STERLITE INDUSTRIES (INDIA) LIMITED
CALCULATION OF REGISTRATION FEE
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Amount to be |
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Offering Price |
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Aggregate |
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Amount to be |
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Title of each class of securities to be registered |
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registered(2) |
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per security |
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Offering Price |
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registration fee(3) |
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Equity shares, par value Rs. 2 per equity share,
each represented by one American Depositary
Share(1) |
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135,802,469 |
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$ |
12.15 |
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$ |
1,650,000,000 |
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$ |
92,070 |
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(1) |
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American Depositary Shares evidenced by American Depositary Receipts issuable upon deposit of
the equity shares registered hereby are being registered pursuant to a separate registration
statement on Form F-6 (File No. 333-139102), as filed with the SEC on June 15, 2007. |
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(2) |
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Includes additional equity shares represented by American Depositary Shares which may be
purchased by the underwriters at their option to cover over-allotments, if any. |
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(3) |
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The registration fee is calculated in accordance with Rules 456(b) and 457(r) of the
Securities Act. |
Filed pursuant to Rule 424(b)(2)
of the Securities Act of 1933,
as amended, and relating to
Registration Number 333-160580
PROSPECTUS SUPPLEMENT
(To Prospectus dated July 15, 2009)
123,456,790 American Depositary
Shares
Sterlite Industries (India)
Limited
Representing 123,456,790 equity
shares
Sterlite Industries (India) Limited is offering American
depositary shares, or ADSs. Each ADS represents one of our
equity shares, par value Rs. 2 per share.
Our ADSs are listed on the New York Stock Exchange, or NYSE,
under the symbol SLT. On July 15, 2009, the
last reported sale price of the ADSs on the NYSE was $12.94 per
ADS. Our equity shares are listed and traded in India on the
National Stock Exchange of India Limited, or the NSE, and the
Bombay Stock Exchange Limited, or the BSE. On July 15,
2009, the last closing price per equity share was Rs. 629.50
($12.92) on the NSE and Rs. 628.65 ($12.90) on the BSE.
Investing in the ADSs involves risks. See Risk
Factors beginning on page S-10.
PRICE $12.150 AN ADS
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Underwriting
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Price to
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Discounts and
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Proceeds to
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Public
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Commissions(2)
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Company
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Per Share(1)
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$
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12.150
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$
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0.15186
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$
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11.998
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Total(1)
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$
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1,500,000,000
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$
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12,498,765
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$
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1,487,501,235
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(1) |
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We will not pay any underwriting discount or commission on any
ADSs purchased by our parent, Vedanta Resources plc, or Vedanta,
either directly or through a subsidiary, in this offering. Any
ADSs purchased by Vedanta, either directly or through a
subsidiary, in this offering will be purchased on the same terms
and conditions as offered to the public. Vedanta intends to
purchase ADSs in this offering and has been allocated 41,152,263
ADSs offered in this offering. |
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(2) |
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In addition, we have agreed to pay to the underwriters a
discretionary performance fee of 0.25% of the price to public
per ADS multiplied by the total number of ADSs, including ADSs
sold to cover over-allotments, that the underwriters are
purchasing (in each case, excluding ADSs allocated to and
purchased by Vedanta, either directly or through a subsidiary).
The payment of such fee is to be determined in our sole
discretion prior to the settlement date of this offering. If we
decide to pay this discretionary fee, the underwriters will
receive additional commissions of $2,500,000 and we will receive
net proceeds of $1,485,001,235 (assuming no exercise of the
underwriters over-allotment option to purchase additional
ADSs). |
Sterlite Industries (India) Limited has granted the underwriters
the right to purchase up to an additional 12,345,679 ADSs to
cover over-allotments.
The Securities and Exchange Commission and state securities
regulators have not approved or disapproved these securities, or
determined if this prospectus supplement or the accompanying
prospectus is truthful or complete. Any representation to the
contrary is a criminal offense.
J.P. Morgan Securities Inc. and Morgan Stanley & Co.
International plc expect to deliver the ADSs to purchasers on
July 21, 2009.
(listed in alphabetical order)
July 16, 2009
TABLE OF
CONTENTS
Prospectus Supplement
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Page
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S-1
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S-2
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S-7
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S-10
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S-13
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S-14
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S-15
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S-21
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Prospectus
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You should rely only on the information contained in,
incorporated or deemed incorporated by reference into this
prospectus supplement and the accompanying prospectus. Neither
we nor the underwriters have authorized anyone to provide
information different from that contained in, incorporated or
deemed incorporated by reference into this prospectus supplement
or the accompanying prospectus. You should not assume that the
information contained in this prospectus supplement and the
accompanying prospectus to which it relates or the documents
incorporated or deemed incorporated herein or therein is
accurate as of any date other than the date of this prospectus
supplement, the accompanying prospectus or such documents.
ABOUT
THIS PROSPECTUS SUPPLEMENT
Unless otherwise stated in this prospectus supplement and the
accompanying prospectus or unless the context otherwise
requires, references in this prospectus supplement to
we, our, us, the
Company and Sterlite are to Sterlite
Industries (India) Limited, 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, Fujairah Gold FZE, Sterlite (USA), Inc., or
Sterlite USA, and Talwandi Sabo Power Limited, or TSPL.
References to the Vedanta group are to Vedanta
Resources plc, or Vedanta, and its subsidiaries. References to
US or United States are to the United
States of America, its territories and its possessions.
References to India are to the Republic of India.
References to $ or US$ or
dollars or US dollars are to the legal
currency of the United States and references to Rs.
or rupees or Indian Rupees are to the
legal currency of India. References to a particular
fiscal year are to our fiscal year ended March 31 of
such year. References in this prospectus supplement to
shares or equity shares refers to our
equity shares, ADSs refers to our American
depositary shares, each of which represents one equity share,
and ADRs refers to the American depositary receipts
that evidence our ADSs. BSE and NSE are collectively referred to
in this prospectus supplement as the Indian Stock Exchanges.
References to our Annual Report on
Form 20-F
are to our Annual Report on
Form 20-F
for the fiscal year ended March 31, 2009 filed with the
US Securities and Exchange Commission, or the SEC, on
July 10, 2009, as amended by our
Form 20-F/A
filed with the SEC on July 14, 2009.
Substantially all of our revenue is denominated or paid with
reference to US dollars and most of our expenses are incurred
and paid in Indian Rupees or Australian dollars. We report our
financial results in Indian Rupees. Unless otherwise stated
herein, all translations in this prospectus supplement from
Indian Rupees to US dollars are based on the noon buying rate in
New York City for cable transfers in Indian Rupees as certified
by the Federal Reserve Bank of New York on July 10, 2009,
which was Rs. 48.76 per $1.00. No representation is made
that the Indian Rupee amounts have been, could have been or
could be converted into US dollars at such a rate or any other
rate. Any discrepancies in any table between totals and sums of
the amounts listed are due to rounding.
This document is in two parts. The first part is this prospectus
supplement, which describes the offering of our ADSs. This first
part also adds to and updates information contained in the
accompanying prospectus and the documents incorporated by
reference into the accompanying prospectus. The second part, the
accompanying prospectus, provides more general information about
us and securities we may offer from time to time, some of which
may not apply to this offering of ADSs. If the information
varies between this prospectus supplement and the accompanying
prospectus, or any document incorporated by reference therein,
you should rely on the information contained in this prospectus
supplement.
You should rely only on the information contained in,
incorporated or deemed incorporated by reference into this
prospectus supplement and the accompanying prospectus. Neither
we nor the underwriters have authorized anyone to provide
information different from that contained in, incorporated or
deemed incorporated by reference into this prospectus supplement
or the accompanying prospectus. You should not assume that the
information contained in this prospectus supplement and the
accompanying prospectus to which it relates or the documents
incorporated or deemed incorporated herein or therein is
accurate as of any date other than the date of this prospectus
supplement, the accompanying prospectus or such documents.
This prospectus supplement and the accompanying prospectus are
not an offer to sell any security other than our ADSs and are
not soliciting an offer to buy any security other than this
security. This prospectus supplement and the accompanying
prospectus are not an offer to sell our ADSs to any person, and
they are not soliciting an offer from any person to buy these
securities, in any jurisdiction where the offer or sale to that
person is not permitted.
S-1
PROSPECTUS
SUPPLEMENT SUMMARY
This summary highlights selected information contained
elsewhere or incorporated by reference into this prospectus
supplement and the accompanying prospectus. This summary does
not contain all the information that you should consider before
investing in our securities. You should read the entire
prospectus supplement and the accompanying prospectus carefully,
including the risk factors, the financial statements and the
information included or incorporated by reference in this
prospectus supplement and the accompanying prospectus.
Overview
We are one of Indias largest non-ferrous metals and mining
companies. We are one of the two custom copper smelters in
India, with a 45.7% primary market share by production volume in
India in fiscal 2009, according to the International Copper
Promotion Council, India, the leading and only integrated zinc
producer with a 79.0% market share by production volume of the
Indian zinc market in fiscal 2009, according to the India Lead
Zinc Development Association, or ILZDA, and one of the five
primary producers of aluminum with a 28.0% primary market share
by production volume in India in fiscal 2009, according to the
Aluminium Association of India, or AAI. In addition to our three
primary businesses of copper, zinc and aluminum, we are also
developing a commercial power generation business in India that
leverages our experience in building and managing captive power
plants used to support our primary businesses. We believe our
experience in operating and expanding our business in India will
allow us to continue to capitalize on attractive growth
opportunities arising from Indias large mineral reserves,
relatively low cost of operations and large and inexpensive
labor and talent pools. We believe we are also well positioned
to take advantage of the growth in industrial production and
investments in infrastructure in India, China, Southeast Asia
and the Middle East, which we expect will continue to create
strong demand for metals.
Our copper business is principally one of custom smelting. We
were one of the top fifteen custom copper smelters worldwide in
2008 and one of the largest in India by production volume in
fiscal 2008, according to Brook Hunt & Associates Ltd,
or Brook Hunt. We own the Mt. Lyell copper mine in Tasmania,
Australia, which provides a small percentage of our copper
concentrate requirements. Our operations also include a copper
smelter, two copper refineries, three copper rod plants, a
doré anode plant, sulphuric and phosphoric acid plants, and
captive power plants at our facilities in Silvassa and Tuticorin
in India, as well as a precious metal refinery at Fujairah in
the United Arab Emirates, or UAE. In addition, on March 6,
2009, we and ASARCO LLC, or Asarco, a US-based copper
mining, smelting and refining company, signed an agreement for
us to acquire substantially all of the operating assets of
Asarco for $1.7 billion. On June 12, 2009, we agreed
to increase the purchase consideration to $1.87 billion,
mostly related to an expected increase in working capital on the
closing date. The purchase consideration consists of a cash
payment of $1.1 billion on closing and a senior secured
non-interest bearing promissory note for $770 million,
payable over a period of nine years. The agreement remains
subject to approval by the US Bankruptcy Court for the Southern
District of Texas, Corpus Christi Division, before which Asarco
has been in reorganization proceedings under Chapter 11 of
the US Bankruptcy Code. As a result, there can be no assurance
that court approval will be obtained or that the proposed
acquisition will be concluded. If this acquisition is completed,
we will acquire ownership of Asarcos three open-pit copper
mines, which had estimated reserves of 5.2 million tons of
contained copper as of January 2008, associated mills, solvent
extraction and electrowinning, or SX-EW, plant and a copper
smelter in the State of Arizona, United States and a copper
refinery, rod plant, cake plant and precious metals plant in the
State of Texas, United States. See Item 5. Operating
and Financial Review and Prospects Recent
Developments of our Annual Report on
Form 20-F.
Our fully-integrated zinc business is owned and operated by HZL,
in which we have a 64.9% ownership interest. HZL is Indias
leading zinc producer with a 79.0% market share by production
volume of the Indian zinc market in fiscal 2009, according to
the ILZDA. HZL was the worlds third largest zinc mining
company in 2008 based on zinc mine production and is also one of
the top ten lead mining companies by production volume
worldwide, according to Brook Hunt. HZLs Rampura Agucha
mine was the largest lead-zinc mine in the world in terms of
contained zinc deposits on a production basis and the fourth
largest on a reserve basis, according to Brook Hunt. HZL was in
the lowest cost quartile in terms of all zinc mining operations
S-2
worldwide in 2008, the fourth largest producer of zinc worldwide
and the largest integrated producer of zinc worldwide based on
production volumes in 2008, according to Brook Hunt. In
addition, HZLs new Chanderiya hydrometallurgical zinc
smelter was the third largest smelter on a production basis
worldwide in 2008, according to Brook Hunt. We have 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%). It is our current intention to exercise our
call option to acquire the Government of Indias remaining
ownership interest in HZL. HZLs operations include four
lead-zinc mines, three zinc smelters, one lead smelter, one
lead-zinc smelter, three sulphuric acid plants, one silver
refinery, and captive power plants at our Chanderiya and Debari
facilities in Northwest India, one zinc smelter and a sulphuric
acid plant at our Vizag facility in Southeast India and one zinc
ingot melting and casting plant at Haridwar in North India.
Our aluminum business is primarily owned and operated by BALCO,
in which we have a 51.0% ownership interest. BALCO is one of the
five primary producers of aluminum in India and had a 28.0%
primary market share by production volume in India in fiscal
2009, according to AAI. We have exercised our option to acquire
the Government of Indias remaining 49.0% ownership
interest, although the exercise is currently subject to dispute.
Further, the Government of India has the right and has expressed
an intention to sell 5.0% of BALCO to BALCO employees.
BALCOs partially integrated operations include two bauxite
mines, captive power plants and refining, smelting and
fabrication facilities at our Korba facility in Central India.
BALCOs 245,000 tons per annum, or tpa, Korba aluminum
smelter was in the lowest cost quartile in terms of all aluminum
smelter operations worldwide in 2007, according to Brook Hunt.
BALCOs operations benefit from relatively cost effective
access to power, the most significant cost component in aluminum
smelting due to the power-intensive nature of the process. This
is to a considerable extent due to BALCO being an
energy-integrated aluminum producer. BALCO received a coal block
allocation of 211.0 million tons for use in its captive
power plants in November 2007. In addition, BALCO is seeking to
build a thermal coal-based 1,200 MW captive power facility,
along with an integrated coal mine, in the State of Chhattisgarh.
In addition, we are expanding our aluminum business through
Vedanta Aluminium Limited, or Vedanta Aluminium. We hold a 29.5%
minority interest in Vedanta Aluminium, a 70.5%-owned subsidiary
of Vedanta. Vedanta Aluminium is intended to be a fully
integrated alumina and aluminum producer with a 1.0 million
tpa, expandable to 1.4 million tpa subject to governmental
approvals, alumina refinery at Lanjigarh in the State of Orissa
in Eastern India, with an associated 75 MW captive power
plant, expandable to 90 MW. In March 2007, Vedanta
Aluminium began the progressive commissioning of the
1.0 million tpa greenfield alumina refinery. The Lanjigarh
alumina refinery started production from a single stream
operation and produced 585,597 tons of alumina in fiscal 2009.
The second production stream of the Lanjigarh alumina refinery
was commissioned in April 2009. Further, Vedanta Aluminium is
expanding its alumina refining capacity at the Lanjigarh
refinery from 1.4 million tpa to 2.0 million tpa
through debottlenecking, which is expected to be completed by
March 2010, and from 2.0 million tpa to 5.0 million
tpa by constructing a second 3.0 million tpa refinery with
an associated 210 MW coal-based captive power plant, which
are expected to be commissioned by mid-2011. Vedanta Aluminium
is in the process of obtaining all governmental approvals for
these expansion projects. In addition, Vedanta Aluminium is
building a greenfield 500,000 tpa aluminum smelter, together
with an associated 1,215 MW coal-based captive power plant,
in Jharsuguda in the State of Orissa. The project will be
implemented in two phases of 250,000 tpa each. Commissioning of
the first phase commenced in May 2008, six months ahead of
schedule, and was fully commissioned in May 2009. The second
phase is expected to be progressively commissioned from June
2009 through the end of fiscal 2010, subject to governmental
approvals. The commissioning of the captive power plant units is
scheduled to meet the power requirements of the new Jharsuguda
smelter and all other power requirements of the facility.
Vedanta Aluminium is also setting up another 1,250,000 tpa
aluminum smelter in Jharsuguda which is expected to be
progressively commissioned from March 2010 and to be completed
by September 2012.
We have been building and managing captive power plants since
1997. As of May 31, 2009, the total power generating
capacity of our captive power plants and wind power plants was
2,078.7 MW, including six thermal coal-based captive power
plants with a total power generation capacity of 1,604 MW
that we built within the last five years. In August 2006, our
shareholders approved a new strategy for us to enter into the
commercial power generation business in India. Our wholly owned
subsidiary Sterlite Energy is investing
S-3
approximately Rs. 82,000 million
($1,681.7 million) to build a 2,400 MW thermal
coal-based power facility (comprising four units of 600 MW
each) in Jharsuguda in the State of Orissa. The project is
expected to be progressively commissioned starting in the third
quarter of fiscal 2010, with full completion anticipated by the
second quarter of fiscal 2011. Sterlite Energy is building this
power facility in the State of Orissa, which has abundant coal
resources estimated at 65.3 billion tons as of
April 1, 2008, according to the Geological Survey of India
2008. In addition, in July 2008, Sterlite Energy was awarded the
tender for a project to build a 1,980 MW thermal coal-based
commercial power plant at Talwandi Sabo, in the State of Punjab,
India, by the Government of Punjab. The project is expected to
be completed in April 2013.
Competitive
Strengths
We believe that we have the following competitive strengths:
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High quality assets and resources making us a low-cost producer;
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Leading non-ferrous metals and mining company in India with a
diversified product portfolio;
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Ideally positioned to capitalize on Indias growth and
resource potential;
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Strong pipeline of growth projects;
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Experience for entry into commercial power generation business
in India;
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Experienced and entrepreneurial management team with outstanding
track record; and
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Ability and capacity to finance world-class projects.
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Strategy
Our goal is to generate strong financial returns and create a
world-class metals and mining company. Our strategy is to
continue to grow our business by completing our existing
expansion projects as well as setting up new greenfield and
brownfield projects. We intend to take advantage of our low-cost
base, expand our position in India as a supplier of copper, zinc
and aluminum products and further develop our exports of these
products. We are also leveraging our experience in building and
managing captive power plants to develop a commercial power
generation business in India and will continue to closely
monitor the Indian resource markets in our existing lines of
business as well as new opportunities such as iron ore and coal.
Key elements of our strategy include:
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Continuing focus on asset optimization and reducing the cost of
production;
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Increasing our capacities through greenfield and brownfield
projects;
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Leveraging our project execution and operating skills and
experience in building and managing captive power plants to
develop a commercial power generation business;
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Seeking further growth and acquisition opportunities that
leverage our transactional, project execution and operational
skills and experience; and
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Consolidating our corporate structure and increasing our direct
ownership of our underlying businesses to derive additional
synergies as an integrated group.
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S-4
Recent
Developments
On July 14, 2009, we filed Amendment No. 1 to our
annual report on
Form 20-F
for the fiscal year ended March 31, 2009, which was
originally filed with the SEC on July 10, 2009. We filed
Amendment No. 1 to our annual report on
Form 20-F
solely for the purposes of:
1. Presenting the following capital expenditure amounts
prepared under US GAAP which is the basis of accounting under
which we prepared our financial statements included in the
original
Form 20-F.
The prior amounts that appeared in the
Form 20-F
filed on July 10, 2009 were not prepared under US GAAP.
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Capital
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US GAAP Capital
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Expenditure
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Expenditure
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Amounts
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Amounts
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Included in the
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Included in the
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Form 20-F Section Reference
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Original Form 20-F
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Amendment No. 1
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Item 4. Information on the Company B. Business
Overview Our Business Competitive
Strengths Experienced and entrepreneurial management
team with outstanding track record
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Rs. 290,696 million
($5,714.5 million)
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Rs. 280,302 million
($5,510.2 million)
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Item 4. Information on the Company B. Business
Overview Our Business Our Copper
Business Principal Facilities Fujairah
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$5.0 million
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$5.2 million
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Item 4. Information on the Company B. Business
Overview Our Business Our Aluminum
Business Projects and Developments
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Rs. 13,224 million
($260.0 million)
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Rs. 12,918 million
($253.9 million)
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Item 4. Information on the Company B. Business
Overview Our Business Vedanta
Aluminium Projects and Developments
Lanjigarh Alumina Refinery
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Rs. 41,054 million
($807.0 million)
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Rs. 34,372 million
($675.7 million)
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Item 4. Information on the Company B. Business
Overview Our Business Vedanta
Aluminium Projects and Developments
Lanjigarh Alumina Refinery
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Rs. 4,065 million
($79.9 million)
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Rs. 6,773 million
($133.1 million)
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Item 4. Information on the Company B. Business
Overview Our Business Vedanta
Aluminium Projects and Developments
Jharsuguda Aluminum Smelter 500,000 tpa Aluminum
Smelter
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Rs. 87,043 million
($1,711.1 million)
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Rs. 80,999 million
($1,592.3 million)
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Item 4. Information on the Company B. Business
Overview Our Business Vedanta
Aluminium Projects and Developments
Jharsuguda Aluminum Smelter 1,250,000 tpa Aluminum
Smelter
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Rs. 17,223 million
($338.6 million)
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Rs. 16,109 million
($316.7 million)
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Item 4. Information on the Company B. Business
Overview Our Business Our Commercial
Power Generation Business Our Plans for Commercial
Power Generation Sterlite Energy Orissa
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Rs. 39,121 million
($769.0 million)
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Rs. 37,545 million
($738.1 million)
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Item 5. Operating and Financial Review and
Prospects Liquidity and Capital Resources
Capital Requirements
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Rs. 13,224 million
($260.0 million)
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Rs. 12,918 million
($253.9 million)
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2. Revising the definition of SRK at
Item 4. Information on the Company B.
Business Overview Our Business Basis of
Presentation of Ore Reserves so that references to
SRK are to SRK Consulting (UK) Ltd only and not to
SRK (Australasia) Pty Ltd.
