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Directors Report of Sterlite Technologies Ltd.

Mar 31, 2016

The Directors are pleased to present the Annual Report for the Financial Year 2015-16 together with the audited financial statements of the Company for the year ended March 31, 2016.

FINANCIAL SUMMARY/HIGHLIGHTS

(Rs. in Crores)

Particulars 2015-16 2014-15*

Net Revenue from Operations 2,036 3,030

Profit / (Loss) before Interest, Depreciation & Tax 446 386

Less: Interest 92 179

Less: Depreciation and amortization expense 107 108

Net Profit/(Loss) before taxation 247 99

Total Tax Expenses 66 15

Net Profit /(Loss) for the year after tax 181 84

Balance carried forward from previous year 749 743

Less : Adjustment on account of demerger 269 -

Amount available for appropriation 661 827

Appropriations

Transfer to General Reserve - -

Transfer to Debenture Redemption Reserve - 50

Proposed Final Dividend 39.54 23.65

Provision for Tax for Dividend 8.06 4.81

Balance carried forward to the next year 614 749

* Previous year figures are not comparable, since current year figures are post Demerger of Power Products and Transmission Grid Business from the Company with effect from April 1, 2015 and also include effect of merger of Elitecore Technologies Private Limited into the Company with effect from September 29, 2015.

PERFORMANCE

Fiscal Year 2015-16 closed with Revenues of Rs. 2,036 Crores, EBITDA of Rs. 446 Crores, PAT of Rs. 181 Crores and EBITDA margins of 22%.

MATERIAL EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS

A. DEMERGER OF POWER PRODUCTS AND TRANSMISSION GRID BUSINESS

The Hon''ble High Court of Judicature at Bombay had on April 22, 2016 approved the Scheme of Arrangement for demerger of the Power Products and Transmission Grid Business of the Company into Sterlite Power Transmission Limited ("SPTL"), effective from May 23, 2016. This Scheme was approved by the Shareholders, Secured Creditors and Unsecured Creditors of the Company at the Court Convened Meetings held on December 15, 2015. The appointed date for the Demerger was April 01, 2015.

Upon the effective implementation of the Scheme, the Company will continue to be a publicly listed company and will focus on the growth opportunities in the telecom sector and shareholders of the Company, towards consideration of the demerger, will be issued equity shares or redeemable preference shares of SPTL in the manner detailed below -

(i) Resident Indian shareholders of the Company on the record date can choose from options as per their investment objectives. They may opt to: (i) receive 1 (one) equity share in SPTL for every 5 (fve) equity shares with face value of Rs. 2 each in the Company that they hold; or (ii) receive 1 (one) fully paid-up Redeemable Preference Share of Rs. 2 each at a premium of Rs. 110.30 per redeemable preference share in SPTL for every 5 (five) equity shares of Rs. 2 each of the Company that they hold, with an option of seeking voluntary exit as per the Scheme.

(ii) Non-resident shareholders (excluding Foreign Institutional Investors ("FIIs")) of the Company on the record date would be entitled to receive 1 (one) equity share in SPTL for every 5 (fve) equity shares with face value of Rs. 2 each in the Company that they hold. All such equity shares that are issued and allotted to non-resident shareholders of the Company (excluding FIIs), subject to applicable law, will be immediately purchased by the promoters of the Company and/ or their affiliates or any other person and/or entity nominated by them as per the Scheme.

(iii) FII shareholders of the Company on the record date, subject to receipt of approval from the appropriate regulatory authorities can choose from options as per their investment objectives. They may opt to: (i) receive 1 (one) Redeemable Preference Share in SPTL for every 5 (fve) equity shares of the Company that they hold; or (ii) receive 1 (one) equity share in SPTL for every 5 (five) equity shares with face value of Rs. 2 each in Sterlite Technologies Limited that they hold which will be purchased by the promoters of the Company and/or their affiliates or any other person and/or any other person and/or entity nominated by them as per the Scheme.

The equity shares of SPTL will not be listed on any stock exchange and the redeemable preference shares issued pursuant to the Scheme shall be listed on BSE Limited and the National Stock Exchange of India Limited.

B. ACQUISITION AND MERGER OF ELITECORE TECHNOLOGIES PRIVATE LIMITED

The Company acquired 100% stake in Elitecore Technologies Private Limited ("Elitecore") on September 29, 2015 followed by merger of Elitecore with the Company, effective from May 20, 2016. The merger was approved by the Hon''ble High Court of Judicature at Gujarat and the Hon''ble High Court of Judicature at Bombay on March 21, 2016 and April 7, 2016, respectively. The appointed date for the said merger was September 29, 2015.

DIVIDEND

The Board of Directors are pleased to recommend a dividend of 50% (Rs. 1 per share of Rs. 2/- each) for the Financial Year 2015-16. The distribution of dividend will result in payout of Rs. 39.52 Crores excluding tax on dividend. The dividend payout is subject to approval of members at the ensuing Annual General Meeting. The Company proposes not to carry any amount to reserves for the FY 2015-16. The dividend will be paid to members whose names appear in the Register of Members as on the Record Date and in respect of shares held in dematerialized form, it will be paid to members whose names are furnished by National Securities Depository Limited and Central Depository Services (India) Limited, as beneficial owners as on that date. The dividend payout for the year under review has been formulated in accordance with the Company''s policy to pay sustainable dividend linked to long term growth objectives of the Company to be met by internal cash accruals.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review giving detailed analysis of Company''s operations and segment-wise performance, as stipulated under Regulation 34 (2) of the SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015 ("Listing Regulations"), is presented in a separate section forming part of the Annual Report.

BOARD MEETINGS

During the Financial Year 2015-16, six meetings of the Board of Directors were held on April 20, 2015; May 18, 2015; July 23, 2015; September 21, 2015; October 26, 2015 and January 28, 2016. The maximum time-gap between any two consecutive meetings did not exceed four months. Video/Tele-conferencing facilities are made available to facilitate Directors travelling abroad, or present at other locations, to participate in the meetings.

COMPOSITION OF AUDIT COMMITTEE

The Board has constituted the Audit Committee which comprises Mr. Arun Todarwal as the Chairman, Mr. A. R. Narayanaswamy, Mr. C. V. Krishnan and Mr. Pravin Agarwal as the Members. More details on the Committee are given in the Corporate Governance Report. The Board of Directors has accepted all the recommendations given by Audit Committee during the FY 2015-16.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Pursuant to Section 149 read with Section 152 of the Companies Act, 2013 ("the Act"), the provisions in respect of retirement of directors by rotation shall not be applicable to Independent Directors. Accordingly, Mr. Pratik Agarwal, Non-Executive Director retires by rotation at the ensuing Annual General Meeting. A brief resume, expertise, shareholding in your Company and details of other directorships of Mr. Pratik Agarwal is given in the Corporate Governance Report.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Act and the Listing Regulations.

The Board of Directors of the Company is committed to assessing its own performance as a Board in order to identify its strengths and areas in which it may improve its functioning. To that end, the Nomination and Remuneration Committee has established the processes for evaluation of performance of Independent Directors and the Board.

Pursuant to the provisions of the Act and Regulation 17 of the Listing Regulations, the Board has carried out an annual performance evaluation of its own performance, the directors individually including that of Chairperson as well as the evaluation of the working of its Audit, Nomination & Remuneration and other Committees. A structured evaluation was conducted after taking into consideration inputs received from the Directors, covering various aspects including but not limited to the knowledge to perform the role, time and level of participation, performance of duties, level of oversight, professional conduct and independence.

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Nomination & Remuneration Policy details are stated in the Corporate Governance Report.

Pursuant to Section 203 of the Act, and rules made thereunder, following persons are Key Managerial Personnel of the Company

1. Dr. Anand Agarwal – Chief Executive Officer

2. Mr. Anupam Jindal – Chief Financial Officer

3. Mr. Amit Deshpande – Company Secretary

DIRECTORS'' RESPONSIBILITY STATEMENT

In pursuance of section 134 (5) of the Act, the Directors state that:

(a) in the preparation of the annual accounts for the year ended March 31, 2016, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same;

(b) the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2016 and of the profit of the Company for the year ended on that date;

(c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the Directors have prepared the annual accounts on a ''going concern'' basis;

(e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

(f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

SUBSIDIARIES AND JOINT VENTURES

A report on the performance and financial position of each of the subsidiaries and joint venture companies as per the Act is provided as part of the consolidated financial statement and hence not repeated here for the sake of brevity. During the year under review, following are the details of the companies which have become or ceased to be Company''s subsidiaries or joint ventures companies –

A. Companies which have become subsidiaries during the Financial Year 2015-16 –

- Sterlite Power Transmission Limited

- Twin Star Display Technologies Limited

- Maheshwaram Transmission Limited

- Sterlite Telesystems Limited

- Elitecore Technologies Private Limited

- Elitecore Technologies (Mauritius) Limited

- Elitecore Technologies Sdn Bhd. (Malaysia)

- Sterlite (Shanghai) Trading Company Limited

B. Companies which ceased to be subsidiaries during the Financial Year 2015-16 –

- Twin Star Technologies Limited (Erstwhile Sterlite Display Limited)

- Twin Star Display Technologies Limited

- Sterlite Power Transmission Limited*

- Sterlite Power Grid Ventures Limited*

- Sterlite Grid 1 Limited*

- Sterlite Grid 2 Limited*

- Sterlite Grid 3 Limited*

- Sterlite Grid 4 Limited*

- East-North Interconnection Company Limited*

- Bhopal Dhule Transmission Company Limited*

- Jabalpur Transmission Company Limited*

- RAPP Transmission Company Limited*

- Purulia & Kharagpur Transmission Company Limited*

- NRSS XXIX Transmission Limited*

- Maheshwaram Transmission Limited*

- Elitecore Technologies Private Limited#

* Ceased to be subsidiaries of the Company pursuant to Scheme of Arrangement for demerger of the Power Products and Transmission Grid Business of the Company into Sterlite Power Transmission Limited.

