Resourceful | Sustainable | Value-Focussed 2024 INTEGRATED REPORT AND ANNUAL ACCOUNTS A STRONGER VEDANTA Vedanta Resources Limited CONTENTS Vedanta at a glance pg.06 Message from the Chairman pg.22 People and Culture pg.86 VRL Reporting Suite To view this report online, please visit: https://www.vedantaresources.com/ Integrated Report 01 Integrated Thinking at Vedanta 02 Highlights FY 2024 Introducing Vedanta 06 Vedanta at a Glance 09 ESG Purpose and Mission 10 Asset Overview 14 Our Investment Case Management Discussion and Analysis 94 Market Review 100 Finance Review 108 Operational Review Statutory Reports 148 Governance 154 Directors’ Report 159 Directors’ Remuneration Report Financial Statements 160 Independent Auditor’s Report 166 Financials 283 Five-Year Summary 287 Production and Reserves Summary 291 Glossary and Definitions Sustainability Review 68 Our ESG Strategy 86 People and Culture 64 Stakeholder Engagement 66 Materiality Stakeholder Engagement and Materiality Performance Review 22 Message from the Chairman 26 Case Studies 34 Key Performance Indicators 36 Value-Creation Model 40 Opportunities 44 Strategic Priorities and Update 54 Risk Management VEDANTA RESOURCES LIMITED | Sustainability Report (SR) 2023 Information coverage: Disclosures on triple bottom line performance Standards/guidelines used: Global Reporting Initiative (GRI) Standards TRANSFORMING TOGETHER INCLUSIVE | RESPONSIBLE | VALUE-ACCRETIVE DELIVERY Tax Transparency Report Vedanta Limited VEDANTA RESOURCES LIMITED | Transparency Report (TTR) 2023 Information coverage: Voluntary disclosure of profits made and taxes paid (only Indian company to publish a TTR) Standards/guidelines used: Indian Accounting Standards (Ind AS) TRANSFORMING TOGETHER INCLUSIVE. RESPONSIBLE. VALUE-ACCRETIVE DELIVERY. Vedanta Resources Limited Integrated Report and Annual Accounts 2022-23 VEDANTA RESOURCES LIMITED | TCFD Report 2023 Information coverage: Climate-related financial disclosures Standards/guidelines used: Approach to climate action, climate strategy and climate risk management VEDANTA RESOURCES LIMITED | Integrated Report (IR) and Annual Accounts 2023 Information coverage: Holistic disclosure of performance and strategy Standards/guidelines used: International Integrated Reporting Framework, Indian Accounting Standards (Ind AS), Indian Secretarial Standards A STRONGER VEDANTA At Vedanta, a commitment to superior performance, creating enduring value for stakeholders and ensuring sustainable growth propels us forward, underscored by the resolve to become more resilient and future-ready. Through the last many years, our journey of transformation has solidified our status as a world-class Indian multinational with an unparalleled asset base. This positions us at the forefront of India’s natural resource potential, reinforced by our focus on innovation, digitalisation and industry best practices that ensure top-tier operational performance. Our pioneering environmental, social and governance (ESG) initiatives further solidify our reputation as a sustainable and responsible organisation. FY 2024 proved to be a pivotal year in this journey, with substantial strides in our ambitious capacity expansion and vertical integration projects along with strategic endeavours aimed at unlocking value. A prudent liability management exercise has strengthened our capital framework, easing Resourceful | Sustainable | Value-Focussed off liquidity pressure and empowering us to pursue growth initiatives. Advancement in the high-potential semiconductor and display fab segment gives us the first-mover advantage to capitalise on the thriving Indian electronics market. Furthermore, the proposed demerger into six pure-play entities is set to streamline our corporate structure and unlock growth potential across each vertical. As India accelerates towards a rapid growth trajectory brimming with exciting opportunities, Vedanta stands on a stronger footing with enhanced capacities, competencies and a strong purpose. We are poised for greater success and creating enduring value for all stakeholders, affirming our position as ‘A Stronger Vedanta’. At Vedanta, we have always been inspired to make disclosures that go beyond statutory requirements to enable our stakeholders and providers of financial capital to take the right decision. In line with this, the content elements and guiding principles of the International Integrated ReportingFramework, outlined by the International Integrated Reporting Council (IIRC), now the Value Reporting Foundation (VRF). ABOUT THE REPORT We commenced our Integrated Reporting journey in FY 2018, with a view to communicating our approach to value creation and key outcomes to our stakeholders. The integrated reports are prepared to assist our stakeholders, primarily the providers of financial capital, to make an informed assessment of our ability to create value over the short, medium and long term. At Vedanta, we remain committed to providing relevant disclosures pertaining to our material issues, with the highest standards of transparency and integrity, in line with our values. Scope and boundary The Integrated Report and Annual Accounts 2024 covers the reporting period from April 1, 2023 to March 31, 2024, and provides holistic information on Vedanta Resources Limited. It provides an overview of operations across our business units, namely, zinc-lead-silver, oil and gas, aluminium, power, iron ore, steel, nickel and copper. Our assets are spread through India, South Africa and Namibia, and across the value chain comprising exploration, asset development, extraction, processing and value- accretion activities. This report aims to provide a concise explanation of Vedanta’s performance, strategy, value-creation model, business outputs and outcomes using an interlinked, multi-capital approach. It includes measures of engagement with identified material stakeholder groups and outlines the organisation’s governance framework, together with our risk-mitigation strategy. Approach to stakeholder engagement and materiality Our stakeholders include those individuals and organisations who have an interest in, and/or whose actions impact our ability to execute business strategy. We periodically engage with different stakeholder groups and actively respond to their concerns and issues. This report contains information that we believe is of interest to our stakeholders and presents a discussion on matters that can impact our ability to create value over the short, medium and long term. Forward-looking statements This report contains ‘forward-looking statements’ – that is, statements about business expectations and forecasts that are based on future, not past events. In this context, forward- looking statements address our expected future business and financial performance, and often contain words such as ‘expects’, ‘anticipates’, ‘intends’, ‘plans’, ‘believes’, ‘seeks’, or ‘will’. Forward-looking statements by their nature address matters that are, in different degrees, uncertain. For us, uncertainties arise from the behaviour of financial and metals markets including the London Metal Exchange, fluctuations in interest and/ or exchange rates and metal prices; from future integration of acquired businesses; and from numerous other matters of national, regional and global scale, including those of environmental, climatic, natural, political, economic, business, competitive or regulatory nature. These uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements. These forward-looking statements involve risk and uncertainties, and although we believe that the assumption on which our forward- looking statements are based are reasonable, any of those assumptions could prove to be inaccurate and, as a result, the forward-looking statement based on those assumptions could be materially incorrect. Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED At Vedanta, an integrated and comprehensive approach to value creation, helps us grow from strength to strength. This propels our long-term growth while empowering us to contribute to the nation’s growth, foster a sustainable world and create value for all our stakeholders. This model, firmly anchored in our mission and values, considers all resources and relationships, external operating factors and material issues to craft effective strategies. We have further embedded ESG aspects with our ‘Transforming for Good’ strategy and a more encompassing ‘Transforming Together’ theme to reinforce our decision-making process and bring greater resilience to our business. A STRONGER, VALUE-ACCRETIVE VEDANTA ENABLED BY INTEGRATED THINKING Value creation for stakeholders Resulting in an impact across the capitals and for stakeholders Capitals Financial Capital Manufactured Capital Social & Relationship Capital Natural Capital Intellectual Capital Human Capital Shareholders, investors and lenders Local communities Governments Civil societies Employees Industry Mission Strategic focus areas To create a world leading natural resources company Values Trust | Entrepreneurship | Innovation | Excellence | Integrity | Care | Respect S1 Continued focus on world-class ESG performance S2 Augment our Reserves & Resources (R&R) base S5 Operational excellence and cost leadership S3 Delivering growth opportunities S4 Optimise capital allocation and maintain a strong balance sheet Our value creation is propelled by Supported by our business activity Exploration Asset development Extraction Processing Value addition and marketing Megatrends and opportunities Risks And influenced by key factors in our operating environment R1 R5 R3 R2 R4 R6 R7 R10 R8 R9 R11 R13 R12 T1 T5 T3 T2 T4 T6 T7 pg.54 Material issues M1 M3 M2 M4 M6 M5 M7 pg.66 pg.40 pg.8 pg.2 pg.64 pg.44 CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT Integrated Thinking at Vedanta 1 OUR VALUE CREATION ACROSS SIX CAPITALS FINANCIAL CAPITAL We are focussed on optimising capital allocation and maintaining a strong balance sheet while generating strong free cash flows. We also review all investments, taking into account the Group’s financial resources with a view to maximise returns for shareholders. Key FY 2024 outcomes Profit attributable to equity shareholders (before special items) US$ 31 million Free cash flow (FCF) post-capex US$ 0.7 billion ROCE ~25% Gross debt Net debt US$ 14.3 billion US$ 12.3 billion 1 Excluding custom smelting at copper business Revenue US$ 17.1 billion EBITDA US$ 4.7 billion EBITDA margin1 32% 6% YoY 2% YoY 315 bps YoY 512 bps YoY Net Debt/EBITDA vs 2.8x in FY 2023 2.6 X Cash and cash equivalents US$ 2.0 billion Strong Liquidity Position vs 15.4 billion in FY 2023 vs 12.7 billion in FY 2023 HIGHLIGHTS FY 2024 Integrated Report and Annual Accounts 2023-24 2 VEDANTA RESOURCES LIMITED MANUFACTURED CAPITAL We invest in best-in-class equipment and machinery to ensure we operate as efficiently and safely as possible, both at our current operations and in our expansion projects. This also supports our strong and sustainable cash flow generation. Key FY 2024 outcomes Business highlights Business highlights Steel Ferro Alloys Highest-ever crude steel production 1.4 million tonnes Zinc India Best-ever mined metal production 1,079 kt Record saleable production Growth capex 80 kt US$ 1.5 billion Highest-ever refined zinc-lead production 1,033 kt Oil & Gas Average gross operated production 128 Kboepd Iron Ore Highest-ever production of saleable ore at Karnataka 5.6 million tonnes Higest-ever pig Iron production 831 kt Copper India Cathode production from Silvassa 141 kt Highest-ever silver production 746 tonnes Aluminium Highest-ever aluminium production 2,370 kt Power Overall power sales 13,443 million units 25% YoY 8% YoY 18% YoY 18% YoY 5% YoY 3% YoY 5% YoY 19% YoY 5% YoY 2% YoY CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT 3 Highlights FY 2024 Key FY 2024 outcomes HUMAN CAPITAL We hire people from around the world. Our employees’ diverse skills and varied experience effectively contributes to our operations. For our mining and plant operations that require specialised skills, we employ qualified technical, engineering and geology professionals. Additionally, we foster a culture that nurtures safety, innovation, creativity and diversity, which helps us to achieve our business goals while also enabling our employees to grow personally and advance professionally. Attrition rate 10.8% TRIFR - basis Full time employees 1.30 Women employees 20% Employees covered under mentoring & support programmes 2,900 INTELLECTUAL CAPITAL Our collective knowledge, skills and resources are key to ensuring optimal and sustainable operations and driving our value creation. Our ongoing investments in innovation, digital transformation and technology help strengthen our competitiveness and business resilience. Key FY 2024 outcomes Investment in digitalisation programmes US$ 19 million R&D Spend US$ 1.6 million Patents received in FY 2024 2 Patents under active application 11 Integrated Report and Annual Accounts 2023-24 4 VEDANTA RESOURCES LIMITED Key FY 2024 outcomes NATURAL CAPITAL We own world-class mining assets in India and Africa, endowed with abundant natural resources and reserves (R&R), giving us long-term visibility to sustain operations. We effectively use these assets to generate significant social and economic value for our stakeholders. However, our operations also have associated environmental impacts, which we are striving to minimise by operating responsibly and investing in environmental stewardship. Zinc India R&R Combined R&R 456.3 million tonnes Zinc-Lead metal R&R 30.8 million tonnes Silver R&R 854.3 million tonnes GHG Intensity 5.66 tCO2e per tonne of metal Water Positivity Ratio HVLT waste recycled 0.7x 92% Trees Planted (As part of the commitment to plant 7 million trees by 2030) 2 million Zinc International R&R Combined R&R 662 million tonnes Metal R&R 34.8 million tonnes Gross proved, and probable reserves and resources 1,376 mmboe Oil and Gas R&R SOCIAL AND RELATIONSHIP CAPITAL We aim to forge strong partnerships with our key stakeholders, including shareholders and lenders, suppliers and contractors, employees, governments, communities and civil societies. Our meaningful engagement with them helps us to foster these strong connections that help us to maintain and strengthen our licence to operate. Key FY 2024 outcomes Nand Ghars built 6,000+ CSR beneficiaries 17.40 million* Total CSR spent US$ 53 million * including Direct+Indirect Beneficiaries women and children benefited from CSR programmes 13 million CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT 5 Highlights FY 2024 VEDANTA AT A GLANCE Vedanta Resources Limited, is one of the world’s foremost natural resources conglomerates, with primary operations in zinc-lead-silver, iron ore, steel, copper, aluminium, power, nickel, and oil and gas. As market leaders in most of these segments, we serve domestic and international demand for primary materials, thereby playing a key role that enables resource sufficiency at scale. With strategic assets in India, South Africa and Namibia, we are committed to creating long-term value, with an uncompromised focus on business, social and environmental sustainability. INDIA’S LARGEST AND GLOBALLY LEADING NATURAL RESOURCES POWERHOUSE Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED 6 Core values shape our approach to business and value-creation Total employment generation 97,000+ tCO2e in avoided emissions from FY 2020-21 baseline 6.2 million Zinc India R&R 456 million tonnes Zinc International 662 million tonnes Oil and Gas 1.4 billion boe CARE RESPECT INTEGRITY TRUST ENTREPRENEURSHIP INNOVATION EXCELLENCE Largest natural resources company in India CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT Vedanta at a Glance 7 We operate an end-to-end value-chain in the natural resources sector Exploration Processing Asset development Value addition Extraction We have consistently added to our Reserves and Resources (‘R&R’) through brownfield and greenfield activities that have helped us to extend the lives of our existing mines and oilfields. We produce refined metals by processing and smelting extracted minerals at our zinc, lead, silver, copper, and aluminium smelters, and other processing facilities in India and Africa. As a best practice measure, we also generate captive power and sell any surplus power. We have a remarkable track record of project execution on time and within budget. We undertake special measures to develop the resource base to optimise production and increase the life of the resource. We have also developed strategic processing facilities. We meet market requirements by converting the primary metals produced at our facilities into value-added products such as sheets, rods, bars, rolled products, etc. at our zinc, aluminium and copper businesses. Our operations are focussed on the exploration and production of metals, oil and gas extraction besides power generation. We extract zinc- lead-silver, iron ore, steel, copper and aluminium. We have three operating blocks in India producing oil and gas. VEDANTA RESOURCES LIMITED 8 Integrated Report and Annual Accounts 2023-24 ESG PURPOSE AND MISSION TRANSFORMING FOR GOOD Our ESG purpose and mission ESG purpose Transforming for good Transforming the workplace Transforming communities Pillars Aim 1 Keep community welfare as the guiding principle for our business decisions Commitments & Targets Aim 2 Empower 2.5 million individuals with enhanced skillsets Aim 3 Uplift 100 million women and children through Education, Nutrition, Healthcare and Welfare Transforming the planet Aim 4 Net Zero Carbon by 2050 or sooner Aim 5 Achieving net water positivity by 2030 Aim 6 Innovating for a greener business model Aim 7 Prioritising safety and health of all employees Aim 8 Promote gender parity, diversity and inclusivity Aim 9 Adhere to global business standards of corporate governance Operating structure Our diversified structure and wide geographic presence enable efficient operations and serviceability As of 31 March 2024 * Skorpion – 100% BMM & Gamsberg – 74% ** 50% of the share in the RJ Block is held by a subsidiary of Vedanta Limited Group Structure Listed entities Unlisted entities Vedanta Resources Limited Divisions of Vedanta Limited Sesa Iron Ore Sterlite Copper Power (600 MW Jharsuguda) Subsidiaries of Vedanta Ltd. Vedanta Limited 61.95% 64.9% Hindustan Zinc (HZL) 51% Bharat Aluminium (BALCO) 100% Zinc International* 100% Talwandi Sabo Power (1,980 MW) 95.5% ESL Steel Limited 99.99% Ferro Alloy Corporation Ltd. (FACOR) Aluminium (Odisha Aluminium and power assets) Cairn Oil & Gas** Athena 100% Meenakshi Energy Limited (1000 MW) 100% Vedanta Displays Limited 100% Vedanta Semiconductors Pvt Limited CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT ESG Purpose and Mission 9 ASSET OVERVIEW STRENGTH IN DIVERSITY AND MARKET LEADERSHIP ZINC-LEAD-SILVER 75% market share in India’s primary zinc market (Hindustan Zinc Limited) Asset Highlights World’s largest underground zinc-lead mine at Rampura Agucha, India 3rd largest silver producer in the world Zinc India has an R&R of 456 million tonnes with a mine life of 25+ years Zinc International has an R&R of more than 662 million tonnes supporting mine life in excess of 20 years HZL - Low-cost zinc producer, which lies in the first quartile of the global zinc cost curve (2023) Application Areas Galvanising for infrastructure and construction sectors Die-casting alloys, brass, oxides and chemicals Application Areas Power systems, automotive sector, aerospace, building and construction, packaging ALUMINIUM Largest primary aluminium producer in India Asset Highlights Largest aluminium installed capacity in India at 2.4 MTPA Integrated 4.9 GW Power & 3.5 MTPA Alumina refinery 45% market share in India among primary aluminium producers Diverse product portfolio – ingots, wire rods, primary foundry alloy, rolled products, billet and slab EBITDA US$ 1,167 million EBITDA Zinc India (HZL) (In US$ million): 1,722 US$ 1,638 million Zinc International US$ 84 million Production Volume Zinc 817 kt Lead 216 kt Silver 746 tonnes Zinc India 208 kt Zinc International Production Volume Aluminium 2,370 kt Alumina 1,813 kt Zinc India (HZL), Zinc International Business Aluminium smelters at Jharsuguda & Korba (BALCO) Alumina refinery at Lanjigarh Business Integrated Report and Annual Accounts 2023-24 10 VEDANTA RESOURCES LIMITED OIL & GAS Asset Highlights First Field Development Plan (FDP) approved under OALP regime for Jaya field. Production commenced with initial plan to deliver > 3 kboepd. This is the first FDP approved in OALP regime, among 144 blocks awarded under 8 OALP rounds by the Government to various companies World’s longest continuously heated pipeline from Barmer to Gujarat Coast (~670 kms) Infill drilling in Rajasthan (Mangala, Bhagyam, Aishwariya, Tight Oil (ABH), Tight Gas (RDG) and Satellite Field to augment reserves and mitigate natural decline Drilling commenced in North- East region to explore the prospects in this region Largest private sector oil & gas producer in India Executed one of the largest polymers EOR projects in the world Footprint over a total acreage of c. 65,000 square kilometres Gross 2P reserves and 2C resources of 1,376 mmboe Application Areas Crude oil is used by hydrocarbon refineries Natural gas is mainly used by the fertiliser sector EBITDA US$ 1,184 million Average daily gross operated production 128 kboepd (Average Participating Interest production of 82 kboepd) Cairn India Business POWER 11 GW total power portfolio. 4.8 GW of installed IPP capacity. Asset Highlights One of the largest power producers in India’s private sector* Energy-efficient, super critical 1,980 MW power plant at Talwandi Sabo Upcoming 1000 MW Meenakshi (by FY 2025) and 1200 MW Athena (by FY 2026) thermal power plants at Andhra Pradesh and Chhattisgarh respectively Application Areas Commercial power backed by power purchase agreements Captive use EBITDA US$ 117 million Power sales 13,443 million units Power Assets at TSPL (1980 MW) at Talwandi Sabo, Jharsuguda IPP (600 MW), Meenakshi (1000 MW), Athena (1200 MW) Merchant Power Business *including captive power generation Operates ~25% of India’s crude oil production CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT Asset Overview 11 1. Hot metal design capacity IRON ORE STEEL 3.5 MTPA design capacity1 Asset Highlights Design capacity of 3.5 MTPA Largely long steel products Highest-ever hot metal production of 1,473 kt Highest-ever DIP production of 212 kt Application Areas Construction, infrastructure, transport, energy, packaging, appliances and industry Product portfolio includes pig iron, billets, TMT bars, wire rods and ductile iron pipes One of the largest merchant iron ore miners in India and one of the largest producers and exporters of merchant pig iron in India Asset Highlights Karnataka Iron ore mines with R&R of 75 million tonnes and life of 9 years Goa Iron Ore mines; R&R of 55.7 million tonnes and mines life of 18 years Value-added business: 3 blast furnaces (0.96 MTPA), 2 coke oven batteries (0.52 MTPA) and 2 power plants (65 MW) WCL mine R&R: 249 million tonnes Coke-Vazare: One merchant coke plant of capacity 0.1 MTPA Application Areas Essential for steel making Used in construction, infrastructure and automotive sectors EBITDA US$ 200 million Production Volume Pig iron 831 kt 5.6 million DMT Saleable Ore Production EBITDA US$ 27 million Iron Ore Business Business ESL Steel Business Production Volume Steel 1,386 kt Integrated Report and Annual Accounts 2023-24 12 VEDANTA RESOURCES LIMITED FACOR 145 KTPA charge chrome / ferro chrome capacity with 100 MW power plant; 290 KTPA chrome ore mining capacity Asset Highlights Osthpal mines have 240 KTPA mining capacity 45 MVA Charge chrome plant of 80 KTPA, 33 MVA Charge chrome plant of 65 KTPA and captive power plant of 100 MW Application Areas Used for making stainless steel, carbon steel, ball- bearing steels, tool steels and other alloy steels EBITDA US$ 14 million Production Volume 80 kt Ferro chrome Ferro Alloys Corporation Ltd Business COPPER One of the largest copper production capacity in India Asset Highlights Tuticorin smelter and refinery are currently not operational Tuticorin Smelter Capacity: 400 KTPA Silvassa Refinery Capacity: 216 KTPA Production Volume 141 kt Cathode Copper India Business Application Areas Used for making cables, transformers, castings, motors and alloy-based products CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT Asset Overview 13 OUR INVESTMENT CASE BUILT ON A SOLID, VALUE-ACCRETIVE FOUNDATION The Indian economy is poised for robust growth, which alongside the emphasis on digitalisation and greener economy is set to boost the demand for metals and minerals. Vedanta, being the country’s largest and most diversified natural resources company, will play a pivotal role in this transformative journey. We have large scale, cost‑efficient and highly-productive operations, coupled with a solid financial foundation and strategic, forward-thinking investments. These alongside our commitment to sustainability and innovation, ensure that we have all the essential building blocks to address the nation’s evolving needs and create value for all stakeholders. 14 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED Strengths powering our long-term success World-class natural resources powerhouse with low cost, long-life and diversified asset base Well-placed to contribute to and capitalise on India’s growth and benefit through the cycle with an attractive commodity mix Proven track record of operational excellence with high productivity and consistent utilisation rates Focussed on digitalisation and innovation to drive efficiency and resilience Disciplined capital allocation framework with emphasis on superior and consistent shareholder returns Robust financial profile with strong ROCE, increasing EBITDA and a stronger balance sheet Committed to ESG leadership in the natural resources sector FINANCIAL STATEMENT STATUTORY REPORTS 15 CORPORATE OVERVIEW Our Investment Case Vedanta has an extensive and diversified asset portfolio, which is characterised by global cost leadership in several core businesses enabling superior margins and free cash flow generation across the commodity cycle. With ongoing investments in capacity creation and efforts for structural cost reduction and operational efficiency, we continue to reinforce our cost competitiveness. Our robust commodity mix, focussed on base metals and oil, that have strong fundamentals and robust demand further gives resilience to our business. Iron and Steel Power 13 MTPA Iron Ore Mines: Karnataka Mines Goa Mines WCL 1,980 MW TSPL 600 MW JSG IPP Copper 216 KTPA Silvassa Refinery 400 KTPA Tuticorin Aluminium Oil and Gas 1.8 MTPA Jharsuguda Smelter 0.6 MTPA BALCO Smelter Total Acreage: Footprint > 60,000 square km World-class natural resources powerhouse with low cost, long-life and diversified asset base Asset Base 3.5 MTPA Lanjigarh Refinery 4.9 GW Captive Power 3.6 MTPA Coal Mines Zinc-Lead-Silver HZL 1,123 KTPA Smelter Capacity 456 million tonnes Mine R&R 587 MW Captive Power Zinc International 325 KTPA MIC BMM and Gamsberg Mine R&R: Gross 2P reserves and 2C resources of 1,376 Mmboe Primary Oil fields: Mangala, Ravva, Cambay, KG - On/Offshore 1 MTPA Pig Iron Capacity 1.5 MTPA Steel Capacity 145 KTPA FACOR Capacity 1,200 MW Athena 1,000 MW Meenakshi Integrated Report and Annual Accounts 2023-24 16 VEDANTA RESOURCES LIMITED Indian economy, on the back of significant infrastructure investment and the government’s focus on manufacturing and urbanisation, is growing rapidly. This alongside the emphasis on a green economy, electronics and digitalisation is likely to push the per capita metal consumption, presently below the global average. Expectation of healthy economic growth at 8.6% CAGR during 2022-2030 augurs well for the minerals demand. Vedanta’s operations, being primarily India-focussed, are poised to benefit from the economic momentum. The following advantages position us uniquely in this market: Leadership position as India’s largest base metals and oil (private sector) producer Extensive and scalable portfolio of commodities aligned with the nation’s needs Expert team with extensive Indian market experience, including project execution and fulfilling demand Demand 2023-2030 CAGR Aluminium Global Demand India Demand Zinc Oil & Gas Iron Ore Finished Steel Copper Nickel 2% 1.7 0.9 0.5 1.3 8.7 4.0 1.7 4.6 27.8 10.7 4.7 3.9 9% 7.5% 1.9% 4.2% 1.3% 4.5% 0.1% 5.2% 0.8% 8.5% 3.1% 6% 5.4% Source: Wood Mackenzie, IHS Markit, OPEC World Oil Outlook 2023 Note: All commodities demand correspond to primary demand; figures are for 2023 Aluminium consumption (Kg/capita) Copper consumption (Kg/capita) Zinc consumption (Kg/capita) Oil consumption (boe/capita) India India India India Global Global Global Global China China China China Well-placed to contribute to and capitalise on India’s growth and benefit through the cycle with an attractive commodity mix Vedanta continued its strong growth momentum and witnessed steady volume augmentation and cost reduction across key businesses, with Aluminium and Zinc, Steel, Iron Ore, Pig Iron, Ferrochrome businesses delivering record performance. Aluminium Cost (US$/t) Zinc India Cost (US$/t) 1QFY23 2,653 2Q(Δ) (224) 3Q(Δ) (280) 4Q(Δ) (90) 1Q(Δ) (127) 2Q(Δ) (118) 3Q(Δ) (79) 4Q(Δ) (24) 4QFY24 1,711 3QFY23 4Q(Δ) 1Q(Δ) 2Q(Δ) 3Q(Δ) 4Q(Δ) 4QFY24 1,293 (79) (20) (57) (42) (44) 1,051 Cost Position CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT Our Investment Case 17 We have a track record of consistently delivering phenomenal production growth across our assets. We ensure this through our disciplined approach to development, ensuring * All commodity and power capacities rebased to copper equivalent capacity (defined as production x commodity price/copper price) using average commodity prices for FY 2024. Power rebased using FY 2024 realisations, Copper custom smelting production rebased at TC/RC for FY 2024, Iron ore volumes refer to sales with prices rebased at realised prices for FY 2024 India Growth Potential 4.1 2,400 1.4 36 7.5 4,000 1.5 40 GDP (Real) (US$ trillion) Per capita income (Real) (US$) Population (billion) Urbanisation (%) 2023 2023 2023 2023 2030 2030 2030 2030 India mineral reserves ranking globally Source - IHS Markit Source: USGS Mineral Commodity Summaries 2022, OPEC Annual Statistical Bulletin 2023 9% CAGR 7.7% CAGR 0.8% CAGR 3.8% CAGR 7th Zinc Reserves: 7.4 million tonnes 8th Iron ore Reserves: 5.5 billion tonnes 9th bauxite Reserves: 660 million tonnes Oil Reserves: 4.4 billion barrels Total Production Copper Equivalent (kt) 1,800 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 FY2024 1,600 1,400 1,200 1,000 800 600 400 200 0 10x or ~13% CAGR Production Growth against India’s GDP of 7% Zinc-Lead Silver Copper Aluminium Steel Power Iron Ore Oil & Gas Proven track record of operational excellence with high productivity and consistent utilisation rates steady production growth across operations while prioritising efficiency and cost savings. We further leverage our management team’s extensive sectoral and global experience alongside investments in digitalisation, automation and vertical integration, to operate efficiently and responsibly. Integrated Report and Annual Accounts 2023-24 18 VEDANTA RESOURCES LIMITED Focussed on digitalisation and innovation to drive efficiency and resilience Vedanta has been at the forefront of digitalisation, adopting a digital-first culture that ensures sustained technology innovation and digital literacy of the entire workforce. Enabled by this, we have successfully implemented an organisation-wide digital transformation. This includes ongoing investments in advanced Industry 4.0 technologies like deploying Digital Twin and Advanced Process Control, to enhance operational efficiency. We are among the few companies to deploy cutting- edge digitalisation at mines, which ensures highly efficient and safe remote operations. We further collaborate with established startups and partners to implement cutting-edge digital solutions. These efforts have contributed to volume gains and cost optimisation, contributing to EBITDA improvement. 19 CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT Our Investment Case Our robust capital allocation policy supports achieving our long-term growth and optimal shareholder returns objectives. The policy aligns three key areas of capital expenditure, dividend policy and selective inorganic growth. Guided by consistent, disciplined and balanced capital allocation, it ensures long-term balance sheet integrity, optimal leverage management and maximisation of total shareholder returns. It is a result of this, Vedanta has been able to commit substantial capex investment and pay high dividends to shareholders, without stressing the balance sheet. We have a proven track record of delivering consistent growth across all financial parameters, driven by sustained investment in new capacities and operational efficiencies, which have strengthened our financial foundation. In FY 2024, despite market volatilities, we maintained a resilient performance: Revenues of US$ 17.1 billion and EBITDA of US$ 4.7 billion Strong ROCE of ~25% Committed towards Deleveraging Strong and robust FCF (Post Capex) of US$ 0.7 billion Cash and liquid investments of US$ 2.0 billion A strong balance sheet, with respect to Net Debt/EBITDA and gearing Disciplined capital allocation framework with emphasis on superior and consistent shareholder returns Robust financial profile with strong ROCE, increasing EBITDA and a stronger balance sheet Capital Allocation Mergers & Acquisitions Dividend Capital Integrated Report and Annual Accounts 2023-24 20 VEDANTA RESOURCES LIMITED Aiming to spend US$ 5 billion in the next decade targeting to reduce absolute emissions by 25% by 2030 (from the 2021 baseline) and eventually progress towards Net Carbon neutrality by 2050. Towards this, we have set goals to have 2.5 GW of RE RTC (835 MW under construction) by 2030 and decarbonising 100% of our Light Motor Vehicle (LMV) fleet by 2030 and 75% of our mining fleet by 2035. We further continue to take measures like promoting operational efficiency, changing fuel mix and exploring the potential for green product development. Making steady progress across various other ESG targets including water positivity (currently 0.7x) by 2030, uplifting 100 million (currently 17.4 million) women and children, empowering 100 million families (currently 1.4 million) with enhanced skill sets Ensuring a diverse and inclusive workplace, with 20% women representation and 36 members from the transgender community Enhancing workplace safety with the implementation of critical risk management across the business Maintaining transparent and complete disclosures, beyond regulatory, by aligning with international frameworks and standards like GRI, TCFD etc. Committed to ESG leadership in the natural resources sector CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT Our Investment Case 21 MESSAGE FROM THE CHAIRMAN INVESTING IN A BETTER TOMORROW In today’s ever-evolving world, where transformation is key, we understand the imperative to continuously transform for good to outperform DEAR STAKEHOLDERS, It’s with immense pride that I reflect on another remarkable year in Vedanta’s evolution as a world-class Indian multinational. As we embark on the next stage of our multi-year growth trajectory, aimed at unleashing value for all stakeholders, I extend my deepest gratitude to each of you. You are the pillars of our success, propelling us towards building a futuristic organisation rooted in India’s progress. Anil Agarwal Chairman Integrated Report and Annual Accounts 2023-24 22 VEDANTA RESOURCES LIMITED The commissioning of Train 1 at Lanjigarh refinery, adding 1.5 MTPA of capacity, marks a significant milestone, and other projects are steadily progressing. In today’s ever-evolving world, where transformation is key, we understand the imperative to continuously transform for good to outperform. FY 2024 is a pivotal year for Vedanta, characterised by transformative initiatives to unlock greater value for stakeholders, drive a sustainable tomorrow and strengthen the competitive edge. This transformation is leading to “a stronger Vedanta”. Join me as I unveil our vision for the next phase of growth, building a value- focussed, future-ready, and purpose- driven institution that will stand the test of time. Vedanta for a progressive India India, under the leadership of a visionary government, is on an expressway of progress. The optimism surrounding the Indian economy is unparalleled, fuelled by robust manufacturing activity, thriving private consumption and commendable strides in infrastructure development. The buoyancy observed in the stock markets and the influx of foreign direct investments solidify India’s rise as a global power and a critical long-term market. The recorded GDP growth of ~6.5% in FY 2024 supports the narrative of India’s flourishing growth trajectory. Going by the prevailing macro indicators, India’s growth momentum is poised to further accelerate in the years ahead. The government’s manufacturing and infrastructure push and aggressive investments in the green economy are catalysing a new level of progress and development for the country. International Monetary Fund forecasts the Indian economy to grow the fastest and ascend to the world’s third-largest economy position by 2027, with GDP expanding at a projected CAGR close to 7% during 2023-2028. The dream of witnessing India enter a golden era once again is within reach. As the economic growth engine gathers steam, the demand for commodities is set to surge. Equipped with a unique portfolio, ranging from oil and gas to essential metals, Vedanta is strategically positioned to seize the momentum, while aiding the nation’s goal of reaching a US$ 30 trillion developed economy by 2047 and achieving self-reliance. Our recent foray into Electronics business exemplifies our commitment to India’s vision of self-sufficiency. This exciting venture opens doors to the thriving Indian electronics market, predicted to grow a staggering 43% CAGR between 2023 and 2026, reaching a monumental US$ 300 billion. Looking ahead, our unwavering commitment to substantial capex projects worth US$ 6 billion for expanding our capacities across the businesses and integrating Aluminium business will be a cornerstone of our future growth. The commissioning of Train 1 at Lanjigarh refinery expansion project, adding 1.5 MTPA of capacity, marks a significant milestone, and other projects are steadily progressing. Furthermore, we are actively pursuing various strategic initiatives to unlock the immense value within our diversified conglomerate, positioning ourselves for continued success in evolving market landscapes. Unleashing value through demerger As a visionary organisation, Vedanta has always changed for the better. Having built a US$ 50 billion diversified conglomerate over the last four decades, we now aim to propel our journey with the proposed demerger of Vedanta Limited into six independent, pure-play companies. This strategic move will simplify the corporate structure, unlock greater value and attract targeted investment for the expansion and growth of each business. CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT Message from the Chairman 23 The demerger will be a simple vertical split, with shareholders receiving one share in each demerged listed company for every share of Vedanta Limited they hold. Each entity will have greater freedom to grow to its potential, led by independent management, capital allocation and niche strategies as per their customers, investment, and end markets. Our goal is to see each entity replicate the success of today’s Vedanta Limited. Strategic finance management We are committed to financial prudence and fortifying our capital management framework to proactively meet the expectations of our investor community. Over the past two years, we have deleveraged Vedanta Resources by US$ 3.7 billion against our commitment of US$ 4 billion in three years. Thanks to your overwhelming support, Vedanta Resources has successfully restructured its outstanding bonds totalling US$ 3.2 billion, extending their maturity up to FY 2029 and easing off the liquidity pressure. This newfound liquidity flexibility allows us to channel cash flows to important capex projects. These decisive moves demonstrate our commitment to a debt-free and value- accretive future for our stakeholders. Performance In FY 2024, India stood out globally as a market characterised by both growth and stability. Our team, backed by strong leadership, did a commendable job of capturing the opportunity, despite commodity prices exhibiting mixed performance, influenced by global market dynamics and sector-specific demand trends. Through a sharp focus on operational performance, strategic investments and commitment to innovation and sustainability, we achieved significant success. Our financial report reflects this, with revenues reaching US$ 17.1 billion and EBITDA at US$ 4.7 billion. Notably, we also generated a healthy amount of free cash flow pre capex of US$ 2.2 billion, indicating the strength of operations. Investing in ESG for a sustainable future As a responsible corporate committed to sustainable development, ESG remains central to Vedanta’s growth plans and investments. Our efforts continued to yield tangible outcomes during the year under review. I am thrilled to announce some big wins in the S&P Global Corporate Sustainability Assessment 2023. Vedanta Limited and Hindustan Zinc Limited (HZL) secured the third and first positions respectively in the metal and mining sector, becoming the only two Indian companies in the top 10. Additionally, Vedanta Aluminium Business took the top spot in its aluminium peer group. The accomplishment reflects Vedanta’s unwavering commitment to sustainable business practices and responsible corporate citizenship, led by our Transforming for Good ESG strategy. Vedanta’s exceptional progress on various ESG goals during the year was witnessed in other milestone achievements. Advancing towards net zero, we secured 835-MW of renewable energy round-the-clock (RE RTC) PDAs. We have rolled out industry-leading policies, such as an EV purchase policy for all our employees, and all Over the past two years, we have deleveraged Vedanta Resources by US$ 3.7 billion against our commitment of US$ 4 billion in three years. EBITDA US$ 4.7 billion REVENUE US$ 17.1 billion Integrated Report and Annual Accounts 2023-24 24 VEDANTA RESOURCES LIMITED our business units have plans in place to ensure 100% light mobility vehicle electrification by 2030. Jharsuguda unit and HZL have also begun trials for the electrification of heavy mobility and other vehicles from the mining fleet. Our water positivity ratio improved to 0.71x during the fiscal, with 3% reduction in freshwater consumption. In our commitment to diversity, equity and inclusion, women’s representation improved to 20% in FY 2024, enabled by programmes to place them in STEM and leadership roles. We are proud to have expanded our definition of diversity beyond gender, with more than 36 members from the transgender community now part of the Vedanta team. A revolutionary parenthood policy was introduced for women and LGBTQIA+ employees to emphasise that parenthood is not a hiatus for professional life but a transformative phase. The policy allows options for maternity leave, work from home, flexible working hours and even a 12-month sabbatical with job security. As you are aware, we follow extremely focussed CSR policies as part of our community support programme. During the year, our efforts benefited nearly 0.25 million women and children across India through NandGhar Initiative. The second edition of the Vedanta Delhi Half Marathon set yet another milestone, as a record 35,000+ participants ran in support of the #RunForZeroHunger cause, raising 5 million meals for children in the process. This is a true example of the immense power of participative sport to bring together people from all walks of life for fun, fitness and, most importantly, a cause. Ethics, good governance and transparency are core to Vedanta’s business values and integral to its ESG philosophy. During the year, we continued our track record of being one of highest exchequer contributor with contribution of ~ US$ 6.7 billion. We also made considerable efforts towards enhancing transparency – a testament to our commitment to responsible practices. This is evident in Vedanta’s alignment with multiple global frameworks and publication of disclosures beyond statutory requirements. On a steady path to progress As we move ahead, we will endeavour to continue pursuing the path of steady and progressive performance, which we have stayed consistently on through the years. The fundamentals supporting the sectors in which we operate remain robust, providing an optimistic outlook. We believe that the key growth projects that are on the horizon, along with the expected acceleration in commodity prices, will drive future profitability. On behalf of the entire Board, I extend my heartfelt gratitude to all the stakeholders for their continuous support, the driving force behind our success. Vedanta remains committed to executing strategic priorities to create long-term value for all. Best regards Anil Agarwal Chairman During the year, we continued our record of being among the top taxpayers in India (US$ 6.7 billion). CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT Message from the Chairman 25 Enhancing Capacity and Economic Impact - Gamsberg Concentrator Phase 2 Business Growth VEDANTA RESOURCES LIMITED Integrated Report and Annual Accounts 2023-24 26 Problem Statement Boasting a massive resource base of Gamsberg mine, Ghamsberg Phase 2 presents a significant expansion opportunity. However, its ambitious scope necessitates careful coordination of various activities, including the expansion of mining operations, construction of a new concentrator plant, and the establishment of critical infrastructure like a new tailings dam, power transmission lines, and water reservoirs. Successfully navigating these complex logistical challenges will be crucial to unlocking the full potential of this large-scale mining project. Spearheading the transformative Gamsberg Phase 2 project, reflecting Vedanta’s commitment to sustainable mining and operational excellence. This initiative entails the expansion of Gamsberg’s mining capacity to double and the construction of a new Concentrator plant, reinforcing the Company’s dedication to advancing mineral processing capabilities while fostering economic growth and job creation. Our Solution Conceptualised an EPC (Engineering, Procurement, and Construction) approach for the Phase 2 concentrator Initiated major long lead item orders, to be freely issued to the EPC Business Partner for erection and commissioning Undertaken construction of a new tailings dam, additional power infrastructure, and a water reservoir to meet increased demands Ensured completion of civil works in key process areas, facilitating the installation of equipment and structures Way Forward Continue equipment deliveries, targeting completion by first quarter of FY 2025 Advance construction progress with a specific focus on completing the wet TSF (Tailing Storage Facility) components Execute remaining construction phases, addressing the external water and power needs Monitor and address any unforeseen challenges in construction progress Progress Overall project completion 53% Engineering work completed 100% CAPEX incurred for the project US$ 466 million Procurement work has been done 96% Double the annual ore capacity of Gamsberg, from 4 MTPA to 8 MTPA Is set to achieve from this project 2,000-2,500 jobs Expected job creation during the construction 1,800 People employed including inhouse and business partners 200 kt of MiC (Mineral in Concentrate) Anticipated future annual production Project Impact FINANCIAL STATEMENT STATUTORY REPORTS CORPORATE OVERVIEW Case Studies 27 Breakthrough in Reduction Cell Lining Design Business Growth Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED 28 Problem Statement Primary Aluminium production is energy-intensive, necessitating a focus on reducing power consumption for sustainable practices. The Company faced the challenge of optimising energy efficiency in the smelting process to meet ESG commitments and enhance overall operational sustainability. Our Solution Conducted a detailed model of existing pots and busbar networks to identify potential opportunities for improvement Implemented copper inserts to diminish electrical resistivity and horizontal current components, enhancing overall conductivity Utilised existing assets with added insulation to maintain superior thermal balance and prevent electrolytic bath material infiltration Employed a unique cold sealant, distinguishing the lining design from other solutions in the market Way Forward Installed 150 pots with the lining design Commenced a comprehensive scale-up process, aiming to achieve full production capacity Vedanta Aluminium has achieved a groundbreaking advancement in the design of reduction cells (pots) at its Jharsuguda smelter. The patented “Vedanta lining design” significantly improves energy efficiency and extends the lifespan of smelting pots, aligning with the Company’s commitment to self‑reliant sustainable production and environmental, social, and governance (ESG) goals. Estimated power reduction target Annual GHG emission reduction target on full‑scale implement 250 kWh/t 0.432 million tCO2e Volume increment target on full-scale implementation Estimated cost savings target on full‑scale implement 16 kt US$ 19.9 million Targets Case Studies FINANCIAL STATEMENT STATUTORY REPORTS CORPORATE OVERVIEW 29 Monetising the Jaya Field Business Growth Integrated Report and Annual Accounts 2023-24 30 VEDANTA RESOURCES LIMITED Problem Statement Monetising the Jaya field faced challenges such as regulatory compliance, market volatility, and the need for technological adaptations. Efficiently navigating these hurdles was crucial for the Company to ensure timely and profitable returns on investment. Our Solution Commissioned a modular facility within 11 months, setting a global benchmark for drilling-to-production turnaround time Onboarded a rental facility contractor and gas buyer in December 2020 and January 2021 respectively Addressed delayed pipeline connectivity by commissioning a CNG facility at the Jaya site, allowing for innovative and immediate gas testing through truck-mounted CNG kits Initiated long-term testing by December 2022, utilising a first‑of‑its‑kind CNG cascade system for sales to nearby gas stations, minimising gas flaring and enabling simultaneous appraisal and monetisation Commenced sales via gas pipeline on 10 August 2023, enhancing production from the Jaya field Way Forward Continue enhancing production from the Jaya field, with sales through gas pipelines facilitating increased testing production Address ongoing challenges related to remote site access, regulatory compliance (DGH, MoPnG, PESO, CTO, PNGRB), and ensure seamless execution Cairn, a prominent player in the Oil and Gas industry, has set course to monetise Jaya field (OALP CB/ONHP/2017/2 block) to cater the nation’s energy demand. Overcoming regulatory, market, and technological challenges, Cairn aimed to transform the Jaya field’s potential into a lucrative revenue stream. January 2023 Production ~350 boe Sales through cascades August 2023 Production ~1,500 boe Sales through gas pipeline December 2023 Production 2,300 boe YME-01 well line up Progress FINANCIAL STATEMENT STATUTORY REPORTS CORPORATE OVERVIEW Case Studies 31 People India’s First All-Women Mining Rescue Team: Pioneering Safety Initiatives Integrated Report and Annual Accounts 2023-24 32 VEDANTA RESOURCES LIMITED In adherence to its core safety philosophy “Safety First”, Hindustan Zinc has successfully trained India’s inaugural all-women mining rescue team. This groundbreaking initiative, a testament to the company’s commitment to Safety Development Goals, aims to achieve Zero Harm in mining operations. The seven- member rescue team underwent comprehensive training, including first aid, firefighting, and emergency response, aligning with the company’s focus on safety and sustainability. Impact Statement The creation of India’s first all-women mining rescue team addresses a crucial need for gender-inclusive safety measures in mining operations. This initiative pioneers diversity and contributes significantly to Hindustan Zinc’s overarching goal of achieving Zero Harm in its operational practices. Our Approach Established India’s first-ever all-women mining rescue team to bolster safety measures in mining operations Aligned the initiative with the Company’s Sustainability Development Goals, emphasising the commitment to Zero Harm Conducted base training at the RRRT centre at Rajpura Dariba Complex, followed by rigorous training at the Mine Rescue Station, Nagpur Covered key areas such as first aid, firefighting, mine emergency scenarios, self-rescue techniques, and emergency response in the training curriculum Way Forward Continue to strengthen the capabilities of the all-women mining rescue team through ongoing training and skill development Explore opportunities to replicate this pioneering initiative across other mining sites, fostering inclusivity and diversity in the mining sector Evaluate the effectiveness of the training programme through regular assessments and feedback sessions Actively promote the achievements of the all-women mining rescue team to inspire more women to join the mining industry FINANCIAL STATEMENT STATUTORY REPORTS CORPORATE OVERVIEW 33 Case Studies KEY PERFORMANCE INDICATORS TESTAMENT TO SUSTAINED VALUE CREATION GROWTH Revenue (US$ billion) FY 2022 FY 2023 FY 2024 17.6 18.1 17.1 Description: Revenue represents the value of goods sold and services provided to third parties during the year. Commentary: In FY 2024, consolidated revenue was at US$ 17.1 billion compared with US$ 18.1 billion in FY 2023. This was driven by lower output commodity prices primarily of aluminium, zinc and brent, partially offset by higher volume at Aluminium, Copper and Iron Ore business. FY 2022 FY 2023 FY 2024 6.3 4.6 4.7 EBITDA (US$ billion) Description: Earnings before interest, tax, depreciation and amortisation (EBITDA) is a factor of volume, prices and cost of production. This measure is calculated by adjusting operating profit for special items and adding back depreciation and amortisation. Commentary: Second highest ever EBITDA for FY 2024 at US$ 4.7 billion compared with US$ 4.6 billion in FY 2023. This was mainly due to softening of input commodity prices coupled with strategic cost savings, one time arbitration award in Oil & Gas business which is partially offset by slip in commodity prices primarily of aluminium, zinc and brent and strategic hedging gain recognised in previous year. FY 2022 FY 2023 FY 2024 2.1 1.6 0.7 FCF post-capex (US$ billion) Description: This represents net cash flow from operations after investing in growth projects. This measure ensures that profit generated by our assets is reflected by cash flow, in order to de-lever or maintain future growth or shareholder returns Commentary: We generated FCF of US$ 0.7 billion in FY 2024, driven by strong cash flow from operations and working capital release, partly offset by capital expenditure incurred during the year FY 2022 FY 2023 FY 2024 32 20 25 Return on capital employed (ROCE) (%) Description: This is calculated on the basis of operating profit, before special items and net of tax outflow, as a ratio of average capital employed. The objective is to earn a post-tax return consistently above the weighted average cost of capital Commentary: ROCE elevated to 25% in FY 2024 (FY 2023: 20%), primarily due to increase in EBIT and decrease in debt FY 2024 32 FY 2022 FY 2023 40 29 Adjusted EBITDA margin (%) Description: Calculated as EBITDA margin excluding EBITDA and turnover from custom smelting of Copper business Commentary: Adjusted EBITDA margin for FY 2024 was 32% (FY 2023: 29%) 32 Integrated Report and Annual Accounts 2023-24 34 VEDANTA RESOURCES LIMITED FY 2022 FY 2023 FY 2024 1.9 2.8 2.6 Net debt/EBITDA (consolidated) Description: This ratio represents the level of leverage of the Company. It represents the strength of the balance sheet of Vedanta Resources Limited. Net debt is calculated in the manner as defined in Note 22(b) of the consolidated financial statements Commentary: Net debt/EBITDA ratio as at 31 March 2024 was at 2.6x, reduced as compared to 2.8x as at 31 March 2023 FY 2022 FY 2023 FY 2024 4.8 3.4 2.6 Interest Cover (%) Description: The ratio is a representation of the ability of the Company to service its debt. It is computed as a ratio of EBITDA divided by gross finance costs (including capitalised interest) less investment revenue Commentary: The interest cover for the Company was at c. 2.6 times LONG-TERM VALUE Growth capex (US$ billion) FY 2022 FY 2023 FY 2024 0.7 1.2 1.5 Description: This represents the amount invested in our organic growth programme during the year Commentary: Our stated strategy is of disciplined capital allocation on high-return, low-risk projects. Capital expenditure on expansion was US$ 1.5 billion during the year FY 2022 FY 2023 FY 2024 448 460 456 FY 2022 FY 2023 FY 2024 671 659 662 FY 2022 FY 2023 FY 2024 1,151 1,156 1,376 Zinc India (million tonnes) Zinc International (million tonnes) Oil & Gas (mmboe) Description: During the year, combined R&R were estimated to be 456 million tonnes, containing 30.81 million tonnes of zinc-lead metal and 854.3 million ounces of silver. Overall mine life continues to be more than 25 years Description: During the year, combined mineral resources and ore reserves estimated at 662 million tonnes, containing 34.12 million tonnes of metal Description: During FY 2023, the gross proved, and probable reserves and resources stood at 1,376 mmboe Reserves and resources (R&R) Description: Reserves and resources are based on specified guidelines for each commodity and region. CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT Key Performance Indicators 35 A RESILIENT MODEL FOR LONG-TERM VALUE CREATION VALUE CREATION MODEL Financial Capital Manufactured Capital Intellectual Capital Inputs Resources and relationships deployed Availability, affordability and accessibility of capital and trade- offs faced • Gross debt: US$ 14.3 billion • Cash and cash equivalent: US$ 2.0 billion • Growth capex: US$ 1.5 billion • Operating in a fast-growing economy where the focus is on infrastructure development and sustainability, Vedanta has adequate access to capital • The increase in market rates has increased interest costs • Ensuring continued access to manufactured assets through targeted investments in maintenance and necessary replacement • Robust R&R base ensures steady raw material availability • All capex projects are progressing well for scheduled completion • Plant and Equipment: US$ 13.7 billion • Purpose and long-term goals‑driven culture with continued investments to align strategy • Leadership and management training • Ongoing investments in digitalisation, innovation and process automation • Focussed approach and programmes for R&D, skill development and attracting and retaining top talent • Modernised processes and high-end technology ensure alignment with the evolving world Business segments Oil and Gas Iron Ore Steel Ferro Alloys Aluminium Zinc Copper Our value chain activities Exploration Asset development Extraction Infrastructure Building and Construction Power Automotive Steel Transport Appliances Wires and Cables Industries serviced pg.88 Integrated Report and Annual Accounts 2023-24 36 VEDANTA RESOURCES LIMITED Human Capital Social And Relationship Capital Natural Capital • No. of Employees including Contractors: 97,015 • HSE workforce (incl. contractors): 1,160 • No. of geologists: 206 • No. of hours of training : 2,973,887 hours • No. of Man Hours of safety training: 2,358,662 hours • Employees covered under mentoring and support programmes: 2,900 • Ready availability of skilled and semi-skilled people across global operations • Continued investments in skilling and well-being initiatives for people ensuring high retention • Increased stakeholders’ expectations for enhanced ESG performance • Negative sentiments towards companies in the metal and mining sector • Community investment: US$ 53 million • Strong global and domestic banking relationship: 30+ • Independent Directors: 4 • Constructive dialogues with unionised and non-unionised workforce • Established credibility with local communities, civil society organisations, NGOs and the media • Rated by two domestic rating agencies - Crisil & India Rating • Resources consumed (in million): • Energy: 648.72 million GJ • Water: 280.21 million m3 • Coal: 38.6 million tonnes • HVLT waste generated: 19.86 million tonnes • Fly ash generated: 15.32 million tonnes • R&R Zinc India: 456 million tonnes, containing • R&R Zinc International: 662 million tonnes, • R&R Oil & Gas: 1,376 mmboe gross proved, and probable reserves and resources • Healthy and long-life asset with an adequate R&R base • Natural and mineral resources being finite, we maintain a strong focus on managing them carefully Our core values Integrity Respect Care Trust Excellence Innovation Entrepreneurship Processing Value addition and marketing Aerospace Packaging Hydrocarbon refineries Fertiliser Chemicals CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT Value Creation Model 37 USING OUR SIX CAPITALS TO CREATE VALUE Outcomes Actions to enhance outcomes Stakeholder affected SDGs positively impacted Shareholders Investors Employees Lenders Suppliers Business segments and Outputs OIL & GAS ZINC INDIA POWER PIG IRON • Mined Metal – 1,079 kt • Integrated Metal – 1,033 kt • 128 kboepd • 13.4 billion kWh • 831 kt FINANCIAL CAPITAL MANUFACTURED CAPITAL INTELLECTUAL CAPITAL • Revenue: US$ 17.1 billion • EBIDTA: US$ 4.7 billion • Total exchequer contribution: US$ 6.7 billion • Attributable PAT(Before exceptional items): US$ 31 million • FCF post-capex: US$ 0.7 billion • RoCE: 25% • Net Debt to EBITDA: 2.6x • Focus on value-added products with better margins • Prudent capital allocation for capacity expansion • Demerger approved by the Board to unlock the potential of respective businesses • Focus on deleveraging balance sheet • Continued efforts to reduce costs and enhance productivity • Significant investments committed towards capex projects • Sustained investments in innovation and phase 2 implementation of organisation-wide digital transformation project to maintain the competitive edge • Implementation of capex projects on schedule • Ensuring optimal performance of assets • R&D Spend: US$ 1.6 million • Patents received in FY 2024: 2 • Patents under active application: 11 • Investment in digitalisation: US$ 19 million Integrated Report and Annual Accounts 2023-24 38 VEDANTA RESOURCES LIMITED Customers Government Local community NGOs Environment Civil Society Groups ALUMINIUM ZINC INTERNATIONAL STEEL COPPER • Alumina – 1.8 million tonnes • Aluminium – 2.4 million tonnes • 208 kt • 1,386 kt • 141 kt HUMAN CAPITAL SOCIAL AND RELATIONSHIP CAPITAL NATURAL CAPITAL • Rolling out critical risk management to cover major risk areas • Strive for zero harm and zero discrimination workplace • Invest in employee skilling, health & safety and well-being • Seek newer ways to engage and build healthy relationships with stakeholders • Maintain a robust ESG framework • R&D to convert operational by‑products into raw materials for application in other industries and internal consumption • Partnerships for circular economy solutions • Attrition rate: 10.8% • Diversity ratio: 20% • Total recordable injury frequency rate (TRIFR): 1.3 • Fatalities: 3 • Successful inclusion of LGBTQ+ colleagues with supportive policies • CSR beneficiaries: 17.4 million • Nand Ghars built till FY 2023: 6,000 • Contribution to the exchequer: ~ US$ 6.7 billion • Youth benefited from employment-based skills training: 4,076 • GHG Emissions: • Scope 1 – 61.28 million tCO2e • Scope 2 – 4.5 million tCO2e • Water recycled: 85 million m3 • HVLT utilised/utilisation: 18.4 million tonnes/92.50% • Fly ash utilised/utilisation rate: 16.5 million tonnes/108% CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT Value Creation Model 39 OPPORTUNITIES SETTING THE STANDARDS FOR INDUSTRY ADVANCEMENT We are operating in a dynamic industry landscape, marked by continual evolution and emerging trends that present new opportunities for growth and innovation. Vedanta stands out with its agility and a robust, yet flexible business model, that enables implementing industry-defining practices to stay ahead of the competition. This proactive approach ensures our relevance, positioning us for future success and creating sustainable value for all stakeholders. Purpose-Driven Mining The mining industry is shifting towards purpose-driven operations, focussing on ethical and sustainable practices to create value for stakeholders and gain their trust. This approach requires a leadership commitment and presents mining companies with an opportunity to play a pivotal role in driving economic development and advancing social progress. Vedanta believes in mining with a mission and is at the forefront of the industry’s transition towards a purpose- driven future. Our operations go beyond extracting resources, aiming to enrich lives and create a sustainable legacy of positive change for future generations. Guided by the philosophy of giving back, we positively impact over 15 million lives annually through initiatives in childcare, nutrition, women’s empowerment, healthcare and education. Our flagship Nand Ghar project is revolutionising early childhood development in rural India, having transformed nearly 6,000 Anganwadis, and aiming to reach all 0.14 million nationwide. As one of India’s leading social investors, we have pledged an additional US$ 600 million over the next five years aiming to empower 2.5 million families annually with essential skills training and uplift over 100 million women and children. Vedanta response T1 Integrated Report and Annual Accounts 2023-24 40 VEDANTA RESOURCES LIMITED Grassroots Exploration A thinning pipeline of mining assets and the escalating challenge of finding deposits pose risks to meet growing metals demand and fill reserves for the future. It is therefore critical for miners to shift focus from acquisitions, and instead increase spending on grassroots exploration to Vedanta recognises the critical role of grassroots exploration in securing a sustainable future for the mining sector. Our mines are rich with reserves that promise productivity for over two decades, yet we persist in exploration to safeguard our long-term prospects. Our commitment is evident in our proactive search for new resources, which has notably enhanced our mines’ Reserves & Resources (R&R). This is exemplified by the impressive expansion of our oil and gas 2P reserves and 2C resources, now totalling 1.4 billion barrels of oil equivalent. Through a focus on grassroots exploration, Vedanta is dedicated to achieving organic growth and reducing our dependence on acquisitions, aligning with our strategic objectives for enduring success. Vedanta response Net-Zero Commitment Mining companies are positioned to lead in sustainability by swiftly implementing comprehensive ESG strategies. Adopting pioneering sustainability practices and undertaking collaborative efforts across the value chain can significantly contribute to climate change mitigation and create a credible transition. Vedanta is committed to achieving net zero carbon by 2050, with an aim to spend US$ 5 billion over the next decade. Leading in energy efficiency, we are deploying 835 MW of renewable energy (RE) and aim for round the clock 2.5 GW by 2030, which will make us the world’s largest RE consumer. We are pioneering sustainable logistics within the mining sector, having introduced battery-operated EVs in underground mining to reduce emissions. Five of our businesses have achieved water positivity, reflecting our dedication to preserving vital resources. To play an active role in biodiversity conservation, we have planted 2 million trees across India towards our pledge of 7 million trees under the World Economic Forum’s initiative. Our efforts have been recognised. Vedanta was ranked 3rd out of 238 global companies in the S&P Global Corporate Sustainability Assessment, Hindustan Zinc has been recognised as a global leader in sustainability and Vedanta Aluminium as the most sustainable aluminium producer in its peer group. Vedanta response discover new resources sustainably and reverse this trend. They must also harness advanced technologies to expedite the identification and evaluation of targets. T3 T2 CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT Opportunities 41 Unlocking new value in existing assets Operational technologies and analytical tools are revolutionising decision-making in the mining industry, driving a paradigm change in functions like mine planning and maintenance. These technologies enable digital replication of assets, facilitating visualisation and strategic simulation, optimising decisions on investments and processes. This innovative approach, supported by accessible simulation software, maximises value from existing assets. Vedanta is harnessing the power of digitalisation, integrating advanced technologies to enhance the value of existing assets and drive operational efficiency. This includes Digital Twin which allows us to create a virtual model of physical assets, facilitating simulation and optimisation of operations before real-world implementation. Additionally, we have implemented Advanced Process Control (APC) which uses real-time data and analytics to fine-tune production processes, ensuring maximum efficiency and minimal waste. We also actively collaborate with established multinationals and vibrant Indian startups to source cutting-edge digital solutions. This helps enhance our operational processes and redefine possibilities. Our commitment to digitalisation extends to remote mining operations, to enhance the safety of our workforce. By leveraging remote-controlled machinery and operations, we minimise personnel exposure to hazardous conditions, reducing the risk of accidents and ensuring a safer working environment. Vedanta response Third-party delivery models (TPDM) Mining and metals companies are strategically partnering with global industry leaders to manage critical business functions like tax compliance, AI-enabled data management, ESG reporting, applications management, supply chain oversight and cybersecurity. Amidst global risks and supply Our commitment to integrating cutting-edge technology and scaling our projects internationally is reflected in our choice of partners. These partners are not just industry frontrunners; they assume complete end-to-end responsibility for the successful delivery of our projects, ensuring excellence and reliability. Vedanta collaborates with esteemed partners such as Schlumberger, Halliburton, GE, Siemens and Worley to meticulously execute projects with end-to-end accountability. Additionally, for vital support functions such as tax compliance and ESG reporting, we engage with the renowned expertise of the Big Four accounting firms. This strategic alliance ensures that every aspect of our operations is managed with precision and adheres to the highest standards of excellence. Vedanta response chain disruptions, TPDM enables companies to focus on core operations and have the flexibility to scale activities rapidly. T4 T5 Integrated Report and Annual Accounts 2023-24 42 VEDANTA RESOURCES LIMITED Rethinking minerals and metals investments In the pursuit of sustainable growth and quicker access to essential minerals and metals, companies are reevaluating their investment strategies. They are exploring non- traditional avenues like joint ventures (JVs) and strategic alliances to secure resources vital for sustainability and expedite the launch of new production capacities. They must also adopt innovative thinking regarding investment Vedanta is at the forefront of sustainable development, ensuring timely access to vital minerals and metals. We are innovating our investment strategies, embracing JVs and strategic alliances to secure resources essential for a sustainable future. These partnerships are key to fast-tracking new production capacities. We are not confined to conventional investment methods; our approach includes creative investment structures and engaging diverse investors like governments and OEMs. This broadens our resource base and accelerates the integration of crucial supplies into the market. Our dedication to sustainability is unwavering. Vedanta’s investment strategies are designed to support and drive industry-wide sustainable practices, reflecting our commitment to global environmental stewardship. Vedanta response structures and potential investors, including governments and Original Equipment Manufacturers (OEMs), to facilitate this process and integrate crucial metal supplies into the market more rapidly. Skills-based approach to solve workforce challenges Amidst skill shortages and ageing workforce, mining and metals companies must adopt a skills-based approach, focussing on worker capabilities rather than specific roles. This strategy enhances agility and flexibility, enabling them to tap into the workforce’s full potential and innovate new Vedanta embraces a skills-based workforce approach, focussing on capabilities to enhance flexibility and potential. Through robust internal talent building programmes and strategic educational partnerships, we ensure a future- and industry-ready workforce, bolstering operational resilience. A youthful workforce with an average age of 33 years is ensured by adopting a practice of inducting 1,500-2,000 freshers annually from top universities. Our commitment to talent-based recognition fosters a performance-driven culture, while our structured talent management programmes have helped develop a pipeline of 3,000 young and dynamic leaders. Diversity, equity and inclusion are at the forefront of Vedanta’s hiring philosophy supported by industry-leading policies for women, parenthood and transgenders. Our people practices have resulted in over 100 external recognitions, including ‘Kincentric Best Employer, India 2023’ and ‘India’s Best Employers Among Nation-Builders by Great Place to Work’. Vedanta response work methods. Collaborations with universities to align education with industry needs are also key. T6 T7 CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT Opportunities 43 STRATEGIC PRIORITIES AND UPDATE POSITIONING VEDANTA FOR A SUSTAINABLE AND SCALABLE GROWTH Operating in a dynamic business environment, we must proactively manage risks and material matters and stay ahead of trends and market cycles to seize opportunities. To this end, we have devised robust and all-encompassing strategies that empower us to leverage our strong foundation and align with our purpose. Through the effective execution of these strategic priorities, we are charting a path to maximise outcomes for our business and our stakeholders. 44 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED Strategic Priorities Continued focus on world-class ESG performance 01 Augment our Reserves & Resources (R&R) base 02 Operational excellence and cost leadership 04 Delivering on growth opportunities 03 45 CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT Strategic Priorities and Update Continued focus on world-class ESG performance S1 Operating sustainably and responsibly is key to our success. Focussed on this, we ensure embedding ESG into all aspects of business and have set vision of “Transforming for Good” which encompasses transforming communities, transforming the planet, and transforming the workplace. Through pioneering efforts in these areas, we aim to positively impact stakeholders, minimise environmental impact and progress towards zero harm, zero discharge and zero waste. FY 2024 Update Total Nand Ghars in FY 2024 – 6,000+ Skill-based training impacting 1.48 million families GHG emissions increased by 0.8% Y-O-Y Water positivity ratio 0.71 92% HVLT waste utilisation 3 Fatalities LTIFR - 0.589 TRIFR - 1.3 Women employees - 20% Women in leadership positions - 29% ESG rating improvement in MSCI, DJSI, Sustainalytics and CDP water Vision Objectives for FY 2025 Enhance skillsets of ~1,600 families Positively impact ~13,000 women and children through programmes in education, healthcare, nutrition 20% reduction in metals and mining intensity 500 MW RE RTC in operations Investment in energy transition - US$ 3.3 billion Water positivity ratio - 0.7 Legacy waste - 29.6 million metric tonnes Habitat restoration - 2,300 hectares Zero fatalities LTIFR - 0.63 Zero governance issues Transforming Communities Aim 1: Keep community welfare as the guiding principle for our business decisions Aim 2: Empower 2.5 million individuals with enhanced skillsets Transforming the Workplace Aim 7: Prioritise the safety and health of our workforce Aim 8: Promote gender parity, diversity, and inclusivity Aim 9: Align with global standards of corporate governance Transforming the Planet Aim 4: Net Zero Carbon by 2050 or sooner Aim 5: Achieving net water positivity by 2030 Aim 6: Enhance our business model by incorporating innovative green practices Aim 3: Uplift 100 million women and children via social welfare interventions Integrated Report and Annual Accounts 2023-24 46 VEDANTA RESOURCES LIMITED Augment our Reserves & Resources (R&R) base S2 Expansion in R&R base, being key to our long-term growth ambitions, we continually engage in targeted and disciplined exploration programmes. Through deploying best technologies, making sustained investments and ensuring dedicated efforts by exploration teams to discover mineral and oil deposits safely and responsibly, we ensure the replenishment of our resources FY 2024 Update Zinc India Improved total Ore Reserves to 175.1 million tonnes supported by increased focus on resource-to- reserve conversion Combined R&R were estimated to be 456.3 million tonnes, containing 30.82 million tonnes of zinc-lead metal and 854.3 million ounces of silver Overall mine life continues to be more than 25 years Oil & Gas First Field Development Plan (FDP) approved under OALP regime for Jaya field. Production commenced with initial plan to deliver > 3 Kboepd Infill wells drilled across PSC blocks to mitigate natural decline Drilling campaign underway in North-East region to export the prospects in the block Gross proved and probable reserves and resources stands increased to 1,376 Mmboe Zinc International Combined mineral resources and ore reserves estimated at 662 million tonnes, containing 34.8 million tonnes of metal Objectives for FY 2030 ~2.5 million families with enhanced skillsets Positively impact 10 million women and children through programmes in education, healthcare, nutrition 25% absolute reduction GHG emissions vs FY 2021 baseline 2.5 GW RE RTC in operations Water positivity ratio - 1.0 Legacy waste - 23 million metric tonnes Habitat restoration - ~2,500 hectares Zero fatalities LTIFR - 0.37 Total women employees - 20% Women in leadership roles - 40% Zero governance issues KPIs Risk Total Number of Nand Ghars Skillset imparted to families Impact of CSR programmes in education, healthcare, nutrition Absolute GHG emissions RE power in operations Metals and Mining GHG intensity Annual waste utilisation Water positivity ratio Habitat restoration Fatalities LTIFR % of women employees % of women in leadership roles Zero governance-related issues Annual disclosures R1 R4 CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT Strategic Priorities and Update 47 Oil & Gas Establish diversified R&R portfolio to support the vision of contributing to India’s 50% of domestic O&G production Zinc International Completion of drilling programmes and studies at Big Syncline Completion of studies on East/ East Ext and Gamsberg South for execution Objectives for FY 2026 Objectives for FY 2030 Zinc India Retain existing mining leases in HZL portfolio while acquiring new potential areas through auction Attain R&R metal of ~40 million tonnes in HZL portfolio Zinc International Execution of 28 km of drilling across greenfield and brownfield projects in RSA and Namibia Upgradation of 20 million tonnes of ore; no addition of metal targeted this year Zinc India Securing new tenements for R&R growth Target generation through the application of AI & ML along with advanced geophysics Enhancement of the mineral resource by 40 million tonnes ore with contained metal of 2 million tonnes and upgrade ore reserves to 42 million tonnes, which will lead to total R&R of 500+ million tonnes with ~35 million tonnes metal Total R&R in Zinc India and Zinc International Total 2P+2C Reserves & Resources in O&G R1 R5 R9 KPIs Risk Oil & Gas Exploration and appraisal drilling across the portfolio in Rajasthan, Cambay, Northeast and Offshore blocks to add resources Establish potential of the unconventional Oil & Gas in the portfolio Monetisation potential of the resource base comprising Tight Oil, Satellite Fields, to enhance oil recovery opportunities Zinc International Execution of 30 km of drilling across greenfield and brownfield projects in RSA and Namibia Addition and upgradation of 30 million tonnes of ore (2 million tonnes metal) Objectives for FY 2025 Zinc India Target generation and drill testing: Zawar, RD-SK, RA & Kayad Mine Exploration plan to enhance the mineral resource by 20 million tonnes Ore Acquiring new potential areas through auction Ore reserves upgradation for sustained mine production for next 10 years Use of AI and ML algorithms to analyse HZL geological, geochemical, and geophysical data leads to quicker new target identification and evaluation Integrated Report and Annual Accounts 2023-24 48 VEDANTA RESOURCES LIMITED Delivering on growth opportunities S3 Our large, well-diversified, low-cost and long-life asset portfolio offers attractive expansion opportunities. We continue to explore brownfield opportunities within our existing portfolio, striving to grow operations both organically and inorganically. We employ a prudent approach and rigorously evaluate these opportunities to ensure they meet our internal rate of return criteria and support our objective stakeholder value-creation. FY 2024 Update Zinc India Total mine development 101 km in FY 2024 Zawar Mines has achieved highest ever MIC of 179 kt in FY 2024 Shaft partition at SK increased the shaft hoisting from 2.6 MTPA in FY 2023 to 3.1 MTPA in FY 2024 Rampura Agucha Mines achieved ever highest 566 kt MIC in FY 2024 Highest-ever mined metal production 1,079 kt in FY 2024 Highest-ever refined metal production at 1,033 kt in FY 2024 Highest-ever silver production of 746 tonnes in FY 2024 Battery electric vehicle introduced at SK mine for sustainable & environment-friendly mining operations and net zero carbon by 2030 in line with the Company’s ESG commitment Successful completion of Roaster 3 and pyro plant major overhauling Pantnagar Metal Plant producing green zinc using 100% renewable energy produced from hydropower Waste management through jarosite utilisation in the cement industry by modification in present circuits Indigenous commissioning of fumer plant at CLZS Aluminium Lanjigarh refinery capacity expanded to 3.5 MTPA Oil & Gas Production ramped up from Jaya discovery in OALP Cambay region. Infill drilling in Mangala, Bhagyam, Aishwariya, Tight Oil (ABH) and Tight Gas (RDG), to augment reserves and mitigate natural decline 29 wells drilled across all assets Zinc International Total zinc MIC production at 208 kt in FY 2024 Hydraulic fill plant hook up with Mill 2 at Zawar to expedite filling at Mochia & Balaria mines and improve ore recovery New portal commencement at Zawarmala to enhance production up to 2 MTPA With supporting MIC flow, smelters are geared to touch approx. 1,080 - 1100 kt Capacity expansion through erection of Roaster-6 New leaching & cell house to be erected in Debari with a capacity of 210 KTPA and other efficiency improvement initiatives to achieve overall finished good production of 1.1 MTPA Best-in-class new HZDA production facility (HZAPL) to cater to demand of Indian market Waste to Wealth: Fumer: Complete ramp-up of fumer to produce 33 million tonnes silver through zinc route Tailings and Jarofix: Partners already locked in for residual metal recovery from waste streams, completion of technical evaluation and pre-feasibility analysis targeted in FY 2025 Objectives for FY 2025 Zinc India Further ramp-up of underground mines towards their design capacity of 1.2 MTPA Combined paste-fill and dry tailing plant at Rajpura Dariba, which will help increase ore production from 1.5 MTPA to 2 MTPA Migration to 100% mechanised charging at Zawar leading to improved safety, faster charging, increased pull per blast Construction and commissioning of new ZLD plant at Agucha and Zawar New beneficiation plant started at RDM to increase treatment capacity from 1.1 MTPA to 1.5 MTPA CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT Strategic Priorities and Update 49 Objectives for FY 2026 Zinc India Ramp-up of underground mines to reach 1.25 MTPA capacity Study on alternate access to the portal at Rampura Agucha Commissioning of vertical conveyor at SKM to mine high-grade shaft pillar area Transition to one-third BEV deployment at RA & SK Mines Completion of Mill 3 at Zawar to increase beneficiation capacity Establishment of a new tailing dam at Zawar mines Commissioning of Roaster-6 Complete construction of new leaching & cell house in Debari Set up 510 KTPA Fertiliser plant in Chanderiya Up to 450 MW green energy sourcing in operations Aluminium Complete full ramp-up of Lanjigarh 3 MTPA expansion, and progress implementation of debottlenecking to 6 MTPA Complete ramp-up of BALCO smelting expansion to 1 MTPA Ramp-up all VAP production to full capacity Operationalisation of Ghogharpalli Coal Block Further ramp-up of all operating mines towards full permitted capacity Zinc International Full ramp-up of Gamsberg Phase 2 project in FY 2025-26 Skorpion Refinery conversion – Completion of conversion project final decision to be taken by FY 2026 Gamsberg mining operations from underground start up, with a plan to increase throughput from 8 MTPA to 9 MTPA from current processing plants Oil & Gas Infill wells across the onshore and offshore producing blocks for incremental volumes Commence execution of Alkaline Surfactant Polymer (ASP) project at Mangala through cluster approach to deliver incremental volume Monetisation of discoveries from OALP, DSF and PSC block Establish secondary methods of oil recovery in offshore fields Zinc International Gamsberg Phase 2 project approved by the Vedanta Board. Project includes the mining expansion from 4 MTPA to 8 MTPA and construction of new concentrator plant of 4 MTPA, taking the total capacity to 8 MTPA. MIC production will be 200 KTPA, taking the total South Africa production to >500 KTPA. Target date of completion of project is H2 FY 2025 Skorpion Refinery conversion – awaiting confirmation of power tariff to take the final decision before beginning on-ground execution in FY 2025 Black Mountain Iron Ore project intends to recover iron ore (magnetite) from the BMM tailings. Best-in-class quality iron ore will be produced from the new plant with Fe grade >68%. First production is expected in Q3/Q4 Objectives for FY 2025 Aluminium Ramp-up Lanjigarh Train 1 and commission and ramp-up of Train 2 Commence production at BALCO 414 KTPA capacity expansion Jharsuguda VAP expansion to 1.6 MTPA and BALCO VAP expansion to 1 MTPA to commence production Commence production at BALCO of Rolled Product expansion to 100 kt capacity Operationalise Kurloi North & Radhikapur West Coal Blocks Commence initial production from Sijimali Bauxite block Integrated Report and Annual Accounts 2023-24 50 VEDANTA RESOURCES LIMITED Overall 3 MTPA operational Hot Metal capacity 100% value - added product portfolio focussed on India domestic market All coal blocks operating at 100% of permitted capacity to enable captive, low-cost supply for captive thermal power plants Oil & Gas Full field scale ASP project execution across MBA fields in Rajasthan block to monetise reserves Continuation of monetisation opportunities across asset portfolio (supported by organic and inorganic strategies) Zinc International Gergarub mining and concentrator plant planned to be in production by FY 2027, delivering MIC of 100 KTPA Iron Ore Phase 2: Construction of an additional plant to treat 2 MTPA of current tailings storage facility with opportunity to construct a pig iron plant Gamsberg Smelter planned to treat all zinc concentrate from current operation. Planned first production in FY 2029-30. First phase planned to produce 300 KTPA Objectives for FY 2030 Zinc India Ramp-up of underground mines to 1.5 MTPA capacity Look for new mining leases Advocacy for opening new mining sites Addition of one more smelter to take the overall capacity to 1.5 MTPA Aluminium Achieve balanced fully vertically integrated supply chain from mine to metal Sijimali Bauxite mine operating at 12 MPTA Lanjigarh Refinery operating at 6 MTPA Volume Revenue ROCE FCF post-capex Growth capex R8 R9 KPIs Risk R12 Supply delays on account of logistics disruption Business partner contract CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT Strategic Priorities and Update 51 Operational excellence and cost leadership S4 Achieving all-round operational excellence is central to our objective of achieving benchmarked performance. Through efforts like debottlenecking assets to enhance production, investing in advanced digital and technology solutions and adopting best practices, we set new benchmarks in operational efficiency. We also focus on enhancing profitability through ongoing cost optimisation and improving realisations with prudent marketing strategies. FY 2024 Update Zinc India Ore production of 16.52 million tonnes Record mined metal production of 1,079 kt, refined zinc-lead production of 1,033 kt and silver production of 746 tonnes APC commissioned at all the beneficiation plants of Rampura Agucha Smelters recovery improvement through various initiatives Volume enhancement through operations of pyro plant on lead- zinc mode for 6 months 40% reduction in cost of generation of power by improving efficiency and percentage of Indian coal in the blend Achieved ever lowest specific coal consumption of 422 gm/kWhr at CPP Aluminium Record aluminium production at 2,370 kt, up 3% Y-O-Y Highest ever domestic sales at 978 kt, 26% increase Y-O-Y Alumina production at Lanjigarh refinery at 1,813 kt, up 1% Y-O-Y Aluminium COP at US$ 1,796 per tonne, down by 23% Y-O-Y, due to decline in commodity prices, majorly coal and carbon, and operational improvements Oil & Gas Average gross-operated production of 128 Kboepd for FY 2024, down 11% Y-O-Y, owing to natural field decline First Field Development Plan (FDP) approved under OALP regime for Jaya field. This is the first FDP approved in OALP regime, among 144 blocks awarded under 8 OALP rounds by the Government to various companies Zinc International BMM achieved production of 61 kt in FY 2024 with declining grades at Deeps impacting production Gamsberg production was 147 kt production in FY 2024 which is lower compared to previous year due to impact of geotechnical failure on ore production Skorpion remained under care and maintenance following geotechnical instabilities in the open pit Objectives for FY 2025 Zinc India Maintain cost of production between US$ 1,050 - US$ 1,100 per tonne through efficient ore hauling, higher volume and grades and higher productivity through ongoing efforts in automation and digitalisation Switching to RE power from CPP (partially at DSC zinc smelter). Increase in Indian coal consumption in blend (>40%) for power production Aluminium Highest-ever production from refinery, with start of alumina production from 3 MTPA expansion Highest-ever annual aluminium production projected at 2,370‑2,450 kt Significant reduction in aluminium production COP, through unlocking potential in operational & buying efficiency Improved raw material (bauxite & coal) security from local sources with ramp-up of owned mines Reduced power purchase due to higher operational efficiency of captive thermal power plants Increased rail share of domestic overland transport Oil & Gas Increase production from existing assets through the use of leading- edge technologies, large-scale AIML (artificial intelligence and machine learning) enabled base Operations and Maintenance (O&M) model in partnership with best‑in‑class partners Continue to operate at a low cost‑base and generate free cash flow post-capex Zinc International Ramp-up Gamsberg to 200 kt in FY 2025 BMM improvement in ore production from 1.6 mt to 2.0 mt resulting in 70 kt MIC production Integrated Report and Annual Accounts 2023-24 52 VEDANTA RESOURCES LIMITED and realise higher net effective premium Zinc International 300 KTPA production from South Africa at a low cost of production Aluminium 100% backward and forward integration: 3 MTPA Aluminium, 6 MTPA Alumina, 100% VAP, 100% coal & bauxite security (Captive + Linkage) First Decile position on global aluminium cost curve Oil & Gas Leverage win-win partnership models for operations through global technology leaders to achieve best‑in-class operational efficiencies Continue to operate at a low cost‑base and generate free cash flow post-capex Zinc International 1 MTPA production from South Africa at a low cost of production Objectives for FY 2026 Objectives for FY 2030 Zinc India Maintain cost of production at a low level through efficient ore hauling, higher volume and grades and higher productivity through ongoing efforts in automation and digitalisation Aluminium Lower hot metal cost of production through increased captive Alumina & Coal consumption Zinc India Maintain cost of production at below US$ 1,000 per tonne through efficient ore hauling, higher volume & grades and higher productivity through ongoing efforts in automation and digitalisation Elimination of waste generation by gainful utilisation and recycling Deploy new innovation and technology for holding benchmark operation Further increase in rail share for coal and other bulk commodities driving lower costs Continued focus on quality, asset reliability and optimisation, digitalisation, innovation, and R&D Further ramp-up of VAP production, including introduction of new innovative alloys, to capture increased share of domestic market EBITDA Adj. EBITDA margin FCF post-capex ROCE R1 R3 R7 R11 KPIs Risk CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT Strategic Priorities and Update 53 RISK MANAGEMENT NAVIGATING DYNAMIC RISKS AND OPPORTUNITIES FOR TOMORROW’S SUCCESS We have deployed a multi-layered risk management system and robust governance framework to proficiently identify, assess, monitor and mitigate risks inherent to global businesses. Aligned with our vision and mission, these mechanism facilitates in effective execution of strategies amidst a volatile external context. Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED 54 Risk Governance Framework Board of Directors Audit Committee Business Unit Management Teams GRMC ExCo Group Risk Governance Framework External Strategic Operational Financial Evaluate Monitor Mitigate Identify CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT Risk Management 55 Risk Governance Framework We have a robust risk management framework which is embedded in business-critical activities, functions and processes. It ensures managing rather than eliminating the risk of failure to achieve business objectives and provides reasonable, and not absolute assurance, against material misstatement or loss. Materiality and risk tolerance are key considerations in our decision-making. This framework is simple and consistent, providing clarity on managing and reporting risks to our Board. Together, our management systems, organisational structures, processes, standards and Code of Conduct and ethics represent the internal control systems that govern how the Group conducts its business and manages associated risks. Approach to risk identification We identify risks at the individual business level for both existing operations and ongoing projects through a consistently applied methodology. Business-level review meetings are conducted at least once every quarter to formally discuss risk management. All business divisions maintain their risk matrix, which is reviewed by the respective management/executive committee, with CEO as the chairman. Additionally, business divisions have their risk registers as per their operational size and the number of SBUs/locations. The respective businesses review the risks, changes in their nature, exposure since the last assessment and control measures to decide further action plans. Control measures stated in the risk matrix are also periodically reviewed by the business management teams to verify their effectiveness. These meetings are chaired by the CEOs of the respective businesses and attended by CXOs, senior management and functional heads concerned. Finally, the risks across the various risk registers are aggregated and evaluated to identify the Group’s principal risks and formulate a response mechanism. This element is an important component of the overall internal control process for which the Board obtains assurance. Risk governance The risk officers at each business and the Group level create risks awareness among the senior management and nurture a risk management culture within the businesses. Risk-mitigation plans form an integral part of KRAs/ KPIs of process owners. Governance of risk management framework in the businesses is anchored with the leadership teams. The Audit & Risk Management Committee (ARMC) aids the Board in the risk management process by identifying and assessing any changes in risk exposure, reviewing risk-control measures and approving necessary remedial actions. The Committee is supported by the Group Risk Management Committee (GRMC), which helps it evaluate the design and operating effectiveness of the risk mitigation programme and the control systems. The Risk Management Committee meets periodically to discuss risks and mitigation measures, review the robustness of our framework and map the progress against actions planned for key risks. The GRMC comprises the Executive Director, Group Chief Financial Officer and Director - Management Assurance. The Group Head - Health, Safety, Environment & Sustainability is invited to attend these meetings. GRMC discusses key events impacting the risk profile, relevant risks and uncertainties, emerging risks and progress against planned actions. The Board shoulders the ultimate responsibility for managing risks and ensuring the effectiveness of internal control systems. This includes a review of the ARMC’s report on the risk matrix, significant risks and mitigating actions. Any systemic weaknesses identified by the review are addressed by enhanced procedures to strengthen the relevant controls, which are reviewed regularly. The responsibility for identifying and managing risks lies with every manager and business leader. Additionally, we have key risk governance and oversight committees in the Group. They are: Committee of Directors (COD) comprising Executive Directors and an Independent Director supports the Board by considering, reviewing and approving all borrowing and investment-related proposals within the overall limits approved by the Board. The invitees to these committee meetings are the CEO, business CFOs, Group Head Treasury and BU Treasury Heads, depending upon the agenda matters. Audit and Risk management committee along with the Sustainability committee reviews sustainability-related risks In addition to the above, there are various group level ManCom such as Commercial ManCom, Finance ManCom, Sustainability - HSE ManCom, CSR ManCom, etc. who work on identifying risks in those specific areas and mitigating them The scope of work, authority and resources of the Management Assurance Services (MAS) are regularly reviewed by the Audit Committee. The responsibilities of MAS include recommending improvements in the control environment and reviewing compliance with our philosophy, policies and procedures. The planning of internal audits is approached from a risk perspective. In preparing the internal audit plan, reference is made to the risk matrix, and inputs are sought from the senior management, business teams and members of the Audit Committee. In addition, we refer to past audit experience, financial analysis and the prevailing economic and business environment. While Vedanta’s risk management framework is designed to help the organisation meet its objectives, there is no guarantee that the Group’s risk-management activities will mitigate or prevent these or other risks from occurring. The Board, with the assistance of the management, conducts periodic and robust assessments of principal risks and uncertainties of the Group, and tests the financial plans associated with each. Integrated Report and Annual Accounts 2023-24 56 VEDANTA RESOURCES LIMITED Managing our risks Below are the key risks identified for FY 2024 with the potential to impact our operations. Their order does not necessarily reflect the likelihood of their occurrence or the relative magnitude of their impact on Vedanta’s businesses. The risk direction of each risk has been reviewed based on events, economic conditions, business environment and regulatory changes during the year. Potential impact on the Group The resources sector is mandated to adhere to extensive health, safety and environmental (HSE) laws, regulations and standards, alongside keeping up with the evolving requirements and stakeholder expectations. These regulations are projected to intensify over the next decade, with large-scale environmental damage and failure of climate change mitigation and adaptation ranking among the top 10 risks in the World Economic Forum Global Risk Report 2023. Our global presence exposes us to jurisdictions implementing or planning emission regulations. This may lead to increased fossil fuel costs, levies for exceeding emissions levels, litigations and an increase in administrative expenses for monitoring and reporting. Increasing greenhouse gas (GHG) emission regulations, including the carbon emissions trading mechanisms and tighter emission reduction targets, can raise costs and dampen demand. Sustainability risks 01 Mitigating actions Prioritising health, safety and environment (HSE) Safety first culture: We are committed to compliance with international and local regulations, protecting our people, communities and the environment, ensuring minimal business disruptions caused by HSE incidents. Robust management systems: We have comprehensive policies and standards to mitigate HSE risks, and ensure continuous improvements through regular reviews and positive compliance reporting. High-risk areas receive special attention through ongoing safety standard updates. Leadership by example: Our site leadership actively promotes a “visible felt leadership” approach to safety, focussing on safety-critical tasks and managing business partner HSE performance. Continuous learning environment: We are constantly improving our incident investigation and learning processes to prevent similar incidents from recurring. Sustainability: a core value International best practices: Vedanta’s sustainability framework aligns with international best practices and our structured assurance programme across various business divisions guarantees comprehensive coverage of HSE, community relations, and human rights aspects. This approach embeds sustainability throughout our operations. Employee well-being: All businesses have comprehensive occupational health & safety policies supported by structured processes, controls and technology to ensure employee well- being. Performance-driven safety culture: Safety key performance indicators (KPIs) are integrated into all employee performance evaluations, further incentivising safe behaviour and effective risk management. Climate change action Carbon reduction strategy: The Energy & Carbon Community of Practice (COP), ensures active development and recommendation of carbon reduction strategies to the Executive Committee and Board. Renewable energy focus: We are dedicated to increasing our reliance on renewable energy sources to fulfil power obligations. GHG reduction initiatives: Our Group companies are actively working to reduce greenhouse gas (GHG) emission intensity across all operations. Strategy at risk S1 Continuous focus on world class ESG performance S2 Augment our Reserves & Resources (R&R) base S3 Delivering on growth opportunities S4 Optimise capital allocation and maintain a strong balance sheet Capitals at risk Health, safety and environment (HSE) R1 CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT Risk Management 57 Potential impact on the Group Our success in existing operations and future projects hinges on strong support and healthy relationships with local communities. Failure to address local concerns and expectations can strain relations, impacting our reputation and social licence to operate and grow. Mitigating actions Building strong stakeholder relationships At Vedanta, we recognise the importance of fostering positive and collaborative relationships with all stakeholders. To mitigate potential risks in this area, we take a multi-pronged approach: Comprehensive CSR strategy Community-centric focus: Our Corporate Social Responsibility (CSR) initiatives prioritise the needs of local communities, aligning with the Companies Act, CSR Guidelines, National Voluntary Guidelines, and UN Sustainable Development Goals (SDGs). This ensures meaningful local development. Proactive engagement: Our business unit (BU) teams actively engage with communities and stakeholders through structured plans, fostering a partnership approach. Strategic planning & governance: Our dedicated CSR Management Committee (ManCom) meets regularly to review and approve CSR strategy, execution, and communication. Business Executive Committees (ExCos) consider these inputs alongside strategic business priorities to determine CSR focus areas and budgets. Effective grievance redressal Standardised processes: All BUs follow established procedures for recording and resolving community and external grievances, along with clear social investment processes. Dedicated resources Community development teams: Each BU has a Community Development Manager (CDM) within the ExCo, supported by a team of community professionals which ensures consistent engagement and effective project implementation. Building trust and transparency Regular community engagement: Our business leadership teams hold regular interactions with local communities to build trust and relationships based on mutual benefit. Responsible operations: We strive to identify and minimise any potential negative impacts from our operations. This includes acting transparently and ethically, fostering open dialogue, and adhering to commitments made to stakeholders. Stakeholder engagement and communication Strategic communication: We enhance our visibility through a strategic CSR communication approach which includes regular meetings with key stakeholders, showcasing our technology advancements and increasing organic social media engagement. Comprehensive reporting: We report on best practices and performance across environmental, social, and governance (ESG) aspects, ensuring transparency and accountability to all stakeholders. Managing relationships with stakeholders R2 Strategy at risk S1 Continuous focus on world class ESG performance S3 Delivering on growth opportunities Capitals at risk Potential impact on the Group Mining operations involve the release of waste material which can lead to loss of life, injuries, environmental damage and impact production. This can impact our reputation and have financial implications. A tailings dam failure is deemed a catastrophic risk – a low-frequency but highly severe event – and remains a continuous risk requiring the highest priority. Tailings dam stability R3 Strategy at risk S1 Continuous focus on world class ESG performance S3 Delivering on growth opportunities S5 Operational excellence and cost leadership Capitals at risk Mitigating actions We prioritise tailings dam safety through a multi-pronged approach: Accountability and continuous improvement BU accountability: All BUs are responsible for continuous management of all tailings facilities, supported by experienced personnel with oversight from the Executive Committee (ExCo). Independent reviews and oversight: We conduct independent third-party assessments annually to evaluate the implementation of best practices year-on-year. Additionally, a third party is engaged every three years to review tailings dam operations. This includes identifying improvement opportunities, necessary remedial work and assessing Operational Maintenance and Surveillance (OMS) manuals implementation across all operations. Technology and best practices: We are continuously digitalising tailings monitoring systems for improved efficiency and data analysis. Our tailings management standard is regularly updated to incorporate the latest best practices, including those established by the UNEP/ICMM Global Tailings Standard. Enhanced standards and procedures We have augmented the Vedanta Tailings Management Standard adding robust features. These include annual independent reviews of each dam and half-yearly CEO sign-off confirming adherence to design parameters and the recent surveillance audit. Further, we prioritise transitioning to dry tailings facilities where feasible. Management personnel responsible for dam management receive ongoing training from third-party experts and international consultants. Integrated Report and Annual Accounts 2023-24 58 VEDANTA RESOURCES LIMITED Operational risks 02 Potential impact on the Group Our operations might be subject to several challenges including sourcing raw materials and infrastructure-related aspects and concerns around ash utilisation/evacuation. Mitigating actions We have made significant progress in optimising operations and solidifying our position for the future. Here are some key highlights: Improved margins and production Despite challenges in the London Metal Exchange (LME) prices, the Aluminium business has achieved consistent performance with highest-ever production and improved EBITDA supported by a consistent focus on cost reduction and aggressive pursuit of debottlenecking projects. We will continue this pursuit targeting 1,000 US$/t EBITDA margin and a record‑breaking 3 MTPA production. The first 1.5 MTPA train of Alumina Refinery expansion at Lanjigarh was commissioned on 31 March 2024 and is in the process of being ramped up to full name-plate capacity. In parallel, efforts are underway to get the second train operationalised by Q2FY25. This two‑stage expansion marks a significant milestone in our journey towards becoming fully self-sufficient for Alumina supply. Dedicated teams are actively working to operationalise newly‑acquired Bauxite Mine at Sijimali by Q3FY25 with an objective to achieve 100% captive bauxite. This, combined with other existing domestic sources under long- term agreements, significantly bolsters our Bauxite Security and enhances our margins. Our coal mine at Jamkhani is fully operational and running at full approved capacity. Our teams are also working on the ground to secure all necessary approvals and operationalise the newly‑acquired coal mines at Kurloi, Radhikapur and Ghogharpalli. These endeavours will ensure our achievement of 100% security of low-cost, good quality coal through captive coal mines. The Company has introduced a [few] captive rakes at our businesses as we endeavour to shift all overland transport from road to rail. This will improve safety, reduce cost and increase security of supply. More rakes will be placed in circuit in coming years. Operational Efficiency Enhanced Asset Reliability: Reliability of Assets have been significantly improved across all the units, delivering the highest ever power load factor (PLF), improved operational parameters and ultimately resulting in the highest ever production volume. Value-Added Products: We are increasing the capacity of our value-added facilities to enhance the product mix and meet the evolving needs of our sophisticated customers. This enables us to further augment our margins through higher net effective premium (NEP) for our products. Robust infrastructure and logistics: The Company has introduced few captive rakes at our businesses as we endeavour to shift all overland transport from road to rail. This will improve safety, reduce cost and increase security of supply. More rakes will be placed in circuit in coming years. Waste management: We pursued agreements with cement companies, NHAI, and Brick Industries for Ash evacuation, and implemented mine backfilling. Additionally, we secured a patent for an innovative process to reduce Red Mud generation by 30% and enhance alumina yield by extracting iron from the bauxite ore before introduction to the Bayer process Operational challenges in Aluminium and Power business R4 Strategy at risk S3 Delivering on growth opportunities S4 Operational excellence and cost leadership Capitals at risk Potential impact on the Group Our expanding operations and production rates necessitate accelerated exploration and prospecting initiatives to replenish reserves and resources (R&R) faster than depletion. Failure to discover new resources or enhance existing ones could hinder our growth prospects. Besides, estimating ore and oil and gas reserves involves various uncertainties, owing to geological, technical and economic assumptions which are time-bound and subject to change with new information. Mitigating actions Governance mechanism We have a dedicated Exploration Executive Committee to develop and implement strategy and review projects group-wide Our dedicated exploration cell maintains persistent focus on enhancing exploration capabilities Robust exploration practices Reserve and resource growth: We ensure adequate capex allocation for exploration, prioritising R&R growth through a continuous drilling and exploration programme and leveraging modern technologies for operational efficiency New exploration applications: Continue to make applications for new exploration tenements in our operational countries under their respective legislative regimes Collaboration: Collaborating with international technical experts to strengthen our exploration capabilities Discovery risk R5 Strategy at risk S2 Augment our Reserves & Resources (R&R) base S3 Delivering on growth opportunities Capitals at risk CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT Risk Management 59 Potential impact on the Group As our reliance on computers and network technology for operational efficiency increases, so does our vulnerability to security breaches. These breaches could result in theft, disclosure or corruption of critical information, a potential misappropriation of funds or disruptions to our business operations. Such cybersecurity breaches pose a threat to our business continuity and integrity. Mitigating actions Framework development and implementation Best practices and standards: We have developed frameworks, policies and procedures aligned with industry best practices and international standards Advanced security technologies: We have implemented best-in-class tools and advanced security technologies to create a robust security posture Risk assessments and controls Risk assessments and controls: We perform regular Risk Control Matrix (RCM) and IT General Controls (ITGC) assessments under SOx/ICOFR frameworks to identify and mitigate vulnerabilities Plant technical security systems: Dedicated initiatives to strengthen the security landscape of plant technical systems (PTS) Framework development and implementation Capability building: Mandatory employee training programmes to promote cybersecurity awareness across all levels, including leadership and the Board Regular penetration testing: Reputable external agencies conduct periodic assessments of our IT systems and governance framework, addressing any identified vulnerabilities promptly Social engineering defence: Conducting a structured programme to educate all stakeholders (employees, leadership, Board) on social engineering tactics to prevent cyberattacks. Aadoption of various international standards relating to information security, disaster recovery and business continuity management, IT risk management and setting up internal IT processes and practices in line with these standards Breaches in IT/cybersecurity R6 Strategy at risk S4 Operational excellence and cost leadership Capitals at risk Potential impact on the Group Our operations face various circumstances including equipment or infrastructure damage, unexpected geological variations or technical issues, extreme weather conditions and natural disasters. Any of these circumstances, beyond our complete control, threaten operational stability and could adversely affect production and/or costs. Mitigating actions Insurance management and oversight We have taken adequate Group insurance cover to safeguard operations, with an Insurance Council in place to monitor coverage adequacy and claims status Engaging reputable institutions to underwrite our risk and an external agency to review the risk portfolio and adequacy of cover, assisting in managing our insurance portfolio Implementing a mechanism for periodic insurance reviews across all entities, acknowledging that occurrences not fully covered by insurance could negatively impact the Group’s business Function monitoring and capability building Enhancing effectiveness of security and Insurance function through continuous monitoring and periodic reviews Focussing on capability building within the Group to enhance risk management and insurance-related competencies Loss of assets or profit due to natural calamities R7 Strategy at risk S1 Continuous focus on world class ESG performance S2 Augment our Reserves & Resources (R&R) base S3 Delivering on growth opportunities S4 Operational excellence and cost leadership Capitals at risk Integrated Report and Annual Accounts 2023-24 60 VEDANTA RESOURCES LIMITED Compliance risk 03 Potential impact on the Group We face challenges stemming from legal and regulatory changes in the multiple countries where we operate. This may result in increased operating costs, and restrictions such as higher royalties or taxation rates, export duties, alterations to mining rights/bans and legislation change. Mitigating actions Proactive regulatory monitoring and compliance Proactive monitoring: The Group and the respective BUs actively track regulatory developments. The BUs additionally ensures meeting regulatory obligations, adapting to emerging requirements Responsible business advocacy: We communicate our commitment to responsible mining through government and industry engagement Best practices and governance mechanism Standardised system: A common compliance monitoring system across all Group companies, mapping legal requirements and assigning responsible personnel Legal expertise: Our strong in-house legal teams, reinforced by senior professionals, work to strengthen the compliance and governance framework and effectively resolve legal disputes Standardised procedures: Established Standard Operating Procedures (SOPs) to ensure consistent compliance monitoring across businesses Contract management: Ensuring a robust contract management framework by utilising boilerplate clauses and standardising key contract types. Anti-bribery & corruption: Established a framework to monitor performance against anti-bribery and corruption guidelines Regulatory and legal risk R9 Strategy at risk S2 Augment our Reserves & Resources (R&R) base S3 Delivering on growth opportunity Capitals at risk Potential impact on the Group Cairn India holds a 70% participating interest in Rajasthan Block, whose production sharing contract (PSC) was valid till 2020. While it has been granted a 10-year extension under the government’s policy for extending Pre-New Exploration and Licensing Policy (NELP) Exploration Blocks, the terms are less favourable and subject to certain conditions. Any deviation from the anticipated production ramp-up could potentially impact profitability. Mitigating actions Rajasthan PSC extension A 10-year extension (15 May 2020 to 14 May 2030) has been executed by the parties to the Rajasthan PSC on 27 October 2022 Pre-NELP Extension Policy’s applicability to the Rajasthan Block is currently under judicial review Production and project management Undertaking focussed efforts to manage production decline including infill wells and recovery projects in key producing fields and exploration drilling across the portfolio to add resources Established dedicated Project Management and Project Operating Committees to support the outsourcing partner and address issues promptly, to enable better quality control and timely execution of growth projects Cairn-related challenges R8 Strategy at risk S2 Augment our Reserves & Resources (R&R) base S3 Delivering on growth opportunities Capitals at risk CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT Risk Management 61 Potential impact on the Group Our businesses are subject to the tax regime. Any changes in tax structure or any tax-related litigation may impact our profitability. Mitigating actions Tax management approach Regular engagement: We maintain regular communication with tax authorities to stay updated with changes, enabling us to take proactive actions to address issues and maintain compliance. Maintaining high standards of integrity with respect to tax compliance and reporting Actively participating in tax policy consultation processes where appropriate at a national or international level Engaging internal and external experts Dedicated expertise: Robust tax teams with significant experience and expertise to effectively handle tax matters at the business and Group levels. Tax-related matters R10 Strategy at risk S4 Operational excellence and cost leadership Capitals at risk Financial risks 04 Potential impact on the Group The Group’s product prices and demand are susceptible to volatility/uncertainty, influenced by global economic, environmental, political, legal and social conditions. Additionally, our global operations and transactions in multiple currencies expose us to risks associated with exchange rate fluctuation. Any adverse movement in these aspects may negatively impact our earnings, cash flow and reserves. Mitigating actions Ensuring operational resilience Diversified portfolio: Our diversified portfolio helps mitigate fluctuations in commodity prices. Low-cost production: Leveraging effective technology, vertical integration and operational improvement measures to ensure low-cost production. These strategies help maintain profitability and steady cash flow generation across the commodity price cycle. Deploying effective forex strategies Hedging strategies: We primarily sell products at market prices. However, back-to-back hedging is employed for custom smelting and purchased alumina to mitigate specific risks. Strategic hedging may be used with Executive Committee approval. Foreign exchange management: Our policy prohibits forex speculation, but robust controls allow hedging currency risks on a back-to-back basis. We progressively hedge short-term exposures to mitigate near-term currency fluctuations. The Finance Standing Committee reviews all forex and commodity risks and recommends actions to business units. Transparency and proactive management: Significant currency movements are discussed and addressed at Group ManComs, ensuring prompt action. The Annual Report details the accounting policy for currency translation. Price (metal, oil, ore, power, etc.), currency and interest rate volatility R11 Strategy at risk S4 Operational excellence and cost leadership Capitals at risk Integrated Report and Annual Accounts 2023-24 62 VEDANTA RESOURCES LIMITED Potential impact on the Group Failure to meet the stated objectives of expansion projects may pose challenge in achieving business milestones. Mitigating actions Centralised and effective project management Centralised project management: A dedicated group-level cell effectively monitors project progress, supported by market research, leveraging data analytics and benchmarking against industry leaders. Empowered teams and streamlined systems: Streamlined project management systems with empowered structures along with fortnightly review meetings with senior leadership ensure accountability and value stream mapping. Collaboration and cost reduction: Fostering close collaboration with key partners to optimise cost and timelines. Excellence in project execution Execution excellence: Ensuring superior project execution and on-time project by prioritising safety throughout the project lifecycle, engaging reputable contractors and utilising best-in-class technology and equipment for optimal productivity and safety. Digitalisation and analytics further enhance efficiency. Global expertise: Partnering with a global engineering firm ensures life-of-mine planning and capital efficiency aligned with business goals. Quality assurance: Employing robust quality control procedures to ensure the safety and quality of services, design, and construction. Geotechnical expertise: Engaging reputable international agencies to provide geotechnical modelling and technical support when required. Major project delivery R12 Strategy at risk S2 Augment our Reserves & Resources (R&R) base S3 Delivering on growth opportunities S4 Operational excellence and cost leadership Capitals at risk Potential impact on the Group Sustained adverse economic downturn and/or suspension of any of our operations can affect revenue and free cash flow generation. This may hinder our ability to meet payment obligations, affecting our credit-worthiness, or make it challenging to raise financing at competitive terms to fund actual or proposed commitments. Mitigating actions Prudent financial management Refinancing strategy: A dedicated team diligently focusses on executing cost- effective refinancing initiatives to extend debt maturities. Long-term funding: We actively focus on building a pipeline of long-term funds to meet refinancing and growth capital expenditure needs. BUs rigorously adhere to the Group’s treasury policies, ensuring sound financial risk management practices. Building strong partnerships Strong banking relationships: Vedanta maintains good relations with banks, which facilitates convenient access to borrowings. Access to capital R13 Capitals at risk Strategy at risk S3 Delivering on growth opportunities S4 Operational excellence and cost leadership CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT Risk Management 63 STAKEHOLDER ENGAGEMENT EFFECTIVE ENGAGEMENT AND BUILDING STAKEHOLDER TRUST The table below sets out how we engaged with our stakeholders during the year to address their concerns and meet their expectations. Key Expectations Undertaking need-based community infrastructure projects Increasing reach of community development programmes Provision of jobs & other means of livelihood Improving grievance mechanism How We Engage The Group has established a comprehensive social framework as a key to engaging with local communities. The Social Performance Steering Committee (SPSCs) employs a cross-functional approach to community engagement through community group meetings and village council meetings. Community needs/social impact assessments are undertaken to design need-based community projects. We are increasing our community outreach via public hearings, grievance mechanisms and cultural events. Vedanta Foundation supports community engagement by supporting through grant-based projects. How We Engage The Group undertakes employee performance management and employee feedback as the primary mode of engaging with employees. We follow a multi-dimensional approach to career and leadership development through V-Lead and ACT-UP programmes. Chairman’s workshops, Chairman’s/ CEO’s townhall meetings and plant-level meetings are organised periodically to improve performance on material issues pertinent to Vedanta Limited Event management committee and welfare committee to assist in the training, organisation and supervision of employee engagement initiatives How We Engage The Group has an active investor relations team that consistently provides disclosures on economic, social and environmental performance. The team provides regular updates to stakeholders through investor meetings, site visits, conferences and quarterly result calls. The Company organises annual general meetings to engage with our key financial audience i.e., shareholders, investors & lenders. For stakeholders to raise their concerns, a dedicated contact channel has been assigned – ir@vedanta.co.in and esg@vedanta.co.in Key Expectations Safe workplace Improved training on safety Increased opportunities for career growth Increasing the gender diversity of the workforce Key Expectations Consistent disclosure of economic, social, and environmental performance Local Community Employees Shareholders, Investors, & Lenders Initiatives in FY 2024 Across all Business Units, we completed baseline impact and SWOT assessments Community grievance redressal process followed at all operations Launched Project Panchhi to help young women in the local communities get higher education and placed in Vedanta’s workforce US$ 53 million Total CSR Investment 17.4 million Number of Beneficiaries 272 young women employed under Project Panchhi 20,78,119 man-hours of safety training 40% of new hires are women 31 man-hours average training man-hours for total workforce ~US$ 400 million Employee Benefit Expense 73% Employee Satisfaction Initiatives in FY 2024 Identification of top talent and future leaders through workshops Recruitment of global talent through hiring from top global universities Strengthening gender and regional diversity with V-Lead and V-Engage respectively. Dedicated hiring drive for women Initiatives in FY 2024 Bi-weekly investor briefings and proactive engagement with the investor community on ESG topics Integrated Report and Annual Accounts 2023-24 64 VEDANTA RESOURCES LIMITED At Vedanta, we ensure constructive stakeholder engagement across multiple industries and geographies. This builds successful, long-lasting relationships by identifying and addressing material problems that help us to anticipate emerging risks, opportunities and challenges that reinforce our competitiveness for long-term value creation How We Engage The Group has implemented multi-stakeholder initiatives and partnerships with international organisations to align with the, expectations of the global sustainability agenda. Any key concerns or trends from engagements with international, national and local NGOs are reported to the relevant community of practice. Conferences and workshops are conducted as needed How We Engage The Group ensures consistent implementation of the code of business conduct via in-person visits to customers, suppliers and vendors. To ascertain contractual integrity, a vendor scorecard is maintained. We strive to improve the overall customer experience through continual customer satisfaction surveys and meetings How We Engage Engagement with regulatory bodies includes participation in government consultation programmes. The Group engages with - national, state, and regional - government bodies at the business and operational levels both directly and through industrial associations Key Expectations Expectations of being aligned with the global sustainability agenda Compliance with Human Rights Key Expectations Consistent implementation of the code of business conduct & ethics Ensuring contractual integrity, data privacy Key Expectations Compliance with laws Contributing towards the economic development of the nation Civil Society Industry (Suppliers, Customers, Peers, Media) Governments US$ 4.6 billion Local Procurement US$ 6.7 billion paid to the exchequer Zero new cases of non-compliance Initiatives in FY 2024 Membership of international organisations including the United Nations Global Compact (UNGC), Confederation of Indian Industry (CII), and Indian Biodiversity Business Initiative (IBBI), Federation of Indian Mineral Industry (FIMI), Federation of Indian Chambers of Commerce & Industry (FICCI) etc. Alignment with Sustainable Development Goals Compliance with the Modern Slavery Act Initiatives in FY 2024 Active 24X7 hotline service and email ID to receive whistle-blower complaints. Vendor meets to understand business partner issues Initiatives in FY 2024 Taxes paid to the government Regulatory compliances met CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT 65 Stakeholder Engagement MATERIALITY ADDRESSING PRIORITY MATTERS FOR A SUSTAINABLE FUTURE Identifying the areas most material to our business helps us align our business priorities, act ethically and responsibly, and create long-lasting impact. The three pillars that constitute our sustainability strategy – Transforming Communities, Transforming the Planet and Transforming the Workplace and the nine aims, are all closely linked with our material issues. The comprehensive stakeholder engagement and materiality exercise undertaken by the company in FY 2022, identified Vedanta’s key material issues as Community Engagement and Development; Water Management; Health, Safety and Well-being; Corporate Governance, Climate Action and Governance; and Diversity, Inclusion and Equal Opportunity. All these issues and several more are addressed through our various ESG KPIs that devolve from our well-defined targets and are driven through our pragmatic sustainability frameworks. Materiality matrix Impact on Business Importance to Stakeholder M1 M2 M3 M5 M4 M6 M8 M9 M10 M11 M12 M7 M13 M14 M15 M17 M16 M20 M18 M19 M21 M22 M24 M25 M23 Important issues M21 Data Privacy & Cyber Security M22 Pandemic Response & Preparedness M23 Material Management & Circularity M24 Product Stewardship M25 Macro-economic & Geopolitical Context Highly material issues M1 Community Engagement & Development M2 Water Management M3 Health, Safety & Wellbeing M4 Business Ethics & Corporate Governance M5 Climate Change & Decarbonisation M6 Diversity & Inclusion M7 Air Emission & Quality Material issues M8 Biodiversity & Ecosystems M9 Waste Management M10 Labour Practices M11 Long-term Growth & Profitability M12 Innovation & R&D M13 Tailings Management M14 Responsible Advocacy M15 Talent Attraction & Retention M16 Learning & Development M17 Sustainable and Inclusive Supply Chain M18 Indigenous People & Cultural Heritage M19 Land Acquisition, Rehabilitation & Closure M20 Human Rights Highly Material Material Important Environmental Social Economic Governance Integrated Report and Annual Accounts 2023-24 66 VEDANTA RESOURCES LIMITED Key KPI’s FY 2024 Performance Targets/Initiatives for FY 2025 SDG Alignment Total community spend Total outreach Nand Ghars in operations US$ 53 million 0.3 million individuals skilled, empowering 1.55 million members of their household Nand Ghars - 6,000+ 13.3 million women & children benefited 1.5 million families empowered Nand Ghars - >9,000 Community Engagement and Development Water Recycling % Freshwater consumption reduction Water positivity ratio 30% water recycled 2.7% reduction in net fresh water consumption from FY 2021 baseline 5 businesses water positive (Cairn, HZL, IOB, BMM, FACOR Mines) Water positivity ratio – 0.71 Water positivity ratio - 0.7 Water Management Zero fatalities TRIFR LTIFR 3 fatalities TRIFR - 1.3 LTIFR - 0.62 Zero fatalities* 2. TRIFR: 0.8 per million man-hours* LTIFR: 10% YoY reduction* * Numbers include both employee and contractors Health, Safety and Well-Being GHG emissions RE power in operations Biomass usage GHG emissions 61.28 MnTCO2e RE PDAs in place - 835 MW RE RTC 66,081 tonnes of Biomass usage 20% reduction in GHG intensity for metals business (FY 2021 baseline) 500 MW of RE RTC equivalent in use Climate Change and Decarbonisation Women employees in organisation (as a % of total FTE) Women employees in leadership positions (as % of total in Leadership positions) 20% women 8% women in leadership positions Our diversity and inclusion targets have FY 2030 as the target year Diversity and Inclusion Zero incidents/instances related to corporate governance failure Transparent disclosures Zero instances/incidents Transparent disclosures done through Sustainability, TCFD, IR, and BRSR reports No major instances/ incidents in corporate governance Include TNFD in the disclosures list Business Ethics and Corporate Governance CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT Materiality 67 OUR ESG STRATEGY ESG: A BUSINESS IMPERATIVE Environmental, social and governance (ESG) issues have critical impact on several dimensions of our business – from our bottom line to our brand value and reputation. Recognising this, we, at Vedanta, have consistently prioritised on effective identification, monitoring and management of ESG issues. To keep building A Stronger Vedanta, we follow a three-pronged sustainability strategy that is centred on three aspects of ESG – Transforming Communities, Transforming the Planet and Transforming the Workplace. Multiple facets of ESG are integrated across our processes and embedded across our different verticals in diverse geographies. Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED 68 As a large, multinational natural resources company we are sensitive to the many expectations that our stakeholders have from us. Our sustainability strategy tackles the most significant of these like resource use, water security, lower carbon footprint, better health and safety, inclusive workplaces and human rights, and good corporate governance. We ensure efficient outcomes by adopting best-in-class frameworks and technologies, aligning with globally accepted standards and bringing in leadership accountability. Today, national and international governments have well- defined targets to combat climate change and enable greater social equity. Through the pillars of Transforming Communities, Transforming the Planet and Transforming the Workplace, we throw our weight with national and international priorities, constantly demonstrating that no goal is too big to warrant non-engagement on our behalf. We do this by setting pragmatic targets over the short, medium and long-term, and operating within a strong ESG governance architecture. The Transforming Communities pillar addresses the UNSDGs of removing hunger, providing quality education and decent work and economic growth and this year we have helped 13.3 million women and children gain access to education, nutrition and healthcare through our community initiatives. India seeks to become net-zero by 2070, while Vedanta targets achieving this by 2050. This year we have avoided nearly 6.2 million tonnes of GHG emissions, against the 2021 baseline because of our decarbonisation initiatives. Through our ESG actions, we are taking resolute steps towards A Stronger Vedanta as we unite our efforts to build a robust organisation with our dedication towards creating a better world and society. CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT 69 Our ESG Strategy TRANSFORMING FOR GOOD Vedanta aims to create value for its stakeholders, lead a purpose-driven transformation and be ready for the future by investing in a sustainable tomorrow. The three pillars of our sustainability strategy focus on Transforming Communities, Transforming the Planet and Transforming the Workplace. These pillars will aid our efforts to uplift the underprivileged and empower those at a disadvantage, establish standards for environmental-friendly mining practices, and develop an extensive green product portfolio. The 3 pillars ensure that we create a workplace that is safe, inclusive, merit-based and nurturing. We express the intent to achieve these goals through our nine aims, which are closely aligned to our business activities. We aim to address our stakeholder expectations on the material matters including Climate Change and Decarbonisation, Water Management, Biodiversity, Health and Safety, Diversity, Inclusion and Equal Opportunity, Supply Chain Sustainability and Community Development by fortifying our aims with time-focussed, pragmatic targets that are driven through by well-defined and performance-oriented Sustainability key performance indicators. The seamless implementation of this approach is achieved through sound policies and frameworks aligned to globally accepted standards. Aim 1 Keep community welfare as the guiding principle for our business decisions KPIs FY 2025 goal FY 2030 goal Baseline Progress as of FY 2024 Material Issues UN SDGs Review Frequency of Aim Impact Management Zero social incidents category 4 and above - Two category 4 and four category 5 incidents were reported in FY 2024 Community Development 8.3 Determined by site- teams Transparency & Trust Signatories and participants in VPSHR - - Application for VPSHR membership submitted to the VPI Secretariat Set up an external Social Performance advisory body - - Yet to be undertaken Annual human rights assessment across all the businesses - - Planning phase completed. Work to be undertaken in FY 2025 Aim 2 Empower 2.5 million individuals with enhanced skillsets KPIs FY 2025 goal FY 2030 goal Baseline Progress as of FY 2024 Material Issues UN SDGs Review Frequency of Aim Skilling (Number of individuals to be impacted through skill development and training) 1.5 million 2.5 million individuals 0.6 million individuals (2016 baseline) Skill-based training impacting 1.55 million individuals Community Development 2.3, 2.4, 4.4, 8.3 Monthly Aim 3 Uplift 100 million women and children via social welfare interventions KPIs FY 2025 goal FY 2030 goal Baseline Progress as of FY 2024 Material Issues UN SDGs Review Frequency of Aim Nand Ghar (Number of Nand Ghars to be completed) ~9,000 29,000 6,000+ Nandghars operational Community Development 2.1, 2.2, 4.1, 4.2 2.3, 2.4, 4.4, 8.3 Monthly Education, Nutrition, Healthcare, and Welfare (Number of women and children to be uplifted by Nand Ghar initiatives) 100 million women and children via social welfare interventions - 6.46 million (2016 baseline) 13.3 million women and children benefited ESG Scorecard Transforming Communities Integrated Report and Annual Accounts 2023-24 70 VEDANTA RESOURCES LIMITED Transforming Planet Aim 4 Net Zero Carbon by 2050 or sooner KPIs FY 2025 goal FY 2030 goal Baseline Progress as of FY 2024 Material Issues UN SDGs Review Frequency of Aim Absolute GHG emissions (% reduction from FY 2021 baseline) - 25% reduction by 2030 60.24 million tCO2e 9.3% increase (Vedanta’s emissions are likely to peak in FY 2026-27, 65.85 million tCO2e in FY 2024) Climate change and decarbonisation 7.2, 12.2, 13.2 Monthly GHG Emissions Intensity (% reduction from FY 2021 baseline) 20% reduction by 2025 - 67 MW in FY 2021 12% reduction (5.66 tCO2e/mt Metal in FY 2024) Renewable Energy 500 MW RE RTC or equivalent 2.5 GW of RE RTC or equivalent 67 MW 255 MW FY 2024 LMV Decarbonisation (% LMVs) 50% 100% - 7% Capital Allocation for transition to net zero - US$ 5 billion - US$ 3 billion allocated towards Renewable Energy projects; US$ 0.08 billion spent till March 31, 2024 Hydrogen as fuel - Commitment to accelerate the adoption of hydrogen as a fuel and seek to diversify into H2 fuel or related businesses - No work was undertaken in this area in FY 2024 Aim 5 Achieving Net Water Positivity by 2030 KPIs FY 2025 goal FY 2030 goal Baseline Progress as of FY 2024 Material Issues UN SDGs Review Frequency of Aim Net Water Positivity - >1 ratio 0.52 (FY 2021 baseline) 0.71 Water management 6.3, 6.4, 6.5, 6.b Monthly Freshwater consumption (% reduction from FY 2021 baseline) 15% - - 2.7% reduction - Water-related Incidents Zero category 5 incidents related to water - Zero category 5 incidents reported - Water Recycling (%) 33% - 30.71% (FY 2021) 30.23% - Aim 6 Enhance our business model by incorporating innovative green practices KPIs FY 2025 goal FY 2030 goal Baseline Progress as of FY 2024 Material Issues UN SDGs Review Frequency of Aim Fly ash (utilisation) Sustain 100% utilisation 110% 107% Solid Waste Management 12.5 Monthly Waste Utilisation (High volume, low toxicity) 100% 100% 92% Tailings dam audit and findings closure All tailing facilities were audited, and actions were closed with real-time monitoring All facilities audited by third party. Implementation of Conformance is 76% as per GISTM standards Tailings Dam Management Biodiversity risk Review of site biodiversity risk across all our locations 100% sites have been re- assessed for biodiversity risk Biodiversity 15.1, 15.2, 15.9 Biodiversity Determine the feasibility for commitment to No-Net-Loss or Net Positive-Impact (NNL/NPI) targets Roadmap to achieve No-Net- Loss or Net- Positive-Impact in place Feasibility Analysis completed CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT 71 Our ESG Strategy Transforming the Workplace Aim 7 Prioritise the safety and health of our workforce KPIs FY 2025 goal FY 2030 goal Baseline Progress as of FY 2024 Material Issues UN SDGs Review Frequency of Aim Fatalities (No.) Zero 8 fatalities in (FY 2021) 3 Health and Safety 8.8 Monthly Total Recordable Injury Frequency Rate (TRIFR) 1.036 (30% reduction from FY 2021 baseline) 1.48 (FY 2021) 1.3 Occupational Health Management Systems Health performance standards implemented and part of VSAP - Exposure Monitoring Employee and community exposure monitoring to be completed - Employees exposure monitoring has been initiated Exposure Prevention No employee exposure to red zone areas Employee Well-being Mental health programme in place for all employees 54% 6 out of 11 Businesses have started specific programmes & others are in advance planning stage for implementation 100% of eligible employees to undergo periodic medical examinations Number of planned and underwent periodic medical examinations for direct employees and Business Directors 92% of eligible employees (direct + BP) of Total eligible Employees planned Aim 8 Promote gender parity, diversity and inclusivity KPIs FY 2025 goal FY 2030 goal Baseline Progress as of FY 2024 Material Issues UN SDGs Review Frequency of Aim Gender diversity (% women in the FTE) Equal Opportunity for everyone 20% 10% 20% Diversity and Equal Opportunity 5.1 5.5 5.c Monthly Gender diversity (% women in leadership roles as a % of total FTE in leadership roles) 40% - 8% Gender diversity (% women in decision- making bodies as a % of total FTE in decision- making roles) 30% - 20% Gender diversity (% women in technical leader/shop floor roles as a % of total FTE in technical/shop floor roles) 10% - 12% Integrated Report and Annual Accounts 2023-24 72 VEDANTA RESOURCES LIMITED ESG Governance Making ESG effective through organisational actions Vedanta has Board-level oversight of all ESG topics at the operating entity level (Vedanta Limited), via the ESG Committee. The Board ESG Committee meets twice in a year and charts the course for turning key material issues into executive action. During this financial year, the Board’s ESG Committee focussed on the following material issues: Safety Performance Water and Biodiversity Climate Mitigation and Adaption Disclosures & Statutory Findings Tailings Management ESG Governance High High High Key areas of performance Oversight on fatality investigations Fatality prevention and engineering controls Safety performance monitoring through Integrated HSES portal Risk governance Key areas of performance Evaluating progress made on Water Stewardship Roadmap and key water projects Identifying key action items for achieving Net Water Positive Index (NWPI) across BUs Defining SOPs for NWPI Fine-tuning site-specific approaches for more effective conservation and mitigation and better monitoring and reporting Key areas of performance Oversight on the Group’s Net Zero roadmap Review of semi-annual GHG performance Evaluating RE expansion, and CCUS and hydrogen-based technologies Inclusion of Scope 3 emissions calculations for business Key areas of performance Peer benchmarking and best practice identification across national and international peers Evaluating preparedness and assurance competencies for differed BRSR topics Understanding disclosure requirements, frameworks and performance adaptability of various reporting protocols viz. GRI, CDP, IR, DJSI, BRSR, Tax transparency report etc. Key areas of performance Developing the Group’s Tailings policy Reviewing safety aspects of tailings’ dams Setting targets for 100% compliance with GISTM by 2025 Key areas of performance Review of progress on all 9 aims and select KPIs; using digital platform for such tracking Setting direction for future goals on ESG roadmap Review of the Group’s ESG rankings and ways for maintaining and improving them Business impact Business impact Business impact Business impact Business impact Business impact Medium High Medium Aim 9 Align with global standards of corporate governance KPIs FY 2025 goal FY 2030 goal Baseline Progress as of FY 2024 Material Issues UN SDGs Review Frequency of Aim Supply Chain GHG transition Work with our long- term, tier 1 suppliers to submit their GHG reduction strategies Align our GHG reduction strategies with our long-term tier 1 suppliers Some of our businesses have begun engaging with our tier-1 suppliers on their climate goals Supply Chain Sustainability 8.7 Monthly Training on Code of Conduct Training on Code of Conduct Continue to cover 100% of employees Continue to cover 100% of employees % Independent Directors on Board 50% Independent Directors on Board as per SEBI requirements 50% Independent Directors on Board as per SEBI requirements Business Ethics & Corporate Governance % gender diversity on the Board 25% 25% Business Ethics & Corporate Governance Diversity & Inclusion CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT 73 Our ESG Strategy Additionally, management-level committees at the Group and BU-level help to effectively implement the strategies. At the Group-level these include: The ESG ManCom, which helps prioritise the ESG implementation roadmap, and along with the Group Executive Committee provides oversight on the day-to-day implementation of this roadmap. The Group ESG team, with representation in the aforementioned management bodies is tasked with the implementation of the ESG roadmap across the organisation, with assistance of the BU-level management bodies and ESG teams. Collectively, these committees are the custodians of the Group-level ESG roadmap. The Corporate Transformation Office (CTO), ensures that large-scale, high-impact projects undergo a periodic review to ensure appropriate resource allocation and project-completion. At the BU level, each business has separate ESG teams that are responsible for implementation of the ESG strategy within their business. Further, to drive consistent adoption of strategies, concentrate grassroots-level innovation efforts, drive progress on the aims, and integrate ESG practices across all functions, Vedanta has developed function-specific “Communities of Practice” (CoP). There are 13 CoPs and they exist at the Strategic Business Unit (SBU/site), Business Unit (BU/Sector) and Group level. Vedanta Sustainability Framework (VSF) The Vedanta Sustainability Framework functions as the foundational framework for all Group-wide sustainability actions. It contains policies, standards, and guidance documents and is aligned with ICMM, International Finance Corporation (IFC), and UNGC. It serves as a reference platform for operational decisions, thereby assisting in end-to-end sustainability integration. We provide education, training, and development opportunities to our employees and business partners so that they gain expertise in working in conformance with the VSF. Vedanta Sustainability Assurance Process (VSAP) The VSAP serves as the internal audit tool and assists in Group-wide ESG compliance and integration across Vedanta’s business units. Beyond compliance, it evaluates the robustness of our systems, highlighting gaps and contributing towards their timely completion and overall efficacy. Vedanta has been able to achieve steady progress across its ESG goals emerging as a strong sustainability leader at the industry level due to mechanisms like the VSAP and VSF that tie every member of the organisation in a matrix of responsibility and performance. VSAP scores are a key variable in determining Executive compensation VSAP results are reviewed by Board-level ESG Committee ESG Component in Bonus Structures For the fiscal year 2024, Vedanta’s bonus structure reflects a substantial emphasis on ESG considerations, including climate change mitigation efforts. The ESG component, constituting 15% of the bonus weighting for all employees, including executive leadership, underscores the company’s dedication to rewarding contributions towards sustainability objectives. LONG-TERM INCENTIVE PAY-OUTS (LTIP) Sustainability considerations, including climate change metrics, are seamlessly integrated into Vedanta’s Long-Term Incentive Pay-out (LTIP) schemes, reflecting the company’s long-term commitment to environmental sustainability. COMPANY CAR POLICY WITH ELECTRIC VEHICLE INCENTIVES Road-based transportation is a significant contributor, accounting for approximately 12% of global greenhouse gas (GHG) emissions. At Vedanta, we recognise the urgency of addressing this challenge and are steadfast in our commitment to mitigate these emissions. As part of our proactive stance, Vedanta has set a bold target to achieve complete decarbonisation of our light motor vehicle fleet by 2030. To accelerate progress towards our emission reduction objectives, we have implemented a radical transformation of our Company Car Policy. This includes the introduction of an Electric Vehicle (“EV”) Kicker designed to incentivise employees to opt for electric vehicles. By offering compelling incentives, we aim to encourage widespread adoption of EVs among our workforce, thereby driving tangible reductions in emissions. Our response to climate-related impacts on Vedanta’s business The metal and mining sector is crucial for the energy transition, with a significant increase in demand expected for critical minerals such as copper and nickel. These minerals are essential for green technologies, including solar panels, wind turbines, electric vehicles, and batteries. However, their extraction and processing are associated with substantial greenhouse gas (GHG) emissions, making it essential for the mining industry to cut emissions by 90% by 2050 while increasing production to meet demand. Innovation and collaboration are vital for achieving net zero emissions target in the mining sector. The industry This section has been drafted to comply with the reporting requirements under Section 414CA and 414 CB of the Companies Act 2006, also commonly known as the UK Climate-related Financial Disclosures (UK CFD). Integrated Report and Annual Accounts 2023-24 74 VEDANTA RESOURCES LIMITED must explore low carbon technology solutions, financial support mechanisms, innovative supporting policy instruments, opportunities for a just transition, and other ESG considerations. Strategic partnerships with Original Equipment Manufacturers (OEMs) and financial/virtual Power Purchase Agreements (PPAs) can provide flexibility and cost-effective options for transitioning towards cleaner energy sources while maintaining operational efficiency in the sector. The exploration process for energy transition-related mining sites is crucial for determining if there are sufficient minerals under the ground to warrant moving forward. The impact of climate-change on Vedanta’s business, and our corresponding decarbonisation strategy is a critical part of our business-planning, de-risking, and opportunity realisation strategy. The sections below describe our comprehensive approach. Climate Governance At Vedanta, we’ve set up a clear system for integrating climate change concerns into how we do business and plan for the future. The ESG Committee of the Board monitors all sustainability issues, including climate change. Audit & Risk Management Committee Board ESG Committee Group ESG Management Committee & Transformation Office (Execution) Group Head HSES Group Risk Committee Group Executive Committee (including BU CEO’s and COO’s) Energy and Carbon Community of Practice Group Executive Director Director ESG, Carbon & Social Performance Board of Directors (Supervisory) Vedanta Board Responsibilities The Board oversees the holistic aspects of strategy, people, culture, ESG (Environmental, Social, and Governance), and community engagement, with the ultimate responsibility of prioritising business performance and governance. It ensures that the group maintains a comprehensive risk management framework, which includes addressing climate-related risks and opportunities. The Board oversees the climate-related risk management process, reviewing corporate goals, incentives, targets, and key performance indicators (KPIs) related to climate considerations every six months. This ensures alignment with our commitment to effectively manage climate risks and capitalise on opportunities for sustainable growth. Board ESG Committee Responsibilities The ESG Committee comprises the Group Executive Director and two independent Directors, convening biannually to provide strategic guidance on climate-related matters. This committee advises the Board on changes in regulatory requirements concerning climate and sustainability matters in both Indian and international contexts. It also provides oversight on the effectiveness of short-, medium-, and long-term targets related to climate and other ESG (Environmental, Social, and Governance) topics, recommending improvements as needed. Policies and Management Systems: The committee reviews and suggests enhancements to established governance structures regarding carbon management and monitors the company’s progress toward Net Zero and other ESG goals. It ensures the effective implementation of governance, advocacy, and public relations mechanisms concerning ESG and Climate Change issues. Moreover, the committee outlines initiatives to embed a sustainability and climate change culture throughout the organisation, engaging employees at all levels. It reviews the information presented in the ESG report and Climate Change Report, evaluating emerging sustainability and climate risks and opportunities to guide management in mitigating potential threats to sustained growth. CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT 75 Our ESG Strategy Group Audit and Risk Committee Responsibilities The Audit & Risk Management Committee oversees the risk management framework by enhancing the organisation’s resilience against emerging threats. This committee plays a pivotal role in identifying, assessing, and addressing changes in risk exposure. To support risk governance, the committee reviews existing risk control measures and evaluates the opportunities and actions by providing strategic guidance and oversight. It receives support from the Internal Group Risk Executive Management Committee (GRMC), which complements its efforts by evaluating the design and operational effectiveness of risk mitigation programmes and control systems. BU COOs Responsibilities The COO’s are responsible for understanding and executing group- level targets, policies, and standards within their businesses. Furthermore, they ensure the implementation of carbon reduction strategies by overseeing operational aspects such as energy management. BU CEOs Responsibilities The BU CEOs are responsible for supervising climate-related matters, risks, and opportunities within their designated business units. They are accountable for executing climate mitigation and resilience measures at the local business level. ESG Management Committee (ESG ManCom) Responsibilities The committee is responsible for providing governance, strategic leadership, and execution support for Vedanta’s sustainability strategy, including implementing our 2050 net zero roadmap, focussing on ensuring alignment and execution. Group Executive Committee (ExCo) Responsibilities The team coordinates the various geographical business scopes led by our business CEOs and functional leadership at the Executive level. They convene monthly to discuss key performance indicators (KPIs), including greenhouse gas (GHG) emissions, metals intensity, renewable energy integration in operations, new product launches, and research and development (R&D) initiatives with the Board. In collaboration with the ESG Management Committee (Man- Com), they provide guidance and advice to the Board’s ESG committee. Their monthly meetings ensure ongoing progress tracking, and they report updates to the full Executive Board every month. Energy and Carbon Community of Practice Responsibilities The team holds overall operational responsibility for implementing Vedanta’s carbon and climate strategy, focussing on initiatives related to energy efficiency. They are also responsible for developing, overseeing, and providing recommendations to the ESG ManCom (Management Committee) and Group Executive Committee (ExCo) regarding implementing Vedanta’s carbon mitigation approach. It is chaired by the Director of ESG, Carbon, and Social Performance; the team’s membership includes Business Unit Chief Operating Officers (COOs) or designated carbon champions. It convenes monthly to discuss progress, share insights, and collaborate on strategies to address carbon emissions and climate-related challenges within Vedanta’s operations. Chaired by the Group Executive Director and a Non-executive, Non- independent Director, the committee’s membership includes key stakeholders such as the Director of ESG, Carbon, and Social Performance, the Group Head of Health, Safety, Environment, and Sustainability (HSES), Group CFO, CEOs of the Aluminium and Base Metals Businesses and senior leadership representation from the Human Resources, Communications, Commercial teams. The committee meets fortnightly to discuss progress, address challenges, and provide guidance on initiatives related to sustainability, ensuring a concerted effort towards achieving our long-term sustainability goals. Integrated Report and Annual Accounts 2023-24 76 VEDANTA RESOURCES LIMITED Note on the climate disclosures: Vedanta is actively monitoring how climate-related physical and transition risks will impact the company in the near, mid, and long-term. A significant portion of our efforts are directed towards decarbonising our operations – beginning with energy efficiency and fuel switch measures, and expanding into large-scale use of renewable power. As of FY 2024, the company has completed evaluations that help us identify the broad areas of impact for each of our businesses. As this analysis evolves, we will be able to determine how emerging risks and opportunities impact financial outcomes for the business, at which time we will add them to our future disclosures. As of this reporting period, our assets and our business-model do not face any financial impact from climate change in the short term. In these sections, we have attempted to provide details that align with UK CFD requirements (a) – (h). However, we are aware that some elements of these disclosures will improve in granularity and management response in subsequent time-periods and these improvements will be reflected in our future reports. Climate-related Risks and Opportunities At Vedanta, accountability and oversight in risk management form the integral components of our governance framework, which seamlessly intertwine with our core governance principles. Adherence to Rigorous Standards Aligned with ISO 31000:2018 standards, our Enterprise Risk Management (ERM) framework serves as a robust mechanism to identify, address, and mitigate risks that could impact the Company. Embracing a systematic approach, we conduct thorough risk identification and assessments, followed by monitoring and reporting across operational, financial, strategic, and reputational domains. Within this framework, climate change emerges as a focal point, reflecting our primary commitment to its mitigation. The Board ESG Committee stands as a pivotal body entrusted with overseeing the management of climate- related and broader Environmental, Social, and Governance (ESG) risks. In close collaboration with the Audit Committee, the ESG Committee identifies material ESG risks and orchestrates targeted mitigation actions, ensuring effective risk management through continuous controlling mechanisms. Our risk management process adopts a bottom-up approach, leveraging decentralised internal controls to capture risks at a granular level, spanning both physical and transition risks. Designated risk officers at operating business and group levels overlook this effort, ensuring comprehensive risk coverage and timely response measures. Enhanced Oversight through GRMC The Audit & Risk Management Committee receives assistance from the Group Risk Management Committee (GRMC) in overseeing the comprehensive risk mitigation programme and control systems. Through quarterly discussions, the GRMC decides the resilience of our framework at the business unit level and facilitates the integration of Climate-related Financial Risk into Enterprise Risk Management. The Director of ESG, Carbon & Social Performance delivers quarterly updates to the GRMC on climate-related risks. Risks Vedanta Limited's climate change policy emphasises the importance of annual greenhouse gas (GHG) emissions reporting, climate trajectory scenario analysis, and climate change risk assessment as crucial components for disclosing performance against strategic goals. We are committed to transitioning to clean and green energy sources and aim to become a net-zero carbon company by 2050. This commitment includes addressing challenges related to material sourcing, regulatory pressures, and uncertainties in the renewables energy sector, such as: The pace of renewable adoption varies significantly by country, with varying degrees of reliance on fossil fuel grid electricity remaining for most countries. Permitting new electricity plants and transmission lines can be time- consuming, leading to higher power costs in the near term until renewable energy costs catch up with lower cost fossil fuel options Vedanta Limited's smelting and refining processes have constant and large electricity requirements, limiting a shift away from fossil fuels and grid electricity to 2030. Risk and Scenarios Financial/virtual power purchase agreements (PPAs) and other similar instruments are seen as a stopgap measure until global grid renewable % and battery storage form the dominant source beyond 2030 Hydrogen may not be the carbon cure-all if infrastructure and supply questions are not addressed across the entire supply chain. Some smelting/refining processes may simply work well with fossil fuels, pushing companies to abate carbon through other means such as carbon capture, utilisation, and storage (CCUS) and other technologies Since Vedanta is the major exporter of aluminium to the EU, it is likely that the carbon border tax will impact the export volumes due to price per unit emission will be levied to the goods imported into the EU mandatorily from 2026. Once the permanent system kicks in, importers into EU will need to report the quantity of annual imports and their embedded greenhouse gases which will be equivalent to the European Union Allowances (EUA) prices CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT 77 Our ESG Strategy Moderate Climate Change Scenario (RCP 4.5) In the RCP 4.5 Scenario, significant mitigation efforts are undertaken to reduce emissions by half of current levels by 2080. This scenario will likely lead to a warming of over 2 degrees Celsius by the year 2100. Low-GHG- emission Aluminium Aluminium Short The launch of Restora and Restora Ultra is catering to the sustainability-conscious customers In Europe Going forward, we see demand for green aluminium rising Reducing the risk of CBAM-related penalty Low-GHG- emission Copper Copper Medium and long We will launch low-GHG-emission copper in the next few quarters Robust demand, use of renewable energy, and increased use of scrap in production will drive this segment going forward Electric Vehicle All Business Medium and long Will reduce the consumption of diesel improve the availability of our mining fleet due to fewer failure chances in general Will reduce harmful emissions (fugitive emissions) from vehicles which will reduce air circulation requirements in underground mines Renewable Power in operations Aluminium, Zinc, Steel, and Copper Short and Medium Reduced coal usage in operations Reduced water usage assists in the aim of the Net Water Positive (NWP) organisation by 2030 Leading to reduced waste generation * Short-term horizon (1 - 3 years), Medium Term (3 - 10 years), Long-term horizon (10 - 25 years) Opportunities Business Units Time Horizon* Strategy to realise opportunities The company has assessed the impacts of climate change on the business over multiple scenarios, time-periods and locations. Details of the assessments are given below: These scenarios have been selected, keeping in mind the NDC commitments of the Government of India, which seeks to make India a net-zero carbon economy by 2070. Additionally, scenarios that predict an adverse warming of the planet were considered to determine the change in hazard levels. Considering the RCP 4.5 scenario, over the next decade, we understand that there would water scarcity at BALCO and Cairn Oil and Gas units, and a high chance of flooding at High-Risk Climate Change Scenario (RCP 8.5) Under the scenario of business as usual, where emissions persist at current rates, it is anticipated that warming exceeding 4 degrees Celsius will occur by the year 2100. Physical Risks the Iron Ore Business. Vedanta Aluminium in Lanjigarh and Jharsuguda already face risk from cyclones that will get accentuated in the future. Under the worst-case scenario (RCP 8.5), many businesses will face extreme climate risks. There will be water stress and scarcity at TSPL, BALCO (Korba) and Cairn Oil and Gas. Vedanta will also experience very high temperatures at TSPL and at their units in South Africa as compared to the current temperature. Opportunities Vedanta has the opportunity to lead the way in decarbonisation by taking bold steps such as joining fleet decarbonisation initiatives and collaborating with OEMs. By transitioning away from fossil fuels and focussing on direct emission decarbonisation solutions tailored to each commodity, Vedanta can secure higher margins as carbon mechanisms drive up costs and prices Vedanta's mines have the advantage of exploring onsite and financial/virtual power supply options to shift away from grid supply, enabling faster decarbonisation and capitalising on carbon cost price uplift for margins. However, smelting and refining processes with constant and large electricity requirements may face limitations in shifting away from fossil fuels and grid electricity until 2030. Financial/virtual PPAs and other similar instruments can serve as a stopgap until global grid renewable and battery storage become the dominant source beyond 2030 Vedanta can leverage its strong commitment to sustainability and its goal of achieving net zero emissions by 2050 by taking advantage of opportunities in carbon credit trading. By increasing its renewables portfolio and implementing eco-friendly technologies, Vedanta can generate revenue through Carbon Emission Reduction (CER) trading, contributing to sustainable development and reducing negative environmental impacts Integrated Report and Annual Accounts 2023-24 78 VEDANTA RESOURCES LIMITED Physical risks under RCP 4.5 and 8.5 Hazard Type Baseline BU Short1 Medium1 Long1 RCP 4.5 RCP 8.5 RCP 4.5 RCP 8.5 RCP 4.5 RCP 8.5 Drought FY 2021 Balco Cairn ESL HZL Iron ore TSPL VAL SC VZI High Temperatures Balco Cairn ESL HZL TSPL VZI VAL Iron ore SC Floods Balco Cairn ESL HZL Iron ore TSPL VAL SC VZI Cyclones Balco Cairn ESL HZL Iron ore TSPL VAL SC VZI Rainfall Balco Cairn ESL HZL Iron ore TSPL VAL SC VZI Legend Low Medium High 1Short-term horizon (1 - 3 years), Medium Term (3 - 10 years), Long-term horizon (10 - 25 years) Current Policies Scenario (CPS) In this pathway, existing climate policies remain unchanged, lacking any strengthening of ambition. Consequently, emissions persist on an upward trajectory, ultimately surpassing the 1.5°C limit by a considerable margin. Nationally Determined Contributions (NDCs) Scenario This scenario envisions the full implementation of India’s presently pledged unconditional NDCs, ensuring the attainment of specified targets on energy and emissions by 2025 and 2030, respectively. Below 2°C Scenario (B2DS) Under this scenario, explicit temperature targets are set to keep warming below 2°C throughout the 21st century, with the 87th percentile of temperature rise remaining within this threshold. Net Zero 2050 Scenario Anticipating global CO2 emissions reaching net zero by 2050, this scenario envisages a balance between emissions and removals, with some countries achieving net- negative emissions to offset positive emissions elsewhere. Delayed Transition Scenario In this scenario, a 2°C temperature target is established for 2,100, allowing for a temporary overshoot before stabilisation, reflecting a slower pace of transition to a low-carbon economy. Transition Risks CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT 79 Our ESG Strategy Transition Driver Business Unit Risk Level Short Medium Long 1. Cost of switching to cleaner energy 2. Impact of CBAM costs 3. Increased demand for greener products Balco ESL VAL Sterlite Copper VZI 4. Increasing costs of compliance and reputational risks - climate-related impacts Cairn - - 5. Reduced demand for oil & gas costs of transition to low emission technologies and CCUS - - 6. Reduced demand for oil and gas - - 7. Increased regulations and compliance costs TSPL - - 8. Phase-down of Coal and loss of market shares - - 9. Increase in usage of RE Technologies - - Legend Low Medium High Strategies to mitigate climate risks & realise opportunities Decarbonising an hard-to-abate industry, such as metals and mining requires a multi-pronged strategy that is played out over the short-medium-and-long-term. Vedanta’s net-zero roadmap incorporate large-scale, interim, and consistent measures that will continue to evolve as technologies, financials, and regulations change. A glimpse of our approach as it stands in FY 2024 is given below. BIGGEST IMPACT TRANSITIONAL IMPACT CONSISTENT IMPACT Oil & Gas ENERGY EFFICIENCY Top recovery turbine DRI-EAF Increased PCI Sinter waste heat recovery Coke dry quenching Reduced flaring Iron & Steel GREEN POWER Solar, solar-wind hybrid All Round-the-clock RE SECTORS FULL SWITCH-LONG-TERM Natural Gas to Hydrogen Aluminium, Iron & Steel SECTORS FULL SWITCH- INTERMEDIATE Coal to Biomass HFO/Coke to Natural Gas Aluminium Aluminium, Iron & Steel Power SECTORS OFFSETS CCUS Plantations Iron & Steel Oil & Gas, Zinc, Power, Aluminium SECTORS SECTORS LOGISTICS Battery EVs E-LMVS Zinc All SECTORS Integrated Report and Annual Accounts 2023-24 80 VEDANTA RESOURCES LIMITED The “Biggest Impact” category suggests a focus on green power initiatives, such as solar and solar-wind hybrid energy sources, and transitioning long-term from natural gas to hydrogen, affecting all sectors but with an emphasis on aluminium and iron & steel. The “Transitional Impact” addresses intermediate strategies like switching from coal to biomass and heavy fuel oil/coke to natural gas, with a specific focus on the aluminium, iron & steel, and power sectors. It also includes carbon capture, utilisation, and storage (CCUS) and plantations for offsetting emissions, particularly in the oil, gas, and power sectors. Under “Consistent Impact” practices address steady environmental benefits, like coke dry quenching, waste heat recovery, and improved process integration (increased Pulverised Coal Injection- PCI) in iron & steel production, as well as advancements in logistics such as battery electric vehicles (EVs) and electric light-medium vehicles (E-LMVs), affecting multiple sectors but with a particular focus on iron & steel, oil & gas, and zinc. We aim to strategically align our operations and financial planning with the impacts of climate-related risks and opportunities. Our measures focus on product and service offerings, supply chain management, and operational enhancements. Products & Services At Vedanta, we've recognised the shift in consumer preferences towards low-carbon metals, prompting us to focus on decarbonising our product portfolio. In FY 2022, we introduced low-ghg-emission aluminium Products "Restora" and "Restora Ultra," boasting significantly lower GHG intensity than global standards. Restora, produced using renewable energy, emits half the global standard of 4 tCO2e per tonne of aluminium. Restora Ultra, made from reclaimed aluminium, has nearly zero carbon footprint. In FY 2024, low-carbon aluminium generated around US$ 150 million in revenue. Additionally, a pilot project for recycled copper production reduced our carbon footprint, generating ~US$ 25 million in green copper sales. With the economy transitioning towards a low-carbon future, we anticipate shifts in demand for our products, with increased demand projected for copper, silver, and zinc in electric motors, transmission lines, batteries, and solar panels. However, the decline in lead-acid battery usage in electric vehicles may reduce demand for our products. Supply Chain We are actively assessing the impact of climate-related risks and opportunities on our supply chain, aiming to align our diverse operations with decarbonisation efforts. Vedanta has instituted a supplier selection criterion emphasising compliance with environmental and sustainability standards, including climate change considerations. By FY 2025, we aim to collaborate with long-term tier 1 suppliers to establish GHG reduction strategies, with plans to align strategies by FY 2030. While some business units are progressing faster, our Aluminium and Zinc sectors have committed to reducing scope 3 emissions, targeting a 25% reduction for Aluminium and 20% for HZL by 2030 and 2027, respectively, over specified baseline years. Looking ahead, our pledge extends to achieving full decarbonisation of our light-motor-vehicle fleet by 2030, alongside substantial strides in greening our mining operations, targeting a considerable portion of our mining fleet by 2035. Initiatives such as the integration of electric vehicles (EVs) at HZL and ESL, as well as strategic collaborations like the Memorandum of Understanding (MoU) with Sandvik AB, underscore our proactive stance in curbing carbon emissions and mitigating environmental impact, particularly in our subterranean mining endeavours. Operations We have devised a comprehensive four-pronged strategy to mitigate our carbon footprint and attain net zero emissions. This strategy involves enhancing renewable energy adoption, transitioning to low-carbon fuels, optimising operational energy efficiency, and offsetting residual emissions through carbon offsets. Moreover, we have instituted an internal carbon pricing mechanism, influencing capital investment decisions across our operations. Our recent Power Distribution Agreement, securing 788 MW of Renewable Energy Credits, is a notable step towards decarbonisation. Mitigation strategies & their business impacts Climate Attribute Business Impact Mitigation Actions Use of lower emissions source of energy We have recognised that integrating lower- emission practices, such as leveraging renewable energy sources and adopting technologies that minimise energy consumption and emissions, presents substantial cost-saving opportunities for our operations. By prioritising these initiatives, we aim to optimise our processes while simultaneously reducing our environmental footprint. Our goal is to reduce absolute GHG emissions by 25% by FY 2030, compared to our baseline in 2021. To accomplish this objective, we've implemented several initiatives aimed at restructuring our energy generation portfolio. For instance, we've installed solar panels on rooftops across various locations in our business units both in India and abroad. Furthermore, we've initiated a comprehensive transition, replacing our current diesel vehicles with electric ones and integrating technologically advanced lithium-ion forklifts on a substantial scale. CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT 81 Our ESG Strategy Mitigation strategies & their business impacts Climate Attribute Business Impact Mitigation Actions Emerging Regulations and shift in consumer preferences Vedanta has recognised the imminent impact of regulatory shifts, such as the "National Carbon Market" and CBAM, on our operations. Concurrently, we have closely monitored changing consumer preferences favouring carbon-neutral or low-carbon products. With the anticipated rise in demand for commodities like aluminium amidst the transition to a low- carbon economy. Vedanta has made pledges to curb GHG emissions, encompassing goals such as using 2.5 GW of Round-the- Clock equivalent Renewable Energy by 2030 and reducing absolute emissions by 25% from a 2021 baseline. To fulfil these commitments, we’ve implemented a range of initiatives, spanning efficiency enhancements in turbines and thermal operations, adoption of biomass cofiring in thermal power plants, and sourcing Renewable Energy power across all our facilities. We’ve noted a shift in consumer preferences toward low-carbon metals and are actively exploring avenues to decarbonise our product offerings. In line with this, we’ve procured over 6 billion units of Renewable Energy power in our Aluminium division over the past two years, specifically utilised for the production of Restora and Restora Ultra, our low-carbon aluminium products. Chronic climatic changes We've conducted an assessment and identified several environmental factors that could significantly impact our business operations. These include changes in water availability, heightened frequency, and intensity of cyclones, as well as escalating temperatures. These factors pose various challenges, such as potential disruptions to our supply chain, increased operational risks, and the need for enhanced infrastructure resilience. Additionally, we are exploring innovative solutions and technologies to bolster our business's resilience in the face of these environmental changes. We made a roadmap and studied how climate change affects our operations in different places. This helps us see where we might have problems. We're also planning ways to make our business stronger against climate changes by looking at different possible scenarios. Targets & Performance Vedanta reports on its Scope 1, 2, and 3 emissions. These emissions are calculated using the methodology prescribed by the GHG Protocol. Business-wise details of our GHG emissions in FY 2024 are presented below: Business units Scope 1 emissions (million tCO2e) Scope 2 emissions (million tCO2e) Scope 3 emissions (million tCO2e) BALCO 12.38 0.16 1.78 Cairn Oil & Gas 1.73 0.34 19.81 ESL Steel Limited 3.74 0.28 0.38 FACOR 0.47 0.037 - Hindustan Zinc Limited 3.98 0.56 4.54 Iron Ore Business 1.96 0.009 0.89 Power Business 9.40 0.00039 0.40 Sterlite Copper 0.063 0.086 0.87 VAL - Jharsuguda 25.10 2.71 5.24 VAL- Lanjigarh-New 1.72 0.011 0.58 Vedanta Zinc International 0.74 0.36 2.80 VGCB 0.0013 0.0077 - Total 61.29 4.56 34.58 Integrated Report and Annual Accounts 2023-24 82 VEDANTA RESOURCES LIMITED The company aims to become a net-zero carbon business by 2050 or sooner. This target is broken down into several interim targets, each of which is monitored using associated KPIs. These include: Net Zero by 2050 or sooner Use of 2.5 GW of round the clock RE by 2030 Reduce absolute emissions by 25% by 2030 from 2021 baseline 20% reduction in GHG intensity of metals business by 2025 from the baseline year of 2021 Aim to spend US$ 5 billion over the next 10 years to accelerate transition to net zero Decarbonise 100% of light motor vehicle (LMV) fleet by 2030 and 75% of mining fleet by 2035 Accelerate hydrogen adoption as fuel Ensure all businesses account for their Scope 3 emission by 2025 Vedanta’s climate-related targets have been designed to help the company: a. Lower its absolute GHG emissions, along a net-zero by 2050 trajectory. We believe that decarbonising the business in this timeframe will de-risk the business from emerging carbon-related regulations such as carbon taxes (CBAM, etc), emergence of carbon markets in India, and the rising cost of fossil-fuel based power. b. Ensure that the company de-risks its value-chain, by working with our long-term business partners to set decarbonisation targets. We believe this will help avoid all of the risks stated in point (a) above for our value-chain partners, thereby minimising volatility on the supply chain disruptions such as price fluctuations, non-availability of goods/services, climate-related stoppages, etc. c. Ensure that we adequately finance the decarbonisation of our business, AND d. Ensure that the company continues to evaluate newer technologies that will help in decarbonising our operations Our targets have timeframes and are monitored and reviewed in accordance with the governance mechanisms described in the section, “Climate Governance”. The KPIs used to track progress on these aims can be found in the section “ESG Scorecard: Aim 4”. Net zero targets are divided into short, medium, and long- term goals, with FY 2021 as the baseline year Short-term targets includes reducing the GHG intensity of our metals business by 20% by FY 2025 (baseline: FY 2021) Renewable energy (RE) and carbon offsets Mid-term target of using 2.5 GW of Round-the-Clock Renewable Energy by 2030 Long-term target of using ~10 GW of Round-the-Clock equivalent Renewable Energy by 2050 Governance and risk management Climate change has been identified as one of the top 20 risks by the management committee Concerns include Carbon Boarder Adjustment Mechanism (CBAM) 5% biomass adoption requirement, and Indian Carbon Market Acquisition of old thermal power plants impact 2030 targets, but not long-term net zero strategy Other initiatives Flare reduction efforts. Memorandum of Understanding signed for battery vehicles and nature-based solutions Large-scale nature-based projects for sequestration, water, biodiversity protection, and co‑benefits 30% through carbon offsets and fuel switching (5% biomass usage) Mid-term targets include reducing our absolute GHG missions by 25% by 2030 (baseline: FY 2021) Long-term targets include to set up specific targets on the use of clean technologies – CCUS, green hydrogen along with this revise climate budget, ICP, GHG emission reduction targets according to the revised climate risk assessments Emissions are expected to peak by 2027 which is in line with India’s target Existing and acquired thermal power plants to reach the end of life by 2045 Short/medium/long term targets Key Challenges RE intermittency and power variability issues Potential RE pricing fluctuations, impacting their position as the largest RE purchaser Captive coal mines as a backup, which could increase emissions Aligning targets with international standards CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT 83 Our ESG Strategy Decarbonisation Pathway Several projects are planned to commence from 2026 aim to align GHG emissions with the 2030 target trajectory. Initiatives such as renewable energy, energy conservation projects, and biomass implementation across various Vedanta businesses are projected to reduce emissions by nearly 20 million tonnes of CO2 by 2030. To achieve the targeted 25% absolute emissions reduction by 2030 from the FY 2021 baseline, scaling up planned initiatives and utilising offsets have been identified as strategies. Major Milestones for 2030 (in alignment with Aim 4): Renewable energy 0.83 GW of renewable energy power plants under commissioning Fuel switch 5% Biomass co‑firing in thermal power plants Actions required for additional 5% biomass co-firing Energy Efficiency Programmes Programmes in place to avoid 5 million tCO2e emissions Offsets Actions required on securing 5 million tCO2e of carbon offsets Actions required on deploying additional 2 GW of renewable energy 1.7 GW of renewable energy power plants under planning FY21 62 65 14 5 4 3 91+ 12 5 3 6 12 3 5 45 FY23 FY27 Projects Planned Actions Required VAL Expansion Steel Expansion HZL + VZI Expansion FACOR Expansion RE RTC ~600 MW Energy Conservation Projects 5% Biomass co-firing RE RTC ~1,900 MW Additional RE RTC ~2,000 MW Additional 5% Biomass Offsets FY30 26 MTCO2e 20 MTCO2e 26 MTCO2e Integrated Report and Annual Accounts 2023-24 84 VEDANTA RESOURCES LIMITED Zinc Avoid 100% renewable energy by 2040 100% shut down of coal-based CPP by 2040 100% shift to Battery Operated Vehicles/Hydrogen Vehicles Minimise Carbon capture and utilise - 50% concrete, 50% soil carbon enhancement by 2050 Offset Plantations - 5 million trees by 2050 Oil and Gas Avoid Minimise Up to 50 MW of renewable energy sourcing by 2030 Minimise Energy conservation and process optimisation reduced flaring wherever possible Offset Plantations - 2 million trees by 2030 Thermal Power Avoid Up to 25 MW of renewable energy by 2025 Natural Gas to replace HFO/LDO by 2025 Acquisition of biomass-based plants Iron & Steel Avoid Gradual increase in use of Natural Gas in Blast Furnace 10 MW of solar power by 2030 Use of hydrogen in PCI pilots to start with and then gradual increase of hydrogen use in PCIs Minimise Continuous process improvements such as coke dry quenching, sinter waste heat recovery, increased PCI, top recovery turbine etc. Gradual increase in carbon capture, starting with 50 TPD in the short term Aluminium - smelters Avoid Phase-wise round-the-clock renewable energy capacity addition, 580 MW of which has already been committed and agreements signed Gradual increments in biomass cofiring in boilers 100% HFO replacement in processes, with Natural Gas by 2035, followed by replacements with Green Hydrogen by 2050 Minimise Incremental and continuous energy efficiency Starting to invest in Inert Anodes in the short term with an aim to shift to 100% Inert Anodes in the long term Aluminium - Refinery Avoid 50% hydrogen in cogeneration during 2035-50 Biomass cofiring in boilers 100% HFO replacement in processes with Natural Gas by 2030, followed by green hydrogen by 2050 Phase-wise capacity addition of renewable energy Minimise Incremental and continuous energy efficiency Figure 1: Business-wise decarbonisation strategy Business Units Decarbonisation pillars Key measures Business expansion projects are expected to add 26 million tonnes of CO2 emissions, with emissions peak expected in FY 2027. A US$ 250 million Sustainability-Linked Loan (SLL) has been secured by the aluminium business to fund the expansion in a sustainable manner from leading international banks. The loans were granted based on specific performance parameters for decarbonisation and safety. CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT 85 Our ESG Strategy PEOPLE AND CULTURE TRANSFORMING TO UNLEASH PEOPLE’S POTENTIAL Nurturing a culture of growth and empowerment is fundamental to Vedanta’s people prodigy. The primary focus lies on enabling our people to realise their optimal potential that further supported by cultivating and incentivising performance and contribution towards business goals. Central to our ethos, is the transformation of our workplace and creation of a culture of equal opportunity, through initiatives focussed on health, safety, diversity, equity, and inclusion. Vedanta’s transformational approach is dedicated to unlocking the untapped potential in our workforce, driving sustained organisational success by harnessing a blend of skills, experiences, and diverse perspectives. Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED 86 Promoting diversity, equity, and inclusion Our commitment to diversity, equity and inclusion (DEI) is deeply embedded in Vedanta’s culture and guides our people strategy. We promote gender parity and embrace individuals from diverse backgrounds and cultures at every level of our organisation, from leadership teams to operational units. We are committed to creating an LGBTQ+ friendly workplace ensuring every individual feels valued and respected. Our initiatives include role identification, infrastructure and policy upgradations are targeted towards creating an inclusive environment and empowering individuals. Transgender employees are contributing to our success 40+ CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT People and Culture 87 Parenthood and childcare policy Continuing our dedication to fostering DEI, we have improved our maternity policy to offer better support our female employees during their transition to motherhood. The improvements made in our Parenthood Policy are designed to empower women and LGBTQIA+ employees. This initiative reflects our core value of Care and is operates on the principle that motherhood is not a career hiatus, but a period of personal growth. Our updated policy also promotes gender equality in childcare support to all employees, regardless of gender or orientation. Gender reaffirmation policy Vedanta acknowledges and respects the unique needs and rights of transgender individuals affirming our commitment to equality and non-discrimination. In pursuit of creating a supportive and inclusive workplace environment, we have introduced the Gender Reaffirmation & Leave Policy for individuals from the Transgender Communities. This policy outlines provisions of financial and wellbeing support rendered by Vedanta during the gender reaffirmation process. As on FY 2024, Vedanta has more than 40 Transgenders working in various roles across the organisation majorly in business partner workforce. Women CXOs in making – V-Lead Vedanta’s flagship Women Leadership Development Programme V-LEAD is focussed to create a strong pipeline of women CXOs across functions, include them in decision-making bodies and create role-models which can act as inspiration. Winspire A groundbreaking initiative recently united women from across Vedanta to celebrate and acknowledge their achievements and contributions. This event underscored Vedanta’s dedication to fostering a diverse workforce. It featured enriching panel discussions, insightful dialogues on Leadership Excellence, and discussions on organisational culture, reinforcing our commitment to gender parity within the organisation. Talented women leaders from experience bracket and specialisation and expertise are groomed for leadership positions 100+ Vedanta’s senior leaders provide ongoing mentorship to nurture the personal and professional growth of selected candidates 25 V-Lead Leaders were rewarded with the prestigious Chairman Award for exemplary contribution to business growth and performance 25% V-Lead Leaders elevated to higher roles through Growth Workshops, ACT-UP, and other Talent Initiatives 60% Women across Vedanta came together to celebrate and honour their achievements and contributions 150 Integrated Report and Annual Accounts 2023-24 88 VEDANTA RESOURCES LIMITED Role model campus minds Role Model Campus Minds is a groundbreaking initiative aimed at recognising, elevating, and showcasing our brightest talents with 3-7 years of experience. In this inaugural initiative, a group of young leaders has been identified and placed in impactful roles across various functions and businesses. Recognised for their exceptional potential, these individuals have been paired with CXOs as mentors to facilitate accelerated growth and unlock their true capabilities. These roles encompass cross-business and cross-functional movements, offering a comprehensive growth platform and preparing them for future CXO positions. Professional leadership and collaborative decision- making As a professionally managed organisation, Vedanta operates within a strong management framework, overseen by an Executive Committee that makes collective decisions at both the company and business unit levels. Each business unit operates independently under the leadership of its CEO, promoting a federated operating structure. Cultivating excellence: Recognition and rewards Vedanta recognises the significance of keeping the workforce motivated and enthusiastic to drive organisation’s long-term success. We have implemented transparent schemes and adopted a well-defined methodology to acknowledge the efforts of our employees and business partners. Our best-in-class people practices and globally benchmarked reward programmes keep them inspired and incentivised to deliver their best. Our management actively acknowledges individuals who exceed expectations in contributing towards business performance and objectives. These recognitions include the Chairman Individual Awards, Chairman Award for Business Partners, Leadership Excellence Award, Sustainability Award, Chairman’s Discretionary Award, Business Performance-based Incentive Schemes, and Employee Stock Options Scheme. We ensure comprehensive coverage through our employee stock option scheme, which also includes campus hires, fostering the growth of young talent and their contribution to overall business performance. Identified and elevated into different roles aligned with their unique aspirations. 117 leaders Selected leaders are women 30%+ Identified and given elevated impactful roles 67 young leaders Leaders representing the Operations and other Technical Domains 60% High-performing employees benefit from incentive schemes, development programmes, and competitive compensation. Our appraisal and compensation programmes integrate an ESG element, aligning employee performance with safety, sustainability, and carbon footprint reduction. Our world- class people practices and globally benchmarked reward programmes ensure that our employees remain motivated to consistently deliver their best. Exemplary talent management practices We are committed to making a meaningful impact, prioritising both business delivery and the growth of our people. This ethos is ingrained in all our initiatives. V-Desire V-Desire stands as a pioneering initiative offering individuals demonstrating passion and drive a unique platform to propose ideas for projects and roles where they can contribute uniquely through their experience and expertise. Individuals have the opportunity to spearhead and execute projects aligned with their visions. The journey commenced with over 700 leaders expressing interest, each presenting unique ideas, projects, and role aspirations. A structured selection process ensued, assessing the viability of proposed ideas, performance, and potential. Shortlisted candidates presented the “what” and “how” of their aspirations to a senior panel comprising internal leaders and external industry experts. Moving forward, each selected leader will receive dedicated support. CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT People and Culture 89 Ex-defence hires workshop This initiative is crafted to leverage the distinctive skills and experiences of former defence personnel, identifying exceptional individuals for leadership roles. Through structured evaluation processes and workshops, it aims to pinpoint and elevate the most promising candidates. These individuals are subsequently offered mentorship to further cultivate their leadership abilities. The initiative honours ex-defence hires’ service and enriches leadership across sectors by recognising promoting the best candidates. Executive education & C-suite coaching In collaboration with ISB, we introduced a bespoke executive education initiative, seamlessly integrating both in-person and virtual learning experiences,. Tailored with specialised modules for our executives, this programme ensured precise development closely aligned with organisational goals. This hybrid learning model enabled participants to gain invaluable insights, foster collaboration, stimulate innovation, and refine their strategic leadership capabilities. Undergone the hybrid programme in the inaugural batch with more batches are planned in the coming financial year 35 leaders Emerging women leaders Gender diversity is vital for innovation and success in any organisation that further elevated by our “Emerging Women Leaders Programme.” Launched to nurture high-potential women in mid and senior roles, this initiative aims to drive superior business performance and lead transformational change. The programme boasts a well-balanced group, with 49% from Operations/Technical domains and 51% from Enabling functions. Notably, 30% of these women have taken on cross-Business/Function/Location roles, demonstrating our commitment to fostering well-rounded leaders. High-potential women were selected through a structured process and promoted to significantly elevated roles across various business units 70+ onboarded across businesses & functions with a 40% gender diversity 1,800 freshers from 150+ premier campuses Senior CXOs were Augmenting their professional growth journey Paired with internationally acclaimed executive coaches Onboarding top talent for entry-level roles Attracting top talent from leading universities across various fields while ensuring a healthy gender and geographical balance is a Group priority. Providing suitable roles with business relevance, mentorship, and best-in- class rewards, including ESOPs, coupled with accelerated career growth through flexible cross-business and cross- functional mobility, is essential for offering rapid career advancement to young professionals. Talent development initiatives Recruitment from remote regions: Implementing the V-ENGAGE project to recruit young talent from underrepresented areas such as the North-East, J&K, Leh, etc. Minority representation: Achieving 15% minority state and community representation in the overall talent pool Leadership pipeline from premier institutions: Continuously sourcing talent from top institutions like IITs and IIMs for the Vedanta Leadership Development Programme (VLDP) Comprehensive development programme: Providing participants with business and functional rotations, mentorship from CXOs, and fast-track growth opportunities with rigorous evaluations Chairman’s Young Leader Programme: Offering a unique opportunity for select VLDP participants to work and learn directly from the Chairman for a short period Integrated Report and Annual Accounts 2023-24 90 VEDANTA RESOURCES LIMITED Appreciation and awards: Our Subsidiary, Vedanta Limited has been identified as Kincentric Best Employer for 2 years in a row, entering the coveted Best Employer Club YUVA (Young Upcoming Vedanta Achievers) A comprehensive induction programme is organised for all campus hires joining Vedanta, featuring interactions with the Leadership Team, Business CEOs, Functional Heads, and Industry Experts. They share their experiences and expectations, fostering a deeper understanding of the organisation. The programme includes business and functional sessions, site visits, CSR activities, and Campus To Corporate programmes to provide a holistic view of the organisation and its operations. V-Campus A 12-month detailed programme, complementing YUVA, offers every new campus hire a single digitally-driven platform. This platform assists in steering their performance with appropriate anchoring, ensuring continuous engagement, learning opportunities, and recognition based on measurable KPIs. Vedanta has once again been honoured as a Best Employer India 2023 by Kincentric, securing a place in their elite Best Employer Club, alongside the top 16 companies out of over 60 participants Received special recognition as India’s Best Employers Among Nation- Builders 2023. TSPL was ranked among the top 25 companies in the Manufacturing category 13 leaders from Vedanta have been named in the Top 100 Great Managers in the Great Manager Awards-2023 by the Economic Times & People Business. Cairn, VLL, BALCO, Sesa Goa, Sterlite Copper, and Runaya have been recognised as “Companies with Great Managers,” among the Top 50 Companies from over 175 participating organisations Vedanta achieved the Gold standard in the Healthy Workplace Award by Arogya World in its inaugural attempt, showcasing industry-leading practices for Employee Health & Well-Being. The award is based on a rigorous audit measuring a range of parameters Fortune India has acknowledged Vedanta as a Top 10 Future-Ready Workplace among 200+ leading organisations, after analysing key metrics such as Culture, Leadership, Performance, Innovation, Resilience, and Sustainability Vedanta Group has been listed among the Top 10 Happiest Workplaces in the Happiness & Wellbeing Awards by Economic Times HR World, standing out among over 100 nominations. BALCO, ESL, TSPL, HZL, Cairn, and Sesa Goa secured positions in the top 30 organisations Recognised as one of the Best Companies to work for in 2023 by Great Place to Work CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT People and Culture 91 Unleashing potential through V-Desire initiative CASE STUDY #1 Renowned as a talent powerhouse in the industry, we advocate for “Growth from within” as our guiding philosophy, propelling our rapid expansion. Central to our ethos is a culture that empowers individuals to realise their full potential, epitomised by the V-Desire initiative. This groundbreaking programme provides a platform for passionate individuals to innovate, drive business value, and assume elevated roles and projects aligned with their aspirations. Engaging over 700 individuals through an expression of interest, V-Desire integrated a unique ideation survey crafted by our global advisory partner. Following a rigorous 3P assessment framework (Performance, Pedigree, Potential), 350 candidates were shortlisted, with 200+ advancing to showcase their ideas to an exclusive panel. Led by Senior Leaders, discussions assessed candidates’ enthusiasm and ambition across domains like Innovation Projects, Digital & AI, Sustainability & ESG, among others. Spanning 8 weeks with over 70 hours of panel evaluations, the process involved dynamic discussions with Business CEOs and Functional CXOs. Ultimately, over 100 leaders were identified to spearhead aspirational roles and projects across Vedanta, exemplifying our commitment to nurturing impactful career journeys. Driving excellence in people practices CASE STUDY #2 Our commitment to sustainable business practices, employee empowerment, and community upliftment has garnered us numerous prestigious awards. This year, we proudly received the “Best Employer” accolade for the second consecutive year from Kincentric, a Spencer Stuart company renowned for unlocking the potential of people and teams to drive business success. This recognition underscores our holistic approach to People Practices, Vibrant Culture, and Visionary Leadership, setting us apart as a global leader in stakeholder opinion. Of the 100+ leaders identified through V-Desire Women Hi-Potential Leaders 30% Exhibit 1 V-Desire Panel Interaction Rounds Exhibit 2 V-Desire Chairman Townhall Leaders in Enabling Functions 42% Leaders in Operations/Technical Domain Cross Business, Location & Function Changes 58% 20% Earning the title of “Best Employer” is a journey guided by a robust evaluation framework assessing an organisation’s unique attributes and differentiators. This framework evaluates Intent, Design, and Experience, gauging the alignment of business leaders’ future vision, the effectiveness of people processes, and the employee experience. Joining the elite “Best Employer Club” offers us a platform to engage, share best practices, and collaborate with industry experts, paving the way for continual advancements. This award celebrates our harmonised approach of Intent, Design, and Experience, reaffirming our commitment to fostering a culture of excellence that drives competitive advantage through people while prioritising People, Profit, and Planet. Integrated Report and Annual Accounts 2023-24 92 VEDANTA RESOURCES LIMITED Exhibit 3 Winners - Kincentric Best Employer 2023 93 FINANCIAL STATEMENT STATUTORY REPORTS CORPORATE OVERVIEW People and Culture MANAGEMENT DISCUSSION AND ANALYSIS Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED 94 MARKET REVIEW Global Economy: The global economy remained resilient in 2023 despite the escalation of geo-political conflicts, higher-for-longer interest rates and demand slowdown. High interest rates have also speculated a period of recession in the major economies like the US and the EU, which have been outdone in CY2023. After projecting global economic growth of 3.1% in CY2023 in its Jan 2024 outlook, the IMF has upgraded its projection to 3.2% in its April 2024 outlook[1]. Global inflation is receding at a faster pace than anticipated. It declined from 8.7% in CY2022 to 6.8% in CY2023 and is expected to further decline to 5.9% in CY2024, according to IMF [1]. Though headline inflation witnessed a sustained decline from the unprecedented peaks, core inflation has maintained its sticky nature and required strict vigilance of the central banks to bring it down to the desired levels. Inflation levels in most of the countries remained above the target levels which compelled the central banks to maintain their stance on monetary tightening for the year. The global economy also dealt with the challenge of high borrowing costs due to the persistent high interest rates. However, the prospect of further relaxation of financial conditions has prompted an upswing in equity markets, although uncertainty persists regarding the timing of interest rate reductions. Financial market sentiments have been fluctuating, with evolving perspectives on an early pivot by central banks in advanced economies [10]. Central banks are exercising caution and have stalled the interest rates to fully transmit the impact of tight monetary policy. This has led to subdued commodity demand and a softening in prices in CY2023. The global manufacturing industry focussed on the high tech and energy transition technology resulting from the policy push from the respective governments. As a result, the metal demand has been majorly driven by the energy transition activities and is expected to provide a cushion to the economic slowdown. The global Manufacturing PMI has been under contraction in CY2023 but has indicated stabilisation towards the start of CY2024. Additionally, commodity prices have remained relatively stable in CY2023 despite the ongoing economic slowdown in China and Europe and geo-political challenges in Europe and the Middle East. Global trade growth was nearly stagnant in CY2023 due to elevated inflation and a sluggish pace in global industrial production. Geoeconomic fragmentation is expected to exert continued pressure on global trade and cause additional price volatility. The IMF expects global trade to grow at 3.0%, y-o-y, in CY2024 before improving marginally to 3.3%, y-o-y, in CY2025. [1]. 