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Vedanta Ltd.

BSE: 500295 Sector: Metals & Mining
NSE: VEDL ISIN Code: INE205A01025
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OPEN 278.00
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VOLUME 512820
52-Week high 440.75
52-Week low 206.10
P/E 6.60
Mkt Cap.(Rs cr) 103,747
Buy Price 0.00
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Sell Price 0.00
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OPEN 278.00
CLOSE 268.30
VOLUME 512820
52-Week high 440.75
52-Week low 206.10
P/E 6.60
Mkt Cap.(Rs cr) 103,747
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Vedanta Ltd. (VEDL) - Auditors Report

Company auditors report

To the Members of Vedanta Limited

Report on the Audit of the Standalone Ind AS Financial Statements

Opinion

We have audited the accompanying standalone Ind AS financial statementsof Vedanta Limited ("the Company") which comprise the Balance sheet as at March31 2022 the Statement of Profit and Loss including the statement of Other ComprehensiveIncome the Cash Flow Statement and the Statement of Changes in Eguity for the year thenended and notes to the standalone Ind AS financial statements including a summary ofsignificant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone Ind AS financial statements give theinformation reguired by the Companies Act 2013 as amended ("the Act") in themanner so reguired and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 2022 its profit including other comprehensive income its cash flows and the changesin eguity for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone Ind AS financial statements inaccordance with the Standards on Auditing (SAs) as specified under Section 143(10) oftheAct.

Our responsibilities under those Standards are further described in theAuditor's Responsibilities for the Audit of the Standalone Ind AS Financial Statements'section of our report. We are independent of the Company in accordance with the 'Code ofEthics' issued by the Institute of Chartered Accountants of India together with theethical reguirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these reguirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our audit opinion on the standalone Ind AS financial statements.

Emphasis of Matter

We draw attention to Note 3(c)(A)(iv) of the accompanying standaloneInd AS financial statements which describes the uncertainty arising out of the demandsthat have been raised on the Company with respect to government's share of profit oil bythe Director General of Flydrocarbons and one of the pre-conditions for the extension ofthe Production Sharing Contract (PSC) for the Rajasthan oil block is the settlement ofthese demands. While the Government has granted permission to the Company to continueoperations in the block till May 14 2022 or signing of the PSC addendum whichever isearlier the Company based on external legal advice believes it is in compliance withthe necessary conditions to secure an extension of this PSC and that the demands areuntenable and hence no provision is reguired in respect of these demands. Our opinion isnot modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that in our professionaljudgement were of most significance in our audit of the standalone Ind AS financialstatements for the financial year ended 31 March 2022. These matters were addressed in thecontext of our audit of the standalone Ind AS financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.For each matter below our description of how our audit addressed the matter is providedin that context.

We have determined the matters described below to be the key auditmatters to be communicated in our report.

We have fulfilled the responsibilities described in the Auditor'sresponsibilities for the audit of the standalone Ind AS financial statements section ofour report including in relation to these matters. Accordingly our audit included theperformance of procedures designed to respond to our assessment of the risks of materialmisstatement of the standalone Ind AS financial statements. The results of our auditprocedures including the procedures performed to address the matters below provide thebasis for our audit opinion on the accompanying standalone Ind AS financial statements.

