UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K

Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of the Securities Exchange Act of 1934

Sterlite Industries (India) Limited

Not Applicable
(Translation of Registrant’s name into English)

Republic of India
(Jurisdiction of incorporation or organization)

Vedanta, 75 Nehru Road
Vile Parle East
Mumbai, Maharashtra 400-099, India
+91-22-6646-1000
(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F þ     Form 40-F o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o

Indicate by check mark whether the Registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes o     No þ

If “Yes” is marked, indicate below the file number assigned to registrant in connection with Rule 12g3-2(b): Not applicable.

 

 

Conventions used in this report

Unless otherwise stated in this report or unless the context otherwise requires, references herein to “we,” “us,” “our,” “Sterlite,” the “Company” or “our consolidated group of companies” mean Sterlite Industries (India) Limited, and its consolidated subsidiaries and its predecessors, collectively, including Monte Cello BV, or Monte Cello, Copper Mines of Tasmania Pty Ltd, or CMT, Thalanga Copper Mines Pty Ltd, or TCM, Bharat Aluminium Company Limited, or BALCO, Sterlite Energy Limited, or Sterlite Energy, Sterlite Opportunities and Ventures Limited, or SOVL, Hindustan Zinc Limited, or HZL, and Talwandi Sabo Power Limited or TSPL. Our financial information does not include Vedanta Resources plc, or Vedanta, Vedanta Resources Holdings Limited, or VRHL, Konkola Copper Mines plc, or KCM, Twin Star Holdings Limited, or Twin Star, the Anil Agarwal Discretionary Trust, or the Agarwal Trust, Onclave PTC Limited, or Onclave, The Madras Aluminium Company Limited, or MALCO, India Foils Limited, or IFL, Sterlite Technologies Limited, or STL ,Monte Cello Corporation NV, or MCNV, Twin Star Infrastructure Limited, Sesa Goa Limited, Sesa Industries Limited and Vedanta Aluminium Limited, or Vedanta Aluminium, except that as to Vedanta Aluminium, our consolidated financial statements account for our 29.5% minority interest therein under the equity method of accounting, but Vedanta Aluminium is not otherwise included in our consolidated group of companies or our consolidated financial statements. References to the “Vedanta group” are to Vedanta and its subsidiaries.

In this report, references to The London Metal Exchange Limited, or LME, price of copper, zinc or aluminum are to the cash seller and settlement price on the LME for copper, zinc or aluminum for the period indicated.

In this report, all references herein to “US” or the “United States” are to the United States of America, its territories and its possessions. References to “UK” are to the United Kingdom. References to “India” are to the Republic of India. References to “$,” “US$,” “dollars” or “US dollars” are to the legal currency of the United States, references to “Rs.,” “Rupees” or “Indian Rupee” are to the legal currency of India and references to “AUD,” “Australian dollars” or “A$” are to the legal currency of the Commonwealth of Australia. References to “¢” are to US cents and references to “lb” are to the imperial pounds (mass) equivalent to 0.4536 kilograms. References to “tons” are to metric tons, a unit of mass equivalent to 1,000 kilograms or 2,204.6 lb. Unless otherwise indicated, the accompanying financial information for our company has been prepared in accordance with US generally accepted accounting principles, or US GAAP, for the fiscal years ended March 31, 2008 and for the nine-month period ended December 31, 2007 and 2008. References to a particular “fiscal” year are to our fiscal year ended March 31 of that year. Our fiscal quarters end on June 30, September 30 and December 31. References to a year other than a “fiscal” year are to the calendar year ended December 31.

Special note regarding forward-looking statements

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

	•		a decline or volatility in the prices of or demand for copper, zinc or aluminum;
	•		events that could cause a decrease in our production of copper, zinc or aluminum;
	•		unavailability or increased costs of raw materials for our products;
	•		our actual economically recoverable copper ore, lead-zinc ore or bauxite reserves being lower than we have estimated;
	•		our ability to expand our business, effectively manage our growth or implement our strategy, including our planned entry into the commercial power business;
	•		our ability to retain our senior management team and hire and retain sufficiently skilled labor to support our operations;

	•		regulatory, legislative and judicial developments and future regulatory actions and conditions in our operating areas;
	•		increasing competition in the copper, zinc or aluminum industry;
	•		political or economic instability in India or around the region;
	•		worldwide economic and business conditions;
	•		our ability to successfully consummate strategic acquisitions;
	•		the outcome of outstanding litigation in which we are involved;
	•		our ability to maintain good relations with our trade unions and avoid strikes and lock-outs;
	•		any actions of our controlling shareholder, Vedanta;
	•		our business’ future capital requirements and the availability of financing on favorable terms;
	•		the continuation of tax holidays, exemptions and deferred tax schemes we enjoy;
	•		changes in tariffs, royalties, customs duties and government assistance; and
	•		terrorist attacks and other acts of violence, natural disasters and other environmental conditions and outbreaks of infectious diseases and other public health concerns in India, Asia and elsewhere.

These and other factors are more fully discussed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this report and in our other filings with the US Securities and Exchange Commission, or the SEC, including “Item 3. Key Information — D. Risk Factors,” “Item 5. Operating and Financial Review and Prospects” and elsewhere in our annual report on Form 20-F (Registration No. 001-33175). In light of these and other uncertainties, you should not conclude that we will necessarily achieve any plans, objectives or projected financial results referred to in any of the forward-looking statements. Except as required by law, we do not undertake to release revisions of any of these forward-looking statements to reflect future events or circumstances.

Index to Unaudited Condensed Consolidated Financial Statements

		Page(s)
Unaudited Condensed Consolidated Statements of Operations for the nine-month periods ended December 31, 2007 and 2008			F-1
Unaudited Condensed Consolidated Balance Sheets as of March 31, 2008 and December 31, 2008			F-2
Unaudited Condensed Consolidated Statements of Cash Flows for the nine-month periods ended December 31, 2007 and 2008			F-3
Unaudited Condensed Consolidated Statements of Changes in Shareholders’ Equity for the nine-month periods ended December 31, 2007 and 2008			F-4
Notes to the Unaudited Condensed Consolidated Financial Statements			F-5

STERLITE INDUSTRIES (INDIA) LIMITED AND SUBSIDIARIES

For the nine-month period ended December 31,		2007				2008				2008
		(Rs. in millions)								(US dollars in millions)
Sales
— External			192,245				176,887				3,641.1
— Related parties			3,055				5,711				117.6
Less : Excise duty			(16,032	)			(13,536	)			(278.6	)
Net sales			179,268				169,062				3,480.1
Other operating revenues			1,761				2,511				51.7
Total revenue			181,029				171,573				3,531.8
Cost of sales			(119,717	)			(128,674	)			(2,648.7	)
Selling and distribution expenses			(2,650	)			(2,885	)			(59.4	)
General and administration expenses			(3,423	)			(3,177	)			(65.4	)
Losses, write offs and provision for investments and loans			—				(145	)			(3.0	)
Operating income			55,239				36,692				755.3
Interest and dividend income			4,473				12,691				261.2
Interest expense			(2,481	)			(3,595	)			(74.0	)
Net realized and unrealized investment gain			3,502				2,232				45.9
Income before income taxes, minority interests and equity in net income / (loss) of associate			60,733				48,020				988.4
Income taxes
— Current			(14,131	)			(7,502	)			(154.4	)
— Deferred			(1,873	)			(344	)			(7.1	)
Income after income taxes, before minority interests and equity in net income / (loss) of associate			44,729				40,174				826.9
Minority interests			(13,925	)			(10,376	)			(213.6	)
Equity in net income / (loss) of associate, net of taxes			888				(3,271	)			(67.3	)
Net income			31,692				26,527				546.0
Earnings per share (Note 13)			47.67				37.44				0.77
Weighted average number of equity shares used in computing earnings per share			664,858,077				708,494,411				708,494,411

     The accompanying notes are an integral part of these interim unaudited condensed consolidated financial statements.