95 CORPORATE OVERVIEW FINANCIAL STATEMENT Management Discussion and Analysis STATUTORY REPORTS Geo-political challenges and climate change have impacted the supply chain Apart from the ongoing Russia-Ukraine war, the intensifying conflict between Israel and Gaza has become an additional source of concern for the global economy. Furthermore, the trade disruption caused by the crisis in the Red Sea route, responsible for 12-15% of the global trade flow and 20% of the container trade, is leading to delays and heightened logistic costs [2]. The trade flow between the European and Asian counterparts has been impacted majorly by the significant hike in logistics costs. This has kept the commodity prices volatile in Q4 CY2023 and in Q1 CY2024. The climate change has also impacted the supply chain. The Panama Canal route is witnessing a low water level. According to the United Nations, low water levels have caused a decrease of 36% in ship transits compared to a year ago and are almost 62% down from two years ago [2]. On top of that, the El Niño effect also poses a threat to agricultural commodities which can shoot up the inflation causing the interest rates to remain high for a longer period. The Chinese economy continues with the ailing real estate sector Despite the failed recovery of the real estate sector, Chinese economy has grown by 5.2% in CY2023 which was in line with the government’s target of 5%. As the rest of the world is dealing with high inflation, the Chinese economy has been experiencing a period of deflation. After the unfolding of the property sector status, the dwindling consumer sentiments persisted in CY2023. The People’s Bank of China has reduced the interest rates lower with additional support to the vulnerable sectors. China’s property sector has continued with its downward trend in CY2023. While the construction activity has remained subdued, the real estate prices have remained elevated and did not decline much [3]. The Chinese government has extended the support like expanding the financial support to the property developers, relaxation of the loan defaults by the home buyers, relaxation of the rules to boost the home purchase, and so on. However, the stimulus packages announced by the government are yet to reflect on the indicators. On top of the domestic consumption, the slowdown in the export market has also impacted the Chinese economy’s Mar-24 World's Retail Inflation in 2023 (%Y-o-Y) Central Bank Interest Rate Hikes (In basis Points) S&P Global Manufacturing PMI (%) -2 0 0 100 200 300 325 300 225 200 200 60 400 2 4 6 8 10 12 40 45 50 55 60 65 Jan-23 EU UK USA South Africa Australia India Mar-23 May-23 Jul-23 Sep-23 Nov-23 Jan-24 China World EU EU India India UK China USA USA Jan-23 Feb-23 Mar-23 Apr-23 May-23 Jun-23 Jul-23 Aug-23 Sep-23 Oct-23 Nov-23 Dec-23 Jan-24 Feb-24 Mar-24 40 90 140 Mar-23 Mar-22 Jun-23 Jun-22 Sep-23 Sep-22 Dec-23 Dec-22 Dec-21 Mar-24 World Bank Commodity Index (Base: Dec-2021) (%) Energy Agriculture Fertilisers Metals & Minerals Q4/CY22 Q1/CY23 Q2/CY23 Q3/CY23 Q4/CY23 Source: CEIC [4], S&P Global [7], World Bank [8] 96 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED growth. Chinese domestic demand has also witnessed a shift from conventional infrastructure-related demand to energy transition demand. The growth of renewable energy capacity, EV production and sales and other structural changes have initiated a structural change in the economy. The IMF has projected the Chinese economy is expected to witness a slowdown and grow at 4.6% in CY2024 and 4.1% in CY2025 [1]. China’s central banks announced cutting the reserve requirement ratio (RRR) for all banks by 50 basis points (bps) as part of a slew of measures to support the fragile economy. The US economy remains resilient The US economy has performed better than expected in CY2023 amid a high level of uncertainty and high interest rates maintained by the US Federal Reserve. A tight labour market and healthy consumer spending have supported the economic growth. Retail inflation also came down considerably from its CY2022 peak but remained under observation as it witnessed a slight upward trend towards the end of CY2023. The stickiness of the core inflation has kept the interest rate high and impacted the business investment and the real estate sector’s performance in CY2023. Source: IMF Country Focus [3], CEIC [4] The US economy was previously expected to face challenges due to the impact of the prolonged high interest rate, but the economy has been responding with resilience. The Fed has kept the interest rate unchanged after the increase in July 2023. The market had anticipated aggressive rate cuts post December 2023 announcements, but that expectation was diffused after the Fed Chair’s comments to keep the decision longer for the need of the economy around the ongoing global uncetainty. After growing at the rate of 2.5% in CY2023, IMF projects that the US economy will further grow by 2.7% in CY2024 before slowing down to 1.9% in CY2025. [1]. The European economy stagnates but falling inflation keeping hopes up The European Union managed to avoid the recession in CY2023, but the block is struggling to attract growth due to the contraction of Germany, Austria, Estonia, Finland, Hungary, Ireland, Netherlands, and Sweden. The hike in energy prices in CY2022 led to the closure of the manufacturing units across Europe which continue to suffer due to the slowdown in demand. Among the major economies, Germany has witnessed a setback as the GDP growth on a y-o-y basis contracted in three consecutive quarters in CY2023 from Q2 to Q4. Moreover, the European Central Bank has kept the interest rates high and is expected to maintain the monetary tightening to control the inflation level. Core inflation has been coming down, but the geopolitical and supply chain uncertainty is expected to keep consumer sentiments restricted. Despite challenges, the European economy has resisted the recession supported by falling inflation levels with a tight labour market supporting private consumption. The expectations in CY2024 from the European economy are better than that of CY2023 as the worst impact is likely to be over. After witnessing a marginal growth of 0.4% in CY2023, the IMF projects that the Euro Area will grow at 0.8% in CY2024 and 1.5% in CY2025. Germany which is expected to have contracted by 0.3% in CY2023 will grow by 0.2% in CY2024 and 1.3% in CY2025 [1]. Global Economy Outlook The global economy is expected to sustain its resilience in 2024. However, the economic outlook for CY2024 will be impacted by the heightened geopolitical unrest which could raise the risks of supply disruptions, elevate energy and commodity prices, and pose downside risks to the global economy. Moreover, the performance of the Chinese economy has also been a major concern. The Chinese government’s efforts to support the property sector and financial market and encourage consumer spending might need more time to indicate any significant improvement. The slowdown in inflation has raised the anticipation of interest rate cuts but most of the central banks are expected to hold it till H2 2024. After successful economic performance, it is expected that the impact of high inflation rates will not be reflected in CY2023 and CY2024 might witness its completion. Global headline inflation is projected to decrease to 5.9% in CY2024 and further to 4.5% in CY2025 [1]. Chinese Real Estate Sector (%) China's Foreign Trade Growth (% Y-o-Y) -30 -20 -10 0 10 20 30 20 40 60 80 100 120 140 Real estate sales Real estate starts Median 70-city new house price Jan-22 Jan-23 2018 0 2019 2020 2021 2022 2023 Mar-22 Mar-23 May-22 May-23 Jul-22 Jul-23 Sep-22 Sep-23 Nov-23 Nov-22 Jan-24 Mar-24 Export Import CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT 97 Management Discussion and Analysis The IMF has upgraded the global GDP forecast for CY2024 to 3.2% from the earlier projection backed by the better-than- expected performance of the US and other large emerging markets and developing economies in CY2023 [1]. Source: IMF Country Focus [3], CEIC [4] Indian Economy Indian economy came out as a top performer in FY 2024 despite the domestic challenges of high inflation and subsequent monetary tightening, and setbacks in the export market due to the global slowdown. As per the second advance estimates released by the National Statistical Office (NSO), real GDP is expected to grow by 7.6% in FY 2024 as against 7.0% in FY 2023 [11], driven by robust domestic demand, moderate inflation, a stable interest rate environment, and strong investment activities. Furthermore, India also concluded a successful presidency of G20, showcasing India’s capability to cater to global needs and providing a platform to address global concerns. Globally, high inflation and interest rates, coupled with supply surplus, have exerted significant pressure on demand. However, India’s robust government spending on infrastructure development and positive consumer sentiments have not only provided a cushion but also boosted economic growth. Despite the persistent monetary tightening by the RBI, the domestic demand has remained resilient and supportive. Source: S&P Global, RBI, CMIE S&P Global PMI FY 2024 Global GDP Growth (% Y-O-Y) Demand Growth in FY 2024 Capital Expenditure by Govt. (` lakh crore) India's Trade Growth 50 -1 -1 1 2 3 4 5 6 7 8 9 -30% -20% -10% 0% 10% 20% 7.8 6.8 6.5 5.2 4.6 4.1 2.5 2.7 1.9 0.4 0.8 1.5 1.9 0.9 1 0.9 0.7 1.4 0.3 0.2 1.3 3.2 3.2 3.2 52 54 56 58 60 62 64 Light Motor Vehicle Sales 6.1% 7% 12.3% 18.0% 7.4 9.5 16.8% 28.4% 11.1 41.6% Electricity Generation Steel Consumption Passenger Air Traffic Electric Vehicle Sales Mar-24 Mar-24 Jan-23 FY 23 (Actual) FY 24 (RE) FY 25 (BE) Jan-23 Mar-23 Mar-23 May-23 May-23 Jul-23 Jul-23 Sep-23 Sep-23 Nov-23 Nov-23 Jan-24 Jan-24 Manufacturing PMI Export Service PMI Import India China US Euro Area Japan France Germany World 2023 2024 2025 98 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED India’s manufacturing sector has maintained its expansionary state in CY 2023 with consistent positive levels of new orders, according to the PMI survey. At the start of CY 2024, international sales have also witnessed a pickup creating a positive sentiment towards the export market. The positive response of domestic and a hint of global demand expansion have fuelled the expectations from CY 2024. The Index of Industrial Production (IIP) shows that the output of India's industry grew by 6.1% in the first three quarters of FY 2024 compared to 5.5% in the corresponding period of last year. The performance in January 2024 and February 2024 has also been moderate with y-o-y growth of 4.1% and 5.7%, respectively [11]. From April 2023 to February 2024, mining and quarrying activity has contributed to 8.2%, y-o-y, followed by electricity which grew by 7.5%, y-o-y, and manufacturing which grew by 5.01%, y-o-y. India’s foreign trade has witnessed a contraction in FY 2024. India’s overall exports including merchandise and services in FY 2024 are estimated to be US$ 776.68 billion, which is US$ 0.28 billion higher than 2023. Overall imports in FY 2024 are estimated to be US$ 854.8 billion, witnessing a drop of -4.8% over FY 2023. [12]. India’s POL product import has witnessed a drop of -14.2% in FY 2024 as compared to FY 2023 [5]. India’s crude oil consumption has been robust in CY 2023, OPEC has indicated that India’s crude oil import in CY 2023 will reach to record high of 4.7 mbpd from 4.6 mbpd in CY 2022 [6]. The drop in crude oil prices in CY 2023 as compared to the CY 2022 level is indicating a contraction in the import value. India’s non-POL export has also witnessed a drop of -1.7% in FY 2024 from FY 2023 levels [5]. On the brighter side, the gross GST collection witnessed a healthy 11.8% y-o-y growth, reaching ` 120.18 lakh crore during FY 2024 period as against ` 18.06 lakh crore collected in the same period of the previous year (FY 2023) [13]. Despite repetitive food price shocks and volatility in fuel prices, CPI inflation is on a downward trajectory and eased to 4.85% in March 2024 from 5.09% in February 2024 [11]. Core inflation which has remained sticky in CY2022 has come down to the RBI’s tolerance limit. The RBI keeps the policy repo rate unchanged at 6.50% and retains the CPI inflation forecast at 5.4% in FY 2024 and expects to drop down to 4.5% in FY 2025[10]. Fiscal and monetary policy spurring economic growth A conducive domestic policy environment will continue to improve the business environment, promote industrial activity, accelerate manufacturing, create economies of scale, and make India an integral part of the global value chain. With the rollout of schemes like PLI and FAME and the government’s push for infrastructure development, India is now one of the attractive destinations for foreign investments. Bilateral agreement to facilitate trade opportunities has expanded the markets for Indian MSMEs and businesses. The India- Middle East-Europe Economic Corridor announced at the G20 Summit has not only brought focus to India’s importance in the global economy but has also provided an opportunity to diversify the logistic constraints. In the interim budget of FY 2025, the government of India continued with its robust spending on capital expenditure, which grew by 11.1% to ` 11.1 lakh crore for FY 2024-25. The primary focus of the government has been to further strengthen the infrastructure of the country. Implementation of the economic railway corridor programmes under the PM GatiShakti scheme will further strengthen the connectivity and logistic capabilities. Efforts towards green energy by supporting the installation of renewable energy capacity and reducing high carbon intensity fuel have also been made. The RBI has been vigilantly monitoring India’s economic conditions under the influence of global upturns and has successfully provided stability in the monetary environment of the country. Amid the volatility of the US Dollar Index, the RBI has successfully steered the monetary policy to maintain stability in the economy and reduced the risk associated with external factors. Indian Economy Outlook India’s economic outlook remains positive and it is poised to become the third-largest economy in the world, with a GDP of US$ 5 trillion by FY 2028. The support of infrastructure spending, efforts to build a manufacturing ecosystem, and strong consumer and business sentiments have become the fundamental drivers of the growth. The global concerns related to the supply chain disruption, high logistics cost, escalation of the geo-political crisis and volatility in global financial markets pose a downside risk, however, the Indian economy is well-positioned to navigate forthcoming uncertainties due to its robust domestic demand. The RBI is expecting inflation to moderate to an average of 4.5% in FY 2024-25, under the upper tolerance limit of 6% but still above the comfort level of 4%. The IMF expects India’s GDP to grow at 7.8% in FY 2024 in April 2024 World Economic Outlook, an upward revision from the 6.7% projected in the January 2024 economic outlook [1]. The GDP growth outlook for FY 2025 and FY 2026 is expected to be 6.8% and 6.5%, respectively [1]. India’s growth outlook by domestic and global agencies Agency/Institution Month of Release FY 2024 FY 2025 NSO, MOSPI (GoI) February 2024 7.6% 7.0% RBI April 2024 7.3% 7.0% IMF April 2024 7.8% 6.8% World Bank April 2024 7.5% 6.6% Asia Development Bank (ADB) April 2024 7.6% 7.0% S&P Global Ratings March 2024 7.6% 6.8% Fitch Ratings March 2024 7.8% 7.0% Nomura March 2024 6.7% 6.2% OECD February 2024 6.3% 6.2% Source: CMIE References 1. IMF, WEO, April 2024 | 2. https://news.un.org/en/story/2024/01/1145902 3. https://www.imf.org/en/News/Articles/2024/02/02/cf-chinas-real-estate-sector-managing-the-medium-termslowdown#:~:text=With%20 the%20property%20downturn%20in,in%20the%20last%20three%20decades. 4. CEIC | 5. CMIE | 6. OPEC | 7. S&P Global | 8. World Bank, The Pink Sheet | 9. CMIE | 10. RBI, Monetary Policy Committee 11. MOSPI | 12. Ministry of Commerce & Industry | 13. Ministry of Finance CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT 99 Management Discussion and Analysis FINANCE REVIEW Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED 100 Executive summary: We had a strong operational and financial performance in FY 2024 amidst the challenges faced due to macroeconomic uncertainty. The company continues to focus on controllable factors such as resetting cost base through diverse cost optimisation initiatives, disciplined capital investments, working capital initiatives, marketing initiatives & volume with strong control measures to ensure safe operations across businesses within framed government and corporate guidelines. In FY 2024, we recorded EBITDA of US$ 4.7 billion, 2% higher YoY and robust adjusted EBITDA margin1 of 32%. (FY 2023: US$ 4.6 billion, margin 29%). Cost savings resulted in increase in EBITDA by US$ 287 million, driven by Aluminium partially offset by Iron Ore and Zinc business. Market factors resulted in decrease in EBITDA by US$ 368 million. This was primarily driven by decrease in output commodity prices partly offset by softening of input commodity prices. Gross debt as on 31 March 2024 was US$ 14.3 billion, a decrease of US$ 1.1 billion since 31 March 2023. This was mainly due to deleveraging of US$ 1.6 billion at Vedanta Resources Standalone and US$ 0.4 billion at HZL partly offset by increase in debt of US$ 0.9 billion at THL Zinc Ventures. Net debt as on 31 March 2024 was US$ 12.3 billion, decrease by US$ 0.4 billion since 31 March 2023 (FY 2023: US$ 12.7 billion), primarily due to cash flow from operations and working capital release which is partially offset by capex outflow and return to shareholders. The balance sheet of Vedanta Resources Limited continues to remain strong with cash & cash equivalents, of US$ 2.0 billion and Net Debt to EBITDA ratio at 2.6x (FY 2023: 2.8x). Consolidated operating profit before special items Operating profit before special items increased by 5% in FY 2024 to US$ 3.3 billion. This was mainly due to softening of input commodity prices coupled with cost savings, one time arbitration award in Oil & Gas business partially offset by slip in commodity prices primarily of aluminium, zinc and brent and strategic hedging gain recognised in previous year. 1. Excludes custom smelting at copper business. Consolidated operating profit summary before special items (US$ million, unless stated) Consolidated operating profit before special items FY 2024 FY 2023 % change Zinc 1,268 1,968 (36%) - India 1,239 1,788 (31%) - International 29 180 (84%) Oil and Gas 768 500 54% Aluminium 876 414 - Power 52 46 13% Iron Ore 161 91 77% Steel (22) (9) - Copper India (35) (25) 40% Others 278 211 32% Total EBITDA 3,347 3,196 5% CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT 101 Management Discussion and Analysis CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT Consolidated operating profit bridge before special items: (US$ million) Operating profit before special items for FY 2023 3,196 Market and regulatory: US$ (368) million a) Prices, premium / discount (1,553) b) Direct raw material inflation 1,042 c) Foreign exchange movement 143 Operational: US$ 244 million d) Volume (43) e) Cost savings 287 f) Others 175 Depreciation and amortisation 100 Operating profit before special items for FY 2024 3,347 a) Prices, premium/discount Commodity price fluctuations have a significant impact on the Group’s business. During FY 2024, we saw a net negative impact of US$ 1,553 million on operating profit due to commodity price fluctuations. Zinc, lead and silver: Average zinc LME prices during FY 2024 decreased to US$ 2,475 per tonne, down 25% YoY; lead LME prices increased to US$ 2,122 per tonne, up 1% YoY ; and silver prices US$ 23.55 per ounce, up 10% YoY. The cumulative impact of these price fluctuations decreased EBITDA by US$ 628 million. Aluminium: Average aluminium LME prices decreased to US$ 2,200 per tonne in FY 2024, down 11% YoY, this had a negative impact of US$ 682 million on EBITDA. Oil & Gas: The average Brent price for the year was US$ 83 per barrel, down 13% YoY. This had negative impact on EBITDA by US$ 231 million. Iron & Steel: Lower realisations negatively impacted EBITDA at ESL by US$ 121 million. Higher realisations positively impacted EBITDA at Iron Ore by US$ 59 million. b) Direct raw material inflation Prices of key raw materials such as imported alumina, thermal coal, carbon and coking coal have decreased in FY 2024, positively impacting EBITDA by US$ 1,042 million, primarily at Aluminium, Zinc and Iron & Steel business. c) Foreign exchange fluctuation Key exchange rates against the US dollar: Average year ended 31 March 2024 Average year ended 31 March 2023 % change As at 31 March 2024 As at 31 March 2023 Indian rupee 82.78 80.27 3.13% 83.34 82.16 d) Volumes Lower volume led to decrease in EBITDA by US$ 43 million by following businesses: Oil & Gas (negative US$ 77 million): In FY 2024, sales reduced from 91 kboepd to 82 kboepd ZI (negative US$ 61 million): In FY 2024, MIC sales lowered to 209 kt, down 24% YoY Partly offset by: Aluminium (positive US$ 30 million): In FY 2024, Aluminium sector achieved sales of 2,357 kt, up 3% YoY Iron Ore (positive US$ 28 million): In FY 2024, Iron Ore Karnataka achieved sales of 5.9 million tonnes, up 19% YoY and Pig Iron achieved sales of 836 kt, up 23% YoY HZL (positive US$ 18 million): In FY 2024, HZL achieved silver sales of 746 tonnes, up 4% YoY. e) Cost savings Lower cost resulted in increase in EBITDA by US$ 287 million during FY 2024, primarily due to cost savings at Aluminium partially offset by higher cost at Iron Ore and Zinc business. f) Others This primarily includes one-time Oil & Gas arbitration award partially offset by strategic hedging gain recognised in previous year, impacting EBITDA positively by US$ 175 million. 102 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED Income statement (US$ million, unless stated) Particulars FY 2024 FY 2023 % Change Revenue 17,128 18,141 (6%) EBITDA 4,718 4,608 2% EBITDA margin (%) 28% 25% - EBITDA margin without custom smelting (%) 32% 29% - Special items 124 (178) Exploration cost written off (89) (30) - Depreciation and amortisation (1,282) (1,382) (7%) Operating profit 3,471 3,018 15% Operating profit without special items 3,347 3,196 5% Net interest expense (1,680) (1,307) 29% Interest cost-related special items - - - Other gains /(losses) (37) (79) (53%) Profit before taxation 1,754 1,632 7% Profit before taxation without special items 1,630 1,810 (10%) Income tax expense (837) (894) (6%) Income tax (expense)/credit (special items) (818) 100 - Profit for the year from continuing operations 99 838 (88%) Profit for the period/year from continuing operations before special items 793 916 (13%) Profit for the year from discontinuing operations (special items) - - - Profit for the period/year 99 838 (88%) Profit for the period/year without special items 793 916 (13%) Non-controlling interest 499 843 (41%) Non-controlling interest without special items 762 867 (12%) Attributable profit (400) (5) - Attributable profit without special items 31 49 (37%) Underlying attributable profit 45 87 (48%) Consolidated Revenue Revenue for the year was US$ 17,128 million, lower 6% YoY. This was primarily driven by lower output commodity prices primarily of aluminium, zinc and brent, partially offset by higher volume at Aluminium, Copper and Iron Ore business. (US$ million, unless stated) Consolidated revenue FY 2024 FY 2023 % Change Zinc 3,803 4,775 (20%) India 3,373 4,126 (18%) International 430 649 (34%) Oil & Gas 2,155 1,873 15% Aluminium 5,843 6,615 (12%) Power 743 838 (11%) Iron Ore 1,095 809 35% Steel 1,003 978 3% Copper India 2,383 2,179 9% Others 1 103 73 40% Total 17,128 18,141 (6%) 1 Includes FACOR, ASI, Malco Energy Limited, port business, Vedanta Display, Vedanta Semiconductor and eliminations of inter-segment sales. CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT 103 Management Discussion and Analysis Other gains/(losses) excluding special items Other gains/(losses) excluding special items for FY 2024 amounted to US$ (37) million, compared to US$ (79) million in FY 2023. Taxation The normalised ETR for FY 2024 is 44% compared to 41% in FY 2023 which is primarily on account of change in profit mix. FY 2024 includes one-time non-cash expense of US$ 771 million on account of adoption of new tax regime at Vedanta Limited. Profit after tax (after special items) Profit after tax (after special items) was US$ 99 million in FY 2024 compared to US$ 838 million in FY 2023. This reduction was mainly due to one-time non-cash tax expense of US$ 771 million on account of adoption of new tax regime at Vedanta Limited. Attributable profit after tax (before special items) Attributable PAT before special items was US$ 31 million in FY 2024 compared to US$ 49 million in FY 2023. Fund flow post-capex The Group generated free cash flow (FCF) post-capex of US$ 746 million (FY 2023: US$ 1,610 million), mainly due to increased capex outflow and working capital investment. EBITDA and EBITDA Margin EBITDA for the year was US$ 4,718 million, 2% higher YoY. This was mainly due to softening of input commodity prices coupled with cost savings, one time arbitration award in Oil & Gas business which is partially offset by slip in commodity prices primarily of aluminium, zinc and brent and strategic hedging gain recognised in previous year. We maintained a strong double digit adjusted EBITDA margin1 of 32% for the year (FY 2023: 29%) Special items - Continued operations (included interest income related and others) In FY 2024, special items stood at US$ 124 million. For more information, refer note[6] on special items is set out in financial statement. Net Interest The blended cost of borrowings was 10.2% for FY 2024 compared with 8.7% in FY 2023. Finance cost for FY 2024 was US$ 1,882 million, 21% higher compared to US$ 1,558 million in FY 2023, mainly on account of increase in blended cost of borrowings partly offset by decline in average borrowings. Investment income for FY 2024 stood at US$ 202 million, 20% lower compared to US$ 252 million in FY 2023. This was mainly due to decrease in average investments partly offset by mark to market movement. (US$ million, unless stated) FY 2024 FY 2023 % change Key drivers EBITDA margin % FY 2024 EBITDA margin % FY 2023 Zinc 1,722 2,418 (29%) 45% 51% - India 1,638 2,177 (25%) Lower LME 49% 53% - International 84 241 (65%) Lower volume & lower LME 20% 37% Oil & Gas 1,184 972 22% One-time Cairn arbitration award partly offset by lower LME 55% 52% Aluminium 1,167 699 67% Lower CoP 20% 11% Power 117 114 3% 16% 14% Iron Ore 200 124 61% Higher volume 18% 15% Steel 27 39 (31%) 3% 4% Copper India (9) (7) (20%) (0%) (0%) Others 2 310 249 25% - - Total 4,718 4,608 2% EBITDA margin 28% 25% Adjusted EBITDA margin1 32% 29% 1. Excludes customs smelting at Copper business. 2. Includes FACOR, ASI, Malco Energy Limited, port business, Vedanta Display, Vedanta Semiconductor and eliminations of inter-segment sales. Consolidated EBITDA The consolidated EBITDA by segment is set out below: 104 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED Fund flow movement in net debt1 Fund flow and movement in net debt1 in FY 2024 are set out below. (US$ million, unless stated) Particulars FY 2024 FY 2023 EBITDA 4,718 4,608 Working capital movements 221 941 Changes in non-cash items 12 (15) Sustaining capital expenditure (667) (725) Movements in capital creditors 12 28 Sale of property, plant and equipment 23 16 Net interest (including interest cost- related special items) (1,697) (1,315) Tax paid (414) (689) Expansion capital expenditure (1,462) (1,239) Free cash flow (FCF) post capex1 746 1,610 Dividend paid to equity shareholders - (16) Dividend paid to non-controlling interests (967) (2,523) Dividend Received 5 2 Payment for acquiring non-controlling interest - (2) Proceeds from sale of stake in subsidiaries 904 - Others (306) (115) Movement in net debt 382 (1,044) 1 Includes foreign exchange movements The maturity profile of term debt of the Group (totalling US$ 13.8 billion) is summarised below: Particulars As at 31 March 2024 As at 31 March 2023 FY 2025 FY 2026 FY 2027 FY 2028 & beyond Debt at Vedanta Resources 5.5 7.2 0.9 0.9 1.8 1.9 Debt at subsidiaries 8.3 6.6 1.8 2.2 2.0 2.3 Total term debt 13.8 13.8 2.7 3.1 3.8 4.2 Cash and liquid investments stood at US$ 2.0 billion at 31 March 2024 (31 March 2023: US$ 2.6 billion). The portfolio continues to be invested in debt mutual funds, and in cash and fixed deposits with banks. Debt, maturity profile and refinancing Gross debt at US$ 14.3 billion (FY 2023: US$ 15.4 billion). This was mainly due to deleveraging of US$ 1.6 billion at Vedanta Resources Standalone and US$ 0.4 billion at HZL partly offset by increase in debt of US$ 0.9 billion at THL Zinc Ventures. During FY 2024, Net Debt decreased from US$ 12.7 billion to US$ 12.3 billion, primarily due to cash flow from operations and working capital release which is partially offset by capex outflow and return to shareholders. Our total gross debt of US$ 14.3 billion comprises: US$ 13.8 billion as term debt (March 2023: US$ 13.8 billion); US$ 0.2 billion of short-term borrowings (March 2023: US$ 1.0 billion); and US$ 0.3 billion of working capital loans (March 2023: US$ 0.5 billion) Going Concern The Group has prepared the consolidated financial statements on a going concern basis. The Directors have considered a number of factors in concluding their going concern assessment. The Group monitors and manages its funding position and liquidity requirements throughout the year and routinely forecasts its future cash flows and financial position. The key assumptions for these forecasts include production profiles, commodity prices and financing activities. Prior to current period, the last going concern assessment carried out for the period ended 30 September 2023 was approved by the Board of Directors in December 2023. The Directors were confident that the Group will be able to operate within the levels of its current facilities for the foreseeable future, that the Group will be able to roll-over or obtain external financing as required and that prices will remain within their expected range. Since then, while the other mitigating actions as highlighted in the period ended 30 September 2023 financial statements CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT 105 Management Discussion and Analysis remain available to the Group, several recent significant developments have had a positive bearing on the liquidity and company’s ability to continue as going concern. For more information, please refer to, Note 1(c) of the Consolidated Financial Statements]. Notwithstanding the uncertainties, the Directors have confidence in Group’s ability to execute sufficient mitigating actions. Based on these considerations, the Directors have a reasonable expectation that the Group and the Company will meet its commitments as they fall due over the going concern period. Accordingly, the Directors continue to adopt the going concern basis in preparing the Group’s consolidated financial statements and Company’s standalone financial statements. Covenant Compliance The Group’s financing facilities, including bank loans and bonds, contain covenants requiring the Group to maintain specified financial ratios. The Group has complied with all the covenant requirements up to and including 31 March 2024. The Directors of the Group are confident that the Group will be able to comply requisite covenants for the going concern period and will be able to execute mitigating actions [as per note 1(c) of the Consolidated Financial Statements] to ensure that the Group avoids, or secures waivers or relaxations for future period breaches, if any, of its covenants during the going concern period. Credit rating As on 31 March 2024, credit ratings of Vedanta Resources Limited is ‘CCC+ with stable outlook’. On 3 August 2023, S&P Global Ratings revised outlook of the ratings from ‘B- with stable outlook’ to ‘B- with negative outlook’. On 29 September 2023, the ratings were revised to ‘CCC with Watch Negative’ and on 13 December 2023 to ‘CC with Watch negative’. The long-term issuer credit ratings were further revised to ‘SD’ on 11 January 2024 while the ratings on the company’s bonds due in January 2024, August 2024 and March 2025 were revised to ‘D’ due to the successful completion of the liability management exercise to extend the maturities of three US$ denominated bonds as this transaction was considered distressed under S&P’s criteria. On 15 January 2024, the credit ratings were upgraded to ‘CCC+ with Stable outlook’ with the view that Vedanta Resources Limited has a more manageable debt maturity profile following the extension of three bond maturities in liability management exercise and the stable outlook reflects the high prospects that the company will meet its debt obligations. The Group remains in a very comfortable position to address all its debt maturities with a strong balance sheet, robust liquidity at its operating subsidiaries and strong track record of raising funds through relationship banks. The Group remains committed to maintaining a healthy liquidity, a low gearing ratio, deleveraging and strengthening our balance sheet. Balance Sheet (US$ million, unless stated) Particulars 31 March 2024 31 March 2023 Goodwill - 12 Intangible assets 84 64 Property, plant and equipment 13,452 12,786 Exploration and Evaluation Assets 282 284 Other non-current assets 2,527 3,220 Cash and liquid investments 1,959 2,765 Other current assets 4,026 4,180 Total assets 22,330 23,311 Gross debt (14,330) (15,358) Other current and non-current liabilities (8,848) (8,825) Net assets (848) (872) Shareholders’ equity (3,428) (3,348) Non-controlling interests 2,580 2,476 Total equity (848) (872) Shareholders’ (deficit)/equity was US$ (3,428) million at 31 March 2024 compared with US$ (3,348) million at 31 March 2023. Non-controlling interests increased to US$ 2,580 million at 31 March 2024 (from US$ 2,476 million at 31 March 2023). Property, plant and equipment (including Exploration and Evaluation Assets) As at 31 March 2024, PPE was at US$ 13,734 million (FY 2023: US$ 13,070 million). The increase of US$ 664 million was primarily driven by additions US$ 2,385 million (Aluminium division US$ 902 million, Zinc India US$ 456 million, Oil & Gas US$ 376 million, Zinc International US$ 257 million, Meenakshi US$ 136 million, ESL US$ 91 million), impairment reversal of US$ 51 million partly offset by depreciation charge US$ 1,282 million, FCTR loss~ US$ 216 million, disposals ~ US$ 191 million, and exploration cost written off ~ US$ 89 million. 106 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED Project capex (US$ million) Capex in progress Status Approved capex2 Spent up to FY 20233 Spent in FY 20243 Unspent as on 31 March 20244 Cairn India1 Mangala, Bhagyam & Aishwariya infill, OALP, ABH infill, RDG infill, Offshore infill etc. 904 337 246 321 Aluminium Sector Jharsuguda VAP capacity expansion and others Coal Mines (Jamkhani, Radhikapur, Kurloi, Ghoghrapalli, Sijimali) LanjigarhRefinery: 2 to 5 MTPA Balco smelter and VAP capacity expansion In progress In progress In progress In progress 237 1,079 641 1,068 13 87 277 106 98 42 236 379 126 951 128 583 Zinc India Mine expansion 2,077 1,850 13 214 Roaster (Debari) In progress 101 1 35 65 Others 386 132 21 233 Zinc International Gamsberg Phase II Project In progress 466 53 174 239 Iron Ore Project In progress 37 20 8 9 ESL 1.5 to 3 MTPA hot metal 349 88 45 216 Avanstrate Inc Furnace Expansion and Cold line repair 203 121 2 80 Facor 150 to 450 KTPA ferro chrome 318 - 17 301 Athena Power Project 36 - 6 30 1. Capex approved for Cairn represents Net capex, however Gross capex is US$ 1.2 billion 2. Based on exchange rate prevailing at time of approval. 3. Based on exchange rate prevailing at the time of incurrence. 4. Unspent capex represents the difference between total capex approved and cumulative spend as on 31 March 2024. CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT 107 Management Discussion and Analysis OPERATIONAL REVIEW ZINC INDIA 108 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED Integrated Report and Annual Accounts 2023-24 The year in brief Zinc India is in first decile of the global zinc mining cost curve. It achieved highest-ever mined metal production of 1,079 kt, up by 2% YoY on account of improved mined metal grades & recorded 3rd largest silver production globally at 746 tonnes up 5% YoY in line with management’s operational & financial strategy. Best-ever mined metal production 1,079 kt Highest-ever refined metal 1,033 kt Highest-ever silver production 746 tonnes ESG Update Occupational health and safety In line with our commitment to ensure zero harm to employees, the leadership has undertaken the prime responsibility of providing a safe workplace for all the employees entering our premises. Setting a milestone in FY 2024, in-line with our commitment to ‘Zero Harm’ we have achieved zero fatalities in this financial year. LTIFR for the year was 0.88 as compared to 0.70 in FY 2023. To avoid fatalities and catastrophic incidents in the Company, ‘Vihan’: a critical risk management (CRM) initiative was launched in FY 2023 to improve managerial control over rare but potentially catastrophic events by focussing on the critical controls. Through the initiative, we have reinforced the focus upon seven more risks in FY 2024. In alignment with our vision of zero-harm, Hindustan Zinc Limited introduced 'SURAKSHA KAVACH' phase I of fatality prevention controls initiative for underground mining operations which can proactively address potential risks associated with activities conducted at our sites, encompassing 25 diverse activities, both routine and non- routine, for underground mining operations in Phase I. It outlines clear NO-GO criteria and critical checks that must be meticulously conducted by our statutory supervisors and competent personnel. During the year, safety pause was conducted across all our operational units under the theme ‘stop work if it’s not safe’. During this connect, all recent safety incidents that had occurred across the Group were discussed and key learnings were shared. The programme was organised by business partners in all the three shifts, including the night shift. In line with our vision of ‘zero-harm’ and to prevent reoccurrence of similar fatalities within the Group, we have launched infrastructure Inframatrix across Hindustan Zinc for 9 top risks that exist in our business. It helps to eliminate the probability of occurrence of fatalities for the identified critical risks in the business by improving the infrastructure of various risks. 10 days of capacity building training programme on disaster management conducted by National Disaster Response Force (NDRF) emergency response at Dariba Smelting Complex (DSC). The training included medical first responder, collapsed structure search and rescue, fire management, chemical and gas disaster management emergencies. Hindustan Zinc has always set world-class practices in continuous improvement of safety of the assets and facilities. To provide further focus on the integrity of structures, we have established the formation of ‘Structure Integrity Management’ community, which will work towards predictive assessment, corrosion mapping and managing risk through timely rectification of old, damaged and corroded structures in the plant and ensure the safety and reliability of operations. For demonstrating a higher degree of safety, we have been awarded with below awards: Highly prestigious International Safety Awards by British Safety Council in the year 2024 Zinc Smelter Debari and Zawar group of mines have been awarded in Distinction Category, Chanderiya Lead Zinc smelter, Rajpura Dariba projects and DSC in Merit Category and Rampura Agucha Mine, Sindesar Khurd Mine and Rajpura Dariba in pass category DSC was also honoured with platinum in metal and mining sector at Apex India Occupational Health and Safety Awards 2023 CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT 109 Management Discussion and Analysis Environment Hindustan Zinc has received validation on its near-term and net-zero targets by the Science Based Targets initiative (SBTi). Our targets include a commitment to reduce 50% of absolute scope 1 and 2 GHG emissions and further reduction of 25% of absolute scope 3 GHG emissions by FY 2030 from the base year FY 2020 and achieving net-zero emissions across the value chain by FY 2050. These target ambitions have been approved by the SBTi in line with 1.5°C trajectory. We also became the only company in India to be shortlisted for setting Science Based Targets for Nature (SBTN) based on which we will set targets against freshwater and land. In FY 2023, we signed renewable energy supply agreement of 450 MW round-the-clock renewable energy (RE-RTC), the project is progressing well and the Company is expected to start receiving renewable energy from April 2024. This 450 MW RE-RTC will help us reduce our GHG emissions significantly by 2.7 million TCO2e per annum. We have deployed 2nd BEV in our underground operations at Sindesar Khurd Mine. We have taken a significant leap towards sustainable logistics by signing an agreement which marked the deployment of 10 EV Trucks, each boasting a capacity of 55 mn, helping in interunit transport of goods and reduction of Scope 3 emissions. Hindustan Zinc has led by example by inducting an LNG powered truck for upstream and downstream transportation which shall reduce GHG emissions. With their deployment, we will reduce our carbon footprint by 30% in comparison to traditional diesel vehicles, thereby reducing Scope 3 emissions. The Company is also working along with International Zinc Association (IZA) and its climate action taskforce for standardisation of Scope 3 emissions guidelines across the zinc sector. The company has inaugurated a 4,000 KLD zero liquid discharge (ZLD) plant phase 1 at Zawar Mines, which utilises advanced technology to help in water conservation. The plant has resulted in reduction of freshwater dependency, aligning with the vision of becoming 5 times water positive by 2025. Dry tailing plant at Rajpura Dariba mine is in progress and will result in significant amount of water recovery from the tailings. The 3-year engagement with International Union for Conservation of Nature (IUCN) is in progress with 3rd season assessment completed. Under this, we have prepared an integrated biodiversity assessment tool (IBAT) report for all Rajasthan based locations. Site visit by IUCN team members was done for three seasons. These studies will help the Company prepare a strategy to achieve ‘no net loss’ towards biodiversity. First fuming furnace commissioning was completed at Chanderiya Lead Zinc Smelter (CLZS) which will help us in improving metal recovery and reducing the generation of jarosite waste. As a significant achievement in our pursuit of reducing waste by improving efficiency, Hindustan Zinc received two Indian patents titled “Method for production of lead by performing dross removal procedures” and “Method for production of zinc by utilising lead plant slag”. We organised a series of training sessions called "Wednesday for Transition," which were designed to provide suppliers with essential knowledge on ESG (Environmental, Social, and Governance) topics. 110 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED Consent to Establish was granted for PAP (Phosphoric Acid Plant) in March 2024 by State Pollution Control Board. The project includes the establishment of PAP plant with a capacity 240 KTPA inside CLZS complex based on Hemidihydrate (HDH) technology. Environment clearance was granted for CLZS expansion project in December 2023 by the Ministry of Environment, Forest, and Climate Change (MOEF and CC). The project includes expansion of pyro metallurgical smelter unit and other debottlenecking projects in CLZS. Our sustainability-related activities received several endorsements during the year: Hindustan Zinc ranked #1 globally at S&P Global Corporate Sustainability Assessment score in metal and mining sector. Score improved from 80 last year to 85 this year Included in Sustainability Yearbook 2024 amongst the top 1% most sustainable organisations globally Climate Action Programme (CAP) 2.0° - Oriented Award in the Energy, Mining and Heavy Manufacturing Sector Hindustan Zinc selected as Leadership band A- listed company by CDP in “Climate Change“ and “Water Security “in CDP 2023 Greenco Rating Award to Rampura Agucha Mine and Zawar Mines (Silver Rating) Zawar Mines was announced winner for CII best practices award for its dry tailing plant and CII National Awars in Innovation Project category for Environmental Best Practice Production performance Production (kt) FY 2024 FY 2023 % Change Total mined metal 1,079 1,062 2% Refined metal production 1,033 1,032 - Refined zinc – integrated 817 821 - Refined lead – integrated1 216 211 3% Production – silver (in tonnes)2 746 714 5% 1. Excluding captive consumption of 7,622 tonnes in FY 2024 vs. 7,912 tonnes in FY 2023. 2. Excluding captive consumption of 39.0 tonnes in FY 2024 vs. 41.4 tonnes in FY 2023. Operations FY 2024 recorded the best-ever Mined Metal production of 1,079 kt compared to 1,062 kt in the prior year driven by improved mined metal grades. For the full year, ore production was lower by 1% YoY to 16.52 million tonnes on account of lower ore production at Zawar, Kayad and Rajpura dariba mine. Silver recorded the highest volume in FY 2024 in line with management’s operational & financial strategy, at 24.0 moz up 5% YoY. Refined lead production was at 216 kt, up 3% YoY. Prices Particulars FY 2024 FY 2023 % Change Average zinc LME cash settlement prices US$ per tonne 2,475 3,319 (25%) Average lead LME cash settlement prices US$ per tonne 2,122 2,101 1% Average silver prices US$/ounce 23.55 21.37 10% In CY 2023, zinc price lost its shine as macro headwinds deterred investor sentiments, and unsustainable metal surpluses got piled up. Zinc LME ended FY 2024 at 2,391 US$/t which is 17.7% lower than 31 March 2023. At supply level, the refined zinc production increased by 1.5% to 13.8 million tonnes in CY 2023. However, with expectations of interest rate cuts by the US Fed and geopolitical tensions in the Middle East, commodity prices went on a rally starting April 2024, with silver touching its highest in INR terms. Chinese manufacturing PMI has also increased from 50.9 in February to 51.1 in March, entering into expansion zone for the first time since September 2023. Zinc Demand-Supply Zinc Global Balance In kt CY2022 CY2023 CY2024 E Mine Production 12,843 12,497 12,567 Smelter Production 13,569 13,779 13,640 Consumption 13,641 13,434 13,779 Source: Wood Mackenzie, March STO The global refined zinc demand contracted by 1.5% to 13.4 million tonnes in CY 2023, largely due to a fall in Chinese, USA, EU regions. An increase in supply created a surplus in the market resulting to an increase in the warehouse (LME & SHFE) stocks by 386% (50 kt to 243 kt) and consequent increase in pressure on metal premiums on a spot basis. The market anticipated that the removal of COVID restrictions in 2023 would signal a strong rebound in the Chinese economy and zinc demand. This optimism, however, turned out to be misguided, as the recovery has been stifled by the structural slump in the real estate industry as well as exceptionally low levels of confidence among consumers and businesses. Therefore, the combination of government- backed stimulus programmes and strong export demand for Chinese-made galvanised sheets, white goods, and automobiles drove the zinc consumption in 2023. CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT 111 Management Discussion and Analysis European continent's zinc consumption also undergone a structural shift due to permanent capacity closures caused by rising energy prices, even though they have decreased. This is especially the case in Germany, where the effects of increasing energy costs have been most pronounced. US economy went through demand slump in 2023 on account of rising interest rates, rising unemployment and couple of other macroeconomic factors. In terms of demand, India has surpassed the globe. The Indian economic environment has remained optimistic. The same was reflected by the S&P Global Manufacturing PMI which stood at 59.2 in March 2024 as compared to 56.4 in March 2023, reflecting expansion in the manufacturing sector. This highlighted 31 successive monthly improvement in operating conditions. The domestic production of finished steel went up by 13.2% to 118.947 million tonnes from April 2023 to January 2024 (P). Consumption in domestic market during the same period stood at 112.5 million tonnes, up by 14.5%. The total net finished steel exports till January 2024 stood at 5.5 million tonnes, up by 3.6%. Unit costs Particulars FY 2024 FY 2023 % Change Unit costs (US$ per tonne) Zinc (including royalty) 1,450 1,707 (15%) Zinc (excluding royalty) 1,117 1,257 (11%) For the full year, Zinc CoP excluding royalty was US$ 1,117 per tonne, down by 11% YoY (8% lower in INR terms). The reduction in CoP has been achieved mainly due to lower coal and input commodity prices, better grades & better linkage coal availability. Financial performance (US$ million, unless stated) Particulars FY 2024 FY 2023 % Change Revenue 3,373 4,126 (18%) EBITDA 1,638 2,177 (25%) EBITDA margin (%) 49% 53% - Depreciation and amortisation 399 389 3% Operating Profit before special items 1,239 1,788 (31%) Share in Group EBITDA (%) 35% 47% - Capital Expenditure 472 466 1% Sustaining 355 402 (12%) Growth 117 64 82% Revenue from operations for the year was US$ 3,373 million, down by 18% YoY, primarily on account of lower zinc LME prices and zinc metal volume, higher silver and lead prices and volume. EBITDA for FY 2024 was at US$ 1,638 million, down by 25% YoY in line with the lower revenues. Projects As Zinc India advances in the journey of 1.25 MTPA metal in concentrate (MIC) expansion, several projects have been undertaken throughout the year: Rajpura Dariba mill revamping project for improved recovery of zinc, lead, and silver has been commissioned in August 2023 and is currently under ramp-up. To further enhance metal volume, 160 KTPA roaster project at Debari is under installation and has achieved 43% progress with final commissioning being targeted by Q4 FY 2025. The project of Hindustan Zinc Alloys Pvt. Ltd. has been commissioned in Q3 FY 2024 and complete ramp-up is under progress. Further, the 160 KTPA fumer plant has also been commissioned in Q2 FY 2024 and full ramp-up is in progress. Fertiliser plant of 0.51 million MTPA in Chanderiya work is under progress and the project is targeted to be completed by Q2 FY 2026. Company has also received requisite regulatory approvals for Bamnia Kalan Mines and is in process of finalising the business partner to start the site activities. For next phase of expansion of mines and smelters, preliminary studies are under progress and proposals will be finalised by Q1 FY 2025. 112 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED Strategic Priorities and Outlook Our primary focus remains on enhancing overall output, cost efficiency of our operations, disciplined capital expenditure and sustainable operations. Whilst the current economic environment remains uncertain, our goals over the medium term are unchanged. Our key strategic priorities include: Further ramp-up of underground mines towards their design capacity, deliver increased silver output in line with communicated strategy Sustain cost of production to be in the range of US$ 1,050- US$ 1,100 per tonnes through efficient ore hauling, higher volume and grades and higher productivity through ongoing efforts in automation and digitisation Disciplined capital investments in minor metal recovery to enhance profitability Increase R&R through higher exploration activity and new mining tenements, as well as upgrade resource to reserve Progressing towards sustainable future with continued efforts towards reduction in GHG emissions, water stewardship, circular economy, biodiversity conservation and waste management Exploration Zinc India’s exploration objective is to upgrade the resources to reserves and replenish every tonne of mined metal to sustain more than 25 years of metal production by fostering innovation and using new technologies. The Company has an aggressive exploration programme focussing on delineating and upgrading Reserves and Resources (R&R) within its licence areas. Technology adoption and innovations play key role in enhancing exploration success. The deposits are ‘open’ in depth, and exploration has identified number of new targets on mining leases having potential to increase R&R over the next 12 months. Across all the sites, the Company increased its surface drilling to assist in Resource addition and upgrading Resources to Reserves. In line with previous years, the Mineral Resource is reported on an exclusive basis to the Ore Reserve and all statements have been independently audited by SRK (UK). On an exclusive basis, total Ore Reserves at the end of FY 2024 stood at 175.1 million tonnes (net of depletion of 16.5 million tonnes during FY 2024) and exclusive Mineral Resources totalled 281.2 million tonnes. Total contained metal in Ore Reserves is estimated at 9.9 million tonnes of zinc, 2.8 million tonnes of lead and 312.2 million ounces of silver. The Mineral Resource contains approximately 12.7 million tonnes of zinc, 5.5 million tonnes of lead and 542.1 million ounces of silver. At current mining rates, the R&R underpins metal production for more than 25 years. CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT 113 Management Discussion and Analysis ZINC INTERNATIONAL 114 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED Integrated Report and Annual Accounts 2023-24 The year in brief During FY 2024, Zinc International recorded annual production of 208 kt. The significant decline in production for the year was mainly due to ore availability challenges, significantly lower throughput, and lower zinc and lead grades at both units. Black Mountain production for FY 2024 stands at 61 kt down by 6% YoY, due to lower zinc and lead head grades partly offset by higher tonnes treated and better recoveries. Gamsberg production for FY 2024 is down 29% YoY due to lower mining volumes driven by West pit geotechnical issue and lower grades. Skorpion Zinc has been under Care and Maintenance since start of May 2020, following cessation of mining activities due to geotechnical instabilities in the open pit. Activities to restart the mine are still in progress. MIC production 208 kt ESG Update Occupational health and safety At VZI, we take the health and safety of our employees and stakeholders very seriously and we remain committed to communicating timeously and transparently to all stakeholders. Airborne particulate management remains a key focus in reducing lead and silica dust exposures of employees (Exposure Reduction to Carcinogenic). Zero new HIV and any other Occupational Related Diseases for the year. VZI had 8 blood lead withdrawals for FY 2024 (a reduction from 17 in the previous year), against more stringent limits than required by law. We have strengthened our Employee Wellness Programme through weekly training and empowerment sessions presented by our Wellness Coordinator at our training centres as well as focussing on the increased participation of employees and communities in VCT for Aids / HIV, blood donation and wellness. Upgrade of BMC Occupational Health & Primary Health Care facility is also underway to improve space and flow within the facility. VZI has also embarked on a real-time monitoring strategy and additional controls at source to reduce and eliminate exposures to both silica and lead. The VZI LTIFR for FY 2024 YTD regressed from 0.75 in FY 2023 to 1.26 in FY 2024. The TRIFR remained within the guidance of 3 per million-man hours worked in FY 2024 at 3.6. The regression in LTIFR was attributed to low energy types of injuries such as slipping and falling as well as manual handling of material. Short-term awareness campaigns such as “Season of Exceptional Care” were implemented to ensure that employees remained focussed whilst at work and return home to their families safe and healthy every day. Environment VZI has secured Portion 1 of the farm Wortel 42 as the fifth Biodiversity Offset Property and has presented the property to the Department of Agriculture, Environmental Affairs, Rural Development and Land Reform (DAERDLR) for declaration as part of the Gamsberg Nature Reserve (Protected Area under the National Environmental Management Protected Areas Act, 2003 (Act No.57 of 2003). Once declared, the property will be transferred to the Department of Public Works. This is a requirement of Clause 6 of the Biodiversity Offset Agreement (BOA). During the year, Gamsberg successfully renewed the Salvage yard waste licence that expired on 31 December 2023 and will be valid for the next 10 years. Gamsberg and Black Mountain Mine further maintained its ISO 14001:2015 certification. The Project offices achieved a Green Building Certification. Production performance Production FY 2024 FY 2023 % Change Total production (kt) 208 273 (24%) Production – mined metal (kt) BMM 61 65 (6%) Gamsberg 147 208 (29%) CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT 115 Management Discussion and Analysis Operations Total production for the year was 208 kt, down by 24% YoY. This was primarily due to lower tonnes treated and lower grades. At BMM, production for the year 61 kt, down by 6% YoY. This was mainly due to lower lead grades (2.6% vs 3.0%) and lower zinc grades (1.6% vs 1.8%) offset by 0.1 MT higher throughput (1.8 MT vs 1.7 MT), higher zinc recoveries (78.3% vs 71.9%) and higher lead recoveries (85.4% vs 82.8%). At Gamsberg production for the year was at 147 kt, down by 29% YoY. The low production at Gamsberg is attributable to mining underperformance resulting in lower ore availability, and lower zinc grades (5.6% vs 6.5%). At Skorpion Zinc engagement with technical experts to explore opportunities of safely extracting the remaining ore is ongoing. The business is currently evaluating options to restart mining. Unit costs Production FY 2024 FY 2023 % Change Zinc (US$ per tonne) unit cost 1,488 1,577 (6%) Overall Zinc CoP including TcRc for the year was US$ 1,488 per tonne, down by 6% This was mainly driven by lower mining and other costs, lower treatment and refining charges, higher production of copper, local currency depreciation against the US$ partially offset by lower production. Financial performance (US$ million, unless stated) Particulars FY 2024 FY 2023 % Change Revenue 430 649 (34%) EBITDA 84 241 (65%) EBITDA margin (%) 20% 37% - Depreciation and amortisation 55 61 (9%) Operating Profit before special items 29 180 (84%) Share in Group EBITDA (%) 2% 5% (3%) Capital Expenditure 256 144 77% Sustaining 58 68 (16%) Growth 198 76 - Revenue for the year was US$ 430 million, down by 34%, mainly due to significantly lower production volumes, and lower LME prices offset by lower treatment charges. EBITDA for the year was US$ 84 million, down by 65% mainly due to lower production volumes, and lower LME prices. Exploration 1% increase in resources from 27.21 mt to 27.61 mt metal and 1% reduction in reserve metal tonnes from 7.66 mt to 7.20 mt Total R&R for VZI increased from 658 mt to 662 mt of ore, while metal decreased from 34.86 mt to 34.80 mt (0.2% decrease in total metal) Reduction reserve largely attributed mining depletions and the slight increase in resources due to addition of metal tonnes at Broken Hill which was offset by an increase in mining costs which impacted the cut-offs used 116 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED Projects Refinery Conversion The Skorpion Refinery Conversion project was at Ready- to-order stage, post completion of FEED, feasibility study, tendering activities, techno-commercial adjudication, contract finalisation, and now currently on hold pending finalisation of power tariff. The application for environmental clearance renewal certificate for the refinery conversion project has been submitted and waiting for approval. Confirmation on agreed power tariff is awaited to take the final decision and start the project execution on ground. Gamsberg Phase 2 Gamsberg Phase 2 project includes the mining expansion from 4 MTPA to 8 MTPA and Construction of New Concentrator plant of 4 MTPA, taking the total capacity to 8 MTPA ore. Owner’s Engineering consultant has been appointed for conducting pre-feasibility studies, executing the basic engineering design, detailed engineering review, quality assurance and site construction management. All activities related to tendering, techno-commercial adjudication, contract finalisation have been completed. Strategic Priorities and Outlook Zinc International continues to remain focussed to improve its YoY Production by sweating its current assets beyond its design capacity, debottlenecking the existing capacity, and adding capacity through Growth Projects. Our immediate priority is to ramp-up the performance of Gamsberg mining operations and simultaneously complete Gamsberg Phase 2 project to add another 190 kt to the total production of VZI. Likewise, BMM continues to deliver stable production performance and focus is to debottleneck its ore volumes from 1.7 mt to 2.0 mt. Skorpion is expected to remain in Care and Maintenance while management is assessing feasible and safe mining methods to extract ore from Pit 112. Zinc International continues to drive cost reduction programme to place Gamsberg operations on 1st Quartile of global cost curve with CoP< US$ 1,200 per tonne. Core Growth strategic priorities include the following: Ramp-up of Gamsberg Phase 1 Mining up to 9 mt per month to ensure adequate ore availability for the plant Completion of construction activities of Gamsberg Phase 2 project in H1 FY 2025 Continue to improvise Business case of Skorpion Refinery Conversion Project and Gamsberg Smelter Project through Government support, Capex and Opex reduction Magnetite project (waste to value) reinitiated with target completion date of H1 FY 2025 All Major Long-Lead Free Issue Materials {Ball and Sag Mill (CITIC), Crusher, Floatation, Filter Presses and Thickeners Package (MO)} Orders placed. Major FIM supplies such as Thickeners, Mills, Transformers have been delivered to Project Site. Project is targeted to be completed by H1 FY 2025. The status on the project is as follows: Overall progress is at 52.6% Engineering and procurement are 99.6% and 94% completed respectively Construction progress is at 27% Black Mountain Iron Ore project This is a project to recover iron ore (magnetite) from the BMM fresh tailings. Detailed engineering and procurement have been completed and construction progress is at 76%. The project was on hold due to EPC Business partner (LeadEPC) going into Business Rescue (BR). LeadEPC came out of BR in Q3 FY 2024. Team started mobilisation in Feb 2024, and have planned to complete the project by Q2 FY 2025. All the environmental approvals are in place to process fresh tailings and extract Iron Ore. CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT 117 Management Discussion and Analysis OIL AND GAS 118 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED The year in summary During FY 2024, Oil and Gas business delivered gross-operated production of 128 kboepd, down by 11% YoY, primarily driven by natural reservoir decline at the MBA fields. The decline was partially offset by addition of volumes through new infill wells brought online in Mangala, Aishwariya, Bhagyam and Raageshwari Deep Gas fields. OALP assets were supported by ramp-up of volumes from Jaya discovery. Average gross-operated production 128 Kboepd ESG Update Occupational health and safety There were two lost time injuries (LTIs) in FY 2024. Frequency rate stood at 0.06 per million-man hours (FY 2023: 0.03 per million-man hours). Our focus remains on strengthening our safety philosophy and management systems. We were recognised with awards conferred by external bodies: RJ North SBU recognised with British Safety Council International Safety Award (ISA), UK 2023 RJ North SBU awarded with ‘Royal Society for Prevention of Accidents’ Gold award for Health and Safety Management 2023 Cairn received ‘Sustainable Corporate of the Year Award 2023’ by Frost and Sullivan, TERI under Sustainability 4.0 Award Platinum award under mining sector at 10th FICCI Awards for Excellence in Safety Systems 2023 and RJ North SBU received 2nd CII award for ‘Best Practices in Waste Management’ in Northern Region, CII National award for ‘Excellence in Water Management’ 2023 'Golden Peacock Award 2023' for Excellence in Health and Safety for RJ South SBU Cairn Oil and Gas has taken various initiatives: Implemented uniform HSE Governance structure and critical risk management system for fatal risks Process Safety management gap assessment exercise across assets Digital initiatives: Artificial Intelligence based safety surveillance, Occupational Health MIS portal, Digital Tanker inspection system, E-dispensation management system, E-HSE legal permit monitoring system and Static discharge palm plate Environment Our Oil and Gas business is committed to protect the environment, minimise resource consumption and drive towards our goal of ‘zero harm, zero waste, zero discharge’. Highlights for FY 2024 are as: Suvali Site has been certified as ‘Net Water Positive Certification’ (NWPI) by TUV SUD with NPWI index of 1.14. Constructed 69 community-based rainwater harvesting structure in Barmer having RWH potential of 0.78 million KL annually. Re-use of boiler blow down water for injector at MPT of 35,000 KL annually. CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT 119 Management Discussion and Analysis Production performance Particulars Unit FY 2024 FY 2023 % change Gross-operated production Kboepd 127.5 142.6 (11%) Rajasthan Kboepd 106.5 119.9 (11%) Ravva Kboepd 10.8 11.8 (8%) Cambay Kboepd 8.9 10.8 (17%) OALP Kboepd 1.4 0.1 - Oil Kboepd 104.0 118.6 (12%) Gas Mmscfd 141 144 (2%) Net production – working interest* Kboepd 82.5 91.5 (10%) Oil Kboepd 66.8 76.1 (12%) Gas Mmscfd 94 92 2% Gross-operated production Mmboe 46.7 52.1 (10%) Net production – working interest Mmboe 30.2 33.4 (10%) * Includes net production of 556 boepd in FY 2024 and 450 boepd in FY 2023 from KG-ONN block, which is operated by ONGC. Cairn holds a 49% stake. Operations Average gross-operated production across our assets was 11% lower YoY at 127.5 kboepd. The company’s production from the Rajasthan block was 106.5 kboepd, 11% lower YoY and from the offshore assets, was at 19.7 kboepd, 13% lower YoY. The natural decline has been partially offset by infill wells brough online across all assets. Production details by block are summarised below. Rajasthan block Gross production from the Rajasthan block averaged 106.5 kboepd, 11% lower YoY. The natural decline in the MBA fields has been partially offset by infill wells brought online in Mangala, Aishwariya, Bhagyam, ABH and RDG fields. Gas production from Raageshwari Deep Gas (RDG) averaged 140 million standard cubic feet per day (mmscfd) in FY 2024, with gas sales, post captive consumption, at 116 mmscfd. The appeal against the Division Bench order (additional 10% profit sharing from 2020 onwards) was filed by us before the Supreme Court in June 2021. The matter was part heard on 16 February 2023 and mentioned by the Company several times for early listing. We await the next date of hearing. The Government of India (GoI), acting through the Directorate General of Hydrocarbons (DGH), had raised demand up to 14 May 2020 for Government’s additional share of Profit oil based on its computation of disallowance of cost incurred over retrospective re-allocation of certain common costs between Development Areas (DAs) of Rajasthan Block and certain other matters aggregating to US$ 1,162 million applicable interest thereon representing share of Vedanta Limited and its subsidiary. Biodiversity/wildlife conservation initiatives Plantation work completed in 400 hectares with 0.2 million saplings in Barmer district. 60 hectares mangroves planted for carbon offset and biodiversity in Surat Coastal area, over 13 hectares in Ravva terminal and MoU signed with Government of Gujarat for plantation of mangroves on 130 hectares in the coast of Surat ~ 0.27 million saplings sourced from Rajasthan State Forest Department and distributed to Border Security Force (BSF), Army and local farmers Planted 5,000 saplings in Bhogat terminal along with Gujarat Forest Department Reduction in GHG emission Received certification of Energy Management System (ISO 50001:2018) for Ravva and Suvali Flare Gas utilisation from KW-02 through gas cascading and bottling. (Annual GHG reduction potential ~ 6,000 tonnes of CO2e/annum). Commissioned motor-driven power fluid pump at MPT to replace the stream-driven pump. (Annual GHG reduction potential of ~ 86,000 tonnes of CO2e/annum). Solar rooftop installed on 16 AGIs (above ground installations) for pipeline operations (Annual GHG reduction potential of 300 tonnes of CO2e/annum). Installation of 126 KWP at Raag Gas WPs. (Annual GHG reduction potential of ~157 tonnes of CO2e/ annum). Commissioned 40 KWP Solar Plant at Cambay asset. (Annual GHG reduction potential of ~ 30 tonnes of CO2e/annum). Introduced 15 new Electric Vehicle at RJ and 2 in Ravva for internal commuting. Hydrocarbon recovery by processing of skimmed oil ~43,253 bbls. Suvali has been certified by TUV SUD towards ‘Zero Waste to Landfill’ 120 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED We had disputed the aforesaid demand and invoked arbitration as per the provisions of the Production Sharing Contract. The Company had received the Final Partial Award dated 22 August 2023 from the Arbitration Tribunal ('the Tribunal') as amended by orders dated 15 November 2023 and 08 December 2023 ("the Award"), dismissing the Government’s contention of the additional Profit Petroleum in relation to allocation of common development costs across Development Areas and certain other matters in accordance with terms of the Production Sharing Contract for Rajasthan Block, while disallowing some matters. Further, Tribunal has decided that the Company is allowed to claim cost recovery of exploration cost for the purpose of computation of Profit Oil. Pursuant to the award, the Company has recognised a benefit of US$ 578 million in Revenue from operations. The Gol had sought an additional award or interpretation/ clarification on certain matters decided by the Tribunal under the Indian Arbitration and Conciliation Act, 1996 ("the Act") ("Gol Applications"), The Tribunal vide its orders dated 15 November 2023 and 08 December 2023 has dismissed Gol Applications, in favour of the Company. GoI had filed interim relief application on 03 February 2024 seeking stay on further recovery by Company and return of amounts already recovered. The matter was heard on 26 March 2024 and we await order of Tribunal’s order in this regard. GoI on 07 March 2024 filed application before Delhi High Court challenging the Final Partial Award and matter was heard on 14 March 2024. No stay was granted and the petition was not admitted. The next date of hearing is 22 April 2024. The Company is of the view that there is no merit in the challenge filed by GoI, as the Court cannot re-appreciate the evidence in Section 34 appeal. The interpretation by the Tribunal is plausible and therefore no challenge is merited. The Group has adjusted the liability as on 31 March 2024 of US$ 233 million against the aforesaid benefits recognised per the Arbitration award. Ravva block The Ravva block produced at an average rate of 10.8 kboepd, lower by 8% YoY, owing to natural field decline. Cambay block The Cambay block produced at an average rate of 8.9 kboepd, lower by 17% YoY, owing to natural field decline. Prices Production FY 2024 FY 2023 % Change Average Brent prices –US$/barrel 83.1 96.2 (14%) Crude oil price averaged US$ 83.1 per barrel in FY 2024 representing decrease from US$ 96.2 per barrel. The decline is largely attributed to ongoing geopolitical risk, concerns about demand in major economies like the US and China, monetary tightening by major banks and expectations of global oil production surpassing consumption in 2024. Previous period was influenced by Russia-Ukraine war which resulted in rally in prices. Early in the year, prices fluctuated due to supply and demand factors. On the supply side, limited availability due to increase in U.S. crude and gasoline inventories, concerns about production cuts, sanctions on Russia contributed to volatility. Additionally, demand was influenced by structural uncertainties, such as looming possibility of U.S. debt default potential and a slowdown in China’s economy. However, in September and October optimism emerged as expectations grew that central banks were approaching the end of their tightening cycles. Additionally, the decline of US Dollar and anticipated economic stimulus in China added to the positive sentiments. Firm demand for crude in the spot market, rising global refinery intakes, stronger refining margins and a large draw in US crude stocks boosted the prices. Despite these developments, the oil market remains shrouded in uncertainty and susceptible to ongoing fluctuations due geopolitical risk surrounding the Middle East and Russia, disruptions in maritime trade flows, persistent worries about the demand outlook in the US and China, compounded by global petroleum reserves and unexpected supply disruptions in several regions. CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT 121 Management Discussion and Analysis Growth Projects Development The Oil and Gas business has a robust portfolio of infill development and enhanced oil recovery projects to add volumes in the near term and manage natural field decline. Some of key projects are: Infill Projects Mangala Based on the success of the infill drilling campaigns in Mangala field, opportunities to further accelerate production by drilling and hook up of 18 wells (15 producers and 3 injectors) in FM1 sands were identified. The project also entails conversion of 6 wells. As of 31 March 2024, 8 wells have been drilled, of which 6 wells are online. Bhagyam To accelerate production and augment reserves from Bhagyam field, infill drilling opportunities in FB1 and FB3 layers were identified. The project entails drilling of 9 infill wells in FB3 layers and three horizontal wells in the bio-degraded zone. As of 31 March 2024, project is completed, and all wells are online. Aishwarya Based on the success of the polymer injection in Lower Fatehgarh (LF) sands of Aishwariya field, additional production opportunities were identified in Upper Fatehgarh (UF) sands. The project entails drilling of 25 infill wells in Upper Fatehgarh (UF) sands and conversion of 7 existing wells to UF polymer injectors. As of 31 March 2024, 24 wells have been drilled, of which 21 wells are online. Tight Oil (ABH) Aishwariya Barmer hill infill drilling program established confidence in reservoir understanding of ABH. Based on its success, drilling of 14 additional wells were conceptualised. As of 31 March 2024, 8 wells have been drilled of which all are online. The projects work on surface facilities are currently in progress. Tight Gas (RDG) In order to realise the full potential of the gas reservoir, an infill drilling campaign of 25 wells was executed. Project has been completed during second quarter of fiscal year 2024 and all wells are online. To augment reserves and manage natural decline, we commenced additional 8 infill wells drilling campaign during fiscal year 2024. As of 31 March 2024, 6 well has been drilled of which 3 wells are online. Satellite Fields In order to monetise the satellite fields, 14 wells development campaign for 3 satellite fields (GSV, Tukaram, Raag Oil) was conceptualised. Drilling was completed during fiscal year 2023 of which 9 wells are online as on date. Financial performance (US$ million, unless stated) Particulars FY 2024 FY 2023 % Change Revenue 2,155 1,873 15% EBITDA 1,184 972 22% EBITDA margin (%) 55% 52% - Depreciation and amortisation 327 442 (26%) Operating Profit before special items 768 500 54% Share in Group EBITDA (%) 25% 21% - Capital Expenditure 337 474 (29%) Sustaining 22 14 58% Growth 315 460 (31%) Revenue for the year was US$ 2,155 million (after profit petroleum and royalty sharing with the Government of India), up 15% YoY, as a result of favourable order received in GoI Arbitration partially offset by fall in oil prices. EBITDA for FY 2024 was at US$ 1,184 million, up by 22% YoY in line with the higher revenues. The Rajasthan operating cost for the year was US$ 14.5 per barrel compared to US$ 14.2 per barrel in previous year, primarily driven by lower production and increased well interventions to manage natural field decline. 122 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED Exploration and Appraisal Under the Open Acreage Licensing Policy (OALP), revenue- sharing contracts have been signed for 51 blocks located primarily in established basins, including some optimally close to existing infrastructure, of which 5 onshore blocks in the KG region have been relinquished. During fiscal year 2024, we drilled eight exploration/ appraisal wells [4 wells in Cambay Onshore (YME-1 Jaya Appraisal and Jaya SW1, Jaya SW1-ST, and Jaya SW-3), 1 well in Western Offshore (Dwarka 1-) and 3 wells in Rajasthan (Durga Lateral 1, and Durga Lateral 2 and Western Margin GH-1A)]. Through exploration and appraisal successes encountered in Cambay Onshore (Jaya) wells, we have got approval for Field Development Plan (FDP) to produce >3,000 boepd . This will be the first FDP in OALP regime, among 144 blocks awarded under 8 OALP rounds by the Government to various companies. Seismic Acquisition activities are ongoing in the North- East and Cambay region. Strategic Priorities and Outlook Vedanta’s Oil and Gas business has a robust portfolio mix comprising exploration prospects spread across basins in India, development projects in the prolific producing blocks and stable operations which generate robust cash flows. The key priority ahead is to deliver our commitments from our world-class resources with ‘zero harm, zero waste and zero discharge': Infill projects across producing fields to add volume in near term Define up to >20 potential new development projects to bring these Resources into production Unlock the potential of the exploration portfolio comprising OALP and PSC blocks Continue to operate at a low cost-base and generate free cash flow post-capex Need Image CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT 123 Management Discussion and Analysis ALUMINIUM 124 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED Integrated Report and Annual Accounts 2023-24 The year in brief With our continued focus on operational excellence, improving asset reliability across units and efficiency in procurement we have achieved highest-ever annual cast metal production of 2.37 million tonnes in FY 2024, up 3% YoY, and achieved hot metal cost of US$ 1,796 per tonnes, 23% lower YoY. We also produced 1.81 million tonnes of calcined alumina, up 1% YoY. In addition, as the first milestone in our transformational capex program, we produced the first alumina from Train 1 of the Lanjigarh refinery expansion project, as a step towards becoming a fully vertically integrated Aluminium producer. Highest-ever aluminium production 2,370 kt ESG Update Occupational health and safety We report with deep regret one fatality of business partner employees during the year at Jharsuguda site. We have thoroughly investigated all the incidents and the lessons learned were shared across all our businesses to prevent such incidents in future. This year, we experienced a total of 33 Lost Time Injuries (LTIs) resulting in an LTIFR of 0.41 at our operations. To advance the goal of Zero Harm in Safety, all our units undertook a comprehensive programme of safety measures to improve workplace conditions in terms of site infrastructure, safety systems and safety culture. Noteworthy infrastructural improvements include safer access pathways for pedestrians to isolate them from vehicles across the sites. Safety systems like introduction of Driver Management Centre, monitoring of vehicle design and condition, and safe driving parameters through smart cameras, speed detectors and GPS-enabled Vehicle Tracking Systems. External third-party training has been provided to 4,000 workers in hazardous process training. Further, we have developed the Enablon portal for timely identification and reporting of safety hazards and rectification of the same. All sites are committed to ‘Refuse Work if it is Unsafe to Execute’ and empowered all site personnel to reject any activity that posed a possible safety concern. For Occupational Health, our units celebrate Sankalp Day every month with different themes. Various health awareness campaigns have also been conducted, such as the "Beat the Heat" campaign during summers, Pinkathon for breast cancer awareness, non-invasive anaemia detection camps, mass diabetic screening camps, and neglected tropical disease campaigns. Additionally, three mandatory trainings (Occupational Health and Industrial Hygiene, Ergonomics, and CPR) are provided each month. Environment During the year, Jharsuguda recycled 17% of their water used, while BALCO and Lanjigarh recycled 13% and 50% respectively. Our specific water consumption at Jharsuguda was 0.20 m3/t, BALCO was 0.53 m3/t and Lanjigarh specific water consumption was 2.09 m3/t. In line with Vedanta’s de-carbonisation plan, we have undertaken trials at Lanjigarh to co-fire biomass in the boiler, with all defined safety measures, to reduce GHG emissions of the power plant. Furthermore, Jharsuguda has deployed 27 Electric forklifts while BALCO and Lanjigarh have deployed 6 and 3 forklifts respectively, we have planned to shift to 100% EV light motor vehicles by FY 2029-30. Under our Green product initiative, this year we produced 44 kt of Green Aluminium under the Restora brand name with an immediate potential to produce up to 100 KTPA. Further, our Restora Ultra brand, produced from Aluminium dross generated from the operations, has one of the lowest carbon footprints available on the market today. In the current fiscal year, we reduced our GHG emission intensity by 2% compared to the FY 2023 baseline. We have purchased 1,013 MU of Green Power and co-fired 13,811 tonnes of Biomass. Management of hazardous waste such as spent pot lining (SPL), aluminium dross, and high-volume low-toxicity waste such as fly ash and red mud are material waste management issues facing the aluminium industry. During the year, our operations have utilised 103% of Ash and 98% of Dross. CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT 125 Management Discussion and Analysis Vedanta Aluminium has entered into a long-term partnership with Dalmia Cements for gainful utilisation of industrial by-products such as fly-ash and SPL waste to manufacture ‘green’ cement. This partnership demonstrates our commitment to promoting the circular economy and create ‘wealth from waste’. BALCO is engaged in back filling of fly ash into coal mines which further supports our efforts for sustainable management of ash from our operations and achieve our ‘Zero Waste to Landfill’ objective. Our R&D team, in collaboration with IIT Kharagpur, has developed and patented a new technology for pre-processing of bauxite prior to introduction to the Beyer circuit, which will reduce red mud generation by about 30%. This will also further enhance alumina recovery and broaden range of acceptable bauxite specifications. Production performance Particulars FY 2024 FY 2023 % change Calcined Alumina Production (kt) Alumina – Lanjigarh 1,813 1,793 1% Cast Aluminium Production (kt) 2,370 2,291 3% Jharsuguda 1,784 1,721 4% BALCO 586 570 3% Alumina refinery: Lanjigarh At Lanjigarh, calcined alumina production stands at 1.81 million tonnes, up 1% YoY. Aluminium smelters Achieved highest-ever cast metal production of 2.37 million tonnes in FY 2024, up 3% YoY, primarily due to improved operational efficiency. Coal Security We continue to focus on the long-term security of coal supply to our thermal power plants at competitive prices. We have plans in place to operationalise our captive coal blocks of Radhikapur (West) (6 MTPA) and Kuraloi (A) North (8 MTPA) in FY 2025 and Ghogharpalli (20 mt) in FY 2026. The Barra coal block is currently under exploration. These captive mines along with 16.7 million tonnes of long-term linkage will ensure 100% coal security for our Aluminium business. We also intend to continue our participation in linkage coal auctions to secure additional coal at competitive rates. Prices Particulars FY 2024 FY 2023 % change Average LME cash settlement prices (US$ per tonne) 2,200 2,481 (11%) In FY 2024, the aluminium market continued the downward trend experienced in Q4 FY 2023 with LME prices falling steadily to US$ 2,100 per tonne at the end of June 2023. The market was significantly impacted by volatility in macroeconomic environment during the year amidst the ongoing Russia-Ukraine war, European energy crisis, and high inflation in the key markets. Prices remained range- bound at these levels through until late in the calendar year where concerns about potential sanctions on Russian metal caused a short-lived spike in prices, before returning to US$ 2,200 per tonne at the close. Total global aluminium demand is expected to increase at a CAGR of ~3% for the rest of this decade. Higher growth rate is driven by the decarbonisation transition in transportation, deployment of renewable power generation, infrastructure development and growth in recyclable packaging. Specifically, aluminium consumption from the renewable energy and electric vehicle sectors is expected to increase to 16 million tonnes by CY 2030. The transportation sector should support modest growth in domestic consumption, while the building & construction sector will continue a downtrend trend. For the Rest of World, CY 2024 is expected to witness modest demand improvements as inflation rates start to decline and monetary authorities around the world can start to reduce interest rates. Indian domestic aluminium demand will remain very robust driven by key consuming segments like electronics and appliances as well as anticipated boom in renewable, defence, and aerospace sectors. 126 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED Strategic Priorities and Outlook Our strategic priorities remain increasing production volume of aluminium reducing and delinking production cost from external volatility through achieving full backwards vertical integration maximising share of value-added products (VAP) in our mix Aluminium Volume: BALCO is poised to add smelter capacity of 0.4 MTPA (to achieve 1 MTPA total capacity) with first metal planned by end of Q3 FY 2025. Efforts continue towards achieving higher operational performance along with increased volume delivery through debottlenecking and planning for future growth projects. Backwards Vertical Integration: The Lanjigarh expansion activities are in full swing, and we achieved our first alumina production from Train-1 in March 2024 and efforts are in place to get first alumina production from Train-2 by end of Q2 FY 2025. Activities are underway to finalise approvals, acquire land, and instal necessary processing and logistics infrastructure at Sijimali Bauxite Mines to enable us to secure first production by late Q2 FY 2024-25. The future ramp-up will be instrumental in enabling us to meet the requirement for 5 MTPA refinery operations from captive domestic sources. Operationalisation of our captive coal mines in the short to medium-term and improved linkage materialisation will ease our dependence on relatively higher-cost spot market coal. Increased VAP Jharsuguda and BALCO are currently expanding their VAP capacity from 1.1 MTPA to 1.6 MTPA and 0.4 MTPA to 1.0 MTPA respectively to secure enhanced product margins. Other business priorities include: Sustainability: Safety and well-being of all our stakeholders, reduction of our carbon footprint and increased production of Low Carbon Green Aluminium (Restora, Restora Ultra), increased Diversity of our Workforce, and promoting the Circular Economy. Operational Excellence: Continual improvement in operational parameters. Asset Optimisation: Achieving >100% capacity utilisation of assets through implementation of our structured reliability and asset management programme. Quality: Zero product defects and customer complaints. Product Portfolio: Improve VAP portfolio with focus on anticipating and meeting the needs of sophisticated customers to enable better price realisation. Unit costs (US$ per tonne) Particulars FY 2024 FY 2023 % change Alumina cost - Lanjigarh 325 364 (11%) Aluminium CoP 1,796 2,324 (23%) Jharsuguda CoP 1,761 2,291 (23%) BALCO CoP 1,904 2,424 (21%) Cost of production (CoP) of alumina for the year was US$ 325 per tonne, down 11% YoY, majorly driven by softening of caustic soda and coal prices. Cost of production (CoP) of hot metal was US$ 1,796 per tonne down 23% YoY, primarily on account of improvement in asset reliability and reduction in coal and CP coke prices. Financial performance (US$ million, unless stated) Particulars FY 2024 FY 2023 % Change Revenue 5,843 6,615 (12%) EBITDA 1,167 699 67% EBITDA margin (%) 20% 11% Depreciation and amortisation 291 285 2% Operating Profit before special items 876 414 - Share in Group EBITDA (%) 25% 15% - Capital Expenditure 865 648 33% Sustaining 173 192 (10%) Growth 692 456 52% Revenue for the year was US$ 5,843 million, down by 12%, due to slip in LME prices partially offset by increase in volume. EBITDA for the year was US$ 1,167 million, up by 67% to majorly driven by softening of input commodity prices along with the improved operational performance partly offset by lower LME prices. CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT 127 Management Discussion and Analysis POWER 128 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED Integrated Report and Annual Accounts 2023-24 The year in brief Vedanta Power is on the brink of significant expansion and operation of two new thermal power projects—Meenakshi (1000 MW) in Andhra Pradesh and Athena (1200 MW) in Chhattisgarh. These ventures are slated to commence operations in FY 2025 and FY 2026 respectively. This expansion will bolster Vedanta Power's total capacity to 4780 MW, encompassing its existing operational plants- Talwandi Sabo Private Limited (1980 MW) in Punjab and Jharsuguda IPP (600 MW) in Odisha. This strategic initiative not only amplifies Vedanta Power's operational capabilities but also positions the company for sustained growth. The integration of these capacities is expected to contribute to stable and substantial cash flows, ensuring a robust balance sheet and sustained margin stability for the business. In FY 2024, TSPL’s (Talwandi Sabo Power Limited) plant availability was 82% and Plant Load Factor (PLF) was 64%. Overall power sales 13,443 million units ESG Update Occupational health and safety In line with group philosophy, TSPL is also a part of “VIHAN- Every Step Safe Step” which is a unique safety initiative which focusses on developing Infra- matrix for each type of critical risk. In FY 2024, TSPL focussed on Category 5 Safety Incident elimination through Critical Risk management, Catastrophic Risk Management, Horizontal deployment of Safety alert learnings, Vedanta Safety Standard Implementation and Engineering / Controls such as Hand Injury Prevention and Green hand policies. We continue to strengthen ‘Visible Felt Leadership’ through on-ground presence of senior management, improvement in reporting across all risk and verification of on-ground critical controls. We also continue to build safety capability building assisting infrastructure and procedure development for fire-man endurance test, lifting tools and Tackles testing bench, apart from regular development through expansion of Bulker parking, finalisation of road map for ITMS etc. Environment TSPL focusses on environment protection measures such as maintaining green cover of over 800 acres, continue the expansion of green cover inside plant premises and nearby communities. TSPL ensures availability of environment protection system such as ESP, Fabric Filters, water treatment plant and RO Plant. In Tailing Dam Management, TSPL has implemented all the recommendations of M/s Golder associates for ash dyke. Additional GISTM Conformance Assessment of TSPL Ash Dyke Facility by ATC Williams, Australia and TATA Consultancy (TCE) as Engineer of Records (EOR) to ensure Ash Dyke stability to review dyke design, quality assurance during ash dyke raising and quarterly audit of ash dyke facility. In FY 2024, TSPL achieved 100% Ash utilisation in Road Construction, in building sector for bricks, blocks, cements and low- lying area filling. TSPL has signed various MoUs with stakeholders to increase ash utilisation. TSPL has recycled 19% of the water used and reduced Fresh water consumption by various operation controls. TSPL continues its focus on energy saving projects such as CEP VFD rpm reduction, condenser vacuum improvement, HP heaters performance improvement, APH basket and seal replacement, high energy drain valve replacement and rectification, replacement of conventional lighting fixtures with LED lighting fixtures. To stimulate efforts and reach towards new heights of sustainable business practices, TSPL continued with ESG transformation office. TSPL ESG Transformation Office was created which includes 13 communities of practice from each aspect of sustainability like Carbon, Water, Waste, Biodiversity, Supply Chain, People, Communities (CSR), Communication, Safety and Health, Acquisitions, Expansions and Finance. Each Community is led by a senior leader in the concerned department. Each community is driving sustainability initiatives in their community which is being reviewed by Senior management on regular basis through ESG-TO engagement. In FY 2024, 124 new projects were identified, 53 initiatives were completed, and 71 improvement initiatives are in progress. CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT 129 Management Discussion and Analysis In FY 2024, TSPL has reduced Specific GHG emissions to 3% & has achieved a reduced Specific water consumption to 11%. In this year, TSPL along with district administration has developed 3 Miyawaki forest covering 0.125 acres land in the district of Mansa. Production performance Production FY 2024 FY 2023 % Change Total Power 13,443 14,187 (5%) HZL wind power 394 395 - Jharsuguda 600 MW 2,771 3,048 (9%) TSPL 10,278 10,744 (4%) TSPL – Availability 82% 82% Note: Malco continues to be under care and maintenance since 26 May 2017 due to low demand in Southern India. Operations Power sales for the year was 13,443 million units, down by 5% YoY. Power sales at TSPL were 10,278 million units with 82% availability in FY 2024. At TSPL, the Power Purchase Agreement with the Punjab State Electricity Board compensates us based on the availability of the plant. At Jharsuguda, the 600 MW power plant operated at a lower plant load factor (PLF) of 58% in FY 2024 due to ash evacuation issue. Unit sales and costs Production FY 2024 FY 2023 % Change Jharsuguda sales realisation (`/kWh)1 2.66 2.75 (3%) Jharsuguda cost of production (`/kWh)1 2.77 2.50 11% TSPL sales realisation (`/kWh)2 4.10 4.50 (9%) TSPL cost of production (`/kWh)2 3.26 3.65 (11%) (1) Power generation excluding TSPL (2) TSPL sales realisation and cost of production is considered above, based on availability declared during the respective period Average power sale prices for the year was US$ 2.82 per kWh excluding TSPL, down by 4% and the average generation cost was US$ .57 per kWh, up by 9%. TSPL’s average sales price was ` per 4.10 kWh, down by 9% at, and power generation cost was US$ 3.26 per kWh, down by 11% YoY. Financial performance (US$ million, unless stated) Particulars FY 2024 FY 2023 % Change Revenue 743 838 (11%) EBITDA 117 114 2% EBITDA margin (%) 16% 12% - Depreciation and amortisation 65 68 (4%) Operating Profit before special items 52 46 13% Share in Group EBITDA (%) 2% 2% - Capital Expenditure 2 2 (19%) Sustaining 2 2 (19%) Growth - - - Note: Excluding one-offs Revenue for the year was US$ 743 million, down by 11%. EBITDA for the year was US$ 117 million, up by 2%. Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED 130 Strategic Priorities and Outlook During FY 2025, we will remain focussed on maintaining the plant availability of TSPL and achieving higher plant load factors at Jharsuguda IPPs. Our focus and priorities will be to: Resolve pending legal issues and recover aged power debtors Improve power plant operating parameters to deliver higher PLFs/ availability and reduce the non-coal cost Ensuring safe operations, energy and carbon management CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT 131 Management Discussion and Analysis IRON ORE 132 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED Integrated Report and Annual Accounts 2023-24 The year in brief Sesa Goa is one of the largest private sector exporter of iron ore in India. In FY 2024, we operationalised the Bicholim mine in Goa (3 MTPA capacity), marking the commencement of first mining operation in Goa region after six years. Also, WCL made its first shipment in freight-friendly market earning a higher margin. In Coke business, Prime Hard coal consumption was reduced to 20% in FY 2024 from 35% in FY 2023 in overall coal blend. Highest-ever production 5.6 million tonnes ESG Update Occupational health and safety With our vision towards the aim of Zero Harm, we are committed to achieving zero fatal accident at Iron ore Business. Our Lost Time Injury Frequency Rate (“LTIFR") is 0.89 compared to 0.79 in previous year. We are now focussing on bringing down the number of Injuries by conducting a detailed review of critical risk controls through critical task audits, strengthening our work permit and isolation system through identification and closure of gaps, on-site audits, increasing awareness of both Company and business partner personnel by conducting trainings as per requirements considering the sustainability framework. We have strived to enhance the health and safety performance by digitalisation initiatives such as usage of non- contact type voltage detectors, underground cable detectors. We have also implemented AI cameras (T- Pulse system) for reporting of unsafe acts/conditions. Our prime focus is on elimination, substitution, and Engineering Controls to reduce workplace-related hazards. Vedanta has launched a HSE-based portal by name V-Unified (Enablon) for reporting, collating, and analysing the HSE related data across the Business which has become a way of life since its inception during the Financial Year. At Sesa Goa, we have rolled out Critical Risk Management (CRM) modules to improve our safety culture and bringing down our injury rates. All the observations are being tracked, analysed, and rectified by preparing global action plans. We have achieved more than 95% actual verifications vs our planned verifications. We have implemented Monthly theme of the month campaigns for implementation of Vedanta Safety Standards at shop floor level and creating awareness among all the employees and business partners. In Health function, we have also launched SEVAMOB digital platform for digitisation of Employee Medical Records which help us in tracking and giving health related trend analysis of employees. We have rolled out Safety Governance structure and Safety score card system for all SBUs of IOB. Through Safety Governance structure, senior line function leaders are driving safety management system for their SBUs. In order to achieve highest levels of safety at site we have identified key personnel from operation and maintenance to serve as Grid Owners in addition to their current roles and responsibilities. Specialised safety trainings like defensive driving, work at height, confined space, crane lifts, etc. are provided to concerned employees based on their job role. Environment At Sesa Goa, we strive towards zero harm to environment. We work on the principle of Reduce, Recycle and Reuse across business. We harvest rainwater at all our operational sites and are water positive. We also adopt best practises in mine reclamation and Sanquelim mine reclamation is a testament to the same. We have planted 66,000+ native species plants across SBUs in this year. Value-Added Business also improved its air pollution control devices by replacing the old bag houses by new efficient baghouses. CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT 133 Management Discussion and Analysis At Iron ore Karnataka, continuing with its best practises, company has constructed 38 check dams, 7 settling pond. Additionally, company has de-silted 2 nearby village ponds increasing their rainwater harvesting potential by 20,000 m3/ annum. To abide by our net zero target by 2050, Sesa Goa is the first company to take the trial of EV wheel loaders in open cast mines at IOK and is determined to convert the existing fleet to EV. Vedanta SESA Goa has taken a step forward to promote sustainable transport by installing the first ever free EV fast charging station at Amona, VAB. This charging station will allow all the employees, business partners and people from the community to adopt sustainable transport. Vedanta Sesa Goa is actively advocating for the broader adoption of biodiesel, across its diverse business units. Production performance Production FY 2024 FY 2023 % Change Production (million DMT) Saleable ore 5.6 5.3 5% Goa 0.0 - - Karnataka 5.6 5.3 5% Pig iron (kt) 831 696 19% Sales (million DMT) Iron ore 6.2 5.7 8% Goa 0.3 0.7 (64%) Karnataka 5.9 5.0 19% Pig iron (kt) 836 682 23% Operations At Karnataka, highest-ever annual saleable ore production of 5.6 million tonnes in FY 2024, up by 5% YoY due to operational efficiency and process improvement. We recorded highest-ever annual sales of 5.9 million tonnes in FY 2024, up by 19% YoY due to improvement in logistics efficiency, which in turn helped to liquidate the inventory level. We achieved highest-ever annual production of pig iron of 831 kt in FY 2024, up by 19% YoY driven by improvement in process efficiency and FY 2023 production was impacted due to shut down in one of smaller blast furnaces. Also, we achieved highest-ever annual sales of 836 KT, up by 23% YoY driven by improvement in operational & logistics efficiency. At Goa, we bought iron ore in auctions held by Goa government in FY 2024 which was then beneficiated. Around 0.3 million tonnes was exported and some ore were consumed to cater to requirement of our pig iron plant at Amona. For Bicholim mines, EC for 3 MTPA was granted in January 2024 and operations were seamlessly restarted in end of March 2024 within 15 months of its acquisition. Financial performance (US$ million, unless stated) Particulars FY 2024 FY 2023 % Change Revenue 1,095 809 35% EBITDA 200 124 61% EBITDA margin (%) 18% 15% - Depreciation and amortisation 39 33 16% Operating Profit before special items 161 91 77% Share in Group EBITDA (%) 4% 3% - Capital Expenditure 53 64 (17%) Sustaining 34 7 - Growth 19 57 (63%) Revenue for the year was US$ 1,095 million, up by 35% YoY mainly due to higher volume at Karnataka and VAB. EBITDA for the year was US$ 200 million, up by 61% YoY majorly due to increase in sales at Karnataka and VAB and softening of coking coal prices. 134 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED Strategic Priorities and Outlook Our near-term priorities comprise: IOK - 7.2 MTPA MPAP Removal from Karnataka. Dry and wet beneficiation plant commissioning IOG - Commencement of Mining operations at Cudnem mines in Goa WCL - Ramp-up our operations and setting up magnetite concentrator plant, tailing processing unit and mini concentrator plant VAB - DIP project execution and debottlenecking projects completion. Green Mining leveraging, digitalisation, and Renewable energy Ramp-up of our operations in Coke business at Gujarat and Vazare, Maharashtra CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT 135 Management Discussion and Analysis STEEL 136 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED The year in brief ESL Steel limited or ESL is an integrated steel plant situated in Bokaro, Jharkhand, with a design hot metal capacity of 3.5 MTPA. Its current operating hot metal capacity is 1.5 MTPA with a diversified product portfolio of Wire Rod, Rebar, DI Pipe and Pig Iron which are sold across key sectors such as construction, infrastructure, transportation and energy. In line with debottlenecking and improved operational efficiency, ESL achieved highest-ever hot metal production of 1.47 million tonnes up 8% YoY and highest-ever saleable production of 1.4 million tonnes up 8% YoY. Highest-ever saleable crude steel production 1.4 million tonnes Environment Waste and circular economy We have achieved 100% utilisation of High-Volume Low Toxic waste by re-using in cement plants, brick manufacturing and earth filling Climate change Started to use Dolachar at Sinter plant which has led to reduction in Coke Fines consumption and the same has resulted in reduction of more than 58,000 tCO2 emission About 40+ Energy-saving projects are completed in this year contributing significantly in carbon emission reduction as about 60,000 tCO2 Biodiversity/Plantation Greenbelt cover of 36.44% with 3,76,246 trees and maintaining a density of 2,923 trees/ha including Miyawaki afforestation of 2.66 acres with 53,000 saplings which is a first-of-its-kind initiative in Jharkhand Water management 275 KL/day sewage treatment plant has been commissioned which would reduce fresh water offtake by 275 KL/day. This would ensure saving of fresh water 90,000 KL/annum Reduced freshwater offtake from the reservoir by 1.5 Million m3 through the following water stewardship programme. This has resulted in achieving specific water consumption of 2.7 m3/tcs from 2.8 m3/tcs ESG Update Occupational health and safety Safety is a paramount focus for ESL, ingrained in every facet of our operations. We prioritise the well-being of our employees, business partners, and the communities we serve above all else. Through rigorous training programmes, stringent safety protocols, and continuous monitoring, we ensure that safety remains at the forefront of every task, from the shop floor to the boardroom. Our commitment to safety extends beyond compliance with regulations; it’s a core value that guides our decision-making and shapes our culture. By fostering a safety-conscious environment, we not only protect lives and assets but also cultivate trust, loyalty and long-term success. Few specific projects which have improved safety culture in our organisation: Leveraging Technology for enhancing safety deliverables such as V-Unified digital platform, digital and AI-based Camera surveillance, AI-based sleep detection cameras Infrastructural development with robust engineering controls such as interlocking of all 170+ conveyor guarding, vehicle parking infra facilities for LMV and HMV vehicles, SCADA system Identification of 60 Similar Exposure Group (SEG) based on the activities performed and the associated occupational health hazards Industrial Hygiene Study has been conducted based on the identified SEGs covering the entire plant operations to identify the red, amber and the green zones with the required engineering controls to mitigate the health risks CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT 137 Management Discussion and Analysis ESG We have a robust transformation office and governance structure including 12 Community of Practices which is spearheaded by CEO and senior leadership. Identified 97 projects under various CoPs and 27 projects have been completed and 30 project are in final stage. Specific Energy and GHG Emissions: SEC has been reduced from 0.676 toe/tcs to 0.668 toe/ tcs GHG emission intensity is reduced from 2.92 tCO2/tcs to 2.83 tCO2/tcs Various projects such as CML5 Motors optimisation, Caster exhaust fan automation, Commissioning of LT Capacitor banks, Thermal insulation work, VFD installation and other initiatives have led to power savings of 3,705 MWh annually. Production performance Production FY 2024 FY 2023 % Change Production (kt) 1,386 1,285 8% Pig iron 203 192 6% Billet 30 26 15% TMT bar 505 463 9% Wire rod 436 407 7% Ductile iron pipes 212 196 8% Operations Production of saleable product for the year was 1,386 kt, up by 8% YoY in line with increased hot metal due to debottlenecking of blast furnace and operational efficiencies. Softening of costs in raw materials such as coking coal, coupled with various market dynamics, led to a decrease in the cost of sales while sales and market prices remained under pressure. In FY 2024, our captive mines at Barbil produced 5.4 million tonnes and despatches were 5 million tonnes, ensuring iron ore raw material security. Our priority remains to enhance production of value- added products viz. Rebar, Wire Rod and DI Pipe and hence margins. Regarding renewal of Consent to Operate (CTO) for the steel plant at Bokaro, Ministry of Environment, Forests and Climate Change (MoEF&CC) has issued a letter to forest department of Jharkhand to submit the complete compliance of the condition for further consideration. State has submitted the Compliance Report vide letter dated 17 November 2023 citing the progress and requesting to reconsider the FC Stage I revocation. Further updated letter is expected from the State by MOEF&CC with respect to the status. For detailed information, please refer to ‘Note 3(c) Significant accounting estimates and judgements’ of the consolidated financial statements. Prices Production FY 2024 FY 2023 % Change Average steel price (US$ per tonne) 610 689 (11%) Average sales realisation for the year was US$ 610 per tonne down by 11% YoY Prices of iron and steel are influenced by several macro-economic factors. These include global economic scenarios, wars, duties on iron and steel products, supply chain destocking, government expenditure on infrastructure, the emphasis on developmental projects, demand-supply dynamics, the Purchasing Managers’ Index (PMI) in India and production and inventory levels across the globe especially China. Unit costs Production FY 2024 FY 2023 % Change Steel (US$ per tonne) 588 656 (10%) Cost for the year was US$ 588 per tonne, down by 10% YoY primarily on account of decrease in coking coal prices during the year, and other operational efficiencies which is partly offset higher bid premium paid on captive iron ore mines despatches. Financial performance (US$ million, unless stated) Particulars FY 2024 FY 2023 % Change Revenue 1,003 978 3% EBITDA 27 39 (31%) EBITDA margin (%) 3% 4% Depreciation and amortisation 49 48 (2%) Operating Profit before special items (22) (9) - Share in Group EBITDA (%) 1% 1% - Capital Expenditure 79 85 (7%) Sustaining 8 12 (34%) Growth 71 73 (2%) Revenue for the year was US$ 1,003 million, up by 3% YoY, primarily due to higher volume which is getting offset due to lower realisation. EBITDA was US$ 27 million, down by 31% YoY. 138 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED Strategic Priorities and Outlook Steel demand is expected to be robust in India, buoyed by strong demand from key sectors (construction and housing, automobiles, power projects) and government’s push to ramp-up infrastructure spend in India. Hence, we prioritise to increase our hot metal production capacity from 1.7 MTPA to 3.5 MTPA by FY 2024-25 with a vision to become high-grade and low-cost steel producer with highest Environment, Health and Safety standards. The focus areas comprise: Innovation in Technology for sustainable operations/production Development of low-cost Capex products (Alloy Steel Segments, Flat Products, new DI plant) to capture market share Optimise and significantly reduce logistics cost over time Obtain clean ‘Consent to Operate’ and environmental clearances Ensure zero harm and zero discharge, fostering a culture of 24x7 safety culture CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT 139 Management Discussion and Analysis FERROCHROME 140 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED The year in brief Ferro Alloys Corporation Limited or FACOR has a strong presence in the business of producing Ferro Alloys and owns a Ferro Chrome plant with capacity of 145 KTPA one operational Chrome mines and 100 MW of captive power plant. In FY 2024, Ferro chrome ore production was 240 kt which is down by 17% YoY on account of statutory clearances for Kalarangiatta Mine. Ferro Chrome production was 80 kt up 18% up YoY being highest-ever production since acquisition. Record saleable production 80 kt Proximity sensors and Semi Fire Suppression System (SFSS) were installed at all Mines Dumpers and Inhouse Machine Guarding work was done throughout all the Conveyors across all the units of mines We successfully eliminated a few critical jobs from line of fire by shifting the control levers of furnace charging, Furnace door operations and furnace inspection by shifting the control levers and switches into the control room A safety training kiosk has been deployed inside the plant premises to provide standardised safety training to all stakeholders including drivers A lot of major initiatives and state-of-the-art technology implemented inside the mine premises in the areas of mine design, simulation, monitoring and data analysis. Live monitoring system have been implemented in slope monitoring, air quality monitoring and water quality monitoring. All the HEEMs are fully equipped with safety features suggested by the statutory body – Director General of Mines Safety (DGMS) ESG Update Occupational health and safety LTIFR for the year was 0.32 as compared to 0.13 in FY 2023. The total number of injuries reported in the year was significantly reduced by 35%. The reduction was driven by several safety awareness, investigation, and prevention initiatives. There has been greater management focus to bring a cultural change via felt leadership programmes, town halls and recognition for near- miss reporting Completion of Arc Flash assessment for all electrical panels at CCP and Power Plant AI-based Safety System “T-Pulse” which was already was installed in CCTV Cameras of 45 MVA Furnace was extended to 33 MVA Furnace at Charge Chrome Plant (CCP) to auto-detect Unsafe observations For Risk Management, EOT Cranes were provided with an Anti-Collison device and Audio-Visual Alarm CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT 141 Management Discussion and Analysis Environment Public Hearing has been conducted successfully for Patabali COB Plant for the capacity of 495 KTPA and also for Ostapal Chromite Mine for Expansion of Opencast to Underground Mines with Enhanced Capacity of 1.5 million tonnes Chromite ROM from current capacity of 0.24 million tonnes Chromite ROM Production. Public hearing has been conducted successfully at Charge Chrome Plant for expansion of Ferro Alloys Plant for High Carbon Ferro Chrome production from 140 KTPA (1 x 45 MVA, 1 x 33 MVA) to 440 KTPA (1x45 MVA, 1 x 33 MVA and 2 x 75 MVA) and 11,800 tonnes from Metal Recovery Plant along with new installation of Raw Material Handling Facility and 700 KTPA Pallet and Sinter Plant Environmental Clearance for Capacity 495 KTPA was obtained for Patabali COB Plant ETP (Effluent Treatment Plant) Sludge from Mines disposed timely to OSPCB authorised vendor Plastic waste Disposal to Authorised OSPCB Vendor for Ostapal and Kalarangiatta Chromite Mines and carried out Plastic waste collection drive to make single-use plastic-free plant premises Installation of IOT flowmeter in the intake well of Salandi River for Power Plant and Installation of IOT Flowmeter in the ETP (Effluent Treatment Plant) inlets of Both Ostapal and Kalarangiatta Chromite Mines Installation of fugitive dust control system in Ground Hopper of the new furnace Installation of 7 KVA solar under progress at mines Production performance Production FY 2024 FY 2023 % Change Ore Production (kt) 240 290 (17%) Ferrochrome Production (kt) 80 67 18% Ferrochrome Sales (kt) 78 67 16% Power Generation (MU) 291 112 160% At Mining division, ROM production from Ostapal Mine achieved 100% of EC limit, i.e. 240 kt and EC for enhanced production of 1.5 million tonnes per annum is in pipeline, and for that public hearing has been conducted successfully in Deccember 2023. Production at Kalarangiatta mine has been temporarily halted due to statutory clearance issue, but full fledge production will commence again in FY 2024-25. At Charge Chrome Plant (CCP), we recorded Ferrochrome metal volume of 80 kt in FY 2024. We have recorded highest-ever monthly ferro chrome production of 8,907 mt in January 2024. We have reduced our specific ore consumption to 2.31 mt/mt against 2.40 mt/mt. Current year specific coke consumption is 560 Kg/mt against 591 Kg/mt last year. At Power Plant, we recorded annual Power Generation of 291 MU in FY 2024. Financial performance (US$ million, unless stated) Particulars FY 2024 FY 2023 % Change Revenue 98 96 2% EBITDA 14 19 (25%) EBITDA margin (%) 14% 19% - Depreciation and amortisation 10 12 (15%) Operating Profit before special items 4 7 (43%) Share in Group EBITDA (%) 0% 0% - Capital Expenditure 26 24 8% Sustaining 5 12 (58%) Growth 21 12 75% Revenue for the year was US$ 98 million, up by 2% YoY, primarily due to higher sales volume partially offset by lower realisation. EBITDA for the year was US$ 14 million, down by 25% mainly due to higher cost of production because of purchase of ore from external sources and statutory clearance pending for Kalarangiatta Mines. 142 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED Strategic Priorities and Outlook Expansion of Growth Capex project of 300 KTPA Ferrochrome Production Expansion of Mines project of 1.5 MTPA Establishment of 600 KTPA concentrator Plant Revival of Kalarangiatta and Kathpal Mines 100 MW Power Generation and Sale of additional Power Sale CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT 143 Management Discussion and Analysis COPPER – INDIA / AUSTRALIA 144 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED Integrated Report and Annual Accounts 2023-24 The year in brief Silvassa operations continued to deliver 21% growth in sales volume on YoY basis and significant portion of which is catered to India’s domestic copper market. The copper smelter plant at Tuticorin was under shutdown for the whole of FY 2024. On 29 February 2024, the Supreme Court dismissed the Special Leave Petitions filed by the Company towards plant restart. The company is evaluating legal remedies for sustainable restart of Tuticorin plant. Growth in sales volume 21% process has seen significant reduction of approx. 39,000+ tCO2e compared to primary sources. The company has been constantly striving to achieve efficiency in terms of power consumption in process vis-à-vis – installation of IE4 motors phasing out lesser efficient motors. Emission reduction programmes in pipeline include implementation of E-Forklift and announcement of E-Vehicle Incentive programme for all eligible employees. First-of-its-kind Digital Initiative Copper business has launched "CuBert", the first AI chatbot in Base Metal Industry, to transform Customer Experience (CX) through digital innovation. CuBert enhances customer engagement with features like real-time order tracking, live LME & Forex rates, and access to booking details, quality certificates, ledger statements, and many more. By integrating real-time data and personalised interactions, CuBert has significantly improved user satisfaction and set a new industry standard in customer service. Production performance Production FY 2024 FY 2023 % Change Production (kt) India – cathode 141 148 (5%) Sales (kt) 198 164 21% Operations Copper production in Silvassa reduced by 5% to 141 kt owing to global copper blister shortage. However, sales have witnessed growth of 21% in terms of sales volume and realised highest sales after closure of the Tuticorin unit and improved operational efficiencies, debottlenecking and capability building initiatives carried across the plant, the year also marked remarkable growth in free cash flow. In the matter of restart of Tuticorin operations, the Supreme Court has dismissed Special Leave Petitions filed by the Company and refused to grant it permission to reopen ESG Update Occupational health and safety The lost time injury frequency rate (LTIFR) was 0.39 in FY 2024 (FY 2023: 2.77). This year witnessed adoption of new technologies to enhance the workplace safety. Artificial Intelligence based camera system were installed for continuous monitoring of the workplace to detect any unsafe acts/conditions in the critical work areas. Initiated projects such as Air-Cooled helmets for employees working in hot work areas and fatigue monitoring devices for forklift drivers. Critical Risk Management (CRM). The safe work culture was promoted by the safety leadership with constant interaction with business partners and other stakeholders through trainings, campaigns, leadership walkthrough programmes, stand downs, committee meetings and R&R programmes. The Silvassa copper operation was awarded with the British Safety Council – International Safety Award in the Merit Category as a testimony to our commitment of maintaining safe and healthy workplace. Environment Aligned with the Vedanta’s vision to reach net zero emissions by 2050, Sterlite Copper has signed contract with M/s Serentica Renewable Power Limited for the supply of 16 MW with a potential to offset 64,535 tCO2e per annum. Further, consumption of secondary copper in the CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT 145 Management Discussion and Analysis Tuticorin smelting operations. The company is evaluating legal remedies for sustainable restart of Tuticorin plant. For detailed information, please refer to ‘Note 3(c) Significant accounting estimates and judgements’ of the consolidated financial statements. Prices Production FY 2024 FY 2023 % Change Average LME cash settlement prices (US$ per tonne) 8,353 8,530 (2%) Average LME copper prices reduced by 2% compared with FY 2023 predominantly due to lower than expected demand in China & Higher US Fed Interest rates. Financial performance (US$ million, unless stated) Particulars FY 2024 FY 2023 % Change Revenue 2,383 2,179 9% EBITDA (9) (7) (20%) EBITDA margin (%) (0%) (0%) - Depreciation and amortisation 26 18 49% Operating Profit before special items (35) (25) (40%) Share in Group EBITDA (%) 0% 0% - Capital Expenditure 7 14 (51%) Sustaining 5 12 (57%) Growth 2 2 18% Revenue for the year was US$ 2,383 million, up by 9% The increase in revenue was mainly due to higher volume, favourable exchange rate partially offset by lower Copper LME prices. EBITDA for the year was US$ (9) million, mainly on account of supply shocks from global blister shortage. Strategic Priorities and Outlook Over the following year, our focus and priorities will be to: Improving operating efficiencies, increasing Sales Margin, reducing our cost profile; Upgrade technology and digitalisation to ensure high-quality products and services that sustain market leadership and surpass customer expectations; and Continuous debottlenecking and upgrading our processing capacities for increased throughput. NICOMET The year in brief Indian market for Nickel sulphate and Nickel metal is driven by sectors like stainless steel and electroplating. Further, nickel is also a key component of electric vehicles which is fuelling the growth. Currently there is total 44 KTPA domestic market of primary Nickel metal and 2 KTPA domestic market. Nickel market in India is expected to grow at the CAGR of 4.7%. Our metal production is mostly sold in the domestic market where our market share is currently close to 7.5%. We have also captured 35% of total Nickel sulphate domestic market. Further, Nickel sulphate is exported to the EV battery makers in South Korea, Japan and China. We have also signed export LTC with South Korean EV battery manufacturer ESG Occupational health & safety We believe every incident can be prevented. The lost time injury frequency rate (LTIFR) is 6.92 in FY 2024 vis-à-vis 2.91 in FY 2023. To improve safety at workplace, we promote felt leadership culture with involvement of senior leaders for strengthening our safety system. Safety stand-downs were conducted to communicate the learnings from safety incidents across the group. Our safety leadership regularly engages with the on- ground team to improve behaviour-based safety culture. 146 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED PORT BUSINESS Vizag General Cargo Berth (VGCB) The volumes handled increased by 9% YoY and the despatch volume increased by 9% YoY. 23% of the total volumes handled represents Multi-cargo (i.e., other than coal) under supplementary agreement signed with Visakhapatnam Port Authority (VPA). Production performance Production FY 2024 FY 2023 % Change Production (mt) Nickel 2,702 681 - Sales (mt) 2,911 194 - Prices (US$ per tonne) Production FY 2024 FY 2023 % Change Average LME CSP 19,083 25,628 (26%) Nickel CSP for the year was US$ 19,083 per tonne, down by 26% mainly on account of global market rebalancing. Financial performance (US$ million, unless stated) Particulars FY 2024 FY 2023 % Change Revenue 55 5 - EBITDA (2) (3) 17% EBITDA margin (%) - - - Depreciation and amortisation 1 0.4 - Operating Profit before special items (3) (3) (2%) Share in Group EBITDA (%) 0% 0% - Capital Expenditure Sustaining 2 1 - Growth 0 0 11% Projects With the view of rising Nickel demand due to upsurge in the EV battery markets, outlook of the global Nickel demand is very much positive. We have planned on enhancing the plant capacity production in following two phases In the first phase, debottlenecking is under progress in the existing plant, to reach capacity of 10 KTPA. This will be supported with plant automation, modernisation and ensure optimum utilisation of assets. The second phase of capacity enhancement will be setting up a new 'state-of-the-art' Nickel plant with the capacity of 50 KTPA to cater the Indian domestic demand in line with our Chairman's vision – “Desh Ki Zarooraton Ke Liye” CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT 147 Management Discussion and Analysis The Board is responsible for ensuring the long-term success of the Group by balancing the needs of its various stakeholders. Good governance plays a key role in the delivery of shareholder value and the Board remains committed to maintaining good corporate governance and ethical business practices. Section 172 Statement The following section serves as our “section 172(1) statement” and explains how the Board considers the interests of key stakeholders and the broader matters set out in s172 of the Companies Act 2006 (s172) when performing their duty to promote the success of the Company under s172, the Board's engagement with those stakeholders and their influence on decision making. The Board’s approach to s172 and decision making The Board is ultimately responsible for the long-term success of the Group. It recognizes that this is dependent on fostering good relationships with its key stakeholders in the pursuit of sustainable growth for the benefit of the Company’s shareholders. The Board therefore considers the interests of and the impact of its decisions on the Group’s key stakeholders as part of its decision-making process. When making decisions, each Director ensures that he acts in the way he considers, in good faith, would most likely promote the Company’s success for the benefit of its members as a whole, and in doing so have regard (among other matters) to those set out in s172. How the Board operates Vedanta Resources Limited is the parent company of the Vedanta Group. Through its subsidiaries, it holds its principal operating businesses such as Vedanta Limited. It is the Board’s view that good governance of the Group is best achieved by the delegation of authority from the Board to its operating subsidiaries. Accordingly, the Board has well- established arrangements for the delegation of authority to its operating subsidiaries, together with a schedule of matters which are reserved for the Company’s Board. Therefore, while the interests of the Group’s stakeholders are considered by the Company’s Board, at a business level, the interests of each business’ stakeholders are considered by the boards of Vedanta Limited and each of its operating subsidiaries. Each subsidiary is responsible for their own decision making and formulates its own policies in line with local regulations in the country they operate in. Details of the Company’s governance framework and delegation of authority to the Board and Management committees, which is regularly reviewed to ensure it remains fit for purpose, can be found of page 150. GOVERNANCE For every strategic proposal, the primary focus of the Board is to promote the long-term success of the group to the benefit of members and other stakeholders. Decision making by both the Company’s Board, and under its delegated authorities to its principal operating subsidiaries, take into account the assessment of the impact of the decision of the long-term success of the Group to the benefit of its shareholders, with regard to other stakeholders. The Company’s principal operating subsidiaries report back to the Company’s Board on the consideration taken by the respective subsidiary boards of the s172 factors on all strategic decisions taken by them. As Vedanta Limited is listed on the Bombay Stock Exchange and National Stock Exchange in India, stringent compliance and reporting measures are in place to ensure good governance and to consider the interests of its key stakeholders. The role of the chair The chairman encourages open dialogue between the non- executive director and management on all Board discussions. This includes constructive discussion, to assess the long- term impact for the Group including its stakeholders, of any strategic proposals presented to the Board. Information The associated briefing papers circulated to the Board for consideration and approval detail potential impacts, if any, on the members and other stakeholders and the long-term consequences for the business. The s172 assessment is performed internally by management, and where required, the Board may request external assurance of the quality of information provided. Policies and practices Vedanta Limited, as the principal operating subsidiary, has an established stakeholder engagement standard which governs the procedure for identifying key stakeholders. At Vedanta Limited, a review of key stakeholders is undertaken every 3 years and discussed by the Group Executive Committee. This subsequently gets presented to the Vedanta Limited Board for information. In line with the Group’s delegated authority structure, stakeholder identification is undertaken at a Business Unit level. Vedanta’s social responsibility performance standard aims to ensure effective engagement with all key stakeholders. Details on the Group’s ongoing engagement with stakeholders can be found on page 64. 148 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED Training The relevance of stakeholder considerations in the context of the Board’s decision-making has long been a part of Board as they are aligned to the Group’s vision, values and sustainability principles. We recognise the importance of keeping the interests of our stakeholders at the forefront of decision-making and provide refresher training to Directors as required. The Board and Company’s senior management team have received briefings on the Directors’ duties as outlined in s172 of Companies Act 2006. These training briefings have also been cascaded to the management teams including those at the principal operating subsidiary, Vedanta Limited to ensure that delegated decision making adequately covers the impact assessment of these s172 factors and that stakeholder considerations are at the forefront of all strategic decisions. Culture and Stakeholder Engagement The Board is committed to maintaining strong relationships with its shareholders, bondholders and other stakeholders. The Group is working to continually improve its engagement with its various stakeholders. The Group has a number of governance standards which facilitate the pursuit of its goals and vision with adherence to its purpose and values. The Group’s stakeholder engagement standard and social responsibility performance standard ensure that the Group’s stakeholders are at the forefront of its operations and decision making. They also facilitate effective engagement with all key stakeholders. Further details on ongoing engagement with stakeholders can be found on page 64 of the Strategic Report. All Group governance standards including the stakeholder engagement standard and social responsibility performance standards are rolled out across the Group and include new operating businesses following their acquisition by the Group in order to promote consistency across the Group. Maintaining our licence to operate Our licence to operate is dictated by our reputation and the way the Group is perceived by its stakeholders. The Board’s leadership ensures that management of the respective businesses run the businesses in an ethical and responsible manner in relation to all stakeholders. The Board has an established set of corporate values which guide its decision- making process and operations. Further details of the Group’s purpose and values can be found on page 1. The Group has a Code of Business Conduct and Ethics, a Supplier Code of Conduct and its Whistleblower Policy which reinforce the Board’s commitment to operating in an ethical manner in the pursuit of its goals. Furthermore, staff receive regular training updates on ethical practices including anti-bribery and corruption and anti-money laundering. The Group Internal Audit function regularly reports to the Board on the operation of the Whistleblower policy including remedial actions taken following the investigation of any complaints received. Creating value for our stakeholders The Group maintains ongoing dialogue with its stakeholders to understand their expectations and how their concerns can be addressed. Consideration of stakeholder interests forms a vital part of the Board’s deliberations. Details of what the Board considers are the key interests of the Group’s stakeholders and the Group’s actions in FY 2023-24 to foster these interests can be found in the sustainability section on page 64. The Board and subsidiary boards ensure that stakeholder considerations are taken into account in strategic decision making by requiring that all strategic proposals coming to the Board include an analysis of stakeholder impacts, which form part of the discussions when making decisions. The Company Secretary provides support to the Board to ensure that sufficient consideration is given to stakeholder issues. In accordance with the Schedule of Matters Reserved for the Board, the principal operating subsidiaries will regularly report to the Board on the considerations taken for key strategic decisions. Making strategic decisions for a better future During the year, the Company’s principal subsidiary, Vedanta Limited approved a number of strategic transactions which were determined would promote the long-term success of the company for the benefit of its shareholders while taking into account the needs of all its stakeholders. During the year, Vedanta Limited approved a Scheme of Arrangement to significantly reshape its business portfolio, with the aim of creating dedicated, pure play world-class business units capable of independent, direct investment across a broad array of natural resources, renewables, semiconductors, display, and technology sectors. Following the completion of this undertaking, achieved through a series of demergers from the current conglomerate structure, Vedanta Limited will be the sole or majority owner of 17 investment vehicles. In turn, this portfolio reshaping will unlock significant stakeholder value across the entire breadth of Vedanta's business interests, ensuring full capitalisation of the latent potential of the Group’s asset base, increase balance sheet optionality for each of the business units individually and future-proof the organisation for decades to come. Once demerged, each independent entity will have greater freedom to grow to its potential and true value via an independent management, capital allocation and niche strategies for growth. It will also give global and Indian investors potential to invest in their preferred vertical, broadening the investor base for Vedanta assets. In addition, a number of other strategic transactions were approved including capex of USD 296mn to Cairn Oil & Gas to increase near term volume through infill wells and add CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT 149 Governance resources through exploration, bidding for various mineral blocks, growth project at Ferro Alloys Corporation Limited (FACOR), to increase capacity from current 150KTPA to 450KTPA and the Athena Growth Project. GOVERNANCE FRAMEWORK The Company’s Board of Directors collectively provides entrepreneurial leadership for the Group and strategic direction to management for the delivery of sustainable shareholder value. The reporting structure, as outlined below, between the Board and Management represents the Group’s Delegation of Authority and Corporate Governance framework. As part of its decision-making processes, the Board considers the long- term consequences of its decisions, the interests of various stakeholders including employees, the impact of the Group’s operations on the environment and the need to conduct its business ethically. This is achieved through a prudent and robust risk management framework, internal controls and strong governance processes. Board Comprises of three directors including the Executive Chairman, Executive Vice Chairman and one Non- Executive Director. The Board’s responsibilities • Set the values and vision of the Group; • Determine strategic priorities and risk appetite; • Review the delivery of strategy by management and provide challenge or support as necessary; • Oversee the Group’s internal controls and risk management framework; • Monitor the Group’s risk environment and tolerances; • Stakeholder engagement; • Financial and performance reporting; and • Determine remuneration of Directors. The Group Company Secretary acts as Secretary to the Board and attends all its meetings to formally record each meeting. The Executive Committee The Executive Committee is responsible for the day-to-day running of the Group and meets monthly. It is responsible for implementing the strategy adopted by the Board, allocating resources in line with delegated authorities, managing risk and monitoring the operational and financial performance of the Group. Authority is delegated by the Executive Committee to the respective chief executive officer of each of the Group’s businesses. During the year, the CEO of Vedanta Limited attended the Company’s Board meetings to brief the Board on strategic and operational matters. The CEO of Vedanta Limited reports to the Board on all operational matters. Key matters reserved for Board consideration The duties of the Board are set out in its terms of reference, including those matters specifically reserved for its consideration. The Board’s terms of reference also set out those matters which must be reported to the Board, such as details of fatalities within the Group and the adoption or material amendment to the Group policies relating to business conduct, environment and health and safety. The formal schedule of reserved matters is replicated in internal delegation of authorities within the Group to provide the businesses with flexibility to operate whilst ensuring that strategic matters are always considered and decided by the Board. The Board reviews its schedule of reserved matters regularly. Board focus during the year Operational and financial performance • Approval of the Group’s Business Plan FY2023-2024; • Reviewed the Group’s operational performance, including safety and environment across its businesses, through updates from the Chief Executive Officer at each scheduled Board meeting; • Reviewed the Group’s financial performance and debt management initiatives through updates from the Chief Financial Officer at each scheduled Board meeting; • Reviewed the Group’s Treasury position and considered Management’s liability management proposals including the approval of various loan financing facilities and amendments to existing loan facilities; • Discussed the Group’s operational and financial performance, reviewed its going concern status and approved the going concern statements for inclusion in the Company’s Annual Report. • Received updated on the significant accounting, legal and tax issues and approved the Group’s Annual Report and full- and half-year financial results; Governance and Risk • Review of the Group’s progress on compliance with the Modern Slavery Act; • Approval of the Payments to Governments’ and Tax transparency reports; • Review of the Company’s going concern position; and • Approval of the auditor’s re-appointment and fees. 150 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED The Board is comprised of two executive directors and one independent non-executive director for effective governance. The non-executive director is considered fully independent in character and judgement and free from any relationship or circumstance that could affect or appear to affect his independent judgement. The Board operates in an open and collaborative manner to support and constructively challenge management to deliver operational success. The Directors harness their collectively wide-ranging expertise and experience to shape decision making. Board induction On appointment to the Board, each Director undergoes a comprehensive induction programme which is tailored to their individual needs but is intended to provide an EFFECTIVENESS introduction to the Group’s operations, challenges and risks. Newly appointed Directors also receive an overview of their duties, corporate governance policies and Board processes. Ongoing board training and development The Board is committed to the continuing development of its Directors and they are offered training as required to assist them in the performance of their duties. There are also procedures in place to provide the Directors with appropriate and timely information, including receiving information between meetings regarding Group business development and financial performance. The Directors have access to the Company’s professional advisers, where necessary, as well as to the Company Secretary, who is responsible for ensuring that Board procedures are followed. The Company Secretary is also responsible for advising the Board on governance matters. CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT 151 Governance Area of responsibility Activities Financial reporting The Board oversees the integrity of the Company’s financial reporting process to ensure that the information provided to the Company’s shareholders and other stakeholders is fair, balanced and understandable and provides the information necessary to assess the Company’s financial position, performance, business model and strategy. The Group has a comprehensive financial reporting system, which is reviewed and modified in line with accounting standards to ensure that all published financial information is accurate. During the year, the Board reviewed the preliminary announcement, Annual Report and financial statements for the Board’s approval. As part of the process, it reviewed and challenged the key accounting and other judgements presented by management. A detailed audit plan (the Audit Plan) was prepared by the external auditor. The Audit Plan set out the audit scope, key audit risks identified, materiality issues, the client team working on the audit and the audit timetable. The audit scope covered the significant components of the audit and audit plans for each component and geographical location. Each of the key audit risks and the external auditor’s response on how it will investigate these risks was considered by the Board. The Board discussed the key accounting issues as outlined in the audit opinion. Other areas of review and discussion included: • Six-monthly reviews of significant accounting issues and impact on the Group; • Review and approval of the half-year report; • Discussion on impairment reviews; • Review of pending tax issues and the financial exposure to the Group; • Review of legal and tax cases and the associated risks arising to ensure that appropriate provisions are made and disclosed; • Review of the going concern basis for the preparation of the financial statements including working capital forecasts, monthly projections and funding requirements; Internal controls, risk management and governance The Board reviews internal control and risk management processes and output from the regular review of risks carried out during the year by the internal audit function. Vedanta’s risk management framework serves to identify, assess and report on the principal and emerging risks facing the Group’s businesses in a consistent manner. Further details on the Group’s risk management framework are on pages [x to x] of the Strategic Report. • During the year and up to the date of this Report, the Board reviewed the internal control system in place to ensure that it remains effective. The review included a report on the risk matrix, significant risks and actions put in place to mitigate these risks. Any weaknesses identified by the review were addressed by enhanced procedures to strengthen the relevant controls and these are in turn reviewed at regular intervals. • The Board also continued to monitor the market conditions, risks and uncertainties relevant to the Group, reviewed the risk management framework and reported to the Board on relevant risks affecting the Group. The Board received periodic updates from management confirming that risks relevant to the Group were appropriately categorised, the potential impact to the Group and adequacy of resources allocated to manage the risks. The Board has reviewed the Principal Risks and Uncertainties for the Group disclosed in the Annual Report and Accounts 2024 and consider them to be appropriate. • Internal audit review including reviews of the internal control framework, changes to the control gradings within the Group and whistle-blower cases; and • Review of the Group’s risk management infrastructure, risk profile, significant risks, risk matrix and resulting action plans. The audit and external auditor • Review of the significant audit risks with the external auditor during interim review and year-end audit; • Consideration of external audit findings and review of significant issues raised; • Review of key audit issues and management’s report; • Review of the independence of the external auditor and the provision of non-audit services including non-audit fees paid to the external auditor; • Review of the external auditor’s performance and making recommendations in respect of the re-appointment of the external auditor; • Review of the management representation letter; • Review of the audit plan, scope of the 2024 external audit of the financial statements and key risk areas for the 2024 audit. ACCOUNTABILITY 152 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED Significant accounting issues considered by the Board The preparation of financial statements requires management to make judgements, estimates and assumptions, that affect the application of accounting policies and the reported amount of assets, liabilities, income, expenses and disclosures of contingent liabilities at the date of these financial statements and the reported amount of revenues and expenses for the years presented. The Board reviews whether the Group’s accounting policies are appropriate, and management’s estimate and judgements applied in the financial statements are reasonable. The Board also reviewed the disclosures made in the financial statements and the views of the external auditor as outlined in the audit opinion on pages 160 - 165 on these significant issues were considered by the Board. External auditor MHA is the Company’s external auditor. The Board reviews the external auditor’s independence and assesses their ongoing effectiveness. The Board also determines the external auditor’s remuneration and includes all the fees that the Company pays for audit, audit-related and non-audit services performed by MHA. Non-audit services The Group has a policy that governs the provision of non- audit services by the external auditor which specifies the services which the external auditor is permitted to undertake. It also specifies non-audit services which MHA is prohibited from undertaking in order to safeguard their objectivity as such services present a high risk of conflict and could undermine the external auditor’s independence. The Board reviews the fees paid to the external auditor for non-audit services to ensure auditor independence is safeguarded. A breakdown of the non-audit fees paid to the external auditor is disclosed in Note 36 to the financial statements. CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT 153 Governance The Directors are pleased to present their annual report on the business of the Group, together with the financial statements and auditor’s report, for the year ended 31 March 2024. Information required by Schedule 7 of the Large and Medium- sized Companies and Groups (Accounts and Reports) Regulations 2008 as amended to be included in the Directors’ Report but, which is instead included in the Strategic Report or elsewhere in the Annual Report, is set out in the table below: Employment policies and employee involvement Strategic Report on pages 86 - 93 Strategic report The Strategic Report has been prepared in accordance with the Companies Act 2006 (‘the Act’) which requires the Company to set out a fair review of the business of the Group during the financial year, including an analysis of the position of the Group at the end of the financial year and the trends and factors likely to affect the future development, performance and position of the business. The Strategic Report on pages 1 - 147 provides a comprehensive review of Vedanta’s strategy, operations, its financial position and its business prospects, and is incorporated by reference into, and forms part of this Directors’ report. Review of business and future developments Certain items that would ordinarily need to be included in this Directors’ report (including an indication of likely future developments in the business of the company and the Group) have, as permitted, instead been discussed in the Strategic report. A review of the business and future developments of the Group is presented in the Strategic Report on pages 1 - 147. The Directors’ declaration on pages 158 - 159 is also incorporated into this Directors’ report. Forward looking statements The Strategic Report and other sections of this Annual Report contain forward looking statements. By their nature, forward looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future and may be beyond the Company’s ability to control or predict. Forward looking statements and past performance are therefore not guarantees of future performance. The information contained in the Strategic Report has been prepared on the basis of information and knowledge available to the Directors at the date of preparation and the Company does not undertake to update or revise the content during the year ahead. DIRECTORS’ REPORT Dividends The Directors are not recommending a final dividend for the year ended 31 March 2024. (2023: US cents 6.53 per ordinary share). Directors The Directors as at the date of this Report are Messrs Anil Agarwal, Navin Agarwal and Allampallam Ramakrishnan Narayanaswamy. Biographies for each of the Directors can be found on the Company’s website at www.vedantaresources. com Directors’ Remuneration Details of the remuneration of the Directors of the Company is provided in the Directors’ Remuneration Report on pages 150 - 151. Directors’ and officers’ indemnity The Company had in place qualifying third party indemnity provisions for the benefit of its directors’ and officers during the year which remain in force as at the date of this report. Directors and Officers insurance cover is in place for all directors to provide cover against certain acts or omissions on behalf of the Company. Material Interest in shares The shares of Vedanta Resources Limited are held by Volcan Investments Limited and its wholly owned subsidiary, Volcan Investments Cyprus Limited as follows: Volcan Investments Limited- 187,488,092 shares – 65.73% Volcan Investments Cyprus Limited- 97,758,606 shares – 34.27% Share capital As at 31 March 2024 the issued share capital of the Company was comprised of 285,246,698 ordinary shares of US$0.10 each and 50,000 deferred shares of £1 each. Rights and obligations attaching to shares The rights and obligations attaching to the ordinary and deferred shares are set out in the Articles. Details of the issued share capital are shown in Note 29 of the financial statements. Apart from the above, each ordinary share carries the right to one vote at general meetings of the Company. Holders of deferred shares are not entitled to attend, speak or vote at any general meeting of the Company, nor are they entitled to the payment of any dividend or to receive notice of general meetings. 154 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED Further details of the rights attaching to the deferred shares are set out in the Articles and summarised in Note 30 of the financial statements. Financial instruments An explanation of the Group’s financial management objectives and policies, together with details of the Group’s exposure to price risk, credit risk, liquidity and cash flow risk and foreign currency risk, appears in Note 24 to the financial statements. Branches During the year and to the date of this report, the Company has one branch overseas, situated in Jharsuguda, Orissa, India. Employees Information on the Group’s employees and its policies with respect to employees can be found in the Sustainability Report section of the Strategic Report on pages 86 - 93. In summary, the Group’s commitment to communication and dialogue with employees continues. The existence of a Group- wide intranet enables engagement and communication with employees throughout the Group. It also helps management to share information, ideas and opportunities quickly and to achieve a common awareness on the part of all employees of the financial and economic factors affecting the performance of the Company. Employees have opportunities to voice their opinions and ask questions through the Group intranet and engage in question and answer sessions with the Executive Chairman. Slavery and Human Trafficking Statement The Group’s slavery and human trafficking statement for the year ended 31 March 2024 in accordance with s54 of the Modern Slavery Act 2015 will be published on the Company’s website at www.vedantaresources.com. The statement outlines the steps taken by the Group to address the risk of slavery and human trafficking occurring within its operations and supply chains. Diversity & inclusion policy The Board has formalised its approach to diversity and inclusion with its approval of the Group’s Diversity and Inclusion Policy. The policy reinforces the Group’s commitment to promoting an inclusive environment, in which every member of its workforce feels valued and respected, with a zero tolerance of discrimination and harassment. While our commitment extends to embracing diversity in all its forms, including but not limited to, age, gender, ethnicity, abilities, sexual orientation and religious beliefs, the Group’s is specifically focussing on improving the gender balance. The objective of the Diversity and Inclusion Policy is to have a workforce which is representative of the countries and communities in which we operate and where every individual is valued, respected and empowered to utilize their different abilities and experiences to realize their full potential. Gender diversity The Board is committed to improving diversity across the Group. At Vedanta, we strive to achieve gender parity in our workforce. By driving diversity equity & inclusion for the organization, we also include the communities surrounding our operations as we take bolder steps to include representation from all sections of the society. Our workforce comprises of 20% gender diversity in its executive workforce. We are proud of our diverse workforce which is a mix of regional, gender, sexual orientation, physical abilities, ethnicity and other forms of diversity. In the last financial year, we implemented various pathbreaking initiatives including the launch of the new Parenthood Policy which encompassed benefits for LGBTQ employees. In addition, a ‘NO QUESTIONS ASKED’ Work From Home policy was launched for female professionals to improve the well-being of female employees. Vedanta also organized the ‘WINSPIRE’ initiative with the objective of setting the way forward for women leaders in the coming years. This event was hosted by Hindustan Zinc and witnessed more than 150 women leaders cheering and inspiring other women professionals. This was chaired by Ms Priya Agarwal Hebbar, Vedanta, Non-Executive Director and HZL Chairperson. This re-emphasized Vedanta’s commitment to building a truly diverse workforce. The event focussed on women challenging the status-quo while growing in their career trajectory and fulfilling their career aspirations. It also included engaging panel discussions, meaningful dialogues around leadership excellence and conversations about organizational culture that sharpened the Group’s focus on achieving gender parity in the organization. The organization has also focussed on diversity beyond gender and in FY24, 41 new employees were recruited from the LGBTQ community. Progress on measurable objectives FY2023-24 FY2022-23 WOMEN IN SENIOR MANAGEMENT 9% 8.37% TOTAL FULL TIME FEMALE EMPLOYEES ACROSS THE GROUP 18% 14.81% Political donations It is the Board’s policy that neither the Company nor any of its subsidiary companies outside India may, under any circumstances, make donations or contributions to political organisations. Subsidiaries in India may make political donations or contributions as this is customary in India and permitted under local legislation. Any political donations made in India will be disclosed in the Company’s Annual Report and Accounts. The Company’s subsidiary, Vedanta Limited including its subsidiaries, contributed US$ 11.84Mn to political parties CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT 155 Directors’ Report during the financial year ended 31 March 2024, out of which US$ 8.82Mn was made through purchase of electoral bonds. (2023: Vedanta Limited purchased USD 19.3 million worth of electoral bonds). Going Concern The Group has prepared the consolidated financial statements on a going concern basis. The Directors have considered a number of factors in concluding on their going concern assessment. Details of the going concern assessment are included on pages 160 - 161. Covenant Compliance The Group’s financing facilities, including bank loans and bonds, contain covenants requiring the Group to maintain specified financial ratios. The Group has complied with all the covenant requirements till 31 March 2024. Post balance sheet events Details of significant events since the balance sheet date are disclosed in Note 35 to the financial statements. There are no material adjusting or non-adjusting subsequent events, except already disclosed. Research and development The Group’s business units carry out research and development activities as outlined below: Research and Development (“R&D”) is a critical component of Vedanta’s growth strategy. It enables us to stay competitive by developing innovative products and services that meet the changing needs of customers. Vedanta invests a significant amount of resources into R&D to improve the quality of its products and services, reduce costs, and increase efficiency. R&D helps the company to differentiate itself from competitors and maintain its market position. Details of the Group’s R&D expenditure is disclosed on pages 25-28 of the Vedanta Limited Annual Report FY24. The Group’s expenditure on Research and Development is disclosed in Note 10(a) of the financial statements on page 210. Agreements: change of control There are a number of agreements that take effect, alter or terminate upon a change of control of the Company, (defined as a transfer of 35% shareholding) such as commercial contracts, bank loan agreements and capital market borrowing. The following are considered to be significant in terms of their likely impact on the business of the Group as a whole: 1. The US$1 Billion 13.875% bonds due in 2027; US$951 million 6.125% bonds due in 2027 and 2028, US 1200 million 8.95% bonds due in 2027 and 2028 and USD600mn 9.25% bonds due in 2026 where a change of control together with a rating decline requires the Company to make an offer to purchase all of the outstanding bonds at 101% of the principal amount together with any accrued and unpaid interest. 2. Under various other financing facilities entered into by the Group where a change of control gives the majority lenders the right to declare the loans payable. There are no agreements between the Company and any of its directors or employees that provide for compensation for loss of office or employment that occurs because of a takeover bid. SECR disclosure within the Directors Report. Whilst we provide global Greenhouse gas and energy data within this report, we are a private limited group whose operations and turnover are based overseas and as such fall outside of the reporting requirements for an unquoted company. The UK element of our operations falls below both the turnover and employee thresholds for a large company and as such no SECR disclosures are required or made. Greenhouse gas (GHG) emissions reporting Climate risk is recognized as a global risk. Since the Paris accord, significant efforts are made by global communities to mitigate and adapt climate change impacts. Last year, at Vedanta, we had formulated a Carbon Forum, under the leadership of our Power business head, to develop strategies and actions to manage climate related business risk. The forum is comprised of the chief operating officers of our businesses. The Group now has a Climate related Risk Management Policy and Strategy in place. In addition to the Carbon Forum, climate related business risk is on the Group level risk register which enables us to review the progress made on climate related risk at the highest risk committee level of the organization. We calculate and report greenhouse gas inventory i.e. Scope 1 (process emissions and other direct emissions) and Scope 2 (purchased electricity) as defined under the World Business Council for Sustainable Development (WBCSD) and World Resource Institute (WRI) GHG protocols. GHG Emissions (million TCO2e) FY2024 FY2023 FY2022 Scope 1 61.28 57.17 60.69 Scope 2 4.56 8.18 3.52 Total 65.84 65.35 64.21 156 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED GHG Emissions (Tonnes of CO2) Business FY2024 FY2023 Scope 1 Scope 2 Scope 1 Scope 2 Zinc India 3,983,137 562,939 3,444,672 1,135,622 Zinc International 740,154 355,838 114,489 249,700 Oil & Gas 1,729,152 339,470 1,777,161 344,655 Iron Ore 1,957,316 8,992 1,862,912 3805 Ports 1,285 7,712 2,301 7,588 Copper India & Australia 63,006 86,378 34,822 87,924 Aluminium 39,205,932 2,880,127 31,992,077 5,994,336 Power 9,401,631 385 14,791,782 - Others* (Steel +Ferrochrome business) 4,207,226 319,523 31,55,174 356,901 Total 61,288,839 4,561,364 57,175,390 8,180,531 The GHG intensity ratio below expresses Vedanta’s annual GHG emissions in relation to the Group’s consolidated revenue. GHG Intensity Ratio (Tonnes of CO2/Mn US$) Business FY2024 FY2023 Zinc India 1,348 1,145 Zinc International 2,551 579 Oil & Gas 960 1,168 Iron Ore 1,795 2,376 Ports* - - Copper India & Australia 63 58 Aluminium 7,202 6,001 Power 743 812 Others including Steel 4,114 3,373 Consolidated Group 3,846 3,728 *Ports figure is included in Iron Ore Statement of Directors’ responsibilities in respect of the Strategic Report, Directors’ Report and financial statements The directors are responsible for preparing the Strategic Report, Directors’ Report and the financial statements in accordance with UK law and regulations. The directors are required by the UK Companies Act 2006 to prepare financial statements for each financial year that give a true and fair view of the financial position of the Group and the parent company and the financial performance and cash flows of the Group and parent company for that period. Under that law they have elected to prepare the consolidated financial statements in accordance with UK adopted International Financial Reporting Standards (UK adopted IFRS) and applicable law and have elected to prepare the parent company financial statements in accordance with applicable United Kingdom law and United Kingdom accounting standards (United Kingdom generally accepted accounting practice), including FRS 101 “Reduced Disclosure Framework”). Under company law, the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs and of the profit or loss of the Group and Company for that period. In preparing the parent company financial statements, the directors are required to: • select suitable accounting policies and then apply them consistently; • make judgments and accounting estimates that are reasonable and prudent; • state whether Financial Reporting Standard 101 ‘Reduced Disclosure Framework’ has been followed, subject to any material departures disclosed and explained in the financial statements; • prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business. In preparing the Group financial statements, IAS 1 requires that the directors: CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT 157 Directors’ Report • properly select and apply accounting policies; • present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information; • provide additional disclosures when compliance with the specific requirements in UK adopted IFRSs are insufficient to enable users to understand the impact of particular transactions, other events and conditions on the Group’s financial position and financial performance; and • prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business. The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group and parent company’s transactions and disclose with reasonable accuracy at any time the financial position of the Group and parent company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Having made the requisite enquiries, so far as the directors are aware, there is no relevant audit information (as defined by Section 418(3) of the Companies Act 2006) of which the Company’s auditors are unaware, and the directors have taken all the steps they ought to have taken to make themselves aware of any relevant audit information and to establish that the Company’s auditors are aware of that information. The directors are also responsible for preparing a Strategic Report and Directors’ Report that comply with that law and those regulations. The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. The Directors confirm that to the best of their knowledge: • The consolidated financial statements, prepared in accordance with UK adopted IFRS and in accordance with the provisions of the Companies Act 2006, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group. • The parent company financial statements, prepared in accordance with United Kingdom generally accepted accounting practice, give a true and fair view of the assets, liabilities and financial position of the Company. • The annual report and financial statements, including the Strategic Report and Directors’ Report, includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal risks and uncertainties that they face. Thie Directors’ Report was approved by the Board of Directors and signed on its behalf by: Deepak Kumar Company Secretary Vedanta Resources Limited Registered no: 4740415 158 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED DIRECTORS' REMUNERATION POLICY REPORT Policy overview The key objective of the Group’s broad remuneration policy is to ensure that competitive and fair awards are linked to key deliverables and are also aligned with market practice and investor expectations. The company ensures that remuneration policies and practices are designed to attract, retain and motivate the Executive Directors and the senior management group, while focusing on the delivery of the Group’s strategic and business objectives. The key focus area is alignment of the interests of the Executive Directors and the senior management group with the strategic goals of the company and the interest of the investors to build a sustainable performance culture. When setting remuneration for the Executive Directors, various aspects are taken into account such as the business performance, developments in the natural resources sector and, considering that the majority of the Group’s operations are based in India, similar information for high-performing Indian companies. In setting the policy for Executive Directors' remuneration, the company considers the pay and employment conditions across the Group, including annual base compensation increases across the general employee population and the overall spend on annual bonuses. Employees may be eligible to participate in the annual bonus arrangement and receive awards under the ESOP. Opportunities and performance metrics may vary by employee level, with specific business metrics incorporated where possible. The company does not formally consult with employees in respect of the design of the Executive Directors' Remuneration Policy, although the company will keep this under review. DIRECTORS’ REMUNERATION REPORT There is a formal remuneration policy which details the various elements of pay, performance measures and their linkage to objective and the maximum opportunity of each element for the Executive Directors. Service contracts for Executive Directors The board reviews the contractual terms for new Executive Directors to ensure these reflect best practice. Mr Anil Agarwal is employed under a contract of employment with the Company for a rolling-term, but which may be terminated by not less than six months’ notice. Provision is made in Mr Anil Agarwal’s contract for payment to be made in lieu of notice on termination which is equal to base compensation. Mr Navin Agarwal has a letter of appointment with the Company which is a rolling contract and may be terminated by giving six months’ notice. Mr Navin Agarwal has a contact of employment with Vedanta Limited which expires on 31 July 2028, with a notice period of three months or base compensation in lieu thereof. Letters of appointment for Non-Executive Directors The Non-Executive Directors have letters of appointment which may be terminated by either party giving three months' notice. The Non-Executive Directors' letters of appointment set out the time requirements expected of them in the performance of their duties. Non-Executive Directors are normally expected to spend at least 20 days per year in the performance of their duties for the Company. There is no provision in the letters of appointment of the Non-Executive Directors for compensation to be paid in the event of early termination. The Board has access to remuneration advisor as and when the advice is needed. ANNUAL REPORT ON REMUNERATION Single total figure for remuneration The table below summarises Directors’ remuneration received during the year ended 31 March 2024 and the prior year for comparison. Base compensation including salary or fees £000 Taxable Benefits £000 Pension £000 Annual bonus3 £000 Long-term incentives £000 Total £000 Executive Directors Anil Agarwal 1 2023/24 1739 13 1200 1355 4307 2022/23 1739 7 1155 1578 4479 Navin Agarwal 2 2023/24 1154 133 62 961 938 3247 2022/23 1256 153 67 885 1091 3452 Non-Executive Directors Allampllam Narayanaswamy 2023/24 25 25 2022/23 25 25 NOTES 1. Mr Anil Agarwal's taxable benefits in kind include provision of medical benefits. 2. Mr Navin Agarwal is based out of India and is drawing the majority of his remuneration in INR. For the financial year ended 31 March 2024, Mr Navin Agarwal received a Vedanta Limited salary of INR 227,072,124 Vedanta Resources Limited fees of £85,000 and Employee Share Option Plan (ESOP) related payment of £ 937,605, Hindustan Zinc Limited fees of INR 6,75,000 & commission of INR 29,92,000. 3. Annual bonus paid out during the year ending 31 March 2024 is the bonus for the performance year April 2022 – March 2023. CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENT 159 Directors’ Report INDEPENDENT AUDITOR’S REPORT To the Members of Vedanta Resources Limited For the purpose of this report, the terms “we” and “our” denote MHA in relation to UK legal, professional and regulatory responsibilities and reporting obligations to the members of Vedanta Resources Limited. For the purposes of the table in this report that sets out the key audit matters and how our audit addressed the key audit matters, the terms “we” and “our” refer to MHA. The Group financial statements, as defined below, consolidate the accounts of Vedanta Resources Limited and its subsidiaries (the “Group”). The “Parent Company” is defined as Vedanta Resources Limited, as an individual entity. The relevant legislation governing the Company is the United Kingdom Companies Act 2006 (“Companies Act 2006”). Opinion We have audited the financial statements of Vedanta Resources Limited for the year ended 31 March 2024. The financial statements that we have audited comprise: • the Consolidated Income Statement • the Consolidated Statement of Comprehensive Income • the Consolidated Statement of Financial Position • the Consolidated Cash Flow Statement • the Consolidated Statement of Changes in Equity • Notes 1 to 39 to the consolidated financial statements, including significant accounting policies • the Company Balance Sheet • the Company Statement of Changes in Equity and • Notes 1 to 12 to the company financial statements, including significant accounting policies. The financial reporting framework that has been applied in the preparation of the Group’s financial statements is applicable law and UK adopted International Financial Reporting Standards (IFRS) and International Accounting Standards as adopted in the United Kingdom (UK adopted IFRS). The financial reporting framework that has been applied in preparation of the Parent Company financial statements is United Kingdom Accounting Standards, including Financial Reporting Standard 101 Reduced Disclosure Framework (United Kingdom Generally Accepted Accounting Practice). In our opinion • the financial statements give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as at 31 March 2024 and of the Group’s profit for the year then ended; • the Group financial statements have been properly prepared in accordance with UK adopted IFRS; • the parent company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and • the financial statements have been prepared in accordance with the requirements of the Companies Act 2006. Our opinion is consistent with our reporting to the Board of Directors. Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed entities, and we have fulfilled our ethical responsibilities in accordance with those requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Conclusions relating to going concern In auditing the financial statements, we have concluded that the Directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the Directors’ assessment of the Group’s and the Parent Company’s ability to continue to adopt the going concern basis of accounting included: • The consideration of inherent risks to the Company’s operations and specifically its business model. • The evaluation of how those risks might impact on the Company’s available financial resources. • Where additional resources may be required the reasonableness and practicality of the assumptions made by the Directors when assessing the probability and likelihood of those resources becoming available. • Liquidity and solvency considerations including examination of budgets and forecasts and their basis of preparation, including review and assessment of the model’s mechanical accuracy and the reasonableness of assumptions included within. • Consideration of terms and conditions attaching to financing facilities in place as at the date of the approval of the financial statements and compliance with covenants attaching to those facilities both up to the date of the approval of the financial statements and into the forecast period. 160 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED • Consideration of availability of funds required to settle funding facilities due for repayment during the going concern review period. Assessing the reasonableness and practicality of the mitigation measures identified by management in their conservative case scenario and considered by them in arriving at their conclusions about the existence of any uncertainties in respect of going concern. Overview of our audit approachs Scope Our audit was scoped by obtaining an understanding of the Group, including the Parent Company, and its environment, including the Group’s system of internal control, and assessing the risks of material misstatement in the financial statements. We also addressed the risk of management override of internal controls, including assessing whether there was evidence of bias by the directors that may have represented a risk of material misstatement. We, and our component auditors acting on specific Group instructions, undertook full scope audits on the complete financial information of 21 components, specified audit procedures on particular aspects and balances on another 5 components and analytical procedures were undertaken on the remaining components. Overall materiality 2024 2023 Benchmark used Group $118m $114m 2.5% (2023: 2.5%) of EBITDA Parent Company $31.8m $17.8m 0.5% (2023: 0.25%) of gross assets Key audit matters Recurring Group key audit matters • Valuation of Konkola Copper Mines plc (KCM) receivables and equity investment • Taxation claims and exposures Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group’s and Parent Company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. Key Audit Matters Key Audit Matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified. These matters included those matters which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Valuation of Konkola Copper Mines plc (KCM) receivables and equity investment Key audit matter description As at 31 March 2024, KCM related receivables with a carrying value of $682 million (2023: $682 million) were recognised in the financial statements of Vedanta Resources Limited, whilst the value of the equity investment in KCM was $Nil (2023: $Nil). We draw attention to note 3a of the accompanying consolidated financial statements which describes the uncertainty arising in respect of the valuation of KCM related receivables and equity interests, as a result of the liquidation proceedings initiated by KCM’s minority shareholder, ZCCM Investments Holdings Plc (“ZCCM”), against KCM. Due to the high level of subjectivity and material nature of this receivable, we have designated this as a key audit matter. How the scope of our audit responded to the key audit matter We have obtained an understanding of the liquidation proceedings through inquiries of the Company’s management and review of internal reports in relation to the matter. We have obtained and reviewed legal opinions obtained from management, and assessed the competency of those providing legal opinions, and have considered how this has impacted on the fair value calculation. We engaged in discussion and challenged the approach of management appointed experts appointed to perform a fair value exercise in relation to the KCM economic interest. We performed procedures to assess the reasonableness of the key assumptions included in the valuation report, and the view taken by management in respect of the final value to be included in the financial statements. Key observations communicated to the Group’s Board of Directors We concluded that the value determined is reasonable and that the uncertainties surrounding the valuation have been appropriately disclosed in the financial statements. Our opinion is not modified in respect of this matter. CORPORATE OVERVIEW STATUTORY REPORTS Consolidated FINANCIAL STATEMENTS 161 Taxation claims and exposures Key audit matter description The Group is subject to various tax disputes, mainly with the Indian authorities, which have been ongoing for numerous years. A material risk exists that the provision for these disputes is insufficient, or the contingent liability disclosed is understated, due to the inherent uncertainty in such disputes and the requirement for management judgements on whether the tax risk is remote, possible, or probable. The most material disputes relate to: 1. Recomputed tax holiday claim on plants engaged in processing and casting zinc and lead ingots from zinc and lead cathodes and silver from silver mud. The majority of this dispute was classified as possible, which is the same classification as the prior year. 2. Rajasthan VAT Matter - Writ petition relating to sales tax. This was deemed as a remote tax risk by management. How the scope of our audit responded to the key audit matter We have engaged internal tax specialists to assist the audit team in performing work over all tax related matters. We have obtained an understanding of the processes in place to identify and assess risk in relation to tax disputes. We have critically reviewed detailed papers prepared by management assessing such risks and concluding on the appropriate accounting treatment of any potential liabilities. We have, along with local component auditors, reviewed the positions taken by management, and the relevant legal opinions, in respect of the major material taxation matters. Key observations communicated to the Group’s Board of Directors We concluded that management’s assessment is appropriate and as detailed in notes 11 and 32d. Our application of materiality Our definition of materiality considers the value of error or omission on the financial statements that, individually or in aggregate, would change or influence the economic decision of a reasonably knowledgeable user of those financial statements. Misstatements below these levels will not necessarily be evaluated as immaterial as we also take account of the nature of identified misstatements, and the particular circumstances of their occurrence, when evaluating their effect on the financial statements as a whole. Materiality is used in planning the scope of our work, executing that work and evaluating the results. Performance materiality is the application of materiality at the individual account or balance level, set at an amount to reduce, to an appropriately low level, the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality for the financial statements as a whole. The determination of performance materiality reflects our assessment of the risk of undetected errors existing, the nature of the systems and controls and the level of misstatements arising in previous audits. Group financial statements Parent Company financial statements Overall materiality US$ 118 million (2023: US$ 114 million) US$ 31.8 million (2023: US$ 17.8 million) How we determined it 2.5% of EBITDA (2023: 2.5% of EBITDA) 0.5% of Parent Company’s gross assets (2023: 0.25% of Parent Company’s gross assets) Rationale for the benchmark applied We consider the EBITDA to be a key indicator for the Group and is reflective of the current and future performance of the company. In our opinion EBITDA is the KPI of critical interest to the users of the financial statements of Vedanta Resources Limited as it is the key measure of the company’s success, demonstrating profitable trading and the ability to service debt capital and interest payments. The parent company is a holding company whose purpose is to consolidate the active trading entities and a number of other Group companies. We consider gross assets to be the most important balance to the users of the Parent Company financial statements. Performance materiality We set our 2024 performance materiality at 70% of overall materiality, amounting to $82.6m (2023: 60%, $68.7m) to reduce the probability that, in aggregate, uncorrected and undetected misstatements exceed the materiality for the financial statements as a whole. In determining performance materiality, we considered a number of factors - the history of misstatements, our risk assessment and the strength and robustness of the control environment. Following assessment of these factors, we have increased our performance materiality from 60% to 70%. We set our 2024 performance materiality at 70% of overall materiality, amounting to $11.1m (2023: 60%, $10.7m) to reduce the probability that, in aggregate, uncorrected and undetected misstatements exceed the materiality for the financial statements as a whole. In determining performance materiality, we considered a number of factors - the history of misstatements, our risk assessment and the strength and robustness of the control environment. Following assessment of these factors, we have increased our performance materiality from 60% to 70%. Reporting threshold We agreed to report any corrected or uncorrected adjustments exceeding $5.9m (2023: $5.7m) in respect of the Group to the Board of Directors as well as differences below this threshold that in our view warranted reporting on qualitative grounds. We agreed to report any corrected or uncorrected adjustments exceeding $0.8m (2023: $0.9m) in respect of the Parent Company to the Board of Directors as well as differences below this threshold that in our view warranted reporting on qualitative grounds. 162 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED Overview of the scope of the Group and Parent Company audits The Group’s parent entity is UK based, whilst the primary location of operations is India. Considering operational and financial performance and risk factors, we focused our assessment on the significant components and performed full scope audits of the UK parent company, certain other UK holding and financing companies and six significant operating companies being Vedanta Limited, Cairn Energy Hydrocarbons Limited, Talwandi Sabo Power Limited, Hindustan Zinc Limited, Bharat Aluminium Company Limited and ESL Steel Limited along with specified Group level audit procedures on the material external balances at the non-significant components. Our audit of the Group financial statements also involved the use of component auditors. The Group audit team provided comprehensive instructions to those component auditors. These instructions included details of the identified risks of material misstatement including those risks identified above. Those instruction also included an assessment of component materiality. The Group audit team discussed and agreed the proposed approach to addressing these risks with the component auditors and the nature and form of their reporting on the results of their work. The Group team conducted reviews of the working papers prepared by component auditors using remote file reviews. They also participated in face-to-face meetings and conference calls at various phases of the audit engagement as part of their management and control of the Group audit engagement. Notes: • Full scope refers to the conduct of an audit of the components underlying financial information in accordance with ISAs UK. • Limited scope incorporates those circumstances where component auditors have been instructed to perform certain procedures on financial statements areas or specific financial statement line items for individual components. • Component auditors of lower risk components will usually be instructed to conduct a review of the financial position and performance of the component comparing the actual performance of that component with their valid expectations based on their knowledge of the entity and any known changes in its operational environment and investigating any unusual or unexpected results. • Some components have been identified as being immaterial to the Group individually and in aggregate. Material subsidiaries were determined based on: • financial significance of the component to the Group as a whole; and • assessment of the risk of material misstatements applicable to each component. At the parent company level we also tested the consolidation process and carried out analytical procedures to confirm that there were no significant risks of material misstatement of the aggregated financial information of the remaining components not subject to audit or audit of specified account balances. The control environment We evaluated the design and implementation of those internal controls of the Group, including the Parent Company, which are relevant to our audit, such as those relating to the financial reporting cycle. Climate-related risks In planning our audit and gaining an understanding of the Group and Parent Company we considered the potential impact of climate-related risks on the business and its financial statements. We obtained management’s climate- related risk assessment, along with relevant documentation and reports relating to management’s assessment and held discussions with management to understand their process for identifying and assessing those risks. We engaged internal specialists to assess, amongst other factors, the benchmarks used by management, the nature of the Group’s business activities, its processes and the geographic distribution of its activities. Full Scope Limited Scope Analytical Review 94% 86% 98% 6% 13% 1% 1% 1% EBITDA Revenue Net Assets CORPORATE OVERVIEW STATUTORY REPORTS Consolidated FINANCIAL STATEMENTS 163 We critically reviewed management’s assessment and challenged the assumptions underlying their assessment. We made enquiries to understand the extent of the potential impact of climate change risks on the Group’s financial statements. This has included a review of critical accounting estimates and judgements, and the effect on our audit approach. We also considered the ongoing viability of the business in respect both to direct climate risks and changes in legislation as nations grapple with their commitments to reduce emissions. Reporting on other information The other information comprises the information included in the annual report other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Opinions on other matters prescribed by the Companies Act 2006 In our opinion, the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with the Companies Act 2006. In our opinion, based on the work undertaken in the course of the audit: • the information given in the Strategic Report and the Directors’ Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and • the Strategic Report and the Directors’ Report have been prepared in accordance with applicable legal requirements. In the light of the knowledge and understanding of the Group and the Parent Company and their environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors’ Report. Matters on which we are required to report by exception We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion: • adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received by branches not visited by us; or • the parent company financial statements are not in agreement with the accounting records and returns; or • we have not received all the information and explanations we require for our audit. Responsibilities of Directors As explained more fully in the directors’ responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the Group’s and the Parent Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or Parent Company or to cease operations, or have no realistic alternative but to do so. Auditor responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. A further description of our responsibilities for the financial statements is located on the FRC’s website at: www.frc.org. uk/auditorsresponsibilities . This description forms part of our auditor’s report. Extent to which the audit was considered capable of detecting irregularities, including fraud Irregularities, including fraud, are instances of non- compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. These audit procedures were designed to provide reasonable assurance that the financial statements were free from fraud or error. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error and detecting irregularities that result from fraud is inherently more difficult than detecting those that result from 164 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED error, as fraud may involve collusion, deliberate concealment, forgery or intentional misrepresentations. Also, the further removed non-compliance with laws and regulations is from events and transactions reflected in the financial statements, the less likely we would become aware of it. Identifying and assessing potential risks arising from irregularities, including fraud The extent of the procedures undertaken to identify and assess the risks of material misstatement in respect of irregularities, including fraud, included the following: • We considered the nature of the industry and sector, the control environment, business performance including remuneration policies and the Group’s, including the Parent Company’s, own risk assessment that irregularities might occur as a result of fraud or error. From our sector experience and through discussion with the directors and component auditors, we obtained an understanding of the legal and regulatory frameworks applicable to the Group focusing on laws and regulations that could reasonably be expected to have a direct material effect on the financial statements, such as provisions of Indian corporate and tax law, the Companies Act 2006, UK tax legislation or those that had a fundamental effect on the operations of the Group. • Obtained an understanding of the legal and regulatory frameworks that the Group operates in, focusing on those laws and regulations that had a direct effect on the financial statements. We considered the key UK laws and regulations including, the Companies Act 2006 and applicable tax legislation. In addition, we considered compliance with the UK Bribery Act and employee legislation, as fundamental to the Group’s operations. • We enquired of the directors and management concerning the Group’s and the Parent Company’s policies and procedures relating to: – identifying, evaluating and complying with the laws and regulations and whether they were aware of any instances of non-compliance; – detecting and responding to the risks of fraud and whether they had any knowledge of actual or suspected fraud; and – the internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations. • We assessed the susceptibility of the financial statements to material misstatement, including how fraud might occur by evaluating management’s incentives and opportunities for manipulation of the financial statements. This included utilising the spectrum of inherent risk and an evaluation of the risk of management override of controls. The Group engagement team shared this risk assessment with the Component Auditors of Significant Subsidiaries so that they could include appropriate audit procedures in response to such risks in their work. Audit response to the risks identified In respect of the above procedures we: • We reviewed and challenged component auditor workpapers in respect of compliance with local relevant laws in operation in India, including reviewing third party opinions obtained by the component auditors in respect of the most significant legal matters. • Enquired of management to identify any instances of non- compliance with laws and regulations. • Reviewed financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations. • Enquired of management around actual and potential litigation and claims including review of professional legal opinions where appropriate. • Enquired of management to identify any instances of known or suspected instances of fraud. • Discussed among the engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud. • Reviewed minutes of meetings of those charged with governance. • Reviewed internal audit reports. • Reviewed the control systems in place and testing the effectiveness of certain controls. • Performed audit work over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business, and reviewing accounting estimates for bias; and • Assessed the procedures performed by component auditors in respect of the capability of such procedures to detect irregularities including fraud, from a detailed review of their work. Use of our report This report is made solely to the Parent Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Parent Company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Parent Company and the Parent Company’s members as a body, for our audit work, for this report, or for the opinions we have formed. Rakesh Shaunak FCA Senior Statutory Auditor for and on behalf of MHA, Statutory Auditor London, United Kingdom May 30, 2024 MHA is a trading name of MacIntyre Hudson LLP, a limited liability partnership in England and Wales (registered number OC312313) CORPORATE OVERVIEW STATUTORY REPORTS Consolidated FINANCIAL STATEMENTS 165 CONSOLIDATED INCOME STATEMENT (US$ million) Year ended 31 March 2024 Year ended 31 March 2023 Note Before Special items Special items (Note 6) Total Before Special items Special items (Note 6) Total Revenue 5 17,128 - 17,128 18,141 142 18,283 Cost of sales (12,959) 96 (12,863) (14,178) (259) (14,437) Gross profit / (loss) 4,169 96 4,265 3,963 (117) 3,846 Other operating income 247 - 247 239 - 239 Distribution costs (473) - (473) (476) - (476) Administrative expenses (596) - (596) (530) - (530) Impairment reversal / (charge) [net] 6 - 28 28 - (61) (61) Operating profit / (loss) 3,347 124 3,471 3,196 (178) 3,018 Investment revenue 7 202 - 202 251 - 251 Finance costs 8 (1,882) - (1882) (1,558) - (1,558) Other gains and (losses) [net] 9 (37) - (37) (79) - (79) Profit / (loss) before taxation (a) 1,630 124 1,754 1,810 (178) 1,632 Net (expense)/tax credit (b) 11 (837) (818) (1,655) (894) 100 (794) Profit / (loss) for the year (a+b) 793 (694) 99 916 (78) 838 Attributable to: Equity holders of the parent 31 (431) (400) 49 (54) (5) Non-controlling interests 762 (263) 499 867 (24) 843 Profit / (loss) for the year 793 (694) 99 916 (78) 838 166 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED (US$ million) Particulars Year ended 31 March 2024 Year ended 31 March 2023 Profit for the year 99 838 Items that will not be reclassified subsequently to income statement: Remeasurement of net defined benefit plans (note 26) (1) (1) Tax effects on net defined benefit plans 1 1 Loss on fair value of financial asset equity investment (2) (5) Total (a) (2) (5) Items that may be reclassified subsequently to income statement: Exchange differences arising on translation of foreign operations (75) (614) Loss on fair value of financial asset debt investment - (4) (Loss) / Gain on cash flow hedges (7) 430 Tax effects arising on cash flow hedges 2 (149) Gain on cash flow hedges recycled to income statement (6) (428) Tax effects arising on cash flow hedges recycled to income statement 2 150 Total (b) (84) (615) Other comprehensive loss for the year (a+b) (86) (620) Total comprehensive income for the year 13 218 Attributable to: Equity holders of the parent (446) (301) Non-controlling interests 459 519 Total comprehensive income for the year 13 218 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME CORPORATE OVERVIEW STATUTORY REPORTS Consolidated FINANCIAL STATEMENTS 167 (US$ million) Particulars Note As at 31 March 2024 As at 31 March 2023* Assets Non-current assets Goodwill 14 - 12 Intangible assets 15 84 64 Property, plant and equipment 16 13,452 12,786 Exploration and evaluation assets 16 282 284 Financial asset investments 17 118 63 Non-current tax assets 11(d) 458 382 Other non-current assets 18 1,529 1,680 Deferred tax assets 11(c) 422 1,095 16,345 16,366 Current assets Inventories 19 1,560 1,830 Trade and other receivables 18 2,438 2,279 Financial instruments (derivatives) 24 20 26 Current tax assets 8 45 Short-term investments 20 1,575 1,728 Cash and cash equivalents 21 384 1,037 5,985 6,945 Total assets 22,330 23,311 Liabilities Current liabilities Borrowings 22(a) 3,378 5,809 Operational buyer's credit/supplier's credit 22(c) 1,792 1,667 Trade and other payables 23 4,881 5,513 Financial instruments (derivatives) 24 17 23 Retirement benefits 26 6 8 Provisions 25 35 38 Current tax liabilities 299 72 10,408 13,130 Net current liabilities (4,423) (6,185) Non-current liabilities Borrowings 22(a) 10,952 9,549 Trade and other payables 23 240 219 Financial instruments (derivatives) 24 - 2 Deferred tax liabilities 11(c) 1,206 866 Retirement benefits 26 28 27 Provisions 25 344 390 12,770 11,053 Total liabilities 23,178 24,183 Net liabilities (848) (872) CONSOLIDATED STATEMENT OF FINANCIAL POSITION 168 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED (US$ million) Particulars Note As at 31 March 2024 As at 31 March 2023* Equity Share capital 29 29 29 Hedging reserve (94) (90) Other reserves (792) (750) Retained earnings (2,571) (2,537) Equity attributable to equity holders of the parent (3,428) (3,348) Non-controlling interests 30 2,580 2,476 Total equity (848) (872) *Restated. Refer note 3(b). Financial Statements of Vedanta Resources Limited with registration number 4740415 were approved and authorised for issue by the Board of Directors on 30 May 2024 and signed on their behalf by AR Narayanaswamy Deepak Kumar Director Company Secretary CORPORATE OVERVIEW STATUTORY REPORTS Consolidated FINANCIAL STATEMENTS 169 (US$ million) Particulars Note Year ended 31 March 2024 Year ended 31 March 2023 Operating activities Profit before taxation 1,754 1,632 Adjustments for: Depreciation and amortisation 1,283 1,382 Investment revenues 7 (202) (251) Finance costs 1,882 1,558 Other (gains) and losses (net) 37 79 Loss on disposal of Property plant and equipment 14 1 Share-based payment charge 14 11 Liabilities written back (16) (34) Exploration costs written off 89 30 Capital creditor written back 6 (96) - Impairment charge/ (reversal) of assets (net) 6 (28) 61 Transfer of CSR Assets 15 - 15 Provision for doubtful debts /Expected credit loss (ECL)/bad debts written off 33 53 Other non cash items (0) (7) Operating cash flows before movements in working capital 4,764 4,530 (Increase)/Decrease in inventories 204 (92) (Increase)/Decrease in receivables (35) 280 Increase/(Decrease) in payables (415) 363 Cash generated from operations 4,515 5,081 Dividend received 5 2 Interest received 152 210 Interest paid (1,840) (1,503) Income taxes paid (net of refunds) (351) (998) Dividends paid - (16) Refund of dividend distribution tax - 10 Net cash inflow from operating activities 2,484 2,786 Cash flows from investing activities Purchases of property, plant and equipment, intangibles, exploration and evaluation assets (2,019) (1,700) Proceeds on disposal of property, plant and equipment, intangibles, exploration and evaluation assets 23 16 Proceeds from redemption of short-term investments 22(b) 8,199 16,185 Purchases of short-term investments 22(b) (8,028) (15,092) Proceeds from sale of stake in subsidiaries 904 - Proceeds from sale of investment in subsidiary 3(e) 10 - Purchase of long term investments 34 (59) (3) Proceeds from sale of long term investments 1 - Payment made to site restoration fund (25) (16) Net cash used in investing activities (994) (637) CONSOLIDATED CASH FLOW STATEMENT 170 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED CONSOLIDATED CASH FLOW STATEMENT (US$ million) Particulars Note Year ended 31 March 2024 Year ended 31 March 2023 Cash flows from financing activities Payment for acquiring non-controlling interest - (2) Dividends paid to non-controlling interests of subsidiaries (967) (2,523) Proceeds/(repayment of) working capital loan (net) 22(b) (18) (118) Proceeds from other short-term borrowings 22(b) 1,301 2,971 Repayment of other short-term borrowings 22(b) (2,367) (2,281) Proceeds from long-term borrowings 22(b) 4,764 3,819 Repayment of long-term borrowings 22(b) (4,613) (4,317) Purchase of stock option (24) - Payment of lease liabilities (48) (23) Net cash used in financing activities (1,972) (2,474) Net decrease in cash and cash equivalents (482) (325) Effect of foreign exchange rate changes (11) (83) Cash and cash equivalents at beginning of the year 858 1,266 Cash and cash equivalents at end of the year 21 & 22(b) 365 858 CORPORATE OVERVIEW STATUTORY REPORTS Consolidated FINANCIAL STATEMENTS 171 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (US$ million) Attributable to equity holders of the parent Share capital (Note 29) Hedging reserve2 Other reserves1 Retained earnings Total Non- controlling Interests Total equity At 01 April 2023 29 (90) (750) (2,537) (3,348) 2,476 (872) Profit/ (Loss) for the year - - - (400) (400) 499 99 Other comprehensive income/ (loss) for the year - (4) (42) - (46) (40) (86) Total comprehensive income/ (loss) for the year - (4) (42) (400) (446) 459 13 Dividends paid/ payable (note 13) - - - - - (676) (676) Exercise of stock options of subsidiary - - - 10 10 2 12 Acquisition/sale of stake in Subsidiary4 - - - 376 376 325 701 Change in fair value of put option liability/ conversion option asset/derecognition of non- controlling interest - - - (0) (0) (4) (4) Other changes in non-controlling interests3 - - - (20) (20) (2) (22) At 31 March 2024 29 (94) (792) (2,571) (3,428) 2,580 (848) 1. Other reserves comprise the currency translation reserve, merger reserve, investment revaluation reserve, debenture redemption reserve, capital redemption reserve and the general reserves established in the statutory accounts of the Group’s subsidiaries. 