Key audit matters How our audit addressed the key audit matter
Accounting and disclosure of transactions with the parent company and its affiliates (as described in note 39 of the standalone Ind AS financial statements)
The Company has undertaken transactions with Vedanta Resources Limited ('VRL') its parent company and its affiliates pertaining to payment of brand and management fee; and obtaining guarantees and payment of commission in consideration thereof. Accounting and disclosure of such related party transactions has been identified as a key audit matter due to: Our procedures included the following:
• Significance of such related party transactions; • Obtained and read the Company's policies processes and procedures in respect of identification of such related parties obtaining approval recording and disclosure of related party transactions and identified key controls. For selected controls we have performed tests of controls.
• Risk of such transactions being executed without proper authorisations; • Tested such related party transactions and balances with the underlying contracts confirmation letters and other supporting documents.
• Risk of material information relating to such transactions not getting disclosed in the financial statements • Held discussions and obtained representations from the management in relation to such transactions.
• Examined the approvals of the board and/or audit committee for entering into these transactions.
• Read the disclosures made in this regard in the financial statements and assessing whether the relevant and material information have been disclosed.
Recoverability of carrying value of property plant and equipment capital work-in-progress exploration intangible assets under development and investments being carried at cost (as described in note 3(a)(F) 3(c)(A)(i) (iii) and (vi) of the standalone Ind AS financial statements)
As at March 31 2022 the Company had significant amounts of property plant and equipment capital work-in-progress exploration intangible assets under development and investments being carried at cost. We focused our efforts on the Cash Generating Unit ("CGU") at (a) Tuticorin within the copper segment; and (b) Krishna Godavari block and the Rajasthan block within the oil & gas segment; as it had impairment/impairment reversal indicators. Our audit procedures included the following:
Recoverability of property plant and equipment capital work-in-progress exploration intangible assets and investment being carried at cost has been identified as a key audit matter due to: • Obtained and read the Company's policies processes and procedures in respect of identification of impairment indicators recording and disclosure of impairment charge/ (reversal) and identified key controls. For selected controls we have performed tests of controls.
• The significance of the carrying value of assets being assessed. • Assessed through an analysis of internal and external factors impacting the Company whether there were any indicators of impairment in line with Ind AS 36.
• The withdrawal of the Company's licenses to operate the copper plant. • In relation to the CGU at (a) Tuticorin within the copper segment; and (b) Krishna Godavari block and the Rajasthan block within the oil & gas segment where impairment indicators were identified obtained and evaluated the valuation models used to determine the recoverable amount by assessing the key assumptions used by management which included:
• The upward revision to brent oil assumptions up to 2030 due to increased demand. - Assessed management's forecasting accuracy by comparing prior year forecasts to actual results and assessed the potential impact of any variances.
• Changes in production forecasts due to adjustments in the future reserve estimates - Corroborated the sales price assumptions used in the models against analyst consensus and assessing the reasonableness of costs.
• The fact that the assessment of the recoverable amount of the Company's CGUs and investments involves significant judgements about the future cash flow forecasts start date of the plant and the discount rate that is applied. - Assessed Company's reserves and resources estimation methods and policies and reading reports provided by management's external reserves experts and assessed the scope of work and findings of these third parties;
The key judgements and estimates centered on the likely outcome of the litigations cash flow forecasts and discount rate assumptions. Details of impairment reversal amounting to Rs 1370 crore recognised are given in note 34 of the accompanying financial statements. - Assessed the competence capability and objectivity of Company's external reserve experts; through understanding their relevant professional qualifications and experience.
- Compared the production forecasts used in the impairment tests with management's approved reserves and resources estimates.
- Tested the weighted average cost of capital used to discount the impairment models.
- Tested the integrity of the models together with their clerical accuracy.
- Assessed the implications of withdrawal of Company's license to operate the copper plants. Inspected the external legal opinions in respect of the merits of the case and assessed management's position through discussions with the legal counsel to determine the basis of their conclusion.
- Assessed the implications and likelihood of the possible outcome of the conditions precedent to the extension of the Rajasthan oil block and management's analysis of the same including an assessment of how a market participant would react to the same.
- Engaged valuation experts to assist in performance of the above procedures.
• Assessed the competence and objectivity of the experts engaged by us.
• Assessed the disclosures made by the Company in this regard.
Recoverability of disputed trade receivables in Dower seament (as described in note 3(c)(B)(ii) and 7 of the standalone Ind AS financial statements)
As of March 31 2022 the value of disputed receivables in the power segment aggregated to Rs 1293. Our audit procedures included the following:-
Due to disagreements over the quantification or timing of the receivable the recovery of receivables from GRIDCO are subject to increased risk. Some of these balances are also subject to litigation. The risk is specifically related to receivables from GRIDCO. These receivables include long outstanding balances as well and are also subject to counter party credit risk and hence considered as a key audit matter. • Examined the underlying power purchase agreements.
• Examined the relevant state regulatory commission appellate tribunal and court rulings.
• Examined external legal opinions in respect of the merits of the case and assessed management's position through discussions with the management's in-house legal team to determine the basis of their conclusion.
• Examined management's assessment of recoverability of receivables.
• Obtained independent external lawyer confirmation from Legal Counsel representing the Company in these cases.
• Assessed the competence and objectivity of the Company's experts.
• Assessed the disclosures made by the Company in this regard.
Claims and exposures relating to taxation and litigation (as described in note 3(c)(A)(iv) 3(c)(B)(i) 38D and 45 of the standalone Ind AS financial statements)
The Company is subject to a large number of tax and legal disputes including objections raised by the auditors appointed by the Director in the oil and gas segment which have been disclosed/provided for in the financial statements based on the facts and circumstances of each case. Our audit procedures included the following: -
Taxation and litigation exposures have been identified as a key audit matter due to the complexities involved in these matters timescales involved for resolution and the potential financial impact of these on the financial statements. Further significant management judgement is involved in assessing the exposure of each case and thus a risk that such cases may not be adequately provided for or disclosed. • Obtained an understanding of the process of identification of claims litigations and contingent liabilities and identified key controls in the process. For selected controls we have performed tests of controls.
• Obtained the summary of Company's legal and tax cases and assessed management's position through discussions with the Legal Counsel Head of Tax and operational management on both the probability of success in significant cases and the magnitude of any potential loss.
• Examined external legal opinions (where considered necessary) and other evidence to corroborate management's assessment of the risk profile in respect of legal claims.
• Assessed the competence and objectivity of the Company's experts
• Engaged tax specialists to technically appraise the tax positions taken by management with respect to local tax issues.
• Assessed whether management assessment of similar cases is consistent across the divisions or that differences in positions are adequately justified.
• Assessed the relevant disclosures made within the financial statements to address whether they reflect the facts and circumstances of the respective tax and legal exposures and the requirements of relevant accounting standards.
Recoverability of unutilised Minimum Alternate Tax (MAT) credits included under deferred tax assets (as described in note 3(c)(A)(ii) and 35 of the standalone Ind AS financial statements)
Deferred tax assets as at March 31 2022 includes MAT credits of Rs 4839 crore relating to the Company which is available for utilisation against future tax liabilities. Out of the same Rs 208 crore is expected to be utilised in the fourteenth year fifteen years being the maximum permissible time period to utilise the same. Our audit procedures included the following:-
The analysis of the recoverability of such deferred tax assets has been identified as a key audit matter because the assessment process involves judgement regarding the future profitability and the likelihood of the realization of these assets in particular whether there will be taxable profits in future periods that support the recognition of these assets. This requires assumptions regarding future profitability which is inherently uncertain. • Obtained an understanding of the management's process for estimating the recoverability of the deferred tax assets and identified key controls in the process. For selected controls we have performed tests of controls.
• Obtained and analysed the future projections of taxable profits estimated by management assessed key assumptions used including the analysis of the consistency of the actual results obtained by the various segments with those projected in the previous year. We further obtained evidence of the approval of the budgeted results included in the current year's projections and the reasonableness of the future cash flow projections.
• Tested the computation of the MAT credits recognized as deferred tax assets.
• Assessed the disclosures made by the management in this regard.

