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Directors Report of Vedanta Ltd.

Mar 31, 2013

To the Members, The Board of Directors presents the Annual Report of the Company together with the Audited Statements of Account for the financial year ended March 31, 2013. This report is drawn for the Company on a stand-alone basis Rs. in crore, except as stated Particulars 2012-13 2011-12 Profit before provisions for depreciation and tax 204.90 2,504.79 Less: Depreciation 147.91 83.85 Provision for Tax - Current and Prior Year Tax 10.92 719.00 - Deferred Tax -74.70 22.00 Profit after depreciation and tax 120.77 1,679.94 Add: Balance brought forward from the preceding year 1,962.10 1,137.72 Profit available for appropriation 2,082.87 2,817.66 Appropriations Interim dividend / Proposed Final dividend 8.69 347.64 Tax on distributed profit 1.48 7.92 General Reserve 5.00 500.00 Balance carried to Balance Sheet 2,067.70 1,962.10 Total 2,082.87 2,817.66 In accordance with the requirements of the Listing Agreement, a consolidated Financial Statement of the Company is included in this Annual Report. The consolidated profit after tax for the group for the year ended March 31, 2013 is Rs. 2,280 crore as against Rs. 2,696 crore for the previous year. The basic earnings per share for 2012-13 were Rs. 26.24 as against Rs. 31.01 for the previous year. Corporate Actions Western Cluster Limited (WCL) The Company increased its equity interest in Western Cluster Limited to 100% through the acquisition of the remaining 49% in December 2012 at an acquisition cost of US$33.5 million. This acquisition consolidates our presence in Liberia and reaffirms our faith in the significant potential for the Western Cluster Project. With a large resource potential and with proximity to the port, it is one of the most exciting upcoming iron ore projects. The project is progressing well with about 69,000 meters of exploratory drilling completed till March 31, 2013. The first JORC resources of 966 mt have been announced. The reserves and resources position has been independently reviewed and certified as per Joint Ore Reserves Committee (JORC) standards. The feasibility and engineering work for the project is also progressing as per plan. Sesa has completed the feasibility studies for the first phase of the project, which envisages a 4 mtpa high-grade concentrate output (2 modules of 2 mtpa each) from the Bomi Mine. Initially, the saleable ore will be transported 76 km to the Monrovia port by road, which will be replaced / supplemented by rail transport as the railway line is gradually set up for the integrated project. The first shipments are targeted by the end of FY2014. The Western Cluster Project presents an excellent opportunity for Sesa to strengthen its presence in the world seaborne iron ore market and the Company intends to gradually ramp up the production capacity at WCL in a phased manner targeting a total of about 25-30 mtpa. Sesa Sterlite - A Merger Announcement The Scheme of Amalgamation and Arrangement amongst Sterlite Industries (India) Limited (SIIL), The Madras Aluminium Company Limited (MALCO), Sterlite Energy Limited (SEL), Vedanta Aluminium Limited (VAL) with the Company, which was announced last year has received approvals of respective company's equity shareholders, the Stock Exchanges in India and the Competition Commission of India. Approval of Foreign Investment Promotion Board, respective company's equity shareholders and the Supreme Court of Mauritius approval for the merger of Ekaterina Limited with the Sesa Goa Limited have been received. The High Court of Mumbai at Goa has already approved both the mergers while the hearing at the High Court of Madras has been completed and the order is awaited. The Order of the Single Judge of High Court of Bombay at Goa approving both the Schemes has been challenged before the Division Bench. Dividend The board of directors has recommended a dividend of Rs. 0.10 per equity share of Rs. 1/- each for 2012-13. Operations A summary on a stand-alone basis of the sales turnover and the working results is given below: 2012 - 13 2011 - 12 (All money values are net of ocean freight and Qty. mt Value Qty. mt Value excise duty) Rs. crore Rs. crore Sale of Iron Ore* 2.5 1,289 12.7 5,635 Direct Exports 2.2 1,188 9.7 5,082 Other Sales 0.3 101 3.0 553 Sale of Metallurgical Coke 0.30 552 0.25 191 Sale of Pig Iron 0.28 775 0.25 721 Profit after Tax - 120 - 1,680 * Includes 0.17 mt (amounting to Rs. 72 crore) in FY2013 as compared to 0.3 mt (amounting to Rs. 95 crore) in FY2012 transfered to PID. Iron Ore Business 2012-13 was a year of challenges for your Company - challenges unprecedented in its history. In September / October 2012, the iron ore mining operations in Goa were brought to a complete halt by an abrupt imposition of ban on mineral extraction and transportation by the State Government and subsequently by the Supreme Court. The Company's entire iron ore mining business is currently at a standstill in the State of Goa. The Honourable Supreme Court of India has given clearance for resumption of mining operations for A and B category mines in Karnataka subject to statutory clearances, vide its order dated April 18, 2013. Sesa's Karnataka mine falls under B category, and the Company is in the process of securing necessary statutory clearances to resume mining shortly. The Ministry of Mines, Government of India, had constituted the Shah Commission for inquiry into aspects of compliances for iron ore mining across India in FY2011. Post the submission of Shah Commission report, in September 2012, the State Government of Goa, temporarily suspended the mining and transportation of iron ore across the state of Goa. This was followed by an Order from Ministry of Environment and Forest (MoEF) putting into abeyance the Environmental Clearances for iron ore mines in Goa. Subsequently, a review by a High Powered committee appointed by the State government was also ordered. In October 2012, the Honourable Supreme Court suspended mining and transportation of Iron ore across the State of Goa and ordered a review by the Centrally Empowered Committee (CEC). In view of the foregoing, operations at the Company's mines in Goa have been remained suspended. The Company has filed an application before the Supreme Court seeking modification or vacation of the aforesaid order. The hearing in the Court is yet to commence effectively. Despite the adverse circumstances during the year, the Company looks ahead to an early resolution of these challenges. We continue to work on furthering our internal systemic robustness and strengthening processes to handle such challenges. In 2012, Sesa became the 1st Indian mining company to implement automation using RFID technology. The Implementation covers all Sesa Group companies. The RFID system identifies the vehicle using RFID tags across the Sesa operations in Goa and Karnataka and links forest passes and Department of Mines and Geology permits (in Karnataka) with truck information thereby providing assurance and control. Sesa received Supply Chain Technology Advancement award at the 2nd Asia Manufacturing Supply Chain Summit (AMCSCS) for this implementation. Spot prices witnessed a significant drop from August due to drop in demand reaching a low of $83 per tonne (63% Fe FOB India) in early September from about -$130 per tonne at the start of the year. With the improved sentiment in China, iron ore spot prices experienced a sharp recovery, December onwards, reaching above $140 per tonne in February 2013, before showing slight softening in March to reach $125 per tonne on March 31, 2013. The average spot iron ore price for 2012-13 was about -20% lower at US$ 120 per tonne (63% grade FOB price) level, compared to about -$150 per tonne in 2011-12. Exploration Exploration at the Liberian project combined with significant new discoveries in India has resulted in the addition of 1.03 billion tonnes of Ore Reserves and Mineral Resources (R&R) in 2012-13. This includes 966 mt of JORC / CRIRSCO certified R&R in Liberia and 59 mt net R&R addition in India. Now operating in India and Liberia, Sesa has applied new thinking to old deposits. Driven by the consistent focus on resource addition, the total R&R in Goa and Karnataka has increased 3.6 times (net of depletion) over the last 5 years. During 2012-13, over 95,000 metres were drilled, with about 69,000 m in Liberia and about 26,500 m in India. The R&R as on March 31, 2013 now stands at 433 mt in India and 966 mt in Liberia (WCL), totalling to 1,399 mt for Sesa group. These resources in Liberia pertain to only a portion of the exploration license area. With a small part of the strike length explored as on date, there is a potential for significant upside with focused drilling in coming years. Pig Iron & Met Coke Business The Value Addition Business achieved a new landmark in August 2012 with the commissioning of the new 450 m3 blast furnace enhancing the pig iron production from 0.25 to 0.625 mtpa, making us the largest low phosphorous pig iron facility in India. A 0.28 mtpa metallurgical coke plant, a 0.8 mtpa sinter plant and a 30 MW power plant have also been commissioned as part of the expansion project. The newly commissioned sintering facility would enable the Pig Iron Division (PID) to partially meet its iron ore requirement with sintered iron ore fines, resulting in significant cost savings and increasing efficiencies. Driven by the commissioning of new capacities, pig iron production increased by 24% from 248,729 tonnes in 2011-12 to 307,775 tonnes in 2012-13. The pig iron sales volume increased by 10% from 250,571 tonnes in 2011-12 to 275,119 tonnes in 2012-13, while gross sales revenue grew by 7.4% to Rs. 784 crore in 2012-13 from Rs. 730 crore in 2011-12. Profits before interest, tax, dividends and other nonrecurring or non-allocable incomes for the Pig iron business decreased from Rs. 45 crore in 2011-12 to Rs. (9.3) crore in 2012-13. The metallurgical coke production increased by 29% to 331 kt in 2012-13 due to new capacities commissioned in Q2 FY2013. Sales volume of metallurgical (met) coke increased by 20% to 301,889 tonnes in 2012-13 from 251,264 tonnes in 2011-12. External sales revenue increased by 1.4% to Rs. 558 crore in 2012-13 from Rs. 550 crore in 2011-12. Sesa had applied for validation of its European patent in Germany, Italy and the United Kingdom. During the year, The International Organisation for Patent and Trademark Service confirmed the validity of the patent overruling some objections raised by a German Company. Outlook The iron ore mining industry continues to face increasing challenges with social licensing as a result of the competition for resources, and high prices increasing social pressure on the extractive industries to share more and more benefits with the society. As far as the overall iron ore market is concerned, despite temporary glitches, the theme of the emerging market super cycle remains unchanged, on the demand front. Supply forecasts continue to remain complex on account of supply disruptions due to regulatory concerns as in