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Vedanta Ltd.

BSE: 500295 Sector: Metals & Mining
NSE: VEDL ISIN Code: INE205A01025
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OPEN 204.90
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VOLUME 74688
52-Week high 355.70
52-Week low 197.10
P/E 26.48
Mkt Cap.(Rs cr) 75,608
Buy Price 203.25
Buy Qty 720.00
Sell Price 203.40
Sell Qty 946.00
OPEN 204.90
CLOSE 204.20
VOLUME 74688
52-Week high 355.70
52-Week low 197.10
P/E 26.48
Mkt Cap.(Rs cr) 75,608
Buy Price 203.25
Buy Qty 720.00
Sell Price 203.40
Sell Qty 946.00

Vedanta Ltd. (VEDL) - Director Report

Company director report

Dear Shareholders

The Board of Directors presents the Company's Annual Reporttogether with the audited financial statements for the financial year ended March 312018.

During the year your company focused on generating cash flows acrossall businesses deleveraging the balance sheet and delivering superior shareholder returnthrough disciplined capital allocation. The profitability improvement has been driven byproduction ramp-up and complemented by the strong commodity market. There was recordproduction at Zinc India aluminium and copper business.

We expect FY 2019 to be another productive year for your company withramp-ups across Zinc Oil & Gas and Aluminium businesses continuing. The next phase ofgrowth projects announced during the year set a strong base for the future. With a strongbalance sheet and a clear capital allocation strategy we are confident aboutVedanta's prospects for the coming years and are optimistic about the long-termoutlook for the global resources sector.

Financial Highlights for FY 2017-18

• Revenue increased by 22% to Rs 92922 crore (FY 2017: Rs 76168crore) driven by firm commodity prices and volume ramp up

• EBITDA increased by 19% to Rs 25470 crore (FY 2017: EBITDA: Rs21437 crore)

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

• Free cash flow (FCF) post capex for the year at' 7870crore (FY 2017: Rs 13312 crore)

• Gross debt at Rs 58159 crore reduced by Rs 13410 crore duringthe last 12 months (including repayment of Rs 7908 crore of temporary borrowing at ZincIndia offset by issuance of preference shares)

• Net debt at' 21958 crore (FY 2017: Rs 8099 crore)higher on account of special dividends paid and acquisition of AvanStrate Inc. (ASI)

• Attributable PAT (before exceptional items and DDT) increased by10 % to Rs 8026 crore (FY 2017: Rs 7323 crore)

• Crisil upgraded the Company's Rating from AA/Stable to AA/Positive

• Contribution of Exchequer of Rs 33000 crore includingdividends.

• Strong financial position with cash and liquid investments of Rs36201 crore

• Record interim dividend of Rs 7881 billion by Vedanta Ltd inMarch 2018

Financial Performance Summary

Your Company's financial highlights in accordance with IND AS areprovided below:

Standalone

Consolidated

Particulars Year Ended March 31 2018 Year Ended March 31 2017 Year Ended March 31 2018 Year Ended March 31 2017
Net Sales/Income from Operations 45974 38540 92923 76171
Profit from operations before other income finance costs and exceptional items 3851 3665 18881 15040
Other Income 3866 9705 3574 4581
Finance costs 3900 3896 5783 5855
Net exceptional items gain/(loss) 5407 1324 2897 (114)
Profit /(loss) before tax 9224 10798 19569 13652
Tax expense/(credit) 1968 (271) 5877 2333
Net Profit/(loss) after tax 7256 11069 13692 11316
Share of profit/(loss) of associate NA NA 0 (3)
Minority Interest NA NA 3350 4358
Net Profit after taxes minority interest and consolidated share in profit/(loss) of associate and before other comprehensive income 7256 11069 10342 6958
Paid-up equity share capital (Face value of '1 each) 372 297 372 297
Reserves excluding revaluation reserves as per balance sheet 78941 79396 63136 60128
Basic EPS after exceptional items 19.47 29.04 28.3 23.47
Transferred to General Reserve Nil NIL NIL NIL
Interim Dividend 7881 7099 7881 7099

Consolidated Financial Statement

The Company announces its Consolidated Financial Results on a quarterlybasis. As required under the Securities and Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015 (SEBI Listing Regulations) the ConsolidatedFinancial Statement of the Company and its subsidiaries prepared in accordance with IndAS 110 issued by the Institute of Chartered Accountants of India form part of the AnnualReport and are reflected in the Consolidated Financial Statement of the Company. Pursuantto Section 129(3) of the Companies Act 2013 (the Act) a statement containing the salientfeatures of the financial statement of the subsidiary companies is attached to thefinancial statement in Form AOC-1.

Pursuant to the provisions of Section 136 of the Act the Standaloneand Consolidated financial statements of the Company along with relevant notes andseparate audited accounts of subsidiaries are available on the website of the Company. Acopy of the financial statements of the Company and of the subsidiary companies shall bemade available upon request by any member of the Company. Additionally these financialstatements shall be available for inspection by members at the Registered Office of theCompany.

Operational Highlights for FY 2017-18

In line with Vedanta's stated strategic priority of productiongrowth through continued ramp up at Aluminium and Zinc India business we delivered strongoperational performance driven by record production at Aluminium (exit capacity c.2.0 MT)Zinc India and Copper India. During the year we also announced next phase of growthprojects in Oil & Gas and Copper India and continued to work on the Gamsberg projectfor commencement of production in mid CY2018.

