Anil Agarwal,
Chairman
DEAR STAKEHOLDERS,
The year 2020 was a very unusual year for all of us. A year that was challenging on multiple fronts, but what stood out was the extraordinary resilience and adaptability of individuals and enterprises. There was a tectonic shift in the way we live or conduct our businesses, and Vedanta was no different. As a large natural resources company, we have had our fair share of challenges. However, we were quick to adapt to the emerging realties, backed by the relentless support of our dynamic workforce.
We extended our support to the nation’s fight against COVID-19 during its first wave through contributions to the PM CARES Fund and undertaking initiatives that positively impacted the lives of over 15 lakh people. We have now pledged `150 crore to help the country in its fight against the second wave of COVID-19 along with setting up 1,000 specialty beds in 10 locations across India. Sterlite Copper, which has a capacity to produce 1,000 tonnes of oxygen at Tuticorin, is catering to the needs of COVID-19 patients in the region.
A YEAR OF CONTINUED EXCELLENCE AND LEARNING
Vedanta Limited is one of the world’s largest suppliers of natural resources, with primary operations in zinc-lead-silver, iron ore, steel, copper, aluminium, power, oil & gas. Our portfolio of world-class, low-cost, scalable assets consistently generate strong profitability and deliver robust cash flows. We are actively deleveraging our balance sheet and are raising the bar in operational excellence across our wide canvas of operations.
During FY2021, Vedanta continued to live up to its promises to its stakeholders and operated a resilient and responsible business that contributed to a self-reliant India. Even as temporary disruptions materialised, we were able to bounce back strongly with industry-leading EBITDA margins and exceptional quarters for key businesses.
Pledged by Vedanta to support India during the second wave of COVID-19
We continued to deliver on all strategic levers, building on our strengths and commitment to operational excellence. We remained cash flow positive; and maintained liquidity at comfortable levels.
It also gives me great pleasure to inform you that we performed exceedingly well on key environmental, social and governance (ESG) aspects during the year. This is validated by our ranking in the Dow Jones Sustainability Index, which improved nine places to 12th globally in our industry. It’s a true reflection of our belief that business and sustainability are synergistic in nature.
While we have reasons to celebrate, we mourn the passing of eight of our colleagues. We are grieved by their irreplaceable loss and are supporting the bereaved families. At Vedanta, we accord paramount importance to occupational safety and employee well-being and continue to nurture a safety culture that results in zero harm. However, there is always room for improvement, and collective action and behavioural change alone can help bring transformational outcomes. Aligned to this, we are conducting a Groupwide review of permit to work and isolation procedure and are instating a safety alert dashboard to improve implementation of fatality learnings. Cross business safety audits and piloting of critical risk management are other supplementary initiatives supporting this.
OPERATING IN A THRIVING ECONOMY
After an outlier year, India is now back on the growth trajectory, and is poised to grow by 11.5% in FY2022, according to the International Monetary Fund. The rebound is clearly evidenced by the uptick in consumption, manufacturing activity and bank credit. India is experiencing a V-shaped recovery. Global agencies such as the World Bank have acknowledged the fact that this recovery is phenomenal, given how the country has now opened up, and is organising large-scale vaccination drives on priority.
The government is also playing a key role in facilitating the economy’s return to the growth path. This is clearly reflected in the Union Budget 2021-22, which lays extended focus on economic enablers such as infrastructure and socially important sectors such as health. Among others, the proposals to create a Development Financial Institution (DFI), monetise assets, set up new economic corridors and increase the ambit of the National Infrastructure Pipeline (NIP) are promising. These measures, in conjunction with a conducive policy environment, are expected to increase the demand for basic materials in which we specialise. The relevance of metals and mining are more pronounced today than ever, and at Vedanta, we are rightly positioned to cater to the growing needs. The clarion call for ‘Aatmanirbharta’ is very well founded, and we are perfectly aligned to the government’s vision of a self-reliant nation. In line with this, we have augmented our positioning to 'Desh Ki Zarooraton Ke Liye, Aatmanirbhar Bharat Ke Liye'.