India, weather disruptions as in Australian ports, continued structural challenges from cost inflations, grade depletion and large uncertainty of project. However, in the longer term, prices are forecast to be under pressure as and when supply picks up with several new investments coming on stream, albeit supported by the phasing out of high cost operations. Despite all these challenges, the overall outlook for Sesa remains positive. Sesa's low cost operations in Goa and Karnataka are well placed to sustain any cost or pricing pressures. The Supreme Court has already permitted a conditional resumption of operations in Karnataka and the Company is in the process of securing the statutory clearances for an early resumption of operations. The expansion projects at pig iron and metallurgical coke operations have been commissioned, with the sinter plant adding key strategic ability to utilise iron ore fines. With the maiden resource estimate at Liberia already announced, Sesa's total reserves and resources exceed 1.4 billion tonnes with a significant upside expected from hitherto untouched exploration area in Liberia. Certification All the certificates under ISO: 9001-2008, ISO: 14001-2004,OHSAS 18001-2007 and SA 8000 for Quality Management, Environment Management, Occupational Health and Safety Management and Social Accountability respectively, are being maintained by the Company after periodical surveillance audits. Chitradurga Mine, Sonshi Mine, Amona Plant and Amona Bunder have been certified for implementing '5S Workplace Management System' from Quality Circle Forum of India, Hyderabad. Codli mine has been certified for implementing '5S Workplace Management System' from Quality Circle Forum of India, Hyderabad. Sesa's Information Technology Department has been certified for 'ISO 27001:2005' standard for its Information Security Management System (ISMS) for Sesa HO and SAP Data Center, Mahape. Energy Conservation, Technology Absorption, Foreign Exchange Earnings and Outgo Particulars prescribed under Section 217(1) (e) of the Companies Act, 1956, are given in Annexure A, which forms part of this Report. Ecology and Social Development Your Company remains focused on improving the ecology and the environment. Its mine reclamation efforts have significantly improved the biodiversity of the working as well as reclaimed mines. Successful replication of proven biotechnologies for mined land reclamation has become an integral part of the Company's resource planning process. Sesa accords high priority to the safety of its employees. Conscious efforts were made to improve safety practices across all the units. Your Company continued its focus on CSR activities with strong commitment in stakeholder engagement to understand the community needs. Company has associated with reputed CSR partners to implement CSR programs, notably among them Mineral Foundation of Goa, Government of Goa and so on. Details of the sustainable development activities are included in the Business Responsibility report, which is part of the annual report. The Company had published Sustainable Development Report for 2008-09, 2009-10, 2010-11 and 2011-12 based on International Guidelines of GRI - G3 / 3.1 with application level of A and has plans to publish at the G 3.1 level in 2012-13. CSR-SCDF Sesa Community Development Foundation (SCDF) runs two units, viz. the Sesa Technical School (STS) and the Sesa Football Academy (SFA). The Company's contribution during the year was Rs. 3.94 crore to the Foundation. Awards Your Company was awarded with the following prestigious awards during the year 2012-13: - Sesa has been recognised with the 'Commendation Certificate' in IMC Ramkrishna BajajNational Quality assessment in the Manufacturing Category for the year 2012. Sesa is the first and only mining company to get this recognition since the award's inception in 1996. The award is presented annually by the Indian Merchants' Chambers (IMC) to promote quality awareness and practices, recognise quality achievements of Indian companies and publicise successful quality strategies and programs. - Sesa won the first place for the Best Practices adopted and implemented in Environment Technology for its initiatives on 'Energy Conservation' given by the Goa State Pollution Control Board (GSPCB) on the occasion of World Environment Day. - Sesa's Pig Iron Division was the winner in the 'Manufacturing process Metallurgical - Medium Scale Industry' category and Met Coke Division was the runners up in the 'Manufacturing process Non Metallurgical - Medium Scale Industry' category. These awards, given at the national level, have been instituted by Srishti Publications. - Sesa won the 'CSR Initiative of the Year' award at Business Goa Corporate Excellence Awards given by Business Goa, a business magazine in March 2013. - Sesa won the Silver Award in the category of Best Strategy at the 3rd Annual Greentech HR Excellence Awards, 2013, given by the Greentech Foundation, which presents these HR Excellence Awards to companies that demonstrate the highest level of commitment to HR practices. - Sesa Goa Limited, has been conferred the Diamond Edge Award 2012, for its RFID Based Logistics System at the EDGE Awards 2012 in Mumbai on 10 October 2012. EDGE (Enterprises Driving Growth and Excellence through IT) initiative of InformationWeek is an effort to identify, recognise and honour end-user companies in India that have demonstrated the best use of technology to solve a business problem, improve their business competitiveness and deliver quantifiable return to stakeholders. - Sesa was declared the winner of 'Manufacturing Supply Chain Awards' in the category of 'Supply Chain Technology Advancement' for its RFID implementation across Goa and Karnataka iron ore operations. These awards were given as a part of the 2nd Asia Manufacturing Supply Chain Summit (AMSCS). - Sesa Goa Limited was awarded the Best Custom Solution Award in SAP Logistics category for Customisation of Ore Trucking Logistics at the SAP Localisation Forum India 2013. - Sesa's Met Coke division won two prestigious National Safety Awards in New Delhi in September 2012 for - Achieving lowest average weighted accident frequency rate over a period of 3 consecutive years ending in the performance year 2010 for factories working less than one million man-hours but more than half million man hours per year. - Achieving maximum man-hours without any fatal / non-fatal / PTD accident in the performance year 2010 for factories working less than one million man-hours but more than half million man hours per year. - Sesa Mining Corporation Limited (SMCL) was awarded the CSR Excellence Gold Award in the Education Category by the Green Triangle Society on 21 December 2012. - Sesa has been awarded a Merit Certificate for being a finalist in the Global CSR Awards 2012. - Sesa's mining division won the Late Manikant Hiralal Shah Memorial Gold Medal for excellence in Community & Social Welfare at the Green Triangle Society's CSR Excellence & Safety Awards. Fixed Deposits As reported last year, the Company has discontinued renewal of its fixed deposits on maturity. As on March 31, 2013 all fixed deposits had matured while 8 deposits amounting to Rs. 1.36 lakhs remained unclaimed. All these depositors are regularly advised about maturity of their deposits and urged to claim these as soon as they can. Safety The safety performance for the Financial Year 2012 - 13 is as under: FSI LTIFR 2012-13 2011-12 2012-13 2011-12 Mining Sesa 0.053 0.111 0.24 0.39 Shipping Division - SGL 0 0.47 0 3.2 Shipbuilding Division 0 0 0 0 Metallurgical Coke Division / PP* 0 0.243 0 1.64 Pig iron Division / SP* 0.29 0 1 0 Expansion Projects (Pig iron, Met coke, 0.443 0.125 1.75 1 Power Plant, Sinter Plant) Sesa Goa Limited 0.118 0.138 0.45 0.70 FSI - Frequency Severity Incidence, LTIFR - Lost Time Injury Frequency Rate * For 12-13, rate for MCD and PID have been computed including the expansion plants, power plant and sinter plant after commissioning in addition to the existing plant. Directors' Responsibility Statement Your Directors confirm that: i. the applicable accounting standards have been followed along with proper explanations relating to material departures, if any, for preparation of the annual accounts; ii. the accounting policies have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year ended March 31, 2013 and of the profits of the Company for that year. iii. proper and sufficient care has been taken to maintain adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud or other irregularities; iv. the annual accounts have been prepared on a going concern basis. Directors Mr. K. K. Kaura and Mr. J. P. Singh, Directors, retire by rotation at the ensuing Annual General Meeting and, being eligible, offer themselves for re-appointment. Mr. A. Pradhan was re-appointed as Wholetime Director of the Company at the Board meeting held on April 27, 2013, effective from April 1, 2013 for a period of two years, subject to the approval of the shareholders at the ensuing Annual General Meeting of the Company. Auditors The Company's Auditors, M/s. Deloitte Haskins & Sells, Chartered Accountants retire at the ensuing Annual General Meeting and are eligible for re-appointment. As per the requirement of the Central Government and in pursuance of Section 233 B of the Companies Act, 1956, your Directors have appointed M/s R. J. Goel & Co, Cost Accountants, as cost auditors of the Company to carry out the audit of cost accounting records related to Mining, Pig Iron and Met Coke product produced at plants located at Navelim / Amona for the financial year 2012-13. Compliance Certificate A certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is attached to this Report along with report on Corporate Governance. Listing As stipulated under Clause 32 of the Listing Agreement, the names and addresses of Stock Exchange on which the Company's equity shares are listed are: 1) Bombay Stock Exchange Limited, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400 001. 2) National Stock Exchange of India Limited, Exchange Plaza, Bandra Kurla Complex, Bandra East, Mumbai - 400 051. Your Company confirms that Annual Listing Fees for the year 2012-13 have been paid. Employees Your Directors express their deep appreciation for the unrelenting cooperation and support rendered by the employees at all levels of the Company. Your Directors wish to lay emphasis on safe working culture in the organisation and urge all the employees to not only follow safety standards but also to excel in all safety parameters. Statement of Particulars of Employees as required in terms of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules 1975, is annexed hereto. Acknowledgement The Directors would like to thank the employees and employee unions, shareholders, customers, suppliers, bankers, regulatory authorities and all the other business associates of the Company for their confidence and support to its Management. For and on behalf of Board of Directors Place: Panaji - Goa G. D. Kamat P. K. Mukherjee Date: April 27, 2013 Director Managing Director


