Sterlite Energy Ltd. - (Amalgamated) - Stock Valuation and Financial Performance

Sterlite Energy incorporated as Manjiri Finvest Private Limited on February 2, 1995 under the Indian Companies Act, 1956 with the Registrar of Companies, Maharashtra. Pursuant to a special resolution of the shareholders of the company on April 3, 2004, the name of the company was changed to Sterlite Energy Private Limited due to change in its business activities to generation and distribution of power, and consequent to such change of name, a fresh Certificate of Incorporation dated May 10, 2004 was issued by the Registrar of Companies, Maharashtra. Pursuant to a special resolution of the shareholders of the company on May 25, 2006, the company was converted into a public company, and the name of the company was further changed to Sterlite Energy Limited and consequent to such change of name, a fresh Certificate of Incorporation dated July 21, 2006 was issued by the Registrar of Companies, Maharashtra.

The company is part of the Vedanta Group, a leading metals and mining group in India, and a subsidiary of one of the Vedanta Group’s flagship companies, Sterlite Industries.

It leverages on the experience of the Vedanta Group in building and managing captive power plants to develop, operate and manage the power projects. The Vedanta Group has been building and managing captive power plants since 1997 and, as of September 30, 2009, the total capacity of its captive power plants and wind power plants was approximately 2,464 MW of which approximately 2,259 MW was from thermal power plants. The Vedanta Group is currently constructing power plants with an installed capacity of 6,380 MW and expects to have power plants with a capacity of approximately 3,334 MW operational by the end of fiscal year 2010.

In August 2006, the shareholders of its Promoter, Sterlite Industries approved a new strategy for Sterlite Industries to enter into commercial power generation business in India, in order to leverage on Sterlite Industries’ experience in building and managing captive power plants used to support its primary copper, zinc and aluminium businesses. Sterlite Industries acquired all of the outstanding equity shares and operational control of the company in October 2006. Vedanta has indicated to us that all future commercial power generation projects in India to be undertaken by the Vedanta Group will be developed by Sterlite Industries.

Business area of the company

The company is engaged in commercial power generation business in India and it is currently developing two thermal power projects in Jharsuguda, Orissa and Talwandi, Punjab, respectively, with a combined proposed installed capacity of 4,380 MW.

Subsidiary of the company

Talwandi Sabo: Incorporated by PSEB to execute the Talwandi Power Project prior to the selection of a developer through a competitive bidding process. In July 2008, the company succeeded in the bidding process and was awarded the project for the construction of the thermal power plant at village Banawala, District Mansa, in the State of Punjab.

Group companies

• Hindustan Zinc
• Bharat Aluminum Company
• Vedanta Aluminum
• Sterlite Opportunities and Ventures
• Sterlite Copper
• Sterlite Paper
• Monte Cello BV
• Copper Mines of Tasmania
• Thalanga Copper Mines
• Fujairah Gold FZE
• Sterlite (USA) Inc

Milestones

• 1995: Company incorporation .
• 2006: Sterlite Industries, the promoter acquired all of the outstanding equity shares and operational control of the company in October 2006 from an affiliated individual and an affiliated entity for a total consideration of approximately Rs 4.93 million.
• 2006: The company entered into the Jharsuguda MoU with the Governor of Orissa on September 26, 2006 committing to set up a thermal power plant of 2,400 MW in the Orissa State and are currently in the process of negotiations for extension of the same.
• 2006: The company entered into EPC contracts for the 2,400 MW thermal power plant at Jharsuguda.
• 2008: Awarded the tender to build a 1,980 MW (comprising three units of 660 MW each) thermal coal-based commercial power plant at Talwandi Sabo, in the state of Punjab, India, by the Governor of Punjab and supply of 1,841.40 MW power to PSEB.
• 2008: Awarded and allocated coal block for Jharsuguda Power Project by the Government of Orissa.
• 2009: Achieved financial closure for the Jharsuguda Power Project
• 2009: Entered into the EPC contracts for the Talwandi Power Project.
• 2009: The implementation of the Jharsuguda Power Project and the Talwandi Power Project has been delayed.