STERLITE INDUSTRIES (INDIA) LIMITED AND SUBSIDIARIES

		March 31,				December 31,				December 31,
As of		2008				2008				2008
		(Rs. in millions)				(Rs. in millions)				(US dollars in millions)
										(Note 2)
ASSETS
Current assets
Cash and cash equivalents			12,363				32,034				659.4
Restricted — cash, deposits and investments			1,659				1,786				36.8
Short-term investments and deposits			154,364				156,700				3,225.6
Accounts receivable, net			15,652				11,284				232.3
Inventories			33,358				28,037				577.1
Deferred income taxes			421				276				5.7
Other current assets, net			14,138				30,932				636.7
Total current assets			231,955				261,049				5,373.6
Non-current assets
Long-term investments			1,123				1,039				21.4
Investment in associate			19,524				15,113				311.1
Deferred income taxes			374				217				4.4
Property, plant and equipment, net			121,582				144,749				2,979.6
Other non-current assets, net			1,621				1,539				31.7
Total non-current assets			144,224				162,657				3,348.2
Total assets			376,179				423,706				8,721.8
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Short-term and current portion of long-term debt			10,190				17,626				362.8
Accounts payable			44,811				48,626				1,000.9
Accrued expenses			1,921				2,228				45.9
Current income taxes payable			1,067				1,570				32.3
Deferred income taxes			765				214				4.4
Other current liabilities			7,305				9,653				198.7
Total current liabilities			66,059				79,917				1,645.0
Non-current liabilities
Long-term debt, net of current portion			9,949				14,037				289.0
Deferred income taxes			16,369				16,489				339.4
Other non-current liabilities			4,581				3,270				67.3
Total non-current liabilities			30,899				33,796				695.7
Total liabilities			96,958				113,713				2,340.7
Commitments and contingencies (Note 11)
Minority interests			58,098				67,803				1,395.7
Shareholders’ equity
Equity Shares — par value Rs.2 per equity share (925,000,000 shares authorized as of March 31, 2008 and December 31, 2008; 708,494,411 equity shares issued and outstanding as of March 31, 2008 and December 31, 2008) (Note 10)			1,417				1,417				29.2
Additional paid-in capital			106,426				106,426				2,190.7
Retained earnings			113,598				136,810				2,816.2
Accumulated other comprehensive (losses) / income			(318	)			(2,463	)			(50.7	)
Total shareholders’ equity			221,123				242,190				4,985.4
Total liabilities and shareholders’ equity			376,179				423,706				8,721.8

     The accompanying notes are an integral part of these interim unaudited condensed consolidated financial statements.

STERLITE INDUSTRIES (INDIA) LIMITED AND SUBSIDIARIES

For the nine-month period ended December 31,		2007				2008				2008
		(Rs. in millions)				(Rs. in millions)				(US dollars in
										millions)
										(Note 2)
Cash flows from operating activities
Net income			31,692				26,527				546.0
Adjustments to reconcile net income to net cash (used in) / provided by operating activities
Depreciation, depletion and amortization			5,138				5,714				117.6
Net realized and unrealized investment gains			(3,502	)			(2,232	)			(45.9	)
Gain on sale of property, plant and equipment, net			—				(11	)			(0.2	)
Equity in net (income) / loss of associate			(888	)			3,271				67.3
Impairment of investments & guarantees			—				145				3.0
Deferred income taxes			1,873				344				7.1
Minority interests			13,925				10,376				213.6
Other non cash expense			12				—				—
Changes in assets and liabilities:
Accounts receivable, net			1,065				4,372				90.0
Other current and non-current assets, net			(1,347	)			(8,066	)			(166.0	)
Inventories			(6,401	)			5,319				109.4
Accounts payable and accrued expenses			(54	)			7,664				157.8
Other current and non-current liabilities			1,889				(5,512	)			(113.5	)
Short-term investments			(97,071	)			(1,176	)			(24.2	)
Net cash (used in) / provided by operating activities			(53,669	)			46,735				962.0
Cash flows from investing activities
Purchases of property, plant and equipment			(15,014	)			(25,895	)			(533.0	)
Proceeds from sale of property, plant and equipment			21				62				1.3
Net changes in restricted — deposits and investments			(200	)			(120	)			(2.5	)
Advance to related party			(12,330	)			(6,041	)			(124.4	)
Short-term deposits			—				1,054				21.7
Net cash (used in) investing activities			(27,523	)			(30,940	)			(636.9	)
Cash flows from financing activities
Proceeds from issuance of equity shares, net			80,516				—				—
Net changes in restricted cash			85				(7	)			(0.1	)
Proceeds from/(repayment of) short-term debt, net			6,819				2,240				46.1
Proceeds from long-term debt			—				9,552				196.6
Repayment of long-term debt			(6,304	)			(3,361	)			(69.2	)
Payment of dividends,(including dividend tax)			(935	)			(3,812	)			(78.5	)
Net cash provided by financing activities			80,181				4,612				94.9
Effect of exchange rate changes on cash and cash equivalents			18				(736	)			(15.1	)
Net increase / (decrease) in cash and cash equivalents			(993	)			19,671				404.9
Cash and cash equivalents at the beginning of the period			9,436				12,363				254.5
Cash and cash equivalents at the end of the period			8,443				32,034				659.4
Supplementary information:
Interest paid			2,017				2,249				46.3
Income taxes paid			13,715				6,887				141.8

     The accompanying notes are an integral part of these interim unaudited condensed consolidated financial statements.