Mar 31, 2011

The Board of Directors presents the Annual Report of the Company together with the Audited Statements of Account for the financial year ended 31st March, 2011.

This report, therefore, is drawn for the Company on a stand-alone basis.

2010 -2011 2009 -2010 (Rs. in (Rs. in crore) crore)

Profit before provisions for depreciation 4,468.93 2,715.47 and tax

Less: Depreciation 83.13 57.38

Provision for Tax

- Current Tax 963.00 538.00

- Deferred Tax (10.00) 2.00

Profit after depreciation and tax 3,432.80 2,118.09

Add: Balance brought forward from the preceding year 297.70 95.57

Transferred on amalgamation of Sesa Industries Ltd. 283.48

Profit available for appropriation 4,013.98 2,213.66

Appropriations

Proposed dividend/final dividend 304.18 270.06

Tax on distributed profit 49.35 45.90

Dividend for 2009-10 in respect of Foreign Currency Convertible Bonds converted during the year (inclusive of dividend tax of Rs. 9.85 - 0.51 crore)

Dividend to shareholders of erstwhile Sesa Industries Limited on amalgamation (inclusive of dividend tax of Rs. 1.83 crore) 12.88 -

General Reserve 2,500.00 1,600.00

Balance carried to Balance Sheet 1,13772 297.70

4,013.98 2,213.66



In accordance with the requirements of the Listing Agreement, a consolidated Financial Statement of the Company is included in this Annual Report. The consolidated profit after tax for the group for the year ended 31st March, 2011 is Rs. 4,222.45 crore as against Rs. 2,639.04 crore for the previous year. The basic earnings per share (of Rs. 1 each) (excluding minority interest) works out to Rs. 49.17 as against Rs. 32.41 for the previous year.

Amalgamation of Sesa Industries Limited with Sesa Goa Limited

The Hon’ble Supreme Court of India has vide Order dated 7th February, 2011, upheld the Order of the Single Judge of High Court of Bombay at Goa dated 18th December, 2008 approving the Scheme of Amalgamation of Sesa Industries Limited (SIL) with Sesa Goa Limited (SGL) with appointed date of 1st April, 2005.

