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Directors Report of Vedanta Ltd.

Mar 31, 2019

Dear Shareholders,

Your Directors hereby presents the report on the business and operations of the Company, together with the audited Consolidated as well as Standalone financial statements for the financial year ended March 31, 2019.

COMPANY PERFORMANCE

During the year, your Company saw setting of new production records across some of our businesses, commissioning of a new Zinc mine, significant and successful inroads in our Aluminium business and increase in our mineral and oil resources and reserves. Our three large businesses - Zinc, Aluminium and Oil & Gas achieved significant milestones at low cost and are strongly positioned for the near-term targets that we have set for these businesses.

We expect FY2020 to be another productive year with our three key businesses well positioned. In the case of our Zinc, Lead and Silver business, we will see the benefit of increased volumes. In Oil & Gas, we are India''s largest private producer of crude, and rank with the world''s lowest-cost producers with production, development and exploration pipeline. In Aluminium, we offer India''s largest production capacity, supported by our own captive power generation and increasingly integrating backwards for our own Alumina. The strengths of our diverse portfolio, together with our focussed growth strategy expanding our reserves and resource base, a strong balance sheet, strong talent base, technology and modernisation initiatives, all combine to create a truly inspirational Company.

FINANCIAL PERFORMANCE SUMMARY

In compliance with the provisions of Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) the Company has prepared its standalone and consolidated financial statements as per Indian Accounting Standards (Ind AS) for the FY2019.

Your Company''s standalone and consolidated financial highlights are provided below:

(Rs. in Crore)

Standalone

Consolidated

Particulars

Year Ended March 31, 2019

Year Ended March 31,

2018

Year Ended March 31, 2019

Year Ended March 31,

2018

Net Sales/Income from Operations

38,098

45,496

90,901

92,011

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

2,228

3,611

14,911

18,579

Other Operating Income

546

478

1,147

912

Other Income

6,152

3,559

4,018

3,205

Finance costs

3,757

3,353

5,689

5,112

Net exceptional items gain/(loss)

324

5,407

320

2,897

Profit/(loss) before tax

4,947

9,224

13,560

19,569

Tax expense/(credit)

(128)

1,968

3,862

5,877

Net Profit/(loss) after tax

5,075

7,256

9,698

13,692

Share of profit/(loss) of associate

NA

NA

0

0

Minority Interest

NA

NA

2,633

3,350

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

5,075

7,256

7,065

10,342

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

372

372

372

372

Reserves excluding revaluation reserves as per balance sheet

77,508

78,941

61,925

62,940

Basic EPS after exceptional items

13.65

19.47

19.07

28.30

Transferred to General Reserve

Nil

Nil

Nil

Nil

Interim Dividend

7,005

7,881

7,005

7,881

The financial results and the results of operations, including major developments have been further discussed in detail in the Management Discussion and Analysis section.

OPERATIONAL HIGHLIGHTS FOR FY2019

1 ZINC INDIA

- Record underground mined metal production at 936kt, up 29% y-o-y. Total mined metal production marginally down 1% y-o-y, post closure of open-cast operations.

- Record lead metal production at 198kt, up 18% y-o-y.

- Record refined silver production at 679mt, up 22% y-o-y.

2 ZINC INTERNATIONAL

- At Gamsberg, commenced trial production in November 2018 and first shipment in December 2018.

3 OIL & GAS

- Average gross production of 189kboepd for FY2019, up 2% y-o-y.

- 11 development drilling rigs as at March 2019, with 99 wells drilled and 33 wells hooked up during FY2019 in Rajasthan.

- Production Sharing Contract (PSC) of Rajasthan block extended for 10 years, subject to conditions.

4 ALUMINIUM

- Record aluminium production at 1,959kt, up 17% y-o-y.

- Record alumina production from Lanjigarh refinery at 1,501kt, up 24% y-o-y .

- Q4 FY2019 hot metal cost of production significantly lower at $956 /ton, lower by 12% q-o-q.

5 POWER

- Record PAF of 88% at the 1,980 MW TSPL plant in FY2019.

6 IRON ORE

- Goa operations remain suspended due to state-wide directive from the Hon''ble Supreme Court; engagement continues with the Government for a resumption of mining operations.

- Production of saleable ore at Karnataka at 4.1 million tonnes, up 89% y-o-y.

7 STEEL

- Record annual steel production at 1.2 million tonnes for FY2019, up 17% y-o-y.

- Achieved hot metal production run rate of c.1.5mtpa in FY2019.

8 COPPER INDIA

- Due legal process being followed to achieve a sustainable restart of the operations.

SIGNIFICANT DEVELOPMENTS

ZINC INDIA

Zinc India has completely transitioned from open cast to fully underground mining with the business creating new records with mined metal production from underground operations at 936kt, up 29% y-o-y. We are expecting these volumes to increase to achieve the design capacity of 1.2 mt. The business now ranks 9th in the Elite Club of top 10 silver producers with a record production of 679 tonnes during the year, up 22% y-o-y.

OIL & GAS

Award of 41 exploration blocks in India pursuant to Open Acreage Licencing Policy at a total bid cost of US$551 million

Vedanta Limited was successfully awarded 41 exploration blocks in sedimentary basins throughout India pursuant to the Indian Open Acreage Licencing Policy ("OALP”) at a total bid cost of US$551 million. The 41 blocks awarded to the Company comprises of 33 onshore blocks and 8 offshore blocks.

OALP is the first major auction of hydrocarbon blocks to take place in India since 2010 and provided an opportunity for the Group to acquire new acreages from all available areas in the sedimentary basins of India.

KG-OSN-2009/3 Discovery, Krishna-Godavari Basin, India

Your Company announced a hydrocarbon discovery in well A3-2 within its operated block KG-OSN-2009/3 within Krishna-Godavari Basin, East Coast of India. Vedanta Limited holds 100% participating interest in the block. A3-2 is the first exploration well drilled within the KG-OSN-2009/3 block. Multiple reservoir zones were encountered in the Mesozoic rift formation between the depths of 3351-3944m MDBRT with indications of hydrocarbon during drilling and formation evaluations.

ALUMINIUM

The business achieved an all-time-high aluminium production at 1,959kt. We also achieved record alumina production from Lanjigarh refinery at 1,501kt. Structural changes put in place including increased Bauxite sourcing reducing our reliance on imported alumina, improved volumes from our alumina refinery, better coal availability, linkage and coal stock on hand and more efficient logistics have provided stability to the operations.

ZINC INTERNATIONAL

Inaugration of Vedanta''s Gamsberg mine by President Cyril Ramaphosa

On February 28, 2019, Vedanta announced inauguration of Vedanta Zinc International''s (VZI) Gamsberg mine, outside Aggeneys in South Africa''s Northern Cape Province by President Cyril Ramaphosa, which represents a US$400 million investment by Vedanta in South Africa.

KG-OSN-2009/3 Oil Discovery, Krishna-Godavari Basin, India

During the year, your Company announced an Oil i Discovery in the second exploratory well H2, located i in the block KG-OSN-2009/3, Krishna-Godavari Basin, East Coast of India. Vedanta Limited holds 100% i participating interest in the block. Multiple reservoir zones were encountered in the well H2 within the Mesozoic sequence between the depths of 3310m to 4026m with hydrocarbon indications during drilling and down hole logging.

10 year PSC extension for Cairn, Oil & Gas operated Rajasthan Block

During the year, we received approval from the i Government of India, acting through the Directorate : General of Hydrocarbons, Ministry of Petroleum and : Natural Gas for a ten-year extension of the Production i Sharing Contract (PSC) for the Rajasthan Block, RJ-ON-90/1. The tenure of the RJ Block PSC has been : extended for an additional period of 10 years with effect i from May 15, 2020.

POWER

FY2019 was a significant year for the Talwandi Sabo Power Limited (TSPL) plant, where we achieved record plant availability of around 88%.

IRON

During the year, operations in Goa remained suspended due to a state-wide industry directive from the Supreme Court. We continue to engage with and encourage the Central and State Governments to resume production given the benefits to all stakeholders. In this regard, we welcome the efforts of the Goa Mining People Front and FICCI to reopen the industry in Goa.

CSR

Inauguration of 500th Nand Ghar reaching out to over 17,000 children

Your Company inaugurated 500th Nand Ghar at Chaksu Block in Jaipur and reached out to more than 17,000 children and 15,000 women, through this programme, aimed to lead the way for early childhood development in Rajasthan, Uttar Pradesh and Madhya Pradesh. We have also planned an outlay of Rs.800 crore for setting up 4,000 Nand Ghars across India over next few years.

Through these 500 Nand Ghars, Vedanta is committed to ensure a better future for children and women.

COPPER

Production from our copper smelter plant at Tuticorin was suspended for the whole of FY2019. We continue to engage with the Government, the relevant authorities, the Courts and all stakeholders to enable the safe and supported restart of operations.

Meanwhile, we continue to operate our refinery and rod plant at Silvassa, catering to the domestic market.

ACQUISITIONS

Acquisition of Electrosteel Steels Limited under IBC

Pursuant to a Corporate Insolvency Resolution process implemented by way of the Insolvency and Bankruptcy Code 2016, your Company acquired Electrosteel Steels Limited, engaged in the business of manufacturing of steel with a total current capacity of 1.5 million tonnes per annum (MTPA) with a potential to increase the capacity to 2.5 MTPA. The operations have seen a complete turnaround in the last 10 months after acquisition with the operations achieving record production.

Your Directors believed that the acquisition will complement the Company''s existing Iron Ore Business as the vertical integration of steel manufacturing capabilities has potential to generate significant efficiencies.

The detailed announcements made by the Company in this regard are available on the website of the Company at www.vedantalimited.com

ECONOMIC RESPONSIBILITY

It has been another successful year for Vedanta as we continue to deliver across our strategic priorities. We stay focussed on contributing by way of economic value creation and building trustworthy relations with the Governments and other stakeholders.

With these values being ingrained in Vedanta''s DNA, we are proud to share that we have contributed c. 47% of our turnover, i.e. c. Rs.42,400 crore to the public exchequer of the various countries where we operate.

Your Company publishes Tax Transparency Report which provides an overview of the tax strategy, governance and tax contributions made by the Company.

The report for the FY2019 is available on the website at www.vedantalimited.com

DIVIDEND DISTRIBUTION POLICY

For bringing transparency and to protect the interest of investors, your Company has in place a Dividend Distribution Policy formulated in accordance with Listing Regulations which sets out the parameters and circumstances to be considered by the Board in determining the distribution of dividend to shareholders and/or retaining profits earned by the Company. The Policy is available on the website of the Company at www.vedantalimited.com.

DIVIDEND

We have always believed in sharing the economic value generated. A consistent dividend is a healthy sign of a growing company. With a robust operational performance and a complementary market environment, we returned impressive numbers for FY2019.

The Company has declared the following dividends during the year out of the reserves of the Company and in compliance with the Dividend Distribution Policy:-

Type of Dividend

Date of Declaration

Record Date

Rate of Dividend per share (face value Rs.1 per share)

%

Total Payout (in Cr.)

1st Interim Dividend

October 31, 2018

November 10, 2018

Rs. 17.00

1700

6,320

2nd Interim Dividend

March 6, 2019

March 14, 2019

Rs. 1.85

185

685

Total

Rs.18.85

The total dividend for the year stands at Rs.18.85/- per equity share representing a dividend yield of ~8% based on last one-year average share price of the Company.

Further, the Board of Directors on October 10, 2018 have approved payment of Dividend on 7.5% Redeemable Non-Convertible Non-Cumulative Preference Shares (RPS) of face value Rs.10/- each for a period from April 01, 2018 to October 27, 2018 as per the terms of issuance. These RPS were issued and allotted on April 28, 2017 and were due for redemption on October 27, 2018. The record date fixed for the same was October 22, 2018.

The Directors have not recommend final dividend for the financial year ended March 31, 2019.

CREDIT RATING

Your Company is rated by CRISIL and India Rating and Research Private Limited on its various debt instruments.

The details of ratings provided by the agencies is provided in the Corporate Governance Report.

SUSTAINABILITY

Sustainable Development is integral to Vedanta''s core business strategy. We continue to be a transparent and responsible corporate citizen; committed to a ''social licence 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 our Sustainable Development Model.

The model continues to be centered 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 businesses and its leaders with the parameters on which to assess, monitor, review key sustainability priorities, such as safety, health, environment, stakeholder engagement and community development activities, as per the Company''s approach on ''social licence to operate''.

The Vedanta Sustainability Assurance Program (VSAP) has been the 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 ten key safety performance standards across the Group; VSAP process has categorically focussed on compliance level to these standards and highlighted areas of improvement.

During the year, we focussed heavily on safety performance of your 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 programmes rolled out across the businesses to improve safety decision making of leaders at all levels, particularly those on the front line. Similarly, ''Experience Based Quantification'' (EBQ) using Bow Tie Risk Assessment methodologies were utilised to identify critical risks from safety and environmental perspective for key businesses. In FY2019, over 1.4 million hours of safety training were delivered to employees and contractors.

Our Company remains committed to decreasing its carbon footprint. Last year we stated our expectation to reduce our GHG intensity by 16% from a 2012 baseline by 2020. We are committed at ensuring that we develop our carbon reduction strategies in alignment with the framework laid out by the Taskforce on Climate related Financial Disclosures (TCFD).

A Carbon Forum has been internally constituted to develop our carbon strategy and provide governance on the risk to business from climate change.

