sustainable growth to emerge stronger

Our Safety Records

We began this fiscal year with a strong commitment to improve our safety performance. While there have been significant gains made across our businesses, I am deeply saddened by the loss of 7 lives this year. Our LTIFR stands at 0.67 in FY2020. We have completed the incident investigations for the accidents and are taking measures to ensure repeats do not occur. The learnings from the incidents are being implemented across the business. Occupational health and safety is a non-negotiable factor for us and we are determined to achieve absolute ‘Zero Harm’ in our operations. In light of our safety incidents, there is a renewed focus by the leadership team to improve our safety performance. Three safety KPIs were taken to help us improve our journey to Zero Harm. We are making steady progress in all three areas.

• In the area of Visible Felt Leadership:
  Where leaders & support personnel are mandated to spend quality time in the field performing safety interactions
• In the area of Managing Safety Critical Tasks:
  That could cause a fatal or a permanent injury like Fall of Ground, Working at Heights, Confined Spaces etc.
• In the area of Business partner engagement:
  We have established a committee that has the mandate to help improve the Business Partner safety performance. The committee is currently completing work on prequalification requirements, and on special terms and conditions that highlight Vedanta’s safety expectations for Business Partners, especially those that do heavy maintenance and construction activities at our facilities.

We are confident that these measures will help stabilize our safety performance in the short-term and help us move closer towards our objective of Zero Harm and Zero Fatality. As discussed above, the last quarter of FY2020 has been a time of global crisis as a result of the Covid-19 spread. We are fully committed to the safety of our employees. Our strategy has been threefold: practice physical distancing for all essential workstreams, rely on early diagnosis for our workforce to prevent an outbreak and share knowledge and best practices across our business entities to ensure safe workplaces. While the average footfall at our plants has been reduced significantly, our employees are actively involved in building homegrown solutions to the challenges created by COVID 19. For example, we now have nontouch based hand washing system which was built by our employees. Additional safety measures in terms of sanitiser fogging, social distancing measures through on ground marking are also in place to ensure minimum contact. We have also launched an healthcare helpline for our employees in partnership with Apollo hospitals, through which they can tele-consult with a General Physician or a Psychologist.

Sustainability, a Business and Social Imperative

Our unwavering focus on operating a sustainable and responsible business continued to deliver results in FY2020 which was well affirmed by thirdparty experts. Work on improving the stability and the management of our tailings dam facilities continues. BUs are implementing the recommendations from the audit conducted by Golder Associates in the previous year. In addition, we have updated the Tailings Dam Performance Standard and have added a detailed set of Guidance Notes that all our BUs must adhere to when managing their tailings facilities. With a view to de-risking our tailings dam facilities, we have embarked on a program to dewater our tailings and store the dry tailings moving forward. Our Lanjigarh red mud pond has led the way early on this and HZL’s Zawar location has commenced operations with this approach during the year. We are exploring to adapt this to our Dariba and Rampura Agucha locations.

2020 also is the end-of-cycle for our GHG emissions intensity reduction target. We have managed to reduce our GHG emissions intensity by 13.83%. This is slightly below our targeted 16% reduction from a 2012 baseline and indicative of the stretch target we had taken. This reduction is equivalent to ~9 million tonnes in avoided GHG emissions. We have begun work on setting our next set of long-term GHG reduction targets and will be disclosing those numbers in the next fiscal cycle. Read a detailed account of our ESG strategy, initiatives and performance on [Page XX]

Business Review and Outlook

Zinc
We are on track to become the world’s largest long-life, low-cost zinc-lead-silver producer in the coming two years. This is being made possible with both our Zinc India operations through HZL and our Zinc International business. At HZL, where we have fully integrated operations with matching mining and smelting capacities, we are witnessing solid output, across both zinc and silver while maintaining our cost leadership. The ramp-up of our mines is in its final phases and will significantly de-risk our future growth potential for the next few years. HZL is currently targeting an expansion of up to 1.35 MTPA and then further to 1.5 MTPA. With respect to Zinc International, the Gamsberg plant, inaugurated in 2019, is beginning to stabilize and ramp up. An expanded Gamsberg will see ore mined increase to 8 MTPA, with zinc-in-concentrate rising to 600,000 tpa. This will make Gamsberg the largest open-cast mine in South Africa, and its first fully integrated zinc manufacturing facility. Read more on Zinc India and Zinc International on [Page XX]

