the year charged to profit or loss. Company contributes at a fixed percentage of 10.5% for up to supervisor grade and 15% for others.

Lisheen Mine, Ireland Pension Funds

Lisheen participates in a defined contribution pension scheme for all employees. The plan requires Lisheen to contribute 5% of annual basic salary of the employee and the employee is required to also contribute 5% of their annual basic salary. Under the terms of the executive scheme a contribution of 15% each is made by Lisheen and by the individual. Employees may also make additional voluntary contributions subject to certain limits. The Lisheen’s contribution will continue until an employee terminates employment or reaches the retirement age of 65, whichever happens first.

Defined benefit plans

Post Retirement Medical Benefits:

The Company has a scheme of post retirement medical benefits for employees at BMM. Based on an actuarial valuation conducted as at year end, a provision is recognised in full for the benefit obligation. The scheme is unfunded. The obligation relating to post retirement medical benefits at BMM were Rs. 317 million and Rs. 339 million ($ 6.2 million) as at March 31, 2012 and 2013 respectively. The obligation under this plan is unfunded. The Company considers these amounts as not material and accordingly has not provided further disclosures as required by IAS 19 “Employee benefits”.

Gratuity plan

In accordance with the Payment of Gratuity Act of 1972, SIIL and its Indian subsidiaries contribute to a defined benefit plan (the “Gratuity Plan”) covering certain categories of employees. The Gratuity Plan provides a lump sum payment to vested employees at retirement, disability or termination of employment being an amount based on the respective employee’s last drawn salary and the number of years of employment with the Company.

Based on actuarial valuations conducted as at year end, a provision is recognised in full for the benefit obligation over and above the funds held in the Gratuity plan. In the case where there is no fund held by the scheme, full provision is recognised in the consolidated statements of financial position.

Principal actuarial assumptions used to calculate the defined benefit plan’s liabilities are:

	SIIL									HZL									BALCO
	2011			2012			2013			2011			2012			2013			2011		2012		2013
Discount rate		8.00	%		8.00	%		8.00	%		8.00	%		8.00	%		8.00	%		8.00%		8.40%		8.00%
Expected rate of increase in compensation level of covered employees		5.50	%		5.50	%		5.50	%		5.50	%		5.50	%		5.50	%		5.00% for Executives 3.00% Non Executives		5.00% for Executives 3.00% Non Executives		5.00% for Executives 3.00% Non Executives
Expected return on assets		7.50	%		7.50	%		7.50	%		9.50	%		9.50	%		9.50	%		9.40%		9.40%		*

* The fund has been setup for certain beneficiaries, all of whom have been paid off

The expected return on plan assets is based on expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligations.

The following table sets out the components of net benefit expense recognized in the financial statements for the Gratuity Plan:

Year ended March 31	2011			2012			2013			2013
	(Rs. in millions)			(Rs. in millions)			(Rs. in millions)			(US dollars in millions)
Current service cost		(119	)		(135	)		(143	)		(2.6	)
Actuarial losses		(274	)		(152	)		(299	)		(5.5	)
Expected return on plan assets		105			121			167			3.1
Past service costs		(865	)		—			—			—
Interest cost		(146	)		(232	)		(252	)		(4.6	)
Total charge		(1,299	)		(398	)		(527	)		(9.6	)

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The Company’s obligations in respect of its defined benefit plan are as follows:

As at March, 31,	2009			2010			2011			2012			2013			2013
	(Rs. in millions)			(Rs. in millions)			(Rs. in millions)			(Rs. in millions)			(Rs. in millions)			(US dollars in millions)
Fair value of plan assets (a)		981			1,121			1,333			1,788			1,839			33.7
Present value of defined benefit obligation (b)		(1,692	)		(1,986	)		(2,949	)		(3,167	)		(3,403	)		(62.4	)
Deficit in defined benefit obligations (a-b)		(711	)		(865	)		(1,616	)		(1,379	)		(1,564	)		(28.7	)
Comprising:
Funded obligations		(1,084	)		(1,384	)		(2,870	)		(2,002	)		(2,137	)		(39.2	)
Unfunded obligations		(608	)		(602	)		(79	)		(1,165	)		(1,266	)		(23.2	)

The movement during the years ended March 31, 2011, 2012 and 2013 of the change in present value of the defined benefit obligation was as follows:

As at March, 31,	2011			2012			2013			2013
	(Rs. in millions)			(Rs. in millions)			(Rs. in millions)			(US dollars in millions)
As at April 01,		(1,986	)		(2,949	)		(3,167	)		(58.1	)
Current service costs		(119	)		(135	)		(143	)		(2.6	)
Past service costs		(865	)		—			—			—
Benefits paid		459			335			461			8.4
Interest cost		(146	)		(232	)		(252	)		(4.6	)
Actuarial losses		(292	)		(186	)		(302	)		(5.5	)
As at March 31,		(2,949	)		(3,167	)		(3,403	)		(62.4	)

Movements in the fair value of the plan assets are as follows:

As at March, 31,	2011			2012			2013			2013
	(Rs. in millions)			(Rs. in millions)			(Rs. in millions)			(US dollars in millions)
As at April 01,		1,121			1,333			1,788			32.8
Contributions received		403			600			211			3.9
Benefits paid		(314	)		(300	)		(330	)		(6.2	)
Actuarial gain/(loss)		18			34			3			0.1
Expected return on plan assets		105			121			167			3.1
As at March 31,		1,333			1,788			1,839			33.7

The Company maintains its gratuity fund with Life Insurance Corporation of India (LIC). The percentage allocation fund value to various categories of financial assets maintained with LIC as at March 31, 2012 and 2013 are as follows:

	% allocation of plan assets As at March 31
Assets by category	2012		2013
Government securities		51.0		43.4
Debentures/bonds		42.5		42.8
Equity instruments		3.6		5.2
Fixed Deposits		—		8.4
Money market instruments		2.9		0.2
		100.0		100.0

Historical information related to experience adjustments:

As at March 31	2009			2010			2011			2012			2013			2013
	(Rs. in millions)			(Rs. in millions)			(Rs. in millions)			(Rs. in millions)			(Rs. in millions)			(US dollars in millions)
Experience adjustments on plan liabilities gain/(loss)		(68	)		(242	)		(292	)		(186	)		(302	)		(5.5	)
Experience adjustments on plan assets gain/(loss)		6			6			18			34			3			0.1

The Company expects to contribute Rs. 187 million ($ 3.4million) to the funded defined benefit plans in fiscal 2014.

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25. Financial instruments

This section gives an overview of the significance of financial instruments for the Company and provides additional information on the consolidated statements of financial position. Details of significant accounting policies, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in Note 2 and Note 3.

Financial assets and liabilities:

The following tables present the carrying value and fair value of each category of financial assets and liabilities as at March 31, 2012 and 2013.

As at March 31, 2012
	(Rs. in millions)
Financial assets	Cash		Held for trading		Loans and receivables		Available-for- sale financial assets		Derivatives used for hedging		Total carrying value		Total fair value
Financial assets investments
—at fair value		—		—		—		8,636		—		8,636		8,636
—at cost		—		—		—		984		—		984		*
Other non—current assets#		—		—		49,700		—		—		49,700		48,640
Trade and other receivables		—		—		101,523		—		—		101,523		101,523
Short-term investments
—Bank deposits		—		—		72,083		—		—		72,083		72,083
—Other investments		—		144,200		—		—		—		144,200		144,200
Derivative financial assets		—		—		—		—		517		517		517
Cash and cash equivalents including restricted cash		17,232		—		—		—		—		17,232		17,232
		17,232		144,200		223,306		9,620		517		394,875		392,831

The consolidated statements of financial position and Note 14 “Trade and other receivables” include balances with governments authorities of Rs. 10,299 million, prepayments of Rs. 878 million, advance for supplies of Rs. 4,745 million which are not financial assets and hence have been excluded from the above table.

* The fair value of unquoted financial assets investments cannot be reliably measured. Refer assumptions below.

# Other non-current assets is gross value before application of share of losses in an associate of Rs. 8,138 million.

As at March 31, 2012
	(Rs. in millions)
Financial liabilities	Derivatives not used for hedging		Derivatives used for hedging		Amortised cost		Total carrying value		Total fair value
Borrowings
—Short-term		—		—		53,983		53,983		53,983
—Long term (other than convertible notes)		—		—		53,123		53,123		54,007
—Convertible notes		302		—		21,065		21,367		24,044
Acceptances		—		—		28,471		28,471		28,471
Trade and other payables		—		—		67,167		67,167		67,167
Derivative financial liabilities		—		606		—		606		606
Total		302		606		223,809		224,717		228,278

The consolidated statements of financial position and Note 21 “Trade and other payables” include advances from customers of Rs. 1,816 million, balances due to government authorities of Rs. 3,581 million and other employees benefits of Rs. 1,160 million which are not financial liabilities and hence have been excluded from above table (balances due to government authorities and other employees’ benefits are included within other payables in Note 21).

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As at March 31, 2013:

	(Rs. in millions)														(US dollar in millions)
Financial assets	Cash		Held for trading		Loans and receivables		Available for sale financial assets		Derivatives used for hedging		Total carrying value		Total fair value		Total carrying value		Total fair value
Financial assets investments
—at fair value		—		—		—		1,200		—		1,200		1,200		22.0		22.0
—at cost		—		—		—		—		—		—		—		—		—
Other non—current assets#		—		—		45,944		—		—		45,944		45,256		842.7		830.1
Trade and other receivable		—		—		144,002		—		—		144,002		144,002		2,641.2		2,641.2
Short term investments
—Bank deposits		—		—		87,106		—		—		87,106		87,106		1,597.7		1,597.7
—Other investments		—		149,875		—		—		—		149,875		149,875		2,749.0		2,749.0
Derivative financial assets		—		—		—		—		351		351		351		6.4		6.4
Cash and cash equivalents including restricted cash		14,420		—		—		—		—		14,420		14,420		264.5		264.5
Total		14,420		149,875		277,052		1,200		351		442,898		442,210		8,123.5		8,110.9

The consolidated statements of financial position and Note 14 “Trade and other receivables” include balances with governments authorities of Rs. 6,350 million ($ 116.5 million), prepayments of Rs. 1,538 million ($ 28.2 million), advance for supplies of Rs. 5,282 million ($ 96.9 million) and claims receivable of Rs. 1,498 million ($ 27.5 million) which are not financial assets and hence have been excluded from the above table.

# Other non-current assets is gross value before application of share of losses in an associate of Rs. 15,008 million ($ 275.3 million).

As at March 31, 2013:

	(Rs. in millions)										(US dollar in millions)
Financial liabilities	Derivatives not used for hedging		Derivatives used for hedging		Amortised cost		Total carrying value		Total fair value		Total carrying value		Total fair value
Borrowings
—Short term		—		—		26,287		26,287		26,287		482.1		482.1
—Long term (other than convertible notes)		—		—		82,151		82,151		82,227		1,506.8		1,508.2
—Convertible notes		3		—		24,078		24,081		26,702		441.7		489.8
Acceptances		—		—		60,254		60,254		60,254		1,105.2		1,105.2
Trade and other payables		—		—		77,899		77,899		77,899		1,428.8		1,428.8
Derivative financial liabilities		—		945		—		945		945		17.3		17.3
Total		3		945		270,669		271,617		274,314		4,981.9		5,031.4

The consolidated statements of financial position and Note 21 “Trade and other payables” include advances from customers of Rs. 1,960 million ($ 36.0 million), balances due to government authorities of Rs. 2,855 million ($ 52.4 million), other employees benefits of Rs. 3,088 million ($ 56.6 million) and liability towards compensation ordered by the Supreme Court of Rs. 1,000 million ($ 18.3 million), which are not financial liabilities and hence have been excluded from the above table (Balances due to government authorities, other employees’ benefits and compensation ordered by the Supreme Court are included within other payables in Note 21).

Financial guarantees of Rs. 45,383 million and Rs. 56,604 million ($ 1,038.2 million) given on behalf of Vedanta Aluminium as at March 31, 2012 and 2013 respectively. These guarantees are continuing and valid until contractual obligations are fulfilled by Vedanta Aluminium.