STERLITE INDUSTRIES (INDIA) LIMITED AND SUBSIDIARIES

																		Accumulated
																		other
		Equity shares								Additional								comprehensive								Total
		No. of								paid-in-				Retained				income				Comprehensive				Shareholders’
		shares				Par value				capital				earnings				/(loss)				income/(loss)				Equity
Balance at April 1, 2007			558,494,411				1,117				26,220				70,463				(840	)			—				96,960
Adoption of FIN 48															535												535
Share Issued (Note 10)			150,000,000				300				80,216																80,516
Net income															31,692								31,692				31,692
Unrealized gain on available-for-sale securities, net of tax of Rs. 44 million.																			85				85				85
Foreign currency translation adjustment																			31				31				31
Unrealized loss on cash flow hedges, net of tax of Rs. 126 million.																			(372	)			(372	)			(372	)
Comprehensive income																							31,436
Balance at December 31, 2007			708,494,411				1,417				106,436				102,690				(1,096	)							209,447

																		Accumulated
																		other												Total
		Equity shares								Additional								comprehensive								Total				(US dollars in
		No. of								paid-in-				Retained				income				Comprehensive				Shareholders’				millions)
		shares				Par value				capital				earnings				/(loss)				income/(loss)				Equity				(Note 2)
Balance at April 1, 2008			708,494,411				1,417				106,426				113,598				(318	)			—				221,123				4,551.7
Net income															26,527								26,527				26,527				546.0
Dividend (including dividend tax)															(3,315	)											(3,315	)			(68.2	)
Unrealized loss on available-for-sale securities, net of tax of Rs. 28 million ($0.6 million)																			(54	)			(54	)			(54	)			(1.1	)
Foreign currency translation adjustment																			(738	)			(738	)			(738	)			(15.2	)
Unrealized loss on cash flow hedges, net of tax Rs. 964 million ($19.8 million)																			(1,353	)			(1,353	)			(1,353	)			(27.8	)
Comprehensive income																							24,382
Balance at December 31, 2008			708,494,411				1,417				106,426				136,810				(2,463	)							242,190				4,985.4
Balance at December 31, 2008 (in US dollars in millions) (Note 2)							29.2				2,190.7				2,816.2				(50.7	)							4,985.4

     The accompanying notes are an integral part of these interim unaudited condensed consolidated financial statements

STERLITE INDUSTRIES (INDIA) LIMITED AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Background and Operations

     Sterlite Industries (India) Limited and its consolidated subsidiaries (the “Company” or “Sterlite”) are engaged in the businesses of mining, smelting and refining non-ferrous metals in India and Australia. Sterlite Industries (India) Limited (“SIIL”) was incorporated on September 8, 1975 under the laws of the Republic of India. Its shares are listed in India on the National Stock Exchange of India Limited and the Bombay Stock Exchange Limited. SIIL’s American Depositary Shares (“ADSs”), each representing one equity share, are listed on the New York Stock Exchange.

     SIIL is a majority-owned subsidiary of Twin Star Holdings Limited (“Twin Star”), which is in turn a wholly-owned subsidiary of Vedanta Resources plc (“Vedanta”), a public limited company incorporated in the United Kingdom and listed on the London Stock Exchange. Twin Star held 57.0% of SIIL’s equity as on December 31, 2008.

     The Company’s copper business is principally one of custom smelting and includes a smelter, refinery, phosphoric acid plant, sulphuric acid plant and copper rod plant at Tuticorin in Southern India, and a refinery and two copper rod plants at Silvassa in Western India. In addition, the Company owns and operates the Mt. Lyell copper mine in Tasmania, Australia through its subsidiary Copper Mines of Tasmania Pty Ltd (“CMT”), which provides a small percentage of the copper concentrate requirements for its smelter.

     The Company’s zinc business is owned and operated by Hindustan Zinc Limited (“HZL”). The Company has a 64.9% ownership interest in HZL, with the remaining interests owned by the Government of India (29.5%) and institutional and public shareholders (5.6%). HZL’s operations include three lead-zinc mines in Northwest India, three zinc smelters, one lead-zinc smelter and one lead smelter in Northwest India, one zinc smelter in Southeast India and one zinc melting plant in North India.

     The Company’s aluminum business is owned and operated by Bharat Aluminium Company Limited (“BALCO”), in which the Company has a 51.0% ownership interest and the remaining interest is owned by the Government of India. BALCO’s operations include bauxite mines, captive power plants and refining, smelting and fabrication facilities in Central India.

     The Company owns a 29.5% minority interest in Vedanta Aluminium Limited (formerly Vedanta Alumina Limited) (“Vedanta Aluminium”), a 70.5%-owned subsidiary of Vedanta. Vedanta Aluminium commenced construction of an aluminum refinery in the State of Orissa in Eastern India during fiscal 2004. On August 8, 2008, the Supreme Court of India cleared Vedanta Aluminium’s bauxite mining project in the Niyamgiri Hills. This project had been the subject of litigation. Vedanta Aluminium began the progressive commissioning of the greenfield alumina refinery in March 2007 and the first stream became fully operational during the fiscal quarter ended September 30, 2008.

     The Company acquired a 100% ownership interest in Sterlite Energy Limited (“SEL”) during fiscal 2007. SEL is engaged in power generation business in India. SEL has commenced construction of the first phase of a pit-head thermal coal-based power facility in the state of Orissa in Eastern India.

     In July 2008, following a competitive bidding process in which SEL was selected as the successful bidder, SEL entered into an agreement to acquire a 100% ownership interest in Talwandi Sabo Power Limited (“TSPL”), a company created by the Punjab State Electricity Board of India for the purpose of undertaking a 1,980 MW thermal power project in the State of Punjab, India. On September 1, 2008, the Company completed the acquisition of TSPL through SEL for a purchase price of Rs. 3,868.4 million.

2. Significant Accounting Policies

Basis of preparation

     The unaudited condensed consolidated financial statements of the Company are prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) which include industry practices. The unaudited condensed consolidated financial statements are presented in Indian Rupee (“Rs.”). Certain financial information that is normally included in

annual financial statements, including certain financial statement notes, prepared in accordance with US GAAP, is not required for interim reporting purposes and has been condensed or omitted.

     The financial information with respect to the nine-month periods ended December 31, 2007 and 2008 is unaudited and as of and for the year ended March 31, 2008 is derived from the audited financial statements of the Company. The unaudited condensed consolidated financial statements have been prepared on the same basis as the audited financial statements. In the opinion of management, such unaudited financial information contains all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of the results of such periods. The results of operations for the nine-month period ended December 31, 2008 are not necessarily indicative of results to be expected for the full year.

Basis of consolidation

     The consolidated financial statements include the results of SIIL and all its wholly-owned subsidiaries and other subsidiaries in which a controlling interest is maintained. There are no Variable Interest Entities to be consolidated in accordance with Financial Accounting Standards Board (“FASB”) Interpretation No. 46(R), “Consolidation of Variable Interest Entities (revised December 2003) — an interpretation of ARB No. 51” (FIN 46(R)).

     All significant inter-company balances and transactions, including unrealized profits arising from transactions between the subsidiaries, have been eliminated upon consolidation.

     Non-Indian subsidiaries have a functional currency (i.e., the currency in which activities are primarily conducted) of the country in which a subsidiary is domiciled. Foreign subsidiaries’ assets and liabilities are translated to Indian Rupee at year-end exchange rates, while revenues and expenses are translated at average exchange rates during the year. Adjustments that result from translating amounts in a subsidiary’s functional currency are reported in shareholders’ equity as a component of accumulated other comprehensive income. Minority interests in subsidiaries represent the minority shareholders’ proportionate share.