Some of the key operational highlights for FY 2018 are:

• Record annual production at Zinc India and Aluminium business

• Oil & Gas: Mar 18 Exit run rate of 200000 boepd; Growthprojects on track to enable significant volume growth in FY 19

• Zinc International: Gamsberg project on track with productionexpected by mid CY 2018

• Aluminum: Record annual production at 1.7mt; with an exit runrate of c.2.0 mtpa

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

• Power: 1980 MW Talwandi Sabo Power Plant operating at 93%availability in Q4FY 18

Capital Expenditure

We continue to take a disciplined approach to growth through prudentcapital allocation. During the year FY 2018 we commenced the next phase of growth in ourOil & Gas business with a near term target of about 300kboepd. With positivefundamentals in place we have also commenced the expansion of the 400kt copper smelteratTuticorin in Southern India to 800kt. Completion of this project will place Tuticorin asone of the largest single-location copper smelting complexes in the world. Both theseprojects are having robust returns. The Zinc projects both at Zinc India & ZincInternational are progressing well. We are geared up for commencement of production at theGamsberg project from Mid Calendar Year 2018 (CY 2018).

During FY 2018 we have spent Rs 5306 Cr on Growth projects and it islikely to be higher around Rs 9700 Cr in FY 2019 primarily driven by higher capex at Oil& Gas.

Dividend

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

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

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

Transfer to General Reserve

The Company proposes NILtransfer to General Reserve out of its totalprofit of' 7256 Crore for the financial year.

Share Capital

The Authorised Share Capital of the Company is Rs 74120100000divided into 44020100000 (Four Thousand Four Hundred and Two Crores and One Lakh only)number of equity shares of Rs 1/- (Rupee One) each and 3010000000 (Three Hundred andOne Crore) Preference Shares of' 10/- (Rupees Ten) each.

Bidding under Insolvency and Bankruptcy Code 2016

Under the Insolvency and Bankruptcy Code 2016 the Reserve Bank ofIndia (RBI) mandated banks to refer their defaulting customers/ NPA accounts to NationalCompany Law Tribunal (NCLT). The companies referred to the NCLT for initiating insolvencyproceedings included few steel companies with significant production capacity.

Whilst globally following two decades of significant steel expansionin China global steel capacity is high India remains a significant exception to this.Given India's size of economy population and existing steel capacity it is expectedthat the steel sector in India will grow rapidly over the coming few years. In view ofthis and the synergies from its Iron ore business your Company bid for two of the steelassets up for auction. The companies under consideration own state of the art andtechnologically advanced steel plants. These acquisitions will provide your Company readyoperating capacities instead of investing time and effort in a greenfield project.

On March 31 2018 your Company was declared as the successfulresolution applicant by the Committee of Creditors for Electrosteel Steels Limited("ESL") underthe Corporate Insolvency Resolution Process of the Bankruptcy Codeand received a letter of intent from the Committee of Creditors. The Company has acceptedthe terms of the letter of intent and the closing of the transaction will be subject tocompliance with applicable regulatory requirements and the final terms approved by theNCLT.

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

Credit Rating

Your Company is rated by CRISIL Limited (CRISIL) and India Ratings andResearch Private Limited (India Rating) for its banking facilities in line with Basel IInorms.

During the year CRISIL changed the outlook on Company's long-termbank facilities and its Non-Convertible Debentures (NCDs) programmeto CRISILAA / PositiveOutlook fromCRISIL AA / Stable. The Company has the highest short-term rating on itsworking capital and Commercial Paper programme at CRISILA1+. The agency expects that thestructural improvement in cost structure along with continued focus on deleveraging shallhelp improve the credit profile of your Company. The agency shall be guided by extent ofgross debt and structural improvements in business driving the lower leverage levels forfurther positive rating action.

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

Sustainability

Your Company's Sustainable Development is integral to the corebusiness strategy. We continue to be a transparent and responsible corporate citizen;committed to a ‘social license to operate' and partner with communities localgovernments and academic institutions to help catalyse socio-economic development in theareas where we operate.

The Company reaffirms its Core Values of Trust EntrepreneurshipInnovation Excellence Integrity Respect and Care which are the basis of Company'sSustainable Development Model. The model continues to be centered on the four strategicpillars: Responsible Stewardship; Building Strong Relationships; Adding and Sharing Value;and Strategic Communications.

With the Sustainable Development model we built the SustainableDevelopment framework which is aligned to global best practices and standards includingthe United Nations Global Compact's (UNGC) 10 principles; the International FinanceCorporation (IFC) performance standards; the International Council on Mining and Metals(ICMM) principles; UN Sustainable Development Goals (SDGs); and the Organisation forEconomic Cooperation and Development (OECD) promoted Multinational Guidelines.

This robust framework provides the business and the leadership teamsthe parameters on which to assess monitor review key sustainability priorities such assafety health environment stakeholder engagement and community development activitiesas per the Company's approach on ‘social license to operate'.

The Vedanta Sustainability Assurance Programme (VSAP) has been thebedrock in promoting transparency and compliance of all our businesses with theGroup's Sustainable Development Framework. In continuation with last year the bigfocus areas have been on implementation of six key safety performance standards across theGroup; VSAP process has categorically focused on compliance level to these standards andhighlighted areas of improvement.

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

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

Vedanta's teams across businesses are driving variouscapacitybuilding and behavioural programmes. Our awareness campaigns aim to entrench aculture of safety and risk awareness. Training programmes on ‘Making Better Riskdecisions' is one such programme rolled out across the businesses to improve safetydecision making of leaders at all levels particularly those on the front line. Similarly‘Experience Based Quantification' (EBQ) using Bow Tie Risk Assessmentmethodologies were utilised to identify critical risks from safety and environmentalperspective for key businesses. In FY 2017-18 over 874296 hours of safety training weredelivered to employees and contractors.

After an encouraging COP21 conference in Paris which resulted in morethan 174 countries ratify the agreement the global climate agenda continues to pushahead despite the United States withdrawing from the agreement. India which had setambitious targets of reducing its carbon intensity by 33-35% by 2030 and to source 40% ofits electric power from non-fossil fuel based sources continues to move forward to meetthose targets.