Our businesses have made significant progress on our GHG reduction commitment. Hindustan Zinc Limited and Oil & Gas business have committed to increase their investment in solar power, while other businesses have made significant improvements in their process efficiencies, thereby reducing their GHG intensity emissions. As of March 31, 2019, we had been able to achieve about 14.6% reduction in our GHG intensity from our baseline number. We are confident of achieving our target by 2020.

Climate related financial risk is a part of our corporate risk register and we believe that climate resilience is the best approach we can take to safe guard our climate related business risks.

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.

We remain committed to our agenda of "Zero Harm, Zero Waste, Zero Discharge”. This year we were able to recycle more than 111% of the fly ash that was generated at our power plants. Large volumes of our high calorific hazardous wastes are also sent to the cement industry to be used as clinker fuel, thereby preventing them from being sent to secure landfills. This year, we have recycled 94% of our overall High Volume and Low Effect waste in sustainable applications and are continuing to develop new and innovative ways to increase the proportion of waste we recycle.

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''.

Our spend on our social investment and CSR programmes thereby reaffirm our commitment to ensuring the well-being of the communities who live in proximity to our operations.

Lessons from our experience in Tuticorin continue to guide us in improving engagement with our local stakeholders.

We have introduced revised stakeholder engagement and grievance mechanism standards and have initiated several projects to understand the perceptions and expectations of local communities from Vedanta. We are hopeful that these measures will help improve our social license to operate over a period of time.

We remain positive that our overall sustainability journey is headed in the right direction. Our sustainability framework is robust and in line with global practices on engaging with civil society, communicating performance on community development, human rights as well as addressing legacy issues. We are confident that it will help us achieve higher levels of performance in the years to come.

A separate detailed report on Company''s Sustainability Development also forms part of the Annual Report.

CORPORATE SOCIAL RESPONSIBILITY

Your Company works towards a larger goal of creating enduring value for the communities it works in.

Towards that end, we undertake various need-based community programmes as part of our Corporate Social Responsibility (CSR). Putting the last as first being the top most priority, the Company has committed to align its CSR activities to the priorities of its neighborhood communities and also the national priorities including the Sustainable Development Goals.

For almost all our programmes, a bottom up community engagement approach is non-negotiable. This collaborative approach ensures community ownership, suitable project design, effective delivery and post project sustainability.

Apart from communities, we also strongly believe in partnering with government agencies, corporates, civil society organisations & community-based organisations to carry out durable and meaningful interventions.

All our CSR programmes are governed by the Vedanta CSR Policy, Corporate Technical Standards and each entity specific Standard Operating Procedures for CSR. The documents are periodically revised. Further, in order to benefit from diverse perspectives, and in keeping with a culture of collective leadership, Vedanta has formed a CSR Council. The Council is led by senior business leaders comprising of CSR Heads & CSR executives from the different Business Units. The Council is responsible for governance, synergy and cross learning across the Group CSR efforts. It meets every month and reviews the performance, spends and outcome of CSR programmes for all Business Units. The Council is instrumental in implementing improvement projects to create a seamless enabling eco-system for Business Units to carry out best-in-class community development programmes.

Vedanta has a strong Board CSR Committee including senior Independent Directors. The Committee provides strategic direction for CSR activities, and approves its plans and budgets. It also reviews progress and guides the CSR teams towards running well-governed and impactful community programmes.

Brief overview on Community Development Programmes for FY2019 is as under:

NAND GHAR AND CHILDREN''S WELL-BEING PROJECTS

The importance of education for social growth and upliftment is undisputable and for Vedanta this is a very important pillar of its work with communities. Through our various education and childcare initiatives, we reached to around 1.55 lakh children.

The Nand Ghar Project is the Company''s flagship national initiative, which aims to build new-age Anganwadis for ensuring the health and learning of young children in rural areas, and also as a platform for women''s empowerment and skilling. The Project ultimately aims to impact 85 million children and 20 million women across 1.37 million Anganwadis in the country. During this financial year, we were proud to cross the 500 Nand Ghars mark, with 502 Nand Ghars now operational in 4 states of the country. The key metrics of their operational efficiency are tracked using an online and custom designed application.

As part of the Khushi initiative, HZL, in partnership with Government of Rajasthan strengthens the functioning of 3,089 ICDS Centres (called Anganwadis) in the 5 Districts of Hindustan Zinc''s presence, reaching to over 60,000 children and caters to health, nutrition and pre-school need of children in the formative 0-6-year age group. The project also conducts periodic assessments to track developmental metrics of the kids. This year an average increase of 11% in children''s learning capability was identified through these standardised assessments. Attendance also saw an increase with the average attendance increasing from 44% two years ago to 60% now.

Vedanta Limited Jharsuguda initiated a project called ''Vedanta Vidyarthi Vikas Yojana (VVVY)'' in the year 2009 to strengthen the education standards of secondary school students through remedial coaching classes. Since the beginning of VVVY project, quality education has been provided to the students of standard 8th to 10th and it''s going through a remarkable growth in terms of quality education and passing percentage of children. Till date total of 3,975 students have been enrolled under VVVY project, 1,346 students appeared in matriculation examination and 1,130 students successfully passed with good marks.

- WOMEN''S EMPOWERMENT

Women''s empowerment is all about equipping and enabling women to make life determining decisions. Vedanta recognises this need for empowering women and is running various projects to help the communities take a step towards a more equitable future. It is associated with around 35,000 women (up from 28,000 last year) and amongst them 3,600 women have started /revamped their own micro enterprises. One of our interventions in this space is the Subhalaxmi Cooperative Society in Jharsuguda which has emerged as a model community-based organisation. The Cooperative has successfully completed 10 years of empowering women since its inception and currently is touching the lives of 3,793 members in 71 villages. Through this programme, the Cooperative has been able to generate funds of Rs.2.52 crore and through its various activities it has seen a significant increase in the income of the members.

HZL is running a similar programme called Sakhi which started three years ago and now has 1922 SHGs connecting the Company with 23,954 women. The total savings accumulated through this project are now at Rs.6.22 crore and the total loans disbursed amounts to Rs.17.13 crore, utilised for household consumption, agriculture, health & sanitation and 492 women utilised the loans to create new enterprises or expand existing enterprises.

- HEALTH CARE

There is a great disparity in the quality and coverage of medical treatment in India. The majority of rural population lack basic primary healthcare and given that most of our operations are also in rural areas, enabling rural communities access to affordable and quality healthcare is an important focus for us. The Vedanta Hospital at Lanjigarh continues to provide much needed healthcare to thousands in the District of Kalahandi, Odisha. This year, the hospital has seen a total footfall of 67,425 patients, of which 6,935 were new patients and 11,664 were old patients. Further, 12,980 patients were treated through their Mobile Health Van.

VMRF

To prevent, control and eradicate cancer and illnesses related to it, Bharat Aluminium Company Limited (BALCO), a subsidiary of Vedanta started Vedanta Medical Research Foundation (VMRF), a voluntary, non-profit organisation. Balco Medical Centre, a state-of-art oncology facility in Naya Raipur, is its first flagship initiative. As the first super-specialty hospital with the capability to treat cancer, Balco Medical Centre''s genuinely colossal impact is validated by the reception it received from the people and the milestones achieved - over 4,000 patients were served, more than 230 patients underwent radiation, 250 plus surgeries were performed and well past 1,000 chemotherapies were carried out.

-- AGRICULTURE AND ANIMAL HUSBANDRY

In much of rural India, the communities continue to rely heavily on agriculture and animal husbandry. We therefore follow a livelihood development approach of integrating agriculture, dairy, water management, technology, farmer''s organisations and market outreach. To increase the income of farming community in Barmer through productivity enhancement of agriculture and livestock, project Unnati, a Cairn CSR initiative, was set up. More than 10,000 farmers benefitted through various interventions like horticulture demonstrations, construction & renovation of traditional water harvesting structures like KHADIN, etc. In similar line, through project SAMADHAN by HZL, the Company aims to improve the returns from Agriculture & Livestock for about 30,000 families. By the end of this year, the project had successfully worked with 8,660 farmers on agriculture and 8,944 farmers on livestock.

In Jharsuguda, to secure economic prosperity among identified households of Siripali village, Jeevika Samriddhi project was launched. The relevance of Jeevika Samriddhi project is based on the need to augment irrigation infrastructure, promotion of advanced agriculture, application of bio-fertiliser and pesticides and making farming as a remunerative profession. 111 farmers are benefiting from this project and because of this project, the irrigation potential of the village increased by 21.34%.

- SKILLING THE YOUTH

To maximise the output from the immense demographic dividend India has, it is imperative that the youth are trained in skills suited for the current economic scenario. With the aim of channelising this untapped potential the Company is running a lot of skill development initiatives providing training to more than 3,000 youths. Balco in partnership with IL&FS is providing training to youth in five different high employment potential trades - Hospitality, Welding Assistant, Industrial stitching, Fitter Fabrication and Electrician. The institute has provided assured employment opportunities to 7,800 students since the inception of its operations. In Thoothukudi, Sterlite Copper through its Tamira Muthukkal project has provided vocational training to 2,000 youth and currently covers 500 more beneficiaries helping them gain skills thus increasing their employability.

A few other programmes ran by HZL, also aims at skilling the youth of Rajasthan and increase their employability. HZL''s Skilling and Entrepreneurship centres provide training to youth to become Domestic Electricians, Security Guard, General duty assistant, Sales entry and Data entry operators and in Micro Finance. Currently, 160 students are being trained and the plans are to train 700 youths each year. Through other initiatives like the Mining academy, ITI training at Maruti, BPO training, etc. the Company has been able to reach 559 youths this year.

- ENVIRONMENT PROTECTION & RESTORATION

In our operations we make it a priority to operate in harmony with the natural environment. The Company is committed to safeguard the environment and makes extensive efforts to protect and restore nature. Pasumai Thoothukudi, an initiative by Sterlite Copper, launched on the World Forest Day with a vision of developing a green belt in Thoothukudi is an illustration of the significance of this commitment for the Company. The Company aims to plant 1 million trees and has already planted 800 saplings within 10 days of the launch of the programme.

- SPORTS & CULTURE

Sports, at an individual level, helps build character, benefits health and for talented individuals becomes a source of livelihood. However, it is at a societal stage where sports can have a value-altering effect which can lead to a more tolerant and inclusive society. Vedanta identifies this dual impact that can be achieved through sports and thus its sports initiatives are focussed on two main objectives; Sports for all and Sports for excellence. Vedanta through its football initiatives in Rajasthan by Hindustan Zinc Football Initiative (ZF), and in Goa by the Iron Ore Business (Sesa Football Academy (SFA)), established on a reclaimed mine has taken great strides in getting closer to reaching these objectives. Zinc Football trains around 2,000 kids, both girls and boys in its 64 Zinc football schools. Sesa Goa also has 4 similar centres training 500 kids on a weekly basis. These centres enable the game to reach the masses and help create a culture of sports in the country. Both academies have their centres of excellence with state-of-art infrastructure that have not just developed players for their respective state teams but also contributed to the national setup with 7 alumni of SFA playing for the Indian national team and 8 playing in the elite Indian Super League. The second edition of ''Vedanta Women''s Football League'' saw involvement of 160 female football professionals and provided a platform for them to showcase their talents.

- COMMUNITY INFRASTRUCTURE

Infrastructure development provides impetus for economic growth and it is no different for the villages in our operational areas. It not only helps elevate the quality of life in the villages, but also forms the foundation for socio-economical upliftment. The Company recognises this need and therefore is aiding the operational villages in developing basic infrastructure in villages, such as school toilets, drinking water projects, sports infra, local drains, community centres etc. as per local needs.

During the year, the Company''s divisions spent Rs.51.72 crore on CSR activities, while on a consolidated basis it spent about Rs.309.24 crore on CSR.

A brief overview of CSR initiatives forms part of this 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 environmentally friendly manner; and to continuously work towards improving the quality of life of the communities in the areas where it operates.

The policy may be viewed at www.vedantalimited.com

DIGITISATION INITIATIVES – CSR

I. Unified & Online CSR Reporting Platform for the Group

Vedanta has a large and complex CSR portfolio with multiple and diverse projects running across various locations. During the year, we have worked with Goodera, a global SaaS company, in assisting us with the development of a CSR lifecycle and volunteering technology platform that will assist in planning, managing, evaluating and reporting on our Corporate Social Responsibility (CSR) programmes.

The technology platform will enable Vedanta business Units to continuously measure progress and impact of CSR and volunteering projects, in real time, with last-mile visibility through impact dashboards. While enabling effective governance, this integrated technology platform will also assist in maximising the impact of every rupee spent via automation, intelligence and analytics for data-driven decision-making.

The platform will also empower Vedanta with solutions to engage employees across its geographies to create the culture of giving and volunteering seamlessly.

II. A web-enabled, online community grievance register -''NIVAARAN''

Nivaaran is our internal community grievance/requests reporting and monitoring platform. This is an online web-enabled system developed this year by our Information Technology team. This central repository platform primarily aims to enable the submission of community requests/grievances from anywhere and anytime (24x7) by our stakeholder and CSR teams, who validate the request and take action for speedy closure of the same. Tracking grievances/requests is also facilitated on this portal through the system generated unique registration number. It also enables analysis of the data related to grievances across various categories including - type of grievance/requests, resolution time, location/asset etc.