# Ceased to be subsidiary of the Company pursuant to Scheme of Arrangement for amalgamation of Elitecore Technologies Private Limited with the Company.

C. Companies which have become/ceased to be a joint venture or associate during the Financial Year 2015-16 - Nil

As per the Listing Regulation, a policy on material subsidiaries as approved by the Board of Directors, may be accessed on the Company''s website: www.sterlitetech.com

RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the Financial Year were on an arm''s length basis and were in the ordinary course of business except those which are mentioned in Annexure V to this report. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. All Related Party Transactions are placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee is obtained on an annual basis for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are audited and a statement giving details of all related party transactions is placed before the Audit Committee for their approval on a quarterly basis. The Company has developed a Related Party Transactions Manual, Standard Operating Procedures for purpose of identification and monitoring of such transactions. The policy on Related Party Transactions as approved by the Board is uploaded on the Company''s website www.sterlitetech.com. None of the Directors has any pecuniary relationships or transactions vis-à-vis the Company.

The details of the transactions with Related Parties are provided as Annexure V to the Directors'' Report.

ACCOUNTS

In terms of Section 136(1) of the Act, copies of the Audited Financial Statements including the Report of the Board of Directors and the Report of the Auditors of the Subsidiary Companies have not been attached with the Balance Sheet of the Company.

The Company undertakes that the financial statements of the subsidiary companies and the related detailed information will be made available, upon request, to the members seeking such information at any point of time. The financial statements of the subsidiary companies will also be kept for inspection by any member at registered office of the Company and that of the respective Subsidiary Companies. The Company shall furnish a hard copy of details of financial statements of subsidiaries to any shareholder on demand. The financial statements of the subsidiary companies will also be available on the Website of the Company www.sterlitetech.com.

Additionally, the physical (hard) copies of the statement containing the salient features of all the documents, as prescribed in sub-section (1) to Section 136 of the Act, read with Regulation 36 of the Listing Regulations, is being sent to all the shareholders/debenture holders of the Company who have not registered their email address (es) for the purpose. Any shareholder/debenture holder interested in obtaining physical copies of full annual report may write to the "Company Secretary" at the Registered Office of the Company or to Registrar & Transfer Agents on its address as appearing in Corporate Governance section of this Annual Report.

CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements, in terms of Section 136 of the Act, read with Regulation 36 of the Listing Regulations and in terms of Accounting Standard (AS) 21 on Consolidated Financial Statements read with AS-23 on Accounting for Investments in Associates and AS-27 on Financial Reporting of Interest in Joint Ventures, the audited Consolidated Financial Statements, duly audited by Statutory Auditors, also forms part of this Annual Report.

EXPLANATION ON AUDITOR''S QUALIFICATION

The paragraph titled "Basis for Qualified Opinion" in the Auditor''s Report and over Note No. 45 (A) in Notes to Accounts regarding demand of excise duty and penalty amounting to Rs. 188 crores is self-explanatory and does not require further comment.

In the year 2004-05, CESTAT upheld the demand of Rs. 188 crores and interest thereon for alleged breach of norms pertaining to Export Oriented Unit (EOU). The Company had fled an appeal before the Hon''ble High Court of Bombay against this order. The Department had also made an appeal against the same CESTAT order before the High Court of Bombay. On Company''s appeal, the Hon''ble High Court directed that the appeal is not maintainable in High Court, however without prejudice to the rights of the Company. Subsequently, the Company had fled a Special Leave Petition (SLP) and appeal before the Supreme Court of India which was admitted by the Court. Hon''ble Supreme Court has also maintained the stay granted by Hon''ble High Court.

The Hon''ble Supreme Court, considering that the departmental appeal against the CESTAT order was still pending before the High Court, disposed of the Special Leave Petition of the Company and directed that the records of the departmental appeal be transferred to the Supreme Court and both the Appeals i.e. Departmental Appeal as well as Civil Appeal of the Company be heard together by the Supreme Court. The status remains same and there was no development during the year under review.

Based on merits of the case and the legal opinion obtained, the management believes that the Company has a strong case and this matter does not require any further provisioning.

STATUTORY AUDITORS

M/s. S R B C & Co. LLP, Chartered Accountants were appointed as Statutory Auditors in the Annual General Meeting held on August 4, 2015 for a period of 2 years upto conclusion of the Annual General Meeting to be held for FY 2016-17 subject to ratification by members at every Annual General Meeting of the Company. M/s. S R B C & Co. LLP have confirmed their eligibility under Section 141 of the Act, and the Rules framed thereunder for reappointment as Auditors of the Company. As required under Regulation 33 of the Listing Regulations, the Auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

COST AUDITORS

Pursuant to Section 148 of the Act, read with The Companies (Cost Records and Audit) Amendment Rules, 2014, the cost audit records maintained by the Company in respect of its Telecom Products is required to be audited. Your Directors had, on the recommendation of the Audit Committee, appointed Mr. Kiran Naik, Cost Accountant, to audit the cost accounts of the Company for the Financial Year 2016-17 on a remuneration of Rs. 75,000/-. Mr. Kiran Naik has confirmed that his appointment is within the prescribed limits. As required under the Act, the remuneration payable to the cost auditor is required to be placed before the Members in a general meeting for their ratification. Accordingly, a Resolution seeking Member''s approval for the remuneration payable to Mr. Kiran Naik, Cost Auditor is included as part of the Notice convening the Annual General Meeting.

SECRETARIAL AUDIT REPORT

Pursuant to Section 204 of the Act, Dr. K.R. Chandratre, Practicing Company Secretary, was appointed to conduct the Secretarial Audit for the Financial Year ended March 31, 2016. The Secretarial Audit Report for the Financial Year ended March 31, 2016 is annexed herewith as Annexure III to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

SHIFTING OF REGISTERED OFFICE OF THE COMPANY

During the Financial Year 15-16, your Company shifted its registered office from Survey No. 68/1, Rakholi Village, Madhuban Dam Road 396 230, Union Territory of Dadra & Nagar Haveli, India to E-1, MIDC Industrial Area, Waluj, Aurangabad – 431 136, Maharashtra, India.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The Company has documented a robust and comprehensive internal control system for all the major processes to ensure reliability of financial reporting, timely feedback on achievement of operational and strategic goals, compliance with policies, procedures, laws and regulations, safeguarding of assets and economical and efficient use of resources. The formalized system of control facilitates effective compliance as per relevant provisions of the Companies Act, 2013 and Listing Regulations.

To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board. The Internal Audit function monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company and its subsidiaries. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board. The Audit Committee also met the Company''s Statutory Auditors to ascertain their views on the financial statements, including financial reporting system, compliance to accounting policies and procedures, the adequacy and effectiveness of internal controls and systems followed by the Company.

BUSINESS RISK MANAGEMENT

The Company has formally framed a Risk Management Plan to identify and assess the risk areas, monitor and report compliance and effectiveness of the policy and procedure. A detailed exercise is being carried out to identify, evaluate, manage and monitoring of both business and non-business risk. This plan seeks to create transparency, minimize adverse impact on the business objectives and enhance the Company''s competitive advantage. The business risk plan defines the risk management approach across the enterprise at various levels including documentation and reporting. The plan has different risk models which help in identifying risks trend, exposure and potential impact analysis at a Company level as also separately for business segments. The Audit Committee and Board of Directors periodically reviews the risk and suggest steps to be taken to control and mitigate the same through a properly defined framework. Details of Risk Management is presented in a separate section forming part of the Annual Report.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has a vigil mechanism named Whistle Blower Policy (WB) to deal with instance of fraud and mismanagement, if any. The details of the WB Policy is explained in the Corporate Governance Report and also posted on the website of the Company.

CORPORATE GOVERNANCE

In terms of Regulation 34 of the Listing Regulations, a Report on Corporate Governance along with the Certificate from Practising Company Secretary certifying the compliance of Corporate Governance enumerated in the Listing Regulations is included in the Annual Report.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as Annexure IV.

NON-CONVERTIBLE DEBENTURES

As on March 31, 2016, the Company has outstanding Secured, Rated, Listed, Redeemable, Non-Convertible Debentures (NCDs) of Rs. 270 Crores. The Company has maintained 100% asset cover sufficient to discharge the principal amount at all times for its NCDs. Credit rating for the NCDs is CRISIL A (Rating watched with developing implications). The Debentures are listed on the debt segment of BSE Limited as per the SEBI Guidelines and Debt Listing Regulation. The details of debenture trustee are –

Axis Trustee Services Limited

Axis House, 2nd Floor, Bombay Dyeing Mills Compound,

Pandurang Budhkar Marg, Worli,

Mumbai - 400025, Maharashtra, INDIA

Phone No. 91-22-24255216 Fax No. 91-22-24254200

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars of conservation of energy, technology absorption and foreign exchange earnings and outgo as prescribed under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014, is given as Annexure I and forms part of the Directors'' Report.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the Annual Report. Details are provided as Annexure VII to this report.

