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Directors Report of Vedanta Ltd.

Mar 31, 2017

Dear Shareholders,

The Board of Directors (Board) presents the Company’s Annual Report, together with the audited financial statements for the financial year ended March 31, 2017.

The Company remains focused on cash and building further on balance sheet. The improvement has been driven by the commodity market upturn, production ramp-up as per our commitment and the simplification of our group structure, and we now aspire to attain the next investment level. There was record production of aluminium, power and copper cathodes. Cost optimisation initiatives were implemented across the businesses, which helped us to maintain cost positions on the global cost curves and generate positive cash during FY 2017 before investment for growth capex.

We expect FY 2017-18 to be a transformative year for your Company. With an already strong balance sheet, a record Q4 FY 2016-17 EBITDA of Rs.7,275 Crore, continuing growth from the ongoing ramp-ups across most of our businesses, a clear capital allocation strategy and a defined dividend policy, we are confident about Vedanta’s prospects for the coming years and are optimistic about the long-term outlook for the global resources sector.

FINANCIAL HIGHLIGHTS FOR FY 2016-17

FY 2017 has seen strong performance both in terms of volumes and costs. Aluminum and Power continued to ramp up and Zinc India delivered a strong performance in last quarter in line with the mine plan. Margin improved further by about 500 basis points sequentially to exit at 44%.

Attributable PAT before exceptional and DDT for the year was at Rs.7,323 Crore, nearly 3 times that of previous year, reflecting the operational leverage flowing through to the bottom line. EPS is the highest in the last four years since the existence of Vedanta Limited in its current form, post the Sesa Goa-Sterlite merger.

Debt reduction continued to remain one of our key priorities. Excluding temporary borrowing by Zinc India to bridge its dividend payment and investment maturities, gross debt reduced by over Rs.4,000 Crore during the year. Our net debt to EBITDA and gearing ratios are best-in-class, and the lowest and strongest among the Indian and global peers.

Some of the key financial highlights for FY 2017 are:

Solid Financial Performance

- PAT1 up 2.6 times at Rs.7,323 Crore and Revenues up 12% to Rs.71,721 Crore

- EBITDA up 41% to Rs.21,437 Crore

- Free cash flow of Rs.13,312 Crore

Delivering on committed cost savings

- Delivered cumulative cost and marketing savings of US$712 Mn over the last 8 quarters; ahead of plan to deliver US$1.3 Bn in four years

Strong Balance sheet

- Gross Debt2 reduced by c. Rs.4,115 Crore during the year; further reduction of c. Rs.6,200 Crore post 1st April

- Net Debt/EBITDA at 0.4x - lowest and strongest among Indian and global peers

- Strong financial position with total cash and liquid investments of Rs.63,471 Crore

Highest-ever dividends declared

- Vedanta Limited announced interim dividend of Rs.6,580 Crore in March 2017

- Hindustan Zinc announced interim dividend of

Rs.13,985 Crore including dividend distribution tax in March 2017

Contribution to the ex-chequer in FY 2017 at c. Rs.40,0003 Crore

1. Attributable PAT before exceptional items & Dividend Distribution Tax (DDT)

2. Excluding Temporary short term borrowing (Rs.7,908 Crore) at Zinc India taken for dividend payment

3. Including Dividends to Government

The Company’s financial highlights in accordance with IND AS are provided below:

(Rs. in Crore)

Standalone

Consolidated

Particulars

Year ended March 31, 2017

Year Ended March 31, 2016

Year ended March 31, 2017

Year ended March 31, 2016

Net Sales/Income from Operations (including excise duty)

38,540.42

36,022.57

76,171.25

67,992.71

Profit from operations before other income, finance costs and exceptional items

3,665.15

36,022.57

15,040.42

6,579.12

Other Income

9,704.92

9,925.63

4,580.59

4,443.56

Finance costs

3,896.16

4

5,855.04

5,778.13

Exceptional items

(1,324.10)

25,588.02

114.40

33,784.72

Profit /(loss) before tax

10,798.01

(17,759.55)

13,651.57

(28,540.17)

Tax expense,/(credit)

(270.69)

(5,853.32)

3,778.31

(10,67755)

Net Profit/(loss) after tax

11,068.70

(11,906.23)

9,873.26

(17,862.62)

Share of profit/(loss) of associate

NA

NA

(2.67)

0.23

Minority Interest

NA

NA

4,358.38

(5,591.92)

Net Profit after taxes, minority interest and consolidated share in profit/(loss) of associate

11,068.70

(11,906.23)

5,512.21

(12,270.47)

Paid-up equity share capital (Face value of Rs.1 each) *

296.5

296.5

296.50

296.50

Reserves excluding revaluation reserves as per balance sheet

79,396.35

78,865.69

60,128.36

43,742.67

Earnings per share (?)

29.04

(32.76)

18.60

(41.38)

Transferred to General Reserve

NIL

NIL

-

-

Interim Dividend

7,098.86

1,037.75

7,098.86

1,03775

Transferred to Debenture Redemption Reserve

571.27

440.16

560.65

504.94

Proposed dividend on equity shares (incl. Dividend distribution tax)......

NIL

271.58

-

-

* Pursuant to the merger the increased paid up share capital would be Rs.371.75 Crores.

** Proposed dividend of erstwhile Cairn India Limited paid to external shareholders (excluding the share of dividend in Vedanta Limited and fellow subsidiaries)

OPERATIONAL HIGHLIGHTS FOR FY 2016-17

In line with Vedanta’s strategic priority to ramp up production at our Zinc, Aluminium, Power and Iron Ore businesses, we achieved strong results on this front during the year. In particular, record production levels at Hindustan Zinc and the ramp-up at Aluminium are well-timed in these strong commodity markets.

We have maintained our commitment to prudent cost management, thereby delivering strong returns for all stakeholders.

Some of the key operational highlights for FY 2017 are:

- Record annual production at Aluminium, Power, Zinc India (Zinc and Silver) and at Copper-India

- Oil & Gas: Successful ramp up from Mangala EOR with production level of 56,000 boepd in Q4

- Iron Ore: Achieved 2.6 million tonnes of the additional production capacity granted in Goa

- Zinc International: Gamsberg project on track to commence production in mid CY 2018

MANAGEMENT DISCUSSION AND ANALYSIS

A detailed report on the Management Discussion and Analysis in terms of the provisions of Regulation 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), is provided as a separate chapter in this Annual Report.