CSR IMPACT ASSESSMENT

Taru Leading Edge assessed the impact of the CSR activities of Vedanta Group in the states of Rajasthan, Uttarakhand, Gujarat, Andhra Pradesh, Odisha, Chhattisgarh, Punjab, Goa, Karnataka and Jharkhand. This study employed various primary and secondary research techniques for comprehensive data gathering to arrive at objective insights which would assist in gauging the impact of the Company''s current operational projects and help identify new interventions to improve these projects. Taru, for this study, deployed trained professionals to oversee the Survey, focus group discussions, and perform in-depth interviews with the community members, beneficiaries, government/local authority personnel etc. To assess the investment made for development of infrastructure, physical survey of the infrastructure was done. Over 6,000 samples were collected for Impact assessment along with 730 Key Informant Interviews/In-depth Interviews and 240 Focus Group Discussions.

Overall, all sectoral interventions under thematic areas of sustainable livelihoods, Health & Nutrition, Water, Sanitation & Hygiene (WASH), Energy & Environment, Education and Sports & Culture received positive feedbacks with around 60% households reporting having benefitted from at least one of the CSR interventions of the Vedanta Indian BUs.

Under the sustainable livelihoods, the CSR interventions reached out to at least 46% of the CSR beneficiaries and around 62% of these CSR beneficiaries reported an increase in household income. Other impacts included benefits such as Increase in yield and lifespan of livestock, more earning from livestock, and generation of more employment opportunities.

The Health & Nutrition CSR interventions of various BUs reached out to approximately 50% of the CSR beneficiaries and around 76% of these beneficiaries reported that they were able to save money on Medicine & Health and close to 70% reported an improvement in Healthcare Quality.

The WASH, Energy & Environment CSR initiatives of Vedanta Group were able to reach approximately 30% of the CSR beneficiaries and more than 60% of these beneficiaries reported impact and benefits such as improvement in general cleanliness in the focus areas, availability of water at home, women feeling safer with construction of toilet facility in the house and improvement in school attendance after construction of toilet in schools.

It was observed that through various interventions in the Education thematic area, more than 80% of the CSR beneficiaries reported an improvement in grades of children, increased interest in going to school and improvement in quality of education.

Vedanta Group has also implemented various other programmes such as Community Centres, Road Safety Programmes, Football Academy Project, Sports & Culture etc. which are also appreciated by the community and have created a positive impact.

INNOVATION, DIGITALISATION & TECHNOLOGY

Vedanta has made innovation a strategic priority by acknowledging the role innovation plays as an enabler across every facet of the business. Beyond this ideology, Vedanta has instilled innovation as a corporate value and the Group''s leadership supports and incentivises employees in the establishment of a culture of innovation. This is because Vedanta''s leadership believes that innovation, and not just incremental improvement, will help mitigate the volatility in commodity prices. Innovation, which encompasses technology and digitalisation, drives efficiency and sustainability. It is a central part of the Group''s drive for operational excellence. We want to become an innovator company and to do this, we are focussed on not only acquiring best in class technology for our assets, but on creating our own.

Calling on two of our core values of entrepreneurship and innovation, we have stepped up our efforts to discover and implement new, innovative and disruptive technologies through the introduction of new systems and incentive programmes.

Across our business units, employees are encouraged to be creative in their thinking and approach. Ideas are valued by continually asking employees to think about what they and the Group can do differently. More than 1,000 ideas have been submitted, of these, 200 were selected for implementation and are being rolled out across the Group.

Of all the trends impacting the mining industry at present, digitalisation is arguably the most crucial, given its over-arching impact on every aspect of operations.

Offering significant potential for improving operational efficiency and lowering costs, digitalisation is opening up exciting opportunities at our several eading mines.

Hindustan Zinc''s Sindesar Khurd mine is our most automated mine and has successfully implemented mine digitalisation. Here, we are moving into a new era of mining, where high speed WiFi networks and high bandwidth optical fibre forms the backbone of a new digital-enabled operating model.

At our Oil & Gas business, the world''s longest, continuously-heated and insulated pipeline is one example of high technology standards. We remain ahead of the curve with industry leading extraction techniques like enhanced oil recovery and alkaline surfactant polymer, which have been deployed at the Mangala field. Extensive use of digital oil field software has improved reservoir management.

At Gamsberg, we have taken the application of technology a step further. Gamsberg has been conceptualised to be a digital mine. By introducing technology and digitalisation from the start, the operation will have leading-edge systems that report the state of the mine, the quality of ore, the conditions of the concentrator and the quality of the concentrate, all in real-time, to enable minute-by-minute decisions.

- HUMAN RESOURCES (HR)

PEOPLE & CULTURE

Your Company has always aspired to build a culture that demonstrates world-class standards in safety, environment and sustainability. People are our most valuable asset and we are committed to provide all our employees with a safe and healthy work environment.

Our culture exemplifies our core values and nurtures innovation, creativity and diversity. We align our business goals with individual goals and enable our employees to grow on personal as well as professional front.

- DIVERSITY

Diversity remains a strong focus. We are committed to provide equal opportunities to our employees regardless of their race, nationality, religion, gender or age. We are pleased with our progress to date on gender diversity, and women now represent 10.6% of our total workforce and 20% of our Board. We have set ourselves a target to reach over 33% women at senior levels by 2020 and aim to achieve 20% female representation amongst our employees.

We are also focussed on increasing the mix of geographies and nationalities in our workforce. Since most of our operations are in remote areas, we place a strong emphasis on recruiting employees from among the local population.

A significant percentage of the senior management team and our employees are recruited from the country in which our operations are located.

We strictly follow our Equal Opportunity policy to ensure there is no discrimination and all our decisions are based on meritocracy.

- RECRUITMENT

We have put a range of initiatives in place to support us in hiring skilled professionals.

Right management in place (RMIP)

To re-emphasise the Group''s philosophy of empowering the SBUs, we have reviewed our existing Business & SBU structures and followed a rigorous assessment process to ensure we have right talent in the right positions. The RMIP process also ensured that we have filled all the critical roles within our structures and any gaps in the management team are supported by strategic plans to fill vacancies. Our approach to recruitment is focussed on hiring diverse, high quality talent as well as expats and specialists.

Vedanta Leadership Development Program (VLDP)

VLDP is our flagship programme which aims to build organisational capability through developing talented individuals from premier management and technology institutes. It is a tailored programme which focuses on nurturing these bright minds to act as catalysts to steer our business to the next level of growth by implementing transformational ideas. The programme includes induction sessions, cross functional projects in significant roles, job rotation, development opportunities and continuous anchoring.

TALENT MANAGEMENT AND DEVELOPMENT

Internal Growth Workshops

We have always aimed to design an organisation which is spearheaded by our "Leaders from Within”. Recognising internal talent and recruiting them to leadership roles has been the driving factor in our journey of rapid growth. Aligned with this philosophy, the Group conducts ''Chairman''s Internal Growth Workshops'' which enable our young leaders to fulfil their potential through development opportunities and provide us with a talent pipeline enabled to fill critical roles across the Group. These workshops have resulted in the development of 600 high potential New Leaders across the Group''s businesses who are given significantly elevated roles and responsibilities.

Leadership and Talent Analytics

We have partnered with experts to evaluate our existing talent management practices and implement best-in-class new initiatives for talent development. We are focussing on employing digital channels to run accelerated growth drives, workshops, in-house learning modules and other development opportunities.

360 Degree Feedback

At Vedanta we promote growth and nurturing of our internal talent pool by encouraging internal dialogue between senior leaders and their young mentees and peers. For this reason, we have launched a 360 Degree Feedback for our ExCo Leaders in collaboration with an external partner. We believe that this will help to fast track assessment and development of leaders and we aim to extend this to cover all our professionals in due course.

- PERFORMANCE MANAGEMENT & TOTAL REWARDS

V-Perform: One Performance System for One Vedanta

At Vedanta, our focus is to constantly improve the level of automation in all our operations. V-Perform is a pan-Vedanta initiative to standardise the Performance Management System (PMS) and process across all Vedanta Group companies by leveraging technology. This enables functions, teams and individuals to track performance on a regular basis, evaluate efficiency through advanced analytics and implement proactive decisions towards achieving Vedanta''s objectives. We foster a culture of safety and sustainability to achieve our ultimate vision of "Zero Harm”, "Zero Waste & "Zero Discharge”. To enhance our safety performance in the workplace and strengthen our existing Safety Management System, a safety competency assessment process was completed mid-year by all employees.

Employee Stock Option Scheme (''ESOS'')

Employee stock options are a significant component of our long-term incentives. They enable our employees to share in the success of the Company, encouraging high-growth performance and reinforcing employee pride with a focus on ownership.

Your Company has established a share incentive schemes viz. ''Vedanta Limited Employee Stock Option Scheme 2016'' ("the Scheme”). The Scheme was framed with a view to reward employees for their contribution in successful operation of the Company with wealth creation opportunities, encouraging high-growth performance and reinforcing employee pride.

The Scheme is a conditional share plan for rewarding performance on pre-determined performance criteria and continued employment with the Company.

The pre-determined performance criteria shall focus on rewarding employees for Company performance vis-a-vis competition and also for achievement of internal operational metrics.

The Scheme was launched after obtaining statutory approvals, including shareholders'' approval by way of postal ballot on December 12, 2016. In 2018, 35% of the workforce participated in this Scheme with a focus on our young & senior leaders, employees driving strategic projects and high impact task force members.

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. During the year, the ESOS Trust was re-constituted by the Nomination & Remuneration Committee in its meeting held on July 13, 2018. The details of the trustees can be accessed at www.vedantalimited.com.

No employee has been issued stock options during the year, equal to or exceeding one percent of the issued capital of the Company at the time of grant.

During the year, the acquisition by the trust does not exceeded 2% of the paid-up capital of the Company. Further, the total acquisition by trust at no time exceeded 5% of the paid-up equity capital of the Company.

During the year under review 14,055,556 options were granted to 2,798 employees including Whole-Time Director and Key Managerial Personnel.

Pursuant to the provisions of SEBI (Share Based Employee Benefits) Regulations, 2014 ("Employee Benefits Regulations”), disclosure with respect to the ESOS Scheme of the Company as on March 31, 2019 is available on the website of the Company at www.vedantalimited.com.

The Company confirms that the Scheme complies with the Employee Benefits Regulations and there have been no material 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 Annual General Meeting. A copy of the same will also be available for inspection at the Company''s Registered Office.

EMPLOYEE INFORMATION AND RELATED DISCLOSURES / PARTICULARS OF EMPLOYEES

The statement of Disclosure of Remuneration under Section 197 of the Companies Act, 2013 and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 ("Rules”) is appended as Annexure B to the Report.

The information, as per Rule 5(2) of the Rules, forms part of this Report. However, as per provision of Section 136 of the Act and Rule 5(2), the Report and the Financial Statements are being sent to the Members of the Company excluding the statement of particulars of employees under Rule 5(2) of the Rules. The statement shall be available for inspection at the Company''s Registered Office and any Member interested in obtaining a copy of the said statement may write to the Company Secretary.

PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

The Company has zero tolerance for sexual harassment at workplace and 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, your 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 period under review, eight complaints were received and resolved. Four employees were separated on account of complaints. 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.

RISK MANAGEMENT

Your businesses are exposed to a variety of risks, which are inherent to a global natural resources organisation.

The effective management of risk is critical to support the delivery of the Group''s strategic objectives. Risk management is embedded in the organisation''s processes and the risk framework helps the organisation meet its objectives by aligning operating controls with the mission and vision of the Group set by the Board.

As part of our governance philosophy, the Board has a Risk Management Committee to ensure a robust risk management system. The details of Committee and its terms of reference are set out in the Corporate Governance Report, which forms part of this Annual Report.

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 multi-layered 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.

The Risk Management Policy of the Company was revised by the Board in its meeting held on March 28, 2019 on the recommendation of the Risk Management Committee and Audit Committee to include cyber security.

For a detailed risk analysis, you may like to refer to the risk section in the Management Discussion Analysis Report which forms part of this Annual Report.

INTERNAL FINANCIAL CONTROLS

Your Board has devised systems, policies and procedures/ frameworks, which are currently operational within your Company for ensuring the orderly and efficient conduct of its business, which includes adherence to policies, safeguarding its 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 an 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, focussing 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.

In addition, as part of their role, the Board and its Committees routinely monitor 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 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 under review. There have been no significant changes in the Company''s internal financial controls during the year that have materially affected, or are reasonably likely to materially affect its internal financial controls.

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 judgement in evaluating the cost-benefit relationship of possible controls and procedures.

Further, the Audit Committee annually evaluates the internal financial controls for ensuring that the Company has implemented robust systems/framework of internal financial controls viz. the policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of its business, including adherence to Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information.

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, a centralised database, a 24X7 whistle-blower hotline and a web-based portal have been created to facilitate receipt of complaints. 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.

All cases reported as part of whistle-blower mechanism are taken to their logical conclusion within a reasonable timeframe. After the investigation, established cases are brought to the Group Ethics Committee for decision-making. 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 available on the Company''s website at www.vedantalimited.com.

INVESTOR RELATIONS

Your Company has an active Investor Relations (IR) Programme and continuously strives for excellence in its IR engagement with international and domestic investors through various mediums such as quarterly earnings calls, Investor & Analyst Days, site visits, one-on-one and group meetings, participation in sell-side conferences and non-deal Roadshows.

The promoters of the Company and the senior management consisting of CEO and CFO involve themselves regularly in investor and analyst interactions. Depending on the context and need, the leadership team from businesses is also invited for these engagements.

