Your Directors take pleasure in presenting the 4th Integrated Report (prepared as perthe framework set forth by the International Integrated Reporting Council) and the AnnualStandalone as well as Consolidated Financial Statements for the financial year ended March31 2021 of Vedanta Limited ('Company').
KEY BUSINESS FINANCIAL AND OPERATIONAL HIGHLIGHTS
Vedanta Limited a subsidiary of Vedanta Resources Limited is one of the world'slargest suppliers of natural resources with primary operations in Oil & Gas ZincLead Silver Copper Iron Ore Steel and Aluminium & Power across India SouthAfrica Namibia and Australia. The Company's strategic capabilities and alliances aresingularly focused on creating and preserving value for its esteemed clients and the widerstakeholder fraternity. The Company is among the top private sector contributors to theexchequer with contribution of ~' 34500 crores in FY 2021.
Vedanta is committed to delivering sustainable and responsible growth and arecommitted to sustainability in mining practices health & safety practices wellbeingof employees and development of the local communities. The Company has been conferred theCII - ITC Sustainability Awards Bhamashah Award and certified as FIVE-S WorkplaceManagement System. Vedanta Limited is listed on the BSE Limited and the National StockExchange of India Limited and has American Depository Shares (ADS) listed on the New YorkStock Exchange.
The COVID-19 pandemic is an unprecedented humanitarian and economic crisis. Our metaland mining industry has sought to respond quickly to protect the health of its employeesand its communities. These steps are in response to (and often ahead of) emergencymeasures and lockdowns implemented by governments across the world to control the spreadof the pandemic.
During these testing times our priority is to ensure the health and safety of ouremployees contractors and stakeholders while ensuring the business continuity to theextent possible. At Group level we have formulated various controls to prevent the spreadof infection and thereby maintaining business continuity. We have formalised a Group levelCOVID task force spearheaded by Ms. Priya Agarwal (Non-Executive Director) Group HSEHead Comm. Head HR head CMO and CEO Nand Ghar. There are business COVID taskforceformalised from diverse departments whose tasks is to implement strong controls andSOPs/protocols audit the respective units to ensure complete compliance to COVIDprotocols to prevent the spread of the infection and to monitor and report the proceedingsto the business CEO and Group task force.
Even with temporary disruptions we continue building on our strengths and commitment tooperational excellence.
Vedanta has a portfolio of world-class low-cost scalable assets that consistentlygenerate strong profitability and deliver robust cash flows. We continue to consolidateour position as one of the largest diversified natural resources businesses in the world.We are positioned in the commodities market that have a growing demand in one of thelargest and fastest growing economy in the world with a key focus on operational delivery.Asset planning operational excellence cost control productivity enhancementimprovement in realisation risk mitigation coupled with increasing use of technologymore innovation and digitisation has helped us to enhance the delivery from our assets.Our key priority is to focus on ethics governance and social licence to operate whilewe continue our journey towards zero harm zero waste and zero discharge.
The year gone by was challenging with tremendous uncertainties in the macroenvironment with the advent of novel coronavirus (COVID-19). However we were quick toadapt to the emerging realties backed by the relentless support of our dynamic workforce.
In FY 2021 we saw us achieving some of our best quarters for our three largebusinesses: zinc oil & gas and aluminium. In FY 2021 we were able to sustain ourlow-cost advantage in aluminium by engaging structural measures. While we have optimisedour coal and bauxite source mix we also continued our journey towards improving onoperational efficiencies and debottlenecking our assets for improved capacity utilisation.For Zinc India operations we completed 1.2 MnT mined metal project activities andsustained production post-transition to a fully underground mining company. We are alsoachieving strong momentum in silver production and aim to be among the top 3 producers ofsilver globally. For Zinc International our performance ramp-up continues achievinghighest ever production till date at Gamsberg along with sustained cost reduction. In Oil& Gas we continued delivering on growth projects such as the commissioning of the newgas facility ramp up of polymer injection and upgradation of the liquid handingcapacity.
As we look forward to the year ahead we are operationally well positioned to deliver.In Oil & Gas we are the largest private sector producer of crude oil in India andrank among the world's lowest cost producer with a pipeline of assets in productiondevelopment and exploration. In Zinc we are the world's largest fully integratedzinc-lead producer. In terms of Aluminium we are India's largest primary aluminiumproducer supported by our own captive power generation. We performed exceedingly well onkey environmental social and governance (ESG) aspects during the year. This is validatedby our ranking in the Dow Jones Sustainability Index which improved nine places to 12thglobally in our industry.
The strengths of our diverse portfolio together with our focused growth strategyexpanding our reserves and resource base a strong balance sheet strong talent basetechnology and modernisation initiatives all combine to create a truly inspirationalCompany.
The standalone and consolidated financial statements of the Company for the financialyear ended March 31 2021 prepared as per Indian Accounting Standards (Ind AS) and inaccordance with the provisions of the Companies Act 2013 and SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 (Listing Regulations) forms part of thisAnnual Report.
Operational Highlights Business highlights
Highest ever ore production of15.5 million tonnes despite disruptions on accountof the pandemic
Highest ever mined metal production of 972 kt up 6% y-o-y
Refined zinc-lead production of 930 kt up 7% y-o-y
Cost of production at US$1307 per tonne down 22% y-o-y
Increase in Gamsberg production volume from 108kt in FY 2020 to 145kt in FY 2021
BMM started a new product line of recovering magnetite through its tailings withpotential capacity of 0.7 million tonnes of production per annum
Annual steel production at 1.19 million tonnes for FY 2021
Robust margin of US$131 per tonne during the last quarter (~22% EBITDA Margin)
Oil & Gas
Average gross operated production of 162 kboepd down 6% y-o-y due to impact ofthe pandemic on growth projects completion and natural field decline
Key growth projects update:
- New gas processing terminal construction completed; commissioning underway expectedto add ~100 mmscfd by Q1FY2022
- Liquid handing capacity upgraded by 30% major facility systems commissioned
- Enhanced Oil Recovery project implemented in Bhagyam and Aishwariya Fields
- Aishwariya Barmer Hill surface facility commissioned; wells being hooked upprogressively
Drilling activities across the portfolio in Rajasthan North East & Cambayregions. First well KW-2-Udip drilled in Rajasthan
Capex growth projects update:
- 74 wells hooked up during FY 2021
- Ravva drilling programme completed; ~11 kboepd of incremental volumes
Due legal process being followed to achieve a sustainable restart of theoperations
Highest ever aluminium production at 1969 kt retaining our position as thelargest aluminium producer in the country
Highest ever alumina production from Lanjigarh refinery at 1841 kt up 2% y-o-y
Lowest ever hot metal cost of production at US$1347 per tonne 20% lower y-o-y
Lowest ever APC of 7.19% at the 1980 MW TSPL plant in FY 2021
Sustained operations with zero import coal in FY 21 through coal substitutionscheme of GoI (Government of India)
Goa operations remains suspended during the year due to state-wide directivefrom the Hon'ble Supreme Court continuous engagement with the stakeholders for aresumption of mining operations
Production of saleable ore at Karnataka at 5 million tonnes up 15% y-o-y
Iron Ore Sales at Goa at 2.1 million tonnes
Value Added Business achieved highest ever EBITDA Margin of $104/T supported bystrengthening steel prices
The details of the business results of operations and the significant developmentshave been further elucidated in Management Discussion & Analysis section of the AnnualReport.
Key events during the year Delisting
With respect to the voluntary delisting offer of equity shares of the Company from BSELimited and National Stock Exchange of India Limited made by Vedanta Resources Limited('VRL') one of the members of the promoter and promoter group of the Company the totalnumber of Offer Shares validly tendered by the Public Shareholders in the Delisting Offerwas less than the minimum number of Offer Shares required to be accepted by the Acquirersin order for the Delisting Offer to be successful in terms of Regulation 17(1)(a) of theDelisting Regulations. Thus the Delisting Offer is deemed to have failed in terms ofRegulation 19(1) of the Delisting Regulations.
The complete details can be accessed at www.vedantalimited.com.
Voluntary Open Offer
Pursuant to the Voluntary Open Offer made by Vedanta Resources Limited("Acquirer") together with Twin Star Holdings Limited Vedanta HoldingsMauritius Limited and Vedanta Holdings Mauritius II Limited as persons acting in concertwith the Acquirer (" PACs") to the public shareholders of the Company duringthe year in accordance with the Securities and Exchange Board of India (SubstantialAcquisition of Shares and Takeovers) Regulations 2011 the Acquirer and PACs haveacquired 374231161 equity shares of the Company representing 10.07% of fully dilutedvoting share capital thereby increasing acquirer's indirect shareholding in the Companyfrom 55.1% to 65.18%.
The complete details can be accessed at www.vedantalimited.com
Vedanta Limited acquired the control over Ferro Alloys Corporation Limited (FACOR)with effect from the closing date i.e. September 212020 in accordance with the terms ofApproved Resolution Plan and as replaced by a new board of directors constituted withadequate representation of the persons appointed by Vedanta Limited and independentdirectors in compliance with applicable laws. Vedanta Limited holds 100% shareholding inFACOR.
In March 2021 the Company participated and was declared as the successful bidder inthe Liquidation process for Sale of Assets of Bhachau and Khambhalia coke manufacturingunits of Gujarat NRE Coke Limited which was under liquidation under Bankruptcy Code. Thetotal capacity of Bhachau and Khambalia plants is 594 KTPA and 358 KTPA respectively. Theacquisition will complement our existing Iron Ore business via backward integrationthrough provision of the Met Coke Requirement to our existing facilities.
Projects and Expansion Plan
Projects are key driving factor of our Group as our aspirations for growth are verydifferent from any of the peers globally. In HZL we have successfully completed thedevelopment of North Decline (ND1) at Rampura Agucha mine. This marked the completion ofmost awaited shaft integration and liberated RA shaft from statutory compliance ofsecondary outlet. This improves the accessibility of shaft section alternate emergencyevacuation ease in mine equipment deployment at lower levels of mine face charging withemulsion explosives face drilling with long feed jumbo etc. Also 650 kW ventilation fanwas installed and commissioned at SK Mine with an objective to improve ventilation inunderground by 100 Cum/sec in SKA6 lens. All major projects envisaged for 1.25 mtpa MIChave been commissioned (except RD). Order placed for detail feasibility study forexpansion of zinc & lead smelting capacity.