3. Revising the number of awards held by our directors and
officers as a group under the Vedanta LTIP as set forth under
Item 6. Directors, Senior Management and
Employees B. Compensation Outstanding
Awards and Options so that as of March 31, 2009, our
directors and executive officers as a group held awards vested
under the Vedanta LTIP to acquire an aggregate of 76,415
ordinary shares (instead of the
S-5
previously reported 240,500 ordinary shares) of Vedanta
representing approximately 0.03% (instead of the previously
reported 0.1%) of Vedantas share capital.
4. Revising the liability for compensated absences as set
forth under Item 6. Directors, Senior Management and
Employees B. Compensation Compensated
Absence so that the liability for compensated absence was
Rs. 870 million ($17.1 million) in fiscal 2009
(instead of the previously reported Rs. 729 million
($14.3 million)).
5. Revising the number of Vedanta ordinary shares that our
directors and officers are entitled to acquire pursuant to
options vested under the Vedanta LTIP as set forth under
Item 6. Directors, Senior Management and
Employees B. Compensation Vedanta
Long-Term Incentive Plan so that during fiscal 2009,
options to acquire 76,415 Vedanta ordinary shares (instead of
the previously reported 240,500 Vedanta ordinary shares) under
the Vedanta LTIP vested to our directors and executive officers,
and deleting the next sentence which states Of these,
options to acquire 150,400 and 90,100 Vedanta ordinary shares
were granted on February 1, 2006 and November 15,
2007, respectively, with an exercise price of $0.10 per ordinary
share.
All translations in this section Recent
Developments from Indian Rupees to US dollars are based on
the noon buying rate in New York City for cable transfers in
Indian Rupees as certified by the Federal Reserve Bank of New
York on March 31, 2009, which was Rs. 50.87 per $1.00. No
representation is made that the Indian Rupee amounts have been,
could have been or could be converted into US dollars at such a
rate or any other rate.
We were incorporated on September 8, 1975 under the laws of
India and maintain a registered office at SIPCOT Industrial
Complex, Madurai Bypass Road, T.V. Puram P.O., Tuticorin, State
of Tamil Nadu 628 002, India. Our principal executive office is
located at Vedanta, 75 Nehru Road, Vile Parle (East), Mumbai,
Maharashtra 400 099, India and the telephone number for this
office is
+(91-22)
6646-1000.
Our website address is www.sterlite-industries.com. Information
contained on our website, or the website of any of our
subsidiaries or affiliates, including Vedanta and other members
of the Vedanta group, is not a part of this prospectus
supplement or the accompanying prospectus.
We have appointed CT Corporation System, 111 Eighth Avenue, New
York, New York 10011, as our agent to receive service of process
with respect to any action brought against us in the US District
Court for the Southern District of New York under the federal
securities laws of the United States or of any state in the
United States or any action brought against us in the Supreme
Court of the State of New York in the County of New York under
the securities laws of the State of New York.
S-6
THE
OFFERING
The following contains basic information about our ADSs being
offered and is not intended to be complete. It does not contain
all the information that is important to you. For a more
complete understanding of our ADSs, please refer to sections in
the accompanying prospectus entitled Description of Share
Capital and Description of American Depositary
Shares.
|
|
|
Offering price
|
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$12.150 per ADS. |
|
ADSs offered
|
|
123,456,790 ADSs representing 123,456,790 equity shares,
constituting approximately 14.84% of our issued and outstanding
equity shares upon completion of this ADS offering (assuming no
exercise of the underwriters over-allotment option to
purchase additional ADSs). |
|
Over-allotment option granted by us
|
|
We have granted the underwriters an option exercisable within
30 days from the date of this prospectus supplement to
purchase up to an aggregate of an additional 12,345,679 ADSs,
representing 12,345,679 equity shares, at the initial price to
the public, less the underwriting discount. The over-allotment
option granted by us is equivalent to 15% of the offering size,
excluding the 41,152,263 ADSs allocated to our parent, Vedanta,
either directly or through a subsidiary of Vedanta. |
|
Equity shares to be outstanding immediately after this offering
|
|
831,951,201 equity shares (assuming no exercise of the
underwriters over-allotment option to purchase additional
ADSs). |
|
ADSs to be outstanding immediately after this offering
|
|
186,868,236 ADSs (assuming no exercise of the underwriters
over-allotment option to purchase additional ADSs) based on the
number of ADSs outstanding (as of the close of business in New
York) on July 10, 2009 and the number of ADSs issued in
this offering. |
|
The ADSs
|
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Each ADS represents the right to receive one equity share. The
ADSs will be issued and delivered by Citibank, N.A., as
Depositary. |
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The Depositary will only deliver equity shares upon surrender of
ADSs to the extent the number of equity shares at that time
deposited with Citibank, N.A., Mumbai Branch, as Custodian, have
been listed for trading on the NSE and the BSE, and
dematerialized. The Depositary will process requests for
withdrawal of the equity shares represented by ADSs surrendered
to it on a first come, first served basis. |
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|
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You should carefully read Description of American
Depositary Shares in the accompanying prospectus to better
understand the terms of the ADSs. You should also read the
deposit agreement which is an exhibit to the registration
statement filed with the SEC, on
Form F-6
(Registration
No. 333-139102)
to register the ADSs. |
|
Use of proceeds
|
|
Our net proceeds from the sale of ADSs in this offering will
total approximately $1,482.5 million after deducting the
underwriting discounts and commissions and estimated offering
expenses which are payable by us (excluding any discretionary
fee that we may in our sole discretion determine to pay to the
underwriters). We intend to use the net proceeds from this
offering for the further development of our power generation
business in India, planned |
S-7
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capital expenditures, planned and other potential acquisitions
of complementary businesses that we determine to be attractive
opportunities and/or general corporate purposes. See Use
of Proceeds. |
|
Risk factors
|
|
An investment in our ADSs involves risks. You should carefully
consider the information set forth in the sections of this
prospectus supplement and the accompanying prospectus entitled
Risk Factors, as well as other information included
in or incorporated by reference into this prospectus supplement
and the accompanying prospectus before deciding whether to
invest in the ADSs. |
|
Payment and settlement
|
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The ADSs are expected to be delivered against payment
on July 21, 2009. The ADRs evidencing the ADSs will be
deposited with a custodian for, and registered in the name of a
nominee of, The Depository Trust Company, or DTC, in New
York, New York. Unless you elect to receive an ADR certificate
evidencing your ADSs, in general, beneficial interests in the
ADSs will be shown on, and transfers of these beneficial
interests will be effected through, records maintained by DTC
and its direct and indirect participants. |
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Listing and trading
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Our ADSs are listed on the New York Stock Exchange, or NYSE. Our
outstanding equity shares are listed and traded in India on the
NSE and the BSE. |
|
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We have applied to have the ADSs offered hereby listed on the
NYSE. We expect the equity shares to be represented by the ADSs
offered hereby to be (i) listed for trading on the Indian Stock
Exchanges approximately 45 days after the closing of this
offering and (ii) dematerialized in the account of the
Custodian approximately 10 Indian business days following
receipt by the Depositary of confirmation of listing of the
equity shares for trading on the Indian Stock Exchanges. We
expect the equity shares to be represented by the ADSs issuable
upon exercise of the over-allotment option to be (i) listed for
trading on the Indian Stock Exchanges approximately 45 days
after the closing of the over-allotment option and
(ii) dematerialized in the account of the Custodian
approximately 10 Indian business days following receipt by the
Depositary of confirmation of listing of the equity shares for
trading on the Indian Stock Exchanges. |
|
NYSE symbol for the ADSs
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SLT |
|
Depositary for the ADSs
|
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Citibank, N.A. |
|
Lock-up
|
|
We, our principal shareholders, Twin Star Holdings Limited, or
Twin Star and The Madras Aluminium Company Limited, or MALCO,
Vedanta and our directors and executive officers have agreed not
to, during the period commencing on the date of this prospectus
supplement and ending on the day after the date 90 days after
the date of this prospectus supplement, offer, pledge, announce
the intention to sell, sell, contract to sell, sell any option
or contract to purchase, purchase any option or contract to
sell, grant or exercise any option, right or warrant to
purchase, lend or otherwise transfer or dispose of, directly or
indirectly, or file or cause to be filed a registration
statement, or exercise any registration right, in respect of,
any of our ADSs or equity shares |
S-8
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|
|
or any securities convertible into or exchangeable or
exercisable for any ADSs or equity shares, or any similar
securities, or enter into any swap or other agreement that
transfers, in whole or in part, any of the economic consequences
of ownership of our ADSs or equity shares, subject to certain
exceptions. |
|
Restrictions on ADSs relating to the Indian Stock Exchanges
|
|
ADS holders may not surrender their ADSs to the Depositary for
the purpose of withdrawing the deposited shares until we have
confirmed to the Depositary that we have received confirmation
from the Indian Stock Exchanges that the underlying equity
shares have been listed for trading thereon and have therefore
become listed shares and such equity shares have been
dematerialized. We expect (i) to receive the confirmation
from the Indian Stock Exchanges of the listing of the equity
shares underlying the ADSs approximately 45 days after the
closing of the ADS offering, or approximately 45 days after
the closing of the over-allotment option for any ADSs that are
sold as part of an exercise of the ADS offering over-allotment
option and (ii) the equity shares underlying the ADSs to be
dematerialized in the account of the Custodian approximately 10
Indian business days following receipt by the Depositary of
confirmation of listing of the equity shares for trading on the
Indian Stock Exchanges. The Depositary will process applications
for withdrawal of ADSs for cancellation on a first come, first
served basis and only to the extent of the number of listed
shares deposited at that time with the Custodian. |
|
Vedanta participation
|
|
Our parent, Vedanta, intends to purchase ADSs in this offering
either directly or through a subsidiary and has been allocated
41,152,263 ADSs offered in this offering. Such purchases
will be made on the same terms and conditions as offered to the
public. We will not pay any underwriting discount or commission
on any ADSs purchased by our affiliates in this offering. |
On July 15, 2009, the closing price of our ADSs on the NYSE
was $12.94 per ADS. On July 15, 2009, the closing price of
our equity shares on the BSE was Rs. 628.65 per equity
share and on the NSE was Rs. 629.50 per equity share.
Established in 1875, the BSE is the first stock exchange in
India to have obtained permanent recognition in 1956 from the
Government of India under the Securities Contracts (Regulation)
Act, 1956, as amended, or SCRA, and has evolved over the years
into its present status as the largest stock exchange in India.
First recognized as a stock exchange under the SCRA in April
1993, the NSE, with a wide network in major metropolitan cities,
screen based trading and a central monitoring system, has
recorded high volumes of trading.
S-9
RISK
FACTORS
An investment in our ADSs involves material risks. You should
carefully consider the risks set forth below and in our Annual
Report on Form 20-F, as well as all of the other information
contained or incorporated by reference in this prospectus
supplement and the accompanying prospectus, before deciding to
invest in our ADSs. The occurrence of any of the following risks
could materially and adversely affect our business, financial
condition, results of operations and prospects. In such case,
the trading price of our ADSs could decline and you could lose
all or part of your investment. In addition, please read
Special Note Regarding Forward-Looking Statements in
the accompanying prospectus where we describe additional
uncertainties associated with our business and the
forward-looking statements included or incorporated by reference
in this prospectus supplement.
Risks
Relating to the ADS Offering and Our ADSs
An
active or liquid trading market for our ADSs is not
assured.
While this offering will increase the number of our ADSs
publicly trading on the NYSE, an active, liquid trading market
for our ADSs may not be maintained in the long term and we
cannot be certain that any trading market for our ADSs will be
sustained, or that the present price will correspond to the
future price at which our ADSs will trade in the public market.
Loss of liquidity could increase the price volatility of our
ADSs. Indian legal restrictions may also limit the supply of
ADSs. Any additional issuance of ADSs would dilute the positions
of existing investors in the equity shares and ADSs and could
adversely affect the market price of our equity shares and ADSs.
We cannot assure you that our ADSs will not decline below their
public offering price. The public offering price of our ADSs
will be determined by reference to the prevailing market price
and market conditions at the time of pricing. You may be unable
to resell your ADSs at a price that is attractive to you.
Substantial
future sales of our equity shares or ADSs in the public market,
or the perception of such sales, could cause the market price of
our ADSs to fall.
If our existing shareholders sell a substantial number of our
equity shares in the open market, or if there is a perception
that such sale or distribution could occur, the market price of
our equity shares and ADSs could be adversely affected. While
we, our principal shareholders, Twin Star and MALCO, Vedanta and
our directors and executive officers have agreed not to, during
the period commencing on the date of this prospectus supplement
and ending on the day after the date 90 days after the date of
this prospectus supplement, offer, pledge, announce the
intention to sell, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell,
grant or exercise any option, right or warrant to purchase, lend
or otherwise transfer or dispose of, directly or indirectly, or
file or cause to be filed a registration statement, or exercise
any registration right, in respect of, any of our ADSs or equity
shares or any securities convertible into or exchangeable or
exercisable for any ADSs or equity shares, or any similar
securities, or enter into any swap or other agreement that
transfers, in whole or in part, any of the economic consequences
of ownership of our ADSs or equity shares, subject to certain
exceptions, no assurance can be given that such equity shares or
ADSs will not be sold as soon as the restrictions are lifted,
which sales, or the perception that such sales may occur, could
materially and adversely affect the value of our equity shares
and ADSs. The underwriters may release such
locked-up
shares in their sole discretion at any time and without prior
public announcement.
Upon the completion of this offering, we will have 831,951,201
equity shares outstanding (excluding any equity shares issued
pursuant to the over-allotment option). Of these equity shares,
the equity shares represented by ADSs offered hereby will be
freely tradable without restriction in the public markets. Upon
the completion of this offering and after taking into account
the 41,152,263 ADSs to be purchased by Vedanta in this
offering, Vedanta, through Twin Star and MALCO, will have
effective control over 478,291,746 of our outstanding equity
shares, which will represent 57.5% of our outstanding share
capital, or 56.6% if the underwriters exercise their
over-allotment option in full, which equity shares will be
subject to a 90-day
S-10
lock-up
period. The holders of a total of approximately
478,310,246 equity shares will be subject to a 90-day
lock-up
period and be entitled to dispose of their equity shares
following the expiration of that period.
We
will have broad discretion in how we use the proceeds of this
offering and we may not use these proceeds effectively. This
could affect our profitability and cause the prices of our
equity shares and ADSs to decline.
Our management will have considerable discretion in the
application of the net proceeds of this offering, and you will
not have the opportunity, as part of your investment decision,
to assess whether we are using the proceeds appropriately. We
currently intend to use the net proceeds of this offering for
the further development of our power generation business in
India, planned capital expenditures, planned and other potential
acquisitions of complementary businesses that we determine to be
attractive opportunities and/or general corporate purposes. We
have not yet finalized the amount of net proceeds that we will
use specifically for each of these purposes. We may use the net
proceeds for corporate purposes that do not improve our
profitability or increase our market value, which could cause
the prices of our equity shares and ADSs to decline.
We retain broad discretion in our use of proceeds from this
offering and may not be able to use such proceeds in the manner
we have indicated in this prospectus supplement. As a result, we
may use such proceeds in a different manner, which may have a
material adverse effect upon our business, results of operations
or financial condition.
The
market price of our ADSs may be volatile.
The market price of our ADSs has and may continue to be
volatile. The high and low closing prices of our ADSs on the
NYSE were $28.97 and $11.12, respectively, for fiscal 2008 and
$23.0 and $3.12, respectively, for fiscal 2009. Numerous
factors, including many over which we have no control, may have
a significant impact on the market price of our ADSs, including,
among other things:
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a decline or volatility in the prices of or demand for copper,
zinc or aluminum;
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regulatory developments in our target markets affecting us, our
customers or our competitors;
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actual or anticipated fluctuations in our quarterly operating
results;
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changes in financial estimates or other material comments by
securities analysts relating to us, our competitors or our
industry in general;
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announcements by other companies in our industry relating to
their operations, strategic initiatives, financial condition or
financial performance or to our industry in general;
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announcements of acquisitions or consolidations involving
industry competitors or industry suppliers;
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sales or perceived sales of additional equity shares or ADSs by
us or our significant shareholders;
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impact and development of any lawsuit, currently pending or
threatened, or that may be instituted in the future; and
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fluctuations in the exchange rate between the Indian Rupee and
the US dollar.
|
In addition, the stock market in recent years and particularly
since mid-2008 has experienced extreme price and trading volume
fluctuations that often have been unrelated or disproportionate
to the operating performance of individual companies. These
broad market fluctuations may adversely affect the price of our
ADSs, regardless of our operating performance. These factors,
among others, could depress the trading price of our ADSs.
S-11
We may
be classified as a passive foreign investment company, which
could result in adverse United States federal income tax
consequences to US Holders.
A non-United
States corporation will be considered a passive foreign
investment company, or PFIC, for any taxable year if either
(1) at least 75% of its gross income is passive income or
(2) at least 50% of the total value of its assets (based on
an average of the quarterly values of the assets during a
taxable year) is attributable to assets, including cash, that
produce or are held for the production of passive income, or
passive assets. For this purpose, the total value of our assets
generally will be determined by reference to the market price of
our equity shares and ADSs. Based on the market prices of our
equity shares and ADSs and the composition of our income and
assets, we do not believe we were a PFIC for United States
federal income tax purposes for our taxable year ended
March 31, 2009, and we do not expect to be a PFIC for the
current taxable year ending March 31, 2010. However, we
generally will not be able to make a determination of our PFIC
status for any specific taxable year until the close of that
taxable year and we must make a separate determination each
taxable year as to whether we are a PFIC. In addition, a
decrease in the market value of our equity shares and ADSs
and/or an
increase in cash or other passive assets would increase the
relative percentage of our passive assets. Accordingly, we
cannot assure you that we will not be a PFIC for the current or
any future taxable year. If we are a PFIC for any taxable year
during which a US Holder (as defined in our Annual Report on
Form 20-F
under Item 10. Additional Information
E. Taxation United States Federal Income
Taxation) holds an ADS or an equity share, certain adverse
United States federal income tax consequences could apply to the
US Holder. We encourage you to read our Annual Report on
Form 20-F
under Item 10. Additional Information
E. Taxation United States Federal Income
Taxation Passive Foreign Investment Company
for information about PFIC status and certain elections that may
be available to mitigate such adverse United States federal
income tax consequences if we ever become a PFIC. US Holders are
urged to consult their own tax advisors regarding the potential
application of the PFIC rules to their ownership of ADSs or
equity shares and the availability and advisability of any
elections.
S-12
USE OF
PROCEEDS
We estimate that the net proceeds from the sale of ADSs will be
approximately $1,482.5 million, assuming no exercise of the
over-allotment option, after deducting the underwriters
discounts (excluding any discretionary fee that we may in our
sole discretion determine to pay to the underwriters) and
commissions and our estimated offering expenses.
We intend to use the net proceeds from this offering for any of
the following purposes:
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the further development of our power generation business in
India;
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planned capital expenditures;
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planned and other potential acquisitions of complementary
businesses that we determine to be attractive opportunities;
and/or
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general corporate purposes.
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The amounts that we actually expend for these and other purposes
will vary significantly depending on a number of factors,
including the timing and size of capital expenditures, our
ability to successfully consummate strategic acquisitions,
future revenue growth, if any, and the amount of cash that we
generate from operations. As a result, we will retain broad
discretion over the allocation of the net proceeds of the ADS
offering. See Risk Factors Risks Relating to
the ADS Offering and Our ADSs We will have broad
discretion in how we use the proceeds of this offering and we
may not use these proceeds effectively. This could affect our
profitability and cause the prices of our equity shares and ADSs
to decline. Pending their use, we intend to invest our net
proceeds in high quality interest-bearing investments.
S-13
CAPITALIZATION
AND INDEBTEDNESS
The following table sets forth our indebtedness and
capitalization as of March 31, 2009:
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on an actual basis; and
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as adjusted to give effect to the sale by us of 123,456,790 ADSs
(each ADS representing one equity share) offered in the ADS
offering at the offering price of $12.150 per ADS, after
deducting underwriting discounts (excluding any discretionary
fee that we may in our sole discretion determine to pay to the
underwriters) and commissions and estimated offering expenses
payable by us in this offering, and further assuming no exercise
by the underwriters of their over-allotment option and without
taking into account the application of the net proceeds of this
offering.
|
You should read this information in conjunction with our audited
consolidated financial statements and the related notes
incorporated by reference in this prospectus supplement and the
accompanying prospectus.
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As of March 31, 2009
|
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Actual
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As Adjusted
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(in millions)
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Long-term debt, net of current portion(1)
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$
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282.8
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$
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282.8
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Shareholders equity:
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Equity shares of par value Rs. 2,
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Authorized: 925,000,000
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Issued: 708,494,411 actual; 831,951,201, as adjusted
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27.9
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32.8
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Additional paid-in capital
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2,092.1
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3,569.7
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Retained earnings
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2,749.1
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2,749.1
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Accumulated other comprehensive losses
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(16.2
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)
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(16.2
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Total shareholders equity
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4,852.9
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6,335.4
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Total capitalization
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$
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5,135.7
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$
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6,618.2
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(1) |
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Includes $154.2 million of secured debt and
$128.6 million of unsecured debt. None of our debt is
guaranteed by Vedanta or by any third party. |
The US dollar amounts in this section have been translated from
Indian Rupees to US dollars based on the noon buying rate in New
York City for cable transfers in Indian Rupees as certified by
the Federal Reserve Bank of New York on March 31, 2009,
which was Rs. 50.87 per $1.00. No representation is made
that the Indian Rupee amounts have been, could have been or
could be converted into US dollars at such a rate or any other
rate.
S-14
UNDERWRITING
Under the terms and subject to the conditions in an underwriting
agreement dated the date of this prospectus supplement, each of
J.P. Morgan Securities Inc. and Morgan Stanley &
Co. International plc have severally agreed to purchase, and we
have agreed to sell, the number of ADSs listed next to its name
in the following table:
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Name
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Number of ADSs
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J.P. Morgan Securities Inc.
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61,728,395
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Morgan Stanley & Co. International plc
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61,728,395
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Total
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123,456,790
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The underwriters are offering the ADSs subject to their
acceptance of the ADSs from us and subject to prior sale. The
underwriting agreement provides that the obligations of the
underwriters to pay for and accept delivery of the ADSs offered
by this prospectus supplement and the accompanying prospectus
are subject to certain conditions precedent, including the
absence of any material adverse change in our business and the
receipt of certain certificates, opinions and letters from us,
our counsel and the independent auditors. The underwriters are
obligated to take and pay for all of the ADSs offered by this
prospectus supplement and the accompanying prospectus if any
such ADSs are taken. The underwriting agreement also provides
that if an underwriter defaults, the purchase commitments of
non-defaulting underwriter may be increased or the offering may
be terminated. However, the underwriters are not required to
take or pay for the ADSs covered by the underwriters
over-allotment option described below.