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration is provided in a separate annexure forming part of this report. Having regard to the provisions of the first proviso to Section 136 (1) of the Act and as advised, the Annual Report excluding the aforesaid information is being sent to the members of the Company. The said information is available for inspection at the registered office of the Company during working hours and any member interested in obtaining such information may write to the Company Secretary or Registrar and Transfer Agent and the same will be furnished on request.

EMPLOYEES STOCK OPTION SCHEME

As the members are aware, the Company had launched Employee Stock Option Schemes for the employees in June 2006 (ESOP 2006) and December 2010 (ESOP 2010) respectively, in line with Company''s philosophy of sharing benefits of growth with the growth drivers. The Company allotted 11,29,395 shares during the year to various employees who exercised their options. The details of the options vested during the year under review are provided in Annexure II to this report, as required under Clause 14 of the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014. The paid up Equity Share Capital as on March 31, 2016 was Rs. 79.04 Crores divided into 39.52 Equity Shares of Rs. 2 each. The Company has not issued any equity shares with differential voting rights during the year. The Company has received a certificate from the Auditors of the Company that the Scheme has been implemented in accordance with the SEBI Regulations and the resolution passed by the shareholders. The Certificate would be placed at the Annual General Meeting for inspection by members.

The Members of the Company through resolutions passed by Postal Ballot on March 30, 2016, have approved Sterlite Technologies Limited Employee Stock Appreciation Rights 2016 ("ESAR 2016") and Sterlite Technologies Limited Employee Stock Option Plan 2016 ("ESOP 2016") and grant of Stock Appreciation Rights or Employee Stock Options to employees of the Company and/or its Subsidiary (ies) under the respective Schemes.

Disclosures with respect to Stock Options, as required under Regulation 14 of the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (''the Regulations''), are available in the Annexure II to this Report and Notes to the Financial Statements and can also be accessed on the Company''s website www.sterlitetechnologies.com.

TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to the provisions of Section 205A(5) and 205C of the Companies Act, 1956 (which are still applicable as the relevant sections under the Companies Act, 2013 are yet to be notified), relevant amounts which remained unpaid or unclaimed for a period of 7 years have been transferred by the Company to the Investor Education and Protection Fund.

Pursuant to the provisions of Investor Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, the Company has uploaded the details of unpaid and unclaimed amounts lying with the Company as on August 4, 2015 (date of last Annual General Meeting) on the website of the Company (www.sterlitetech.com), as also on the Ministry of Corporate Affairs website.

CORPORATE SOCIAL RESPONSIBILITY

The Board has constituted Corporate Social Responsibility (CSR) Committee which comprises of Mr. Arun Todarwal, Chairman, Mr. A.R. Narayanaswamy, Mr. Pravin Agarwal and Dr. Anand Agarwal, Members. The Board has also approved a CSR policy on recommendations of CSR Committee.

As part of its initiatives under Corporate Social Responsibility, the Company has undertaken projects in the areas of Education, Health, Women Empowerment and Community Development during FY 2015-16.

During the year, the Company has spent Rs. 2.23 crores (around 3% of the average net profits of last three Financial Years) on CSR activities. The Annual Report on CSR activities is annexed herewith as Annexure VI.

GENERAL

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

(a) The Company has not accepted any deposits from the public or otherwise in terms of Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposit) Rules, 2014.

(b) Issue of equity shares with differential rights as to dividend, voting or otherwise.

(c) Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries.

(d) No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company''s operations in future.

(e) No cases fled pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

ACKNOWLEDGEMENT

Your Directors would like to express their appreciation for the assistance and co-operation received from the financial institutions, banks, Government authorities, customers, vendors and members during the year under review. Your Directors take on record their deep sense of appreciation to the contributions made by the employees through their hard work, dedication, competence, support and co-operation towards the progress of your Company.



For and on behalf of the Board of Directors

Place: Pune Pravin Agarwal Anand Agarwal

Date: May 26, 2016 Vice Chairman & CEO &

Whole-time Director Whole-time Director


Mar 31, 2013

To the Members,

The Directors are pleased to present the Annual Report for the financial year 2012-13 together with the audited accounts of the Company for the year ended March 31, 2013.

FINANCIAL RESULTS

Rs. in Crores

Particulars 2012-13 2011-12

Net Revenue 3354 2,727

Profit/(Loss) before Interest, Depreciation & Tax 260 223

Less: Interest 106 95

Less: Depreciation 86 71

Net Profit/(Loss) before taxation 69 57

Provision for Taxation:

Current Tax 15 18

Earlier Year Tax / (Written Back) (6) 5

Minimum Alternative Tax eligible for Set Off (1) (18)

Deferred Tax (Credit) 14 8

Net Profit /(Loss) for the year after tax 47 44

Balance carried forward from previous year 740 712

Amount available for appropriation 788 756

APPROPRIATIONS

Transfer to General Reserve 2 2

Proposed Dividend 12 12

Provision for Tax on Dividend 2 2

Balance carried forward to the next year 772 740

PERFORMANCE

Fiscal year 2012-13 closed with Revenues of Rs. 3354 Crores, EBITDA of Rs. 260 Crores, PAT of Rs. 47 Crores and EBITDA margins of 8%. The Telecom business had revenues of Rs. 1,056 Crores at an EBITDA margin of 15.74% and the power business had revenues of Rs. 2,230 Crores at an EBITDA margin of 4.22%.

The detailed analysis of Company''s operations and segment- wise performance is covered under ''Management Discussion & Analysis Report''.

DIVIDEND

The Board of Directors are pleased to recommend a dividend of 15% (Rs. 0.30 per share of Rs. 2/- each) for the financial year 2012-13. The distribution of dividend will result in payout of Rs. 11.80 Crores excluding tax on dividend.

EMPLOYEES STOCK OPTION SCHEME

As the members are aware, the Company had launched Employee Stock Option Schemes for the employees in June 2006 (ESOP 2006) and June 2010 (ESOP 2010) respectively, in line with Company''s philosophy of sharing benefits of growth with the growth drivers. The details of the options vested during the year under review are provided in Annexure-II to this report, as required under Clause 12 of the Securities and Exchange Board of India (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999. In July 2012, 26,68,800 options were granted under ESOS 2010; however, all the options lapsed for not meeting the vesting criteria.

SUBSIDIARY COMPANIES AND JOINT VENTURES

At the end of the year, the Company has nine Subsidiary Companies and two Joint Ventures, the details of which are given below:

a. Sterlite Grid Limited (SGL)

SGL is a wholly owned subsidiary of the Company incorporated to undertake power transmission (IPTC) projects. SGL is currently executing multi-Million dollar power transmission system projects, Pan-India via its wholly-owned subsidiary companies, awarded on a ''Build, Own, Operate and Maintain'' (BOOM) basis. In accordance with this, transmission lines would be commissioned and the Company would operate and maintain the same for a minimum tenure of 35 years through project SPVs acquired through competitive bidding process.

b. East-North Interconnection Company Limited (ENICL)

ENICL project involves establishment of two 400 kV Double Circuit transmission lines that would respectively connect the Indian states of Assam with West Bengal and Bihar.

This project has 18 identified beneficiaries (mainly SEBs in the states of Rajasthan, Punjab, Haryana, Uttaranchal and the city of Delhi), who would be directly benefitted by this project. Out of the two lines, one line will be operational in the first quarter of the FY 2013-14, while the second line will be operational in the third quarter of the FY 2013-14.

c. Bhopal Dhule Transmission Company Limited (BDTCL)

BDTCL project involves establishment of four 765 kV Single Circuit and two 400 kV Double Circuit transmission lines that would strengthen the transmission system in the Indian states of Madhya Pradesh, Maharashtra and Gujarat. The project is expected to be completed before the end of March 2014.

d. Jabalpur Transmission Company Limited (JTCL)

JTCL project involves establishment of a 765 kV Double Circuit and a 765 kV Single Circuit transmission line each, that would strengthen the transmission system in the Indian states of Chhattisgarh and Madhya Pradesh. The project is expected to be completed before March 2014.

The Company achieved financial closure during the year.

e. Jiangsu Sterlite Tongguang Fiber Co. Ltd. (JSTFCL)

The Company is a Joint Venture with Tongguang Group of China to set up an Optical Fiber Manufacturing Facility in China. During the year under review, JSTFCL commenced the production of optical fiber at their new facility located at Haimen, Jiangsu Province, China.

f. Sterlite Display Technologies Private Limited (SDTPL)

The Company is currently exploring various growth opportunities including liquid crystal displays (LCDs) glass manufacturing and other related products.

g. Sterlite Networks Limited (SNL)

SNL is providing shared last mile infrastructure for Broadband connectivity, dark fiber and duct space leasing, tower fiber connectivity, backhaul connectivity, wifi - hot spots, DAS / IBS etc. Under the FiON™ brand, SNL has created FTTX infrastructure in 6 major cities pan-India, connecting over 70,000 homes, serving 6500 subscribers from all major Telecom Service Providers like Airtel, Tata, Spectranet, etc.