In VZI the Gamsberg mine and processing facilities are stabilizing which will set thestage for Gamsberg Phase 2 expansion. This expansion which would see a double in theproduction capacity. A smelter enhancement to the Black Mountain Complex (BMC) operationswould allow for refining our concentrate product to produce metal. In Cairn we are stillfocussed on the journey to produce India's 50% Oil & Gas production. GAS volumes areup in Q4 and further ramping up as project is fully commissioned now. The seismicacquisition programme and satellite-based prospecting has commenced in Open AcreageLicensing Policy (OALP). In Aluminium Lanjigarh expansion is the key expansion projectand coal block execution will be critical to deliver more value from this sector.
We are set to deliver tremendous value to all our stakeholders once we successfullyexecute these projects of across the group.
Dividend Distribution Policy and Dividend
In terms of the provisions of Regulation 43A of the Listing Regulations the Companyhas adopted Dividend Distribution Policy to determine the distribution of dividends inaccordance with the applicable provisions. The policy can be accessed on the website ofthe Company at www.vedantalimited.com.
With consistent dividend as a healthy sign of our sustained growth our firm belief inpercolating the benefits of our business progress for widespread socioeconomic welfarefacilitates the equitable sharing of our economic value generated. Attaining steadyoperational performance and a harmonised market environment in continuation of thehistorical trends helped us to reaffirm the realisation of competent numbers for FY 2021.
The Company has declared interim dividend during the year in compliance with theDividend Distribution Policy:
|Particulars ||FY 2020-21 |
|Interim Dividend ||1st |
|Record Date ||October 31 2020 |
|Date of Declaration ||October 24 2020 |
|Rate of Dividend per share (Face Value of ' 1 per share) ||' 9.50 |
|% ||950 |
|Total Payout (' in crores) ||' 3531.63 |
Pursuant to the Finance Act 2020 dividend is taxable in the hands of the shareholderswith effective from April 1 2020 and tax has been deducted at source on the Dividend atprevailing tax rates inclusive of applicable surcharge and cess based on informationreceived by the Registrar & Share Transfer Agent and the Company from theDepositories.
The Directors do not recommend any final dividend for financial year ended March 312021.
Your Company is rated by CRISIL and India Rating and Research Private Limited on itsvarious debt instruments. The details of ratings provided by the agencies is stipulated inthe Corporate Governance Report.
Vedanta strives to be a responsible corporate citizen and to make a positivecontribution to the communities in which we operate. Payment to exchequer viz. taxesroyalty dividend etc. is a vital part of our contribution to national economies andpeople's lives. Vedanta supports the principles of greater transparency that increasesunderstanding of tax systems and build public trust.
With these values being ingrained in Vedanta's DNA we are proud to share that we havecontributed
34500 crores to the public exchequer of the various countries where we operate.
Your Company publishes Tax Transparency Report which provides an overview of the taxstrategy governance and tax contributions made by the Company.
The report is available on the website at www.vedantalimited.com
SUSTAINABILITY AND SOCIAL RESPONSIBILITY
Environmental Social and Governance (ESG) Approach
Driven by the sincere approach to achieve larger good at Vedanta our EnvironmentalSocial and Governance (ESG) priorities are well-aligned to our enterprise goals andtowards this end we continue to work with a target-based strategy focused on fostering aninclusive and sustainable future for all.
Our ESG vision is strongly driven by the growing need to address the expectations ofour stakeholders while delivering resilient business performance. As a responsiblecorporate citizen we are attuned to both local and global expectations and endeavour tocontribute to the fulfilment of UN Sustainable Development Goals (SDGs) and globalframeworks such as ICMM and IFC performance standards. The Vedanta SustainabilityFramework (VSF) as elucidated below provides the cornerstone to our ESG approach.
Each pillar of our ESG vision is elaborated below for further insights into the Companypractices.
With the key objective of "Zero Harm Zero Waste and Zero Discharge" acrossall our operations we continue to manage our environmental impact through associatedprogrammes on water management energy and climate change carbon footprint reductionsolid waste management with recycling of our high- volume-low-effect wastes such as flyash tailings dam management GHG emissions intensity reduction and biodiversity. Westrive to set ourselves with aggressive targets believing that our sustainable futuredepends on responsible and eco-friendly operations.
Guided by our aspirational goals our priority areas towards social development remainto become a developer of choice in our areas of operations. We have defined a socialperformance framework to secure our social licence to operate assessing the maturity ofour business in the context and driving community activities across multiple spheres suchas child education combating malnutrition medical infrastructure development womenempowerment and sports engagement among others.
Our community development programmes are designed and developed to suit therequirements of our immediate communities and country at large with specific emphasis oncriticalities. While we embark on the journey to improve skilling set up Nand Ghars andcater to larger people needs through our CSR pillars we are also focused to ensure thatwe create a positive relationship with the communities about our operations and aim tohave all our stakeholders as champions of our responsible practices.
As a pre-requisite for protecting shareholder value as well as delivering sustainablegrowth good corporate governance underpins the delivery of our strategic objectives andthe outcomes produced thereafter.
Our governance philosophy with prudent and robust risk management frameworks; internalcontrols; and strong functional processes; stems from our core values of Trust IntegrityCare Entrepreneurship Innovation Respect and Excellence. By overseeing the businessconduct with strict adherence to responsibility and ethics the entire structurecascading from the Board of Directors and Sustainability Committee at the top supportedby policies and frameworks enhances the prosperity long-term viability andsustainability of the Company.
Thus as the world renews its consensus around the crucial role of ESG factors inassessment of all forms of businesses we believe that our ESG approach is certain to reapmeaningful returns over time.
Sustainability and Business Responsibility Report
Sustainable Development is integral to Vedanta's core business strategy. We continue tobe a transparent and responsible corporate citizen; committed to a 'social license tooperate' and partner with communities local governments and academic institutions to helpcatalyse socio-economic development in the areas where we operate.
The Company reaffirms its core values of Trust Entrepreneurship InnovationExcellence Integrity Respect and Care which are the basis of our SustainableDevelopment Model.
The model continues to be centreed on the four strategic pillars: ResponsibleStewardship; Building Strong Relationships; Adding and Sharing Value; and StrategicCommunications.
A separate detailed report on Company's Sustainability Development also forms part ofthe Annual Report.
Recognising sustainable development as a core requirement to strategically improve thevalue of our business the Board of Directors constituted a Sustainability Committeeeffective April 01 2019 to provide oversight and assistance in building an approachtowards sustainability which mirrors our prevailing business ethos of achieving excellencethrough continuous improvement in our processes and outcomes while also benchmarkingourselves against our global peers.
Details of the composition of the committee its terms and reference and the meetingsheld during FY 2021 is elucidated in the Corporate Governance Report.
Your Company publishes an annual Sustainability Report prepared in accordance with theGlobal Reporting Initiative (GRI) Standards; mapped to the United Nations Global Compact(UNGC); and aligned to Sustainable Development Goals (SDGs). It reports our approach anddisclosure towards triple bottom line principles - People Planet and Profit.
As per SEBI directives on Integrated Reporting (IR) the Company has followed the<IR> framework of the International Integrated Reporting Council to report on allthe six capitals that are used to create long-term stakeholder value and also provided therequisite mapping of principles between the Integrated Report the Global ReportingInitiative ('GRI') and the Business Responsibility Report (BRR). Hence a separate BRR isnot being published by the Company this year. The Sustainability Report of the Company canbe accessed at www.vedantalimited.com.
Energy Conservation Technology Absorption and Foreign Exchange Earnings & Outgo
The information on conservation of energy technology absorption stipulated underSection 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules 2014 isannexed herewith as 'Annexure A'.
The details of the Foreign Exchange Earnings and Outgo are as follows:
(Rs in crore)
|Particulars ||Year ended 31 March 2021 ||Year ended 31 March 2020 |
|Expenditure in foreign currency ||1251 ||1357 |
|Earnings in foreign currency ||17706 ||16462 |
|CIF Value of Imports ||16447 ||13512 |
Corporate Social Responsibility
The year 2020-21 posed an immense challenge in front of the entire Humanity a newvirus emerged and ensured that all things which are otherwise considered normal; comes toa standstill. COVID -19 has affected all spheres of life in the country and the world atlarge. Despite of all difficulties Vedanta committed itself to the
planned programmes and reached out to communities across India to fulfill theirimmediate needs in terms of meals dry ration preventive health care etc. The year2020-21 brought lot of laurels in the hats of Vedanta Group. The group companies have beenrecognised for Socio-economic impact it has created in the communities through itslarge-scale CSR Program receiving of more than 16 National and International awards is atestimony to that. Companies won CII ITC Sustainability Award IHW Council Health ImpactAward Grant Thornton SABERA Award 2020 ICC Social Impact award 2021 to name a few.
For almost all our programmes a bottom-up community engagement approach isnon-negotiable. This collaborative approach ensures community ownership suitable projectdesign effective delivery and post project sustainability.
Our development initiatives are governed by the needs of the communities where weoperate. Needs assessment studies form the basis of the course of action undertaken by theBU CSR teams. These actions enable us to create a positive social impact where we operate.All our community development programmes are governed by the Vedanta CSR Policy andCorporate Technical Standards that are part of the Vedanta Sustainability Framework.Further to benefit from diverse perspectives and in keeping with a culture of collectiveleadership Vedanta has formed a Group CSR ManCom and Group CSR EXCO.
Vedanta has a strong Board CSR Committee including senior Independent Directors. TheCommittee provides strategic direction for CSR programmes and approves its plans andbudgets. It also reviews progress and guides the CSR teams towards running well-governedand impactful community programmes.
An overview of CSR initiatives is provided in earlier section of this Annual Report andreport on CSR activities for FY 2020-21 as per Section 135 of Companies Act 2013 andrules made thereunder forms part of this Directors Report and is annexed hereto asAnnexure B. The policy may be viewed at www.vedantalimited.com.
Vedanta's Efforts to Combat COVID-19 Pandemic
Vedanta which has been at the forefront of the battle to combat the COVID-19 pandemichas reached out to communities across 9 states in India to provide them with preventivehealthcare and distribute free meals. As part of the Meals for Free programme the Companyhas so far provided ~11.46 lakhs meals to daily wage earners across the country. Inaddition dry packet rations have been provided to more than 13500 families from themarginalised sections of the society. On their part the business units have alsodistributed more than 49650 dry ration packets to the local communities.
Vedanta has pledged 10 lakh meals to daily wage earners and has set up a ' 100 crorescorpus for daily workers preventive healthcare and welfare of employees and contractpartners. The Company has also contributed ' 101 crores to PM-CARES Fund to join forceswith the government in fighting the pandemic.
