Vedanta : Integrated Report and Annual Accounts 2020-21

ResourcingResponsiblyI dia's rise

CONTENTS

Integrated Report

see pages 02-163

Statutory Financial

Reports Statements

see pages 164-265

see pages 266-499

India is a land of abundant resources. Resources that help our economy grow, and create sustainable livelihoods for millions of people. At Vedanta, we continue to foster long life, structurally low cost and diverse assets with excellent potential, which drive our growth ambitions. Our investments in smarter processes, industry-leading efficiencies, empowerment of

our people, and strong corporate

ABOUT VEDANTA LIMITED

governance help us address the nation's growing needs for metals and minerals.

Our strategic decisions are supported by robust cashflows, disciplined capital allocation and emphasis on sustainability in everything we do. With a resilient and responsible business model, we are ideally positioned to partner India's journey towards greater self-reliance.

1. Integrated thinking at Vedanta
2. Highlights FY2021

INTRODUCTION

1. Vedanta at a Glance

1. Asset Overview

1. Investment case

1. Chairman's statement

1. CEO's statement

1. Key performance indicators

1. Case studies

VALUE CREATION

AND STRATEGY

164	Directors' report	266 Standalone financials
214	Report on Corporate	372 Consolidated financials
	Governance

Read more online

at vedantalimited.com

Vedanta Limited (VEDL), a subsidiary of Vedanta Resources Limited is one of the world's leading natural resources companies with interests in zinc-lead-silver, oil & gas, aluminium, power, iron ore, steel and copper, operating across India, South Africa and Australia. We believe that large-scale environment conservation and community empowerment make our business intrinsically strong and future ready.

VEDL REPORTING SUITE

1. Value creation model

1. Our strategic framework

1. Opportunity landscape

1. Risk Management

OUR BOARD

AND MANAGEMENT

62 Board of Directors

1. Management Committee

1. Executive Committee

SUSTAINABILITY AND ESG

76 Sustainability, Environmental, Social and People

98 Governance

Marching ahead	Powering the wheels
and contributing to	of the automotive
aatmanirbhar bharat	industry
see pages 28	see pages 30

Vedanta Limited Sustainability Report (SR) 2019-20

Information coverage: Disclosures on triple bottom line performance

Standards/guidelines used: Global Reporting Initiative (GRI) Standards

Vedanta Limited Tax Transparency Report (TTR) 2019-20

Information coverage: Voluntary disclosure of profits made and taxes paid (only Indian Company to publish a TTR)

Standards/guidelines used: Indian Accounting Standards (Ind AS)

Vedanta Limited	Vedanta Limited TCFD
Integrated Report (IR)	Report 2020
and Annual Accounts
2019-20
Information coverage:	Information coverage:
Holistic disclosure of	Climate-related financial
performance and strategy	disclosures
Standards/guidelines used:	Standards/guidelines
International; Integrated	used: Approach to
Reporting Framework,	climate action, climate
Indian Accounting	strategy and climate risk
management
Standards (Ind AS), Indian
Secretarial Standards

100 Business Responsibility Report Mapping

108 Awards

MANAGEMENT DISCUSSION AND ANALYSIS

1. Market Review

1. Segment Review

1. Finance Review

1. Operational Review

Taking digital	Cairn pushesthe
transformation to	digital envelope
the next level	farther
see pages 32	see pages 34

ABOUT THE REPORT

< BACK TO CONTENTS			Statutory reports	Financial statements
Integrated Report

INTEGRATED THINKING AT VEDANTA

Inspired by our values, we remain committed to disclosing relevant information pertaining to our material issues, with highest standards of transparency and integrity. It is towards this end that we continue to communicate our annual performance and future strategy through Integrated Reporting . This is our fourth such report, prepared in accordance with the International Integrated Reporting Framework, outlined by the International Integrated Reporting Council (IIRC).Our journey commenced in FY2018 and we were one of the very first natural resources companies in India to publish an integrated report. These reports are prepared to assist our stakeholders, primarily the providers of financial capital, to make an informed assessment of our ability to create value over the short, medium and long term. They strive to demonstrate our confidence, capacity to grow and our ability to deliver on set strategies that can drive significant financial and non-financial value for everyone.

SCOPE AND BOUNDARY

This report covers the reporting period from 1 Apr 2020 to 31 Mar 2021 and provides 360o information on Vedanta Limited (Vedanta, VEDL), a subsidiary of Vedanta Resources limited.

It provides an overview of operations across our business units, namely, zinc-lead-silver, oil & gas, aluminium, power, iron ore, steel

and copper. Our assets are spread across India, South Africa and Namibia, and across the value chain comprising exploration, asset development, extraction, processing and value accretion activities.

This report aims to provide a concise explanation of VEDL's performance, strategy, operating model, business outputs and outcomes using a multi- capital approach. It includes measures of engagement with identified material stakeholder groups and outlines the organisation's governance framework, together with our risk-mitigation strategy.

APPROACH TO MATERIALITY

This report contains information that we believe is of interest to our stakeholders and presents a discussion around matters that can impact our ability to create value over the short, medium and long term.

APPROACH TO STAKEHOLDER ENGAGEMENT

Our stakeholders are those individuals or organisations who have an interest in, and/or whose actions impact our ability to execute our strategy. We periodically engage with different stakeholder groups and actively respond to their concerns and issues.