SNL, in less than 2 years of its existence, has filed 14 domestic and 5 international applications for patents. Several other Intellectual Property applications are in pipeline.

h. Maharashtra Transmission Communication Infrastructure Limited (MTCIL)

MTCIL, incorporated in August 2012, is a Joint Venture (JV) between Maharashtra State Electricity Transmission Company Limited (MSETCL). MTCIL which is held 51% by your Company, was formed with the objective of establishing an OPGW-based communication network over MSETCL''s EHV transmission infrastructure in the state of Maharashtra.

i. Sterlite Global Ventures (Mauritius) Limited (SGVML)

SGVML holds downstream investment of the Company made in Jiangsu Sterlite Tongguang Fiber Co. Ltd.

j. Sterlite Technologies Americas, LLC (STA)

STA is a limited liability company set up in USA to carry the business operations in USA.

k. Sterlite Technologies Europe Ventures Limited - Cyprus (STEVL)

STEVL, incorporated in Cyprus is a wholly owned subsidiary of the Company, with an objective to carry on business operations in the European Union.

CORPORATE SOCIAL RESPONSIBILITY

The Company decided to have a dedicated set-up in the form of charitable trust, to carry-on the CSR activities and accordingly constituted a trust viz. ''Sterlite Tech Foundation''. The trust principally works in the fields of education for the under privileged, women-empowerment by giving vocational training for those below poverty-line. The Annual report contains a special write-up on the CSR activities of the Company.

ACCOUNTS

In terms of the directions under Section 212(8) of the Companies Act, 1956, issued by the Ministry of Corporate Affairs vide General Circular No. 2/2011 dated February 8, 2011 granting general exemption from applicability of Section 212 of the Companies Act, 1956 in relation to subsidiaries; copies of the Balance Sheet, Profit & Loss Account, Report of the Board of Directors and the Report of the Auditors of the Subsidiary Companies have not been attached with the Balance Sheet of the Company.

The Company undertakes that the annual accounts of the subsidiary companies and the related detailed information will be made available, upon request, to the members seeking such information at any point of time. The annual accounts of the subsidiary companies will also be kept for inspection by any member at registered office at Sterlite Technologies Limited, Survey No 68/1, Rakholi Village, Madhuban Dam Road, Silvassa-396230, Union Territory of Dadra and Nagar Haveli, India. The Company shall furnish a hard copy of details of accounts of subsidiaries to any shareholder on demand. The annual accounts of the subsidiary companies will also be available on the Website of the Company www. sterlitetechnologies.com.

The consolidated financial statements, in terms of Clause 32 of the Listing Agreement and in terms of Accounting Standard 21 as prescribed by Companies (Accounting Standards) Rules, 2006 issued by Ministry of Corporate Affairs, Disclosure on "related party transaction", duly audited by Statutory Auditors, also forms part of this Annual Report.

Further, physical (hard) copies of the statement containing the salient features of all the documents, as prescribed in sub-clause (iv) of clause (b) of proviso to Section 219 of the Companies Act, 1956, read with Clause 32 of the Listing Agreement, is being sent to all the shareholders of the Company who have not registered their e-mail address(es) for the purpose. Any shareholder interested in obtaining physical copies of full annual report may write to the "Company Secretary" at the Registered Office of the Company.

EXPLANATION ON AUDITOR''S COMMENT

The remark of Auditors at basis for Qualified Opinion paragraph of the Auditor''s Report over Note No. 43 (A) in Notes to Accounts regarding demand of excise duty and penalty amounting to Rs. 188 Crores is self-explanatory and does not require further comment.

In the year 2004-05 CESTAT upheld the demand of Rs. 188 Crores and interest thereon for alleged breach of norms pertaining to Export Oriented Unit (EOU). The Company had filed an appeal before the Hon''ble High Court of Bombay against this order.

The Department had also made an appeal against the same CESTAT order before the High Court of Bombay. The Company''s appeal against this order was dismissed by the Hon''ble High Court on the grounds that appeal is not maintainable in High Court, however without prejudice to the rights of the Company. Subsequently, the Company had filed a Special Leave Petition (SLP) and appeal before the Supreme Court of India which was admitted by the Court. Hon''ble Supreme Court has also maintained the stay granted by Hon''ble High Court.

The Hon''ble Supreme Court considering that the departmental appeal against the CESTAT order was still pending before the High Court, disposed of the Special Leave Petition of the Company and directed that the records of the departmental appeal be transferred to the Supreme Court and both the Appeals i.e. Departmental Appeal as well as Civil Appeal of the Company be heard together by the Supreme Court.

Based on merits of the case and the legal opinion obtained, the management believes that the Company has a strong case and it has been carrying adequate provisions for contingencies in the Books of Account in this matter and does not require any further provisioning.

FIXED DEPOSITS

During the year, the Company has not accepted any deposits from the public or otherwise in terms of Section 58A of the Companies Act, 1956 read with Companies (Acceptance of Deposit) Rules, 1975.

DIRECTORS

During the year, the Company expanded the Board by adding two new Directors viz. Mr. C. V. Krishnan as an Independent Director and Mr. Pratik Agarwal as non executive director, who pertains to Promoter group. By virtue of Section 255 of the Companies Act, 1956 and the Articles of Association of the Company, Mr. Anil Agarwal and Mr. Haigreve Khaitan retire by rotation at the ensuing Annual General Meeting. A brief resume, expertise, shareholding in your Company and details of other directorships of these directors are given in the Corporate Governance Report.

MANAGEMENT DISCUSSION AND ANALYSIS

The Report on Management Discussion and Analysis has been attached and forms part of the Annual report.

CORPORATE GOVERNANCE

The Report on Corporate Governance along with the Certificate from the Statutory Auditors certifying the compliance of Corporate Governance enumerated in Clause 49 of the Listing Agreement with the Stock Exchanges is included in the Annual Report.

DIRECTORS'' RESPONSIBILITY STATEMENT

Your Directors confirm that:

i) In the preparation of the annual accounts, the applicable accounting standards have been followed;

ii) They have selected such accounting policies and applied them consistently, and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2013 and of the profit of the Company for the financial year ended March 31, 2013;

iii) They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) They have prepared the accounts on a "going concern" basis.

AUDITORS

M/s. S.R. Batliboi & Co. LLP, Chartered Accountants hold office till the conclusion of the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment. The Company has received intimation to the effect that, proposed re- appointment, if made, would be within the prescribed limit under Section 224(1B) of the Companies Act, 1956.

The Company had appointed M/s. Ashwin Solanki & Associates, Cost Accountants to audit the cost accounts related to the Company''s products, Electric Cables & Conductors and compliance report for other products of the Company for FY 2011-12. The due date for filing the above cost audit reports was February 28, 2013 as extended by Ministry of Corporate Affairs vide its circular dated January 31, 2013; the actual date of filing was January 30, 2013. The Company has reappointed M/s. Ashwin Solanki & Associates, Cost Accountants for the FY 2012-13

PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars of conservation of energy, technology absorption and foreign exchange earnings and outgo as prescribed under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosures of Particulars in the Report of Directors) Rules 1988, is given as Annexure I and forms a part of the Directors'' Report.

PARTICULARS OF EMPLOYEES

The particulars of employees as required under the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 2011 forms part of the Directors'' Report. However, as per the provisions of Section 219 (1)(b)(iv) of the Companies Act, 1956, the report and the accounts are being sent to all shareholders of the Company excluding the aforesaid information. Any shareholder interested in obtaining such particulars may write to the Company Secretary at Registered Office of the Company.

ACKNOWLEDGEMENT

Your Directors take on record their sincere appreciation to the contributions made by the employees through their hard work, dedication, competence, support and co-operation towards the progress of your Company. Your Directors are also thankful for consistent co-operation and assistance received from its investors, business associates, customers, vendors, bankers, regulatory and government authorities.

For and on behalf of the Board of Directors

Pravin Agarwal Anand Agarwal

Whole-time Director CEO & Whole-time Director

Place: Mumbai

Date: April 26, 2013


Mar 31, 2012

The Directors are pleased to present the Annual Report for the financial year 2011-12 together with the audited accounts of the Company for the year ended March 31, 2012.

FINANCIAL RESULTS

(Rs. in Crores)

Particulars 2011-12 2010-11

Net Revenue 2,727 2,263

Profit / (Loss) before Interest, Depreciation & Tax 223 282

Less: Interest 95 47

Less: Depreciation 71 56

Net Profit/(Loss) before taxation 57 178

Provision for Taxation:

Current Tax 18 32

Earlier Year Tax / (Written Back) 5 -

Minimum Alternative Tax eligible for Set Of (18) (0.2)

Deferred Tax (Credit) 8 6

Net Profit /(Loss) for the year after tax 44 141

Net Profit /(Loss) for the year after tax (after prior period depreciation) 44 141

Balance carried forward from previous year 712 608

Amount available for appropriation 756 749

APPROPRIATIONS

Transfer to General Reserve 2 14

Proposed Dividend 12 20

Provision for Tax on Dividend 2 3.1

Balance carried forward to the next year 740 712

PERFORMANCE

Fiscal year 2011-12 closed with Revenues of Rs. 2,727 Crores, EBITDA of Rs. 223 Crores, PAT of Rs. 44 Crores and EBITDA margins of 8.2 %. The telecom business earned revenues of Rs. 804 Crores at an EBITDA margin of 17.3% and the power business earned revenues of Rs. 1,923 Crores at an EBITDA margin of 4.4%.

During the year, good Tier-1 clients were added for all businesses, across geographies. Revenue from international sales in FY 12 accounted for Rs. 803 Crores, which is 29% of net revenues in FY 12 and this has been achieved with a right mix of repeat orders from current clients and addition of new eminent global clients.