Our Company remains committed to decreasing its carbon footprint. Lastyear we stated our expectation to reduce our GHG intensity by 16% from a 2012 baseline by2020. This expectation emerged from the Carbon Forum that was constituted to develop ourcarbon strategy and provide governance on the risk to business from climate change.

Our businesses have made significant progress on our GHG reductioncommitment. Hindustan Zinc Limited and Oil & Gas business have committed to increasetheir investment in solar power while other businesses have made significant improvementsin their process efficiencies thereby reducing their GHG intensity emissions. As of March31 2018 we had been able to achieve about 14% reduction in our GHG intensity from ourbaseline number. We are confident of achieving our target by 2020.

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

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

Finding innovative ways to reduce waste is a priority for us. We remaincommitted to our agenda of "Zero Harm Zero Waste Zero Discharge". This year weare able to recycle more than 90% of the fly ash that was generated at our power plants.Large volumes of our high-calorific hazardous wastes are also sent to the cement industryto be used as clinker fuel thereby preventing them from being sent to secure landfills.This year we have recycled 83% of our overall High Volume and Low Effect waste insustainable applications and are continuing to develop new and innovative ways to increasethe proportion of waste we recycle.

We are present in some of the world's most unique remote andunderdeveloped regions. We are committed to respect learn from and create a sharedunderstanding with our communities. Connecting with our communities is not just the rightthing to do; it is a fundamental imperative of our ‘license to operate'.

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

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

This year we encountered strong opposition from the local community toour plant in Tuticorin. We are working with the communities as well as the regulatorybodies to arrive at a solution to the questions raised. We are committed to responsiblyrun our operations.

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

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

Digitalization & Technology

The technology landscape is continuously changing at a rapid pace. Thisdynamic change creates an opportunity to adopt and develop competitive advantage. Adaptingcutting edge technology to create incremental value is in Company's DNA. The agilityto inculcate technology as part of business has been demonstrated over the years in eachsphere of business.

In the current environment Company recognises the need to develop acomprehensive digital strategy and drive transformational change across the organisationthat instils digital expertise in all facets of the business and creates value propositionfor all its stakeholders.

In order to manage the complex digital transformations across businessunits the Company has taken on board resources for the position of ‘Chief DigitalOfficer' (CDO) in each of its key business unit. These resources have brought globalexpertise in digital transformation initiatives. This position is an integral part of theBusiness Executive Committee. These positions are part of the top thought leadership andshall have the critical responsibility for developing and implementing Company'sdigital strategy.

Your Company is committed to adopt digital technology in theorganization to make data driven decisions to generate efficiencies improve planninglower risk create safer working environments while unlocking more value from theresources.

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

• Adopting agile approaches accelerating time to business value;

• Taking a more persona-centric and design-thinking led approachon new digital business solutions design;

• Driving a Minimum Viable Product (MVP) based approach inprogressively industrializing digital business solutions;

• Re-skilling and cross-skilling teams for new age technologiesand skills.

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

• Use of Drones for Pipeline monitoring & Mining StockpileMeasurement;

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

• Integrated Operations thru Connected Assets at Oil & Gas;

• Big Data Analytics & Decision Supportfor PredictiveMaintenance at Oil & Gas;

• Asset Optimization using Predictive Maintenance at SterliteCopper;

• Smart Ore Digitalization Project at Gamsberg in ZincInternational;

• Integrated Mine Operations Management System at Iron Ore;

• Asset Optimization using Machine Learning at Iron Ore;

• Coal Supply Chain Digitalization at Aluminium businessJharsuguda.

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

Corporate Social Responsibility

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

For almost all our programmes a bottom up community engagementapproach is a non-negotiable. This collaborative approach ensures community ownershipsuitable project design effective delivery and post-project sustainability. Apart fromcommunities we also strongly believe in partnering with government agencies developmentorganizations corporates civil society organisations & community based organizationsto carry our durable and meaningful initiatives.

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

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

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

1. Nand Ghar and Children's Well-being Projects - The Nand GharProject is the company's flagship national initiative which aims to build new-ageAnganwadis for ensuring the health and learning of young children in rural areas and alsoas a platform for women's empowerment and skilling. The Project ultimately aims toimpact 85 million children and 20 million women across 1.37 million Anganwadis in thecountry. As on date 101 Greenfield and 53 Brownfield Nand Ghars are operational across -states of the country. Construction is on-going at another 72 Greenfield and 200Brownfield Nand Ghars.

Khushi is a Hindustan Zinc initiative focusing on strengthening thefunctioning of the Integrated Child Development Services (ICDS) programme in 3089Anganwadi centres of 5 Districts of Rajasthan. The programme is the largest suchPublic-Private- People initiative in the ICDS space covering 64000 children in the agegroup of 3-6 years and aims to improve children's attendance retention learninglevels health status and community engagement. Children's attendance at thesecentres has gone up from 44% last year to 59% this year. A unique Anganwadi Grading Toolwas developed and used to rate each one of the 3089 Anganwadis. 25000 community meetingswere held during the year and community contributions equivalent to INR 5.43 million weremobilized.

2. Women's empowerment - Vedanta is endeavouring to provide equalopportunities to women through multiple initiatives. Subhalaxmi Cooperative SocietyatJharsuguda is one such flagship initiative of Vedanta Limited Jharsuguda. Subhalaxmiwhich started in 2008 with 10 women has now emerged as one of the largest women'scooperative in western Odisha with 3324 members and 280 Self Help Groups across 64villages of 3 blocks of Jharsuguda. It started with INR 1000 as working capital and todayit has accumulated corpus fund of more than INR 22 million with an average net profit ofINR 6-7 lacs/annum. Loans of around INR 49.2 million were provided to women entrepreneursfor setting up their own micro enterprises in FY'18. Subhalaxmi now has a specialfund called "UDYAMI FUND (Start-up Fund)" to support emerging & aspiringmicroentrepreneurs in Jharsuguda.