BUSINESS RESPONSIBILITY REPORT

A detailed Business Responsibility Report in terms of the provisions of Regulation 34 of the Listing Regulations is available as a separate section in this Annual Report.

CHANGE OF THE REGISTERED OFFICE OF THE COMPANY

The Regional Director, Western Region, Mumbai (RD), vide its order dated February 2, 2017, approved the shifting of the Company’s registered office from the State of Goa to the State of Maharashtra, Mumbai.

The Board on February 3, 2017, vide their resolution passed through circulation have approved the registered office address in Mumbai as Vedanta Limited, 1st floor, C Wing, Unit 103, Corporate Avenue, Atul Projects, Chakala, Andheri (East), Mumbai - 400093, Maharashtra, India with effect from February 4, 2017.

MERGER OF CAIRN INDIA LIMITED

The Board on July 22, 2016, revised the terms of Scheme of Arrangement between the Company and Cairn India Limited (‘Cairn India’) and their respective shareholders and creditors (the ‘Scheme’), which was initially announced on June 14, 2015. The Company received all approvals necessary for effecting the merger during the year and merger was made effective on April 11, 2017. This merger consolidates Vedanta’s position as one of the world’s largest diversified natural resources companies, with world-class, low-cost assets in Metals & Mining and Oil & Gas. As on the date of merger, pro forma market cap of the merged Company was US$ 15.6 Bn and a higher free float of 49.9%. The combined entity is uniquely positioned to unlock India’s wealth of world-class energy and mineral resources. The merged company is committed to enhance oil & gas production, and preserving the ‘Cairn’ brand.

As per the terms of the merger, public shareholders of Cairn India received for each equity share held by them in erstwhile Cairn India Limited, one equity share of face value of Rs.1 each and four 7.5% Non-Convertible Non-Cumulative Redeemable Preference shares of Rs.10 each in Vedanta. Cairn India shareholders, who became shareholders of Vedanta, also received the second interim dividend of Rs.17.70 per equity share as approved by the Board on March 30, 2017.

INDIAN ACCOUNTING STANDARDS (IND AS)

The Company adopted Ind AS from the current financial year with the transition date of April 1, 2015. As required under Ind AS, the comparative period financial statements have been restated for the effects of Ind AS. The effect of the transition has been explained in more detail in the notes to the financial statements. The Company has also accounted for the Cairn merger as per the pooling of interests method as prescribed under Ind AS 103. The impact of the merger on the carrying value of investments in various subsidiaries including foreign subsidiaries has been accounted for as part of the merger accounting.

SHARE CAPITAL

Pursuant to the Scheme becoming effective, the Company’s authorised share capital stands changed from

51,620,100,000 (Rupees Five thousand One Sixty Two Crore & One Lakh only) divided into 51,270,100,000 (Five Thousand One Twenty Seven Crore & One Lakh) number of equity shares of Rs.1/- (Rupee One) each and 3,50,00,000 (Three Crore Fifty Lakhs Only) redeemable preference shares of Rs.10/- each to Rs.74,12,01,00,000 (Seven Thousand Four Hundred Twelve Crores and One Lakh only) divided into 44,020,100,000 (Four Thousand Four Hundred and Two Crore and One Lakh only) number of equity shares of Rs.1/- (Rupee One) each and 3,010,000,000 (Three Hundred and One Crore) redeemable preference shares of Rs.10/- (Rupees Ten) each.

DIVIDEND

The Board approved the payment of 1st and 2nd interim dividend of Rs.1.75 per equity share and Rs.17.70 per equity share of Rs.1 each on October 28, 2016 and March 30, 2017, respectively. In view of the record interim dividend declared in March, 2017, no final dividend is recommended.

TRANSFER TO GENERAL RESERVE

The Company proposes not to transfer any funds out of its total profit of Rs.11,068.70 Crore for the financial year to the General Reserve.

DIVIDEND DISTRIBUTION POLICY

Your Board has approved and adopted a dividend distribution policy on May 15, 2017. The policy is available on the website of the Company at www.vedantalimited.com/ media/107147/vedl_dividend_policy_may_15_final.pdf

FIXED DEPOSITS

As reported last year, the Company has discontinued the renewal of its fixed deposits on maturity. As at March 31, 2017, all fixed deposits had matured, while deposits amounting to Rs.54,000 remained unclaimed. Since the matter is sub judice, the Company is maintaining status quo.

TRANSFER OF UNPAID AND UNCLAIMED AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Pursuant to the provisions of Section 125 of the Companies Act, 2013, the declared dividends, which remained unpaid or unclaimed for a period of seven years, have been transferred by the Company to the IEPF established by the Central Government pursuant to Section 125 of the said Act.

CREDIT RATING

The Company has been rated by CRISIL Limited (CRISIL) and India Ratings and Research Private Limited (India Rating) for its banking facilities in line with Basel II norms.

During the year, CRISIL upgraded the ratings for the Company’s long-term bank facilities and its Non-Convertible Debentures (NCDs) programme to CRISIL AA / Stable Outlook from our ratings at CRISIL AA- / Negative. The revision happened in three steps in September 2016 -Change in Outlook from Negative to Stable; February 2017- change in Outlook from Stable to Positive and April 2017 - Upgrade of Ratings from CRISIL AA- / Positive outlook to CRISIL AA / Stable Outlook. The Company has the highest short-term rating on its working capital and Commercial Paper programme at CRISIL A1 . The agency expects that the ramp-up of aluminium, iron ore and power capacities; and stable commodity prices shall aid higher cash flow generation and leverage reduction for the Company in near to medium term. Also, the agency shall be guided by extent and timeline for reduction in gross debt for further positive rating action.

India Ratings affirmed the Company’s ratings on long-term scale at IND AA and short-term rating at IND A1 while keeping the Outlook Negative in December 2016. The agency expected the merger to have been completed by 1HFY17 and the shift in timelines to 4QFY17 led to maintaining of Negative Outlook. With necessary approvals for completion of merger along with consolidated leverage (including parent debt) of less than 3x, we are engaging with the agency for review of the ratings.

Overall, we believe that stable price environment along with improved scale of operations across businesses shall aid faster deleveraging during FY 2017-18.

SUSTAINABILITY

At Vedanta, Sustainable Development is integral to the core business strategy. We continue to be a transparent and responsible corporate citizen; committed to a ‘social license to operate’ and partner with communities, local governments and academic institutions to help catalyse socio-economic development in the areas where we operate.