During the year, Sterlite increased the breadth of its portfolio by introducing new products and solutions etc. The Company has enhanced its intellectual property portfolio with the grant of 11more patents, taking the total up to 44.

The detailed analysis of Company's operations and segment- wise performance is covered under 'Management Discussion & Analysis Report'.

DIVIDEND

The Board of Directors are pleased to recommend a dividend of 15% (Rs. 0.30 per share of Rs. 2/- each) for the financial year 2011-12. The distribution of dividend will result in payout of Rs. 11.80 Crores excluding tax on dividend.

EMPLOYEES STOCK OPTION SCHEME

As the members are aware, the Company had launched Employee Stock Option Schemes for the employees in June 2006 (ESOP 2006) and June 2010 (ESOP 2010) respectively, in line with Company's philosophy of sharing Benefits of growth with the growth drivers. The details of the options vested during the year under review are provided in Annexure-II to this report, as required under Clause 12 of the Securities and Exchange Board of India (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999. During the year 22,24,000 options were granted on December 29, 2011 under ESOP 2010.

SUBSIDIARY COMPANIES

The Company has ten Subsidiary Companies, the details of which are given below:

a. Sterlite Display Technologies Private Limited (SDTPL)

The Company is currently exploring on new business opportunities including liquid crystal display (LCD) glass manufacturing and other related products.

b. Sterlite Infra-Tech Limited (SITL)

To achieve operational efficiencies, the management decided to merge SITL in the Company. The Hon'ble Court vide its order dated October 21, 2011 approved the Amalgamation wherein the appointed date was April 1, 2011 which is now in effect.

c. Sterlite Grid Limited (SGL)

During the year under review, the name and legal status of Sterlite Transmission Projects Private Limited was changed to Sterlite Grid Limited (SGL). SGL is a wholly owned subsidiary of the Company incorporated as Special Purpose Vehicle for transmission projects. SGL is currently executing two mega power transmission projects via its fully owned subsidiary companies Bhopal Dhule Transmission Company Limited (BDTCL) and Jabalpur Transmission Company Limited (JTCL). Sterlite Grid's current transmission portfolio consists of a network of about 2200 kilometers of transmission lines and 2 substations in the States of Maharashtra, Gujarat, Madhya Pradesh, Chhattisgarh, West Bengal, Bihar and Assam.

d. East-North Interconnection Company Limited (ENICL)

ENICL project involves establishment of two 400 kV Double Circuit transmission lines that would respectively connect the Indian states of Assam with West Bengal and Bihar. The project, under construction phase, is on schedule with expected commencement date before March 2013.

e. Bhopal Dhule Transmission Company Limited (BDTCL)

BDTCL project involves establishment of four 765 kV Single Circuit and two 400 kV Double Circuit transmission lines that would strengthen the transmission system in the Indian states of Madhya Pradesh, Maharashtra and Gujarat. The project has been awarded on a 'Build, Own, Operate and Maintain' (BOOM) basis, wherein the transmission lines would be commissioned and the Company would operate and maintain the same for a minimum tenure of 35 years. The project, under construction phase, is on schedule with expected commencement date before March 2014.

f. Jabalpur Transmission Company Limited (JTCL)

JTCL project involves establishment of a 765 kV Double Circuit and a 765 kV Single Circuit transmission line each, that would strengthen the transmission system in the Indian states of Chhattisgarh and Madhya Pradesh. The project has been awarded on a 'Build, Own, Operate and Maintain' (BOOM) basis, wherein the transmission lines would be commissioned and the Company would operate and maintain the same for a minimum tenure of 35 years. The project, under construction phase, is on schedule with expected commencement date before March 2014.

g. Jiangsu Sterlite Tongguang Fiber Co. Ltd. (JSTFCL)

The Company is a Joint Venture with Tongguang Group of China to set up an Optical Fiber Manufacturing Facility in China. During the year under review JSTFCL has started construction of the factory along with required ancillary facilities. The Project is moving as per Schedule and the commencement of commercial production is expected during second half of this financial year.

h. Sterlite Networks Limited (SNL)

SNL is a 100% wholly owned subsidiary of the Company that undertakes business operations in the telecom sector. It serves as an infrastructure provider, providing dark fibre, right of way, duct space, tower (IP Category 1), electronic mail and voice mail services. Major highlights during the year include 25,000 homes connected through networks, launch of the 'FION' brand, and partnership with BSNL for its FTTH rollout in Chennai.

i. Sterlite Global Ventures (Mauritius) Limited (SGVML)

SGVML holds downstream investments of the Company made in Jiangsu Sterlite Tongguang Fiber Co. Ltd.

j. Sterlite Technologies American, LLC (STA)

STA is a limited liability corporation set up in USA to carry and manage the business operations in the Americas geographies. The Company will be operational during the current year.

k. Sterlite Technologies Europe Ventures Limited - Cyprus (STEVL)

STEVL, incorporated in Cyprus is a 100% wholly owned subsidiary of the Company, with an objective to carry on business operations in the European Union.

In terms of the directions under Section 212(8) of the Companies Act, 1956, issued by the Ministry of Corporate Affairs vide General Circular No. 2/2011 dated February 8, 2011 granting general exemption from applicability of Section 212 of the Companies Act, 1956 in relation to subsidiaries; copies of the Balance Sheet, Profit & Loss Account, Report of the Board of Directors and the Report of the Auditors of the Subsidiary Companies have not been attached with the Balance Sheet of the Company. The Company undertakes that the annual accounts of the subsidiary companies and the related detailed information will be made available, upon request, to the members seeking such information at any point of time. The annual accounts of the subsidiary companies will also be kept for inspection by any member at registered office at Sterlite Technologies Limited, Survey No. 68/1, Rakholi Village, Madhuban Dam Road, Silvassa – 396230 Union Territory of Dadra & Nagar Haveli, India. The Company shall furnish a hard copy of details of accounts of subsidiaries to any shareholder on demand. The annual accounts of the subsidiary companies will also be available on the Website of the Company www.sterlitetechnologies.com

The consolidated financial statements, in terms of Clause 32 of the Listing Agreement and in terms of Accounting Standard 21 as prescribed by Companies (Accounting Standards) Rules, 2006 issued by Ministry of Corporate Affairs, Disclosure on "related party transaction", duly audited by Statutory Auditors, also forms part of this Annual Report.

EXPLANATION ON AUDITOR'S COMMENT

The remark of Auditors at Para 4 (vi) & (vii) of the Auditor's Report over Note No. 44 in Notes to Accounts regarding demand of excise duty and penalty amounting to Rs. 188 Crores is self-explanatory and does not require further comment.

In the year 2004-05, CESTAT upheld the demand of Rs. 188 Crores and interest thereon for alleged breach of norms pertaining to Export Oriented Unit (EOU). The Company had filled an appeal before the Hon'ble High Court of Bombay against this order. The Department had also made an appeal against the same CESTAT order before the High Court of Bombay. The Company's appeal against this order was dismissed by the Hon'ble High Court on the grounds that appeal is not maintainable in High Court, however without prejudice to the rights of the Company. Subsequently, the Company had filled a Special Leave Petition (SLP) and appeal before the Supreme Court of India which was admitted by the Court. Hon'ble Supreme Court has also maintained the stay granted by Hon'ble High Court.

The Hon'ble Supreme Court considering that the departmental appeal against the CESTAT order was still pending before the High Court, disposed of the Special Leave Petition of the Company and directed that the records of the departmental appeal be transferred to the Supreme Court and both the Appeals i.e. Departmental Appeal as well as Civil Appeal of the Company be heard together by the Supreme Court. Based on merits of the case and the legal opinion obtained, the management believes that the Company has a strong case and it has been carrying adequate provisions for contingencies in the Books of Account in this matter and does not require any further provisioning.

FIXED DEPOSITS

During the year, the Company has not accepted any deposits from the public or otherwise in terms of Section 58A of the Companies Act, 1956 read with Companies (Acceptance of Deposit) Rules, 1975.

DIRECTORS

By virtue of Section 255 of the Companies Act, 1956 and the Articles of Association of the Company, Mr. Arun Todarwal and Mr. A. R. Narayanaswamy retire by rotation at the ensuing Annual General Meeting. A brief resume, expertise, shareholding in your Company and details of other directorships of these directors are given in the Corporate Governance Report.

MANAGEMENT DISCUSSION AND ANALYSIS

The Report on Management Discussion and Analysis has been attached and forms part of the Annual report.

CORPORATE GOVERNANCE

The Report on Corporate Governance along with the Certificate from the Statutory Auditors certifying the compliance of Corporate Governance enumerated in Clause 49 of the Listing Agreement with the Stock Exchanges is included in the Annual Report.

DIRECTORS' RESPONSIBILITY STATEMENT

Your Directors confirm that:

i) In the preparation of the annual accounts, the applicable accounting standards have been followed;

ii) They have selected such accounting policies and applied them consistently, and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of Affairs of the Company as on March 31, 2012 and of the Profit of the Company for the financial year ended March 31, 2012;

iii) They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) They have prepared the accounts on a "going concern" basis.

AUDITORS

M/s. S.R. Batliboi & Co., Chartered Accountants hold office till the conclusion of the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment. The Company has received intimation to the effect that, proposed re-appointment, if made, would be within the prescribed limit under Section 224(1B) of the Companies Act, 1956.

