MIRA INFORM REPORT

Report Date :

29.07.2008

IDENTIFICATION DETAILS

Name :	VEDANTA ALUMINIUM LIMITED
Formerly Known As :	STERLITE TRANSMISSION LIMITED
Registered Office :	75, Nehru Road, Vile Parle (Eeast), Mumbai – 400099, Maharashtra
Country :	India
Financials (as on) :	31.03.2007
Date of Incorporation :	18.01.2001
Com. Reg. No.:	11-130494
CIN No.: [Company Identification No.]	U31300MH2001PLC130494
TAN No.: [Tax Deduction & Collection Account No.]	BBNV00081E MUMV14868A
PAN No.: [Permanent Account No.]	AAHCS6869A
Legal Form :	A closely held public limited liability company
Line of Business :	Manufacturing of Calcined Alumina

RATING & COMMENTS

MIRA’s Rating :

B

RATING		STATUS	PROPOSED CREDIT LINE
26-40	B	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average/normal.	Small

Maximum Credit Limit :	USD 53000000
Status :	Satisfactory
Payment Behaviour :	Usually correct
Litigation :	Clear
Comments :	Subject is a part of Vedanta Group whose main company is Vedanta Resources PLC, UK listed on London Stock Exchange. It is setting up a Greenfield Aluminium Smelter along with captive power plant at Jharsuguda, Orissa, India under the name of Vedanta Aluminium Limited. Trade relations are fair. Payment are correct and as per commitments. The company can be considered normal for business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office/ Factory :	75, Nehru Road, Vile Parle (East), Mumbai-400099, Maharashtra, India
Tel. No.:	91-22-56461000/40058000
Fax No.:	91-22-26461350
Email :	Vinay.gaokar@vedanta.co.in
Corporate Office :	Andheri Ghatkopar Link Road, Solitaire Corporate Park, Chakala, Mumbai – 400093, Maharashtra, India
Tel. No.:	91-22-56461000

DIRECTORS

Name :	Mr. Tarun Jain
Designation :	Additional Director
Address :	411 Akshay Girikunj Pali Ram Road, Opp. Andheri (W), Rly. Stn. Andheri (W), Mumbai-400058, Maharashtra, India
Date of Birth/Age :	06/03/1960
Date of Appointment :	28/01/2004
Name :	Mr. Kuldip Kumar Kaura
Designation :	Director
Address :	3, Ruia park, Juhu Vile Parle (W), Mumbai-400049, Maharashtra, India
Date of Birth/Age :	05/04/1947
Date of Appointment :	28/01/2004
Name :	Mr. Navin Agarwal
Designation :	Director
Address :	8/738, Behramji Gamadia Road, Carmi Chael Road, Mumbai-400026, Maharashtra, India
Date of Birth/Age :	11/01/1961
Date of Appointment :	18/01/2001
Name :	Mr. Anil Agarwal
Designation :	Director
Address :	113/114, Samudra Mahal, Worli, Mumabi-400018, Maharashtra
Date of Birth/Age :	07/09/1952
Date of Appointment :	18/01/2001
Name :	Mr. L T Kumar Palani
Designation :	Director
Address :	901 LA Mer, Kadeshwari Road, Bandra (W), Mumbai-400050, Maharashtra, India
Date of Birth/Age :	24/10/1949
Date of Appointment :	18/11/2004
Name :	Mr. Sanjeev Anand Zutshi
Designation :	Director
Address :	House of Satya Patra, Opp Girls High School, Mhnikhol, Mhniguda, Rayagada, Orissa-765020
Date of Birth/Age :	13/08/1948
Date of Appointment :	09/05/2005
Name :	Mr. Mansoor Siddiqi
Designation :	Director

KEY EXECUTIVES

Name :	Mr. Vinay Sadanand Gaokar
Designation :	Secretary
Address :	E/5, Saraswat colony, Sitaladevi Temple Road, Mahim Mumbai-400016, Maharashtra, India
Date of Birth/Age :	09/11/1959
Date of Appointment :	09/05/2005

MAJOR SHAREHOLDERS

Names of Shareholders	No. of Shares
Sterlite Industries India limited	14453479
Anil Agarwal	1
Tarun Jain	1
Ramesh Venkat	1
Somanath Patil	1
Din Dayal Jalan	1
Kuldip Kumar Kaura	1
Twinstar Holdings Limited	34542188
TOTAL	48995673

BUSINESS DETAILS

Line of Business :

Manufacturing of Calcined Alumina

Products :