Vedanta has set standards through the detailed and transparent disclosures on the Company''s operational and financial performance. Your Company had created its first Integrated Report (for Financial Year 2018). Your Company initiated a new communication initiative which involves sending a brief update about the Company''s performance and events to its shareholders and other stakeholders regularly. Having a diverse shareholder base and seven businesses demands enormous efforts from an IR function to manage investors and sell-side and to ensure that all business updates are provided timely and in complete. The dissemination of business updates through this "Investor Brief” has been well appreciated. As a key milestone in this continuing endeavour, your Company created a digital interactive microsite on the corporate website to provide an interactive experience beyond what is available in the annual and quarterly results materials.

Your Company benchmarks global IR standards and tries to be at par with them. The investor and the analyst community have appreciated your Company''s IR team and practices being one of the best in the country. Your Company has been recognised for its IR efforts year on year by globally renowned forums.

CORPORATE GOVERNANCE REPORT

Your board seeks to embed and sustain a culture that will enable us to achieve our objectives through effective corporate governance and enhance transparent engagement with key stakeholders.

In our constant endeavour to benchmark our policies and practices and in light of various developments in the realm of corporate governance and regulatory reforms, your Company continues to maintain and implement the highest standards of corporate governance and ethical business practices across the globe.

A separate report on Corporate Governance setting out the governance structure, principal activities of the Board and its Committees and the policies and practices that enable the Board to fulfil its stewardship responsibilities together with a Certificate from the Statutory Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Listing Regulations is provided as an Annexure to the Annual report.

DIRECTORS & KEY MANAGERIAL PERSONNEL

We aim to bring a diverse and complementary range of skills, knowledge and experience to the Board, so that we are equipped to navigate the operational, social, regulatory and geopolitical complexity in which our business operates. Achieving the right blend of skills and diversity to support effective decision-making is a continuing process.

The detailed composition of the Board and Key Managerial Personnel (KMP) of the Company along with the changes in the board and KMP during the period under review are provided in the Corporate Governance Report.

DIRECTORS SEEKING RE-APPOINTMENT

Pursuant to the provision of Companies Act, 2013, Ms. Priya Agarwal (DIN: 05162177), Non-Executive Director of the Company, is liable to retire by rotation at the ensuing Annual General Meeting (AGM) and being eligible, has offered herself for re-appointment. Accordingly, the appointment of Ms. Priya Agarwal is being placed for approval of the members at the AGM. A brief profile of Ms. Priya and other related information is provided in the AGM notice. The Board on the recommendation of Nomination & Remuneration Committee recommends her re-appointment at the AGM.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received declaration from all the Independent Directors that they continue to meet the criteria of independence as provided under the Companies Act and Listing Regulations and comply with the Code for Independent Directors as specified under Schedule IV of the Act.

The Directors have also confirmed that they are not aware of any circumstance or situation, which exists or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgement and without any external influence.

BOARD DIVERSITY & INCLUSION

Your Company believes that a diverse and inclusive Board is essential for achieving long-term growth and development of the Company. This ensures timely anticipation of risks and opportunities. The Company has a diverse Board consisting of Directors possessing variety of skills, expertise, qualifications and experience. The details of the key qualifications, skills and attributes are forming part the Corporate Governance Report.

POLICY ON DIRECTOR''S APPOINTMENT AND REMUNERATION

The Company''s Nomination & Remuneration Policy sets out the criteria for determining qualifications, positive attributes and independence while evaluating a person for appointment/ re-appointment as Director or as KMP, with no discrimination on the grounds of ethnicity, nationality, gender or race or any other such factor.

The salient features of the Policy and the changes during the year are provided in the Corporate Governance Report and the policy is also available on the website of the Company at www.vedantalimited.com

FAMILIARISATION PROGRAMME FOR BOARD MEMBERS

Your Company has a separately defined Familiarisation Programme for its Directors which aims to provide insights to the newly inducted Directors about the Company, its operations, business, industry and environment and also to update the Directors on a continual basis.

The details of training and familiarisation programme process for Directors have been provided under the Corporate Governance Report and is also available on the website of the Company at www.vedantalimited.com

BOARD EVALUATION

Your Board is committed to transparency in assessing the performance of Directors. The Company has put in place a robust framework for evaluation of the Board, its Committees the Chairman, and Individual Directors and the governance processes that support the Board''s work.

The Company engaged the services of a leading HR consultancy, to conduct the entire process of Board evaluation and the same was facilitated through an online secured module ensuring transparent, effective and independent of involvement of the management. The evaluation was conducted through questionnaires having qualitative parameters and feedback based on ratings. Recommendations arising from the evaluation process were considered by the Board to optimise its effectiveness.

The outcome of the Board evaluation was discussed by the Nomination & Remuneration Committee and the Board at the meeting held on March 28, 2019.

A detailed update on the Board Evaluation is provided in the Corporate Governance Report.

BOARD & COMMITTEE MEETINGS

The Board in conjunction with its Committees meets at regular intervals to ensure all decisions are taken timely. The Board met 10 times during the FY2019. The details of Board committees as on March 31, 2019 are provided below:

OTHER COMMITTEES

Further, the Board of Directors at their meeting held on January 31, 2019 have also constituted Sustainability Committee w.e.f. April 1, 2019.

The details on Board, its committees, their composition and terms and reference and meetings held during FY2019 and attendance is provided in the Corporate Governance Report.

All the recommendations made by each of the Committees were accepted by the Board.

AUDITORS AND AUDITORS'' REPORT

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.

- The report of the Statutory Auditor forming part of the Annual Report , does not contain any qualification, reservation, adverse remark or disclaimer.

The observations made in the Auditors'' Report are self-explanatory and therefore do not call for any further comments.

- M/s. S R Batliboi & Co. LLP have confirmed their independence and eligibility under the provisions of the Act & Listing Regulations.

COST AUDITORS

- Your Company is required to have the audit of its cost records conducted by a Cost Accountant in practice.

- The Board has appointed M/s. Shome and Banerjee as Cost Auditors for its Oil & Gas Business and and M/s. Ramnath Iyer & Co for other business segments to conduct cost audit for year ended March 31, 2019.

- Further M/s. Ramnath Iyer & Co. have been appointed as the Lead Cost Auditors of the Company.

- The said auditors have been re appointed for FY2020 as well.

SECRETARIAL AUDITOR

- The Company has appointed M/s. Chandrasekaran & Associates, a firm of Company Secretaries in practice to undertake the Secretarial Audit of the Company for FY2019.

- The Report of the Secretarial Audit in Form MR-3 is annexed herewith as Annexure D. Further, the Annual Secretarial Compliance Report is available on the website at www.vedantalimited.com.

- The Secretarial Audit Report does not contain any qualifications, reservation, adverse remarks or disclaimer.

- The Board has re-appointed M/s. Chandrasekaran & Associates as Secretarial Auditors for FY2020.

INTERNAL AUDITOR

- M/s. Deloitte Haskins & Sells, LLP was appointed as the Internal Auditors for FY2019.

- The Group''s internal audit activity is managed through the Management Assurance Services (''MAS'') function.

- The Board, on the recommendation of the Audit Committee has re-appointed M/s. Deloitte Haskins & Sells, LLP as the Internal Auditors for FY2020.

REPORTING OF FRAUDS BY AUDITORS

During the year under review, the Statutory Auditor, Cost Auditors and Secretarial Auditor have not reported any instances of frauds committed in the Company by its Officers or Employees to the Audit Committee under Section 143(12) of the Companies Act, 2013, details of which needs to be mentioned in this Report.

MANAGEMENT DISCUSSION AND ANALYSIS

Pursuant to Regulation 34 of the Listing Regulations, a detailed report on the Management Discussion and Analysis is presented in a separate section in the Annual Report.

DETAILS OF LOANS/ GUARANTEES/ INVESTMENT MADE BY THE COMPANY

The 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. (Please refer to Notes to the standalone financial statement).

The Company has a policy on material subsidiaries and the same may be accessed at www.vedantalimited.com.

DEBENTURES

During the financial year, your Company raised Rs.5,000 crore through issuance of secured, rated, redeemable, non-cumulative, non-convertible debentures of face value of Rs.1,000,000 each on private placement basis as per the following details:

Coupon Rate

Date of Allotment

No. of NCDs

Total Amount

Tenor

Maturity Date

8.50% Secured Redeemable Non-Convertible Debentures - Series I

April 5, 2018

23,500

2,350

3 years

April 5, 2021

8.50% Secured Redeemable Non-Convertible Debentures - Series II

April 5, 2018

16,500

1,650

3 years 2 months & 10 Days

June 15, 2021

9.18% Secured Redeemable Non-Convertible Debentures

July 4, 2018

10,000

1,000

2 years & 363 days

July 2, 2021

The aforesaid debentures are listed on BSE Limited.

FIXED DEPOSITS

As reported last year, the Company has discontinued the renewal of its fixed deposits on maturity. As at March 31, 2019 deposits amounting to Rs. 54, 000 remains unclaimed. Since the matter is sub judice, the Company is maintaining status quo.

TRANSFER TO RESERVES

The Company proposes Nil transfer to General Reserve out of its total profit of Rs.5,075 crore for the financial year.

CAPITAL STRUCTURE

The Authorised Share Capital of the Company is Rs. 74,12,01,00,000 divided into 44,020,100,000 number of equity shares of Rs. 1/- each and 3,010,000,000 Preference Shares of Rs. 10/- each.

During the year the Company redeemed 3,010,000,000 Preference Shares of Rs. 10/- each as per their terms of issuance. The paid-up share capital of the Company was reduced from Rs. 33,817,504,871 divided into 3,717,504,871 equity shares of face value of Rs. 1 each and 3,010,000,000 preference shares of face value of Rs. 10 each to 3,717,504,871 equity shares of Rs. 1 each.

The details of share capital as on March 31, 2019 is provided below:-

Particulars

Amount (Rs.)

Authorised Share Capital

74,12,01,00,000

Paid up Capital

3,71,75,04,871

Listed Capital

3,71,71,96,639

Shares under Abeyance pending allotment

3,08,232

*308,232 equity shares are pending for allotment and listing hence, are kept under abeyance category since they are subjudice.

UNCLAIMED SHARES

Pursuant to the SEBI Circular and Regulation 39 of the Listing Regulations regarding the procedure to be adopted for unclaimed shares issued in physical form in public issue or otherwise, the Company has a separate demat account in the title of ''Vedanta Limited - Unclaimed Suspense Account'' with M/s. Karvy Stock Broking Limited. The details of shares lying in the unclaimed suspense account are provided below:

Description

No. of shareholders

No. of Equity shares of Rs.1 each

Aggregate number of shareholders and the outstanding shares in the suspense account lying at the beginning of the year

4,018

3,403,603

Number of shares transferred to the unclaimed suspense account during the year

0

0

Number of shareholders who approached issuer for transfer of shares from suspense account during the year

80

98,681

Number of shareholders to whom shares were transferred from suspense account during the year

-

-

Number of shares transferred to IEPF account pursuant to Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 read with Amendment Rules, 2017

1,221

654,660

Aggregate number of shareholders and the outstanding shares in the suspense account lying at the end of the year. The voting rights on these shares shall remain frozen till the rightful owner of such shares claims the shares

2,717

2,650,262

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

In accordance with provision of Companies Act and IEPF Rules, the Company is required to transfer the following amounts to IEPF:-

- Dividend amount that remains unpaid/unclaimed for a period of 7 years;

- Shares on which the dividend has not been paid/claimed for 7 consecutive years or more

Your Company in its various communications to the shareholders from time to time, request them to claim the unpaid/unclaimed amount of dividend and shares due for transfer to the IEPF account established by Central Government. Further, in compliance with the IEPF (Accounting, Audit, Transfer and Refund) Rules, 2016 (IEPF Rules) including statutory modifications thereof, the Company publishes notice in newspapers and also sends specific letters to all the shareholders, whose shares are due to be transferred to IEPF, to enable them claim their rightful dues.

The details of dividend transferred during the year is provided below:

Dividend transferred to IEPF during the year

Financial Year

Type of Dividend

Dividend declared on

Amount transferred to IEPF (in Rs.)

Date of transfer to IEPF

2010-11

Interim Dividend

March 12, 2011

1,23,51,835.00

May 9, 2018

2010-11

Final Dividend

July 25, 2011

52,19,694.00

September 21, 2018

2010-11

Final Dividend

July 21, 2011

1,73,95,336.00

September 24, 2018

2010-11

Final Dividend

August 14, 2011

19,77,927.00

August 31, 2018

2011-12

Interim Dividend

October 24, 2011

56,27,575.00

December 19, 2018

2011-12

Interim Dividend

January 25, 2012

1,01,63,686.00

March 16, 2019

Total

5,27, 36,053.00

Unpaid dividend on the shares on which there was a specific order of court/ tribunal/ statutory authority restraining transfer of such shares and dividend thereon, were not transferred to IEPF pursuant to Section 124 of the Companies Act, 2013 and Rule 6 of IEPF (Accounting, Audit, Transfer and Refund) Rules, 2016 including statutory modifications or re-enactments thereof.

Dividend declared during the year transferred to IEPF

Financial Year

Type of Dividend

Dividend declared on

Amount transferred to IEPF (in Rs.)