The underwriters propose to offer the ADSs directly to the
public at the initial public offering price set forth on the
cover page of this prospectus and to certain dealers at that
price less a concession not in excess of $0.09110 per ADS.
We have granted to the underwriters an option, exercisable for
30 days from the date of this prospectus supplement, to
purchase up to an aggregate of 12,345,679 additional ADSs at the
public offering price listed on the cover page of this
prospectus supplement, less underwriting discounts and
commissions, in approximately the same proportion as shown in
the table above. The over-allotment option granted by us is
equivalent to 15% of the offering size, excluding the 41,152,263
ADSs allocated to our parent, Vedanta, either directly or
through a subsidiary of Vedanta. If any additional ADSs are
purchased, the underwriters will offer the additional ADSs on
the same terms as those on which the ADSs are being offered. The
underwriters may exercise this option solely for the purpose of
covering over-allotments, if any, made in connection with the
offering of the ADSs offered by this prospectus supplement and
the accompanying prospectus. If the underwriters option is
exercised in full, the total price to the public (including the
ADSs to be purchased by Vedanta in this offering) would be
$1,650,000,000, the total underwriters discounts and
commissions would be $14,373,580 and total proceeds to us would
be $1,635,626,420.
In addition, we have agreed to pay to the underwriters a
discretionary performance fee of 0.25% of the price to public
per ADS multiplied by the total number of ADSs, including ADSs
sold to cover over-allotments, that the underwriters are
purchasing (in each case, excluding ADSs allocated to and
purchased by Vedanta, either directly or through a subsidiary).
The payment of such fee is to be determined in our sole
discretion prior to the settlement date of this offering. If we
decide to pay this discretionary fee, the underwriters will
receive additional commissions of $2,500,000 and we will receive
net proceeds of $1,485,001,235. If we decide to pay this
discretionary fee and the underwriters option is exercised
in full, the underwriters will receive additional commissions of
$2,875,000 and we will receive net proceeds of $1,632,751,420.
Our parent, Vedanta, intends to purchase ADSs in this offering
either directly or through a subsidiary and has been allocated
41,152,263 ADSs offered hereby. Such purchases will be made
on the same terms and conditions as offered to the public. We
will not pay any underwriting discount or commission on any ADSs
purchased by our affiliates in this offering.
Our ADSs are listed on the NYSE under the symbol
SLT. The equity shares underlying the ADSs issued in
this offering will be eligible for trading on the Indian Stock
Exchanges only after we have received
S-15
final listing and trading approvals from the Indian Stock
Exchanges, which we will apply for after the allotment of the
equity shares issued in this offering.
The equity shares represented by ADSs being offered pursuant to
this prospectus supplement and the accompanying prospectus
include equity shares represented by ADSs initially offered and
sold outside the United States pursuant to Regulation S
that may be resold from time to time in the United States in
transactions that require registration under the Securities Act
of 1933, as amended, or the Securities Act.
We estimate that the total expenses of the offering, excluding
underwriting discounts and commissions, will be approximately
$5.0 million, including registration fees of approximately
$0.1 million, estimated printing fees of approximately
$0.1 million, estimated legal fees and expenses of
approximately $0.6 million and estimated accounting fees
and expenses of approximately $0.3 million.
We are paying all our expenses of the offering, as well as
underwriting discounts and commissions. The underwriters are
paying their own expenses, including their own legal fees and
expenses.
We, our principal shareholders, Twin Star and MALCO, Vedanta and
our directors and executive officers have agreed that, without
the prior written consent of the underwriters, we will not,
during the period ending 90 days after the date of this
prospectus supplement:
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offer, pledge, announce the intention to sell, sell, contract to
sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant or exercise any option, right
or warrant to purchase, lend or otherwise transfer or dispose
of, directly or indirectly, or file or cause to be filed a
registration statement, or exercise any registration right, in
respect of, any ADSs or equity shares or any securities
convertible into or exchangeable or exercisable for any ADSs or
equity shares, or any similar securities; or
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enter into any swap or other agreement that transfers, in whole
or in part, any of the economic consequences of ownership of our
ADSs or equity shares,
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whether any transaction described above is to be settled by
delivery of ADSs or such other securities, in cash or otherwise
subject to certain exceptions.
The 90 day restricted period described in the preceding
paragraph will be extended if:
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during the last 17 days of the 90 day restricted
period we issue an earnings release or material news event
relating to us occurs, or
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prior to the expiration of the 90 day restricted period, we
announce that we will release earnings results during the
16 day period beginning on the last day of the 90 day
period,
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in which case the restrictions described in the preceding
paragraph will continue to apply until the expiration of the
18 day period beginning on the issuance of the earnings
release or the occurrence of the material news or material event.
The underwriters do not have any agreements or understandings,
tacit or explicit, or any present intent to release the
lock-ups
early.
A prospectus in electronic format may be made available on the
website maintained by the underwriters or securities dealers.
The underwriters may agree to allocate a number of ADSs for sale
to its online brokerage account holders. ADSs to be sold
pursuant to an internet distribution will be allocated by the
underwriters that may make internet distributions on the same
basis as other allocations. In addition, ADSs may be sold by the
underwriters to securities dealers who resell ADSs to online
brokerage account holders.
The underwriters reserve the right to withdraw, cancel or modify
the offering and to completely or partially reject any orders.
S-16
In order to facilitate the offering of ADSs, the underwriters
may engage in transactions that stabilize, maintain or otherwise
affect the price of the ADSs. These transactions may include
short sales, stabilizing transactions and purchases to cover
positions created by short sales. Short sales involve the sale
by the underwriters of a greater number of ADSs than they are
required to purchase in the offering. Covered short sales are
sales made in an amount not greater than the option of the
underwriters to purchase additional ADSs from us in the
offering. The underwriters may close out any covered short
position by either exercising their option to purchase
additional ADSs or purchasing additional ADSs in the open
market. In making this determination, the underwriters will
consider, among other things, the price of ADSs available for
purchase in the open market as compared to the price at which
they may purchase ADSs through the over-allotment option. Naked
short sales are any sales in excess of such option. The
underwriters must close out any naked short position by
purchasing ADSs in the open market. A naked short position is
more likely to be created if the underwriters are concerned that
there may be downward pressure on the price of ADSs in the open
market after pricing that could adversely affect investors who
purchase in the offering. The underwriters may also reclaim
selling concessions allowed to a dealer for distributing the
ADSs in the offering, if the underwriters repurchase previously
distributed ADSs in transactions to cover the underwriters
short positions, in stabilization transactions or otherwise. The
underwriters are not required to engage in these activities, and
may end any of these activities at any time.
From time to time, the underwriters and their affiliates have
provided, and continue to provide, commercial banking, financial
advisory, investment banking and other services to us and our
affiliates in the ordinary course of their business, for which
they have received and may continue to receive customary fees
and commissions. In addition, from time to time, certain of the
underwriters and their affiliates may effect transactions for
their own account or the account of customers, and hold on
behalf of themselves or their customers, long or short positions
in our debt or equity securities or loans, and may do so in the
future. As of July 10, 2009, affiliates of the underwriters
owned approximately 29,683,516 of our equity shares.
We have agreed to indemnify the underwriters against certain
liabilities, including liabilities under the Securities Act.
We have been advised that J.P. Morgan Securities Inc. and
Morgan Stanley International plc, through their registered
broker-dealer affiliates, J.P. Morgan Securities Inc. and
Morgan Stanley & Co. Incorporated, expect to make
offers and sales in the United States.
The underwriters may be contacted at the following addresses:
J.P.Morgan Securities Inc., attention: Head of Syndicate, 383
Madison Avenue New York, NY 10179, United States and Morgan
Stanley & Co. International plc, 25 Cabot Square,
Canary Wharf, London E14 4QA, United Kingdom.
No action has been taken in any jurisdiction (except in the
United States) that would permit a public offering of the ADSs,
or the possession, circulation or distribution of this
prospectus supplement and the accompanying prospectus or any
other material relating to us or the ADSs in any jurisdiction
where action for that purpose is required. Accordingly, the ADSs
may not be offered or sold, directly or indirectly, and neither
this prospectus supplement, the accompanying prospectus nor any
other offering material or advertisements in connection with the
ADSs may be distributed or published, in or from any
jurisdiction except in compliance with any applicable rules and
regulations of any such country or jurisdiction.
Australia
This prospectus supplement is not a formal disclosure document
and has not been lodged with the Australian Securities and
Investments Commission. It does not purport to contain all
information that an investor or their professional advisers
would expect to find in a product disclosure statement for the
purposes of Part 7.9 of the Corporations Act 2001
(Australia) in relation to the ADSs.
The ADSs are not being offered in Australia to retail
clients as defined in section 761G of the
Corporations Act 2001 (Australia). This offering is being made
in Australia solely to wholesale clients as defined
in section 761G of the Corporations Act 2001 (Australia)
and as such no product disclosure statement in relation to the
ADSs has been prepared.
S-17
This prospectus supplement does not constitute an offer in
Australia other than to wholesale clients. By submitting an
application for our ADSs, you represent and warrant to us that
you are a wholesale client. If any recipient is not a wholesale
client, no applications for our ADSs will be accepted from such
recipient. Any offer to a recipient in Australia, and any
agreement arising from acceptance of such offer, is personal and
may only be accepted by the recipient. In addition, by applying
for our ADSs you undertake to us that, for a period of
12 months from the date of issue of the ADSs, you will not
transfer any interest in the ADSs to any person in Australia
other than a wholesale client.
European
Economic Area
In relation to each Member State of the European Economic Area,
or EEA, which has implemented the Prospectus Directive, each a
Relevant Member State, with effect from, and including, the date
on which the Prospectus Directive is implemented in that
Relevant Member State, or the Relevant Implementation Date, an
offer to the public of our ADSs which are the subject of the
offering contemplated by this prospectus supplement may not be
made in that Relevant Member State, except that, with effect
from, and including, the Relevant Implementation Date, an offer
to the public in that Relevant Member State of our ADSs may be
made at any time under the following exemptions under the
Prospectus Directive, if they have been implemented in that
Relevant Member State:
(a) to legal entities which are authorized or regulated to
operate in the financial markets, or, if not so authorized or
regulated, whose corporate purpose is solely to invest in our
securities;
(b) to any legal entity which has two or more of
(1) an average of at least 250 employees during the
last financial year; (2) a total balance sheet of more than
43,000,000 and (3) an annual net turnover of more
than 50,000,000, as shown in its last annual or
consolidated accounts;
(c) to fewer than 100 natural or legal persons (other than
qualified investors as defined in the Prospectus Directive)
subject to obtaining the prior consent of the representatives
for any such offer; or
(d) in any other circumstances falling within
Article 3(2) of the Prospectus Directive;
provided that no such offer of our ADSs shall result in a
requirement for the publication by us or any underwriter or
agent of a prospectus pursuant to Article 3 of the
Prospectus Directive. As used above, the expression
offered to the public in relation to any of our ADSs
in any Relevant Member State means the communication in any form
and by any means of sufficient information on the terms of the
offer and our ADSs to be offered so as to enable an investor to
decide to purchase or subscribe for our ADSs, as the same may be
varied in that Member State by any measure implementing the
Prospectus Directive in that Member State and the expression
Prospectus Directive means Directive 2003/71/EC and
includes any relevant implementing measure in each Relevant
Member State.
The EEA selling restriction is in addition to any other selling
restrictions set out in this prospectus supplement.
Hong
Kong
Our ADSs may not be offered or sold in Hong Kong, by means of
this prospectus supplement or any document other than to persons
whose ordinary business is to buy or sell shares, whether as
principal or agent, or in circumstances which do not constitute
an offer to the public within the meaning of the Companies
Ordinance (Cap. 32, Laws of Hong Kong). No advertisement,
invitation or document relating to our ADSs may be issued or may
be in the possession of any person other than with respect to
the securities which are or are intended to be disposed of only
to persons outside Hong Kong or only to professional
investors within the meaning of the Securities and Futures
Ordinance (Cap. 571, Laws of Hong Kong) and any rules made
thereunder.
S-18
India
Other than to eligible mutual funds in India in compliance with
Indian laws, no prospectus or prospectus supplement relating to
the ADS offering may be distributed directly or indirectly in
India to the residents of India and the Underwriters may not
offer or sell, directly or indirectly, any ADSs in India to, or
for the account or benefit of, any resident in India. Neither
the prospectus nor the prospectus supplement in relation to the
ADS offering have been reviewed or approved by any statutory or
regulatory authority in India and do not constitute an offer or
invitation for any investment or subscription for shares in
India.
Erstwhile overseas corporate bodies as defined under the Foreign
Exchange Management (Withdrawal of General Permission to
Overseas Corporate Bodies) Regulations 2003, which are not
eligible to invest in India and entities prohibited by the
Securities and Exchange Board of India from buying, selling or
dealing in securities of Indian companies, are not eligible to
subscribe to the ADS offering.
Japan
Our ADSs have not been and will not be registered under the
Financial Instruments and Exchange Law of Japan and our ADSs
will not be offered or sold, directly or indirectly, in Japan,
or to, or for the benefit of, any resident of Japan (which term
as used herein means any person resident in Japan, including any
corporation or other entity organized under the laws of Japan),
or to others for re-offering or resale, directly or indirectly,
in Japan, or to a resident of Japan, except pursuant to an
exemption from the registration requirements of, and otherwise
in compliance with, the Financial Instruments and Exchange Law
and any other applicable laws, regulations and ministerial
guidelines of Japan.
Singapore
This prospectus supplement has not been registered as a
prospectus with the Monetary Authority of Singapore.
Accordingly, this prospectus supplement and any other document
or material in connection with the offer or sale, or invitation
for subscription or purchase, of our ADSs may not be circulated
or distributed, nor may our ADSs be offered or sold, or be made
the subject of an invitation for subscription or purchase,
whether directly or indirectly, to persons in Singapore other
than (i) to an institutional investor under
Section 274 of the Securities and Futures Act,
Chapter 289 of Singapore, or SFA, (ii) to a relevant
person or any person pursuant to Section 275(1A), and in
accordance with the conditions specified in Section 275 of
the SFA, or (iii) otherwise pursuant to, and in accordance
with the conditions of, any other applicable provision of the
SFA, in each case subject to compliance with conditions set
forth in the SFA.
Where our ADSs are subscribed or purchased under
Section 275 by a relevant person which is: (a) a
corporation (which is not an accredited investor as defined in
Section 4A of the SFA) the sole business of which is to
hold investments and the entire share capital of which is owned
by one or more individuals, each of whom is an accredited
investor; or (b) a trust (where the trustee is not an
accredited investor) whose sole purpose is to hold investments
and each beneficiary of the trust is an individual who is an
accredited investor; shares, debentures and units of shares and
debentures of that corporation or the beneficiaries rights
and interest (howsoever described) in that trust shall not
transferred within six months after that corporation or that
trust has acquired the ADSs under Section 275 of the SFA,
except: (1) to an institutional investor (for corporations
under Section 274 of the SFA) or to a relevant person
defined in Section 275(2) of the SFA, or to any person
pursuant to an offer that is made on terms that such shares,
debentures and units of shares and debentures of that
corporation or such rights and interest in that trust are
acquired at a consideration of not less than S$200,000 (or its
equivalent in a foreign currency) for each transaction, whether
such amount is to be paid for in cash or by exchange of
securities or other assets, and further for corporations, in
accordance with the conditions, specified in Section 275 of
the SFA; (2) where no consideration is or will be given for
the transfer; or (3) where the transfer is by operation of
law.
S-19
Switzerland
This prospectus supplement and the accompanying prospectus does
not constitute a prospectus within the meaning of
Article 652a or 1156 of the Swiss Code of Obligations
(Schweizerisches Obligationenrecht), and none of this offering
and the ADSs has been or will be approved by any Swiss
regulatory authority.
United
Arab Emirates
This prospectus supplement and the accompanying prospectus is
not intended to constitute an offer, sale or delivery of ADSs or
other securities under the laws of the United Arab Emirates, or
UAE. The ADSs have not been and will not be registered under
Federal Law No. 4 of 2000 Concerning the Emirates
Securities and Commodities Authority and the Emirates Security
and Commodity Exchange, or with the UAE Central Bank, the Dubai
Financial Market, the Abu Dhabi Securities Market or with any
other UAE exchange.
This offering, the ADSs and interests therein have not been
approved or licensed by the UAE Central Bank or any other
relevant licensing authorities in the UAE, and do not constitute
a public offer of securities in the UAE in accordance with the
Commercial Companies Law, Federal Law No. 8 of 1984 (as
amended) or otherwise.
In relation to its use in the UAE, this prospectus supplement
and the accompanying prospectus is strictly private and
confidential and is being distributed to a limited number of
investors and must not be provided to any person other than the
original recipient, and may not be reproduced or used for any
other purpose. The interests in the ADSs may not be offered or
sold directly or indirectly to the public in the UAE.
United
Kingdom
This prospectus supplement is only being distributed to and is
only directed at (1) persons who are outside the United
Kingdom, (2) investment professionals falling within
Article 19(5) of the Financial Services and Markets Act
2000 (Financial Promotion) Order 2005, or Order; or
(3) high net worth companies, and other persons to who it
may lawfully be communicated, falling within
Article 49(2)(a) to (d) of the Order, all such persons
together being referred to as relevant persons. The
ADSs are only available to, and any invitation, offer or
agreement to subscribe, purchase or otherwise acquire such
securities will be engaged in only with, relevant persons. Any
person who is not a relevant person should not act or rely on
this prospectus supplement or any of its contents.
S-20
LEGAL
MATTERS
The validity of the equity shares represented by the ADSs
offered by this prospectus supplement and the accompanying
prospectus will be passed upon for us by S&R Associates,
our Indian counsel. Certain matters relating to US federal
securities law in connection with this offering will be passed
upon by Latham & Watkins LLP, our US counsel.
Latham & Watkins LLP may rely upon S&R Associates
with respect to certain matters governed by Indian law. Certain
matters relating to Indian law will be passed upon on behalf of
the underwriters by Luthra & Luthra Law Offices,
Indian counsel for the underwriters. Certain matters relating to
US federal securities law in connection with this offering will
be passed upon on behalf of the underwriters by
Shearman & Sterling LLP, US counsel for the
underwriters. Shearman & Sterling LLP may rely upon
Luthra & Luthra Law Offices with respect to certain
matters governed by Indian law.
S-21
PROSPECTUS
Sterlite Industries (India)
Limited
American Depositary Shares
Representing Equity Shares
We may offer and sell the securities from time to time in one or
more offerings, at prices and on terms described in one or more
supplements to this prospectus. In addition, this prospectus may
be used to offer securities for the account of persons other
than us. This prospectus provides you with a general description
of the securities we may offer. Our American Depositary Shares,
or ADSs, are listed on the New York Stock Exchange under the
symbol SLT. Each ADS represents one equity share,
par value Rs. 2 per share. Our equity shares are listed and
traded in India on the National Stock Exchange of India Limited,
or the NSE, and the Bombay Stock Exchange Limited, or the BSE.
Each time we or any security holder sell the securities, we will
provide a supplement to this prospectus that contains specific
information about the offering and the terms of the securities.
The supplement may also add, update or change information
contained in this prospectus. We may also authorize one or more
free writing prospectuses to be provided in connection with a
specific offering. You should carefully read this prospectus,
the applicable prospectus supplement and any related free
writing prospectuses, as well as any documents incorporated by
reference in this prospectus or any prospectus supplement,
before you invest in any of our securities.
The securities may be offered directly by us or by any selling
security holder, through agents designated from time to time by
us or to or through underwriters or dealers. The names of any
underwriters will be included in the applicable prospectus
supplement.
Investing in our securities involves risks. See the
Risk Factors section contained in this prospectus,
the applicable prospectus supplement, any related free writing
prospectuses and in the documents we incorporate by reference in
this prospectus, the applicable prospectus supplement and any
related free writing prospectuses to read about factors you
should consider before investing in our securities.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or passed upon the accuracy or completeness of this
prospectus. Any representation to the contrary is a criminal
offense.
The date of this prospectus is July 15, 2009.
TABLE OF
CONTENTS
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1
ABOUT
THIS PROSPECTUS
This document is called a prospectus and is part of a
registration statement that we filed with the United States
Securities and Exchange Commission, or the SEC, using an
automatic shelf registration process as a well-known
seasoned issuer as defined in Rule 405 under the
Securities Act of 1933, as amended, or the Securities Act. By
using a shelf registration statement, we or any selling security
holder may sell securities from time to time and in one or more
offerings. This prospectus provides you with a summary
description of our securities. Each time we or any selling
security holder sells the securities, we will provide a
supplement to this prospectus that contains specific information
about the securities being offered and the specific terms of
that offering. The supplement may also add, update or change
information contained in this prospectus. If there is any
inconsistency between the information in this prospectus and any
prospectus supplement, you should rely on the prospectus
supplement. Before purchasing any of the securities, you should
carefully read both this prospectus and any supplement, together
with the additional information described under the heading
Where You Can Find More Information About Us and
Incorporation of Documents by Reference.
You should rely only on the information contained or
incorporated by reference in this prospectus, in any applicable
prospectus supplement or any related free writing prospectus. We
have not authorized any other person to provide you with
different information. If anyone provides you with different or
inconsistent information, you should not rely on it. We will not
make an offer to sell these securities in any jurisdiction where
the offer or sale is not permitted. You should assume that the
information appearing in this prospectus, the applicable
supplement to this prospectus or in any related free writing
prospectus is accurate as of the date on its respective cover,
and that any information incorporated by reference is accurate
only as of the date of the document incorporated by reference,
unless we indicate otherwise. Our business, financial condition,
results of operations and prospects may have changed since those
dates.
You should read this prospectus, the applicable prospectus
supplement and any related free writing prospectuses together
with the additional information described under the heading
Where You Can Find More Information About Us and
Incorporation of Documents by Reference.