Convenience translation

     The accompanying unaudited condensed consolidated financial statements are presented in Indian Rupee, the functional currency of the Company. Solely for the convenience of the readers, the unaudited condensed consolidated financial statements as of and for the nine months ended December 31, 2008 have been translated into US dollars (“$”) at the noon buying rates of $1.00 = Rs. 48.58 in the City of New York for cable transfers of Indian Rupee as certified for customs purposes by the Federal Reserve Bank of New York on December 31, 2008. No representation is made that the Indian Rupee amounts represent US dollar amounts or have been, could have been or could be converted into US dollars at such a rate or any other rate.

Income taxes

     The Company adopted FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes — an interpretation of FASB Statement No. 109” (“FIN 48”), on April 1, 2007. FIN 48 provides specific guidance on the financial statement recognition, measurement, reporting and disclosure of uncertain tax positions taken or expected to be taken in a tax return. FIN 48 addresses the manner in which tax positions, either permanent or temporary, should be reflected in the financial statements.

     In accordance with the adoption of FIN 48, we evaluate our tax positions to determine if it is more likely than not that a tax position is sustainable, based on its technical merits. If a tax position does not meet the more likely than not standard, a liability is established. Additionally, for a position that is determined to, more likely than not, be sustainable, we measure the benefit at the highest cumulative probability of being realized and establish a liability for the remaining portion. A material change in our tax liabilities could have an impact on our results. The Company recognizes potential interest and penalties related to unrecognized tax benefits in income tax expense.

Recently issued accounting pronouncements

     Statement of Financial Accounting Standards (“SFAS”) No. 157, “Fair Value Measurements”

     In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (“SFAS 157”). This Statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. This Statement is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The adoption of the standard did not have a material effect on the consolidated financial position or results of operation of the Company.

     In February 2008, the FASB issued FASB Staff Position No. FAS 157-2, “Effective Date of FASB Statement No. 157” (“FSP 157-2”). FSP 157-2 delays the effective date of SFAS 157 for non-financial assets and non-financial liabilities, except for certain items that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). The Company is currently evaluating the impact of SFAS 157 on its consolidated financial position and results of operation for items within the scope of FSP 157-2, which will become effective beginning with the Company’s first quarter of 2009.

     SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities — including an amendment of FASB Statement No. 115”.

     In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities — Including an amendment of FASB Statement No. 115”(“SFAS 159”) SFAS 159 permits entities to choose to measure many financial instruments and certain other items at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. This Statement is expected to expand the use of fair value measurement, which is consistent with the Board’s long-term measurement objectives for accounting for financial instruments. The fair value option established by this Statement permits all entities to choose to measure eligible items at fair value at specified election dates. This standard is effective for fiscal years beginning after November 15, 2007. The Company has elected not to value any of its financials assets and liabilities other than those required by standard prior to SFAS 159.

     SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements — an amendment of ARB No. 51”

     In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements an amendment of ARB No. 51” (“SFAS 160”). SFAS 160 improves the relevance, comparability and transparency of the financial information that a reporting entity provides in its consolidated financial statements by establishing accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. This standard is effective for fiscal years beginning on or after December 15, 2008. The Company’s management is currently evaluating the impact on the adoption of SFAS 160 will have on the Company’s financial reporting and disclosures.

     SFAS No. 141(R), “Business Combination”

     In December 2007, the FASB issued SFAS No. 141 (Revised), “Business Combination” (“ SFAS 141(R)”). SFAS 141(R) improves the relevance, representational faithfulness and comparability of the information that a reporting entity provides in its financial reports about a business combination and its effects. This standard is effective for fiscal years beginning on or after December 15, 2008. The Company’s management is currently evaluating the impact, if any, the adoption of SFAS 141(R) will have on the Company’s financial reporting and disclosures.

     SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities — an amendment of FASB Statement No. 133”

     In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities — an amendment of FASB Statement No. 133” (“SFAS 161”), which modifies and expands the disclosure requirements for derivative instruments and hedging activities. SFAS 161 requires that objectives for using derivative instruments be disclosed in terms of underlying risk and accounting designation and requires quantitative disclosures about fair value amounts and gains and losses on derivative instruments. It also requires disclosures about credit-related contingent features in derivative agreements. SFAS 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. SFAS 161 encourages, but does not require, comparative disclosures for earlier periods at initial adoption. The Company’s management is currently evaluating the impact, if any, the adoption of SFAS 161 will have on the Company’s financial reporting and disclosures.

3. Interest and dividend income

     Interest and dividend income include foreign currency gain/ (loss) on foreign currency investments.

4. Inventories

     Inventories consist of the following as of the date indicated:

										December 31,
		March 31,				December 31,				2008
		2008				2008				(US dollars in
		(Rs. in millions)				(Rs. in millions)				millions)
Finished goods			1,233				2,611				53.7
Work-in-progress			11,580				6,776				139.5
Raw materials			16,554				14,026				288.7
Stores and spares			3,991				4,624				95.2
Inventories			33,358				28,037				577.1

5. Accounts receivable, net

     Accounts receivable, net consists of the following as of the date indicated:

										December 31,
		March 31,				December 31,				2008
		2008				2008				(US dollars in
		(Rs. in millions)				(Rs. in millions)				millions)
Accounts receivable			13,352				9,748				200.7
Related party receivable			2,312				1,556				32.0
Total receivables			15,664				11,304				232.7
Allowances for doubtful accounts			(12	)			(20	)			(0.4	)
Accounts receivable, net			15,652				11,284				232.3

6. Other current and non-current assets, net

     Other current and non-current assets consist of the following as of the date indicated:

										December 31,
		March 31,				December 31,				2008
		2008				2008				(US dollars in
		(Rs. in millions)				(Rs. in millions)				millions)
Other current and non-current assets			12,029				22,695				467.2
Advances to related party			3,890				9,936				204.5
Total other current and non-current assets			15,919				32,631				671.7
Allowances for doubtful advances			(160	)			(160	)			(3.3	)
Other current and non-current assets,net			15,759				32,471				668.4

7. Short-term and long-term debt

     Short-term debt represents borrowings with an original maturity of less than one year. Long-term debt represents borrowings with an original maturity of greater than one year. Maturity distribution is based on contractual maturities or earlier dates at which debt is callable at the option of the holder or the Company. Interest rates on floating-rate debt are generally linked to benchmark rates.

     Working capital loans

     The Company has credit facilities from various banks for meeting working capital requirements, generally in the form of credit lines for establishing letters of credit, packing credit in foreign currency (“PCFC”), cash credit and issuing bank guarantees. Amounts due under working capital loans as of March 31, 2008 and December 31, 2008 were Rs. 6,119 million and Rs. 4,823 million ($99.3 million), respectively. The facility consisted of Rs. 4,374 million ($90.0 million) working capital loan outstanding as of December 31, 2008, which is a US dollar denominated PCFC loan, and a Rs. 449 million ($9.2 million) cash credit facility. Interest on the PCFC

facility is based on the London Inter-Bank Offer Rate (“LIBOR”) plus 121 basis points. These working capital loans are secured against the inventories and trade accounts receivables.