Keeping in mind the poor condition of stray animals the Company has fed more than50000 stray animals every day. The Company has so far provided more than 12.70 lakhsfeedings to stray animals in Delhi Mumbai and Patna.
In a bid to strengthen preventive healthcare Vedanta has distributed more than 4.5lakhs masks. The Company has handed over another 2 lakhs N95 masks to the Ministry ofHealth and Family Welfare. So far the Company has provided more than 26000 surgicalmasks and 75000 surgical gloves to district hospitals across the country.
Vedanta has also collaborated with the Ministry of Textiles to import 23 machines forindigenously Personal Protective Equipment (PPEs). The imported machines which are nowoperational able to produce 50000 PPEs per day. The Company has distributed more than 1lakhs soaps and sanitisers across communities.
BALCO Hospital has set up isolation wards. A 100-bed hospital has been commissioned atKorba in Chhattisgarh. Jharsuguda unit supported District Administration for DistrictCovid Hospital by providing 110 bedded hospital including 10 ICUs 10 ventilators etc. TheCairn Centre of Excellence (CCoE) in Jodhpur has been handed over to districtadministration as a quarantine facility with a 120-bed capacity with meals provided threetimes a day for 150 people. More than 10 mobile health vans have been made available todistrict administration for use as ambulances and for distribution of essentialcommodities by Business Units and Nand Ghars.
More than 1100 women SHG members were engaged in the stitching of masks anddistributing same among
communities. They also contributed more than 10 ton grains to grain banks created forsupporting needy families during lockdown. As an act of solidarity with the stategovernments Vedanta has contributed ' 32.3 crores to different State's Chief MinisterRelief fund COVID-19 Mitigation Fund. Your Company has also procured PPE kits for theGovernment of Odisha and also arranged food packets sanitiser kits to migrant workerstravelling back to their home states.
Employees have donated one day's salary which was contributed by the Company for therelief funds. Vedanta in collaboration with Apollo Hospitals has established a 24x7general helpline for the employees to ensure timely healthcare advice during the lockdown.The services are open for all employees and their families.
Digitalisation initiatives - CSR
Vedanta is committed towards bringing innovation & creating shared values bymanaging our stakeholders through different community development initiatives in variousthematic areas and automation in CSR Governance. It has developed first of its kind(in-house) application - called NIVAARAN for CSR function to manage the community requestneeds or grievances and address them on time across Vedanta. Besides this an in-housePower BI application was launched across Vedanta in 2020 - CSR DISHA App to monitor theCSR projects of Vedanta across all BUs.
COVID-19 led to the disruption of education for millions of children. eKaksha - incollaboration with the Government of Rajasthan was launched to provide subject and chapterwise learning videos to all students free of cost. One of the biggest engagements was thevirtual 5th Cairn Pink City Half Marathon 2020 involving over 40000 participants from 23countries earning a special place as India's biggest virtual marathon in the Book ofRecords UK.
The Vedanta Group has been at the very forefront of India's battle to combat COVID-19and has made substantial commitments across key regions communities and markets the groupoperates various businesses in. A study was carried out through Weber Shandwick to assessand benchmark key initiatives the Group has undertaken to combat COVID-19 pandemic acrossnine states in India covering more than 600 respondents across different categories ofstakeholders.
Most respondents (~90 %) are happy with the Group's COVID-19 initiatives.
93% of the respondents have rated highly on the quality of assistance providedby the group.
The reach and efficacy of most initiatives have been rated highly withdistribution of masks and engaging rural SHG women initiatives leading with almost 59%respondents giving an 'exceptional' rating to the same.
The rural beneficiary community has responded well; and is largely happy with mostinitiatives.
HUMAN RESOURCES MANAGEMENT
People and Culture
Your Company has always aspired to build a culture that demonstrates world-classstandards in safety environment and sustainability. People are our most valuable assetand we are committed to provide all our employees with a safe and healthy workenvironment.
An update on People & Culture detailing the Company's initiatives recruitmentstrategy hiring projects and talent management and development is elucidated in theSustainability and ESG Section of the Annual Report.
Employee Stock Option Scheme
Employee stock options is a conditional share plan for rewarding performance onpre-determined performance criteria and continued employment with the Company.
It provides a much better line-of-sight to all the employees.
Your Company has established a share incentive schemes viz. 'Vedanta Limited EmployeeStock Option Scheme 2016' ("the Scheme"). The Scheme was framed with a view toreward employees for their contribution in successful operation of the Company with wealthcreation opportunities encouraging high-growth performance and reinforcing employeepride.
The Scheme was launched after obtaining statutory approvals including shareholders'approval by way of postal ballot on December 12 2016.
On March 31 2021 the Nomination & Remuneration Committee approved the grant ofEmployee Stock Options 2020 to Vedanta employees covering 38% of eligible population.In-order to align the scheme with the best-inclass reward practices globally and pertinentIndian peers as well as to emphasise on our value system of 'CARE' for employees andculture of 'Pay for Performance' the ESOS 2020 plan has undergone significanttransformation.
The grant under the ESOS 2020 is completely driven by Business and Individualperformance.
The new design has made our scheme even more robust with an objective to place greaterprominance on superior individual performance thereby recognise high performing talentwhile keeping them accountable for business delivery. It has been ensured that the schemefulfills its motive of wealth creation for employees to fulfill their financial goals andgives them the sense of ownership.
To give prime importance to business delivery ESG and Carbon footprint have been addedas additional parameters to measure business performance. To ensure that we operatesustainably in line with our motto of 'zero harm zero waste and zero discharge'multiplier based on fatalities has also been included as a performance parameter forvesting.
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 secondarymarket from time to time for implementation
of the Scheme. The details of the trustees are provided can be accessed atwww.vedantalimited.com.
No employee has been issued stock options during the year equal to or exceeding onepercent 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-upcapital of the Company. Further the total acquisition by trust at no time exceeded 5% ofthe paid-up equity capital of the Company.
Pursuant to the provisions of SEBI (Share Based Employee Benefits) Regulations 2014("Employee Benefits Regulations") disclosure with respect to the ESOS Scheme ofthe Company as on March 31 2021 is available on the website of the Company atwww.vedantalimited.com.
The Company confirms that the Scheme complies with the SEBI Employee BenefitsRegulations and there have been no material changes to the plan during the financial year.
A certificate from M/s SR Batliboi & Co. LLP Chartered Accountants StatutoryAuditors with respect to the implementation of the Company's ESOS schemes would beplaced before the shareholders at the ensuing Annual General Meeting (AGM). A copy of sameis available for inspection by Members through Electronic Mode.
Managerial Remuneration Employee Information and Related Disclosures
The remuneration paid to Directors Key Managerial Personnel and Senior ManagementPersonnel during FY 2020-21 was in accordance with the Nomination and Remuneration Policyof the Company.
Disclosures under Section 197 of the Act and Rule 5(1) of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 ("Rules") relating to theremuneration and other details as required is appended as Annexure C to the Report.
In terms of provision of Section 136 of the Act and Rule 5(2) the Report and theFinancial Statements are being sent to the Members of the Company excluding the statementof particulars of employees as prescribed under Rule 5(2) of the Rules. The saidinformation is available for inspection through electronic mode. Any member interested inobtaining a copy of the said statement may write to the Company Secretary and the samewill be furnished upon such request.
Compensation Governance Practices at Vedanta
Vedanta has been built on a strong foundation of governance where the Board KeyExecutives and Compliance Officer have been vigilant and committed to ensure structuralintegrity soundness and highest standards of compensation practices. Over the last fewyears we have matured many of our reward practices as an attempt to continue to raise thebar.
The composition of Nomination and Remuneration Committee (NRC) is in compliancewith the Listing Regulations and majority of the members are
Independent Directors. The Chairman of the committee is an Independent Director.
The members of the NRC together bring out the rich expertise diverseperspectives and independence in decision-making on all matters of remuneration forDirectors Key Managerial Personnel (KMP) & Senior Management Personnel (SMP). TheIndependent Directors are actively engaged throughout the year as members of the NRC invarious people matters even beyond remuneration.
A board charter appoints and sets our primary responsibilities of NRC whichincludes selecting compensating monitoring and when necessary replacing key executivesand overseeing succession planning.
Best-in-class independent consultants are engaged to advise and support thecommittee on matters of board evaluation and leading reward practices in the industry.
The Executive Compensation Philosophy is well established and benchmarked acrossrelevant industry comparators which enables us to differentiate people on the basis ofperformance potential and criticality in-order to provide a competitive advantage in theindustry.
The Total Reward Philosophy at Vedanta is built on the core objective of driving'Pay for Performance' culture. The appropriate mix of components of the ExecutiveCompensation aim to drive the short as well as long-term interests of the Company and itsshareholders through strong emphasis on operational / financial fundamentals sociallicense to operate and business sustainability strategic objectives of resource andreserve creation and wealth creation for stakeholders.
Timely risk assessment of compensation practices is done in addition to reviewof all components
of compensation for consistency with stated compensation philosophy:
- Financial analysis & simulation of the longterm cost of reward plans and theirReturn on Investments (ROI).
- Provision of claw back clause as part of the ground rules of our long-term incentivescheme for all our leaders.
- Upper limits and caps defined on incentive pay-outs in the event of over-achievementof targets to avoid windfall gains.
We do not encourage provision of excessive perks or special clauses as part ofemployee contract such as:
- No provision of Severance Pay in Employment contracts of Whole-Time Directors (WTD)
KMP & SMP.
- No Tax Gross up done for executives except for expatriates as part of taxequalisation
- No provision of unearned Incentives/unvested Stock or Cash Options
Any benefit provided to Key Executives are available to all the employees of theCompany as per the defined Company policy.
Voice of the employee: We ensure the involvement of bright minds from diversefunctions in the organisation and well-known external partners in designing and drivingthe major incentive schemes in the organisation. Our policies are transparent and informedto employees in a timely manner confirming that the employees have a say in all ourpractices.
We continue to corroborate the Internal Pay Equity Principles sustained attention toequity grant practices and maintain checks & balances to confirm that the practicesare legally and ethically compliant with International national and state/regional laws.
Prevention of Sexual Harassment at Workplace
The Company has zero tolerance for sexual harassment at workplace and has adopted aPolicy on Prevention Prohibition and Redressal of Sexual Harassment at Workplace in linewith the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and the Rules thereunder for prevention and redressalof complaints of sexual harassment at workplace.