Unless otherwise stated in this prospectus or unless the context
otherwise requires, references in this prospectus to
we, our, us, the
Company and Sterlite are to Sterlite
Industries (India) Limited, Limited, 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, Fujairah Gold FZE, Sterlite
(USA), Inc., or Sterlite USA, and Talwandi Sabo Power Limited,
or TSPL. References to the Vedanta group are to
Vedanta Resources plc, or Vedanta, and its subsidiaries. In this
prospectus, references to US or United
States are to the United States of America, its
territories and its possessions. References to India
are to the Republic of India. References to $ or
US$ or dollars or US dollars
are to the legal currency of the United States and references to
Rs. or rupees or Indian
rupees are to the legal currency of India. References to a
particular fiscal year are to our fiscal year ended
March 31 of such year.
Unless otherwise stated herein, all translations in this
prospectus from Indian Rupees to US dollars are based on the
noon buying rate in New York City for cable transfers in Indian
Rupees as certified by the Federal Reserve Bank of New York on
July 10, 2009, which was Rs. 48.76 per $1.00. No
representation is made that the Indian rupee amounts have been,
could have been or could be converted into US dollars at such a
rate or any other rate.
WHERE YOU
CAN FIND MORE INFORMATION ABOUT US
We file reports and other information with the SEC. Information
filed with the SEC by us can be inspected and copied at the
Public Reference Room maintained by the SEC at
100 F Street N.E., Washington, D.C. 20549. You
may also obtain copies of this information by mail from the
Public Reference Section of the SEC at prescribed rates. Further
information on the operation of the SECs Public Reference
Room in Washington, D.C. can be obtained by calling the SEC
at
1-800-SEC-0330.
2
The SEC also maintains a web site that contains reports, proxy
and information statements and other information about issuers,
such as us, who file electronically with the SEC. The address of
that site is
http://www.sec.gov.
Our website address is
http://www.sterlite-industries.com.
The information on our website, or the website of any of our
subsidiaries or affiliates, including Vedanta and other members
of the Vedanta group, is not, and should not be deemed to be, a
part of this prospectus.
This prospectus and any prospectus supplement are part of a
registration statement that we filed with the SEC and do not
contain all of the information in the registration statement.
The full registration statement may be obtained from the SEC or
us, as indicated below. Forms of the ADS deposit agreement and
other documents establishing the terms of the offered securities
are filed as exhibits to the registration statement. Statements
in this prospectus or any prospectus supplement about these
documents are summaries and each statement is qualified in all
respects by reference to the document to which it refers. You
should refer to the actual documents for a more complete
description of the relevant matters. You may inspect a copy of
the registration statement at the SECs Public Reference
Room in Washington, D.C., as well as through the SECs
website.
INCORPORATION
OF DOCUMENTS BY REFERENCE
The SEC allows us to incorporate by reference
information we file with them in this prospectus. This means
that we can disclose important information to you by referring
you to those documents. Each document incorporated by reference
is current only as of the date of such document, and the
incorporation by reference of such documents shall not create
any implication that there has been no change in our affairs
since the date thereof or that the information contained therein
is current as of any time subsequent to its date. The
information incorporated by reference is considered to be a part
of this prospectus and should be read with the same care. When
we update the information contained in documents that have been
incorporated by reference by making future filings with the SEC,
the information incorporated by reference in this prospectus is
considered to be automatically updated and superseded. In other
words, in the case of a conflict or inconsistency between
information contained in this prospectus and information
incorporated by reference into this prospectus, you should rely
on the information contained in the document that was filed
later.
We incorporate by reference the documents listed below:
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Our registration statement on
Form 8-A
filed with the SEC on November 30, 2006;
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Our Annual Report on
Form 20-F
for the fiscal year ended March 31, 2009 filed with the SEC
on July 10, 2009 as amended by our Form 20-F/A filed
with the SEC on July 14, 2009, collectively referred to in
this prospectus as our Annual Report on Form 20-F; and
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With respect to each offering of the securities under this
prospectus, all reports on
Form 20-F
and any report on
Form 6-K
that indicates it is being incorporated by reference, in each
case, that we file with or submit to the SEC on or after the
date on which the registration statement is first filed with the
SEC and until the termination or completion of that offering
under this prospectus.
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Unless expressly incorporated by reference, nothing in this
prospectus shall be deemed to incorporate by reference
information furnished to, but not filed with, the SEC. Copies of
all documents incorporated by reference in this prospectus,
other than exhibits to those documents unless such exhibits are
specially
3
incorporated by reference in this prospectus, will be provided
at no cost to each person, including any beneficial owner, who
receives a copy of this prospectus on the written or oral
request of that person made to:
Sterlite
Industries (India) Limited
Vedanta, 75 Nehru Road,
Vile Parle (East),
Mumbai, Maharashtra
400-099,
India
Tel. No.:
+(91-22)
6646-1000.
You should rely only on the information that we incorporate by
reference or provide in this prospectus or any prospectus
supplement. We have not authorized anyone to provide you with
different information. We are not making any offer of these
securities in any jurisdiction where the offer is not permitted.
You should not assume that the information in this prospectus or
any prospectus supplement is accurate as of any date other than
the date on the front of those documents.
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus, any accompanying prospectus supplement and the
information incorporated herein and therein by reference may
contain 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 and other factors, including those listed under
Risk Factors.
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. 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:
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a decline or volatility in the prices of or demand for copper,
zinc or aluminum;
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events that could cause a decrease in our production of copper,
zinc or aluminum;
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unavailability or increased costs of raw materials for our
products;
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our actual economically recoverable copper ore, lead-zinc ore or
bauxite reserves being lower than we have estimated;
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our ability to expand our business, effectively manage our
growth or implement our strategy, including our planned entry
into the commercial power business;
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our ability to retain our senior management team and hire and
retain sufficiently skilled labor to support our operations;
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regulatory, legislative and judicial developments and future
regulatory actions and conditions in our operating areas;
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increasing competition in the copper, zinc or aluminum industry;
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political or economic instability in India or around the region;
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worldwide economic and business conditions;
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our ability to successfully consummate strategic acquisitions,
including our proposed acquisition of substantially all of the
operating assets of ASARCO LLC, or Asarco, a copper mining,
smelting and refining company based in Tucson, Arizona, United
States;
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the outcome of outstanding litigation in which we are involved;
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our ability to maintain good relations with our trade unions and
avoid strikes and lock-outs;
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any actions of our controlling shareholder, Vedanta;
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our business future capital requirements and the
availability of financing on favorable terms;
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the continuation of tax holidays, exemptions and deferred tax
schemes we enjoy;
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changes in tariffs, royalties, customs duties and government
assistance; and
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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.
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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.
5
OUR
COMPANY
We are one of Indias largest non-ferrous metals and mining
companies. We are one of the two custom copper smelters in
India, the leading and only integrated zinc producer, and one of
the five primary producers of aluminum. In addition to our three
primary businesses of copper, zinc and aluminum, we are also
developing a commercial power generation business in India that
leverages our experience in building and managing captive power
plants used to support our primary businesses. We believe our
experience in operating and expanding our business in India will
allow us to continue to capitalize on attractive growth
opportunities arising from Indias large mineral reserves,
relatively low cost of operations and large and inexpensive
labor and talent pools. We believe we are also well positioned
to take advantage of the significant growth in industrial
production and investments in infrastructure in India, China,
Southeast Asia and the Middle East, which we expect will
continue to create strong demand for metals.
We were incorporated on September 8, 1975 under the laws of
India and maintain a registered office at SIPCOT Industrial
Complex, Madurai Bypass Road, T.V. Puram P.O., Tuticorin, State
of Tamil Nadu 628 002, India. Our principal executive office is
located at Vedanta, 75 Nehru Road, Vile Parle (East), Mumbai,
Maharashtra
400-099,
India and the telephone number for this office is
+(91-22)
6646-1000.
Our website address is
http://www.sterlite-industries.com.
Information contained on our website, or the website of any of
our subsidiaries or affiliates, including Vedanta and other
members of the Vedanta group, is not a part of this prospectus.
We have appointed CT Corporation System, 111 Eighth Avenue, New
York, New York 10011, as our agent to receive service of process
with respect to any action brought against us in the US District
Court for the Southern District of New York under the federal
securities laws of the United States or of any state in the
United States or any action brought against us in the Supreme
Court of the State of New York in the County of New York under
the securities laws of the State of New York.
6
RISK
FACTORS
Please see the factors set forth under the heading Risk
Factors in the applicable prospectus supplement and in our
most recently filed Annual Report on
Form 20-F,
as amended, and in our updates, if any, to those Risk Factors in
our reports on Form 6-K, together with all other
information appearing in this prospectus or incorporated by
reference into this prospectus and, if applicable, in any
accompanying prospectus supplement before investing in any of
the securities that may be offered pursuant to this prospectus.
7
USE OF
PROCEEDS
We intend to use the net proceeds from the sale of the
securities as set forth in the applicable prospectus supplement.
We will not receive proceeds from sales of securities by persons
other than us except as may otherwise be stated in any
applicable prospectus supplement.
8
ENFORCEABILITY
OF CIVIL LIABILITIES
We are a limited liability company incorporated in India. A
majority of our directors and executive officers are not
residents of the United States and substantially all of our
assets and the assets of those persons are located outside the
United States. As a result, it may not be possible for you to
effect service of process within the United States upon those
persons or us. In addition, you may be unable to enforce
judgments obtained in courts of the United States against those
persons outside the jurisdiction of their residence, including
judgments predicated solely upon US securities laws. Moreover,
it is unlikely that a court in India would award damages on the
same basis as a foreign court if an action were brought in India
or that an Indian court would enforce foreign judgments if it
viewed the amount of damages as excessive or inconsistent with
Indian practice.
Section 44A of the Indian Code of Civil Procedure, 1908, as
amended, or the Civil Code, provides that where a foreign
judgment has been rendered by a superior court in any country or
territory outside of India which the Government of India has by
notification declared to be a reciprocating territory, such
foreign judgment may be enforced in India by proceedings in
execution as if the judgment had been rendered by an appropriate
court in India. However, the enforceability of such judgments is
subject to the exceptions set forth in Section 13 of the
Civil Code. This section, which is the statutory basis for the
recognition of foreign judgments, states that a foreign judgment
is conclusive as to any matter directly adjudicated upon except:
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where the judgment has not been pronounced by a court of
competent jurisdiction;
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where the judgment has not been given on the merits of the case;
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where the judgment appears on the face of the proceedings to be
founded on an incorrect view of international law or a refusal
to recognize the law of India in cases where such law is
applicable;
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where the proceedings in which the judgment was obtained were
opposed to natural justice;
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where the judgment has been obtained by fraud; or
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where the judgment sustains a claim founded on a breach of any
law in force in India.
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Section 44A of the Civil Code is applicable only to
monetary decrees not being in the nature of amounts payable in
respect of taxes or other charges of a similar nature or in
respect of fines or other penalties and does not include
arbitration awards.
If a judgment of a foreign court is not enforceable under
Section 44A of the Civil Code as described above, it may be
enforced in India only by a suit filed upon the judgment,
subject to Section 13 of the Civil Code and not by
proceedings in execution. Accordingly, as the United States has
not been declared by the Government of India to be a
reciprocating territory for the purposes of Section 44A, a
judgment rendered by a court in the United States may not be
enforced in India except by way of a suit filed upon the
judgment.
The suit must be brought in India within three years from the
date of the judgment in the same manner as any other suit filed
to enforce a civil liability in India. Generally, there are
considerable delays in the disposition of suits by Indian courts.
A party seeking to enforce a foreign judgment in India is
required to obtain prior approval from the Reserve Bank of
India, or the RBI, under the Indian Foreign Exchange Management
Act, 1999, or FEMA, to repatriate any amount recovered pursuant
to such enforcement. Any judgment in a foreign currency would be
converted into Indian Rupees on the date of judgment and not on
the date of payment.
9
DESCRIPTION
OF THE SECURITIES
The following is a description of the terms and provisions of
the equity shares and the ADSs representing equity shares we may
offer and sell by this prospectus. These summaries are not meant
to be a complete description of each security. This prospectus
and any accompanying prospectus supplement will contain the
material terms and conditions for each security. The
accompanying prospectus supplement may add, update or change the
terms and conditions of the securities as described in this
prospectus. You should carefully read this prospectus and any
accompanying prospectus supplement before you invest in any of
our securities.
DESCRIPTION
OF SHARE CAPITAL
Set forth below is certain information relating to our share
capital, including brief summaries of certain provisions of our
Memorandum and Articles of Association, the Indian Companies
Act, 1956, or the Indian Companies Act, the Securities Contracts
(Regulation) Act, 1956, as amended, or the SCRA, and certain
related legislation of India, all as currently in effect.
The following description of share capital is subject in its
entirety to our Memorandum and Articles of Association, the
provisions of the Indian Companies Act and other applicable
provisions of Indian law.
The rights of shareholders described in this section are
available only to our shareholders. For the purposes of this
prospectus, a shareholder means a person who holds
our certificated shares or is recorded as a beneficial owner of
our shares with a depository pursuant to the Depositories Act,
1996, as amended, or the Depositories Act. Investors who
purchase the ADSs will not be our shareholders and therefore
will not be directly entitled to the rights conferred on our
shareholders by our Articles of Association or the rights
conferred on shareholders of an Indian company by Indian law.
Our equity shares are in registered physical form as well as non
physical or book-entry form. Investors are entitled to receive
dividends and to exercise the right to vote in accordance with
the deposit agreement. For additional information on the ADS,
see Description of American Depositary Shares.
INVESTORS WHO PURCHASE THE ADSs IN ANY OFFERING MUST LOOK SOLELY
TO THE DEPOSITARY BANK FOR THE PAYMENT OF DIVIDENDS, FOR THE
EXERCISE OF VOTING RIGHTS ATTACHING TO THE EQUITY SHARES
REPRESENTED BY THEIR ADSs AND FOR ALL OTHER RIGHTS ARISING IN
RESPECT OF THE EQUITY SHARES.
General
We were incorporated in Kolkata, the State of West Bengal,
India, as a public company on September 8, 1975 as
Rainbow Investment Limited. Our name was
subsequently changed to Sterlite Cables Limited on
October 19, 1976 and finally to Sterlite Industries
(India) Limited on February 28, 1986. Our company
identification number is L65990TN1975PLC062634. Our registered
office is presently situated in the State of Tamil Nadu at
SIPCOT Industrial Complex, Madurai Bypass Road, T.V. Puram P.O.,
Tuticorin, State of Tamil Nadu 628 002, India.
Our register of members is maintained at our registered office.
Our activities are regulated by our Memorandum and Articles of
Association. Our current Memorandum and Articles of Association
were amended by a special resolution of our shareholders passed
in December 2007. In addition to our Memorandum and Articles of
Association, our activities are regulated by certain
legislation, including the Indian Companies Act, the SCRA and
the Securities Contracts (Regulation) Rules, 1957, as amended,
or the SCR Rules.
Our Memorandum of Association permits us to engage in a wide
variety of activities, including all of the activities that we
are currently engaged in or intend to be engaged in, as well as
other activities that we currently have no intention of engaging
in. Our objects are set out at clause 3 of our Memorandum
of Association.
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Share
Capital
Our authorized share capital is Rs. 1,850 million,
divided into 925 million equity shares of par value
Rs. 2 per equity share. As of March 31, 2009 and
June 30, 2009, our issued share capital was
Rs. 1,417.0 million, divided into
708,494,411 equity shares of par value Rs. 2 per
equity share.
Changes
in Capital or our Memorandum of Association and Articles of
Association
Subject to the Indian Companies Act and our Articles of
Association, we may, by passing an ordinary resolution or a
special resolution, as applicable, at a general meeting or
through postal ballot:
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increase our authorized or paid up share capital;
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consolidate all or any part of our shares into a smaller number
of shares each with a larger par value;
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split all or any part of our shares into a larger number of
shares each with a smaller par value;
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convert any of our
paid-up
shares into stock, and reconvert any stock into any number of
paid-up
shares of any denomination;
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cancel shares which, at the date of passing of the resolution,
have not been taken or agreed to be taken by any person, and
diminish the amount of the authorized share capital by the
amount of the shares so cancelled;
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reduce our issued share capital; or
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alter our Memorandum of Association or Articles of Association.
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Directors
Under our Articles of Association, a director is not required to
hold any qualification shares. There is no age limit requirement
for the retirement of the directors.
Any director who is directly or indirectly interested in a
contract or arrangement or proposed contract or arrangement
entered into or to be entered into by us or on our behalf is
required to disclose the nature of his interest at a meeting of
the board of directors and such interested director shall not
participate in any discussion of, or vote on, any contract,
arrangement or proposal in which he is interested. In addition,
we are prohibited from making loans, directly or indirectly, or
providing any guarantee or security, directly or indirectly, in
connection with any loans made by a third party, to our
directors without the prior approval of the Central Government.
General
Meetings of Shareholders
There are two types of general meetings of shareholders, an
annual general meeting and an extraordinary general meeting. We
must convene our annual general meeting within six months of the
end of each financial year and must ensure that the intervening
period between two annual general meetings does not exceed
15 months. The Registrar of Companies may extend this
period in special circumstances at our request. Extraordinary
general meetings may be convened at any time by our directors at
their discretion or at the request of our shareholders holding
in the aggregate not less than 10% of our
paid-up
capital. A notice in writing to convene a general meeting must
set out the date, time, place and agenda of the meeting and must
be provided to shareholders at least 21 days prior to the
date of the proposed meeting. The requirement of the
21 days notice in writing may be waived if consent to
shorter notice is received from all shareholders entitled to
vote at the annual general meeting or, in the case of an
extraordinary general meeting, from shareholders holding not
less than 95% of our
paid-up
capital. General meetings are generally held at our registered
office. Business may be transacted at a general meeting only
when a quorum of shareholders is present. Five persons entitled
to attend and to vote on the business to be transacted, each
being a member or a proxy for a member or a duly authorized
representative of a corporation which is a member, will
constitute a quorum.
The annual general meetings deal with and dispose of all matters
prescribed by our Articles of Association and by the Indian
Companies Act, including the following:
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the consideration of our annual financial statements and report
of our directors and auditors;
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the election of directors;
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the appointment of auditors and the fixing of their remuneration;
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the authorization of dividends; and
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the transaction of any other business of which notice has been
given.
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Division
of Shares
The Indian Companies Act provides that a company may sub-divide
its share capital if its Articles of Association authorize the
company to do so by adopting an ordinary resolution in its
general meeting.
Our Articles of Association allow us in a general meeting to
alter our Memorandum of Association and subdivide all or any of
our equity shares into a larger number of shares with a smaller
par value than originally fixed by the Memorandum of Association.
Voting
Rights
Subject to any special terms as to voting on which any shares
may have been issued, every shareholder entitled to vote who is
present in person (including any corporation present by its duly
authorized representative) shall on a show of hands have one
vote and every shareholder present in person or by proxy shall
on a poll have one vote for each share of which he is the
holder. In the case of joint holders, only one of them may vote
and in the absence of election as to who is to vote, the vote of
the senior of the joint holders who tenders a vote, whether in
person or by proxy, shall be accepted to the exclusion of the
votes of the other joint holders. Seniority is determined by the
order in which the names appear in the register of members.
Voting is by show of hands unless a poll is ordered by the
chairman of the meeting, who is generally the chairman of our
board of directors but may be another director or other person
selected by our board or the shareholders present at the meeting
in the absence of the chairman, or demanded by a shareholder or
shareholders holding at least 10% of the voting rights or
holding
paid-up
capital of at least Rs. 50,000 (i.e. 25,000 shares of
Rs. 2 each). Upon a poll, the voting rights of each
shareholder entitled to vote and present in person or by proxy
shall be proportionate to the capital
paid-up on
each share against our total
paid-up
capital. In the case of a tie vote, the chairman of the meeting,
who is generally the chairman of our board of directors, has the
right to cast a tie-breaking vote.
A shareholder may appoint any person (whether or not a
shareholder) to act as his proxy to vote on a poll at any
meeting of shareholders (or of any class of shareholders) in
respect of all or a particular number of the shares held by him.
A shareholder may appoint more than one person to act as his
proxy and each such person shall act as proxy for the
shareholder for the number of shares specified in the instrument
appointing the person a proxy. The instrument appointing a proxy
must be delivered to our registered office at least
48 hours prior to the meeting or in case of a poll, not
less than 24 hours before the time appointed for taking of
the poll. If a shareholder appoints more than one person to act
as his proxy, each instrument appointing a proxy shall specify
the number of shares held by the shareholder for which the
relevant person is appointed as his proxy. A proxy does not have
a right to speak at meetings. A corporate shareholder is also
entitled to nominate a representative to attend and vote on its
behalf at general meetings. Such a representative is not
considered a proxy and he has the same rights as the shareholder
by which he was appointed to speak at a meeting and vote at a
meeting in respect of the number of shares held by the
shareholder, including on a show of hands and a poll.
Subject to the Articles of Association and the Companies (Issue
of Share Capital with Differential Voting Rights) Rules, 2001,
as amended, the Indian Companies Act allows a public company to
issue shares with different rights as to dividend, voting or
otherwise, provided that it has distributable profits as
specified under the Indian Companies Act for a period of three
financial years immediately preceding the issue of such shares
and has filed its annual accounts and annual returns for the
immediately preceding three years.
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Quorum
Our Articles of Association provide that a quorum for a general
meeting is at least five shareholders entitled to vote and
present in person.
Shareholder
Resolutions
An ordinary resolution requires the affirmative vote of a
majority of our shareholders entitled to vote in person or by
proxy at a general meeting.
A special resolution requires the affirmative vote of not less
than three-fourths of our shareholders entitled to vote in
person or by proxy at a general meeting and casting a vote. The
Indian Companies Act provides that to amend the Articles of
Association, a special resolution approving such an amendment
must be passed in a general meeting. Certain amendments,
including a change in the name of the company, reduction of
share capital, approval of variation of rights of special
classes of shares and dissolution of the company require a
special resolution.