Fair value hierarchy

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities

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Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices)

Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs)

The below tables summarise the categories of financial assets and liabilities as at March 31, 2012 and 2013 measured at fair value:

As at March 31, 2012	(Level 1)		(Level 2)		(Level 3)
	(Rs. in millions)
Financial assets
At fair value through profit or loss
—Held for trading		144,200		—		—
—Derivative financial assets
—Commodity contracts		148		—		—
—Forward foreign currency contracts		—		369		—
Available-for-sale investments
—Financial asset investments held at fair value		8,636		—		—
		152,984		369		—
Financial liabilities
At fair value through profit or loss
—Derivative financial liabilities
—Commodity contracts		131		—		—
—Forward foreign currency contracts		—		15		—
—Net investment in foreign operation		—		460		—
—Embedded derivative on convertible notes		—		—		302
		131		475		302

As at March 31, 2013	(Level 1)		(Level 2)		(Level 3)		(Level 1)		(Level 2)		(Level 3)
	(Rs. in millions)						(US dollars in millions)
Financial assets
At fair value through profit or loss
—Held for trading		149,875		—		—		2,749.0		—		—
—Derivative financial assets
—Commodity contracts		338		—		—		6.2		—		—
—Forward foreign currency contracts		—		13		—		—		0.2		—
Available-for-sale investments
—Financial asset investments held at fair value		100		—		1,100		1.8		—		20.2
		150,313		13		1,100		2,757.0		0.2		20.2
Financial liabilities
At fair value through profit or loss
—Derivative financial liabilities
—Commodity contracts		—		—		—		—		—		—
—Forward foreign currency contracts		—		763		—		—		14.0		—
—Net investment in foreign operation		—		182		—		—		3.3		—
—Embedded derivative on convertible notes		—		—		3		—		—		0.1
		—		945		3		0.0		17.3		0.1

Movement in the fair value of embedded derivative on convertible notes (Level 3 item):

As at March 31,	2012			2013			2013
	Rs. in millions			Rs. in millions			US dollar  in millions
As at April 01,		2757			302			5.5
Charged/(income) to income statement		(2,455	)		(299	)		(5.4	)
As at March 31,		302			3			0.1

F-45

Movement arising from fair valuation in financial assets investments (Level 3 item):

As at March 31,	2013		2013
	Rs. in millions		US dollar in  millions
As at April 01, 2012		—		—
Addition due to fair valuation during the year		116		2.1
As at March 31, 2013		116		2.1

The fair value of the financial assets and liabilities are included at the amount at which the instrument could be exchanged or settled in a current transaction between willing parties.

The following methods and assumptions were used to estimate the fair values:

• Short-term marketable securities traded in active markets are determined by reference to quotes from the financial institutions; for example: Net asset value (NAV) for investments in mutual funds declared by mutual fund house.

• Trade and other receivables (excluding deposits with governments and other prepayments), trade and other payables and short-term borrowings: Approximate their carrying amounts largely due to the short-term maturities of these instruments.

• Non current financial assets and financial liabilities: Either the carrying value approximates the fair value or fair value have been estimated by discounting the expected future cash flows using a discount rate equivalent to the risk free rate of return adjusted for the appropriate credit spread.

• Long-term fixed-rate and variable-rate borrowings: Fair value has been determined by the Company based on parameters such as interest rates, specific country risk factors, and the risk characteristics of the financed project. Accordingly the fair value of convertible notes as at March 31, 2012 and 2013 is Rs. 24,044 million and Rs. 26,702 million ($ 489.8 million). For all other long-term fixed-rate and variable-rate borrowings, either the carrying amount approximates the fair value, or fair value have been estimated by discounting the expected future cash flows using a discount rate equivalent to the risk free rate of return adjusted for the appropriate credit spread. The fair value of the embedded derivative liability of convertible notes has been calculated using “Auxiliary Reversed Binomial Tree method” and using the following significant assumptions as at March 31, 2012 and 2013, respectively:

• the implied volatility as 37.7% and 30.2%; and

• the share price as $ 8.54 and $ 6.98.

• Quoted available-for-sale financial assets investments: Fair value is derived from quoted market prices in active markets. Unquoted investment represents an investment made by HZL in the equity share capital of the Andhra Pradesh Gas Power Corporation Limited (APGPCL) and was held at cost in the previous year since the fair value of unquoted investment could not be reliably measured. On March 30, 2013 HZL had entered into a share purchase agreement with a buyer for sale of the entire equity investment in APGPCL for an aggregate consideration of Rs. 1,100 million ($20.2 million) subject to approval of board of directors of APGPCL. Pursuant to the share purchase agreement this investment is held at fair value with the consequential gain on fair valuation aggregating to Rs. 116 million ($ 2.1 million) recognised in the consolidated statements of comprehensive income. The sale has been concluded on April 10, 2013.

• Derivative contracts: The Company enters into derivative contracts with various counterparties, principally financial institutions with investment grade credit ratings. Forward foreign currency contracts are valued using valuation techniques with market observable inputs. The most frequently applied valuation techniques for such derivatives include forward pricing using present value calculations, foreign exchange spot and forward premium rates. Commodity contracts are valued using the forward LME rates of commodities actively traded on the listed metal exchange i.e. London Metal Exchange, United Kingdom (U.K.).

The changes in counterparty credit risk had no material effect on the hedge effectiveness assessment for derivatives designated in hedge relationship and the value of other financial instruments recognised at fair value.

The estimated fair value amounts as at March 31, 2013 have been measured as at that date. As such, the fair values of these financial instruments subsequent to reporting date may be different than the amounts reported at each year-end.

There were no transfers between Level 1 and Level 2 during the year.

Risk management

The Company’s businesses are subject to several risks and uncertainties including financial risks.

The Company’s documented risk management polices act as an effective tool in mitigating the various financial risks to which the business is exposed to in the course of their daily operations. The risk management policies cover areas such as liquidity risk, commodity price risk, foreign exchange risk, interest rate risk, counterparty and concentration of credit risk and capital management. Risks are identified through a formal risk management programme with active involvement of senior management personnel and business managers at both the corporate and individual subsidiary level. Each operating subsidiary in the Company has in place risk management processes which are in line with the Company’s policy. Each significant risk has a designated ‘owner’

F-46

within the Company at an appropriate senior level. The potential financial impact of the risk and its likelihood of a negative outcome are regularly updated. The risk management process is coordinated by the Management Assurance function and is regularly reviewed by the Company’s Audit Committee. Key business decisions are discussed at the monthly meetings of the Executive Committee, an advisory committee empowered by the board of directors (the “board”) which performs advisory function for board for decision making. The overall internal control environment and risk management programme including financial risk management is reviewed by the Audit Committee on behalf of the Board.

The risk management framework aims to:

• improve financial risk awareness and risk transparency

• identify, control and monitor key risks

• identify risk accumulations

• provide management with reliable information on the Company’s risk situation

• improve financial returns

Treasury management

The Company’s treasury function provides services to the business, co-ordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Company through internal risk reports which analyse exposures by degree and magnitude of risks. These risks include market risk (including currency risk, fair value interest rate risk and price risk), credit risk, liquidity risk and cash flow interest rate risk.

Treasury management focuses on capital protection, liquidity maintenance and yield maximization. The treasury policies are approved by the Board and adherence to these policies is strictly monitored at the Executive Committee meetings. Day-to-day treasury operations of the subsidiary companies are managed by their respective finance teams within the framework of the overall Company’s treasury policies. Long-term fund raising including strategic treasury initiatives are handled by a central team while short-term funding for routine working capital requirements is delegated to subsidiary companies. A monthly reporting system exists to inform senior management of investments, debt, currency, commodity and interest rate derivatives. The Company has a strong system of internal control which enables effective monitoring of adherence to Company’s policies. The internal control measures are effectively supplemented by regular internal audits.

Commodity price risk

The Company has historically limited the use of derivatives for commodity hedging. As much as possible, the Company tries to mitigate price risk through favorable contractual terms. Moreover, hedging is used purely as a risk management tool and, in some cases, strategically to secure future cash flows in cases of high volatility by entering into forward contracts or similar instruments. These contracts are expected to reduce the volatility of cash flows in respect of highly probable forecast purchases or firm commitments attributable to the fluctuation in commodity price in accordance with the risk management policy approved by the Board.

Financial instruments with commodity price risk are entered into in relation to following activities:

• economic hedging of prices realised on commodity contracts

• purchases and sales of physical contracts

• cash flow hedging of revenues forecasted highly probable transactions

Aluminum

The raw material is mined in India with sales prices linked to the LME prices. At present the Company on selective basis hedges the aluminium content in outsourced alumina to protect its margins.

Copper

The Company’s custom smelting copper operations at Tuticorin benefits from a natural hedge except to the extent of a possible mismatch in quotational periods between the purchase of concentrate and the sale of finished copper. The Company’s policy on custom smelting is to generate margins from Treatment charges/Refining charges or “TcRc”, minimising conversion cost, generating a premium over LME on sale of finished copper, sale of by-products and from achieving import parity on domestic sales. Hence, mismatches in quotational periods are actively managed to ensure that the gains or losses are minimised. The Company hedges this variability of LME prices and tries to make the LME price an indifferent cost between purchases of copper concentrate and sales of finished products, both of which are linked to the LME price. The Company also benefits from the difference between the amounts paid for quantities of copper content received and copper recovered in the manufacturing process, also known as ‘free copper’.

The Company’s copper mines in Tasmania, Australia, supplies approximately 7% to 8% of the requirement of the custom copper smelter at Tuticorin. Hence, TCRCs are a major source of income for the Indian copper smelting operations. Fluctuations in TcRcs are influenced by factors including demand and supply conditions prevailing in the market for mine output. The Company’s copper business has a strategy of securing a majority of its concentrate feed requirement under long-term contracts with mines.

F-47

Zinc India

Raw material for zinc and lead is mined in India with sales prices linked to the LME prices. The Company hedges custom production through forward contracts or other instruments. Zinc International

Raw material for zinc and lead is mined in Namibia, South Africa and Ireland with sales prices linked to the LME prices.

This table illustrates the impact of a $ 100 movement in LME / LBMA prices based on volumes, costs and exchange rates for fiscal 2012 and 2013 and provide the estimated impact on operating profit assuming all other variables remain constant.

$ 100 movement in LME price	Change in operating profit
	2012		2013		2013
	(Rs. in millions)		(Rs. in millions)		(US dollars in millions)
Copper		118		182		3.3
Zinc India		3,465		5,797		106.3
Zinc International		1,533		2,294		42.1
Aluminum		1,148		1,259		23.1
Total		6,264		9,532		174.8

The impact of a $ 100 movement in LME / LBMA prices on net profit and equity would be Rs 7,959 million ($ 146.0 million).

Further, the impact of change in copper LME for provisionally priced copper concentrate purchase at SIIL’s custom smelting operations is pass through in nature and as such will not have any impact on profitability.

Financial risk

The Company’s Board approved financial risk policies comprise liquidity, currency, interest rate and counterparty risk. The Company does not engage in speculative treasury activity but seeks to manage risk and optimize interest and commodity pricing through proven financial instruments.

(a) Liquidity

The Company requires funds both for short-term operational needs as well as for long-term investment programmes mainly in growth projects. The Company generates sufficient cash flows from the current operations which together with the available cash and cash equivalents and short-term investments provide liquidity both in the short-term as well as in the long-term.

The Company’s current ratings from CRISIL are CRISIL AA+/stable for long term and CRISIL A1+ for short-term programmes. These ratings support the necessary financial leverage and access to debt or equity markets at competitive terms. The Company generally maintains a healthy net debt-equity ratio and retains flexibility in the financing structure to alter the ratio when the need arises.

The maturity profile of the Company’s financial liabilities based on the remaining period from the date of financial position to the contractual maturity date is given in the table below. The figures reflect the contractual undiscounted cash obligation of the Company.

As at March 31, 2012 Payment due by year	<1 year		1-2 years		2-5 years		>5 years		Total
	(Rs. in millions)
Acceptances		28,471		—		—		—		28,471
Trade and other payables		67,167		—		—		—		67,167
Borrowings (other than convertible notes)		53,983		6,997		22,864		23,262		107,106
Convertible notes		—		—		21,367		—		21,367
Derivative liabilities		606		—		—		—		606
		150,227		6,997		44,231		23,262		224,717
As at March 31, 2013 Payment due by year	<1 year		1-2 years		2-5 years		>5 years		Total
	(Rs. in millions)
Acceptances		60,254		—		—		—		60,254
Trade and other payables		77,899		—		—		—		77,899
Borrowings (other than convertible notes)		26,294		29,141		11,629		42,256		109,320
Convertible notes		—		27,195		—		—		27,195
Derivative liabilities		945		—		—		—		945
		165,392		56,336		11,629		42,256		275,613
US dollars in million		3,033.6		1,033.3		213.3		775.1		5,055.3

F-48

As at March 31, 2012, the Company had access to funding facilities of Rs. 232,740 million of which Rs. 63,921 million was not yet drawn, as set out below.