The Company reaffirms its Core Values of Trust, Entrepreneurship, Innovation, Excellence, Integrity, Respect and Care, which are the basis of Vedanta’s Sustainable Development Model. The model continues to be centred on the four strategic pillars: Responsible Stewardship; Building Strong Relationships; Adding and Sharing Value; and Strategic Communications.

With the Sustainable Development model, we built the Sustainable Development framework, which is aligned to global best practices and standards, including the United Nations Global Compact’s (UNGC) 10 principles; the International Finance Corporation (IFC) performance standards; the International Council on Mining and Metals (ICMM) principles; UN Sustainable Development Goals (SDGs); and the Organisation for Economic Cooperation and Development (OECD) promoted Multinational Guidelines.

This robust framework provides the business and the leadership teams parameters on which to assess, monitor, review key sustainability priorities, such as safety, health and environment, stakeholder engagement and community development activities, as per the Company’s approach on ‘social license to operate’.

Vedanta Sustainability Assurance Programme (VSAP) has been bedrock in promoting transparency and compliance of all our businesses with the Group’s Sustainable Development Framework. In continuation with last year, the big focus areas have been on implementation of six key safety performance standards across the Group; VSAP process has categorically focused on compliance level to these standards and highlighted areas of improvement.

During the year, we focused heavily on safety performance of our businesses under the overarching umbrella of Health, Safety and Environment (HSE) best practices. Community engagement and development programmes were geared with emphasis on need assessments and longevity of the project and related outcomes/benefits.

Our resolve is strong and we continue to work towards achieving zero harm.

Vedanta’s teams across businesses are driving various capacity-building and behavioural programmes. Our awareness campaigns aim to entrench a culture of safety and risk awareness. Training programmes on ‘Making Better Risk decisions’ is one such programme rolled out across the businesses to improve safety decision making of people at the shop floor level. Similarly, ‘Experience Based Quantification’ (EBQ) using Bow Tie Risk Assessment as methodology was utilised in identifying critical risks from safety and environmental perspective for key businesses.

In FY 2016-17, over 11,155,62 hours of safety training were delivered to employees and contractors.

COP 21 (Conference of partius) has been a remarkable event in changing the dynamic of climate change discourse, globally. We are pleased to see India’s inclusion as a signatory, and as an Indian company, we do respect the country’s unique issues in the carbon debate. We formed a multi-disciplinary committee headed by the CEO Power business to oversee development and implementation of carbon policy/strategy and action plan in lieu of Intended Nationally Determined Contribution (INDC) commitments of the Government of India (GoI).

We ensure that our Biodiversity Management Plans are in place, and our environmental footprint follows the most rigorous global standards. We have developed specific objectives and targets, particularly with regards to water and energy management.

Finding innovative ways to reduce waste is a priority for us at Vedanta. This year we focused on the concept of ‘Waste to Wealth’ and through a house e-platform, Eureka, we invited ideas from our employees on the same. Overwhelming response was received, and presently implementable ideas are being taken as a project with dedicated teams for execution. Efforts on recycling/reuse of mineral waste is ongoing across the businesses with ultimate aim of achieving 100% recycling/reuse.

We are present in some of the world’s most unique, remote and underdeveloped regions. We are committed to respect, learn from and create a shared understanding with our communities. Connecting with our communities is not just the right thing to do; it is a fundamental imperative of our ‘license to operate’.

Periodic stakeholder meetings with Socially Responsible Investors (SRI) Investors and lenders were undertaken and the update was provided in the Group Sustainability Committee; and will be considered as a stakeholder feedback for materiality analysis.

It is heartening to note that the key outcomes included positive validation of our sustainability model is in line with global practices on engaging with civil society, communicating performance on community development, human rights as well as addressing legacy issues.

INFORMATION & TECHNOLOGY

Cutting-edge technology is in Vedanta’s DNA, and over the years, the Company has leveraged technology and innovation to ensure sustainable operations. Over the past few years, the Company has taken various steps to promote innovation and embrace digital technologies. It has a strong Innovation and Technology programme that emphasises on funding in-house opportunities for R&D across mining, exploration and production. As part of the programme, the Company has created ‘Eureka’, a web-based platform to nurture and incubate in-house innovation and technology.

Technology within Vedanta is shifting towards being a partner at the frontlines, directly enabling business, especially in areas like logistics automation, connected mines, integrated operations centre, mobility, IoT based analytics and wearables. The Company has invested in concepts, such as digital mining that allow them to take their mining operations to new levels of performance, from pit to port, across the whole mine value chain. Digital Oil Field (DOF) is a key technology project deployed in the Oil & Gas fields. It integrates the production process with efficient well monitoring — thus optimising the entire asset. DOF provides a user friendly, web-based interface with enhanced data mining and visualisation capabilities. It also acts as a central location for accessing real-time data available through distributed control systems/ supervisory control and data acquisition (DCS/SCADA) systems. To have a digitally enabled workforce, the organisation has undertaken many initiatives which empower the teams to deliver above par performance with real time data. Integrated enterprise platforms and ecosystems are being upgraded across the organisation. Analytics is being adopted to improve information availability on demand.

Organisation is adopting latest security standard and deploying state-of-the-art tools like DLP, SIEM, Anti-APT, PIM, MFA and more to secure digital assets.

Vedanta appreciates that the technology landscape is continuously changing at a rapid pace and the Company must constantly evolve and adapt to leverage these changes for competitive advantage. It recognises the need to develop a comprehensive digital strategy and drive transformational change across the organisation that instills digital expertise in all facets of the business and creates value proposition for all stakeholders.

Towards this end, Vedanta has created a new position of ‘Chief Digital Officer’ (CDO). This position will be an integral part of the Executive Committee. The Company is looking at an innovative model to fill this position in partnership with the global technology giants to bring in cutting-edge technology and expertise to unleash the full potential of the business. This position shall be part of the top thought leadership and shall have the critical responsibility for developing and implementing Vedanta’s digital strategy. Move towards digitisation shall play a key role in adding value to the business through a combination of reduction in costs, improving efficiencies and enabling decision making, among others all culminating into a positive impact on the bottom-line.

RISK MANAGEMENT

As part of our governance philosophy, the Board has formed a Risk Management Committee to ensure a robust risk management system in line with the applicable laws. The details of Committee and its terms of reference are set out in the Corporate Governance Report, which is part of the Board’s Report and is available as a separate section in this Annual Report.