As part of Vedanta Group your Company is an equal opportunity employer and believes inproviding opportunity and key positions to women professionals. The Group has endeavouredto encourage women professionals by creating proper policies to tackle issues relating tosafe and proper working conditions and create and maintain a healthy and conducive workenvironment that is free from discrimination.
This includes discrimination on any basis including gender as well as any form ofsexual harassment.
During the period under review three complaints were received and resolved. YourCompany has constituted Internal Complaints Committee (ICC) for various business divisionsand offices as per the requirements of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013.
The businesses are exposed to a variety of risks which are inherent to a globalnatural resources organisation. The effective management of risk is critical to supportthe delivery of the Group's strategic objectives.
Risk management is embedded in the organisation's processes and the risk frameworkhelps the organisation meet its objectives by aligning operating controls with the missionand vision of the Group set by the Board.
As part of our governance philosophy the Board has a Risk Management Committee toensure a robust risk management system. The details of Committee and its terms ofreference are set out in the Corporate Governance Report which forms part of this AnnualReport.
With effect from June 6 2020 the Risk Management Committee has been consolidated withthe Audit Committee comprising of only Independent Directors ensuring robust riskmanagement systems in place with valued feedback of Independent Directors being on theCommittee.
Our risk-management framework is designed to be simple consistent and clear formanaging and reporting risks from the Group's businesses to the Board. Our managementsystems organisational structures processes standards and code of conduct together formthe system of internal controls that govern how we conduct business and manage associatedrisks. We have a multi-layered risk management framework to effectively mitigate thevarious risks which our businesses are exposed to in the course of their operations.
The Audit & Risk Management Committee aids the Board in the risk management processby identification and assessment of any changes in risk exposure review of risk controlmeasures and by approval of remedial actions where appropriate. The Committee is in turnsupported by the Group Risk Management Committee which helps the Audit & RiskManagement Committee in evaluating the design and operating effectiveness of the riskmitigation programme and the control systems.
Major risks identified by businesses and functions are systematically addressed throughmitigating actions.
Risk officers have also been formally nominated at operating businesses as well as atGroup level to develop the risk-management culture within the businesses.
The Risk Management Policy of the Company revised in 2019 covers cyber security aswell.
For a detailed risk analysis you may like to refer to the risk section in theManagement Discussion and Analysis Report which forms part of this Annual Report.
The Group has a structured framework for cyber security. Each of the Business Units hasa CIO (Chief Information Officer) with suitable experience in Information / Cybersecurity. Every year cyber security review is carried out by IT experts (belonging to ITpractices of Big-4 firms). Vulnerability Assessment and Penetration Testing (VAPT) reviewis also carried out by cyber experts. This practice has been in place for several yearsnow and has helped in strengthening the cyber security environment in the group. At thesame time the external environment on cyber security is continuously evolving. Therespective CIOs are responsible for ensuring appropriate controls are in place to addressthe emerging cyber risks.
Internal Financial Controls
Your Board has devised systems policies and procedures/ frameworks which arecurrently operational within the Company for ensuring the orderly and efficient conduct ofits business which includes adherence to policies safeguarding its assets preventionand detection of frauds and errors accuracy and completeness of the accounting recordsand timely preparation of reliable
financial information. In line with best practices the Audit & Risk ManagementCommittee and the Board reviews these internal control systems to ensure they remaineffective and are achieving their intended purpose.
Where weaknesses if any are identified as a result of the reviews new procedures areput in place to strengthen controls. These controls are in turn reviewed at regularintervals.
The systems/frameworks include proper delegation of authority operating philosophiespolicies and procedures effective IT systems aligned to business requirements aninternal audit framework an ethics framework a risk management framework and adequatesegregation of duties to ensure an acceptable level of risk. Documented controls are inplace for business processes and IT general controls. Key controls are tested by entitiesto assure that these are operating effectively. Besides the Company has also adopted anSAP GRC (Governance Risk and Compliance) framework to strengthen the internal control andsegregation of duties/ access.
The Company has documented Standard Operating Procedures (SOP) for procurementproject/expansion management capital expenditure human resources sales and marketingfinance treasury compliance Safety Health and Environment (SHE) and manufacturing.
The Group's internal audit activity is managed through the Management AssuranceServices ('MAS') function. It is an important element of the overall process by which theAudit & Risk Management Committee and the Board obtains the assurance on theeffectiveness of relevant internal controls.
The scope of work authority and resources of MAS are regularly reviewed by the Audit& Risk Management Committee. Besides its work is supported by the services of leadinginternational accountancy firms.
The Company's system of internal audit includes covering monthly physical verificationof inventory a monthly review of accounts and a quarterly review of critical businessprocesses. To enhance internal controls the internal audit follows a stringent gradingmechanism focusing on the implementation of recommendations of internal auditors. Theinternal auditors make periodic presentations on audit observations including the statusof follow-up to the Audit & Risk Management Committee.
The Company is also required to comply with the Sarbanes Oxley Act Sec 404 whichpertains to Internal Controls over Financial Reporting (ICOFR). Through the SOX 404compliance programme which is aligned to the Committee of Sponsoring Organizations of theTreadway Commission (COSO) framework the Audit & Risk Management Committee and theBoard 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 theGroup's material business risks. Due to the limitations inherent in any risk managementsystem the process for identifying
evaluating and managing the material business risks is designed to manage rather thaneliminate risk. Besides it created to provide reasonable but not absolute assuranceagainst material misstatement or loss.
Since the Company has strong internal control systems which are further strengthened byperiodic reviews as required under the Listing Regulations and SOX compliance by theStatutory Auditors the CEO and CFO recommend to the Board continued strong internalfinancial controls.
There have been no significant changes in the Company's internal financial controlsduring the year that have materially affected or are reasonably likely to materiallyaffect its internal financial controls other than as mentioned in the "Audit Reportand Auditors" section to this report.
There are inherent limitations to the effectiveness of any system of disclosurecontrols and procedures including the possibility of human error and the circumvention oroverriding of the controls and procedures. Accordingly even effective disclosure controlsand procedures can only provide reasonable assurance of achieving their objectives.Moreover in the design and evaluation of the Company's disclosure controls andprocedures the management was required to apply its judgement in evaluating thecost-benefit relationship of possible controls and procedures.
Further the Audit & Risk Management Committee annually evaluates the internalfinancial controls for ensuring that the Company has implemented robust systems/frameworkof internal financial controls viz. the policies and procedures adopted by the Company forensuring the orderly and efficient conduct of its business including adherence toCompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information.
The Company has in place a robust vigil mechanism for reporting genuine concernsthrough the Company's Whistle-Blower Policy. As per the Policy adopted by variousbusinesses in the Group all complaints are reported to the Director - ManagementAssurance who is independent of operating management and the businesses. In line withglobal practices dedicated e-mail IDs a centralised database a 24X7 whistle-blowerhotline and a web-based portal have been created to facilitate receipt of complaints. Allemployees and stakeholders can register their integrity related concerns either by callingthe toll-free number or by writing on the web-based portal which is managed by anindependent third party. The hotline provides multiple local language options. All casesreported as part of whistleblower mechanism are taken to their logical conclusion within areasonable timeframe. After the investigation established cases are brought to the GroupEthics Committee for decision-making. All Whistle-Blower cases are periodically presentedand reported to the Company's Audit & Risk Management Committee. The details of this
process are also provided in the Corporate Governance Report and the Whistle-BlowerPolicy is available on the Company's website at www.vedantalimited.com.
Management Discussion and Analysis
The Management Discussion and Analysis Report for the year under review as specifiedunder Regulation 34 read with Schedule V of Listing Regulations is presented in a separatesection forming part of this Annual Report.
INNOVATION DIGITALISATION AND TECHNOLOGY
Innovation Digitalisation & Technology
As Vedanta looks to continue to build on its strategic vision - the Group and seniorleadership have crafted an aggressive plan to instill Digital innovation in all aspects othe business. It is the group's ambition to leverage cutting edge technology and partnersto drive best in class operations and sustainability. In this connection - your Companyhas greenlit multiple flagship programmes to not only drive the overall transformationjourney but also to build the internal "Digital muscle" to sustain the gains ofthe transformation.
At Vedanta we are going for a group-wide digital transformation Project Pratham withthe vision of transforming Vedanta Group into a truly digital-first organisation andmaking digital the new way of working. Project Pratham is delivering digitaltransformation across our Mining & Metals and Oil & Gas business with a focus ondriving asset optimisation production volume growth operating cost reductions enhancedsafety and improve ease of doing business. The objective of the programme is to deliver acombination of tangible value in the form of EBITDA increase and other intangible gainssuch as enhanced safety and security sustainability better governance and improvedemployee productivity. To sustain this change a clear roadmap is also drawn foraugmenting capabilities in the areas of Digital Smart Manufacturing AnalyticsAutomation and Cyber security.
To engage with innovative start-ups and leverage their technological capabilities andagility - Vedanta Spark programme was launched in OctRs 20. The programme has attracted1300 startups with more than a million impressions across social media platforms. Withthe objective of solving key problems across business units Vedanta is looking to partnerwith top digital and core tech startups.
In addition the Company has launched group-wide idea generation competition - PrathamDigtial Olympics to incentivise grass-root level innovations and bring digital culturalchange.
Policy and Advocacy
Vedanta believes in sustainable and equitable development of natural resource sector.While engaging in public policy and regulatory matters our Advocacy efforts evolve aroundour core values. Our Company participates in stakeholder consultations on economicreforms raw material & energy security taxation environmental development businesscontinuity ease
of doing business sustainable business practices and other policy and regulatorymatters which are related to our business in a responsible manner. We are associated withvarious industry associations and chambers for submission of our representations torelevant ministries government departments and regulatory bodies both at the Centre andState levels.
Research and Development
Vedanta has been an aggressive leader in terms of adopting new technologies andimproving processes and standards. Hindustan Zinc Limited's (HZL) Technology centre worksin the interface between science and business that offers opportunity to processinnovative ideas to technology. Principal focus area includes process improvementsdevelopment work for future growth new technology development and adaptation minor metalrecovery and waste to wealth initiatives. R&D team has implemented/finalised projectson recovery improvement cost reduction process optimisation and evaluation of advancetechnologies. Some of the key projects at mills are: alternative non-hazardous and costeffective reagent for nigrosine improvement in Zawar recovery by process audits &individual ore type characterisation Geo-Metallurgy study for SK Mine and RA Mine onadvance Drill Cores for Metallurgical characterization and completed feasibility study for3% Pb-Ag recovery improvement by Pb regrinding at RAM & Derrick screen at Zawar.