Consequently the Board of Directors, at its meeting held on 12th March, 2011 allotted 9,398,864 equity shares of face value of Rs. 1/- each bearing distinctive numbers 859,702,560 to 869,101,423 to the shareholders of erstwhile SIL, holding shares as on Record Date, i.e. 28th February, 2011 and approved distribution of dividend to the aforesaid allottees in terms of the Scheme of Amalgamation equivalent to Rs. 11.75 per share of face value of Rs. 1/-. As a result of allotment, the paid up share capital of the Company has gone up from Rs. 859,702,559 to Rs. 869,101,423.

Consequently, the figures of the Pig Iron segment for 2010-11 were incorporated in the company’s results in the quarter ended 31st March, 2011. The figures for 2010-11 are therefore not comparable with those of 2009-10 on stand-alone basis.

Dividend

The board of directors has recommended a dividend of Rs. 3.50 per equity share of Rs. 1/- each for 2010-11, as against Rs. 3.25 per equity share of Rs. 1/- each declared in 2009-10.

Operations

A summary on a stand-alone basis of the sales turnover and the working results is given below: 2010 - 2011 2009 - 2010

(All money values are Qty. in Value in Qty. in Value in net of freight) million Rs. crore million Rs. crore tonnes tonnes

Sale of Iron Ore* 14.7 6,736 15.2 4,238

Direct Exports 12.5 6,219 14.1 4,027

Other Sales 2.2 517 1.1 211

Sale of metallurgical coke 0.08 141 0.27 357

Sale of Pig Iron 0.27 664 - -

Profit after Tax - 3,433 - 2,118

* Includes 0.312 mt (amounting to Rs. 99.44 crore) transferred to pig iron division.

Note: Quantitative numbers are reported in DMT basis.

Sesa Goa produced 14.8 million tonnes of iron ore and sold 14.7 million tonnes of iron ore in 2010-11. This was marginally lower than the 16.0 million tonnes produced and 15.2 million tonnes of iron ore sold in 2009-10.

The Company’s production and sales were adversely affected by the imposition of ban on exports of iron ore in Karnataka by the Government of Karnataka (GoK), logistical hurdles and the extended monsoon in Goa which hampered mining and logistics operations. Logistic hurdles were also faced in Orissa.

During end July 2010, the Government of Karnataka (GoK) issued a notification to ban iron ore exports from ten minor ports and in the process stopped all the iron ore exports from the State. While this was aimed at curbing illegal mining, it completely stalled operations of existing regular miners like Sesa in Karnataka. On 5th April, 2011, the Supreme Court issued a ruling to lift the Karnataka iron ore export ban from 20th April, 2011.

In 2010, Chinese import of iron ore reduced by 3.7% in terms of volume. Much of this was on account of supply side constraints in major iron ore producing countries. Brazil also suffered from production shortfalls due to heavy rainfall; while in India, the export ban in Karnataka affected volumes. Both these countries are also facing several environmental restrictions in increasing iron ore exploration and production. In addition, development of port capacities and inland logistics in Brazil and India has not been in pace with growing requirements of the seaborne iron ore trade.

In an environment of strong demand, these supply- side constraints resulted in a steady increase in iron ore prices. Consequently, sales realisation per MT of iron ore

sold increased drastically over the course of 2010-11. This contributed to a increase in external sales revenue of iron ore by 62% from Rs. 5,170 crore in 2009-10 to Rs. 8,387 crore in 2010-11.

On the cost front, there were some developments that adversely affected Sesa Goa’s operations. The railway freight meant for export has continuously increased and on 28th February, 2011 Government of India increased the export duty for iron ore lumps from 15% to 20%, and that on fines from 5% to 20%. Despite these external adversities, the Company maintained its margins and delivered strong profits.

Your Company has successfully integrated the Sesa Resources (erstwhile Dempo) iron ore operations that were acquired in the previous financial year in our operations.

Exploration

Sesa Group continued its strong focus on exploration activities at its operations at Goa and Karnataka. During 2010-11, 6 drilling rigs were deployed across leases in Goa and Karnataka. By 31st March, 2011, over 68,900 metres were drilled which resulted in a gross addition of 53 mt to its reserves and resources base prior to a depletion of 21 mt during 2010-11. In November 2010, the Company closed its third party operations at the Thakurani Mines in Barbil, Orissa as the contract renewal was not on favorable commercial terms.

Total reserves and resources as on 31st March, 2011 stands at 306 million tonnes. The reserves and resources position has been independently reviewed and certified as per JORC standard.

Pig Iron & Met Coke Business

For the pig iron business, sales volumes decreased by 5% to 266,090 MT in 2010-11.

However, with better market prices, sales revenues increased by 22% from Rs. 552 crore in 2009-10 to Rs. 674 crore in 2010-11. Pig Iron profits before interest, tax, dividends and other non-recurring or non-allocable incomes for the pig iron business increased by 21% to Rs. 141 crore in 2010-11

External sales revenues of met coke increased by 6% to Rs. 152 crore in 2010-11 and profits before interest, tax, dividends and other non-recurring or non-allocable incomes for the met coke business increased by 161% to Rs. 89 crore in 2010-11.

Expansion Progress

The iron ore capacity expansion programme is on track for completion by the end of 2012-13.

By then your Company aims to produce 40 mt in Goa and Karnataka. Expansion of the pig iron capacity to 625 ktpa and the associated expansion of metallurgical coke capacity to 560 ktpa are also progressing well for commissioning by Q3 2011-12

Acquisitions

During 2010-11, the Company announced two major investment decisions. On 16th August, 2010, your Company announced a potential acquisition of 20% stake in Cairn India Ltd. And, on 22nd March, 2011, it announced the acquisition of assets of Bellary Steel & Alloys Ltd (“BSAL”).

Cairn India Limited

Your Company announced our participation in the proposed acquisition of Cairn India Ltd along with our parent Company Vedanta Resources plc. Sesa Goa will acquire 20% strategic stake in Cairn India under an Open Offer. If there is insufcient take up in the Open Offer, Sesa Goa will acquire the balance as part of the Vedanta Group’s acquisition of a majority stake in Cairn India. The total cash consideration for the shares to be acquired is circa US$3 billion.

Sesa Goa received the clearance from Securities and Exchange Board of India (“SEBI”) to proceed with the open offer of up to 20% of the shares of Cairn India, post which your company launched the open offer from 11th April, 2011 at a price of INR 355 per Cairn India share which closes on 30th April, 2011.

On 19th April, 2011, your Company acquired 200 million shares amounting to 10.4% stake in Cairn India from Petronas International Corporation Ltd (“Petronas”) at a price of Rs. 331 per share through bulk deal on Bombay Stock Exchange Limited. This acquisition is in addition to the Open Offer launched by your Company on 11th April, 2011 and ends on 30th April, 2011.

Bellary Steel and Alloys Limited

The Company acquired the assets of the upcoming Steel Plant Unit of BSAL for an all cash consideration of Rs. 220.00 crore. BSAL was in the process of putting up a 0.5 mtpa Steel Plant Project at Bellary. The assets of the under construction plant acquired include a free hold land of around 700 acres, building and structures, plant and machinery and other assets of the Steel Plant. The assets have been transferred on an “As is where is” Basis to SGL.