The other information comprises the information included in the Annualreport but does not include the standalone Ind AS financial statements and our auditor'sreport thereon.

Our opinion on the standalone Ind AS financial statements does notcover the other information and we do not express any form of assurance conclusionthereon.

In connection with our audit of the standalone Ind AS financialstatements our responsibility is to read the other information and in doing so considerwhether such other information is materially inconsistent with the financial statements orour knowledge obtained in the audit or otherwise appears to be materially misstated. Ifbased on the work we have performed we conclude that there is a material misstatement ofthis other information we are reguired to report that fact. We have nothing to report inthis regard.

Responsibilities of Management and Those Charged with Governance forthe Standalone Ind AS Financial Statements

The Company's Board of Directors is responsible for the matters statedin Section 134(5) of the Act with respect to the preparation of these standalone Ind ASfinancial statements that give a true and fair view of the financial position financialperformance including other comprehensive income cash flows and changes in eguity of theCompany in accordance with the accounting principles generally accepted in Indiaincluding the Indian Accounting Standards (Ind AS) specified under Section 133 of the Actread with the Companies (Indian Accounting Standards) Rules 2015 as amended. Thisresponsibility also includes maintenance of adeguate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgements and estimates that are reasonable and prudent; andthe design implementation and maintenance of adeguate internal financial controls thatwere operating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone Ind AS financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the standalone Ind AS financial statements management isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liguidate the Company or to ceaseoperations or has no realistic alternative but to do so.

Those Charged with Governance are also responsible for overseeing theCompany's financial reporting process.

Auditor's Responsibilities for the Audit of the Standalone Ind ASFinancial Statements

Our objectives are to obtain reasonable assurance about whether thestandalone Ind AS financial statements as a whole are free from material misstatementwhether due to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone Ind AS financialstatements.

As part of an audit in accordance with SAs we exercise professionaljudgement and maintain professional Skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of thestandalone Ind AS financial statements whether due to fraud or error design and performaudit procedures responsive to those risks and obtain audit evidence that is sufficientand appropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

• Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. UnderSection 143(3)

(i) of the Act we are also responsible for expressing our opinion onwhether the Company has adeguate internal financial controls with reference to financialstatements in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are reguired to draw attention in our auditor's report to therelated disclosures in the financial statements or if such disclosures are inadeguate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause the Companyto cease to continue as a going concern.

• Evaluate the overall presentation structure and content of thestandalone Ind AS financial statements including the disclosures and whether thestandalone Ind AS financial statements represent the underlying transactions and events ina manner that achieves fair presentation.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical reguirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalone IndAS financial statements for the financial year ended March 31 2022 and are therefore thekey audit matters. We describe these matters in our auditor's report unless law orregulation precludes public disclosure about the matter or when in extremely rarecircumstances we determine that a matter should not be communicated in our report becausethe adverse conseguences of doing so would reasonably be expected to outweigh the publicinterest benefits of such communication.