Hindustan Zinc achieved a big milestone being granted two US patents for twotechnologies developed in-house by state of art R&D centre - Zntech. The two patentsare:
1. Technology for manufacturing paver blocks from process waste material.
2. Method for production of potassium antimony tartrate by utilising antimony residuesof smelter.
In Aluminium and Power Business Vedanta has entered into the partnership with threeresearch institutes namely CSIR-National Metallurgical Laboratory (NML) JamshedpurInstitute of Minerals and Materials Technology (IMMT) Bhubaneswar and Jawaharlal NehruAluminium Research Development & Design Centre (JNARDDC) Nagpur. As part of thisall three research institutes shall work together to develop technologies for bauxiteresidue utilisation like red mud beneficiation for REE enrichment recovery of aluminavalues recovery of iron values and process for extraction and separation of Titanium andREEs (La Ce Y Sc).
Vedanta Aluminium has one of the finest and best-in-class R&D setups among peers inthe aluminium value chain. We are already collaborating with customers in the autoindustry to develop customised aluminium alloys and products catering to their objectiveof achieving desired light weighting for EVs and hybrids of the future. Case in pointVedanta pioneered PFAs (Primary Foundry Alloys) for the Indian market. We were the firstin India to supply PFA to the domestic auto sector and until we did so the country'sentire PFA demand was being met through imports even though India has the world'ssecond-largest aluminium production capacity.
In Cairn we continue to operate our fields in a digital manner through unmanned wellpads with remote access which drastically reduces human exposure to risk and increasesoperational efficiency. Centralised control rooms remotely activated surface facilitiesand digital surveillance platform (BabelFish) has allowed high uptime in operation ofMangala Processing Terminal over 500 wells spread across many acres centralised polymerprocessing farm and the world's largest continuously heated pipeline. Our other businessesalso continue to lead the industry in terms of R&D. Copper for example has createdPure Tellurium Extraction to produce copper anodes (99.5% pure) and Ferric SulphateExtraction from Copper Slag which is our by-product. In Iron Ore Business Value AddedBusiness team had developed a customised product Sesa Special Grade (SSG) for a nichesegment (otherwise being imported by customers) by producing high purity pig iron throughblast furnace route. The Value Added Business team had also come up with an innovativeidea of producing Foundry Grade Pig Iron outside the blast furnace using Ferro Siliconwhich otherwise normally gets produced in blast furnace by compromising on productivity& high fuel rate. Some other examples are automation of the charging plate insertionmechanism employee care applications automatic trip counting and dynamic allocation ofhauling units and GPS controlled speed tracking system in dispatch trucks. Our businessescontinue their tremendous work in these areas to make the group more sustainable.
Your Company has an active Investor Relations (IR) function which continuously strivesfor excellence by engaging with international and domestic investors. Your Companybenchmarks global IR standards and aims at exceeding them. The Company proactively seekfeedback from all stakeholders throughout the year.
The Investor Relations team takes both formal and informal approach to engage withshareholders. The team interacts with investors at various platforms demonstratingconsistent and clear communication between internal and external parties. Some of theseforums include quarterly earnings calls hosting Investor/Analyst Day site visits for keybusinesses one-on-one as well as group meetings and participation in sell-sideconferences. The leadership teams from various businesses along with promoters of theCompany as well as senior management consisting of the CEO and the CFO are also invited asrequired for some of these engagements. These proactive investor engagement activities andopenness of senior leaders to interact with investors and analysts is well appreciated byall stakeholders.
Shareholders can contact us any time through our Investor Relations team with contactdetails available online at www.vedantalimited.com. Shareholder and analyst feedbacks areshared in a timely and structured manner with the Board through the Chairman the SeniorIndependent Director the CEO the CFO and the
Company Secretary. Ongoing communication with our stakeholders keeps the board andsenior management abreast of their views and helps to gain insight.
Vedanta has set standards through the detailed and transparent disclosures on theCompany's operational and financial performance. Your Company had created its firstIntegrated Report (for Financial Year 2018) and continued thereafter. The Company has alsobeen conferred with the prestigious LACP and ICAI award for its FY 2020 Integrated report.Having a diverse shareholder base and multiple business verticals demands enormousefforts from an IR function to manage investors sell-side analysts as well as ensuring atimely and complete business update is provided to all. As a key milestone in thiscontinuing endeavour your Company created a digital interactive microsite on thecorporate website to provide an interactive experience beyond what is available in theannual and quarterly results materials.
Key Initiatives with respect to various stakeholders
As a diligent driver of all-encompassing stakeholder growth the Company undertakessignificant initiatives with respect to its employees shareholders investors lenderssuppliers customers civil society local community and Government authorities strivingto accelerate its focus on HSE and sustainability. These initiatives are enlisted withdetailed specifics in the Integrated Report section of the Annual Report. Along with theIntegrated Report the Company also publishes the Sustainability Report which details theCompany's initiatives in the ESG space for a holistic overview to investors.
Report on Corporate Governance
Your Company is committed to maintaining the highest standards of corporate governancein the management of its affairs and ensuring its activities reflect the culture we wishto nurture with our colleagues and other stakeholders.
As part of commitment to the various stakeholders the Company follows global bestpractices. To meet its obligations towards its shareholders and other stakeholders theCompany has a corporate culture of conscience and consciousness; integrity transparencyand accountability for efficient and ethical conduct of business.
Our continued focus on improving the corporate governance mechanisms and on enhancingthe efficiency curve transparency and accountability of our operations will enable us tolead the way for the industry.
Our disclosures seek to attain the best practices in international corporate governanceand we constantly endeavour to enhance long-term shareholder value. Our Corporategovernance report for fiscal 2021 forms part of this Annual Report.
Directorate Key Managerial Personnel and Senior Management Personnel
The Board of Directors of the Company provide entrepreneurial leadership and plays acrucial role in providing strategic supervision overseeing the management performanceand long-term success of the Company while ensuring sustainable shareholder value. Drivenby its guiding principles of Corporate Governance the Board's actions endeavour to workin best interest of the Company.
The Directors hold a fiduciary position exercises independent judgement and plays avital role in the oversight of the Company's affairs. Our Board represents a tapestry ofcomplementary skills attributes perspectives and includes individuals with financialexperience and a diverse background.
In line with the recommendation of SEBI and our relentless endeavour to adhere to theglobal best practices the Company is chaired by Mr. Anil Agarwal Non-Executive Chairmaneffective April 1 2020.
During the year your Company welcomed Ms. Padmini Somani and Mr. Dindayal Jalan as anIndependent Director of the Company effective February 5 2021 and April 1 2021respectively. In the opinion of the Board:
Ms. Somani has rich experience in the philanthropy and development space forover 20 years and holds highest standards of integrity and has also been recognised forher work in youth education health and skilling programmes with vulnerable andmarginalised populations. Based on Ms. Somani's prolific skill set and experience incorporate social responsibility your Board believes that Ms. Somani will be an incredibleasset to the Board as we remain committed to reinvest in the social good of ourneighbourhood communities and nation; and
Mr. Dindayal Jalan has rich and diverse experience of over 40 years in businessoperations financial management corporate negotiations financial control businessplanning due diligence business development treasury capital raising businessrestructuring investor relations commercial taxation people development and strategicplanning and is a person of integrity. With bringing good blend of technical and financialexperience your Board believes that Mr. Jalan's induction will broaden the Board'sexperience bringing in complementary skills and expertise in diverse areas.
Accompanying Ms. Somani's and Mr. Jalan's detailed profile provided in the earliersection of the Annual Report this statement forms a part of the Directors' Report inaccordance with the Companies (Accounts) Amendment Rules 2019 notified to hold effectfrom December 1 2019.
Mr. Sunil Duggal appointed as Interim Chief Executive Officer and Key ManagerialPersonnel of the Company effective April 06 2020 and CEO of the Company for a fixed termof 3 years w.e.f. August 01 2020 has
been appointed as Whole-Time Director & CEO and KMP of the Company effective fromApril 25 2021 till July 31 2023. Mr. Duggal brings with him over 36 years of experienceof leading high-performance teams and more than 20+ years in leadership positions. He isknown for his ability to calmly navigate through tough and challenging times nurture andgrow a business evaluate opportunities & risks and successfully drive efficiency& productivity whilst reducing costs & inefficiencies and deliver innovativesolutions to challenges. Brief Profile of Mr. Duggal is provided in earlier section ofthis Annual Report and can be accessed at www.vedantalimited.com.
The Key Managerial Personnel and Senior Management Personnel similarly comprises ofmultifarious leaders with each member bringing in their key proficiency in different areasaligned with our business and strategy.
A comprehensive update on the change in the Directorate Key Managerial Personnel andSenior Management Personnel of the Company along with the directorships held in otherCompanies their skills and expertise have been explicated in the Corporate Governancereport forming part of this Annual Report.
Director Retiring by Rotation
As per the provisions of Companies Act 2013
Mr. Anil Agarwal (DIN: 00010883) Non-Executive Director designated as Chairman of theCompany is liable to retire by rotation at the ensuing AGM and being eligible offershimself for re-appointment. Based on the performance evaluation and recommendation of theNomination & Remuneration Committee Board recommends his re-appointment.
Brief Profile and other related information seeking re-appointment is provided in theAGM Notice.
Board and Committees
The Board has overall responsibility for establishing the Company's purpose values andstrategy to deliver the long-term sustainable success of the Company and generate valuefor shareholders. The Board places great importance on ensuring these key themes continueto be appropriate for the businesses and markets in which we operate around the worldwhile being aligned with our culture.
The Board is supported by the activities of each of the Board Committees which ensurethe right level of attention and consideration are given to specific matters. Accordinglythe Board has established Committees to assist it in exercising its authority.
Each of the Committees has terms of reference under which authority is delegated by theBoard.
At present the Company has the following Board Committees which ensures greater focuson specific aspects of Corporate Governance and expeditious resolution of issues ofgovernance as and when they arise.
An all-embracing update on the Board its committees their composition terms andreference meetings held during FY 2021 and the attendance of each member is detailed inthe Corporate Governance Report.
Statutory Board Committees
|Audit & Risk Management Committee ||Nomination & Remuneration Committee ||Corporate Social Responsibility Committee ||Stakeholders Relationship Committee |
|Sustainability ||Share and Debenture ||Committee of |
|Committee ||Transfer Committee ||Directors |
1. With effect from June 6 2020 the Risk Management Committee has been consolidatedwith the Audit Committee comprising of only Independent Directors.