Product description	Item Code No. (ITC Code )
Calcined Alumina	2818.20

GENERAL INFORMATION

Bankers :	Not Available
Banking Relations :	-
Auditors :	Deloitte Haskins and Sells Chartered Accountants
Associates/Subsidiaries :	Twinstar Holding Limited Vedanta Resources Plc. U.K. Sterlite Industries India Limited (SIIL) Hindustan Zinc Limited (HZL) Bharat Aluminium Company Limited Sterlite Paper Limited Monte Cello BV Copper Mines of Tasmania Pty. Limited Thalanga Copper Mines Pty. Limited Madras Aluminium Company Limited
Group Companies :	Konkola Copper Mines PLC Sterlite Industrues (India) Limited Madras Aluminium Company Limited Hindustan Zinc Limited Bharat Aluminium Company Limited
Holding Company :	Sterlite Industries India limited Twinstar Holdings Limited

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
60000000	Equity Shares	Rs.10/- each	Rs.600.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
52838850	Equity Shares	Rs.10/- each	Rs.528.389 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2007	31.03.2006
SHAREHOLDERS FUNDS
1] Share Capital		528.400	490.000
2] Share Application Money		0.000	0.000
3] Reserves & Surplus		9992.700	5573.200
4] (Accumulated Losses)		0.000	0.000
NETWORTH		10521.100	6063.200
LOAN FUNDS
1] Secured Loans		1853.700	2109.700
2] Unsecured Loans		39231.000	22305.000
TOTAL BORROWING		41084.700	24414.700
DEFERRED TAX LIABILITIES		0.000	0.000
TOTAL		51605.800	30477.900
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		1388.300	434.800
Capital work-in-progress		36458.100	20099.900
INVESTMENT		5895.700	10671.900
DEFERREX TAX ASSETS		0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	1404.400	33.300
	Sundry Debtors	0.000	0.000
	Cash & Bank Balances	8851.500	560.800
	Other Current Assets	0.000	0.000
	Loans & Advances	2018.800	794.200
Total Current Assets		12274.700	1388.300
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	4411.000	2117.000
	Provisions	0.000	0.000
Total Current Liabilities		4411.000	2117.000
Net Current Assets		7863.700	(728.700)
MISCELLANEOUS EXPENSES		0.000	0.000
TOTAL		51605.800	30477.900

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2007	31.03.2006
Sales Turnover		0.000	0.000
Other Income		1710.300	506.000
Total Income		1710.300	506.000
Profit/(Loss) Before Tax		0.000	0.000
Provision for Taxation		(0.100)	11.900
Profit/(Loss) After Tax		0.100	(11.900)
Expenditures :
	Employees Cost	306.200	122.700
	Manufacturing Expenses	101.200	0.500
	Administrative Expenses	335.700	195.300
	Interest	2429.300	2197.300
	Insurance Expenses	30.100	12.700
	Power & Fuel	51.600	46.200
	Depreciation & Amortization	74.200	22.000
	Less: Preoperative Expenditure Capitalisted	(1618.00)	(2090.700)
Total Expenditure		1710.300	506.000

KEY RATIOS

PARTICULARS		31.03.2007	31.03.2006
PAT / Total Income	(%)	0.01	(2.35)
Net Profit Margin (PBT/Sales)	(%)	0.00	0.00
Return on Total Assets (PBT/Total Assets}	(%)	0.00	0.00
Return on Investment (ROI) (PBT/Networth)		0.00	0.00
Debt Equity Ratio (Total Liability/Networth)		4.32	4.38
Current Ratio (Current Asset/Current Liability)		2.78	0.66

LOCAL AGENCY FURTHER INFORMATION

CONSOLIDATED BALANCE SHEET

ASSETS	31.03.2008 $ Millions
Non –Current Assets
Goodwill	13.300
Property, Plant and Machinery	8354.500
Financial asset investments	30.000
Other non-current assets	29.800
Other financial assets	95.00
Deferred tax assets	15.100
	8537.700
Current Assets
Inventories	1298.800
Trade and other receivables	1048.000
Other current financial assets	44.900
Liquid investments	4648.500
Cash and cash equivalents	458.200
	7498.400
Total Assets	16036.100
LIABILITIES
Current Liabilities
Short term borrowings	(1417.200)
Trade and other payables	(2018.400)
Other current financial liabilities (derivatives)	(23.300)
Provisions	(27.300)
Current tax liabilities	(33.500)
	(3519.700)
Net current assets	3978.700
Non-current liabilities
Medium and long term borrowings	(956.000)
Convertible bonds	(600.900)
Trade and other payables	(0.200)
Other financial liabilities	(83.700)
Deferred tax liabilities	(1380.800)
Retirement benefits	(42.500)
Provisions	(185.200)
Non equity minority interests	(59.400)
	(3308.700)
TOTAL LIABILIIES	(6828.400)
NET ASSETS	9207.700
EQUITY
Share capital	28.800
Share premium account	20.000
Share based payment reserves	15.600
Convertible bond reserve	115.700
Hedging reserves	(9.100)
Other reserves	1932.600
Retained earnings	1743.500
Equity attributable to equity holders of the parent	3847.100
Minority interests	5360.600
TOTAL EQUITY	9207.700