     Foreign currency loans

     The Company had a US dollar denominated unsecured term loan facility of $92.6 million, the purpose of which was to refinance foreign currency loans with various banks. This facility consisted of a Tranche A of $67.6 million which was repaid in June 2007 and a Tranche B of $25.0 million which was repaid by September 2008. As allowed by the loan agreement, in April, 2006 the Company converted these loans into Japanese yen loans amounting to Tranche A of Japanese yen 8,012.6 million and Tranche B of Japanese yen 2,862.5 million. Amounts due under this facility as of March 31, 2008 and December 31, 2008 were Rs. 1,147 million and nil, respectively.

     In September 2005, the Company entered into an unsecured term loan facility consisting of Japanese yen 3,570 million and $19.7 million, the purpose of which was to refinance foreign currency borrowings made in August 2002. The entire loan has been repaid on or prior to December 31, 2008. The balances under this facility as of March 31, 2008 and December 31, 2008 were Rs. 443 million and nil, respectively.

     In November 2008, the Company entered into an US dollar denominated unsecured loan facility of $25 million, from DBS Bank Ltd (“DBS”), arranged by DBS, Mumbai Branch, out of which $16.0 million was drawn down at the coupon interest rate of LIBOR plus 345 basis point per annum. The loan is repayable in three equal yearly installments beginning in November 2013. As of December 31, 2008, the balance under this facility was Rs. 775 million ($16.0 million).

     Term loans

     As of December 31, 2008, the Company had six term loans which consist of two term loans from the ABN AMRO BANK N.V. (“ABN AMRO”), two from the Industrial Development Bank of India (“IDBI”) and two from the Industrial Credit & Investment Corporation of India (“ICICI”).

     The two term loans from ABN AMRO are pursuant to an Indian Rupee fixed rate term loan facility totaling Rs. 17,000 million, of which Rs. 15,904 million had been drawn down at an average interest rate of 7.3% per annum. The interest rate has been reset to 8.1%. These loans are secured by a first charge on the movable and immovable properties, present and future tangible or intangible assets and other than current assets of BALCO. The first loan, under which Rs. 10,000 million is outstanding, is repayable in 12 quarterly installments beginning January 2007, of which Rs. 7,949 million was paid by December 31, 2008. The second loan of Rs. 5,904 million is repayable in eight quarterly installments due to commence in May 2009. However, Rs. 2,127 million of the second loan has been prepaid. As of March 31, 2008 and December 31, 2008, the balances due under these loans were Rs. 7,599 million and Rs. 5,828 million ($120.0 million), respectively.

     Pursuant to the approval of the Board of Industrial and Financial Reconstruction (“BIFR”) for the rehabilitation scheme of India Foils Limited (“IFL”), the Company took over two loans aggregating to Rs. 1,022.5 million granted by ICICI Bank Limited (“ICICI Bank”) on the same terms and conditions by way of a novation agreement entered into among the Company, IFL and ICICI Bank in November 2008. The first loan, under which Rs. 772.5 million is outstanding at an interest rate of 10% per annum, is repayable in 12 quarterly installments beginning November 2008, of which Rs. 61.9 million was paid by December 31, 2008. The second loan of Rs. 250 million has an interest rate of 10% per annum and is repayable in 16 quarterly installments beginning November 2008, of which Rs. 15.6 million was paid by December 31, 2008. As of December 31, 2008, the total balance due under these loans was Rs. 945 million ($19.5 million). These are unsecured debts.

     The two loans from IDBI are pursuant to an Indian Rupee fixed rate term loan facility totaling Rs. 2,500 million. The first loan of Rs. 1,500 million was taken in September, 2008, has an interest rate of 12% per annum and is repayable in March 2009. The second loan of Rs. 1,000 million was taken in December, 2008, has interest rate of 12.75% per annum and is repayable in June 2009.

     Buyers’ credit

     As of December 31, 2008, the Company utilized extended credit terms relating to purchases of property, plant and equipment for its projects. As of March 31, 2008 and December 31, 2008, the balances were Rs. 3,047 million and Rs 6,176 million ($127.1 million), respectively. These loans bear interest at LIBOR plus 120 basis points. These are unsecured debts.

     Non-convertible debentures

     As of December 31, 2008, the Company had four debentures issues which consist of three issues to the Life Insurance Corporation of India (“LIC”) and one issue to the

Reliance Capital Trustee Co. Limited (“RCTCL”).

     In April 2003, the Company issued Rs. 1,000 million ($20.6 million) Indian Rupee denominated non-convertible debentures to LIC. The debentures were established in two tranches. Tranche A, which is in the amount of Rs. 400 million ($8.2 million), is due in April 2010, and Tranche B, which is in the amount of Rs. 600 million ($12.4 million), is due in April 2013. Interest rates are linked to annualized Indian Government Security rates. The applicable interest rate is 9.25% per annum. These debentures are secured by certain of SIIL’s immoveable properties.

     In November 2008, the Company issued Rs. 5,000 million ($102.9 million) nonconvertible debentures to LIC. The applicable interest rate is 12.25% per annum. The debentures shall be secured by a mortgage over an immovable property located either in the State of Maharashtra or the State of Gujarat and a first pari passu charge over movable and other immovable properties of BALCO. The debentures are repayable in three equal yearly installments beginning November 2013.

     In December 2008 the Company issued Rs. 1,000 million ($20.6 million) Indian Rupee denominated non-convertible debentures to RCTCL. The debentures are due in March, 2009. Interest rate on the debentures is linked to the National Stock Exchange of India overnight Mumbai Inter Bank Offer Rate (“MIBOR”). The applicable interest rate is MIBOR plus 0.50% per annum.

     Short-term and current portion of long-term debt consist of the following as of the date indicated:

		March 31, 2008				December 31, 2008				December 31, 2008
		(Rs. in millions)				(Rs. in millions)				(US dollars in millions)
Short-term debt with banks and financial institutions			6,119				8,323				171.3
Current portion of long-term debt(1)			4,071				9,303				191.5
Short-term and current portion of long-term debt			10,190				17,626				362.8
Weighted average interest rate on short-term debts			4.6	%			6.5	%			6.5	%
Unused line of credit on short-term debts			46,393				46,970				966.9

     Long-term debt, net of current portion consists of the following as of the date indicated:

		March 31, 2008				December 31, 2008				December 31, 2008
		(Rs. in millions)				(Rs. in millions)				(US dollars in millions)
Bank and financial institutions			12,293				13,757				283.2
Non-convertible debentures			1,000				6,000				123.5
Others(1)			727				3,583				73.8
Long-term debt			14,020				23,340				480.5
Less : Current portion of long-term debt			(4,071	)			(9,303	)			(191.5	)
Long-term debt, net of current portion			9,949				14,037				289.0