2. Effective May 16 2020 Finance Standing Committee has been consolidated with theCommittee of Directors.
Familiarization Program for Board Members
Your Company has developed comprehensive induction processes for our new Board memberswhich aim to provide a broad introduction to the Group and enable new directors tocontribute to the Board's deliberations from the outset. The details of thefamiliarization programme and process followed are provided in the Corporate GovernanceReport forming part of this Annual Report and can also be accessed on the website of theCompany at www.vedantalimited. com.
Annual Board Evaluation
The Board is committed to transparency in assessing the performance of Directors. TheBoard conducts annual evaluations of its performance the performance of its Committeesthe Chair CEO Directors and the governance processes that support the Board's work.
As a part of governance practice the Company had engaged a leading consultancy firmto conduct the Board Evaluation Process which was facilitated through an online securedmodule ensuring transparent effective and independent of the management.
The evaluation parameters and the process have been explained in the CorporateGovernance Report.
Board Diversity and Inclusion
The Board sets the tone for inclusion and diversity across the Group and believes it isimportant to have an appropriate balance of skills knowledge experience and diversity onthe Board and at senior management level to ensure good decision-making. It recognises theneed to create conditions that foster talent and encourage all colleagues to achieve theirfull potential. A diverse Board with a range of views enhances decision-making which isbeneficial to the Company's long-term success and in the interests of Vedanta'sstakeholders.
Additional Details on the Board Diversity and the key attributes of the Board Membersare explicated in the Corporate Governance Report forming part of this Annual Report.
Policy on Directors' Appointment & Remuneration
The Nomination & Remuneration Policy adopted by the Board on the recommendation ofthe Nomination & Remuneration Committee enumerates the criteria for assessment andappointment/re-appointment of Directors Key Managerial Personnel (KMP) and SeniorManagement Personnel (SMP) on the basis of their qualifications knowledge skillindustrial orientation independence professional and functional expertise among otherparameters with no bias on the grounds of ethnicity nationality gender or race or anyother such discriminatory factor.
The Policy also sets out the guiding principles for the compensation to be paid to theDirectors KMP and SMP; and undertakes effective implementation of Board familiarisationdiversity evaluation and succession planning for cohesive leadership management.
With your Company continuing to comply with the Policy in true letter and spirit thecomplete Policy is reproduced in full on our website at www.vedantalimited.com and asnapshot of the Policy is elucidated in the Corporate Governance Report.
Observance of the Secretarial Standards
The Directors state that proper systems have been devised to ensure compliance with theapplicable laws. Your company adheres and complies with the applicable SecretarialStandards issued by the Institute of Companies Secretaries of India (ICSI).
Independent Directors Statement
The Company has received declaration from all the Independent Directors that theycontinue to meet the criteria of independence as provided under the Companies Act andListing Regulations and comply with the Code for Independent Directors as specified underSchedule IV of the Act.
The Directors have also confirmed that they are not aware of any circumstance orsituation which exists or may be reasonably anticipated that could impair or impacttheir ability to discharge their duties with an objective independent judgement andwithout any external influence.
Further in compliance with Rule 6(1) and 6(2) of the Companies (Appointment andQualification of Directors) Rules 2014 all Independent Directors of the Company haveregistered themselves with the Indian Institute of Corporate Affairs (IICA).
In terms of provisions of Section 92 134(3)(a) of the Companies Act 2013 read withRule 12 of Companies (Management and Administration) Rules 2014 the Annual Return inForm MGT-7 for the financial year ended March 31 2021 is put up on the Company's websiteand can be accessed at www.vedantalimited.com.
Audit Reports and Auditors Audit Reports
The Statutory Auditors have issued unmodified opinion on the financialstatements of the Company as of and for the year ended March 31 2021. Their
report on the Internal Financial Controls contains a qualification related to theeffectiveness of the Company's internal financial controls over financial reporting as atMarch 31 2021 with respect to benchmarking the terms and authorisation of loans andguarantees between itself or its subsidiaries with controlling shareholders and theiraffiliates. In the said report the Statutory Auditors have considered the materialweakness identified in determining the nature timing and extent of audit tests applied intheir audit of the March 31 2021 financial statements of the Company and concluded thatthe material weakness does not affect their opinion on the financial statements of theCompany.
The management's response is as follows:
During the year the Company has updated its policies regarding benchmarking the termsand authorisations for such related party transactions. The Board will continue to monitorcompliance with such policies. However the material weakness described above did notresult in material misstatements to the financial statements.
The Statutory Auditors' report for FY 2020-21 does not contain any other qualificationreservation or adverse remarks which calls for any explanation from the Board ofDirectors. The Auditors' report is enclosed with the financial statements in the AnnualReport.
The Secretarial Auditors' Report for FY 2020-21 does not contain anyqualification reservation or adverse remark. The report in form MR-3 along with AnnualSecretarial Compliance Report is enclosed as Annexure D to the Directors' Report.
As per the Listing Regulations the auditors' certificate on corporategovernance is enclosed as an Annexure to the Corporate Governance Report forming part ofthe Annual Report. The Certificate does not contain any other qualification reservationor adverse remark except as mentioned in the report.
A certificate from Company Secretary in Practice certifying that none of thedirectors on the Board of the Company have been debarred or disqualified from beingappointed or continuing as directors of companies by the SEBI / Ministry of CorporateAffairs or any such statutory authority forms part of the Corporate Governance Report.
|Statutory Auditors || M/s S.R. Batliboi & Co. LLP Chartered Accountants (Firm Registration No. 301003E / E300005) had been appointed as the Statutory Auditors of the Company till the conclusion of 56th Annual General Meeting to be held in calendar year 2021. |
| || The Auditors have confirmed that they are not disqualified from being re-appointed as Statutory Auditors of the Company. |
| || The report of the Statutory Auditors along with notes to financial statements is enclosed to this Report. The Notes on financial statements referred to in the Auditors' Report are self-explanatory and do not call for any further comments. |
| || The auditors have also furnished a declaration confirming their independence as well as their arm's length relationship with the Company. The Audit & Risk Management Committee reviews the independence and objectivity of the auditors and the effectiveness of the audit process. |
| || The Statutory Auditors were present at the last AGM of the Company. |
|Secretarial Auditors || M/s Chandrasekaran & Associates (Firm Registration No. 002500) Practicing Company Secretaries had been appointed by the Board to conduct the secretarial audit of the Company for financial year 2020-21. |
| || The Company had received a certificate confirming their eligibility and consent to act as the Auditors. |
| || The Secretarial Audit Report for the financial year ended March 31 2021 forms part of this report and confirms that the Company has complied with the provisions of the Act Rules Regulations and Guidelines and that there were no deviations or non-compliances. |
| || Pursuant to SEBI circular no. CIR/CFD/CMO1/27/2019 dated February 8 2019 the Company has also undertaken an audit for all applicable compliances as per the Listing Regulations and circular guidelines issued thereunder. The Annual Secretarial Compliance Report for the financial year 2020-21 has also been submitted to the Stock Exchanges within the stipulated timeline. |
| || The Secretarial Auditors were also present at the last AGM of the Company. |
|Cost Auditors || M/s Shome and Banerjee and M/s Ramnath Iyer & Co. Cost Accountants had been appointed by the Board to conduct the audit of cost records of the Oil & Gas Business and other Business segments of the Company respectively for the financial year 2020-21. |
| || M/s Ramnath Iyer & Co. Cost Accountants were nominated as the Lead Cost Auditors. |
| || The Company had received a certificate confirming their eligibility and consent to act as the Auditors. |
| || The cost accounts and records of the Company are duly prepared and maintained by the Company as required under Section 148(1) of the Act pertaining to cost audit. |
|Internal Auditors || M/s Deloitte Haskins & Sells LLP had been appointed as the Internal Auditors of the Company for Financial Year 2020-21 to conduct the Internal Audit on the basis of detailed Internal Audit Plan. |
| || The Company has an independent in-house Management Assurance Services (MAS) team to manage the group's internal audit activity and that functionally reports to the Audit & Risk Management Committee. |
Reporting of Fraud by Auditors
During the reporting year under Section 143(12) of Companies Act 2013 none of theAuditors of the Company have reported to the Audit & Risk Management Committee of theBoard any instances of fraud committed against the Company by its officers or employees.
Legal Compliance Ethics and Governance Function
Through its concerted efforts to generate value while keeping integrity at theforefront the Legal function of your Company is a valued partner in providing regulatorysupport and gauging the viability of strategic assistance for business partnership andexpansion. It ensures advisory and compliance services pertaining to existing regulationsand legislative developments for facilitating business agenda in the areas of effectiveclaims and contract management mergers and acquisitions dispute resolution litigationand adherence to competition business ethics and governance.
With the aim to ensure smooth operations and safeguard interests of your Company forbusiness growth and sustenance in an evolving ambiguous and complex environment thefunction continues to focus on presenting areas of opportunities; mitigating risks;providing proactive assistance to other functions and departments; and bringing aboutpolicy changes based on persistent interaction with various Government bodies andindustrial associations like CII and FICCI.
As newer technologies continue to transform the market your Company ensures adeptnessin mechanisms to safeguard the data security and privacy of our stakeholders with enhancedlegal and security standards. Simultaneously to meet the growing business needs theLegal function continues to seek and identify technological opportunities while harnessingexisting know-how to streamline compliance frameworks litigation management and conductonline ethics awareness training.
Our organisational values and principles are made applicable to all our employeesthrough our Code of Business Conduct and Ethics. In a bid to create a better understandingof its practical implications the Legal function conducts an annual online ethicstraining module to necessitate all employees to mandatorily embrace the values andprinciples embodied as a part of the aforementioned Code. Additionally the functiondrives an Ethics Compliance Month initiative for raising awareness by conduct of employeetrainings in areas of ethical concern such as insider trading prevention of sexualharassment anti-bribery anti-corruption and anti-trust laws through use of interactivelearning tools.
Through our Supplier Code of Conduct we also ensure that third parties includingtheir employees agents and representatives who have a business relationship with yourCompany are bound by industry standards as well as applicable statutory requirementsconcerning labour and human rights; health safety and environment; and businessintegrity.
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. ThePolicy may be accessed at www.vedantalimited.com.
The Policy sets out the philosophy and processes to be followed for approval and reviewof transactions with Related Party and intends to ensure that proper reporting approvaland disclosure processes are in place for all transactions with Related Parties.