Date of transfer to IEPF

2018-19

1st Interim Dividend 2nd Interim Dividend

October 31, 2018 March 6, 2019

3,99,58,228.00

43,48,395.40

November 22, 2018 March 18, 2019

Total

44,306,623.40

Shares transferred/credited to IEPF

During the year, the Company transferred 1,346,250 equity shares of Rs.1/- each comprising of 2,399 shareholders to IEPF.

The Company has also uploaded the details of unpaid and unclaimed amounts lying with the Company as on August 24, 2018 (date of last Annual General Meeting) on the Company''s website www.vedantalimited.com.Further, the details of equity shares transferred are available on the Company''s website www.vedantalimited.com.

The shareholders whose shares/dividends have been transferred to IEPF can claim the same from IEPF in accordance with the prescribed procedure and on submission of such documents as prescribed under the IEPF Rules. The process for claiming the unpaid dividend/shares out of the IEPF can be accessed at www.iepf.gov.in.

The dates on which unclaimed dividend and their corresponding shares would become liable to be transferred to the IEPF during the FY 2020 is provided below:

Dividend to be transferred to IEPF during FY 2020

Dividend

Date of Declaration of Dividend

Due date for transfer to IEPF

Amount (As on March 31,

2019)

Final Dividend 2011-12

29-Jul-2012

28-Aug-19

18,12,052.50

Final dividend 2011-12

24-Apr-2012

7-Sep-19

1,01,03,138.00

Final Dividend 2011-12

25-Apr-2012

18-Sep-19

59,70,651.00

Interim Dividend 2012-13 (1st)

23-Oct-2012

28-Dec-19

64,03,296.90

Interim 2012-13

31-Oct-2012

5-Jan-20

44,62,555.00

Interim Dividend 2012-13 (2nd)

30-Oct-2012

4-Jan-20

14,49,220.00

Total

3,02,00,913.40

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

Your Company has 54 subsidiaries (15 direct and 39 indirect) as at March 31, 2019, as disclosed in the notes to accounts.

During the year and till date the following changes have taken place in subsidiary companies:

Subsidiary companies formed/acquired:

- Vedanta Star Limited acquired on April 23, 2018

- Electrosteel Steels Limited acquired on June 4, 2018

As at March 31, 2019, the Company has 5 associate companies and joint ventures.

Associate Companies and Joint Ventures:

- RoshSkor Township (Pty) Limited

- Gaurav Overseas Private Limited

- Goa Maritime Private Limited

- Madanpur South Coal Company Limited

- Rampia Coal Mines and Energy Private Limited

As required under Listing Regulations, the Consolidated Financial Statement of the Company and its subsidiaries, prepared in accordance with Ind AS 110 issued by the Institute of Chartered Accountants of India, form part of the Annual Report and are reflected in the Consolidated Financial Statement of the Company.

During the year, the Board of Directors have reviewed the affairs of the subsidiaries. Pursuant to Section 129(3) of the Companies Act 2013 (the Act), a statement containing the salient features of the financial statement of the subsidiaries and associate companies is attached to the financial statement in Form AOC-1. The statement also provides details of performance and financial position of each of the subsidiaries.

In accordance with Section 136 of the Act, the audited Standalone and Consolidated financial statements of the Company along with relevant notes and separate audited accounts of subsidiaries are available on the website of the Company at www.vedantalimited.com.A copy of the financial statements of the Company and of the subsidiary companies shall be made available upon request by any member of the Company. Additionally, these financial statements shall be available for inspection by members at the Registered Office of the Company.

RELATED PARTY TRANSACTIONS

Your Company has in place a Policy on Related Party Transaction (RPT) (RPT Policy) formulated in line with the provision of the Companies Act and Listing Regulations. The Policy may be accessed at www.vedantalimited.com.

The Policy sets out the philosophy and processes to be followed for approval and review of transactions with Related Party and intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions with Related Parties.

A detailed landscape of all RPTs to the Audit Committee, specifying the nature, value, and terms and conditions of the transaction is presented to the Audit Committee.

Also, a Related Party Transactions Manual-Standard Operating Procedures has been formulated to identify and monitor all such transactions.

During the fiscal 2019, all the contracts/ arrangements/ transactions entered into by the Company with the related parties were in the ordinary course of business and on an arm''s length basis and were in compliance with the provisions of the Companies Act and Listing Regulations.

Further, there have been no materially significant RPTs during the year pursuant to the provisions of the Companies Act and Listing Regulations. Accordingly, the disclosure required u/s 134(3)(h) of the Act in Form AOC-2 is not applicable to your Company.

SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

Provided below are the significant and material orders which have been passed by any regulators or courts or tribunals against the Company impacting the going concern status and Company''s operations in future.

Iron-Ore Division - Goa Operations

Supreme Court (SC) in the Goa Mining matter in 2014 declared that the deemed mining leases of the lessees in Goa expired on November 22, 1987 and the maximum of 20 years renewal period of the deemed mining leases in Goa under the MMDR Act had also expired on November 22, 2007 and directed state to grant fresh mining leases.

Thereafter, various mining leases were renewed by the state government before and on the date the MMDR Amendment Ordinance 2015 came into effect (i.e. January 12, 2015).

These renewal of mining leases were challenged before the SC by Goa Foundation and others in 2015 as being arbitrary and against the judgement of the SC in the earlier Goa mining matter. The Supreme Court passed the judgement in the matters on February 7, 2018 wherein it set aside the second renewal of the mining leases granted by the State of Goa. The court directed all lease holders operating under a second renewal to stop all mining operations with effect from March 16, 2018 until fresh mining leases (not fresh renewals or other renewals) in accordance with the provisions of the MMDR Act, 1957 and fresh environmental clearances are granted.

Some mining lessees and other mining stakeholder have filed applications in the pending Abolition Act matter for resumption of mining in the State. The Central Government has also filed an early hearing application in the long pending abolition matter.

Copper Division

Copper division of Vedanta Limited has received an order from Tamil Nadu Pollution Control Board (TNPCB) on April 9, 2018 whereby they have rejected the Company''s application for renewal of Consent to Operate (CTO) for the 400,000 Metric Tonnes Per Annum (MTPA) Copper Smelter plant in Tuticorin.

In furtherance to the order of TNPCB rejecting the Company''s application, the Company decided to shut its Copper smelting operations at Tuticorin and has filed an appeal with TNPCB Appellate authority against the order. During the pendency of the appeal the TnPCB vide its order dated May 23, 2018 ordered disconnection of electricity supply and closure of the Company''s Copper Smelter plant. Post this the Government of Tamil Nadu on May 28, 2018 ordered the permanent closure of the plant. The Company challenged the same in the National Green Tribunal which passed a favourable order for reopening of the plant. The order was appealed by the TNPCB and the State of Tamil Nadu in the Supreme Court.

The Supreme Court passed an order upholding the appeal and directing the Company to approach the Madras High Court for relief. The Company has filed a writ petition in the Madras High Court that is currently pending adjudication.

In a separate proceeding, the Madurai Bench of the Madras High Court in a PIL filed against the Company, has stated that the application for renewal for Environmental Clearance for Copper Smelter Plant 2 project, shall be processed after conduct of mandatory public hearing and the application shall be decided by the competent authority on or before September 23, 2018. In the interim, the High Court ordered us to cease construction and all other activities on site for the proposed expansion project with immediate effect. Separately, SIPCOT through its letter dated May 29, 2018, cancelled 342.22 acres of the land allotted to us for the proposed expansion project. The Company challenged the same in the High Court which passed an interim stay on the withdrawal of land allotment.

SECRETARIAL STANDARDS

The Company has complied with the applicable provisions of the Secretarial Standards issued by the Institute of Companies Secretaries of India.

ANNUAL RETURN

An extract of the Annual Return in prescribed form MGT-9 is annexed hereto as ''Annexure C'' to the Directors'' Report.

BUSINESS RESPONSIBILITY REPORT & SUSTAINABILITY REPORT

-The safety of our workforce

- Environmental management

-Retaining our social licence to operate

-Diversity of workforce and equal opportunities

In pursuance of our commitment to responsible business and in compliance with Listing Regulations, a Business Responsibility Report ("BRR”) which describes the initiatives taken by the Company from an environmental, social and governance perspective forms part of this Annual Report.

Our strategy continues to focus on delivering long-term value and growth to our shareholders through diversified portfolio of large, long life and low-cost assets. At Vedanta, we understand the value of a unified sustainable development agenda that goes beyond compliance.

We manage our business in a sustainable manner, ensuring we have effective and appropriate business processes and behaviours in place, focussing on health and safety management and responsibly managing our environmental impacts and preserving biodiversity. We aim to create a culture based on our values which ensures the professional growth and personal well-being of our entire workforce.

Your Company also publishes the Sustainability Report annually which is based on Global Reporting Initiatives (GRI) Standards. The Sustainability report is available on the website of the Company at www.vedantalimited.com

AWARDS AND ACCOLADES

Your Company has been winning accolades for its unique innovations and contributions to the stakeholders & society. Such recognitions are a testimony to the growth, emphasis on being a safe operator and commitment towards delivering value to our people, investors and stakeholders.

During the year, we won multiple awards and recognition.

The details of the same are provided in separate section in the Annual Report.

MATERIAL CHANGES & COMMITMENT AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There are no material changes and commitments affecting the financial position of the Company subsequent to the close of the financial year till the date of this Report.

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 E''.

The details of the Foreign Exchange Earnings and Outgo are as follows:

(Rs. in crore)

Year Ended

Year Ended

Description

March 31, 2019

March 31, 2018

Expenditure in foreign currency

3,459

1,551

Earnings in foreign currency

18,596

28,394

CIF Value of Imports

18,633

28,900

DIRECTORS RESPONSIBILITY STATEMENT

Your Directors hereby confirms that:-

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

(b) they have selected such accounting policies and applied them consistently and made judgements 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, 2019 and of the profit and loss of the Company for that period;

(c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the Company''s assets and for preventing and detecting fraud and other irregularities;

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

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

ACKNOWLEDGEMENT

Your Board takes this opportunity to convey their sincere appreciation to all employees for their dedicated services, firm commitment and collective contribution to the goals, mission and vision of the Company.

We would also like to express our sincere gratitude to all our stakeholders for their endless faith in their Company.

The Directors further take this opportunity to acknowledge the support and assistance extended to us by the Government, Bankers, Stock Exchanges, Financial Institutions and Communities, Shareholders and Investors.

Together, we will continue to benefit from, and contribute to, one of the fastest-growing economies in the world and add value for our shareholders.

We look forward to delivering another year of value adding growth.

For and on behalf of the Board of Directors

Place: Mumbai Navin Agarwal

Dated: May 7, 2019 Executive Chairman


Mar 31, 2018

Directors’ Report

Dear Shareholders,

The Board of Directors presents the Company’s Annual Report, together with the audited financial statements for the financial year ended March 31, 2018.

During the year, your company focused on generating cash flows across all businesses, deleveraging the balance sheet and delivering superior shareholder return through disciplined capital allocation. The profitability improvement has been driven by production ramp-up and complemented by the strong commodity market. There was record production at Zinc India, aluminum and copper business.

We expect FY 2019 to be another productive year for your company with ramp-ups across Zinc, Oil & Gas and Aluminum businesses continuing. The next phase of growth projects announced during the year, set a strong base for the future. With a strong balance sheet and a clear capital allocation strategy, 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 2017-18

- Revenue increased by 22% to Rs, 92,922 crore (FY 2017: Rs, 76,168 crore) driven by firm commodity prices and volume ramp up

- EBITDA increased by 19% to Rs, 25,470 crore (FY 2017: EBITDA:

Rs, 21,437 crore)

- Robust EBITDA margin1 of 36% (FY 2017 39%)

- Free cash flow (FCF) post capex for the year at Rs, 7,870 crore (FY 2017: Rs, 13,312 crore)

- Gross debt at Rs, 58,159 crore, reduced by Rs, 13,410 crore during the last 12 months (including repayment of Rs, 7,908 crore of temporary borrowing at Zinc India offset by issuance of preference shares)

- Net debt at Rs, 21,958 crore (FY 2017: Rs, 8,099 crore) higher on account of special dividends paid and acquisition of AvanStrate Inc. (ASI)

- Attributable PAT (before exceptional items and DDT) increased by 10 % to Rs, 8,026 crore (FY 2017: Rs, 7,323 crore)

- Crisil upgraded the Company’s Rating from AA/Stable to AA/ Positive

- Contribution of Exchequer of Rs, 33,000 crore including dividends.

- Strong financial position with cash and liquid investments of Rs, 36,201 crore

- Record interim dividend of Rs, 7,881 billion by Vedanta Ltd in March 2018

Financial Performance Summary

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

(Rs, in Crore)

Standalone

Consolidated

Year Ended

Year Ended

Year Ended

Year Ended

March 31,

March 31,

March 31,

March 31,

Particulars

2018

2017

2018

2017

Net Sales/Income from Operations

45,974

38,540

92,923

76,171

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

3,851

3,665

18,881

15,040

Other Income

3,866

9,705

3,574

4,581

Finance costs

3,900

3,896

5,783

5,855

Net exceptional items gain/(loss)

5,407

1,324

2,897

(114)

Profit /(loss) before tax

9,224

10,798

19,569

13,652

Tax expense/(credit)

1,968

(271)

5,877

2,333

Net Profit/(loss) after tax

7,256

11,069

13,692

11,316

Share of profit/(loss) of associate

NA

NA

0

(3)

Minority Interest

NA

NA

3,350

4,358

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

and before other comprehensive income

7,256

11,069

10,342

6,958

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

372

297

372

297

Reserves excluding revaluation reserves as per balance sheet

78,941

79,396

63,136

60,128

Basic EPS after exceptional items

19.47

29.04

28.3

23.47

Transferred to General Reserve

Nil

NIL

NIL

NIL

Interim Dividend

7,881

7,099

7,881

7,099

Consolidated Financial Statement

The Company announces its Consolidated Financial Results on a quarterly basis. As required under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015 (SEBI Listing Regulations), the Consolidated Financial Statement of the Company and its subsidiaries, prepared in accordance with Ind AS 110 issued by the Institute of Chartered Accountants of India, form part of the Annual Report and are reflected in the Consolidated Financial Statement of the Company. Pursuant to Section 129(3) of the Companies Act 2013 (the Act), a statement containing the salient features of the financial statement of the subsidiary companies is attached to the financial statement in Form AOC-1.