8. Business Combinations

a. Call option — HZL

     The Company’s wholly-owned subsidiary, Sterlite Opportunities and Ventures Limited (“SOVL”), has the right to purchase all of the Government of India’s remaining shares in HZL at fair market value. As of March 31, 2008 and December 31, 2008, the Government of India’s holding in HZL was 29.5%. This call option is subject to the right of the Government of India to sell 3.5% of HZL to HZL employees. This call option is also subject to the Government of India’s right, prior to the exercise of this call option, to sell its shares in HZL through a public offer. With effect from April 11, 2007, SOVL has the right to purchase all of the Government of India’s remaining shares in HZL. The option has no expiry date. The Company has not yet exercised the option. The Company continues to engage in talks with the Government of India to agree on a process to complete the transaction.

b. Call option — BALCO

     The Company purchased a 51% holding in BALCO from the Government of India on March 2, 2001. Under the terms of this purchase agreement for BALCO, the Company has a call option that allows it to purchase any remaining Government holding in BALCO at any point from March 2, 2004. The Company exercised this option on March 19, 2004. However, the Government of India

has contested the purchase price and validity of the option. The Company sought an interim order from the High Court of Delhi to restrain the Government of India from transferring or disposing of its shareholding pending resolution of the dispute. The High Court directed on August 7, 2006 that the parties attempt to settle the dispute by way of a mediation process as provided for in the shareholders’ agreement. However, the parties were unable to come to an agreement through the mediation process. The dispute now moves to an arbitration process under terms established by order of High Court. The arbitration tribunal has been constituted. The first meeting of the arbitration tribunal is scheduled for February 16, 2009.

9. Accumulated other comprehensive (loss) / income

     The components of accumulated other comprehensive losses consist of the following as of the date indicated:

		March 31, 2008				December 31, 2008				December 31, 2008
		(Rs. in millions)				(Rs. in millions)				(US dollars in millions)
Unrealized gain on available-for-sale securities			58				3				0.1
Foreign currency translation adjustment			(72	)			(809	)			(16.7	)
Unrealized (loss) on cash flow hedges			(304	)			(1,657	)			(34.1	)
Accumulated other comprehensive losses			(318	)			(2,463	)			(50.7	)

10. Shareholders’ equity

Issued shares

     SIIL’s issued equity share capital as of March 31, 2008 and December 31, 2008 was Rs. 1,417 million and Rs. 1,417 million ($29.2 million), consisting of 708,494,411 shares, respectively, of Rs. 2 each including 4,099,400 equity shares allotted as fully paid upon conversion of 50,000 foreign currency redeemable convertible bonds.

     SIIL issued an additional 150,000,000 equity share in June 2007, resulting in an increase in issued equity share capital from 558,494,411 shares to 708,494,411 shares.

     Retained earning includes among others balances of general reserve, debenture redemption reserve and preference share redemption reserve.

General reserves

     Under the Companies Act, a general reserve is created through an annual transfer of net income at a specified percentage in accordance with applicable regulations. The purpose of these transfers is to ensure that if a dividend distribution in a given year is more than 10.0% of the paid-up capital of the company for that year, then the total dividend distribution is less than the total distributable results for that year. The balances in the standalone financial statements of SIIL’s general reserves as determined in accordance with applicable regulations were Rs. 3,602 million ($74.1 million) as of March 31, 2008 and December 31, 2008.

Debenture redemption reserve

     The Companies Act requires companies that issue debentures to create a debenture redemption reserve from annual profits until such debentures are redeemed. Companies are required to maintain a minimum proportion of outstanding redeemable debentures as a reserve. The amounts credited to the debenture redemption reserve may not be utilized by the Company except to redeem debentures. Retained earnings of the standalone financial statements of SIIL as of March 31, 2008 and December 31, 2008 include Rs. 146 million ($3.0 million) of debenture redemption reserve.

Preference share redemption reserve

     The Companies Act provides that companies that issue preference shares may redeem those shares from profits of the company which otherwise would be available for dividends or from proceeds of a new issue of shares made for the purpose of redemption of the preference shares. If there is a premium payable on redemption, the premium must be provided for, either by reducing the additional paid in capital (shares premium account) or net income, before the shares are redeemed.

     If profits are used to redeem preference shares, the value of the nominal amount of shares redeemed should be transferred from profits (retained earnings) to the capital redemption reserve account. This amount should then be utilized for the purpose of redemption of redeemable preference shares. This reserve can be used to issue fully paid-up bonus shares to the shareholders of the Company. Retained earnings of the standalone financial statements of SIIL includes Rs. 769 million ($15.8 million) of preference share redemption reserve as of March 31, 2008 and December 31, 2008.

Dividends

     Each equity share holder is entitled to dividends as and when the Company declares and pays dividends after obtaining shareholder approval. Dividends are paid in Indian Rupees. Remittance of dividends outside India is governed by Indian law on foreign exchange and is subject to applicable taxes. Equity dividends paid were nil for the year ended March 31, 2008 and Rs. 2,833.9 million ($58.3 million) for the nine-month period ended December 31, 2008. Dividend distribution taxes on the equity dividends were nil for the year ended March 31, 2008 and Rs 481.6 million ($9.9 million) for the nine-month period ended December 31, 2008.

     Dividends are payable from the profits determined under Indian GAAP statutory standalone financial statements of SIIL and its subsidiaries. Under Indian law, a company is allowed to pay dividends in excess of 10.0% of its paid-up capital in any year from profits for that year only if it transfers a specified percentage of the profits of that year to reserves. The Company makes such transfers to general reserves.

11. Commitments, Contingencies, and Guarantees

(a) Commitments and Contingencies

(i) Commitments

     The Company has a number of continuing operational and financial commitments in the normal course of business including completion of the construction and expansion of certain assets.

•

Capital commitments

     Significant capital commitments of the Company as of December 31, 2008 amounted to Rs. 85,495 million ($1,759.9 million) and these are related to the capacity expansion projects including commitments amounting to Rs. 35,933 million ($739.7 million) for the Company’s new energy business.

•

Export obligations

     The Company has export obligations of Rs. 64,807 million ($1,334.0 million) over eight years on account of concessional rates received on import duties paid on capital goods under the Export Promotion Capital Goods Scheme enacted by the Government of India. If the Company is unable to meet these obligations, the Company’s liability would be Rs. 9,140 million ($188.1 million), reduced in proportion to actual exports. Due to a remote likelihood of the Company being unable to meet its export obligations, no loss is anticipated with respect to these obligations and hence no provision has been made in its unaudited condensed consolidated financial statements.

(ii) Contingencies

     The Company is from time to time subject to litigation and other legal proceedings. Certain operating subsidiaries of the Company have been named as parties to legal actions by third party claimants and by the Indian sales tax, excise and related tax authorities for additional sales tax, excise and indirect duties. These claims primarily relate either to the assessable values of sales and purchases or to incomplete documentation supporting the Company’s tax returns. The total claims related to these tax liabilities are Rs. 4,741 million ($97.6 million). Management has evaluated these contingencies and hence has recorded Rs. 647 million ($13.3 million) as current liabilities as of December 31, 2008.