2. Hedging reserve represents the cumulative effective portion of gains or losses arising on changes in fair value of hedging instruments entered into for cash flow hedges, which is recognised in OCI and later reclassified to statement of profit and loss when the hedge item affects profit or loss or treated as basis adjustment if a hedged forecast transaction subsequently results in the recognition of a non-financial asset or non-financial liability. 3. Includes purchase of shares by Vedanta Limited through ESOP trust for its stock options and share-based payment charge by subsidiaries. 4. During the current year ended 31 March 2024, VRL, through its subsidiary Vedanta Netherlands Investment B.V. (VNIB), Twinstar Holdings Limited (THL) and Finsider International Company Limited (FICL) reduced its shareholding by 229,018,600 equity shares of Vedanta Limited (“VEDL”) thereby decreasing its overall stake from 68.10% to 61.95% of the total paid-up share capital of VEDL. For the year ended 31 March 2024 172 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (US$ million) Attributable to equity holders of the parent Share capital (Note 29) Hedging reserve2 Other reserves1 Retained earnings Total Non- controlling Interests Total equity At 01 April 2022 29 (88) (456) (2,598) (3,113) 4,648 1,535 Profit for the year - - - (5) (5) 843 838 Other comprehensive income/ (loss) for the year - (2) (294) - (296) (324) (620) Total comprehensive income/ (loss) for the year - (2) (294) (5) (301) 519 218 Dividends paid/ payable (note 13) - - - (18) (18) (2,825) (2,843) Exercise of stock options of subsidiary - - - 7 7 8 15 Acquisition/sale of stake in Subsidiary4,5 - - - 63 63 137 200 Change in fair value of put option liability/ conversion option asset/derecognition of non- controlling interest - - - 7 7 (9) (2) Refund of Dividend Distribution Tax - - - 7 7 3 10 Other changes in non-controlling interests3 - - - - - (5) (5) At 31 March 2023 29 (90) (750) (2,537) (3,348) 2,476 (872) 1. Other reserves comprise the currency translation reserve, merger reserve, investment revaluation reserve, debenture redemption reserve, capital redemption reserve and the general reserves established in the statutory accounts of the Group’s subsidiaries. 2. Hedging reserve represents the cumulative effective portion of gains or losses arising on changes in fair value of hedging instruments entered into for cash flow hedges, which is recognised in OCI and later reclassified to statement of profit and loss when the hedge item affects profit or loss or treated as basis adjustment if a hedged forecast transaction subsequently results in the recognition of a non-financial asset or non-financial liability. 3. Includes share-based payment charge by subsidiaries. 4. During the previous year ended 31 March 2023, Ferro Alloys Corporation Limited (FACOR), wholly owned subsidiary of Vedanta Limited, acquired 20,000,000 shares in its subsidiary, Facor Power Limited (FPL), increasing its stake from 90% to 98.69%. On 21 November 2022, FPL amalgamated with FACOR. 5. During the previous year ended 31 March 2023, VRL, through its subsidiary Vedanta Netherlands Investment B.V. (VNIB) reduced its shareholding from 63,514,714 shares to 5,014,714 equity shares of Vedanta Limited (“VEDL”) thereby decreasing its overall stake from 69.68% to 68.10% of the total paid-up share capital of VEDL. For the year ended 31 March 2023 CORPORATE OVERVIEW STATUTORY REPORTS Consolidated FINANCIAL STATEMENTS 173 OTHER RESERVES COMPRISE (US$ million) Currency translation reserve(1) Merger reserve(2) Financial asset investment revaluation reserve Capital reserve(3) Other reserves(4) Total At 01 April 2022 (2,617) 4 12 29 2,116 (456) Exchange differences on translation of foreign operations (289) - - - - (289) Loss on fair value of financial asset investments - - (5) - - (5) Remeasurements - - - - 0 0 At 31 March 2023 (2,906) 4 7 29 2,116 (750) Exchange differences on translation of foreign operations (41) - - - - (41) Loss on fair value of financial asset investments - - (1) - - (1) Remeasurements - - - - 0 0 At 31 March 2024 (2,947) 4 6 29 2,116 (792) (1) Items in the consolidated statement of profit and loss of those businesses for which the US$ is not the functional currency are translated into US$ at the average rates of exchange during the year/ exchange rates as on the date of transaction. The related consolidated balance sheet is translated into US$ at the rates as at the reporting date. Exchange differences arising on translation are recognised in consolidated statements of other comprehensive income. On disposal of such entities the deferred cumulative exchange differences recognised in equity relating to that particular foreign operation are recognised in the consolidated statement of profit and loss. (2) The merger reserve arose on incorporation of the Company during the year ended 31 March 2004. The investment in Twinstar Holdings Limited (THL) had a carrying amount value of US$ 20 million in the accounts of Vedanta Incorporated (formerly known as Volcan Investments Limited) ("Vedanta Inc"). As required by the Companies Act 1985, Section 132, upon issue of 156,000,000 Ordinary shares to Vedanta Inc, THL’s issued share capital and share premium account have been eliminated and a merger reserve of US$ 4 million arose, being the difference between the carrying value of the investment in THL in Vedanta Inc’s accounts and the nominal value of the shares issued to Vedanta Inc. (3) The balance in capital reserve has mainly arisen pursuant to extinguishment of non-controlling interests of subsidiaries. (4) Other reserves include legal reserves of US$ 4 million (31 March 2023: US$ 4 million), debenture redemption reserve of US$ 36 million (31 March 2023 US$ 36 million) and balance mainly includes general reserve and capital redemption reserve. Debenture redemption reserve is required to be created under the Indian Companies Act from annual profits until such debentures are redeemed. Legal reserve is required to be created by Fujairah Gold by appropriation of 10 % of profits each year until the balance reaches 50% of the paid-up share capital. This reserve is not available for distribution except in circumstances stipulated by the Articles of Incorporation. Under the erstwhile Indian Companies Act, 1956, general reserve was created in relation to Group’s Indian subsidiaries through an annual transfer of net income to general reserve at a specified percentage in accordance with applicable regulations. The purpose of these transfers is to ensure that the total dividend distribution is less than total distributable reserves for that year. The said requirement was dispensed with w.e.f. 01 April 2013 and there are no restrictions on use of these reserves. 174 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 Group overview Vedanta Resources Limited (“Vedanta” or “VRL” or “Company”), a company limited by shares and incorporated and domiciled in the United Kingdom. Registered address of the Company is C/O TMF Group 13th Floor, One Angel Court, London, United Kingdom, EC2R 7HJ. Vedanta and its consolidated subsidiaries (collectively, the “Group”) is a diversified natural resource group engaged in exploring, extracting and processing minerals and oil and gas. The Group engages in the exploration, production and sale of zinc, lead, silver, copper, aluminium, iron ore and oil and gas and has a presence across India, South Africa, Namibia, Ireland, Australia, Liberia and UAE. The Group is also in the business of commercial power generation, steel manufacturing and port operations in India and manufacturing of glass substrate in South Korea and Taiwan. Details of Group’s various businesses are as follows. The Group’s percentage holdings in each of the below businesses are disclosed in note 38. • Zinc India business is owned and operated by Hindustan Zinc Limited (“HZL”). • Zinc international business comprises Skorpion mine and refinery in Namibia operated through THL Zinc Namibia Holdings (Proprietary) Limited (“Skorpion”), Lisheen mine in Ireland operated through Vedanta Lisheen Holdings Limited (“Lisheen”) (Lisheen mine ceased operations in December 2015) and Black Mountain Mining (Proprietary) Limited (“BMM”), whose assets include the operational Black Mountain mine and the Gamsberg mine project located in South Africa. • The Group’s oil and gas business is owned and operated by Vedanta Limited (“VEDL”) and its subsidiary, Cairn Energy Hydrocarbons Limited and consists of exploration, development and production of oil and gas. • The Group’s iron ore business is owned by the Vedanta Limited, and by its wholly owned subsidiary, i.e., Sesa Resources Limited and consists of exploration, mining and processing of iron ore, pig iron and metallurgical coke and generation of power for captive use. Pursuant to the Honourable Supreme Court of India order, mining operations in the state of Goa were suspended. During the year ended 31 March 2023, the Government of Goa had initiated auction of mines in which the Group had participated. The Group has been declared as the principal bidder for the Bicholim mine and has received the Letter of Intent (LOI) from the Government of Goa. During the current year, the Group has received environmental clearance from Ministry of Environment, Forest and Climate Change (“MoEFCC) and Consent to Operate (“CTO”) from Goa State Pollution Board followed by commencement of operations in March 2024. In addition, the Group’s iron ore business also includes a wholly owned subsidiary, Western Cluster Limited (“WCL”) in Liberia which has iron ore assets. WCL’s assets include development rights to Western Cluster and a network of iron ore deposits in West Africa. During the previous year, WCL has signed a Memorandum of Understanding with the Government of Liberia to re-start its mining operations in Liberia post which commercial production and shipments of saleable ore were commenced. • The Group's copper business is owned and operated by Vedanta Limited, Copper Mines of Tasmania Pty Ltd (“CMT”) and Fujairah Gold FZC and is principally one of custom smelting captive power plants at Tuticorin in Southern India. The Group’s copper business in Tamil Nadu, India has received an order from the Tamil Nadu Pollution Control Board (“TNPCB”) on 09 April 2018, rejecting the Group’s application for renewal of consent to operate under the Air and Water Acts for the 400,000 TPA copper smelter plant in Tuticorin for want of further clarification and consequently the operations were suspended. The Group has filed an appeal with TNPCB Appellate authority against the said order. During the pendency of the appeal, TNPCB through its order dated 23 May 2018 ordered for disconnection of electricity supply and closure of copper smelter plant. Post such order, the state government on 28 May 2018 ordered the permanent closure of the plant. The Group has filed a writ petition before the Madras High Court challenging the various orders passed against the Group in FY 2018 and FY 2013. On 18 August 2020, the Madras High Court delivered the judgement wherein it dismissed all the Writ petitions filed by the Group. Thereafter the Group has approached the Supreme Court and challenged the said High Court order by way of a Special Leave petition (‘SLP”). During the year 31 March 2024, the Hon’ble Supreme Court, after hearing the parties to the proceedings has dismissed the SLP filed by the Group vide judgement dated 29 February 2024. On 01 April 2024, the Group preferred a review petition before the Hon’ble Supreme Court. [Refer note 2(c)(I)(iii)]. Further, the Group’s copper business includes refinery and rod plant at Silvassa consisting of a 245,000 MT of blister/ secondary material processing plant, a 216,000 TPA copper refinery plant and a copper rod mill with an installed capacity of 258,000 TPA. The plant continues to operate as usual, catering to the domestic market. In addition, the Group owns and operates a precious metal refinery and copper rod plant in Fujairah, UAE through its subsidiary Fujairah Gold FZC and the Mt. Lyell copper mine in Tasmania, Australia through its subsidiary, CMT. The operations of Mt Lyell copper mine were suspended in January 2014 following a mud slide incident and were put CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Consolidated 175 NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 into care and maintenance since 09 July 2014 following a rock fall incident in June 2014. In November 2021, the Group executed an arrangement with a third party for further exploration with an option to fully divest its shareholding in return for royalties on successful mining and production. In November 2023, the Group has divested its 100% equity ownership in CMT at consideration agreed as per above arrangement [Refer note 3(e)]. • The Group’s Aluminium business is owned and operated by Vedanta Limited and by Bharat Aluminium Company Limited (“BALCO”). The aluminium operations include a refinery and captive power plant at Lanjigarh, smelter and captive power plants at Jharsuguda both situated in the State of Odisha in Eastern India. BALCO’s partially integrated aluminium operations comprise two bauxite mines, captive power plants, smelting and fabrication facilities in the State of Chhattisgarh in central India. • The Group’s power business is owned and operated by Vedanta Limited and Meenakshi Energy Limited (“Meenakshi”), and Talwandi Sabo Power Limited (“TSPL”), wholly owned subsidiaries of the Vedanta Limited, which are engaged in the power generation business in India. Vedanta Limited power operations include a thermal coal- based commercial power facility of 600 MW at Jharsuguda in the State of Odisha in Eastern India and a 1,200 MW (two units of 600MW each) thermal coal-based power plant, in the state of Chhattisgarh in Eastern India. Talwandi Sabo Power Limited (“TSPL”) power operations include 1,980 MW (three units of 660 MW each) thermal coal- based commercial power facilities. Meenakshi power operations include 1,000 MW coal-based power plant (two units of 150 MW each and two units of 350 MW each), located at Nellore, Andhra Pradesh. Power business also includes the wind power plants commissioned by HZL and a power plant at MALCO Energy Limited (“MEL”) (under care and maintenance) situated at Mettur Dam in the State of Tamil Nadu in southern India. • The Group’s other activities include ESL Steel Limited ("ESL") (formerly known as Electrosteel Steels Limited). ESL is engaged in the manufacturing and supply of billets, TMT bars, wire rods and ductile iron pipes in India and also deals in mining of iron ore and its supply. The Group’s other business also include Vizag General Cargo Berth Private Limited (“VGCB”). Vizag port project includes mechanization of coal handling facilities and upgradation of general cargo berth for handling coal at the outer harbour of Visakhapatnam Port on the east coast of India. VGCB commenced operations in the fourth quarter of fiscal 2013. The Group’s other business also include AvanStrate Inc. (“ASI”), Vedanta Semiconductors Private Limited (“VSPL”), Vedanta Displays Limited (“VDL”), Ferro Alloys Corporation Limited (“FACOR”) and Desai Cement Company Private Limited ("DCCPL"). ASI is involved in the manufacturing of glass substrate in South Korea and Taiwan. The Group has acquired Vedanta Semiconductors Private Limited and Vedanta Displays Limited during the current year for manufacturing semiconductor and display glass panels, respectively. FACOR is involved in manufacturing of Ferro Alloys, mining of chrome ore and generation of power. It owns a ferro chrome plant with a capacity of approximately, 140,000 TPA, 100 MW power plant and a mine in Sukinda valley with current capacity of 290,000 TPA. DCCPL is involved in business of producing slag cements and owns three ball mills with capacity of 218,000 TPA. 176 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 1. Basis of preparation and basis of measurement of financial statements a) Basis of preparation The consolidated financial statements have been prepared in accordance with those parts of the Companies Act, 2006 applicable to companies reporting under International Financial Reporting Standards (IFRS) and International Accounting Standards (IAS) as adopted in the United Kingdom (“UK adopted IFRS”). These financial statements have been prepared in accordance with the accounting policies, set out below and were consistently applied to all periods presented unless otherwise stated. The application of UK adopted IFRS has had no impact on accounting policies. These financial statements were approved for issue by the Board of Directors on 30 May 2024. These financial statements are presented in US dollars being the functional currency of the Company and all values are rounded off to the nearest million except when indicated otherwise. Amounts less than US$ 0.5 million have been presented as “0”. Certain comparative amounts appearing in these consolidated financial statements have been regrouped and/or reclassified to better reflect the nature of those items. b) Basis of Measurement The consolidated financial statements have been prepared using historical cost convention and on an accrual method of accounting, except for certain financial assets and liabilities which are measured at fair value as explained in the accounting policies below. c) Going concern The Group has prepared the consolidated financial statements on a going concern basis. The Directors have considered a number of factors in concluding on their going concern assessment. The Group monitors and manages its funding position and liquidity requirements including its net current liability position and routinely forecasts its future cash flows and financial position. The key assumptions for these forecasts include production profiles, commodity prices and financing activities. Prior to current period, the last going concern assessment carried out for the period ended 30 September 2023 was approved by the Board of Directors in December 2023. The Directors were confident that the Group will be able to operate within the levels of its current facilities for the foreseeable future, that the Group will be able to roll-over or obtain external financing as required and that prices will remain within their expected range. While the mitigating actions as highlighted in the period ended 30 September 2023 financial statements remain available to the Group, following recent significant developments have had a positive bearing on the liquidity and Company’s ability to continue as a going concern; a. Vedanta has raised new term loans for refinancing of US$ 1,500 million and short-term loans of US$ 200 million for a period ranging from 1 year to 1.5 year. The Directors consider that the expected operating cash flows of the Group combined with the current finance facilities which are in place give them confidence that the Group has adequate resources to continue as a going concern. The Directors have considered the Group’s ability to continue as a going concern in the period to 30 September 2025 (“the going concern period”) under both a base case and a downside case. The downside case assumes, amongst other sensitivities, delayed ramp-up and re-opening of projects, deferment of additional capital expenditure and a conservative assumption of uncommitted refinancing. Covenant Compliance The Group’s financing facilities, including bank loans and bonds, contain covenants requiring the Group to maintain specified financial ratios. The Group has complied with all the covenant requirements till 31 March 2024. The Directors of the Group are confident that the Group will be able to comply requisite covenants for the going concern period and will be able to execute mitigating actions as mentioned below, to ensure that the Group avoids, or secures waivers or relaxations for future period breaches, if any, of its covenants during the going concern period. Mitigating actions The mitigating options available to the Group and the Company to address the uncertainties in relation to going concern include: CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Consolidated 177 NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 - Execution of an off-take agreement covering certain future production and amounting potentially to c. US$ 1 billion. The Group is currently negotiating with a number of interested bidders for an off-take agreement, under which the Group would receive an advance payment in return for supply of certain future production. However, no agreement has been concluded and there is a therefore uncertainty as to the Group’s ability to access these funds. - Extension of working capital facilities: As at 31 March 2024, the Group had unutilised working capital facilities amounting to c. US$ 1.1 billion. These facilities are not committed for the full duration of the going concern period to September 2025, but rather must be extended or rolled over. There is therefore a risk that, in adverse market conditions, the Group would not be able to extend or roll over these facilities. However, the Directors assess that the Group has a strong record of extending and rolling over these short-term facilities and has historically had significantly higher levels of commercial papers in issue. - Access to buyers’/suppliers’ credit and customer advances: As at 31 March 2024 the Group had c. US$ 1.8 billion of suppliers’ credit and c. US$ 0.9 billion of advances from customers. These financing arrangements are integral to the business of certain Group divisions but are not committed for the full duration of the going concern period. There is therefore a risk that the Group will not be able to access these financing arrangements in the future. Nevertheless, the Directors note that the Group has in the past consistently obtained suppliers’ credit and customer advances at current levels. Conclusion Notwithstanding the factors described above, the Directors have confidence in Group’s ability to execute sufficient mitigating actions. Based on these considerations, the Directors have a reasonable expectation that the Group and the Company will meet its commitments as they fall due over the going concern period. Accordingly, the Directors continue to adopt the going concern basis in preparing the Group’s consolidated financial statements and Company’s standalone financial statements. d) Parent Company financial statements The financial statements of the parent company, Vedanta Resources Limited, incorporated in the United Kingdom, have been prepared in accordance with FRS 101 and The Companies Act 2006. the Company financial statements and associated notes have been presented separately. 2(a) Material Accounting Policies (i) Basis of Consolidation Subsidiaries: The consolidated financial statements incorporate the results of the Company and all its subsidiaries (the “Group”), being the entities that it controls. The financial statements of subsidiaries are prepared for the same reporting year as the Company. Where necessary, adjustments are made to the financial statements of subsidiaries to align the accounting policies in line with accounting policies of the Group. For non-wholly owned subsidiaries, a share of the profit/ (loss) for the financial year and net assets is attributed to the non-controlling interests as shown in the consolidated income statement, consolidated statement of comprehensive income and consolidated statement of financial position. Liability for put option issued to non-controlling interests which do not grant present access to ownership interest to the Group is recognised at present value of the redemption amount and is reclassified from equity. At the end of each reporting period, the non-controlling interests subject to put option is derecognised and the difference between the amount derecognised and present value of the redemption amount, which is recorded as a financial liability, is accounted for as an equity transaction. For acquisitions of additional interests in subsidiaries, where there is no change in control, the Group recognises a reduction to the non-controlling interest of the respective subsidiary with the difference between this figure and the cash paid, inclusive of transaction fees, being recognised in equity. Similarly, upon dilution of controlling interests the difference between the cash received from sale or listing of the subsidiary shares and the increase to non-controlling interest is also recognised in equity. The results of subsidiaries acquired or disposed off during the year are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal, as appropriate. Intra-group balances and transactions, and any unrealised profits arising from intra-group transactions, are eliminated. Unrealised losses are eliminated unless costs cannot be recovered. 178 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 Joint arrangements A Joint arrangement is an arrangement of which two or more parties have joint control. Joint control is considered when there is contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control. Investments in joint arrangements are classified as either joint operations or joint venture. The classification depends on the contractual rights and obligations of each investor, rather than the legal structure of the joint arrangement. A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement, have rights to the assets, and obligations for the liabilities, relating to the arrangement. A joint venture is a joint arrangement whereby, the parties that have joint control of the arrangement have rights to the net assets of the arrangement. The Group has both joint operations and joint ventures. Joint operations The Group has Joint operations within its Oil and gas segment. It participates in several unincorporated joint operations which involve the joint control of assets used in oil and gas exploration and producing activities. The Group accounts for its share of assets, liabilities, income and expenditure of joint operations in which the Group holds an interest. Liabilities in unincorporated joint operations where the Group is the operator, is accounted for at gross values (including share of other partners) with a corresponding receivable from the venture partner. These have been included in the consolidated financial statements under the appropriate headings. Details of joint operations are set out in note 37. Joint venture The Group accounts for its interest in joint ventures using the equity method, after initially being recognised at cost in the consolidated statement of financial position. Goodwill arising on the acquisition of joint venture is included in the carrying value of investments in joint venture. Investments in associates An associate is an entity over which the Group has significant influence. Equity method of accounting Under the equity method of accounting applicable for investments in associates and joint ventures, investments are initially recorded at the cost to the Group and then, in subsequent periods, the carrying value is adjusted to reflect the Group’s share of the post-acquisition profits or losses of the investee, and the Group’s share of other comprehensive income of the investee, other changes to the investee’s net assets and is further adjusted for impairment losses, if any. Dividend received or receivable from associate and joint ventures are recognised as a reduction in carrying amount of the investment. The consolidated income statement and consolidated statement of comprehensive income include the Group’s share of investee’s results, except where the investee is generating losses, share of such losses in excess of the Group’s interest in that investee are not recognised. Losses recognised under the equity method in excess of the Group’s investment in ordinary shares are applied to the other components of the Group’s interest that forms part of Group’s net investment in the investee in the reverse order of their seniority (i.e., priority in liquidation). If the Group’s share of losses in an associate or joint venture equals or exceeds its interests in the associate or joint venture, the Group discontinues the recognition of further losses. Additional losses are provided for, only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate/ joint venture. Unrealised gains arising from transactions with associates and joint ventures are eliminated against the investment to the extent of the Group’s interest in these entities. Unrealised losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment of the asset transferred. Accounting policies of equity accounted investees is changed where necessary to ensure consistency with the policies adopted by the Group. The carrying amount of equity accounted investments are tested for impairment in accordance with the policy described in note 2 (a)(x) below. (ii) Business combination Business combinations are accounted for under the acquisition method. The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3 are recognised at their fair value at the acquisition date, except certain assets and liabilities required to be measured as per the applicable standards. Excess of fair value of purchase consideration and the acquisition date non-controlling interest over the acquisition date fair value of identifiable assets acquired and liabilities assumed is recognised as CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Consolidated 179 NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 goodwill. Goodwill arising on acquisitions is reviewed for impairment annually. Where the fair values of the identifiable assets and liabilities exceed the purchase consideration, the Group re-assesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognised at the acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired over the aggregate consideration transferred, then the surplus is credited to the consolidated income statement in the period of acquisition. Where it is not possible to complete the determination of fair values by the date on which the first post-acquisition financial statements are approved, a provisional assessment of fair value is made and any adjustments required to those provisional fair values are finalised within 12 months of the acquisition date. Those provisional amounts are adjusted through goodwill during the measurement period, or additional assets or liabilities are recognised to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the amounts recognised at that date. These adjustments are called as measurement period adjustments. The measurement period does not exceed twelve months from the acquisition date. Any non-controlling interest in an acquiree is measured at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net identifiable assets. This accounting choice is made on a transaction-by-transaction basis. Acquisition expenses are charged to the consolidated income statement in the periods in which the costs are incurred and the services are received except costs to issue debt or equity securities which shall be recognised in accordance with IAS 32 and IFRS 9. If the Group acquires a group of assets in a company that does not constitute a business combination in accordance with IFRS 3 ‘Business Combinations’, the cost of the acquired group of assets is allocated to the individual identifiable assets acquired based on their relative fair value. Common control transactions A business combination involving entities or businesses under common control is a business combination in which all of the combining entities or businesses are ultimately controlled by the same party or parties both before and after the business combination and the control is not transitory. The transactions between entities under common control are scoped out of IFRS 3 and there is no authoritative literature for these transactions under IFRS. As a result, the Group adopted accounting principles similar to the pooling-of-interest method based on the predecessor values. The assets and liabilities of the acquired entity are recognised at the book values recorded in the ultimate parent entity’s consolidated financial statements. The components of equity of the acquired companies are added to the same components within Group equity except that any share capital and investments in the books of the acquiring entity is cancelled and the differences, if any, is adjusted in the opening retained earnings/ capital reserve. The Company’s shares issued in consideration for the acquired companies are recognised from the moment the acquired companies are included in these financial statements and the financial statements of the commonly controlled entities would be combined, retrospectively, as if the transaction had occurred at the beginning of the earliest reporting period presented. However, the prior years’ comparative information is only adjusted for periods during which the entities were under common control. (iii) Revenue recognition Sale of goods/ rendering of services (Including Revenue from contracts with customers). The Group’s revenue from contracts with customers is mainly from the sale of copper, aluminium, iron ore, zinc, oil and gas, power, steel, glass substrate and port operations. Revenue from contracts with customers is recognised when control of the goods or services is transferred to the customer as per terms of contract, which usually is on delivery of the goods to the shipping agent at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods or services. Revenue is recognised net of discounts, volume rebates, outgoing sales taxes/ goods and service tax and other indirect taxes. Revenues from sale of by-products are included in revenue. Certain of the Group’s sales contracts provide for provisional pricing based on the price on the London Metal Exchange (“LME”) and crude index, as specified in the contract. Revenue in respect of such contracts is recognised when control passes to the customer and is measured at the amount the entity expects to be entitled – being the estimate of the price expected to be received at the end of the measurement period. Post transfer of control of goods, provisional pricing features are accounted in accordance with IFRS 9 ‘Financial Instruments’ rather than IFRS 15 ‘Revenue 180 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 from contracts with customers’ and therefore the IFRS 15 rules on variable consideration do not apply. These ‘provisional pricing’ adjustments, i.e., the consideration adjusted post transfer of control are included in total revenue from operations on the face of the Consolidated Income Statement and disclosed by way of note to the financial statements. Final settlement of the price is based on the applicable price for a specified future period. The Group’s provisionally priced sales are marked to market using the relevant forward prices for the future period specified in the contract and is adjusted in revenue. Revenue from oil, gas and condensate sales represent the Group’s share in the revenue from sale of such products, by the joint operations, and is recognised as and when control in these products gets transferred to the customers. In computing its share of revenue, the Group excludes government’s share of profit oil which gets accounted for when the obligation in respect of the same arises. Revenue from sale of power is recognised when delivered and measured based on rates as per bilateral contractual agreements with buyers and at a rate arrived at based on the principles laid down under the relevant Tariff Regulations as notified by the regulatory bodies, as applicable. Where the Group acts as a port operator, revenues relating to operating and maintenance phase of the port contract are measured at the amount that Group expects to be entitled to for the services provided. If a customer pays consideration before the Group transfers goods or services to the customer, a contract liability is recognised when the payment is received. The advance payments received plus a specified rate of return/ discount, at the prevailing market rates, is settled by supplying respective goods over a period of up to twenty-four months under an agreed delivery schedule as per the terms of the respective agreements. As these are contracts that the Group expects, and has the ability, to fulfil through delivery of a non-financial item, these are presented as advance from customers and are recognised as revenue as and when control of respective commodities is transferred to customers under the agreements. The fixed rate of return/discount is treated as finance cost. The portion of the advance where either the Group does not have a unilateral right to defer settlement beyond 12 months or expects settlement within 12 months from the balance sheet date is classified as current liability. Interest income Interest income from debt instruments carried at amortised cost is recognised using the effective interest rate method as per IFRS 9. Dividends Dividend income is recognised in the consolidated income statement only when the right to receive payment is established, provided it is probable that the economic benefits associated with the dividend will flow to the Group, and the amount of the dividend can be measured reliably. (iv) Special items Special items are those items that management considers, by virtue of their size or incidence (including but not limited to impairment charges and acquisition and restructuring related costs), should be disclosed separately to ensure that the financial information allows an understanding of the underlying performance of the business in the year, so as to facilitate comparison with prior years. No tax impact other than tax impact on exceptional items including change in tax regime are considered exceptional. Such items are material by nature or amount to the year’s result and require separate disclosure in accordance with UK adopted IFRS. The determination as to which items should be disclosed separately requires a degree of judgement. (v) Property, Plant and Equipment Mining properties and leases When a decision is taken that a mining property is viable for commercial production (i.e., when the Group determines that the mining property will provide sufficient and sustainable return relative to the risks and the Group decided to proceed with the mine development), all further pre-production primary development expenditure other than that on land, buildings, plant, equipment and capital work in progress is capitalised as property, plant and equipment under the heading “Mining properties and leases” together with any amount transferred from “Exploration and evaluation” assets. The costs of mining properties and leases include the costs of acquiring and developing mining properties and mineral rights. The stripping cost incurred during the production phase of a surface mine is deferred to the extent the current period stripping cost exceeds the average period stripping cost over the life of mine and recognised as an asset if such cost provides a benefit in terms of improved access to ore in future periods and certain criteria are met. When the benefit from the stripping costs are realised in the current period, the stripping CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Consolidated 181 NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 costs are accounted for as the cost of inventory. If the costs of inventory produced and the stripping activity asset are not separately identifiable, a relevant production measure is used to allocate the production stripping costs between the inventory produced and the stripping activity asset. The group uses the expected volume of waste compared with the actual volume of waste extracted for a given value of ore/mineral production for the purpose of determining the cost of the stripping activity asset. Deferred stripping costs are included in mining properties within property, plant and equipment and disclosed as a part of mining properties. After initial recognition, the stripping activity asset is depreciated on a unit of production method over the expected useful life of the identified component of the ore body. In circumstances where a mining property is abandoned, the cumulative capitalised costs relating to the property are written off in the period in which it occurs, i.e., when the Group determines that the mining property will not provide sufficient and sustainable returns relative to the risks and the Group decides not to proceed with the mine development. Commercial reserves are proved, and probable reserves as defined by the ‘JORC’ Code, ‘MORC’ code or ‘SAMREC’ Code. Changes in the commercial reserves affecting unit of production calculations are dealt with prospectively over the revised remaining reserves. The estimates of hydrocarbon reserves and resources have been derived in accordance with the Society of Petroleum Engineers “Petroleum Resources Management System (2018)”. Oil and gas assets- (developing/producing assets) For oil and gas assets a successful efforts-based accounting policy is followed. Costs incurred prior to obtaining the legal rights to explore an area are expensed immediately to the consolidated income statement. All costs incurred after the technical feasibility and commercial viability of producing hydrocarbons has been demonstrated are capitalised within property, plant and equipment - development/producing assets on a field-by-field basis. Subsequent expenditure is capitalised only where it either enhances the economic benefits of the development/producing asset or replaces part of the existing development/producing asset. Any remaining costs associated with the part replaced are expensed. Net proceeds from any disposal of development/ producing assets are credited against the previously capitalised cost. A gain or loss on disposal of a development/producing asset is recognised in the consolidated income statement to the extent that the net proceeds exceed or are less than the appropriate portion of the net capitalised costs of the asset. Exploration and evaluation assets Exploration and evaluation expenditure incurred prior to obtaining the mining right or the legal right to explore are expensed as incurred. Exploration and evaluation expenditure incurred after obtaining the mining right or the legal right to explore, are capitalised as exploration and evaluation assets (property, plant and equipment) and stated at cost less impairment, if any. Exploration and evaluation assets are transferred to the appropriate category of property, plant and equipment when the technical feasibility and commercial viability has been determined. Exploration and evaluation assets are assessed for impairment and impairment loss, if any, is recognised prior to reclassification. Exploration expenditure includes all direct and allocated indirect expenditure associated with finding specific mineral resources which includes depreciation and applicable operating costs of related support equipment and facilities and other costs of exploration activities: • Acquisition costs - costs associated with acquisition of licences and rights to explore, including related professional fees. • General exploration costs - costs of surveys and studies, rights of access to properties to conduct those studies (e.g., costs incurred for environment clearance, defence clearance, etc.), and salaries and other expenses of geologists, geophysical crews and other personnel conducting those studies. • Costs of exploratory drilling and equipping exploratory and appraisal wells. Exploration expenditure incurred in the process of determining oil and gas exploration targets is capitalised within “exploration and evaluation assets “and subsequently allocated to drilling activities. Exploration drilling costs are initially capitalised on a well-by-well basis until the success or otherwise of the well has been established. The success or failure of each exploration effort is judged on a well-by-well basis. Drilling costs are written off on completion of a well unless the results indicate that hydrocarbon reserves exist and 182 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 there is a reasonable prospect that these reserves are commercial. Following appraisal of successful exploration wells, if commercial reserves are established and technical feasibility for extraction demonstrated, then the related capitalised exploration costs are transferred into a single field cost centre within property, plant & equipment - development/ producing assets (oil and gas properties) after testing for impairment. Where results of exploration drilling indicate the presence of hydrocarbons which are ultimately not considered commercially viable, all related costs are written off to the consolidated income statement. Expenditure incurred on the acquisition of a licence interest is initially capitalised on a licence-by-licence basis. Costs are held undepleted, within exploration and evaluation assets until such time as the exploration phase on the licence area is complete or commercial reserves have been discovered. Net proceeds from any disposal of an exploration asset are initially credited against the previously capitalised costs. Any surplus/ deficit is recognised in the consolidated income statement. Other property, plant and equipment The initial cost of property, plant and equipment comprises its purchase price, including import duties and non- refundable purchase taxes, and any directly attributable costs of bringing an asset to working condition and location for its intended use. It also includes the initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located. Subsequently, property plant and equipment is measured at cost less accumulated depreciation and accumulated impairment losses, if any. If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment. All other expenses on existing property, plant and equipment, including day- to-day repair and maintenance expenditure and cost of replacing parts, are charged to the consolidated income statement for the period during which such expenses are incurred. An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Gains and losses on disposal of an item of property, plant and equipment computed as the difference between the net disposal proceeds and the carrying amount of the asset is included in the consolidated income statement when the asset is derecognised. Major inspection and overhaul expenditure is capitalised, if the recognition criteria are met. (vi) Assets under construction Assets under construction are capitalised in the assets under construction account. At the point when an asset is capable of operating in the manner intended by management, the cost of construction is transferred to the appropriate category of property, plant and equipment. Costs associated with the commissioning of an asset and any obligatory decommissioning costs are capitalised until the period of commissioning has been completed and the asset is ready for its intended use. Asset under construction is carried at cost less accumulated impairment losses, if any. (vii) Depreciation, depletion and amortisation expense Mining properties and other assets in the course of development or construction, freehold land and goodwill are not depreciated or amortised. Mining properties The capitalised mining properties are amortised on a unit-of-production basis over the total estimated remaining commercial proved and probable reserves of each property or Group of properties and are subject to impairment review. Costs used in the unit of production calculation comprise the net book value of capitalised costs plus the estimated future capital expenditure required to access the commercial reserves. Changes in the estimates of commercial reserves or future capital expenditure are dealt with prospectively. Oil and gas assets All expenditures carried within each field are amortised from the commencement of production on a unit of production basis, which is the ratio of oil and gas production in the period to the estimated quantities of commercial reserves at the end of the period plus the production in the period, generally on a field- by-field basis or group of fields which are reliant on common infrastructure. Commercial reserves are proven and probable oil and gas reserves, which are defined as the estimated quantities of crude oil, natural gas and natural gas liquids which geological, geophysical and engineering data demonstrate with a specified degree of certainty to be recoverable in future years from known reservoirs and which are considered commercially producible. CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Consolidated 183 NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 Costs used in the unit of production calculation comprise the net book value of capitalised costs plus the estimated future field development costs required to access the commercial reserves. Changes in the estimates of commercial reserves or future field development costs are dealt with prospectively. Other assets Depreciation on other Property, plant and equipment is calculated using the straight-line method (SLM) to allocate their cost, net of their residual values, over their estimated useful lives (determined by the management) as given below. Management’s assessment takes into account, inter alia, the nature of the assets, the estimated usage of the assets, the operating conditions of the assets, past history of replacement and maintenance support. Estimated useful life of assets are as follows: Asset Useful life (in years) Buildings - operations and administration 3-60 Plant and machinery 15-40 Railway Sidings 15 Office equipment 3–6 Furniture and fixtures 8-10 Vehicles 8-10 Major inspection and overhaul costs are depreciated over the estimated life of the economic benefit to be derived from such costs. The carrying amount of the remaining previous overhaul cost is charged to the consolidated income statement if the next overhaul is undertaken earlier than the previously estimated life of the economic benefit. The Group reviews the residual value and useful life of an asset at least at each financial year end and, if expectations differ from previous estimates, the change is accounted for as a change in accounting estimate. (viii) Intangible assets Intangible assets acquired separately are measured on initial recognition at cost. Subsequently, intangible assets are measured at cost less accumulated amortisation and accumulated impairment losses, if any. The Group recognises port concession rights as “Intangible Assets” arising from a service concession arrangements, in which the grantor controls or regulates the services provided and the prices charged, and also controls any significant residual interest in the infrastructure such as property, plant and equipment, irrespective whether the infrastructure is existing infrastructure of the grantor or the infrastructure is constructed or purchased by the Group as part of the service concession arrangement. Such an intangible asset is recognised by the Group initially at cost determined as the fair value of the consideration received or receivable for the construction service delivered and is capitalised when the project is complete in all respects. Port concession rights are amortised on straight line basis over the balance of license period. The concession period is 30 years from the date of the award. Any addition to the port concession rights are measured at fair value on recognition. Port concession rights also include certain property, plant and equipment in accordance with IFRIC 12 “Service Concession Arrangements”. Intangible assets are amortised over their estimated useful life on a straight-line basis. Software is amortised over the estimated useful life ranging from 2 – 5 years. Amounts paid for securing mining rights are amortised over the period of the mining lease ranging from 16-25 years. Technological know-how and acquired brand are amortised over the estimated useful life of 10 years. Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the consolidated income statement when the asset is derecognised. The amortisation period and the amortisation method are reviewed at least at each financial year end. If the expected useful life of the asset is different from previous estimates, the change is accounted for prospectively as a change in accounting estimate. (ix) Impairment Non-financial assets Impairment charges and reversals are assessed at the level of cash-generating units. The Group assesses at each reporting date, whether there is an indication that an asset may be impaired. The Group conducts an internal review of asset values annually, which is used as a source of information to assess for any indications of impairment or reversal of previously recognised impairment losses. Internal and external factors, such as worse economic performance than expected, changes in expected future prices, costs and other market factors are also monitored to assess for indications of impairment or reversal of previously recognised impairment losses. If any such indication exists or in case of goodwill where annual testing of impairment is required then an 184 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 impairment review is undertaken, and the recoverable amount is calculated, as the higher of fair value less costs of disposal and the asset’s value in use. Fair value less costs of disposal is the price that would be received to sell the asset in an orderly transaction between market participants and does not reflect the effects of factors that may be specific to the Group and not applicable to entities in general. Fair value for mineral and oil and gas assets is generally determined as the present value of the estimated future cash flows expected to arise from the continued use of the asset, including any expansion prospects, and its eventual disposal, using assumptions that an independent market participant may take into account. These cash flows are discounted at an appropriate post-tax discount rate to arrive at the net present value. Value in use is determined as the present value of the estimated future cash flows expected to arise from the continued use of the asset in its present form and its eventual disposal. The cash flows are discounted using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which estimates of future cash flows have not been adjusted. Value in use is determined by applying assumptions specific to the Group’s continued use and cannot take into account future development. These assumptions are different to those used in calculating fair value and consequently the value in use calculation is likely to give a different result to a fair value calculation. The carrying amount of the CGU is determined on a basis consistent with the way the recoverable amount of the CGU is determined. The carrying value is net of deferred tax liability recognised in the fair value of assets acquired in the business combination. If the recoverable amount of an asset or CGU is estimated to be less than its carrying amount, the carrying amount of the asset or CGU is reduced to its recoverable amount. An impairment loss is recognised in the consolidated income statement. Any reversal of the previously recognised impairment loss is limited to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined if no impairment loss had previously been recognised except if initially attributed to goodwill. Exploration and evaluation assets: In assessing whether there is any indication that an exploration and evaluation asset may be impaired, the Group considers, as a minimum, the following indicators: • the period for which the Group has the right to explore in the specific area has expired during the period or will expire in the near future, and is not expected to be renewed; • substantive expenditure on further exploration for and evaluation of mineral resources in the specific area is neither budgeted nor planned; • exploration for and evaluation of mineral resources in the specific area have not led to the discovery of commercially viable quantities of mineral resources and the Group has decided to discontinue such activities in the specific area; • sufficient data exist to indicate that, although a development in the specific area is likely to proceed, the carrying amount of the exploration and evaluation asset is unlikely to be recovered in full from successful development or by sale; and • reserve information prepared annually by external experts. When a potential impairment is identified, an assessment is performed for each area of interest in conjunction with the group of operating assets (representing a cash-generating unit) to which the exploration and evaluation assets is attributed. Exploration areas in which reserves have been discovered but require major capital expenditure before production can begin, are continually evaluated to ensure that commercial quantities of reserves exist or to ensure that additional exploration work is under-way or planned. To the extent that capitalised expenditure is no longer expected to be recovered, it is charged to the consolidated income statement. (x) Financial Instruments (a) Financial assets – recognition and subsequent measurement All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the marketplace (regular way trades) are recognised on the trade date, i.e., the date that the Group commits to purchase or sell the asset. CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Consolidated 185 NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 Trade receivables that do not contain a significant financing component are measured at transaction price as per IFRS 15. For purposes of subsequent measurement, financial assets are classified in four categories: Financial assets at amortised cost A ‘Financial asset’ is measured at amortised cost if both the following conditions are met: a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding. After initial measurement, such financial assets are subsequently measured at amortised cost using the Effective Interest Rate (EIR) method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in interest income in consolidated income statement. The losses arising from impairment are recognised in consolidated income statement. Financial assets at fair value through other comprehensive income (FVOCI) A ‘debt instrument’ is classified as at FVOCI if both of the following criteria are met: a) The objective of the business model is achieved both by collecting contractual cash flows and selling the financial assets, and b) The asset’s contractual cash flows represent SPPI. Debt instruments included within the FVOCI category are measured initially as well as at each reporting date at fair value. Fair value movements are recognised in other comprehensive income (OCI). However, interest income, impairment losses and reversals and foreign exchange gain or loss are recognised in the consolidated income statement. On derecognition of the asset, cumulative gain or loss previously recognised in other comprehensive income is reclassified from the equity to consolidated income statement. Interest earned whilst holding fair value through other comprehensive income debt instrument is reported as interest income using the EIR method. For equity instruments, the Group may make an irrevocable election to present subsequent changes in the fair value in OCI. The Group makes such election on an instrument-by-instrument basis. If the Group decides to classify an equity instrument as at FVOCI, then all fair value changes on the instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to the consolidated income statement, even on sale of investment. However, the Group may transfer the cumulative gain or loss within equity. Financial assets at fair value through profit or loss (FVTPL) Any debt instrument, which does not meet the criteria for categorization as at amortised cost or as FVOCI, is classified as at FVTPL. In addition, the Group may elect to designate a debt instrument, which otherwise meets amortised cost or FVOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as ‘accounting mismatch’). The Group has not designated any debt instrument at FVTPL. Debt instruments included within the FVTPL category are measured at fair value with all changes being recognised in consolidated income statement. Equity instruments An equity instrument in the scope of IFRS 9 are measured at fair value. Equity instruments which are held for trading and contingent consideration recognised by an acquirer in a business combination to which IFRS 3 applies are classified as at FVTPL. For equity instruments which are classified as FVTPL, all subsequent fair value changes are recognised in the consolidated income statement. Further, the provisionally priced trade receivables are marked to market using the relevant forward prices for the future period specified in the contract and is adjusted in revenue. (b) Impairment of financial assets The Group follows ‘simplified approach’ for recognition of impairment loss allowance on trade receivables and lease receivables. The application of simplified approach does not require the Group to track changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition. 186 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 At each reporting date, for recognition of impairment loss on other financial assets and risk exposure, the Group determines whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If, in a subsequent period, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the Group reverts to recognising impairment loss allowance based on 12-month ECL. i) Financial assets measured at amortised cost: ECL is presented as an allowance, i.e., as an integral part of the measurement of those assets. The Group does not reduce impairment allowance from the gross carrying amount. ii) Debt instruments measured at FVOCI: Since financial assets are already reflected at fair value, impairment allowance is not further reduced from its value. Rather, ECL amount is presented as ‘accumulated impairment amount’ in the OCI. For assessing increase in credit risk and impairment loss, the Group combines financial instruments on the basis of shared credit risk characteristics with the objective of facilitating an analysis that is designed to enable significant increases in credit risk to be identified on a timely basis. The Group does not have any purchased or originated credit-impaired (“POCI”) financial assets, i.e., financial assets which are credit impaired on purchase/ origination. (c) Financial liabilities – Recognition and Subsequent measurement Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, or as loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. All financial liabilities are recognised initially at fair value, and in the case of financial liabilities at amortised cost, net of directly attributable transaction costs. The Group’s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, financial guarantee contracts and derivative financial instruments. The measurement of financial liabilities depends on their classification, as described below: Financial liabilities at fair value through profit or loss Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial instruments entered into by the Group that are not designated as hedging instruments in hedge relationships as defined by IFRS 9. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments. Gains or losses on liabilities held for trading are recognised in the consolidated income statement. Financial liabilities designated upon initial recognition at fair value through profit or loss are designated as such at the initial date of recognition, and only if the criteria in IFRS 9 are satisfied. For liabilities designated as FVTPL, fair value gains/losses attributable to changes in own credit risk are recognised in OCI. These gains/ losses are not subsequently transferred to consolidated income statement. However, the Group may transfer the cumulative gain or loss within equity. All other changes in fair value of such liability are recognised in the consolidated income statement. The Group has not designated any financial liability at fair value through profit or loss. Further, the provisionally priced trade payables are marked to market using the relevant forward prices for the future period specified in the contract. Financial liabilities at amortised cost (Loans, Borrowings and Trade and Other payables) After initial recognition, interest-bearing loans and borrowings and trade and other payables are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in consolidated income statement when the liabilities are derecognised as well as through the EIR amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the consolidated income statement. CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Consolidated 187 NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 (d) Financial liabilities – Derecognition A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the consolidated income statement. (e) Equity instruments An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Group are recognised at the proceeds received, net of direct issue costs. (f) Derivative financial instruments and hedge accounting Initial recognition and subsequent measurement In order to hedge its exposure to foreign exchange, interest rate, and commodity price risks, the Group enters into forward, option, swap contracts and other derivative financial instruments. The Group does not hold derivative financial instruments for speculative purposes. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. Any gains or losses arising from changes in the fair value of derivatives are taken directly to the consolidated income statement, except for the effective portion of cash flow hedges, which is recognised in OCI and later reclassified to the consolidated income statement when the hedge item affects profit or loss or treated as basis adjustment if a hedged forecast transaction subsequently results in the recognition of a non-financial asset or non-financial liability. Hedges that meet the strict criteria for hedge accounting are accounted for, as described below: (i) Fair value hedges Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in the consolidated income statement immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk. When an unrecognised firm commitment is designated as a hedged item, the subsequent cumulative change in the fair value of the firm commitment attributable to the hedged risk is recognised as an asset or liability with a corresponding gain or loss recognised in the consolidated income statement. Hedge accounting is discontinued when the Group revokes the hedge relationship, the hedging instrument or hedged item expires or is sold, terminated, or exercised or no longer meets the criteria for hedge accounting. (ii) Cash flow hedges The effective portion of the gain or loss on the hedging instrument is recognised in OCI in the cash flow hedge reserve, while any ineffective portion is recognised immediately in the consolidated income statement. Amounts recognised in OCI are transferred to the consolidated income statement when the hedged transaction affects profit or loss, such as when the hedged financial income or financial expense is recognised or when a forecast sale occurs. When the hedged item is the cost of a non-financial asset or non-financial liability, the amounts recognised in OCI are transferred to the initial carrying amount of the non-financial asset or liability If the hedging instrument expires or is sold, terminated, or exercised without replacement or rollover (as part of the hedging strategy), or if its designation as a hedge is revoked, or when the hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss previously recognised in OCI remains separately in equity until the forecast transaction occurs or the foreign currency firm commitment is met. (xi) Leases The Group assesses at contract inception, all arrangements to determine whether they are, or contain, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Group as a lessee applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Group recognises lease liabilities towards future lease payments and right-of-use assets representing the right to use the underlying assets. 188 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 (i) Right-of-use assets The Group recognises right-of-use assets at the commencement date of the lease (i.e., the date when the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. The right-of-use assets are also subject to impairment. Right-of-use assets are depreciated on a straight- line basis over the shorter of the lease term and the estimated useful lives of the assets as described in (vii) above. (ii) Lease liabilities At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (and, in some instances, in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating the lease, if the lease term reflects the Group exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognised as expenses (unless they are incurred to produce inventories) in the period in which the event or condition that triggers the payment occurs. In calculating the present value of lease payments, the Group uses its incremental borrowing rate as per IFRS 16 at the lease commencement date because the interest rate implicit in the lease is generally not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset. The Group’s lease liabilities are included in Trade and other payables. (iii) Short-term leases and leases of low-value assets The Group applies the short-term lease recognition exemption to its short-term leases of equipment (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases of office equipment that are considered to be low value. Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight-line basis over the lease term. (xii) Inventories Inventories and work-in-progress are stated at the lower of cost and net realisable value. Cost is determined on the following basis: • Purchased copper concentrate is recorded at cost on a first-in, first-out (“FIFO”) basis; all other materials including stores and spares are valued on weighted average basis; except in Oil and Gas business where stores and spares are valued on a FIFO basis; • Finished products are valued at raw material cost plus costs of conversion, comprising labour cost and an attributable proportion of manufacturing overheads based on normal levels of activity and are moved out of inventory on a weighted average basis (except in copper business where FIFO basis is followed); and • By-products and scrap are valued at net realisable value. Net realisable value is determined based on estimated selling price, less further costs expected to be incurred for completion and disposal. Inventories of 'Fuel Stock' mainly consist of coal which is used for generating power. On consumption, the cost is charged off to 'Cost of sales' in the consolidated income statement. (xiii) Government grants Grants and subsidies from the government are recognised when there is reasonable assurance that (i) the Group will comply with the conditions attached to them, and (ii) the grant/subsidy will be received. Government grants relating to tangible fixed assets are deducted in calculating the carrying amount of CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Consolidated 189 NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 the assets and recognised in the consolidated income statement over the expected useful lives of the assets concerned as a reduced depreciation expense. (xiv) Taxation Tax expense represents the sum of current tax and deferred tax. Current tax is provided at amounts expected to be paid (or recovered) using the tax rates and laws that have been enacted or substantively enacted by the reporting date and includes any adjustment to tax payable in respect of previous years. Subject to the exceptions below, deferred tax is provided, using the balance sheet method, on all temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes and on carry forward of unused tax credits and unused tax losses: • tax payable on the future remittance of the past earnings of subsidiaries where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future; • deferred income tax is not recognised on initial recognition as well as on the impairment of goodwill which is not deductible for tax purposes or on the initial recognition of an asset; liability in a transaction that is not a business combination, and at the time of the transaction, affects neither the accounting profit nor taxable profit (tax loss); at the time of the transaction, does not give rise to equal taxable and deductible temporary differences; and • deferred tax assets (including MAT credit entitlement) are recognised only to the extent that it is more likely than not that they will be recovered. The carrying amount of deferred tax assets (including MAT credit entitlement) is reviewed at each reporting date and is adjusted to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the asset to be recovered. Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current income tax assets against current income tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority. Deferred tax is provided on temporary differences arising on acquisitions that are categorised as Business Combinations. Deferred tax is recognised at acquisition as part of the assessment of the fair value of assets and liabilities acquired. Subsequently deferred tax is charged or credited in the consolidated income statement/other comprehensive income as the underlying temporary difference is reversed. Further, management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and considers whether it is probable that a taxation authority will accept an uncertain tax treatment. The Group shall reflect the effect of uncertainty for each uncertain tax treatment by using either most likely method or expected value method, depending on which method predicts better resolution of the treatment. (xv) Retirement benefit schemes The Group operates or participates in a number of defined benefits and defined contribution schemes, the assets of which (where funded) are held in separately administered funds. For defined benefit schemes, the cost of providing benefits under the plans is determined by actuarial valuation each year separately for each plan using the projected unit credit method by third party qualified actuaries. Remeasurement including, effects of asset ceiling and return on plan assets (excluding amounts included in interest on the net defined benefit liability) and actuarial gains and losses arising in the year are recognised in full in other comprehensive income and are not recycled to the consolidated income statement. Net interest is calculated by applying a discount rate to the net defined benefit liability or asset at the beginning of the period. Defined benefit costs are split into current service cost, past service cost, net interest expense or income and remeasurement, and gains and losses on curtailments and settlements. Current service cost and past service costs are recognised within cost of sales and administrative expenses and distribution expenses. Net interest expense or income is recognised within finance costs. For defined contribution schemes, the amount charged to the consolidated income statement in respect of pension costs and other post-retirement benefits is the contributions payable in the year, recognised as and when the employee renders related services. 190 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 (xvi) Share-based payments Certain employees (including executive directors) of the Group receive part of their remuneration in the form of share-based payment transactions, whereby employees render services in exchange for shares or rights over shares (‘equity-settled transactions’). The cost of equity-settled transactions with employees is measured at the fair value of share awards at the date at which they are granted. The fair value of share awards is determined with the assistance of an external valuer and the fair value at the grant date is expensed on a proportionate basis over the vesting period based on the Group’s estimate of shares that will eventually vest. The estimate of the number of share awards likely to vest is reviewed at each reporting date up to the vesting date at which point the estimate is adjusted to reflect the current expectations. The resultant increase in equity is recorded in share- based payment reserve. In case of cash-settled transactions, a liability is recognised for the fair value of cash-settled transactions. The fair value is measured initially and at each reporting date up to and including the settlement date, with changes in fair value recognised in employee benefits expense. The fair value is expensed over the period until the vesting date with recognition of a corresponding liability. The fair value is determined with the assistance of an external valuer. (xvii) Provisions, contingent liabilities and contingent assets The assessments undertaken in recognising provisions and contingencies have been made in accordance with the applicable UK adopted IFRS. Provisions represent liabilities for which the amount or timing is uncertain. Provisions are recognised when the Group has a present obligation (legal or constructive), as a result of past events, and it is probable that an outflow of resources, that can be reliably estimated, will be required to settle such an obligation. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows to net present value using an appropriate pre-tax discount rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Unwinding of the discount is recognised in the consolidated income statement as a finance cost. Provisions are reviewed at each reporting date and are adjusted to reflect the current best estimate. A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of Group or a present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognised because it cannot be measured reliably. The Group does not recognise a contingent liability but discloses its existence in the consolidated financial statements. Contingent assets are not recognised but disclosed in the financial statements when an inflow of economic benefit is probable. The Group has significant capital commitments in relation to various capital projects which are not recognised in the consolidated statement of financial position. (xviii) Restoration, rehabilitation and environmental costs An obligation to incur restoration, rehabilitation and environmental costs arises when environmental disturbance is caused by the development or ongoing production of a mine or oil fields. Such costs, discounted to net present value, are provided for and a corresponding amount is capitalised at the start of each project, as soon as the obligation to incur such costs arises. These costs are charged to the consolidated income statement over the life of the operation through the depreciation of the asset and the unwinding of the discount on the provision. The cost estimates are reviewed periodically and are adjusted to reflect known developments which may have an impact on the cost estimates or life of operations. The cost of the related asset is adjusted for changes in the provision due to factors such as updated cost estimates, changes to lives of operations, new disturbance and revisions to discount rates. The adjusted cost of the asset is depreciated prospectively over the lives of the assets to which they relate. The unwinding of the discount is shown as a finance cost in the consolidated income statement. Costs for restoration of subsequent site damage which is caused on an ongoing basis during production are provided for at their net present value and charged to the consolidated income statement as extraction progresses. Where the costs of site restoration are not anticipated to be material, they are expensed as incurred. CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Consolidated 191 NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 (xix) Accounting for foreign currency transactions and translations The functional currency for each entity in the Group is determined as the currency of the primary economic environment in which it operates. For all principal operating subsidiaries, the functional currency is normally the local currency of the country in which it operates with the exception of oil and gas business operations which have a US dollar functional currency as that is the currency of the primary economic environment in which it operates. The financial statements are presented in US dollars. In the financial statements of individual group companies, transactions in currencies other than the respective functional currencies are translated into their functional currencies at the exchange rates ruling at the date of the transaction. Monetary assets and liabilities denominated in other currencies are translated into functional currencies at exchange rates prevailing on the reporting date. Non-monetary assets and liabilities denominated in other currencies and measured at historical cost or fair value are translated at the exchange rates prevailing on the dates on which such values were determined. All exchange differences are included in the consolidated income statement except those where the monetary item is designated as an effective hedging instrument of the currency risk of designated forecasted sales or purchases, which are recognised in the other comprehensive income. Exchange differences which are regarded as an adjustment to interest costs on foreign currency borrowings, are capitalised as part of borrowing costs in qualifying assets. For the purposes of consolidation of financial statements, items in the consolidated income statement of those businesses for which the US dollar is not the functional currency are translated into US dollars at the average rates of exchange during the year/ exchange rates as on the date of transaction. The related consolidated statement of financial position is translated into US dollars at the rates as at the reporting date. Exchange differences arising on translation are recognised in the consolidated statement of comprehensive income. On disposal of such entities the deferred cumulative exchange differences recognised in equity relating to that particular foreign operation are recognised in the consolidated income statement. (xx) Buyers’ credit / Suppliers’ credit and vendor financing The Group enters into arrangements whereby banks and financial institutions make direct payments to suppliers for raw materials and project materials. The banks and financial institutions are subsequently repaid by the Group at a later date providing working capital timing benefits. These are normally settled between twelve months (for raw materials) to thirty six months (for project and materials). Where these arrangements are with a maturity of up to twelve months, the economic substance of the transaction is determined to be operating in nature and these are recognised as operational buyers’ credit/ suppliers' credit and disclosed on the face of the balance sheet. Interest expense on these are recognised in the finance cost. Payments made by banks and financial institutions to the operating vendors are treated as a non-cash item and settlement of operational buyer’s credit/ suppliers’ credit by the Group is treated as cash flows from operating activity reflecting the substance of the payment. Where such arrangements are with a maturity beyond twelve months and up to thirty six months, the economic substance of the transaction is determined to be financing in nature, and these are presented within borrowings in the consolidated statement of financial position. Payments made to vendors are treated as cash item and disclosed as cash flows from operating/ investing activity depending on the nature of the underlying transaction. Settlement of dues to banks and financial institution are treated as cash flows from financing activity. (xxi) Borrowing costs Borrowing cost includes interest expense as per effective interest rate (EIR) and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Borrowing costs directly relating to the acquisition, construction or production of a qualifying capital project under construction are capitalised and added to the project cost during construction until such time that the assets are substantially ready for their intended use, i.e., when they are capable of commercial production. Borrowing costs relating to the construction phase of a service concession arrangement is capitalised as part of the cost of the intangible asset. Where funds are borrowed specifically to finance a qualifying capital project, the amount capitalised represents the actual borrowing costs incurred. Where surplus funds are available out of money borrowed specifically to finance a qualifying capital project, the income generated 192 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 from such short-term investments is deducted from the total capitalised borrowing cost. If any specific borrowing remains outstanding after the related asset is ready for its intended use or sale, that borrowing then becomes part of general borrowing. Where the funds used to finance a project form part of general borrowings, the amount capitalised is calculated using a weighted average of rates applicable to relevant general borrowings of the Group during the year. All other borrowing costs are recognised in the consolidated income statement in the year in which they are incurred. Capitalisation of interest on borrowings related to construction or development projects is ceased when substantially all the activities that are necessary to make the assets ready for their intended use are complete or when delays occur outside of the normal course of business. (xxii) Cash and cash equivalents Cash and cash equivalents in the consolidated statement of financial position comprise cash at bank and in hand and short-term money market deposits which have a maturity of three months or less from the date of acquisition, that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. For the purpose of the consolidated statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above and additionally includes unpaid dividend account. 2(b) Application of new and revised standards The Group has adopted, with effect from 01 April 2023, the following new and revised standards and interpretations. Their adoption has not had any significant impact on the amounts reported in the consolidated financial statements. 1. Disclosure of Accounting Policies - Amendments to IAS 1 and IFRS Practice Statement 2 2. Deferred Tax related to Assets and Liabilities arising from a Single Transaction – Amendments to IAS 12 3. Definition of Accounting Estimates - Amendments to IAS 8 4. IFRS 17 Insurance Contracts Standards issued but not yet effective The new and amended standards that are issued, but not yet effective, up to the date of issuance of the Group’s financial statements are disclosed below: New pronouncement Effective date Lease Liability in a Sale and Leaseback – Amendments to IFRS 16 01 January 2024 Classification of Liabilities as Current or Non- current - Amendments to IAS 1 01 January 2024 Supplier Finance Arrangements - Amendments to IAS 7 and IFRS 7 01 January 2024 The Effects of Changes in Foreign Exchange Rates - Amendments to IAS 21 01 January 2025 IFRS 18 – Presentation and Disclosures in Financial Statements 01 January 2027 The amendments are not expected to have a material impact on the Group. The Group has not early adopted any amendments which has been notified but is not yet effective. 2(c) Significant accounting estimates and judgements The preparation of consolidated financial statements in conformity with UK adopted IFRS requires management to make judgements, estimates and assumptions, that affect the application of accounting policies and the reported amounts of assets, liabilities, income, expenses and disclosures of contingent assets and liabilities at the date of these consolidated financial statements and the reported amounts of revenues and expenses for the years presented. These judgments and estimates are based on management’s best knowledge of the relevant facts and circumstances, having regard to previous experience, but actual results may differ materially from the amounts included in the financial statements. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and future periods affected. The information about significant areas of estimation uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements are as given below: I. Significant Estimates: (i) Carrying value of exploration and evaluation assets The recoverability of a project is assessed under IFRS 6. Exploration assets are assessed by comparing the carrying value to higher of fair value CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Consolidated 193 NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 less cost of disposal or value in use, if impairment indicators exist. Change to the valuation of exploration assets is an area of judgement. Further details on the Group’s accounting policies on this are set out in accounting policy above. The amounts for exploration and evaluation assets represent active exploration projects. These amounts will be written off to the consolidated income statement as exploration costs unless commercial reserves are established, or the determination process is not completed and there are no indications of impairment. The outcome of ongoing exploration, and therefore whether the carrying value of exploration and evaluation assets will ultimately be recovered, is inherently uncertain. Details of carrying values are disclosed in note 16. (ii) Recoverability of deferred tax and other income tax assets The Group has carried forward tax losses and unabsorbed depreciation that are available for offset against future taxable profit. Deferred tax assets are recognised only to the extent that it is probable that taxable profit will be available against which the unused tax losses or tax credits can be utilized. This involves an assessment of when those assets are likely to reverse, and a judgement as to whether or not there will be sufficient taxable profits available to offset the assets. This requires assumptions regarding future profitability, which is inherently uncertain. To the extent assumptions regarding future profitability change, there can be an increase or decrease in the amounts recognised in respect of deferred tax assets and consequential impact in the consolidated income statement. During year ended 31 March 2024, based on financial projections and requirements of IAS 12, ESL derecognized deferred tax assets on business losses amounting to US$ 37 million (31 March 2023: US$ 35 million). Post said derecognition, deferred tax assets balance on carry forward unabsorbed depreciation as at 31 March 2024 is US$ 334 million, which based on management’s estimate is probable to realise. iii) Copper operations in Tamil Nadu, India Tamil Nadu Pollution Control Board (“TNPCB”) had issued a closure order of the Tuticorin Copper smelter, against which the Group had filed an appeal with the National Green Tribunal (“NGT”). NGT had, on 08 August 2013, ruled that the Copper smelter could continue its operations subject to implementation of recommendations of the Expert Committee appointed by the NGT. The TNPCB has filed an appeal against the order of the NGT before the Supreme Court of India. In the meanwhile, the application for renewal of Consent to Operate ("CTO") for existing copper smelter was rejected by TNPCB in April 2018. The Group has filed an appeal before the TNPCB Appellate Authority challenging the Rejection Order. During the pendency of the appeal, the TNPCB vide its order dated 23 May 2018 ordered closure of existing copper smelter plant with immediate effect. Further, the Government of Tamil Nadu issued orders on the same date with a direction to seal the existing copper smelter plant permanently. The Group believes these actions were not taken in accordance with the procedure prescribed under applicable laws. Subsequently, the Directorate of Industrial Safety and Health passed orders dated 30 May 2018, directing the immediate suspension and revocation of the Factory License and the Registration Certificate for the existing smelter plant. The Group appealed this before the NGT. NGT vide its order on 15 December 2018 has set aside the impugned orders and directed the TNPCB to pass fresh orders for renewal of consent and authorization to handle hazardous substances, subject to appropriate conditions for protection of environment in accordance with law. The State of Tamil Nadu and TNPCB approached Supreme Court in Civil Appeals on 02 January 2019 challenging the judgement of NGT dated 15 December 2018 and the previously passed judgement of NGT dated 08 August 2013. The Supreme Court vide its judgement dated 18 February 2019 set aside the judgements of NGT dated 15 December 2018 and 08 August 2013 solely on the basis of maintainability and directed the Group to file an appeal in High court. The Group has filed a writ petition before the Madras High Court challenging the various orders passed against it in FY 2018 and FY 2013. On 18 August 2020, the Madras High Court delivered the judgement wherein it dismissed all the Writ Petitions filed by the Group. Thereafter, the Group has approached the Supreme Court and challenged the said High Court order by way of a Special Leave Petition ("SLP"). 