Further, the Indian Companies Act requires certain resolutions
such as those listed below to be voted on only by a postal
ballot:
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amendments of the memorandum of association to alter the objects
of the company and to change the registered office of the
company under Section 146 of the Indian Companies Act;
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alteration of the articles of association in relation to
insertion of provisions defining private company;
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the issue of shares with differential rights with respect to
voting, dividend or otherwise;
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the sale of the whole or substantially the whole of an
undertaking of the company;
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providing loans, extending guarantees or providing a security in
excess of the limits prescribed under Section 372A of the
Indian Companies Act;
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varying the rights of the holders of any class of shares or
debentures or other securities;
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the election of a director by minority shareholders; and
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the buy-back of shares.
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Dividends
Under the Indian Companies Act, unless the board of directors
recommends the payment of a dividend, the shareholders at a
general meeting have no power to declare any dividend. The board
of directors may also declare interim dividends that do not need
to be approved by the shareholders. A company pays dividends
recommended by the board of directors and approved by a majority
of the shareholders at the annual general meeting of
shareholders held within six months of the end of each fiscal
year. The shareholders have the right to decrease but not
increase the dividend amount recommended by the board of
directors. Pursuant to a recent amendment to the listing
agreement, listed companies are required to declare and disclose
their dividends on per share basis only. The dividend
recommended by the Board of Directors and approved by the
shareholders at a general meeting is distributed and paid to
shareholders in proportion to the paid up value of their equity
shares. The Indian Companies Act provides that shares of a
company of the same class must receive equal dividend treatment.
Dividends can only be paid in cash to the registered shareholder
at a record date fixed on or prior to the annual general meeting
or to his order or his bankers order. No shareholder is
entitled to a dividend while any lien in respect of unpaid calls
on any of such shareholders shares is outstanding.
These distributions and payments are required to be paid to
shareholders within 30 days of the annual general meeting
where the resolution for declaration of dividends is approved.
The dividend so declared is required to be deposited in a
separate bank account within a period of five days from the date
of declaration of such dividend. All dividends unpaid or
unclaimed within a period of 30 days from the date of
declaration of such dividend must be transferred within seven
days of the end of such period to a special unpaid dividend
account held at a scheduled bank. Any dividend which remains
unpaid or unclaimed for a period of seven
13
years from the date of the transfer to a scheduled bank must be
transferred to the Investor Education and Protection Fund
established by the Government of India and following such
transfer, no claim shall lie against the Company or the Investor
Education and Protection Fund. Under the Indian Companies Act,
dividends in respect of a fiscal year may be paid out of the
profits of a company in that fiscal year or out of the
undistributed profits of previous fiscal years or both, after
providing for depreciation in a manner provided for in the
Indian Companies Act.
Under the Indian Companies Act, we are only allowed to pay
dividends in excess of 10% of our
paid-up
capital in respect of any fiscal year from our profits for that
year after we have transferred to our reserves a percentage of
our profits for that year ranging between 2.5% to 10% depending
on the rate of dividend proposed to be declared in that year in
accordance with the Companies (Transfer of Profits to Reserves)
Rules, 1975. Reserves are defined in the Guidance
Note on Terms Used in Financial Statements issued by the
Institute of Chartered Accountants of India as the portion of
earnings, receipts or other surpluses of an enterprise (whether
capital or revenue) appropriated by the management for a general
or specific purpose other than a provision for depreciation or
diminution in the value of assets or for a known liability. The
Indian Companies Act and the Companies (Declaration of Dividend
out of Reserves) Rules, 1975 provide that if profits for that
year are insufficient to declare dividends, the dividends for
that year may be declared and paid out from our accumulated
profits transferred by us to our reserves, subject to the
following conditions:
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the rate of dividend to be declared shall not exceed the lesser
of 10% of our
paid-up
capital or the average of the rates at which dividends were
declared in the five years immediately preceding that year;
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the total amount to be drawn from the accumulated profits may
not exceed 10% of the sum of our
paid-up
capital and free reserves and any amount so drawn shall first be
used to set off any losses incurred in that financial
year; and
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the balance of our reserves following such withdrawal shall not
fall below 15% of our
paid-up
capital.
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Distribution
of Assets on a
Winding-up
In accordance with the Indian Companies Act, all surplus assets
remaining after payments are made to employees, statutory
creditors, tax and revenue authorities, secured and unsecured
creditors and the holders of any preference shares (though not
in that order), shall be distributed among our equity
shareholders in proportion to the amount paid up or credited as
paid-up on
such shares at the commencement of the
winding-up.
Transfer
of Shares
Under the Indian Companies Act, the shares of a public company
are freely transferable, unless such a transfer contravenes
applicable law or the regulations issued by the Securities and
Exchange Board of India, or the SEBI, or the Sick Industrial
Companies (Special Provisions) Act, 1985, as amended, or the
SICA. The transferor is deemed to remain the holder until the
transferees name is entered in the register of members.
In the case of shares held in physical form, we will register
any transfers of equity shares in the register of members upon
lodgment of the duly completed share transfer form, the relevant
share certificate, or if there is no certificate, the letter of
allotment, in respect of shares to be transferred together with
duly stamped share transfer forms. In respect of electronic
transfers, the depository transfers shares by entering the name
of the purchaser in its register as the beneficial owner of the
shares. In turn, we then enter the name of the depository in our
records as the registered owner of the shares. The beneficial
owner is entitled to all the rights and benefits and is subject
to the liabilities attached to the shares held by the depository
on his or her or its behalf.
Equity shares held through depositories are transferred in the
form of book entries or in electronic form in accordance with
the regulations laid down by SEBI. These regulations provide the
regime for the functioning of the depositories and the
participants and set out the manner in which the records are to
be kept and maintained and the safeguards to be followed in this
system.
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SEBI requires that our equity shares for trading and settlement
purposes be in book-entry form for all investors, except for
transactions that are not made on a stock exchange and
transactions that are not required to be reported to the stock
exchange. Transfers of equity shares in book-entry form require
both the seller and the purchaser of the equity shares to
establish accounts with depository participants appointed by
depositories established under the Depositories Act. Charges for
opening an account with a depository participant, transaction
charges for each trade and custodian charges for securities held
in each account vary depending upon the practice of each
depository participant.
The depository transfers equity shares by entering the name of
the purchaser in its books as the beneficial owner of the equity
shares. In turn, we will enter the name of the depository in our
records as the registered owner of the equity shares. The
beneficial owner is entitled to all the rights and benefits as
well as the liabilities with respect to the equity shares that
are held by the depository. The register and index of beneficial
owners maintained by our depository is deemed to be a register
and index of our members and debenture holders under the
Depositories Act. Transfers of beneficial ownership held through
a depository are exempt from stamp duty. For this purpose, we
have entered into an agreement for depository services with the
National Securities Depository Limited and the Central
Depository Services India Limited.
The requirement to hold the equity shares in book-entry form
will apply to the ADS holders when the equity shares are
withdrawn from the depositary facility upon surrender of the
ADSs. In order to trade the equity shares in the Indian market,
the withdrawing ADS holder will be required to comply with the
procedures described above.
Our Articles of Association provide for certain restrictions on
the transfer of equity shares, including granting power to the
board of directors in certain circumstances, to refuse to
register or acknowledge a transfer of equity shares or other
securities issued by us. Under the listing agreements with the
NSE and the BSE, which are collectively referred to as the
Indian Stock Exchanges, on which our equity shares are listed,
in the event we have not effected the transfer of shares within
one month or where we have failed to communicate to the
transferee any valid objection to the transfer within the
stipulated time period of one month, we are required to
compensate the aggrieved party for the opportunity loss caused
during the period of delay.
If a company without sufficient cause refuses to register a
transfer of equity shares within two months from the date on
which the instrument of transfer is delivered to the company,
the transferee may appeal to the Company Law Board, or the CLB,
seeking to register the transfer of equity shares. The CLB may,
in its discretion, issue an interim order suspending the voting
rights attached to the relevant equity shares before completing
its investigation of the alleged contravention.
In addition, the Indian Companies Act provides that the CLB may
direct a rectification of the register of members for a transfer
of equity shares which is in contravention of the SEBI
regulations or the SICA or any similar law, upon an application
by the company, a participant, a depository incorporated in
India, an investor or the SEBI.
Under the Companies (Second Amendment) Act 2002, the CLB is
proposed to be replaced with the National Law Tribunal with
effect from a date that is yet to be notified.
Disclosure
of Ownership Interest
Section 187C of the Indian Companies Act requires that
beneficial owners of shares of companies who are not registered
as holders of those shares must make a declaration to the
company specifying the nature of his or her or its interest,
particulars of the registered holder of such shares and such
other particulars as may be prescribed. Any lien, charge,
promissory note or other collateral agreement created, executed
or entered into with respect to any equity share by its
registered owner, or any hypothecation by the registered owner
of any equity share, shall not be enforceable by the beneficial
owner or any person claiming through the beneficial owner if
such declaration is not made. Failure by a person to comply with
Section 187C will not affect the companys obligation
to register a transfer of shares or to pay any dividends to the
registered holder of any shares in respect of which the
declaration has not been made.
15
Any investor who fails to comply with these requirements may be
liable for a fine of up to Rs. 1,000 for each day such
failure continues. Additionally, if the company fails to comply
with the provisions of Section 187C, then the company and
every defaulting officer may be liable for a fine of up to
Rs. 100 for each day the default continues.
Alteration
of Shareholder Rights
Under the Indian Companies Act, and subject to the provisions of
the articles of association of a company and the relevant rules
as issued by the Ministry of Corporate Affairs, where the share
capital of a company is divided into different classes of
shares, the rights of any class of shareholders can only be
altered or varied with the consent in writing of the holders of
not less than three-fourths of the issued shares of that class
by a special resolution passed at a general meeting of the
holders of the issued shares of that class, or pursuant to a
judicial order sanctioning a compromise or arrangement between
the company and such class of shareholders.
Share
Register and Record Dates
We maintain our register of members at our registered office and
all transfers of shares should be notified to us at such
address. Our register of members is open to inspection during
business hours by shareholders without charge and by other
persons upon payment of a fee prescribed under the applicable
law.
The register and index of beneficial owners maintained by a
depository under the Depositories Act is deemed to be an index
of members and register and index of debenture holders. We
recognize as shareholders only those persons who appear on our
register of members and we do not recognize any person holding
any equity share or part thereof on trust, whether express,
implied or constructive, except as permitted by law.
To determine which shareholders are entitled to specified
shareholder rights, we may close the register of members. For
the purpose of determining who our shareholders are, our
register of members may be closed for periods not exceeding
45 days in any one year or 30 days at any one time. In
order to determine our shareholders entitlement to
dividends, it is our general practice to close the register of
members for approximately ten to 20 days before the annual
general meeting. The date on which this period begins is the
record date. Under the listing agreements with each of the stock
exchanges on which our equity shares are listed, we may, upon
giving at least seven working days advance notice to the
stock exchange, set a record date
and/or close
the register of members. The trading of our equity shares and
the delivery of shares certificates may continue while the
register of members is closed.
Annual
Report
At least 21 days before an annual general meeting, we must
circulate our annual report, which comprises of either a
detailed or abridged version of our audited financial accounts,
our directors report, our corporate governance report, and
our auditors report, to the shareholders along with a
notice convening the annual general meeting. In addition, we
must furnish to the exchanges quarterly unaudited or audited
results within 30 days after the end of each accounting
quarter. In respect of results for the fourth quarter of that
financial year, we can opt to publish audited results for the
entire year within three months, and thus will not be required
to publish unaudited results for the last quarter within
30 days. We are also required to send copies of our annual
report to the NSE and BSE and to publish our financial results
in at least one English language daily newspaper circulating in
the whole or substantially the whole of India and also in a
daily newspaper published in the language of the region where
our registered office is situated. We are also required under
the Indian Companies Act to make available upon the request of
any shareholder our complete balance sheet and profit and loss
account.
Under the Indian Companies Act, we must file with the Registrar
of Companies our balance sheet and profit and loss account
within 30 days of the date on which the balance sheet and
profit and loss account were laid before the annual general
meeting and our annual return within 60 days of the
conclusion of that meeting.
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Borrowing
Powers
Our directors may raise, borrow or secure the payment of any
sums of money for our purposes as they deem appropriate without
the consent of a majority of the shareholders in a general
meeting, provided that, the aggregate of the monies to be
borrowed and the principal amount outstanding in respect of
monies raised, borrowed or secured by us does not exceed the
aggregate of our paid up share capital plus free reserves.
Issue of
Equity Shares and Pre-emptive Rights
Subject to the provisions of the Indian Companies Act and our
Articles of Association and to any special rights attaching to
any of our equity shares, we may increase our share capital by
the allotment or issue of new equity shares with preferred,
deferred or other special rights or restrictions regarding
dividends, voting, return of capital or other matters as we may
from time to time determine by special resolution. We may issue
preference shares that are redeemable or are liable to be
redeemed at our option or the option of the holder in accordance
with our Articles of Association.
Under the Indian Companies Act, new equity shares shall first be
offered to existing shareholders in proportion to the amount
they have paid up on their equity shares on the record date. The
offer shall be made by written notice specifying:
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the right, exercisable by the shareholders of record, to
renounce the equity shares offered in favor of any other person;
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the number of equity shares offered; and
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the period of the offer, which may not be less than 15 days
from the date of the offer. If the offer is not accepted, it is
deemed to have been declined.
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The offer is deemed to include a right exercisable by the person
concerned to renounce the shares offered to him in favor of any
other person. Our board of directors is permitted to distribute
equity shares not accepted by existing shareholders in the
manner it deems beneficial for us in accordance with our
Articles of Association. Holders of ADSs may not be able to
participate in any such offer.
However, under the provisions of the Indian Companies Act, new
equity shares may be offered to non-shareholders, if this has
been approved by a special resolution or by an ordinary
resolution with the Government of Indias permission.
Capitalization
of Profits and Reserves
Our Articles of Association allow our directors, with the
approval of our shareholders by an ordinary resolution, to
capitalize any part of the amount standing to the credit of our
reserve accounts or to the credit of our profit and loss account
or otherwise available for distribution. Any sum which is
capitalized shall be appropriated among our shareholders in the
same proportion as if such sum had been distributed by way of
dividend. This sum shall not be paid out in cash and shall be
applied in the following manner:
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paying up any amount remaining unpaid on the shares held by our
shareholders; or
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issuing to our shareholders, fully paid bonus equity shares
(issued either at par or a premium).
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Any issue of bonus equity shares would be subject to the SEBI
(Disclosure and Investor Protection) Guidelines, 2000, as
amended, or SEBI Guidelines, which provide that:
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no company shall, pending the conversion of convertible
securities, issue any bonus equity shares unless a similar
benefit is extended to the holders of such convertible
securities through a reservation of equity shares in proportion
to such conversion;
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the bonus issue shall be made out of free reserves built out of
genuine profits or share premium collected in cash only;
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bonus equity shares cannot be issued unless all the partly paid
up equity shares have been fully
paid-up;
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the company has not defaulted in the payment of interest or
principal in respect of fixed deposits and interest on existing
debentures or principal on redemption of such debentures;
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a declaration of bonus equity shares in lieu of dividend cannot
be made;
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the company shall have sufficient reason to believe that it has
not defaulted in the payment of statutory dues of the employees
such as contribution to provident fund, gratuity and bonus;
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any reserves created by a revaluation of fixed assets shall not
be capitalized;
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the articles of association of the company must contain
provisions for the capitalization of reserves; and
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the bonus issue must be implemented within two months from the
date of approval by the board of directors.
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Purchase
of Own Equity Shares
A company may reduce its capital in accordance with the Indian
Companies Act and the regulations issued by SEBI by way of a
share buy-back out of its free reserves or securities premium
account or the proceeds of any shares or other specified
securities (other than the kind of shares or other specified
securities proposed to be bought back) subject to certain
conditions, including:
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the buy-back must be authorized by the companys Articles
of Association;
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a special resolution authorizing the buy-back must be passed in
a general meeting;
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the buy-back is limited to 25% of the companys total paid
up capital and free reserves in a fiscal year;
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the ratio of debt owed is not more than twice the capital and
free reserves after such buy-back;
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the shares or other specified securities for share buy back are
fully paid up; and
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the buy-back is in accordance with the SEBI (Buy-Back of
Securities) Regulation, 1998, as amended.
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The first two conditions mentioned above would not be applicable
if the number of equity shares bought back is less than 10% of
our total paid up equity capital and free reserves and if such
buy-back is authorized by the board of directors, provided that
no buy-back shall be made within 365 days from the date of
any previous buy-back. If such buy-back constitutes more than
10% of the total
paid-up
equity capital and free reserves of the company, it must be
authorized by a special resolution of the company in general
meeting. Our Articles of Association permit us to buy-back our
equity shares.
Any equity shares which have been bought back by us must be
extinguished within seven days. Further, we will not be
permitted to buy-back any securities for a period of one year or
to issue new securities of the same kind for six months except
by way of a bonus issue or in discharge of our existing
obligations such as conversion of warrants, stock option
schemes, sweat equity or conversion of preference shares or
debentures into equity. A company is also prohibited from
purchasing its own shares or specified securities through any
subsidiary company including its own subsidiary companies or in
the event of non-compliance with certain other provisions of the
Indian Companies Act.
ADS holders will be eligible to participate in a share buy-back
in certain cases. An ADS holder may acquire equity shares by
withdrawing them from the depositary facility and then selling
those equity shares back to us in accordance with the provisions
of applicable law as discussed above. ADS holders should note
that equity shares withdrawn from the depositary facility may
only be redeposited into the depositary facility under certain
limited circumstances as specified under guidelines issued by
the Government of India and the RBI, relating to a sponsored ADS
facility and fungibility of ADSs. See Item 10.
Additional Information D. Exchange Controls in
our Annual Report on
Form 20-F.
There can be no assurance that the equity shares offered by an
ADS investor in any buy-back of equity shares by us will be
accepted by us. The position regarding regulatory approvals
required for ADS holders to participate in a buy-back is not
clear. ADS investors are advised to consult their Indian legal
advisers prior to participating in any buy-back by us, including
in relation to any regulatory approvals and tax issues relating
to the share buy-back.
18
Rights of
Minority Shareholders
The Indian Companies Act provides mechanisms for the protection
of the rights of the minority shareholder. Where the share
capital of a company is divided into different classes of shares
and there has been variation in the rights attached to the
shares of any class, the holders of not less than 10% of the
issued shares of that class, who did not vote in favor of a
resolution for the variation, have the right to apply to the CLB
to have the variation cancelled and such variation shall not
have any effect unless confirmed by the CLB.
Further, under the Indian Companies Act, shareholders holding
not less than 10% of the issued share capital or shareholders
representing not less than 10% of the total number of members or
100 members, whichever is lesser, provided that they have paid
all calls and other sums due on their shares, have the right to
apply to the CLB for an order to bring an end to the matter
complained of, on the following grounds of oppression or
mismanagement:
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that the companys affairs are being conducted in a manner
prejudicial to public interest or in a manner oppressive to any
member or members or in a manner prejudicial to the interests of
the company; or
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that a material change has taken place in the management or
control of the company, whether by a change in its board of
directors or management or in the ownership of the
companys shares and by reason of such change, it is likely
that the affairs of the company will be conducted in a manner
prejudicial to public interest or in a manner prejudicial to the
interests of the company.
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Provisions
on Squeeze Out of Minority Shareholders
Under the Indian Companies Act, where an arrangement or contract
involving a transfer of shares or any class of shares of a
company to another company has been approved by holders holding
not less than 90% in value of such class of shares, the
transferee company has the right to give notice to any
dissenting shareholder, within a specified time and in a
prescribed manner, that it desires to acquire its shares.
Unless the CLB, upon an application made by a dissenting
shareholder within a month of the aforementioned notice, orders
otherwise, the transferee company has the right to acquire the
shares of the dissenting shareholder on the same terms as those
offered to the other shares to be transferred under the
arrangement or contract.
Where, in pursuance of any such arrangement or contract, shares
in a company are transferred to another company, and those
shares, together with any other shares held by the transferee
company (or its nominee or subsidiary company) in the transferor
company, constitute not less than 90% in value of the shares,
the transferee company is required to give notice of such fact
to any remaining shareholders within a month of such transfer.
Any such remaining shareholder may within three months of the
notice from the transferee company, require the transferee
company to acquire its shares. Where such notice is given by
such remaining shareholder, the transferee company is bound to
acquire those shares on the same terms as provided for under the
arrangement or contract for the transfer of the other shares of
the transferor company or on such terms as may be agreed or on
terms that the CLB (upon an application of either the transferee
company or the shareholder) thinks fit to order.
Book-Entry
Shares and Liquidity
Our equity shares are compulsorily traded in book-entry form and
are available for trading under both depository systems in
India, namely, the National Securities Depository Limited and
Central Depository Services (India) Limited. The International
Securities Identification Number (ISIN) for our equity shares is
INE 268A01031.
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DESCRIPTION
OF AMERICAN DEPOSITARY SHARES
Citibank, N.A. is the depositary bank for the American
Depositary Shares. Citibanks depositary offices are
located at 388 Greenwich Street, New York, New York 10013, USA.
American Depositary Shares are frequently referred to as
ADSs and represent ownership interests in securities
that are on deposit with the depositary bank. ADSs may be
represented by certificates that are commonly known as American
Depositary Receipts, or ADRs. The depositary bank typically
appoints a custodian to safekeep the securities on deposit. In
this case, the custodian is Citibank, N.A., Mumbai Branch,
located at Ramnord House, 77 Dr. Annie Besant Road, Worli,
Mumbai, India 400 018.
We have appointed Citibank, N.A. as depositary bank pursuant to
a deposit agreement. A draft copy of the deposit agreement is on
file with the SEC under cover of a registration statement on
Form F-6
(Registration
No. 333-139102).
You may obtain a copy of the deposit agreement from the
SECs Public Reference Room at 100 F Street,
N.E., Washington, D.C. 20549 and under our name through the
SECs website, http://www.sec.gov.
We are providing you with a summary description of the ADSs and
your rights as an owner of ADSs. Please remember that summaries
by their nature lack the precision of the information summarized
and that a holders rights and obligations as an owner of
ADSs will be determined by the deposit agreement and not by this
summary. We urge you to review the deposit agreement in its
entirety as well as the form of ADR attached to the deposit
agreement. Statements in italics in this section are provided
for your information but may not be contained in the deposit
agreement.
Each ADS represents one equity share on deposit with the
custodian bank. An ADS will also represent any other property
received by the depositary bank or the custodian on behalf of
the owner of the ADS but that has not been distributed to the
owners of ADSs because of legal restrictions or practical
considerations.