On similar lines the Sakhi programme at HZL now has 1299 SHGs(Self-help groups) reaching to nearly 16620 women. During the year 9397 women took loansamounting to INR 79 million. The main purposes for which the loans were taken werehousehold consumption agriculture health & sanitation animal husbandry including280 women who used the loans to become entrepreneurs (either by setting up new orexpanding existing enterprises).

3. Health Care - Health is another critical area of engagement for usand we work to bring affordable healthcare within reach of our communities. Aarogya ahealthcare Initiative of the Company at Lanjigarh is a commitment to improve the healthstatus of less privileged community in Kalahandi region. Vedanta Hospital is a 20 beddedstate of art medical facility well- equipped with doctors physiotherapist and visitingspecialists providing 24X7 ambulance service for referrals with a daily footfall of morethan 150 patients. The hospital services are recognized for sickle cell detectionRashtriya Bima Suraksha Yojana Institutional delivery under Janani Suraksha Yojana Cleft& Palate Surgery and Antenatal check-up under Pradhan Mantri Surakshit MatrutwaAbhiyan.

VMRF

Vedanta Medical Research Foundation (VMRF) a voluntarynon-profitorganisation has been initiated by BharatAluminium Company Limited subsidiarycompany (BALCO) to contribute to the prevention control and eradication of cancer andits related illnesses. VMRF's first flagship initiative has been the establishment of‘Balco Medical Centre' - a 170-bed state-of- the-art tertiary care oncologyfacility in Naya Raipur in close proximity of our Aluminium plants at Korba Lanjigarhand Jharsuguda. The proposed hospital envisages bringing modern comprehensive and highquality medical care within the reach of the population of Central India in general andChhattisgarh in particular.

Hospital at Kalahandi

With a commitment of ‘Giving back to Society' VedantaLimited has signed a Memorandum of Understanding (MoU) with Government of Odisha toestablish a 500 bed hospital for Government Medical College at Bhawanipatna with aninvestment of Rs 100 crores. The MoU was signed on March 27 2018 at Odisha StateSecretariat. The Hon'ble Chief Minister of Odisha congratulated Vedanta for comingforward to set up the hospital for Medical College and partner the Government in crucialareas of development for the people of Kalahandi.

4. Agriculture and Animal Husbandry - Given that most of ourneighbourhood communities still depend on agriculture and animal husbandry we follow alivelihood development approach of integrating agriculture dairy water managementtechnology farmer's organizations and market outreach. Project Unnati a Cairn CSRinitiative was set up to support the farmers of Barmer in enhancing their incomes throughsustainable farming. As part of a MoU with Central Arid Zone Research Institute (CAZRI)Jodhpur - a unit of Indian Council for Agriculture Research (ICAR) 700 framers weretrained in high tech farming techniques. This was supported by the installation of dripsfor 60000 horticulture plants in 120 acres. As a result this year the farmers in Barmerhave harvested over 60 tonnes of Ber Gunda and Anar.

5. Skilling the youth - Skill development is the need of the hour andcan have a huge impact on creating livelihoods opportunities for millions of families. Ouraim is to channelize the untapped potential of youth and help them become employable inthe growing economy. Vedanta IL&FS Institute of Skills at BALCO Korba imparts‘hands-on' training to youth in five different trades - Industrial StitchingFitter Fabrication Welding Assistant Electrician and Hospitality. The Institute hasprovided assured placements to more than 6700 students since operationalisation. SterliteCopper's Tamira Muthukkal project has provided skills training and employability tosome 2000 youth from the Thoothukudi district since its inception.

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

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

8. Community Infrastructure - While human development is the key butinfrastructure also plays an important role. Developing and maintaining socialinfrastructure are critical for rural development and over all nation building. Company issupporting operational villages in developing basic infrastructure in villages such asschool toilets drinking water projects sports infra local drains community centresetc. as per local needs.

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

A brief overview of CSR initiatives forms part of this Directors Reportand is annexed hereto as Annexure A'.

Your Company's CSR Policy addresses the Company's commitmentto conduct its business in a socially responsible ethical and environmentally friendlymanner; and to continuously work towards improving the quality of life of the communitiesin the areas where it operates.

The policy may be viewed here:

http://www.vedantalimited.com/media/85867/csr-policy-final.pdf BusinessResponsibility Report

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

Human Resources (HR)

Human resources play a significant role in your Company's growthstrategy. Your Company emphasised on talent nurturing retention and engaging in aconstructive relationship with employees with a focus on productivity and efficiency andunderlining safe working practices. The significant focus areas during the year comprisedthe following:

V - Perform:

One Performance System for One Vedanta

V-Perform is a pan-Vedanta initiative to standardize the PerformanceManagement System (PMS) system and process across all Vedanta Group companies byleveraging technology. This would enable the functions teams and individuals in trackingperformance generating analytics and taking proactive decisions towards achievingCompany's overall business plan and targets.

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

As a next step toward enhancing our Safety performance at workplace andachieving our ultimate vision of "Zero Harm" Safety Competency Assessmentprocess was initiated as part of V-Perform to strengthen our existing Safety ManagementSystem by means of training skills experience and knowledge that an employee'spossess and their ability to apply them to perform a task safely which will enable tomitigate the risk and ensure that employees are well organized and safe all the time atWorkplace.

Leadership Development and Talent Management

Internal Growth Workshops: Vedanta has always aspired to design anorganization which is led by our "Leaders from Within". Identifying internaltalent and elevating them to enhanced leadership roles has been the driving factor in ourjourney of rapid growth. In line with this philosophy the Group conducts‘Chairman's Internal Growth Workshops' through which we have identified500+ high potential New Leaders till date across various functions in the Group'sbusinesses who have taken up significantly elevated roles and responsibilities. MeetingGrowth Aspirations of the employees and ensuring Internal Mobility of High Quality Talenthas been the highlight of this endeavor. The New Leaders have been empowered throughvarious key strategic initiatives across

the Group and regular feedback sessions which have ensured they are inthe right track of being the "Leaders of Tomorrow". Our Internal GrowthWorkshops have also enabled us to reduce our lateral hiring significantly for criticalroles across the Group in past two years.