Other Matter

We did not audit the financial statements and other financialinformation in respect of an unincorporated joint venture not operated by the Companywhose Ind AS financial statements include total assets of T99 crore as at 31 March 2022.These financial statements and other financial information of the said unincorporatedjoint venture not operated by the Company have not been audited by other auditors andsuch unaudited financial statements and other unaudited financial information have beenfurnished to us by the management and our report on the Ind AS financial statements of theCompany in so far as it relates to the amounts and disclosures included in respect of thesaid unincorporated joint venture is based solely on such unaudited information furnishedto us by the management.. In our opinion and according to the information and explanationsgiven to us by the Management these financial statements and other financial informationof joint venture is not material to the Company. Our opinion is not modified in respectof this matter.

Report on Other Legal and Regulatory Requirements

1. As reguired by the Companies (Auditor's Report) Order 2020("the Order") issued by the Central Government of India in terms of sub-section(11) of Section 143 of the Act we give in the "Annexure 1" a statement on thematters specified in paragraphs 3 and 4 of the Order.

2. As reguired by Section 143(3) of the Act we report that:

(a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit;

(b) In our opinion proper books of account as reguired by law havebeen kept by the Company so far as it appears from our examination of those books;

(c) The Balance Sheet the Statement of Profit and Loss including theStatement of Other Comprehensive Income the Cash Flow Statement and Statement of Changesin Eguity dealt with by this Report are in agreement with the books of account;

(d) In our opinion the aforesaid standalone Ind AS financialstatements comply with the Accounting Standards specified under Section 133 of the Actread with Companies (Indian Accounting Standards) Rules 2015 as amended;

(e) On the basis of the written representations received from thedirectors as on March 31 2022 taken on record by the Board of Directors none of thedirectors is disgualified as on March 31 2022 from being appointed as a director in termsof Section 154 (2) of the Act;

(f) With respect to the adeguacy of the internal financial controlswith reference to these standalone Ind AS financial statements and the operatingeffectiveness of such controls refer to our separate Report in "Annexure 2" tothis report;

(g) In our opinion the managerial remuneration for the year endedMarch 31 2022 has been paid/ provided by the Company to its directors in accordance withthe provisions of Section 197 read with Schedule V to the Act;

(h) With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 asamended in ouropinion and to the best of our information and according to the explanationsgiven to us:

i. The Company has disclosed the impact of pending litigations on itsfinancial position in its standalone Ind AS financial statements - Refer Note 3(c)(A)(iv)3(c)(B)

(ii) 38D and 45 to the standalone Ind AS financial statements;

ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses;

iii. There has been no delay in transferring amounts reguired to betransferred to the Investor Education and Protection Fund by the Company

iv. a) The management has represented

that to the best of its knowledge and belief no funds have beenadvanced or loaned or invested (either from borrowed funds or share premium or any othersources or kind of funds) by the Company to or in any other person(s) or entity(ies)including foreign entities ("Intermediaries") with the understanding whetherrecorded in writing or otherwise that the Intermediary shall whether directly orindirectly lend or invest in other persons or entities identified in any manner whatsoeverby or on behalf of the Company ("Ultimate Beneficiaries") or provide anyguarantee security or the like on behalf of the Ultimate Beneficiaries;

b) The management has represented that to the best of its knowledgeand belief no funds have been received by the Company from any person(s) or entity(ies)including foreign entities ("Funding Parties") with the understanding whetherrecorded in writing or otherwise that the Company shall whether directly or indirectlylend or invest in other persons or entities identified in any manner whatsoever by or onbehalf of the Funding Party ("Ultimate Beneficiaries") or provide any guaranteesecurity or the like on behalf of the Ultimate Beneficiaries; and

c) Based on such audit procedures that were considered reasonable andappropriate in the circumstances nothing has come to our notice that has caused us tobelieve that the representations under sub- clause (a) and (b) contain any materialmisstatement.

v. The interim dividend declared and paid by the Company during theyear is in accordance with Section 123 of the Act.

Annexure 1

referred to in paragraph 1 under the heading "Report on OtherLegal and Regulatory Reguirements" of our report of even date

Re: Vedanta Limited ('the Company')

In terms of the information and explanations sought by us and given bythe Company and the books of account and records examined by us in the normal course ofaudit and to the best of our knowledge and belief we state that:

(i) (a) (A) The Company has maintained proper records showing fullparticulars including guantitative details and situation of fixed assets.

(B) The Company has maintained proper records showing full particularsof intangibles assets as reflected in the financial statements.

(b) All Property Plant and Eguipment have not been physically verifiedby the management during the year but there is a regular programme of verification in ouropinion is reasonable having regard to the size of the Company and the nature of itsassets except for fixed assets aggregating T1.213 crore at Tuticorin plant where due tosuspension of operations (refer note 3(c)(A)

(iii)) management has been unable to perform physical verificationwhich was due in current year. No material discrepancies were noticed wherever suchverification was performed.