     Claims by third parties amounted to Rs 4,432 million ($91.2 million) as of December 31, 2008. No liability has been recorded against these claims, based on management’s estimate that none of these claims would become obligations of the Company. The Company intends to vigorously defend these claims. Although the results of legal actions cannot be predicted with certainty, it is the opinion of management, after taking appropriate legal advice, that the likelihood of these claims becoming obligations of the

Company is remote and hence the resolution of these actions will not have a material adverse effect, if any, on the Company’s business, financial condition or results of operations.

     Therefore, the Company has not recorded any additional liability beyond what is stated above in relation to litigation matters in the accompanying consolidated financial statements.

(b) Guarantees and Put Option

     The Company has given guarantees on the issuance of customs duty bonds amounting to Rs. 878 million ($18.1 million) for import of capital equipment at concessional rates of duty. The Company has fulfilled its obligations under the bonds and procedural formalities are yet to be completed by the authorities for releasing the bonds. The Company does not anticipate any liability on these guarantees.

     Pursuant to the approval of the BIFR for the rehabilitation scheme of IFL, the Company was allotted preference shares of IFL amounting to Rs. 1,520 million in payment of the net loans and guarantees aggregating to Rs. 1,557 million that devolved on the Company during the nine months ended December 31, 2008. The Company subsequently sold the preference shares for a nominal value and incurred a loss of Rs. 1,520 million. Losses, write offs and provision for investments and loans for the nine months ended December 31, 2008 represents the difference of Rs. 145 million between the loss of Rs. 1,520 million on the sale of the preference shares and the write back of provision of Rs. 1,375 million made previously.

     The Company has provided guarantees on behalf of IFL for its loan obligations to the extent of Rs. 295 million ($6.1 million). There was no outstanding amounts against these guarantees as of December 31, 2008. The Company is awaiting the No Objection Certificate from ABN AMRO to relinquish the guarantees.

     The Company has issued a corporate guarantee of Rs. 11,000 million ($226.4 million) on behalf of Vedanta Aluminium for obtaining credit facilities. The Company has also issued a corporate guarantee of Rs. 14,756 million ($303.7 million) for importing capital equipment at concessional rates of duty under the Export Promotion Capital Goods scheme enacted by the Government of India and Rs. 269 million ($5.5 million) for Raw Material imports. Vedanta Aluminium is obligated to export goods worth eight times the value of concessions enjoyed in a period of eight years following the date of import, failing which the Company is liable to pay the dues to the government. With respect to the corporate guarantee of Rs. 11,000 million ($226.4 million), Vedanta Aluminium has issued a counter guarantee to the Company indemnifying the Company for any liability on such guarantee. As of December 31, 2008, management determined that the Company has no liability on either of these guarantees.

     The Company has given a bank guarantee amounting to Australian Dollar 5.0 million (Rs. 168 million or $3.5 million) in favor of the Ministry for Economic Development, Energy and Resources as a security against rehabilitation liability on behalf of CMT. The same guarantee is backed by the issuance of a corporate guarantee of Rs. 320 million ($6.6 million). These liabilities are fully recognized in the consolidated financial statements of the Company. The management of the Company does not anticipate any liability on these guarantees.

     The Company has given bank indemnity guarantees amounting to Australian Dollar 2.9 million (Rs. 95 million or $2.0 million) in favor of the State Government of Queensland, Australia as a security against rehabilitation liabilities that are expected to occur at the closure of the mine. The environmental liability is fully recognized in the financial statements of the Company. The management of the Company does not anticipate any liability on these guarantees.

     The Company has given performance bank guarantees amounting to Rs. 2,947 million ($60.7 million) as of December 31, 2008. These guarantees are issued in the normal course of business while bidding for supply contracts or in lieu of advances received from customers. The guarantees have varying maturity dates normally ranging from six months to three years. These are contractual guarantees and are enforceable if the terms and conditions of the contracts are not met and the maximum liability on these contracts is the amount mentioned above. The management of the Company does not anticipate any liability on these guarantees.

     The Company has given bank guarantees for securing supplies of materials and services in the normal course of business. The value of these guarantees as of December 31, 2008 is Rs. 1,941 million ($40.0 million). The Company has also issued bank guarantees in the normal course of business for an aggregate value of Rs. 478 million ($9.8 million) for litigation, against provisional valuation and for other liabilities. The management of the Company does not expect any liability on these guarantees.

     The Company gave an irrevocable letter of credit amounting to Rs. 2,423 million ($50.0 million) in favor of the Asarco LLC, USA (“Asarco”) as a security deposit at the time of the Company entered into a Purchase and Sale Agreement (“PSA”) with Asarco.

     The Company’s outstanding guarantees and put option cover obligations aggregating Rs. 34,691 million ($714.1 million) as of December 31, 2008. The Company estimates that the likelihood of these claims becoming obligations of the Company is remote and as such no provision has been made in the financial statements for these guarantees and put option.

12. Income Taxes

     The following are the details of tax expense charged to statements of operations for the periods indicated:

		Nine months ended
		December 31, 2007				December 31, 2008				December 31, 2008
		(Rs. in millions)				(Rs. in millions)				(US dollars in millions)
Current tax:
Indian income tax			13,466				6,250				128.6
Foreign income tax			665				1,252				25.8
Total current tax			14,131				7,502				154.4
Deferred tax:
Indian income tax			1,819				296				6.1
Foreign income tax			54				48				1.0
Total deferred tax			1,873				344				7.1
Income taxes for the period			16,004				7,846				161.5
Effective tax rate			26.4	%			16.3	%			16.3	%

     The following are the details of the deferred tax assets and liabilities as of the dates indicated:

		March 31, 2008				December 31, 2008				December 31, 2008
		(Rs. in millions)				(Rs. in millions)				(US dollars in millions)
Deferred tax assets
Current			421				276				5.7
Non-current			374				217				4.4
Total			795				493				10.1
Deferred tax liabilities
Current			765				214				4.4
Non-current			16,369				16,489				339.4
Total			17,134				16,703				343.8

     The Company’s income tax provision from continuing operations for the nine-month period ended December 31, 2008 was Rs. 7,846 million ($161.5 million). The effective tax rate for the nine month period ended December 31, 2008 was 16.3% and the difference between the statutory tax rate of 34.0% and the effective tax rate was primarily due to tax holidays and exemptions available to Indian companies.

     Effective April 1, 2007, the company adopted the provisions of FIN 48. This Interpretation clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with SFAS No. 109, “Accounting for Income Taxes” and prescribes a recognition threshold of more-likely-than-not to be sustained upon examination. As a result of the implementation of FIN 48, the Company has to recognize a Rs. 535 million decrease in the liability for unrecognized tax benefits related to tax positions taken in prior periods, which was accounted for as an increase to the April 1, 2007 balance of retained earnings.