COST AUDITORS

The Company had appointed M/s. Ashwin Solanki & Associates, Cost Accountants to audit the cost accounts related to the Company's products, Electric Cables & Conductors for 2010-11. The due date for fi- ling the above cost audit reports was September 30, 2011; the actual date of filing was September 9, 2011. The Company has reappointed M/s. Ashwin Solanki & Associates, Cost Accountants for the FY 2011-12.

PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars of conservation of energy, technology absorption and foreign exchange earnings and outgo as prescribed under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosures of Particulars in the Report of Directors) Rules 1988, is given as Annexure I and forms a part of the Directors' Report.

PARTICULARS OF EMPLOYEES

The particulars of employees as required under the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 2011 forms part of the Directors' Report. However, as per the provisions of Section 219 (1)(b)(iv) of the Companies Act, 1956, the report and the accounts are being sent to all shareholders of the Company excluding the aforesaid information. Any shareholder interested in obtaining such particulars may write to the Company Secretary at Registered Office of the Company.

ABRIDGED REPORT

Physical (Hard) Copy of the statement containing the salient features of all the documents, as prescribed in sub-clause (iv) of clause (b) of proviso to Section 219 of the Companies Act, 1956, read with Clause 32 of the Listing Agreement, is being sent to all shareholders of the Company who have not registered their email address(es) for the purpose. Any shareholder interested in obtaining physical copies of full annual report may write to the "Company Secretary" at the Registered Office of the Company.

ACKNOWLEDGEMENT

Your Directors take on record their sincere appreciation to the contributions made by the employees through their hard work, dedication, competence, support and co-operation towards the progress of your Company. Your Directors are also thankful for consistent co-operation and assistance received from its investors, business associates, customers, vendors, bankers, regulatory and government authorities.

For and on behalf of the Board of Directors

Pravin Agarwal Anand Agarwal

Whole-time Director CEO & Whole-time Director

Place: Pune

Date: April 26, 2012


Mar 31, 2011

To the Members,

The Directors are pleased to present the Annual Report together with the audited accounts of the Company for the year ended March 31, 2011.

FINANCIAL RESULTS

(Rs. in crores)

Particulars 2010-11 2009-10

Net Revenue 2,263 2,432

Profit / (Loss) before Interest, Depreciation & Tax 282 404

Less: Interest 47 38

Less: Depreciation 56 48

Net Profit/(Loss) before taxation 178 318

Provision for Taxation:

Current Tax 32 58

Earlier Year Tax / (Written Back) - 11

Minimum Alternative Tax eligible for Set Off (0.2) (2.0)

Deferred Tax (Credit) 6 4

Net Profit /(Loss) for the year after tax 141 246

Net Profit /(Loss) for the year after tax 141 246 (after prior period depreciation)

Balance carried forward from previous year 608 407

Amount available for appropriation 749 654

APPROPRIATIONS

Transfer to General Reserve 14 25

Proposed Dividend 20 18

Provision for Tax for Dividend 3.1 3.0

Balance carried forward to the next year 712 608

PERFORMANCE

Fiscal year 2010-11 closed with revenues of Rs. 2,263 crores, EBITDA of Rs. 282 crores, PAT of Rs. 141 crores and EBITDA margins of 12%. The telecom business revenues of Rs. 657 crores at an EBITDA margin of 26% and the power business revenues of Rs. 1,606 crores at an EBITDA margin of 7%.

The Company achieved the highest sales volumes historically for all its core businesses - power conductors, optical fibers and telecommunication cables.

During the year, good Tier-1 clients were added for all businesses, across geographies. Revenue from international sales in FY11 accounted for Rs. 700 crores, which is 31% of net revenues in FY10 and this has been achieved with a right mix of repeat orders from current clients and addition of new eminent global clients.

Sterlite has achieved its target capacity expansion of 160,000 MT for power conductors, through productivity enhancements at its facilities at Rakholi and Haridwar and with the set- up of a green-field facility at Jharsuguda, Orissa.

The Company's ongoing capital project for capacity enhancement of optical fiber to 20 million- km is well on track for completion and is expected to be fully operational during FY12.

As part of its efforts to enhance its global footprint, Sterlite formed a joint venture company Jiangsu Sterlite Tongguang Fiber Company Limited in China to manufacture, market and distribute optical fiber used in the production of fiber optic cables.

During the year, Sterlite increased the breadth of its portfolio by introducing new products and solutions like bend-free fiber, OPGW cables and FTTx solutions. The Company has enhanced its intellectual property portfolio with the grant of 7 more patents, taking the total up to 30.

A detailed analysis of the Company's operations and segment-wise performance is covered under 'Management Discussion and Analysis Report'.

DIVIDEND

The Board of Directors are pleased to recommend a dividend of 25% (Rs. 0.50 per share of Rs. 2/- each) for the financial year 2010-11. The distribution of dividend will result in payout of Rs. 19.65 crores excluding tax on dividend.

SHIFTING OF REGISTERED OFFICE FROM STATE OF MAHARASHTRA TO THE UNION TERRITORY OF DADRA AND NAGAR HAVELI

The shareholders of the Company had approved by postal ballot, shifting of the registered office of the Company from the State of Maharashtra to the Union Territory of Dadra and Nagar Haveli. The Company Law Board vide its order dated June 30, 2010 confirmed the same.

INFUSION OF FUNDS BY PROMOTERS

Since 2006, your promoters have been supporting the business by infusing funds in the form of contributing to equity. Pursuant to the shareholders approval, the Company had on October 8, 2009 made a preferential allotment of 73,00,000 warrants, convertible into equity shares to Twin Star Overseas Limited, a promoter entity, as per SEBI Guidelines.

On April 7, 2011, 18,250,000 equity shares were allotted (after considering share split from face value of Rs. 5 each to Rs. 2 each) to promoters and also equal number of equity shares were allotted as bonus shares (in the ratio of 1:1) pursuant to approval of shareholders. The total holding of Twin Star Overseas Limited, after conversion and bonus has increased from 17,29,02,750 equity shares (48.52%) to 20,94,02,750 equity shares (53.31%).

EMPLOYEES STOCK OPTION SCHEME

The Company had launched an Employee Stock Option Scheme for the employees (ESOP- 2006) in June 2006 in line with Company's philosophy of sharing benefits of growth with the growth drivers. The details of the options vested during the year under review are provided in Annexure-II to this report, as required under Clause 12 of the Securities and Exchange Board of India (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999. During the year, no fresh options were granted.

SUBSIDIARY COMPANIES

As at year-end, the Company has eight Subsidiary Companies, the details of which are given below:

(a) Sterlite Display Technologies Private Limited (formally, Sterlite Infrastructure Private Limited)

During the year, the Company increased its holding in Sterlite Display Technologies Private Limited (SDTPL) from 58.70% to 85.34%.

SDTPL initially had plans to enter into a business of a telecom service provider. The Company is currently working on various growth opportunities including liquid crystal displays (LCDs) glass manufacturing and other related products.

(b) Sterlite Infra-Tech Limited

As reported in the previous year's report, Sterlite Infra-Tech Limited (SITL) was floated for capacity expansion of optical fiber manufacturing under the SEZ scheme. The manufacturing facility at Shendra, Aurangabad is in the final stage of completion and is expected to begin commercial production in first quarter of financial year 2011-12.

(c) Sterlite Transmission Projects Private Limited

During the year, the Company floated wholly-owned subsidiary viz. Sterlite Transmission Projects Private Limited (STPPL) with the objective of consolidating all the bulk power transmission business under one entity.

STPPL has been aggressively participating in competitive bidding process under Independent Power Transmission model. STPPL was awarded two mega projects to establish the Transmission System associated with "System Strengthening Common for Western Region & Northern Region" and "System Strengthening for Western Region", by PFC Consulting Limited, a subsidiary of Power Finance Corporation of India Limited.

(d) East-North Interconnection Company Limited

As reported in the previous year, East-North Interconnection Company Limited (ENICL), a special purpose vehicle created for the East-North interconnection mega transmission project was acquired during FY10. The project involves establishment of two 400 kV Double Circuit transmission lines that would respectively connect the Indian states of Assam with West Bengal and Bihar.

The project has been awarded on a 'Build, Own, Operate and Maintain' (BOOM) basis, wherein the transmission lines would be commissioned within 3 years and the Company would operate and maintain the same for a minimum tenure of 25 years.

During the year, ENICL successfully achieved the financial closure of Rs. 700 crores Debt Syndication for the said project.

(e) Bhopal Dhule Transmission Company Limited

STPPL acquired the entire holding of Bhopal Dhule Transmission Company Limited (BDTCL) from PFC Consulting Limited, a subsidiary of Power Finance Corporation of India. BDTCL is a special purpose vehicle created for the Project to establish the Transmission System associated with 'System Strengthening for Western Region'. This project involves establishment of four 765 kV Single Circuit and two 400 kV Double Circuit transmission lines that would strengthen the transmission system in the Indian states of Madhya Pradesh, Maharashtra and Gujarat.

The project has been awarded on a 'Build, Own, Operate and Maintain' (BOOM) basis, wherein the transmission lines would be commissioned within 3 years and the Company would operate and maintain the same for a minimum tenure of 35 years thereafter.

(f) Jabalpur Transmission Company Limited

STPPL also acquired the entire holding of Jabalpur Transmission Company Limited (JTCL) from PFC Consulting Limited, a subsidiary of Power Finance Corporation of India. JTCL is a special purpose vehicle created for the Project to establish the Transmission System associated with 'System Strengthening Common for Western Region & Northern Region'. This project involves establishment of a 765 kV Double Circuit and a 765 kV Single Circuit transmission line each, that would strengthen the transmission system in the Indian states of Chhattisgarh and Madhya Pradesh.