Funding facility	Total facility		Drawn		Un drawn
	(Rs. in millions)		(Rs. in millions)		(Rs. In millions)
Less than 1 year		193,207		138,765		54,442
1-2 years		1,240		—		1,240
2-5 years and above		38,293		30,054		8,239
Total		232,740		168,819		63,921

As at March 31, 2013, the Company had access to funding facilities of Rs. 242,693 million ($ 4,451.4 million) of which Rs. 75,990 million ($ 1,393.8 million) was not yet drawn, as set out below.

Funding facility	Total facility		Drawn		Un drawn
	(Rs. in millions)		(Rs. in millions)		(Rs. in millions)
Less than 1 year		199,086		138,344		60,742
1-2 years		5,040		4,108		932
2-5 years and above		38,567		24,251		14,316
Total		242,693		166,703		75,990
US dollars in million		4,451.4		3,057.6		1,393.8

Collateral

The Company has pledged a part of its trade receivables, short-term investments and cash and cash equivalents in order to fulfill the collateral requirements for the financial facilities in place. The counterparties have an obligation to return the securities to the Company. There are no other significant terms and conditions associated with the use of collateral.

The details related to the fair value of collateral have been stated in Note 14, 15 and 16.

(b) Foreign exchange risk

Fluctuations in foreign currency exchange rates may have an impact on the consolidated statements of income, the consolidated statements of change in equity, where any transaction references more than one currency or where assets/liabilities are denominated in a currency other than the functional currency of the respective consolidated entities.

Considering the countries and economic environment in which the Company operates, its operations are subject to risks arising from the fluctuations primarily in the US dollar, Australian dollar, Namibian dollar, ZAR and Euro against the functional currencies of SIIL and its subsidiaries.

Exposures on foreign currency loans are managed through the Company wide hedging policy, which is reviewed periodically to ensure that the results from fluctuating currency exchange rates are appropriately managed. Natural hedges available in the business are identified at each entity level and hedges are placed for net exposure.

The Company uses forward exchange contracts, currency swaps and other derivatives to hedge the effects of movements in exchange rates on foreign currency denominated assets and liabilities. The sources of foreign exchange risk are outstanding amounts payable for imported raw materials, capital goods and other supplies as well as financing transactions and loans denominated in foreign currencies. The Company is also exposed to foreign exchange risk on its exports and foreign exchange risk on its net investment in foreign operations. Most of these transactions are denominated in US dollars. The policy of the Company is to determine on a regular basis what portion of the foreign exchange risk on financing transactions and loans are to be hedged through forward exchange contracts and other instruments. Short-term net exposures are hedged progressively based on their maturity. A more conservative approach has been adopted for project expenditures to avoid budget overruns. Longer term exposures are unhedged except part of net investment in foreign operations exposures have been hedged. The hedge mechanisms are reviewed periodically to ensure that the risk from fluctuating currency exchange rates is appropriately managed.

F-49

The following analysis is based on the gross exposure as at the reporting date which could affect the consolidated statements of income and consolidated statements of comprehensive income. The exposure summarised below is mitigated by some of the derivative contracts entered into by the Company as disclosed under the section on “Derivative financial instruments”

	As at March 31, 2012				As at March 31, 2013				As at March 31, 2013
	Financial assets		Financial liabilities		Financial assets		Financial liabilities		Financial assets		Financial liabilities
	(Rs. in millions)		(Rs. in millions)		(Rs. in millions)		(Rs. in millions)		(US dollars in millions)		(US dollars in millions)
US dollar		29,312		144,167		53,444		182,024		980.3		3,338.7
Australian dollar		1,110		756		286		645		5.2		11.8
Euro		5,303		1,765		5,188		1,416		95.2		26.0
Namibian dollar		3,323		875		720		999		13.2		18.3
ZAR		863		1,144		2,176		507		39.9		9.3
Canadian dollar & other		8,490		84		14		50		0.2		0.9

The Company’s exposure to foreign currency arises where a group entity holds monetary assets and liabilities denominated in a currency different to the functional currency of that entity, with US dollar being the major non-functional currency. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rate, liquidity and other market changes.

The results of Company’s operations may be affected largely by fluctuations in the exchange rates between the Indian Rupee, Australian dollar, Namibia dollar and ZAR against the US dollar. The foreign exchange rate sensitivity is calculated by the aggregation the net foreign exchange rate exposure with a simultaneous parallel foreign exchange rates shift in the currencies by 10% against the functional currency of the Company.

A 10% appreciation/depreciation of the respective foreign currencies with respect to the functional currency of the Company and its subsidiaries would result in net decrease/increase in the Company’s profit or loss and equity for the fiscal year 2012 and 2013 by Rs. 6,134 million and Rs. 8,285 million ($152.0 million) respectively.

(c) Interest rate risk

The Company is exposed to interest rate risk on short-term and long-term floating rate instruments. The Company’s policy is to maintain a balance of fixed and floating interest rate borrowings and the proportion of fixed and floating rate debt is determined by current market interest rates.

The borrowings of the Company are principally denominated in Indian Rupees and US dollars with mix of fixed and floating rates of interest. The US dollar debt is split between fixed and floating rates (linked to US dollar LIBOR) and the Indian Rupee debt is principally at fixed interest rates. The Company has a policy of selectively using interest rate swaps, option contracts and other derivative instruments to manage its exposure to interest rate movements. These exposures are reviewed by appropriate levels of management on a monthly basis.

The Company invests cash and liquid investments in short-term deposits and debt mutual funds, some of which generate a tax-free return, to achieve the Company’s goal of maintaining liquidity, carrying manageable risk and achieving satisfactory returns.

Floating rate financial assets are largely mutual fund investments which have debt securities as underlying assets. The returns from these financial assets are linked to market interest rate movements; however the counterparty invests in the agreed securities with known maturity tenure and return and hence has manageable risk.

The exposure of the Company’s financial assets as at March 31, 2012 to interest rate risk is as follows:

	Floating rate financial assets		Fixed rate financial assets		Non-interest bearing financial assets		Total financial assets
	(Rs. in millions)		(Rs. in millions)		(Rs. in millions)		(Rs. in millions)
Financial assets		136,767		158,836		98,755		394,358
Derivative financial assets		—		—		517		517
		136,767		158,836		99,272		394,875

The weighted average interest rate on the fixed rate financial assets is 8.6% and the weighted average period for which the rate is fixed is 2.96 years.

F-50

The exposure of the Company’s financial liabilities as at March 31, 2012 to interest rate risk is as follows:

	Floating rate financial liabilities		Fixed rate financial liabilities		Non-interest bearing financial liabilities		Total financial liabilities
	(Rs. in millions)		(Rs. in millions)		(Rs. in millions)		(Rs. in millions)
Financial liabilities		60,149		95,512		68,450		224,111
Derivative financial liabilities		—		—		606		606
		60,149		95,512		69,056		224,717

The weighted average interest rate on the fixed rate financial liabilities is 8.9% and the weighted average period for which the rate is fixed is 2.73 years.

The exposure of the Company’s financial assets as at March 31, 2013 to interest rate risk is as follows:

	Floating rate financial assets		Fixed rate financial assets		Non-interest bearing financial assets		Total financial assets
	(Rs. in millions)		(Rs. in millions)		(Rs. in millions)		(Rs. in millions)
Financial assets		163,438		243,077		36,032		442,547
Derivative financial assets		—		—		351		351
		163,438		243,077		36,383		442,898
(US dollars in millions)		2,997.8		4,458.5		667.2		8,123.5

The weighted average interest rate on the fixed rate financial assets is 9.1% and the weighted average period for which the rate is fixed is 2.34 years.

The exposure of the Company’s financial liabilities as at March 31, 2013 to interest rate risk is as follows:

	Floating rate financial liabilities		Fixed rate financial liabilities		Non-interest bearing financial liabilities		Total financial liabilities
	(Rs. in millions)		(Rs. in millions)		(Rs. in millions)		(Rs. in millions)
Financial liabilities		57,865		133,998		78,809		270,672
Derivative financial liabilities		—		—		945		945
		57,865		133,998		79,754		271,617
(US dollars in millions)		1,061.3		2,457.8		1,462.8		4,981.9

The weighted average interest rate on the fixed rate financial liabilities is 6.7% and the weighted average period for which the rate is fixed is 3.14 years.

The table below illustrates the impact of a 0.5% to 2.0% movement in interest rates on interest expense on loans and borrowings for fiscal 2013. The risk estimate provided assumes that the changes occur at the reporting date and has been calculated based on risk exposure outstanding as of date. The year end balances are not necessarily representative of the average debt outstanding during the year. This analysis also assumes that all other variables, in particular foreign currency rates, remain constant.

Movement in interest rates	US dollar interest rates
	2012		2013		2013
	(Rs. in millions)		(Rs. in millions)		(US dollars in millions)
0.50%		286		275		5.0
1.00%		572		549		10.1
2.00%		1,144		1,098		20.1

(d) Counterparty and concentration of credit risk

Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults.

The Company is exposed to credit risk for receivables, cash and cash equivalents, short-term investments, financial guarantees and derivative financial instruments.

Credit risk on receivables is limited as almost all credit sales are against letters of credit and guarantees of banks of national standing. Moreover, given the diverse nature of the Company’s businesses trade receivables are spread over a number of customers with no significant concentration of credit risk. No single customer accounted for 10% or more of the Company’s net sales

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during the year ended March 31, 2013 and in the previous year. The history of trade receivables shows a negligible provision for bad and doubtful debts. The credit risk on the loans to associate and other related parties is supported by a Letter of comfort from Vedanta. Therefore, the Company does not expect any material risk on account of non-performance by any of the Company’s counterparties.

For short-term investments, counterparty limits are in place to limit the amount of credit exposure to any one counterparty. For derivative and financial instruments, the Company attempts to limit the credit risk by only dealing with reputable banks and financial institutions having high credit-ratings assigned by international credit-rating agencies. These exposures are further reduced by having standard International Swaps and Derivatives Association (ISDA) master agreements including set-off provisions with each counter party. Defined limits are in place for exposure to individual counterparties in case of mutual funds schemes and bonds.

The carrying value of the financial assets other than cash represents the maximum credit exposure. The Company’s maximum exposure to credit risk at March 31, 2012 and March 31, 2013 is Rs. 369,505 million and Rs. 427,888 million ($ 7,848.3 million).

The maximum credit exposure on financial guarantees given by the Company for various financial facilities is described in Note 31 on “Commitments, contingencies, and guarantees”.

None of the Company’s cash equivalents, including time deposits with banks, are past due or impaired. Regarding trade and other receivables, and other non-current assets, there were no indications as at March 31, 2013, that defaults in payment obligations will occur except as described in Note 14 on allowance for impairment of trade and other receivables.

Of the year end trade and other receivable balance the following were past due but not impaired:

As at March 31	2012		2013		2013
	(Rs. in millions)		(Rs. in millions)		(US dollars in millions)
Less than 1 month		1,232		1,904		34.9
Between 1 - 3 months		707		2,932		53.8
Between 3 - 12 months		1,709		1,894		34.7
Greater than 12 months		164		1,407		25.8
		3,812		8,137		149.2

Receivables are deemed to be past due or impaired with reference to the Company’s normal terms and conditions of business. These terms and conditions are determined on a case to case basis with reference to the customer’s credit quality and prevailing market conditions. Receivables that are classified as ‘past due’ in the above tables are those that have not been settled within the terms and conditions that have been agreed with that customer.

The credit quality of the Company’s customers is monitored on an ongoing basis and assessed for impairment where indicators of such impairment exist. The solvency of the debtor and their ability to repay the receivable is considered in assessing receivables for impairment. Where receivables have been impaired, the Company actively seeks to recover the amounts in question and enforce compliance with credit terms.

Derivative financial instruments

The Company uses derivative instruments as part of its management of exposure to fluctuations in foreign currency exchange rates and commodity prices. The Company does not acquire or issue derivative financial instruments for trading or speculative purposes. The Company does not enter into complex derivative transactions to manage the treasury and commodity risks. Both treasury and commodities derivative transactions are normally in the form of forward contracts and these are subject to the Company guidelines and policies.

All derivative financial instruments are recognized as assets or liabilities on the consolidated statements of financial position and measured at fair value, generally based on quotations obtained from financial institutions or brokers. The accounting for changes in the fair value of a derivative instrument depends on the intended use of the derivative and the resulting designation.

The fair values of all derivatives are separately recorded in the consolidated statements of financial position within other current and non-current assets and liabilities. Derivatives that are designated as hedges are classified as current or non-current depending on the maturity of the derivative.