Our businesses are exposed to a variety of risks, which are inherent to an international mining and resources organisation. Our risk-management framework is designed to be simple, consistent and clear for managing and reporting risks from the Group’s businesses to the Board. Our management systems, organisational structures, processes, standards and code of conduct together form the system of internal controls that govern how we conduct business and manage associated risks. We have a multilayered risk management framework to effectively mitigate the various risks, which our businesses are exposed to in the course of their operations.

The Risk Management Committee supports the Audit Committee and the Board in developing the group-wide risk-management framework. Risks are identified through a consistently applied methodology. The Company has put in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives.

Major risks identified by businesses and functions are systematically addressed through mitigating actions. Risk officers have also been formally nominated at operating businesses, as well as at Group level, to develop the risk-management culture within the businesses.

Our Risk Management Framework is designed to help the organisation meet its objectives through alignment of operating controls with the Group’s mission and vision.

INTERNAL FINANCIAL CONTROLS

The Board has devised systems, policies and procedures / frameworks, which are currently operational within the Company for ensuring the orderly and efficient conduct of its business. This includes adherence to the Company’s policy, safeguarding assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and timely preparation of reliable financial information. In line with best practices, the Audit Committee and the Board reviews these internal control systems to ensure they remain effective and are achieving their intended purpose. Where weaknesses, if any, are identified as a result of the reviews, new procedures are put in place to strengthen controls. These controls are in turn reviewed at regular intervals.

The systems/frameworks include proper delegation of authority, operating philosophies, policies and procedures, effective IT systems aligned to business requirements, an internal audit framework, an ethics framework, a risk management framework and adequate segregation of duties to ensure an acceptable level of risk. Documented controls are in place for business processes and IT general controls.

Key controls are tested by entities to assure that these are operating effectively. Besides, the Company has also adopted a SAP GRC (Governance, Risk and Compliance) framework to strengthen the internal control and segregation of duties/ access. It also follows a half-yearly process of management certification through the Control Self-Assessment framework, which includes financial controls/exposures.

The Company has documented Standard Operating Procedures (SOP) for procurement; project / expansion management capital expenditure; human resources; sales and marketing; finance; treasury; compliance; safety; health; and environment (SHE); and manufacturing.

The Group’s internal audit activity is managed through the Management Assurance Services (MAS) function. It is an important element of the overall process by which the Audit Committee and the Board obtains the assurance on the effectiveness of relevant internal controls.

The scope of work, authority and resources of MAS are regularly reviewed by the Audit Committee. Besides, its work is supported by the services of leading international accountancy firms.

The Company’s system of internal audit includes: covering monthly physical verification of inventory; a monthly review of accounts; and a quarterly review of critical business processes. To enhance internal controls, the internal audit follows a stringent grading mechanism, focusing on the implementation of recommendations of internal auditors. The internal auditors make periodic presentations on audit observations including the status of follow-up to the Audit Committee.

The Company is also required to comply with the Sarbanes Oxley Act Sec 404, which pertains to Internal Controls over Financial Reporting (ICOFR). Through the SOX 404 compliance programme, which is aligned to the COSO framework, the Audit Committee and the Board also gains assurance from the management on the adequacy and effectiveness of ICOFR.

Additionally, as part of their role, the Board and its Committees routinely monitors the Group’s material business risks. Due to the limitations inherent in any risk management system the process for identifying, evaluating and managing the material business risks is designed to manage, rather than eliminate risk. Besides, it has been created to provide reasonable, but not absolute assurance against material misstatement or loss.

Since the Company has strong internal control systems which are further strengthened by periodic reviews as required under the Listing Regulations and SOX compliance by the Statutory Auditors, the CEO and CFO recommend to the Board continued strong internal financial controls.

Based on the information provided, nothing has come to the attention of the Directors to indicate that any material breakdown in the function of these controls, procedures or systems occurred during the year. There have been no significant changes in the Company’s internal financial controls during the year that have materially affected or are likely to materially affect.

There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their objectives. Moreover, in the design and evaluation of the Company’s disclosure controls and procedures, the management was required to apply its judgment in evaluating the cost-benefit relationship.

VIGIL MECHANISM

The Company has in place a robust vigil mechanism for reporting genuine concerns through the Company’s Whistle Blower Policy. As per the Policy adopted by various businesses in the Group, all complaints are reported to the Director -Management Assurance, who is independent of operating management and the businesses. In line with global practices, dedicated email IDs and a centralised database has been created to facilitate receipt of complaints. A 24x7 whistle blower hotline and a web-based portal was also launched during the year. All employees and stakeholders can register their integrity related concerns either by calling the toll free number or by writing on the web-based portal which is managed by an independent third party. The hotline provides multiple local language options. After the investigation, established cases are brought to the Group Ethics Committee for review and decision-making. All cases reported as part of whistle blower mechanism are taken to their logical conclusion within a reasonable timeframe. All Whistle Blower cases are periodically presented and reported to the Company’s Audit Committee. The details of this process are also provided in the Corporate Governance Report and the Whistle Blower Policy is posted on the Company’s website.

PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

The Company has zero tolerance for sexual harassment at workplace. It has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder for prevention and redressal of complaints of sexual harassment at workplace.

As part of Vedanta Group, the Company is an equal opportunity employer and believes in providing opportunity and key positions to women professionals. The Group has endeavoured to encourage women professionals by creating proper policies to tackle issues relating to safe and proper working conditions, and create and maintain a healthy and conducive work environment that is free from discrimination. This includes discrimination on any basis, including gender, as well as any form of sexual harassment. During the year, there were two complaints received, all of which were resolved. Your Company has constituted Internal Complaints Committee (ICC) for various business divisions and offices, as per the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

CORPORATE SOCIAL RESPONSIBILITY

The Company is committed to conduct its business in a socially responsible, ethical and environment friendly manner and to continuously work towards improving quality of life of the communities in its operational areas.

We believe that the sustainable development of our businesses is dependent on sustainable, long lasting and mutually beneficial relationships with our stakeholders, especially the communities we work with. As a responsible corporate citizen, we have a role to play in the integrated and inclusive development of the country, in partnership with government, corporates and civil society/community institutions. We also believe that our employees have the potential to contribute not just to our business, but also towards the goal of building strong communities.