The project has been awarded on a 'Build, Own, Operate and Maintain' (BOOM) basis, wherein the transmission lines would be commissioned within 3 years and the Company would operate and maintain the same for a minimum tenure of 35 years thereafter.

(g) Jiangsu Sterlite Tongguang Fiber Co. Limited

The Company has entered into Joint Venture with Tongguang Group of China to set up an optical fiber manufacturing facility in China. For this purpose a Joint Venture entity by the name Jiangsu Sterlite Tongguang Fiber Co. Limited (JSTFCL) was incorporated in January 2011. JSTFCL is expected to start commercial production during second half of the current Financial Year.

(h) Sterlite Global Ventures (Mauritius) Limited

The Company floated a special purpose vehicle named Sterlite Global Ventures (Mauritius) Limited (SGVML) to hold downstream investments in overseas subsidiaries of the Company, including Jiangsu Sterlite Tongguang Fiber Co. Limited.

In terms of the directions under Section 212(8) of the Companies Act, 1956, issued by the Ministry of Corporate Affairs vide General Circular No. 2/2011 dated February 8, 2011 granting general exemption from applicability of Section 212 of the Companies Act, 1956 in relation to subsidiaries; copies of the Balance Sheet, Profit & Loss Account, Report of the Board of Directors and the Report of the Auditors of the Subsidiary Companies have not been attached with the Balance Sheet of the Company.

The Company undertakes that the annual accounts of the subsidiary companies and the related detailed information will be made available, upon request, to the members seeking such information at any point of time. The annual accounts of the subsidiary companies will also be kept for inspection by any member at head office at Sterlite Technologies Limited, 4th Floor, Godrej Millennium, 9, Koregaon Road, Pune 411001, Maharashtra, India. The Company shall furnish a hard copy of details of accounts of subsidiaries to any shareholder on demand.

The consolidated financial statements, in terms of Clause 32 of the Listing Agreement and in terms of Accounting Standard 21 as prescribed by Companies (Accounting Standards) Rules, 2006 issued by Ministry of Corporate Affairs and duly audited by Statutory Auditors, also forms part of this Annual Report.

EXPLANATION ON AUDITOR'S COMMENT

The remark of Auditors at Para 4 (vi) & (vii) of the Auditor's Report over Note No. 8 in Schedule 21 on Notes to Accounts regarding demand of excise duty and penalty amounting to Rs. 188 crores is self-explanatory and does not require further comment.

In the year 2004-05 CESTAT upheld the demand of Rs. 188 crores and interest thereon for alleged breach of norms pertaining to Export Oriented Unit (EOU). The Company had filed an appeal before the Hon'ble High Court of Bombay against this order. The Department had also made an appeal against the same CESTAT order before the High Court of Bombay. The Company's appeal against this order was dismissed by the Hon'ble High Court on the grounds that appeal is not maintainable in High Court, however without prejudice to the rights of the Company. Subsequently, the Company had filed a Special Leave Petition (SLP) and appeal before the Supreme Court of India which was admitted by the Court. Hon'ble Supreme Court has also maintained the stay granted by Hon'ble High Court.

The SLP came up for final hearing in February 2011 when it was pointed out to the Court that the departmental appeal against the CESTAT order was still pending before the High Court. The Hon'ble Supreme Court while disposing of the Special Leave Petition of the Company directed that the records of the departmental appeal be transferred to the Supreme Court and both the Appeals i.e. Departmental Appeal as well as Civil Appeal of the Company be heard together by the Supreme Court.

Based on merits of the case and the legal opinion obtained, the management believes that the Company has a strong case and it has been carrying adequate provisions for contingencies in the Books of Account in this matter and does not require any further provisioning.

FIXED DEPOSITS

During the year, the Company has not accepted any deposits from the public or otherwise in terms of Section 58A of the Companies Act, 1956 read with Companies (Acceptance of Deposit) Rules, 1975.

DIRECTORS

By virtue of Section 255 of the Companies Act, 1956 and the Articles of Association of the Company, Mr. Anil Agarwal and Mr. Haigreve Khaitan retire by rotation at the ensuing Annual General Meeting. A brief resume, expertise, shareholding in your Company and details of other directorships of these directors are given in the Corporate Governance Report.

MANAGEMENT DISCUSSION AND ANALYSIS

The report on Management Discussion and Analysis has been attached and forms part of the Annual Report.

CORPORATE GOVERNANCE

The report on Corporate Governance along with the Certificate from the Statutory Auditors certifying the compliance of corporate governance enumerated in Clause 49 of the Listing Agreement with the Stock Exchanges is included in the Annual Report.

DIRECTORS' RESPONSIBILITY STATEMENT

Your Directors confirm that:

i) In the preparation of the annual accounts, the applicable accounting standards have been followed;

ii) They have selected such accounting policies and applied them consistently, and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2011 and of the profit of the Company for the financial year ended March 31, 2011;

iii) They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) They have prepared the accounts on a 'going concern' basis.

GROUP

The persons constituting group within definition of 'group' for the purpose of Regulation 3(1) (e)(i) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 include the following:

1. Volcan Investments Limited, Bahamas

2. Twin Star Overseas Limited, Mauritius

3. Mr. Dwarkaprasad Agarwal

4. Mr. Agnivesh Agarwal

STATUTORY AUDITORS

M/s S. R. Batliboi & Co., Chartered Accountants hold office till the conclusion of the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment. The Company has received intimation to the effect that, proposed re-appointment, if made, would be within the prescribed limit under Section 224(1B) of the Companies Act, 1956.

COST AUDITORS

The Company had appointed M/s Ashwin Solanki & Associates, Cost Accountants, to audit the cost accounts related to the Company's products, namely, Electric Cables & Conductors, for 2009-10. The due date for filing the above cost audit reports was September 30, 2010; the actual date of filing was September 7, 2010. The Company has reappointed M/s Ashwin Solanki & Associates, Cost Accountants, for the Financial Year 2010-11.

PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars of conservation of energy, technology absorption and foreign exchange earnings and outgo as prescribed under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosures of Particulars in the Report of Directors) Rules 1988, is given as Annexure I and forms a part of the Directors' Report.

PARTICULARS OF EMPLOYEES

The particulars of employees as required under the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 2011 forms part of the Directors' Report. However, as per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the report and the Accounts are being sent to all shareholders of the Company excluding the aforesaid information. Any shareholder interested in obtaining such particulars may write to the 'Company Secretary' at the Registered Office of the Company.

ACKNOWLEDGEMENT

Your Directors take on record their sincere appreciation to the contributions made by the employees through their hard work, dedication, competence, support and co-operation towards the progress of your Company. Last but not the least, your Directors are also thankful for consistent co-operation and assistance received from its investors, business associates, customers, vendors, bankers, regulatory and government authorities.

For and on behalf of the Board of Directors

Mumbai Anil Agarwal

April 29, 2011 Chairman


Mar 31, 2010

RESULTS OF OPERATIONS

(Rs. in Crores)

Particulars 2009-10 2008-09

Net Revenues 2,431.63 2,289.23

Proft / (Loss) before Interest, Depreciation & Tax 403.83 240.31

Less: Interest 38.12 88.00

Less: Depreciation 48.27 42.52

Net Proft/(Loss) before taxation 317.45 107.31

Provision for Taxation:

Current Tax 58.24 12.51

Earlier Year Tax / (Written Back) 10.93 0.83

Minimum Alternative Tax eligible for Set Of (2.00) (11.66)

Deferred Tax (Credit) 4.21 16.73

Fringe Beneft Tax - 0.88

Net Proft /(Loss) for the year after tax 246.07 88.02

Net Proft /(Loss) for the year after tax (after prior period depreciation) 246.07 90.15

Balance carried forward from previous year 407.39 335.70

Amount available for appropriation 653.46 425.85

AppRopRiATionS

Transfer to General Reserve 24.61 9.02

Proposed Dividend 17.78 8.07

Provision for Tax for Dividend 3.02 1.37

Balance carried forward to the next year 608.05 407.39

To the Members, Your Directors are pleased to present Sterlite TechnologiesAnnual Report, together with the audited accounts of your Company for the year ended March 31, 2010.

PERFORANCE

During the year, your Company registered net revenues of Rs. 2,432 Crores as against Rs. 2,289 Crores in the previous year. The revenue from the power business was Rs. 1,525 Crores in the current year vis-…-vis Rs. 1,473 Crores in the previous financial year. The revenue from the telecom business increased to Rs. 907 Crores in the current year, from Rs. 816 Crores in the previous fiscal.

The EBITDA of your Company showed a significant growth rate of 68% year on year, growing to Rs. 404 Crores from Rs. 240 Crores in the previous year. The profits of your Company after providing for interest, depreciation and tax increased to Rs. 246 Crores in the current year; a very impressive increase from Rs. 90 Crores in the previous fiscal.

The ongoing capital projects for expansion of the optical fiber manufacturing capacity to 12 million-fkm per annum is nearing completion and is expected to be fully commissioned during the fiscal year 2010-11. The capacity expansion for power conductors to 160,000 Metric Tons is also expected to be completed in early FY11.