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The Company uses derivative instruments as part of its management of exposures to fluctuations in foreign currency exchange rates, interest rates and commodity prices. The use of derivatives can give rise to credit and market risk. The Company tries to control credit risk as far as possible by only entering into contracts with reputable banks and financial institutions. The use of derivative instruments is subject to limits, authorities and regular monitoring by appropriate levels of management. The limits, authorities and monitoring systems are periodically reviewed by management and the Board. The market risk on derivatives is mitigated by changes in the valuation of the underlying assets, liabilities or transactions, as derivatives are used only for risk management purposes.

Embedded derivatives

Derivatives embedded in other financial instruments or other contracts are treated as separate derivative contracts and marked-to-market when their risks and characteristics are not clearly and closely related to those of their host contracts and the host contracts are not fair valued.

In respect of embedded derivative conversion option, a 10% increase/decrease in Company’s ADR price would have resulted in an approximate loss of Rs. 115 million and Rs. 3 million ($ 0.1 million) and an approximate gain of Rs. 105 million and Rs. 1 million ($ 0.0 million) for the fiscal 2012 and 2013 respectively. A 10% increase/decrease in implied volatility would have resulted in an approximate loss of Rs. 168 million and Rs. 3 million ($ 0.1 million) and an approximate gain of Rs. 192 million and Rs. 1 million ($ 0.0 million) for fiscal 2012 and 2013 respectively.

Cash flow hedges

The Company also enters into forward exchange and commodity price contracts for hedging highly probable forecast transaction and account for them as cash flow hedges and states them at fair value. Subsequent changes in fair value are recognized in equity until the hedged transaction occurs, at which time, the respective gain or losses are reclassified to the consolidated statements of income. These hedges have been effective for the year ended March 31, 2013.

The Company uses foreign exchange contracts from time to time to optimize currency risk exposure on its foreign currency transactions. The Company hedged part of its foreign currency exposure on capital commitments during fiscal 2013. Fair value changes on such forward contracts are recognized in the consolidated statements of comprehensive income.

The majority of cash flow hedges taken out by the Company during the year comprise non-derivative hedging instruments for hedging the foreign exchange rate of highly probable forecast transactions.

The cash flows related to above are expected to occur during the year ended March 31, 2014 and consequently may impact the consolidated statements of income for that year depending upon the change in the commodity prices and foreign exchange rates movements. For cash flow hedges regarded as basis adjustments to initial carrying value of the property, plant and equipment, the depreciation on the basis adjustments made is expected to affect the consolidated statements of income between fiscal year 2014 to 2032.

Fair value hedge

The fair value hedges relate to forward covers taken to hedge currency exposure and commodity price risks.

The Company’s sales are on a quotational period basis, generally one month to three months after the date of delivery at a customer’s facility. The Company enters into forward contracts for the respective quotational period to hedge its commodity price risk based on average LME prices. Gains and losses on these hedge transactions are substantially offset by the amount of gains or losses on the underlying sales.

The Company uses foreign exchange contracts from time to time to optimize currency risk exposure on its foreign currency transactions. Fair value changes on such forward contracts are recognized in the consolidated statements of income.

Non-qualifying/economic hedge

The Company enters into derivative contracts which are not designated as hedges for accounting purposes, but provide an economic hedge of a particular transaction risk or a risk component of a transaction. Hedging instruments include copper, aluminium and zinc future contracts on the LME and certain other derivative instruments. Fair value changes on such derivative instruments are recognized in the consolidated statements of income.

Hedge of net investment of foreign exchange

The Company has partly hedged its foreign exchange risk in net investment in foreign operations. Exchange differences arising from the translation of the net investment in foreign operations are recognised directly in equity. Gains and losses on those hedging instruments on forward exchange contracts designated as hedges of the net investments in foreign operations are recognised in equity to the extent that the hedging relationship is effective. These amounts are included in exchange differences on translation of foreign operations as stated in the consolidated statements of comprehensive income. Gains and losses relating to hedge ineffectiveness are recognised immediately in the consolidated statements of income for the period. Gains and losses accumulated in the translation reserve are included in the consolidated statements of income when the foreign operation is disposed off.

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The fair value of the Company’s derivative positions recorded under derivative financial assets and derivative financial liabilities are as follows:

	As at March 31, 2012				As at March 31, 2013
	Assets		Liabilities		Assets		Liabilities		Assets		Liabilities
	(Rs. in millions)								(US dollars in millions)
Current
Cash flow hedges*
— Commodity contracts		1		2		318		—		5.8		—
— Forward foreign currency contracts		18		—		—		3		—		0.1
Fair value hedges**
— Commodity contracts		118		—		11		—		0.2		0.0
— Forward foreign currency contracts		242		15		13		755		0.2		13.8
Net investment in foreign operation***		—		460		—		182		—		3.3
Non-qualifying hedges
— Commodity contracts		33		129		9		—		0.2		0.0
— Forward foreign currency contracts		105		—		—		5		—		0.1
Total		517		606		351		945		6.4		17.3

* Refer consolidated statements of income and consolidated statements of change in equity for the change in the fair value of cash flow hedges.

** The change in fair value hedge of Rs. 98 million and Rs. 10 million ($ 0.2 million) in commodity contracts and Rs. 350 million and Rs.742 million ($20.0 million) on forward foreign currency contracts for the fiscal 2012 and 2013 respectively, has been recognised in the consolidated statements of income and offset with the similar gains on the underlying sales.

*** Comprises loss of Rs. 215 million ($ 3.9 million) recognised in consolidated statements of comprehensive income and gain of Rs. 33 million ($ 0.6 million) recognised in consolidated statements of income.

26. Capital management

The Company’s objectives when managing capital is to safeguard continuity, maintain a strong credit rating and healthy capital ratios in order to support its business and provide adequate return to shareholders through continuing growth. The Company’s overall strategy remains unchanged from previous year.

The Company sets the amount of capital required on the basis of annual business and long-term operating plans which include capital and other strategic investments.

The funding requirements are met through a mixture of equity, internal accruals, convertible debt securities, and other long term borrowings. The Company’s policy is to use short-term and long-term borrowings to meet anticipated funding requirements.

The Company monitors capital on the basis of the net cash to equity ratio. The Company is not subject to any externally imposed capital requirements.

Net cash includes cash and cash equivalents (including restricted cash and cash equivalents) and short-term investments as reduced by all long and short-term debts. Equity comprises all components excluding other components of equity (which comprises the cash flow hedges, translation of foreign operations and available-for-sale financial investments).

The following table summarizes the capital of the Company:

As at March 31,	2012		2013		2013
	(Rs. in millions)		(Rs. in millions)		(US dollars in millions)
Equity (excluding other components of equity)		563,909		630,712		11,568.4
Cash and cash equivalents (Note 16 and 17)		17,232		14,420		264.5
Short-term investments (Note 15)		216,283		236,981		4,346.7
Total cash (a)		233,515		251,401		4,611.2
Short-term borrowings		53,983		26,287		482.1
Long-term borrowings		74,490		106,232		1,948.5
Total debt (b) (Note 19)		128,473		132,519		2,430.6
Net cash (a-b)		105,042		118,882		2,180.6
Total capital (equity — net cash)		458,867		511,830		9,387.8
Net cash to equity ratio		0.2		0.2		0.2

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27. Shareholders’ equity

As at March 31, 2012 and 2013 the authorised share capital of SIIL comprised 5,000,000,000 equity shares with a par value of Re 1 each.

SIIL’s issued equity share capital was Rs. 3,361 million and Rs. 3,361 million ($61.6 million) as at March 31, 2012 and 2013, respectively, consisting of 3,361,207,534 equity shares.

Retained earnings includes amongst others, a general reserve, debenture redemption reserve and preference share redemption reserve.

General reserves

Under the Indian Companies Act, a general reserve is created through an annual transfer of net income at a specified percentage in accordance with applicable regulations. The purpose of these transfers is to ensure that if a dividend distribution in a given year is more than 10.0% of the paid-up capital of the Company for that year, then the total dividend distribution is less than the total distributable results for that year. The balances in the standalone financial statements of SIIL’s general reserves, as determined in accordance with applicable regulations, were Rs. 25,703 million and Rs. 27,703 million ($ 508.1 million) as at March 31, 2012 and 2013, respectively.

Debenture redemption reserve

The Indian Companies Act requires companies that issue debentures to create a debenture redemption reserve from annual profits until such debentures are redeemed. Companies are required to maintain 25% as a reserve of outstanding redeemable debentures. The amounts credited to the debenture redemption reserve may not be utilised except to redeem debentures. Retained earnings of the standalone financial statements of SIIL as at March 31, 2012 and 2013 include Rs. 135 million and Rs. 546 million ($ 10.0 million) of debenture redemption reserve, respectively.

Preference share redemption reserve

The Indian Companies Act provides that companies that issue preference shares may redeem those shares from profits of the Company which otherwise would be available for dividends, or from proceeds of a new issue of shares made for the purpose of redemption of the preference shares. If there is a premium payable on redemption, the premium must be provided for, either by reducing the additional paid in capital (securities premium account) or net income, before the shares are redeemed.

If profits are used to redeem preference shares, the value of the nominal amount of shares redeemed should be transferred from profits (retained earnings) to the capital redemption reserve account. This amount should then be utilised for the purpose of redemption of redeemable preference shares. This reserve can be used to issue fully paid-up bonus shares to the shareholders of SIIL. Retained earnings of the standalone financial statements of SIIL include Rs. 769 million and Rs. 769 million ($14.1 million) of preference share redemption reserve as at March 31, 2012 and 2013.

Dividends

Each equity share holder is entitled to dividends as and when SIIL declares and pays dividends after obtaining shareholder approval / board approval in case of an interim dividend. Dividends are paid in Indian Rupees. Remittance of dividends outside India is governed by Indian law on foreign exchange and is subject to applicable taxes.

On April 25, 2012 the board of directors of SIIL recommended a final dividend of Rs. 1 per equity share for the year ended March 31, 2012, which was approved by the shareholders’ at the annual general meeting, held on July 14, 2012. The dividend and dividend distribution tax amounting to Rs. 3,361 million and Rs. 141 million respectively has since been paid during the year ended March 31, 2013.

On October 23, 2012 the board of directors of SIIL declared an interim dividend of Rs.1.10 ($ 0.02) for the year ended March 31, 2013. The dividend amounting to Rs. 3,696 million has been paid as on November 01, 2012.

On April 29, 2013 the board of directors of SIIL declared an interim dividend of Rs. 1.20 ($0.02) per equity share for the year ended March 31, 2013.The dividend amounting to Rs. 4,033 million has been paid on May 14, 2013.

Dividends are payable from the profits determined under Indian GAAP.

Under Indian law, a company is allowed to pay dividends in excess of 10.0% of its paid-up capital in any year from profits for that year only if it transfers a specified percentage of the profits of that year to reserves. The Company makes such transfers to general reserves.

If profits for a year are insufficient to declare dividends, dividends for that year may be declared and paid out from accumulated profits on the following conditions:

• the rate of dividend to be declared shall not exceed the average of the rates at which dividends were declared in the five years immediately preceding that year or 10.0% of the company’s paid-up share capital, whichever is less;

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• the total amount to be drawn from the accumulated profits earned in previous years and transferred to reserves shall not exceed an amount equal to one-tenth of the sum of the company’s paid-up share capital and net reserves, and the amount so drawn shall first be utilised to set off the losses incurred in the financial year before any dividend in respect of preference or equity share is declared; and

• the balance of reserves after such withdrawal shall not fall below 15.0% of the company’s paid-up share capital.

28. Share-Based Compensation Plans

The Company offers equity-based award plans to its employees, officers and directors through its parent, Vedanta.

The Vedanta Resources Long-Term Incentive Plan (the “LTIP”)

The LTIP is the primary arrangement under which share-based incentives are provided to the defined management group. The maximum value of shares that can be awarded to members of the defined management group is calculated by reference to the balance of basic salary and share-based remuneration consistent with local market practice. The performance condition attaching to outstanding awards under the LTIP is that of Vedanta’s performance, measured in terms of Total Shareholder Return (“TSR”) compared over a three year period with the performance of the companies as defined in the scheme from the date of grant. Under this scheme, initial awards under the LTIP were granted in February 2004 and subsequently further awards were granted in respective years. The awards are indexed to and settled by Vedanta shares. The awards provide for a fixed exercise price denominated in Vedanta’s functional currency at 10 US cents per share, the performance period of each award is three years and the same is exercisable within a period of six months from the date of vesting beyond which the option lapse. During the year, Vedanta has granted a new LTIP tranche that shall vest based on the achievement of certain targets. The vesting schedule is staggered over a period of three years. Under the schemes, Vedanta is obligated to issue the shares. Further, in accordance with the terms of agreement between Vedanta and SIIL, the grant date fair value of the awards is recovered by Vedanta from SIIL.

