Institute of Chartered Financial Analysts of India (ICFAI) University 2006 Certification Finance Security Analysis - II - Question Paper

The Company has appointed independent audit firm, with the expertise and specialized staff to carry on the internal audit of the Company's operations. They carry on internal audit at unit level. The reports on audit findings and action taken are tabled at every Audit Committee meeting. The actions are taken on the basis of recommendations of the Audit Committee. The Company has well designed procedures, manuals and policies to execute financial transactions.



Company Philosophy on Code of Governance

Sound corporate governance practices and ethical business conduct are at core of the Sterlite Group's value system. The Company's philosophy of corporate governance steams from its belief that timely disclosures, transparency, accountability, dissemination of info to all its constituents and a strong independent Board of Directors, go long way in maximizing corporate value.

Details of Non Compliance

During the process of Open Offer for acquisition of 20% shares of Hindustan Zinc Limited from the public shareholders, there was a delay in receipt of approval from the RBI and consequently, delay in payment to 9 non-resident shareholders.

SEBI had passed an order dated June 12, 2003 under SEBI (Substantial Acquisition of Shares and Takeovers) Regulation, 1997 (“Takeover Code”) on Sterlite Opportunities and Ventures Limited (SOVL) (as acquirer), Sterlite Industries India Ltd. (SIIL) and the Company (as persons acting in concert) directing payment of interest @ 10% per annum, for alleged delay in payment of consideration amount to NRIs / FIIs / OCBs shareholders, due to delay in receipt of the approval of the Reserve Bank of India, under FEMA in connection with applications accepted in the open offer for HZL. SOVL, SIIL and the Company had preferred an appeal against the SEBI order before Securities Appellate Tribunal (SAT). SAT has passed a final order on February 11, 2005 setting aside the aforesaid impugned order of SEBI.



Annexure I

Income statement of Sterlite Optical Technologies Ltd. for the year ending on

(Rs. in Crore)

Particulars
Mar ' 05
Mar ' 04
Mar ' 03
Mar ' 02
Mar ' 01

Income :






Operating Income
324.15
90.19
116.91
680.14
747.88

Expenses :






Material Consumed
224.63
61.71
90.31
432.56
415.35

Manufacturing Expenses
13.20
7.25

Earning:   Approval pending.