If you become an owner of ADSs, you will become a party to the
deposit agreement and therefore will be bound to its terms and,
if applicable, to the terms of the ADR that represents your
ADSs. The deposit agreement and the ADR specify our rights and
obligations as well as your rights and obligations as owner of
ADSs and those of the depositary bank. As an ADS holder you
appoint the depositary bank to act on your behalf in certain
circumstances. The deposit agreement is governed by New York
law. However, our obligations to the holders of equity shares
will continue to be governed by the laws of India, which may be
different from the laws in the United States.
As an owner of ADSs, you may hold your ADSs by means of an ADR
registered in your name, through a brokerage or safekeeping
account or through an account established by the depositary bank
in your name reflecting the registration of uncertificated ADSs
directly on the books of the depositary bank (commonly referred
to as the direct registration system or
DRS). The direct registration system reflects the
uncertificated (book-entry) registration of ownership of ADSs by
the depositary bank. Under the direct registration system,
ownership of ADSs is evidenced by periodic statements issued by
the depositary bank to the holders of the ADSs. The direct
registration system includes automated transfers between the
depositary bank and The Depository Trust Company, or DTC,
the central book-entry clearing and settlement system for equity
securities in the United States. If you decide to hold your ADSs
through your brokerage or safekeeping account, you must rely on
the procedures of your broker or bank to assert your rights as
an ADS owner. Please consult with your broker or bank to
determine what those procedures are. This summary description
assumes you have opted to own the ADSs directly by means of an
ADR registered in your name and, as such, we will refer to you
as the holder. When we refer to you, we
assume the reader owns ADSs and will own ADSs at the relevant
time.
Dividends
and Distributions
As an ADS holder, you generally have the right to receive the
distributions we make on the securities deposited with the
custodian bank. Your receipt of these distributions may be
limited, however, by practical considerations and legal
limitations. ADS holders will receive such distributions under
the terms of the deposit agreement in proportion to the number
of ADSs held as of a specified record date.
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Distributions
of Cash
Whenever we make a cash distribution for the securities on
deposit with the custodian, we will notify the depositary bank.
Upon receipt of confirmation from the custodian bank that such
cash distribution has been received, the depositary bank will
arrange for the funds to be converted into US dollars and for
the distribution of the US dollars to the ADS holders.
The conversion into dollars will take place only if practicable
and if the dollars are transferable to the United States.
The amounts distributed to holders will be net of the fees,
expenses, taxes and governmental charges payable by holders
under the terms of the deposit agreement. The depositary will
apply the same method for distributing the proceeds of the sale
of any property (such as undistributed rights) held by the
custodian in respect of securities on deposit.
Distributions
of Equity Shares
Whenever we make a free distribution of equity shares for the
securities on deposit with the custodian, we will notify the
depositary bank and deposit the applicable number of equity
shares with the custodian. Upon receipt of confirmation of such
deposit from the custodian bank, the depositary bank will either
distribute to holders new ADSs representing the equity shares
deposited or modify the
ADS-to-equity
shares ratio, in which case each ADS you hold will represent
rights and interests in the additional equity shares so
deposited. Only whole new ADSs will be distributed. Fractional
entitlements will be sold and the proceeds of such sale will be
distributed as in the case of a cash distribution.
The distribution of new ADSs or the modification of the
ADS-to-equity
shares ratio upon a distribution of equity shares will be made
net of the fees, expenses, taxes and governmental charges
payable by holders under the terms of the deposit agreement. In
order to pay such taxes or governmental charges, the depositary
bank may sell all or a portion of the new equity shares so
distributed.
No such distribution of new ADSs will be made if it would
violate a law (for example, the US securities laws) or if it is
not operationally practicable. If the depositary bank does not
distribute new ADSs as described above, it may sell the equity
shares received and will distribute the proceeds of the sale as
in the case of a distribution of cash.
Elective
Distributions
If permitted by applicable law, whenever we intend to distribute
a dividend payable at the election of shareholders either in
cash or in additional equity shares, we will give prior notice
thereof to the depositary bank and will indicate whether we wish
the elective distribution to be made available to you. In such
case, we will assist the depositary bank in determining whether
such distribution is lawful and reasonably practicable.
The depositary bank will make the election available to you only
if it is reasonably practicable and if we have provided all of
the documentation contemplated in the deposit agreement. In such
case, the depositary bank will establish procedures to enable
you to elect to receive either cash or additional ADSs, in each
case as described in the deposit agreement.
If the election is not made available to you, you will receive
either cash or additional ADSs, depending on what a shareholder
in India would receive upon failing to make an election, as more
fully described in the deposit agreement.
Distributions
of Rights
Whenever we intend to distribute rights to purchase additional
equity shares, we will give prior notice to the depositary bank
and will indicate whether we wish such rights to be made
available to you. In such case, we will assist the depositary
bank in determining whether it is lawful and reasonably
practicable to distribute rights to purchase additional ADSs to
holders.
The depositary bank will establish procedures to distribute
rights to purchase additional ADSs to holders and to enable such
holders to exercise such rights if it is lawful and reasonably
practicable to make the rights
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available to holders of ADSs, and if we provide all of the
documentation contemplated in the deposit agreement (such as
opinions to address the lawfulness of the transaction). You will
have to pay the subscription price, fees, expenses, taxes and
other governmental charges to subscribe for the new ADSs upon
the exercise of your rights. The depositary bank is not
obligated to establish procedures to facilitate the distribution
and exercise by holders of rights to purchase new equity shares
directly rather than new ADSs.
The depositary bank will not distribute the rights to you if:
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we do not timely request that the rights be distributed to you
or we request that the rights not be distributed to you;
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we fail to deliver satisfactory documents to the depositary
bank; or
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it is not reasonably practicable to distribute the rights.
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The depositary bank will sell the rights that are not exercised
or not distributed if such sale is lawful and reasonably
practicable. The proceeds of such sale will be distributed to
holders as in the case of a cash distribution.
If the depositary bank is unable to sell the rights, it will
allow the rights to lapse.
Other
Distributions
If permitted by applicable law, whenever we intend to distribute
property other than cash, equity shares or rights to purchase
additional equity shares, we will notify the depositary bank in
advance and will indicate whether we wish such distribution to
be made to you. If so, we will assist the depositary bank in
determining whether such distribution to holders is lawful and
reasonably practicable.
If it is reasonably practicable to distribute such property to
you and if we provide all of the documentation contemplated in
the deposit agreement, the depositary bank will distribute the
property to the holders in a manner it deems practicable.
The distribution will be made net of fees, expenses, taxes and
governmental charges payable by holders under the terms of the
deposit agreement. In order to pay such taxes and governmental
charges, the depositary bank may sell all or a portion of the
property received.
The depositary bank will not distribute the property to you and
will sell the property if:
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we do not request that the property be distributed to you or if
we ask that the property not be distributed to you;
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we do not deliver satisfactory documents to the depositary
bank; or
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the depositary bank determines that all or a portion of the
distribution to you is not reasonably practicable.
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The proceeds of such a sale will be distributed to holders as in
the case of a cash distribution. If the depositary bank is
unable to sell the property, it may dispose of the property for
the account of the holders in any manner it deems reasonably
practicable.
Redemption
Whenever we decide to redeem any of the equity shares on deposit
with the custodian, we will notify the depositary bank. If it is
reasonably practicable and if we provide all of the
documentation contemplated in the deposit agreement, the
depositary bank will mail notice of the redemption to the
holders.
The custodian will be instructed to surrender the shares being
redeemed against payment of the applicable redemption price. The
depositary bank will convert the redemption funds received into
dollars upon the terms of the deposit agreement and will
establish procedures to enable holders to receive the net
proceeds from the redemption upon surrender of their ADSs to the
depositary bank. You may have to pay fees, expenses, taxes and
other governmental charges upon the redemption of your ADSs. If
less than all ADSs are
22
being redeemed, the ADSs to be retired will be selected by lot
or on a pro rata basis, as the depositary bank may determine.
Changes
Affecting Equity Shares
The equity shares held on deposit for your ADSs may change from
time to time. For example, there may be a change in nominal or
par value, a
split-up,
cancellation, consolidation or classification of such equity
shares or a recapitalization, reorganization, merger,
consolidation or sale of assets.
If any such change were to occur, your ADSs would, to the extent
permitted by law, represent the right to receive the property
received or exchanged in respect of the equity shares held on
deposit. The depositary bank may in such circumstances deliver
additional ADSs to you or call for the exchange of your existing
ADSs for new ADSs. If the depositary bank may not lawfully
distribute such property to you, the depositary bank may sell
such property and distribute the net proceeds to you as in the
case of a cash distribution.
Issuance
of ADSs Upon Deposit of Equity Shares
If permitted under applicable law, the depositary bank may
create ADSs on your behalf if you or your broker deposit equity
shares with the custodian. The depositary bank will deliver
these ADSs to the person you indicate only after you obtain all
necessary government approvals and pay any applicable issuance
fees and any charges and taxes payable for the transfer of the
equity shares to the custodian. Your ability to deposit equity
shares and receive ADSs may be limited by US and Indian legal
considerations applicable at the time of deposit. In particular,
in accordance with applicable regulations of the RBI and the
Ministry of Finance, the depositary bank will only be able to
accept additional equity shares for deposit into the ADS
facility to the extent that there have previously been
withdrawals of equity shares.
The issuance of ADSs may be delayed until the depositary bank or
the custodian receives confirmation that all required approvals
have been given and that the equity shares have been duly
transferred to the custodian. The depositary bank will only
issue ADSs in whole numbers.
If you are permitted to make a deposit of equity shares, you
will be responsible for transferring good and valid title to the
depositary bank. As such, you will be deemed to represent and
warrant that:
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the equity shares are duly authorized, validly issued, fully
paid, non-assessable and legally obtained;
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all preemptive (and similar) rights, if any, with respect to
such equity shares have been validly waived or exercised;
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you are duly authorized to deposit the equity shares;
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the equity shares presented for deposit are free and clear of
any lien, encumbrance, security interest, charge, mortgage or
adverse claim, and are not, and the ADSs issuable upon such
deposit will not be, restricted securities (as
defined in the deposit agreement); and
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the equity shares presented for deposit have not been stripped
of any rights or entitlements.
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If any of the representations or warranties are incorrect in any
way, we and the depositary bank may, at your cost and expense,
take any and all actions necessary to correct the consequences
of the misrepresentations.
Transfer,
Combination and Split Up of ADRs
As an ADR holder, you will be entitled to transfer, combine or
split up your ADRs and the ADSs evidenced thereby. For transfers
of ADRs, you will have to surrender the ADRs to be transferred
to the depositary bank and also must:
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ensure that the surrendered ADR is properly endorsed or
otherwise in proper form for transfer;
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provide such proof of identity and genuineness of signatures as
the depositary bank deems appropriate;
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provide any transfer stamps required by the State of New York or
the United States; and
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pay all applicable fees, charges, expenses, taxes and other
government charges payable by ADR holders pursuant to the terms
of the deposit agreement, upon the transfer of ADRs.
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To have your ADRs either combined or split up, you must
surrender the ADRs in question to the depositary bank with your
request to have them combined or split up, and you must pay all
applicable fees, taxes, charges and expenses payable by ADR
holders, pursuant to the terms of the deposit agreement, upon a
combination or split up of ADRs.
Withdrawal
of Equity Shares Upon Cancellation of ADSs
As a holder, you will be entitled to present your ADSs to the
depositary bank for cancellation and then the depositary bank
will have the obligation to transfer to you the corresponding
number of underlying equity shares at the custodians
offices, subject to the laws of India. In order to withdraw the
equity shares represented by your ADSs, you will be required to
pay to the depositary the fees for cancellation of ADSs and any
charges and taxes payable upon the transfer of the equity shares
being withdrawn. You assume the risk for delivery of all funds
and securities upon withdrawal. Once canceled, the ADSs will not
have any rights under the deposit agreement.
If you hold an ADR registered in your name, the depositary bank
may ask you to provide proof of identity and genuineness of any
signature and certain other documents as the depositary bank may
deem appropriate before it will cancel your ADSs. The withdrawal
of the equity shares represented by your ADSs may be delayed
until the depositary bank receives satisfactory evidence of
compliance with all applicable laws and regulations. Please keep
in mind that the depositary bank will only accept ADSs for
cancellation that represent a whole number of securities on
deposit.
You will have the right to withdraw the securities represented
by your ADSs at any time except for:
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Temporary delays that may arise because (i) the transfer
books for the equity shares or ADSs are closed, or
(ii) equity shares are immobilized on account of a
shareholders meeting or a payment of dividends.
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Obligations to pay fees, taxes and similar charges.
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Restrictions imposed because of laws or regulations applicable
to ADSs or the withdrawal of securities on deposit.
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Any other circumstances specifically contemplated in the
regulations promulgated by the SECs staff from time to
time.
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The depositary bank will only deliver equity shares upon
surrender of ADSs to the extent the number of equity shares at
that time deposited with the custodian have been listed for
trading on the Indian Stock Exchanges and dematerialized. The
depositary bank will process requests for withdrawal of the
equity shares represented by ADSs surrendered to it on a first
come, first served basis.
We expect the equity shares to be represented by the ADSs
offered hereby to be (i) listed for trading on the Indian
Stock Exchanges approximately 45 days after the closing of
any offering of ADSs and (ii) dematerialized in the account
of the Custodian approximately 10 Indian business days following
receipt by the depositary bank of confirmation of listing on the
Indian Stock Exchanges. We expect the equity shares to be
represented by the ADSs issuable upon exercise of any
over-allotment option to be (i) listed for trading on the
Indian Stock Exchange approximately 45 days after the
closing of the over-allotment option and
(ii) dematerialized in the account of the Custodian
approximately 10 Indian business days following receipt by the
depositary bank of confirmation of listing of the equity shares
for trading on the Indian Stock Exchanges.
The deposit agreement may not be modified to impair your right
to withdraw the securities represented by your ADSs except to
comply with mandatory provisions of law.
24
Voting
Rights
As an ADS holder, you generally have the right under the deposit
agreement to instruct the depositary bank to exercise the voting
rights for the equity shares represented by your ADSs. You will
have no right to attend our general meetings in person. A holder
of ADSs may withdraw the underlying equity shares from the ADS
facility and vote as a direct shareholder, but there may not be
sufficient time to do so after the announcement of an upcoming
shareholders meeting. The voting rights of holders of
equity shares are described in Description of Share
Capital.
At our request, the depositary bank will mail to you any notice
of shareholders meeting received from us together with
information explaining how to instruct the depositary bank to
exercise the voting rights of the securities represented by ADSs.
If the depositary bank timely receives voting instructions from
a holder of ADSs, it will endeavor to vote the shares
represented by the holders ADSs in accordance with such
voting instructions.
Please note that the ability of the depositary bank to carry out
voting instructions may be limited by practical and legal
limitations and the terms of the securities on deposit. We
cannot assure you that you will receive voting materials in time
to enable you to return voting instructions to the depositary
bank in a timely manner. Securities for which no voting
instructions have been received will not be voted.
Fees and
Charges
As an ADS holder, you will be required to pay the following
service fees to the depositary bank:
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Services
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Fees
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Issuance of ADSs upon deposit of equity shares
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Up to 5¢ per ADS issued
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Surrender of ADSs for withdrawal of equity shares
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Up to 5¢ per ADS surrendered
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Distribution of cash dividends or other cash distribution
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Up to 2¢ per ADS held
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Exercise of rights to purchase additional ADSs
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Up to 5¢ per ADS issued
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Distribution of ADSs pursuant to stock dividend or other free
stock distributions
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Up to 5¢ per ADS issued
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Distributions of cash proceeds (i.e., upon sale of rights or
other entitlements)
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Up to 2¢ per ADS held
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Distribution of securities other than ADSs or rights to purchase
additional ADSs
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Up to 5¢ per ADS held
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Depositary services fee
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Up to 2¢ per ADS held
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Transfer of ADRs
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Up to $1.50 per certificate presented for transfer
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As an ADS holder you will also be responsible to pay certain
fees and expenses incurred by the depositary bank and certain
taxes and governmental charges such as:
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fees for the transfer and registration of equity shares (i.e.,
upon deposit and withdrawal of equity shares);
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expenses incurred for converting foreign currency into US
dollars;
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expenses for cable, telex and fax transmissions and for delivery
of securities;
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fees and expenses incurred in connection with compliance with
exchange control regulations and other applicable regulatory
requirements;
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fees and expenses incurred in connection with the delivery or
servicing of equity shares on deposit; and
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taxes and duties upon the transfer of securities (i.e., when
equity shares are deposited or withdrawn from deposit).
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Depositary fees payable upon the issuance and cancellation of
ADSs are typically paid to the depositary bank by the brokers
(on behalf of their clients) receiving the newly issued ADSs
from the depositary bank and
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by the brokers (on behalf of their clients) delivering the ADSs
to the depositary bank for cancellation. The brokers in turn
charge these fees to their clients. Depositary fees payable in
connection with distributions of cash or securities to ADS
holders and the depositary services fee are charged by the
depositary bank to the holders of record of ADSs as of the
applicable ADS record date.
The depositary fees payable for cash distributions are generally
deducted from the cash being distributed. In the case of
distributions other than cash (i.e., stock dividends, rights),
the depositary bank charges the applicable fee to the ADS record
date holders concurrent with the distribution. In the case of
ADSs registered in the name of the investor (whether
certificated or uncertificated in direct registration), the
depositary bank sends invoices to the applicable record date ADS
holders. In the case of ADSs held in brokerage and custodian
account (via DTC), the depositary bank generally collects its
fees through the systems provided by DTC (whose nominee is the
registered holder of the ADSs held in DTC) from the brokers and
custodians holdings ADSs in their DTC accounts. The brokers and
custodians who hold their clients ADSs in DTC accounts in
turn charge their clients accounts the amount of the fees
paid to the depositary banks.
In the event of refusal to pay the depositary fees, the
depositary bank may, under the terms of the deposit agreement,
refuse the requested service until payment is received or may
set off the amount of the depositary fees from any distribution
to be made to the ADS holder.
Note that the fees and charges you may be required to pay may
vary over time and may be changed by us and by the depositary
bank. The depositary bank will provide, without charge, a copy
of its latest fee schedule to anyone upon request.
The depositary bank has separately agreed to make available to
us a portion of the net fees (after deduction of custody fees
for the shares on deposit) it collects from ADS holders. These
amounts will be available to cover certain expenses related to
the establishment and maintenance of the ADR program, including:
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legal fees and expenses;
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ADS listing fees;
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investor relations fees and expenses;
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mailing and printing fees (i.e., for annual reports and proxy
materials); and
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website and web casting expenses.
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Neither the depositary bank nor we can determine the exact
amount of reimbursements the depositary bank will make available
to us because the number of ADSs that will be issued and
outstanding, the level of fees to be charged to holders of ADSs
and our reimbursable expenses related to the ADR program are not
known at this time.
Amendments
and Termination
We may agree with the depositary bank to modify the deposit
agreement at any time without your prior consent. We undertake
to give holders not less than 30 days prior notice of
any modifications that would prejudice any of their substantial
rights under the deposit agreement (except in very limited
circumstances enumerated in the deposit agreement).
You will be bound by the modifications to the deposit agreement
if you continue to hold your ADSs after the modifications to the
deposit agreement become effective. The deposit agreement cannot
be amended to prevent you from withdrawing the equity shares
represented by your ADSs (except as permitted by law).
We have the right to direct the depositary bank to terminate the
deposit agreement. Similarly, the depositary bank may in certain
circumstances on its own initiative terminate the deposit
agreement. In either case, the depositary bank must give notice
to the holders at least 30 days before termination.
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Upon termination, the following will occur under the deposit
agreement:
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For a period of one month after termination, you will be able to
request the cancellation of your ADSs and the withdrawal of the
equity shares represented by your ADSs and the delivery of all
other property held by the depositary bank in respect of those
equity shares on the same terms as prior to the termination.
During such one month period the depositary bank will continue
to collect all distributions received on the equity shares on
deposit (i.e., dividends) but will not distribute any such
property to you until you request the cancellation of your ADSs.
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After the expiration of such one month period, the depositary
bank may sell the securities held on deposit. The depositary
bank will hold the proceeds from such sale and any other funds
then held for the holders of ADSs in a non-interest bearing
account. At that point, the depositary bank will have no further
obligations to holders other than to account for the funds then
held for the holders of ADSs still outstanding.
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Books of
Depositary
The depositary bank will maintain ADS holder records at its
depositary office. You may inspect such records at such office
during regular business hours but solely for the purpose of
communicating with other holders in the interest of business
matters relating to the ADSs and the deposit agreement.
The depositary bank will maintain facilities in New York to
record and process the issuance, cancellation, combination,
split-up and
transfer of ADSs and, if applicable, ADRs.
These facilities may be closed from time to time, to the extent
not prohibited by law.
Limitations
on Obligations and Liabilities
The deposit agreement limits our obligations and the depositary
banks obligations to you. Please note the following:
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We and the depositary bank are obligated only to take the
actions specifically stated in the deposit agreement without
negligence or bad faith.
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The depositary bank disclaims any liability for any failure to
carry out voting instructions, for any manner in which a vote is
cast or for the effect of any vote, provided it acts in good
faith and in accordance with the terms of the deposit agreement.
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The depositary bank disclaims any liability for any failure to
determine the lawfulness or practicality of any action, for the
content of any document forwarded to you on our behalf or for
the accuracy of any translation of such a document, for the
investment risks associated with investing in equity shares, for
the validity or worth of the equity shares, for any tax
consequences that result from the ownership of ADSs, for the
credit worthiness of any third party, for allowing any rights to
lapse under the terms of the deposit agreement, for the
timeliness of any of our notices or for our failure to give
notice.
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We and the depositary bank will not be obligated to perform any
act that is inconsistent with the terms of the deposit agreement.
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We and the depositary bank disclaim any liability if we are
prevented or forbidden from acting on account of any law or
regulation, any provision of our Articles of Association or
Memorandum of Association, any provision of any securities on
deposit or by reason of any act of God or war or terrorism or
other circumstances beyond our control.
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We and the depositary bank disclaim any liability by reason of
any exercise of, or failure to exercise, any discretion provided
for the deposit agreement or in our Articles of Association or
Memorandum of Association or in any provisions of securities on
deposit.