The amount recovered by Vedanta and recognised by the Company in the consolidated statements of income for the financial year ended March 31, 2011, 2012 and 2013 was Rs. 353 million, Rs. 552 million and Rs. 814 million ($14.9 million) respectively. The Company considers these amounts as not material and accordingly has not provided further disclosures as required by IFRS 2 “Share-based payment”.

29. Earnings per share (“EPS”)

The following reflects the income and share data used in the basic and diluted earnings per share computations:

Computation of weighted average number of shares

	For the year ended March 31,
	2011		2012		2013
Weighted average number of ordinary shares for basic earnings per share		3,361,207,534		3,361,207,534		3,361,207,534
Effect of dilution:
Convertible notes		85,737,600		—		—
Adjusted weighted average number of ordinary shares for diluted earnings per share		3,446,945,134		3,361,207,534		3,361,207,534

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Computation of basic and diluted earnings per share

Basic earnings per share:

	For the year ended March 31,
	2011		2012		2013		2013
	Rs. in millions (except EPS data)						US dollars in millions (except EPS data)
Profit for the year attributable to equity holders of the parent		48,898		38,998		53,895		988.5
Weighted average number of ordinary shares for basic earnings per share		3,361,207,534		3,361,207,534		3,361,207,534		3,361,207,534
Earnings per share (in Rs.)		14.55		11.60		16.03		0.3

Diluted earnings per share:

	For the year ended March 31,
	2011			2012		2013		2013
	Rs. in millions (except EPS data)							US dollars in millions (except EPS data)
Profit for the year attributable to equity holders of the parent		48,898			38,998		53,895		988.5
Adjustment in respect of convertible notes		(1,079	)		—		—		—
Profit for the year after dilutive adjustment		47,819			38,998		53,895		988.5
Weighted average number of ordinary shares for diluted earnings per share		3,446,945,134			3,361,207,534		3,361,207,534		3,361,207,534
Diluted earnings per share (in Rs.)		13.87			11.60		16.03		0.3

The Company has excluded the following shares underlying the convertible note from the calculations of dilutive earnings per share because their inclusion would have been anti-dilutive.

For the year ended March 31,	2011		2012		2013
Shares excluded from the calculation of dilutive EPS		—		85,737,600		85,737,600

30. Options to acquire subsidiary’s shares

a. Call option — HZL

SIIL’s wholly-owned subsidiary, Sterlite Opportunities and Ventures Limited (“SOVL”) (since merged with SIIL), had two call options to purchase all of the Government of India’s shares in HZL at fair market value. SOVL exercised the first call option on August 29, 2003 and acquired an additional 18.9% of HZL’s issued share capital, increasing its shareholding to 64.9%. As at March 31, 2012 and 2013, the Government of India’s holding in HZL was 29.5%. The second call option provides SOVL the right to acquire the Government of India’s remaining 29.5% share in HZL. This call option is subject to the right of the Government of India to sell 3.5% of HZL shares to HZL employees. The Company exercised the second call option via its letter dated July 21, 2009. The Government of India disputed the validity of call option and has refused to act upon the second call option. Consequently the Company invoked arbitration and filed a statement of claim. The arbitration proceedings are under progress. The next date of hearing is fixed on November 13, 2013.

b. Call option — BALCO

SIIL purchased a 51.0% holding in BALCO from the Government of India on March 2, 2001. Under the terms of the shareholder’s agreement (“SHA”) for BALCO, SIIL has a call option that allows it to purchase the Government of India’s remaining ownership interest in BALCO at any point from March 2, 2004. SIIL exercised this option on March 19, 2004. However, the Government of India has contested the purchase price and validity of the option and contended that the clauses of the share holders agreement relating to the Company’s option violated the provision of Section 111A of the Indian Companies Act by restricting the rights of Government of India to transfer its shares and that as a result the share holders agreement was null and void. Subsequently arbitration proceedings commenced. The arbitration tribunal rejected the claims of the Company on the ground that the clauses

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relating to the call option, the right of first refusal, the “tag-along” rights and the restriction on the transfer of shares violate section 111A(2) of the Indian Companies Act, 1956. Hence the Company filed an application under section 34 of the Arbitration and Conciliation Act, 1996 in the High Court of Delhi to set aside the arbitration award to the extent that it holds these clauses ineffective and inoperative. The Government of India also filed an application before the High Court of Delhi to partially set aside the arbitral award in respect of certain matters involving valuation. The High Court of Delhi passed an order dated August 10, 2011 directing our application and the application by the Government of India to be heard together as they arise from a common arbitral award. The matter is currently pending before the High Court of Delhi and scheduled for final hearing on October 07, 2013.

On January 9, 2012, Sterlite offered to acquire the Government of India’s interests in HZL and Balco for Rs. 154,920 million ($ 2,841.5 million) and Rs. 17,820 million ($326.8 million), respectively. Sterlite has, by way of letters dated April 10, 2012 and July 6, 2012, sought to engage with the Government of India on the same terms as the offer. This offer was separate from the contested exercise of the call options, and Sterlite proposed to withdraw the ongoing litigations in relation to the contested exercise of the options should the offer be accepted. To date, the offer has not been accepted by the Government of India and therefore there is no certainty that the acquisition will proceed.

31. Commitments, contingencies, and guarantees

In the normal course of business, the Company enters into certain capital commitments and also gives certain financial guarantees. The aggregate amount of indemnities and other guarantees on which the Company does not expect any material losses, was Rs. 88,681 million and Rs. 112,804 million ($ 2,069.0 million) as at March 31, 2012 and 2013 respectively.

a. Commitments and contingencies

i. Commitments

Capital commitments

The Company had significant capital commitments as at March 31, 2012 and 2013 amounting to Rs. 100,951 million and Rs. 68,905 million ($ 1,263.8 million) respectively, related primarily to capacity expansion projects, including commitments amounting to Rs. 19,027 million ($ 349.0 million) (previous year Rs. 65,552 million) for its commercial power generation business, Rs. 6,220 million ($ 114.1 million) (previous year Rs. 10,892 million) for capacity expansion at BALCO , Rs. 27,777 million ($ 509.5 million) (previous year Rs. 7,969 million) for capacity expansion at HZL and Rs. 15,076 million ($ 276.5 million) (previous year Rs. 12,613) at Sterlite.

Export obligations

The Company had export obligations of Rs. 146,267 million and Rs. 146,070 million ($ 2,679.2 million) as at March 31, 2012 and 2013 respectively on account of concessional rates of import duties paid on capital goods under the Export Promotion Capital Goods Scheme enacted by the Government of India which is to be fulfilled over the next eight years. If the Company is unable to meet these obligations, its liability would be Rs. 23,149 million ($ 424.6 million) (Previous year Rs. 22,482 million) reduced in proportion to actual exports. Due to the remote likelihood of the Company being unable to meet its export obligations, the Company does not anticipate a loss with respect to these obligations and hence has not made any provision in its consolidated financial statements.

ii. Contingencies

Certain of the Company’s operating subsidiaries have been named as parties to legal actions by third party claimants, and by the Indian sales tax, excise and related tax authorities for additional sales tax, electricity cess, excise and indirect duties. These claims primarily relate either to the assessable values of sales and purchases or to incomplete documentation supporting the Company’s tax returns. As at March 31, 2012 and 2013, the total claim related to these liabilities is Rs. 8,144 million and Rs. 10,211 million ($ 187.3 million) respectively. The Company has evaluated these contingencies and estimated that some of these claims are probable of resulting in a loss and hence has recorded Rs. 212 million and Rs. 294 million ($ 5.4 million) as current liabilities as at March 31, 2012 and 2013 respectively.

The claims by third party claimants amounted to Rs. 5,792 million and Rs. 7,133 million ($ 130.8 million) as at March 31, 2012 and 2013 respectively. The Company has evaluated these contingencies and estimated that some of these claims are probable of resulting in a loss and hence has recorded Rs. 536 million and Rs. 1,046 million ($ 19.2 million) as current liabilities as at March 31, 2012 and 2013 respectively.

Vedanta Aluminium has certain disputes which are in appeal. Disputed liabilities in appeal primarily relates to entry tax on the import of goods and other amounting to Rs. 1,572 million and Rs. 5,878 million ($ 107.8 million), being the proportionate share of the Company in the referred contingencies as at March 31, 2012 and 2013 respectively. The Company has evaluated these contingencies and estimated that the likelihood of these disputes becoming an obligation is remote and as a result, will not have any material effect on Company’s financial conditions or results of operations.

b. Guarantees

The Company has given guarantees in the normal course of business as stated below:

• Guarantees including corporate guarantees on the issuance of customs and excise duty bonds amounting to Rs. 12,442 million and Rs. 24,196 million ($ 443.8 million) for the import of goods, including capital equipment at concessional rates of duty as at March 31, 2012 and 2013 respectively. The Company does not anticipate any liability on these guarantees.

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• Corporate guarantee of Rs. 31,000 million and Rs. 42,221 million ($ 774.4 million) on behalf of Vedanta Aluminium for obtaining credit facilities as at March 31, 2012 and 2013 respectively. The Company, has issued corporate guarantees of Rs. 14,383 million and Rs. 14,383 million ($ 263.8 million) as at March 31, 2012 and 2013 respectively, on behalf of Vedanta Aluminium, for importing capital equipment at concessional rates of duty under the Export Promotion Capital Goods Scheme enacted by the Government of India for the referred periods. Vedanta Aluminium is obligated to export goods worth eight times the value of concessions enjoyed in a period of eight years following the date of import, failing which the Company will be liable to pay the dues to the Government of India. As at March 31, 2012 and 2013, the Company determined that it has no liability on these corporate guarantees.

• A bank guarantee amounting to AUD 5.0 million (Rs. 284 million or $ 5.2 million) as at March 31, 2013 (Previous year AUD 5.0 million or Rs. 266 million), in favour of the Ministry for Economic Development, Energy and Resources, Tasmania, Australia as a security against rehabilitation liabilities on behalf of CMT. The same guarantee is backed up by the issuance of a corporate guarantee of Rs. 320 million ($ 5.9 million). These liabilities have been fully recognized in the Company’s consolidated financial statements. The Company does not anticipate any additional liability on these guarantees.

• Bank indemnity guarantees amounting to AUD 2.9 million (Rs. 164 million or $ 3.0 million) as at March 31, 2013 (Previous year AUD 2.9 million or Rs. 154 million), in favour of the State Government of Queensland, Tasmania, Australia, as security against rehabilitation liabilities that are expected to occur at the closure of the mine on behalf of Thalanga Copper Mines Proprietary Limited (“TCM”). The same guarantees are backed up by the issuance of a corporate guarantee of AUD 2.9 million (Rs. 164 million or $ 3.0 million). The environmental liability has been fully recognized in the Company’s consolidated financial statements. The Company does not anticipate any additional liability on these guarantees.

• Bank indemnity guarantees amounting to ZAR 20.2 million (Rs. 119 million or $ 2.2 million) as at March 31, 2013 (Previous year ZAR 20.2 million or Rs. 133 million), in favour of the Department of Mineral Resources, South Africa as a security against rehabilitation liabilities on behalf of BMM. The environmental liability has been fully recognized in the Company’s consolidated financial statements. The Company does not anticipate any additional liability on these guarantees.

• Performance bank guarantees amounting to Rs. 3,368 million and Rs. 2,962 million ($ 54.3 million) as at March 31, 2012 and 2013 respectively. These guarantees are issued in the normal course of business while bidding for supply contracts or in lieu of advances received from customers. The guarantees have varying maturity dates normally ranging up to three years. These are contractual guarantees and are enforceable if the terms and conditions of the contracts are not met and the maximum liability on these contracts is the amount mentioned above. The Company does not anticipate any liability on these guarantees.

• Bank guarantees for securing supplies of materials and services in the normal course of business. The value of these guarantees as at March 31, 2012 and 2013 was Rs. 4,763 million and Rs. 5,189 million ($ 95.2 million) respectively. The Company has also issued bank guarantees in the normal course of business for an aggregate value of Rs. 242 million and Rs. 704 million ($ 12.9 million) for litigation, against provisional valuation of custom duty and for other liabilities as at March 31, 2012 and 2013 respectively. The Company does not anticipate any liability on these guarantees.