The Company complies with Section 135 of the Act and the approach is focused on long- term programmes aligned with community needs.

Nandghar Project has emerged as the Company’s flagship CSR initiative. We have made a bold commitment of building 4,000 state-of-the-art Nandghars in India to secure our children’s future. The same Nandghars will also serve as vehicles for women’s empowerment and entrepreneurship. During the year, we completed 97 Greenfield Nandghars in four states (Rajasthan, Uttar Pradesh, Madhya Pradesh and Goa) and four brownfield Nandghars in Rajasthan.

Other than Nandghar, the various business units of the Company continue to focus on healthcare, education, skill development, women’s empowerment, agriculture and animal husbandry in our neighbourhood communities. Some of the programme highlights from our business units are -

- Since its inception in 2008-09, the Subhalaxmi Cooperative Society promoted by Vedanta Jharsuguda, has formed over 277 Self Help Groups (SHGs) consisting of 3,235 members in 63 peripheral villages of Jharsuguda, Kolabira and Kirmira Blocks. It has promoted over 2,392 micro entrepreneurs in its operational villages.

- At Lanjigarh, under Project Sakhi, around 2,183 women are engaged in 186 SHGs across 45 villages surrounding our area of operation. Out of the cumulative saving of Rs.7.3 Mn, approximately Rs.2.5 Mn has been disbursed as internal loan to various members. Additionally, the SHGs have managed to create credit linkages worth Rs.6.9 Mn resulting in around 1,085 women being engaged in various income generating activities.

- Sterlite Copper’s ‘Ilam Mottukal’ aims to ensure that every girl child is provided with quality school education in an enabling environment so that they can realise her fullest potential. This project is impacting 8,046 girl children across 86 schools in Thootukudi district of Tamil Nadu. The project, in its fifth year now, has resulted in 80% improvement in the learning level of girl children and 95% pass percentage in the class 10 exams.

- With the objective of promoting digital education and literacy in the rural areas, Vedanta Foundation & Vedanta Limited, in collaboration with the Directorate of Education, Government of Goa and Government of Karnataka, have launched Smart Class and Science Lab pilot project for students. The aim is to get these students oriented to smart technology in a friendly manner.

- To improve medical facilities for the community and medical education in the region, Vedanta has partnered with Odisha Government to set-up a Government Medical College in Bhangabari at Bhawanipatna, Kalahandi District at an estimated investment of Rs.100 Crore. Vedanta will provide infrastructural support and the college is scheduled to be completed by 2018. The state-of-the-art hospital, being built as part of the college, will provide easy access to medical treatment for the communities residing in the region.

- Since 2010, Vedanta’s Skill School at BALCO (Korba, Chhattisgarh) has, in partnership with International Leasing & Financial Services (IL&FS), trained nearly 6,120 youth and linked the marginalised sections of society with the mainstream economy.

- Yuvantaran (Mining Academy of HZL) - Underground mining is the future of mining, but there is a dearth of enough skilled manpower in this area. HZL is working to change this and has initiated possibly the largest such initiative, focused on preparing manpower for underground mining. We are currently running two programmes - one is an intense 18 month residential training for Heavy Earth Moving Machinery (with 110 rural youth), and the other is an 8 month residential programme for Winding Engine Drivers (with 47 rural youth). Both programmes are being implemented in partnership with the Skill Council of Mining Sector (SCMS) and Indian Institute of Skill Development (IISD).

- Skorpion Zinc is spearheading the ‘It Begins With Youth’ (IBWY) project in partnership with Omayembeko Hope Foundation (OHF). The project targets young people aged between 13 and 35 years, who are experiencing social problems related but not limited to alcohol and drug abuse, crime, discrimination, HIV/AIDS, immorality, sexual and domestic violence, poverty and unemployment. The overall objective of the project is to empower young people, ensuring that they can develop and reach their potential. The project reaches out to over 6,000 youth.

- CAIRN Ind ia established an RO plant in Sewniwala, which is probably the largest community drinking water plant in India running on solar power, and will have a far-reaching impact with an environment friendly process.

During the year, the Company’s divisions spent Rs.48.48 Crore on CSR activities, while on a consolidated basis it spent about Rs.110.04 Crore on CSR in India.

A brief overview of CSR initiatives forms part of the Directors’ Report and is annexed hereto as Annexure A.

Your Company’s CSR Policy addresses the Company’s commitment to conduct its business in a socially responsible, ethical and environment friendly manner; and to continuously work towards improving the quality of life of the communities in the areas where it operates.

The CSR policy may be viewed on: http://www. vedantalimited.com/media/85867/csr policy final.pdf

BOARD OF DIRECTORS

Appointment

During the year under review, on the recommendation of Nomination and Remuneration Committee (‘NRC’) and in accordance with provisions of the Companies Act, 2013,

Mr. G.R. Arun Kumar (DIN: 01874769) was appointed as an additional Whole-Time Director for a period of three years w.e.f. November 22, 2016 and holds office upto the date of the ensuing Annual General Meeting (‘AGM’) and being eligible has offered himself for appointment as a Whole-Time Director. Mr. GR Arun Kumar is also designated as CFO of the Company. The appointment is subject to approval of the members.

Further, the Board at its meeting held on March 30, 2017, approved the appointment of Mr. K. Venkataramanan (DIN: 00001647), as an additional Non Executive Independent Director for a fixed term of three (3) years effective April 01, 2017. The appointment is subject to approval of the members.

Re-appointment

In accordance with the provisions of Act and the Articles of Association of the Company, Mr. Thomas Albanese (DIN: 06853915), Whole-Time Director & CEO, is retiring by rotation and has offered himself for re-appointment.

Further, on the recommendation of NRC, the Board at its meeting held on March 30, 2017 reappointed Mr. Thomas Albanese as the Company’s Whole-Time Director and CEO for a further period from April 01, 2017 till August 31, 2017.

Brief profiles of Mr. Thomas Albanese, Mr. GR Arun Kumar and Mr. K Venkataramanan along with the disclosures required pursuant to Listing Regulations and the Companies Act, 2013 are given in the Notice of the AGM, forming part of the Annual Report.

Attention of the members is invited to the relevant items in the Notice of the AGM and the Explanatory Statement thereto.

Cessations

Mr. DD Jalan superannuated as the Whole Time Director and CFO of the Company w.e.f. September 30, 2016.