A detailed landscape of all RPTs specifying the nature value and terms and conditionsof the transaction is presented to the Audit & Risk Management Committee. Also aRelated Party Transactions Manual-Standard Operating Procedures has been formulated toidentify and monitor all such transactions.
During the fiscal 2020-21 all the contracts/ arrangements/ transactions entered intoby the Company with the related parties were in the ordinary course of business and on anarm's length basis and were in compliance with the provisions of the Companies Act andListing Regulations other than those mentioned in the Annexure IV of the Report onCorporate Governance forming part of the Annual Report.
All Related Party Transactions are subjected to independent review by a reputedaccounting firm to establish compliance with the requirements of Related PartyTransactions under the Companies Act 2013 and Listing Regulations.
Further there have been no materially significant RPTs during the year pursuant to theprovisions of the Companies Act and Listing Regulations. Accordingly the disclosurerequired u/s 134(3)(h) of the Act in Form AOC-2 is not applicable to your Company.
Share Capital and its Evolution
The Authorised Share Capital of the Company is Rs 74120100000 divided into44020100000 number of equity shares of Rs 1/- each and 3010000000 Preference Sharesof ' 10/- each. There was no change in the capital structure of the Company during theperiod under review.
The details of share capital as on March 31 2021 is provided below:
|Particulars ||Amount (D) |
|Authorised Share Capital ||74120100000 |
|Paid-up Capital ||3717504871 |
|Listed Capital ||3717196639 |
|Shares under Abeyance pending allotment ||308232 |
*Out of the total paid-up capital of 3717504871 equity shares 308232 equity sharesare pending for allotment and listing and hence kept under abeyance since they aresub-judice and further 160903244 equity shares are held in the form of 40225811 ADSsas on March 31 2021.
The details of the Capital Evolution has been provided on the Company's website and canbe accessed at www.vedantalimited.com.
Subsidiaries Joint Ventures and Associate Companies
Your Company has 49 subsidiaries (16 direct and 33 indirect) as at March 31 2021 asdisclosed in the notes to accounts.
During the year and till date the following changes have taken place in subsidiarycompanies:
The name of a Subsidiary Company changed from Electrosteel Steels Limited to"ESL Steel Limited" with effect from September 26 2020.
The Company acquired Ferro Alloys Corporation Limited (FACOR) on September 212020 under IBC as wholly-owned subsidiary.
Consequent to acquisition of FACOR subsidiaries of FACOR - Facor Power Limited(FPL) and Facor Realty and Infrastructure Limited (FRIL) become indirect subsidiaries ofthe Company.
Australia Subsidiary - Cairn Energy India Pty Limited got deregistered w.e.f.August 26 2020.
Scotland subsidiaries - Cairn Energy Discovery Limited and Carin Exploration(No. 2) Limited dissolved w.e.f. September 22 2020.
Application for voluntary liquidation filled for Mauritius entities - CIGMauritius Holdings Private Limited and CIG Mauritius Private Limited confirmationawaited.
Cairn South Africa (Pty) Ltd has been deregistered effective from April 06 2021and the deregistration of tax registration of the entity is under process.
Sterlite (USA) Inc. is under process of dissolution.
Killoran Lisheen Finance Limited and Vedanta Exploration Ireland Limited havebeen voluntarily struck off w.e.f. March 02 2021.
There has been no material change in the nature of the business of the subsidiaries.
As at March 31 2021 the Company has 8 associate companies and joint ventures.
Associate Companies and Joint Ventures:
Gaurav Overseas Private Limited
RoshSkor Township (Pty) Ltd
Raykal Aluminium Company Private Limited
Goa Maritime Private Limited
Madanpur South Coal Company Limited
Rampia Coal Mines and Energy Private Limited
Rosh Pinah Health Care (Proprietary) Limited
Gergarub Exploration and Mining (Pty) Limited
As required under Listing Regulations the Consolidated Financial Statement of theCompany and its subsidiaries and joint ventures prepared in accordance with Ind AS 110issued by the Institute of Chartered Accountants of India form part of the Annual Reportand 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 containingthe salient features of the financial statement of the subsidiary and associate companiesis attached to the financial statement in Form AOC-1. The statement also provides detailsof performance and financial position of each of the subsidiaries and their contributionto the overall performance of the Company.
In accordance with Section 136 of the Act the audited Standalone and Consolidatedfinancial statements of the Company along with relevant notes and separate auditedaccounts of subsidiaries are available on the website of the Company atwww.vedantalimited.com. Copies of the financial statements of the Company and of thesubsidiary companies shall be made available upon request by any member of the Company.Additionally these financial statements shall also be available for inspection by memberson all working days during business hours at the Registered Office of the Company.
The Company has adopted a policy on determination of material subsidiaries in line withthe Listing Regulations. The policy aims to determine the Material Subsidiaries andMaterial Unlisted Indian Subsidiaries of the Company and to provide the governanceframework for such subsidiaries. The policy may be accessed at www.vedantalimited.com.
In accordance with Regulation 16(1)(c) of the Listing Regulations your Company has thefollowing material subsidiary companies during the financial year 2020-21:
Hindustan Zinc Limited (HZL) a listed subsidiary of the Company;
Cairn India Holdings Limited (CIHL) an unlisted subsidiary; and
Cairn Energy Hydrocarbons Limited an unlisted subsidiary.
The Company is in compliance with the applicable requirements of the ListingRegulations for its subsidiary companies during the financial year 2020-21.
During the financial year 2020-21 your Company raised ' 500 crores through issuance ofSecured Rated
Redeemable Non-Cumulative Non-Convertible Debentures (NCDs) of face value of '1000000 each on private placement basis as per the following details:
|Coupon Rate ||Date of Allotment ||No. of NCDs ||Total Amount (in D) ||Tenor ||Maturity Date |
|7.50% Secured Rated Listed Redeemable Non-Convertible Debentures ||February 17 2021 ||5000 ||500 crores ||1 year and 1 month ||March 17 2022 |
The aforesaid debentures are listed on BSE Limited.
Further the details of NCDs outstanding debentures as of March 31 2021 have beendetailed in the Corporate Governance Report.
The Commercial Papers (CPs) issued by the Company had been listed on National StockExchange of India Limited and have been duly redeemed on timely basis. As on March 312021 there are nil outstanding CPs. Further details have been provided in the CorporateGovernance Report.
Pursuant to the SEBI Circular and Regulation 39 of Listing Regulations regarding theprocedure to be adopted for unclaimed shares issued in physical form in public issue orotherwise the Company has a separate demat account in the title of 'Vedanta Limited -Unclaimed Suspense Account' with HDFC Bank Limited*.
The details of shares lying in the unclaimed suspense account are provided below:
|Description ||No. of shareholders ||No. of Equity shares of E 1/- each |
|Aggregate number of shareholders and the outstanding shares in the suspense account lying at the beginning of the year ||776 ||934859 |
|Number of shares transferred to the unclaimed suspense account during the year ||- ||- |
|Number of shareholders who approached issuer for transfer of shares from suspense account during the year ||4 ||107008 |
|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 ||154 ||122039 |
|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 ||618 ||705812 |
*During the year the unclaimed suspense account maintained by the Company with KarvyStock Broking Limited has been closed and securities transferred to a separate demataccount opened with HDFC Bank Limited.
Transfer of unpaid and unclaimed amounts to Investor Education and Protection Fund(IEPF)
In accordance with the provisions of Companies Act 2013 and Investor Education andProtection Fund (Accounting Audit Transfer and Refund) Rules 2016 (IEPF Rules) theCompany is required to transfer the following to IEPF:
Dividend amount that remains unpaid/unclaimed for a period of seven (7) years;and
Shares on which the dividend has not been paid/ claimed for seven (7)consecutive years or more.
Your Company in its various communications to the shareholders from time to timerequests them to claim the unpaid/unclaimed amount of dividend and shares due for transferto IEPF established by Central Government. Further in compliance with IEPF Rulesincluding statutory modifications thereof the Company publishes notices in newspapers andalso sends specific letters to all the shareholders whose shares are due to betransferred to IEPF to enable them to claim their rightful dues.
Dividend and other amounts transferred/credited to IEPF during 2020-21
The details of dividend and other unpaid/unclaimed amounts transferred to IEPF duringthe year are provided below:
Dividend and other unpaid/unclaimed amounts transferred to IEPF during the year
|Financial Year ||Type of Amount ||Date of Declaration ||Amount transferred to IEPF (in D) ||Date of transfer toIEPF |
|2012-13 ||Interim Dividend (2nd) ||April 29 2013 ||7014639.00 ||June 10 2020 |
|2012-13 ||Final Dividend ||June 06 2013 ||1846935.00 ||August 19 2020 |
|2012-13 ||Final Dividend ||June 27 2013 ||718433.00 ||August 21 2020 |
|2012-13 ||Final Dividend ||July 24 2013 ||5998486.00 ||September 08 2020 |
|2012-13 ||Sale Proceeds of Fractional Shares arising out of Amalgamation Scheme 2013 ||August 18 2013 ||243595.00 ||October 14 2020 |
|2013-14 ||Interim Dividend ||October 22 2013 ||4277100.00 ||December 09 2020 |
|2013-14 ||Interim Dividend ||October 31 2013 ||13637440.00 ||December 22 2020 |
|Total || || ||33736628.00 || |
In view of specific order of court/ tribunal/ statutory authority restraining transferof shares and dividend thereon such shares and unpaid dividend have not been
transferred to IEPF pursuant to Section 124 of Companies Act 2013 and Rule 6 of IEPFRules including statutory modifications or re-enactments thereof.
The details of dividend declared during the year on shares already transferred to IEPFare provided below:
|Dividend declared during 2020-21 on shares already transferred to IEPF |
|Financial Year ||Type of Amount ||Date of Declaration ||Amount transferred to IEPF (in D) ||Date of transfer toIEPF |
|2020-21 ||Interim Dividend (1st) ||October 24 2020 ||38227812.50 ||November 11 2020 |
|Total || || ||38227812.50 || |
Shares transferred/credited to IEPF during 2020-21
During the year the Company transferred 458317 equity shares of ' 1/- each comprisingof 1367 shareholders to IEPF.
The Company has also uploaded the details of unpaid and unclaimed amounts lying withthe Company as on September 30 2020 (the date of last Annual General Meeting) on thewebsite of the Company at www.vedantalimited.com. Further the details of equity sharestransferred are also made available on the website of the Company atwww.vedantalimited.com.