The Company’s outstanding guarantees cover obligations aggregating Rs. 66,198 million and Rs. 89,655 million ($ 1,644.4 million) as at March 31,2012 and 2013 respectively, the liabilities for which have not been recorded in its consolidated financial statements.

c. Other matters

i) Asarco had filed a suit in US Court against the Company for alleged breach of the Purchase and Sale agreement signed in May 2008. US Bankruptcy Court heard the matter and vide its order dated February 13, 2012 and February 27, 2012, has ruled that Asarco is entitled to a gross amount of $ 132.8 million in incidental damages which has been recognised in the consolidated statements of income during the previous year. The Company and Asarco have filed notice of appeal against this judgment which is yet to be heard.

ii) In response to various writ petitions filed in the year 1996-98 challenging the environment clearances for setting up of the copper smelter at Tuticorin, the Madras High Court by its order dated 28th September 2010 ordered the closure of the smelter at Tuticorin, The Company has filed Special Leave Petition (SLP) in the Supreme Court of India against the impugned order of Madras High Court and the Honourable Supreme Court stayed the order of the High Court. The Honourable Supreme Court in subsequent hearings directed Tamilnadu Pollution Control Board (‘TNPCB”) to issue directions to implement the improvement measures suggested by National Environmental Engineering Research Institute (“NEERI”), Central Pollution Control Board (“CPCB”) and TNPCB.

On April 2, 2013, the Honorable Supreme Court upheld the Company’s appeal filed in 2010 against the Madras High Court order for the Tuticorin smelter closure. The Company has complied with all the recommendations for improvements ordered by the TNPCB. The Company was ordered to deposit Rs 1000 million ( $ 18.3 million ) within a period of three months with the District Collector of Tuticorin which will be used to improve the environment, including soil and water, in the vicinity of the plant. The compensation ordered by the Supreme Court has been recognized in the financial statements during the year as part of administration expenses.

F-59

iii) Following a few public complaints against emissions, the TNPCB ordered closure of the Tuticorin Copper Smelter on March 29, 2013. On April 1, 2013 the Company filed a petition in the National Green Tribunal (“NGT”) challenging the order of the TNPCB on the basis that the plant’s emissions were within permissible limits. The NGT passed an interim order on May 31, 2013 allowing the copper smelter to recommence operations subject to certain conditions. The Company recommenced operations on June 16, 2013. The expert committee constituted by the NGT submitted a report on the operation of the plant on July 10, 2013 stating that the plant’s emissions were within the prescribed standards and based on this report, the NGT ruled on July 15, 2013 that the copper smelter could remain open and reserved its order. The NGT has also directed the company to comply with the recommendations made by the committee to further improve the working of the plant within a time bound schedule. However, the TNPCB filed a notice of appeal against the interim order of the NGT. The next date of hearing is fixed on August 5, 2013.

iv) The Department of Mines and Geology of the State of Rajasthan issued several show cause notices in August, September and October 2006 to HZL, totalling Rs.3,339 million (US$61.2 million). These notices alleged unlawful occupation and unauthorised mining of associated minerals other than zinc and lead at HZL’s Rampura Agucha, Rajpura Dariba and Zawar mines in Rajasthan during the period from July 1968 to March 2006. HZL believes that the likelihood of this claim becoming an obligation of the Company is remote and thus no provision has been made in the financial statements. HZL has filed writ petitions in the High Court of Rajasthan in Jodhpur and has obtained a stay in respect of these demands.

v) TSPL has entered into a long term Power Purchase Agreement (PPA) with PSPCL for supply of power. As per the terms of the PPA, PSPCL was obligated to fulfill certain conditions including procuring interconnection and transmission facilities, arranging supply of adequate quantity of fuel for the project etc. However due to delay in fulfillment of the obligations by PSPCL as per the PPA, other related reasons and force majeure events, there has been a delay in the project as compared to the PPA timelines. On the basis of legal opinion obtained, TSPL is of the view that PSPCL would not be able to sustain any claim for liquidated damages for the above stated reasons and accordingly, no provision is considered necessary.

32. Segment information

The Company is primarily in the business of non-ferrous mining and metals in India, Namibia, South Africa, Ireland and Australia. The Company has six reportable segments: copper, zinc India, zinc international, aluminum, power and other. The management of the Company is organized by its main products: copper, zinc, aluminum and power. Each of the reportable segments derives its revenues from these main products and hence these have been identified as reportable segments by the Company’s chief operating decision maker (“CODM”). Segment profit amounts are evaluated regularly by the Board who has been identified as the CODM in deciding how to allocate resources and in assessing performance.

Copper

The Company’s copper business is principally one of custom smelting and includes a copper smelter, a refinery, a phosphoric acid plant, a sulphuric acid plant, a copper rod plant and two captive power plants at Tuticorin in Southern India, and a refinery and two copper rod plants at Silvassa in Western India. In addition, the Company owns and operates the Mt. Lyell copper mine in Tasmania, Australia through its subsidiary, CMT, which provides a small percentage of the copper concentrate requirements, and a precious metal refinery and copper rod plant in Fujairah through its subsidiary Fujairah Gold FZE in the UAE.

Zinc India

The Company’s zinc India business is owned and operated by HZL in which it has a 64.9% interest as at March 31, 2013. HZL’s operations include five lead-zinc mines, four zinc smelters, two lead smelters, one lead-zinc smelter, four sulphuric acid plants, a silver refinery and six captive power plants in the State of Rajasthan in Northwest India, one zinc smelter and a sulphuric acid plant in the State of Andhra Pradesh in Southeast India and one zinc ingot melting and casting plant at Haridwar and one silver refinery, one zinc ingot melting and casting plant and one lead ingot melting and casting plant at Pantnagar in the State of Uttarakhand in North India. Operations at the Visakhapatnam facility in the State of Andhra Pradesh were suspended during the last quarter of fiscal 2012. There is no impairment recognized for the Visakhapatnam facility in the consolidated statements of income during the year.

Zinc International

The Company’s zinc International business comprises 100 % of Skorpion, which owns the Skorpion mine and refinery in Namibia, 100 % of Lisheen, which owns the Lisheen mine in Ireland and a 74 % stake in Black Mountain, whose assets include the Black Mountain mine and the Gamsberg mine project in South Africa.

F-60

Aluminum

The aluminum business is owned and operated by BALCO. BALCO’s operations include two bauxite mines, one alumina refinery, one aluminum smelter and two captive power plants, of which the 270 MW power plant is now used for commercial purposes, since the shutdown of the 100,000 tpa smelter, in the State of Chhattisgarh in Central India.

Power

The Company’s power business comprises SEL and TSPL which are engaged in the power generation business in India. SEL completed construction of its 2,400 MW (four units of 600 MW each) thermal coal-based commercial power facility in the State of Orissa in Eastern India and all the four units of 600 MW are currently operational. TSPL had signed a power purchase agreement with the PSPCL for the establishment of 1,980 MW (three units of 660 MW each) thermal coal-based commercial power facilities and is a development stage enterprise in the process of constructing the power plant. The power business also include the 274 MW of wind power plants commissioned by HZL and 270 MW power plant at BALCO’s Korba facility which was previously for captive use before the shutdown of the 100,000 tpa aluminum smelter at Korba on June 5, 2009.

Other

The operating segment “other” includes Paper, infrastructure and other activities. The Company’s infrastructure activities mainly include VGCB, in which the Company owns a 74% interest. Vizag port project includes mechanisation of coal handling facilities and upgradation of general cargo berth for handling coal at the outer harbour of Vishakhapatnam port on the east coast of India. VGCB commenced operations in the fourth quarter of fiscal 2013.

The accounting policies of the reportable segments are the same as the Company’s accounting policies described in Note 3. The operating segments reported are the segments of the Company for which separate financial information is available. Segment profit (Earnings before interest, depreciation and amortization, share in loss of associate and tax) amounts are evaluated regularly by the Board that has been identified as its CODM in deciding how to allocate resources and in assessing performance. The Company’s financing (including finance costs and finance income) and income taxes are reviewed on an overall basis and are not allocated to operating segments as is the Company’s share in loss of associate. Transfer prices between operating segments are on an arm’s length basis in a manner similar to transactions with third parties except from power segment sales amounting to Rs. 486 million, Rs. 622 million and Rs. 537 million ($9.8 million) which is at cost for the year ended March 31, 2011, 2012 and 2013 respectively.

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The following table presents revenue and profit information and certain assets information regarding the Company’s business segments for the year ended March 31, 2011, 2012 and 2013.

a. For the year ended March 31, 2011

	Copper			Zinc India			Zinc International			Aluminum			Power			Total reported Segments			Other			Elimination			Total
	(Rs. in millions)			(Rs. in millions)			(Rs. in millions)			(Rs. in millions)			(Rs. in millions)			(Rs. in millions)			(Rs. in millions)			(Rs. in millions)			(Rs. in millions)
Revenue
Sales to external customers		156,610			98,444			9,961			30,175			7,282			302,472			—			—			302,472
Inter-segment sales		—			—			—			70			486			556			—			(556	)		—
Segment revenue		156,610			98,444			9,961			30,245			7,768			303,028			—			(556	)		302,472
Results
Segment profit		11,247			55,343			4,247			5,866			3,354			80,057			(61	)		—			79,996
Depreciation and amortisation		(2,049	)		(4,429	)		(2,655	)		(2,371	)		(917	)		(12,421	)		(1	)		—			(12,422	)
Operating profit		9,198			50,914			1,592			3,495			2,437			67,636			(62	)		—			67,574
Investment and other income																										21,933
Finance and other costs																										1,096
Share in consolidated loss of associate																										(3,082	)
Profit before tax																										87,521
Income tax expense																										(18,810	)
Profit for the year																										68,711
Assets and liabilities
Assets
Segment assets		74,923			91,541			77,446			86,026			98,582			428,518			1,924			—			430,442
Investment in associate																										1,879
Financial assets investments																										1,233
Short-term investments																										203,111
Cash and cash equivalents including restricted cash																										21,526
Loan to related parties																										87,705
Current tax asset																										827
Total assets																										746,723
Liabilities
Segment liabilities		57,177			9,310			10,780			12,652			15,049			104,968			21			—			104,989
Short-term borrowings																										37,948
Current tax liabilities																										2,356
Long term borrowings including convertible notes																										53,559
Deferred tax liabilities																										27,998
Total liabilities																										226,850
Additions to property, plant and equipment		6,028			13,315			309			19,472			16,720			55,844			—			—			55,844
Additions to property, plant and equipment and intangible assets arising from acquisition		—			—			65,971			—			—			65,971			—			—			65,971

`

F-62

b. For the year ended March 31, 2012

	Copper			Zinc India			Zinc International			Aluminum			Power			Total reported Segments			Other			Elimination			Total
	(Rs. in millions)			(Rs. in millions)			(Rs. in millions)			(Rs. in millions)			(Rs. in millions)			(Rs. in millions)			(Rs. in millions)			(Rs. in millions)			(Rs. in millions)
Revenue
Sales to external customers		201,647			111,319			41,272			31,089			24,333			409,660			2,403			—			412,063
Inter-segment sales		—			—			1,499			30			1,128			2,657			—			(2,657	)		—
Segment revenue		201,647			111,319			42,771			31,119			25,461			412,317			2,403			(2,657	)		412,063
Results
Segment profit		9,943			59,254			17,367			3,998			5,881			96,443			(46	)		—			96,397
Depreciation and amortization		(2,173	)		(5,236	)		(11,359	)		(2,653	)		(3,681	)		(25,102	)		(1	)		—			(25,103	)
Operating profit		7,770			54,018			6,008			1,345			2,200			71,341			(47	)		—			71,294
Investment and other income																										28,829
Finance and other costs																										(12,042	)
Share in loss of associate																										(8,767	)
Profit before tax																										79,314
Income tax expense																										(20,077	)
Profit for the year																										59,237
Assets and liabilities
Assets
Segment assets		74,884			98,343			69,485			103,278			143,082			489,072			3,230			—			492,302
Financial assets investments																										9,620
Short-term investments																										216,283
Cash and cash equivalents including restricted cash																										17,232
Loan to related parties																										106,834
Current tax asset																										618
Total assets																										842,889
Liabilities
Segment liabilities		61,465			9,419			10,237			15,077			20,815			117,013			759			—			117,772
Short-term borrowings																										53,983
Current tax liabilities																										539
Long term borrowings including convertible notes																										74,490
Deferred tax liabilities																										24,920
Total liabilities																										271,704
Additions to property, plant and equipment		5,909			15,578			2,320			19,253			35,701			78,761			—			—			78,761

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c. For the year ended March 31, 2013