‘V Connect' Initiative: The V - Connect programme waslaunched across Vedanta Group as one of a kind anchoring/ mentoring programme covering all12000 professionals with regular talent stories and anchoring conversations across allthe businesses. It was launched in association with AON and the key output from thisinitiative has been to derive enhanced engagement levels from the employees. Thisinitiative has also ensured transparent communication of organizational growth vision andkey priorities in our roadmap for being the best in class employer in the industry. Tofacilitate smooth functioning of the programme a specialized app - "Aon Lead"was introduced. The App allows participants to schedule their connects; get latestbusiness updates from around the globe; access to articles and videos that focus oneffective leadership skill-building; and participate in quizzes/learning challenges. Tilldate more than 5000 conversations have been completed for the employees across Vedanta.

Right Management in Place (RMIP) - Strategic Hiring

In our endeavour to strengthen management teams across businessrealigning the organisation structure and bridging the critical gaps in each of thebusiness we initiated recruitment drive along with the business for various leadershippositions including Expats /

Specialist Positions. Hiring for these positions was initiated withfocus on recruitment from best practices companies / diversity.

During the year we focused on building and strengthening HSE functionand technical capability in the organization. We hired around 28 technical experts acrossbusinesses which include 10 global HSE experts to head the HSE function at each of ourbusinesses in India and Africa and these individuals bring onboard rich and diverseexperience from their past global organizations like BHP Rio Tinto BP Sheel ChevronGE DuPont Alcoa Anglo etc.

Global Internship Programme (GIP)

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

The interns work with top management especially the C-suite onreal-time projects impacting business directly. They work in a fast-paced dynamic teamenvironment and finish the internship having gained broad experience in various aspectsof the natural resources industry.

The programme would help us in the following ways:

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

2. Add value by driving projects which leverage their analyticalskills.

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

Last year we also launched a similar programme for full time hiresVLDP- Vedanta Leadership Development Programme. In VLDP our focus is to hire full timeemployees from the top management and technology institutes which include IIM AhmedabadBangalore Calcutta and I IT Bombay Kharagpur Madras. The aim of VLDP is to buildorganizational capability for the future by bringing on board best-in-class young talentfrom premier institutes and developing them to be the future Leaders of Vedanta byproviding them with the right induction roles opportunities job rotations andanchoring.

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

"Vedanta's unprecedented growth over the years is owing toits entrepreneurial culture and strong focus on continuous benchmarking and innovation. Aspart of this continuous improvement journey Manpower Analytics forms an integral piece inthe strategic decision making to embark on the next level of growth. The recent studyconducted by a reputed firm on Manpower Analytics brought out some interesting facts -

• Vedanta believes in growth from within and giving enhanced rolesto the High potential employees within the organization thereby maintaining the ValueSystems and Culture fabric intact. The Pay for performance Culture emerged clearly duringthe study as the Mid Layer in the organizational pyramid came out to be higher thanbenchmark owing to early career growth and higher responsibilities at relatively youngerexperience level.

• Although Executive Diversity at Vedanta is one of the leading inthe industry the company has taken stringent targets to further bridge the gap and moveupto 33% at Board & 20% at the professional employee population level. When looked atproviding avenues for growth and higher compensation the study also showcased thatVedanta is an equal opportunity employer.

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

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

Your Company's Jharsuguda unit has received special recognitiontowards their Commitment to Engagement. Aon Hewitt has acknowledged the efforts yourorganization is putting in to be an Employer of Choice and its continued efforts onyourjourney towards being a Best Employer.

Employee Information and Related Disclosures

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

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

Employees Stock Option Plan

In order to motivate incentivize and reward employees your Companyintroduced ‘Vedanta Limited Employee Stock Option Scheme 2016' ("theScheme") to provide equity based incentives to thepermanent employees of the Companyincluding holding/ subsidiary companies. The Scheme is a conditional share plan forrewarding performance on pre-determined performance criteria and continued employment withthe Company. The predetermined performance criteria shall focus on rewarding employees forCompany performance vis a vis competition and also for achievement of internal operationalmetrics. The Scheme is currently administered through Vedanta Limited ESOS Trust (ESOSTrust) which is authorized by the Shareholders to acquire the Company's shares fromsecondary market from time to time for implementation of the Scheme.

The Company's shareholders by way of postal ballot on December 122016 have approved the Scheme.

During the year under review 10088960 options were granted to 2806employees including Whole Time Director and Key Managerial Personnel.

Pursuant to the provisions of SEBI (Share Based Employee Benefits)Regulations 2014 ("Employee Benefits Regulations") disclosure with respect tothe ESOS Scheme of the Company as on March 31 2018 is annexed as Annexure C to thisreport and has also been uploaded on the Company's website at www.Vedantalimited.com .

The stock option Scheme is in compliance with Employee BenefitsRegulations and there have been no material changes to the plan during the financial year.

A certificate from M/s S.R. Batliboi & Co. LLP CharteredAccountants Statutory Auditors with respect to the implementation of the Company'sESOS schemes would be placed before the shareholders at the ensuing AGM. A copy of thesame will also be available for inspection at the Company's Registered Office.

Vigil Mechanism

The Company has in place a robust vigil mechanism for reporting genuineconcerns through the Company's Whistle Blower Policy. As per the Policy adopted byvarious businesses 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 email 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 whistle blower mechanism are taken to their logical conclusion withina reasonable timeframe. After the investigation established cases are brought to theGroup Ethics Committee for decisionmaking. All Whistle Blower cases are periodicallypresented and reported to the Company's Audit Committee. The details of this processare also provided in the Corporate Governance Report and the Whistle Blower Policy isposted on the Company's website.