GROWING IN A VITAL INDUSTRY
There is a definite focus on India’s natural resources sector as a key enabler in supporting the nation’s development. Apart from being a contributor to GDP, it underpins the supply of raw materials to the nation’s burgeoning manufacturing sector. Development of this sector thus holds the key to the nation’s ambition of becoming fully self-reliant.
In recognition of this, India is turning a new leaf with the introduction of the Mines and Minerals (Development and Regulation) Amendment (MMRDA) Bill, 2021. A welcome move, its passage will significantly boost India’s metals and mining industry, by inviting private participation in the exploration of key resources such as coal and gold. It is set to redefined the norms of exploration of mineral blocks and adequately utilise India’s unused mineral reserves. Currently, natural resources contribute 1.75% to India’s GDP, whereas in countries with similar reserves, the contribution is 7-7.5%. The MMRDA Bill is a gamechanger in this context and is expected to significantly improve the share of the sector in the national economy. It will contribute to the creation of over five million jobs and will considerably reduce India’s import dependence for basic materials.
BEING THE DEVELOPER OF CHOICE
Over the years, Vedanta has built one of the most recognised and impactful CSR programmes in India. As a natural resources player, we are inextricably linked to the communities near our operations, and have become an inalienable part of their livelihood.
From here stems our deep sense of responsibility and extended obligation beyond what is mandatory.
During FY2021, we spent over ₹322.7 crore on social development activities, spread across our core impact areas of education, health, sustainable livelihoods, women empowerment, sports and culture, environment and community development. Each Group company played its part by executing the respective CSR agenda, in line with the Group guidelines.
This year, supporting communities during the COVID-19 crisis also assumed precedence, with the distribution of nearly 25 lakh meal and ration kits, and over 7 lakh health and hygiene kits.
As we stand today, our flagship CSR initiative for women and children has touched a new milestone, with the setting up of 2,300+ Nand Ghars in 11 states. It continues to pave the way for the model Anganwadi movement across the country and till date, we have positively touched the lives of ~52,000 women and ~65,000 children through the initiative.
Water savings achieved over the past four years
Women benefited through Nand Ghar initiative
Children benefited through the Nand Ghar initiative
BEING NATURALLY RESPONSIBLE
As the largest natural resources company of India, we are well aware of the responsibility that rests on our shoulders. It’s in this context that we have a target-oriented environmental programme. We believe that good ecology is good business and strive our best to give back more than we take. Consequently, over the past four years, we have achieved water savings of ~9.23 million m3 and have implemented an active plastic protocol in three of our business units. We have also seen 100%+ fly ash utilisation.
With regards to GHG emissions, we have a vision to substantially de-carbonise our operations by 2050, and towards this extent, we have built a Group-wide carbon forum with CEO-level engagement.
I’m also proud of the fact that we are among the 24 Indian companies who, in late 2020, signed the declaration towards carbon neutrality. Today, we have achieved ~13.6 million tCO2e in avoided emissions compared to our 2012 baseline.
BEING THE EMPLOYER OF CHOICE
Vedanta is home to thousands of skilled professionals, who seek to develop their careers aligned to our culture and facilitated by an employee-friendly, diverse, and meritocratic environment. Their efforts have been instrumental in taking Vedanta to its current stature, and their contribution to ensuring business continuity has been phenomenal at the height of the pandemic.
The safety, well-being and happiness of our employees is of utmost importance to us, and we are taking every measure to ensure the same. Towards this, we rolled out health programmes for our employees and business partners during the year. We also focused on telemedicine, promotion of mental health and health monitoring so that our people remained safe and secure during these trying times.
We constantly engage with best-in-class service and technology providers to ensure the highest level of safety for our employees and have managed to achieve a zero-fatality year at our largest business - Hindustan Zinc.
AHEAD WITH INDIA
As I look forward, I see an opportunity of a lifetime ahead of us. Our economy has regained its growth momentum and we are operating in an industry that complements this growth curve. With India’s young energy, consistent governance, strong consumption, and a thriving private sector, I’m positive that the best for the nation is yet to come. At Vedanta, we are cognisant of the immense growth potential and will invest in opportunities that create value for all stakeholders. As we power ahead, we stand in solidarity with India, its ambition of being Aatmanirbhar and creating a 5 trillion-dollar economy.
Best regards,
Anil Agarwal