(c) The title deeds of all the immovable properties (other thanproperties where the Company is the lessee and the lease agreements are duly executed infavour of the lessee) are held in the name of the Company except for the title deeds ofimmovable properties in oil and gas blocks jointly owned with other joint venturepartners which are held in the name of the licensee of the block. The written down valueof such immovable properties in the accompanying financial statement aggregates ? 68crore.

The original title deeds amounting to T142 crore pertaining toimmovable properties have been pledged with lenders which have been confirmed by thelenders/trustees.

(d) The Company has not revalued its Property Plant and Eguipment(including Right of use assets) or intangible assets during the year ended 31 March 2022.

(e) There are no proceedings initiated or are pending against theCompany for holding any benami property under the Prohibition of Benami PropertyTransactions Act 1988 and rules made thereunder.

(ii) (a) The inventory has been physically verified by the managementduring the year except for inventories aggregating T301 crore lying at Tuticorin plantwhich is under suspension (refer note 3(c)(A)(iii)) and inventories lying with thirdparties amounting to T409 crore. Inventories lying with third parties have been confirmedby them as at March 31 2022 and discrepancies were not noted in respect of suchconfirmation. In our opinion except for inventories lying at Tuticorin plant which isunder suspension as stated above the freguency of verification by the management isreasonable and the coverage and procedure for such verification is appropriateDiscrepancies of 10% or more in aggregate for each class of inventory were not noticed inrespect of such verification.

(b) As disclosed in note 17B to the financial statements the Companyhas been sanctioned working capital limits in excess of Rs. five crores in aggregate frombanks and financial institutions during the year on the basis of security of currentassets of the Company. The quarterly statements filed by the Company with such banks andfinancial institutions are in agreement with the books of accounts of the Company.

(iii) (a) During the year the Company has provided loans stoodguarantee and provided security to companies or any other parties as follows:

Guarantees in crore) Loans in crore)
Aggregate amount granted/provided during the year
Subsidiaries 5153 383
Ultimate Parent Nil Nil
Balance outstanding as at balance sheet date in respect of above cases (including opening balances)
Subsidiaries 11610 518
Ultimate Parent 115 Nil

The Company has not given any advances in the nature of loans.

(b) During the year the guarantees provided security given and theterms and conditions of the grant of all loans and guarantees to companies or any otherparties are not prejudicial to the Company's

Annexure 1

referred to in paragraph 1 under the heading "Report on OtherLegal and Regulatory Reguirements" of our report of even date interest. The Companyhas not made any investments or given advances in the nature of loans during the year.

(c) In respect of the following loans which were repayable on demandthe repayment terms for principal and interest were specified during the year. Based onoriginal and revised terms no amounts were due during the year on such loans:

Name of the Entity Amount in crore)
Paradip Multi Cargo Berth Private Limited* 0.35
Sesa Resources Limited 68
Sterlite Ports Limited* 4
Sterlite Iron & Steel Co. Limited 5

*Refer note 47

(d) There are no amounts of loans and advances in the nature of loansgranted to companies firms limited liability partnerships or any other parties which areoverdue for more than ninety days.

(e) The Company had granted a loan of T425 crore to a wholly ownedsubsidiary Vizag General Cargo Berth Private Limited which had fallen due during the yearand the repayment terms of the loan were revised. The subsidiary has since repaid T407crore up to 31 March 2022 in advance of the scheduled repayment terms.

The aggregate amount of such dues extended and the percentage of theaggregate to the total loans or advances in the nature of loans granted during the yearare as follows:

Name of Parties Aggregate amount of overdues of existing loans extended in crore) Percentage of the aggregate to the total loans or advances in the nature of loans granted during the year
Vizag General Cargo Berth Private 425 39%

(f) During the year the Company has not granted any loans or advancesin the nature of loans either repayable on demand or without specifying any terms orperiod of repayment to companies.

Accordingly the reguirement to report on clause 3(iii)(f) of the Orderis not applicable to the Company.

(iv) Loans investments and guarantee in respect of which provisions ofSections 185 and 185 of the Companies Act 2013 are applicable have been complied with bythe Company. The Company has not granted any security in terms of Sections 185 and 185.

(v) The Company has neither accepted any deposits from the public noraccepted any amounts which are deemed to be deposits within the meaning of Sections 73 to75 of the Companies Act and the rules made thereunder to the extent applicable. Inrespect of unclaimed deposits the Company has complied with the provisions of Sections 73to 75 of the Act and the Companies (Acceptance of Deposits) Rules 2014 (as amended).

(vi) We have broadly reviewed the books of account maintained by theCompany pursuant to the rules made by the Central Government for the maintenance of costrecords under Section 148(1) of the Act related to the manufacture of goods andgeneration of electricity and are of the opinion that prima facie the specified accountsand records have been made and maintained. We have not however made a detailedexamination of the same.