Your Company is presently conducting a detailed assessment in order to determine the best way forward for commissioning the steel plant at the earliest. However, the acquisition has been challenged by JSW Steel Ltd in the Supreme Court of India, which has asked the parties to maintain status quo until the matter is decided.

Outlook

The Company remains optimistic on the demand and price outlook for Iron Ore in the Global Seaborne trade. In fact, the consensus expectations suggest a global deficit for the next 2 years on the back of supply constraints. In the longer term, however, prices, will come down as supply picks-up with several new investments coming on stream.

On the cost front, increased royalty rates, railway and road freight and export duty continue to exert pressure on the Company’s margins. In addition, uncertain policies and slow progress on logistics infrastructure development will continue to affect volumes.

In this milieu, your Company reiterates its commitment to the medium term growth objective of achieving 40 mt of production by 2012-13 subject to certain statutory clearances. Sesa Goa remains focused on extracting the maximum internal efficiencies and operational productivity to develop the Company using its sustainable growth model. As with last year, we remain cautiously optimistic for overcoming challenges and delivering good growth in 2011-12.

ISO Certification

All the certificates under ISO: 9001-2008, ISO: 14001- 2004 and OHSAS 18001-2007 for Quality Management, Environment Management, Occupational Health and Safety Management respectively, are being maintained by the Company after periodical surveillance audits.

Sesa Community Development Foundation

The Foundation runs two units, viz. the Sesa Technical School (STS) and the Sesa Football Academy (SFA). The Company’s contribution during the year was Rs. 3.29 crore to the Foundation.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

Particulars prescribed under Section 217(1) (e) of the Companies Act, 1956, are given in Annexure A, which forms part of this Report.

Ecology and Social Development

Your Company remains focused on improving the ecology and the environment. Its mine reclamation efforts have significantly improved the bio-diversity of the working as well as reclaimed mines. Successful replication of proven biotechnologies for mine land reclamation has become an integral part of the Company’s resource planning process. Trials have also been conducted to utilise the reject dump area for floriculture and the cultivation of other forest products.

Sesa Goa accords high priority to the safety of its employees. Conscious efforts were made to improve safety practices across all the units. DuPont Safety Services, Internationally best known consultant in safety, were engaged to undertake the safety culture assessment across all the units.

The Company had published Sustainable Development Report for 2008-2009 and 2009-10 based on International Guidelines of GRI G3 with application level of A+ and has plans to publish at the same level in 2010-11.

Sesa Goa continued its focus on CSR activities with strong commitment in Stake holder engagement to understand the community needs. Company has associated with reputed CSR partners to implement the CSR programs. Notably among them is University of

Agricultural Sciences Dharwad for Alternative Livelihood Methods for the communities around A. Narain Mine, Chitradurga, Karnataka, Gram Nirman-Codli with Mineral Foundation of Goa and Government of Goa and so on. Details on the Company’s CSR and sustainable development initiatives are given in the chapter on Management Discussion and Analysis that forms a part of this Annual Report.

Awards

Your Company was awarded with the following prestigious awards during the year 2010-11

- Awarded the Goan Achievers Award for Corporate Social Responsibility at an award function organised by Navhind Times and Viva Goa Magazine in Goa on 28th March, 2011.

- Won the Environmental Sustainability Excellence Award 2010-11, by the Indian Chamber of Commerce at Kolkata on 9th March, 2011.

- Conferred the award of being an ‘Excellent Water Efficient Unit - Beyond Fence’ at the Seventh Award for Excellence in Water Management 2010, organised by the Confederation of Indian Industry (CII), Godrej Green Business Centre.

- Excellence award for Afforestation for Sanquelim and overall performance Award for Codli Mines by Indian Bureau of Mines (IBM).

- Sesa Goa received British Safety Councils International Safety Award 2011 for its 5 units.

- Pig Iron Division and Met Coke Division received the Gomantak Suraksha Patra’ for safety performance for 2009 during an award function organised by the Green Triangle Society of Goa, in collaboration with Inspectorate of Factories & Boilers, in May 2010.

- Received the best performer award instituted by Financial Express-EVI in the Metals and Mining category for its contributions towards the environment and the excellence in the area of Green Businesses.

- Won the runners up trophy for the Best Corporate Social Responsibility Award for its Alternate Livelihood Project by Bombay Stock Exchange at its Sixth Social and Corporate Governance Awards 2010, on 16th December, 2010 at Mumbai.

Fixed Deposits

As reported last year, the Company has discontinued renewal of its fixed deposits on maturity. As on 31st March, 2011, all fixed deposits had matured. 11 deposits amounting to Rs. 1.56 lakhs remained unclaimed. All these depositors are regularly advised about maturity of their deposits and urged to claim these as soon as they can.

Safety

The FSI is an index which simultaneously takes into account both the frequency and severity of accidents. The Company’s safety performance is given below:

Division FSI 2010-11 2009-10

Mining 0.141 0.308

Shipping Division 5.477 0

Shipbuilding Division 0.106 1.019

Metallurgical Coke Division 0 0

Pig Iron Division 0 1.648

SGL Group 0.561 0.819

Group Structure

The Agarwal Group being a group defined under the Monopolies and Restrictive Trade Practices Act, 1969, controls the Company. A list of its group entities is given below:

Sr. List of Vedanta Group Companies Country of No incorporation

1 Mr. Anil Agarwal

2 Anil Agarwal Discretionary Trust Bahamas

3 Onclave PTC Limited Bahamas

4 Volcan Investments Limited Bahamas

5 Vedanta Resources Plc Great Britain

Direct Subsidiaries of the Parent Company

6 Vedanta Resources Holding Limited Great Britain

7 Vedanta Resources Jersey Limited Jersey(CI)

8 Vedanta Resources Jersey II Limited Jersey(CI)

9 Vedanta Finance (Jersey) Limited Jersey(CI)

10 Vedanta Resources Investments Limited Great Britain

11 Vedanta Jersey Investments Limited Jersey(CI)

Indirect Subsidiaries of the Parent Company

12 Bharat Aluminium Company Limited India

13 Copper Mines Of Tasmania Pty Limited Australia

14 Fujariah Gold UAE

15 Hindustan Zinc Limited India

16 The Madras Aluminium Company Limited India

17 Monte Cello BV Netherlands

18 Monte Cello Corporation NV Netherlands

19 Konkola Copper Mines PLC Zambia

20 Sterlite Energy Limited India

21 Sesa Goa Limited India

22 Sesa Resources Limited India

23 Sesa Mining Corporation Limited India

24 Sterlite Industries (India) Limited India

25 Goa Maritime Private Limited India

26 Sterlite Opportunities and Venture Limited India

27 Sterlite Infra Limited India

28 Thalanga Copper Mines Pty Limited Australia

29 Twin Star Holding Limited Mauritius

30 Vedanta Aluminium Limited India

31 Richter Holding Limited Cyprus

32 Westglobe Limited Mauritius

33 Finsider International Company Limited Great Britain

34 Vedanta Resources Finance Limited Great Britain

35 Vedanta Resources Cyprus Limited Cyprus

36 Welter Trading Limited Cyprus

37 Lakomasko BV Netherlands

38 THL Zinc Ventures Limited - Former THL KCM Mauritius Limited

39 Twinstar Energy Holdings Limited - Former Mauritius THL Aluminium

40 THL Zinc Limited - Former KCM Holdings Mauritius Limited

41 Sterlite (USA) Inc. USA

42 Talwandi Sabo Power Limited India

43 Allied Port Services Pvt Ltd India

44 Konkola Resources Plc Great Britain

45 Vizag General Cargo Berth Pvt. Limited India

46 Twin Star Mauritius Holding Limited Mauritius

47 Vedanta Namibia Holdings Limited Namibia

48 Skorpion Zinc (Pty) Limited Namibia

49 Namzinc (Pty) Limited Namibia

50 Skorpion Mining Company (Pty) Limited Namibia

51 Amica Guesthouse (Pty) Ltd Namibia

52 Rosh Pinah healthcare (Pty) Ltd Namibia

53 Black Mountain Mining (Pty) Ltd South Africa

54 THL Zinc Holding BV - Former Labaume BV Netherlands

55 Lisheen Mine Partnership Ireland

56 THL Zinc Holding Cooperative U.A Netherlands

57 Pecvest 17 Pvt. Ltd. South Africa

58 Vedanta Lisheen Finance Limited Ireland

59 Vedanta Base Metals (Ireland) Limited Ireland

60 Vedanta Lisheen Mining Limited Ireland

61 Killoran Lisheen Mining Limited Ireland

62 Killoran Lisheen Finance Limited Ireland

63 Lisheen Milling Limited Ireland

64 Killoran Concentrates Limited Ireland

65 Killoran Lisheen Limited Ireland

66 Killoran Lisheen Holdings Limited Ireland

67 Azela Limited Ireland

68 Paradip Port Services Pvt Limited India

69 MALCO Power Company Limited India

70 Malco Industries Limited India

Directors’ Responsibility Statement

Your Directors confirm that:

(i) the applicable accounting standards have been followed along with proper explanations relating to material departures, if any, for preparation of the annual accounts;

(ii) the accounting policies have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year ended 31st March, 2011 and of the profits of the Company for that year;

(iii) proper and sufficient care has been taken to maintain adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud or other irregularities;

(iv) the annual accounts have been prepared on a going concern basis.

Directors

Mr. Ashok Kini and Mr. P. G. Kakodkar, Directors, retire by rotation at the ensuing Annual General Meeting and, being eligible, offer themselves for re-appointment.

The Board of Directors, at its meeting held on 19th July, 2010 appointed Mr. Jagdish Pal Singh as Additional Director of the Company. In terms of Section 260 of the Companies Act, 1956, he will be holding office up to the ensuing Annual General Meeting, and being eligible, offer himself for appointment.

Auditors

The Company’s Auditors, M/s. Deloitte Haskins & Sells, Chartered Accountants retire at the ensuing Annual General Meeting and are eligible for re-appointment.

Compliance Certificate

A certificate from the Auditors of the Company regarding compliance of conditions of Corporate

Governance as stipulated under Clause 49 of the Listing Agreement is attached to this Report along with report on Corporate Governance.

Listing

As stipulated under Clause 32 of the Listing Agreement, the names and addresses of Stock Exchange on which the Company’s equity shares are listed are:

1) Bombay Stock Exchange Limited, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400 001.

2) National Stock Exchange of India Limited, Exchange Plaza, Bandra Kurla Complex, Bandra East, Mumbai - 400 051.

Your Company confirms that Annual Listing Fees for the year 2010-11 have been paid.

Employees

Your Directors express their deep appreciation for the unrelented co-operation and support rendered by the employees at all levels of the Company. Your Directors wish to lay emphasis on safe working culture in the organization and urge all the employees to not only follow safety standards but also to excel in all safety parameters.

Statement of Particualrs of Employees as required in terms of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules 1975, is annexed hereto.

Acknowledgement

Our Chairman, Mr. S. D. Kulkarni, has stepped down from the Board w.e.f. 24th January, 2011 after serving the Company for 10 years. The Board of Directors would like to thank Mr. Kulkarni for his substantial contributions, and for guiding Sesa Goa to its pioneering position.

The Directors would like to thank the employees and employee unions, shareholders, customers, suppliers, bankers, regulatory authorities and all the other business associates of the Company for their confidence and support to its Management.

For and on behalf of the Board of Directors

G. D. Kamat P. K. Mukherjee Director Managing Director

Place: Panaji-Goa Dated: 25th April, 2011


Mar 31, 2010

The Board of Directors presents the Annual Report of the Company together with the Audited Statements of Account for the financial year ended 31st March 2010.

The merger of the subsidiary Company, Sesa Industries Limited (SIL) with the Company was approved by the single judge of the Bombay High Court at Goa. However, based on the appeal by the objector to the Division Bench of same Court, the Order of the Single Judge was set aside. SIL has filed Special Leave Petition in the Supreme Court of India against the Order of the Division Bench.

This report, therefore, is drawn for the Company on a stand-alone basis.

Financial Results

2009 -10 2008 -09 (Rs. in crore) (Rs. in crore)

Profit before provisions for depreciation and tax 2,715.47 2,674.80

Less: Depreciation (57.38) (44.10) Provision for Tax

– Current Tax (538.00) (684.00)

– Deferred Tax (2.00) (3.46)

– Fringe Benefit Tax -- (0.75)

Profit after depreciation and tax 2,118.09 1,942.49

Add: Balance brought forward from the preceding year 95.57 60.31

Profit available for appropriation 2,213.66 2,002.80

Appropriations

Interim dividend -- --

Proposed dividend/final dividend 270.06 177.13

Tax on distributed profit 45.90 30.10

General Reserve 1,600.00 1,700.00

Balance carried to Balance Sheet 297.70 95.57

2,213.66 2,002.80

In accordance with the requirements of the Listing Agreement, a consolidated Financial Statement of the Company is included in this Annual Report. The consolidated profit after tax for the group for the year ended 31st March 2010 is Rs. 2,639.04 crore as against Rs. 1,994.89 crore for the previous year. The earnings per share of Re. 1 each (excluding minority interest) works out to be Rs. 31.62 as against Rs. 25.26 for the previous year.

Dividend

The Board of Directors has recommended a dividend of Rs. 3.25 per share of Re. 1 each for the year 2009-10.

As stated in the earlier reports, the same amount of dividend per share will also be paid to the recipients of the Company’s shares upon merger of SIL with the Company out of the appropriable profits of the merged Company. Such distribution of dividend will also be required to be made out of the appropriable profits of the merged Company for the earlier years, viz., years ended 31st March 2006, 31st March 2007, 31st March 2008 and 31st March 2009.

Acquisition

In June 2009, through a definitive Share Purchase Agreement, Sesa Goa acquired all the outstanding common shares of VS Dempo & Co. Private Limited (“VSD”), which in turn, also holds 100% equity shares of Dempo Mining Corporation Private Limited and 50% equity shares of Goa Maritime Private Limited for a total consideration of Rs. 1,750 crore (based on normative working capital) on debt-free and cash-free basis. The working capital on the acquisition date, thereafter, was determined and audited, and accordingly the final consideration amounted to Rs. 1,713 crores. The transaction was funded by Sesa Goa from its existing cash resources. At the time of acquisition it was estimated that VSD owned or had the rights to mineable reserves and resources of 70 million tonnes of iron ore in Goa. VSD’s Goa mining assets include processing plants, barges, jetties, transhippers and loading capacities at Mormugoa port.