Prevention of Sexual Harassment at Workplace

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

As part of Vedanta Group your Company is an equal opportunity employerand believes in providing opportunity and key positions to women professionals. The Grouphas endeavoured to encourage women professionals by creating proper policies to tackleissues relating to safe and proper working conditions and create and maintain a healthyand conducive work environment that is free from discrimination. This includesdiscrimination on any basis including gender as well as any form of sexual harassment.During the period under review 11 complaints were received and resolved. Seven employeeswere separated on account of complaints. Your Company has constituted Internal ComplaintsCommittee (ICC) for various business divisions and offices as per the requirements of theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.

Corporate Governance Report

The Company is committed to maintain the highest standards of CorporateGovernance and adhere to the Corporate Governance requirements set out by the SEBI. TheCompany has also implemented several best Corporate Governance practices as prevalentglobally. The report on Corporate Governance as stipulated under the SEBI ListingRegulations forms an integral part of this Report

The requisite certificate from the Auditors of the Company confirmingcompliance with the conditions of Corporate Governance is attached to the report onCorporate Governance.

Internal Financial Controls

Your Board has devised systems policies and procedures / frameworkswhich are currently operational within your Company for ensuring the orderly and efficientconduct of its business which includes adherence to policies safeguarding its assetsprevention and detection of frauds and errors accuracy and completeness of the accountingrecords and timely preparation of reliable financial information. In line with bestpractices the Audit Committee and the Board reviews these internal control systems toensure they remain effective and are achieving their intended purpose. Where weaknessesif any are identified as a result of the reviews new procedures are put in place tostrengthen controls. These controls are in turn reviewed at regular intervals.

The systems/frameworks include proper delegation of authorityoperating philosophies policies and procedures effective IT systems aligned to businessrequirements an internal audit framework an ethics framework a risk managementframework and adequate segregation of duties to ensure an acceptable level of risk.Documented controls are in place for business processes and IT general controls. Keycontrols are tested by entities to assure that these are operating effectively. Besidesthe Company has also adopted an SAP GRC (Governance Risk and Compliance) framework tostrengthen the internal control and segregation of duties/access. It also follows ahalf-yearly process of management certification through the Control Self-Assessmentframework which includesfinancial controls/exposures.

The Company has documented Standard Operating Procedures (SOP) forprocurement project / expansion management capital expenditure human resources salesand marketing finance treasury compliance safety health and environment (SHE) andmanufacturing.

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

The scope of work authority and resources of MAS are regularlyreviewed by the Audit Committee. Besides its work is supported by the services of leadinginternational accountancy firms.

The Company's system of internal audit includes: covering monthlyphysical verification of inventory a monthly review of accounts and a quarterly review ofcritical business processes. To enhance internal controls the internal audit follows astringent grading mechanism focusing on the implementation of recommendations of internalauditors. The internal auditors make periodic presentations on audit observationsincluding the status of follow-up to the Audit Committee.

The Company is also required to comply with the Sarbanes Oxley Act Sec404 which pertains to Internal Controls over Financial Reporting (ICOFR). Through the SOX404 compliance programme which is aligned to the COSO framework the Audit Committee andthe Board also gains assurance from the management on the adequacy and effectiveness ofICOFR.

In addition as part of their role the Board and its Committeesroutinely monitor the Group's material business risks. Due to the limitationsinherent in any risk management system the process for identifying evaluating andmanaging the material business risks is designed to manage rather than eliminate risk.Besides it created to provide reasonable but not absolute assurance against materialmisstatement or loss.

Since the Company has strong internal control systems which are furtherstrengthened by periodic reviews as required under the SEBI Listing Regulations and SOXcompliance by the Statutory Auditors the CEO and CFO recommend to the Board continuedstrong internal financial controls.

Based on the information provided nothing has come to the attention ofthe Directors to indicate that any material breakdown in the function of these controlsprocedures or systems occurred during the year under review. There have been nosignificant changes in the Company's internal financial controls during the year thathave materially affected or are reasonably likely to materially affect its internalfinancial controls.

There are inherent limitations to the effectiveness of any system ofdisclosure controls and procedures including the possibility of human error and thecircumvention or overriding of the controls and procedures. Accordingly even effectivedisclosure controls and procedures can only provide reasonable assurance of achievingtheir objectives. Moreover in the design and evaluation of the Company's disclosurecontrols and procedures the management was required to apply its judgment in evaluatingthe cost-benefit relationship of possible controls and procedures.

Further the Audit Committee annually evaluates the internal financialcontrols for ensuring that the Company has implemented robust systems/ framework ofinternal financial controls viz. the policies and procedures adopted by the company forensuring the orderly and efficient conduct of its business including adherence tocompanys 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.

Risk Management

Your businesses are exposed to a variety of risks which are inherentto a global mining and resources organisation. The effective management of risk iscritical to support the delivery of the Group's strategic objectives. Risk managementis embedded in the organization's processes and the risk framework helps theorganisation meet its objectives by aligning operating controls with the mission andvision of the Group set by the Board.

As part of our governance philosophy the Board has a Risk ManagementCommittee to ensure a robust risk management system. The details of Committee and itsterms of reference are set out in the Corporate Governance Report which is part of theBoard's Report and is available as a separate section in this Annual Report.

Our risk-management framework is designed to be simple consistent andclear for managing and reporting risks from the Group's businesses to the Board. Ourmanagement systems organisational structures processes standards and code of conducttogether form the system of internal controls that govern how we conduct business andmanage associated risks. We have a multi-layered risk management framework to effectivelymitigate the various risks which our businesses are exposed to in the course of theiroperations.