Your Company continued to focus on global market penetration and increase in market share by enhancing the manufacturing capacities in the existing businesses. In line with this, during the year 2009-10, your Company announced a further capacity enhancement of optical fiber from 12 million-fkm per annum to 20 million-fkm per annum. This capacity expansion is anticipated to complete by the end of FY 2011-12, making your Company the third largest manufacturing capacity in the world.

As a part of aforesaid Optical Fiber expansion plans, your Company also floated a new wholly owned subsidiary named Sterlite Infra Tech Limited, with the objective of setting up a green field facility for optical fiber at Aurangabad in a Special Economic Zone (SEZ). Direct ors Speak Compiled by : Religare Technova Global Solutions Limited

INDEPENDENT POWER TRANSMISSION BUSINESS

The Ministry of Power, Government of India, has initiated a scheme for development of Independent Power Transmission projects through private sector participation, for evacuation of power from the generation stations, strengthening of the grid and transmission of power from pooling stations to the other grid stations and load centres. This offers a good opportunity for business and due to Companys understanding of the power sector, there is a unique synergy of this business and the Companys existing business line in power conductors.

The Company had participated in some of these business opportunities during the year and was successful in winning Indias first mega independent power transmission project.

The East-North Interconnection Mega Transmission Project, which aims to evacuate power from the North-East and Eastern states to the Northern region of India, is the first Mega Independent Power Transmission Project awarded in India. The project involves establishment of two 400KV double circuit transmission lines that would respectively connect the Indian states of Assam with West Bengal and Bihar. This project was awarded to Sterlite Technologies on a `Build, Own, Operate and Maintain (BOOM) basis.

Your Company will be exploring similar opportunities in independent power transmission projects, thereby leveraging the inherent expertise in project execution, to build a sustainable stream of revenue in the long-term and enhance shareholder value. The detailed analysis of Companys operations and segment-wise performance is covered under the `Management Discussion & Analysis Report.

SUB-DIVISION(SPLIT) OF EQUITY SHARES AND ISSU OF BONUS SHARES

During the year, the equity shares of your Company of the face value of Rs. 5/- each were sub-divided into face value of Rs. 2/- each and subsequently, bonus shares were alloted in the ratio of one equity share for one equity share held. This is in line with your Companys philosophy of creating value for its shareholders and sharing the benefits of growth on a sustained basis.

DIVIDED

Your Board of Directors is pleased to recommend a dividend of 25% (Rs. 0.50 per share of Rs. 2/- each) for the financial year 2009-10. The distribution of dividend will result in payout of Rs. 17.78 Crores excluding tax on dividend.

SHIFTING OF REGISTERED OFFICE FROM THE STATE MAHARASHTRA TO THE UNION TERRITORY OF DADRA AND NAGAR HAVELI

Subject to the approval of the Central Government (Company Law Board), the shareholders of your Company had approved through postal ballot, the shifting of the registered office from the State of Maharashtra to the Union Territory of Dadra and Nagar Haveli. Your Company is awaiting approval from Company Law Board, Mumbai for the same and expects to complete the process in the near future.

PREFERNTIAL ALLOMENT

As approved by the shareholders, your Company has made a preferential allotment of 64,50,000 share warrants and 73,00,000 share warrants to Twinstar Overseas Limited, a Promoter of the Company, on August 8, 2009 and October 8, 2009, respectively. Of this, 6,450,000 (16,125,000 after considering share split from face value of Rs. 5 each to Rs. 2 each) share warrants have been converted into an equal number of equity shares on March 29, 2010. Bonus shares in the ratio of 1:1 have also been alloted on these shares. The balance warrants outstanding as at March 31, 2010 aggregating 7,300,000 (18,250,000 after considering share split from face value of Rs. 5 each to Rs. 2 each) are convertible within a period of 18 months from the date of allotment, and are entitled to equal number of bonus shares.

EMPLOYESS STOCK OPTION SCHEME

As the members are aware, your Company had launched an Employee Stock Option Scheme in June 2006 (ESOP-2006). The details of the options granted, vested is provided in Annexure-II to this report, as required under Clause 12 of the Securities and Exchange Board of India (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999.

Your Company will continue to drive growth of the organisation whilst sharing of the fruits of growth with employees in the form of stock options. It is proposed to obtain fresh approval of shareholders for the new scheme of ESOP for which suitable resolutions are proposed for approval of shareholders in the notice of forthcoming Annual General Meeting.

SUBSIDIARY COMPANIES

Sterlite Infrastructure Private Limited (SIPL), a subsidiary of your Company has at present not commenced any commercial activity. The Company had applied for Pan-India access licenses to provide telecom service, allotment of which is awaited from Department of Telecommunication.

During the year, your Company floated a wholly owned subsidiary viz. Sterlite Infra-Tech Limited (SITL) for capacity expansion of Optical Fibers in Aurangabad under SEZ scheme. SITL is expected to begin commercial production in the third quarter of current financial year.

As a part of implementation of mega independent power transmission project to establish two 400KV Double Circuit transmission lines in Assam with West Bengal and Bihar, your Company has acquired 100% holding of `East-North Interconnection Company Limited (ENICL), from Power Finance Corporation Limited. ENICL is the Special Purpose Vehicle (SPV) floated by Power Finance Corporation for the purpose of execution of this project.

EXPLANATION ON AUDITORS COMMENT

The remark of Auditors at Para 5 (vi) & (vii) of the Auditors Report over Note No. 8 in Schedule 21 on Notes to Accounts regarding demand of excise duty and penalty amounting to Rs. 188 Crores is self-explanatory and does not require further comment.

In the year 2004-05 CESTAT upheld the demand of Rs. 188 Crores and interest thereon for alleged breach of norms pertaining to

Export Oriented Unit (EOU). Your Company had filed an appeal before the Honble High Court of Bombay against this order. Your Companys appeal against this order was dismissed by the Honble High Court Bombay during the year on the grounds that appeal is not maintainable in High Court, however without prejudice to the rights of the Company. Your Company subsequently filed a Special Leave Petition (SLP) and appeal with the Supreme Court of India which has been admitted by the Court. Honble Supreme Court has also maintained the stay granted by Honble High Court Bombay.

Based on merits of the case and the legal opinion obtained, the management believes that your Company has a strong case and it has been carrying adequate provisions for contingencies in the Books of Account in this matter and does not require any further provisioning.

FIXED DEPOSITS

During the year, your Company has not accepted any deposits from the public or otherwise in terms of Section 58A of the Companies Act, 1956 read with Companies (Acceptance of Deposit) Rules, 1975.

DIREVTORS

By virtue of Section 255 of the Companies Act, 1956 and the Articles of Association of the Company, Mr. A R Narayanaswamy and Mr. ArunTodarwal retire by rotation at the ensuing Annual General Meeting. A brief resume, expertise, shareholding in your Company and details of other directorships of these directors are given in the Corporate Governance Report.

MANAGEMENT DISCUSSION AND ANALYSIS

The report on Management Discussion and Analysis has been attached and forms part of the Annual Report. Corporate Governance The report on Corporate Governance along with the Certificate from the Statutory Auditors certifying the compliance of Corporate Governance enumerated in Clause 49 of the Listing Agreement with the Stock Exchanges is included in the Annual Report.

DIRECTORS RESPONSIBILITY STATEMENTS YOUR DIRECTORS CONFIRM THAT :

i) In the preparation of the annual accounts, the applicable accounting standards have been followed;

ii) They have selected such accounting policies and applied them consistently, and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at March 31, 2010 and of the profit of the Company for the financial year ended March 31, 2010;

iii) They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;

iv) They have prepared the accounts on a `going concernbasis.

GROUP

Your Company is controlled by the Agarwal Group; being a Group as defined under the Monopolies and Restrictive Trade Practices Act, 1969. The list of entities in the Group is as under:

i) Volcan Investments Limited, Bahamas

ii) Twin Star Overseas Limited, Mauritius

iii) Mr. Dwarkaprasad Agarwal

iv) Mr. Agnivesh Agarwal

AUDIOTRS

M/s. S. R. Batliboi & Co., Chartered Accountants hold office till the conclusion of the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment. Your Company has received intimation to the effect that, proposed re-appointment, if made, would be within the prescribed limit under Section 224(1B) of the Companies Act, 1956.

PARTICULARS OF CONSERVATION OF ENERGY,

technology absorption, foreign exchange earnings and outgo The particulars of conservation of energy, technology absorption, foreign exchange earnings and outgo as prescribed under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosures of Particulars in the Report of Directors) Rules 1988, is given as Annexure-I and forms a part of the Directors Report.

PARTICULARS OF EMPLOYEES

The particulars of employees as required under the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 is annexed hereto and forms a part of the Directors Report. However, as per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the report and the Accounts are being sent to all shareholders of your Company excluding the aforesaid information. Any shareholder interested in obtaining such particulars may write to the "Company Secretary" at the Registered Office of the Company.

ACKNOWLEDGEMENT

It has been an impressive year for your Company especially with the expectations of continuing with the sterling performance it had displayed last year and of holding on to its domestic market share while at the same time expanding its global footprint. The Board of Directors of take on record their sincere appreciation to the contributions made by the employees through their hard work, dedication, competence, support and co-operation towards the success of your Company. Last but not the least, your Directors are also thankful for consistent co-operation and assistance received from its investors, business associates, customers, vendors, bankers, regulatory and government authorities.

For and on behalf of the Board of Directors

Place : Mumbai Anil Agarwal

Date : April 22, 2010 Chairman

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