	Copper			Zinc India			Zinc International			Aluminum			Power			Total reported Segments			Other			Elimination			Total			Total
	(Rs. in millions)			(Rs. in millions)			(Rs. in millions)			(Rs. in millions)			(Rs. in millions)			(Rs. in millions)			(Rs. in millions)			(Rs. in millions)			(Rs. in millions)			(US dollars in millions)
Revenue
Sales to external customers		217,374			123,241			43,475			34,148			30,800			449,038			3,512			—			452,550			8,300.6
Inter-segment sales		—			—			—			109			579			688			—			(688	)		—			—
Segment revenue		217,374			123,241			43,475			34,257			31,379			449,726			3,512			(688	)		452,550			8,300.6
Results
Segment profit		10,866			63,270			15,712			2,649			10,125			102,622			(61	)		—			102,561			1,881.1
Depreciation and amortization		(2,351	)		(5,844	)		(10,634	)		(2,321	)		(4,874	)		(26,024	)		(11	)		—			(26,035	)		(477.5	)
Operating profit		8,515			57,426			5,078			328			5,251			76,598			(72	)		—			76,526			1,403.6
Investment and other income																										36,693			673.0
Finance and other costs																										(11,183	)		(205.1	)
Share in loss of associate																										(7,736	)		(141.9	)
Profit before tax																										94,300			1,729.6
Income tax expense																										(15,555	)		(285.3	)
Profit for the year																										78,745			1,444.3
Assets and liabilities
Assets
Segment assets		102,881			112,587			54,899			113,110			174,244			557,721			8,194			—			565,915			10,379.9
Financial assets investments																										1,200			22.0
Deferred Tax Asset																										162			3.0
Short-term investments																										236,981			4,346.7
Cash and cash equivalents including restricted cash																										14,420			264.5
Loan to related parties																										136,086			2,496.1
Current tax asset																										1,120			20.5
Total assets																										955,884			17,532.7
Liabilities
Segment liabilities		92,832			10,770			10,703			20,056			33,121			167,482			1,188			—			168,670			3,093.8
Short-term borrowings																										26,287			482.1
Current tax liabilities																										3,153			57.8
Long term borrowings including convertible notes																										106,232			1,948.5
Deferred tax liabilities																										16,797			308.1
Total liabilities																										321,139			5,890.3
Additions to property, plant and equipment		4,864			15,418			1,949			10,841			38,091			71,163			47			—			71,210			1,306.1
Additions to leasehold land prepayments		—			120			—			4			—			124			—			—			124			2.3
Additions to intangible assets		37			108			—			79			45			269			5,881			—			6,150			112.8

F-64

Geographical Segment Analysis

The Company’s operations are primarily located in India. The following table provides an analysis of the Company’s sales by geographical market irrespective of the origin of the goods:

For the year ended March 31,	2011		2012		2013		2013
	(Rs. in millions)		(Rs. in millions)		(Rs. in millions)		(US dollars in millions)
India		187,454		229,163		264,688		4,854.9
China		16,357		52,060		62,280		1,142.3
Belgium		18,538		42,338		23,713		434.9
Other		80,123		88,502		101,869		1,868.5
		302,472		412,063		452,550		8,300.6

The following is an analysis of the carrying amount of non-current assets, being property, plant and equipment, intangible assets and leasehold prepayments analysed by the geographical area in which the assets are located:

	As at March 31
	2012		2013		2013
	Carrying amount		Carrying amount		Carrying amount
	(Rs. in millions)				(US dollars in millions)
India		334,323		393,424		7,216.1
Australia		1,205		1,731		31.8
South Africa		24,624		21,160		388.1
Namibia		21,507		14,788		271.2
Ireland		11,192		8,444		154.9
UAE		1,039		1,203		22.1
		393,890		440,750		8,084.2

33. Related party transactions

The Company’s subsidiaries as at March 31, 2013 are as follows:

Subsidiaries	Principal activities	The Company’s percentage holding (in % as at March 31, 2013)	Immediate holding Company	Immediate holding company’s percentage holding (as at March 31, 2013)
BALCO	Aluminium mining and smelting	51	SIIL	51
CMT	Copper mining	100	Monte Cello B.V.	100
Fujairah Gold FZE	Precious metal processing	100	CMT	100
HZL	Zinc mining and smelting	64.9	SIIL	64.9
Monte Cello B.V.	Holding Company	100	SIIL	100
SEL	Energy generation	100	SIIL	100

F-65

Sterlite Infra Limited (“SIL”)	Infrastructure projects and Holding company	100	SIIL	100
TCM	Copper mining	100	Monte Cello B.V.	100
Sterlite (USA)	Financing company	100	SIIL	100
TSPL	Energy generation	100	SEL	100
THL Zinc Ventures Limited (“THLZVL”)	Investment company	100	SIL	100
THL Zinc Limited (“THLZL”)	Investment company	100	THLZVL	100
THL Zinc Holding BV (“THLZBV”)	Investment company	100	SIL	100
Skorpion	Mining and exploration	100	THLZL	100
Skorpion Zinc (Pty) Ltd	Investment company	100	Skorpion	100
Skorpion Mining Company (Pty) Ltd	Zinc mining	100	Skorpion Zinc (Pty) Ltd	100
Namzinc (Pty) Ltd	Zinc refinery	100	Skorpion Zinc (Pty) Ltd	100
Amica Guesthouse (Pty) Ltd	Accommodation and catering services	100	Skorpion Zinc (Pty) Ltd	100
Rosh Pinah Health Care (Pty) Ltd	Leasing out of medical equipment and building and conducting services related thereto	64	Skorpion Zinc (Pty) Ltd	64
BMM	Zinc mining and milling	74	THLZL	74
Lisheen	Investment company	100	THLZBV	100
Vedanta Lisheen Mining Limited	Zinc mining and milling	100	Lisheen	100
Killoran Lisheen Mining Limited	Zinc mining and milling	100	Lisheen	100
KilloranLisheen Finance Limited	Investment company	100	Lisheen	100
Lisheen Milling Limited	Manufacturing of zinc & lead	100	Lisheen	100
Sterlite Ports Limited	Investment company	100	SIIL	100
Sterlite Infraventures Limited	Investment company	100	SIIL	100
VGCB	Infrastructure	74	SIIL	74
PMCBPL	Infrastructure	74	SIIL	74
Pecvest 17 Proprietary Limited	Investment company	100	THLZL	100
Lisheen Mine Partnership**	Mining partnership firm	100	Killoran Lisheen Mining Limited and Vedanta Lisheen Mining Limited	100
Lakomasko BV.	Investment company	100	THLZL	100

** Entities registered as other than Corporate entity.

The Company owns directly or indirectly through subsidiaries, more than half of the voting power of all of its subsidiaries as mentioned in the list above, and the Company is able to govern its subsidiaries’ financial and operating policies so as to benefit from their activities.

Ultimate controlling party

As at March 31, 2013, the immediate parent of the Company is Twin Star Holding Limited and the ultimate controlling party of the Company is Volcan Investments Limited (“Volcan”), which is controlled by persons related to the Executive Chairman, Mr. Anil Agarwal. Volcan Investment Limited and Twin Star Holdings Limited do not produce Group financial statements. Vedanta Resources Plc is the intermediate holding company of the Company.

F-66

List of related parties and relationships

A) Entities Controlling the Company (Holding Companies)

• Vedanta Resources Plc (“Vedanta”)

• Twin Star Holdings Limited (“Twin Star”)

• Vedanta Resources Holding Limited (“VRHL”)

• Volcan

B) Fellow subsidiaries

• The Madras Aluminium Company Limited (“MALCO”)

• Vedanta Jersey Investments Limited (“VJIL”)

• Welter Trading Limited (“WTL”)

• Sesa Goa Limited (“Sesa Goa”)

• Sesa Industries Limited (“Sesa Industries”) [merged with Sesa Goa Limited on February 14, 2011]

• Sesa Resources Limited (formerly V S Dempo and Company Private Limited)

• Sesa Mining Corporation Private Limited (formerly Dempo Mining Corporation Private Limited)

• Cairn India Limited

• Richter Holding Limited (“RHL”)

• Bloom Fountain Limited

• Vedanta Resource Cyprus Limited

• Konkola Copper Mines plc (“KCM”)

• Monte Cello Corporation NV (“MCNV”)

C) Other related parties

• Vedanta Foundation

• Anil Agarwal Foundation Trust

• Vedanta Medical Research Foundation (“VMRF”)

• Political and Public Awareness Trust (“PPAT”)

• Sterlite Technologies Limited (“STL”)

• Sterlite Iron and Steel Company Limited (“SISCL”)

• Balco Employees Provident Fund Trust

• Hindustan Zinc Ltd Employees Contributory Provident Fund Trust

D) Fellow subsidiary cum associate of the Company

• Vedanta Aluminium Limited (“Vedanta Aluminium”)

E) Key managerial personnel

• Mr. Anil Agarwal, Non executive chairman

• Mr. Navin Agarwal, Executive vice-chairman

• Mr. Tarun Jain, Director of finance

• Mr. M. S. Mehta, Chief Executive Officer

• Mr. D. D. Jalan, Chief Financial Officer and Whole time director

The Company enters into transactions in the normal course of business with its related parties, including its parent Vedanta, and the companies over which it has significant influence. A summary of significant related party transactions for the year ended March 31, 2011, 2012 and 2013 is noted below.

F-67

The following table provides the total amount of transactions that have been entered into with related parties for the relevant financial year. The significant transactions relate to the normal sale and purchase of goods and loans and investments. All inter-company transactions and balances are eliminated on consolidation.

	For the year ended March 31,
	2011			2012			2013			2013
	(Rs. in millions)			(Rs. in millions)			(Rs. in millions)			(US dollars in millions)
Sales
STL		1,495			2,134			1,619			29.7
MALCO		2			2			112			2.1
Vedanta Aluminium		461			577			810			14.9
Total		1,958			2,713			2,541			46.7
Purchases of goods/services
STL		238			341			254			4.7
Sesa Industries		68			—			—			—
Sesa Goa		8			97			65			1.2
Vedanta Aluminium		4,396			9,400			6,520			119.6
KCM		3,839			27			22,363			410.2
MALCO		401			859			1,288			23.6
Anil Agarwal Foundation Trust		—			1			—			—
Total		8,950			10,725			30,490			559.3
Rent income
Vedanta Aluminium		35			35			14			0.3
Total		35			35			14			0.3
Interest income / (Finance costs)
Vedanta		(32	)		7			68			1.2
Vedanta Aluminium		6,757			8,890			9,710			178.1
KCM		45			—			—			—
RHL		—			—			55			1.0
Twin star					2			56			1.0
STL		—			—			1			0.0
VRHL		(41	)		(16	)		—			—
VJIL		111			73			109			2.0
WTL		42			94			279			5.1
Total		6,882			9,050			10,278			188.4
Dividend paid
MALCO		(96	)		(251	)		(251	)		(4.6	)
Twin star		(1,722	)		(3,857	)		(3,857	)		(70.7	)
Total		(1,818	)		(4,108	)		(4,108	)		(75.3	)
Representative office and consultancy fee
Vedanta		(228	)		(240	)		(272	)		(5.0	)
Total		(228	)		(240	)		(272	)		(5.0	)
Service income
Vedanta		9			10			11			0.2
Total		9			10			11			0.2

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Loans given/(repaid) during the year
Vedanta Aluminium	45,000		17,124		15,409		282.6
Vedanta Aluminium	(68,650	)	(1,000	)	(8,700	)	(159.6	)
KCM	(6,983	)	—		—		—
Vedanta	—		4,144		1,943		35.6
Vedanta	—		(64	)	(909	)	(16.7	)
Twin star	—		2,397		3,544		65.0
VJIL	7,023		—		—		—
VJIL	(3,923	)	—		—		—
Richter	—		—		10,758		197.3
WTL	4,558		3,704		10,341		189.7
Total	(22,975	)	26,305		32,386		593.9
Loan received/(repaid) during the year
VRHL	15,738		—		—		—
VRHL	(10,838	)	(5,202	)	—		—
Total	4,900		(5,202	)	—		—
Guarantees outstanding - given / (taken)**
Vedanta Aluminium	46,384		45,383		56,604		1,038.2
Vedanta	(6,407	)	(6,140	)	(2,720	)	(49.9	)
Total	39,977		39,243		53,884		988.3
Donations
Sterlite Foundation	44		86		54		1.0
VMRF	435		252		259		4.8
Anil Agarwal Foundation Trust	—		—		1		0.0
PPAT	1		50		50		0.9
Total	480		388		364		6.7
Purchase/(sale) of property, plant and equipment
Vedanta Aluminium	(40	)	10		—		—
Anil Agarwal Foundation Trust			(39	)	—		—
Total	(40	)	(29	)	—		—