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

Major risks identified by businesses and functions are systematicallyaddressed through mitigating actions. Risk officers have also been formally nominated atoperating businesses as well as at Group level to develop the risk-management culturewithin the businesses.

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

Management Discussion and Analysis

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

Significant & Material Orders passed by the Regulators or Courts orTribunals

Provided below are the significant and material orders which have beenpassed by any regulators or courts or tribunals against the Company impacting the goingconcern status and Company's operations in future:

1. Iron-Ore Division - Goa Operations

Supreme Court in the Goa Mining matter in 2014 declared that the deemedmining leases of the lessees in Goa expired on 22.11.1987 and the maximum of 20 yearsrenewal period of the deemed mining leases in Goa under the MMDR Act had also expired on22.11.2007 and directed state to grant fresh mining leases.

Thereafter various mining leases were renewed by the state governmentbefore and on the date the MMDR Amendment Ordinance 2015 came into effect (i.e. January12 2015).

These renewal of mining leases were challenged before the SC by GoaFoundation and others in 2015 as being arbitrary and against the judgment of the SC in theearlier Goa mining matter. The Supreme Court passed the judgment in the matters onFebruary 7 2018 wherein it set aside the second renewal of the mining leases granted bythe State of Goa. The court directed all lease holders operating under a second renewal tostop all mining operations with effect from March 16 2018 until fresh mining leases (notfresh renewals or other renewals) in accordance with the provisions of the MMDR Act 1957and fresh environmental clearances are granted. For further course of action we are in theprocess of evaluation and are awaiting clarity from the government.

2. Copper Division

Copper division of Vedanta Limited has received an order from TamilNadu Pollution Control Boardon 09.04.2018wherebythey 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 atTuticorin 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 CopperSmelter plant. Post this the Govt of Tamil Nadu on May 28 2018 ordered the permanentclosure of the plant. The Company is taking all the necessary steps to restart itsoperations in Tuticorin.

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

Board of Directors Appointment(s)

The Board on the recommendation of the Nomination & RemunerationCommittee (NRC) at its meeting held on March 13 2018 approved the appointment of Mr. UKSinha (0)IN: 00010336) as an Additional Non Executive Independent Director w.e.f. March13 2018 to August 10 2021. The appointment is subject to the approval of the Members atthe ensuing Annual General Meeting (AGM).

Mr. Sinha has served as the Chairman ofSEBI from February 2011 to March2017. He was instrumental in bringing about key capital market reforms. Under hisleadership SEBI introduced significant regulatory amendments to the various actsenhancing corporate governance and disclosure norms.

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

Mr. Kuldip Kumar Kaura was appointed as an Interim CEO of the Companyw.e.f September 01 2017. In his over four decades of experience across engineering andmining roles Mr. Kaura has served at senior levels in various reputable companiesincluding Vedanta Resources Pic as Chief Executive Officer Managing Director at ABBIndia and Managing Director and Chief Executive Officer of a cement major in India ACCLimited (LafargeHolcim).

Re-appointment(s)

In accordance with the provisions of Act and the Articles ofAssociation of the Company Mr. GR Arun Kumar (0)IN:01874769) Whole Time Director &CFO is retiring by rotation and has offered himself for re-appointment.

Further on the recommendation of the Nomination & Remuneration andbased on the performance evaluation the Board through circular resolution dated January20 2018 reappointed Mr. Ravi Kant & Ms. Lalita D Gupte as Independent Directors for asecond and final term from January 29 2018 till August 10 2021. The reappointment issubject to the shareholder's approval at the forthcoming AGM.

The Board on the recommendation of the NRC reappointed Mr. Tarun Jainas the Company's Whole Time Director for a further period from April 01 2018 tillMarch 31 2019. The appointment is subject to the shareholder's approval.

Brief profiles of Mr. UKSinha Mr. Ravi Kant Ms. Lalita D Gupte

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

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

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

Cessation(s)

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

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

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

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

The policy on Director's appointment and remuneration includingcriteria for determining qualifications positive attributes independence of Directorand also remuneration for Key Managerial Personnel and other employees forms part ofCorporate Governance Report of this Annual Report.

Key Managerial Personnel

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

Mr. Navin Agarwal Executive Chairman Mr. Tarun Jain Whole TimeDirector

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

Number of Board Meetings

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

Audit Committee

The composition of the Audit Committee is in compliance with theprovisions of Section 177 of the Act and Regulation 18 of the SEBI Listing Regulations. Ason March 31 2018 the Audit Committee of the Board comprises of four (4) Non-ExecutiveDirectors all of whom are Independent. The Chairperson of the Audit Committee isaNon-Executive Independent Director.

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

Auditors

• StatutoryAuditors

M/s S.R. Batliboi & Co. LLP Chartered Accountants (FRN: 301003E)were appointed as Statutory Auditors of your Company at the AGM held on June 29 2016 fora term of five consecutive years i.e. until the conclusion of the 56th AGM.M/s S.R. Batliboi & Co. LLP have confirmed their independence and eligibility underthe provisions of the Act &SEBI Listing Regulations.

The report of the Statutory Auditors along with notes to Schedules isenclosed to this Report. The observations made in the Auditors' Report areself-explanatory and therefore do not call for any further comments.

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

• Cost Auditor

As per Section 148 of the Act the Company is required to have theaudit of its cost records conducted by a Cost Accountant in practice. The Board of yourCompany has on the recommendation of the Audit Committee approved the appointment of M/sShome and Banerjee as Cost Auditors for its oil & gas Business and M/s Ramnath Iyer& Co as Cost Auditors for its copper aluminium iron ore and electricity Business toconduct cost audits pertaining to relevant products prescribed under the Companies (CostRecords and Audit) Rules 2014 as amended from time to time for the year ending March 312018 at a remuneration of Rs 500000 p.a and Rs 1400000/-p.a (plus applicable taxes andreimbursement of out of pocket expenses if any) respectively. Further M/s Ramnath Iyer& Co have been appointed as the Lead Cost Auditors of the Company.