Operations

A summary of the sales turnover and the working results on standalone basis, is given below:

2009 - 10 2008 - 09

Qty. in Qty. in million Value in million Value in

(All money values are net of freight) tonnes Rs. crore tonnes Rs. crore

Sale of Iron Ore 16.875 4,238 15.103 4,282

Direct Exports 15.735 4,027 14.089 4,077

Indirect Exports 0.009 1 0.405 50 (through local exporters)

Other Sales 1.131 210 0.609 155

Sale of metallurgical coke 265 357 0.217 465

Profit after Tax 2,118 1,942

Sesa Goa confronted difficult market conditions in the first two quarters. With rising Chinese imports, demand started picking up from Q3 of, 2009-10. And in Q4 of 2009-10, the Company recorded all time high sales and production. With this rally in the second half, annual sales volumes increased by 12% from 15.1 million tonnes in 2008-09 to 16.9 million tonnes in 2009-10. While high levels of price remained below what was attained in the pre-economic slowdown days, sales realisation also increased steadily over the course of 2009-10. The combination of sales volumes and improved realisation helped propel Sesa Goa’s performance in 2009-10.

On the cost front, there were some external developments that adversely affected Sesa Goa’s operations. During Q2, 2009-10, the Government of India (GoI) changed the basis of royalty-charges on iron ore to ad-valorem (10%) basis from specific rates being levied earlier. This change in royalty was effective from 13th August 2009. Also, in December 2009, the export duty for iron ore lumps was increased from 5% to 10% along with the re-introduction of export duty on iron ore fines by 5%. Despite, these adversities increasing the Company’s cost base, Sesa Goa increased its profits in 2009-10 as compared to 2008-09. This was achieved through higher sales volume, better price realisation and productivity improvements.

During 2009-10 your Company’s geographical distribution of iron ore sales on standalone basis is given below:

Particulars 2009-10

China 83%

Europe 3%

Japan 3%

Pakistan --

South Korea 4%

India-Domestic 7%

Total 100%

With 83% share China continues to be the primary market for Sesa Goa. While 93% of its iron ore revenues are from exports, 7% is sold in the domestic Indian market.

The total material handled by Sesa increased from 36.5 million tonnes in 2008-09 to 49.1 million tonnes in 2009-10. The Company delivered good results even in difficult conditions. This is a result of its aggressive policy and successful efforts to increase production at its mines at Goa, and Karnataka. This was supported by well managed logistics activities, which includes land transportation, barge management and port activities at Mormugao, New Mangalore, Paradip and Haldia. The Company has surpassed all past records in terms of tonnage handled at mines and by the transhipper vessel, M.V. Orissa.

Exploration Success

While production is important, Sesa Goa lays great emphasis on developing assets. With this objective, Your Company is focused on adding more iron ore resources through its exploration activities. During 2009-10, there were 9 drilling rigs deployed across leases in Goa and Karnataka. By 31st March 2010, over 56,000 metres have been drilled which has resulted in a net addition of 43 million tonnes to reserves and resources, post depletion of 24 million tonnes through production activities.

As on 31st March 2010, total consolidated reserves and resources stand at 353 million tonnes (at the mines that the Company holds on lease and/or right to mine) as compared with 240 million tonnes as on 31st March 2009 and 70 million tonnes of reserves and resources from

Dempo which was acquired in the month of June 2009. The reserves and resources position has been independently reviewed and certified as per Joint Ore Reserve Committee (JORC) standard.

Expansion Project

During Q2, 2009-10, Sesa Goa announced setting up of new integrated project to increase the pig iron production capacity by 0.375 million tonnes per annum (mtpa) by setting up a new blast furnace of 450 cubic metres working volume. The Company also announced the setting up of a new sinter plant of 75 square metres, a new non recovery coke plant of 0.280 mtpa based on its own patented coke-making technology. A 30 MW power plant utilising the waste heat from the new coke plant and excess blast furnace gas from the new blast furnace facilities is also coming up. Post commissioning of the new projects, Sesa will be the only producer/manufacturer of pig iron in the secondary sector in India, with almost total backward integration.

Total investment in these projects is estimated at Rs.605 crore (equivalent to US$125 million). This will be funded through a combination of debt and internal accruals. The project, expected to be completed by Q1, 2011-12 is being executed as per schedule.

Outlook

While there are some positive signs with USA recording two consecutive quarters of positive growth, there will continue to be considerable uncertainties and negative surprises from the developed world. However, the Company believes that China and India are well on the recovery path. There are no indications of any sharp reduction in steel production or iron ore imports in China. In fact, in the near future iron ore prices are expected to remain firm. In this milieu, there will be several opportunities for Sesa Goa to leverage its competitive cost structure to penetrate markets, especially in China, and gain share in its imports. It will have to continue to focus on minimising costs and aggressively pushing volumes to customers and increase its share in the global iron ore trade. The Company remains cautiously optimistic about its prospects in 2010-11.

ISO Certification

All the certificates under ISO : 9001-2008, ISO: 14001-2004, OHSAS 18001-2007 for Quality Management, Environment Management and Occupational Health and Safety Management, respectively, are being maintained by the Company after regular periodical surveillance audits.

Subsidiary Companies

Operations of Sesa Industries Limited (SIL) have resulted in a net profit of Rs. 84.30 crore in 2009-10, as against Rs. 57.67 crore for the previous year. Production was at record high of 0.280 million tonnes as against 0.217 million tonnes for the previous year and sales at 0.279 million tonnes as against 0.224 million tonnes.

The operations of Dempo’s have resulted in a net profit of Rs. 493 crore in 2009-10. The increase in profitability was mainly driven by higher operational efficiencies and increased iron ore prices. Saleable iron ore production and sales during the attributable period of post 11th June 2009 in 2009-10 was at 3.600 million tonnes and 3.647 million tonnes respectively.

Pursuant to the Accounting Standards AS-21 issued by the Institute of Chartered Accountants of India, the consolidated financial statements presented by the Company includes financial information of its subsidiaries. The Company has made an application to the Government of India seeking exemption under Section 212(8) of the Companies Act, 1956, from attaching/including the balance sheet, profit and loss account and other documents of the subsidiary companies to the Annual Accounts and Annual Reports of the Company. The Company will make available these documents/details upon request by any member of the Company, if the same application is granted.

Sesa Community Development Foundation

The Foundation runs two units, viz. the Sesa Technical School (STS) and the Sesa Football Academy (SFA). The Company’s contribution during the year was Rs. 3.53 crore to the Foundation.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

Particulars prescribed under Section 217(1) (e) of the Companies Act, 1956, are given in Annexure A, which forms part of this Report.

Ecology and Social Development

The Company has a strong focus on preservation of environment and adaption of new technologies that are environment friendly. The Company has successfully integrated biotechnological approach in its plantation programmes; this approach was developed in collaboration with Goa University. The Company has made further progress on improving the mine land reclamation practices by developing Bamboo pavilion on reclaimed site. The Company has developed Butterfly Park to further enhance the recreational aspects of the site.