194 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 The Hon'ble Supreme Court, after hearing the parties to the proceedings had dismissed the SLP filed by the Company vide judgment dated 29 February 2024. On 01 April 2024, The Group preferred a review petition before the Hon'ble Supreme Court. In the said review petition, the Company has also moved an application for open Court hearing of the review petition. Expansion Plant: Separately, the Group has filed a fresh application for renewal of the Environmental Clearance for the proposed Copper Smelter Plant 2 ("Expansion Project") dated 12 March 2018 before the Expert Appraisal Committee of the Ministry of Environment, Forests and Climate Change ("the MoEFCC") wherein a sub-committee was directed to visit the Expansion Project site prior to prescribing the Terms of Reference. In the meantime, the Madurai Bench of the Madras High Court in a Public Interest Litigation held vide its order dated 23 May 2018 that the application for renewal of the Environmental Clearance for the Expansion Project shall be processed after a mandatory public hearing and in the interim, ordered the Group to cease construction and all other activities on site for the proposed Expansion Project with immediate effect. The MoEFCC has delisted the Expansion Project since the matter is sub-judice. Separately, SIPCOT vide its letter dated 29 May 2018, cancelled 342.22 acres of the land allotted for the proposed Expansion Project. Further, the TNPCB issued orders on 07 June 2018 directing the withdrawal of the Consent to Establish ("CTE") which was valid till 31 March 2023. The Group has approached Madras High Court by way of writ petition challenging the cancellation of lease deeds by SIPCOT pursuant to which an interim stay had been granted. The Company had also appealed this action before the TNPCB Appellate Authority. The matter was heard on 01 March 2023 and was adjourned until further notice. As per the Group's assessment, they are in compliance with the applicable regulations and hence preferred a review petition before the Hon'ble Supreme Court. Considering prolonged time of plant closure and uncertainties around opening of plant due to rejection of SLP by Hon’ble Supreme Court, the Group has carried out an impairment assessment, basis above development, on Tuticorin plant assets having carrying value of US$ 187 million (including PPE, CWIP and inventory) using Depreciated Replacement Cost / Scrap Value method for PPE and CWIP, and Net recoverable method for inventory. Accordingly, impairment on assets of US$ 81 million (including Goodwill of US$ 12 million, PPE of US$ 45 million, CWIP of US$ 16 million and loss on inventory of US$ 8 million) has been recorded during the year ended 31 March 2024. Property, plant and equipment of US$ 51 million (31 March 2023: US$ 102 million) and inventories of US$ 26 million (31 March 2023: US$ 32 million), pertaining to existing and expansion plant, could not be physically verified, anytime during the year, as the access to the plant is presently restricted. However, any difference between book and physical quantities is unlikely to be material. (iv) ESL - CTO ESL Steel Limited (“ESL”), had filed application for renewal of CTO on 24 August 2017 for the period of five years which was denied by Jharkhand State Pollution Control Board ("JSPCB") on 23 August 2018, as JSPCB awaited response from The MoEFCC over a 2012 show-cause notice. After a personal hearing towards the show cause notice, The MoEFCC revoked the Environment Clearance (“EC”) on 20 September 2018. The High Court of Jharkhand granted stay against both revocation orders and allowed the continuous running of the plant operations under regulatory supervision of the JSPCB. Jharkhand High Court, on 16 September 2020, passed an order vacating the interim stay in place beyond 23 September 2020, while listed the matter for final hearing. ESL urgently filed a petition in the Hon’ble Supreme Court, and on 22 September 2020, ESL was granted permission to run the plant till further orders. The Forest Advisory Committee ("FAC") of the MoEFCC granted the Stage 1 clearance and the MoEFCC approved the related Terms of Reference ("TOR") on 25 August 2020. ESL presented its proposal before the Expert Appraisal Committee ("EAC") after completing the public consultation process and the same has been recommended for grant of EC subject to Forest Clearance by the EAC in its 41st meeting dated 29 and 30 July 2021. Vide letter dated 25 August 2021, the MoEFCC rejected the EC “as of now” due to stay granted by Madras High Court vide order dated 15 July 2021 in a CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Consolidated 195 NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 Public Interest Litigation filed against the Standard Operating Procedure which was issued by the MoEFCC for regularization of violation case on 07 July 2021. The Hon’ble Supreme Court vide order dated 09 December 2021 decided the matter by directing The MoEFCC to process the EC application of ESL as per the applicable law within a period of three months. The MoEFCC vide its letter dated 02 February 2022 has deferred the grant of EC till Forest Clearance ("FC") Stage-II is granted to ESL. ESL has submitted its reply against the MoEFCC letter vide letter dated 11 February 2022 for reconsidering the decision of linking EC with FC as the grant of FC Stage – II is not a condition precedent for grant of EC. As per Stage 1 clearance, the Group is required to provide non-forest land in addition to the afforestation cost. The Group, based on the report of an Environment Impact Assessment consultant, had recognised a provision of $ 26 million as part of special item during the year ended 31 March 2021 with respect to the costs to be incurred by it for obtaining EC and additional $ 1 million has been provided against final order relating to wildlife conservation plan received during the previous year. Management believes no further provision is required. (v) Discontinued operations - Copper Zambia (KCM) The investment in KCM and loans, receivables, and obligations of KCM towards the Group are fair valued during the year. The Group employed third- party experts to undertake the valuations using the income approach method. In this approach, the discounted cash flow method was used to capture the present value of the expected future economic benefits to be derived from the ownership of these assets. The resulting valuation is adjusted to reflect several factors, including the uncertainty and risks inherent in litigation and recovery. Details of significant estimates are disclosed in note 3(a). (vi) Oil and Gas reserves Significant technical and commercial judgements are required to determine the Group’s estimated oil and natural gas reserves. Oil and Gas reserves are estimated on a proved and probable entitlement interest basis. Proven and probable reserves are estimated using standard recognised evaluation techniques. The estimate is reviewed annually. Future development costs are estimated taking into account the level of development required to produce the reserves by reference to operators, where applicable and internal engineers. Net entitlement reserves estimates are subsequently calculated using the Group’s current oil price and cost recovery assumptions, in line with the relevant agreements. Changes in reserves as a result of factors such as production cost, recovery rates, grade of reserves or oil and gas prices could impact the depletion rates, carrying value of assets (refer note 16) and environmental and restoration provisions. (vii) Carrying value of developing/producing oil and gas assets Management performs impairment tests on the Group’s developing/producing oil and gas assets where indicators of impairment are identified in accordance with IAS 36. The impairment assessments are based on a range of estimates and assumptions, including: Estimates/ assumptions Basis Future production proved and probable reserves, production facilities, resource estimates and expansion projects Commodity prices management’s best estimate benchmarked with external sources of information, to ensure they are within the range of available analyst forecast Discount to price management’s best estimate based on historical prevailing discount and updated sales contracts Period for Rajasthan block, cash flows are considered based on economic life of the fields. Discount rates cost of capital risk-adjusted for the risk specific to the asset/ CGU Any subsequent changes to cash flows due to changes in the above-mentioned factors could impact the carrying value of the assets. Details of carrying values and impairment charge and the assumptions used are disclosed in notes 16 and 6 respectively. (viii) Climate Change The Group aims to achieve net carbon neutrality by 2050, and has outlined its climate risk assessment and opportunities in the ESG strategy. Climate change may have various impacts on the Group in the medium to long term. These impacts include 196 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 the risks and opportunities related to the demand of products and services, impact due to transition to a low-carbon economy, disruption to the supply chain, risk of physical harm to the assets due to extreme weather conditions, regulatory changes etc. The accounting related measurement and disclosure items that are most impacted by our commitments, and climate change risk more generally, relate to those areas of the financial statements that are prepared under the historical cost convention and are subject to estimation uncertainties in the medium to long term. The potential effects of climate change may be on assets and liabilities that are measured based on an estimate of future cash flows. The main ways in which potential climate change impacts have been considered in the preparation of the financial statements, pertain to (a) inclusion of capex in cash flow projections, (b) recoverable amounts of existing assets and (c) review of estimates of useful lives of property, plant and equipment. The Group's strategy consists of mitigation and adaptation measures. The Group is committed to reduce its carbon footprint by limiting its exposure to coal-based projects and reducing its GHG emissions through high impact initiatives such as investment in Renewable Energy, fuel switch, electrification of vehicles and mining fleet and energy efficiency opportunities. During the current year, work has progressed towards the construction renewable power delivery agreements in accordance with the Board approved plan. Renewable sources have limitations in supplying round the clock power, so existing power plants would support transition and fleet replacement is part of normal lifecycle renewal. The group has also taken certain measures towards water management such as commissioning of sewage treatment plants, rainwater harvesting, and reducing fresh water consumption. Collectively these measures have led to an increase of our water positivity to 0.7 (FY23: 0.63). These initiatives are aligned with the group's ESG strategy and no material changes were identified to the financial statements as a result. As the Group’s assessment of the potential impacts of climate change and the transition to a low-carbon economy continues to mature, any future changes in Group's climate change strategy, changes in environmental laws and regulations and global decarbonisation measures may impact the Group's significant judgments and key estimates and result in changes to financial statements and carrying values of certain assets and liabilities in future reporting periods. However, as of the balance sheet date, the Group believes that there is no material impact on carrying values of its assets or liabilities. (ix) Refer note 25 for significant estimates on restoration, rehabilitation and environmental II. Significant Judgements: (i) Determining whether an arrangement contains a lease The Group has ascertained that the Power Purchase Agreement (PPA) executed between one of the subsidiaries and a State Grid qualifies to be an operating lease under IFRS 16 “Leases”. Accordingly, the consideration receivable under the PPA relating to recovery of capacity charges towards capital cost have been recognised as operating lease rentals and in respect of variable cost that includes fuel costs, operations and maintenance etc is considered as revenue from sale of products/services. Significant judgement is required in segregating the capacity charges due from the State Grid, between fixed and contingent payments. The Group has determined that since the capacity charges under the PPA are based on the number of units of electricity made available by its subsidiary which would be subject to variation on account of various factors like availability of coal and water for the plant, there are no fixed minimum payments under the PPA, which requires it to be accounted for on a straight-line basis. The contingent rents recognised are disclosed in notes 4 and 5. (ii) Contingencies and other litigations In the normal course of business, contingent liabilities may arise from litigation, taxation and other claims against the Group. A provision is recognised when the Group has a present obligation as a result of past events, and it is probable that the Group will be required to settle that obligation. Where it is management’s assessment that the outcome cannot be reliably quantified or is uncertain the claims are disclosed as contingent liabilities unless the likelihood of an adverse outcome is remote. Such liabilities are disclosed in the notes but are not provided for in the financial statements. When considering the classification of a legal or tax cases as probable, possible or remote there is CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Consolidated 197 NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 judgement involved. This pertains to the application of the legislation, which in certain cases is based upon management’s interpretation of country specific applicable law, in particular India, and the likelihood of settlement. Management uses in-house and external legal professionals to make informed decision. Although there can be no assurance regarding the final outcome of the legal proceedings, the Group does not expect them to have a materially adverse impact on the Group’s financial position or profitability. These are set out in note 32. For other significant litigations where the possibility of an outflow of resources embodying economic benefits is remote, refer note 33. (iii) Revenue recognition and receivable recovery in relation to the power division In certain cases, the Group’s power customers are disputing various contractual provisions of Power Purchase Agreements (PPA). Significant judgement is required in both assessing the tariff to be charged under the PPA in accordance with IFRS 15 and to assess the recoverability of withheld revenue currently accounted for as receivables. In assessing this critical judgment management considered favourable external legal opinions the Group has obtained in relation to the claims and favourable court judgements in the related matter. In addition, the fact that the contracts are with government owned companies implies the credit risk is low. Refer note 18. 3. Discontinued operations, acquisitions and restructuring (a) Discontinued operations - Copper Zambia (KCM): In 2019, ZCCM Investments Holdings Plc (ZCCM), a company majority owned by the Government of the Republic of Zambia (GRZ), which owns 20.6% of the shares in Konkola Copper Mines Plc (KCM), filed a petition in the High Court of Zambia to wind up KCM (‘the Petition’) on “just and equitable” grounds. Subsequently, ZCCM amended the Petition to include an additional ground based on allegations that KCM is unable to pay its debts. ZCCM also obtained an ex parte order from the High Court of Zambia appointing a Provisional Liquidator (‘PL’) of KCM pending the hearing of the Petition. As a result of the appointment of the PL following ZCCM’s ex parte application, the PL is the designated authority for exercising almost all the functions of the Board of Directors, to the exclusion of the Board. The Group not only disputes the allegations and opposes the Petition, but also maintains that the complaints brought by ZCCM are in effect “disputes” between the shareholders. Per the KCM Shareholders’ Agreement, the parties (including ZCCM and the Government of the Republic of Zambia) have agreed that any disputes must be resolved through international arbitration seated in Johannesburg, South Africa, applying the UNCITRAL Arbitration Rules; not the Zambian courts. Proceedings in the Zambian Courts & Arbitration Application In respect of the ongoing arbitration proceedings, further information in respect of which can be found in the Group’s Integrated Report and Annual Accounts for the financial year ended 31 March 2022, on 07 September 2022, Vedanta Resources Limited (“VRL”), Vedanta Resources Holdings Limited (“VRHL”), ZCCM and the Official Receiver (who is currently acting as KCM’s PL) entered into a further legal and arbitration proceedings suspension agreement for an initial period of 6 months. The arbitration hearing which was to commence on 09 January 2023 has been vacated. A court date for the hearing of the judicial review application, as to whether a vacancy in the office of the Provisional Liquidator can automatically be filed by the Official Receiver without the requisite Court Order, has not yet been allocated. In light of the further legal and arbitration proceedings suspension agreement that was entered into on 07 September 2022, the judicial review application with regards to the Official Receiver will only resume if settlement talks between the parties fail. KCM has recently instituted legal proceedings against the PL and his legal firm in the High Court of Zambia in which KCM aims to recover monies improperly drawn by the PL from KCM’s accounts and damages for the PL’s breach of fiduciary and statutory duties vis-à-vis KCM. VRL, VRHL, ZCCM, the Official Receiver and KCM entered into an Extension and Amendment to the Legal Suspension Agreement on 14 February 2023, whereby the Parties agreed to an Additional Postponement Period in the suspension of legal proceedings up to 31 March 2023. The Legal Suspension Agreement has post 31 March 2023, been extended multiple times. On 06 November 2023, the parties have signed a new shareholder agreement for KCM as well as an 198 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 Implementation Agreement that sets out the terms for VRHL to re-gain control of KCM and re-start its operations. Various ancillary agreements have been finalised and executed to enable the Creditor Scheme of Arrangement in the High Court of Zambia who vide its order dated 21 February 2024 directed to convey meeting of creditors to consider the Scheme of Arrangement. The Creditors meetings were scheduled on 24 May 2024 and 30 May 2024 and the results are pending review at the High Court of Zambia. Subsequently, VRHL will initiate necessary applications and implementation steps (including removal of PL) to reconstitute the Board of Directors of KCM, thereby regaining control of KCM. At the date of approval of these financial statements, the PL continues to remain in office and the Petition remains stayed. Accounting Considerations As all the significant decision-making powers, including carrying on the business of KCM and taking control over all the assets of KCM, rests with the PL, the Group believes that the appointment of PL has caused loss of its control over KCM. Accordingly, the Group deconsolidated KCM with effect from 21 May 2019 and presented the same in the consolidated income statement as a discontinued operation. The Group continues to account for its investment in KCM and loans, receivables and obligations of KCM towards the Group at cost, subject to impairment. The loss with respect to KCM operations along with the loss on fair valuation of the Group’s interest in KCM has been presented as a special item in the consolidated income statement of previous years. The Group has total exposure of US$ 1,887 million (31 March 2023: US$ 1,887 million) (including equity investment in KCM of US$ 266 million) to KCM in the form of loans, receivables, investments and amounts relating to the guarantees issued by VRL, which have been accounted for at fair value on initial recognition and disclosed under non- current assets in the Consolidated Statement of Financial Position. Key sources of estimation uncertainty The investment in KCM and loans, receivables and obligations of KCM towards the Group recognised following deconsolidation of the subsidiary are initially recognized at fair value on the date of loss of control. Subsequently, the equity investment in KCM is measured at fair value through profit or loss and the loans, receivables and obligations of KCM towards the Group are measured at amortised cost, subject to impairment. The Group employed third-party experts (“Expert”) to undertake valuations of the investment in KCM and loans, receivables and obligations of KCM towards the Group. The income approach method was applied for the purposes of the valuation, as updated by the management during the year. In this approach, the discounted cash flow method was used to capture the present value of the expected future economic benefits to be derived from the ownership of these assets. The resulting valuation is adjusted to reflect a number of factors, including the uncertainty and risks inherent in litigation and recovery. The valuation model provides a range of reasonable fair values, based on which management calculated the fair value as the mid- point of the range. The management believes that the litigation risk included in the model has reduced significantly on execution of the new shareholder agreement during the year. However, uncertainty remains in respect of the amount and timing of recovery of the receivables due from KCM, until successful implementation of the new shareholder agreement. During the year ended 31 March 2024, basis fair valuation model updated by the management, no further adjustments to the existing balances were identified. Therefore, carrying value as at 31 March 2024 remain unchanged at US$ 682 million (31 March 2024: US$ 682 million) (refer note 18(5)). Cash flow projections are based on financial budgets and life of mine plans on a going concern basis and are sensitive to changes in input assumptions. Input assumptions into the valuation that involve management judgement include: • Expected delay between recommencement of operations and receipt of any amounts due. • Liquidity of the market in the event of a sale of KCM, which has been considered through benchmarking the resulting valuation against other recent transactions for similar mines. • The discount rate used to discount the cash flow projection, which has been calculated on a post- tax basis at 13% (31 March 2023: 13%). • To factor in the uncertainties, valuation under few scenarios in addition to the base case valuation, assuming equal likelihood, has been CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Consolidated 199 NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 (US$ million, unless stated otherwise) Financial asset Fair value at Significant unobservable Inputs Relationship of unobservable inputs to fair value 31 March 2024 31 March 2023 Investments and Loans, receivables and obligations of KCM towards the Group 756 751 Uncertainty in the debt maturity profile in the event of achieving a positive settlement outcome An increase in the risk for the uncertainty of debt maturity profile would decrease the fair value. A 10% increase in the risk for uncertainty of the debt maturity profile would decrease the fair value by US$ 115 million. We have used a 10% assumption to calculate our exposure as it represents a change in the risk for the uncertainty of debt maturity profile. Potential proportion of the value that may expected to be recovered on successful implementation of new shareholder agreement A decrease in the recovery percentage would decrease the fair value. A 10% decrease in the recovery percentage, with no change to any other inputs, would decrease the fair value by US$ 157 million (31 March 2023: US$ 156 million) We have used a 10% assumption to calculate our exposure as it represents a change in the recovery probability that we deem to be reasonably probable. Copper price Long term price A decrease in the copper price would decrease the fair value. A 10% reduction in the long-term copper price, with no change to any other inputs, would decrease the fair value by US$ 39 million (31 March 2022: US$ 113 million). We have used a 10% assumption to calculate our exposure as it represents the annual copper price movement that we deem to be reasonably probable (on an annual basis over a long term). computed a) additional capex required to achieve the planned ramp up of production and b) future implied Zambian country risk premium. The key sources of estimation uncertainty, to which the valuation is most sensitive, are: • The long-term copper prices which are based on the median of analyst forecasts. • Throughput at the Konkola concentrator: The timing of ramp up of through put at the Konkola concentrator is based on internal management forecasts. The forecasts incorporate management experience and expectations as well as the risks associated therewith (for example availability of required fleets, skill sets for level developments at critical areas). • The potential proportion of the carrying value that may be expected to be recovered in the event of achieving a positive settlement outcome. This includes uncertainties around the timing of cashflows at KCM. Where discounted cash flow models based on management’s assumptions are used, the resulting fair value measurements are considered to be at level 3 in the fair value hierarchy, as defined in IFRS 13 Fair Value Measurement, as they depend to a significant extent on unobservable valuation inputs. ii. Fair value measurements The valuation of the investment in KCM and the loans, receivables and obligations of KCM towards the group is determined using discounted future cash flows and adjusted to reflect expert’s current views on successful implementation and other unobservable inputs as described below. These assets are considered to be level 3 in the fair value hierarchy. Quantitative information about the significant unobservable inputs used in level 3 fair value measurements are set out in the table below: 200 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 (b) Athena Chhattisgarh Power Limited On 21 July 2022, the Group acquired Athena Chhattisgarh Power Limited ("ACPL"), an unrelated party, under the liquidation proceedings of the Insolvency and Bankruptcy Code, 2016 for a consideration of US$ 69 million (INR 5,647 million), subject to National Company Law Tribunal (“NCLT”) approval. ACPL is building a 1,200 MW (600 MW X 2) coal-based power plant located at Jhanjgir Champa district, Chhattisgarh. The plant is expected to fulfil the power requirements for the Group’s aluminium business. VEDL had filed its application with the NCLT in July 2022 and further amended the application in November 2022 praying for merger of ACPL with itself. The Group has requested various reliefs from the applicable legal and regulatory provisions as part of the above applications. The NCLT approval of the Group’s resolution application is pending as on balance sheet date. On consolidation, the consideration paid for acquisition of ACPL represents mainly Capital work-in-progress. The NCLT approved the VEDL’s resolution application with an appointed date of 21 July 2022 ("appointed date"), in its July 2023 order ("NCLT Order"), In accordance with applicable IFRS, the Company has restated its financial results as at and for the year ended 31 March 2023 to record this merger. The Scheme of merger as approved by the NCLT inter alia prescribes the following accounting treatment in the standalone financials of the Company: the difference between the fair value at the appointed date and the carrying value of the assets recorded pursuant to the amalgamation at their book value arrived at without considering any impairment/ write-off, would be written off by debit to the Statement of Profit and Loss of the Company and credited to the carrying value of the assets. This would be a permanent write-off of the carrying value of the assets and not a provision for diminution in the value of the assets. The charge on account of write off of the assets, as mentioned above, as recorded by the Company will be transferred from its Retained Earnings to its Capital Reserve and accordingly, the Capital Reserve will stand diminished by the said amount. Pursuant to the NCLT Order, VEDL has merged ACPL by carrying forward the book values of ACPL's assets of US$ 1,150 million (INR 86,980 million) (as appearing in ACPL's financial statements as at 31 March 2022, which were audited by ACPL's auditors) at the appointed date without considering any impairment, applying IFRS 3 - Business Combinations, instead of recognising the assets at purchase consideration in accordance with IFRS 16. The difference between the values of assets acquired and the consideration paid was credited to Other Equity (Capital Reserve). The Company has written off the consequent loss of US$ 1,013 Million (INR 81,330 million) in the Statement of Profit and Loss for the year ended 31 March 2023, representing the difference between the book value of assets and consideration paid. The assets written off of US$ 1,013 million (INR 81,330 million), excluding tax consequences thereof, has been transferred from ‘Retained Earnings’ to ‘Capital Reserve’, in accordance with the Scheme. The above is in accordance with the NCLT Order, overriding the applicable IFRS requirements. Consequent to the implementation of the merger, the carrying values of deferred tax assets (MAT credit) in the consolidated balance sheet as at 31 March 2023 was lower by US$ 173 million (INR 14,210 million) with a corresponding reduction in income tax liabilities by US$ 119 million (INR 9,790 million) and an increase in income tax assets by US$ 54 million (INR 4,420 million), on account of the lower MAT charge. These restated balances of 31 March 2023 have been carried to FY 2023-24. (c) Meenakshi Energy Limited Meenakshi Energy Limited (“Meenakshi”) is a 1,000 MW coal-based power plant located at Nellore, Andhra Pradesh. NCLT vide its order dated 10 August 2023 has granted its approval for the Resolution Plan as submitted by VEDL for acquisition of Meenakshi under Corporate Insolvency Resolution Process in accordance with the provisions of Insolvency and Bankruptcy Code (IBC), 2016 for a total consideration of US$ 174 million (INR 14,440 million). Pursuant to the approval of Resolution Plan, the Company has made a payment of upfront consideration of US$ 37 million (INR 3,120 million) and infused US$ 0.12 million (INR 10 million) through equity for the implementation of approved Resolution Plan. On 16 October 2023, zero coupon, secured, unlisted non-convertible debentures ("NCDs") of aggregate face value of US$ 135 million (INR 11,280 million) have been issued by Meenakshi to its financial creditors, redeemable CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Consolidated 201 NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 in 5 equal annual instalments starting from 16 October 2025. Consequent to satisfaction of all conditions precedent of the Resolution Plan, the Company has acquired control of Meenakshi on 27 December 2023. The above acquisition meets the criterion of asset acquisition under IFRS 3 - Business Combinations. Accordingly, fair value of the total consideration amounting to US$ 130 million (INR 10,800 million) has been allocated to the identified assets and liabilities acquired on the basis of their relative fair values. (d) Scheme of Arrangements for Demerger The Board of Directors, in its meeting held on 29 September 2023, have approved a Scheme of Arrangement (“the Scheme”) for demerger of various businesses of VEDL. The Scheme entails demerger of the Company’s Aluminium (represented by the Aluminium segment), Merchant Power (represented by the Power segment), Oil & Gas (represented by the Oil and Gas segment), Base Metals (represented by the Copper and Zinc International segment) and Iron Ore (represented by Iron Ore segment and Steel business) Undertakings, into 6 separate companies with a mirrored shareholding and consequent listings at BSE Limited and National Stock Exchange of India Limited (‘the Stock Exchanges’). VEDL has filed the Scheme with the Stock Exchanges. Upon receipt of necessary approvals from the Stock Exchanges, the Scheme will be filed with the NCLT. Pending regulatory and other approvals, no adjustments have been recorded in the financial statements of the Group for the year ended 31 March 2024. (e) Disposal of Subsidiary During the year ended 31 March 2024, Monte Cello BV ("MCBV"), a wholly owned subsidiary of Vedanta Limited, sold 100% of its equity ownership in its wholly owned subsidiary, Copper Mines of Tasmania ("CMT") which was previously engaged in copper mining operations in Australia. Consequently, upfront cash consideration of US$ 10 million (INR 840 million) received by the Group and de-recognition of net liabilities of US$ 12 million (INR 940 million) pertaining to CMT, has resulted in a total gain of US$ 22 million (INR 1,780 million) which has been included in investment revenue in consolidated financial statements for the year ended 31 March 2024. Further, as part of the transaction, the acquirer shall pay the Group additional consideration in future upto US$ 310 million by way of fee/ royalties, on achieving certain pre-agreed milestones. 4. Segment information The Group is a diversified natural resources Group engaged in exploring, extracting and processing minerals and oil and gas. The Group produces zinc, lead, silver, copper, aluminium, iron ore, oil and gas, ferro alloys, steel, cement and commercial power and has a presence across India, Zambia, South Africa, Namibia, UAE, Ireland, Australia, Japan, South Korea, Taiwan and Liberia. The Group is also in the business of port operations and manufacturing of glass substrate. The Group’s reportable segments defined in accordance with IFRS 8 are as follows: • Zinc- India (comprises zinc and lead India) • Zinc-International • Oil & Gas • Iron Ore • Copper-India/Australia • Aluminium • Power ‘Others’ segment mainly comprises port/berth, steel, glass substrate, ferro alloys and cement business and those segments which do not meet the quantitative threshold for separate reporting. Each of the reportable segments derives its revenues from these main products and hence these have been identified as reportable segments by the Group’s chief operating decision maker (“CODM”). Management monitors the operating results of reportable segments for the purpose of making decisions about resources to be allocated and for assessing performance. Segment performance is evaluated based on the Earnings Before Interest, Taxes, Depreciation, and Amortization (“EBITDA”) of each segment. Business segment financial data includes certain corporate costs, which have been allocated on an appropriate basis. Inter-segment sales are charged based on prevailing market prices. The following tables present revenue and profit information and certain asset and liability information regarding the Group’s reportable segments for the years ended 31 March 2024 and 31 March 2023. Items after operating profit are not allocated by segment. 202 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 (a) Reportable segments Year ended 31 March 2024 (US$ million) Zinc- India Zinc- International Oil and gas Iron Ore Copper- India/ Australia Aluminium Power Others Elimination Total operations REVENUE Sales to external customers 3,369 430 2,155 1,080 2,383 5,837 743 1,131 - 17,128 Inter-segment sales 4 - - 15 - 6 - 87 (112) - Segment revenue 3,373 430 2,155 1,095 2,383 5,843 743 1,218 (112) 17,128 Results Segment Results (EBITDA)(1) 1,638 84 1,184 200 (9) 1,167 117 337 - 4,718 Less: Depreciation and amortisation (2) 399 55 327 39 26 291 65 80 - 1,282 Other Expenses * - - 89 - - - - - - 89 Operating profit / (loss) before special items 1,239 29 768 161 (35) 876 52 257 - 3,347 Investment revenue 202 Finance costs (1,882) Other gains and (losses) [net] (37) Special items (Refer Note 6) 124 Profit before taxation 1,754 Segments assets 2,567 955 3,272 689 446 7,388 1,749 1,274 - 18,340 Financial asset investments 118 Deferred tax assets 422 Short-term investments 1,575 Cash and cash equivalents 384 Tax assets 466 Others 1,025 TOTAL ASSETS 22,330 Segment liabilities 746 252 1,738 415 646 2,653 92 454 - 6,996 Borrowings 14,330 Current tax liabilities 299 Deferred tax liabilities 1,206 Others 347 TOTAL LIABILITIES 23,178 Other segment information Additions to property, plant and equipment, exploration and evaluation assets and intangible assets (4) 462 259 367 89 14 926 165 134 - 2,418 Impairment charge/ (reversal) (3) - 14 (157) 18 81 16 - - - (28) * Exploration costs written off CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Consolidated 203 NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 Year ended 31 March 2023 (US$ million) Zinc- India Zinc- International Oil and gas Iron Ore Copper- India/ Australia Aluminium Power Others Elimination Total operations REVENUE Sales to external customers 4,126 649 1,873 753 2,179 6,582 838 1,141 - 18,141 Inter-segment sales - - - 56 - 33 0 11 (100) - Segment revenue 4,126 649 1,873 809 2,179 6,615 838 1,152 (100) 18,141 Results Segment Results (EBITDA)(1) 2,177 241 972 124 (7) 699 114 288 - 4,608 Less: Depreciation and amortisation (2) 389 61 442 33 18 285 68 86 - 1,382 Other Expenses * - - 30 - - - - - - 30 Operating profit / (loss) before special items 1,788 180 500 91 (25) 414 46 202 - 3,196 Investment revenue 251 Finance costs (1,558) Other gains and (losses) [net] (79) Special items (Refer Note 6) (178) Profit before taxation 1,632 Segments assets 2,617 833 2,896 679 610 6,947 1,875 1,323 - 17,780 Financial asset investments 63 Deferred tax assets * 1,095 Short-term investments 1,728 Cash and cash equivalents 1,037 Tax assets * 427 Others 1,181 TOTAL ASSETS 23,311 Segment liabilities 625 131 1,809 312 632 2,867 248 445 - 7,069 Borrowings 15,358 Current tax liabilities * 72 Deferred tax liabilities 866 Others 818 TOTAL LIABILITIES 24,183 Other segment information Additions to property, plant and equipment, exploration and evaluation assets and intangible assets (4) 475 158 433 70 18 708 74 182 - 2,121 Impairment charge/ (reversal) (3) - - 157 (82) - - - (14) - 61 * Exploration costs written off ** Restated. Refer note 3(b) (1) EBITDA is a non-IFRS measure and represents earnings before special items, depreciation, amortisation, other gains and losses, interest and tax. (2) Depreciation and amortisation are also provided to the chief operating decision maker on a regular basis. (3) Included under special items (Note 6). (4) Additions to property, plant and equipment, exploration and evaluation assets and intangible assets includes US$ 2 million (31 March 2023: US$ 3 million) not allocated to any segment. (5) Pursuant to conversion of one of the 300 MW Captive Power Plant ("CPP") unit to Independent Power Plant ("IPP") with effect from 01 April 2023, and considering the usability of units interchangeably as IPP or CPP based on the annual declaration to Chief Electricity Inspector and the annual consumption criteria as per the Electricity Act, 2003 and the Electricity Rules, 2005, the Chief Operating Decision Maker ("CODM") has decided to review the operating results of aluminium and power segments together in a combined manner for one of its subsidiaries, Bharat Aluminium Company Limited ("BALCO"). Consequently, with effect from 01 April 2023, these have been reported as a single Operating Segment, i.e., “Aluminium Segment”. Corresponding segment information for the year ended 31 March 2023, i.e., Segment revenue of US$ 32 million, including intersegment revenue of US$ 27 million, EBITDA of (US$ 8 million), Depreciation and amortisation of US$ 4 million and operating loss of (US$ 12 million) for the year ended 31 March 2023 and Segment assets of US$ 12 million and Segment liabilities of US$ 1 million as at 31 March 2023 have been restated in accordance with Ind AS 108 “Operating Segments”. 204 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 B) Geographical segment analysis The Group’s operations are located in India, Zambia, Namibia, South Africa, UAE, Ireland, Australia, Japan, South Korea, Taiwan and Liberia. The following table provides an analysis of the Group’s revenue by region in which the customer is located, irrespective of the origin of the goods. (US$ million) Revenue by geographical segment Year ended 31 March 2024 Year ended 31 March 2023 India 11,009 10,851 Europe 907 1,985 China 641 661 The United States of America 283 481 Mexico 189 579 Malaysia 819 595 Singapore 826 497 United Kingdom 20 76 Others 2,434 2,416 Total 17,128 18,141 The following is an analysis of the carrying amount of non-current assets, excluding deferred tax assets, derivative financial assets, financial asset investments and other non-current financial assets analysed by the geographical area in which the assets are located: (US$ million) Revenue by geographical segment As at 31 March 2024 As at 31 March 2023* India 13,350 12,629 South Africa 816 647 Taiwan 101 127 Namibia 79 108 Others 186 264 Total 14,532 13,775 *Restated. Refer note 3(b). Information about major customer No single customer has accounted for 10% or more of the Group’s revenue for the year ended 31 March 2024 and 31 March 2023. Disaggregation of Revenue Below table summarises the disaggregated revenue from contracts with customers: (US$ million) Particulars Year ended 31 March 2024 Year ended 31 March 2023 Zinc Metal 2,595 3,613 Lead Metal 591 601 Silver Bars 665 570 Oil 1,797 1,551 Gas 348 350 Iron Ore 652 290 Pig Iron 494 506 Metallurgical Coke 28 58 Copper Products 2,335 2,127 Aluminium Products 5,671 6,550 Power 553 659 Steel Products 778 781 Ferro Alloys 98 96 Others 610 461 Revenue from contracts with customers* 17,215 18,213 Revenue from contingent rents 172 192 Losses on provisionally priced contracts under IFRS 9 (refer note 5) (259) (264) Total Revenue 17,128 18,141 *Includes revenues from sale of services aggregating to US$ 39 million (31 March 2023: US$ 41 million) which is recorded over a period of time and the balance revenue is recognised at a point in time. CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Consolidated 205 NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 5. Total Revenue (US$ million) Year ended 31 March 2024 Year ended 31 March 2023 Sale of products a 16,917 17,908 Sale of services a 39 41 Revenue from contingent rents 172 192 Total Revenue 17,128 18,141 a) Revenue from sale of products and from sale of services for the year ended 31 March 2024 includes revenue from contracts with customers of US$ 17,198 million (31 March 2023: US$ 18,213 million) and a net loss on mark-to-market of US$ 256 million (31 March 2023: US$ 264 million) on account of gains/ losses relating to sales that were provisionally priced as at 31 March 2024 with the final price settled in the current year, gains/ losses relating to sales fully priced during the year, and marked to market gains/ losses relating to sales that were provisionally priced as at 31 March 2024. b) Majority of the Group’s sales are against advance or are against letters of credit/ cash against documents/ guarantees of banks of national standing. Where sales are made on credit, the amount of consideration does not contain any significant financing component as payment terms are within three months. As per the terms of the contract with its customers, either all performance obligations are to be completed within one year from the date of such contracts or the Group has a right to receive consideration from its customers for all completed performance obligations. Accordingly, the Group has availed the practical expedient available under paragraph 121 of IFRS 15 and dispensed with the additional disclosures with respect to performance obligations that remained unsatisfied (or partially unsatisfied) at the balance sheet date. Further, since the terms of the contracts directly identify the transaction price for each of the completed performance obligations, in all material respects, there are no elements of transaction price which have not been included in the revenue recognised in the financial statements. Further, there is no material difference between the contract price and the revenue from contract with customers. 206 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 6. Special items (US$ million) Year ended 31 March 2024 Year ended 31 March 2023 Particulars Special items Tax effect of Special items Special items after tax Special items Tax effect of Special items Special items after tax Capital creditors written back in Power segment 4 96 (24) 72 - - - SAED on Oil and Gas business 5 - - - (117) 44 (73) Gross profit special items (a) 96 (24) 72 (117) 44 (73) Impairment reversal / (charge) in oil and gas properties 1 152 (50) 102 (82) 32 (50) Impairment reversal / (charge) of exploration & evaluation assets1 5 (2) 3 (75) 29 (46) Impairment reversal of asset under construction - - - 14 (5) 9 Impairment (charge) in copper assets (refer note 2(c)(I)(iii)) (81) 20 (61) - - - Impairment (charge) in aluminium assets2 (16) 4 (12) - - - Impairment (charge) in zinc international assets (14) - (14) - - - Impairment (charge) in iron ore assets (18) 5 (13) - - - Reversal of previously recorded impairment of assets in Liberia on commencement of mining operations 3 - - - 82 - 82 Total impairment (charge)/ reversal (net) (b) 28 (23) 5 (61) 56 (5) Operating special items (a+b) 124 (47) 77 (178) 100 (78) Total of Special items 124 (47) 77 (178) 100 (78) 1.(a) During the year ended 31 March 2024, the Government of India ("GoI"), acting through the Directorate General of Hydrocarbons ("DGH"), had raised demand up to 14 May 2020 for Government’s additional share of Profit Oil, based on its computation of disallowance of cost incurred over retrospective re-allocation of certain common costs between Development Areas (DAs) of Rajasthan Block and certain other matters aggregating to US$ 1,162 million and applicable interest thereon representing share of Vedanta Limited and its subsidiary. The Group had disputed the aforesaid demand and invoked arbitration as per the provisions of the Production Sharing Contract. The Group had received the Final Partial Award dated 22 August 2023 from the Arbitration Tribunal (‘the Tribunal') as amended by order dated 15 November 2023 and 08 December 2023 (“the Award”), dismissing the Government’s contention of additional Profit Petroleum in relation to allocation of common development costs across Development Areas and certain other matters in accordance with terms of the Production Sharing Contract for Rajasthan Block, while disallowing some matters. Further, the Tribunal had decided that the Group was allowed to claim cost recovery of exploration cost for the purpose of computation of Profit Oil. Pursuant to the Award, the Group has recognized a benefit of US$ 578 million in revenue from operations and reversed previously recognized impairment on PPE of US$ 157 million during the year ended 31 March 2024. GoI has sought an additional award or interpretation/ clarification on certain matters decided by the Tribunal under the Indian Arbitration and Conciliation Act, 1996 ("the Act") (“GoI Application”). The Tribunal vide its order dated 15 November 2023 and 08 December 2023 has dismissed GoI’s interpretation and additional award applications in favour of the Group. The Group has adjusted the liability during the current year of US$ 233 million against the aforesaid benefits recognized as per the Award. GoI has filed interim relief application on 03 February 2024 stating that the Group has unilaterally enforced the award although the quantification of the same is pending. The Group is of the view that it is bound to implement the award. CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Consolidated 207 NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 Further, the application by GoI does not meet the strict criteria for grant of interim injunction. The matter was heard on 26 March 2024 and order of the Tribunal is awaited. GoI also has filed an appeal on 07 March 2024 against the Award in Delhi High Court and the matter was heard on 14 March 2024 and 21 May 2024. No stay was granted and petition was not admitted. Next date of hearing is 09 July 2024. The Group is of the view that there is no merit in the challenge filed by GoI, as the Court cannot re-appreciate the evidence in Section 34 appeal as the interpretation by the Tribunal is plausible. In the interim, vide letter dated 06 May 2024, GoI has submitted its calculation of the quantum basis the Award. GoI has claimed a sum of US$ 224 million from the Group. The Group is of the view that the computation is prima-facie contrary to the Award and clarifications issued by the Tribunal since certain costs were allowed for cost recovery by the Tribunal but were not considered by GoI. The Group is evaluating the computation shared by GoI in detail and is confident that it can defend against the quantum raised by GoI. (b) (i) During the year ended 31 March 2023, the Group has recognized net impairment charge of US$ 82 million (after considering impairment reversal of US$ 155 million on account of ONGC partial arbitration award Refer footnote (ii) for details) on its assets in the oil and gas properties and US$ 75 million on exploration and evaluation assets mainly due to revision of reserves and capex estimates. The recoverable amount of the Group’s share in Rajasthan Oil and Gas cash generating unit “RJ CGU” was determined to be US$ 1,239 million as at 31 March 2023. The recoverable amount of the RJ CGU was determined based on the fair value less costs of disposal approach, a level-3 valuation technique in the fair value hierarchy, as it more accurately reflects the recoverable amount based on the Group’s view of the assumptions that would be used by a market participant. This is based on the cash flows expected to be generated by the projected oil and natural gas production profiles up to 2040, the expected dates of cessation of production sharing contract (PSC)/cessation of production from each producing field based on the current estimates of reserves and risked resources. Reserves assumptions for fair value less costs of disposal tests consider all reserves that a market participant would consider when valuing the asset, which are usually broader in scope than the reserves used in a value-in-use test. Discounted cash flow analysis used to calculate fair value less costs of disposal uses assumption for short-term oil price of US$ 84 per barrel for the next one year and tapers down to long-term nominal price of US $ 73 per barrel three years thereafter derived from a consensus of various analyst recommendations. Thereafter, these have been escalated at a rate of 2.4% per annum. The cash flows are discounted using the post-tax nominal discount rate of 10.99% derived from the post-tax weighted average cost of capital after factoring in the risks ascribed to PSC extension including successful implementation of key growth projects. Based on the sensitivities carried out by the Group , change in crude price assumptions by US$ 1/bbl and changes to discount rate by 1% would lead to a change in recoverable value US$ 9 million and US$ 46 million, respectively. (ii) In the Oil and Gas business, the Group operates the Rajasthan Block under a joint venture model with ONGC. As the operator of the block, the Group raises cash calls to ensure the smooth functioning of the petroleum operations. During the year ended 31 March 2023, the Group received a favourable partial arbitration award on cash call claims made from ONGC, pursuant to which, reversal of previously recorded impairment of US$ 155 million has been recognised against capitalised development costs. The Group had a liability towards ONGC of US$ 199 million as of 31 March 2022 on account of revenue received in excess of entitlement. Based on the partial arbitration award, the Group has adjusted the claims received in the favour of the Group against the liability towards ONGC and the net payable as of 31 March 2023 amounted to US$ 34 million. 2. Represents certain items of CWIP, which have been written off during the year ended 31 March 2024 as they are no longer expected to be used. 3. During the year ended 31 March 2023, WCL had signed a Memorandum of Understanding with the Government of Liberia to re-start its mining operations and commenced commercial production at its Bomi Mines from July 2022. Consequently, the net recoverable value of assets and liabilities of WCL had been assessed US$ 108 million based on the value-in-use approach, using the Discounted Cash Flow Method, a level 3 valuation technique in the fair value hierarchy as it more accurately reflects the recoverable amount. The impairment assessment was based on a range of estimates and assumptions, including long-term selling price as per the consensus report, volumes based on the mine planning and concentrate plant setup and a post-tax nominal discount rate of 14.45%. Any subsequent changes to cash flows due to changes in the above-mentioned factors could impact the carrying value of the assets. 208 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 Based on the sensitivities carried out by the Company, a decrease in the long-term selling price by 1% would lead to a decrease in the recoverable value by US$ 6 million and an increase in the discount rate by 1% would lead to a decrease in the recoverable value by US$ 9 million. Accordingly, the impairment recorded in previous years had been reversed, to an extent of US$ 82 million pertaining only to the assets of the Bomi Mine. 4. During the year, the Group has terminated its contract with one of its capital contractor due to its continuing failure in fulfilling contractual obligations impacting plant performance since inception and written back creditors amounting to US$ 151 million pertaining to the contract, as amount is no longer payable. The management has assessed that the amount written back comprises US$ 96 million toward loss of profit due to plant performance in the current and earlier years and therefore recognised the same as exceptional gain in the statement of profit and loss and adjusted the balance amount towards the cost of spares and ancillaries capitalised in PPE in earlier years. 5. GoI vide its notification dated 30 June 2022 levied Special Additional Excise Duty ("SAED") on production of crude oil, i.e., cess on windfall gain triggered by increase in crude oil prices which was effective from 01 July 2022. The consequential net impact of the said duty is US$ 117 million (Revenue US$ 142 million and Cost of sales US$ 259 million) for the year ended 31 March 2023. SAED is continuing as levy like other duty of excise, that forms part of ordinary business of production of crude oil and hence, consequential impact of the said duty has been presented as an ordinary item during the year ended 31 March 2024. 7. Investment revenue (US$ million) Year ended 31 March 2024 Year ended 31 March 2023 Net gain on financial assets held at fair value through profit or loss (FVTPL) 20 6,078 Gain on sale of investment in subsidiary (refer note 3(e)) 22 0 Interest Income: Interest income- financial assets held at FVTPL 37 63 Interest income- financial assets held at FVOCI 44 35 Interest income- bank deposits at amortised cost 29 48 Interest income- loans and receivables at amortised cost 37 60 Interest income- others 6 21 Dividend Income: Dividend income- financial assets held at FVOCI 5 3 Foreign exchange gain/ (loss) (net) 2 11 Total 202 251 8. Finance costs (US$ million) Particulars Year ended 31 March 2024 Year ended 31 March 2023 Interest expense – financial liabilities at amortised cost 1,756 1,484 Other finance costs (including bank charges) 223 119 Total interest cost 1,979 1,603 Unwinding of discount on provisions (note 25) 16 12 Net interest on defined benefit arrangements 3 3 Capitalisation of finance costs/borrowing costs (note 16) (116) (60) Total 1,882 1,558 All borrowing costs are capitalised using rates based on specific borrowings and general borrowings with the interest rate of 8.65% (6.75% for 31 March 2023) per annum for the year ended 31 March 2024. CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Consolidated 209 NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 9. Other gains and (losses), (net) (US$ million) Year ended 31 March 2024 Year ended 31 March 2023 Foreign exchange gain/ (loss) (net) (31) (88) Change in fair value of financial liabilities measured at fair value 0 0 Net gain/(loss) arising on qualifying hedges and non-qualifying hedges (6) 9 Total (37) (79) 10(a). Profit/ (Loss) for the year has been stated after charging/ (crediting): (US$ million) Year ended 31 March 2024 Year ended 31 March 2023 Depreciation & amortization 1,283 1,382 Costs of inventories recognised as an expense 5,366 5,519 Auditor’s remuneration for audit services (refer note 36) 5 3 Research and development 1 1 Net loss on disposal of Property plant and equipment 14 1 ECL allowance on receivables 31 52 Impairment charge/(reversal) & assets written off (refer note 6) (28) 61 Exploration costs written off (refer note 16) 89 30 Employee costs (refer note 27) 414 395 Rent* 7 8 * Rent represents expense on short term/ low value leases. 10(b). Exchange gain/ (loss) recognised in the consolidated income statement: (US$ million) Particulars Year ended 31 March 2024 Year ended 31 March 2023 Cost of sales (0) (8) Investment revenue (refer note 7) 2 11 Other gains and (losses) (refer note 9) (37) (79) Total (35) (76) 11. Tax (a) Tax charge/ (credit) recognised in Consolidated Income Statement (including on special items) (US$ million) Particulars Year ended 31 March 2024 Year ended 31 March 2023* Current tax: Current tax 839 1,151 Credit in respect of current tax for earlier years 3 (14) Credit in respect of Special items (refer note 6) (4) (190) Effect of change in tax regime*** (218) - Total current tax (a) 620 947 Deferred tax: Origination of temporary differences 1 (233) Charge in respect of deferred tax for earlier years (6) (10) Credit in respect of Special items (refer note 6) 51 90 Effect of change in tax regime*** 989 Total deferred tax (b) 1,035 (153) Total Income tax expense for the year((a)+(b)) 1,655 794 Profit before tax from continuing operations 1,754 1,632 Effective Income tax rate (%) 94.4% 48.7% 210 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 Tax expense/ (benefit) (US$ million) Particulars Year ended 31 March 2024 Year ended 31 March 2023* Tax effect on special items 47 (100) Tax effect of change in regime*** 771 - Tax expense – others 837 894 Net tax expense 1,655 794 (b) A reconciliation of income tax expense/ (credit) applicable to profit/ (loss) before tax at the Indian statutory income (US$ million) Particulars Year ended 31 March 2024 Year ended 31 March 2023 Profit/ (Loss) before tax from continuing operations 1,754 1,632 Indian statutory income tax rate 25.168% 34.944% Tax at statutory income tax rate 442 570 Non-taxable income 10 (9) Tax holidays and similar exemptions 0 (67) Effect of tax rate differences of subsidiaries operating at other tax rates (43) 19 Tax on distributable reserve of/ dividend from subsidiary 51 149 Unrecognized tax assets (Net)** 25 (6) Change in deferred tax balances due to change in tax law 1 (22) Capital Gains/ Other income subject to lower tax rate (3) (65) Credit in respect of earlier years (3) (28) Other permanent differences 404 253 Effect of change in tax regime*** 771 - Total 1,655 794 *Restated Refer Note 3(b) ** Includes Deferred Tax Assets written off in ESL Steel Limited refer note 2(c)(I)(iii) ***Pursuant to the introduction of Section 115BAA of the Income-tax Act, 1961 ("New Tax Regime"), the Company has an option to pay corporate income tax at a lower rate of 22% plus applicable surcharge and cess as against the currently applicable rate of 30% plus surcharge and cess. Under the New Tax Regime, provisions of Section 115 JB-Minimum Alternate Tax (MAT) are no longer applicable. During the year ended 31 March 2024, the Company has elected to adopt New Tax Regime from FY 2022-23 onwards due to expected corporate actions and other considerations and the first tax return under the New Tax Regime has been filed for FY 2022-23 on 29 November 2023. Upon adoption of New Tax Regime for FY 2022-23, the current tax charge is lower by US$ 218 million (mainly on account of section 80M benefit not available under MAT) and deferred tax charge is higher by US$ 46 million. Further, the MAT credit balance of US$ 943 million, for periods up to 31 March 2023, has been expensed. Consequently, the net impact of the above amounting to US$ 771 million is accounted for as special item in the year ended 31 March 2024. Accordingly, current year tax expense is not comparable with the reported tax expense for the year ended 31 March 2023. CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Consolidated 211 NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 (c) Deferred tax assets/liabilities The Group has accrued significant amounts of deferred tax. The majority of the deferred tax liability represents accelerated tax relief for the depreciation of property, plant and equipment, depreciation of mining reserves and the fair value uplifts created on acquisitions net of deferred tax assets representing unabsorbed depreciation and carried forward losses. Significant components of Deferred tax (assets) and liabilities recognized in the Consolidated Statement of financial position are as follows: For the year ended 31 March 2024: (US$ million) Significant components of deferred tax (assets)/ liabilities Opening balance as at 01 April 2023* Charged/ (credited) to Income Statement Charged/ (credited) to other comprehensive income Charged to Equity Exchange difference transferred to translation of foreign operation Closing balance as at 31 March 2024 Property, plant and equipment, Exploration and Evaluation and other intangible assets 1,317 (20) - - (23) 1,274 Voluntary retirement scheme (2) 1 - - - (1) Employee benefits (13) (1) (1) - (1) (16) Fair value of derivative asset/ liability (8) 3 (3) - 1 (7) Fair valuation of other asset/liability 104 32 - - (14) 122 MAT credit entitlement (975) 966 - - 9 - Unabsorbed depreciation and business losses (597) 64 - - (58) (591) Other temporary differences (55) (10) - - 68 3 Total (229) 1,035 (4) - (18) 784 For the year ended 31 March 2023: (US$ million) Significant components of deferred tax (assets)/ liabilities Opening balance as at 01 April 2022 Charged/ (credited) to Income Statement Charged/ (credited) to other comprehensive income Charged to Equity Exchange difference transferred to translation of foreign operation Closing balance as at 31 March 2023 Property, plant and equipment, Exploration and Evaluation and other intangible assets 1,445 20 - - (148) 1,317 Voluntary retirement scheme (6) 2 - - 2 (2) Employee benefits (50) 3 (1) - 35 (13) Fair value of derivative asset/ liability (19) 3 1 - 7 (8) Fair valuation of other asset/liability 93 16 - - (5) 104 MAT credit entitlement (894) (159) - - 78 (975) Unabsorbed depreciation and business losses (593) (50) - - 46 (597) Other temporary differences (72) 12 - - 5 (55) Total (96) (153) 0 - 20 (229) *Restated Refer Note 3(b) 212 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 Deferred tax assets and liabilities have been offset where they arise in the same taxing jurisdiction with a legal right to offset current income tax assets against current income tax liabilities but not otherwise. Accordingly, the net deferred tax (assets liability has been disclosed in the Consolidated Statement of financial position as follows: (US$ million) As at 31 March 2024 As at 31 March 2023* Deferred tax assets (422) (1,095) Deferred tax liabilities 1,206 866 Net Deferred tax (assets) / Liabilities 784 (229) *Restated Refer Note 3(b) Deferred tax assets in the Group have been recognised to the extent there are sufficient taxable temporary differences relating to the same taxation authority and the same taxable entity which are expected to reverse. For certain components of the Group, deferred tax assets on carry forward unused tax losses have been recognised to the extent of deferred tax liabilities on taxable temporary differences available. It is expected that any reversals of the deferred tax liability would be offset against the reversal of the deferred tax asset at respective entities. Unused tax losses/unused tax credit for which no deferred tax asset has been recognized amount to US$ 4,128 million and US$ 4,630 million as at 31 March 2024 and 31 March 2023 respectively. As at 31 March 2024 (US$ million) Unused tax losses/ Unused tax credit Particulars Within one year Greater than one year, less than five years Greater than five years No expiry date Total Unutilized business losses 38 437 337 1,233 2,045 Unabsorbed depreciation - - 0 301 301 Unutilized R&D credit - - - - - Unabsorbed interest allowance* - - - 1,782 1,782 Total 38 437 337 3,316 4,128 As at 31 March 2023 (US$ million) Unused tax losses/ Unused tax credit Particulars Within one year Greater than one year, less than five years Greater than five years No expiry date Total Unutilized business losses 88 661 493 1,434 2,676 Unabsorbed depreciation - - - 241 241 Unutilized R&D credit - - - 1 1 Unabsorbed interest allowance* - - - 1,712 1,712 Total 88 661 493 3,388 4,630 * As per UK's corporate interest restriction rules, the disallowed interest expense for any year can be carried forward and claimed in future years for unlimited life subject to specified conditions No deferred tax assets have been recognised on these unused tax losses/unused tax credit as there is no evidence that sufficient taxable profit will be available in future against which these can be utilised by the respective entities. The Group has not recognised any deferred tax liabilities for taxes that would be payable on the Group’s share in unremitted earnings of certain of its subsidiaries because the Group controls when the liability will be incurred, and it is probable that the liability will not be incurred in the foreseeable future. The amount of unremitted earnings is US$ 2,544 million and US$ 3,120 million as at 31 March 2024 and 31 March 2023 respectively. CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Consolidated 213 NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 (d) Non-current tax assets Non-current tax assets of US$ 458 million (31 March 2023: US$ 382 million) mainly represents income tax receivable from Indian Tax authorities by Vedanta Limited owing to shift in tax regime and relating to the refund arising consequent to the Scheme of Amalgamation & Arrangement made effective in August 2013 pursuant to approval by the jurisdiction High Court and receivables relating to matters in tax disputes in Group companies including tax holiday claim. (e) The tax department had issued demands on account of remeasurement of certain tax incentives, under section 80IA and 80IC of the Income-tax Act, 1961. For AY 2009-10 to 2012-13, 2017-18 & 2018-19, Hon’ble Income Tax Appellate Tribunal (ITAT) has allowed these claims. For AY 2013-14 to 2016-17, the cases are pending before Hon’ble ITAT. Against the Tribunal order, the department had filed an appeal in Hon’ble Rajasthan High Court in financial year 2017-18 (for AY 2009-10 to AY 2012-13) and in FY 2023-24 (for AY 2017-18 and AY 2018-19) which are yet to be admitted. As per the view of external legal counsel, Department’s appeal seeks re-examination of facts rather than raising any substantial question of law and hence it is unlikely that appeal will be admitted by the High Court. Accordingly, there is a high probability that the case will go in favour of the Group. The amount involved in this dispute as of 31 March 2024 is US$ 1,494 million (31March 2023: US$ 1,515 million) plus applicable interest up to the date of settlement of the dispute. (f) The UK adopted global minimum tax rules (BEPS Pillar Two) in July 2023. These rules are effective for accounting periods starting after 31 December 2023 and applies to profits earned by the Group in each jurisdiction where it operates. A top- up tax may be imposed if the Group's effective tax rate in a jurisdiction falls below 15% (as defined by OECD). Overseas jurisdictions may impose payment of the top-up tax within their own jurisdiction. Our initial assessment arising for the accounting period starting from 01 April 2024 indicates no material expected top-up tax liability. The Group will continue monitoring BEPS Pillar Two developments to assess any future financial impact. In addition, the group is taking advantage of the temporary deferred tax exception within the “International Tax Reform — Pillar Two Model Rules (Amendments to IAS 12)” in relation to the current year and retrospectively in accordance with IAS 8. This means the Group does not recognise and does not disclose information about deferred tax assets and liabilities related to OECD pillar two income taxes. 12. Underlying Attributable Profit/(Loss) for the year Underlying earnings is an alternative earnings measure, which the management considers to be a useful additional measure of the Group’s performance. The Group’s Underlying profit/ loss is the profit/ loss for the year after adding back special items, other losses/(gains) [net] (note 9) and their resultant tax (including taxes classified as special items) and non-controlling interest effects and (Gain)/loss on discontinued operations. This is a non-IFRS measure. (US$ million) Particulars Note Year ended 31 March 2024 Year ended 31 March 2023 (Loss)/Profit for the year attributable to equity holders of the parent (400) (5) Special items (gains)/losses 6 (124) 178 Other (gains)/losses [net] 9 37 79 Tax effect of special items (including taxes classified as special items) and other gains/ (losses) [net] 810 (120) Non-controlling interest on special items and other gains/ (losses) (278) (45) Underlying attributable profit for the year 45 87 13. Dividends (US$ million) Year ended 31 March 2024 Year ended 31 March 2023 Amounts recognized as distributions to equity holders: Equity dividends on ordinary shares: First Interim Dividend for 2022-23: 2.28 US cents per share - 6 Second Interim Dividend for 2022-23: 2.45 US cents per share - 7 Third Interim Dividend for 2022-23: 1.8 US cents per share - 5 214 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 14. Goodwill (US$ million) Copper India CGU As at 31 March 2024 As at 31 March 2023 At 01 April 12 12 Impairment during the year (refer note 2(c)(I)(iii)) (12) - At 31 March - 12 The Group tests goodwill annually for impairment or more frequently if there are indications that goodwill might be impaired. Accordingly, during the year, the Company has impaired the goodwill of Copper India CGU as of 31 March 2024. 15. Intangible assets Intangible assets include Port concession rights to operate a general cargo berth for handling coal at the outer harbour of the Visakhapatnam port on the east coast of India, software licences, technological know-how, acquired brand and others. (US$ million) Intangible assets Port concession rights (1) Software license Others (2) Total Cost As at 01 April 2022 79 9 49 137 Additions - 1 - 1 Disposals - - (18) (18) Transfers 1 1 - 2 Exchange differences (6) (2) (4) (12) As at 01 April 2023 74 9 27 110 Additions - 1 32 33 Disposals - (1) - (1) Transfers 1 1 - 2 Exchange differences (2) - (3) (5) As at 31 March 2024 73 10 56 139 Accumulated amortisation As at 01 April 2022 26 6 15 47 Charge for the year 3 1 3 7 Disposals - - (4) (4) Exchange differences (1) (2) (1) (4) As at 01 April 2023 28 5 13 46 Charge for the year 3 2 6 11 Disposals - (1) - (1) Exchange differences 0 - (1) (1) As at 31 March 2024 31 6 18 55 Net book value As at 01 April 2022 53 3 34 90 As at 01 April 2023 46 4 14 64 As at 31 March 2024 42 4 38 84 CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Consolidated 215 NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 (1) Vizag General Cargo Berth Private Limited (VGCB), a special purpose vehicle, was incorporated for the coal berth mechanization and upgrades at Visakhapatnam port in Eastern India. VGCB is wholly owned by Vedanta Limited. The project is to be carried out on a design, build, finance, operate, transfer basis and the concession agreement between Visakhapatnam Port Trust ('VPT') and the VGCB was signed in June 2010. In October 2010, the VGCB was awarded with the concession after fulfilling conditions stipulated as a precedent to the concession agreement. VPT has provided, in lieu of license fee an exclusive license to VGCB for designing, engineering, financing, constructing, equipping, operating, maintaining, and replacing the project/project facilities and services. The concession period is 30 years from the date of the award. The upgraded capacity is 10.18 mmtpa and VPT would be entitled to receive 38.10% share of the gross revenue as royalty. VGCB is entitled to recover a tariff from the user(s) of the project facilities and services as per its Tariff Authority for Major Ports (TAMP) notification. The tariff rates are linked to the Wholesale Price Index (WPI) and would accordingly be adjusted as specified in the concession agreement every year. The ownership of all infrastructure assets, buildings, structures, berths, wharfs, equipment and other immovable and movable assets constructed, installed, located, created or provided by VGCB at the project site and/or in the port’s assets pursuant to concession agreement would be with VGCB until expiry of this concession agreement. The cost of any repair, replacement or restoration of the project facilities and services shall be borne by VGCB during the concession period. VGCB has to transfer all its rights, titles and interest in the project facilities and services free of cost to VPT at the end of the concession period. The Group has entered into a supplementary agreement to the original concession agreement with VPT dated 20 October 2021, wherein VPT can handle other compatible cargos at VGCB during idling of the berth. Intangible asset port concession rights represent consideration for construction services. No revenue from construction contract of service concession arrangements on exchanging construction services for the port concession rights was recognised for the year ended 31 March 2024 and 31 March 2023. (2) (i) Others include technological know-how and acquired brand relating to acquisition of AvanStrate Inc. (ii) Consequent to the Indian Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021 (“the Rules”), the Group, during the previous year ended 31 March 2023, has transferred its CSR assets, after obtaining regulatory approvals, having carrying value of US$ 15 million as on the date of transfer, at nominal consideration to Zinc India Foundation (Wholly owned subsidiary of HZL), incorporated during the previous year under Section 8 of the Indian Companies Act, 2013. The carrying value of these assets has been included as CSR expense in the financial statements owing to such transfer. 216 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 16. Property, plant and equipment (US$ million) Mining property and leases Freehold Land and buildings Plant and equipment Assets under construction Oil & Gas properties (3) ROU Assets (6) Others Total Property, plant and equipment Exploration and evaluation assets(3) Grand Total Cost At 01 April 2022 3,426 1,889 12,544 1,795 19,807 159 176 39,796 1,328 41,124 Additions* 193 22 212 1,210 256 28 11 1,932 189 2,121 Transfers (4),(5) 301 29 436 (669) - - 1 98 (18) 80 Exploration costs written off - - - - - - - - (30) (30) Disposals (2) (1) (270) (32) (160) (1) (4) (470) - (470) Exchange differences (360) (164) (1,061) (159) - (12) (20) (1,776) (2) (1,778) At 01 April 2023* 3,558 1,775 11,861 2,145 19,903 174 164 39,580 1,467 41,047 Additions 60 39 209 1,608 243 97 9 2,265 120 2,385 Transfers (4) 249 30 738 (1,012) 25 - 2 32 (34) (2) CWIP written off (note 6) - - - (16) - - - (16) - (16) Exploration costs written off - - - - - - - - (89) (89) Disposals (66) (4) (255) (25) (35) (2) (6) (393) (8) (401) Exchange differences (79) (38) (207) (45) - (3) (5) (377) - (377) At 31 March 2024 3,722 1,802 12,346 2,655 20,136 266 164 41,091 1,456 42,547 Accumulated depreciation, amortization and impairment - At 01 April 2022 2,603 552 4,683 244 18,136 25 69 26,312 1,108 27,420 Charge for the year 314 51 541 - 443 12 19 1,380 - 1,380 Disposals - - (219) - (4) (1) (3) (227) - (227) Transfers (4) - - 1 82 - - (1) 82 - 82 Impairment Charge/ (reversal) of assets (note 6) - - - (96) 82 - - (14) 75 61 Exchange differences (225) (61) (422) (13) - (2) (16) (739) - (739) At 01 April 2023 2,692 542 4,584 217 18,657 34 68 26,794 1,183 27,977 Charge for the year 291 51 568 - 323 24 18 1,275 - 1,275 Disposals (55) (1) (151) 5 (1) (1) (6) (210) - (210) Transfers - (3) 3 - 4 - - 4 (4) - Impairment Charge/ (reversal) of assets (note 6) 18 20 21 28 (152) 3 - (62) (5) (67) Exchange differences (47) (19) (88) (3) - (1) (4) (162) - (162) At 31 March 2024 2,899 590 4,937 247 18,831 59 76 27,639 1,174 28,813 Net book value At 01 April 2022 823 1,337 7,861 1,551 1,671 134 107 13,484 220 13,704 At 01 April 2023 866 1,233 7,277 1,928 1,246 140 96 12,786 284 13,070 At 31 March 2024 823 1,212 7,409 2,408 1,305 207 88 13,452 282 13,734 1) During the year ended 31 March 2024, interest capitalised was US$ 116 million (31 March 2023: US$ 60 million). 2) Oil and Gas properties includes development assets under construction of carrying value US$ 240 million (31 March 2023: US$ 267 million). 3) Oil and Gas properties and exploration and evaluation assets net block includes share of jointly owned assets with the joint venture partners US$ 1,362 million (31 March 2023: US$ 1,289 million). 4) Transfers/reclassification majorly includes capitalisation of CWIP to respective class of assets. 5) Transfer/reclassification from CWIP Accumulated Impairment to Mining Property Gross block amounting to US$ 82 million. CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Consolidated 217 NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 (6) Disclosure of Right of Use (ROU) Assets as per IFRS 16 "Leases" (US$ million) Particulars Land & Building Plant and Equipment Total Cost At 01 April 2022 150 9 159 Additions* 23 5 28 Disposals (1) - (1) Exchange difference (11) (1) (12) At 01 April 2023* 161 13 174 Additions 31 66 97 Disposals (2) - (2) Exchange difference (2) (1) (3) At 31 March 2024 188 78 266 Accumulated depreciation At 01 April 2022 21 4 25 Charge for the year 9 3 12 Disposals (1) - (1) Exchange difference (2) - (2) At 01 April 2023 27 7 34 Charge for the year 8 16 24 Disposals (1) - (1) Transfers (4) 4 - Impairment of assets 3 - 3 Exchange difference (1) - (1) At 31 March 2024 32 27 59 Net book value At 01 April 2022 129 5 134 At 01 April 2023 134 6 140 At 31 March 2024 156 51 207 17. Financial asset investments Financial asset investments represent investments classified and accounted for at fair value through profit or loss or through other comprehensive income (refer note 25). Financial Asset Investments (US$ million) Particulars As at 31 March 2024 As at 31 March 2023 At 01 April 63 20 Movements in fair value (2) (5) Investment in Optionally Convertible Redeemable Preference Shares at FVTPL - unquoted - Serentica Renewable Power Companies (Refer note 32) 58 30 Investment in Bonds at FVOCI - quoted 0 19 Exchange difference (1) (1) At 31 March 118 63 218 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 Financial asset investment represents quoted investments in equity shares, debentures and other investments that present the Group with an opportunity for returns through dividend income and gains in value. These securities are held at fair value. These are classified as non-current as at 31 March 2024 and 31 March 2023. 18. Other non-current assets and trade and other receivables (US$ million) Particulars As at 31 March 2024 As at 31 March 2023 Non- Current Current Total Non- Current Current Total Bank deposits (2) 97 - 97 84 - 84 Site restoration assets 171 - 171 149 - 149 Trade receivables (1) 289 455 744 308 488 796 Others (3) 62 594 656 237 267 504 Trade receivables from related parties - 27 27 - 3 3 Cash call / receivables from joint operations(4) - 934 934 - 928 928 Receivable from KCM (5) 654 - 654 655 - 655 Financial (A) 1,273 2,010 3,283 1,433 1,686 3,119 Balance with Government authorities 111 155 266 98 186 284 Advance for supplies 7 186 193 5 258 263 Others (3) 112 87 199 117 149 266 Receivable from KCM (5) 26 - 26 27 - 27 Non-financial (B) 256 428 684 247 593 840 Total (A+B) 1,529 2,438 3,967 1,680 2,279 3,959 The credit period given to customers is upto 180 days. Also refer note 24(d) (1) In a matter between TSPL and Punjab State Power Corporation Limited (PSPCL) relating to assessment of whether there has been a change in law following the execution of the Power Purchase Agreement, the Appellate Tribunal for Electricity has dismissed the appeal in July 2017 filed by TSPL. TSPL later filed an appeal before the Honourable Supreme Court to seek relief, which is yet to be listed. The outstanding trade receivables in relation to this dispute and other matters is US$ 194 million as of 31 March 2024 (31 March 2023: US$ 180 Million). The Group, based on external legal opinion and its own assessment of the merits of the case, remains confident that it is highly probable that the Supreme court will uphold TSPL’s appeal and has thus continued to treat these balances as recoverable. Additionally, trade receivables include US$ 88 Million (net of Provision for expected credit loss ("ECL") recognised during the year on account of time value of money) as at 31 March 2024 (31 March 2023: US$ 107 million) withheld by GRIDCO Limited (“GRIDCO”) primarily on account of reconciliation and disputes relating to computation of power tariffs and alleged short-supply of power by the Group under the terms of long term power supply agreement. Out of the above, US$ 44 million (net of ECL recognised during the year on account of time value of money) relates to the amounts withheld by GRIDCO due to tariff adjustments on account of transmission line constraints in respect of which GRIDCO’s appeal against order of APTEL is pending before the Hon’ble Supreme Court of India and US$ 28 million (net of ECL) relates to alleged short supply of power for which the Group’s appeal on certain grounds are pending before APTEL. (2) Includes US$ 36 million (31 March 2023: US$ 28 million) and US$ 1 million (31 March 2023: US$ 1 million) under lien with banks and Others respectively, US$ 0 million (31 March 2023: US$ 5 million) under margin money, US$ 49 million (31 March 2023: US$ 43 million) maintained as debt service reserve account and US$ 8 million (31 March 2023: US$ 7 million) held as margin money against bank guarantee (3) Includes claim receivables, advance recoverable (oil and gas business), prepaid expenses, export incentive receivables and others. (4) Government of India (GOI) vide Office Memorandum (“OM”) No. O-19025/10/2005-ONG-DV dated 01 February 2013 allowed for Exploration in the Mining Lease Area after expiry of Exploration period and prescribed the mechanism for recovery of such Exploration Costs incurred. Vide another Memorandum dated 24 October 2019, GOI clarified that all approved Exploration costs incurred on Exploration activities, both successful and unsuccessful, are recoverable in the manner as prescribed in the OM and as per the provisions of PSC. Accordingly, the Group has started recognized revenue for past exploration costs, through increased share in the joint operations revenue as the Group believes that cost recovery mechanism prescribed under OM for profit petroleum payable to GOI is not applicable to its Joint operation partner, a view which is also supported by an independent legal opinion. During the year, the Arbitration Tribunal has issued Final Partial Award which allowed for recovery of exploration costs (refer note 36(a)). Accordingly, the Group has recognized additional US$ 58 million. At year end, an amount of US$ 267 million (31 March 2023: US$ 209 million) is receivable from its joint operation partner on account of this. However, the Joint operation partner carries a different understanding, and the matter is pending resolution. (5) Out of total receivables from KCM of US$ 682 million, US$ 27 million is on account of advance for supplies and hence classified as non- financial (Refer Note 3(a)). CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Consolidated 219 NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 19. Inventories (US$ million) Particulars As at 31 March 2024 As at 31 March 2023 Raw materials and consumables 885 1,083 Work-in-progress 560 618 Finished goods 115 129 Total 1,560 1,830 Inventory held at net realizable value amounted to US$ 220 million (31 March 2023: US$ 250 million). A write down of inventories amounting to US$ 20 million (31 March 2023: US$ 14 million) has been charged to the Consolidated Income Statement. 20. Short-term investments (US$ million) Particulars As at 31 March 2024 As at 31 March 2023 Bank deposits 1,2 221 161 Other investments Investments at FVOCI / quoted bonds 3 531 516 Investments at FVTPL 823 1,051 Total 1,575 1,728 (1) The above bank deposits include US$ 18 million (31 March 2023: US$ 15 million) on lien with banks, US$ 14 million (31 March 2023: US$ 5 million) of margin money, US$ 58 million (31 March 2023: US$ 56 million) maintained as debt service reserve account. (2) Restricted funds of US$ 3 million (31 March 2023: US$ 3 million) on lien with Others, US$ 5 million (31 March 2023: US$ 5 million) of restricted funds held as collateral in respect of closure costs and US$ 31 million (31 March 2023: US$ 8 million) held as margin money against bank guarantee. (3) Includes investments amounting to US$ 244 million (31 March 2023: $ 221 million) are pledged as security for repurchase liability (Refer Note 22(a)). The Group continues to record these investments as it retains rights to contractual cash flows on such investments and thus do not meet the criteria for derecognition or transfer of financial asset as per IFRS 7. Bank deposits are made for periods of between three months and one year depending on the cash requirements of the companies within the Group and earn interest at the respective fixed deposit rates. Other investments include mutual fund investments and investments in bonds which are recorded at fair value with changes in fair value reported through the consolidated income statement. These investments do not qualify for recognition as cash and cash equivalents due to their maturity period and risk of change in value of the investments. Refer Note 24 for further details. 21. Cash and cash equivalents (US$ million) Particulars As at 31 March 2024 As at 31 March 2023 Cash and cash equivalents consist of the following Cash at bank and in hand (1) 349 755 Short-term deposits (2) 16 103 Restricted cash and cash equivalents (3) 19 179 Total 384 1,037 220 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 (1) Including foreign inward remittances aggregating US$ 2 million (31 March 2023: US$ 40 million) held by banks in their Nostro accounts on behalf of the Group. (2) Short-term deposits are made for periods of between one day and three months, depending on the immediate cash requirements of the Group, and earn interest at the respective short-term deposit rates. (3) Restricted cash and cash equivalents include US$ 19 million (31 March 2023: US$ 179 million) that are kept in a specified bank account to be utilised solely for the purpose of the payment of dividends to non-controlling shareholders, which are being carried as a current liability. (4) Cash and cash equivalents for the purpose of Statement of Cash Flows comprise the following: (US$ million) Particulars As at 31 March 2024 As at 31 March 2023 Cash and cash equivalents as above 384 1,037 Less: Restricted cash and cash equivalents (19) (179) Total 365 858 22(a) Borrowings (US$ million) Particulars As at 31 March 2024 As at 31 March 2023 Current borrowings consist of: Banks and financial institutions 320 1,616 Non-convertible debentures 192 - Total short-term borrowings 512 1,616 Add: Current maturities of long-term borrowings 2,866 4,193 Current borrowings (A) 3,378 5,809 Non-current borrowings consist of: Banks and financial institutions 8,813 7,813 Non- convertible bonds 2,952 4,641 Non-convertible debentures 1,608 1,223 Redeemable Preference shares 0 0 Others 445 65 Total long-term borrowings 13,818 13,742 Less: Current maturities of long-term borrowings (2,866) (4,193) Non-current borrowings (B) 10,952 9,549 Total (A+B) 14,330 15,358 The Group facilities are subject to certain financial and non-financial covenants. The primary covenants which must be complied with include fixed charge cover ratio, net borrowing to EBITDA ratio, total net assets to borrowings ratio, attributable leverage ratio and EBITDA to net interest expense ratio. CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Consolidated 221 NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 Details of the non-convertible bonds and non-convertible debentures issued by the Group have been provided below (carrying value): (US$ million) Particulars As at 31 March 2024 As at 31 March 2023 Non-Convertible Bonds: 0.28 % bonds due October 2032 4 4 13.875% bonds due December 2028* 1,008 - 13.875% bonds due December 2028* 894 - 13.875% bonds due January 2027* 453 - 9.25% bonds due April 2026 593 596 8.95 % bonds due March 2025* - 1,196 6.13 % bonds due August 2024* - 947 13.88% bonds due January 2024* - 998 7.13 % bonds due June 2023 - 500 7.99 % bonds due April 2023 - 400 2,952 4,641 * During the year ended 31 March 2024, the Management has undertaken a Liquidity Management Exercise ("LM Exercise"), owing to which terms of the bonds have been restructured as below: Original bonds Restructured bonds 8.95 % bonds due March 2025 13.875% bonds due December 2028 6.13 % bonds due August 2024 13.875% bonds due December 2028 13.88% bonds due January 2024 13.875% bonds due January 2027 Further, the Management has tested whether this restructuring leads to a substantial modification in accordance with IFRS 9 "Financial Instruments". As a result, 8.95 % bonds due March 2025 and 6.13 % bonds due August 2024 have satisfied the criteria of substantial modification and accordingly, a loss of US$ 4 million has been recognized as a modification loss in the Consolidated Income Statement for the year ended 31 March 2024. (US$ million) As at 31 March 2024 As at 31 March 2023 Non-Convertible Debentures 8.74% due June 2032 491 498 9.20% due February 2030 240 243 0.00% due October 2029 (refer note 3(c)) 93 - 12% NCDs due June 2025 380 - 12% due March 2025 284 - 7.68% due December 2024 120 121 11.85% due May 2024 192 - 3m T-bill rate + 240 bp due March 2024* - 97 0.00% NCDs due March-2024 - 7 5.35% due September 2023 - 257 1,800 1,223 *The 3-month treasury bill rate in India as at 31 March 2023 was 6.34%. Security Details The Group has taken borrowings in various countries towards funding of its acquisitions, capital expenditure and working capital requirements. The borrowings comprise funding arrangements from various banks and financial institutions taken by the parent and subsidiaries. Out of the total borrowings of US$ 14,330 million (31 March 2023: US$ 15,358 million) shown above, total secured borrowings are US$ 7,901 million (31 March 2023: US$ 6,126 million) and unsecured borrowings are US$ 6,429 million (31 March 2023: US$ 9,232 million). The details and carrying amount of security provided by the Group in various countries, to various lenders on the assets of Parent and subsidiaries are as follows: 222 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 (US$ million) Facility Category Security details As at 31 March 2024 As at 31 March 2023 Working Capital Loans (grouped under banks and financial institutions) Secured by second pari passu charge on fixed assets of TSPL and first pari passu charge on current assets of TSPL, both present and future 52 13 First ranking pari passu charge by deed of Hypothecation on 28 March 2023 in favour of Vistra ITCL (India) Limited, security trustees 8 - First pari passu charge on current assets of FACOR 3 3 Other Secured Working Capital loans - 50 External commercial borrowings (grouped under banks and financial institutions) A First pari passu charge by way of hypothecation on the specified movable fixed assets of Vedanta Limited pertaining to its manufacturing facilities comprising: (i) alumina refinery having output of 6 MTPA along with co-generation captive power plant with an aggregate capacity of 90 MW at Lanjigarh, Odisha; (ii) aluminium smelter having output of 1.6 MTPA along with a 1,215 (9*135) MW CPP at Jharsuguda, Odisha 219 248 First pari passu charge by way of hypothecation on all present and future movable assets of Vedanta Limited with a minimum fixed asset cover of 1.10 times of the outstanding facility during the period of the facility comprising: (i) 1.6 MTPA (proposed capacity of 1.8 MTPA) aluminium smelter along with 1,215 MW CPP (Captive power plant) at Jharsuguda (ii) 1 MTPA (proposed capacity of 6 MTPA) alumina refinery along with CPP of 90 MW (Captive power plant) at Lanjigarh, Odisha (iii) 2,400 MW Power plant (1,800 MW CPP and 600 MW IPP) located at Jharsuguda, Odisha and (iv) Oil & Gas division comprising RJ-ON-90/1 Oil & Gas Block (Rajasthan), Cambay oil fields, Ravva Oil & Gas fields (under PKGM-1 block) and OALP blocks. 131 149 Non convertible debentures Secured by way of first pari passu charge on whole of the movable fixed assets of: (i) alumina refinery having output of 1 MTPA along with co-generation captive power plant with an aggregate capacity of 90 MW at Lanjigarh, Odisha; and (ii) aluminum smelter having output of 1.6 MTPA along with a 1,215 (9*135) MW CPP at Jharsuguda, Odisha. Additionally, secured by way of mortgage on the freehold land comprising 18.92 acres situated at Jharsuguda, Odisha. 240 243 Secured by way of first pari passu charge on the specific movable Fixed Assets. The whole of the movable Fixed Assets both present and future, of Vedanta Limited in relation to the aluminium Division, comprising the following facilities: (i) 1 MTPA alumina refinery alongwith 90 MW co-generation captive power plant in Lanjigarh, Odisha; and (ii) 1.6 MTPA aluminium smelter plant along with 1,215 MW (9*135 MW) power plant in Jharsuguda, Odisha including its movable plant and machinery, capital work in progress, machinery spares, tools and accessories, and other movable fixed assets. 120 121 First ranking pari passu charge by way of mortgage over 18.92 acres freehold land in Jharsuguda, Odisha together with the building and structures/ erections constructed/ to be constructed thereon and all the plant and machinery and other furniture and fixtures erected/ installed or to be erected/installed thereon and hypothecation over movable fixed assets excluding capital work in progress in relation to the aluminium division comprising 6 MTPA alumina refinery along with 90 MW co-generation captive power plant in Lanjigarh, Odisha; and 1.6 MTPA aluminium smelter plant along with 1,215 MW (9*135 MW) power plant and 2400 MW power plant in Jharsuguda, Odisha including its movable plant and machinery, machinery spares, tools and accessories and other movable fixed assets. 491 499 Secured by :- i. first ranking pari passu charge, by way of hypothecation, over the movable fixed assets of the Company to be more particularly set out in the deed of hypothecation; ii. first ranking exclusive charge, by way of hypothecation, over certain charged receivables and designated cash account to be more particularly set out in the deed of hypothecation; and iii. a pledge over shares constituting 100 per cent of the share capital of Sesa Iron and Steel Limited (Pledged Shares); and iv. any other security as may be agreed between the Company and the Trustee, ((i) to (iv) above are collectively referred to as Transaction Security) 380 - CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Consolidated 223 NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 (US$ million) Facility Category Security details As at 31 March 2024 As at 31 March 2023 Secured by i) 1.6 MTPA aluminium smelter plant along with 1,215 MW (9*135 MW) captive power plant in Jharsuguda, Odisha; ii) 6 MTPA Alumina refinery along with 90 MW co-generation captive power plant (operating capacity) in Lanjigarh, Odisha; iii) 2,400 MW power plant (1,800 MW CPP and 600 MW IPP) located at Jharsuguda, Odisha; iv) Copper plant assets at Silvasaincluding 245,000 MT of blister/ secondary material processing plant, a 216,000 TPA copper refinery plant and a copper rod mill with an installed capacity of 258,000 TPA; v) Oil & gas division comprising of RJ-ON-90/i Oil & Gas Block (Rajasthan); Cambay oil fields and Ravva oil & gas Fields (under PKGM-1 block); OALP blocks; vi) all assets, business and undertaking of every kind (tangible movable assets constituting fixed assets) of the Company related to exploration, mining, processing, and manufacturing of iron ore and its derivatives in Karnataka and Goa. These assets include pig iron plants, metallurgical coke plants, and power plants in Goa. 284 - Secured by: first pari-passu charge on all existing fixed assets of the Meenakshi Energy Limited as on the last available audited accounts of the Closing Date, as more particularly set out in, and pursuant to the terms of, the Security Documents (hereinafter referred to as the "Security", with each asset (which shall also include each of the Sale Deeds that may be executed by the Issuer in relation to the relevant Agreement to Sell Assets and the Patta Land). The Security specified above, shall be created as a first ranking security ranking pari passu amongst: (a) the Debenture Holders, to secure the due repayment of the Outstanding Amounts; and (b) the Persons who have provided/shall provide any Additional Financial Indebtedness, to secure such Additional Financial Indebtedness. 93 - Secured by: (i) Pledge of shares of Sesa Resources Limited held by the Company (ii) Corporate Guarantee from the Company backed by asset security (movable fixed asset of the Company and certain intangible assets) (iii) Movable fixed assets of Sesa Resources Limited 192 - Other Secured Non-Convertible Debentures - 7 Term loan from banks (grouped under banks and financial institutions) Secured by first pari passu charge on fixed assets of TSPL and second pari passu charge on current assets of TSPL, both present and future 674 751 Secured by a pari passu charge by way of hypothecation of all the movable fixed assets of Vedanta limited pertaining to its aluminium division project consisting: (i) alumina refinery having output of 1 MTPA (Refinery) along with co-generation captive power plant with an aggregate capacity of 90 MW at Lanjigarh, Orissa (Power Plant); and (ii) aluminium smelter having output of 1.6 MTPA along with a 1,215 (9x135) MW CPP at Jharsuguda, Orissa (Smelter) (the Refinery, Power Plant and Smelter). Also, a first pari passu charge by way of equitable mortgage on the land pertaining to the mentioned project of aluminium division. 172 195 Secured by a pari passu charge by way of hypothecation on the movable fixed assets of the Lanjigarh Refinery Expansion Project including 210 MW Power Project. Lanjigarh Refinery Expansion Project shall specifically exclude the 1 MTPA alumina refinery of the Group along with 90 MW power plant in Lanjigarh and all its related expansions. 37 44 Secured by a pari passu charge by way of hypothecation on the movable fixed assets of Vedanta Limited pertaining to its aluminium Division comprising 1 MTPA alumina refinery plant with 90 MW captive power plant at Lanjigarh, Odisha and 1.6 MTPA aluminium smelter plant with 1,215 MW captive power plant at Jharsuguda, Odisha. 332 413 224 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 (US$ million) Facility Category Security details As at 31 March 2024 As at 31 March 2023 First pari passu charge by way of hypothecation/ equitable mortgage on the movable/ immovable assets of the aluminium Division of Vedanta Limited comprising alumina refinery having output of 1 MTPA along with co-generation captive power plant with an aggregate capacity of 90 MW at Lanjigarh, Orissa; aluminium smelter having output of 1.6 MTPA along with a 1,215 (9x135) MW CPP at Jharsuguda, Orissa and additional charge on Lanjigarh Expansion project, both present and future. 56 95 Secured by a pari passu charge by way of hypothecation/ equitable mortgage of the movable/ immovable fixed assets of Vedanta Limited pertaining to its aluminium division comprising 1 MTPA alumina refinery plant with 90 MW captive power plant at Lanjigarh, Odisha and 1.6 MTPA aluminium smelter plant with 1,215 MW captive power plant at Jharsuguda, Odisha. 591 714 Secured by: (i) floating charge on borrower collection account and associated permitted investments and (ii) corporate guarantee from CEHL and floating charge on collection account and current assets of CEHL 220 324 Secured by first pari passu charge on all present and future movable fixed assets including but not limited to plant & machinery, spares, tools and accessories of BALCO (excluding of coal block assets) by way of a deed of hypothecation 246 101 Term loan from banks (grouped under banks and financial institutions) First ranking pari passu charge by way of hypothecation/mortgage on all fixed/ immovable assets of ESL Steel Limited but excluding any current assets or pledge over any shares. 221 277 Secured by a first pari passu charge on the identified fixed assets of Vedanta Limited both present and future, pertaining to its aluminium business (Jharsuguda Plant, Lanjigarh Plant), 2,400 MW power plant assets at Jharsuguda, copper plant assets at Silvassa, iron ore business in the states of Karnataka and Goa, dividends receivable from Hindustan Zinc Limited (“HZL”), a subsidiary of Vedanta limited, and the debt service reserve account to be opened for the facility along with the amount lying to the credit thereof# 766 878 Secured by first pari passu charge by way of movable fixed assets of the aluminium division of Vedanta Limited comprising: (i) 6 MTPA aluminium refinery along with 90 MW Co-generation captive power plant in Lanjigarh, Orissa; (ii) 1.6 MTPA aluminium smelter along with 1,215 MW CPP at Jharsuguda, (iii) 2,400 MW power plant (1,800 MW CPP and 600 MW IPP) located at Jharsuguda, Odisha and (iv) Oil and gas division comprising RJ-ON-90/91 Oil and Gas Block (Rajasthan), Cambay Oil Fields, Ravva Oil and gas Fields under (PKMGH-1 block) and OALP blocks 87 90 A first pari passu charge by way of mortgage/ hypothecation over the specified movable fixed assets of Vedanta Limited. Security shall comprise of assets of the aluminium and power division of Vedanta limited, comprising: (i) 1.6 MTPA aluminium smelter along with 1,215 MW CPP at Jharsuguda and (ii) 1 MTPA alumina refinery along with 90 MW CPP at Lanjigarh, Odisha. 118 144 A first pari passu first charge by way of hypothecation on the specified movable fixed assets of Vedanta Limited pertaining to its Manufacturing facilities comprising: (i) alumina refinery having output of 1 MTPA along with co- generation captive power plant with an aggregate capacity of 90 MW at Lanjigarh, Orissa (ii) aluminium smelter having output of 1.6 MTPA along with a 1,215 (9x135) MW CPP at Jharsuguda, Orissa. 113 138 A first pari passu charged by way of hypothecation on the specified movable fixed assets (present and future) including movable plant and machinery, machinery spares, tools and accessories, furniture and fixtures, vehicle, Capital work-in progress etc. of Vedanta Limited pertaining to Aluminium division (Jharsuguda plant, Lanjigarh plant) and 2,400 MW power plant at JSG as more particularly described as below: (i) Alumina refinery up to 6 MTPA along with cogeneration captive power plant with aggregate capacity of 90 MW located in Lanjigarh, Odisha (ii) Alumina smelter output of 1.6 MTPA aluminium Smelter including 1,215 (9x135) MW power plant in Jharsuguda, Odisha (iii) 2,400 MW power plant (1,800 MW CPP and 600 MW IPP) located as Jharsuguda, Odisha 45 58 CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Consolidated 225 NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 (US$ million) Facility Category Security details As at 31 March 2024 As at 31 March 2023 A first pari passu charge by way of mortgage/ hypothecation over the specified immovable and movable fixed assets of Vedanta Limited. Security shall comprise of assets of the aluminium and power division of Vedanta limited, comprising: (i) 1.6 MTPA Aluminium Smelter along with 1215 MW CPP at Jharsuguda and (ii) 1 MTPA Alumina refinery along with CPP of 90 MW CPP at Lanjigarh, Odisha 98 113 Term loans from banks (Includes rupee term loans and foreign currency term loans) First pari passu charge by way of hypothecation on all present and future movable fixed assets of Vedanta Limited including but not limited to plant and machinery, spares, tools and accessories of 1.6 MTPA aluminium smelter along with 1,215 MW CPP at Jharsuguda, Odisha and 1 MTPA alumina refinery along with 90 MW CPP at Lanjigarh, Odisha 51 83 A first pari passu charge by way of hypothecation on all present and future movable Fixed Assets including movable plant and machinery, machinery spares, tools and accessories, furniture and fixtures, vehicles, Capital Work-in-Progress etc. of Vedanta Limited with a minimum fixed asset coverage ratio of 1.10 times as more particularly described as below: (i) Alumina refinery up to 6 MTPA along with co-generation captive power plant with an aggregate capacity of 90 MW located at Lanjigarh, Orissa; (ii) Aluminium smelter having output of 1.6 MTPA along with a 1,215 (9x135) MW CPP located at Jharsuguda, Orissa. (iii) 2400 MW Power Plant (1800 MW CPP and 600 MW IPP) located at Jharsuguda, Odisha; and (iv) Oil & Gas division comprising of RJ-ON-90/1 Oil & Gas Block (Rajasthan), Cambay Oil Fields and Ravva Oil & Gas Fields (under PKGM-1 block) 24 30 A first pari passu first charge by way of hypothecation on the Specified movable fixed assets of Vedanta Limited pertaining to its Manufacturing facilities comprising: (i) 1.6 MTPA Aluminium smelter along with 1,215 MW CPP (captive power plant) at Jharsuguda and (ii) 1 MTPA Alumina refinery along with CPP of 90 MW (captive power plant) at Lanjigarh, Odisha 56 60 Secured by tax free perpetual bonds* 180 182 First Pari-passu charge by way of hypothecation on all present and future movable assets of the Company with a minimum fixed asset cover of 1.10 times of the outstanding facility during the currency of the facility comprising of – i. 6 MTPA alumina refinery along with 90 MW co-generation captive power plant (operating capacity) in Lanjigarh, Odisha. ii. 1.6 MTPA aluminium smelter plant along with 1215 MW (9*135 MW) captive power plant in Jharsuguda, Odisha. iii. 2,400 MW Power Plant (1,800 MW CPP and 600 MW IPP) located at Jharsuguda, Odisha. iv. Oil & Gas division comprising RJ-ON-90/1 Oil & Gas Block (Rajasthan), Cambay Oil Fields, Ravva Oil & Gas Fields (under PKGM-1 block) and OALP blocks. 102 - Secondary charge by way of hypothecation on all present and future movable assets of the Company comprising - (i) Aluminium business of the Company at its Jharsuguda Plant and Lanjigarh Plant; (ii) 2,400 MW power plant of the Company at Jharsuguda; (iii) Copper Plant of the Company at Silvasa; (iv) Iron ore business of the Company in the state of Goa; and (v) Oil & Gas business of the Company in the states of Rajasthan, Gujarat, Andhra Pradesh and OALP blocks. Pledge of shares of HZL held by the Company with a minimum coverage of 2.29X of the outstanding loan value 131 - Exclusive charge by way of hypothecation on all present and future movable assets of the Company comprising - (i) 400 KTPA Copper Smelter Plant along with 246 KTPA Refinery and Ancillary Plants including 96 KTPA Copper Rod Plant, 1,300 KTPA Sulphuric Acid plant and 230 KTPA Phosphoric Acid Plant at Tuticorin; (ii) 160 MW Thermal Power Plant (TPP) at Tuticorin. Pledge of shares of HZL held by the Company with a minimum coverage of 2.2X of the outstanding loan value 179 - 226 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 (US$ million) Facility Category Security details As at 31 March 2024 As at 31 March 2023 Secured by first pari pasu charge on all bank accounts, insurance policies and trade receivables of Black Mountain Mining (Pty) Ltd by way of a deed of hypothecation 52 - Secured by: i) Exclusive pledge on 3.3% of Hindustan Zinc Limited (“HZL”) shares; ii) 100% share pledge of THL Zinc Ventures Limited, THL Zinc Limited, THL Zinc Holding BV and THL Zinc Namibia Holdings (pty) Limited; iii) 100% share pledge of Zinc holding in Black Mountain Mining (Pty) Ltd 892 - Secured by: i) Non-deposit Undertaking by FICL on the shares held by it in the Vedanta Limited; ii) Pledge over the shares in FICL held by Richter Holding Limited and Westglobe Limited. 