The shareholders whose shares/dividends have been transferred to IEPF can claim thesame from IEPF in accordance with the prescribed procedure and on submission of suchdocuments as prescribed under the IEPF Rules. The process for claiming the unpaid shares/dividends out of IEPF can be accessed on the IEPF website at www.iepf.gov.in and on thewebsite of the Company at www.vedantalimited.com.
Dividend due to be transferred to IEPF during 2021-22
The dates on which unclaimed dividend and their corresponding shares would become dueto be transferred to IEPF during the financial year 2021-22 are provided below:
|Dividend due to be transferred to IEPF during 2021-22 |
|Particulars ||Date of Declaration ||Date of completion of seven years ||Due date for transfer to IEPF ||Amount as on March 312021 (in D) |
|Final Dividend 2013-14 ||July 11 2014 ||August 15 2021 ||September 14 2021 ||14311444.00 |
|Final Dividend 2013-14 ||July 23 2014 ||August 27 2021 ||September 26 2021 ||4180676.50 |
|Interim Dividend 2014-15 ||September 17 2014 ||October 22 2021 ||November 21 2021 ||3693990.00 |
|Interim Dividend 2014-15 ||October 29 2014 ||December 03 2021 ||January 02 2022 ||14501971.75 |
|Total || || || ||36688082.25 |
Ms. Prerna Halwasiya the Company Secretary & Compliance Officer of the Company isdesignated as the Nodal Officer under the provisions of IEPF. The contact details can beaccessed on the website of the Company at www.vedantalimited.com.
Transfer to Reserves
The Company proposes Nil transfer to General Reserve out of its total profit of '10503 crores for the financial year.
Particulars of Loans Guarantees or Investments
The particulars of loans given investments made guarantees given and securitiesprovided along with the purpose for which the loan or guarantee or security is proposed tobe utilised as per the provisions of Section 186 of the Act are provided in the standalonefinancial statements. (Please refer to Notes to the standalone financial statements).
As at March 31 2021 deposits amounting to Rs 54000 remain unclaimed. Since thematter is sub judice the Company is maintaining status quo.
The Company has not accepted any deposits falling under the ambit of Section 73 of theCompanies Act 2013 ('Act') and the Rules framed thereunder during the year under review.
Material changes affecting the financial position of the Company
No material changes and commitments have occurred subsequent to the close of thefinancial year till the date of this Report which may affect the financial position of theCompany.
Significant & Material orders passed by the regulators or Courts or Tribunals
Provided below are the significant and material orders which have been passed by anyregulators or courts or tribunals against the Company impacting the going concern statusand Company's operations in future.
Iron-Ore Division - Goa Operations
Supreme Court (SC) in the Goa Mining matter in 2014 declared that the deemed miningleases of the lessees in Goa expired on November 22 1987 and the maximum of 20 yearsrenewal period of the deemed mining leases in Goa under the Mines and Minerals(Development and Regulation) (MMDR) Act had also expired on November 22 2007 and directedstate to grant fresh mining leases.
Thereafter various mining leases were renewed by the state government before and onthe 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 andothers in 2015 as being arbitrary and against the judgement of the SC in the earlier Goamining matter. The SC passed the judgement in the matters on February 7 2018 wherein itset aside the second renewal of the mining leases granted by the State of Goa. The courtdirected all lease holders operating under a second renewal to stop all mining operationswith effect from March 16 2018 until fresh mining leases (not fresh renewals or otherrenewals) in accordance with the provisions of the MMDR Act 1957 and fresh environmentalclearances are granted.
Subsequently mining lessees and other mining stakeholder have filed applications inthe pending Abolition Act matter for resumption of mining in the State. The CentralGovernment has also filed an early hearing application in the long pending abolitionmatter.
We have now filed Special Leave Petition in the Supreme Court in appeal from the HCorder against a non-consideration of our representation seeking an amendment of the mininglease till 2037 based on the provisions on the MMDR Amendment Act 2015. This will beheard in due course. SC has on February 10 2020 allowed the impediment of Goa foundationand another
impleader. The matter will be listed in due course. Separately we also filed a reviewpetition against the Supreme Court judgement dated February 7 2018 before the SupremeCourt. The review petition was heard in chambers and the order in relation to it isexpected in due course. Vedanta's special leave petition will be listed for hearing in duecourse.
Copper division of Vedanta Limited has received an order from Tamil Nadu PollutionControl Board (TNPCB) on April 09 2018 whereby they have rejected the Company'sapplication for renewal of Consent to Operate (CTO) for the 400000 Metric Tonnes PerAnnum (MTPA) Copper Smelter plant in Tuticorin. In furtherance to the order of TNPCBrejecting the Company's application the Company decided to shut its Copper smeltingoperations at Tuticorin and has filed an appeal with TNPCB Appellate authority against theorder. During the pendency of the appeal the TNPCB vide its order dated May 23 2018ordered disconnection of electricity supply and closure of the Company's Copper Smelterplant. Post this the Govt of Tamil Nadu on May 28 2018 ordered the permanent closure ofthe plant. The Company challenged the same in the National Green Tribunal (NGT) whichpassed a favorable order for reopening of the plant.
The order was appealed by the TN PCB and the State of Tamil Nadu in the Supreme Court.The Supreme Court passed an order upholding the appeal and directing the Company toapproach the Madras High Court for relied. On August 18 2020 the Division Bench ofMadras High Court dismissed all the writ petitions filed by the Company. Vedanta Limitedsubsequently filed a special leave petition to appeal against the Madras High Courtdecision before the Supreme Court. The application for interim relief under the specialleave petition was heard on December 2 2020 and the Supreme Court had rejected suchapplication for interim relief. The main matter of the special leave petition will beheard for its final merits in due course. Next date of hearing is currently August 172021. On April 27 2021 in line with the decision of the TN State Govt the Supreme Courtpassed an order for permitting the operation of our oxygen plant on a standalone basisunder the oversight of a committee nominated by the State Govt. The power for operation ofthe oxygen plant is to be provided by the State Govt. We have since sent tankers withliquid oxygen that have been dispatched to Government Medical Colleges in ThoothukudiThirunelveli and Kanyakumari as well.
In the meantime the Madurai Bench of the High Court of Madras in a public interestlitigation filed against Vedanta Fathima Babu held through its order dated May 23 2018that the application for renewal of the environmental clearance for the expansion projectshall be processed after a mandatory public hearing and the said application shall bedecided by the competent authority on or before September 23 2018. In the interim theHigh Court ordered Vedanta to cease construction and all other activities on site for theproposed expansion project with immediate effect. Currently the Ministry of Environment
Forest and Climate Change ("MoEF") has updated on its website that VedantaLimited's environmental clearance for expansion project will be considered for ToR eitherupon verdict of the NGT case or upon filing of a Report from the State Government/District Collector Thoothukudi. Separately SIPCOT through its letter dated May 29 2018cancelled 342.22 acres of the land allotted to Vedanta Limited for the proposed expansionproject. Further the TNPCB issued orders on June 7 2018 directing the withdrawal of theconsent to establish for the expansion project which is valid until December 31 2022. Ina writ filed before Madras High Court Madurai Bench challenging the lease cancellationorder Madras High Court through order dated October 3 2018 has granted an interim stayin favour of the Company cancelling on the cancellation of 342.22 acres of the landallotted.
Further on June 07 2018 TNPCB withdrew the CTE granted for expansion project for aperiod of five years. The Company has filed Appeals before the TN PCB Appellate Authoritychallenging withdrawal of CTE by the TNPCB and the matter will be listed for hearing indue course.
Change in nature of business of Company
There is no change in the nature of business of your Company during the year underreview.
Failure to implement any corporate action
There were no instances where the Company failed to implement any corporate actionwithin the specified time limit.
AWARDS AND RECOGNITION
In its constant quest for growth and excellence your Company continues to be committedtowards maintaining the highest standards of corporate governance and sustainablepractices. As a recognition for our unconventional innovations and significantcontributions towards stakeholders and the society as a whole your Company has beenwinning an array of accolades at various forums while securing plaudits as the recipientof numerous prestigious awards for demonstrating its business ethos.
These acknowledgements render a testament to the Company's progress and its diligentefforts towards delivering value for all its stakeholders.
The details of the key recognitions bestowed upon the Company have been highlighted ina separate section in the Annual Report.
DIRECTORS' RESPONSIBILITY STATEMENT
As stipulated in Section 134 of the Companies Act 2013 your Directors subscribe tothe "Directors' Responsibility Statement" and to the best of their knowledge andability hereby confirms that:
(a) in the preparation of the annual accounts the applicable accounting standards havebeen followed and there are no material departures from the same;
(b) they have selected such accounting policies and applied them consistently and madejudgements and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the financial year i.e. March31 2021 and of the profit and loss of the Company for that period;
(c) they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the Company's assets and for preventing and detecting fraud and otherirregularities;
(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 andthat such internal financial controls are adequate and are operating effectively. Howevercertain controls relating to benchmarking the terms and authorisations for transactionswith related parties were required to be enhanced which have since been strengthened; and
(f) proper systems have been devised to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
Your Directors wish to place on record their sincere appreciation to the Central andState Government Authorities Bankers Stock Exchanges Financial Institutions AnalystsAdvisors Local Communities Customers Vendors Business Partners Shareholders andInvestors forming part of the Vedanta family for their continued support assistance andencouragement extended to us during the year.
Our business was built with a simple mission envisioned by the Group's Chairman Mr.Anil Agarwal
"To create a leading global natural resource company."
In a bid to accomplish the mission the Company is deftly managed by an adroit set ofleaders with global and diverse experience in the sector. The professionally equipped andtechnically sound management has set progressive policies and objectives follows globalpractices all with a pragmatic vision to take the Company ahead to the next level.
We would also like to take this opportunity to extend our earnest regard to all ouremployees for their zealous enthusiasm and interminable efforts directed towards lodgingsignificant contributions to the growth of the Company.
We further undertake to express our heartiest gratitude to all our stakeholders fortheir unflinching faith in their Company.
We look forward for bestowal of your support as we diligently strive to deliversustained value for our stakeholders and inscribe on the footprints of nation building forone of the fastest growing economies of the world.
We regret the loss of life due to COVID-19 pandemic and are deeply grateful and haveimmense respect for every person who risked their life and safety to fight this pandemic.
We look forward for your continued support in future.
|For and on behalf of the Board of Directors |
|Anil Agarwal |
|Non-Executive Chairman |
|DIN: 00010883 |
|Place: London |
|Date: May 13 2021 |