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We and the depositary bank further disclaim any liability for
any action or inaction in reliance on the advice or information
received from legal counsel, accountants, any person presenting
equity shares for
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deposit, any holder of ADSs or authorized representative
thereof, or any other person believed by either of us in good
faith to be competent to give such advice or information.
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We and the depositary bank also disclaim liability for the
inability by a holder to benefit from any distribution,
offering, right or other benefit which is made available to
holders of equity shares but is not, under the terms of the
deposit agreement, made available to you.
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We and the depositary bank may rely without any liability upon
any written notice, request or other document believed to be
genuine and to have been signed or presented by the proper
parties.
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Pre-Release
Transactions
The depositary bank may, in certain circumstances, issue ADSs
before receiving a deposit of equity shares or release equity
shares before receiving ADSs. These transactions are commonly
referred to as pre-release transactions. The deposit
agreement limits the aggregate size of pre-release transactions
and imposes a number of conditions on such transactions (i.e.,
the need to receive collateral, the type of collateral required,
the representations required from brokers, etc.). The depositary
bank may retain the compensation received from the pre-release
transactions.
Taxes
You will be responsible for the taxes and other governmental
charges payable on the ADSs and the securities represented by
the ADSs. We, the depositary bank and the custodian may deduct
from any distribution the taxes and governmental charges payable
by holders and may sell any and all property on deposit to pay
the taxes and governmental charges payable by holders. You will
be liable for any deficiency if the sale proceeds do not cover
the taxes that are due.
The depositary bank may refuse to issue ADSs, to deliver
transfer, split and combine ADRs or to release securities on
deposit until all taxes and charges are paid by the applicable
holder. The depositary bank and the custodian may take
reasonable administrative actions to obtain tax refunds and
reduced tax withholding for any distributions on your behalf.
However, you may be required to provide to the depositary bank
and to the custodian proof of taxpayer status and residence and
such other information as the depositary bank and the custodian
may require to fulfill legal obligations. You are required to
indemnify us, the depositary bank and the custodian for any
claims with respect to taxes based on any tax benefit obtained
for you.
Foreign
Currency Conversion
The depositary bank will arrange for the conversion of all
foreign currency received into US dollars if such conversion is
practicable, and it will distribute the US dollars in accordance
with the terms of the deposit agreement. You may have to pay
fees and expenses incurred in converting foreign currency, such
as fees and expenses incurred in complying with currency
exchange controls and other governmental requirements.
If the conversion of foreign currency is not practicable or
lawful, or if any required approvals are denied or not
obtainable at a reasonable cost or within a reasonable period,
the depositary bank may take the following actions in its
discretion:
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convert the foreign currency to the extent practicable and
lawful and distribute the US dollars to the holders for whom the
conversion and distribution is lawful and practicable;
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distribute the foreign currency to holders for whom the
distribution is lawful and practicable; and
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hold the foreign currency (without liability for interest) for
the applicable holders.
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THE
INDIAN SECURITIES MARKET
The information in this section has been extracted from
publicly available documents from various sources, including
officially prepared materials from the Securities and Exchange
Board of India, or SEBI, the BSE and the NSE and has not been
prepared or independently verified by us or any of our
affiliates or advisors.
The
Indian Securities Market and Stock Exchange
Regulations
India has a long history of organized securities trading. In
1875, the first stock exchange was established in Mumbai.
Indias stock exchanges are regulated primarily by SEBI, as
well as by the Government of India acting through the Ministry
of Finance, Capital Markets Division, under the SCRA and the
Securities Contracts (Regulation) Rules, 1957, as amended, or
the SCR Rules. The SCR Rules, along with the rules, bylaws and
regulations of the respective stock exchanges, regulate the
recognition of stock exchanges, the qualifications for
membership thereof and the manner in which contracts are entered
into and enforced between members.
The Securities and Exchange Board of India Act 1992, as amended,
or the SEBI Act, provided for the establishment of SEBI to
protect the interests of investors in securities and to promote
the development of, and to regulate, the securities market and
matters connected or incidental to the securities market. The
SEBI Act granted powers to SEBI to, among other things, regulate
the Indian securities market, including stock exchanges and
other intermediaries in the securities market, to promote and
monitor self-regulatory organizations, to prohibit fraudulent
and unfair trade practices and insider trading, to regulate
substantial acquisitions of shares and takeovers of companies,
to call for information, to undertake inspections and to conduct
inquiries and audits of stock exchanges, self regulatory
organizations, intermediaries and other persons associated with
the securities market.
SEBI has also issued guidelines concerning minimum disclosure
requirements for public companies, rules and regulations
concerning investor protection, insider trading, substantial
acquisition of shares and takeovers of companies, buy-backs of
securities, delisting of securities, employees stock option
plans, stock brokers, merchant bankers, underwriters, mutual
funds, foreign institutional investors, credit rating agencies
and other securities market participants.
Listing
and Delisting
The listing of securities on recognized Indian stock exchanges
is regulated by the SCRA, the SCR Rules and the listing
agreements of the respective stock exchanges. Under the SCR
Rules, the governing body of each stock exchange is empowered to
suspend trading of or dealing in a listed security for breach by
a listed company of its obligations under such stock
exchanges listing agreement, subject to such company
receiving prior notice of such intent of the stock exchange.
In order to ensure availability of floating stock of listed
companies, the SEBI has notified amendments to the listing
agreement. All listed companies are required to ensure that
their minimum level of public shareholding remains at or above
25%. This requirement does not apply to those companies who at
the time of their initial listing had offered at least 10% of
the issue size to the public pursuant to Rule 19(2)(b) of
the SCR Rules, and which fulfil certain other conditions
provided in the SCR Rules However, such listed companies are
required to maintain the minimum level of public shareholding at
10% of the total number of issued ordinary shares of a class or
kind for the purposes of listing. Failure to comply with this
clause in the listing agreement requires the listed company to
delist its shares pursuant to the terms of the delisting
guidelines issued by SEBI and may result in penal action being
taken against the listed company.
The provisions of the SEBI (Delisting of Equity Shares)
Regulations, 2009, as amended, or the Delisting Regulations, and
the SCR Rules govern voluntary and compulsory delisting of
equity shares of listed Indian companies from any of the
recognized stock exchanges. A company may voluntarily delist
from a stock exchange provided that the securities of the
company have been listed for a minimum period of three years on
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any recognized stock exchange, the delisting has been approved
by two-thirds of the public shareholders, and the company, the
promoter
and/or the
directors of the company provide an exit opportunity and
purchase the outstanding securities from those holders who wish
to sell them at a price determined in accordance with the
Delisting Regulations (an exemption from this last condition on
providing an exit opportunity and purchasing the outstanding
shares may be granted by SEBI if the securities remain listed on
the NSE or the BSE).
In the event a company seeks to voluntarily delist from a stock
exchange, it is required to provide an exit opportunity to the
other shareholders and seek the in-principle approval of the
stock exchange. This exit opportunity involves a price discovery
process known as the book building process. A
delisting offer can be launched by any promoter seeking to
delist the securities of the company. The delisting offer needs
to be supported by a resolution approved by the board of
directors and a resolution approved by three-fourths of the
shareholders of the listed company through a postal ballot. In
addition, the special resolution of the shareholders can be
acted upon if, and only if, the votes cast by public
shareholders in favour of the proposal amount are at least two
times the number of votes cast by public shareholders against it
(non-promoters and holders of depository receipts are considered
non-public shareholders). Following the approval of the
shareholders, the promoter is required to issue a public
announcement relating to the delisting offer. The offer price
shall be at or above a floor price determined in accordance with
the provisions of the Delisting Regulations.
The Delisting Regulations and the SCR Rules also provide the
stock exchanges the power to delist the securities of companies
on certain grounds, including: if a company is incurring losses
during the preceding three consecutive years and has negative
net worth; the trading in the securities of the company has
remained suspended for a minimum period of six months; the
securities of a company have remained infrequently traded during
the preceding three years; the company or any of its promoters
or directors have been convicted for failure to comply with any
provisions of the SEBI Act or the Depositories Act, or rules and
regulations made thereunder and given a sentence of not less
than three years; or there has been failure to raise the public
shareholdings within a specified time to the minimum level
applicable to the company under its listing agreement. Any order
for compulsory delisting can be made only after considering
representations received from aggrieved persons. In the event
that the securities of a company are delisted by a stock
exchange, the fair value of the securities shall be determined
by an independent valuer appointed by the stock exchange from a
panel of experts selected by the stock exchange. If a listed
company is delisted by the stock exchange, the listed company
can file an appeal before the Securities Appellate Tribunal. The
Delisting Regulations do not permit the relisting of equity
shares following a delisting for a period of five years (in a
voluntary delisting) and ten years (if the stock exchanges
initiate the delisting).
We have entered into listing agreements with the BSE and the
NSE. These agreements require us to adhere to certain corporate
governance requirements, including ensuring that we have a
minimum number of independent directors on our board of
directors, specify the required composition of various
committees, such as our audit committee and remuneration
committee, and subject us to continuing disclosure requirements.
Disclosures
under the Indian Companies Act and Securities
Regulations
All companies, including public limited companies, are required
under the Indian Companies Act to prepare and file with the
Registrar of Companies and circulate to their shareholders
audited annual accounts that comply with the disclosure
requirements under the Indian Companies Act. In addition, a
listed company is subject to continuing disclosure requirements
pursuant to the terms of its listing agreement with the relevant
stock exchange and SEBI regulatory requirements. Companies are
also required to publish unaudited financial statements (though
subject to a limited review by the companys auditors), on
a quarterly basis and are required to inform the related stock
exchanges immediately regarding any sensitive information that
would be likely to affect the stock price.
Indian
Stock Exchanges
There are currently 23 recognized stock exchanges in India, most
of which have a governing board for self-regulation. A number of
these exchanges have been directed by SEBI to file schemes for
demutualization
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as part of the move towards greater investor protection. The BSE
and the NSE hold prominent positions among the stock exchanges
in terms of the number of listed companies, market
capitalization and trading activity.
With effect from April 1, 2003, the stock exchanges in
India operate on a trading day plus two, or T+2, rolling
settlement system. At the end of the T+2 period, obligations are
settled with buyers of securities paying for and receiving
securities, while sellers transfer and receive payment for
securities. For example, trades executed on a Monday would
typically be settled on a Wednesday. In order to contain the
risk arising out of the transactions entered into by the members
of various stock exchanges either on their own account or on
behalf of their clients, the stock exchanges have designed risk
management procedures, which include compulsory prescribed
margins on the individual broker members, based on their
outstanding exposure in the market, as well as stock-specific
margins from the members.
To restrict abnormal price volatility, SEBI has instructed stock
exchanges to apply the following price bands calculated at the
previous days closing price (there are no restrictions on
price movements of index stocks):
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Market Wide Circuit Breakers. In order to
restrict abnormal price volatility in any particular stock, SEBI
has instructed stock exchanges to apply daily circuit breakers,
which do not allow transactions beyond certain price volatility.
An index based market-wide (equity and equity derivatives)
circuit breaker system has been implemented and the circuit
breakers are applied to the market for movement by 10%, 15% and
20% for two prescribed market indices: the BSE Sensitive Index,
or Sensex, for the BSE and the Nifty for the NSE, or the NSE
Nifty, whichever is breached earlier. If any of these circuit
breaker thresholds are reached, trading in all equity and equity
derivatives markets nationwide is halted.
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Price Bands. Price bands are circuit filters
of 20% movements either up or down, and are applied to most
securities traded in the markets, excluding securities included
in the BSE Sensex and the NSE Nifty and derivatives products. In
addition to the market-wide index based circuit breakers, there
are currently in place varying individual scrip wise bands
(except for scrips on which derivative products are available or
scrips included in indices on which derivative products are
available) of 20% either way for all other scrips.
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BSE
The BSE is one of the stock exchanges in India on which our
equity shares are listed. Established in 1875, it is the first
stock exchange in India to have obtained permanent recognition
in 1956 from the Government of India under the SCRA and has
evolved over the years into its present status as the largest
stock exchange in India. Pursuant to the BSE (Corporatization
and Demutualization) Scheme 2005 of SEBI, with effect from
August 20, 2005, the BSE has been incorporated and is
now a company under the Indian Companies Act.
The BSE has switched over to an on-line trading network since
May 1995 and has expanded this network to over 349 cities
in India. As of March 2009, the BSE had 1,007 members comprising
175 individual members, 809 Indian companies and 23 foreign
institutional investors. Only a member of the BSE has the right
to trade in the stocks listed on the BSE. As of March 2009,
there were 4,929 companies trading on the BSE and the
estimated market capitalization of stocks trading on the BSE was
Rs. 30,861 billion. In March 2009, the average daily
turnover on the BSE was approximately
Rs. 34,895 million. As of March 2009, the BSE had
15,402 trader work stations spread over 349 cities.
Derivatives trading commenced on the BSE in 2000. The BSE has
also wholesale and retail debt trading segments. Retail trading
in government securities commenced on the BSE in January 2003.
The following two indices are generally used in tracking the
aggregate price movements on the BSE. The BSE Sensex consists of
listed shares of 30 large market capitalization companies. The
companies are selected on the basis of market capitalization,
liquidity and industry representation. The Sensex was first
compiled in 1986 with the fiscal year ended March 31, 1979
as its base year. The BSE 100 Index (formerly the BSE National
Index) contains listed
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shares of 100 companies including the 30 in Sensex with
fiscal 1984 as the base year. The BSE 100 Index was introduced
in January 1989.
NSE
Our equity shares are also listed in India on the NSE. The NSE
was established by financial institutions and banks to provide
nationwide, online, satellite-linked, screen-based trading
facilities for market-makers and electronic clearing and
settlement for securities including government securities,
debentures, public sector bonds and units. The NSE was
recognised as a stock exchange under the SCRA in April 1993 and
commenced operations in the wholesale debt market segment in
June 1994. The capital market (equities) segment commenced
operations in November 1994 and operations in the derivatives
segment commenced in June 2000. In March 2009, the average daily
traded value of the capital market segment was Rs. 101,400
million. As of March 31, 2008, the NSE had 1,075 trading
members and over 21,083 registered sub-brokers on the capital
market segment and the wholesale debt market segment. The NSE
launched the NSE 50 index, now known as S&P CNX NIFTY,
on April 22, 1996 and the Mid-cap Index on January 1,
1996. As of April 17, 2009, the market capitalisation of
the NSE was approximately Rs. 33,106 billion. With a
wide network in major metropolitan cities, screen based trading,
a central monitoring system and greater transparency, the NSE
has lately recorded high volumes of trading.
Trading
Hours
Trading on both the BSE and the NSE normally occurs Monday
through Friday, between 9:55 a.m. and
3:30 p.m. The BSE and the NSE are closed on public
holidays.
Trading
Procedure
In order to facilitate smooth transactions, in 1995 BSE replaced
its open outcry system with the BSE On-line Trading, or BOLT,
facility in 1995. This totally automated screen based trading in
securities was put into practice nation-wide. This has enhanced
transparency in dealings and has assisted considerably in
smoothing settlement cycles and improving efficiency in
back-office work.
The NSE has introduced a fully automated trading system called
National Exchange for Automated Trading, or NEAT, which operates
on a strict price / time priority. This system enables
efficient trade. NEAT has lent considerable depth in the market
by enabling large number of members all over India to trade
simultaneously, narrowing the spreads significantly.
Stock
Market Indices
The following two indices are generally used in tracking the
aggregate price movements on the BSE. The BSE Sensex consists of
listed shares of 30 large market capitalization companies. The
companies are selected on the basis of market capitalization,
liquidity and industry representation. Sensex was first compiled
in 1986 with the fiscal year ended March 31, 1979 as its
base year. The BSE 100 Index (formerly the BSE National Index)
contains listed shares of 100 companies including the 30 in
Sensex with fiscal 1984 as the base year. The BSE 100 Index was
introduced in January 1989.
Internet-Based
Securities Trading and Services
SEBI approved internet trading in January 2000. Internet trading
takes place through order routing systems, which route client
orders to exchange trading systems for execution. This permits
clients throughout the country to trade using brokers
Internet trading systems. Stock brokers interested in providing
this service are required to apply for permission to the
relevant stock exchange and also have to comply with certain
minimum conditions stipulated by SEBI.
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Takeover
Code
The SEBI (Substantial Acquisition of Shares and Takeovers)
Regulations, 1997, as amended, or the Takeover Code, prescribes
certain thresholds of securities ownership or trigger points
that give rise to certain obligations. The Takeover Code
requires disclosure of the aggregate shareholding or voting
rights in a listed company by any acquiror who acquires shares
or voting rights which (taken together with shares or voting
rights, if any, already held by such acquiror) entitle such
acquiror to more than 5%, 10%, 14%, 54% or 74% of the shares or
voting rights in that company.
SEBI has recently amended the Takeover Code to make it mandatory
for the promoters and promoter group of listed companies to
disclose the creation and enforcement of a pledge on the equity
shares held by such persons. The Takeover Code also requires
(unless specifically exempted) the making of an open offer to
acquire an additional 20% of the voting capital of a company in
the following circumstances:
(a) any acquiror, who together with persons acting in
concert with such acquiror, acquires or agrees to acquire 15% or
more of the equity shares or voting rights in the company;
(b) any acquiror who, together with persons acting in
concert with such acquiror, has acquired 15% or more, but less
than 55%, of the equity shares or voting rights in the shares of
the company and who acquires additional shares or voting rights
entitling such acquiror to exercise more than 5% of the voting
rights in any financial year ending March 31;
(c) any acquiror who, together with persons acting in
concert with such acquiror, has acquired 55% or more, but less
than 75%, of the shares or voting rights in the shares of the
company (or, where the company concerned had obtained the
initial listing of its shares by making an offer of at least 10%
of the issue size to the public pursuant to Rule 19(2)(b)
of the SCR Rules, less than 90% of the shares or voting rights
in the company) and who acquires any additional shares entitling
the acquiror to exercise voting rights or voting rights;
provided that an acquiror together with persons acting in
concert with such acquirer, may acquire additional shares or
voting rights that entitle such acquiror to up to 5% of the
voting rights in a company without making a public announcement
if the acquisition is made through open market purchases on the
stock exchanges, but not through bulk deal/block deal/negotiated
deal/preferential allotment; or if the increase in shareholding
or voting rights of the acquirer is pursuant to a buyback of
shares by the company, and the post acquisition
shareholding of the acquiror and persons acting in concert does
not exceed 75%;
(d) any acquiror who, together with persons acting in
concert with such acquiror, holds 55% or more, but less than
75%, of the shares or voting rights of the company (or, where
the company concerned had obtained the initial listing of its
shares by making an offer of at least 10% of the issue size to
the public pursuant to Rule 19(2)(b) of the SCR Rules, less than
90% of the shares or voting rights in the company), intends to
consolidate its holdings while ensuring that the public
shareholding in the target company does not fall below the
minimum level permitted by the listing agreement with the stock
exchanges; or
(e) any acquiror who acquires control over the company
(directly or indirectly), irrespective of whether there has been
any acquisition of shares or voting rights in the company.
However, in the event a public offer is made pursuant to item
(d) above (an acquiror who holds 55% or more but less than 75%),
the minimum size of the public offer to acquire the voting
capital of the target company is required to be the lesser of
20% of the voting capital of the company or such other lesser
percentage of the voting capital of the company as would,
assuming full subscription of the offer, enable the acquiror,
together with persons acting in concert with him, to increase
his holding to the maximum level possible, which is consistent
with the target company meeting the requirements of minimum
public shareholding as set forth in the listing agreement.
The Takeover Code introduces the chain principle by
which the acquisition of a holding company will obligate the
acquiror to make a public offer to the shareholders of each
subsidiary company which is listed.
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Further, if the acquisition of voting capital of a target
company made by an acquiror pursuant to a public offer results
in the public shareholding in the target company being reduced
below the minimum level required in the listing agreements with
the stock exchanges for the purpose of continuous listing, the
acquiror is required to take necessary steps to facilitate
compliance of the target company with the relevant provisions of
the listing agreement within the time period stated in the
listing agreements.
The Takeover Code sets out the contents of the required public
announcements as well as the minimum offer price. The minimum
offer price depends on whether the shares of the company are
frequently or infrequently traded (as
defined in the Takeover Code). In case the shares of the company
are frequently traded, the minimum offer price shall be the
higher of:
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the negotiated price under the agreement for the acquisition of
shares in the company;
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the highest price paid by the acquiror or persons acting in
concert with such acquiror for any acquisitions, including
through an allotment in a public, preferential or rights issue,
during the 26-week period prior to the date of public
announcement; and
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the average of the weekly high and low of the closing prices of
the shares of the company quoted on the stock exchange where the
shares of the company are most frequently traded during the
26-week period prior to the date of public announcement, or the
average of the daily high and low of the prices of the shares as
quoted on the stock exchange where the shares of the company are
most frequently traded during the two weeks preceding the date
of public announcement, whichever is higher.
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Specific obligations of the acquiror and the board of directors
of the target company in the offer process have also been
specified. Acquirors making a public offer also must deposit in
an escrow account a percentage of the total consideration
payable under the public offer, which will be forfeited in the
event that the acquiror does not fulfill its obligations.
The Takeover Code, subject to certain conditions specified in
the Takeover Code, exempts certain specified acquisitions from
the requirement of making a public offer, including, among
others, the acquisition of shares:
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by allotment in a public issue or a rights issue;
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by underwriters pursuant to an underwriting agreement;
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by registered stockbrokers in the ordinary course of business on
behalf of clients;
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in unlisted companies;
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pursuant to a scheme of reconstruction or amalgamation approved
by a court in India or abroad;
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pursuant to a scheme under Section 18 of the Sick
Industries Companies (Special Provisions) Act, 1985;
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resulting from transfers between companies belonging to the same
group of companies, as defined in the Monopolies and Restrictive
Trade Practices Act, 1969, as amended, or between relatives or
between qualifying promoters of a publicly listed
company or between qualifying Indian promoters and foreign
collaborators who are shareholders;
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by way of transmission through inheritance or succession;
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resulting from transfers by Indian venture capital funds or
foreign venture capital investors registered with SEBI, to
promoters of a venture capital undertaking or venture capital
undertaking pursuant to an agreement between such venture
capital funds or foreign venture capital investors with such
promoters or venture capital undertaking;
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by government controlled companies, unless such acquisition is
made pursuant to a disinvestment process undertaken by the
Government of India or a state government;
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pursuant to a change in control by takeover/restoration of the
management of the borrower company by the secured creditor in
terms of the Securitisation and Reconstruction of Financial
Assets and Enforcement of Security Interest Act, 2002;
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acquisition of shares by a person in exchange for equity shares
received under a public offer made under the Takeover
Code; and
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in accordance with guidelines and regulations relating to
delisting of securities as specified by SEBI.