The Plantation Management Plan of the reclaimed Sanquelim mine is being implemented in a phased manner over a period of three years. The objective is to improve the bio-diversity of the area.

During the monsoon, about 135,831 saplings of different native species have been planted in and around various establishments of the Company.

The Company accords the highest priority to safety of its employees. Conscious efforts were made to improve safety practices across all the units. World renowned safety consultant, DuPont Safety Services, were engaged to undertake the safety culture assessment across all the units and its recommendations are being implemented.

Sesa Goa continued its CSR activities with a strong commitment to stakeholder engagement and understanding of community needs. The Company further developed its association with the reputed CSR partners to implement its CSR programmes. Apart from the University of Agricultural Sciences, Dharwad for Alternative Livelihood Methods for the communities around A. Narain Mine, Chitradurga, Karnataka and Gram Nirman-Codli in association with

Mineral Foundation of Goa and Government of Goa, the Compamy also partnered with Mathruchaya, Bedki Panlot Sangh, Bedki Khandola Panlot Sangh and SPEECH.

For the fourth successive year the Company had published Sustainable Development Report for the year 2008-2009 based on International Guidelines G3 with A+ level and has plans to publish at same level for the year 2009-10.

More on the Company’s CSR and sustainable development initiatives are given in the chapter on Management Discussion and Analysis that forms a part of this Annual Report.

Awards

Your Company was awarded with the following prestigious awards during the year:

– Sesa Goa Limited – Reclaimed Sanquelim Mine was awarded the “Certificate of Appreciation for Plantation Management” by Confederation of Indian Industry (CII) during 6th CII Western Region Safety, Health and Environment (CII WR SHE).

– At the ANML – MEMCA week held in January 2010, the Company secured the following awards: Afforestation – 1st Prize; Waste Dump Management – 1st Prize; Top Soil Management – 2nd Prize; Systematic Development, Reclamation & Rehabilitation – 2nd Prize; Management of Sub Grade Minerals – 2nd Prize; Installation and use of Mechanical Beneficiation Plant – 2nd Prize; Publicity and Propaganda – 1st Prize. Apart from these Sesa Goa secured the first prize for overall performance.

– Sesa Goa’s Met Coke Division won the International Safety Award for 2009 by British Safety Council.

– During the 47th National Maritime Celebration, Sesa Goa was adjusted as the best Barge operator in Goa (2009-10).

– Sesa Goa won the overall first prize for Corporate Social Responsibility (CSR) during the 7th National conference on Occupational Safety, Health and Environment, organized by Inspectorate of Factories and Boilers, Govt. of Goa, held in February 2010.

Fixed Deposits

As reported last year, the Company has discontinued renewal of its fixed deposits on maturity. As on 31st March 2010, all fixed deposits had matured. 16 deposits amounting to Rs. 0.02 crore remained unclaimed. All these depositors are regularly advised about maturity of their deposits and urged to claim these as soon as they can.

Safety

The FSI is an index which simultaneously accounts for the frequency and the severity of accidents. The Company’s safety performance is given below:

Division FSI

2009-10 2008-09

Mining 0.308 1.451

Shipping Division 0 0.391

Shipbuilding Division 1.019 0.096

Metallurgical Coke Division 0 0.152

Sesa Goa Limited 0.319 1.505

It is evident from the above data that there is substantial reduction i.e 79% reduction in FSI compared to the last year.

Group Structure

The Agarwal Group being a group defined under the Monopolies and Restrictive Trade Practices Act, 1969, controls the Company. A list of its group entities is given below:

Sr. No Name of Group Companies

1. Volcan Investments Limited, Bahamas

2. Vedanta Resources Plc, United Kingdom

3. Vedanta Finance Jersey Limited, Jersey

4. Vedanta Resources Holdings Limited, United Kingdom

5. Twinstar Holdings Limited, Mauritius

6. Welter Trading Limited, Cyprus

7. Vedanta Resources Finance Limited, United Kingdom

8. Vedanta Resources Cyprus Limited, Cyprus

9. Richter Holding Limited, Cyprus

10. Westglobe Limited, Mauritius

11. Finsider International Company Limited, United Kingdom

12. Hindustan Zinc Limited, India

13. Sesa Industries Limited, India

14. Konkola Copper Mines Plc, Zambia

15. Vedanta Aluminium Limited, India

16. Sterlite Industries (India) Limited, India

17. Sterltie Paper Limited, India

18. Sterlite Opportunities and Ventures Limited, India

19. The Madras Aluminium Company Limited, India

20. Bharat Aluminium Company Limited, India

21. THL KCM Limited, Mauritius

22. KCM THL Limited, Mauritius

23. Vedanta Resources Investments Limited, United Kingdom

24. THL Aluminum Limited, Mauritius

25. Monte Cello BV, Netherlands

26. Sterlite Energy Limited, India

27. Copper Mines of Tasmania Pty Limited, Australia

28. Fujairah Gold FZE, UAE

29. Thalanga Copper Mines Pty Limited., Australia

30. Monte Cello NV, Netherlands Antilles

31. Vedanta Resources Jersey Limited

32. Vedanta Resources Jersey II Limited

33. Vedanta Jersey Investment Limited.

34. Mr. Anil Agarwal

Directors Responsibility Statement

Your Directors confirm that:

(i) the applicable accounting standards have been followed along with proper explanations relating to material departures, if any, for preparation of the annual accounts;

(ii) the accounting policies have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year ended 31st March 2010 and of the profits of the Company for that year;

(iii) proper and sufficient care has been taken to maintain adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud or other irregularities;

(iv) the annual accounts have been prepared on a going concern basis.

Directors

Mr. G. D. Kamat and Mr. K. K. Kaura, Directors, retire by rotation at the ensuing Annual General Meeting and, being eligible, offer themselves for re-appointment.

Auditors

The Company’s Auditors, M/s. Deloitte Haskins & Sells, Chartered Accountants retire at the ensuing Annual General Meeting and are eligible for re-appointment.

Compliance Certificate

A certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is attached to this Report along with report on Corporate Governance.

Listing

As stipulated under Clause 32 of the Listing Agreement, the names and addresses of Stock Exchange on which the Company’s equity shares are listed are:

1) Bombay Stock Exchange Limited Phiroze Jeejeebhoy Towers Dalal Street Mumbai – 400 001

2) National Stock Exchange of India Ltd. Exchange Plaza Bandra Kurla Complex Bandra East Mumbai – 400 051

Your Company confirms that Annual Listing Fees for the year 2009-10 have been paid.

Employees

Your Directors express their deep appreciation for the unrelented co-operation and support rendered by the employees at all levels of the Company. Your Directors wish to lay emphasis on safe working culture in the organization and urge all the employees to not only follow safety standards but also to excel in all safety parameters.

Statement of Particulars of Employees as required in terms of Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules 1975, is annexed hereto.

Acknowledgement

The Directors would like to thank the employees and employee unions, shareholders, customers, suppliers, bankers, regulatory authorities and all the other business associates of the Company for their confidence and support to its Management.

For and on behalf of the Board of Directors

S.D. Kulkarni

Chairman

Dated: 19th April 2010