Pursuant to the provisions of Section 136 of the Act, the Standalone and Consolidated financial statements of the Company along with

relevant notes and separate audited accounts of subsidiaries are available on the website of the Company. A copy of the financial statements of the Company and of the subsidiary companies shall be made available upon request by any member of the Company. Additionally these financial statements shall be available for inspection by members at the Registered Office of the Company.

Operational Highlights for FY 2017-18

In line with Vedanta’s stated strategic priority of production growth through continued ramp up at Aluminum and Zinc India business, we delivered strong operational performance driven by record production at Aluminum (exit capacity c.2.0 MT), Zinc India and Copper India. During the year, we also announced next phase of growth projects in Oil & Gas and Copper India and continued to work on the Gamsberg project for commencement of production in mid CY2018.

Some of the key operational highlights for FY 2018 are:

- Record annual production at Zinc India and Aluminum business

- Oil & Gas: Mar 18 Exit run rate of 200,000 boepd; Growth projects on track to enable significant volume growth in FY 19

- Zinc International : Gamsberg project on track with production expected by mid CY 2018

- Aluminum: Record annual production at 1.7mt; with an exit run rate of c.2.0 mtpa

- Iron Ore: Increase in company-wise mining cap allocation in Karnataka expected in Q1 FY2019

- Power: 1,980 MW Talwandi Sabo Power Plant operating at 93% availability in Q4FY 18

Capital Expenditure

We continue to take a disciplined approach to growth through prudent capital allocation. During the year FY 2018, we commenced the next phase of growth in our Oil & Gas business with a near term target of about 300kboepd. With positive fundamentals in place, we have also commenced the expansion of the 400kt copper smelter at Tuticorin in Southern India to 800kt. Completion of this project will place Tuticorin as one of the largest single-location copper smelting complexes in the world. Both these projects are having robust returns. The Zinc projects both at Zinc India & Zinc International are progressing well. We are geared up for commencement of production at the Gamsberg project from Mid Calendar Year 2018 (CY 2018).

During FY 2018, we have spent Rs, 5,306 Cr on Growth projects and it is likely to be higher around Rs, 9,700 Cr in FY 2019 primarily driven by higher capex at Oil & Gas.

Dividend

The Board of Directors approved the payment of 1st interim dividend @2120% of INR 21.20 per equity share of Rs, 1 each on March 13, 2018. In view of the record interim dividend declared in March, 2018, no final dividend is recommended.

The Board of Directors further approved a Dividend @7.5% p.a. on the Redeemable Non-Convertible Preference Shares (Preference Shares) of face value Rs, 10/- each as per the terms of issuance.

These preference shares were issued and allotted on April 28, 2017 pursuant to the Scheme of Arrangement between shareholders and creditors of Vedanta Limited and Cairn India Limited (“Scheme”) and the dividend was payable uptil the end of the Financial Year March 31, 2018.

Transfer to General Reserve

The Company proposes NIL transfer to General Reserve out of its total profit of Rs, 7256 Crore for the financial year.

Share Capital

The Authorized Share Capital of the Company is Rs, 74,12,01,00,000 divided into 44,020,100,000 (Four Thousand Four Hundred and Two Crores and One Lakh only) number of equity shares of Rs, 1/- (Rupee One) each and 3,010,000,000 (Three Hundred and One Crore) Preference Shares of Rs, 10/- (Rupees Ten) each.

Bidding under Insolvency and Bankruptcy Code 2016

Under the Insolvency and Bankruptcy Code 2016, the Reserve Bank of India (RBI) mandated banks to refer their defaulting customers/ NPA accounts to National Company Law Tribunal (NCLT). The companies referred to the NCLT for initiating insolvency proceedings, included few steel companies with significant production capacity.

Whilst globally, following two decades of significant steel expansion in China, global steel capacity is high, India remains a significant exception to this. Given India’s size of economy, population and existing steel capacity it is expected that the steel sector in India will grow rapidly over the coming few years. In view of this and the synergies from its Iron ore business, your Company bid for two of the steel assets up for auction. The companies under consideration own state of the art and technologically advanced steel plants. These acquisitions will provide your Company ready operating capacities instead of investing time and effort in a Greenfield project.

On March 31, 2018, your Company was declared as the successful resolution applicant by the Committee of Creditors for Electro steel Steels Limited (“ESL”) under the Corporate Insolvency Resolution Process of the Bankruptcy Code, and received a letter of intent from the Committee of Creditors. The Company has accepted the terms of the letter of intent and the closing of the transaction will be subject to compliance with applicable regulatory requirements and the final terms approved by the NCLT.

The Company’s other bid is for a steel asset in Gujarat, India. The auction process and evaluation of bids for this asset is on-going.

Credit Rating

Your Company is 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 changed the outlook on Company’s long-term bank facilities and its Non-Convertible Debentures (NCDs) programme to CRISIL AA / Positive Outlook from CRISIL AA / Stable. The Company has the highest short-term rating on its working capital and Commercial Paper programme at CRISIL A1 . The agency expects that the structural improvement in cost structure along with continued focus on deleveraging shall help improve the credit profile of your Company. The agency shall be guided by extent of gross debt and structural improvements in business driving the lower leverage levels for further positive rating action.

India Ratings changed the Company’s ratings on long-term scale to IND AA / Positive from IND AA / Negative during the year and short-term rating are maintained at IND A1 . The agency is monitoring the improvement in leverage along with ramp-up of operations to upgrade the ratings while resolving the outlook.

Sustainability

Your Company’s 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 catalyze 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 Company’s Sustainable Development Model. The model continues to be centered 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 Organization for Economic Cooperation and Development (OECD) promoted Multinational Guidelines.

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

The Vedanta Sustainability Assurance Programme (VSAP) has been the 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 your 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 behavioral 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 leaders at all levels, particularly those on the front line. Similarly, ‘Experience Based Quantification’ (EBQ) using Bow Tie Risk Assessment methodologies were utilized to identify critical risks from safety and environmental perspective for key businesses. In FY 2017-18, over 874,296 hours of safety training were delivered to employees and contractors.

After an encouraging COP21 conference in Paris, which resulted in more than 174 countries ratify the agreement, the global climate agenda continues to push ahead, despite the United States withdrawing from the agreement. India, which had set ambitious targets of reducing its carbon intensity by 33-35% by 2030 and to source 40% of its electric power from non-fossil fuel based sources, continues to move forward to meet those targets.

Our Company remains committed to decreasing its carbon footprint. Last year we stated our expectation to reduce our GHG intensity by 16% from a 2012 baseline by 2020. This expectation emerged from the Carbon Forum that was constituted to develop our carbon strategy and provide governance on the risk to business from climate change.

Our businesses have made significant progress on our GHG reduction commitment. Hindustan Zinc Limited and Oil & Gas business have committed to increase their investment in solar power, while other businesses have made significant improvements in their process efficiencies, thereby reducing their GHG intensity emissions. As of March 31, 2018, we had been able to achieve about 14% reduction in our GHG intensity from our baseline number. We are confident of achieving our target by 2020.

We are also committed to develop an internal carbon price mechanism to manage our climate related financial risk. We believe that climate resilience is the best approach we can take to safeguard our climate related business risks and we are committed to work with all our stakeholders in achieving this goal.

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. We remain committed to our agenda of “Zero Harm, Zero Waste, Zero Discharge”. This year we are able to recycle more than 90% of the fly ash that was generated at our power plants. Large volumes of our high-calorific hazardous wastes are also sent to the cement industry to be used as clinker fuel, thereby preventing them from being sent to secure landfills. This year, we have recycled 83% of our overall High Volume and Low Effect waste in sustainable applications and are continuing to develop new and innovative ways to increase the proportion of waste we recycle.

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’.

Our spend on our social investment and CSR programmes thereby reaffirm our commitment to ensuring the well-being of the communities who live in proximity to our operations.

Periodic meetings with Socially Responsible Investors (SRI) and lenders were undertaken and an update was provided in the Group Sustainability Committee meeting.

This year, we encountered strong opposition from the local community to our plant in Tuticorin. We are working with the communities as well as the regulatory bodies to arrive at a solution to the questions raised. We are committed to responsibly run our operations.

We remain positive that our overall sustainability journey is headed in the right direction. Our sustainability framework is robust and in line with global practices on engaging with civil society, communicating performance on community development, human rights as well as addressing legacy issues. We are confident that it will help us achieve higher levels of performance in the years to come.

A separate detailed report on Company’s Sustainability Development also forms part of the Annual Report.

Digitalization & Technology

The technology landscape is continuously changing at a rapid pace. This dynamic change creates an opportunity to adopt and develop competitive advantage. Adapting cutting edge technology to create incremental value is in Company’s DNA. The agility to inculcate technology as part of business has been demonstrated over the years in each sphere of business.

In the current environment, Company recognizes the need to develop a comprehensive digital strategy and drive transformational change across the organization that instills digital expertise in all facets of the business and creates value proposition for all its stakeholders.

In order to manage the complex digital transformations across business units, the Company has taken on board resources for the position of ‘Chief Digital Officer’ (CDO) in each of its key business unit. These resources have brought global expertise in digital transformation initiatives. This position is an integral part of the Business Executive Committee. These positions are part of the top thought leadership and shall have the critical responsibility for developing and implementing Company’s digital strategy.

Your Company is committed to adopt digital technology in the organization to make data driven decisions, to generate efficiencies, improve planning, lower risk, create safer working environments while unlocking more value from the resources.

The Company is also institutionalizing ‘new ways of working’ through these digital-led business transformation programmes including:

- Adopting agile approaches accelerating time to business value;

- Taking a more persona-centric and design-thinking led approach on new digital business solutions design;

- Driving a Minimum Viable Product (MVP) based approach in progressively industrializing digital business solutions;

- Re-skilling and cross-skilling teams for new age technologies and skills.

A series of measures have been put in place to drive the digital transformation across business units. Some of these key initiatives include:

- Use of Drones for Pipeline monitoring & Mining Stockpile Measurement;

- Digitalization of underground mining operations at HZL (SKM & RAUG);

- Integrated Operations thru Connected Assets at Oil & Gas;

- Big Data Analytics & Decision Support for Predictive Maintenance at Oil & Gas;

- Asset Optimization using Predictive Maintenance at Sterlite Copper;

- Smart Ore Digitalization Project at Gamsberg in Zinc International;

- Integrated Mine Operations Management System at Iron Ore;

- Asset Optimization using Machine Learning at Iron Ore;

- Coal Supply Chain Digitalization at Aluminum business, Jharsuguda.

The focus for FY2019 shall be scale up the transformation efforts and reap the benefits of technology adaption.

Corporate Social Responsibility

Your Company works towards a larger goal of creating enduring value for the communities it works in. Towards that end, we undertake various need based community programmes as part of our Corporate Social Responsibility (CSR). Putting the last as first being the top most priority, the Company has committed to align its CSR activities to the evolving and dynamic priorities of Nation and State besides local needs.

For almost all our programmes, a bottom up community engagement approach is a non-negotiable. This collaborative approach ensures community ownership, suitable project design, effective delivery and post-project sustainability. Apart from communities, we also strongly believe in partnering with government agencies, development organizations, corporates, civil society organizations & community based organizations to carry our durable and meaningful initiatives.

All our CSR programmes are governed by the Vedanta CSR Policy, the Technical Standard 19, and each entity specific Standard Operating Procedures for CSR. The documents are periodically revised. Further, in order to benefit from diverse perspectives, and in keeping with a culture of collective leadership, Vedanta has formed a CSR Council. The council comprises of business leaders and CSR executives from the different Business Units. The Council is responsible for governance, synergy and cross-learning across the Group CSR efforts. It meets every month and reviews the performance, spends and outcome of CSR programmes for all Business Units. The council is instrumental in implementing improvement projects to create a seamless enabling eco-system for Business Units to carry out best-in-class community development programmes.

We have a CSR Committee comprising majority of Independent Directors. The Committee provides strategic direction for CSR activities, and approves its plans and budgets. It also reviews the programmes and guides the CSR Teams towards running well-governed and impactful community programmes.

Brief Overview on Community Development Programmes for 2017-18 is as under:

1. Nand Ghar and Children’s Well-being Projects - The Nand Ghar Project is the company’s flagship national initiative, which aims to build new-age Anganwadis for ensuring the health and learning of young children in rural areas, and also as a platform for women’s empowerment and skilling. The Project ultimately aims to impact 85 million children and 20 million women across

1.37 million Anganwadis in the country. As on date, 101 Greenfield and 53 Brownfield Nand Ghars are operational across - states of the country. Construction is on-going at another 72 Greenfield and 200 Brownfield Nand Ghars.