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The Takeover Code does not apply to acquisitions in the ordinary
course of business by public financial institutions either on
their own account or as a pledgee. An application may also be
filed with the takeover panel seeking an exemption from the open
offer requirements of the Takeover Code. Pursuant to a recent
amendment, a listed company can apply to SEBI to waive
requirements under the Takeover Code in relation to an
acquisition of a listed company in circumstances where the board
of directors of the listed company has been taken over by the
Government of India and there is a plan for a transparent and
competitive process for the operations of the listed company.
In addition, the provisions of the Takeover Code relating to the
making of a public offer do not apply to the acquisition of ADRs
or global depository receipts so long as they are not converted
into equity shares carrying voting rights.
Insider
Trading Regulations
The SEBI (Prohibition of Insider Trading) Regulations 1992, as
amended, or the Insider Trading Regulations, have been
established by SEBI to prohibit and penalize insider trading in
India. The Insider Trading Regulations prohibit an
insider from dealing, either on his own behalf or on
behalf of any other person, in the securities of a company
listed on any stock exchanges when in possession of unpublished
price-sensitive information. The terms insider,
unpublished and price-sensitive
information are defined in the Insider Trading Regulations.
Insider means any person who (i) is or was
connected with the company or is deemed to have been connected
with the company and who is reasonably expected to have access
to unpublished price-sensitive information in respect of the
securities of a company or (ii) has received or has had
access to such unpublished price-sensitive information.
Unpublished means information which is not published
by the Company or its agents and is not specific in nature. The
Insider Trading Regulations clarify that speculative reports in
print or electronic media are not considered published
information. Price-sensitive information means any
information which relates directly or indirectly to a company
and which if published is likely to materially affect the price
of securities of the company, such as the periodic financial
results of the company, intended declaration of dividends (both
interim and final), issue of securities or buy-back of
securities.
The insider is also prohibited from communicating, counselling
or procuring, directly or indirectly, any unpublished
price-sensitive information to any other person who while in
possession of such unpublished price-sensitive information is
prohibited from dealing in securities. The prohibition under the
Insider Trading Regulations extends to all persons, including a
company dealing in the securities of a company listed on any
stock exchange or associate of that other company, while in
possession of unpublished price-sensitive information.
Any person who holds more than 5% of the shares or voting rights
in any listed company is required to disclose to the company on
a continuous basis the number of shares or voting rights held by
such person and any change in such holding since the last
disclosure made (even if such change results in the shareholding
falling below 5%), where such change exceeds 2% of the total
shareholding or voting rights in the company. Such disclosure is
required to be made within two working days of either:
(i) the receipt of intimation of allotment of shares; or
(ii) the acquisition or sale of shares or voting rights, as
the case may be.
Further, all directors and officers of a listed company are
required to disclose to the company the number of shares or
voting rights held and derivatives positions taken by such
person within two working days of becoming a director or officer
of such company. All directors and officers of a listed company
are also required to make periodic disclosures of their
shareholding in the company.
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The Insider Trading Regulations make it compulsory for listed
companies and certain other entities associated with the
securities market to establish an internal code of conduct to
prevent insider trading deals and also to regulate disclosure of
unpublished price-sensitive information within such entities so
as to minimize misuse of such information. To this end, the
Insider Trading Regulations provide a model code of conduct.
Amendments to the Insider Trading Regulations require that the
model code of conduct should not be diluted in any manner and
shall be complied with.
The model code of conduct has also been amended to prohibit all
directors, officers and designated employees who buy or sell any
number of shares of the company from entering into opposite
transactions during the next six months following the prior
transaction. All directors and designated employees have also
been prohibited from taking positions in derivative transactions
involving shares of the company at any time. Further, certain
provisions pertaining to, inter alia, reporting
requirements have also been extended to dependants of directors,
officers and designated employees of the company.
Depositories
In August 1996, the Indian Parliament enacted the Depositories
Act which provides a legal framework for the establishment of
depositories to record ownership details and effectuate
transfers in book-entry form. SEBI established the Securities
and Exchange Board of India (Depositories and Participants)
Regulations 1996, as amended, which provide for, among other
things, the registration of depositories and participants, the
rights and obligations of the depositories, participants, the
issuer companies and the beneficial owners, pledge of securities
held in book-entry form, and procedure for the conversion to
book-entry form of shares held in physical form.
Trading of securities in book-entry form commenced in December
1996. In January 1998, SEBI notified scrips of various companies
for compulsory book-entry trading by certain categories of
investors. Subsequently, SEBI has significantly increased the
number of scrips in which book-entry form trading is mandatory
for all investors. The SEBI (Disclosure and Investor Protection)
Guidelines, 2000, as amended, provide that no company may make a
public or rights issue or an offer for sale of securities unless
the company enters into an agreement with a depository for
book-entry of securities already issued or proposed to be issued
to the public or existing shareholders and the company gives an
option to subscribers, shareholders or investors to receive the
security certificates or hold securities in book-entry form with
a depository.
SEBI has also provided that the issue and allotment of shares in
initial public offerings
and/or the
trading of shares shall only be in electronic form, and the
company gives an option to subscribers, shareholders or
investors either to receive the security certificates or to hold
the securities in book-entry form with a depository.
Under the Depositories Act, every person subscribing to
securities offered by an issuer has an option to either receive
the security certificates or hold the securities with a
depository. The Indian Companies Act provides that Indian
companies making any initial public offerings of securities for
or in excess of Rs. 100 million ($2.05 million)
should issue the securities in book-entry form.
However, even in case of scrips notified for compulsory
dematerialized trading, investors, other than institutional
investors, are permitted to trade in physical shares on
transactions outside the stock exchange where there are no
requirements of reporting such transactions to the stock
exchange, and on transactions on the stock exchange involving
lots of less than 500 securities.
Transfers of shares in book-entry form require both the seller
and the purchaser of the equity shares to establish accounts
with depositary participants registered with the depositaries
established under the Depositories Act, 1996. Charges for
opening an account with a depositary participant, transaction
charges for each trade and custodian charges for securities held
in each account vary depending upon the practice of each
depositary participant and have to be borne by the account
holder. Upon delivery, the shares shall be registered in the
name of the relevant depositary on the companys books and
this depositary shall enter the name of the investor in its
records as the beneficial owner. The transfer of beneficial
ownership shall be effected through
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the records of the depositary. The beneficial owner shall be
entitled to all rights and benefits and subject to all
liabilities in respect of his securities held by a depositary.
Derivatives
(Futures and Options)
Trading in derivatives is governed by the SCRA and the SEBI Act.
Trading in derivatives in India takes place either on separate
and independent derivatives exchanges or on a separate segment
of an existing stock exchange. The derivative exchange or a
derivative segment of a stock exchange functions as a
self-regulatory organization under the supervision of SEBI.
Derivatives products have been introduced in a phased manner in
India.
Calculation
of Total Foreign Investment in Indian Companies
Press Note No. 2 (2009 Series), effective from
February 13, 2009, or Press Note No. 2, issued by the
Department of Industrial Policy and Promotion, or DIPP, read
with the clarificatory guidelines for downstream investment
under Press Note No. 4 (2009 Series) dated
February 25, 2009, or Press Note No. 4, issued by the
DIPP (collectively with Press Note No. 2, the Press Notes),
determine the calculation of foreign investment in an Indian
company.
Foreign investment is defined broadly and includes investment by
foreign institutional investors and non-resident Indians, and
foreign investment in the form of American depositary receipts,
global depositary receipts, foreign currency convertible bonds,
convertible preference shares and convertible debentures.
Press Note No. 2 specifies that all investments made
directly by a non-resident entity in an Indian company would be
considered as foreign investment. Further, in relation to an
investment by an Indian company in another Indian company, if
(i) the investing Indian company is owned and controlled by
resident Indian citizens, and (ii) foreign entities do not
own or control the investing Indian company, then the foreign
investment in the investing Indian company will not be
considered for calculation of the foreign investment in the
second Indian company. However, if the requirements under
(i) and (ii) above are not satisfied, then the entire
investment of the investing Indian company in the second Indian
company being invested in will be considered foreign investment.
Pursuant to Press Note No. 2, an investing company shall be
considered (i) owned by resident Indian
citizens or foreign entities if more than 50% of its equity
interest is beneficially owned by resident Indian citizens or
foreign entities, as the case may be, and
(ii) controlled by resident Indian citizens or
foreign entities if the resident Indian citizens or foreign
entities, as the case may be, have the power to appoint a
majority of its directors.
Press Note No. 4 provides guidelines relating to downstream
investments by Indian companies that have foreign investment.
These guidelines are based on the principle that downstream
investments by Indian companies owned or controlled by foreign
entities should follow the same rules as those applicable to
direct foreign investment. In respect of downstream investments
by Indian companies that are not owned or controlled by foreign
entities, there would not be any restrictions.
For the purpose of downstream investments, Press Note No. 4
classifies Indian companies into (i) operating companies,
(ii) operating-and-investing
companies and (iii) investing companies. In connection with
foreign investment in these categories of Indian companies,
Press Note No. 4 provides that:
1. Operating company: Foreign investment
in an operating company will need to comply with the terms and
conditions for foreign investment in the relevant sector(s) in
which such company operates;
2. Operating-and-investing
company: Foreign investment in such a company
will need to comply with the terms and conditions for foreign
investment in the relevant sector(s) in which such company
operates. Further, the investee Indian company in which
downstream investments are made by such company will need to
comply with the terms and conditions for foreign investment in
the relevant sectors in which the investee Indian company
operates; and
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3. Investing company: An investing
company has been defined under Press Note No. 4 as an
Indian company holding only direct or indirect investments in
other Indian companies other than for trading of such holdings.
Any foreign investment in such company will require the prior
approval of the Foreign Investment Promotion Board, or FIPB.
Press Note No. 4 further provides that foreign investment
in an Indian company that does not have (i) any operations,
and (ii) any downstream investments, will require the prior
approval of the FIPB.
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GOVERNMENT
OF INDIA APPROVALS
Legal
Regime
The issue of ADSs by an Indian company is primarily regulated by
the Issue of Foreign Currency Convertible Bonds and Ordinary
Shares (Through Depository Receipt Mechanism) Scheme, 1993, as
amended, or the ADR Scheme, and the Foreign Exchange Management
(Transfer or Issue of Security by a Person Resident Outside
India) Regulations, 2000, as amended, or the Regulations, read
with Circular F.
No. 15/7/1999-NRI
dated January 19, 2000, or the Circular, issued by the
Ministry of Finance, Department of Economic Affairs, Government
of India, which permit Indian companies to issue ADSs in
accordance with the procedure laid down thereunder without
obtaining any regulatory approvals except in certain cases.
An Indian company can issue ADRs if it is eligible to issue
shares to persons resident outside India under the foreign
direct investment scheme. However, an Indian listed company
which is not eligible to raise funds from the Indian capital
markets, including a company which has been restricted from
accessing the securities market by the SEBI, is not eligible to
issue ADRs.
Automatic
Route
Foreign direct investment in our company is permitted under the
automatic route and non-resident investors are permitted to hold
up to 100% of our equity share capital. Erstwhile overseas
corporate bodies, or OCBs, as defined under applicable RBI
regulations, who are not eligible to invest in India and
entities prohibited to buy, sell or deal in securities by the
SEBI are not eligible to subscribe to ADSs issued by Indian
companies. In the event that the issue related expenses
(including fixed expenses such as underwriting commissions, lead
managers charges, legal expenses and other reimbursable
expenses) exceed the prescribed ceiling of 7% of the issue, we
would be required to obtain the approval of the RBI.
Pricing
of an ADS Issue
Pursuant to a circular dated November 27, 2008, the pricing
guidelines set forth under the ADR Scheme in relation to ADS
issues have been amended.
The issue price should be not less than the average of the
weekly high and low of the closing prices of the related shares
quoted on the stock exchange during the two weeks preceding the
relevant date, where the relevant date
means the date of the meeting in which our Board of Directors or
the Committee of Directors duly authorized by the Board of
Directors decides to open the proposed issue.
Regulatory
Filings
We are required to make the following filings in connection with
the issue of ADSs:
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full details of the ADS issue including details of our equity
capital structure, the number of ADSs issued, the ratio of ADSs
to the underlying shares, amount raised by this issue and amount
repatriated with the RBI in the form specified in Annexure C of
the Regulations, within 30 days from the date of closing of
the ADS issue;
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a quarterly return with the RBI in the form specified in
Annexure D of the Regulations within 15 days of the close
of the calendar quarter; and
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a return of allotment with the Registrar of Companies, at the
time of issuance of the new equity shares.
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Declaration
for Equity Shares Beneficially Owned
Section 187C of the Indian Companies Act requires the
holder of record of an equity share to declare details of the
beneficial owner and vice versa within the prescribed periods.
Any person who defaults in making the said declaration within
such period is liable to pay a fine of up to Rs. 1,000 for
each day of such continuing default. However, the failure to
comply with Section 187C would not affect the obligation of
the
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company to register a transfer of shares or pay any dividends to
the registered holder of any shares, in respect of which such a
declaration has not been made.
Approvals
Received by the Company
We intend to obtain in-principle approvals for the issue and
allotment of the equity shares underlying the ADSs from the BSE
and the NSE, respectively, prior to the allotment of the equity
shares. We are also required to apply for and obtain the
approval for listing and trading of the equity shares underlying
the ADSs after the completion of the allotment of the equity
shares.
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PLAN OF
DISTRIBUTION
We or any selling security holder may sell or distribute the
securities offered by this prospectus, from time to time, in one
or more offerings, as follows:
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through agents;
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to dealers or underwriters for resale;
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directly to purchasers; or
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through a combination of any of these methods of sale.
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The prospectus supplement with respect to the securities will
state the terms of the offering of the securities.
In addition, we may issue the securities as a dividend or
distribution or in a rights offering to our existing security
holders. In some cases, we or dealers acting for us or on our
behalf may also repurchase securities and reoffer them to the
public by one or more of the methods described above. This
prospectus may be used in connection with any offering of our
securities through any of these methods or other methods
described in the applicable prospectus supplement.
In the case of a rights offering, if all of the underlying
securities are not subscribed for, we may then sell the
unsubscribed securities directly to third parties or may engage
the services of one or more underwriters, dealers or agents,
including standby underwriters, to sell the unsubscribed
securities to third parties. If we enter into a standby
underwriting agreement, we may pay the standby underwriters a
commitment fee for the securities they commit to purchase on a
standby basis. If we do not enter into a standby underwriting
agreement, we may retain a dealer-manager to manage a rights
offering for us. Any rights offering by us will need to be in
compliance with applicable Indian laws and regulations. Equity
shares (directly or in the form of ADSs) subscribed by the
selling shareholder or, where the rights offering involves
standby underwriters, subscribed by the standby underwriters may
be resold by them by one or more of the methods described above.
Our securities distributed by any of these methods may be sold
to the public, in one or more transactions, either:
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at a fixed price or prices, which may be changed;
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at market prices prevailing at the time of sale;
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at prices related to prevailing market prices; or
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at negotiated prices.
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Sale
through Underwriters or Dealers
If underwriters are used in the sale of securities offered
through this prospectus, the underwriters will acquire the
securities for their own account, including through
underwriting, purchase, security lending or repurchase
agreements with us and the names of the underwriters and the
terms of the transaction will be set forth in the accompanying
prospectus supplement, which will be used by the underwriters to
make resales of the securities in respect of which this
prospectus is delivered to the public. The underwriters may
resell the securities from time to time in one or more
transactions, including negotiated transactions. The
underwriters may sell the securities in order to facilitate
transactions in any of our other securities (described in this
prospectus or otherwise), including other public or private
transactions and short sales. The underwriters may offer the
securities to the public either through underwriting syndicates
represented by one or more managing underwriters or directly by
one or more firms acting as underwriters. Unless otherwise
indicated in the applicable prospectus supplement, the
obligations of the underwriters to purchase the securities will
be subject to certain conditions, and the underwriters will be
obligated to purchase all the offered securities if they
purchase any of them. The underwriters may change from time to
time any initial public offering price and any discounts or
concessions allowed or reallowed or paid to dealers.
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If dealers are used in the sale of securities offered through
this prospectus, we will sell the securities to them as
principals. They may then resell those securities to the public
at varying prices determined by the dealers at the time of
resale. The applicable prospectus supplement will include the
names of the dealers and the terms of the transaction.
Direct
Sales and Sales through Agents
We may sell the securities offered through this prospectus
directly, subject to compliance with any applicable Indian law
and regulation. In this case, no underwriters or agents would be
involved. Such securities may also be sold through agents
designated from time to time. The applicable prospectus
supplement will name any agent involved in the offer or sale of
the offered securities and will describe any commissions payable
to the agent. Unless otherwise indicated in the applicable
prospectus supplement, any agent will agree to use its commonly
reasonable efforts to solicit purchases for the period of its
appointment.
We may sell the securities directly to institutional investors
or others who may be deemed to be underwriters within the
meaning of the Securities Act with respect to any sale of those
securities. The terms of any such sales will be described in the
applicable prospectus supplement.
Delayed
Delivery Contracts
If the applicable prospectus supplement indicates, we may
authorize agents, underwriters or dealers to solicit offers from
certain types of institutions to purchase securities at the
public offering price under delayed delivery contracts. These
contracts would provide for payment and delivery on a specified
date in the future. The contracts would be subject only to those
conditions described in the prospectus supplement. The
applicable prospectus supplement will describe the commission
payable for solicitation of those contracts.
Market
Making, Stabilization and Other Transactions
Any underwriter may engage in stabilizing transactions,
syndicate covering transactions and penalty bids in accordance
with Rule 104 under the Securities Exchange Act of 1934, as
amended. Stabilizing transactions involve bids to purchase the
underlying security in the open market for the purpose of
pegging, fixing or maintaining the price of the securities.
Syndicate covering transactions involve purchases of the
securities in the open market after the distribution has been
completed in order to cover syndicate short positions.
Penalty bids permit the underwriters to reclaim a selling
concession from a syndicate member when the securities
originally sold by the syndicate member are purchased in a
syndicate covering transaction to cover syndicate short
positions. Stabilizing transactions, syndicate covering
transactions and penalty bids may cause the price of the
securities to be higher than it would be in the absence of the
transactions. The underwriters may, if they commence these
transactions, discontinue them at any time.
Derivative
Transactions and Hedging
We, any selling security holder and the underwriters may engage
in derivative transactions involving the securities subject to
compliance with any applicable Indian law and regulation. These
derivatives may consist of short sale transactions and other
hedging activities. The underwriters may acquire a long or short
position in the securities, hold or resell securities acquired
and purchase options or futures on the securities and other
derivative instruments with returns linked to or related to
changes in the price of the securities. In order to facilitate
these derivative transactions, we may enter into security
lending or repurchase agreements with the underwriters. The
underwriters may effect the derivative transactions through
sales of the securities to the public, including short sales, or
by lending the securities in order to facilitate short sale
transactions by others. The underwriters may also use the
securities purchased or borrowed from us or others (or, in the
case of derivatives, securities received from us in settlement
of those derivatives) to directly or indirectly settle sales of
the securities or close out any related open borrowings of the
securities.
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Loans of
Securities
We or a selling security holder may loan or pledge securities to
a financial institution or other third party that in turn may
sell the securities using this prospectus and an applicable
prospectus supplement, subject to compliance with any applicable
Indian law and regulation.
General
Information
Agents, underwriters, and dealers may be entitled, under
agreements entered into with us, to indemnification by us,
against certain liabilities, including liabilities under the
Securities Act. Our agents, underwriters, and dealers, or their
affiliates, may be customers of, engage in transactions with or
perform services for us or our affiliates in the ordinary course
of business, for which they may receive customary compensation.
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LEGAL
MATTERS
The validity of the equity shares offered by this prospectus
will be passed upon for us by S&R Associates, our Indian
counsel. Certain matters relating to US federal securities law
in connection with any offering pursuant to this prospectus will
be passed upon by Latham & Watkins LLP, our US
counsel. Latham & Watkins LLP may rely upon S&R
Associates with respect to certain matters governed by Indian
law.
EXPERTS
The consolidated financial statements and related financial
statement schedule included in Schedule II of Sterlite
Industries (India) Limited incorporated in this prospectus by
reference from the Companys Annual Report on
Form 20-F
for the year ended March 31, 2009, and the financial
statements from which the Selected Consolidated Financial Data
appearing under the heading Item 3. Key
Information A. Selected Consolidated Financial
Data in the Annual Report on Form 20-F of the Company
for the year ended March 31, 2009 have been derived, and
the effectiveness of Sterlite Industries (India) Limiteds
internal control over financial reporting have been audited by
Deloitte Haskins & Sells, Mumbai, India, an
independent registered public accounting firm, as stated in
their reports appearing herein by reference (which reports
(1) express an unqualified opinion on the consolidated
financial statements and the related financial statement
schedule and includes an explanatory paragraph referring to the
convenience translation of the Indian Rupee amounts into US
dollar amounts and (2) express an unqualified opinion on
the effectiveness of internal control over financial reporting).
Such financial statements, financial statement schedule, and
Selected Consolidated Financial Data have been so incorporated
in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing. The offices of
Deloitte Haskins & Sells are located at 12,
Dr. Annie Besant Road, Opposite Shiv Sagar Estate, Worli,
Mumbai 400018, India.
The information included in this prospectus regarding the ore
reserves is based on estimates determined by Sterlite and in
respect of BALCOs Mainpat and Bodai-Daldali bauxite mines
and HZLs Rampura Agucha, Zawar and Rajpura Dariba zinc
mines, have been reviewed and confirmed as being reported in
compliance with Industry Guide 7 of the SEC by SRK Consulting
(UK) Limited in reliance upon the authority of such firm as
experts in geology, mine planning, metallurgy, mineral
evaluation and mineral reserve estimation and the consent of
such firms to its inclusion.
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