F-69

The significant receivables from and payables to related parties as at March 31, 2012 and March 31, 2013 are set out below:

	As at March 31,
	2012		2013			2013
	(Rs. in millions)		(Rs. in millions)			(US dollars in millions)
Receivable from:
STL		332		350			6.4
Vedanta Aluminium		4,937		13,053			239.4
MALCO		21		8			0.1
KCM		47		109			2.0
Sesa Goa		6		23			0.4
Anil Agarwal Foundation Trust		1		(1	)		(0.0	)
Sesa Resources Limited		1		17			0.3
Sesa Mining Corporation Private Limited		2		5			0.1
Bloom Fountain Limited		—		1			0.0
RHL		—		43			0.8
Sterlite Iron and Steel Company Limited		17		22			0.4
Welter Trading Limited		32		153			2.8
Vedanta Jersey Investments Limited		26		32			0.6
Cairn India Limited		1		1			0.0
Vedanta Foundation		0		0			0.0
Vedanta		14		26			0.5
Twin Star		3		51			1.0
Total		5,440		13,893			254.8
Loans to:
Vedanta Aluminium		95,514		104,855			1,923.2
RHL		—		10,732			196.8
Welter Trading Limited		9,067		19,902			365.0
Vedanta Jersey Investments Limited		3,479		3,700			67.9
Vedanta		4,354		5,659			103.8
Twin Star		2,558		6,246			114.6
Total		114,972		151,094			2,771.3
Payable to:
STL		3		3			0.1
Vedanta Aluminium		1,251		606			11.1
Vedanta		1,539		1,211			22.2
MALCO		53		—			—
Sesa Goa Limited		—		2			0.0
Sesa Resources Limited		—		1			0.0
Sesa Mining Corporation Private Limited		—		1			0.0
Anil Agarwal Foundation Trust		—		1			0.0
KCM		12		—			—
Total		2,858		1,825			33.4

** Maximum guarantee amount and does not represent actual liability.

Terms and conditions of transactions with related parties

The sales to and purchases from related parties are made in ordinary course of business. There have been no guarantees provided or received for any related party receivables or payables. For the year ended March 31 2013, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (2013 and 2012: Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

Loans to holding companies

From time to time the Company has given loan to Vedanta to finance general corporate purpose. The loan balance as at March 31, 2013 was Rs. 5,659 million ($ 103.8 million). These unsecured loans have been provided on fixed and floating basis interest rates and carry an average interest rate of 1.58% per annum and are repayable on various dates till November 2013. During the year loans amounting to Rs 4,533 million ($ 83.1 million) were renewed on maturity on fresh terms and conditions.

The Company has given loans to Twin Star to finance general corporate purpose. The loan balance as at March 31, 2013 was Rs. 6,246 million ($ 114.6 million). These unsecured loans have been provided on fixed and floating basis interest rates and carry an average interest of rate of 1.59% per annum and repayable on various dates till March 2014. Loans given to Twinstar are supported by a Letter of comfort from Vedanta.

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Loans to associate

The loans granted to Vedanta Aluminium are intended to finance its planned capital expenditures. These loans are unsecured. Loans receivable as at March 31, 2013 was Rs. 104,854 million ($ 1,923.2 million) comprising of term loans amounting to Rs. 6,890 million ($ 126.4 million) on which the interest is charged at 11.0% (bank rate as declared by Reserve Bank of India “RBI” plus 2%) repayable in quarterly installments of Rs 250 million ($ 4.6 million) till March 2020, 9% cumulative preference shares amounting to Rs. 32,631 million ($ 598.5 million) redeemable in March 2022 and one year loans amounting to Rs. 65,333 million ($ 1,198.3 million) at an average interest rate of 9.88% repayable on various dates till March 2014. Loans given to Vedanta Aluminium are supported by a Letter of comfort from Vedanta. During the year loans amounting to Rs 53,210 million ($ 976.0 million) were renewed upon maturity on fresh terms and conditions.

Loans to fellow subsidiaries

The Company has given loans to Welter Trading Limited to finance general corporate purpose. The loan balance as at March 31, 2013 was Rs. 19,902 million ($ 365.0 million). These unsecured loans have been provided on fixed and floating basis interest rates at an average rate of 1.65% per annum and are repayable on various dates till March 2014. Loans given to Welter Trading Limited are supported by a Letter of comfort from Vedanta. During the year loans amounting to Rs 9,651 million ($ 177.0 million) were renewed upon maturity on fresh terms and conditions.

The Company has given a loan to VJIL to finance general corporate purpose. The loan balance as at March 31, 2013 was Rs 3,700 million ($ 67.9 million). This unsecured loan carries an interest rate of 1.3% per annum and is repayable in April 2013. Loan given to VJIL are supported by a Letter of comfort from Vedanta. During the year loans amounting to Rs 3,700 million ($ 67.9 million) were renewed upon maturity on fresh terms and conditions.

The Company has given loans to Richter Holdings Limited to finance general corporate purpose. The loan balance as at March 31, 2013 was Rs 10,732 million ($ 196.8 million). These unsecured loans have been provided on fixed and floating basis interest rates at an average rate of 1.66% per annum and are repayable on various dates till March 2014. Loans given to Richter Holdings Limited are supported by a Letter of comfort from Vedanta.

Remuneration of key management personnel

The remuneration of the key management personnel of the Company are set out below in aggregate for each of the categories specified in IAS 24 Related party disclosures.

For the year ended March 31,	2011		2012		2013		2013
	(Rs. in millions)		(Rs. in millions)		(Rs. in millions)		(US dollars in millions)
Short-term employee benefits		133		200		264		4.8
Post employment benefits		16		18		20		0.4
Share based payments		33		54		79		1.4
		182		272		363		6.6

Details of transactions during the year with post retirement trusts:

For the year ended March 31,	2011		2012		2013		2013
	(Rs. in millions)		(Rs. in millions)		(Rs. in millions)		(US dollars in millions)
Balco Employees Provident Fund Trust		151		129		141		2.6
Hindustan Zinc Ltd Employees Contributory Provident Fund Trust		220		248		269		4.9
		371		377		410		7.5

34. Other notes

(a) Components of other comprehensive income – cash flow hedges

For the year ended March 31,	2011			2012			2013		2013
	(Rs. in millions)			(Rs. in millions)			(Rs. in millions)		(US dollars in millions)
Net gain/(loss) arising during the year		251			(222	)		223		4.1
Reclassification adjustments for net gain/(loss) included in the consolidated statements of income		(348	)		(232	)		276		5.1
Net gain/(loss) on cash flow hedges recognised in other comprehensive income, net of tax		(97	)		(454	)		499		9.2

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(b) Exchange gain/(loss) recognised in the consolidated statements of income:

For the year ended March 31,	2011		2012			2013			2013
	(Rs. in millions)		(Rs. in millions)			(Rs. in millions)			(US dollars in millions)
Other operating income		32		(752	)		(582	)		(10.7	)
Cost of sales		420		(4,980	)		(3,268	)		(59.9	)
Administration expenses		—		—			(268	)		(4.9	)
Investment and other income		788		18			667			12.2
Finance and other costs		746		(7,704	)		(5,648	)		(103.6	)
Total		1,986		(13,418	)		(9,099	)		(166.9	)

(c). The Company presents the consolidated statements of income by disclosing expenses by function. The consolidated statements of income disclosing expenses by nature is presented below:

CONSOLIDATED STATEMENTS OF INCOME

(Indian Rupees in millions except share or per share amounts unless otherwise stated)

For the year ended March 31,	Notes		2011			2012			2013			2013
			(Rs. in millions)			(Rs. in millions)			(Rs. in millions)			(US dollars in millions)
Revenue		4		302,472			412,063			452,550			8,300.6
Other operating income				2,366			1,398			1,883			34.5
Investment and other income		5		21,933			28,829			36,693			673.0
Total Income				326,771			442,290			491,126			9,008.1
Increase/(decrease) in inventories of finished goods and work-in-progress				4,947			(635	)		(1,447	)		(26.5	)
Raw materials and other consumables used				(209,334	)		(280,337	)		(312,329	)		(5,728.7	)
Employee costs				(11,896	)		(17,073	)		(19,419	)		(356.2	)
Costs associated with Asarco [refer note 31(c)(i)]				—			(4,233	)		(268	)		(4.9	)
Other costs				(8,559	)		(14,786	)		(18,409	)		(337.7	)
Depreciation and amortisation				(12,422	)		(25,103	)		(26,035	)		(477.5	)
Finance and other costs		6		1,096			(12,042	)		(11,183	)		(205.1	)
Share in consolidated loss of associate		10		(3,082	)		(8,767	)		(7,736	)		(141.9	)
Profit before tax				87,521			79,314			94,300			1,729.6
Income tax expense		7		(18,810	)		(20,077	)		(15,555	)		(285.3	)
Profit for the year				68,711			59,237			78,745			1,444.3

(d). Employee costs

For the year ended March 31,	2011		2012		2013		2013
	(Rs. in millions)		(Rs. in millions)		(Rs. in millions)		(US dollars in millions
Salaries, wages and bonuses		9,540		15,389		17,938		329.1
Defined contribution pension scheme costs		510		819		736		13.5
Defined benefit pension scheme costs		1,278		372		569		10.4
Voluntary retirement expenses		568		493		176		3.2
		11,896		17,073		19,419		356.2

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35. Merger with Sesa Goa

On February 25, 2012, Sterlite, Sesa Goa and Vedanta announced an all-share merger of Vedanta’s majority-owned subsidiaries Sesa Goa and Sterlite to create Sesa Sterlite (“SesaSterlite”) and a consolidation of various subsidiaries held within Vedanta (the “Scheme”).

Under the Scheme the following steps are proposed to occur:

(i) Vedanta’s 70.5% shareholding in Vedanta Aluminium will be consolidated into Sesa Goa in consideration for the issue to Vedanta of 72.3 million Sesa Goa shares;

(ii) Sterlite will be merged into Sesa Goa, which will be renamed SesaSterlite, in consideration for the issue to Sterlite shareholders (other than MALCO) of three Sesa shares for every five existing Sterlite shares and the issue to holders of Sterlite’s American Depository Shares (“Sterlite ADSs”) of three Sesa ADSs for every five existing Sterlite ADSs;

(iii) MALCO’s power business will be hived off to Vedanta Aluminium for cash consideration of Rs 1,500 million;

(iv) MALCO will be merged into Sesa Goa in consideration for the issue of 78.7 million Sesa Goa shares to shareholders of MALCO;

(v) SEL will be merged into Sesa Goa;

(vi) Vedanta Aluminium’s aluminium business will be demerged into Sesa Goa; and

(vii) Vedanta’s 38.7%. Shareholding in Cairn India Limited, together with debt of approximately US$ 5.9 billion incurred by Vedanta to acquire that interest in Cairn India Limited, will be transferred to Sesa Goa for nominal consideration.

Sesa Goa, Sterlite, MALCO, Vedanta Aluminium and SEL are together, the “Scheme Companies”. The boards of directors of the Scheme Companies, having received independent financial advice, have approved the Scheme.

The Honourable High Court of Judicature of Bombay at Goa, by order dated April 03, 2013, has approved the Scheme of Amalgamation and Arrangement amongst Sterlite Industries (India) Limited, Madras Aluminium Company Limited, SEL, Vedanta Aluminium Limited and Sesa Goa Limited and their respective Shareholders and Creditors (‘Composite Scheme’). The Scheme of Amalgamation and Arrangement approved by the Honourable High Court of Judicature of Bombay at Goa has been subsequently appealed by a shareholder. The hearings in the appeal are over and order is awaited. The Scheme of Amalgamation of Ekaterina Limited with Sesa Goa Limited and their respective Shareholders and Creditors (‘Ekaterina Scheme’) was earlier approved by the Supreme Court of Mauritius by its order dated August 24, 2012. The Honourable High Court of Madras has also approved the Scheme of Amalgamation and Arrangement of SIIL with Sesa Goa Limited on July 25, 2013.

Notwithstanding the foregoing, the Scheme shall come into effect upon sanction by the respective jurisdictional High Court and other statutory approvals. The final approval of the Scheme has not occurred, and therefore the proposed Scheme has had no impact on the consolidated financial statements of Sterlite for any of the periods presented herein.

36. Subsequent Events

There have been no material events other than disclosed in the financial statement after reporting date which would require disclosure or adjustments to the financial statements for the year ended March 31, 2013.

F-73