Khushi is a Hindustan Zinc initiative, focusing on strengthening the functioning of the Integrated Child Development Services (ICDS) programme in 3089 Anganwadi centres of 5 Districts of Rajasthan. The programme is the largest such Public-Private-People initiative in the ICDS space covering 64,000 children in the age group of 3-6 years and aims to improve children’s attendance, retention, learning levels, health status and community engagement. Children’s attendance at these centres has gone up from 44% last year to 59% this year. A unique Anganwadi Grading Tool was developed and used to rate each one of the 3089 Anganwadis. 25,000 community meetings were held during the year, and community contributions equivalent to INR 5.43 million were mobilized.

2. Women’s empowerment - Vedanta is endeavouring to provide equal opportunities to women through multiple initiatives. Subhalaxmi Cooperative Society at Jharsuguda is one such flagship initiative of Vedanta Limited, Jharsuguda. Subhalaxmi, which started in 2008 with 10 women, has now emerged as one of the largest women’s cooperative in western Odisha with 3324 members and 280 Self Help Groups across 64 villages of 3 blocks of Jharsuguda. It started with INR 1000 as working capital and today it has accumulated corpus fund of more than INR 22 million with an average net profit of INR 6-7 lacs/annum. Loans of around INR 49.2 million were provided to women entrepreneurs for setting up their own micro enterprises in FY’18. Subhalaxmi now has a special fund called “UDYAMI FUND (Start-up Fund)” to support emerging & aspiring microentrepreneurs in Jharsuguda.

On similar lines, the Sakhi programme at HZL now has 1299 SHGs (Self-help groups) reaching to nearly 16,620 women. During the year, 9397 women took loans amounting to INR 79 million. The main purposes for which the loans were taken were household consumption, agriculture, health & sanitation, animal husbandry, including 280 women who used the loans to become entrepreneurs (either by setting up new or expanding existing enterprises).

3. Health Care - Health is another critical area of engagement for us, and we work to bring affordable healthcare within reach of our communities. Aarogya, a healthcare Initiative of the Company at Lanjigarh, is a commitment to improve the health status of less privileged community in Kalahandi region. Vedanta Hospital is a 20 bedded state of art medical facility well-equipped with doctors, physiotherapist and visiting specialists providing 24X7 ambulance service for referrals with a daily footfall of more than 150 patients. The hospital services are recognized for sickle cell detection, Rashtriya Bima Suraksha Yojana, Institutional delivery under Janani Suraksha Yojana, Cleft & Palate Surgery and Antenatal check-up under Pradhan Mantri Surakshit Matrutwa Abhiyan.

VMRF

Vedanta Medical Research Foundation (VMRF), a voluntary, non-profit organisation, has been initiated by Bharat Aluminium Company Limited, subsidiary company (BALCO), to contribute to the prevention, control and eradication of cancer and its related illnesses. VM RF’s first flagship initiative has been the establishment of ‘Balco Medical Centre’ - a 170-bed, state-of-the-art tertiary care oncology facility in Naya Raipur, in close proximity of our Aluminium plants at Korba, Lanjigarh and Jharsuguda. The proposed hospital envisages bringing modern, comprehensive and high quality medical care within the reach of the population of Central India in general and Chhattisgarh in particular.

Hospital at Kalahandi

With a commitment of ‘Giving back to Society’, Vedanta Limited has signed a Memorandum of Understanding (MoU) with Government of Odisha to establish a 500 bed hospital for Government Medical College at Bhawanipatna with an investment of '' 100 crores. The MoU was signed on March 27, 2018 at Odisha State Secretariat. The Hon’ble Chief Minister of Odisha congratulated Vedanta for coming forward to set up the hospital for Medical College and partner the Government in crucial areas of development for the people of Kalahandi.

4. Agriculture and Animal Husbandry - Given that most of our neighborhood communities still depend on agriculture and animal husbandry, we follow a livelihood development approach of integrating agriculture, dairy, water management, technology, farmer’s organizations and market outreach. Project Unnati, a Cairn CSR initiative, was set up to support the farmers of Barmer in enhancing their incomes through sustainable farming. As part of a MoU with Central Arid Zone Research Institute (CAZRI), Jodhpur - a unit of Indian Council for Agriculture Research (ICAR), 700 framers were trained in high tech farming techniques. This was supported by the installation of drips for 60,000 horticulture plants in 120 acres. As a result, this year, the farmers in Barmer have harvested over 60 tonnes of Ber, Gunda, and Anar.

5. Skilling the youth - Skill development is the need of the hour, and can have a huge impact on creating livelihoods opportunities for millions of families. Our aim is to channelize the untapped potential of youth and help them become employable in the growing economy. Vedanta IL&FS Institute of Skills at BALCO, Korba imparts ‘hands-on’ training to youth in five different trades - Industrial Stitching, Fitter Fabrication, Welding Assistant, Electrician and Hospitality. The Institute has provided assured placements to more than 6,700 students since operationalisation. Sterlite Copper’s Tamira Muthukkal project has provided skills training and employability to some 2,000 youth from the Thoothukudi district since its inception.

6. Environment protection & restoration - We understand the interdependency between our operations and the natural environment. As a natural resource company, our prime focus is on protecting and restoring nature. At Talwandi Sabo Power Limited, wholly owned subsidiary (TSPL), Mansa, Punjab, individual household level soak pits were constructed in partnership with MGNREGA and Gram Panchayat in 2 villages. Looking to the success of the project, Department of Rural Development, Punjab directed all 22 districts to replicate the same model on a pilot basis.

7. Sports & Culture - Sports and culture have the ability to attract and mobilize youth as well as foster stronger community bonding. Sesa Football Academy (SFA), an Iron Ore Business’s CSR initiative, was established in 1999 on a reclaimed mine at Sanquelim with a vision to become a premier academy in India. Until now, the Academy at Sanquelim has passed out 123 boys, some of whom have represented India internationally and many are pursuing their football career with major clubs. Seven alumni of SFA have played for the Indian national team and 8 are playing in the elite Indian Super League 2017-18 seasons. Taking forward the commitment and passion to nurture girl child through sports, SFA launched the ‘Vedanta Women’s Football League’ on November 6, 2017 with the support of Goa Football Association (GFA). Vedanta created history through this first of its kind league by providing women footballers a prominent platform to showcase their talent and skills. 137 women footballers hailing from all over Goa participated in this league through 6 teams and made it a grand success.

8. Community Infrastructure - While human development is the key, but infrastructure also plays an important role. Developing and maintaining social infrastructure are critical for rural development and over all nation building. Company is supporting operational villages in developing basic infrastructure in villages, such as school toilets, drinking water projects, sports infra, local drains, community centres etc. as per local needs.

During the year, the Company’s divisions spent INR 45.19 Crore on CSR activities, while on a consolidated basis it spent about INR 244.33 Crore on CSR.

A brief overview of CSR initiatives forms part of this 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 environmentally friendly manner; and to continuously work towards improving the quality of life of the communities in the areas where it operates.

The policy may be viewed here:

http://www.vedantalimited.com/media/85867/csr_policy_final.pdf Business Responsibility Report

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

Human Resources (HR)

Human resources play a significant role in your Company’s growth strategy. Your Company emphasized 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:

V - Perform:

One Performance System for One Vedanta

V-Perform is a pan-Vedanta initiative to standardize the Performance Management System (PMS) system and process across all Vedanta Group companies by leveraging technology. This would enable the functions, teams and individuals in tracking performance, generating analytics and taking proactive decisions towards achieving Company’s overall business plan and targets.

The online V-perform portal delivers a consistent user experience for all ~12k professionals across Vedanta, starting from goal setting to the quarterly / mid-year appraisal and finally the year-end assessment. In addition to this, the portal facilitates open dialogue and feedback discussion between the managers and the team members to ensure transparency and efficiency in all PMS related activities.

As a next step toward enhancing our Safety performance at workplace and achieving our ultimate vision of “Zero Harm”, Safety Competency Assessment process was initiated as part of V-Perform to strengthen our existing Safety Management System by means of training, skills, experience and knowledge that an employee’s possess and their ability to apply them to perform a task safely which will enable to mitigate the risk and ensure that employees are well organized and safe all the time at Workplace.

Leadership Development and Talent Management

Internal Growth Workshops: Vedanta has always aspired to design an organization which is led by our “Leaders from Within”. Identifying internal talent and elevating them to enhanced leadership roles has been the driving factor in our journey of rapid growth. In line with this philosophy, the Group conducts ‘Chairman’s Internal Growth Workshops’ through which we have identified 500 high potential New Leaders till date across various functions in the Group’s businesses who have taken up significantly elevated roles and responsibilities. Meeting Growth Aspirations of the employees and ensuring Internal Mobility of High Quality Talent has been the highlight of this endeavor. The New Leaders have been empowered through various key strategic initiatives across the Group and regular feedback sessions which have ensured they are in the right track of being the “Leaders of Tomorrow”. Our Internal Growth Workshops have also enabled us to reduce our lateral hiring significantly for critical roles across the Group in past two years.

‘V Connect’ Initiative: The V - Connect programme was launched across Vedanta Group as one of a kind anchoring/ mentoring programme covering all 12,000 professionals with regular talent stories and anchoring conversations across all the businesses. It was launched in association with AON and the key output from this initiative has been to derive enhanced engagement levels from the employees. This initiative has also ensured transparent communication of organizational growth vision and key priorities in our roadmap for being the best in class employer in the industry. To facilitate smooth functioning of the programme, a specialized app

- “Aon Lead” was introduced. The App allows participants to schedule their connects; get latest business updates from around the globe; access to articles and videos that focus on effective leadership, skill-building; and participate in quizzes/learning challenges. Till date, more than 5000 conversations have been completed for the employees across Vedanta.

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.

During the year, we focused on building and strengthening HSE function and technical capability in the organization. We hired around 28 technical experts across businesses which include 10 global HSE experts to head the HSE function at each of our businesses in India and Africa and these individuals bring onboard rich and diverse experience from their past global organizations like BHP, Rio Tinto, BP, Sheel, Chevron, GE, DuPont, Alcoa, Anglo etc.

Global Internship Programme (GIP)

The Programme was introduced in FY 2016-17 with the aim to hire bright students from premier global university. Vedanta attracts first year MBA students from premier B-schools with the aim to create lasting business value by bringing on board world class talent. The B-Schools include Harvard, Wharton, INSEAD & London Business School among the international campuses and the top three IIM’s-Ahmedabad, Bangalore & Calcutta among the national campuses.

The interns work with top management, especially the C-suite on real-time projects impacting business directly. They work in a fast-paced dynamic team environment, and finish the internship having gained broad experience in various aspects of the natural resources industry.

The programme would help us in the following ways:

1. The Young Talent will bring in fresh insights and global benchmark practices to our business.

2. Add value by driving projects which leverage their analytical skills.

3. This Young Talent can potentially become Brand Ambassadors for Vedanta globally and help in building our Employer Brand. Approximately 39 students have been a part of the programme:

Last year we also launched a similar programme for full time hires VLDP- Vedanta Leadership Development Programme. In VLDP our focus is to hire full time employees from the top management and technology institutes which include IIM Ahmedabad, Bangalore, Calcutta and IIT Bombay, Kharagpur, Madras. The aim of VLDP is to build organizational capability for the future by bringing on board best-in-class young talent from premier institutes and developing them to be the future Leaders of Vedanta by providing them with the right induction, roles, opportunities, job rotations and anchoring.

During the first year 19 students joined and in the second year 28 students will be joining us for the programme.

“Vedanta’s unprecedented growth over the years is owing to its entrepreneurial culture and strong focus on continuous benchmarking and innovation. As part of this continuous improvement journey, Manpower Analytics forms an integral piece in the strategic decision making to embark on the next level of growth. The recent study conducted by a reputed firm on Manpower Analytics brought out some interesting facts -

- Vedanta believes in growth from within and giving enhanced roles to the High potential employees within the organization thereby maintaining the Value Systems and Culture fabric intact. The Pay for performance Culture emerged clearly during the study as the Mid Layer in the organizational pyramid came out to be higher than benchmark owing to early career growth and higher responsibilities at relatively younger experience level.

- Although Executive Diversity at Vedanta is one of the leading in the industry, the company has taken stringent targets to further bridge the gap and move upto 33% at Board & 20% at the professional employee population level. When looked at providing avenues for growth and higher compensation, the study also showcased that Vedanta is an equal opportunity employer.

- The Benchmarking exercise of comparing to the Global Best in the industry we operate in highlighted improvement Potential in Manpower Productivity.

During the year, Company has received recognitions at Forums like CII, Golden Peacock, Ek Kaam Desh Ke Naam (NGO) in fields of HR excellence, HR Tech and HR Innovation. The Company is committed to provide equal opportunities to all its employees, irrespective of gender, nationality and background.

Your Company’s, Jharsuguda unit has received special recognition towards their Commitment to Engagement. Aon Hewitt has acknowledged the efforts your organization is putting in, to be an Employer of Choice and its continued efforts on your journey towards being a Best Employer.

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.

The information, as per Rule 5(2) of the Rules, forms part of this Report. However, as per provision of Section 136 of the Act and Rule 5(2), the Report and the Financial Statements are being sent to the Members of the Company excluding the statement of particulars of employees under Rule 5(2) of the Rules. The statement shall be available for inspection at the Company’s Registered Office and any Member interested in obtaining a copy of the said statement may write to the Company Secretary.