Ms. Anuradha Dutt resigned from the position of Independent Director w.e.f. close of business hours of March 31, 2017 on account of her other commitments.

The Board places on record its appreciation for the valuable services rendered by Mr. Jalan and Ms. Dutt during their tenure.

All Independent Directors have provided declarations that they meet the criteria of independence as laid out under Section 149(6) of the Act and the Listing Regulations.

The details of training and familiarisation programmes; annual Board Evaluation process; the policy on Director’s appointment and remuneration including criteria for determining qualifications, positive attributes, independence of Director; and also remuneration for Key Managerial Personnel (KMP) and other employees forms part of Corporate Governance Report.

NUMBER OF BOARD MEETINGS

The Board met nine (9) times during the year. The details of Board meetings are laid out in Corporate Governance Report.

KEY MANAGERIAL PERSONNEL (KMP)

During the year under review, the Company appointed Mr. GR Arun Kumar as CFO w.e.f. October 1, 2016 and Ms. Bhumika Sood, as the Company Secretary of the Company w.e.f. November 22, 2016 and designated them as the KMP under Section 203 of the Act.

Mr. DD Jalan, Whole -Time Director and CFO and Mr. Rajiv Choubey, Company Secretary & Compliance Officer ceased to be in employment of the Company and accordingly relinquished their position of KMPs w.e.f September 30, 2016 and May 31, 2016, respectively.

The following Directors/Executives are KMPs of the Company during FY 2016-17:

Mr. Navin Agarwal, Executive Chairman

Mr. Tarun Jain, Whole-Time Director

Mr. Thomas Albanese, Whole-Time Director & Chief Executive Officer

Mr. GR Arun Kumar, Whole-Time Director & Chief Financial Officer

Ms. Bhumika Sood, Company Secretary & Compliance Officer

AUDIT COMMITTEE

The composition of the Audit Committee is in compliance with the provisions of Section 177 of the Act and Regulation 18 of the Listing Regulations. The information in respect of composition, scope, terms of reference, meetings etc. of Audit Committee forms part of the Corporate Governance Report.

The Board has accepted all recommendations made by the Audit Committee during the year.

HUMAN RESOURCES (HR)

Human resources play a significant role in your Company’s growth strategy. Your Company emphasised on talent nurturing, retention and engaging in a constructive relationship with employees with a focus on productivity and efficiency and underlining safe working practices. The significant focus areas during the year comprised the following:

Leadership Development and Talent Management

- Internal Growth Workshops: Internal Growth Workshop is a uniquely designed programme with an objective to provide enhanced and elevated roles to the HIPOs in line with their career aspirations. It is a two way platform to share ideas, vision and synergies aspirations in a structured way. Such workshops enhance communication, inspire employees, and urge them to harness their potential further. So far over 300 new leaders have been identified through this initiative and has benefited them significantly in their career trajectory, which has come ahead of time opportunity. Importantly employees are encouraged to rotate / move across various new roles, locations, businesses once every three years. The average age of the participant was 35 years.

- ‘V Connect’ Initiative: ‘V Connect’ is a programme to anchor all 12,000 professionals globally to engage with the senior leadership team and get personal and professional development insights, ultimately leading to superior performance delivery. This is one of the largest initiatives of its kind carried out across corporates. We are utilising the power of technology using ‘App’ to its optimum to ensure coverage at such a large scale.

- Right Management In Place (RMIP) - Strategic Hiring

In our endeavour to strengthen management teams across business, realigning the organisation structure and bridging the critical gaps in each of the business, we initiated recruitment drive along with the business for various leadership positions including Expats / Specialist Positions. Hiring for these positions was initiated with focus on recruitment from best practices companies / diversity.

- Enhanced Maternity/Paternity/Adoption Leave

A progressive parental leave policy was announced wherein maternity leave was enhanced to 26 weeks. Adoption leave of 12 weeks and paternity leave for 1 week was also announced. The new parental leave policy has been welcomed by our employees as the best-in-class in the industry.

- Performance Scorecard

With an objective to further strengthen, objectivise the performance evaluation process has put in place Performance Scorecard assessment for employees. Vedanta Senior management believe in leading from the front and live up to the highest performance benchmarks. In this regard, over 300 key people in the organisation who are in the top two grades already have a Performance Scorecard created for them. Moving further, similar approach will be followed for developing output based Performance Scorecards for its professionals with clearer goals, measurable targets and defined performance levels.

- Employee Stock Option Scheme (‘ESOS’) 2016

ESOS 2016 aims at rewarding employees with wealth creation opportunities, encouraging high-growth performance and reinforcing employee pride. For the very first time Vedanta Limited options were conceived and scheme was launched after obtaining statutory approvals, including shareholders’ approval. The Company’s 1,116 employees were covered under the ESOS 2016 scheme and the same was well received by them. The Grant under ESOS is a combination of individual contribution, business as well as overall Vedanta Limited’s performance.

- Global Internship Programme (GIP)

GIP was launched in June 2016 to bring on board global professionals to provide their perspective on our businesses and gain exposure by working on live projects under the mentorship of the senior leadership team. Through this programme, we engaged with the Ivy League B-Schools including Harvard Business School, Wharton as well as London Business School.

During the year, your Company has received recognitions at Forums like CII and World HRD Congress in fields of HR excellence and HR Tech. Your Company got facilitation by the Working Mother and AVTAR as well as WILL for progressive Women friendly policies in the area of internal development, growth opportunities, leadership development and enhanced parental leave policies. The Company is committed to provide equal opportunities to all its employees, irrespective of gender, nationality and background. It believes that diversity brings varied perspective, collaborative decision making and ideas to the organisation and collectively can create superior outcomes. The Company is conscious towards improvising the gender diversity up to 33% at board level from existing 13% and 20% at its professional employee population from existing 12% by year 2020.

EMPLOYEE INFORMATION AND RELATED DISCLOSURES

The statement of Disclosure of Remuneration under Section 197 of the Act and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (‘Rules’), is appended as Annexure B to the Report.

In accordance with the provisions of Section 197(12) of the Act and Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and other particulars of employees are set out in the annexure to this report. In terms of provisions of Section 136 (1) of the Act, this report is being sent to the members without this annexure. Shareholders interested in obtaining a copy of the annexure may write to the Company Secretary.