• Secretarial Auditor

Pursuant to the provisions of Section 204 of the Act and the Companies(Appointment and Remuneration of managerial Personnel) Rules 2014 the Company hasappointed M/s Chandrasekaran & Associates a firm of Company Secretaries in practiceto undertake the Secretarial Audit of the Company for FY 2018. The Report of theSecretarial Audit in Form MR-3 is annexed herewith as Annexure D. The Secretarial AuditReport does not contain any qualifications reservation adverse remarks or disclaimer.

Subsidiaries/Joint Ventures/Associate Companies

The Company has 52 subsidiaries (15 direct and 37 indirect) as at March31 2018 as disclosed in the accounts.

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

Subsidiary companies formed/acquired:

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

• Avanstrate (Korea) Inc. acquired on December 28 2017

• Avanstrate (Taiwan) Inc. acquired on December 28 2017

• Vedanta Star Limited incorporated on April 23 2018

As at March 31 2018 the Company has 5 associate companies and jointventures.

Associate Companies and Joint Ventures:

• RoshSkorTownship(Pty)Ltd

• Gaurav Overseas Private Limited

• Goa Maritime Private Limited

• MadanpurSouth Coal Company Limited

• Rampia Coal Mines and Energy Private Limited

Details of Loans/Guarantees/Investment made by the Company

Particulars of loans given investments made guarantees given andsecurities provided along with the purpose for which the loan or guarantee or security isproposed to be utilised as per the provisions of Section 186 of the Act are provided inthe standalone financial statement (Please refer to Notes to the standalone financialstatement).

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

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

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

During the year the Company has transferred a sum of Rs 14903948/-to Investor Education & Protection Fund (IEPF) the amount which was due & payableand remained unclaimed and unpaid for a period of seven (7) years as provided in Section125 of the Act and the rules made thereunder. Despite the reminder letters sent to eachshareholder this amount remained unclaimed and hence was transferred.

In accordance with the provisions of the Section 124(6) of the Act andRule 6(3)(a) of the Investor Education and Protection Fund Authority (Accounting AuditTransfer and Refund) Rules 2016 (IEPF Rules) the Company is required to Transfer1060879 equity shares of Re.1 each held by 986 shareholders to IEPF. The said sharescorrespond to the dividend which has remained unclaimed for a period of seven consecutiveyears from the financial year 2009-10. The equity shares wherein disputes are pending andCourt Order(s) are Nil. All the remaining shares as mentioned above have beentransferred to IEPF. Subsequent to the transfer the concerned shareholders can claim thesaid shares along with the dividend(s) from IEPF in accordance with the prescribedprocedure and on submission of such documents as prescribed under the IEPF Rules.

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

Fixed Deposits

As reported last year the Company has discontinued the renewal of itsfixed deposits on maturity. As at March 31 2018 all fixed deposits had matured whiledeposits amounting to Rs 54000 remained unclaimed. Since the matter is subjudice theCompany is maintaining status quo.

Extract of Annual Return

The details forming part of the extract of the Annual Return in formMGT 9 is annexed hereto as ‘Annexure E'

Related Party Transactions

In line with the requirements of the Act and SEBI Listing Regulationsyour Company has formulated a Policy on Related Party Transaction (RPT) which is alsoavailable on Company's website (http://www.vedantalimited.com/investor-relations/corporate-governance.aspx). The Policy intends to ensure that proper reporting approvaland disclosure processes are in place for all transactions between the Company and RelatedParties.

The Company presents a detailed landscape of all RPTs to the AuditCommittee specifying the nature value and terms and conditions of the transaction. TheCompany has developed a Related PartyTransactions Manual-Standard Operating Procedures toidentify and monitor all such transactions.

All contracts/arrangements/transactions entered by the Company duringthe financial year with related parties were on an arm's length basis in theordinary course of business and were in compliance with the applicable provisions of theAct and SEBI Listing Regulations.

During the Fiscal 2018 there have been no materially significant RPTsbetween the Company and Directors management subsidiaries or relatives as defined underSection 188 of the Act and Regulations 23 the SEBI Listing Regulations.

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

Material Changes & Commitment affecting the Financial Position ofthe Company

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

Energy Conservation Technology Absorption Foreign Exchange EarningsAnd Outgo

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

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

(Rs Crores)
Particulars Year Ended 31 March 2018 Year Ended 31 March 2017
Expenditure in foreign currency 1551 1282
Earnings in foreign currency 28394 21138
GIF Value of Imports 28900 19322

Directors Responsibility Statement

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

a. in the preparation of the annual accounts the applicable accountingstandards has been followed and there is no material departures from the same;

b. your Directors selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year i.e. 31 March 2018 and of the profit and loss of the Company for thatperiod;

c. your Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the Company's assets and for preventing anddetecting fraud and other irregularities;

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

e. your Directors have laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate and areoperating effectively; and

f. your Directors have devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.

Acknowledgement

Your Directors place on record their deep appreciation to employees atall levels for their hard work dedication and commitment. The enthusiasm and unstintingefforts of the employees have enabled the Company to remain as industry leader.

The Board also extends its appreciation for the support andco-operation your Company has been receiving from its customers vendors dealersinvestors suppliers business associates and others associated with the Company. YourCompany looks upon them as partners in its progress and has shared with them the rewardsof growth. It will be the Company's endeavour to build and nurture relationships withall its stakeholders.

The Directors also take this opportunity to acknowledge the support andassistance extended to us by the Government of India various State Governments andgovernment departments financial institutions bankers stock exchanges communitiesshareholders and investors at large for their continued support.

For and on behalf of the Board of Directors
Place: Mumbai Navin Agarwal
Dated: May 03 2018 Executive Chairman