(vii) (a) Undisputed statutory dues including goods and services taxprovident fund employees' state insurance income-tax sales-tax duty of custom valueadded tax cess and other statutory dues have generally been regularly deposited with theappropriate authorities though there has been a slight delay in a few cases. According tothe information and explanations given to us and based on audit procedures performed byus no undisputed dues in respect of goods and services tax provident fund employees'state insurance income-tax service tax sales-tax duty of custom duty of excise valueadded tax cess and other statutory dues which were outstanding at the year end for aperiod of more than six months from the date they became payable. The provisions relatingto excise duty and service tax are not applicable to the Company.

(b) The dues of goods and services tax provident fund employees'state insurance income-tax sales-tax service tax duty of custom duty of excise valueadded tax cess and other statutory dues have not been deposited on account of anydispute are as follows:

(Rs in crore)

Name of the Statute Nature of the dues Forum where the dispute is pending Period to Which amount relates Amount*
Central Excise Act 1944 Excise Duty CESTAT/Supreme court December 2013 to February 2015 49.45
Central Excise Act 1944 Excise Duty Assistant Commissioner 2013-14 0.57
Central Excise Act 1944 Excise Duty CESTAT 1997-98 to 2015-16 141.24
Central Excise Act 1944 Excise Duty Commissioner 1997-2013 23.46
Central Excise Act 1944 Excise Duty Commissioner Appeals October 2013 to July 2014 2015-16 to 2016-17 0.15
Central Excise Act 1944 Excise Duty High Court 2000-2006 2017-18 98.29
Central Excise Act 1944 Excise Duty Additional Commissioner November 07 to July 08 0.40
Central Sales Tax 1956 Sales Tax Additional Commissioner 2004-2020 8.10
Central Sales Tax 1956 Sales Tax Commissioner (Appeals) FY 2014-15 5.47
Central Sales Tax 1956 Sales Tax Deputy Commissioner FY 2015-16 to FY 2017-18 5.95
Central Sales Tax 1956 Sales Tax Tribunal 2007-08 to 2014-15 17.99
Central Sales Tax 1956 Sales Tax High Court 1998-99 2009-10 2010-11 2012-13 2016-17 18.89
Central Sales Tax 1956 Sales Tax Assistant Commissioner FY 2014-15 2016-17 1.59
Custom Act 1962 Customs Duty CESTAT 2004-05 to 2013-14 2016-17 to 2018-19 116.19
Custom Act 1962 Customs Duty Commissioner Appeals 2012-13 2014-15 10.46
Custom Act 1962 Customs Duty Commissioner 2004-05 to 2009-10 and 2012-13 to 2019-20 47.82
Custom Act 1962 Customs Duty High Court 2005-06 to 2006-07 47.34
Custom Act 1962 Customs Duty Supreme Court 1996-97 2005-10 2015 0.18
Custom Act 1962 Customs duty on exports Assistant Commissioner FY 2015-16 to FY 2019-20 130.00
Finance Act1994 Service Tax Assistant Commissioner FY 2015-2016 FY 2016-17 28.00
Finance Act1994 Service Tax CESTAT 2004-05 to 2015- 2016 and Oct 2016 to Mar 2017 2017-18 (upto June 2017). 207.18
Finance Act1994 Service Tax Directorate General FY 2016-17 18.00
Finance Act1994 Service Tax Commissioner Appeals 2010-112012-13 to 2015-16 1.83
Finance Act1994 Service Tax Commissioner 2014-15 2016-17 and 2017-18 (Till June 30 2017) 5.44
Finance Act1994 Service Tax High Court 2006-072007-08 2016-17 24.31
The Goods and Service tax 2017 GST CESTAT 2018-19 0.18
The Goods and Service tax 2017 GST Additional Commissioner 2017-18 28.06
Income tax Act 1961 Additional Income Tax demand CIT Appeals 2005-06 to 2016-17 729.04
Income tax Act 1961 Additional Income Tax demand High Court 2006-07 to 2014-15 201920 1493.07
Income tax Act 1961 Additional Income Tax demand Assessing Officer 1999-00 2008-09 2009-10 30.35
Income tax Act 1961 Additional Income Tax demand & penalty Income Tax Appellate Tribunal 2004-05 to 2009-10201112 2013-15 2014.30
Income tax Act 1961 Additional Income Tax demand Supreme Court 2007-08 205.82
Sales Tax Sales Tax Joint Commissioner 2015-16 0.03
Sales Tax Sales Tax Commissioner 2007-08 to 2014-15 53.87
Sales Tax Sales Tax High Court 1998-99 to 2016-17 315.96
Sales Tax Sales Tax Additional Commissioner 2014-15 5.64
Sales Tax Sales Tax Deputy Commissioner 2012 to 2015 0.45
Entry Tax Entry Tax High Court April 2007 to June 2017 and 2007-08 to 2012-13 971.08
Entry Tax Entry Tax Additional Commissioner 18 August 2013 - 31 March 2015 0.93
Entry Tax Entry Tax Deputy Commissioner October 2015 to June 2017 7.02
Electricity Tax Electricity Tax High Court 2017-18 to 2020-21 25.10
Energy Cess Energy Cess High Court 2014-19 38.28
Foreign Development Tax & Foreign Development Fund Forest Development tax Supreme Court FY 2008 to till date 341.20
Mumbai Metropolitan Region Development Authority Forest lease rent High Court FY 2009 0.08
Mumbai Metropolitan Region Development Authority Royalty Supreme Court FY 2007-12 12.67
Railways Act1971 and wagon investment scheme Stacking and Warfare charge High Court FY 2010 4.09
Mines and Minerals (Regulation and Development) Act 1957 Royalty High Court FY 2013-14 11.78
Goa Rural Improvement and Welfare Cess Act 2000 Transportation Cess High Court FY 2010 to till date 113.60
Energy Cess Energy Cess High Court 2014-19 38.28