192 - Others (grouped under banks and financial institutions) Secured by Fixed asset (platinum) of AvanStrate Inc. 53 60 Total 7,901 6,126 *Repurchase liability as on March 31, 2024 are secured by current investments amounting to US$ 244 million ( March 31, 2023: US$ 221 million) and are repayable in 365 days (March 31, 2023: 102 to 109 days) from the date of borrowings through repurchase obligation. # In December 2021, Vedanta Limited executed a US$ 959 million facility agreement with Union Bank of India Limited to take over a long term syndicated facility of US$ 1,200 million. This loan is secured by the way of pledge over the shares held by Vedanta Limited in HZL equal to minimum 1x outstanding loan value (calculated quarterly at Value Weighted Average Price), currently representing 6.10% (31 March 2023: 6.77%) of the paid-up shares of HZL. Further, Vedanta Limited has also signed a Non-Disposal Undertaking (NDU) in respect of its shareholding in HZL to the extent of 50.1% of the paid-up share capital of HZL. As at 31 March 2024, the outstanding loan amount under the facility is US$ 768 million (31 March 2023: US$ 881 million). 22(b). Movement in net debt (1) (US$ million) Cash and cash equivalents Short term investments and Non- current Bank Deposits Total cash and short-term investments Short-term borrowing Long-term borrowing* Total Net Debt (4)* Debt carrying value Debt carrying value At 01 April 2022 1,266 3,130 4,396 (1,350) (14,732) (11,686) Cash flow from continuing operations (3) (325) (1,093) (1,418) (572) 498 (1,492) Other non-cash changes (2) - (60) (60) (3) (34) (97) Foreign exchange currency translation differences (83) (207) (290) 309 526 545 At 31 March 2023 858 1,770 2,628 (1,616) (13,742) (12,730) Cash flow from continuing operations (3) (482) (171) (653) 1084 (151) 280 Other non-cash changes (2) - (2) (2) 5 (25) (22) Foreign exchange currency translation differences (11) 19 8 15 100 123 At 31 March 2024 365 1,616 1,981 (512) (13,818) (12,349) * Includes current maturities of long-term borrowings of US$ 2,866 million as at 31 March 2024 (31 March 2023: US$ 4,193 million) (1) Net debt is a non-IFRS measure and represents total debt after fair value adjustments under IAS 32 and IFRS 9 as reduced by cash and cash equivalents and short-term investments and changes in liabilities arising from financing activities as per requirements of IAS 7. (2) Other non-cash changes comprise amortisation of borrowing costs, foreign exchange difference on net debt. It also includes US$ 2 million (31 March 2023: US$ 60 million) of fair value movement in investments and accrued interest on investments. (3) Consists of net repayment of working capital loan, proceeds and repayments of short-term and long-term borrowings. (4) Total net debt excludes movement in lease liabilities which is separately disclosed in Note 23. CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Consolidated 227 NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 22(c). Operational buyer’s/Supplier’s Credit Operational Buyers' /Suppliers' Credit is availed in foreign currency from offshore branches of Indian banks or foreign banks at an interest rate ranging from 4.85% to 8.43% per annum and in rupee from domestic banks at interest rate ranging from 6.25%-10.00% per annum. These trade credits are largely repayable within 180 days from the date of draw down. Operational Buyers' credit availed in foreign currency is backed by Standby Letter of Credit issued under working capital facilities sanctioned by domestic banks. Part of these facilities are secured by first pari passu charge over the present and future current assets of the Group. 23. Trade and other payables (US$ million) As at 31 March 2024 As at 31 March 2023 Non- Current Current Total Non- Current Current Total Lease liability (4) 68 59 127 23 39 62 Dividend payable to NCI - 21 21 - 426 426 Trade payables - 1,211 1,211 - 1,344 1,344 Liabilities for capital expenditure 19 1,222 1,241 151 1,225 1,376 Profit petroleum payable - 408 408 - 349 349 Security deposits and retentions - 39 39 - 37 37 Put option liability with non-controlling interests (1) - 30 30 5 25 30 Other payables (3) 41 546 587 40 492 532 Financial (A) 128 3,536 3,664 219 3,937 4,156 Statutory liabilities - 342 342 - 463 463 Advance from customers (2) 112 969 1,081 - 1,087 1,087 Other payables - 34 34 - 26 26 Non-financial (B) 112 1,345 1,457 - 1,576 1,576 Total (A+B) 240 4,881 5,121 219 5,513 5,732 Trade payables are majorly non-interest bearing and are normally settled upto 180 days terms. The fair value of trade and other payables is not materially different from the carrying value presented. (1) The non-controlling shareholders of ASI have an option to offload their shareholding to the Group. The option is exercisable at any time within the period of three years following the fifth anniversary of the date of shareholders’ agreement (22 December 2017) at a price higher of US$ 0.757 per share and the fair market value of the share. Therefore, the liability is carried at higher of the two. Subsequent changes to the put option liability are treated as equity transaction and hence accounted for in equity. (2) Advance from customers are contract liabilities to be settled through delivery of goods. The amount of such balances as on 01 April 2023: US$ 1,087 million. During the current year, the Group has recognised revenue of US$ 1,082 million (31 March 2023: US$ 546 million) out of such opening balances. All other changes are either due to receipt of fresh advances or exchange differences. (3) Includes revenue received in excess of entitlement interest of US$ 58 million (31 March 2023: US$ 61 million) of which US$ 35 million is payable to ONGC, and reimbursement of expenses, interest accrued on other than borrowings, liabilities related to claim, liability for stock options etc. (4) Movement in lease liabilities is as follows: (US$ million) At 01 April 2023 62 Payments made (48) Other non-cash changes: Additions during the year 125 Interest on lease liabilities 7 Deletions (19) At 31 March 2024 127 228 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 24 Financial instruments Financial Assets and Liabilities The following tables present the carrying value and fair value of each category of financial assets and liabilities as at 31 March 2024 and 31 March 2023: (US$ million) As at 31 March 2024 Fair value through profit or loss Fair value through other comprehensive income Derivatives designated as hedging instruments Amortised cost Total carrying value Total fair value Financial Assets Financial instruments (derivatives) 8 - 12 - 20 20 Financial asset investments held at fair value 80 38 - - 118 118 Short term investments - Bank deposits - - - 221 221 221 - Other investments 823 531 - - 1,354 1,354 C;ash and cash equivalents - - - 384 384 384 Other non-current assets and trade and other receivables 24 - - 3,259 3,283 3,384 Total 935 569 12 3,864 5,380 5,481 (US$ million) As at 31 March 2024 Fair value through profit or loss Derivatives designated as hedging instruments Amortised cost Others*** Total carrying value Total fair value Financial Liabilities Financial instruments (derivatives) 7 10 - - 17 17 Trade and other payables** 67 - 5,359 30 5,456 5,456 Borrowings - - 14,330 - 14,330 14,035 Total 74 10 19,689 30 19,803 19,508 *Represents put option liability accounted for at fair value **Includes operational buyers’ credit/suppliers’ credit of US$ 1,792 million (US$ million) As at 31 March 2023 Fair value through profit or loss Fair value through other comprehensive income Derivatives designated as hedging instruments Amortised cost Total carrying value Total fair value Financial Assets Financial instruments (derivatives) 11 - 15 - 26 26 Financial asset investments held at fair value 35 28 - - 63 63 Short term investments - Bank deposits - - - 161 161 161 - Other investments 1,051 516 - - 1,567 1,567 Cash and cash equivalents - - - 1,037 1,037 1,037 Other non-current assets and trade and other receivables 47 - - 3,072 3,119 3,215 Total 1,144 544 15 4,270 5,973 6,069 CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Consolidated 229 NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 (US$ million) As at 31 March 2023 Fair value through profit or loss Derivatives designated as hedging instruments Amortised cost Others*** Total carrying value Total fair value Financial Liabilities Financial instruments (derivatives) 9 16 - - 25 25 Trade and other payables** 120 - 5,673 30 5,823 5,823 Borrowings - - 15,358 - 15,358 14,024 Total 129 16 21,031 30 21,206 19,872 *Represents put option liability accounted for at fair value **Includes operational buyers’ credit/suppliers’ credit of US$ 1,667 million Fair value hierarchy The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique: • Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities • Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices) • Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs) The below tables summarise the categories of financial assets and liabilities as at 31 March 2024 and 31 March 2023 measured at fair value: As at 31 March 2024 (US$ million) Financial Assets Level 1 Level 2 Level 3 At fair value through profit or loss - Short term investments 319 504 - - Financial asset investments held at fair value - - 80 - Financial instruments (derivatives) - 8 - - Other non-current assets and trade and other receivables - 24 - At fair value through other comprehensive income - Financial asset investments held at fair value 6 551 12 Derivatives designated as hedging instruments - Financial instruments (derivatives) - 12 - Total 325 1,099 92 (US$ million) Financial Liabilities Level 1 Level 2 Level 3 At fair value through profit or loss - Financial instruments (derivatives) - 7 - - Trade and other payables - 67 - Derivatives designated as hedging instruments - Financial instruments (derivatives) - 10 - - Trade and other payables- Put option liability with non- controlling interest - - 30 Total - 84 30 230 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 As at 31 March 2023 (US$ million) Financial Assets Level 1 Level 2 Level 3 At fair value through profit or loss - Short term investments 556 495 - - Financial asset investments held at fair value - - 35 - Financial instruments (derivatives) - 11 - - Other non-current assets and trade and other receivables - 47 - At fair value through other comprehensive income - Financial asset investments held at fair value 9 534 1 Derivatives designated as hedging instruments - Financial instruments (derivatives) - 15 - Total 565 1,102 36 (US$ million) Financial Liabilities Level 1 Level 2 Level 3 At fair value through profit or loss - Financial instruments (derivatives) - 9 - - Trade and other payables - 120 - Derivatives designated as hedging instruments - Financial instruments (derivatives) - 16 - Trade and other payables- Put option liability with non- controlling interest - - 30 Total - 145 30 The below table summarizes the fair value of borrowings and Loans, receivables and obligations relating to KCM which are carried at amortised cost as at 31 March 2024 and 31 March 2023: (US$ million) Particulars As at 31 March 2024 As at 31 March 2023 Level 1 Level 2 Level 1 Level 2 Borrowings 2,645 11,390 3,306 10,718 Total 2,645 11,390 3,306 10,718 (US$ million) Particulars As at 31 March 2024 As at 31 March 2023 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Loans, receivables and obligations of KCM towards the Group - - 756 - - 751 Total - - 756 - - 751 The changes in fair value of Level 3 items for the year ended 31 March 2024 and 31 March 2023 are set out in the table below: Loans, receivables and obligations of KCM towards the Group (US$ million) Particulars As at 31 March 2024 As at 31 March 2023 01 April 751 720 Fair value change during the year 5 31 31 March 756 751 CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Consolidated 231 NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 Reconciliation of Level 3 financial assets fair value measurement (US$ million) Particulars As at 31 March 2023 At 01 April 2022 5 Investments made during the year 31 At 31 March 2023 36 Investments made during the year 58 Investments redeemed during the year (1) Exchange difference during the year (1) At 31 March 2024 92 The fair value of the financial assets and liabilities are at the amount that would be received to sell an asset and paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following methods and assumptions were used to estimate the fair values: • Investments traded in active markets are determined by reference to quoted prices in an active market in case of listed securities and by quotes from the financial institutions; for example: Net asset value (NAV) for investments in mutual funds declared by mutual fund house. For other listed securities traded in markets which are not active, the quoted price is used wherever the pricing mechanism is same as for other marketable securities traded in active markets. Other investments, inputs for which are not based on observable market data (unobservable inputs), are valued on the basis of net assets value method. Other current investments are valued on the basis of market trades, poll and primary issuances for securities issued by the same or similar issuer and for similar maturities or based on the applicable spread movement for the security derived based on the aforementioned factor(s).Financial assets forming part of Trade and other receivables, cash and cash equivalents (including restricted cash and cash equivalents), bank deposits, financial liabilities forming part of trade and other payables and short-term borrowings: Approximate their carrying amounts largely due to the short-term maturities of these instruments. • Other non-current financial assets and financial liabilities: Fair value is calculated using a discounted cash flow model with market assumptions, unless the carrying value is considered to approximate to fair value. • Long-term fixed-rate and variable rate borrowings: Listed bonds are fair valued based on the prevailing market price. For all other long-term fixed-rate and variable-rate borrowings, fair value has been determined using discounted cash flow model based on parameters such as interest rates, specific country risk factors, and the risk characteristics of the financed project. • Quoted financial asset investments: Fair value is derived from quoted market prices in active markets. • Derivative financial assets/liabilities: The Group enters into derivative financial instruments with various counterparties. Interest rate swaps, foreign exchange forward contracts and commodity forward contracts are valued using valuation techniques, which employs the use of market observable inputs. The most frequently applied valuation techniques by the Group include forward pricing and swap models, using present value calculations. The models incorporate various inputs including the foreign exchange spot and forward rates, yield curves of the respective currencies, currency basis spreads between the respective currencies, interest rate curves and forward rate curves of the underlying commodity. Commodity contracts are valued using the forward LME rates of commodities actively traded on the listed metal exchange, i.e., London Metal Exchange, United Kingdom (UK). For all other financial instruments, the carrying amount is either the fair value, or approximates the fair value. The changes in counterparty credit risk had no material effect on the hedge effectiveness assessment for derivatives designated in hedge relationship and the value of other financial instruments recognised at fair value. The estimated fair value amounts as at 31 March 2024 have been measured as at that date. As such, the fair values of these financial instruments subsequent to reporting date may be different than the amounts reported at each year-end. There were no significant transfers between level 1, level 2 and level 3 during the current year. 232 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 Risk management framework The Group’s businesses are subject to several risks and uncertainties including financial risks. The Group’s documented risk management polices act as an effective tool in mitigating the various financial risks to which the businesses are exposed to in the course of their daily operations. The risk management policies cover areas such as liquidity risk, commodity price risk, foreign exchange risk, interest rate risk, counterparty credit risk and capital management. Risks are identified at both the corporate and individual subsidiary level with active involvement of senior management. Each operating subsidiary in the Group has in place risk management processes which are in line with the Group’s policy. Each significant risk has a designated ‘owner’ within the Group at an appropriate senior level. The potential financial impact of the risk and its likelihood of a negative outcome are regularly updated. The risk management process is coordinated by the Group’s Management Assurance function and is regularly reviewed by the Board. The Board is aided by the other Group committees including the Risk Management Committee, which meets regularly to review risks as well as the progress against the planned actions. Key business decisions are discussed at the periodic meetings of the Executive Committee. The overall internal control environment and risk management programme including financial risk management is reviewed by the Risk Management Committee and Finance Management committee. The Company’s independent non-executive director meets the auditors to discuss the audit process and audit findings and observations. The risk management framework aims to: • improve financial risk awareness and risk transparency • identify, control and monitor key risks • identify risk accumulations • provide management with reliable information on the Group’s risk situation • improve financial returns Treasury management Treasury management focuses on liability management, capital protection, liquidity maintenance and yield maximization. The treasury policies are approved by the Committee of the Board. Daily treasury operations of the subsidiary companies are managed by their respective finance teams within the framework of the overall Group treasury policies. Long-term fund raising including strategic treasury initiatives are managed jointly by the business treasury team and the central team at corporate treasury while short-term funding for routine working capital requirements is delegated to subsidiary companies. A monthly reporting system exists to inform senior management of the Group’s investments and debt position, exposure to currency, commodity and interest rate risk and their mitigants including the derivative position. The Group has a strong system of internal control which enables effective monitoring of adherence to Group’s policies. The internal control measures are effectively supplemented by regular internal audits. The Group uses derivative instruments to manage the exposure in foreign currency exchange rates, interest rates and commodity prices. The Group does not acquire or issue derivative financial instruments for trading or speculative purposes. The Group does not enter into complex derivative transactions to manage the treasury and commodity risks. Both treasury and commodities derivative transactions are normally in the form of forward contracts, interest rate and currency swaps and these are in line with the Group’s policies. Commodity Price risk The Group is exposed to the movement of base metal commodity prices on the London Metal Exchange. Any decline in the prices of the base metals that the Group produces and sells will have an immediate and direct impact on the profitability of the businesses. As a general policy, the Group aims to sell the products at prevailing market prices. The commodity price risk in import of input commodities such as Copper Concentrate & Alumina, for our Copper and Aluminium business respectively, is hedged on back-to back basis ensuring no price risk for the business. Hedging is used primarily as a risk management tool and, in some cases, to secure future cash flows in cases of high volatility by entering into forward contracts or similar instruments. The hedging activities are subject to strict limits set out by the Board and to a strictly defined internal control and monitoring mechanism. Decisions relating to hedging of commodities are taken at the Executive Committee level, basis clearly laid down guidelines. CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Consolidated 233 NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 Whilst the Group aims to achieve average LME prices for a month or a year, average realised prices may not necessarily reflect the LME price movements because of a variety of reasons such as uneven sales during the year and timing of shipments. The Group is also exposed to the movement of international crude oil price and the discount in the price of Rajasthan crude oil to Brent price. Financial instruments with commodity price risk are entered into in relation to following activities: • economic hedging of prices realised on commodity contracts • cash flow hedging of revenues, forecasted highly probable transactions Aluminium The requirement of the primary raw material, alumina, is partly met from own sources and the rest is purchased primarily on negotiated price terms. Sales prices are linked to the LME prices. At present the Group on selective basis hedges the aluminium content in outsourced alumina to protect its margins. The Group also executes into hedging arrangements for its aluminium sales to realise average month of sale LME prices. Copper The Group’s custom smelting copper operations at Silvassa is benefitted by a natural hedge except to the extent of a possible mismatch in quotational periods between the purchase of concentrate and the sale of finished copper. The Group’s policy on custom smelting is to generate margins from Refining Charges or “RC”, improving operational efficiencies, minimising conversion cost, generating a premium over LME on sale of finished copper, sale of by-products and from achieving import parity on domestic sales. Hence, mismatches in quotational periods are managed to ensure that the gains or losses are minimised. The Group hedges this variability of LME prices through forward contracts and tries to make the LME price a pass- through cost between purchases of anodes/blisters and sales of finished products, both of which are linked to the LME price. RC is a major source of income for the Indian copper smelting operations. Fluctuation in RC is influenced by factors including demand and supply conditions prevailing in the market for mine output. The Group’s copper business has a strategy of securing a majority of its anodes/blisters requirement under long-term contracts with mines. Zinc, lead and silver The sales prices are linked to the LME prices. The Group also executes hedging arrangements for its Zinc, Lead and Silver sales to realise average month of sale LME prices. Zinc International Raw material for zinc and lead is mined in South Africa with sales prices linked to the LME prices. Iron ore The Group sells its Iron Ore production from Goa on the prevailing market prices and from Karnataka through e-auction route as mandated by State Government of Karnataka in India. Oil and Gas The prices of various crude oils are based upon the price of the key physical benchmark crude oil such as Dated Brent, West Texas Intermediate, and Dubai/Oman etc. The crude oil prices move based upon market factors like supply and demand. The regional producers price their crude basis these benchmark crudes with a premium or discount over the benchmark based upon quality differential and competitiveness of various grades. Natural gas markets are evolving differently in important geographical markets. There is no single global market for natural gas. This could be owing to difficulties in large-scale transportation over long distances as compared to crude oil. Globally, there are three main regional hubs for pricing of natural gas, which are USA (Henry Hub Prices), UK (NBP Price) and Japan (imported gas price, mostly linked to crude oil). Provisionally priced financial instruments On 31 March 2024, the value of net financial liabilities linked to commodities (excluding derivatives) accounted for on provisional prices was US$ 43 million (31 March 2023: liabilities of US$ 73 million). These instruments are subject to price movements at the time of final settlement and the final price of these instruments will be determined in the financial year beginning 01 April 2023. 234 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 Set out below is the impact of 10% increase in LME prices on pre-tax profit/ (loss) for the year and pre-tax equity as a result of changes in value of the Group’s commodity financial instruments: For the year ended 31 March 2024 (US$ million) Commodity price sensitivity Total Exposure Effect on pre-tax profit/(loss) of a 10% increase in the LME Effect on pre-tax equity of a 10% increase in the LME Copper (71) (7) - For the year ended 31 March 2023 (US$ million) Commodity price sensitivity Total Exposure Effect on pre-tax profit/(loss) of a 10% increase in the LME Effect on pre-tax equity of a 10% increase in the LME Copper (106) (11) - The above sensitivities are based on volumes, costs, exchange rates and other variables and provide the estimated impact of a change in LME prices on profit and equity assuming that all other variables remain constant. A 10% decrease in LME prices would have an equal and opposite effect on the Group’s financial statements. The impact on pre-tax profit/(loss) mentioned above includes the impact of a 10% increase in closing copper LME for provisionally priced copper concentrate purchased at Vedanta Limited Copper division custom smelting operations of US$ 12 million (31 March 2023: US$ 16 million), which is pass through in nature and as such will not have any impact on the profitability. Financial risk: The Group’s Board approved financial risk policies include monitoring, measuring and mitigating the liquidity, currency, interest rate and counterparty risk. The Group does not engage in speculative treasury activity but seeks to manage risk and optimise interest and commodity pricing through proven financial instruments. (a) Liquidity risk The Group requires funds both for short-term operational needs as well as for long-term investment programmes mainly in growth projects. The Group is currently forecasting to generate sufficient cash flows from the current operations which together with the available cash and cash equivalents and short-term investments provide liquidity both in the short term as well as in the long term (refer note 1(c)). Anticipated future cash flows, together with undrawn fund based committed facilities of US$ 809 million, and cash and short-term investments of US$ 1,981 million as at 31 March 2024, are expected to be sufficient to meet the liquidity requirement of the Group in the near future. As on 31 March 2024, credit ratings of Vedanta Resources Ltd is ‘CCC+ with stable outlook’. On 03 August 2023, S&P Global Ratings revised outlook of the ratings from ‘B- with stable outlook’ to ‘B- with negative outlook’. On 29 September 2023, the ratings were revised to ‘CCC with Watch Negative’ and on 13 December 2023 to ‘CC with Watch negative’. The long-term issuer credit ratings were further revised to ‘SD’ on 11 January 2024 while the ratings on the Company’s bonds due in January 2024, August 2024 and March 2025 were revised to ‘D’ due to the successful completion of the liability management exercise to extend the maturities of three US $ denominated bonds as this transaction was considered distressed under S&P’s criteria. On 15 January 2024, the credit ratings were upgraded to ‘CCC+ with Stable outlook’ with the view that Vedanta Resources Ltd has a more manageable debt maturity profile following the extension of three bond maturities in liability management exercise and the stable outlook reflects the high prospects that the Company will meet its debt obligations. The Group remains in a very comfortable position to address all its debt maturities with a strong balance sheet, robust liquidity at its operating subsidiaries and strong track record of raising funds through relationship banks. The Group remains committed to maintaining a healthy liquidity, a low gearing ratio, deleveraging and strengthening our balance sheet. The maturity profile of the Group’s financial liabilities based on the remaining period from the balance sheet date to the contractual maturity date is given in the table below. The figures reflect the contractual undiscounted cash obligation of the Group: CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Consolidated 235 NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 At 31 March 2024 (US$ million) Payment due by period <1 year 1-3 years 3-5 years >5 years Total Trade and other payables (1) 5,094 57 - - 5,151 Bank and other borrowings (2) 6,911 6,745 4,233 2,759 20,648 Lease liability 56 55 12 15 138 Derivative liabilities 17 0 - - 17 Total 12,078 6,857 4,245 2,774 25,954 At 31 March 2023 (US$ million) Payments due by year <1 year 1-3 years 3-5 years >5 years Total Trade and other payables (1) 5,407 43 - - 5,450 Bank and other borrowings (2) 6,945 6,738 3,122 1,723 18,528 Lease liability 39 17 2 4 62 Derivative liabilities 23 2 - - 25 Total 12,414 6,800 3,124 1,727 24,065 (1) Excludes accrued interest which has been included with borrowings (2) Includes current and non-current borrowings and committed interest payments At 31 March 2024, the Group had access to following funding facilities: (US$ million) As at 31 March 2024 Total facility Drawn Undrawn Fund/non-fund based 14,376 12,592 1,784 (US$ million) As at 31 March 2023 Total facility Drawn Undrawn Fund/Non-fund based 14,342 12,526 1,816 (b) Foreign exchange risk Fluctuations in foreign currency exchange rates may have an impact on the consolidated income statement, the consolidated statements of change in equity, where any transaction references more than one currency or where assets/ liabilities are denominated in a currency other than the functional currency of the respective consolidated entities. Considering the countries and economic environment in which the Group operates, its operations are subject to risks arising from the fluctuations primarily in the US dollar (USD), Australian dollar (AUD), Namibian dollar (NAD), Emirati Dirham (AED), South African Rand (ZAR), Great British Pound (GBP), Indian Rupee (INR), Japanese Yen (JPY) and Euro against the functional currencies of its subsidiaries. Exposures on foreign currency loans are managed through the Group wide hedging policy, which is reviewed periodically to ensure that the results from fluctuating currency exchange rates are appropriately managed. The Group strives to achieve asset liability offset of foreign currency exposures and only the net position is hedged. The Group’s presentation currency is the US dollar. The majority of the assets are located in India and the Indian Rupee is the functional currency for the Indian operating subsidiaries except for Oil and Gas business operations which have a US dollar functional currency. Natural hedges available in the business are identified at each entity level and hedges are placed only for the net exposure. Short-term net exposures are hedged progressively based on their maturity. A more conservative approach has been adopted for project expenditures to avoid budget overruns, where cost of the project is calculated taking into account the hedge cost. The hedge mechanisms are reviewed periodically to ensure that the risk from fluctuating currency exchange rates is appropriately managed. 236 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 The following analysis is based on the gross exposure as at the reporting date which could affect the consolidated income statement. The exposure summarised below is mitigated by some of the derivative contracts entered into by the Group as disclosed under the section on “Derivative financial instruments”. The carrying amount of the Group’s financial assets and liabilities in different currencies are as follows: (US$ million) Particulars As at 31 March 2024 As at 31 March 2023 Financial Asset Financial liabilities Financial Asset Financial liabilities USD 2,342 9,662 1,823 11,117 INR 2,898 9,623 4,025 9,697 Others 140 518 125 392 Total 5,380 19,803 5,973 21,206 The Group’s exposure to foreign currency arises where a Group company holds monetary assets and liabilities denominated in a currency different to the functional currency of that entity, with USD (US Dollar) being the major non- functional currency of the Group’s main operating subsidiaries. The foreign exchange rate sensitivity is calculated by the aggregation of the net foreign exchange rate exposure with a simultaneous parallel foreign exchange rates shift in the currencies by 10 % against the functional currencies of the respective entities. Set out below is the impact of a 10% strengthening in the functional currencies of the respective entities on pre-tax profit/ (loss) and pre-tax equity arising as a result of the revaluation of the Group’s foreign currency monetary financial assets/ liabilities: For the year ended 31 March 2024 (US$ million) Closing exchange rate Effect on pre-tax profit/(loss) of 10% strengthening in currency Effect on pre-tax equity of 10% increase in currency USD 83.3416 142 - For the year ended 31 March 2023 (US$ million) Closing exchange rate Effect on pre-tax profit/(loss) of 10% strengthening in currency Effect on pre-tax equity of 10% increase in currency USD 82.1643 186 - A 10% weakening of the functional currencies of the respective entities would have an equal and opposite effect on the Group’s financial statements. (c) Interest rate risk At 31 March 2024, the Group’s net debt of US$ 12,349 million (31 March 2023: US$ 12,730 million net debt) comprises debt of US$ 14,330 million (31 March 2023: US$ 15,358 million) offset by cash, cash equivalents, short-term investments and non-current bank deposit of US$ 1,981 million (31 March 2023: US$ 2,628 million). The Group is exposed to interest rate risk on short-term and long-term floating rate instruments and on the refinancing of fixed rate debt. The Group’s policy is to maintain a balance of fixed and floating interest rate borrowings and the proportion of fixed and floating rate debt is determined by current market interest rates. The borrowings of the Group are principally denominated in Indian Rupees and US dollars with mix of fixed and floating rates of interest. The USD floating rate debt is linked to US dollar LIBOR and INR Floating rate debt to Bank’s base rate. The Group has a policy of selectively using interest rate swaps, option contracts and other derivative instruments to manage its exposure to interest rate movements. These exposures are reviewed by appropriate levels of management on a monthly basis. CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Consolidated 237 NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 The Group invests cash and short-term investments in short-term deposits and debt mutual funds, some of which generate a tax-free return, to achieve the Group’s goal of maintaining liquidity, carrying manageable risk and achieving satisfactory returns. Floating rate financial assets are largely mutual fund investments which have debt securities as underlying assets. The returns from these financial assets are linked to market interest rate movements; however, the counterparty invests in the agreed securities with known maturity tenure and return and hence has manageable risk. The exposure of the Group’s financial assets to interest rate risk is as follows: (US$ million) As at 31 March 2024 As at 31 March 2023 Floating rate financial assets Fixed rate financial assets Non-interest bearing financial assets Floating rate financial assets Fixed rate financial assets Non-interest bearing financial assets Financial assets 323 1,964 3,093 569 1,596 3,808 The exposure of the Group’s financial liabilities to interest rate risk is as follows: (US$ million) As at 31 March 2024 As at 31 March 2023 Floating rate financial liabilities Fixed rate financial liabilities Non-interest bearing financial liabilities Floating rate financial liabilities Fixed rate financial liabilities Non-interest bearing financial liabilities Financial liabilities 7,415 8,802 3,586 7,780 9,270 4,156 Considering the net debt position as at 31 March 2024 and the investment in bank deposits, corporate bonds and debt mutual funds, any increase in interest rates would result in a net loss and any decrease in interest rates would result in a net gain. The sensitivity analysis below has been determined based on the exposure to interest rates for financial instruments at the balance sheet date. The below table illustrates the impact of a 0.5% to 2.0% movement in interest rate of floating rate financial assets/ liabilities (net) on profit/(loss) and equity assuming that the changes occur at the reporting date and has been calculated based on risk exposure outstanding as of date. The year end balances are not necessarily representative of the average debt outstanding during the year. This analysis also assumes that all other variables, in particular foreign currency rates, remain constant. (US$ million) Increase in interest rates Effect on pre-tax profit/(loss) during the year ended 31 March 2024 Effect on pre-tax profit/(loss) during the year ended 31 March 2023 0.5% (35) (36) 1.0% (71) (72) 2.0% (142) (144) A reduction in interest rates would have an equal and opposite effect on the Group’s financial statements. (d) Credit risk Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults. The Group is exposed to credit risk from trade receivables, cash and cash equivalents, short term investments and other financial instruments. The Group has clearly defined policies to mitigate counterparty risks. For short-term investments, counterparty limits are in place to limit the amount of credit exposure to any one counterparty. This, therefore, results in diversification of credit risk 238 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 for our mutual fund and bond investments. For derivative and financial instruments, the Group attempts to limit the credit risk by only dealing with reputable banks and financial institutions. Credit risk on receivables is limited as almost all credit sales are against letters of credit and guarantees of banks of national standing. Moreover, given the diverse nature of the Group’s businesses trade receivables are spread over a number of customers with no significant concentration of credit risk. No single customer accounted for 10% or more of revenue on a consolidated basis in the current year and previous year. The history of trade receivables shows a negligible expected credit loss for bad and doubtful debts. Therefore, the Group does not expect any material risk on account of non- performance by any of our counterparties. The Group’s maximum gross exposure to credit risk as at 31 March 2024 is US$ 5,380 million (31 March 2023: US$ 5,973 million). Of the year end trade and other receivable balances, the following, though overdue, are expected to be realised in the normal course of business and hence, are not considered impaired as at: (US$ million) Particulars As at 31 March 2024 As at 31 March 2023 Neither past due nor impaired 1,792 2,142 Past due but not impaired - Less than 1 month 149 136 - Between 1 - 3 months 56 29 - Between 3 - 12 months 400 40 - Greater than 12 months 618 539 Total 3,015 2,886 Receivables are deemed to be past due or impaired with reference to the Group’s normal terms and conditions of business. These terms and conditions are determined on a case-to-case basis with reference to the customer’s credit quality and prevailing market conditions. Receivables that are classified as ‘past due’ in the above table are those that have not been settled within the terms and conditions that have been agreed with that customer. The credit quality of the Group’s customers is monitored on an ongoing basis. Where receivables have been impaired, the Group actively seeks to recover the amounts in question and enforce compliance with credit terms. Movement in allowances for Financial Assets (other non-current assets, loans and trade and other receivables) Particulars US$ million As at 01 April 2022 263 Allowance made during the year 44 Reversals/write off during the year (28) Foreign Exchange difference (17) As at 01 April 2023 262 Allowance made during the year 60 Reversals/write off during the year (70) Foreign Exchange difference 0 As at 31 March 2024 252 Derivative financial instruments The Group uses derivative instruments as part of its management of exposure to fluctuations in foreign currency exchange rates, interest rates and commodity prices. The Group does not acquire or issue derivative financial instruments for trading or speculative purposes. The Group does not enter into complex derivative transactions to manage the treasury and commodity risks. Both treasury and commodities derivative transactions are normally in the form of forward contracts and these are subject to the Group guidelines and policies. CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Consolidated 239 NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 The fair values of all derivatives are separately recorded on the balance sheet within other financial assets (derivatives) and other financial liabilities (derivatives), current and non-current. Derivatives that are designated as hedges are classified as current or non-current depending on the maturity of the derivative. The use of derivatives can give rise to credit and market risk. The Group tries to control credit risk as far as possible by only entering into contracts with reputable banks and financial institutions. The use of derivative instruments is subject to limits, authorities and regular monitoring by appropriate levels of management. The limits, authorities and monitoring systems are periodically reviewed by management and the Board. The market risk on derivatives is mitigated by changes in the valuation of the underlying assets, liabilities or transactions, as derivatives are used only for risk management purposes. Cash flow hedges The Group enters into forward exchange and commodity price contracts for hedging highly probable forecast transaction and account for them as cash flow hedges and states them at fair value. Subsequent changes in fair value are recognised in consolidated statement of comprehensive income until the hedged transaction occurs, at which time, the respective gain or losses are reclassified to the consolidated income statement. These hedges have been effective for the year ended 31 March 2024. The Group uses foreign exchange contracts from time to time to optimize currency risk exposure on its foreign currency transactions. The Group hedged part of its foreign currency exposure on capital commitments during fiscal year 2024. Fair value changes on such forward contracts are recognised in the consolidated statement of comprehensive income. The majority of cash flow hedges taken out by the Group during the year comprise non-derivative hedging instruments for hedging the foreign exchange rate of highly probable forecast transactions and commodity price contracts for hedging the commodity price risk of highly probable forecast transactions. The cash flows related to above are expected to occur during the year ending 31 March 2025 and consequently may impact the consolidated income statement for that year depending upon the change in the commodity prices and foreign exchange rates movements. For cash flow hedges regarded as basis adjustments to initial carrying value of the property, plant and equipment, the depreciation on the basis adjustments made is expected to affect the consolidated income statement over the expected useful life of the property, plant and equipment. Fair value hedges The fair value hedges relate to forward covers taken to hedge currency exposure and commodity price risks. The Group’s sales are on a quotational period basis, generally one month to three months after the date of delivery at a customer’s facility. The Group enters into forward contracts for the respective quotational period to hedge its commodity price risk based on average LME prices. Gains and losses on these hedge transactions are substantially offset by the amount of gains or losses on the underlying sales. Net gains and losses are recognised in the consolidated income statement. The Group uses foreign exchange contracts from time to time to optimize currency risk exposure on its foreign currency transactions. Fair value changes on such forward contracts are recognised in the consolidated income statement. Non-qualifying/economic hedge The Group enters into derivative contracts which are not designated as hedges for accounting purposes but provide an economic hedge of a particular transaction risk or a risk component of a transaction. Hedging instruments include copper, aluminium and zinc future contracts on the LME and certain other derivative instruments. Fair value changes on such derivative instruments are recognised in the consolidated income statement. 240 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 The fair value of the Group’s open derivative positions as at the year end, recorded within financial instruments (derivative) is as follows: (US$ million) Derivative Financial Instruments As at 31 March 2024 As at 31 March 2023 Liability Asset Liability Asset Current Cash flow hedges - Commodity contracts 3 0 4 5 - Interest rate swap - - - - Fair value hedges - Commodity contracts 6 11 8 10 - Forward foreign currency contracts 1 1 2 0 Non-Qualifying hedges - Commodity contracts - 7 - 6 - Forward foreign currency contracts 7 1 9 5 Total 17 20 23 26 Non-current Fair value hedges - Forward foreign currency contracts - 0 2 - Total - 0 2 - Grand Total 17 20 25 26 * Refer the Consolidated Statement of Profit and Loss and the Consolidated Statement of Changes in Equity for the change in the fair value of cash flow hedges. 25 Provisions (US$ million) Particulars As at 31 March 2024 As at 31 March 2023 Current Non-current Total Current Non-current Total Provision for restoration, rehabilitation and environmental 3 343 346 4 388 392 Provision for employee benefits 22 1 23 20 2 22 Others 10 0 10 14 0 14 Total 35 344 379 38 390 428 (US$ million) Particulars Restoration, rehabilitation and environmental* Other As at 01 April 2022 429 14 Additions 6 1 Utilized (2) - Unwinding of discount (note 8) 12 - Revision in estimates (37) - Exchange differences (16) (1) As at 01 April 2023 392 14 Additions 1 1 Utilized (2) - Unwinding of discount (note 8) 16 - Revision in estimates (40) - Exchange differences (4) (1) Reclassifications - - Disposals (17) (4) As at 31 March 2024 346 10 CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Consolidated 241 NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 Restoration, rehabilitation and environmental costs The provisions for restoration, rehabilitation and environmental liabilities represent the management’s best estimate of the costs which will be incurred in the future to meet the Group’s obligations under existing Indian, Australian, Namibian, South African and Irish law and the terms of the Group’s mining and other licences and contractual arrangements. Within India, the principal restoration and rehabilitation provisions are recorded within Cairn India where a legal obligation exists relating to the oil and gas fields, where costs are expected to be incurred in restoring the site of production facilities at the end of the producing life of an oil field. The Group recognises the full cost of site restoration as a liability when the obligation to rectify environmental damage arises. These amounts are calculated by considering discount rates within the range of 1% to 15% and are payable upon mine closure These costs are expected to be spread out over a period of one to forty-seven years. The lower end of the discount rate is seen at ASI, Oil and Gas business, and Zinc International operations in Ireland, while the higher end is observed at ESL Steels and Zinc International operations in African countries. An obligation to incur restoration, rehabilitation and environmental costs arises when environmental disturbance is caused by the development or ongoing production from a producing field. Other Others mainly include provision for disputed cases and claims. 26. Retirement benefits The Group participates in defined contribution and benefit plans, the assets of which are held (where funded) in separately administered funds. For defined contribution plans the amount charged to the consolidated income statement is the total amount of contributions payable in the year. For defined benefit plans, the cost of providing benefits under the plans is determined by actuarial valuation separately each year for each plan using the projected unit credit method by independent qualified actuaries as at the year end. Re-measurement gains and losses arising in the year are recognized in full in Consolidated Statement of Comprehensive Income for the year. (i) Defined contribution plans The Group contributed a total of US$ 18 million and US$ 18 million for the years ended 31 March 2024 and 31 March 2023 respectively, to the following defined contribution plans. (US$ million) Particulars Year ended 31 March 2024 Year ended 31 March 2023 Employer’s contribution to recognized Provident fund and family pension fund 14 15 Employer’s contribution to superannuation 3 2 Employer’s contribution to National Pension Scheme 1 1 Total 18 18 Indian pension plans Central recognised provident fund In accordance with the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, employees are entitled to receive benefits under the Provident Fund. Both the employee and the employer make monthly contributions to the plan at a predetermined rate (12% for the year ended 31 March 2024 and 31 March 2023) of an employee’s basic salary and includes contributions made to Family Pension Fund as explained below. All employees have an option to make additional voluntary contributions. These contributions are made to the fund administered and managed by the Government of India (GoI) or to independently managed and approved funds. The Group has no further obligations under the fund managed by the GoI beyond its monthly contributions which are charged to the consolidated income statement in the year they are incurred. 242 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 Family Pension Fund The Pension Fund was established in 1995 and is managed by the Government of India. The employee makes no contribution to this fund but the employer makes a contribution of 8.33% of salary each month (included in the 12% rate specified above) subject to a specified ceiling per employee. This is provided for every permanent employee on the payroll. At the age of superannuation, contributions ceases and the individual receives a monthly payment based on the level of contributions through the years, and on their salary scale at the time they retire, subject to a maximum ceiling of salary level. The Government funds these payments, thus the Group has no additional liability beyond the contributions that it makes, regardless of whether the central fund is in surplus or deficit. Superannuation Superannuation, another pension scheme applicable in India, is applicable only to executives above certain grade. However, in case of oil & gas (applicable from the second year of employment) and Iron Ore Segment, the benefit is applicable to all executives. Vedanta Limited and each relevant Indian subsidiary holds policy with the Life Insurance Corporation of India (“LIC”), to which each of these entities contributes a fixed amount relating to superannuation and the pension annuity is met by the LIC as required, taking into consideration the contributions made. The Group has no further obligations under the scheme beyond its monthly contributions which are charged to the consolidated income statement in the year they are incurred. National Pension Scheme National Pension Scheme is a retirement savings account for social security and welfare applicable for executives covered under the superannuation benefit of Vedanta Limited and each relevant Indian subsidiary, on a choice basis. It was introduced to enable employees to select the treatment of superannuation component of their fixed salaries and avail the benefits offered by National Pension Scheme launched by Government of India. Vedanta Limited and each relevant entity holds a corporate account with one of the pension fund managers authorized by the Government of India to which each of the entity contributes a fixed amount relating to superannuation and the pension annuity will be met by the fund manager as per rules of National Pension Scheme. The Group has no further obligations under the scheme beyond its monthly contributions which are charged to the consolidated income statement in the year they are incurred. Non-Indian plans Australian pension scheme The Group also participates in defined contribution superannuation schemes in Australia. The contribution of a proportion of an employee’s salary into a superannuation fund is a compulsory legal requirement in Australia. The employer contributes, into the employee’s fund of choice 10.00% (2023: 10.00%) of the employee’s gross remuneration where the employee is covered by the industrial agreement and 13.00% (2023: 13.00%) of the basic remuneration for all other employees. All employees have an option to make additional voluntary contributions. The Group has no further obligations under the scheme beyond its monthly contributions which are charged to the consolidated income statement in the year they are incurred. Skorpion Zinc Provident Fund, Namibia The Skorpion Zinc Provident Fund is a defined contribution fund and is compulsory to all full-time employees under the age of 60. The contribution to the fund is a fixed percentage of 9% per month of pensionable salary, whilst the employee contributes 7% with the option of making additional contributions, over and above the normal contribution, up to a maximum of 12%. Normal retirement age is 60 years and benefit payable is the member’s fund credit which is equal to all employer and employee contributions plus interest. The same applies when an employee resigns from Skorpion Zinc. The Fund provides disability cover which is equal to the member’s fund credit and a death cover of two times annual salary in the event of death before retirement. The Group has no additional liability beyond the contributions that it makes. Accordingly, this scheme has been accounted for on a defined contribution basis and contributions are charged directly to the consolidated income statement in the year they are incurred. Black Mountain (Pty) Limited, South Africa Pension & Provident Funds Black Mountain Mining (Pty) Ltd has two retirement funds, both administered by Alexander Forbes, a registered financial service provider. The purpose of the funds is to provide retirement and death benefits to all eligible employees. Group contributes at a fixed percentage of 15% for for pension fund and 12.5% for provident fund. CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Consolidated 243 NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 Membership of both funds is compulsory for all permanent employees under the age of 60 years. The Group has no additional liability beyond the contributions that it makes. Accordingly, this scheme has been accounted for on a defined contribution basis and contributions are charged directly to the consolidated income statement in the year they are incurred. (ii) Defined benefit plans (a) Contribution to provident fund trust (the “trusts”) of Iron ore division, Bharat Aluminium Company Limited (BALCO), Hindustan Zinc Limited (HZL), Sesa Resources Limited (SRL) and Sesa Mining Corporation Limited (SMCL) The provident funds of Iron ore division, BALCO, HZL, SRL and SMCL are exempted under section 17 of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. Conditions for grant of exemption stipulates that the employer shall make good deficiency, if any, between the return guaranteed by the statute and actual earning of the Fund. Based on actuarial valuation in accordance with IAS 19 and Guidance note issued by Institute of Actuaries of India for interest rate guarantee of exempted provident fund liability of employees. Having regard to the assets of the fund and the return on investments, the Group does not expect any deficiency in the foreseeable future except as mentioned below. The Group contributed a total of US$ 8 million and US$ 10 million for the years ended 31 March 2024 and 2023 respectively in relation to the independently managed and approved funds. The present value of obligation and the fair value of plan assets of the trust are summarized below. (US$ million) Particulars As at 31 March 2024 As at 31 March 2023 Fair value of plan assets of trusts 324 318 Present value of defined benefit obligation (318) (317) Net liability arising from defined benefit obligation - - Percentage allocation of Plan assets of the trust (US$ million) Assets by Category As at 31 March 2024 As at 31 March 2023 Government Securities 21.09% 45.15% Debentures / Bonds 69.67% 38.32% Equity 8.70% 16.53% Money Market Instruments 0.00% 0.00% Fixed Deposits 0.54% - (b) Post-Retirement Medical Benefits: The Group has a scheme of medical benefits for employees at BMM and BALCO subsequent to their retirement on completion of tenure including retirement on medical grounds and voluntary retirement on contributory basis. The scheme includes employee’s spouses as well. Based on an actuarial valuation conducted as at year-end, a provision is recognised in full for the benefit obligation. The obligation relating to post-retirement medical benefits as at 31 March 2024 was US$ 11 million (31 March 2023: US$ 13 million). The obligation under this plan is unfunded. The Group considers these amounts as not material and accordingly has not provided further disclosures as required by IAS 19 ‘Employee benefits’. The current service cost for the year ending 31 March 2024 of US$ 0 million (31 March 2023: US$ 0 million) has been recognised in consolidated income statement. The remeasurement (gain)/loss and net interest on the obligation of post-retirement medical benefits of US$ (1) million (31 March 2023: US$ 0 million) and US$ 1 million (31 March 2023: US$ 1 million) for the year ended 31 March 2024 have been recognised in other comprehensive income and finance cost respectively. (c) Other Post-employment Benefits: India - Gratuity Plan In accordance with the Payment of Gratuity Act of 1972, Vedanta Limited and its Indian subsidiaries contribute to a defined benefit plan (the “Gratuity Plan”) covering certain categories of employees. The Gratuity Plan provides a lump sum payment to vested employees at retirement, disability or termination of employment being an amount based on the respective employee’s last drawn salary and the number of years of employment with the Group. 244 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 Based on actuarial valuations conducted as at year end using the projected unit credit method, a provision is recognized in full for the benefit obligation over and above the funds held in the Gratuity Plan. For entities where the plan is unfunded, full provision is recognized in the consolidated statements of financial position. The iron ore and oil & gas division of Vedanta Limited, SRL, SMCL, HZL and FACOR have constituted a trust recognized by Indian Income Tax Authorities for gratuity to employees, contributions to the trust are funded with the LIC, ICICI Prudential Life Insurance Company Limited (“ICICI PL”) and HDFC Standard Life Insurance Company Limited (“HDFC SL”). Principal actuarial assumptions Principal actuarial assumptions used to determine the present value of Other post-employment benefit plan obligation are as follows: (US$ million) Particulars Year ended 31 March 2024 Year ended 31 March 2023 Discount rate 7.10% 7.39% Expected rate of increase in compensation level of covered employees 2.0%-15.0% 2.0%-15.0% Assumptions regarding mortality for Indian entities are based on mortality table of ‘Indian Assured Lives Mortality (2012-2014) published by the Institute of Actuaries of India. Amount recognised in the Consolidated Statement of Financial Position consists of: (US$ million) Particulars As at 31 March 2024 As at 31 March 2023 Fair value of plan assets 55 53 Present value of defined benefit obligation (78) (75) Net liability arising from defined benefit obligation (23) (22) Amounts recognised in Consolidated income statement in respect of Other post-employment benefit plan are as follows: (US$ million) Particulars Year ended 31 March 2024 Year ended 31 March 2023 Current service cost 6 5 Net Interest cost 2 1 Components of defined benefit costs recognised in consolidated income statement 8 6 Amounts recognised in the Consolidated Statement of Comprehensive Income in respect of Other post-employment benefit plan are as follows: (US$ million) Particulars Year ended 31 March 2024 Year ended 31 March 2023 Remeasurement of the net defined benefit obligation: Actuarial losses/ (gains) arising from changes in demographic assumptions 0 (0) Actuarial losses arising from changes in financial assumptions 1 0 Actuarial losses arising from experience adjustments 1 1 Actuarial losses on plan assets (excluding amounts included in net interest cost) 0 0 Components of defined benefit costs recognised in consolidated statement of comprehensive income- losses 2 1 CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Consolidated 245 NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 The movement of the present value of Other post-employment benefit plan obligation is as follows: (US$ million) Particulars Year ended 31 March 2024 Year ended 31 March 2023 Opening balance (75) (81) Current service cost (6) (5) Benefits paid 10 9 Interest cost (6) (5) Actuarial loss arising from changes in assumptions (2) (1) Foreign currency translation 1 8 Closing balance (78) (75) The movement in the fair value of Other post-employment benefit plan assets is as follows: (US$ million) Particulars Year ended 31 March 2024 Year ended 31 March 2023 Opening balance 53 59 Contributions received 8 4 Benefits paid (9) (7) Remeasurement (loss)/ gain arising from return on plan assets (0) 0 Interest income 4 4 Foreign currency translation (1) (7) Closing balance 55 53 The above plan assets have been invested in the qualified insurance policies. The actual return on plan assets was US$ 4 million and US$ 3 million for the year ended 31 March 2024 and 31 March 2023 respectively. The weighted average duration of the defined benefit obligation is 12.45 years and 11.58 years as at 31 March 2024 and 31 March 2023 respectively. The Group expects to contribute US$ 4 million to the funded Gratuity plan during the year ending 31 March 2025. Sensitivity analysis for Defined Benefit Plan Below is the sensitivity analysis determined for significant actuarial assumptions for the determination of defined benefit obligations and based on reasonably possible changes of the respective assumptions occurring at the end of reporting year while holding all other assumptions constant. (US$ million) Increase/(Decrease) in defined benefit obligation Discount rate Increase by 0.50 % (3) Decrease by 0.50% 4 Change in salary assumption Increase by 0.50 % 3 Decrease by 0.50% (3) The above sensitivity analysis may not be representative of the actual benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated. In presenting the above sensitivity analysis, the present value of defined benefit obligation has been calculated using the projected unit credit method at the end of reporting period, which is the same as that applied in calculating the defined obligation liability recognized in the consolidated statement of financial position. 246 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 Maturity analysis of defined benefit obligation (US$ million) Particulars Year ended 31 March 2024 Year ended 31 March 2023 Less than 1 year 8 9 1-2 years 7 8 2-5 years 17 19 More than 5 years 46 40 78 75 Risk analysis The Group is exposed to a number of risks in the defined benefit plans. Most significant risks pertaining to defined benefits plans and management estimation of the impact of these risks are as follows: Investment risk Most of the Indian defined benefit plans are funded with the LIC, ICICI PL and HDFC SL. The Group does not have any liberty to manage the fund provided to the LIC, ICICI PL and HDFC SL. The present value of the defined benefit plan obligation is calculated using a discount rate determined by reference to the Government of India bonds for the Group’s Indian operations. If the return on plan asset is below this rate, it will create a plan deficit. Interest risk A decrease in the interest rate on plan assets will increase the net plan obligation. Longevity risk/ Life expectancy The present value of the defined benefit plan obligation is calculated by reference to the best estimate of the mortality of plan participants both during and at the end of the employment. An increase in the life expectancy of the plan participants will increase the plan obligation. Salary growth risk The present value of the defined benefit plan obligation is calculated by reference to the future salaries of plan participants. An increase in the salary of the plan participants will increase the plan obligation. 27. Employee numbers and costs Average number of persons employed by the Group in the year* Class of business Year ended 31 March 2024 Year ended 31 March 2023 Zinc 4,536 4,541 - India 3,537 3,567 - International 999 974 Iron ore 2,323 2,361 Copper India/Australia 541 539 Aluminium 6,179 5,547 Power 132 65 Oil & Gas 1,475 1,459 Other 3,108 3,215 18,294 17,727 *Non IFRS measure CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Consolidated 247 NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 Costs incurred during the year in respect of Employees and Executive Directors recognized in the Consolidated Income Statement: (US$ million) Class of business Year ended 31 March 2024 Year ended 31 March 2023 Salaries and wages 435 422 Defined contribution pension scheme costs (refer note 26) 18 18 Defined benefit pension scheme costs (refer note 26) 14 15 Share- based payments charge (refer note 28) 14 11 Voluntary retirement scheme cost 0 0 Less: Cost allocated/directly booked in joint ventures (67) (71) 414 395 28. Share-based payments Employee share schemesThe Group aims to provide superior rewards for outstanding performance and a high proportion of ‘at risk’ remuneration for Executive Directors. The Group offers equity based and cash based option plans to its employees, officers and directors through Vedanta Limited (VEDL) Employee Stock Option Scheme 2016 (“ESOS”), which was introduced and approved by the VEDL shareholders in 2016. The Vedanta Limited Plans Employee Stock Option Scheme (ESOS) 2016 During the year 2016, VEDL introduced an Employee Stock Option Scheme 2016 (“ESOS”), which was approved by the VEDL shareholders to provide equity settled incentive to all employees of the Group including subsidiary companies. The ESOS scheme includes tenure based, business performance based (EBITDA) and market performance-based stock options. The maximum value of shares that can be conditionally awarded to an Executive Committee in a year is 125% of annual salary. The maximum value of options that can be awarded to members of the wider management group is calculated by reference to the grade average cost-to-company (“CTC”) and individual grade of the employee. The performance conditions attached to the award is measured by comparing VEDL’s performance in terms of TSR over the performance period with the performance of the companies as defined in the scheme. The extent to which an award vests will depend on the VEDL’s TSR rank against a group or groups of peer companies at the end of the performance period and as moderated by the Remuneration Committee. Dependent on the level of employee, part of these awards will be subject to a continued service condition only with the remainder measured in terms of TSR. Further in some schemes under the plan, business performance set against business plan for the financial year is included as an additional condition. Options granted during the year ended 31 March 2024 and 31 March 2023 includes business performance based, sustained individual performance based, management discretion and fatality multiplier based stock options. Business performances will be measured using Volume, Cost, Net Sales Realisation, EBITDA, Free Cash Flows, ESG & Carbon footprint or a combination of these for the respective business/ SBU entities. The exercise price of the options is ` 1 per share and the performance period is three years, with no re-testing being allowed. The details of share options for the year ended 31 March 2024 and 31 March 2023 is presented below: Financial Year of Grant Exercise Period Options outstanding 01 April 2023 Options granted during the year Options forfeited during the year Options exercised during the year Options outstanding 31 March 2024 Options exercisable 31 March 2024 2018-19 01 November 2021 – 30 April 2022 41,450 - - 1,094 40,356 40,356* 2019-20 29 November 2022 – 28 May 2023 1,152,087 - 70,526 1,081,561 - - 2020-21 06 November 2023 – 05 May 2024 8,325,751 - 4,153,161 2,654,818 1,517,772 1,517,772 2020-21 Cash settled 1,836,011 - 305,955 1,530,056 - - 2021-22 01 November 2024 – 30 April 2025 9,521,390 - 1,296,015 - 8,225,375 - 2021-22 Cash settled 1,570,000 - 96,000 - 1,474,000 - 2022-23 01 November 2025 – 30 April 2026 13,526,444 - 1,859,759 - 11,666,685 2022-23 Cash settled 2,182,171 - 302,791 - 1,879,380 - 2023-24 04 November 2026 - 04 May 2027 - 18,138,912 961,371 - 17,177,541 - 2023-24 Cash Settled 5,116,353 308,056 - 4,808,297 - 38,155,304 23,255,265 9,353,634 5,267,529 46,789,406 1,558,128 248 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 Financial Year of Grant Exercise Period Options outstanding 01 April 2022 Options granted during the year Options forfeited during the year Options exercised during the year Options outstanding 31 March 2023 Options exercisable 31 March 2023 2018-19 01 November 2021 – 30 April 2022 323,015 - - 281,565 41,450 41,450* 2019-20 29 November 2022 – 28 May 2023 11,481,718 - 6,153,328 4,176,303 1,152,087 1,152,087 2019-20 Cash settled 2,025,891 - 807,752 1,218,139 - - 2020-21 06 November 2023 – 05 May 2024 10,807,521 - 2,481,770 - 8,325,751 - 2020-21 Cash settled 1,943,293 - 107,282 - 1,836,011 - 2021-22 01 November 2024 – 30 April 2025 11,304,599 - 1,783,209 - 9,521,390 - 2021-22 Cash settled 1,704,067 - 134,067 - 1,570,000 - 2022-23 01 November 2025 – 30 April 2026 - 14,437,268 910,824 - 13,526,444 - 2022-23 Cash settled - 2,317,332 135,161 - 2,182,171 - 39,590,104 16,754,600 12,513,393 5,676,007 38,155,304 1,193,537 *Options for some employees could not be exercised within exercise period due to technical issues. The fair value of all awards has been determined at the date of grant of the award allowing for the effect of any market-based performance conditions. This fair value, adjusted by the Group’s estimate of the number of awards that will eventually vest as a result of non-market conditions, is expensed on a straight-line basis over the vesting period. Business Performance-Based and Sustained Individual Performance-Based Options: The fair value of stock options following these types of vesting conditions have been estimated using the Black-Scholes-Merton Option Pricing model. The value arrived at under this model has been then multiplied by the expected % vesting based on business performance conditions (only for business performance-based options) and the expected multiplier on account of sustained individual performance (for both type of options). The inputs used in the Black-Scholes-Merton Option Pricing model include the share price considered as of the valuation date, exercise price as per the scheme/ plan of the options, expected dividend yield (estimated based on actual/ expected dividend trend of the Company), expected tenure (estimated as the remaining vesting period of the options), the risk-free rate (considered as the zero coupon yield as of the valuation date for a term commensurate with the expected tenure of the options) and expected volatility (estimated based on the historical volatility of the return in company’s share prices for a term commensurate with the expected tenure of the options). The exercise period of 6 months post vesting period has not been considered as the options are expected to be exercised immediately post the completion of the vesting period. The assumptions used in the calculations of the charge in respect of the ESOS awards granted during the year ended 31 March 2024 and 31 March 2023 are set out below: Particulars Year ended 31 March 2024 Year ended 31 March 2023 ESOS 2023 ESOS 2022 Number of instruments 51,16,353 (Cash settled) 18,138,912 (Equity Settled) 2,317,332 (Cash settled) 14,437,268 (Equity Settled) Exercise price C 1 C 1 Share price at the date of grant C 232.75 C 286.09 Contractual life 3 years 3 years Expected volatility 41.16% 50.95% Expected option life 3 years 3 years Expected dividends 14.94% 7.11% Risk free interest rate 7.18% 7.07% Expected annual forfeitures 10%p.a. 10%p.a. Fair value per option granted (Non-market performance based) C 121.98 C 182.46 CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Consolidated 249 NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 Weighted average share price at the date of exercise of stock options was ` 210.15 (2023: ` 303.80) The weighted average remaining contractual life for the share options outstanding was 1.87 years (2023: 1.74 years). The Group recognized total expenses of US$ 11 million (2023: US$ 11 million) related to equity settled share-based plans under the above scheme in the year ended 31 March 2024. The total expense recognised on account of the cash settled option plans during the year ended 31 March 2024 is US$ 4 million (2023: US$ 1 million) and the carrying value of cash settled share based compensation liability as at 31 March 2024 is sUS$ 4 million (2023: US$ 4 million). The Group has awarded certain other cash settled option plans indexed to shares of its subsidiaries. As the amounts under these plans are not material, accordingly no further disclosures have been provided. Out of the total expense pertaining to equity settled and cash settled options for the year ended 31 March 2024, the Group has capitalised US$ 0 million (2023: US$ 0 million) expense for the year ended 31 March 2024. 29. Share capital CIESOP Plan Year ended 31 March 2024 Year ended 31 March 2023 Number Paid up amount (US$ million) Number Paid up amount (US$ million) Ordinary shares of 10 US cents each 285,246,698 29 285,246,698 29 Deferred shares of £1 each 50,000 0 50,000 0 Total 285,296,698 29 285,296,698 29 Rights and obligations attaching to shares The rights and obligations attaching to the ordinary and deferred shares are set out in the Articles. Each ordinary share carries the right to one vote at general meetings of the Company and is entitled to dividends. the Company did not issue any shares during the year ended 31 March 2024. The holders of deferred shares do not have the right to receive notice of any general meeting of the Company nor the right to attend, speak or vote at any such general meeting. The deferred shares have no rights to dividends and, on a winding-up or other return of capital, entitle the holder only to the payment of the amounts paid on such shares after repayment to the holders of Ordinary Shares of the nominal amount paid up on the Ordinary Shares plus the payment of £100,000 per Ordinary Share. Of the 50,000 deferred shares, one deferred share was issued at par and has been fully paid, and 49,999 deferred shares were each paid up as to one-quarter of their nominal value. 30. Non-controlling interests (‘NCI’) The Group consists of a parent Company, Vedanta Resources Limited, incorporated in UK and a number of subsidiaries held directly and indirectly by the Group which operate and are incorporated around the world. Note 38 to the financial statements lists details of the interests in the subsidiaries. Non-controlling interests that are material to the Group relate to Hindustan Zinc Limited (HZL), Cairn India Holdings Limited (CIHL) and its subsidiaries and Vedanta Limited. As at 31 March 2024, NCIs hold an economic interest of 59.71%, 37.94%, 68.35%, 54.08%, 67.96%, 40.74%, 37.94% and 37.94% respectively in HZL, CIHL and its wholly owned subsidiaries, Bharat Aluminium Company Limited (BALCO), Black Mountain Mining (BMM), ASI (partly owned subsidiary of CIHL), ESL Steel Limited (ESL), Facor Alloys Corporation Limited (FACOR) and Vedanta Limited. As at 31 March 2023, NCIs hold an economic interest of 55.74%, 31.82%, 65.23%, 49.55%, 64.80%, 34.89%, 31.82% and 31.82% respectively in HZL, CIHL and its wholly owned subsidiaries, Bharat Aluminium Company Limited (BALCO), Black Mountain Mining (BMM), ASI (partly owned subsidiary of CIHL), ESL Steel Limited (ESL), Facor Alloys Corporation Limited (FACOR) and Vedanta Limited. Principal place of business of HZL, CIHL and its subsidiaries and Vedanta Limited is set out under note 38. The table below shows summarised financial information of subsidiaries of the Group that have material non-controlling interests. The amounts are presented before intercompany elimination. 250 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 (US$ million) Year ended 31 March 2024 Year ended 31 March 2023 Particulars HZL CIHL and its subsidiaries Vedanta Limited Others* Total HZL CIHL and its subsidiaries Vedanta Limited Others* Total Profit/ (loss) Attributable to NCI 540 76 253 (370) 499 714 20 995 (886) 843 Equity Attributable to NCI ** 1,106 323 3,300 (2,149) 2,580 895 322 2,895 (1,636) 2,476 Dividends paid / payable to NCI (233) - (443) - (676) (1,394) - (1,431) - (2,825) * Others consist of investment subsidiaries of Vedanta Limited, other individual non-material subsidiaries and consolidation adjustments. ** Loss of US$ 2 million (31 March 2023: loss of US$ 5 million) attributable to NCI of ASI transferred to put option liability. Refer note 23. (US$ million) Year ended 31 March 2024 Year ended 31 March 2023 Particulars HZL CIHL and its subsidiaries Vedanta Limited Others* Total HZL CIHL and its subsidiaries Vedanta Limited Others* Total Non-current assets 2,461 938 15,456 (2,510) 16,345 2,411 1,189 15,836 (2,951) 16,485 Current assets 1,515 1,331 3,071 68 5,985 1,802 1,237 4,031 (125) 6,945 Current liabilities 1,280 740 6,002 2,386 10,408 2,104 686 6,626 3,833 13,249 Non-current liabilities 845 600 3,825 7,500 12,770 503 701 4,144 5,705 11,053 Net assets 1,851 929 8,700 (12,328) (848) 1,606 1,039 9,097 (12,614) (872) * Others consist of investment subsidiaries of Vedanta Limited, Vedanta Resources Limited, other individual non-material subsidiaries and consolidation adjustments. (US$ million) Year ended 31 March 2024 Year ended 31 March 2023 Particulars HZL CIHL and its subsidiaries Vedanta Limited Others* Total HZL CIHL and its subsidiaries Vedanta Limited Others* Total Revenue 3,392 1,029 8,415 4,292 17,128 4,145 962 8,474 4,702 18,283 Profit/ (loss) for the year 934 217 776 (1,828) 99 1,306 53 3,299 (3,820) 838 Other comprehensive income / (loss)** (0) 1 (11) (1) (11) 5 - (17) 6 (6) Net cash inflow/ (outflow) from operating activities 1,552 224 (699) 1,407 2,484 2,032 106 (188) 836 2,786 Net cash inflow/ (outflow) from investing activities (477) (175) 113 (455) (994) 634 81 (501) (851) (637) Net cash inflow/ (outflow) from financing activities (1,075) (101) 145 (941) (1,972) (2,857) (159) 642 (100) (2,474) * Others consist of investment subsidiaries of Vedanta Limited, Vedanta Resources Limited, other Individual non-material subsidiaries and consolidation adjustments. **Excluding exchange differences arising on translation of foreign operations. The effect of changes in ownership interests in subsidiaries that did not result in a loss of control is as follows: (US$ million) For the year ended 31 March 2024 HZL CIHL and its subsidiaries Vedanta Limited Others Total Other changes in non-controlling interests - - 323 0 323 (US$ million) For the year ended 31 March 2023 HZL CIHL and its subsidiaries Vedanta Limited Others Total Changes in NCI due to merger - - - 6 6 Other changes in non-controlling interests - - 126 5 131 CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Consolidated 251 NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 31. Capital management The Group’s objectives when managing capital are to safeguard continuity, maintain a strong credit rating and healthy capital ratios in order to support its business and provide adequate return to shareholders through continuing growth. The Group’s overall strategy remains unchanged from previous year. The Group sets the amount of capital required on the basis of annual business and long-term operating plans which include capital and other strategic investments. The funding requirement is met through a mixture of equity, internal accruals and other borrowings. The Group’s policy is to use current and non-current borrowings to meet anticipated funding requirements. The Group monitors capital using a gearing ratio, being the ratio of net debt as a percentage of total capital. The Group is not subject to any externally imposed capital requirements. (US$ million) Particulars As at 31 March 2024 As at 31 March 2023 Total equity (848) (872) Net debt (Refer note 22(b)) 12,349 12,730 Total capital 11,501 11,858 Gearing Ratio 107% 107% 32. Commitments, guarantees, contingencies and other disclosures A. Commitments The Group has a number of continuing commitments in the normal course of business including: • Exploratory mining commitments; • Oil and gas commitments; • Mining commitments arising under production sharing agreements; and • Completion of the construction of certain assets. (US$ million) As at 31 March 2024 As at 31 March 2023 Capital commitments contracted but not provided 2,784 2,730 Estimated amounts of contracts remaining to be executed on capital accounts and not provided for: (US$ million) Particulars As at 31 March 2024 As at 31 March 2023 Oil & Gas sector Cairn Oil & Gas 129 172 Aluminium sector Lanjigarh Refinery (Phase II) 187 297 Jharsuguda 1.25 MTPA smelter 65 154 BALCO Smelter Expansion from 0.57 MTPA to 1 MTPA 622 816 Zinc sector Zinc India (mines expansion, solar and smelter) 241 213 Gamsberg mining and milling project (Phase II) 196 237 Copper sector Tuticorin Smelter 400 KTPA* - 373 Others 798 468 Total 2,238 2,730 *currently contracts are under suspension under the force majeure clause as per the contract 252 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 Committed work programme (Other than capital commitment): (US$ million) As at 31 March 2024 As at 31 March 2023 Oil & Gas sector Cairn Oil & Gas (OALP blocks) 609 631 Other Commitments (i) The Power Division of the Group has signed a long-term power purchase agreement (PPA) with GRIDCO Limited for supply of 25% of power generated from the power station, in addition 5%/7% of the power to be supplied at variable cost as per the conditions referred to in PPA. The PPA has a tenure of twenty-five years, expiring in FY 2037. The Group received favourable order from Odisha Electricity Regulatory Commission (“OERC”) dated 05 October 2021 for conversion of Independent Power Plant ("IPP") to Captive Power Plant ("CPP") w.e.f, from 01 January 2022 subject to certain terms and conditions. However, OERC vide order dated 19 February 2022 directed the Group to supply power to GRIDCO from 19 February 2022 onwards. Thereafter, the Group has resumed supplying power to GRIDCO from 01 April 2022 as per GRIDCO’s requisition. The OERC vide its order dated 03 May 2023 has reviewed its previous order dated 05 October 2021 and directed the Group to operate Unit 2 as an IPP. The Group has filed an appeal against the said order before APTEL. (ii) TSPL has signed a long term PPA with the Punjab State Power Corporation Limited (PSPCL) for supply of power generated from the power plant. The PPA has tenure of twenty five years, expiring in FY 2042. (iii) During the year ended 31 March 2023, the Group has executed Power Delivery Agreements ("PDA") with Serentica group companies (Serentica Renewables India 1 Private Limited, Serentica Renewables India 3 Private Limited, Serentica Renewables India 4 Private Limited, Serentica Renewables India 5 Private Limited, Serentica Renewables India 6 Private Limited, Serentica Renewables India 7 Private Limited, Serentica Renewables India 8 Private Limited and Serentica Renewables India 9 Private Limited), which are associates of Vedanta Inc, for procuring renewable power over twenty five years from date of commissioning of the combined renewable energy power projects (“the Projects”) on a group captive basis. These Serentica group companies were incorporated for building the Projects of approximately 1,826 MW (31 March 2023: 1246 MW). During the current year, the Group has invested US$ 58 million in Optionally Convertible Redeemable Preference shares (“OCRPS”) of US$ 1 (INR 10) each of Serentica group companies. These OCRPS will be converted into equity basis conversion terms of the PDA, resulting in Vedanta Group holding twenty six percent stake in its equity. As at 31 March 2024, total outstanding commitments related to PDA with Serentica Group Companies are US$ 147 million (31 March 2023: US$ 194 million). B. Guarantees The aggregate amount of indemnities and other guarantees on which the Group does not expect any material losses, was US$ 1,122 million (31 March 2023: US$ 1,031 million). The Group has given guarantees in the normal course of business as stated below: i. Guarantees and bonds advanced to the Indian customs authorities of US$ 206 million (31 March 2023: US$ 163 million) relating to the export and payment of import duties on purchases of raw material and capital goods. ii. Guarantees issued for the Group’s share of minimum work programme commitments of US$ 368 million (31 March 2023: US$ 334 million). iii. Guarantees of US$ 19 million (31 March 2023: US$ 10 million) issued under bid bond for placing bids. iv. Bank guarantees of US$ 15 million (31 March 2023: US$ 14 million) has been provided by the Group on behalf of Vedanta Inc to the Indian Income tax department, as a collateral in respect of certain tax disputes. v. Other guarantees worth US$ 515 million (31 March 2023: US$ 510 million) issued for securing supplies of materials and services, in lieu of advances received from customers, litigation, for provisional valuation of custom duty and also to various agencies, suppliers and government authorities for various purposes. The Group does not anticipate any liability on these guarantees. CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Consolidated 253 NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 C. Export Obligations The Indian entities of the Group have export obligations of US$ 323 million (31 March 2023: US$ 168 million) on account of concessional rates of import duty paid on capital goods under the Export Promotion Capital Goods Scheme and under the Advance Licence Scheme for the import of raw material prescribed by the Government of India. In the event of the Group’s inability to meet its obligations, the Group’s liability would be US$ 70 million (31 March 2023: US$ 39 million) plus applicable interest. The Group has given bonds of US$ 124 million (31 March 2023: US$ 98 million) to custom authorities against these export obligations. D. Contingencies The Group discloses the following legal and tax cases as contingent liabilities. Hindustan Zinc Limited (‘HZL’): Department of Mines and Geology The Department of Mines and Geology of the State of Rajasthan issued several show cause notices to HZL in August, September and October 2006, aggregating US$ 41 million as at 31 March 2023 (31 March 2023: US$ 41 million) claiming unlawful occupation and unauthorised mining of associated minerals other than zinc and lead at HZL’s Rampura Agucha, Rajpura Dariba and Zawar mines in Rajasthan during the period from July 1968 to March 2006. In response, HZL filed a writ petition against these show cause notices before the High Court of Rajasthan in Jodhpur. In October 2006, the High Court issued an order granting a stay and restrained the Department of Mines and Geology from undertaking any coercive measures to recover the penalty. In January 2007, the High Court issued another order granting the Department of Mines and Geology additional time to file their reply and also ordered the Department of Mines and Geology not to issue any orders cancelling the lease. The State Government filed for an early hearing application in the High Court. The High Court has passed an order rejecting the application stating that Central Government should file their replies. HZL believes it is unlikely that the claim will lead to a future obligation and thus no provision has been made in the financial statements. Ravva Joint Operations arbitration proceedings ONGC Carry The Ravva Production Sharing Contract (PSC) obliges the contractor parties to pay a proportionate share of ONGC’s exploration, development, production and contract costs in consideration for ONGC’s payment of costs related to the construction and other activities it conducted in Ravva prior to the effective date of the Ravva PSC (the ONGC Carry). The question as to how the ONGC Carry is to be recovered and calculated, along with other issues, was submitted to an International Arbitration Tribunal in August 2002 which rendered a decision on the ONGC Carry in favour of the contractor parties (including Vedanta Limited (Cairn India Limited which subsequently merged with Vedanta Limited, accordingly now referred to as Vedanta Limited)) whereas four other issues were decided in favour of Government of India (GOI) in October 2004 (Partial Award). The GOI then proceeded to challenge the ONGC Carry decision before the Malaysian courts, as Kuala Lumpur was the seat of the arbitration. The Federal Court of Malaysia upheld the Partial Award. As the Partial Award did not quantify the sums, therefore, contractor parties approached the same Arbitration Tribunal to pass a Final Award in the subject matter since it had retained the jurisdiction to do so. The Arbitral Tribunal was reconstituted and the Final Award was passed in October 2016 in Vedanta Limited’s favour. GOI’s challenge of the Final Award has been dismissed by the Malaysian High Court and the next appellate court in Malaysia, i.e., Malaysian Court of Appeal. GOI then filed an appeal at Federal Court of Malaysia. The matter was heard on 28 February 2019 and the Federal Court dismissed GOI’s leave to appeal. Vedanta Limited has also filed for the enforcement of the Partial Award and Final Award before the Hon’ble Delhi High Court. The matter is currently being heard. While the Group does not believe the GOI will be successful in its challenge, if the Arbitral Awards in above matters are reversed and such reversals are binding, Group would be liable for approximately US$ 64 million plus interest (31 March 2023: US$ 64 million plus interest). Proceedings related to the imposition of entry tax Vedanta Limited and other Group companies, challenged the constitutional validity of the local statutes and related notifications in the states of Chhattisgarh, Odisha and Rajasthan pertaining to the levy of entry tax on the entry of goods brought into the respective states from outside. 254 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 Post some contradictory orders of High Courts across India adjudicating on similar challenges, the Supreme Court referred the matters to a nine judge bench. Consequent to a detailed hearing, although the bench rejected the compensatory nature of tax as a ground of challenge, it maintained status quo with respect to all other issues which have been left open for adjudication by regular benches hearing the matters. Following the order of the nine judge bench, the regular bench of the Supreme Court proceeded with hearing the matters. The regular bench remanded the entry tax matters relating to the issue of discrimination against domestic goods bought from other States to the respective High Courts for final determination but retained the issue of jurisdiction for levy on imported goods, for determination by the regular bench of the Supreme Court. Following the order of the Supreme Court, the Group filed writ petitions in respective High Courts. On 09 October 2017, the Supreme Court has held that states have the jurisdiction to levy entry tax on imported goods. With this Supreme Court judgement, imported goods will rank pari passu with domestic goods for the purpose of levy of Entry tax. Vedanta Limited and its subsidiaries have amended their appeals (writ petitions) in Odisha and Chhattisgarh to include imported goods as well. The issue pertaining to the levy of entry tax on the movement of goods into a Special Economic Zone (SEZ) remains pending before the Odisha High Court. The Group has challenged the levy of entry tax on any movement of goods into SEZ based on the definition of ‘local area’ under the Odisha Entry Tax Act, 1999 which is very clear and does not include a SEZ. In addition, the Government of Odisha, further through its SEZ Policy 2015 and the operational guidelines for administration of this policy dated 22 August 2016, exempted the entry tax levy on SEZ operations. The total claims against Vedanta Limited and its subsidiaries (net of provisions made) are US$ 96 million (31 March 2023: US$ 100 million) including interest and penalty till the date of order. Further interest and penalty if any, would be additional. BALCO: Challenge against imposition of Energy Development Cess BALCO challenged the imposition of Energy Development Cess levied on generators and distributors of electrical energy @ 10 paise per unit on the electrical energy sold or supplied before the High Court on the grounds that the Cess is effectively on production and not on consumption or sale since the figures of consumption are not taken into account and the Cess is discriminatory since captive power plants are required to pay @ 10 paise while the State Electricity Board is required to pay @ 5 paise. The High Court of Chhattisgarh by order dated 15 December 2006 declared the provisions imposing ED Cess on CPPs as discriminatory and therefore ultra vires the Constitution. BALCO has sought refund of ED Cess paid till March 2006 amounting to US$ 4 million. The State of Chhattisgarh moved an SLP in the Supreme Court and whilst issuing notice has stayed the refund of the Cess already deposited and the Supreme Court has also directed the State of Chhattisgarh to raise the bills but no coercive action be taken for recovery for the same. Final argument in this matter started before the Supreme Court. In case the Supreme Court overturns the decision of the High Court, the Group would be liable to pay an additional amount of US$ 141 million (31 March 2023: US$ 133 million). As at 31 March 2024, an amount of US$ 146 million relating to principal has been considered as a contingent liability (31 March 2023: US$ 137 million). BALCO: Electricity Duty The Group operates a 1,200 MW power plant (“the Plant”) which commenced production in July 2015. Based on the Memorandum of Understanding signed between the Group and the Chhattisgarh State Government, the management believes that the Plant is covered under the Chhattisgarh Industrial policy 2004-09 which provides exemption of electricity duty for 15 years. In June 2021, the Chief Electrical Inspectorate, Raipur (“CEI”) issued a demand notice for electricity duty and interest thereon of US$ 108 million and US$ 72 million respectively for the period March 2015 to March 2021. The Group carries an accrual for electricity duty of US$ 55 million (31 March 2023: US$ 77 million), net of US$ 113 million (31 March 2023: US$ 69 million) paid under protest. The Group has requested the CEI to allow payment of the principal amount over a period of 5 years along with a waiver of interest demand. BALCO has received the reply from CIE that the matter will be discussed with appropriate authorities. As at 31 March 2024, no confirmation has been received on this matter and therefore, amount of US$ 126 million (INR 10,510 million) (31 March 2023: US$ 111 million (INR 9,160 million)) relating to interest has been considered as a contingent liability. CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Consolidated 255 NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 ESL: MDPA Mine Development and Production Agreement (MDPA) entered into by ESL with respect to the Nadidihi Iron Ore Block (74.50 Ha) and the Nadidihi Iron & Manganese Ore Block (117.206 Ha) in Orissa obligates certain minimum despatch requirement for each year from the commencement of mining, as prescribed under Sub Rule-1 of Rule 12(A) of the Minerals (other than Atomic and Hydrocarbon Energy Minerals) Concession Rules, 2016 (MCR 2016). ESL has received demand notices dated 03 December 2022 aggregating US$ 208 million (INR 17,078 million) towards penalty for annual shortfall in minimum despatch required under Sub Rule-1 of Rule 12(A) of MCR 2016, for the first year of the lease for both the mines. Management believes that the aforesaid demands are unreasonable and arbitrary to the law on various grounds including the fact that the State Government has erroneously considered the wrong period to calculate the MDPA requirement as per Sub Rule 1 of Rule 12 (A) of MCR 2016. Further, ESL was unable to carry out mining operation for significant part of the first year owing to reasons beyond its control (Force Majeure) and for the said the period, is entitled to be afforded an additional period in terms of Section 12(1)(ff) of the Mineral (Other than Atomic and Hydrocarbons Energy Minerals) Concession Rules, to meet the said minimum despatch requirement. Based on aforesaid grounds that are supported by a legal opinion obtained in this regard, Inter-alia, the Group has filed the Revision Application under Section 30 of the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act) to keep the above demand notice in abeyance during the pendency of the proceedings before the Revisional Authority, Ministry of Mines and the same has been informed to Office of the Deputy Director of mines through intimation letter. The Revisional Authority vide its order dated 14 March 2023 has put stay on the impugned demand notices and directed the State Government not to take any coercive action to realize the demand till further orders. Also, ESL has received the demand notices dated 11 April 2023 aggregating US$ 6 million for the first quarter of the second- year lease period from 20 November 2022 till 19 November 2023 for both the mines, to which ESL has replied stating that these demand notices shall be kept in abeyance till the pendency of the proceedings before the Revisionary Authority, Ministry of Mines as the similar contentions were taken by the Management in the revision application filed against the earlier demand notices for shortfall in the first year of lease period. Management believes that the aforesaid demands are unreasonable and arbitrary to the law on various grounds including the fact that the State Government has erroneously considered the wrong period to calculate the MDPA requirement as per Sub Rule 1 of Rule 12 (A) of MCR 2016. Basis MDPA and legal opinion received, any obligation in this regard can be termed as a remote. As a matter of prudence, aforesaid demand notices of US$ 211 million (31 March 2023: US$ 214 million) have been disclosed as contingent liability in the financial statements. Miscellaneous disputes- Income tax The Group is involved in various tax disputes amounting to US$ 162 million (31 March 2023: US$ 177 million) relating to income tax. It also includes similar matters where initial assessment is pending for subsequent periods and where the Group has made claims and assessments are in progress. These mainly relate to the disallowance of tax holidays and depreciation under the Income-tax Act, 1961 and interest thereon which are pending at various appellate levels. Penalties, if any, may be additional. Based on detailed evaluations and supported by external legal advice, where necessary, the Group believes that it has strong merits and no material adverse impact is expected. Miscellaneous disputes- Others The Group is subject to various claims and exposures which arise in the ordinary course of conducting and financing its business from the excise, indirect tax authorities and others. These claims and exposures mostly relate to the assessable values of sales and purchases or to incomplete documentation supporting the companies’ returns or other claims. The approximate value of claims (excluding the items as set out separately above) against the Group companies total US$ 562 million (31 March 2023: US$ 598 million). Based on evaluations of the matters and legal advice obtained, the Group believes that it has strong merits in its favor. Accordingly, no provision is considered at this stage. Except as described above, there are no pending litigations which the Group believes could reasonably be expected to have a material adverse effect on the results of operations, cash flows or the financial position of the Group. 