ANNUAL ACCOUNTS

This report should be read in conjunction with the annual accounts (page 266 to

499) to gain a complete picture of VEDL's financial performance. The consolidated and standalone financial statements in our report have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 (as amended from time to time) and have been independently audited by S.R. Batliboi & Co. LLP. The Independent Auditors' Report for both consolidated and standalone financials can be found on page 266 and 373 respectively.

BOARD AND MANAGEMENT

ASSURANCE

The Board of Directors and the Company's management acknowledge their responsibility to ensure the integrity of information covered in this report. They believe, to the best of their knowledge, that this report addresses all material issues and presents the integrated performance of VEDL and its impact in a fair and accurate manner. The report has therefore been authorised for release on 13 May 2021.

At Vedanta, we are led by an integrated thought process that powers our decision-making and enables our consistent market success.

We are

Mission

Values

To create a leading global natural

Trust | Entrepreneurship | Innovation |

led by

resource Company

Excellence | Integrity | Care | Respect

Capitals

Building

Financial

Natural

Intellectual

Manufactured

Social and

Human

on

capital

capital

capital

capital

relationship

capital

38

capital

Material issues

Focusing

M1

M2

M3

M4

M5

M6

M7

M8

M9

M10

M11

M12

M13

on

77

M

Material issue

Strategic focus

Enabled

Continue

Augment our

Operational

Optimise capital

Delivering

world-class ESG

resource base

excellence

maintain strong

opportunities

by

to focus on

reserves and

allocation and

on growth

performance

balance sheet

40

Top risks

Megatrends and opportunities

With a

R1

R2

R3

R4

R5

R6

R7

T1

T2

T3

T4

T5

constant

R8

R9

R10

R11

R12

R13

T6

T7

T8

T9

T10

eye on

50

R

Risk

46

T

Trend

Creating

investors and lenders

communities

For employees

For shareholders,

For local

consistent

value

For industry

For governments

For civil societies

02

VEDANTA LIMITED | INTEGRATED REPORT AND ANNUAL ACCOUNTS 2020-21 |

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HIGHLIGHTS FY2021

< BACK TO CONTENTS			Statutory reports	Financial statements
Integrated Report

Financial	`27,341crore	36%
`86,863crore
Revenue	EBITDA	EBITDA Margin
4%	30%
`12,151crore	`13,821 crore	`57,028crore
Profit Attributable to equity	FCF post-capex	Gross Debt
holders (before exceptional items)	`24,414 crore	~19%
`32,614crore
Cash and Cash Equivalents	Net Debt	ROCE
AA-	~`34,500 crore	0.9x
Credit ratings with stable outlook,	Contribution to the exchequer	Net Debt/EBITDA
CRISIL and India Ratings

Operational

ALUMINIUM

1,969 kt

Highest ever aluminium production

1,841 kt

Highest ever alumina production from Lanjigarh refinery

2% y-o-y

US$1,347 per tonne

Lowest ever hot metal

POWER

Lowest ever APC of 7.19% at the

1,980 MW

TSPL plant in FY2021

Sustained operations with zero import coal in FY2021 through coal substitution scheme of GoI

Operational

ZINC INDIA

15.5 million tonnes

ZINC INTERNATIONAL

US$1,307 per tonne

cost of production

20% y-o-y

IRON ORE

STEEL

Highest ever ore production

972 kt	930 kt
Highest ever mined	Refined zinc-lead
metal production	production
6% y-o-y	7% y-o-y

OIL & GAS

162 kboepd

Average gross operated production

6% y-o-y

Capex growth projects update:
74 wells	~11 kboepd
Hooked up	Incremental volumes;
during FY2021	post completion of Ravva
	drilling programme

04

Cost of production

22% y-o-y

145 kt

production volume

in Gamsberg (FY2020: 108 kt)

0.7 million tonnes per annum

Potential production capacity of the new product line of recovering magnetite through its tailings in BMM

5 million tonnes

Production of saleable ore at Karnataka

15% y-o-y

2.1 million tonnes

Iron ore sales in Goa

US$104 per tonne

Highest ever EBIDTA

Margin for VABs

Goa operations remain suspended during the year due to state-wide directive from the Hon'ble Supreme Court; continuous engagement with stakeholders for a resumption of mining operations is

in progress

1.19 million tonnes

Annual steel production

US$131 per tonne

Robust margin during the last quarter (~22% EBITDA margin)

COPPER INDIA

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

VEDANTA LIMITED | INTEGRATED REPORT AND ANNUAL ACCOUNTS 2020-21 |

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< BACK TO CONTENTS

VEDANTA

AT A GLANCE

Vedanta Limited is one of the world's foremost natural resources conglomerates, with primary interests in zinc-lead-silver, iron ore, steel, copper, aluminium, power, oil and gas. With world-class,low-cost,long-life strategic assets based in India and Africa, we are rightly positioned to create long-term value with superior cash flows.

70,000+	Largest	Ranked #2	2,300+	~13.6million	~`2,74,000 crore
Direct and indirect	Natural resources	By DJSI in Asia Pacific in	Nand Ghars created	tCO2e in avoided emissions	Total contribution to the national
employment	company in India	the metal & mining sector	for social welfare	from 2012 baseline	exchequer in the past 10 years

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VEDANTA LIMITED | INTEGRATED REPORT AND ANNUAL ACCOUNTS 2020-21 |

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