* Net of amounts paid under protest/adjusted against refunds.

(viii) The Company has not surrendered or disclosed any transactionpreviously unrecorded in the books of account in the tax assessments under the Income TaxAct 1961 as income during the year. Accordingly the reguirement to report on clause3(viii) of the Order is not applicable to the Company.

(ix) (a) The Company has not defaulted in repayment of

loans or other borrowings or in the payment of interest thereon to anylender.

(b) The Company has not been declared wilful defaulter by any bank orfinancial institution or government or any government authority.

(c) Term loans were applied for the purpose for which the loans wereobtained.

(d) On an overall examination of the financial statements of theCompany funds raised on short-term basis have generally not been used for long-termpurposes by the Company.

(e) On an overall examination of the financial statements of theCompany the Company has not taken any funds from any entity or person on account of or tomeet the obligations of its subsidiaries associates or joint ventures.

(f) The Company has raised loans during the year on the pledge ofsecurities held in its subsidiary as per details below.

Nature of loan taken Name of lender Amount of facility in crore) Name of the subsidiary Details of security pledged Remarks
Rupee term loan Bank 8000 Hindustan Zinc Limited Shares Refer note 17(g) of the financial statements

The Company has not raised loans during the year on the pledge ofsecurities held in its joint ventures or associate companies. Further the Company has notdefaulted in repayment of such loans raised.

(x) (a) Monies raised during the year by the Company by way of debtinstruments were applied for the purpose for which they were raised. The Company has notraised monies by way of initial public offer or further public offer.

(b) The Company has not made any preferential allotment or privateplacement of shares /fully or partially or optionally convertible debentures during theyear under audit and hence the reguirement to report on clause 3(x)(b) of the Order isnot applicable to the Company.

(xi) (a) No fraud by the Company or no material fraud on the Companyhas been noticed or reported during the year.

(b) During the year no report under sub-section (12) of Section 143 ofthe Companies Act 2013 has been filed by cost auditor/secretarial auditor or by us inForm ADT - 4 as prescribed under Rule 13 of Companies (Audit and Auditors) Rules 2014with the Central Government.

(c) We have taken into consideration the whistle blower complaintsreceived by the Company during the year while determining the nature timing and extent ofaudit procedures.

(xii) The Company is not a nidhi Company as per the provisions of theCompanies Act 2013. Therefore the reguirement to report on clause 3(xii)(a) (b) &(c) of the Order is not applicable to the Company.

(xiii) Transactions with related parties are in compliance withSections 177 and 188 of Companies Act 2013 where applicable and the details have beendisclosed in the notes to the financial statements as reguired by the applicableaccounting standards.

(xiv) (a) The Company has an internal audit system commensurate withthe size and nature of its business.

(b) The internal audit reports of the Company issued till the date ofthe audit report for the period under audit have been considered by us.

(xv) The Company has not entered into any non-cash transactions withits directors or persons connected with its directors and hence reguirement to report onclause 3(xv) of the Order is not applicable to the Company.

(xvi) The provisions of Section 45-IAof the Reserve Bank of India Act1934 (2 of 1934) are not applicable to the Company. Accordingly the reguirement to reporton clause (xvi)(a)(b)(c) & (d) of the Order is not applicable to the Company.

(xvii) The Company has not incurred cash losses in the current year andimmediately preceding financial year.

(xviii) There has been no resignation of the statutory auditors duringthe year and accordingly reguirement to report on Clause 3(xviii) of the Order is notapplicable to the Company.