CORPORATE GOVERNANCE REPORT

The Company is committed to maintain the highest standards of corporate governance and adhere to the corporate governance requirements set out by the Securities and Exchange Board of India (SEBI). The Company has also implemented several best corporate governance practices as prevalent, globally. The Corporate Governance Report as stipulated under the Listing Regulations forms an integral part of this Report.

The requisite certificate from the Company’s auditors confirming compliance with the conditions of corporate governance is attached to the Corporate Governance Report.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT-9 is annexed hereto as ‘Annexure C’

DETAILS OF LOANS/GUARANTEES/ INVESTMENT MADE BY THE COMPANY

Particulars of loans given, investments made, guarantees given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilised as per the provisions of Section 186 of the Act are provided in the standalone financial statement forming part of the Annual Report.

SUBSIDIARIES/JOINT VENTURES/ASSOCIATE COMPANIES

In terms of provisions of Section 129(3) of the Companies Act, 2013, where the Company has one or more subsidiaries, it shall, in addition to its financial statements, prepare a consolidated financial statement of the Company and of all the subsidiaries in the same form and manner as that of its own and also attach along with its financial statement, a separate statement containing the salient features of the financial statement of its subsidiaries.

In accordance with the above, the consolidated financial statement of the Company and all its subsidiaries and joint ventures form part of the Annual Report. Further, a statement containing the salient features of the financial statements of our subsidiaries and joint ventures in the prescribed Form AOC-1 is part of the report. The said form is included in the Consolidated Financial Statement.

In accordance with Section 136 of the Companies Act, 2013, the Audited Financial Statements and related information of the subsidiaries, where applicable, will be available for inspection during regular business hours at our registered office. These may also be accessed on the Company’s website www.vedantalimited.com.

As per the Listing Regulations, a policy on material subsidiaries as approved by the Board, may be accessed on the Company’s website: www.vedantalimited.com.

RELATED PARTY TRANSACTIONS

In line with the requirements of the Companies Act, 2013 and Listing Regulations, your Company has formulated a policy on Related Party Transaction (RPT), which is also available on the Company’s website (http://www.vedantalimited. com/investor-relations/corporate-governance.aspx). The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and related parties.

The Company presents a detailed landscape of all RPTs to the Audit Committee, specifying the nature, value, and terms and conditions of the transaction. The Company has developed a Related Party Transactions Manual-Standard Operating Procedures to identify and monitor all such transactions.

All contracts/arrangements/transactions entered by the Company during the financial year with related parties were on an arm’s length basis, in the ordinary course of business and were in compliance with the applicable provisions of the Act and Listing Regulations.

During the year, there have been no materially significant related party transactions between the Company and Directors, management, subsidiaries or relatives, as defined under Section 188 of the Act and Regulations 23 the Listing Regulations.

Accordingly, the disclosure required u/s 134(3)(h) of the Act in Form AOC-2 is not applicable to your Company.

MATERIAL CHANGES AFFECTING THE COMPANY

No significant and material orders have been passed by any regulators or courts or tribunals against the Company, impacting the going concern status and its operations in future. However, as informed in the previous report:

1. Iron-Ore Division - Goa Operations

Following allegations of illegal mining and based on Justice M.B. Shah Commission Report, the Hon’ble Supreme Court of India on October 5, 2012 had suspended the Iron-ore mining operations and transportation of material of all miners in Goa (including the Company). Separately, the Government of Goa also banned all mining and transportation of iron ore in Goa, and the Ministry of Environment and Forest (MOEF) suspended Environmental Clearances (ECs) of all mining leases within Goa.

On April 21, 2014, the Hon’ble Supreme Court lifted the ban, subject to certain conditions, limiting the maximum annual excavation to 20 million tonnes, subject to the determination of final capacity by the Expert Committee appointed by the Court; and 10% of the sale proceeds of the iron ore to be appropriated towards a sustainability fund (Goa Mineral Iron Ore Fund). The Supreme Court has held that all mining leases in Goa, including those of the Company, expired in 2007 and, consequently, no mining operations could be carried out until the renewal/execution of mining lease deeds by the Government of Goa.

On August 13, 2014, the High Court of Goa passed a common order directing the State of Goa to renew the mining leases for which stamp duty was collected in accordance with the Goa Mineral Policy (2013), and to decide the other applications for which no stamp duty was collected within three months thereof.

In January 2015, the Goa State Government revoked the order suspending mining operations in Goa and by a subsequent order of March 2015, MOEF revoked the suspension of Environment Clearance (EC). Lease deeds for all working leases of the Company in Goa have been executed and registered. The Company has obtained Consent to Operate under the Air (Prevention of Pollution) Act and Water (Prevention of Pollution) Act from the Goa State Pollution Control Board and mining plan approval from IBM for the said leases, thereby paving way for commencing mining operations of the Company in Goa. The mining operations resumed in phases during the financial year under review.

On September 10, 2014, the Goa Foundation challenged the High Court order directing the renewal of mining by way of a Special Leave Petition (SLP) before the Supreme Court of India, challenging the judgment of the High Court dated August 13, 2014 directing renewal of mining leases. No stay has yet been granted by the Supreme Court. Another set of SLPs on an identical issue were filed by a local activist. Two writ petitions have also been filed before Supreme Court by Goa Foundation and Sudip Tamankar in September 2015 for setting aside the second renewal of iron ore mining leases in Goa made under section 8 (3) of MMDR Act and challenging the revocation of suspension on mining in State of Goa.

2. Aluminium Division - Lanjigarh - Bauxite and Alumina Operations

a. Bauxite Sourcing

The Company has signed a Memorandum of Understanding (MoU) with Odisha Government for the supply of bauxite for the alumina plant at Lanjigarh.

The Company has also entered into a Joint Venture (JV) Agreement with Orissa Mining Corporation (OMC) for supply of bauxite. OMC has, by a separate action, terminated the JV Agreement for which the Company is pursuing the appropriate course of action.

The Company is presently sourcing bauxite from alternate sources including imports. The Company is also looking at bauxite mines which may come up for auction and at other alternatives.

b. Alumina Operations

The Company has received requisite environmental clearances regarding the expansion of its Lanjigarh alumina refinery from 1 MTPA to 6 MTPA with conditions and construction in phases. The consent to establish has been revalidated for another five years.

A challenge has been filed by an individual against MOEF, Odisha Pollution Control Board (OSPCB) and the Company before National Green Tribunal (NGT) disputing the grant of this environmental clearance. No adverse orders have been made by the NGT.