256 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 33. Other matters i) Share transactions Call options a. HZL Pursuant to the Government of India’s policy of divestment, the Group in April 2002 acquired 26% equity interest in HZL from the Government of India. Under the terms of the Shareholder’s Agreement (‘SHA’), the Group had two call options to purchase all of the Government of India’s shares in HZL at fair market value. The Group also acquired an additional 20% of the equity capital in HZL through an open offer. The Group exercised the first call option on 29 August 2003 and acquired an additional 18.9% of HZL’s issued share capital, increasing its shareholding to 64.9%. The second call option provides the Group the right to acquire the Government of India’s remaining 29.5% share in HZL. This call option is subject to the right of the Government of India to sell 3.5% of HZL shares to HZL employees. The Group exercised the second call option on 21 July 2009. The Government of India disputed the validity of the call option and has refused to act upon the second call option. Consequently, the Group invoked arbitration which is in the early stages. The next date of hearing is to be notified. The Government of India without prejudice to the position on the Put / Call option issue has received approval from the Cabinet for divestment and the Government is looking to divest through the auction route. Meanwhile, the Supreme Court has, in January 2016, directed status quo pertaining to disinvestment of Government of India’s residual shareholding in a public interest petition filed. On 13 August 2020, the Supreme Court passed an order partially removing the status quo order in place and has allowed the arbitration proceedings to continue via its order passed on 18 November 2021, the Supreme Court of India allowed the GOI’s proposal to divest its entire stake in HZL in the open market in accordance with the rules and regulations of SEBI and also directed the Central Bureau of India to register a regular case in relation to the process followed for the disinvestment of HZL in the year 2002 by the GOI. In line with the said order, the Group has withdrawn its arbitration proceedings. b. BALCO Pursuant to the Government of India’s policy of divestment, the Group in March 2001 acquired 51% equity interest in BALCO from the Government of India. Under the terms of the SHA, the Group has a call option to purchase the Government of India’s remaining ownership interest in BALCO at any point from 02 March 2004. However, the Government of India has contested the valuation and validity of the option and contended that the clauses of the SHA violate the (erstwhile) Indian Companies Act, 1956 by restricting the rights of the Government of India to transfer its shares and that as a result such provisions of the SHA were null and void. In the arbitration filed by the Group, the arbitral tribunal by a majority award rejected the claims of the Group on the grounds that the clauses relating to the call option, the right of first refusal, the “tag-along” rights and the restriction on the transfer of shares violate the said Act and are not enforceable. The Group has challenged the validity of the majority award before the High Court of Delhi and sought for setting aside the arbitration award to the extent that it holds these clauses ineffective and inoperative. The Government of India also filed an application before the High Court of Delhi to partially set aside the arbitral award in respect of certain matters involving valuation. The matter will be listed for hearing in due course. The matter is currently scheduled for hearing at the Delhi High Court. Meanwhile, the Government of India without prejudice to its position on the Put/Call option issue has received approval from the Cabinet for divestment and the Government is looking to divest through the auction route. On 9 January 2012, the Group offered to acquire the Government of India’s interests in HZL and BALCO for US$ 1,885 million and US$ 217 million respectively. This offer was separate from the contested exercise of the call options, and Group proposed to withdraw the ongoing litigations in relation to the contested exercise of the options should the offer be accepted. To date, the offer has not been accepted by the Government of India and therefore, there is no certainty that the acquisition will proceed. In view of the lack of resolution on the options, the non-response to the exercise and valuation request from the Government of India, the resultant uncertainty surrounding the potential transaction and the valuation of the consideration payable, the Group considers the strike price of the options to be at the fair value, which is effectively nil, and hence the call options have not been recognised in the financial statements. ii) The Department of Mines and Geology (DMG) of the State of Rajasthan initiated the royalty assessment process from January 2008 to 2019 and issued a show cause notice vide an office order dated 31 January 2020 amounting to US$ 234 million (INR 19,250 million), further an additional demand was issued vide an office order dated 14 December 2020 for US$ 38 million on similar questions of law. The Group has challenged (the show cause notice or/and) computation mechanism of the royalty itself and the High Court has granted a stay on the notice and directed DMG not to take any coercive action. CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Consolidated 257 NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 State Government has also been directed to not take any coercive action in order to recover such miscomputed dues. Further, Revisionary Authority (RA), has granted a stay on the recovery under the March 2022 notice of US$ 173 million and recovery of US$ 38 million vide its order dated 15 June 2022. and 07 September 2022, respectively. Based on the opinion of external council, the Group believes that it has strong grounds of a successful appeal, and the chances of an outcome which is not in favour of the Group is remote. iii) Vedanta Limited is purchasing bauxite under long term linkage arrangement (“LTL”) with Orissa Mining Corporation Ltd (OMC) at provisional price of US$ 12/MT (INR 1000/MT) from October 2020 onwards based on interim order dated 08 October 2020 of the Hon’ble High Court of Odisha, which is subject to final outcome of the writ petition filed by Vedanta Limited. The last successful e-auction based price discovery was done by OMC in April 2019 at US$ 8/MT (INR 673/MT) and supplied bauxite at this rate from September 2019 to September 2020 with an undertaking from Vedanta Limited to compensate the differential price discovered through successful national e-auction. Though the OMC conducted the next e-auction on 31 August 2020 with floor price of US$ 21/MT (INR 1707/MT) determined on the basis of Rule 45 of Minerals Concession Rules, 2016 (hereafter referred as the Rules), there was no bidder at that floor price and hence, the auction could not be conducted. However, OMC issued a demand of US$ 34 million on Vedanta Limited towards differential pricing and interest for bauxite supplied till September 2020 considering the auction base price of US$ 21/MT (INR 1707/MT). Vedanta Limited had then filed a writ petition before Hon’ble High Court of Odisha in September 2020 which issued interim Order dated 8 October 2020 directing that the petitioner shall be permitted to lift the quantity of bauxite mutually agreed on payment of US$ 12/MT (INR 1000/MT) and furnishing an undertaking for the differential amount with the floor price arrived at by OMC under the Rules, subject to final outcome of the writ petition. OMC re-conducted e-auction on 09 March 2021 with floor price of US$ 25/MT (INR 2,011/MT) which was not successful. On 18 March 2021, Cuttack HC issued an order disposing off the writ petition, directing that the current arrangement of bauxite price at US$ 12/MT (INR 1,000/MT) will continue for FY 2021-22. Further, on 06 April 2022, the Hon’ble Cuttack HC directed that the current arrangement will continue for FY 2022-23 also. An interim application was filed on 11 May 2023 in Odisha High Court seeking directions for OMC to continue the supplies for FY 2023-24 and extend the LTL agreement. The Honorable High Court vide order dated 15 May 2023, passed an order that unless the fresh agreement is not executed interim arrangement cannot be granted. Accordingly, post the direction of honorable court, LTL was executed with OMC on 16 of May for supply of 2.4 MnT bauxite annually at US$ 12/MT – (INR 1,000/MT). On 26 September 2023, OMC conducted the 10th National E-auction tender for sale of 300 KT bauxite at floor price of US$ 29.24/MT (INR 2,429/MT) after considering the pricing as per Rule 45. On 27th March 2024, OMC conducted the 11th National E-auction tender for sale of 300 KT bauxite at floor price of Rs. 2,740/MT after considering the pricing as per Rule 45. The said auction failed since no participation was observed in the bidding. Supported by legal opinions obtained, management believes that the provisions of Rule 45 of the Rules are not applicable to sale of bauxite and hence, it is not probable that Vedanta Limited will have any material obligation towards the aforesaid commitments over and above the price of US$ 8/MT (INR 673/MT) discovered vide last successful e-auction. However, as an abundant precaution, the Group has recognised purchase of Bauxite from September 2019 onwards at the aforesaid rate of US$ 12/MT (INR 1,000/MT). iv) The Scheme of Amalgamation and Arrangement amongst Sterlite Energy Limited ('SEL'), Sterlite Industries (India) Limited ('Sterlite'), Vedanta Aluminium Limited ('VAL'), Ekaterina Limited ('Ekaterina'), Madras Aluminium Company Limited ('Malco') and Vedanta Limited (the “Scheme”) had been sanctioned by the Honourable High Court of Madras and the Honourable High Court of Judicature of Bombay at Goa and was given effect to in the year ended 31 March 2014. Subsequently, the above orders of the Honourable High Court of Bombay and Madras have been challenged by the Commissioner of Income Tax, Goa and the Ministry of Corporate Affairs through a Special Leave Petition before the Honourable Supreme Court and also by a creditor and a shareholder of Vedanta Limited. The said petitions are currently pending for hearing. 258 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 v) Flue-gas desulfurization (FGD) implementation: The Ministry of Environment, Forest and Climate Change (MOEFCC) has revised emission norms for coal-based power plants in India. Accordingly, both captive and independent coal-based power plants in India are required to comply with these revised norms for reduction of sulphur oxide (SOx) emissions for which the current plant infrastructure is to be modified or new equipment have to be installed. Timelines for compliance to the revised norm for various plants in the Group range from December 2024 to December 2026. Different power plants are at different stages of the implementation process. TSPL filed a petition before Punjab State Electricity Regulatory Commission (PSERC) for approval of MoEFCC notification as change in law in terms of Article 13 of PPA on 30 June 2017. PSERC vide its order dated 21 December 2018 has held that MoEFCC notification is not a change in law as it does not impose any new requirements. TSPL had filed an appeal before Hon’ble Appellate Tribunal for Electricity (APTEL) challenging the said order of PSERC. APTEL has pronounced the order 28 August 2020 in favour of TSPL allowing the cost pass through. PSPCL has filed an appeal against this order in the Supreme Court. The matter was listed on 03 February 2022, wherein respondents including TSPL have been directed to file counter affidavits in the matter. TSPL filed Counter Affidavit on 09 November 2022. PSPCL filed Stay Application seeking relief to stay PSERC proceedings. On 7 August 2023, the stay application was listed, and the bench directed the PSERC proceedings to continue however, the execution of the proceedings have been stayed. PSPCL filed its Rejoinder and Application to file Additional Documents on 22 April 2024. The next date is yet to be notified. 34. Related party Disclosures Related party transactions The information below sets out transactions and balances between the Group and various related parties in the normal course of business for the year ended 31 March 2024. HOLDING COMPANIES Vedanta Incorporated (formerly known as Volcan Investments Limited) * Volcan Investments Cyprus Limited FELLOW SUBSIDIARY (with whom transactions have taken place) Sterlite Technologies Limited Sterlite Power Transmission limited Sterlite Iron and Steel Company Limited Sterlite Convergence Limited Twin Star Technologies Limited Sterlite Power Grid Ventures Limited Sterlite Grid 16 Limited STL Digital Limited ASSOCIATE OF ULTIMATE PARENT (with whom transactions have taken place) Serentica Renewables India 1 Private Limited# Serentica Renewables India 3 Private Limited# Serentica Renewables India 4 Private Limited# Serentica Renewables India 5 Private Limited# Serentica Renewables India 6 Private Limited# Serentica Renewables India 7 Private Limited# Serentica Renewables India 8 Private Limited# Serentica Renewables India 9 Private Limited# CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Consolidated 259 NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 ASSOCIATES / JOINT VENTURES (with whom transactions have taken place) RoshSkor Township (Pty) Limited Gaurav Overseas Private Limited Goa Maritime Private Limited Madanpur South Coal Company Limited Gergarub Exploration and Mining (Pty) Limited Post-retirement benefit plan Sesa Group Employees Provident Fund Trust Sesa Group Employees Gratuity Fund and Sesa Group Executives Gratuity Fund Sesa Group Executives Superannuation Scheme Fund Sesa Resources Limited Employees Provident Fund Trust Sesa Resources Limited Employees Gratuity Fund Sesa Mining Corporation Limited Employees Provident Fund Trust Sesa Mining Corporation Limited Employees Gratuity Fund Sesa Resources Limited and Sesa Mining Corporation Limited Employees Superannuation Fund Hindustan Zinc Limited Employees Contributory Provident Fund Trust HZL Employee Group Gratuity Trust HZL Superannuation Trust Balco Employees Provident Fund Trust FACOR Superannuation Trust FACOR Employees Gratuity Scheme OTHERS (with whom transactions have taken place) Enterprises over which key management personnel / their relatives have control or significant influence Anil Agarwal Foundation Cairn Foundation Caitlyn India Private Limited Fujairah Metals LLC Janhit Electoral Trust Minova Runaya Private Limited Runaya Refining LLP Runaya Green Tech Limited Sesa Community Development Foundation Vedanta Foundation Vedanta Limited ESOS Trust Radha Madhav Investments Private Limited Vedanta Medical Research Foundation Voorspoed Trust * The name of ultimate holding Company "Volcan Investments Limited" has been changed to 'Vedanta Incorporated' effective 13 October 2023. # During the year ended 31 March 2023, due to change in shareholding of the intermediate holding company of Serentica group companies, the relationship of Vedanta group with these companies was changed from fellow subsidiaries to associates of Vedanta Inc. 260 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 Details of transactions for the year ended 31 March 2024 are as follows: (US$ million) Particulars Holding Company/ Fellow Subsidiaries Associates / Joint Ventures Others Total Income: (i) Revenue from operations 207 - 13 220 (ii) Dividend income 0 - - 0 (iii) Net interest received 3 - 0 3 (iv) Miscellaneous income - - 0 0 Expenditure: (i) Purchases of goods/services 14 0 47 61 (ii) Purchase/(sale) of fixed assets 0 - (5) (5) (iii) Management fees paid 1 - - 1 (iv) Reimbursement for other expenses (net of recovery) 0 - (1) (1) (v) Donation - - 18 18 (vi) Interest paid 1 - - 1 (vii) Contribution to post retirement employees benefit trust/fund - - 12 12 Other transactions during the year: (i) Loans given/ (repayment thereof) 0 - - 0 (ii) Loans taken during the year 1 - - 1 (iii) Bond redeemed during the year 2 - - 2 (iv) Investments made during the year (refer note 32) - - 58 58 Details of balances as at 31 March 2024 are as follows: (US$ million) Particulars Holding Company/ Fellow Subsidiaries Associates / Joint Ventures Others Total (i) Net amounts receivable at year end 2 1 4 7 (ii) Net amounts payable at year end 1 - 12 13 (iii) Investment in equity Share and OCRPS 8 - 88 96 (iv) Value of bonds held by Vedanta Inc 7 - - 7 (v) Interest payable 0 - - 0 (vi) Dividend payable 2 - - 2 (vii) Net advance given at year end 1 1 7 9 (viii) Bank guarantee given * 14 - - 14 (x) Loans given** 0 1 - 1 (xi) Loan taken 1 - - 1 * Bank guarantee has been provided by the Group on behalf of Vedanta Incorporated (“Vedanta Inc”) in favour of Income tax department, India as collateral in respect of certain tax disputes of Vedanta Inc. The guarantee amount is US$ 14 million (31 March 2023: US$ 14 million). ** During the current year ended 31 March 2024, the Group has renewed loan provided to Sterlite Iron and Steel Company Limited for a further period of 12 months. The loan balance as at 31 March 2024 is US$ 1 million (31 March 2023: US$ 1 million). The loan is unsecured in nature and carries an interest rate of 12.80% per annum. The said loan including accrued interest thereon have been fully provided for in the books of accounts. CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Consolidated 261 NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 Details of transactions for the year ended 31 March 2023 are as follows: (US$ million) Particulars Holding Company/ Fellow Subsidiaries Associates / Joint Ventures Others Total Income: (i) Revenue from operations 228 - 6 234 (ii) Dividend income 0 - - 0 (iii) Net interest received 4 - - 4 (iv) Miscellaneous income - - 0 0 Expenditure: (i) Purchases of goods/services 1 0 35 36 (ii) Purchase/(sale) of fixed assets 2 - - 2 (iii) Management fees paid 1 - - 1 (iv) Reimbursement for other expenses (net of recovery) 0 - (0) (0) (v) Donation - - 10 10 (vi) Interest paid 1 - - 1 (vii) Dividend Paid 19 - 0 19 (viii) Contribution to post retirement employees benefit trust/fund - - 10 10 Other transactions during the year: (i) Loans given/ (repayment thereof) - 1 - 1 (ii) Loans taken during the year - - (0) (0) (iii) Bond redeemed during the year 2 - - 2 (iv) Investments made during the year (refer note 32) - - 30 30 Details of balances as at 31 March 2023 are as follows: (US$ million) Particulars Holding Company/ Fellow Subsidiaries Associates / Joint Ventures Others Total (i) Net amounts receivable at year end * 2 - 0 2 (ii) Net amounts payable at year end 2 - 9 11 (iii) Investment in equity Share 10 - 30 40 (iv) Value of bonds held by Vedanta Inc 9 - - 9 (v) Interest payable 0 - - 0 (vi) Dividend payable 2 - - 2 (vii) Net advance given at year end - 1 4 5 (viii) Financial guarantee given * 14 - - 14 (x) Loans given** - 1 - 1 Remuneration of Key Management Personnel (US$ million) Particulars Year ended 31 March 2024 Year ended 31 March 2023 Short-term employee benefits 12 8 Post-employment benefits* 0 1 Share-based payments 0 4 12 13 Compensation for Non-Executive Directors 0 0 Commission/Sitting Fees to KMP 0 0 Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Group, directly or indirectly, including any director (whether executive or otherwise). *Does not include the provision made for gratuity and leave benefits, as they are determined on an actuarial basis for all the employees together. Other related party# (US$ million) Particulars Year ended 31 March 2024 Year ended 31 March 2023 Remuneration to relatives 3 3 Commission/ sitting fees to relatives of KMP 0 0 # close relatives of the Executive Chairman 262 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 35. Subsequent events (i) Subsequent to the year end, the Board of Directors of Vedanta Limited approved the acquisition of an additional 46.57% stake in AvanStrate Inc. ('ASI') from HOYA Corporation, Japan ('HOYA') through Cairn India Holdings Limited ('CIHL'), a wholly-owned subsidiary of the Company, on May 10, 2024. Following the completion of this transaction, CIHL will hold 98.2% of ASI, resulting in VRL holding 60.94% of ASI. There are no other material adjusting or non-adjusting subsequent events, except already disclosed. 36. Auditor’s remuneration The table below shows the fees payable globally to the Company’s auditor, MHA and their associate firms, for statutory external audit and audit related services, as well as fees paid to other accountancy firms for statutory external audit and audit related services for the year ended 31 March 2024: (US$ million) Particulars Year ended 31 March 2024 Year ended 31 March 2023 Fees payable to the Company’s auditor for the audit of Vedanta Resources Limited annual accounts 1 1 The audit of the Company’s subsidiaries pursuant to legislation 0 0 Total audit fees 1 1 Fees payable to the Company’s auditor and their associates for other services to the Group 0 0 Other services pursuant to legislation (1) 0 0 Corporate finance services (2) 0 - Total non-audit fees 0 0 Total fees paid to the Company’s auditor 1 1 Audit fees payable to other auditors of the Group’s subsidiaries 4 2 Non-audit fees payable to other auditors of the Group’s subsidiaries 1 1 Total fees paid to other auditors 5 3 (1) Other services pursuant to legislation principally comprise assurance services and the half year review of the Group’s results. (2) Corporate finance services principally comprise services in connection with debt raising transactions. These assurance-related services are ordinarily provided by the auditor. 37. Joint Arrangements Joint Operations The Group’s principal licence interests in oil and gas business are joint operations. The principal licence interests for the years ended 31 March 2024 and 31 March 2023 are as follows: Oil & Gas blocks/ fields (a) Area Participating Interest Operating blocks Ravva block-Exploration, Development & production Krishna Godavari 22.50% CB-OS/2 – Exploration Cambay Offshore 60.00% CB-OS/2 - Development & production Cambay Offshore 40.00% RJ-ON-90/1 – Exploration Rajasthan Onshore 100.00% RJ-ON-90/1 – Development & production Rajasthan Onshore 70.00% KG-OSN-2009/3 – Exploration Krishna Godavari Offshore 100.00% Non-operating blocks KG-ONN-2003/1 Krishna Godavari Onshore 49.00% 38. List of Subsidiaries The Group owns directly or indirectly through subsidiaries, more than half of the voting power of all of its subsidiaries as mentioned in the list below, and has power over the subsidiaries, is exposed or has rights, to variable returns from its involvement with the subsidiaries and has the ability to affect those returns through its power over the subsidiaries. CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Consolidated 263 NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 Subsidiaries Principal activities Registered Address Country of incorporation The Company's economic percentage holding Immediate holding company The Company's immediate percentage holding 31 March 2024 31 March 2023 31 March 2024 31 March 2023 Direct Subsidiaries of the Parent Company Vedanta Resources Jersey Limited (‘VRJL”) Investment company 47 Esplanade, St Helier JE1 0BD Jersey (CI) 100% 100% VRL 100% 100% Vedanta Resources Jersey II Limited (‘VRJL-II’) Investment company 47 Esplanade, St Helier JE1 0BD Jersey (CI) 100% 100% VRL 100% 100% Vedanta Holdings Jersey Limited Investment company 47 Esplanade, St Helier JE1 0BD Jersey (CI) 100% 100% VRL 100% 100% Vedanta Resources Holdings Limited ('VRHL') Holding company 8th Floor, 20 Farringdon Street, London EC4A 4AB, United Kingdom United Kingdom 100% 100% VRL 100% 100% Vedanta UK Holdings Limited ('VUHL') (a) Investment Company 8th Floor, 20 Farringdon Street, London EC4A 4AB, United Kingdom United Kingdom 100% - VRL 100% - Vedanta Resources Investments Limited ('VRIL') (b) Investment Company 8th Floor, 20 Farringdon Street, London EC4A 4AB, United Kingdom United Kingdom 100% - VRL 100% - Indirect Subsidiaries of the Parent Company Richter Holding Limited (‘Richter’) Investment company 221 Christodoulou Chatzipavlou, Helios Court, 3rd Floor, 3036 Limassol, Cyprus Cyprus 100% 100% VRCL 100% 100% Vedanta Resources Cyprus Limited ('VRCL') Investment company 221 Christodoulou Chatzipavlou, Helios Court, 3rd Floor, 3036 Limassol, Cyprus Cyprus 100% 100% VRFL 100% 100% Welter Trading Limited (‘Welter’) Investment company 28th Oktovriou Street, 205 Louloupis Court, 1st Floor P.C. 3035, Limassol, Cyprus Cyprus 100% 100% VRCL 100% 100% Valliant (Jersey) Limited Investment company 47 Esplanade, St Helier JE1 0BD, Jersey Jersey (CI) 100% 100% VRJ2L 100% 100% Twin Star Holdings Limited ('TSHL') Holding company IQ EQ Corporate Services (Mauritius) Ltd, 33, Edith Cavell Street, Port Louis, 11324 Mauritius Mauritius 100% 100% VRHL 100% 100% Vedanta Twinstar Holdings Limited (c) Investment company IQ EQ Corporate Services (Mauritius) Ltd 33, Edith Cavell Street, Port Louis, 11324, Mauritius Mauritius 100% - VRL 100.00 - Vedanta Twinstar Holdings II Limited (d) Investment company IQ EQ Corporate Services (Mauritius) Ltd 33, Edith Cavell Street, Port Louis, 11324, Mauritius Mauritius 100% - Vedanta Twinstar Holdings Limited 100.00 - 264 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 Subsidiaries Principal activities Registered Address Country of incorporation The Company's economic percentage holding Immediate holding company The Company's immediate percentage holding 31 March 2024 31 March 2023 31 March 2024 31 March 2023 Westglobe Limited (‘Westglobe’) Investment company IQ EQ Corporate Services (Mauritius) Ltd, 33, Edith Cavell Street, Port Louis, 11324 Mauritius Mauritius 100% 100% Richter 100% 100% Vedanta Holdings Mauritius Limited (VHML) Investment company Amicorp (Mauritius) Limited, 6th Floor, Tower 1, Nexteracom Mauritius 100% 100% VHJL 100% 100% Vedanta Holdings Mauritius II Limited (‘VHM2L’) Investment company Amicorp (Mauritius) Limited, 6th Floor, Tower 1, Nexteracom Mauritius 100% 100% FICL 100% 100% Vedanta Resources Mauritius Limited Investment Company Amicorp Mauritius, 6th Floor, Tower 1, Nextera Building, Ebene, Mauritius Mauritius 100% 100% VRCL 100% 100% Vedanta Netherlands Investments BV (‘VNIBV’) Investment Company Strawinskylaan 1143, 1077XX Amsterdam, Netherlands The Netherlands 100% 100% VUIL 100% 100% Vedanta Netherlands Investments II BV Investment Company Strawinskylaan 1143, 1077XX Amsterdam, Netherlands The Netherlands 100% 100% VUIL 100% 100% Vedanta Resources Finance II Plc Investment company 8th Floor, 20 Farringdon Street, London EC4A 4AB, United Kingdom United Kingdom 100% 100% VRHL 100% 100% Vedanta Resources Finance Limited ('VRFL') Investment company 8th Floor, 20 Farringdon Street, London EC4A 4AB, United Kingdom United Kingdom 100% 100% VRHL 100% 100% Finsider International Company Limited (‘FICL’) Investment company 8th Floor, 20 Farringdon Street, London EC4A 4AB, United Kingdom United Kingdom 100% 100% Richter, Westglobe 100% 100% Vedanta Finance UK Limited Investment company 8th Floor, 20 Farringdon Street, London EC4A 4AB, United Kingdom United Kingdom 100% 100% Welter 100% 100% Vedanta UK Investments Limited (‘VUIL’) Investment Company 8th Floor 20 Farringdon Street, London, United Kingdom, EC4A 4AB United Kingdom 100% 100% Vedanta Resources Holding Limited 100% 100% Vedanta Limited Copper smelting, Iron ore mining, Aluminium mining, refining, and smelting, Power generation, Oil and Gas exploration, and production Vedanta Limited 1st Floor, ‘C’ wing, Unit 103, Corporate Avenue, Atul Projects, Chakala, Andheri (East), Mumbai–400093, Maharashtra India 62.06% 68.18% Twin Star, Welter, Westglobe FICL and Vedanta Holdings Mauritius II Limited 63.72% 68.18% Copper Mines of Tasmania Pty Limited ("CMT") (e) Copper Mining c/o MCullough Robertson, lawyers 44 martin place, Sydney NSW 2000 Australia - 68.18% Monte Cello BV - 100% CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Consolidated 265 NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 Subsidiaries Principal activities Registered Address Country of incorporation The Company's economic percentage holding Immediate holding company The Company's immediate percentage holding 31 March 2024 31 March 2023 31 March 2024 31 March 2023 Thalanga Copper Mines Pty Limited ("TCM") Copper Mining c/o MCullough Robertson lawyers 44 martin place, Sydney NSW 2000 Australia 62.06% 68.18% Monte Cello BV 100% 100% Bharat Aluminium Company Limited ("BALCO") Aluminium mining and smelting Aluminium Sadan Core -6 Scope Office Complex 7 Lodhi Road New Delhi 110003 India 31.65% 34.77% Vedanta Limited 51% 51% Desai Cement Company Private Limited Cement Survey no. 184, Maina, Navelim, Bicholim North Goa 403505, Goa India 62.06% 68.18% Sesa Mining Corporation Limited 100% 100% ESL Steel Limited Manufacturing of Steel & DI Pipe Village -Siyaljori, Post – Jogidih, O.P. – Bangaria, PS- Chandankyari Bokaro Steel City Bokaro JH 828303 IN India 59.26% 65.11% Vedanta Limited 95.49% 95.49% Ferro Alloy Corporation Limited ("FACOR") Manufacturing of Ferro Alloys and Mining and generation of power D P Nagar, Randia, Bhadrak-756135, Odisha India 62.06% 68.18% Vedanta Limited 100% 99.99% Goa Sea Port Private Limited (f) Infrastructure SIPCOT Industrial Complex, Madurai Bypass Road, T.V. Puram P.O., Tuticorin, Thoothukudi, Tuticorin Thoothukudi TN – 628 002 IN India - 68.18% Sterlite Ports Limited - 100% Hindustan Zinc Alloys Private Limited Manufacturing of metals and its alloys Yashad Bhawan, Udaipur, Rajasthan 313004 India 40.29% 44.26% Hindustan Zinc Limited 100% 100% Hindustan Zinc Fertilisers Private Limited Manufacturing of phosphatic fertilisers Yashad Bhawan, Udaipur, Rajasthan 313004 India 40.29% 44.26% Hindustan Zinc Limited 100% 100% Hindustan Zinc Limited ("HZL") Exploring, extracting, processing of minerals and manufacturing of metals Yashad Bhawan, Udaipur, Rajasthan 313004 India 40.29% 44.26% Vedanta Limited 64.92% 64.92% MALCO Energy Limited ("MEL") Power Generation SIPCOT Industrial Complex, Madurai Bypass Road, Thoothukudi (Tamil Nadu) 628002 India 62.06% 68.18% Vedanta Limited 100% 100% Maritime Ventures Private Limited ('MVPL') (f) Infrastructure SIPCOT Industrial Complex, Madurai By pass Road, T V Puram PO, Tuticorin Tuticorin Thoothukudi TN 628002 IN India - 68.18% Sterlite Ports Limited - 100% 266 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 Subsidiaries Principal activities Registered Address Country of incorporation The Company's economic percentage holding Immediate holding company The Company's immediate percentage holding 31 March 2024 31 March 2023 31 March 2024 31 March 2023 Paradip Multi Cargo Berth Private Limited (f) Infrastructure SIPCOT Industrial Complex, Madurai Bypass Road, T. V. Puram P.O., Tuticorin, Thoothukudi TN 628002 IN India - 68.18% Sesa Resources Limited - 100% Sesa Mining Corporation Limited (f) Iron ore mining Sesa Ghor, 20 EDC Complex, Patto Panaji (Goa) - 403001 India 62.06% 68.18% Sesa Resources Limited 100% 100% Sesa Resources Limited ("SRL") Iron ore mining Sesa Ghor, 20 EDC Complex, Patto Panaji (Goa) - 403001 India 62.06% 68.18% Vedanta Limited 100% 100% Sterlite Ports Limited (“SPL”) (f) Infrastructure Malco Power Company Limited, Sipcot Industrial Complex, Madurai Bye Pass Road Tuticorin, Thoothukudi TN 628002 India - 68.18% Sesa Resources Limited - 100% Talwandi Sabo Power Limited ("TSPL") Power Generation Vill. Banawala, Mansa - Talwandi Sabo Road, Mansa, Punjab - 151302 India 62.06% 68.18% Vedanta Limited 100% 100% Vedanta Zinc Football & Sports Foundation Sports Foundation Yashad Bhawan, Udaipur, Rajasthan 313004 India 40.29% 44.26% Hindustan Zinc Limited 100% 100% Vizag General Cargo Berth Private Limited Infrastructure SIPCOT Industrial Complex Madurai Bye Pass Road, T. V. Puram P.O Thoothukudi TN 628002 IN India 62.06% 68.18% Vedanta Limited 100% 100% Zinc India Foundation CSR Activities Yashad Bhawan, Udaipur, Rajasthan 313004 India 40.29% 44.26% Hindustan Zinc Limited 100% 100% AvanStrate Inc. (''ASI'') Manufacturing of LCD Glass Substrate 1-11-1 , Nishi - Gotanda, Shinagwa-Ku, Tokyo, Japan Japan 32.04% 35.20% Cairn India Holdings Limited 51.63 51.63 Cairn India Holdings Limited Investment company 22-24 Seale Street, St Helier, Jersey, JE2 3QG Jersey 62.06% 68.18% Vedanta Limited 100% 100% AvanStrate Taiwan Inc Manufacturing of LCD Glass Substrate No.8,Industry III Road Annan, Tainan 709-55, Taiwan, R.O.C. Taiwan 32.04% 35.20% AvanStrate Inc. (''ASI'') 100% 100% Western Cluster Limited Iron ore mining Amir Building, 18th Street, Sinkor, Tubman Boulevard,Sinkor, Monrovia, Liberia,West Africa Liberia 62.06% 68.18% Bloom Fountain Limited 100% 100% Bloom Fountain Limited Operating (Iron ore) and Investment Company IQ EQ Corporate Services (Mauritius) Ltd 33, Edith Cavell Street Port Louis, 11324 Mauritius Mauritius 62.06% 68.18% Vedanta Limited 100% 100% CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Consolidated 267 NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 Subsidiaries Principal activities Registered Address Country of incorporation The Company's economic percentage holding Immediate holding company The Company's immediate percentage holding 31 March 2024 31 March 2023 31 March 2024 31 March 2023 THL Zinc Ltd Investment Company IQ EQ Corporate Services (Mauritius) Ltd, 33, Edith Cavell Street Port Louis, 11324, Mauritius Mauritius 62.06% 68.18% THL Zinc Ventures Limited 100% 100% THL Zinc Ventures Limited Investment Company IQ EQ Corporate Services (Mauritius) Ltd, 33, Edith Cavell Street, Port Louis, 11324, Mauritius Mauritius 62.06% 68.18% Vedanta Limited 100% 100% Amica Guesthouse (Proprietary) Limited Accomodation and catering services Unit 1, Hartmann Suites, Cnr Robert Mugabe Avenue & Ballot Street, Windhoek, Namibia Nambia 62.06% 68.18% Skorpion Zinc (Proprietary) Limited 100% 100% Namzinc (Proprietary) Limited Owns and operates a zinc refinery 24 Orban Street, Klein Windhoek, Windhoek, Namibia Nambia 62.06% 68.18% Skorpion Zinc (Proprietary) Limited 100% 100% Skorpion Mining Company (Proprietary) Limited ('NZ') Exploration, development, treatment, production and sale of zinc ore 24 Orban Street, Klein Windhoek, Windhoek, Namibia Nambia 62.06% 68.18% Skorpion Zinc (Proprietary) Limited 100% 100% Skorpion Zinc (Proprietary) Limited (''SZPL'') Operating (zinc) and investing company 24 Orban Street, Klein Windhoek, Windhoek, Namibia Nambia 62.06% 68.18% THL Zinc Namibia Holdings (Proprietary) Ltd 100% 100% THL Zinc Namibia Holdings (Proprietary) Limited (“VNHL”) Mining and Exploration and Investment company 24 Orban Street, Klein Windhoek, Windhoek, Namibia Nambia 62.06% 68.18% THL Zinc Ltd 100% 100% Vedanta Lisheen Holdings Limited Investment company Deloitte & Touche House, Charlottes Quay, Ireland Republic of Ireland 62.06% 68.18% THL Zinc Holding BV 100% 100% Killoran Lisheen Mining Limited Development of a zinc/lead mine Deloitte & Touche House, Charlotte’s Quay, Ireland Republic of Ireland 62.06% 68.18% Vedanta Lisheen Holdings Limited 100% 100% Lisheen Milling Limited Manufacturing (m) Deloitte & Touche House, Charlottes Quay, Ireland Republic of Ireland 62.06% 68.18% Vedanta Lisheen Holdings Limited 100% 100% 268 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 Subsidiaries Principal activities Registered Address Country of incorporation The Company's economic percentage holding Immediate holding company The Company's immediate percentage holding 31 March 2024 31 March 2023 31 March 2024 31 March 2023 Lisheen Mine Partnership Development and operation of a zinc/lead mine Deloitte & Touche House, Charlottes Quay, Ireland Republic of Ireland 62.06% 68.18% 50% each held by Killoran Lisheen Mining Limited & Vedanta Lisheen Mining Limited 100% 100% Vedanta Lisheen Mining Limited Development of a zinc/lead mine Deloitte & Touche House, Charlotte’s Quay, Ireland Republic of Ireland 62.06% 68.18% Vedanta Lisheen Holdings Limited 100% 100% Cairn Energy Hydrocarbons Limited Oil and gas exploration, development and production 272 Bath Street, Glasgow, United Kingdom, G2 4JR Scotland (n) 62.06% 68.18% Cairn India Holdings Limited 100% 100% Black Mountain Mining (Proprietary) Limited Exploration, development, production and sale of zinc, lead, copper and associated mineral concentrates Penge Road , Aggeneys South Africa 45.92% 50.45% THL Zinc Ltd 70.66% 74% Cairn Lanka Private Limited (q) Oil and gas exploration, development and production Lanka Shipping Tower No. 99, St Michael's Road, Colombo 3, Sri Lanka Sri Lanka 62.06% 68.18% Cairn Energy Hydrocarbons Limited 100% 100% AvanStrate Korea Inc Manufacturing of LCD Glass Substrate 84, Hyeongoksandan-ro, Cheongbuk-eup, Pyeongtaek-si, Gyeonggi-do,17812, Republic of Korea Taiwan 32.04% 35.20% AvanStrate Inc. (''ASI'') 100% 100% Monte Cello BV (“MCBV”) Holding company Atrium Building, 8th Floor, Strawinskylaan, 3127, Amsterdam, Netherlands The Netherlands 62.06% 68.18% Vedanta Limited 100% 100% THL Zinc Holding BV Investment company Atrium Building, 8th Floor, Strawinskylaan, 3127, Amsterdam, Netherlands The Netherlands 62.06% 68.18% Vedanta Limited 100% 100% CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Consolidated 269 NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 Subsidiaries Principal activities Registered Address Country of incorporation The Company's economic percentage holding Immediate holding company The Company's immediate percentage holding 31 March 2024 31 March 2023 31 March 2024 31 March 2023 Fujairah Gold FZC Manufacturing of Copper Rod and Refining of Precious Metals (Gold & Silver) P.O. Box 3992, Fujairah, United Arab Emirates United Arab Emirates 62.06% 68.18% Malco Energy Limited 100% 100% Meenakshi Energy Limited(g) Power Generation 405, Saptagiri Towers, 1-10-75/1/1 to 6, Begumpet, Hyderabad, Secunderabad, Telangana, India, 500016 India 62.06% - Vedanta Limited 100% - Sesa Iron and Steel Limited (h) Manufacturing of Steel Sesa Ghor, EDC Complex 20, Patto, Panaji, North Goa, Tiswadi, Goa, India, 403001 India 62.06% - Vedanta Limited 100% - Vedanta Aluminium Metal Limited (i) Aluminium Business C-103 Atul Projects, Corporate Avenue New Link, Chakala Midc, Mumbai, Mumbai, Maharashtra, India, 400093 India 62.06% - Vedanta Limited 100% - Vedanta Base Metals Limited (j) Metal business C-103 Atul Projects, Corporate Avenue New Link, Chakala Midc, Mumbai, Mumbai, Maharashtra, India, 400093 India 62.06% - Vedanta Limited 100% - Vedanta Iron and Steel Limited (l) Iron and Steel Business C-103 ATUL PROJECTS, CORPORATE AVENUE NEW LINK, Chakala Midc, Mumbai, Mumbai, Maharashtra, India, 400093 India 62.06% - Vedanta Limited 100% - Vedanta Displays Limited (k) LCD Panel ASF Centre, Plot 362-363 Udyog Vihar Phase-4, Gurgaon, Haryana, India, 122016 India 62.06% - Vedanta Limited 100% - Vedanta Semiconductors Private Limited (k) Semiconductor ASF Centre, Plot 362-363 Udyog Vihar Phase-4, Gurgaon, Haryana, India, 122016 India 62.06% - Vedanta Limited 100% - Vedanta Copper International VCI Company Limited (o) Manufacturing of copper rod Ras-Al-Khair, Saudi Arabia Saudi Arabia 62.06% - Malco Energy Limited 100% - Hindmetal Exploration Services Private Limited (p) Exploration of metals Yashad Bhawan, Udaipur, Rajasthan 313004 India 40.29% - Hindustan Zinc Limited 100% 270 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 (a) Vedanta UK Holdings Limited- 100% subsidiary of Vedanta Resources Limited, incorporated w.e.f. 06 September 2023. (b) Vedanta Resources Investments Limited,100% Subsidiary of Vedanta UK Investments Limited, incorporated w.e.f. 28 July 2023. The shareholding was transferred on 07 September 2023 to Vedanta UK Holdings Limited. (c) Vedanta Twinstar Holdings Limited- 100% subsidiary of Twin Star Holdings Limited, incorporated w.e.f. 01 September 2023. Further, shares of Vedanta Twinstar Holdings Limited transferred from Twin Star Holdings Limited to Vedanta Resources Limited w.e.f. 13 March 2024. (c) Vedanta Twinstar Holdings II Limited- 100% subsidiary of Vedanta Twinstar Holdings Limited, incorporated w.e.f. 01 September 2023. (d) Vedanta UK Holdings Limited- 100% subsidiary of Vedanta Resources Limited, incorporated w.e.f. 06 September 2023. (e) Copper Mines of Tasmania (CMT), wholly owned subsidiary of Vedanta Limited through intermediate holding company Monte Cello B.V. (MCBV) was sold on 17 November 2023. (f) The Mumbai NCLT and Chennai NCLT had passed orders dated 06 June 2022 and 22 March 2023 respectively to sanction the scheme of amalgamation of Sterlite Ports Limited ('SPL'), Paradip Multi Cargo Berth Private Limited ('PMCB'), Maritime Ventures Private Limited ('MVPL'), Goa Sea Port Private Limited ('GSPL'), wholly owned subsidiaries/step down subsidiaries of Sesa Resources Limited ('SRL'), with Sesa Mining Corporation Limited ('SMCL'). MCA statutory filing has completed on 18 January 2024 which is the effective date of merger. (g) Meenakshi energy limited has been acquired on 27 December 2023 under the liquidation proceedings of the Insolvency and Bankruptcy Code, 2016 as a 100% subsidiary of Vedanta Limited. (h) Sesa Iron and Steel Limited incorporated on 06 September 2023 as a 100% subsidiary of Vedanta Limited. (i) Vedanta Aluminium Metal Limited incorporated on 06 October 2023 as a 100% subsidiary of Vedanta Limited. (j) Vedanta Base Metals Limited incorporated on 09 October 2023 as a 100% subsidiary of Vedanta Limited. (k) Vedanta Displays Limited & Vedanta Semiconductors Private Limited has been acquired on 27 July 2023 from Twin star Technologies Ltd via share purchase agreement. (l) Vedanta Iron and Steel Limited incorporated on 10 October 2023 as a 100% subsidiary of Vedanta Limited. (m) Activity of the Company ceased in February 2016. (n) Principal place of business in India. (o) Vedanta Copper International VCI Company Limited incorporated on 14 November 2023 as a 100% subsidiary of Vedanta Limited. (p) Hindmetal Exploration Services Private Limited incorporated on 26 February 2024 as a 100% subsidiary of Hindustan Zinc Limited. (q) Cairn Lanka Private Limited is under process of liquidation. 39. Ultimate controlling party At 31 March 2024, all of the issued shares of the Company were held by Vedanta Incorporated (formerly known as Volcan Investments Limited) ("Vedanta Inc") and its wholly owned subsidiary. Accordingly, the ultimate controlling party of the Group is Vedanta Inc, which is beneficially owned by the Anil Agarwal Discretionary Trust. Vedanta Inc is incorporated in the Bahamas and does not produce Group accounts. CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Consolidated 271 (US$ million) Particulars Note As at 31 March 2024 As at 31 March 2023 Fixed assets Tangible assets 2 8 10 Investments in subsidiaries 3 1,731 1,731 Financial asset investment 4 0 0 1,739 1,741 Current assets Debtors due within one year 5 2,507 2,977 Debtors due after one year 5 2,013 2,345 Investments 6 92 79 Cash and cash equivalents 8 9 Current tax asset 2 22 4,622 5,432 Creditors: amounts falling due within one year Trade and other creditors 7 222 464 Lease liability 9 2 2 External borrowings 7 683 774 Loan from subsidiary 7 793 698 1,700 1,938 Net current assets 2,922 3,494 Total assets less current liabilities 4,661 5,235 Creditors: amounts falling due after one year External borrowings 8 1,473 1,883 Loan from subsidiary 8 2,340 2,638 Other creditors 8 2 3 Lease liability 9 4 5 3,819 4,529 Net assets 842 706 Capital and reserves Called up share capital 29 29 Capital reduction reserve 2 (2) Other reserves (2) 2 Retained earnings 813 677 Equity shareholders’ funds 842 706 The Company has taken an advantage of the disclosure exemption permitted by section 408 of the Companies Act 2006 and has not presented a profit and loss account. The profit after tax for the year of the Company amounted to US$ 136 million (2023: US$ 156 million) The separate Financial Statements of the Company, registration number 4740415 were approved and authorised for issue by the Board of Directors on 30 May 2024 and signed on their behalf by AR Narayanaswamy Deepak Kumar Director Company Secretary As at 31 March 2024 COMPANY BALANCE SHEET 272 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED For the year ended 31 March 2024 For the year ended 31 March 2023 (US$ million) Share capital* Capital redemption Reserve Retained earnings Other Reserves Total Equity shareholders’ funds at 01 April 2023 29 2 677 (2) 706 Profit for the year - - 136 - 136 Dividends paid (note 13 of Group financial statements) - - - - - Movement in fair value of Financial Investment - - - (0) (0) Equity shareholders’ funds at 31 March 2024 29 2 813 (2) 842 (US$ million) Share capital* Capital redemption Reserve Retained earnings Other Reserves Total Equity shareholders’ funds at 01 April 2022 29 2 540 (2) 569 Profit for the year - - 156 - 156 Dividends paid (note 13 of Group financial statements) - - (19) - (19) Movement in fair value of Financial Investment - - - (0) (0) Equity shareholders’ funds at 31 March 2023 29 2 677 (2) 706 * For details, refer note 30 of Group financial statements COMPANY STATEMENT OF CHANGES IN EQUITY CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Consolidated 273 NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 1. Company material accounting policies Basis of Accounting The Company meets the definition of a qualifying entity in accordance with Financial Reporting Standard 100 ‘Application of Financial Reporting Requirements’ (FRS 100) issued by the Financial Reporting Council and in accordance with 101 Reduced Disclosure Framework (FRS 101). Accordingly, these financial statements have been prepared on a going concern basis and in accordance with the provisions of the UK Companies Act, 2006 and applicable UK accounting standards. These financial statements have been prepared under the historical cost convention. Historical cost is generally based on the fair value of the consideration given in exchange for the assets. These financial statements are presented in US dollars being the functional currency of the Company and all values are rounded off to the nearest million except when indicated otherwise. Amounts less than US$ 0.5 million have been presented as “0”. In these financial statements, the Company has applied the exemptions available under FRS 101 in respect of the following disclosures: • The requirements of paragraph 38, 134 and 136 of IAS 1 ‘Presentation of Financial Statements’; • The requirements of IAS 7 ‘Statement of Cash Flows’; • Paragraphs 45 (b) and 46 to 52 of IFRS 2, “Share-based payment” (details of the number and weighted average exercise prices of share options and how the fair value of goods and services received was determined); • The requirements of IFRS 7 ‘Financial Instruments: Disclosures’; • The requirements of Paragraph 17 of IAS 24 “Related party disclosures”; • The requirements of IAS 24, “Related party disclosures” to disclose related-party transactions entered into between two or more members of a group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member; • Paragraphs 91-99 of IFRS 13 “Fair value measurement” (disclosure of valuation techniques and inputs used for fair value measurement of assets and liabilities); • The requirements of Paragraph 30 and 31 of IAS 8 “Accounting policies, changes in accounting estimates and errors” in relation to standards not yet effective. Material accounting policies Investments in subsidiaries Investments in subsidiaries represent equity holdings in subsidiaries except preference shares, valued at cost less any provision for impairment. Investments are reviewed for impairment if events or changes in circumstances indicate that the carrying amount may not be recoverable. Cash and cash equivalents Cash and cash equivalents in the balance sheet comprise cash at bank and in hand and short-term money market deposits which have a maturity of three months or less from the date of acquisition, that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Currency translation Transactions in currencies other than the functional currency of the Company, being US dollars, are translated into US dollars at the spot exchange rates ruling at the date of transaction. Monetary assets and liabilities denominated in other currencies at the balance sheet date are translated into US dollars at year end exchange rates, or at a contractual rate if applicable. Tangible fixed assets Tangible fixed assets are stated at cost less accumulated depreciation and provision for impairment. Depreciation on tangible fixed assets is calculated using the straight-line method (SLM) to allocate their cost, net of their residual values, over their estimated useful lives (determined by the management) as given below. Management’s assessment takes into account, inter alia, the nature of the assets, the estimated usage of the assets and the operating conditions of the assets. Estimated useful life of assets are as follows: Asset Useful life (in years) IT equipment 5 Office equipment 10 Furniture and fixtures 10 Leasehold improvement 10 The Company reviews the residual value and useful life of an asset at least at each financial year end and, if expectations differ from previous estimates, the change is accounted for as a change in accounting estimate. 274 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 Deferred taxation Deferred taxation is provided in full on all timing differences that result in an obligation at the balance sheet date to pay more tax, or a right to pay less tax, at a future date, subject to the recoverability of deferred tax assets. Deferred tax assets and liabilities are not discounted. Borrowings Interest bearing loans are recorded at the net proceeds received i.e. net of direct transaction costs. Finance charges, including premiums payable on settlement or redemption and direct issue costs, are accounted for on accruals basis and charged to the profit and loss account using the effective interest method and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise. Financial instruments A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. (a) Financial Assets – Recognition All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset on the trade date. For purposes of subsequent measurement, financial assets are classified in the following categories: Debt instruments at amortised cost A ‘debt instrument’ is measured at amortised cost if both the following conditions are met: a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding. After initial measurement, such financial assets are subsequently measured at amortised cost using the Effective Interest Rate (EIR) method. Equity instruments All equity investments in scope of IFRS 9 are measured at fair value. For all equity instruments not held for trading, the Company may make an irrevocable election to present in other comprehensive income subsequent changes in the fair value. Dividends Dividend income is recognised in the income statement only when the right to receive payment is established, provided it is probable that the economic benefits associated with the dividend will flow to the Company, and the amount of the dividend can be measured reliably. (b) Financial Asset – Derecognition The Company derecognises a financial asset when the contractual rights to cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. (c) Impairment of financial assets In accordance with IFRS 9, the Company applies expected credit loss (“ECL”) model for measurement and recognition of impairment loss on financial assets. The Company follows ‘simplified approach’ for recognition of impairment loss allowance on trade receivables. The Company recognises impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition. At each reporting date, for recognition of impairment loss on other financial assets and risk exposure, the Company determines whether there has been a significant increase in the credit risk since initial recognition. If credit risk has increased significantly, lifetime ECL is used instead of 12-month ECL. ECL is the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the entity expects to receive, discounted at the original EIR. (d) Financial liabilities – Recognition & Subsequent measurement The Company’s financial liabilities include trade and other payables and loans and borrowings. All financial liabilities are recognised initially at fair value, and in the case of financial liabilities at amortised cost, net of directly attributable transaction costs. After initial recognition, interest-bearing loans and borrowings and trade and other payables are subsequently measured at amortised cost using the EIR method. (e) Financial liabilities – Derecognition A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Consolidated 275 NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 2. Company tangible fixed assets (US$ million) Cost At 01 April 2022 8 ROU Asset 10 Additions 0 At 31 March 2023 18 Additions 0 At 31 March 2024 18 Accumulated depreciation At 01 April 2022 6 Charge for the period 2 ROU assets 1 Other assets 1 At 31 March 2023 8 Charge for the period 2 ROU assets 1 Other assets 1 At 31 March 2024 10 Net book value At 01 April 2022 12 At 31 March 2023 10 At 31 March 2024 8 Details of Right of Use (ROU) Assets Particulars Building Net book value as at 01 April 2022 7 Depreciation (1) Net book value as at 31 March 2023 6 Depreciation (1) Net book value as at 31 March 2024 5 3. Investments in subsidiaries (US$ million) Cost At 01 April 2022 1,731 Investment written off during the year** (0) At 31 March 2023 1,731 At 01 April 2023 1,731 Addition during the year* 0 At 31 March 2024 1,731 * During the current year, the Company acquired one share in Vedanta UK Holdings Limited (‘VUHL’), being 100% of its issued equity share capital for a consideration of US$ 1000 and one share in Vedanta Twinstar Holdings Limited (‘VTHL’), being 100% of its issued equity share capital for a consideration of US$ 1. **During the previous year, VRIL has been liquidated. Accordingly, the Company has written off its investment in VRIL. 276 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 At 31 March 2024, the Company held 662,073,200 shares in Vedanta Resources Holdings Limited (‘VRHL’) (March 2023: 662,073,200 shares), being 100% of VRHL’s issued equity share capital. The Company also held one deferred share in VRHL (31 March 2023: one). At 31 March 2024, the Company held two shares in Vedanta Resources Jersey Limited (‘VRJL’) (31 March 2023: two), two shares in Vedanta Resources Jersey II Limited (‘VRJL-II’) (31 March 2023: two), one share in Vedanta Twinstar Holdings (‘VTHL’) (31 March 2023: Nil), one thousand share in Vedanta UK Holdings Limited (‘VUHL’) (31 March 2023: Nil), and one share in Vedanta Holdings Jersey Limited (‘VHJL’) (31 March 2023: one), being 100% of its issued equity share capital. VRHL is an intermediary holding company incorporated in the United Kingdom (note 39 of the financial statements of the Group) and registered in England and Wales. VRJL, VHJL and VRJL-II are companies, registered and incorporated in Jersey, established to raise funds for the Vedanta Group. 4. Financial asset investment (US$ million) Fair value As at 01 April 2022 0 Fair value movement 0 As at 31 March 2023 0 As at 01 April 2023 0 Fair value movement (0) As at 31 March 2024 0 The investment relates to an equity investment in the shares of Victoria Gold Corporation. As at 31 March 2024, the investment in Victoria Gold Corporation was revalued and loss of US$ 0 million (2023: loss of US$ 0 million) was recognised in equity. 5. Company debtors (US$ million) As at 31 March 2024 As at 31 March 2023 Amounts due from subsidiary undertakings 5,270 6,072 Amounts due from Konkola Copper Mines (note 3(a) of Group financial statements)* 305 305 Advance to vendors and deposit 0 0 Prepayments and accrued income 0 0 Other taxes 0 0 Less: Provision for impairment* (1,055) (1,055) Total 4,520 5,322 Debtors due within one year 2,507 2,977 Debtors due after one year 2,013 2,345 Total 4,520 5,322 Amounts due from subsidiary undertakings i. At 31 March 2024, the Company had loans of US$ 1,863 million (31 March 2023: US$ 2,447 million) due from VRHL which represented the funds being loaned for funding the subsidiaries. Out of the total loans, US$ 581 million bears interest at 11.07%, US$ 476 million at 7.80%, US$ 806 million at 9.70%. ii. At 31 March 2024, the Company had loans of US$ 1,981 million (31 March 2023: US$ 1,133 million) due from Vedanta Resources Jersey II Limited (VRJL-II). Out of the total loans, US$ 1,514 million (Impairment provision US$ 1055 million bears interest at 8.05%, US$ 295 million at 11.07%, and US$ 172 million at 7.64%. iii. At 31 March 2024, the Company had loans of US$ 303 million (31 March 2023: US$ 303 million) due from Vedanta Holdings Mauritius Limited (VHML). Out of the total loans, US$ 104 million bears interest at 8.10%, US$ 20 million bears interest at 11.07% and US$ 179 million at 8.13%. CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Consolidated 277 NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 iv. At 31 March 2024, the Company had loan of US$ NIL (31 March 2023: US$ 5 million) due from Vedanta Netherlands Investment BV (VNIBV) at 7.95% which is repaid during the year. v. At 31 March 2024, the Company had loan of US$ 333 million (31 March 2023: US$ 333 million) due from Twin Star Holdings Limited (THL) at 11.07%, during the current year loan was reclassed from Current maturities to Non-Current Loan and Advances due to extension of repayment term. vi. At 31 March 2024, the Company had loans of US$ NIL (31 March 2023: US$ 8 million) due from Vedanta Resources Financial Limited (VRFL) which is fully repaid in April 2023. vii. The Company was owed US$ 723 million (31 March 2024: US$ 743 million) of accrued interest from VRHL, VRJL-II, VHML and THL, Out of total accrued interest 25 million represents non-current portion receivable from VHML and rest 698 million represents current portion. viii. The Company had given a corporate guarantee for loan facilities/ trade advances on behalf of Konkola Copper Mines Plc (KCM), an erstwhile subsidiary of Vedanta Resources Holding Limited (VRHL). During the year ended 31 March 2020, due to loss of control over KCM and the resulting developments (for details refer note 3 (a) of group financial statements), the Company had recognised a liability of US$ 355 million (inclusive of interest), towards the guarantee liability and a corresponding receivable from KCM. Of the said liability, the Company had paid an amount of US$ 250 million to the lenders of KCM. During the year ended 31 March 2021, the Company has made further payments of US$ 23 million to lenders of KCM. The Company has also reversed the amount of corporate guarantees which have expired, from the amount receivable and from the corresponding liability. The balance is presented as creditors due within one year. ix. Additionally, the Company was owed US$ 16 million (31 March 2023: US$ 16 million) from KCM in the form guarantee commission and other receivables. x. In addition to the loans, the Company also owes US$ 48 million (31 March 2023: US$ 46 million) of other receivables from Group companies. The above amounts include brand fee receivable from subsidiaries (refer note 11). * The Company had given loans to its subsidiary, VRJL - II in previous years, which was further advanced as inter-company loans to its then fellow subsidiary, (KCM). With the loss of control over KCM w.e.f. 21 May 2019 and the ensuing recoverability assessment (Refer note 3 (a) of Group Financial Statements for details), VRJL- II had impaired its receivables from KCM in the year ended 31 March 2020. Consequently, the Company had also carried out an impairment assessment of its receivables from VRJL- II and had recognised an impairment of US$ 1,102 million during the year ended 31 March 2020. During the year ended 31 March 2021, VRJL- II has reversed the previously recognised impairment on its receivables from KCM, amounting to $ 118 million. Consequently, the Company has also carried out an impairment assessment of its receivables from VRJL- II and had recognised an impairment reversal of US$ 118 million during the year ended 31 March 2021. During the current year, the directors have assessed receivables from KCM for indicators of impairment and are of opinion that no further impairment has to be provided on these receivables. (For details refer Group Financial Statements). 6. Company current asset investments (US$ million) As at 31 March 2024 As at 31 March 2023 Liquid investments 49 30 Bank term deposits 43 49 Total 92 79 7. Company creditors: amounts falling due within one year (US$ million) As at 31 March 2024 As at 31 March 2023 Accruals 155 246 Advance from related parties 29 201 Loan from subsidiary (Note 8) 793 698 Term Loans (Note 8) 683 274 Bonds - 500 Guarantee amount payable on behalf of KCM (Refer note 5) 15 15 Dividend payable 2 2 Others 21 - Total 1,698 1,936 278 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 8. Company creditors: amounts falling due after one year (US$ million) As at 31 March 2024 As at 31 March 2023 Loan from subsidiaries 2,340 2,638 Advance from related parties 2 3 Term loans 1,262 1,210 Bonds: 13.875% bonds due December 2028 894 947 7.13% bonds due june 2023 - 500 Less: Current Maturities (Note 7) Term Loans (683) (274) Bonds - (500) Total 3,815 4,524 i. As at 31 March 2024, loans from subsidiaries includes US$ 1,233 million (31 March 2023: US$ 1,203 million) due to Vedanta Finance UK Limited. During the year 2019-20, its maturity was extended to January 2022 and the rate of interest was amended to US$ LIBOR plus 410 basis points. During the year 2020-21, maturity of the said loan was further extended to October 2023 and rate of interest was amended to 7.84%. During the current year, $ 178 million loan is reclassified to Long term Borrowings and maturity of the said loan was further extended to October 2028 and rate of interest was amended to 11.07%. ii. Loan from subsidiaries also includes US$ 793 million (31 March 2023: US$ 1,749 million) due to Vedanta Resources Finance II Plc (VRF2) which bears an interest at the rate 9.2% and is repayable in March 2025. iii. Loan from subsidiaries also includes US$ 421 million (31 March 2023: US$ 384 million) due to Finsider Limited (FI) which bears an interest at the rate of 6.82% and is repayable in November 2027. iv. Loan from subsidiaries also includes US$ 57 million (31 March 2023: US$ NIL) due to Vedanta Resources Finance Ltd (VRFL) which bears an interest at the rate 11.07% and is repayable in January 2028. v. Loan from subsidiaries also includes US$ 629 million (31 March 2023: US$ NIL) due to Vedanta UK Holding Limited (VHUL) which bears an interest at the rate 18.5% and is repayable in February 2029. Terms loans are made up of the following loan arrangements that the Company has executed: i. During the year 2017-18, the Company executed facility agreements with State Bank of India for borrowings up to US$ 200 million in different tranches and bears interest at a rate of LIBOR plus 389 basis points. The loan is repayable in January 2025. During the year margin rate has been revised as 431 basis points As at 31 March 2024, the outstanding amount under this facility is US$ 200 million. The unamortized expense on this loan as at 31 March 2024 is US$ 5 million. ii. During the year 2018-2019, the Company executed facility agreements with ICICI Bank Limited for borrowings up to US$ 200 million in different tranches and bears interest at a rate of LIBOR plus 390 basis points. During the previous year, US $ 120 million has been repaid. The loan is repaid in various instalments till September 2023. As at 31 March 2024, the outstanding amount under this facility is US$ NIL (31 March 2023: US$ 120 million). The unamortized expense on this loan as at 31 March 2024 is US$ NIL. iii. During the year 2018-2019, the Company executed facility agreements with Bank of Baroda for borrowings up to US$ 200 million in different tranches and bears interest at a rate of LIBOR plus 350 basis points. The loan is repaid in various instalments till June 2024. During the previous year, US$ 20 million has been repaid. During the current year complete loan was repaid. As at 31 March 2024, the outstanding amount under this facility is US$ NIL (31 March 2023: US$ 145 million). The unamortized expense on this loan as at 31 March 2024 is US$ NIL. iv. During the year 2019-20, the Company executed facility agreements with Syndicate Bank (since amalgamated into Canara Bank) for borrowings up to US$ 200 million in different tranches and bears interest at a rate of LIBOR plus 375 basis points. The loan is repayable in various instalments till December 2024. During the year LIBOR has been revised. As at 31 March CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Consolidated 279 NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 2024, the outstanding amount under this facility is US$ 120 million (31 March 2023: US$ 180 million). The unamortized expense on this loan as at 31 March 2024 is US$ 1.5 million. v. During the previous year 2022-23, the Company executed into facility agreements with DBS RCF Bank for borrowings up to US$ 100 million and bears interest at a rate of LIBOR plus 450 basis points repayable as US$ 55 million in April 2023 and US$ 45 million in May 2023. During the year loan was fully repaid. As at 31 March 2024, the outstanding amount under this facility is US$ NIL (31 March 2023: US$ 100 million). vi. During the previous year, the Company executed into facility agreements with State Bank of India for borrowings up to US$ 500 million and bears interest at a rate of LIBOR plus 506 basis points repayable as US$ 25 million in June 2023, US$ 100 million in June 2024, US$ 100 million in June 2025, US$ 125 million in June 2026 and US$ 150 million in June 2027. During the year US$ 25 million was been repaid. As at 31 March 2024, the outstanding amount under this facility is US$ 475 million (31st March 2023: US$ 500 million). The unamortized expense on this loan as at 31 March 2024 is US$ 14 million. vii. During the previous year, the Company executed into facility agreements with Canara Bank for borrowings up to US$ 100 million and bears interest at a rate of LIBOR plus 350 basis points repayable in September 2025. As at 31 March 2024, the outstanding amount under this facility is US$ 100 million (31 March 2023: US$ 100 million). The unamortized expense on this loan as at 31 March 2024 is US$ 2 million. viii. During the previous year, the Company has repaid bond amount of US$ 999 million bearing interest at the rate of 6.375% which was repayable in July 2022 and US$ 49 million bearing interest at the rate of 6.125% which was repayable in August 2024. During the year additional US$ 57mn has been repaid bearing interest at the rate of 6.125%. ix. During the current year, the Company has repaid bond amount of US$ 500 million bearing interest at the rate of 7.125% which was repayable in May 2023. x. During the current year, bond agreement has been amended of US$ 950mn with revise ROI 13.875% & repayable in 3 tranches of US$ 298 million each as Aug 2027, Aug 2028 & Dec 2028 respectively. xi. During the current year, the Company executed a facility agreement with Glencore for an amount of US$ 250 million bearing an interest at a rate of SOFR plus 550 basis points repayable in 8 tranches as- US$ 31.25 million each as August 2024, November 2024, February 2025, May 2025, August 2025, November 2025, February 2026, May 2026. During the current year, US$ 55 million was repaid. As at 31 March 2024, the outstanding amount under this facility is US$ 195 million (31 March 2023: NIL). The unamortized expense on this loan as at 31 March 2024 is US$ 4 million. xii. During the current year, the Company executed a facility agreement with Trafigura for an amount of US$ 200 million, bearing an interest at a rate of 12% repayable in May 2024. As at 31 March 2024, the outstanding amount under this facility is US$ 200 million (31 March 2023: NIL). The unamortized expense on this loan as at 31 March 2024 is US$ 1 million. 9. Lease liability Movement in Lease liabilities is as follows: (US$ million) Particulars Amount At 01 April 2022 8 Interest on Lease Liabilities 0 Payments made (1) At 31 March 2023/ 01 April 2023 7 Interest on Lease Liabilities 0 Payments made (1) As at 31 March 2024 6 280 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 10. Company contingent liabilities i. Vedanta Resources Limited (“VRL” or “the Company”) has provided a financial and performance guarantee to the Government of India for erstwhile Vedanta Limited’s (‘VEDL’) obligation under the Production Sharing Contract (‘PSC’) provided for onshore block RJ-ON-90/1, for making available financial resources equivalent to VEDL’s share for its obligations under the PSC, personnel and technical services in accordance with industry practices and any other resources in case VEDL is unable to fulfil its obligations under the PSC. Similarly, the Company has also provided financial and performance guarantee to the Government of India for VEDL’s obligations under the Revenue Sharing Contract (‘RSC’) in respect of 51 Blocks awarded under the Open Acreage Licensing Policy (“OALP”) by the Government of India. ii. During the year 2019-20, Vedanta Resources Finance II Plc (VRFII Plc) issued US$ 1,000 million bonds which were guaranteed by the Company. During the current year $ 400 million was repaid and $ 600 million is outstanding as at 31 March 2024. During the year 2020-21, VRFII Plc further issued US$ 1,000 million and US$ 1,200 million bonds which were guaranteed by the Company along with Twin Star Holdings Limited and Welter Trading Ltd as co-guarantors. As at 31 March 2023, the entire amount is outstanding. During the year ended 31 March 2023, US$ 530 million and US$ 192 million was repaid from Facility I and Facility II respectively. Outstanding amount as at 31 March 2024 is US$ 470 million and US$ 1,008 million respectively. (31 March 2023: US$ 1,000 million and US$ 1,200 million). iii. During the year 2022-23, the Company, along with Finsider International Company Limited and Westglobe Limited as co- guarantors, has guaranteed US$ 1,000 million for a facility agreement entered by Vedanta Holdings Mauritius II Limited with OCM Verde XI Investments Pte. Limited as facility agent. US$ 427 million and US$ 323 million have been drawn under this facility during the years 2020-21 and 2021-22 respectively. During the current year loan was been fully repaid by VHM2L. Outstanding amount as at 31 March 2024 is US$ NIL (31 March 2023: US$ 255 million). iv. During the year 2021-22, the Company has guaranteed US$ 400 million and $150 million for facility agreement entered by Twin Star Holdings Limited and Vedanta Netherlands Investments BV, respectively with Standard Chartered Bank. During the current year, both loans have been fully repaid by entities. As at 31 March 2024, amount outstanding under the said facility is US$ NIL (31 March 2023:US$ 250 million) by Twin Star Holdings Limited and US$ NIL (31 March 2023: US$ 150 million) by Vedanta Netherlands Investments BV. v. During the previous year, the Company has guaranteed, jointly with Welter Trading Limited, US$ 200 million for a facility agreement executed by Twin Star Holdings Limited with Canara Bank. As at 31 March 2023, US$ 200 million has been drawn under the facility. The amount of loan outstanding as at 31 March 2024 is US$ 200 million (31 March 2023: US$ 200 million). vi. During the previous year, the Company has guaranteed, jointly with Welter Trading Limited, US$ 150 million for a facility agreement executed by Twin Star Holdings Limited with Union Bank of India. As at 31 March 2023, US$ 150 million has been drawn under the facility. The amount of loan outstanding as at 31 March 2024 is US$ 135 million (31 March 2023: US$ 150 million). vii. During the previous year, the Company has guaranteed, jointly with Welter Trading Limited, US$ 200 million for a facility agreement executed by Twin Star Holdings Limited with Standard Chartered Bank. During the year loan has been fully repaid. As at 31 March 2024, US$ NIL (31 March 2023: US$ 100 million) is outstanding in the books of Twin Star Holdings Limited. viii. During the current year, certain subsidiaries of the Company has taken loan facilities aggregating to $1,250 million from Standard Chartered Bank which has been guaranteed by the company. CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Consolidated 281 NOTES forming part of the consolidated financial statements as at and for the year ended 31 March 2024 11. Related party transactions During the year, the Company executed transactions, in the ordinary course of business, with other related parties. The Company has taken advantage of the exemption under paragraph 8(k) of FRS101 not to disclose transactions with wholly- owned subsidiaries. Transactions entered into and trading balances outstanding at 31 March 2024 with other related parties, are as follows: (US$ million) Name of Company Relationship Nature of transaction Year Ended 2024 Year Ended 2023 Vedanta Limited Subsidiary PCO Income and Management & Brand fees charged 296 217 Vedanta Limited Subsidiary Receipt of service (1) (1) Vedanta Limited Subsidiary Agency Commission 1 0 Vedanta Limited Subsidiary Guarantee commission income 14 20 Vedanta Limited Subsidiary (Reimbursement) of expenses (0) (0) Vedanta Incorporated {Erstwhile Volcan Investments Limited} Holding Company Dividend declared - 12 Volcan Investments Cyprus Limited Holding Company Dividend declared - 6 ESL Steels Ltd (ESL) Subsidiary Brand fee charged 13 13 Talwandi Sabo Power Ltd Subsidiary Brand fee charged 5 5 Black Mountain Mining (Pty) Limited Subsidiary Brand fee charged 6 10 Cairn Energy Hydrocarbons Limited Subsidiary Brand fee charged 30 18 Cairn Energy Hydrocarbons Limited Subsidiary Payment of expenses - 0 Cairn Energy Hydrocarbons Limited Subsidiary Guarantee commission income 3 3 Fujairah Gold FZC Subsidiary (Reimbursement) of expenses - (0) Outstanding balances (US$ million) Name of Company Relationship Nature of transaction As at 31 March 24 As at 31 March 2023 Vedanta Limited Subsidiary Receivable 3 31 Vedanta Limited Subsidiary Advance received 23 177 Namzinc Pty Limited Subsidiary (Payable)/Receivable (0) 0 Sterlite Technologies Limited Fellow Subsidiary Receivable 0 0 Cairn India Holdings Limited Subsidiary Receivable 0 0 ESL Steels Ltd (ESL) Subsidiary (Payable) (8) (7) Black Mountain Mining (Pty) Limited Subsidiary Receivable 1 2 Talwandi Sabo Power Ltd Subsidiary Receivable 1 1 Western Cluster Limited Subsidiary (Payable)/Receivable (0) 0 Monte Cello BV Subsidiary (Payable) (1) (1) Bloom Fountain Limited Subsidiary Receivable 0 0 THL Zinc Limited THL Zinc Ventures Limited Subsidiary Subsidiary Receivable Receivable 0 0 0 0 Cairn Energy Hydrocarbon Limited Subsidiary Receivable/(Payable) 7 (15) Vedanta Incorporated {Erstwhile Volcan Investments Limited} Holding Company Dividend payable (1) (1) Volcan Investments Cyprus limited Holding Company Dividend payable (1) (1) 12. Subsequent Events There have been no material events after reporting date, other than those already reported, which would require disclosure or adjustment to the financial statements for the year ended 31 March 2024. 282 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED FIVE YEAR SUMMARY SUMMARY CONSOLIDATED INCOME STATEMENT (US$ million except as stated) Year ended 31-Mar-24 Year ended 31-Mar-23 Year ended 31-Mar-22 Year ended 31-Mar-21 Year ended 31-Mar-20 Revenue 17,128 18,283 17,619 11,722 11,790 EBITDA 4,718 4,608 6,255 3,800 3,003 Depreciation and amortisation (1,282) (1,382) (1,228) (1,099) (1,412) Other Expenses (89) (30) - - - Special items 124 (178) 408 (49) (2,065) Operating profit 3,471 3,018 5,435 2,652 (474) Net finance (costs) / investment revenues (including other gains and Losses) (1,717) (1,386) (1,287) (969) (872) Profit before taxation from continuing operations (a) 1,754 1,632 4,148 1,683 (1,346) Net tax credit / (expense) (b) (1,655) (794) (1,570) (298) 370 Profit for the period/ year from continuing operations (a+b) 99 838 2,578 1,385 (976) Profit/ (loss) after tax for the period/ year from discontinued operations and gain on deconsolidation - - - 91 (771) Profit after taxation 99 838 2,578 1,476 (1,747) Non-controlling interests 499 843 1,576 1,153 (179) Profit attributable to equity shareholders in parent (400) (5) 1,002 323 (1,568) Dividends - (18) (131) (251) (352) Retained (loss) / profit (400) (23) 871 72 (1,919) Dividend per share (US cents per share) - 7 46 88 123 SUMMARY CONSOLIDATED FINANCIAL POSITION (US$ million except as stated) Year ended 31-Mar-24 Year ended 31-Mar-23 Year ended 31-Mar-22 Year ended 31-Mar-21 Year ended 31-Mar-20 Goodwill - 12 12 12 12 Intangible assets 84 64 90 99 100 Property, plant and equipment 13,734 13,070 13,704 13,302 13,245 Financial asset investments 118 63 20 21 12 Total fixed assets 13,936 13,209 13,826 13,434 13,369 Stocks 1,560 1,830 1,895 1,358 1,515 Debtors 2,438 2,279 2,479 1,465 1,102 Cash & Liquid Investments 1,959 2,765 4,445 5,957 5,090 Total current assets 5,957 6,874 8,819 8,780 7,707 Short-term borrowings (3,378) (5,809) (4,972) (3,673) (6,065) Other current liabilities (7,030) (7,321) (6,541) (5,670) (5,805) Total current liabilities (10,408) (13,130) (11,513) (9,343) (11,870) Net current assets (4,423) (6,185) (2,657) (552) (4,069) Total assets less current Liabilities 11,922 10,181 14,112 15,976 12,316 Long-term borrowings (10,952) (9,549) (11,110) (12,704) (9,030) Other long-term liabilities (240) (221) (255) (215) (238) Provisions and deferred tax assets (1,578) (1,283) (1,212) (726) (775) Total long-term liabilities (12,770) (11,053) (12,577) (13,645) (10,043) Equity Non-controlling interests (2,580) (2,476) (4,648) (5,478) (5,536) Non equity Non-controlling interest - - - - - Net assets attributable to the equity holders of the parent (3,428) (3,348) (3,113) (3,147) (3,263) CORPORATE OVERVIEW STATUTORY REPORTS 283 Consolidated FINANCIAL STATEMENTS FIVE YEAR SUMMARY REVENUE (US$ million) Revenue (US$ million) Year ended 31-Mar-24 Year ended 31-Mar-23 Year ended 31-Mar-22 Year ended 31-Mar-21 Year ended 31-Mar-20 Zinc 3,803 4,775 4,446 3,328 3,004 India 3,373 4,126 3,844 2,960 2,563 International 430 649 602 368 441 Oil and Gas 2,155 1,873 1,669 1,016 1,787 Iron ore 1,095 809 852 611 489 Copper India 2,383 2,179 2,035 1,469 1,278 Aluminium 5,843 6,615 6,833 3,865 3,751 Power 743 838 783 725 827 Steel 1,003 978 869 630 604 Other 103 74 132 76 51 Group 17,128 18,141 17,619 11,722 11,790 EBITDA Revenue (US$ million) Year ended 31-Mar-24 Year ended 31-Mar-23 Year ended 31-Mar-22 Year ended 31-Mar-21 Year ended 31-Mar-20 Zinc 1,722 2,418 2,376 1,688 1,283 India 1,638 2,177 2,170 1,568 1,230 International 84 241 206 120 54 Oil and Gas 1,184 972 809 438 1,032 Iron ore 200 124 304 245 117 Copper India (9) (7) (15) (21) (40) Aluminium 1,167 699 2,328 1,046 281 Power 117 114 145 190 233 Steel 27 39 94 117 83 Other 310 249 214 97 14 Group 4,718 4,608 6,255 3,800 3,003 EBITDA MARGIN EBITDA Margin (%) Year ended 31-Mar-24 Year ended 31-Mar-23 Year ended 31-Mar-22 Year ended 31-Mar-21 Year ended 31-Mar-20 Zinc 45 51 53 51 43 India 49 53 56 53 48 International 20 37 34 33 12 Oil and Gas 55 52 48 43 58 Iron ore 18 15 36 40 24 Copper India (0) (0) (1) (1) (3) Aluminium 20 11 34 27 8 Power 16 16 19 26 28 Steel 3 4 11 19 14 Group 28 25 36 32 25 284 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED FIVE YEAR SUMMARY PRODUCTION Production (000’s MT) Year ended 31-Mar-24 Year ended 31-Mar-23 Year ended 31-Mar-22 Year ended 31-Mar-21 Year ended 31-Mar-20 Aluminium 2,370 2,291 2,268 1969 1904 BALCO 586 570 582 570 561 Jharsuguda Aluminium 1,784 1,721 1,687 1400 1,343 Copper 148 125 101 77 Sterlite Copper 141 148 125 101 77 KCM - - - - - Iron Ore (WMT) 5,890 5,890 5,597 5,607 4,562 Steel 1,386 1,285 1,260 1,187 1,231 Zinc total 1,033 1,032 967 930 937 HZL 1,033 1,032 967 930 870 Skorpion - - -* 67 Zinc and Lead MIC 1,033 1,032 967 930 174 BMM 61 65 52 58 66 Lisheen - - - - Gamsberg 147 208 170 145 108 Oil and Gas- Gross Production 47 52 59 59 63 Oil and Gas- Working Interest 30 33 38 37 40 * Skorpion produced 0.6kt in April 20 before moving into Care and Maintenance for rest of the year CASH COST OF PRODUCTION IN US CENTS (US$ million except as stated) Cash costs of production (US cents/lb) Year ended 31-Mar-24 Year ended 31-Mar-23 Year ended 31-Mar-22 Year ended 31-Mar-21 Year ended 31-Mar-20 Aluminium-Balco 86 110 87 66 77 Aluminium-Jharsuguda Aluminium 80 104 83 59 76 Copper – Sterlite Copper - - - - - Copper – KCM - - - - - Zinc including Royalty- HZL 66 77 71 58 62 Zinc without Royalty- HZL 51 57 51 43 47 Zinc COP- Skorpion - - - - 100 Zinc COP- BMM 59 66 77 61 67 Zinc COP- Lisheen - - - - - Zinc COP- Gamsberg 71 58 62 58 65 Oil and Gas (Opex) (US$/ boe) 14 14 11 8 9 CASH COST OF PRODUCTION IN INR (US$ million except as stated) Cash costs of production in INR (INR/ mt) Year ended 31-Mar-24 Year ended 31-Mar-23 Year ended 31-Mar-22 Year ended 31-Mar-21 Year ended 31-Mar-20 Aluminium-Balco 1,57,600 1,94,500 1,42,400 1,07,500 1,20,400 Aluminium-Jharsuguda Aluminium 1,45,800 1,83,800 1,37,000 96,600 1,19,500 Copper – Sterlite Copper - - - - Zinc including Royalty 1,20,038 1,37,025 116,655 95,305 97,248 Zinc without Royalty 92,470 1,00,900 83,500 70,700 74,300 CORPORATE OVERVIEW STATUTORY REPORTS 285 Consolidated FINANCIAL STATEMENTS FIVE YEAR SUMMARY CAPITAL EXPENDITURE (US$ million except as stated) Capital expenditure (INR/ mt) Year ended 31-Mar-24 Year ended 31-Mar-23 Year ended 31-Mar-22 Year ended 31-Mar-21 Year ended 31-Mar-20 Aluminium-Balco 1,57,600 1,94,500 1,42,400 1,07,500 1,20,400 Aluminium-Jharsuguda Aluminium 1,45,800 1,83,800 1,37,000 96,600 1,19,500 Copper – Sterlite Copper - - - - Zinc including Royalty 1,20,038 1,37,025 116,655 95,305 97,248 Zinc without Royalty 92,470 1,00,900 83,500 70,700 74,300 NET CASH/(DEBT) Net cash / (debt) (US$ million) Year ended 31-Mar-24 Year ended 31-Mar-23 Year ended 31-Mar-22 Year ended 31-Mar-21 Year ended 31-Mar-20 Zinc 199 (154) 2,450 2,097 2,902 India 206 (235) 2,377 2,064 2,890 International (7) 81 73 32 12 Oil and gas (64) (128) (24) 77 693 Iron Ore 34 22 6 38 (51) Copper 244 47 90 48 (49) India/Australia 244 47 90 48 (49) Zambia Aluminium (4,529) (4,220) (4,046) (4,102) (4,987) Power (801) (772) (916) (1,062) (917) Other (7,432) (7,525) (9,229) (7,827) (7,612) Group (12,349) (12,730) (11,686) (10,731) (10,022) GEARING Gearing (%) Year ended 31-Mar-24 Year ended 31-Mar-23 Year ended 31-Mar-22 Year ended 31-Mar-21 Year ended 31-Mar-20 Gearing 107% 107% 88% 83% 82% GROUP FREE CASH FLOW Group Free Cash Flow (US$ million) Year ended 31-Mar-24 Year ended 31-Mar-23 Year ended 31-Mar-22 Year ended 31-Mar-21 Year ended 31-Mar-20 Group Free Cash Flow after capital creditors 2,208 2,849 2,788 1,578 1,642 Group Free Cash Flow after post capex 746 1,610 2,083 1,253 823 CAPITAL EMPLYOED Capital Employed (US$ million) Year ended 31-Mar-24 Year ended 31-Mar-23 Year ended 31-Mar-22 Year ended 31-Mar-21 Year ended 31-Mar-20 Average Capital Employed 11,679 12,540 13,176 12,679 13,920 ROCE ROCE (%) Year ended 31-Mar-24 Year ended 31-Mar-23 Year ended 31-Mar-22 Year ended 31-Mar-21 Year ended 31-Mar-20 ROCE 25.1% 20.0% 31.9% 19.4% 10.2% 286 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED PRODUCTION AND RESERVES SUMMARY Copper Copper Production Summary Facility Product Year ended 31 March 2024 Year ended 31-Mar-23 Tuticorin Copper anode - - Sulphuric acid - - Phosphoric acid - - Copper cathode - - Copper rods - - Silvassa Copper cathode 1,40,716 1,47,880 Copper rods 2,54,119 2,25,415 Aluminium, Alumina and Bauxite Aluminium Production Summary Facility Year ended 31 March 2024 MT Year ended 31-Mar-23 MT Year ended 31-Mar-23 MT BALCO 5,86,063 5,69,871 5,81,675 Jharsuguda Aluminium 17,83,741 17,20,726 16,86,756 Aluminium Production Summary Facility Year ended 31 March 2024 MT Year ended 31-Mar-23 MT Year ended 31-Mar-23 MT Jharsuguda Aluminium 18,13,176 17,92,744 19,67,910 Hindustan Zinc Zinc and Lead Production Summary Facility Year ended 31 March 2024 MT Year ended 31-Mar-23 MT Year ended 31-Mar-23 MT HZL Zinc 8,17,059 8,20,894 775,812 Lead 2,15,984 2,10,690 191,185 Zinc and Lead Mining Summary a) Metal mined & metal concentrate Mine Type of mine Ore mined Zinc concentrate Lead concentrate 31 March 2024 mt 31 March 2023 mt 31 March 2024 mt 31 March 2023 mt 31 March 2024 mt 31 March 2023 mt Rampura Agucha Underground 49,30,755 47,95,131 10,18,245 9,61,028 84,330 79,357 Rajpura Dariba Underground 13,43,830 13,90,229 79,953 88,015 18,429 19,929 Zawar Underground 40,32,141 43,02,812 2,21,921 1,98,526 99,524 96,982 Kayad Underground 5,64,113 6,57,186 65,980 67,980 5,776 5,545 Sindesar Khurd Underground 56,50,482 55,98,714 3,24,043 3,54,659 1,72,738 1,74,850 Total 1,65,21,322 1,67,44,072 17,10,142 16,70,209 3,80,797 3,76,664 287 CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Consolidated PRODUCTION AND RESERVES SUMMARY b) Metal in Concentrate (MIC) Mine Type of mine Zinc concentrate Lead concentrate 31 March 2024 mt 31 March 2023 mt 31 March 2024 mt 31 March 2023 mt Rampura Agucha Underground 5,15,397 4,86,326 52,022 49,341 Rajpura Dariba Underground 35,994 43,617 5,586 7,240 Zawar Underground 1,15,405 1,03,253 63,581 61,944 Kayad Underground 33,488 34,800 3,572 3,463 Sindesar Khurd Underground 1,54,717 1,71,056 99,292 1,01,051 Total 8,55,001 8,39,051 2,24,052 2,23,039 Zinc and Lead Mine Resource and Reserve Summary Zinc India Mine Resources Reserves Measured and indicated million mt Zinc grade % Lead grade % Inferred million mt Zinc grade % Lead grade % Proved and probable reserves million mt Zinc grade % Lead grade % Rampura Agucha 17.1 12.9 2.7 7.7 0.2 5.2 44.4 11.0 1.2 Rajpura Dariba 2.5 6.6 2.1 38.1 6.0 1.9 47.1 5.4 1.7 Zawar 33.0 3.4 1.9 67.6 3.8 2.2 42.2 2.6 1.5 Kayad 3.7 8.3 1.1 1.7 5.7 0.3 1.3 5.2 0.7 Sindesar Khurd 60.0 3.7 1.8 8.9 3.2 1.5 40.1 3.1 2.0 Bamnia Kalan 20.7 3.3 1.1 20.2 3.5 1.4 - - - Total 137.0 4.9 1.8 144.2 4.2 2.1 175.1 5.6 1.6 Resources are additional to Reserves Zinc International Mine Resources Reserves Measured and indicated million mt Zinc grade % Lead grade % Inferred million mt Zinc grade % Lead grade % Proved and probable reserves million mt Zinc grade % Lead grade % Skorpion 3.3 12.2 0.0 1.3 9.5 0.0 0.8 9.7 0.0 BMM - Deeps 8.8 2.3 2.8 - - - 1.9 2.6 2.4 - Swartberg 69.7 0.8 2.1 39.6 0.8 1.8 48.5 0.6 1.7 - Gamsberg 62.7 7.4 0.6 115.8 7.4 0.5 88.9 6.0 0.5 - Big Syncline Project 6.1 3.0 1.1 185.6 2.4 1.0 - - - Resources are additional to Reserves 288 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED Zinc and Lead Mining Summary a) Metal mined & metal concentrate Mine Type of mine Ore mined Zinc concentrate Lead concentrate 31 March 2024 mt 31 March 2023 mt 31 March 2024 mt 31 March 2023 mt 31 March 2024 mt 31 March 2023 mt Skorpion Open Cast - - - - - - BMM Underground 15,72,495 17,94,023 44,997 45,913 57,793 61,902 Gamsberg Open cast 24,24,799 34,13,402 3,10,312 4,35,263 445 639 Total 39,97,294 52,07,424 3,55,309 4,81,176 58,238 62,541 b) Metal in Concentrate (MIC) Mine Type of mine Ore mined Zinc concentrate 31 March 2024 mt 31 March 2023 mt 31 March 2024 mt 31 March 2023 mt BMM Underground 21,792 22,388 39,373 42,723 Gamsberg Open cast 1,47,214 2,07,421 86 180 Total 1,69,006 2,29,809 39,459 42,904 Iron ore Iron Ore Production Summary Company Lead concentrate 31 March 2024 mt 31 March 2023 mt Vedanta Limited Saleable Iron Ore 5.6 5.3 Goa 0.0 0.0 Karnataka 5.6 5.3 Iron Ore Resource and Reserve Summary Mine Resources Reserves Measured and indicated million mt Iron ore grade % Inferred million mt Iron ore grade %w Proved and probable reserves million mt Iron ore grade % Iron ore Karnataka 36.14 41.7 - - 38.98 43.9 Iron ore Goa 37.78 57.6 2.81 59.4 15.11 58.0 Oil and gas The Oil and gas reserves data set out below are estimated on the basis set out in the section headed “Presentation of Information”. PRODUCTION AND RESERVES SUMMARY 289 CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Consolidated PRODUCTION AND RESERVES SUMMARY Cairn India The Company's gross reserve estimates are updated at least annually based on the forecast of production profiles, determined on an asset-by-asset basis, using appropriate petroleum engineering techniques. The estimates of reserves and resources have been derived in accordance with the Society for Petroleum Engineers “Petroleum Resources Management System (2018)". The changes to the reserves are generally on account of future development projects, application of technologies such as enhanced oil recovery techniques and true up of the estimates. The management’s internal estimates of hydrocarbon reserves and resources at the period end, based on the current terms of the PSCs, are as follows: Particulars Gross proved and probable hydrocarbons initially in place Gross proved and probable reserves and resources Net working interest proved and probable reserves and resources (mmboe) (mmboe) 31 March 2024 31 March 2023 31 March 2024 31 March 2023 31 March 2024 31 March 2023 Rajasthan Block 5,210 4,806 1,107 933 775 653 Ravva Fields 704 704 14 18 3 4 CBOS/2 Fields 298 298 31 22 12 9 Other fields 839 853 224 182 208 166 Total 7,052 6,661 1,376 1,156 999 832 The Company’s net working interest proved and probable reserves is as follows: Particulars Proved and Probable reserves Proved and Probable reserves (developed) Oil Gas Oil Gas (mmstb) (bscf) (mmstb) (bscf) Reserves as of 31 March 2022** 210 189 133 121 Additions/ revision during the year (15) (3) 14 18 Production during the year 28 34 28 34 Reserves as on 31 March 2023*** 167 153 120 105 Additions/ revision during the year (3) (2) 5 28 Production during the year 24 34 24 34 Reserves as on 31 March 2024*** 140 117 120 99 * Includes probable oil reserves of 78.48 mmstb (of which 18.15 mmstb is developed) and probable gas reserves of 75.98 bscf (of which 26.30 bscf is developed) ** Includes probable oil reserves of 55.68 mmstb (of which 18.99 mmstb is developed) and probable gas reserves of 46.91 bscf (of which 16.91 bscf is developed) *** Includes probable oil reserves of 45.89 mmstb (of which 25.92 mmstb is developed) and probable gas reserves of 29.15 bscf (of which 27.34 bscf is developed) 290 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED Adapted Comparator Group The new comparator group of companies used for the purpose of comparing TSR performance in relation to the LTIP, adopted by the Remuneration Committee on 1 February 2006 and replacing the previous comparator group comprising companies constituting the FTSE Worldwide Mining Index (excluding precious metals) Adjusted EBITDA Group EBITDA net of EBITDA from custom smelting operations at Copper business. Adjusted EBITDA margin EBITDA margin computed on the basis of Adjusted EBITDA and Adjusted Revenue as defined elsewhere Adjusted Revenue Group Revenue net of revenue from custom smelting operations at Copper business. Aluminium Business The aluminium business of the Group, comprising of its fully integrated bauxite mining, alumina refining and aluminium smelting operations in India, and trading through the Bharat Aluminium Company Limited and Jharsuguda Aluminium (a division of Vedanta Limited), in India Articles of Association The articles of association of Vedanta Resources Limited Attributable Profit Profit for the financial year before dividends attributable to the equity shareholders of Vedanta Resources Limited BALCO Bharat Aluminium Company Limited, a company incorporated in India. BMM Black Mountain Mining Pty Board or Vedanta Board The board of directors of the Company Board Committees The committees reporting to the Board: Audit, Remuneration, Nominations, and Sustainability, each with its own terms of reference Businesses The Aluminium Business, the Copper Business, the Zinc, lead, silver, Iron ore, Power and Oil & Gas Business together Boepd Barrels of oil equivalent per day GLOSSARY AND DEFINITIONS Bopd Barrels of oil per day Cairn India Erstwhile Cairn India Limited and its subsidiaries Capital Employed Net assets before Net (Debt)/Cash Capex Capital expenditure CEO Chief executive officer CFO Chief Financial Officer CII Confederation of Indian Industries CO2 Carbon dioxide COP Cost of production CMT Copper Mines of Tasmania Pty Limited, a company incorporated in Australia Company or Vedanta Vedanta Resources Limited Company financial statements The audited financial statements for the Company for the year ended 31 March 2024 as defined in the Independent Auditors’ Report on the individual Company Financial Statements to the members of Vedanta Resources Limited Copper Business The copper business of the Group, comprising: • A copper smelter, two refineries and two copper rod plants in India, trading through Vedanta Limited, a company incorporated in India; • One copper mine in Australia, trading through Copper Mines of Tasmania Pty Limited, a company incorporated in Australia; and • An integrated operation in Zambia consisting of three mines, a leaching plant and a smelter, trading through Konkola Copper Mines Limited, a company incorporated in Zambia which is treated as discontinued operations and deconsolidated the same w.e.f 1st June’2019, affiliation with Zambian government is in progress. 291 CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Consolidated GLOSSARY AND DEFINITIONS Copper India Copper Division of Vedanta Limited comprising of a copper smelter, two refineries and two copper rod plants in India. Cents/lb US cents per pound CRRI Central Road Research Institute CRISIL CRISIL Limited (A S&P Subsidiary) is a rating agency incorporated in India CSR Corporate social responsibility CTC Cost to company, the basic remuneration of executives, which represents an aggregate figure encompassing basic pay, pension contributions and allowances CY Calendar year DDT Dividend distribution tax Deferred Shares Deferred shares of £1.00 each in the Company DFS Detailed feasibility study DGMS Director General of Mine Safety in the Government of India Directors The Directors of the Company DMF District Mineral Fund DMT Dry metric tonne Dollar or $ United States Dollars, the currency of the United States of America EAC Expert advisory committee EBITDA EBITDA is a non-IFRS measure and represents earnings before special items, depreciation, amortisation, other gains and losses, interest and tax. EBITDA Margin EBITDA as a percentage of turnover Economic Holdings or Economic Interest The economic holdings/interest are derived by combining the Group’s direct and indirect shareholdings in the operating companies. The Group’s Economic Holdings/Interest is the basis on which the Attributable Profit and net assets are determined in the consolidated accounts E&OHSAS Environment and occupational health and safety assessment standards E&OHS Environment and occupational health and safety management system ESOP Employee share option plan ESP Electrostatic precipitator Executive Committee The Executive Committee to whom the Board has delegated operational management. It comprises of the Chief Executive Officer and the senior management of the Group Executive Directors The Executive Directors of the Company Expansion Capital Expenditure Capital expenditure that increases the Group’s operating capacity Financial Statements or Group financial statements The consolidated financial statements for the Company and the Group for the year ended 31 March 2024 as defined in the Independent Auditor’s Report to the members of Vedanta Resources Limited Free Cash Flow Net Cash flow from operating activities Less: purchases of property, plant and equipment and intangibles Add proceeds on disposal of property, plant and equipment Add: Dividend paid and dividend distribution tax paid Add/less: Other non-cash adjustments 292 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED FY Financial year i.e. April to March. GAAP, including UK GAAP Generally Accepted Accounting Principles, the common set of accounting principles, standards and procedures that companies use to compile their financial statements in their respective local territories GDP Gross domestic product Gearing Net Debt as a percentage of Capital Employed GJ Giga joule Government or Indian Government The Government of the Republic of India Gratuity A defined contribution pension arrangement providing pension benefits consistent with Indian market practices Group The Company and its subsidiary undertakings and, where appropriate, its associate undertaking Gross finance costs Finance costs before capitalisation of borrowing costs HIIP Hydrocarbons initially-in place HSE Health, safety and environment HZL Hindustan Zinc Limited, a company incorporated in India IAS International Accounting Standards IFRIC IFRS Interpretations Committee IFRS International Financial Reporting Standards INR Indian Rupees Interest cover EBITDA divided by gross finance costs (including capitalised interest) excluding accretive interest on convertible bonds, unwinding of discount on provisions, interest on defined benefit arrangements less investment revenue IPP Independent power plant Iron Ore Sesa Iron ore Division of Vedanta Limited, comprising of Iron ore mines in Goa and Karnataka in India. Jharsuguda Aluminium Aluminium Division of Vedanta Limited, comprising of an aluminium refining and smelting facilities at Jharsuguda and Lanjigarh in Odisha in India. KCM or Konkola Copper Mines Konkola Copper Mines LIMITED, a company incorporated in Zambia Key Result Areas or KRAs For the purpose of the remuneration report, specific personal targets set as an incentive to achieve short-term goals for the purpose of awarding bonuses, thereby linking individual performance to corporate performance KPIs Key performance indicators KTPA Thousand tonnes per annum Kwh Kilo-watt hour KBOEPD Kilo barrel of oil equivalent per day LIBOR London inter bank offered rate LIC Life Insurance Corporation LME London Metals Exchange London Stock Exchange London Stock Exchange Limited GLOSSARY AND DEFINITIONS 293 CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Consolidated Lost time injury An accident/injury forcing the employee/contractor to remain away from his/her work beyond the day of the accident LTIFR Lost time injury frequency rate: the number of lost time injuries per million man hours worked LTIP The Vedanta Resources Long-Term Incentive Plan or Long- Term Incentive Plan MALCO The Madras Aluminium Company Limited, a company incorporated in India Management Assurance Services (MAS) The function through which the Group’s internal audit activities are managed MAT Minimum alternative tax MBA Mangala, Bhagyam, Aishwarya oil fields in Rajasthan MIC Metal in concentrate MOEF The Ministry of Environment, Forests and Climate change of the Government of the Republic of India MMSCFD Million standard cubic feet per day MT or Tonnes Metric tonnes MU Million Units MW Megawatts of electrical power NCCBM National Council of Cement and Building Materials Net (Debt)/Cash Net debt is a Non-IFRS measure and represents total debt after fair value adjustments under IAS 32 and IFRS 9 as reduced by cash and cash equivalents, liquid investments and structured investment, net of the deferred consideration payable for such investments (referred as Financial asset investment net of related liabilities), if any. NGO Non-governmental organisation Non-executive Directors The Non-Executive Directors of the Company Oil & Gas business Oil & Gas division of Vedanta Limited, is involved in the business of exploration, development and production of Oil & Gas. OALP Open Acreage licensing Policy Ordinary Shares Ordinary shares of 10 US cents each in the Company ONGC Oil and Natural Gas Corporation Limited, a company incorporated in India OPEC Organisation of the Petroleum Exporting Countries PBT Profit before tax PPE Property plant and equipment Provident Fund A defined contribution pension arrangement providing pension benefits consistent with Indian market practices PSC A “production sharing contract” by which the Government of India grants a license to a company or consortium of companies (the ‘Contractor”) to explore for and produce any hydrocarbons found within a specified area and for a specified period, incorporating specified obligations in respect of such activities and a mechanism to ensure an appropriate sharing of the profits arising there from (if any) between the Government and the Contractor. PSP The Vedanta Resources Performance Share Plan GLOSSARY AND DEFINITIONS 294 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED Recycled water Water released during mining or processing and then used in operational activities Relationship Agreement The agreement between the Company, Volcan Investments Limited and members of the Agarwal family which had originally been entered into at the time of the Company’s listing in 2003 and was subsequently amended in 2011 and 2014 to regulate the ongoing relationship between them, the principal purpose of which is to ensure that the Group is capable of carrying on business independently of Volcan, the Agarwal family and their associates. Return on Capital Employed or ROCE Operating profit before special items net of tax outflow, as a ratio of average capital employed RO Reverse osmosis Senior Management Group For the purpose of the remuneration report, the key operational and functional heads within the Group SEWT Sterlite Employee Welfare Trust, a long-term investment plan for Sterlite senior management SHGs Self help groups SBU Strategic Business Unit STL Sterlite Technologies Limited, a company incorporated in India Special items Items which derive from events and transactions that need to be disclosed separately by virtue of their size or nature Sterling, GBP or £ The currency of the United Kingdom Superannuation Fund A defined contribution pension arrangement providing pension benefits consistent with Indian market practices Sustaining Capital Expenditure Capital expenditure to maintain the Group’s operating capacity TCM Thalanga Copper Mines Pty Limited, a company incorporated in Australia TC/RC Treatment charge/refining charge being the terms used to set the smelting and refining costs TGT Tail gas treatment TLP Tail Leaching Plant TPA Metric tonnes per annum TPM Tonne per month TSPL Talwandi Sabo Power Limited, a company incorporated in India TSR Total shareholder return, being the movement in the Company’s share price plus reinvested dividends Twin Star Twin Star Holdings Limited, a company incorporated in Mauritius Twin Star Holdings Group Twin Star and its subsidiaries and associated undertaking US cents United States cents Underlying profit/ (loss) Attributable profit/(loss) before special items Less: NCI share in other gains/(losses) (net of tax) Vedanta Limited (formerly known as Sesa Sterlite Limited/ Sesa Goa Limited) Vedanta Limited, a company incorporated in India engaged in the business of Oil & Gas exploration and production, copper smelting, Iron Ore mining, Alumina & Aluminium production and Energy generation. VFJL Vedanta Finance (Jersey) Limited, a company incorporated in Jersey GLOSSARY AND DEFINITIONS 295 CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Consolidated VGCB Vizag General Cargo Berth Private Limited, a company incorporated in India Volcan Volcan Investments Limited, a company incorporated in the Bahamas VRCL Vedanta Resources Cyprus Limited, a company incorporated in Cyprus VRFL Vedanta Resources Finance Limited, a company incorporated in the United Kingdom VRHL Vedanta Resources Holdings Limited, a company incorporated in the United Kingdom Water Used for Primary Activities Total new or make-up water entering the operation and used for the operation’s primary activities; primary activities are those in which the operation engages to produce its product WBCSD World Business Council for Sustainable Development ZCI Zambia Copper Investment Limited, a company incorporated in Bermuda ZCCM ZCCM Investments Holdings Limited, a company incorporated in Zambia ZRA Zambia Revenue Authority GLOSSARY AND DEFINITIONS 296 Integrated Report and Annual Accounts 2023-24 VEDANTA RESOURCES LIMITED VEDANTA RESOURCES LIMITED 8th Floor, 20 Farringdon Street London EC4A 4AB United Kingdom Registered No.: 4740415 www.vedantaresources.com