(xix) On the basis of the financial ratios disclosed in note 43 to thefinancial statements ageing and expected dates of realisation of financial assets andpayment of financial liabilities other information accompanying the financial statementsour knowledge of the Board of Directors and management plans and based on our examinationof the evidence supporting the assumptions nothing has come to our attention whichcauses us to believe that any material uncertainty exists as on the date of the auditreport that Company is not capable of meeting its liabilities existing at the date ofbalance sheet as and when they fall due within a period of one year from the balance sheetdate. We however state that this is not an assurance as to the future viability of theCompany. We further state that our reporting is based on the facts up to the date of theaudit report and we neither give any guarantee nor any assurance that all liabilitiesfalling due within a period of one year from the balance sheet date will get dischargedby the Company as and when they fall due.

(xx) (a) In respect of other than ongoing projects there are nounspent amounts that are reguired to be transferred to a fund specified in Schedule VII ofthe Companies Act (the Act) in compliance with second proviso to sub-section 5 of Section135 of the Act. This matter has been disclosed in note 42(a) to the financial statements.

(b) There are no unspent amounts in respect of ongoing projects thatare reguired to be transferred to a special account in compliance of provision ofsub-section (5) of Section 135 of Companies Act. This matter has been disclosed in note42(a) to the financial statements.

Annexure 2

to the Independent Auditor's Report of even date on the Ind ASStandalone Financial Statements of Vedanta Limted

Report on the Internal Financial Controls under Clause (i) ofsub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financialreporting of Vedanta Limited ("the Company") as of 31 March 2022 in conjunctionwith our audit of the standalone Ind AS financial statements of the Company for the yearended on that date.

Management's Responsibility for Internal Financial Controls

The Company's Management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Committee of Sponsoring Organisations of the TreadwayCommission (2013 Framework) ("COSO 2013 Criteria"). These responsibilitiesinclude the design implementation and maintenance of adeguate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to the Company's policies the safeguarding of its assetsthe prevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asreguired under the Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting with reference to these standalone financialstatements based on our audit. We conducted our audit in accordance with the Guidance Noteon Audit of Internal Financial Controls Over Financial Reporting (the "GuidanceNote") and the Standards on Auditing as specified under Section 143(10) of theCompanies Act 2013 to the extent applicable to an audit of internal financial controlsand both issued by the Institute of Chartered Accountants of India. Those Standards andthe Guidance Note reguire that we comply with ethical reguirements and plan and performthe audit to obtain reasonable assurance about whether adeguate internal financialcontrols over financial reporting with reference to these standalone financial statementswas established and maintained and if such controls operated effectively in all materialrespects.

Our audit involves performing procedures to obtain audit evidence aboutthe adeguacy of the internal financial controls over financial reporting with reference tothese standalone financial statements and their operating effectiveness. Our audit ofinternal financial controls over financial reporting included obtaining an understandingof internal financial controls over financial reporting with reference to these standalonefinancial statements assessing the risk that a material weakness exists and testing andevaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgement including theassessment of the risks of material misstatement of the financial statements whether dueto fraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the internal financial controlsover financial reporting with reference to these standalone financial statements.

Meaning of Internal Financial Controls Over Financial Reporting WithReference to these Financial Statements

A company's internal financial control over financial reporting withreference to these standalone financial statements is a process designed to providereasonable assurance regarding the reliability of financial reporting and the preparationof financial statements for external purposes in accordance with generally acceptedaccounting principles. A company's internal financial control over financial reportingwith reference to these standalone financial statements includes those policies andprocedures that (1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of theCompany; (2) provide reasonable assurance that transactions are recorded as necessary topermit preparation of financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the Company are being madeonly in accordance with authorisations of management and directors of the Company; and (3)provide reasonable assurance regarding prevention or timely detection of unauthorisedacquisition use or disposition of the Company's assets that could have a material effecton the financial statements.

Inherent Limitations of Internal Financial Controls Over FinancialReporting with reference to these Standalone Financial Statements

Because of the inherent limitations of internal financial controls overfinancial reporting with reference to these standalone financial statements including thepossibility of collusion or improper management override of controls materialmisstatements due to error or fraud may occur and not be detected. Also projections ofany evaluation of the internal financial controls over financial reporting with referenceto these standalone financial statements to future periods are subject to the risk thatthe internal financial control over financial reporting with reference to these standalonefinancial statements may become inadeguate because of changes in conditions or that thedegree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects adeguateinternal financial controls over financial reporting with reference to these standalonefinancial statements and such internal financial controls over financial reporting withreference to these standalone financial statements were operating effectively as at 31March 2022 based on the internal control over financial reporting criteria established bythe Company considering the essential components of internal control stated in COSO 2013criteria.

For S.R. Batliboi & Co. LLP per Sudhir Soni
Chartered Accountants Partner
ICAI Firm Registration Number: 301003E/E300005 Membership Number: 41870
Place of Signature: Mumbai UDIN: 22041870AHZGNE9213
Date: 28 April 2022

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