3. Oil & Gas Division

Erstwhile Cairn India Limited (‘Cairn’, now Vedanta Limited or the Company) had received an order from the Income Tax Department for an alleged failure to deduct withholding tax on alleged capital gains arising during the year 2006-07 in the hands of Cairn UK Holdings Limited (CUHL), the Company’s erstwhile parent company, a subsidiary of Cairn Energy Plc. This was in respect of the transaction of CUHL transferring the shares of Cairn India Holdings Limited to erstwhile Cairn India Limited as part of internal group reorganisation in 2006-07 to facilitate the IPO of Cairn India Limited. A demand of approximately Rs.20,495 Crore (comprising tax of approximately Rs.10,248 Crore and interest of approximately Rs.10,247 Crore) is alleged to be payable. The Company has filed a writ petition with the Delhi High Court praying for quashing/ setting aside the aforesaid order and is pursuing all possible options to protect its interest. Further, the Company has also filed an appeal before Commissioner Appeals. The Company’s parent, Vedanta Resources Plc. has filed a notice of claims against GoI under the UK India bilateral investment treaty challenging the tax demand, seeking resolution through international arbitration.

EMPLOYEES STOCK OPTION PLAN

In order to motivate, incentivise and reward employees, your Company has introduced Vedanta Limited Employee Stock Option Scheme 2016 (‘The Scheme’) to provide equity based incentives to the permanent employees of the Company including holding/subsidiary companies.

The Scheme is a conditional share plan for rewarding performance on pre-determined performance criteria and continued employment with the Company. The predetermined performance criteria shall focus on rewarding employees for the Company’s performance vis-a-vis competition and for achievement of internal operational metrics. The Scheme is currently administered through Vedanta Limited ESOS Trust (ESOS Trust), which is authorised by the shareholders to acquire the Company’s shares from secondary market from time to time, for implementation of the Scheme.

The Company’s shareholders by way of postal ballot on December 12, 2016 have approved the Scheme.

During the year under review, 1,116 options were granted to eligible employees including Whole Time Director and KMPs.

Pursuant to the provisions of SEBI (Share Based Employee Benefits), Regulations, 2014, disclosure with respect to the ESOS Scheme of the Company as on March 31, 2017 is annexed as Annexure D to this Report and has also been uploaded on the Company’s website at www.vedantalimited.com.

The stock option scheme is in compliance with SEBI (Share Based Employee Benefits) Regulations, 2014 (‘Employee Benefits Regulations’) and there have been no changes to the plan during the financial year.

A certificate from M/s S.R. Batliboi & Co. LLP, Chartered Accountants, Statutory Auditors, with respect to the implementation of the Company’s ESOS schemes, would be placed before the shareholders at the ensuing AGM. A copy of the same will also be available for inspection at the Company’s registered office.

AUDITORS

- Statutory Auditors

M/s S.R. Batliboi & Co. LLP, Chartered Accountants (FRN: 301003E) were appointed as Statutory Auditors of your Company at the AGM held on June 29, 2016 for a term of five consecutive years i.e. until the conclusion of the 56th AGM. As per the provisions of Section 139 of the Act, the appointment of Auditors is required to be ratified by members at every AGM. The ratification of appointment of Statutory Auditors for the 2nd year is being sought from the members of the Company at this AGM. Further, M/s S.R. Batliboi & Co. LLP have confirmed their independence and eligibility under the provisions of the Act and Listing Regulations.

The report of the Statutory Auditors along with notes to Schedules is enclosed to this Report. The observations made in the Auditors’ Report are self-explanatory and therefore do not call for any further comments.

During the year under review, the Auditors have not reported any matter under Section 143 (12) of the Act, therefore no detail is required to be disclosed under Section 134 (3)(ca) of the Act.

- Cost Auditor

As per Section 148 of the Act, the Company is required to have the audit of its cost records conducted by a Cost Accountant in practice. The Board has, on the recommendation of the Audit Committee, approved the appointment of M/s Shome and Banerjee as Cost Auditors for its Oil & Gas Business and M/s Ramnath Iyer & Co as Cost Auditors for its Copper, Aluminium, Iron ore and Electricity Business to conduct cost audits pertaining to relevant products prescribed under the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time for the year ending March 31, 2018 at a remuneration of Rs.5,00,000 p.a and Rs.13,15,000/- p.a (plus applicable taxes and reimbursement of out of pocket expenses, if any), respectively. Further M/s Ramnath Iyer & Co have been appointed as the Lead Cost Auditors of the Company.

- Secretarial Auditor

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s Chandrasekaran & Associates, a firm of Company Secretaries in practice to undertake the Company’s Secretarial Audit for FY 2016-17.

The Report of the Secretarial Audit in Form MR-3 is annexed herewith as Annexure E. The Secretarial Audit Report does not contain any qualifications, reservation, adverse remarks or disclaimer.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, technology absorption stipulated under Section 134(3)(m) of the Act, read with Rule 8 of the Companies (Accounts) Rules, 2014, is annexed herewith as ‘Annexure F’.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to section 134 of the Act, with respect to Directors’ Responsibility Statement it is hereby confirmed that:

(a) in the preparation of the annual accounts, the applicable accounting standards has been followed and there is no material departures from the same;

(b) the Directors selected such accounting policies and applied them consistently and made judgments and estimates 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 i.e., March 31, 2017 and of the profit of the Company for that period;

(c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the Company’s assets and for preventing and detecting fraud and other irregularities;

(d) the Directors have prepared the annual accounts on a going concern basis;

(e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

(f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

ACKNOWLEDGEMENT

Your Directors place on record their deep appreciation to employees at all levels for their hard work, dedication and commitment. The enthusiasm and unstinting efforts of the employees have enabled the Company to remain as industry leaders.

The Board also extends its appreciation for the support and co-operation your Company has been receiving from its customers, vendors, dealers, investors, suppliers, business associates and others associated with the Company. Your Company looks upon them as partners in its progress and has shared with them the rewards of growth. It will be the Company’s endeavour to build and nurture relationships with all its stakeholders.

The Directors also take this opportunity to acknowledge the support and assistance extended to us by GoI, various State Governments and government departments, financial institutions, bankers, stock exchanges, communities, shareholders and investors at large for their continued support.

For and on behalf of the Board of Directors

Navin Agarwal

Executive Chairman

Place : Mumbai

Dated : May 15, 2017


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

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