Employees Stock Option Plan

In order to motivate, incentivize and reward employees, your Company 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 Company performance vis a vis competition and also for achievement of internal operational metrics. The Scheme is currently administered through Vedanta Limited ESOS Trust (ESOS Trust) which is authorized 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 10,088,960 options were granted to 2806 employees including Whole Time Director and Key Managerial Personnel.

Pursuant to the provisions of SEBI (Share Based Employee Benefits), Regulations, 2014 (“Employee Benefits Regulations”), disclosure with respect to the ESOS Scheme of the Company as on March 31, 2018 is annexed as Annexure C 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 Employee Benefits Regulations and there have been no material 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.

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, a centralized database, a 24X7 whistle blower hotline and a web-based portal have been created to facilitate receipt of complaints. 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. All cases reported as part of whistle blower mechanism are taken to their logical conclusion within a reasonable timeframe. After the investigation, established cases are brought to the Group Ethics Committee for decision-making. 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 and 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 there under for prevention and redressal of complaints of sexual harassment at workplace.

As part of Vedanta Group, your 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 period under review, 11 complaints were received and resolved. Seven employees were separated on account of complaints. 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 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 SEBI. The Company has also implemented several best Corporate Governance practices as prevalent globally. The report on Corporate Governance as stipulated under the SEBI Listing Regulations forms an integral part of this Report

The requisite certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governance is attached to the report on Corporate Governance.

Internal Financial Controls

Your Board has devised systems, policies and procedures / frameworks, which are currently operational within your Company for ensuring the orderly and efficient conduct of its business, which includes adherence to policies, safeguarding its 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 an 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.

In addition, as part of their role, the Board and its Committees routinely monitor 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 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 SEBI 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 under review. There have been no significant changes in the Company’s internal financial controls during the year that have materially affected, or are reasonably likely to materially affect its internal financial controls.

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 of possible controls and procedures.

Further, the Audit Committee annually evaluates the internal financial controls for ensuring that the Company has implemented robust systems/ framework of internal financial controls viz. the policies and procedures adopted by the company for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information.

Risk Management

Your businesses are exposed to a variety of risks, which are inherent to a global mining and resources organization. The effective management of risk is critical to support the delivery of the Group’s strategic objectives. Risk management is embedded in the organization’s processes and the risk framework helps the organization meet its objectives by aligning operating controls with the mission and vision of the Group set by the Board.

As part of our governance philosophy, the Board has a Risk Management Committee to ensure a robust risk management system. 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 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, organizational 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 multi-layered 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.

For a detailed risk analysis, you may like to refer to the risk section in the Management Discussion Analysis Report which forms part of this Annual Report.

Management Discussion and Analysis

A detailed report on the Management Discussion and Analysis in terms of the provisions of Regulation 34 of the SEBI Listing Regulations is provided as a separate chapter in this Annual Report.

Significant & Material Orders passed by the Regulators or Courts or Tribunals

Provided below are the significant and material orders which have been passed by any regulators or courts or tribunals against the Company impacting the going concern status and Company’s operations in future:

1. Iron-Ore Division - Goa Operations

Supreme Court in the Goa Mining matter in 2014 declared that the deemed mining leases of the lessees in Goa expired on 22.11.1987 and the maximum of 20 years renewal period of the deemed mining leases in Goa under the MMDR Act had also expired on 22.11.2007 and directed state to grant fresh mining leases.

Thereafter, various mining leases were renewed by the state government before and on the date the MMDR Amendment Ordinance 2015 came into effect (i.e. January 12, 2015).

These renewal of mining leases were challenged before the SC by Goa Foundation and others in 2015 as being arbitrary and against the judgment of the SC in the earlier Goa mining matter. The Supreme Court passed the judgment in the matters on February 7, 2018 wherein it set aside the second renewal of the mining leases granted by the State of Goa. The court directed all lease holders operating under a second renewal to stop all mining operations with effect from March 16, 2018 until fresh mining leases (not fresh renewals or other renewals) in accordance with the provisions of the MMDR Act, 1957 and fresh environmental clearances are granted. For further course of action we are in the process of evaluation and are awaiting clarity from the government.

2. Copper Division

Copper division of Vedanta Limited has received an order from Tamil Nadu Pollution Control Board on 09.04.2018 whereby they have rejected the Company’s application for renewal of Consent to Operate (CTO) for the 400,000 Metric Tonnes Per Annum(MTPA) Copper Smelter plant in Tuticorin. In furtherance to the order of TNPCB rejecting the Company’s application, the Company decided to shut its Copper smelting operations at Tuticorin and has filed an appeal with TNPCB Appellate authority against the order. During the pendency of the appeal the TNPCB vide its order dated May 23, 2018 ordered disconnection of electricity supply and closure of the Company’s Copper Smelter plant. Post this the Govt of Tamil Nadu on May 28, 2018 ordered the permanent closure of the plant. The Company is taking all the necessary steps to restart its operations in Tuticorin.

In a separate proceeding, the Madurai Bench of the Madras High Court in a PIL filed against the company, has stated that the application for renewal for Environmental Clearance for Copper Smelter Plant 2 project, shall be processed after conduct of mandatory public hearing and the application shall be decided by the competent authority on or before September 23, 2018. In the interim, High Court ordered the company to cease construction and all other activities onsite for the proposed project. The company is taking all necessary steps to restart the project.

Board of Directors Appointment(s)

The Board on the recommendation of the Nomination & Remuneration Committee (NRC) at its meeting held on March 13, 2018, approved the appointment of Mr. UK Sinha (DIN: 00010336), as an Additional Non Executive Independent Director w.e.f. March

13, 2018 to August 10, 2021. The appointment is subject to the approval of the Members at the ensuing Annual General Meeting (AGM).

Mr. Sinha has served as the Chairman of SEBI from February 2011 to March 2017. He was instrumental in bringing about key capital market reforms. Under his leadership, SEBI introduced significant regulatory amendments to the various acts enhancing corporate governance and disclosure norms.

Mr. K. Venkataramanan and Mr. Aman Mehta were appointed as Independent Non Executive Directors w.e.f April 01, 2017 and May 17, 2017 respectively and Ms. Priya Agarwal was appointed as a Non Executive Director w.e.f. May 17, 2017. The said appointments were confirmed by the Members at the 52nd AGM on July 14, 2017.

Mr. Kuldip Kumar Kaura was appointed as an Interim CEO of the Company w.e.f September 01, 2017. In his over four decades of experience across engineering and mining roles, Mr. Kaura has served at senior levels in various reputable companies, including Vedanta Resources Plc as Chief Executive Officer, Managing Director at ABB, India and Managing Director and Chief Executive Officer of a cement major in India, ACC Limited (LafargeHolcim).

Re-appointment(s)

In accordance with the provisions of Act and the Articles of Association of the Company, Mr. GR Arun Kumar (DIN:01874769), Whole Time Director & CFO, is retiring by rotation and has offered himself for re-appointment.

Further, on the recommendation of the Nomination &

Remuneration and based on the performance evaluation, the Board through circular resolution dated January 20, 2018 reappointed Mr. Ravi Kant & Ms. Lalita D Gupte as Independent Directors for a second and final term from January 29, 2018 till August 10, 2021. The reappointment is subject to the shareholder’s approval at the forthcoming AGM.

The Board on the recommendation of the NRC reappointed Mr. Tarun Jain as the Company’s Whole Time Director for a further period from April 01, 2018 till March 31, 2019. The appointment is subject to the shareholder’s approval.

Brief profiles of Mr. UK Sinha, Mr. Ravi Kant, Ms. Lalita D Gupte,

Mr. Tarun Jain and Mr. GR Arun Kumar along with the disclosures required pursuant to SEBI Listing Regulations and the Act are given in the Notice of the AGM.

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

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

Cessation(s)

We express our profound grief and sorrow over the sad demise of Mr. Naresh Chandra on July 09, 2017 who served as an Independent Director of your Company. Mr. Chandra was a statesman and a visionary, and was instrumental in the industrial reforms and progressive policies. The Board places its deep sympathy and condolences to his family.

Mr. Thomas Albanese superannuated as the Whole Time Director and CEO of the Company w.e.f. August 31, 2017.

The Board places on record its appreciation for the valuable services and significant contribution rendered by Mr. Albanese during his tenure.

The details of training and familiarization programmes and Annual Board Evaluation process for Directors have been provided under the Corporate Governance Report.

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 and other employees forms part of Corporate Governance Report of this Annual Report.

Key Managerial Personnel

The following Directors/Executives are KMPs of the Company during Fiscal 2018:

Mr. Navin Agarwal, Executive Chairman Mr. Tarun Jain, Whole Time Director

Mr. GR Arun Kumar, Whole Time Director & Chief Financial Officer Ms. Bhumika Sood, Company Secretary & Compliance Officer

Number of Board Meetings

The Board of Directors met nine times during the year. The details of Board Meetings are laid out in Corporate Governance report, which forms a part of this annual report.

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 SEBI Listing Regulations. As on March 31, 2018, the Audit Committee of the Board comprises of four (4) Non-Executive Directors all of whom are Independent. The Chairperson of the Audit Committee is a Non-Executive Independent Director.

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

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. M/s S.R. Batliboi & Co. LLP have confirmed their independence and eligibility under the provisions of the Act & SEBI 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 of your Company 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 '' 5,00,000 p.a and '' 14,00,000/-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 Secretarial Audit of the Company for FY 2018. The Report of the Secretarial Audit in Form MR-3 is annexed herewith as Annexure D. The Secretarial Audit Report does not contain any qualifications, reservation, adverse remarks or disclaimer.

Subsidiaries/Joint Ventures/Associate Companies

The Company has 52 subsidiaries (15 direct and 37 indirect) as at March 31, 2018, as disclosed in the accounts.

During the year and till date the following changes have taken place in subsidiary companies:

Subsidiary companies formed/acquired:

- Avanstrate (Japan) Inc. (ASI) acquired on December 28, 2017

- Avanstrate (Korea) Inc. acquired on December 28, 2017

- Avanstrate (Taiwan) Inc. acquired on December 28, 2017

- Vedanta Star Limited incorporated on April 23, 2018

As at March 31, 2018, the Company has 5 associate companies and joint ventures.

Associate Companies and Joint Ventures:

- RoshSkor Township (Pty) Ltd

- Gaurav Overseas Private Limited

- Goa Maritime Private Limited

- Madanpur South Coal Company Limited

- Rampia Coal Mines and Energy Private Limited

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 (Please refer to Notes to the standalone financial statement).

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

Transfer of Unpaid and Unclaimed amounts to Investor Education and Protection Fund (IEPF)

The Company sends letters to all shareholders, whose dividends are unclaimed so as to ensure that they receive their rightful dues.

During the year, the Company has transferred a sum of '' 1,49,03,948/- to Investor Education & Protection Fund (IEPF), the amount which was due & payable and remained unclaimed and unpaid for a period of seven (7) years as provided in Section 125 of the Act and the rules made thereunder. Despite the reminder letters sent to each shareholder, this amount remained unclaimed and hence was transferred.

In accordance with the provisions of the Section 124(6) of the Act and Rule 6(3)(a) of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, (IEPF Rules), the Company is required to Transfer 10,60,879 equity shares of Re.1 each held by 986 shareholders to IEPF. The said shares correspond to the dividend which has remained unclaimed for a period of seven consecutive years from the financial year 2009-10. The equity shares wherein, disputes are pending and Court Order(s) are Nil. All the remaining shares, as mentioned above, have been transferred to IEPF. Subsequent to the transfer, the concerned shareholders can claim the said shares along with the dividend(s) from IEPF in accordance with the prescribed procedure and on submission of such documents as prescribed under the IEPF Rules.

The Company has already sent a specific communication to the concerned shareholders at their address registered with the Company and also published notice in The Free Press Journal and Navshakti providing the details of the shares due for transfer and to enable shareholders to take appropriate action.

Fixed Deposits

As reported last year, the Company has discontinued the renewal of its fixed deposits on maturity. As at March 31, 2018, all fixed deposits had matured, while deposits amounting to '' 54,000 remained unclaimed. Since the matter is sub judice, the Company is maintaining status quo.

Extract of Annual Return

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

Related Party Transactions

In line with the requirements of the Act and SEBI Listing Regulations, your Company has formulated a Policy on Related Party Transaction (RPT) which is also available on 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 SEBI Listing Regulations.

During the Fiscal 2018, there have been no materially significant RPTs between the Company and Directors, management, subsidiaries or relatives, as defined under Section 188 of the Act and Regulations 23 the SEBI 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 & Commitment affecting the Financial Position of the Company

There are no material changes affecting the financial position of the Company subsequent to the close of the Fiscal 2018 till the date of this Report.

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’

The details of the Foreign Exchange Earnings and Outgo are as follows:

(Rs, Crore s)

Year Ended

Year Ended

31 March,

31 March,

Particulars

2018

2017

Expenditure in foreign currency

1,551

1,282

Earnings in foreign currency

28,394

21,138

CIF Value of Imports

28,900

19,322

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. your 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., 31 March, 2018 and of the profit and loss of the Company for that period;

c. your Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the Company’s assets and for preventing and detecting fraud and other irregularities;

d. your Directors have prepared the annual accounts on a going concern basis;

e. your 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. your 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 leader.

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 the Government of India, 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

Place: Mumbai Navin Agarwal

Dated: May 03, 2018 Executive Chairman


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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