CONSOLIDATED INCOME STATEMENT

	31.03.2008 $ Million
Continuing operations
Revenue	8203.700
Cost of sales	(5317.800)
Gross profit	2885.900
Other operating income	86.800
Distribution costs	(170.100)
Administrative expenses	(221.300)
Special items	11.100
Operating profit	2592.400
Investment revenue	321.400
Finance costs	(150.600)
Share of loss of associate	-
Profit before taxation	2763.200
Tax expense	(757.700)
Profit for the year	2005.500
Attributable to:
Equity holders of the parent	879.000
Minority interests	1126.500
	2005.500
Basic earnings per ordinary share (US Cents)	305.400
Diluted earnings per ordinary share (US Cents)	286.700

FIXED ASSETS

• Leasehold land
• Plant and Machinery
• Office equipments
• Furniture and fittings
• Vehicles

Company Description:

Subject is a London listed FTSE 100 diversified metals and mining group with revenues in excess of USD 6.5 billion. Its principal operations are located throughout India, with further operations in Zambia and Australia. The major metals produced are aluminimum, copper, zinc and lead. Company has also recently acquired Sesa Goa Limited, India's largest producer exporter of Iron ore. With a talent pool of over 26,000 employees globally, the Group has a clear focus on achieving and sustaining global leadership in the metals and mining business.

Company is setting up Greenfield Aluminium Smelter of Global capacity along with Captive Power Plant at Jharsuguda, Orissa with an investment of Rs.95000.000 Millions.

AS PER WEBSITE

Mined Minds

Vedanta Alumina Limited has brutally displaced many poor tribals, reports Bibhuti Pathi from Kalahandi

The setting up of Vedanta Alumina Limited (VAL), subsidiary of Sterlite Industries (India) Ltd (SIL), has disturbed the lives of thousands of poor tribals in the villages of Orissa: Kapaguda, Belemba, Basantpara, Teriguda, Anandpore, Topaguda, Hudingpadar, Gedugumma. It will also drive the last nail in the landscape of rare and precious flora and fauna of the region.

The proposed mining area is situated on the Niyamgiri reserve forest of Kalahandi (south) forest division and Khambesi and Niyamgiri proposed Reserve Forest and jungle block (Protected Forest) of Rayagada Forest Division. Earlier in January 2005, a special two-person committee appointed by the Supreme Court found Vedanta guilty of violating the Forest (Conservation) Act, 1980, observing that the company had started building its refinery on forestland for which it did not yet have proper clearance. The committee recommended that the company be allotted a mining site elsewhere as the project would have a disastrous effect on the pristine Niyamgiri ecology.

Till date a number of families have been rehabilitated by val, yet, the company has failed to allay the suffering of the poor villagers. The contractors are not paying the villagers their daily wages. These villagers don’t have any work; hence no money and other basic amenities. They are facing starvation. They are the victims of the district administration’s apathy, police atrocities and constant terror of by goons hired by the company.

The villagers alleged that the company with the connivance of the district administration and police made false promises in the ‘Gram Sabha’, and got their thumb marks. Daina Majhi, 45, says: “They are determined not to leave their villages even if it means being done to death. The forest is theirs, this soil is ours and it goes without saying that they have absolute rights on it.” Bhima Majhi, 42, complains, “One day I was returning from Lanjigarh on my bicycle, some khaki clad men beat me up with lathis. They openly abused the women returning from the haats, (weekly village market). The local sp and the police station refused to accept their fir and told us to go directly to the court.” Chandra Nayak of Kinrau village, staying in the rehabilitation colony, said, “Despite promises of providing proper accommodation and coaxing us, they are unemployed today; they have lost their cultivable land. How can they survive now? Metro builders are not paying their daily wages since 12 months.” Jayasingh Majhee, convener of Niyamgiri Surakhya Samity, said, “Till now the local administration and the state government have not implemented the Supreme Court order and all rules are being violated.”