     In addition, the Company has accrued interest and necessary penalties, where applicable, of Rs. 40 million related to unrecognized tax positions.

13. Earnings Per Share (“EPS”)

     The following are the EPS for the period indicated:

		Nine months ended
		December 31, 2007				December 31, 2008				December 31, 2008
		(Rs. in millions)				(Rs. in millions)				(US dollars in millions)
Net income			31,692				26,527				546.0
Weighted average number of ordinary shares for basic earnings per share			664,858,077				708,494,411				708,494,411
Earnings from per share			47.67				37.44				0.77

14. Segment Information

     The Company is in the business of non-ferrous mining and metals in India and Australia. The Company has four reportable segments: copper, zinc, aluminum and corporate and others. The management of the Company is organized by its main products: copper, zinc and aluminum. Each of the reported segment derives its revenues from these main products and hence these have been identified as reportable segments by the Company’s Chief Operating Decision Maker (CODM). Segment profit amounts are evaluated regularly by the Company’s Managing Director and Chief Executive Officer (“CEO”) who has been identified as its CODM in deciding how to allocate resources and in assessing performance.

     Copper

     The copper business is principally one of custom smelting and includes a smelter, refinery, phosphoric acid plant, sulphuric acid plant and copper rod plant at Tuticorin in Southern India and a refinery and two copper rod plants at Silvassa in Western India. The Company obtains a small quantity of copper concentrate from the Mt. Lyell copper mine in Tasmania, Australia, owned by CMT.

     Zinc

     The zinc business is owned and operated by HZL, India’s leading zinc producer in the Indian zinc market. The Company has a 64.9% ownership interest in HZL, with the remainder owned by the Government of India (29.5%) and institutional and public shareholders (5.6%). HZL’s operations include three zinc smelters, one lead-zinc smelter and one lead smelter in Northwest India, one zinc smelter in Southeast India, one zinc melting plant in North India and three lead-zinc mines in Northwest India.

     Aluminum

     The aluminum business is owned and operated by BALCO, in which the Company has a 51.0% ownership interest. The remainder of BALCO is owned by the Government of India. BALCO’s operations include bauxite mines, captive power plants, and refining, smelting and fabrication facilities in Central India.

     Corporate and others

     The operating segment “Corporate and others” is primarily commercial power generation business and other corporate activities.

Business segments

     The operating segments reported are the segments of the Company for which separate financial information is available. Segment profit amounts are evaluated regularly by the Company’s managing director and CEO who has been identified as its chief operating decision maker in deciding how to allocate resources and in assessing performance. The following table presents revenue and profit information and certain asset and liability information regarding the Company’s business segments for the nine months ended December 31, 2007 and 2008.

For the nine-month period ended December 31, 2007

		Copper				Zinc				Aluminum				Corporate and others				Elimination				Total
																						(Rs. in millions)
Net sales to external customers			92,785				55,900				30,382				201				—				179,268
Inter-segment sales			—				—				67				—				(67	)			—
Segment sales			92,785				55,900				30,449				201				(67	)			179,268
Segment profit			9,451				40,849				9,875				202				—				60,377
Depreciation, depletion and amortization			(1,161	)			(1,795	)			(1,965	)			(217	)			—				(5,138	)
Operating income			8,290				39,054				7,910				(15	)			—				55,239
Interest and dividend income																							4,473
Interest expense																							(2,481	)
Net realized and unrealized investment gain																							3,502
Income before income taxes, minority interests and equity in net income of associate																							60,733
Income taxes																							(16,004	)
Income after income taxes, before minority interests and equity in net income of associate																							44,729
Minority interests																							(13,925	)
Equity in net income of associate, net of taxes																							888
Net income from continuing operations																							31,692
Income from divested business, net of taxes																							—
Net income																							31,692
Assets
Segment assets			155,778				123,764				56,575				14,128				—				350,245
Equity investment in associate															3,921				—				3,921
Total assets			155,778				123,764				56,575				18,048				—				354,166
Additions to property, plant and equipment			817				8,679				683				4,102				—				14,281

For the nine-month period ended December 31, 2008

		Copper				Zinc				Aluminum				Corporate and others				Elimination				Total
																						(Rs. in millions)				(US dollars in millions)
Net sales to external customers			93,877				43,493				31,075				617								169,062				3,480.1
Inter-segment sales			—				—				131				—				(131	)			—				—
Segment sales			93,877				43,493				31,206				617				(131	)			169,062				3,480.1
Segment profit			10,672				22,125				8,980				774								42,551				875.9
Depreciation, depletion and amortization			(1,264	)			(1,992	)			(2,003	)			(455	)							(5,714	)			(117.6	)
Guarantees, impairment of investments and loan			—				—				—				(145	)							(145	)			(3.0	)
Operating income			9,408				20,133				6,977				174								36,692				755.3
Interest and dividend income																							12,691				261.2
Interest expense																							(3,595	)			(74.0	)
Net realized and unrealized investment gain																							2,232				45.9
Income before income taxes, minority interests and equity in net loss of associate																							48,020				988.4
Income taxes																							(7,846	)			(161.5	)
Income after income taxes, before minority interests and equity in net loss of associate																							40,174				826.9
Minority interests																							(10,376	)			(213.6	)
Equity in net loss of associate, net of taxes																							(3,271	)			(67.3	)
Net income																							26,527				546.0
Assets
Segment assets			153,448				153,320				63,102				38,723								408,593				8,410.7
Investment in associate			—												15,113								15,113				311.1
Total assets			153,448				153,320				63,102				53,836								423,706				8,721.8
Additions to property, plant and equipment			811				7,511				4,458				16,136								28,916				595.2

15. Fair Value Measurements

     SFAS 157 defines and establishes a framework for measuring fair value and expands disclosures about fair value measurements. In accordance with SFAS 157, the Company has categorized its financial assets and liabilities as of December 31, 2008, based on the priority of the inputs to the valuation technique, into a three-level fair value hierarchy as set forth below.

		Quoted price																Quoted price
		in active				Significant												in active				Significant
		market for				other				Significant								market for				other				Significant
		identical				observable				unobservable								identical				observable				unobservable
		assets				inputs				inputs								assets				inputs				inputs
		(Level 1)				(Level 2)				(Level 3)				Total				(Level 1)				(Level 2)				(Level 3)				Total
		(Rs. in millions)																(US dollars in millions)
Financials Asset
Trading Securities(1)			147,370				—				—				147,370				3,033.6				—				—				3,033.6
Available for sale securities(2)			55				—				—				55				1.1				—				—				1.1
Derivative(3)			768				1,056				—				1,824				15.8				21.7				—				37.5
Total			148,193				1,056				—				149,249				3,050.5				21.7				—				3,072.2
Financials Liability
Long-term debts(4)			—				600				—				600				—				12.4				—				12.4
Derivative(5)			2,969				1,239				—				4,208				61.1				25.5				—				86.6
Total			2,969				1,839				—				4,808				61.1				37.9				—				99.0