Oil & Gas
In Oil & Gas, we are monetising our existing portfolio and driving growth to the next level. We currently have 136 wells drilled and 41 hooked up. The Early gas production facility has also been ramped up to a design capacity of 90 mmscfd. We had a planned shut down at the Mangala processing terminal in February and have been ramping up our production since then. Our current portfolio for exploration consists of XX offshore and XX onshore Open Acreage Licensing Policy (OALP) blocks, with a combined acreage of ~65,000 sq. km. The full potential production expectation from this portfolio is 500 kboepd and we have committed a capex of USD 800 mn for the exploration phase, with 192 exploratory wells to be drilled. For Production Sharing Contract (PSC) blocks, we have a committed investment of USD 135 million (Rajasthan Tight Oil Appraisal and KG-Offshore). For Rajasthan exploration, we have released an EOI for an integrated exploration & appraisal work programme. Read more Oil & Gas on [Page XX]

Aluminium
In what can be termed as the outcome of collective and conscious efforts, we have maintained the cost of production of Aluminium business at US$1,690/t, despite the macro environment. With respect to alumina, our Lanjigarh refinery achieved a record production of 1,811 tonnes up 21% y-o-y with costs down 15% y-o-y, with the local bauxite meeting more than 50% of our requirement. A key highlight for the year was also emerging as winners of the Jamkhani Coal Block auction, which will add to the energy security for the business. For aluminium, we continue to progress on set strategic levers that comprise coal initiatives, alumina ramp up, bauxite sourcing and others. Together, these levers have brought down our per tonne cost below USD 1,500. Read more on Aluminium on [Page XX]

Steel
Electrosteel Steels Limited (ESL) has exhibited continued volume growth since its acquisition with the FY production up 3% at 1,231kt with industry leading margins at US$127/t during the last quarter of financial year. During the year, we also acquired Ferro Alloys Corporation Limited (FACOR), which will complement and strengthen our existing steel vertical with its production of ferro alloys. Up to 20% of FACOR’s production will be used for our steel operations, which will drive significant efficiencies for us. In the near future, we are expecting a doubling of output from the steel vertical. Read more on Steel on [Page XX]

Iron Ore
In our iron ore business the Production of saleable ore at Karnataka at 4.4 million tonnes, up 6% y-o-y while Sales at Karnataka was at 5.8 million tonnes, up 125% y-o-y. Goa operations remain suspended due to state-wide directive from the Hon’ble Supreme Court; engagement continues with the Government for a resumption of mining operations. Read more on Iron ore on [Page XX]

Copper
In Tuticorin, a legal process being pursued to achieve a sustainable restart of the operations at our copper smelter. Read more on Copper on [Page XX]

Resources and Reserves

As a natural resources company, our available reserves define our value proposition and market success. As introduced at the start of this report, in our Zinc, Iron Ore and Bauxite reserves, we fall in the top decile globally for largest reserves. Further, in our Oil & Gas business, we are the largest private sector acreage holder in India.

Dividends

During the year, the Board declared dividends aggregating c. 1500 crore at Rs 3.9 per equity share.

People

During my time within the Vedanta Group, I’ve been fortunate to interact with a lot of our people, who have the talent and the passion to make a difference. It is them who give me the conviction that we are going to continue our winning streak, without losing focus on our core values and the larger purpose. Our ~80,000-strong workforce leads the way forward for us, and I thank them for all their efforts. Read more on our people practices on [Page XX]

Outlook

As I look ahead, I can say with confidence that we are positioned to grow in our key markets and service the needs of the people. Notwithstanding the current uncertainties around COVID-19 and the ensuing impacts, we will continue to invest forward and deliver superior returns to our stakeholders. Over the next 3-5 years we plan to invest around USD 9 billion across our businesses, and are expecting to grow our revenues by 30% to 40%. Once the industrial and economic scenario has found a new normal, our enviable project pipeline across all our key businesses will benefit from strong signals of resumption of the accelerated growth in India, owing to pro-growth and pro-business government policy decisions. I thank the Board and the Chairman, our people and partners, and all other stakeholders for the support you have extended to help me execute my role well. Going forward, we will continue to raise the bar with everyone and deliver results as we always have. I seek your continued guidance and support in achieving the same.