A local official in Lanjigarh said, “The builders are not even paying the legitimate daily wages to the labourers and have written to the concerned authority, SK Patnaik. If they do not comply within a month then I shall be forced to take action.” But Patnaik said, “I don’t know about all this. But now as I am aware I will try to clear all pending dues within a month.” The state minister for steel and mines, Padmanabh Behera, isn’t at all worried. He says, clinically, “As far as the rehabilitation of people and preserving environment is concerned, laws and policies are open for everybody to see. They will do everything according to the law and as per the direction of the apex court.”

The mining will not only destroy Niyamgiri’s tribal culture and way of life, but will also create extinction of rare species of flora and fauna. If the mining continues, the magic of Niyamgiri will be a grandma’s story, buried in the layers of dust. While the nation must benefit from the exploitation of these mineral resources, they should also consider questions of environmental protection and the human rights of tribals. It is through enlightened developmental policies and humane, sensitive consensus alone that they can resolve such dilemmas of progress where the people are the eternal losers. But for how long?

Vedanta plans Rs.70000.000 Millions- aluminium smelter in Orissa

10 February, 2005

VEDANTA Resources Limited the London-based holding company of Sterlite group, on Thursday announced plans to invest Rs.70000.000 Millions in India to set up a five-lakh-tonne-per-annum greenfield aluminium smelter in Orissa. The project also includes a 1,000-MW power plant.

This investment is in addition to Vedanta's ongoing investments of Rs.100000.000 Millions in Sterlite (copper), Balco (aluminium), Hindustan Zinc (zinc) and Vedanta Alumina (alumina).

Vedanta, which raised $825 million last year through a London Stock Exchange listing, is currently setting up a 1.4-million tonne per annum alumina refinery in Orissa.

Announcing the new investment plans, Mr Anil Agarwal, founder and CEO of Vedanta, said: "This is a major step in our vision to create 1 m.t. of aluminium capacity to meet the growing demand and establish India as a major player in the global resource industry."

The group has sufficient resources to fund this project, although the debt-equity ratio would be 40:60, officials said.

"We have brought in foreign direct investment of $1.5 billion to fund our existing projects. The success of these projects will attract international investors to India's metals and mining industry," Mr. Agarwal said.

"The company's ongoing expansion projects of Rs.10,0000.000 million are fast approaching completion as scheduled. After taking over the state-owned Hindustan Zinc Ltd, its cost of production declined to $560 per tonne from $800 per tonne," he said.

The new aluminium smelter project in Orissa marks the beginning of the next phase of Vedanta's strategy in the aluminium sector, as the project would be implemented in two phases over the next 3-5 years.

The first phase will include setting up a 245000-tpa smelter with associated power facilities. Initial project development work, including land acquisition, feasibility studies and Government approval, is under way, he said.

The plans include increasing copper production from 0.180 Million to 0.300 Million tpa in Tuticorin (Tamil Nadu); zinc production from 0.220 million to 0.400 million tpa at Chanderiya in Rajasthan; aluminium production from 0.100 million to 0.345 million tpa at Korba in Chhattisgarh and the greenfield project of the 1-1.4 million-tpa alumina refinery at Lanjigarh in Orissa.

After the completion of these projects, Vendanta will be among the top five producers of refined copper, top six producers of zinc and top 10 producers of aluminium in the world, he said.

"We have invested $652 million of our $2.2-billion capital programme and further significant progress will be made in the remaining period of this financial year. The copper expansion is ready to start production on receipt of environmental clearance and the zinc expansion is due to be commissioned in the first half of the next financial year, followed by the expansions at Balco and Vedanta Alumina in 2006 and 2007 respectively," Mr. Agarwal said.

Vedanta recently acquired a 51-per cent stake in Zambian copper company Konkola Copper Mines, which produces 0.200 million tpa of refined copper with captive mines.

CMT REPORT [Corruption, Money laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.42.30
UK Pound	1	Rs.84.03
Euro	1	Rs.66.42

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	6
OPERATING SCALE	1~10	4
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	4
--PROFITABILIRY	1~10	-
--LIQUIDITY	1~10	6
--LEVERAGE	1~10	6
--RESERVES	1~10	6
--CREDIT LINES	1~10	6
--MARGINS	-5~5	-
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	NO
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		44

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
NR		In view of the lack of information, we have no basis upon which to recommend credit dealings	No Rating

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions